<PAGE>
As Filed with the Securities and Exchange Commission on August 9, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LIFEPOINT HOSPITALS HOLDINGS, INC.
and the Guarantors Identified in footnote (1) below
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6324 52-2167869
(State of or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
4525 Harding Road
Nashville, Tennessee 37205
(615) 344-6261
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
William F. Carpenter III, Esq.
Senior Vice President, General Counsel and Secretary
4525 Harding Road
Nashville, Tennessee 37205
(615) 344-6261
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
Morton A. Pierce, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
(212) 259-8000
----------------
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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(1) The following domestic direct and indirect subsidiaries of LifePoint
Hospitals Holdings, Inc. are guarantors of the notes and are
Co-Registrants, each of which, unless otherwise indicated, is incorporated
in the state of Delaware and has the I.R.S. Employer Identification Number
indicated: America Group Offices, LLC (62-176341); America Management
Companies, LLC (62-1763639); AMG--Crockett, LLC (62-1763656); AMG--
Hilcrest, LLC (62-1763655); AMG--Hillside, LLC (62-1763652); AMG--
Livingston, LLC (62-1763651); AMG--Logan, LLC (62-1763649); AMG--Southern
Tennessee, LLC (62-1763648); AMG--Trinity, LLC (62-1763642); Ashley Valley
Medical Center, LLC (62-1762532); Ashley Valley Physician Practice, LLC
(62-1762570); Barrow Medical Center, LLC (62-1762529); Bartow Healthcare
Partner, Inc., a Florida corporation (62-1106159); Bartow Healthcare System
Ltd., a Florida limited partnership (62-1644567); Bourbon Community
Hospital, LLC (62-1757924); Buffalo Trace Radiation Oncology Associates,
LLC, a Kentucky limited liability company (61-1303441); Castleview
Hospital, LLC (62-1762357); Castleview Medical, LLC (62-1769739);
Castleview Physician Practice, LLC (61-1762573); LifePoint Medical Group--
Hillside, Inc., a Tennessee corporation (1-1275266); Community Hospital of
Andalusia, Inc., an Alabama corporation (62-1081822); Community Medical,
LLC (62-1779016); Crockett Hospital, LLC (62-1762364); Dodge City
Healthcare Group, LP, a Kansas limited partnership (10-1275266); Dodge City
Healthcare Partner, Inc., a Kansas corporation (61-1275266); Georgetown
Community Hospital, LLC (62-1757921); Georgetown Rehabilitation, LLC (62-
1763818); Halstead Hospital, LLC (62-1754937); HCK Logan Memorial, LLC (62-
1766919); HDP Andalusia, LLC (62-1765720); HDP Georgetown, LLC
(62-1765716); Hillside Hospital, LLC (62-1762382); HST Physician Practice,
LLC (62-1762577); HTI Georgetown, LLC (62-1773817); HTI Pinelake, LLC (62-
1773816); Integrated Physician Services, LLC (62-1762579); Kansas
Healthcare Management Company, Inc., a Kansas corporation (74-2849927);
Kentucky Hospital, LLC (62-1772321); Kentucky Medserv, LLC (62-1772269);
Kentucky MSO, LLC (62-1763638); Kentucky Physicians Services, Inc., a
Kentucky corporation (62-1752492); Lake Cumberland Healthcare, Inc., a
Kentucky corporation (62-1629555); Lake Cumberland Regional Hospital, LLC
(62-1757920); LifePoint CSLP, LLC (62-1779574); LifePoint Corporate
Services, Limited Partnership (62-1779581); LifePoint CSGP, LLC (62-
1779575); LifePoint Holdings 2, LLC (62-1778733); LifePoint Holdings 3,
<PAGE>
Inc. (62-1779573); LifePoint of Georgia, Limited Partnership (62-1778162);
LifePoint of GAGP, LLC (62-1778160); LifePoint of Kentucky, LLC (62-
1778730); LifePoint RC, Inc. (62-1761942); Livingston Regional Hospital,
LLC (62-1762419); Logan Medical, LLC (62-1772319); Logan Memorial Hospital,
LLC (62-1757917); LOSCO, LLC (62-1778111); Meadowview Physician Practice,
LLC (62-1762581); Meadowview Regional Medical Center, LLC (62-1757929);
Meadowview Rights, LLC (62-1766337); PineLake Physician Practice, LLC (62-
1762582); PineLake Regional Hospital, LLC (62-1757927); Poitras Practice,
LLC (62-1762586); R. Kendall Brown Practice, LLC (62-1762590); Riverton
Memorial Hospital, LLC (62-1762468); Riverton Physician Practices, LLC (62-
1763635); Riverview Medical Center, LLC (62-1762469); Select Healthcare,
LLC (62-1763632); Siletchnik Practice, LLC (62-1762275); Smith County
Memorial Hospital, LLC (62-1762490); Southern Tennessee EMS, LLC (62-
1763622); Southern Tennessee Medical Center, LLC (62-1762535); Springhill
Medical Center, LLC (62-1754936); Springhill MOB, LLC (62-1763623); THM
Physician Practice, LLC (62-1762591); Trinity Hospital, LLC (62-1757668);
Western Plains Regional Hospital, LLC (62-1762592). Columbia/HCA Healthcare
Corporation is also a guarantor of the notes, to the limited extent
described herein, is incorporated in the state of Delaware and has an
I.R.S. Employer Identification Number of 75-2497104.
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
Proposed maximum
Title of each class of Amount maximum aggregate Amount of
securities to be to be offering price offering registration
registered registered per Note price(1) fee
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<S> <C> <C> <C> <C>
10 3/4% Series B Senior
Subordinated Notes due
2009................... $150,000,000 100% $150,000,000 $41,700
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Guarantee of 10 3/4%
Series B Senior
Subordinated Notes due
2009................... $150,000,000 (2) (2) (2)
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Total................... $150,000,000 100% $150,000,000 $41,700
</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(f)(2).
(2) No additional consideration for the guarantees of the 10 3/4% Series B
Senior Subordinated Notes due 2009 will be furnished. Pursuant to Rule
457(n), no separate fee is payable with respect to such guarantees.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective time until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 9, 1999
PROSPECTUS
[LifePoint Hospitals Logo]
LifePoint Hospitals Holdings, Inc.
Offer to Exchange 10 3/4% Series B Senior Subordinated Notes due 2009 which
have been registered under the Securities Act for any and all outstanding 10
3/4% Senior Subordinated Notes due 2009
$150,000,000 aggregate principal amount outstanding
----------------
Material Terms of the Exchange Offer
. Expires 5:00 p.m., New York City . The exchange of notes should not
time, on , 1999, unless be a taxable exchange for U.S.
extended federal income tax purposes
. We will exchange your validly . We will not receive any proceeds
tendered unregistered notes for from the exchange offer
an equal principal amount of
registered notes with
substantially identical terms
. The terms of the notes to be
issued are substantially
identical to the outstanding
notes, except for certain
transfer restrictions and
registration rights relating to
the outstanding notes
. Not subject to any condition
other than that the exchange
offer not violate applicable law
or any applicable interpretation
of the Staff of the Securities
and Exchange Commission and
certain other customary
conditions
. You may tender outstanding notes
only in denominations of $1,000
and multiples of $1,000
. You may withdraw your tender of . Affiliates of our company may not
outstanding notes at any time participate in the exchange
prior to the expiration of the offer.
exchange offer
Please refer to "Risk Factors" beginning on page 13 of this document
for certain important information.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the notes to be issued in the
exchange offer or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
----------------
Prospectus dated , 1999.
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information appearing elsewhere in this
prospectus and may not contain all of the information that is important to you.
This prospectus includes the specific terms of the notes we are offering, as
well as information regarding our business, our spin-off from Columbia/HCA
Healthcare Corporation and detailed financial data. In this prospectus, the
word "Holdings" refers to LifePoint Hospitals Holdings, Inc., a direct, wholly-
owned subsidiary of LifePoint Hospitals, Inc. The terms "we," "us," "our," "our
company" and "LifePoint" refer to the business of the America Group of
Columbia/HCA which is operated, following the spin-off, by LifePoint Hospitals,
Inc., Holdings and their subsidiaries as a combined entity, except where it is
clear from the context that such term means only LifePoint Hospitals, Inc. We
encourage you to read this prospectus in its entirety. Except as otherwise
specified, information regarding Columbia/HCA in this prospectus is derived
from reports and other information filed by Columbia/HCA with the Commission.
The Exchange Offer
On May 11, 1999, we assumed $150,000,000 aggregate principal amount of 10
3/4% Senior Subordinated Notes due 2009 issued in a private offering. These
notes were sold to certain initial purchasers named in this prospectus. The
notes are guaranteed by our subsidiaries.
We and the guarantors entered into a registration rights agreement with
the initial purchasers in the private offering in which we agreed, among other
things, to deliver to you this prospectus and to complete the exchange offer on
or prior to December 17, 1999. You are entitled to exchange in the exchange
offer your notes for registered notes with substantially identical terms. If
the exchange offer is not completed on or prior to December 17, 1999,
additional interest will accrue on the notes at a rate of .25% over the stated
interest rate on the notes for the first 90 days immediately following such
date, and will increase by an additional .25% at the beginning of each
subsequent 90-day period up to a maximum of 1.0% in the aggregate, until the
exchange offer is completed. You should read the discussion under the headings
"Summary of Terms of the Exchange Notes" and "Description of the Notes" for
further information regarding the registered notes.
We believe that the notes issued in the exchange offer may be resold by
you without compliance with the registration and prospectus delivery
requirements of the Securities Act, subject to certain conditions. Following
the exchange offer, any notes held by you that are not exchanged in the
exchange offer will continue to be subject to the existing restrictions on
transfer on the notes and, except in certain circumstances, we will have no
further obligation to you to provide for registration under the Securities Act
of transfers of outstanding notes held by you. You should read the discussions
under the headings "Summary of the Exchange Offer" and "The Exchange Offer" for
further information regarding the exchange offer and the resale of notes.
1
<PAGE>
Summary of the Exchange Offer
Issuer...................... LifePoint Hospitals Holdings, Inc.
The Exchange Offer.......... We previously assumed $150 million aggregate
principal amount of 10 3/4% Senior Subordinated
Notes due 2009 issued in a private offering.
These securities were not registered under the
Securities Act. At the time we assumed the notes,
we entered into a registration rights agreement
in which we agreed to offer to exchange your
unregistered notes for new notes which have been
registered under the Securities Act. This
exchange offer is intended to satisfy that
obligation. We are offering to exchange $1,000
principal amount of registered notes for each
$1,000 principal amount of your unregistered
notes. After the exchange offer is completed, you
will no longer be entitled to any exchange or
registration rights with respect to your notes.
Under certain circumstances, certain holders of
outstanding notes may require us to file a shelf
registration statement under the Securities Act.
As of this date, there is $150.0 million
aggregate principal amount of notes outstanding.
Required Representation..... In order to participate in this exchange offer,
you will be required to make certain
representations to us in a letter of transmittal,
including that:
. any exchange notes will be acquired by you in
the ordinary course of your business;
. you have no arrangement with any person to
distribute the notes; and
. you are not an affiliate of our company.
Resale...................... We believe that the exchange notes issued in the
exchange offer may be freely traded by you
without compliance with the registration and
prospectus delivery provisions of the Securities
Act provided that:
. the exchange notes issued in the exchange
offer are being acquired in the ordinary
course of your business;
. you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate
in the distribution of the notes issued to you
in the exchange offer; and
. you are not an "affiliate" of our company.
If our belief is inaccurate and you transfer any
note issued to you in the exchange offer without
delivering a prospectus meeting the requirements
of the Securities Act or without an exemption
from registration of your notes from such
requirements, you may incur liability under the
Securities Act. We do not assume, or indemnify
you against, such liability.
2
<PAGE>
Each broker-dealer that is issued exchange notes
in the exchange offer for its own account in
exchange for notes which were acquired by such
broker-dealer as a result of market-making or
other trading activities, must acknowledge that
it will deliver a prospectus meeting the
requirements of the Securities Act in connection
with any resale of the exchange notes issued in
the exchange offer. We have agreed in the
registration rights agreement that a broker-
dealer may use this prospectus for an offer to
resell, resale or other retransfer of the
exchange notes issued to it in the exchange
offer.
Expiration Date............. The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999, unless extended, in
which case the term "expiration date" shall mean
the latest date and time to which we extend the
exchange offer.
Conditions to the Exchange The exchange offer is subject to certain
Offer....................... customary conditions, which may be waived by us.
The exchange offer is not conditioned upon any
minimum principal amount of notes being tendered.
Procedures for Tendering If you wish to tender your notes for exchange
Old Notes................... pursuant to the exchange offer you must transmit
to Citibank, N.A., as exchange agent, on or
before the expiration date:
either:
. a properly completed and duly executed letter
of transmittal, which accompanies this
prospectus, or a facsimile of the letter of
transmittal, together with your notes and any
other required documentation, to the exchange
agent at the address set forth in this
prospectus under the heading "The Exchange
Offer--Exchange Agent," and on the front cover
of the letter of transmittal; or
. a computer generated message transmitted by
means of The Depository Trust Company's
Automated Tender Offer Program system and
received by the exchange agent and forming a
part of a confirmation of book entry transfer
in which you acknowledge and agree to be bound
by the terms of the letter of transmittal.
If either of these procedures cannot be satisfied
on a timely basis, then you should comply with
the guaranteed delivery procedures described
below.
By executing the letter of transmittal, each
holder of notes will make certain representations
to us described under "The Exchange Offer--
Procedures for Tendering."
Special Procedures for
Beneficial Owners.......... If you are a beneficial owner whose notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender your notes in the exchange
offer,
3
<PAGE>
you should contact such registered holder
promptly and instruct such registered holder to
tender on your behalf. If you wish to tender on
your own behalf, you must, prior to completing
and executing the letter of transmittal and
delivering your notes, either make appropriate
arrangements to register ownership of the notes
in your name or obtain a properly completed bond
power from the registered holder.
The transfer of registered ownership may take
considerable time and may not be able to be
completed prior to the expiration date.
Guaranteed Delivery If you wish to tender your notes and time will
Procedures.................. not permit the documents required by the letter
of transmittal to reach the exchange agent prior
to the expiration date, or the procedure for
book-entry transfer cannot be completed on a
timely basis, you must tender your notes
according to the guaranteed delivery procedures
described under "The Exchange Offer--Guaranteed
Delivery Procedures."
Acceptance of Old Notes and
Delivery of Exchange Subject to the conditions described under "The
Notes...................... Exchange Offer--Conditions to the Exchange
Offer", we will accept for exchange any and all
notes which are validly tendered in the exchange
offer and not withdrawn, prior to 5:00 p.m., New
York City time, on the expiration date.
Withdrawal Rights........... You may withdraw the tender of your notes at any
time prior to 5:00 p.m., New York City time, on
the expiration date, subject to compliance with
the procedures for withdrawal described in this
prospectus under the heading "The Exchange
Offer--Withdrawal of Tenders."
Federal Income Tax For a discussion of the material federal income
Considerations.............. tax considerations relating to the exchange of
notes for the exchange notes, see "Material
Federal Income Tax Considerations."
Exchange Agent.............. Citibank N.A., the trustee under the indenture
governing the notes, is serving as the exchange
agent. The address, telephone number and
facsimile number of the exchange agent are set
forth in this prospectus under the heading "The
Exchange Offer--Exchange Agent."
Consequences of Failure to
Exchange Old Notes......... If you do not exchange your notes for exchange
notes pursuant to the exchange offer, you will
continue to be subject to the restrictions on
transfer provided in the notes and in the
indenture governing the notes. In general, the
unregistered notes may not be offered or sold,
unless they are registered under the Securities
Act, except pursuant to an exemption from, or in
a transaction not subject to, the Securities Act
and applicable state securities laws. We do not
currently intend to register the notes under the
Securities Act.
4
<PAGE>
Summary of Terms of the Exchange Notes
This exchange offer relates to the exchange of up to $150,000,000
aggregate principal amount of exchange notes for up to an equal principal
amount of the unregistered outstanding notes. The form and terms of the
exchange notes are the same as the form and terms of the outstanding notes,
except that the exchange notes will be registered under the Securities Act, and
therefore, the exchange notes will not be subject to transfer restrictions or
registration rights, and the provisions of the registration rights agreement
relating to an increase in the stated interest rate on the outstanding notes
under certain circumstances will be eliminated. The exchange notes issued in
the exchange offer will evidence the same debt as the outstanding notes, which
they replace, and both the outstanding notes and the exchange notes are
governed by the same indenture.
Notes Offered............... $150,000,000 aggregate principal amount of 10
3/4% Series B Senior Subordinated Notes due 2009.
Maturity.................... May 15, 2009.
Interest Payment Dates...... May 15 and November 15, commencing November 15,
1999.
Guarantees.................. Our subsidiaries have guaranteed the notes on a
senior subordinated basis. Future subsidiaries
also may be required to guarantee the notes on a
senior subordinated basis. Columbia/HCA has also,
to a limited extent, guaranteed the notes on a
senior subordinated basis. See "Description of
the Notes--Note Guarantees."
Ranking..................... The notes:
. are unsecured senior subordinated obligations
of our company and are subordinated in right
of payment to all of our existing and future
senior indebtedness;
. rank equal in right of payment with all of our
other existing and future senior subordinated
indebtedness and rank senior in right of
payment to all of our subordinated
indebtedness; and
. are effectively subordinated to all existing
and future senior indebtedness of our
subsidiaries. The term "senior indebtedness"
is defined in the "Description of the Notes--
Ranking" section of this offering memorandum.
Optional Redemption......... We may redeem the notes, in whole or in part, at
any time on or after May 15, 2004, at the
redemption prices set forth in this prospectus.
Optional Redemption Upon
Certain Equity Offerings... On or before May 15, 2002, we may redeem up to
35% of the notes with the net proceeds of certain
equity offerings at 110.75% of the principal
amount thereof, plus accrued interest, if at
least 65% of the aggregate principal amount of
the originally issued notes remains outstanding.
See "Description of the Notes--Optional
Redemption."
5
<PAGE>
Change in Control........... Upon certain change in control events, you may
require us to repurchase all or a portion of your
notes at a purchase price equal to 101% of the
principal amount thereof, plus accrued interest.
See "Description of the Notes--Certain
Covenants--Purchase of Notes upon a Change in
Control."
Certain Covenants...........
The indenture governing the notes contains
covenants that, among other things, limit our
ability and the ability of certain of our
subsidiaries to:
.incur additional indebtedness,
.pay dividends on, redeem or repurchase our
capital stock,
.make investments,
.engage in transactions with affiliates,
.create certain liens,
. in the case of certain of our subsidiaries,
guarantee indebtedness,
.sell assets,
.sell capital stock of restricted subsidiaries,
and
. consolidate, merge or transfer all or
substantially all our assets and the assets of
our subsidiaries on a consolidated basis.
These covenants are subject to important
exceptions and qualifications, which are
described in the "Description of the Notes"
section of this prospectus.
Form of Exchange Notes...... The exchange notes issued in the exchange offer
will be represented by one or more permanent
global certificates, in fully registered form,
deposited with a custodian for, and registered in
the name of a nominee of, The Depository Trust
Company, as depositary. You will not receive
notes in certificated form unless one of the
events set forth under "Book Entry; Delivery and
Form" occurs. Instead, beneficial interests in
the exchange notes will be shown on, and
transfers of these notes will be effected
through, records maintained in book-entry form by
The Depository Trust Company and its
participants.
Use of Proceeds............. We will not receive any proceeds from the
exchange offer.
6
<PAGE>
About Our Company
Who We Are
We operate 23 general, acute care hospitals located in non-urban areas
with an average population of approximately 27,000, based on 1998 data.
According to industry sources, population in our markets is projected to grow
on average in excess of 5% between 1998 and 2003, compared to the expected
national growth rate of 2.4% over the same period. We succeeded to the business
of the America Group, a division of Columbia/HCA, following the distribution by
Columbia/HCA of all outstanding shares of LifePoint common stock to
Columbia/HCA stockholders on May 11, 1999. In 21 of our 23 markets, our
hospital is the only hospital in the community. Our hospitals are located in
nine states: Alabama, Florida, Georgia, Kansas, Kentucky, Louisiana, Tennessee,
Utah and Wyoming. Approximately half of our facilities are located in the
states of Kentucky and Tennessee. All but seven of our hospitals are located in
states that have certificate of need laws, which laws may have the effect of
limiting the development of competing facilities. Three of our hospitals are
held for sale. There can be no assurance that any sale transaction will be
consummated or on what terms any sale will occur.
The Non-Urban Health Care Market
We believe that growing, non-urban health care markets are attractive to
health care service providers as a result of favorable demographic and economic
trends and competitive conditions. Because non-urban service areas have smaller
populations, there are generally fewer hospitals and other health care service
providers in each community, resulting in less direct competition for hospital-
based services. Our management believes that the smaller populations and
relative dominance of the one or two acute care hospitals in these markets also
limit the entry of alternate non-hospital providers, such as outpatient surgery
centers or rehabilitation or diagnostic imaging centers. We believe that non-
urban communities generally view the local hospital as a key part of the
community. Additionally, there is generally a lower level of managed care payer
penetration, that is, a lower relative proportion of the market population
enrolled in managed care programs such as HMOs and PPOs, in our markets than
there is in urban markets. Our management further believes that non-urban
markets provide us with attractive acquisition opportunities. Currently, the
majority of non-urban hospitals are owned by not-for-profit and governmental
entities which frequently have limited access to capital and management
resources. As a result, patients may migrate to, may be referred by local
physicians to, or may be lured by incentives from managed care plans to travel
to, hospitals in larger, urban markets. We believe that not-for-profit and
governmental owners of non-urban hospitals who wish to preserve the local
availability of quality health care services may seek to sell or lease these
hospitals to companies, such as our company, that have the access to capital
and management resources which can better serve the community and are committed
to the local delivery of health care.
Our Business Strategy
Our strategic goals are centered around the unique patient and health
care provider needs and opportunities in our non-urban markets. We intend to
manage our facilities so that they operate in accordance with the strategies
described below:
. Develop Facility-Specific Strategies for Non-Urban Markets. Our
facility-specific strategies have been tailored for the unique
characteristics of each non-urban market and are intended to
improve the quality and breadth of health care services, to provide
an outstanding workplace for our employees, to recognize and expand
the hospitals' roles as community assets and to improve financial
performance.
. Expand Breadth of Service and Reduce Patient Outmigration. We
intend to increase revenues by broadening the scope of health care
services available at our facilities, particularly in markets where
significant outmigration is occurring, and to recruit physicians
7
<PAGE>
with a broader range of specialties. Management believes that this
expansion of available treatments and our community focus should
help to encourage local residents in our non-urban markets to seek
care at facilities within their communities and limit outmigration.
. Strengthen Physician Recruiting and Retention. We seek to enhance
the quality of care available locally, and the revenue derived
therefrom, and believe that recruiting physicians in local
communities is critical to increasing the quality of health care
and the breadth of available services. Management believes that
expansion of the range of available treatments at our hospitals
should also assist in physician recruiting.
. Retain and Develop Stable Management. Our management believes that
achieving long-term retention of executive teams at our hospitals
will enhance medical staff relations and maintain continuity of
relationships within the community.
. Improve Managed Care Position. We believe that independence from
Columbia/HCA and the lower managed care penetration in our markets
will enable our company over time to negotiate contract terms that
are generally more favorable for our facilities and to decrease the
level of discount arrangements in which we participate.
. Improve Expense Management. We have begun to implement cost control
initiatives designed to reduce labor costs and improve labor
productivity, control supplies expense and reduce uncollectible
revenues.
. Acquire Other Hospitals. Our management intends to pursue a
disciplined acquisition strategy that will seek to identify and
acquire attractive hospitals in non-urban markets.
Recent Developments
LifePoint recently announced certain second quarter results. For the
three months ended June 30, 1999, LifePoint's revenues were $128.2 million, net
income was $1.0 million and diluted earnings per share were $0.04. For the six
months ended June 30, 1999, reported revenues were $262.4 million, net income
was $5.0 million and diluted earnings per share were $0.17. On a pro forma
basis, diluted earnings per share for the second quarter increased 50% from
$0.04 to $0.06. Revenues increased 4.2% to $117.0 million, and EBITDA, which is
comprised of earnings before interest, income taxes, depreciation,
amortization, ESOP expense and minority interest, increased 18.3% to $18.2
million. For the first six months of 1999, pro forma EBITDA rose 19.5% to $38.9
million compared to $32.5 million for the first six months of 1998. Pro forma
net income for the first six months totaled $5.5 million, or $0.18 per diluted
share, compared with prior year net income of $3.2 million, or $0.11 per
diluted share, representing increases of 62.0% and 63.6%, respectively. For the
six months ended June 30, 1999, on a pro forma basis, admissions increased 5.9%
and revenues per equivalent admission decreased 1.5% over the prior year's
comparable period. Pro forma results are adjusted to reflect the debt assumed
from Columbia/HCA in connection with the spin-off, overhead expense and ESOP
expense as if the spin-off had occurred at the beginning of 1999, and to
exclude the operating results of three of our hospitals that are held for sale.
Our Formation
LifePoint owns and operates hospitals which, prior to the distribution
described below, comprised the America Group of Columbia/HCA. Columbia/HCA
established the America Group as an independent, publicly-traded company by
distributing all outstanding shares of LifePoint common stock to the
stockholders of Columbia/HCA on May 11, 1999. Columbia/HCA no longer owns any
shares of LifePoint common stock. The common stock of LifePoint is quoted on
the Nasdaq National Market System (symbol: LPNT).
In connection with the distribution, Healthtrust, Inc.--The Hospital
Company, a wholly owned subsidiary of Columbia/HCA, transferred all of the
assets comprising the America Group to LifePoint and
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LifePoint transferred such assets to Holdings and Holdings ultimately assumed
approximately $260.6 million of debt obligations. Such debt obligations consist
of $110 million of term loans with a syndicate of banks pursuant to a new
credit agreement, the $150 million of notes issued in the private offering and
approximately $0.6 million of other debt obligations assumed from Columbia/HCA.
The new credit agreement also includes an additional term loan commitment of
$35 million available for limited purposes and a revolving credit commitment of
up to $65 million.
In connection with the distribution, LifePoint and Columbia/HCA entered
into a distribution agreement and other agreements providing for certain
transitional services that LifePoint purchases from Columbia/HCA, the
allocation of certain liabilities and obligations and indemnification
arrangements by Columbia/HCA with respect to the governmental investigations of
certain Columbia/HCA business practices and certain other matters. To
understand these agreements more fully, you should read the detailed
description of such agreements included elsewhere in this prospectus and the
agreements which were previously filed with the Commission by LifePoint and are
incorporated by reference to the registration statement of which this
prospectus forms a part.
Principal Executive Offices
Our principal executive offices are located at 4525 Harding Road, Suite
300, Nashville, Tennessee 37205, and our phone number is (615) 344-6261. Our
corporate Website address is http://www.lifepointhospitals.com. Information
contained on our Website is not part of this prospectus.
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<PAGE>
Summary Financial Data
The following table sets forth summary historical financial data of
LifePoint for each of the fiscal years in the five year period ended December
31, 1998 and for the three months ended March 31, 1998 and 1999. You should
read this table together with the Combined Financial Statements and the related
notes of LifePoint included elsewhere in this prospectus, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
The summary financial data at December 31, 1994, 1995 and 1996 and for
the years ended December 31, 1994 and 1995 has been derived from unaudited
financial statements. The summary financial data for the three months ended
March 31, 1998 and 1999 is unaudited, but in the opinion of management,
reflects all adjustments necessary for a fair presentation of such information.
Such adjustments are of a normal recurring nature.
Operating results for the three months ended March 31, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1999. EBITDA presented in the following table represents
income from continuing operations before depreciation and amortization,
interest expense, management fees, impairment of long-lived assets, minority
interest in earnings of consolidated entities and income taxes. It is presented
to enhance an understanding of our operating results and is not intended to
represent a measure of financial performance under generally accepted
accounting principles. EBITDA is provided because it is commonly used in the
health care industry by investors to compare and analyze operating performance,
and also serves as a measure to determine a company's ability to incur and
service debt. However, EBITDA should not be considered in isolation or as a
substitute for net income, cash flows or other income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity.
The ratio of earnings to fixed charges presented in the following table
is computed by dividing income from continuing operations before fixed charges,
minority interests and income taxes by fixed charges. Fixed charges consist of
interest charges, which is interest expense plus interest charged to
construction, and the portion of rent expense which is deemed to be equivalent
to interest expense.
In your review of the following table you should note that the data
presented for income (loss) from continuing operations, net income (loss),
basic earnings (loss) per share and diluted earnings (loss) per share includes
charges related to impairment of long-lived assets of $26.1 million, or $15.9
million after-tax, for the year ended December 31, 1998.
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<TABLE>
<CAPTION>
Historical
---------------------------------------------------------------
Years Ended December 31,
---------------------------------------------
Three Months
ended March 31,
----------------
1994 1995 1996 1997 1998 1998 1999
------- ------- ------- -------- -------- ------- -------
(Dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Revenues................ $ 350.1 $ 395.8 $ 464.0 $ 487.6 $ 498.4 $ 130.0 $ 134.2
Income (loss) from
continuing operations.. 14.4 25.6 39.3 17.1 (17.7) 3.4 4.0
Net income (loss)....... 15.9 27.4 41.2 12.5 (21.8) 1.6 4.0
Basic earnings (loss)
per share:
Income (loss) from
continuing
operations........... $ 0.48 $ 0.85 $ 1.31 $ 0.57 $ (0.59) $ 0.11 $ 0.13
Net Income (loss)..... $ 0.53 $ 0.91 $ 1.37 $ 0.41 $ (0.73) $ 0.05 $ 0.13
Shares used in
computing basic
earnings (loss) per
share (in millions).. 30.0 30.0 30.0 30.0 30.0 29.9 29.9
Diluted earnings (loss)
per share:
Income (loss) from
continuing
operations........... $ 0.47 $ 0.84 $ 1.30 $ 0.57 $ (0.59) $ 0.11 $ 0.13
Net income (loss)..... $ 0.52 $ 0.90 $ 1.36 $ 0.41 $ (0.73) $ 0.05 $ 0.13
Shares used in
computing diluted
earnings (loss) per
share (in millions).. 30.4 30.4 30.3 30.2 30.0 30.0 30.2
Financial Position:
Assets.................. $ 312.3 $ 324.5 $ 376.0 $ 397.9 $ 355.0 $ 402.5 $ 381.4
Long-term debt, includ-
ing amounts
due within one year.... 1.7 2.1 1.6 1.6 0.6 0.7 0.6
Intercompany balances
payable to
Columbia/HCA........... 218.2 181.3 176.3 182.5 167.6 186.1 188.0
Working capital......... 19.7 24.4 39.0 41.1 26.9 47.9 40.8
Capital expenditures.... 34.1 28.6 53.4 51.8 29.3 8.4 14.7
Operating Data:
EBITDA ................. 66.3 82.4 110.6 82.0 56.8 19.8 21.9
Number of hospitals at
end of period.......... 20 20 22 22 23 23 23
Number of licensed beds
at end of period(a).... 1,843 1,881 2,074 2,080 2,169 2,136 2,169
Weighted average li-
censed beds(b)......... 1,783 1,862 2,060 2,078 2,127 2,136 2,169
Admissions(c)........... 52,681 54,549 59,381 60,487 62,264 16,842 18,051
Equivalent
admissions(d).......... 81,708 88,915 98,869 105,126 109,336 28,412 30,741
Average length of stay
(days)(e).............. 4.9 4.8 4.7 4.4 4.4 4.6 4.3
Average daily
census(f).............. 713 713 755 733 742 853 863
Occupancy rate(g)....... 40% 38% 37% 35% 35% 40% 40%
</TABLE>
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<PAGE>
(a) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(b) Represents the average number of licensed beds weighted based on periods
owned.
(c) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to LifePoint's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(d) Equivalent admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
admissions is computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation "equates" outpatient revenue to the volume measure
(admissions) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
(e) Represents the average number of days admitted patients stay in LifePoint's
hospitals. Average length of stay has declined due to the continuing
pressures from managed care and other payers to restrict admissions and
reduce the number of days that are covered by the payers for certain
procedures, and by technological and pharmaceutical improvements.
(f) Represents the average number of patients in LifePoint's hospital beds
each day.
(g) Represents the percentage of hospital licensed beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services that were previously
performed in an inpatient setting being performed on an outpatient basis
and the decline in average length of stay per admission.
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<PAGE>
RISK FACTORS
In evaluating an investment in the notes, you should carefully consider
the following factors in addition to all other information contained in this
prospectus.
High Degree of Leverage and Debt Service Obligations May Adversely Affect
LifePoint
LifePoint is highly leveraged. As of March 31, 1999, after giving pro
forma effect to the distribution and the related assumption of debt by
Holdings, the private offering of the notes and the elimination of facilities
to be divested by LifePoint, LifePoint's consolidated long-term debt would have
been approximately $260.6 million. LifePoint also may draw upon an additional
term loan commitment of $35 million available for limited purposes and a
revolving credit commitment of up to $65 million under its new credit
agreement. LifePoint also has the ability to incur additional debt, subject to
limitations imposed by the new credit agreement and the indenture governing the
notes. While LifePoint believes that future operating cash flow, together with
available financing arrangements, will be sufficient to fund operating
requirements, leverage and debt service requirements could have important
consequences to holders of the notes, including the following:
. such requirements may make LifePoint more vulnerable to economic
downturns and to adverse changes in business conditions, such as
further limitations on reimbursement under Medicare and Medicaid
programs;
. LifePoint's ability to obtain additional financing in the future
for working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired;
. a substantial portion of LifePoint's cash flow from operations may
have to be dedicated to the payment of principal and interest on
its indebtedness, thereby reducing the funds available for
operations;
. certain of the borrowings may be at variable rates of interest,
which would make LifePoint vulnerable to increases in interest
rates; and
. the indebtedness of LifePoint contains numerous financial and
other restrictive covenants, including restrictions on payments of
dividends, incurrences of indebtedness and sale of assets, the
failure to comply with which may result in an event of default
which, if not cured or waived, could cause such indebtedness to be
declared immediately due and payable.
Any substantial increase in LifePoint's debt levels or the inability to
borrow funds at favorable interest rates or to comply with the financial or
other restrictive covenants could have a material adverse effect on the
business, financial condition, results of operations or prospects of LifePoint.
There May Not be Sufficient Assets to Pay the Notes
In the event of a bankruptcy, liquidation, dissolution, reorganization or
similar proceeding against Holdings, the assets of Holdings must be used to pay
senior debt in full before making any payments to holders of the notes. Because
of this obligation to pay the senior debt first, there may not be sufficient
assets to pay all or any of the amounts due on the notes. The notes are also
unsecured and, therefore, are effectively subordinated to any secured debt of
Holdings, whether or not such debt is senior by its terms.
As of March 31, 1999, after giving affect to the distribution,
approximately $110 million in debt of Holdings would have been senior in
priority to the notes, all of which would have been incurred under the new
credit agreement, which is senior by its terms to the notes and is secured by
liens on substantially all of the assets of Holdings and its subsidiaries and
the pledge of the common stock of all existing and future material subsidiaries
of Holdings and by subsidiary guarantees secured by substantially all of the
assets of the guarantors.
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<PAGE>
Restrictions Imposed by Senior Debt May Lead to Acceleration of Indebtedness
The new credit agreement includes covenants that will require Holdings to
meet certain financial ratios and financial conditions that require that
Holdings take action to reduce debt or to act in a manner contrary to its
business objectives. In addition, the new credit agreement restricts, among
other things, Holdings' ability to incur additional indebtedness and make
acquisitions and capital expenditures beyond a certain level. If Holdings fails
to comply with the restrictions contained in the new credit agreement, the
lenders can declare the entire amount owed thereunder immediately due and
payable, and prohibit Holdings from making payments of interest and principal
on the notes until the default is cured or all such debt is paid or otherwise
satisfied in full. If Holdings were unable to repay such borrowings, such
lenders could proceed against the collateral securing the new credit agreement.
If any senior debt is accelerated, the assets of Holdings may not be sufficient
to repay in full such indebtedness and the other indebtedness of Holdings,
including the notes, in which event the interests of the senior debt lenders
may conflict with the interests of the holders of the notes.
Loss of Physicians or Other Key Personnel Could Adversely Affect LifePoint's
Business
Since physicians generally direct the majority of hospital admissions,
the success of LifePoint, in part, is dependent upon the number and quality of
physicians on its hospitals' medical staffs, the admissions practices of such
physicians and the maintenance of good relations with such physicians. Hospital
physicians are generally not employees. Only a limited number of physicians
practice in the non-urban communities in which LifePoint's hospitals are
located. Consequently, the loss of physicians in these communities, the
inability of LifePoint to recruit and to retain physicians in these communities
or the inability of LifePoint to maintain good relations with the physicians on
its hospitals' medical staffs could have a material adverse effect on its
business, financial condition, results of operations or prospects. The
operations of LifePoint's hospitals could also be materially adversely affected
by the shortage of nurses and certain other health care professionals in these
communities.
LifePoint is also dependent upon the continued services and management
experience of Scott L. Mercy, James M. Fleetwood, Jr. and other of its
executive officers. If Messrs. Mercy or Fleetwood or any of such other
executive officers were to resign their positions or otherwise be unable to
serve, the operating results of LifePoint could be adversely affected. In
addition, the success of LifePoint depends on its ability to attract and retain
managers at its hospitals and related facilities, on the ability of its
officers and key employees to manage growth successfully and on its ability to
attract and retain skilled employees.
No Operating History as an Independent Company; Net Losses
Prior to the distribution, LifePoint operated as the America Group
division of Columbia/HCA. Accordingly, LifePoint does not have a long operating
history as an independent, publicly-traded company and, prior to the
distribution, LifePoint had historically relied on Columbia/HCA for various
financial, administrative and managerial expertise relevant to the conduct of
its business. LifePoint maintains its own lines of credit and banking
relationships, employs its own senior executives and performs its own
administrative functions, except that Columbia/HCA continues to provide certain
support services to LifePoint on a contractual basis. The operations of the
America Group did not generate a profit for 1998. There can be no assurance
that LifePoint will not continue to have net losses as an independent,
publicly-traded company. See "Unaudited Pro Forma Condensed Combined Financial
Statements" and "Arrangements Relating to the Distribution" for more
information regarding LifePoint's arrangements with Columbia/HCA and see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for certain factors that could affect LifePoint's ability to
generate profits.
14
<PAGE>
Limits on Reimbursement and Health Care Reform Legislation May Reduce
Profitability
A significant portion of the revenues of LifePoint are derived from the
Medicare and Medicaid programs, which are highly regulated and subject to
frequent and substantial changes. In recent years,
fundamental changes in the Medicare and Medicaid programs, including the
implementation of a prospective payment system ("PPS") for inpatient services
at medical/surgical hospitals, have resulted in limitations on, and reduced
levels of payment and reimbursement for, a substantial portion of hospital
procedures and costs. The Federal Balanced Budget Act of 1997, which
establishes a plan to balance the Federal budget by fiscal year 2002, includes
significant additional reductions in spending levels for the Medicare and
Medicaid programs. These include, among others, payment reductions for
inpatient and outpatient hospital services, establishment of a PPS for hospital
outpatient services, skilled nursing facilities and home health agencies under
Medicare, and repeal of the Federal payment standard (the so-called "Boren
Amendment") for hospitals and nursing facilities under Medicaid. A number of
states also are considering legislation designed to reduce their Medicaid
expenditures and to provide universal coverage and additional care, including
enrolling Medicaid recipients in managed care programs and imposing additional
taxes on hospitals to help finance or expand the states' Medicaid systems. In
addition, private payers increasingly are attempting to control health care
costs through direct contracting with hospitals to provide services on a
discounted basis, increased utilization review and greater enrollment in
managed care programs such as health maintenance organizations and preferred
provider organizations ("PPOs"). LifePoint believes that hospital operating
margins have been, and may continue to be, under significant pressure because
of deterioration in pricing flexibility and payer mix, and growth in operating
expenses in excess of the increase in prospective payments under the Medicare
program.
In recent years, an increasing number of legislative proposals have been
introduced or proposed in Congress and in some state legislatures that would
effect major changes in the health care system, either nationally or at the
state level. Among the proposals under consideration or already enacted are
price controls on hospitals, insurance market reforms to increase the
availability of group health insurance to small businesses, Medicare and
Medicaid managed care programs and requirements that all businesses offer
health insurance coverage to their employees. While LifePoint anticipates that
the rate of increase in payments to hospitals will be reduced as a result of
future Federal and state legislation, it is uncertain at this time what
legislation on health care reform may ultimately be enacted or whether other
changes in the administration or interpretation of governmental health care
programs will occur. There can be no assurance that future health care
legislation or other changes in the administration or interpretation of
governmental health care programs will not have a material adverse effect on
the business, financial condition, results of operations or prospects of
LifePoint.
In conection with the distribution, most LifePoint hospitals were
required to re-enroll as Medicaid providers. There can be no assurance that the
states will enroll the LifePoint hospitals in their Medicaid programs on a
timely basis. Any significant delay could negatively affect LifePoint's
operating cash flow.
Reimbursement by Managed Care Organizations May Reduce Hospital Profitability
The competitive position of LifePoint's hospitals also is affected by the
increasing number of initiatives undertaken during the past several years by
major purchasers of health care, including Federal and state governments,
insurance companies and employers, to revise payment methodologies and monitor
health care expenditures in order to contain health care costs. As a result of
these initiatives, managed care organizations offering prepaid and discounted
medical services packages represent an increasing portion of LifePoint's
admissions, resulting in reduced hospital revenue growth. If LifePoint is
unable to lower costs through increased operational efficiencies and the trend
toward declining reimbursements and payments continues, LifePoint's results of
operations and cash flows will be adversely affected. One managed care
organization in Tennessee has been placed in receivership by the state of
Tennessee. There can be no assurances that other managed care organizations
with which LifePoint has contracts will not encounter similar difficulties in
paying claims in the future.
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<PAGE>
Competition
The health care business is highly competitive and competition among
hospitals and other health care providers for patients has intensified in
recent years. Almost all of LifePoint's hospitals operate in geographic areas
where they are currently the sole provider of hospital services in their
communities. While these hospitals face less direct competition in their
immediate service areas than would be expected in larger communities, they do
face competition from other hospitals, including larger tertiary care centers.
Although these competing hospitals may be in excess of 30 to 50 miles away,
patients in these markets may migrate to, may be referred by local physicians
to, or may be lured by incentives from managed care plans to travel to, such
distant hospitals.
Risks Associated with Acquisition Strategy and Potential Acquisitions
One element of LifePoint's business strategy is expansion through the
acquisition of acute care hospitals in growing non-urban markets. The
competition to acquire non-urban hospitals is significant, and there can be no
assurance that suitable acquisitions, for which other health care companies,
including those with greater financial resources than LifePoint, may be
competing, can be accomplished on terms favorable to LifePoint, that financing,
if necessary, can be obtained for such acquisitions or that acquired facilities
can be effectively integrated with LifePoint's operations. The consummation of
acquisitions may result in the incurrence or assumption by LifePoint of
additional indebtedness. In addition, in order to ensure the tax-free treatment
of the distribution, LifePoint is limited in the amount of stock it may issue
as consideration for acquisitions.
Acquired businesses may have unknown or contingent liabilities, including
liabilities for failure to comply with health care laws and regulations.
Although LifePoint has policies to conform the practices of acquired facilities
to its standards, and generally will seek indemnification from prospective
sellers covering these matters, there can be no assurance that LifePoint will
not become liable for past activities of acquired businesses or that any such
liabilities will not be material.
In recent years, the legislatures and attorneys general of several states
have increased their level of interest in transactions involving the sale of
hospitals by not-for-profit entities. Such heightened scrutiny may increase the
cost and difficulty or prevent the completion of transactions with not-for-
profit organizations in certain states in the future.
Geographic Concentration of Operations Could Adversely Affect LifePoint
After certain intended divestitures, six of LifePoint's remaining 20
general, acute care hospitals will be located in the Commonwealth of Kentucky,
and six of LifePoint's remaining 20 general, acute care hospitals will be
located in the state of Tennessee. After giving effect to such intended
divestitures, for the year ended December 31, 1998, 38.5% of LifePoint's
revenue was generated by LifePoint's Kentucky hospitals and 21.3% of
LifePoint's revenue was generated by LifePoint's Tennessee hospitals. Also
after giving effect to such intended divestitures, for the three months ended
March 31, 1999, 41.9% of LifePoint's revenue was generated by LifePoint's
Kentucky hospitals and 21.7% of LifePoint's revenue was generated by
LifePoint's Tennessee hospitals. Accordingly, any change in the current
demographic, economic, competitive and regulatory conditions in Kentucky or
Tennessee could have a material adverse effect on the business, financial
condition, results of operations or prospects of LifePoint.
Extensive Regulation Could Adversely Affect LifePoint
The health care industry is subject to extensive Federal, state and local
laws and regulations relating to licensure, conduct of operations, ownership of
facilities, addition of facilities and services, payment for services and
prices for services that are extremely complex and for which, in many
instances, the industry does not have
16
<PAGE>
the benefit of significant regulatory or judicial interpretation. In
particular, Medicare and Medicaid antifraud and abuse amendments, codified
under Section 1128B(b) of the Social Security Act (the "Anti-Kickback
Statute"), prohibit certain business practices and relationships related to
items or services reimbursable under Medicare, Medicaid and other Federal
health care programs, including the payment or receipt of remuneration to
induce or arrange for the referral of patients covered by a Federal or state
healthcare program. Sanctions for violating the Anti-Kickback Statute include
criminal penalties and civil sanctions, including civil money penalties and
possible exclusion from government programs such as Medicare and Medicaid.
Pursuant to the Medicare and Medicaid Patient and Program Protection Act of
1987, the United States Department of Health and Human Services ("HHS") has
issued regulations which describe some of the conduct and business
relationships immune from prosecution under the Anti-Kickback Statute. The fact
that a given business arrangement does not fall within a safe harbor does not
render the arrangement illegal. However, business arrangements of health care
service providers that fail to satisfy the applicable safe harbor criteria risk
scrutiny by enforcement authorities. Certain of the current business
arrangements of LifePoint do not qualify for a safe harbor.
The Health Insurance Portability and Accountability Act of 1996, which
became effective January 1, 1997, amends, among other things, Title XI (42
U.S.C. (S)1301 et seq.) to broaden the scope of certain fraud and abuse laws to
include all health care services, whether or not they are reimbursed under a
Federal program, and creates new enforcement mechanisms to combat fraud and
abuse, including an incentive program under which individuals can receive up to
$1,000 for providing information on Medicare fraud and abuse that leads to the
recovery of at least $100 of Medicare funds.
LifePoint provides financial incentives to recruit physicians into the
communities served by its hospitals, including loans and minimum revenue
guarantees. Although HHS has proposed a safe harbor for certain physician
recruitment, no safe harbor for physician recruitment is currently in force.
One LifePoint hospital has physician investors. LifePoint also enters into
employment agreements, independent contractor agreements, leases and other
agreements with physicians. There can be no assurance that regulatory
authorities who enforce the Anti-Kickback Statute will not determine that such
physician recruiting activities or any other arrangements of any of the
hospitals owned and operated by LifePoint violate the Anti-Kickback Statute or
other Federal laws. Such a determination could subject LifePoint to liabilities
under the Social Security Act, including criminal penalties, civil monetary
penalties and/or exclusion from participation in Medicare, Medicaid or other
Federal health care programs, any of which could have a material adverse effect
on the business, financial condition, results of operations or prospects of
LifePoint.
In addition, Section 1877 of the Social Security Act, commonly known as
the "Stark Law," was amended, effective January 1, 1995, to significantly
broaden the scope of prohibited referrals by physicians under the Medicare and
Medicaid programs to providers of designated health services with which such
physicians have ownership or certain other financial arrangements. Certain
exceptions are available for physicians maintaining an ownership interest in an
entire hospital, employment agreements, leases, physician recruitment and
certain other physician arrangements. Final implementing regulations have not
yet been adopted, and there can be no assurance that the physician arrangements
of LifePoint will be found to be in compliance with the Stark Law, as such law
ultimately may be interpreted. Many states have adopted or are considering
similar anti-kickback and physician self-referral legislation, some of which
extends beyond the scope of the Federal law to prohibit the payment or receipt
of remuneration for the referral of patients and physician self-referrals
regardless of the source of the payment for the care. Both Federal and state
government agencies have announced heightened and coordinated civil and
criminal enforcement efforts. In addition, the Office of the Inspector General
of the United States Department of Health and Human Services and the Department
of Justice have from time to time established enforcement initiatives that
focus on specific billing practices or other suspected areas of abuse. Current
initiatives include a focus on hospital billing for outpatient charges
associated with inpatient services, as well as hospital laboratory billing
practices. LifePoint is cooperating with the government agencies which are
responsible for such initiatives where such initiatives involve its hospitals.
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<PAGE>
LifePoint exercises care in structuring its arrangements with physicians
and other referral sources to comply in all material respects with applicable
laws. It is possible, however, that government officials charged with
responsibility for enforcing such laws could assert that LifePoint or certain
transactions in which it is involved, are in violation of such laws. It is also
possible that such laws ultimately could be interpreted by the courts in a
manner inconsistent with the interpretations of LifePoint.
Many states have enacted or are considering enacting laws affecting the
conversion or sale of not-for-profit hospitals. These laws, in general, include
provisions relating to state attorney general approval, advance notification
and community involvement. In addition, state attorneys general in states
without specific conversion legislation may exercise authority over these
transactions based upon existing law. In many states there has been an
increased interest in the oversight of not-for-profit conversions. The adoption
of conversion legislation and the increased review of not-for-profit hospital
conversions may limit the ability of LifePoint to acquire not-for-profit
hospitals.
Some states require prior approval for the purchase, construction and
expansion of health care facilities, based upon a state's determination of need
for additional or expanded health care facilities or services. Such
determinations, embodied in certificates of need ("CONs") issued by
governmental agencies with jurisdiction over health care facilities, may be
required for capital expenditures exceeding a prescribed amount, changes in bed
capacity or services and certain other matters. Five states in which LifePoint
currently owns hospitals, Alabama, Florida, Georgia, Kentucky and Tennessee,
have enacted CON legislation. There can be no assurance that LifePoint will be
able to obtain CONs required for expansion activities in the future or that the
failure to obtain any required CON will not have a material adverse effect on
the business, financial condition, results of operations or prospects of
LifePoint.
The laws, rules and regulations described above are complex and subject
to interpretation. In the event of a determination that LifePoint is in
violation of such laws, rules or regulations, or if further changes in the
regulatory framework occur, any such determination or changes could have a
material adverse effect on business, financial condition, results of operations
or prospects of LifePoint. See "Government Regulation and Other Factors" for a
detailed discussion of laws and regulations affecting LifePoint.
Potential Adverse Impact of Columbia/HCA Investigations and Litigation
Columbia/HCA is currently the subject of several Federal investigations
into certain of its business practices, as well as governmental investigations
by various states. Columbia/HCA is cooperating in these investigations and
understands, through written notice and other means, that it is a target in
these investigations. Given the breadth of the ongoing investigations,
Columbia/HCA expects additional subpoenas and other investigative and
prosecutorial activity to occur in the future. Columbia/HCA is the subject of a
formal order of investigation by the Commission. Columbia/HCA understands that
the Commission investigation includes the anti-fraud, periodic reporting and
internal accounting control provisions of the Federal securities laws.
According to published reports, on July 2, 1999, a federal jury in Tampa,
Florida found two Columbia/HCA employees guilty of conspiracy and making false
statements on Medicare and Champus cost reports for the years 1992 and 1993 and
on a Medicaid cost report for 1993. Both were found not guilty of obstructing a
federal auditor. One other employee was acquitted on all counts for which he
had been charged and the jury was unable to reach a verdict with respect to
another employee.
Columbia/HCA is a defendant in several qui tam actions, or actions under
a state statute brought by private parties on behalf of the United States of
America, which have been unsealed and served on Columbia/HCA. The actions
allege, in general, that Columbia/HCA and certain subsidiaries and/or
affiliated partnerships violated the False Claims Act, 31 U.S.C. (S) 3729 et
seq., for improper claims submitted to the government for reimbursement. The
lawsuits seek three times the amount of damages caused to the United States by
the submission of any Medicare or Medicaid false claims presented by the
defendants to the Federal government, civil penalties of not less than $5,000
nor more than $10,000 for each such Medicare or Medicaid
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claim, attorneys' fees and costs. To the knowledge of Columbia/HCA, the
government has intervened in three qui tam actions. Columbia/HCA is aware of
additional qui tam actions that remain under seal and believes that there may
be other sealed qui tam cases of which it is unaware.
Columbia/HCA is a defendant in a number of other suits, which allege, in
general, improper and fraudulent billing, overcharging, coding and physician
referrals, as well as other violations of law. Certain of the suits have been
conditionally certified as class actions. For a detailed discussion of such
suits, see "Government Regulation and Other Factors--Governmental Investigation
of Columbia/HCA and Related Litigation" for more information regarding such
litigation.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigation will be commenced. If Columbia/HCA is found to
have violated Federal or state laws relating to Medicare, Medicaid or similar
programs, then Columbia/HCA could be subject to substantial monetary fines,
civil and criminal penalties, and exclusion from participation in the Medicare
and Medicaid programs. Similarly, the amounts claimed in the qui tam and other
actions may be substantial, and Columbia/HCA could be subject to substantial
costs resulting from an adverse outcome of one or more of such actions. Any
such sanctions or losses could have a material adverse effect on Columbia/HCA's
financial position and results of operations.
Pursuant to the distribution agreement entered into by and among
Columbia/HCA, LifePoint and Triad, Columbia/HCA has agreed to indemnify
LifePoint and Triad in respect of any losses which they may incur as a result
of the proceedings described above. Columbia/HCA has also agreed to indemnify
LifePoint and Triad in respect of any losses which they may incur as a result
of proceedings which may be commenced by government authorities or by private
parties in the future that arise from acts, practices or omissions engaged in
prior to the distribution date and relate to the proceedings described above.
Columbia/HCA has also agreed that, in the event that any hospital owned by
LifePoint or Triad is permanently excluded from participation in the Medicare
and Medicaid programs as a result of the proceedings described above, then
Columbia/HCA will make a cash payment to LifePoint or Triad, as the case may
be, in an amount (if positive) equal to five times the excluded hospital's 1998
income from continuing operations before depreciation and amortization,
interest expense, management fees, impairment of long-lived assets, minority
interests and income taxes, as set forth on a schedule to the distribution
agreement, less the net proceeds of the sale or other disposition of the
excluded hospital. Each of LifePoint and Triad has agreed that, in connection
with the government investigations described above, it will participate with
Columbia/HCA in negotiating one or more compliance agreements setting forth
each of their agreements to comply with applicable laws and regulations. See
"Arrangements Relating to the Distribution--Distribution Agreement." If any of
such indemnified matters were successfully asserted against LifePoint or any of
its facilities, and Columbia/HCA failed to meet its indemnification
obligations, then such losses could have a material adverse effect on the
business, financial position, results of operations or prospects of LifePoint.
Columbia/HCA will not indemnify LifePoint for losses relating to any acts,
practices and omissions engaged in by LifePoint after the distribution date,
whether or not LifePoint is indemnified for similar acts, practices and
omissions occurring prior to the distribution date.
Columbia/HCA believes that the ongoing governmental investigations and
related media coverage may have had a negative effect on Columbia/HCA's results
of operations, which includes LifePoint for the periods prior to the
distribution date which are presented herein. The extent to which LifePoint may
or may not continue to be affected by the ongoing investigations of
Columbia/HCA, the initiation of additional investigations, if any, and the
related media coverage cannot be predicted. It is possible that these matters
could have a material adverse effect on the business, financial condition,
results of operations or prospects of LifePoint in future periods.
Professional Liability Risks Could Adversely Affect Results of Operations and
Cash Flow
As is typical in the health care industry, LifePoint is subject to claims
and legal actions by patients and others in the ordinary course of business.
Columbia/HCA and LifePoint intend to cooperate in the purchase of
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insurance coverage for professional and general liability risks for periods
ending on or after the distribution date. Substantially all losses in periods
prior to the distribution are insured through a wholly-owned insurance
subsidiary of Columbia/HCA and excess loss policies maintained by Columbia/HCA.
See "Arrangements Relating to the Distribution--Insurance Allocation and
Administration Agreement" for a more detailed discussion of such arrangement.
Because substantially all liability for professional and general
liability claims incurred is insured through a wholly-owned insurance
subsidiary of Columbia/HCA and excess loss policies maintained by Columbia/HCA,
and Columbia/HCA maintains the related reserve, no reserve for professional and
general liability risks is recorded on the balance sheets of LifePoint. While
the professional and general liability insurance coverage maintained for the
LifePoint business has been adequate to provide for liability claims in the
past, and the insurance coverage to be obtained for future periods is expected
to be adequate for future claims, there can be no assurance that such insurance
will be adequate.
Liability of LifePoint if the Distribution Is Taxable
On March 30, 1999, Columbia/HCA received a ruling from the IRS concerning
the United States Federal income tax consequences of the distribution. The tax
ruling provides that, because the distribution qualifies under Section 355 of
the Internal Revenue Code of 1986, the distribution generally will be tax-free
to Columbia/HCA and to Columbia/HCA's stockholders, except for any cash
received instead of fractional shares. The tax ruling is based upon the
accuracy of representations made by Columbia/HCA as to numerous factual matters
and as to the intention to take, or to refrain from taking, certain future
actions. The inaccuracy of any of those factual representations or the failure
to take the intended actions, or the taking of actions which were represented
would not be taken, could cause the IRS to revoke all or part of the tax ruling
retroactively.
If the distribution were not to qualify for tax-free treatment under
Section 355 of the Code, then, in general, additional corporate tax (which
would be substantial) would be payable by the consolidated group of which
Columbia/HCA is the common parent. Under the consolidated return rules, each
member of the consolidated group, including LifePoint, would be jointly and
severally liable for such tax liability. If the distribution did not qualify
for tax-free treatment under Section 355 of the Code, the resulting tax
liability would have a material adverse effect on the business, financial
position, results of operations or prospects of Columbia/HCA and, possibly,
also of LifePoint.
Columbia/HCA, LifePoint and Triad entered into a tax sharing and
indemnification agreement, which allocates tax liabilities among Columbia/HCA,
LifePoint and Triad and addresses certain other tax matters such as
responsibility for filing tax returns, control of and cooperation in tax
litigation, and the tax treatment of the distribution. Generally, Columbia/HCA
will be responsible for taxes that are allocable to periods prior to the
distribution date, and each of Columbia/HCA, LifePoint and Triad will be
responsible for its own tax liabilities, including its allocable share of taxes
shown on any consolidated, combined or other tax return filed by Columbia/HCA
for periods after the distribution date. The tax sharing and indemnification
agreement prohibits LifePoint and Triad from taking actions that could
jeopardize the tax treatment of either the distribution or the restructuring
that preceded the distribution, and requires LifePoint and Triad to indemnify
each other and Columbia/HCA for any taxes or other losses that result from any
such actions.
Holding Company Structure Risks
Holdings is a holding company and holds most of its assets at, and
conducts most of its operations through, direct and indirect subsidiaries. As a
holding company, the results of operations of Holdings depend on the results of
operations of its subsidiaries. Moreover, Holdings is dependent on dividends or
other intercompany transfers of funds from such subsidiaries to meet its debt
service and other obligations, including
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payment of principal and interest on the notes. The ability of Holdings'
subsidiaries to pay dividends or make
other payments or advances to Holdings will depend on their operating results
and will be subject to applicable laws and restrictions contained in agreements
governing indebtedness of such subsidiaries.
The claims of creditors of the subsidiaries of Holdings, including trade
creditors, will generally have priority as to the assets of such subsidiaries
over the claims of creditors of Holdings, including the noteholders. As of
March 31, 1999, on a pro forma basis after giving effect to the distribution
and the elimination of the facilities to be divested, the aggregate amount of
indebtedness and other obligations of Holdings' subsidiaries, including trade
payables and lease obligations, would have been approximately $274.5 million,
including the guarantees of the notes offered hereby.
Possible Lack of Year 2000 Compliance May Adversely Affect LifePoint
Until May 2006, LifePoint will continue to obtain most of its computer
applications and support from Columbia Information Systems, Inc., a wholly-
owned subsidiary of Columbia/HCA, pursuant to a computer and data processing
services agreement. Columbia Information Systems does not warrant that the
software and hardware used by it in providing services to LifePoint will be
Year 2000 ready, but Columbia Information Systems is currently making efforts
in a professional, timely and workmanlike manner that it deems reasonable to
address Year 2000 issues with respect to the software licensed to LifePoint
under the computer and data processing services agreement. Columbia Information
Systems also has undertaken to examine and remediate the software systems and
applications of LifePoint not obtained from Columbia/HCA and the non-
information technology systems, such as vendor products, medical equipment and
other related equipment with embedded chips of LifePoint to ensure that they
are Year 2000 ready. In connection with the distribution, Columbia/ HCA's
wholly owned subsidiary CHCA Management Services, L.P. and LifePoint entered
into a year 2000 professional services agreement, pursuant to which CHCA will
continue its ongoing program to inspect medical equipment at LifePoint
facilities for year 2000 readiness. Under such agreement, LifePoint remains
solely responsible for any lack of Year 2000 compliance. See "Arrangements
Relating to the Distribution--Computer and Data Processing Services Agreement"
and "--Other Agreements" for a more detailed discussion of such arrangements.
Any malfunctions in such systems, applications or equipment could have a
material adverse effect on the business, financial condition, results of
operations or prospects of LifePoint. LifePoint is not currently able to
reasonably estimate the ultimate cost to be incurred by it for the assessment,
remediation, upgrade, replacement and testing of its impacted information and
non-information technology systems. LifePoint is dependent upon Columbia/HCA in
substantially all respects for the Year 2000 readiness of their respective
information technology and non-information technology systems and for
contingency planning in respect of Year 2000-related risks. Any failure by
Columbia/HCA to adequately address such matters could have a material adverse
effect on LifePoint's businesses, financial conditions, results of operations
and prospects of LifePoint.
In addition, LifePoint has significant ongoing relationships with
government agencies, third party payers, vendors, suppliers and others that may
have computer systems with Year 2000 problems. The Health Care Financing
Administration recently announced that, due to potential Year 2000 concerns,
Medicare reimbursement updates for hospitals scheduled to take effect October
1, 1999 will be delayed until April 1, 2000, although reimbursement rates will
be adjusted to replace revenues lost due to such delay. If the fiscal
intermediaries and governmental agencies with which LifePoint transacts
business, and which are responsible for payment to LifePoint under the Medicare
and Medicaid programs, other payers, or suppliers and vendors experience
problems in Year 2000 readiness, that could have a material adverse effect on
the business, financial condition, results of operations and prospects of
LifePoint. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Impact of Year 2000 Computer Issues" for a more detailed
discussion of LifePoint's Year 2000 assessment.
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You May Not Receive A Change in Control Payment
In the event of a change in control, Holdings is required to make an
offer for cash to repurchase the notes at 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereof to the repurchase date.
However, the new credit agreement prohibits the purchase of outstanding notes
prior to repayment of the borrowings under the new credit agreement and any
exercise by the holders of the notes of their right to require Holdings to
repurchase the notes may cause an event of default under the new credit
agreement. In addition, Holdings may not have the financial resources necessary
to repurchase the notes upon a change of control. See "Description of the
Notes--Certain Covenants--Purchase of Notes Upon a Change in Control" for a
more detailed description of the change in control provision.
You May Not be Able to Sell Your Notes
There is no existing trading market for the exchange notes and such a
market may not develop. The absence of such market adversely affects the
liquidity of an investment in the exchange notes. If a market for the exchange
notes does develop, future trading prices will depend on many factors,
including, among other things, prevailing interest rates and the market for
similar securities, general economic conditions and the financial condition and
performance of, and prospects for, LifePoint. LifePoint does not intend to
apply for listing of the exchange notes on any securities exchange or for
quotation through any over-the-counter market.
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The old notes were originally sold to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., Fleet
Securities, Inc., Scotia Capital Markets (USA) Inc. and SunTrust Equitable
Securities Corporation as initial purchasers in a private offering by
Healthtrust and then assumed by LifePoint and then in turn by our company on
May 11, 1999. In connection with the private offering of the notes, our
company, the guarantors and the initial purchasers entered into a registration
rights agreement in which we and the guarantors agreed to:
(1) use our reasonable best efforts to file a registration
statement for the exchange notes within 90 days after the issue date of
the old notes;
(2) use our reasonable best efforts to cause the registration
statement to become effective within 180 days after the issue date of
the old notes; and
(3) promptly upon the effectiveness of the registration statement,
offer to the holders of the old notes the opportunity to exchange their
old notes for a like principal amount of exchange notes, and to hold
such exchange offer open for at least 30 days after the date notice of
the exchange offer is mailed to holders.
The exchange notes will be issued without a restrictive legend and may be
reoffered and resold by the holder without restrictions or limitations under
the Securities Act, except as described below. We have agreed in the
registration rights agreement to use our reasonable best efforts to complete
the exchange offer and issue the exchange notes within 30 business days after
the registration statement is declared effective. This exchange offer is
intended to satisfy our exchange offer obligations under the registration
rights agreement.
For each old note surrendered to us pursuant to the exchange offer, the
holder of such old note will receive an exchange note having a principal amount
equal to that of the surrendered old note. The term "holder" with respect to
the exchange offer means any person in whose name old notes are registered on
our books or any other person who has obtained a properly completed bond power
from the registered holder or any person whose old notes are held of record by
The Depository Trust Company ("DTC") who desires to deliver such old notes by
book-entry transfer through DTC.
Under existing interpretations of the staff of the Commission contained
in several no-action letters to third parties, the exchange notes, including
the related guarantees, would in general be freely transferable by holders
thereof after the exchange offer without further registration under the
Securities Act. However any purchaser of old notes who is either an "affiliate"
of our company within the meaning of Rule 405 of the Securities Act or who
intends to participate in the exchange offer for the purpose of distributing
the exchange notes:
(1) will not be able to tender its old notes in the exchange
offer,
(2) will not be able to rely on the interpretations of the staff
of the Commission, and
(3) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or
transfer of the old notes, unless such sale or transfer is made pursuant
to an exemption from such requirements.
Each holder that wishes to exchange its old notes for exchange notes will
be required to represent in a letter of transmittal that:
. any exchange notes received by it will be acquired in the ordinary
course of its business,
. it has no arrangement or understanding with any person to participate
in a distribution of the exchange notes in violation of the
Securities Act,
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. it is not an affiliate of our company,
. if such holder is not a broker-dealer, that it is not engaged in, and
does not intend to engage in a distribution of the exchange notes,
and
. if such holder is a broker-dealer (a "Participating Broker-Dealer)
that will receive exchange notes for its own account in exchange for
old notes that are acquired as a result of market-making or other
trading activities, that it will deliver a prospectus in connection
with any resale of such exchange notes.
The Commission has taken the position that Participating Broker-Dealers
may fulfill their prospectus delivery requirements with respect to resales of
the exchange notes with the prospectus contained in the registration statement.
Each of our company and the guarantors have agreed in the registration rights
agreement that it will make available, during the period required by the
Securities Act, a prospectus meeting the requirements of the Securities Act for
use by Participating Broker-Dealers and other persons, if any, with similar
prospectus delivery requirements for use in connection with any resale of
exchange notes. We will keep the registration statement effective for a period
of 180 days after the exchange offer has been completed in order to permit
resales of exchange notes acquired by broker-dealers in after-market
transactions.
However, the Commission has recently proposed that its interpretations
referred to above be repealed. We cannot predict whether the Commission will
act on this proposal prior to the completion of this exchange offer. If those
interpretations are repealed prior to completion of this exchange offer,
holders of old notes will not be able to receive exchange notes pursuant to an
exchange offer. Rather, as described below, we and the guarantors will be
required to register the notes pursuant to a shelf registration statement in
connection with resales by holders of the notes. Holders of notes will be
required to deliver a prospectus to purchasers and will be subject to certain
of the civil liability provisions under the Securities Act in connection with
such resales.
If,
(1) prior to completion of the exchange offer, existing Commission
interpretations are changed such that the exchange notes would not in
general be freely transferable under the Securities Act,
(2) the exchange offer is not completed within 220 days following
the issue date of the old notes,
(3) any holder of notes notifies our company prior to the 20th day
following completion of the exchange offer that:
(a) due to a change in law or policy such holder is not
eligible to participate in the exchange offer;
(b) due to a change in law or policy such holder may not
resell the exchange notes acquired by it in the exchange offer to
the public without a prospectus, and the prospectus contained in
the exchange offer registration statement is not appropriate or
available for such resales by such holder;
(c) such holder is a broker-dealer and owns notes acquired
directly from us or an affiliate of our company; or
(4) the holders of a majority of the notes may not resell the
exchange notes they acquired in the exchange offer without restriction
under the Securities Act and without restriction under applicable blue
sky or state securities laws,
then, in each case, our company and the guarantors will, instead of, or in the
case of clause (3) above, in addition to, completing the exchange offer, file
and use our reasonable best efforts to cause a registration
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statement under the Securities Act relating to a shelf registration of the
notes for resale by holders (the "Resale Registration") to become effective
and to remain effective until the earlier of two years following the effective
date of the shelf registration statement or such time as all securities
covered by the shelf registration statement have been sold pursuant to the
shelf registration statement.
Our company and the guarantors will, in the event of a Resale
Registration,
(1) provide to the holders of the applicable notes copies of the
prospectus that is a part of the shelf registration statement filed in
connection with the Resale Registration,
(2) notify each such holder when the shelf registration statement
for the applicable notes has become effective, and
(3) take certain other actions as are required to permit
unrestricted resales of the notes.
A holder that sells its notes pursuant to the Resale Registration
(1) will be required to be named as a selling security holder in
the related prospectus and to deliver a prospectus to the purchaser,
(2) will be subject to certain of the civil liability provisions
under the Securities Act in connection with such sales, and
(3) will be bound by the provisions of the registration rights
agreement that are applicable to such holder, including certain
indemnification obligations.
The old notes provide, among other things, that if
(1) our company and the guarantors have not filed any of the
registration statements required by the registration rights agreement on
or prior to the date specified for such filing;
(2) any of such registration statements is not declared effective
on or prior to the date specified for such effectiveness;
(3) the exchange offer is not consummated within 30 business days
after the effective date of the exchange offer registration statement;
or
(4) the shelf registration statement or the exchange offer
registration statement is declared effective but thereafter ceases to be
effective, except as specifically permitted therein, without being
succeeded by an additional registration which was filed and declared
effective (any such event referred to in clauses (1)-(4), a
"Registration Default"),
then, from the date that a Registration Default or Defaults occurs through,
but excluding the date when all Registration Defaults are cured, the interest
rate on the applicable notes will
(1) increase by .25% for the first 90-day period or portion
thereof immediately following the occurrence of such Registration
Default or Defaults, and
(2) thereafter increase by an additional .25% at the beginning of
each subsequent 90-day period, or portion thereof, while a Registration
Default or Defaults is continuing.
The additional interest on any affected old notes may not exceed 1.0% in
the aggregate. Following the cure of all Registration Defaults, the interest
rate on the notes will revert to the original rate. Additional interest will
not accrue and be payable as set forth above during any period when a shelf
registration statement is permitted to be suspended under the registration
rights agreement.
The above summary highlights the material provisions of the registration
rights agreement, but does not restate that agreement in its entirety. We urge
you to review all of the provisions of the registration rights
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agreement, because it, and not this description, defines your rights as holders
to exchange your old notes for registered notes. A copy of the registration
rights agreement has previously been filed with the Commission by LifePoint,
and is incorporated by reference to the registration statement of which this
prospectus forms a part.
Following the consummation of the exchange offer, holders of old notes
who were eligible to participate in the exchange offer but who did not tender
their old notes will not have any further registration rights, and the old
notes will continue to be subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for the old notes could be adversely
affected.
Terms of the Exchange Offer
This prospectus and the accompanying letter of transmittal contain the
terms and conditions for the exchange offer. Upon the terms and subject to the
conditions set forth in this prospectus and in the accompanying letter of
transmittal, we will accept for exchange all old notes which are properly
tendered and not withdrawn on or prior to 5:00 p.m., New York City time, on the
expiration date. After authentication of the exchange notes by the trustee or
an authentication agent, we will issue and deliver $1,000 principal amount of
exchange notes in exchange for each $1,000 principal amount of outstanding old
notes accepted in the exchange offer. Holders may tender some or all of their
old notes in the exchange offer in denominations of $1,000 and integral
multiples thereof.
The form and terms of the exchange notes are identical in all material
respects to the form and terms of the old notes, except that
(1) the offering of the exchange notes has been registered under the
Securities Act,
(2) the exchange notes will not be subject to transfer restrictions or
registration rights, and
(3) certain provisions relating to an increase in the stated interest
rate on the old notes provided for under certain circumstances will be
eliminated.
The exchange notes will evidence the same debt as the old notes. The
exchange notes will be issued under and entitled to the benefits of the
indenture.
As of the date of this prospectus, $150,000,000 aggregate principal
amount of the old notes is outstanding. In connection with the issuance of the
old notes, arrangements were made for the old notes to be issued and
transferable in book-entry form through the facilities of DTC, acting as a
depositary. The exchange notes will also be issuable and transferable in book-
entry form through DTC.
This prospectus, together with the accompanying letter of transmittal, is
initially being sent to all registered holders of the old notes as of the close
of business on , 1999. The exchange offer is not conditioned upon any
minimum aggregate principal amount of old notes being tendered. However, our
obligation to accept old notes for exchange pursuant to the exchange offer is
subject to certain customary conditions that we describe under "--Conditions to
the Exchange Offer" below.
We shall be deemed to have accepted validly tendered old notes when, as
and if we have given oral or written notice thereof to the exchange agent. The
exchange agent will act as agent for the tendering holders for the purpose of
receiving exchange notes from us and delivering exchange notes to such holders.
If any tendered old notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted old notes will be returned, at our cost,
to the tendering holder thereof as promptly as practicable after the expiration
date.
Holders who tender old notes in the exchange offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
letter of transmittal, transfer taxes with respect to the exchange of
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old notes pursuant to the exchange offer. We will pay all charges and expenses,
other than certain applicable taxes, in connection with the exchange offer. See
"-- Solicitation of Tenders; Fees and Expenses" for more detailed information
regarding the expenses of the exchange offer.
By executing or otherwise becoming bound by the letter of transmittal,
you will be making the representations described under "--Procedures for
Tendering" below.
Expiration Date; Extensions; Amendments
. The term "expiration date" shall mean 5:00 p.m., New York City time,
on , 1999, unless we, in our sole discretion, extend the exchange
offer, in which case the term "expiration date" shall mean the latest
date to which the exchange offer is extended. We may extend the
exchange offer at any time and from time to time by giving oral or
written notice to the exchange agent and by timely public
announcement.
. We expressly reserve the right, at any time, to extend the period of
time during which the exchange offer is open, and thereby delay
acceptance of any old notes, by giving oral or written notice of such
extension to the exchange agent and notice of such extension to the
holders as described below. During any such extension, all old notes
previously tendered will remain subject to the exchange offer and may
be accepted for exchange by us. Any old notes not accepted for
exchange for any reason will be returned without expense to the
tendering holder thereof as promptly as practicable after the
expiration or termination of the exchange offer.
. We expressly reserve the right to amend or terminate the exchange
offer, and not to accept for exchange any old notes that we have not
yet accepted for exchange, if any of the conditions set forth herein
under "--Conditions to the Exchange Offer" shall have occurred and
shall not have been waived by us, if such conditions are permitted to
be waived by our company.
. We will give oral or written notice of any such extension, amendment,
termination or non-acceptance described above to holders of the old
notes as promptly as practicable. If the exchange offer is amended in
a manner determined by us to constitute a material change, we will
promptly disclose such amendment in a manner reasonably calculated to
inform the holders of such amendment and we will extend the exchange
offer to the extent required by law.
. Without limiting the manner in which we may choose to make public
announcements of any extension, amendment, termination or non-
acceptance of the exchange offer, and subject to applicable law, we
will have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a
timely release to the Dow Jones News Service.
Interest on the Exchange Notes
Interest on the exchange notes will accrue from the last interest payment
date on which interest was paid on the old notes surrendered in exchange
therefor or, if no interest has been paid on the old notes, from the issue date
of the old notes. Interest on the exchange notes will be payable semi-annually
on May 15 and November 15 of each year, commencing November 15, 1999.
Procedures for Tendering
What to submit and how
Each holder of old notes wishing to accept the exchange offer must
complete, sign and date the letter of transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and therein. Each holder
shall then mail or otherwise deliver such letter of transmittal, or such
facsimile, together with the old notes to be exchanged and any other required
documentation, to Citibank, N.A., as exchange agent, at the
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address set forth below under "--Exchange Agent" on or prior to the expiration
date. A holder may also effect a tender of old notes pursuant to the procedures
for book-entry transfer as provided for herein and therein. By executing the
letter of transmittal, each holder will represent to our company that, among
other things,
(1) the exchange notes acquired pursuant to the exchange offer are
being acquired in the ordinary course of business of the person
receiving such exchange notes, whether or not such person is the holder,
(2) that neither the holder nor any such other person has any
arrangement or understanding with any person to participate in the
distribution of such exchange notes, and
(3) that neither the holder nor any such other person is an
"affiliate," as defined in Rule 405 under the Securities Act, of our
company.
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the old notes by
causing DTC to transfer such old notes into the exchange agent's account in
accordance with DTC's procedure for such transfer. Although delivery of old
notes may be effected through book-entry transfer into the exchange agent's
account at DTC, the letter of transmittal, or facsimile thereof, with any
required signature guarantees and any other required documents, must, in any
case, be transmitted to and received by the exchange agent at its address set
forth herein under "--Exchange Agent" prior to 5:00 p.m., New York City time,
on the expiration date. Delivery of documents to DTC in accordance with its
procedures does not constitute delivery to the exchange agent.
Only a holder may tender its old notes in the exchange offer. To tender
in the exchange offer, a holder must:
(1) complete, sign and date the letter of transmittal or a
facsimile thereof,
(2) have the signatures thereof guaranteed if required by the
letter of transmittal, and
(3) unless such tender is being effected pursuant to the procedure
for book-entry transfer, mail or otherwise deliver such letter of
transmittal or such facsimile, together with the old notes and other
required documents, to the exchange agent, prior to 5:00 p.m., New York
City time, on the expiration date.
The tender by a holder will constitute an agreement between such holder,
our company and the exchange agent in accordance with the terms and subject to
the conditions set forth herein and in the letter of transmittal. If less than
all of the old notes are tendered, a tendering holder should fill in the amount
of old notes being tendered in the appropriate box on the letter of
transmittal. The entire amount of old notes delivered to the exchange agent
will be deemed to have been tendered unless otherwise indicated.
The method of delivery of old notes and the letter of transmittal and all
other required documents to the exchange agent is at the election and risk of
the holders. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to ensure delivery to the exchange agent prior to the expiration date.
No letter of transmittal or old notes should be sent to the company. Holders
may also request that their respective brokers, dealers, commercial banks,
trust companies or nominees effect such tender for holders, in each case as set
forth herein and in the letter of transmittal.
Any beneficial owner whose old notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the letter of transmittal and delivering his old notes, either make
appropriate arrangements to register ownership of the old notes in such owner's
name or
28
<PAGE>
obtain a properly completed bond power from the registered holder. The transfer
of record ownership may take considerable time.
Required representations in letter of transmittal
The letter of transmittal will include representations to our company
that, among other things,
(1) the exchange notes acquired pursuant to the exchange offer are being
acquired in the ordinary course of business of the person receiving such
exchange notes, whether or not such person is the holder,
(2) neither the holder nor any such other person is engaged in, intends
to engage in or has any arrangement or understanding with any person to
participate in the distribution of such exchange notes,
(3) neither the holder nor any such other person is an "affiliate," as
defined in Rule 405 under the Securities Act, of our company, and
(4) if the tendering holder is a broker or dealer as defined in the
Exchange Act, then
(a) it acquired the old notes for its own account as a
result of market-making activities or other trading activities,
and
(b) it has not entered into any arrangement or understanding
with our company or any "affiliate" of our company within the
meaning of Rule 405 under the Securities Act to distribute the
exchange notes to be received in the exchange offer.
In the case of a broker-dealer that receives exchange notes for its own
account in exchange for old notes which were acquired by it as a result of
market-making or other trading activities, the letter of transmittal will also
include an acknowledgement that the broker-dealer will deliver a copy of this
prospectus in connection with the resale by it of exchange notes received
pursuant to the exchange offer; however, by so acknowledging and by delivering
a prospectus, such holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
How to sign your letter of transmittal and other documents
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (each an "Eligible Institution"), unless the old
notes tendered pursuant thereto are tendered
(1) by a registered holder who has not completed the box entitled
"Special Registration Instructions" or "Special Delivery Instruction" of the
letter of transmittal, or
(2) for the account of an Eligible Institution.
If the letter of transmittal is signed by a person other than the
registered holder of old notes, such old notes must be endorsed or accompanied
by appropriate bond powers which authorize such person to tender the old notes
on behalf of the registered holder, in either case signed as the name of the
registered holder or holders appears on the old notes. If the letter of
transmittal or any old notes or bond powers are signed or endorsed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with such
letter of transmittal.
Important rules concerning the exchange offer
You should note that:
. All questions as to the validity, form, eligibility, including time
of receipt, acceptance and withdrawal of the tendered old notes will
be determined by us in our sole discretion, which determination will
be final and binding.
29
<PAGE>
. We reserve the absolute right to reject any and all old notes not
properly tendered or any old notes the acceptance of which would, in
our judgment or the judgment of our counsel, would be unlawful.
. We also reserve the absolute right to waive any irregularities or
conditions of tender as to particular old notes. Our company's
interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be
final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of old notes must be cured
within such time as we shall determine.
. Although we intend to notify holders of defects or irregularities
with respect to any tender of old notes, neither our company, the
exchange agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to tenders of
old notes, nor shall any of them incur any liability for failure to
give such notification.
. Tenders of old notes will not be deemed to have been made until such
irregularities have been cured or waived. Any old notes received by
the exchange agent that we determine are not properly tendered or the
tender of which is otherwise rejected by us and as to which the
defects or irregularities have not been cured or waived by us will be
returned by the exchange agent to the tendering holder unless
otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.
Book-Entry Transfer
The exchange agent will make a request promptly after the date of this
prospectus to establish accounts with respect to the old notes at the DTC for
the purpose of facilitating the exchange offer. Any financial institution that
is a participant in the DTC's system may make book-entry delivery of old notes
by causing the DTC to transfer such old notes into the exchange agent's account
with respect to the old notes in accordance with DTC's Automated Tender Offer
Program procedures for such transfer. However, the exchange for the old notes
so tendered will only be made after timely confirmation of such book-entry
transfer of old notes into the exchange agent's account, and timely receipt by
the exchange agent of an agent's message and any other documents required by
the letter of transmittal. The term "agent's message" means a message,
transmitted by DTC and received by the exchange agent and forming a part of the
confirmation of a book-entry transfer, which states that DTC has received an
express acknowledgment from a participant that is tendering old notes that such
participant has received the letter of transmittal and agrees to be bound by
the terms of the letter of transmittal, and that we may enforce such agreement
against the participant.
Although delivery of old notes may be effected through book-entry
transfer into the exchange agent's account at DTC, an appropriate letter of
transmittal properly completed and duly executed with any required signature
guarantee and all other required documents must in each case be transmitted to
and received or confirmed by the exchange agent at its address set forth below
on or prior to the expiration date, or you must comply with the guaranteed
delivery procedures described below. Delivery of documents to DTC does not
constitute delivery to the exchange agent.
Guaranteed Delivery Procedures
If you are a registered holder of old notes and you wish to tender such
old notes but your old notes are not immediately available, or time will not
permit your old notes or other required documents to reach the exchange agent
before the expiration date, or the procedure for book-entry transfer cannot be
completed on a timely basis, you may effect a tender if:
(1) the tender is made through an Eligible Institution;
30
<PAGE>
(2) prior to the expiration date, the exchange agent receives from
such Eligible Institution a properly completed and duly executed notice
of guaranteed delivery, by facsimile transmittal, mail or hand delivery
(a) stating the name and address of the holder, the
certificate number or numbers of such holder's old notes and the
principal amount of such old notes tendered,
(b) stating that the tender is being made thereby, and
(c) guaranteeing that, within three New York Stock Exchange
trading days after the expiration date, the letter of transmittal
or facsimile thereof, together with the certificate(s)
representing the old notes to be tendered in proper form for
transfer, or confirmation of a book-entry transfer into the
exchange agent's account at DTC of old notes delivered
electronically, and any other documents required by the letter of
transmittal, will be deposited by the Eligible Institution with
the exchange agent; and
(3) such properly completed and executed letter of transmittal, or
facsimile thereof, together with the certificate(s) representing all
tendered old notes in proper form for transfer, or confirmation of a
book-entry transfer into the exchange agent's account at DTC of old
notes delivered electronically and all other documents required by the
letter of transmittal are received by the exchange agent within three
NYSE trading days after the expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will
be sent to holders who wish to tender their old notes according to the
guaranteed delivery procedures set forth above.
Withdrawal of Tenders
Except as otherwise provided herein, tenders of old notes may be
withdrawn at any time prior to 5:00 p.m. New York City time, on the expiration
date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be received by the exchange agent at its address set
forth herein prior to 5:00 p.m., New York City time, on the expiration date.
Any such notice of withdrawal must::
. specify the name of the person having deposited the old notes to be
withdrawn (the "Depositor"),
. identify the old notes to be withdrawn, including the certificate
number or number and principal amount of such old notes or, in the
case of old notes transferred by book-entry transfer, the name and
number of the account at DTC to be credited,
. be signed by the Depositor in the same manner as the original
signature on the letter of transmittal by which such old notes were
tendered, including any required signature guarantee, or be
accompanied by documents of transfer sufficient to permit the trustee
with respect to the old notes to register the transfer of such old
notes into the name of the Depositor withdrawing the tender, and
. specify the name in which any such old notes are to be registered, if
different from that of the Depositor.
Please note that all questions as to the validity, form and eligibility,
including time of receipt, of such withdrawal notices will be determined by us,
and our determination shall be final and binding on all parties. Any old notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the exchange offer, and no exchange notes will be issued with respect thereto
unless the old notes so withdrawn are validly retendered. Properly withdrawn
old notes may be retendered by following one of the procedures described above
under "--Procedures for Tendering" at any time prior to the expiration date.
31
<PAGE>
Conditions to the Exchange Offer
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or to issue exchange notes in exchange for,
any old notes, and may terminate or amend the exchange offer as provided herein
before the acceptance of such old notes if, in our company's judgment, any of
the following conditions has occurred or exists or has not been satisfied:
(1) that the exchange offer, or the making of any exchange by a
holder, violates applicable interpretation of the staff of the
Commission,
(2) that any action or proceeding shall have been instituted or
threatened in any court or by or before any governmental agency or body
with respect to the exchange offer, or
(3) that there has been proposed, adopted or enacted any law,
statute, rule or regulation that, in the sole judgment of our company,
might materially impair our ability to proceed with the exchange offer.
If we determine that we may terminate the exchange offer for any of the
reasons set forth above, we may
(1) refuse to accept any old notes and return any old notes that
have been tendered to the holders thereof,
(2) extend the exchange offer and retain all old notes tendered
prior to the expiration date of the exchange offer, subject to the
rights of such holders of tendered old notes to withdraw their tendered
old notes, or
(3) waive such termination event with respect to the exchange
offer and accept all properly tendered old notes that have not been
withdrawn. If such waiver constitutes a material change in the exchange
offer, we will disclose such change by means of a supplement to this
prospectus that will be distributed to each registered holder, and we
will extend the exchange offer for a period of five to ten business
days, depending upon the significance of the waiver and the manner of
disclosure to the registered holders, if the exchange offer would
otherwise expire during such period.
The above conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to such condition. Our failure at
any time to exercise the foregoing rights shall not be deemed to be a waiver by
us of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
Exchange Agent
Citibank, N.A., the trustee under the indenture, has been appointed as
exchange agent for the exchange offer. All executed letters of transmittal
should be directed to the exchange agent at one of the addresses set forth
below. In such capacity, the exchange agent has no fiduciary duties and will be
acting solely on the basis of directions of our company. Questions, requests
for assistance and requests for additional copies of this prospectus or of the
letter of transmittal should be directed to the exchange agent addressed as
follows:
By Courier: Citibank, N.A.
915 Broadway
5th Floor
New York, NY 10010
By Mail: Citibank, N.A.
P.O. Box 685
Old Chelsea Station
New York, New York 10113
32
<PAGE>
By Hand Delivery:
Citibank, N.A.
Corporate Trust Window
111 Wall Street, 5th Floor
New York, New York 10043
Facsimile for Eligible Institutions:
(212) 505-2248
Attention: Customer Service
To Confirm by Telephone: (800) 270-0808
Delivery to an address or facsimile number other than those listed above
will not constitute a valid delivery.
Solicitation of Tenders; Fees and Expenses
We will pay all expenses of soliciting tenders pursuant to the exchange
offer. The principal solicitation pursuant to the exchange offer is being made
by mail. Additional solicitations may be made by officers and regular employees
of our company and our affiliates in person, by telegraph, telephone or
telecopier.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker, dealers or other persons
soliciting acceptances of the exchange offer. We will, however, pay the
exchange agent reasonable and customary fees for its services and will
reimburse the exchange agent for its reasonable out-of-pocket costs and
expenses in connection therewith and will indemnify the exchange agent for all
losses and claims incurred by it as a result of the exchange offer.
We may also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this prospectus, letters of transmittal and related
documents to the beneficial owners of the old notes and in handling or
forwarding tenders for exchange.
The expenses to be incurred in connection with the exchange offer,
including fees and expenses of the exchange agent and trustee and accounting
and legal fees and printing costs, will be paid by our company.
We will pay all transfer taxes, if any, applicable to the exchange of old
notes pursuant to the exchange offer. If, however, certificates representing
exchange notes or old notes for principal amounts not tendered or accepted for
exchange are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the old notes tendered, or
if tendered old notes are registered in the name of any person other than the
person signing the letter of transmittal, or if the transfer tax is imposed for
any reason other than the exchange of old notes pursuant to the exchange offer,
then the amount of any such transfer taxes, whether imposed on the registered
holder or any other persons, will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the letter of transmittal, the amount of such transfer taxes
will be billed by us directly to such tendering holder.
Accounting Treatment
The exchange notes will be recorded at the same carrying value as the old
notes, as reflected in our accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by us
as a result of the consummation of the exchange offer. The expenses of the
exchange offer will be amortized by us over the term of the exchange notes.
33
<PAGE>
Consequences of Failure to Exchange
As a result of the making of, and upon acceptance for exchange of all
validly tendered old notes pursuant to the terms of, this exchange offer, we
will have fulfilled a covenant contained in the registration rights agreement.
Holders of the old notes who do not tender their old notes in the exchange
offer will continue to hold such old notes and will be entitled to all the
rights, and subject to the limitations applicable thereto, under the indenture
and the registration rights agreement, except for any such rights under the
registration rights agreement that by their terms terminate or cease to have
further effect as a result of the making of this exchange offer. All
untendered old notes will continue to be subject to the restrictions on
transfer set forth in the Indenture. Accordingly, such old notes may be resold
only:
(1) to our company,
(2) pursuant to a registration statement which has been declared
effective under the Securities Act,
(3) in the United States to qualified institutional buyers within the
meaning of Rule 144A in reliance upon the exemption from the registration
requirements of the Securities Act provided by Rule 144A,
(4) in the United States to Institutional Accredited Investors, as
defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities
Act, in transactions exempt from the registration requirements of the
Securities Act,
(5) outside the United States in transactions complying with the
provisions of Regulation S under the Securities Act, or
(6) pursuant to any other available exemption from the registration
requirements under the Securities Act.
To the extent that old notes are tendered and accepted in the exchange
offer, the liquidity of the trading market for untendered old notes could be
adversely affected.
34
<PAGE>
USE OF PROCEEDS
The exchange offer is intended to satisfy certain of our obligations
under the registration rights agreement. We will not receive any cash proceeds
from the exchange offer.
CAPITALIZATION
The following table sets forth the capitalization of LifePoint as of
March 31, 1999, and pro forma to reflect the private offering of the notes, the
distribution and the related assumption of debt by Holdings and the elimination
of facilities to be divested by LifePoint. This table should be read in
conjunction with the Unaudited Pro Forma Condensed Combined Financial
Information and the related notes, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," as well as the Combined
Financial Statements of LifePoint and the related notes appearing elsewhere in
this prospectus.
<TABLE>
<CAPTION>
As of March 31, 1999
--------------------
Actual Pro Forma
---------- ------------
(Dollars in millions)
<S> <C> <C>
Long term debt including amounts due within one year:
New credit agreement............................... $ -- $ 110.0
Notes offered hereby............................... -- 150.0
Intercompany balances payable to Columbia/HCA...... 188.0 --
Other.............................................. 0.6 0.6
---------- ----------
Total long-term debt (including amounts due
within one year)................................ 188.6 260.6
---------- ----------
Stockholders' equity:
Equity, investments by Columbia/HCA................ 122.7 --
Common stock, par value $0.01 per share, 90 million
shares authorized; 30 million shares issued and
outstanding on a pro forma basis.................. -- 0.3
Capital in excess of par value..................... -- 48.5
---------- ----------
Total stockholders' equity....................... 122.7 48.8(a)
---------- ----------
Total capitalization............................. $ 311.3 $ 309.4
========== ==========
</TABLE>
- --------
(a) Three of LifePoint's hospitals are held for sale. Any proceeds from the
sale of these facilities, which are expected to be used to increase cash or
reduce debt, are not reflected in the pro forma balances included above.
The pro forma stockholders' equity balance has been reduced by $28.8
million, the amount equal to the net book value of the three hospitals
currently held for sale.
35
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth selected historical financial data of
LifePoint for each of the fiscal years in the five year period ended December
31, 1998 and for the three months ended March 31, 1998 and 1999. You should
read this table together with the Combined Financial Statement and related
notes included elsewhere in this prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The selected financial data at December 31, 1994, 1995 and 1996 and for
the years ended December 31, 1994 and 1995 has been derived from unaudited
financial statements. The selected financial data for the three months ended
March 31, 1998 and 1999 is unaudited, but in the opinion of management,
reflects all adjustments necessary for a fair presentation of such information.
Such adjustments are of a recurring nature.
Operating results for the three months ended March 31, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1999.
36
<PAGE>
<TABLE>
<CAPTION>
Three Months
Ended
Years Ended December 31, March 31,
------------------------------------------------------- ----------------
1994 1995 1996 1997 1998 1998 1999
--------- --------- --------- ---------- ---------- ------- -------
(Dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Revenues................ $ 350.1 $ 395.8 $ 464.0 $ 487.6 $ 498.4 $130.0 $134.2
Salaries and benefits... 141.1 158.1 175.2 196.6 220.8 55.0 57.1
Supplies................ 44.4 48.8 50.9 55.0 62.0 16.0 16.4
Other operating
expenses............... 75.7 83.3 99.3 119.5 117.2 29.3 28.5
Provision for doubtful
accounts............... 24.6 23.2 28.0 34.5 41.6 9.9 10.3
Depreciation and
amortization........... 17.6 20.3 23.5 27.4 28.3 6.6 7.5
Interest expense
allocated from
Columbia/HCA........... 13.5 11.3 14.1 15.4 19.1 4.6 4.7
Management fees
allocated from
Columbia/HCA........... 9.2 8.1 6.2 8.2 8.9 2.3 2.4
Impairment of long-lived
assets................. -- -- -- -- 26.1 -- --
--------- --------- --------- ---------- ---------- ------- -------
326.1 353.1 397.2 456.6 524.0 123.7 126.9
--------- --------- --------- ---------- ---------- ------- -------
Income (loss) from
continuing operations
before minority
interests and
income taxes (benefit).. 24.0 42.7 66.8 31.0 (25.6) 6.3 7.3
Minority interests in
earnings of
consolidated entities.. -- -- 1.2 2.2 1.9 0.6 0.4
--------- --------- --------- ---------- ---------- ------- -------
Income (loss) from
continuing operations
before income taxes
(benefit).............. 24.0 42.7 65.6 28.8 (27.5) 5.7 6.9
Provision for income
taxes (benefit)........ 9.6 17.1 26.3 11.7 (9.8) 2.3 2.9
--------- --------- --------- ---------- ---------- ------- -------
Income (loss) from
continuing
operations(a).......... $ 14.4 $ 25.6 $ 39.3 $ 17.1 $ (17.7) $ 3.4 $ 4.0
========= ========= ========= ========== ========== ======= =======
Net income (loss)(a).... $ 15.9 $ 27.4 $ 41.2 $ 12.5 $ (21.8) $ 1.6 $ 4.0
========= ========= ========= ========== ========== ======= =======
Basic earnings (loss)
per share:
Income (loss) from
continuing
operations(a)........ $ 0.48 $ 0.85 $ 1.31 $ 0.57 $ (0.59) $ 0.11 $ 0.13
Net Income (loss)(a).. $ 0.53 $ 0.91 $ 1.37 $ 0.41 $ (0.73) $ 0.05 $ 0.13
Shares used in
computing basic
earnings (loss) per
share (in millions).. 30.0 30.0 30.0 30.0 30.0 29.9 29.9
Diluted earnings (loss)
per share:
Income (loss) from
continuing
operations(a)........ $ 0.47 $ 0.84 $ 1.30 $ 0.57 $ (0.59) $ 0.11 $ 0.13
Net income (loss)(a).. $ 0.52 $ 0.90 $ 1.36 $ 0.41 $ (0.73) $ 0.05 $ 0.13
Shares used in
computing diluted
earnings (loss) per
share (in millions).. 30.4 30.4 30.3 30.2 30.0 30.0 30.2
Financial Position:
Assets.................. $ 312.3 $ 324.5 $ 376.0 $ 397.9 $ 355.0 $ 402.5 $ 381.4
Long-term debt,
including amounts due
within one year........ 1.7 2.1 1.6 1.6 0.6 0.7 0.6
Intercompany balances
payable to
Columbia/HCA........... 218.2 181.3 176.3 182.5 167.6 186.1 188.0
Working capital......... 19.7 24.4 39.0 41.1 26.9 47.9 40.8
Capital expenditures.... 34.1 28.6 53.4 51.8 29.3 8.4 14.7
Other Operating Data:
EBITDA(b)............... 66.3 82.4 110.6 82.0 56.8 19.8 21.9
Number of hospitals at
end of period.......... 20 20 22 22 23 23 23
Number of licensed beds
at end of period(c).... 1,843 1,881 2,074 2,080 2,169 2,136 2,169
Weighted average
licensed beds(d)....... 1,783 1,862 2,060 2,078 2,127 2,136 2,169
Admissions(e)........... 52,681 54,549 59,381 60,487 62,264 16,842 18,051
Equivalent
admissions(f).......... 81,708 88,915 98,869 105,126 109,336 28,412 30,741
Average length of stay
(days)(g).............. 4.9 4.8 4.7 4.4 4.4 4.6 4.3
Average daily
census(h).............. 713 713 755 733 742 853 863
Occupancy rate(i)....... 40% 38% 37% 35% 35% 40% 40%
Ratio of earnings to
fixed charges(j)....... 2.6x 4.3x 5.1x 2.8x -- 2.2x 2.4x
</TABLE>
37
<PAGE>
- --------
(a) Includes charge related to impairment of long-lived assets of $26.1
million ($15.9 million after-tax) for the year ended December 31, 1998.
(b) EBITDA is defined as income from continuing operations before depreciation
and amortization, interest expense, management fees, impairment of long-
lived assets, minority interests in earnings of consolidated entities and
income taxes. EBITDA is commonly used as an analytical indicator within
the health care industry, and also serves as a measure of leverage
capacity and debt service ability. EBITDA should not be considered as a
measure of financial performance under generally accepted accounting
principles, and the items excluded from EBITDA are significant components
in understanding and assessing financial performance. EBITDA should not be
considered in isolation or as an alternative to net income, cash flows
generated by operating, investing or financing activities or other
financial statement data presented in the combined financial statements as
an indicator of financial performance or liquidity. Because EBITDA is not
a measurement determined in accordance with generally accepted accounting
principles and is thus susceptible to varying calculations, EBITDA as
presented may not be comparable to other similarly titled measures of
other companies.
(c) Licensed beds are those beds for which a facility has been granted
approval to operate from the applicable state licensing agency.
(d) Represents the average number of licensed beds weighted based on periods
owned.
(e) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to LifePoint's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(f) Equivalent admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
admissions is computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation "equates" outpatient revenue to the volume measure
(admissions) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
(g) Represents the average number of days admitted patients stay in
LifePoint's hospitals. Average length of stay has declined due to the
continuing pressures from managed care and other payers to restrict
admissions and reduce the number of days that are covered by the payers
for certain procedures, and by technological and pharmaceutical
improvements.
(h) Represents the average number of patients in LifePoint's hospital beds
each day.
(i) Represents the percentage of hospital licensed beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services, that were previously
performed in an inpatient setting, being performed on an outpatient basis
and the decline in average length of stay per admission.
(j) The ratio of earnings to fixed charges was computed by dividing (i) income
from continuing operations before fixed charges, minority interests and
income taxes by (ii) fixed charges, which consist of interest charges
(interest expense plus interest charged to construction) and the portion
of rent expense which is deemed to be equivalent to interest expense.
LifePoint's earnings were insufficient to cover fixed charges for the year
ended December 31, 1998 by $25.6 million.
38
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Combined Financial Statements
of LifePoint are based on the historical combined financial statements, which
reflect periods during which the businesses that comprise LifePoint did not
operate as a separate, independent company and certain estimates, assumptions
and allocations were made in preparing such financial statements. Therefore,
such historical combined financial statements do not necessarily reflect the
combined results of operations or financial position that would have existed
had LifePoint been a separate, independent company.
The Unaudited Pro Forma Condensed Combined Statement of Operations for
the year ended December 31, 1998 and the three months ended March 31, 1999
reflects the results of LifePoint's operations as if the distribution and the
divestitures of facilities that LifePoint intends to divest during 1999 had
occurred at the beginning of 1998. The Unaudited Pro Forma Condensed Combined
Balance Sheet assumes that the distribution and such divestitures had occurred
on March 31, 1999.
The Unaudited Pro Forma Condensed Combined Financial Statements should be
read in conjunction with the historical financial statements and the related
notes of LifePoint included elsewhere in this prospectus. The pro forma
condensed combined financial information is presented for informational
purposes only and does not purport to reflect the results of operations or
financial position of LifePoint or the results of operations or financial
position that would have occurred had LifePoint been operated as a separate,
independent company on the dates specified, nor is it indicative of LifePoint's
future results.
39
<PAGE>
Unaudited Pro Forma Condensed Combined Statement of Operations
Year Ended December 31, 1998
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenues..................................... $498.4 $(48.0)(a) $450.4
Salaries and benefits........................ 220.8 (23.5)(a) 200.4
(5.3)(b)
8.4 (c)
Supplies..................................... 62.0 (6.6)(a) 55.9
0.5 (c)
Other operating expenses..................... 117.2 (12.3)(a) 108.0
3.1 (c)
Provision for doubtful accounts.............. 41.6 (5.5)(a) 36.1
Depreciation and amortization................ 28.3 (3.2)(a) 25.1
ESOP expense................................. -- 2.4 (b) 2.4
Interest expense allocated from 19.1 (5.6)(a) 26.6
Columbia/HCA................................ 13.1 (d)
Management fees allocated from Columbia/HCA.. 8.9 (0.9)(a) --
(8.0)(c)
Impairment of long-lived assets.............. 26.1 (24.8)(a) 1.3
------ ------ ------
524.0 (68.2) 455.8
------ ------ ------
Loss from continuing operations before
minority interests
and income tax benefit...................... (25.6) 20.2 (5.4)
Minority interests in earnings of
consolidated entities....................... 1.9 -- 1.9
------ ------ ------
Loss from continuing operations before income
taxes....................................... (27.5) 20.2 (7.3)
Income tax benefit........................... (9.8) 6.9 (e) (2.9)
------ ------ ------
Loss from continuing operations.............. $(17.7) $ 13.3 $ (4.4)
====== ====== ======
Basic and diluted loss per share(g).......... $ (.59) $ (.15)
Shares used in computing basic and diluted
loss per share
(in millions)(g)............................ 30.0 30.0
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed
combined financial statements.
40
<PAGE>
Unaudited Pro Forma Condensed Combined Statement of Operations
Quarter Ended March 31, 1999
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenues..................................... $ 134.2 $(12.9)(a) $ 121.3
Salaries and benefits........................ 57.1 (5.8)(a) 50.6
0.7 (c)
(1.4)(b)
Supplies..................................... 16.4 (1.7)(a) 14.8
0.1 (c)
Other operating expenses..................... 28.5 (2.8)(a) 26.9
1.2 (c)
Provision for doubtful accounts.............. 10.3 (2.0)(a) 8.3
Depreciation and amortization................ 7.5 (0.8)(a) 6.7
ESOP expense................................. -- 0.7 (b) 0.7
Interest expense allocated from 4.7 (1.6)(a) 6.6
Columbia/HCA................................ 3.5 (d)
Management fees allocated from Columbia/HCA.. 2.4 (0.8)(a) --
(1.6)(c)
------- ------ -------
126.9 (12.1) 114.6
------- ------ -------
Income from continuing operations before
minority interests
and income taxes............................ 7.3 (0.6) 6.7
Minority interests in earnings of
consolidated entities....................... 0.4 -- 0.4
------- ------ -------
Income from continuing operations before
income taxes................................ 6.9 (0.6) 6.3
Provision for income taxes................... 2.9 (0.2)(e) 2.7
------- ------ -------
Income from continuing operations............ $ 4.0 $ (0.4) $ 3.6
======= ====== =======
Basic and diluted earnings per share(g)...... $ 0.13 $(0.01) $ 0.12
Shares used in earnings per share
calculations
(in millions)(g)............................
Basic........................................ 29,899 -- 29,899
Dilutive securities--stock options.......... 269 -- 269
------- ------ -------
Diluted...................................... 30,168 -- 30,168
======= ====== =======
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed
combined financial statements.
41
<PAGE>
Unaudited Pro Forma Condensed Combined Balance Sheet
March 31, 1999
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Accounts receivable, net.................. $ 48.8 $ (6.6)(a) $ 65.0
22.8 (h)
Inventories............................... 13.9 (2.0)(a) 11.9
Deferred taxes and other current assets... 21.3 (0.3)(a) 18.1
(2.9)(h)
------- ------- -------
84.0 11.0 95.0
Property and equipment, at cost............. 453.2 (30.6)(a) 422.6
Accumulated depreciation.................... (175.5) 11.5 (a) (164.0)
------- ------- -------
277.7 (19.1) 258.6
Intangible assets, net...................... 15.1 (0.4)(a) 14.7
Other....................................... 4.6 (4.2)(a) 10.4
10.0 (f)
------- ------- -------
$ 381.4 $ (2.7) $ 378.7
======= ======= =======
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable.......................... $ 15.2 $ (1.3)(a) $ 13.9
Accrued salaries.......................... 11.4 (1.0)(a) 10.4
Other current liabilities................. 16.6 (1.5)(a) 15.1
------- ------- -------
43.2 (3.8) 39.4
Intercompany balances payable to
Columbia/HCA............................... 188.0 (38.8)(a) --
(168.9)(f)
19.7 (h)
Long-term debt.............................. 0.3 260.0 (f) 260.3
Deferred taxes and other liabilities........ 22.4 2.8 (a) 25.4
0.2 (h)
Minority interests in equity of consolidated
entities................................... 4.8 -- 4.8
Equity, investments by Columbia/HCA......... 122.7 10.0 (a) --
(132.7)(f)
Preferred stock, par value $0.01 per share;
10.0 million shares authorized;
no shares issued........................... -- -- --
Common stock, par value $0.01 per share;
90.0 million shares authorized;
30.0 million shares issued and outstand-
ing........................................ -- 0.3 (f) 0.3
Capital in excess of par value.............. -- 48.5 (f) 48.5
------- ------- -------
$ 381.4 $ (2.7) $ 378.7
======= ======= =======
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed
combined financial statements.
42
<PAGE>
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1--Basis of Presentation
The pro forma condensed combined financial statements reflect the
combination of historical financial information of the facilities to be part of
LifePoint and the pro forma adjustments described in Note 2.
Note 2--Pro Forma Adjustments
(a) To eliminate the assets, liabilities and March 31, 1999 quarterly results
of operations of the three facilities for which LifePoint management
believes divestiture during 1999 is probable.
(b) To adjust historical retirement plan expense recorded as a component of
salaries and wages and record the estimated LifePoint Hospitals, Inc.
Retirement Plan (the "ESOP") expense for the quarter ended March 31, 1999.
The ESOP will be established in connection with the distribution and the
ESOP will purchase newly issued shares of LifePoint common stock equal to
approximately 8.3% of the outstanding shares of LifePoint. The ESOP shares
will be released from a suspense account and allocated to LifePoint
participating employees over an expected 10 year period. The non-cash ESOP
expense will be recognized as the shares are released and allocated to the
participants and will be based upon the fair value of the shares released.
(c) To adjust for the estimated general and administrative costs of $3.8
million, (including $1.8 million in costs already included in the
historical combined statement of operations) that would have been incurred
if LifePoint had managed comparable general and administrative functions
and to eliminate the management fee allocated from Columbia/HCA.
(d) To adjust interest expense to $6.6 million for the quarter ended March 31,
1999. The interest expense adjustment is based on the elimination of all
intercompany amounts payable by LifePoint to Columbia/HCA ($188.0 million
at March 31, 1999) and the assumption of certain indebtedness from
Columbia/HCA in the aggregate amount of approximately $260.6 million,
including $0.3 million in other current liabilities, at an assumed average
interest rate of approximately 9.7% and $0.4 million in amortization of the
deferred loan cost.
(e) To adjust income tax provision for the estimated impact of the pro forma
adjustments.
(f) To adjust for the assumption of certain indebtedness from Columbia/HCA in
the aggregate amount of $260.6 million (including $0.3 million in other
current liabilities) record deferred loan costs of $10.0 million, and
record the issuance of approximately 29.9 million shares of LifePoint
common stock.
(g) Pro forma basic earnings per share was computed based upon approximately
29.9 million shares of LifePoint's common stock which were distributed to
the stockholders of Columbia/HCA on the date of the Distribution. Pro forma
diluted earnings per share was computed based upon approximately 30.2
million shares which includes approximately 29.9 million shares distributed
to the stockholders of Columbia/HCA and approximately 0.3 million shares of
common stock equivalents.
(h) To adjust for Columbia/HCA's agreement to indemnify LifePoint with respect
to Medicare, Medicaid, and cost-based Blue Cross receivables and payables
relating to cost reporting periods ending on or prior to the distribution
date pursuant to the Distribution Agreement, and to adjust for certain
deferred taxes in connection with the Distribution.
43
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read together with the historical financial
statements and the related notes of LifePoint included elsewhere in this
prospectus and the information set forth under "Selected Historical Financial
Data" and "Unaudited Pro Forma Condensed Combined Financial Statements" and the
related notes.
Overview
LifePoint owns and operates the hospitals which had comprised the America
Group of Columbia/HCA until the distribution by Columbia/HCA to its
shareholders of all of the shares of outstanding common stock of LifePoint. The
distribution marked the beginning of LifePoint's operations as an independent,
publicly-traded company. As such, the historical financial statements of
LifePoint Hospitals, Inc. may not be indicative of LifePoint's future
performance, nor do they necessarily reflect what the financial position and
results of operations of LifePoint would have been if it had operated as a
separate, stand-alone entity during the periods covered. See "Risk Factors--No
Operating History as an Independent Company; Net Losses."
At March 31, 1999, LifePoint was comprised of 23 general, acute care
hospitals and related health care entities. The entities are located in non-
urban areas in the states of Alabama, Florida, Georgia, Kansas, Kentucky,
Louisiana, Tennessee, Utah and Wyoming. Subsequent to March 31, 1999 and in
connection with the Distribution, all intercompany amounts payable by LifePoint
to Columbia/HCA were eliminated and LifePoint assumed certain indebtedness from
Columbia/HCA. In addition, LifePoint entered into various agreements with
Columbia/HCA which are intended to facilitate orderly changes for both
companies in a way which would be minimally disruptive to each entity.
Forward-Looking Statements
This "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains disclosures which are "forward-looking
statements." Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can be identified by the use
of words such as "may," "believe," "will," "expect," "project," "estimate,"
"anticipate," "plan" or "continue." These forward-looking statements are based
on the current plans and expectations of LifePoint and are subject to a number
of uncertainties and risks that could significantly affect current plans and
expectations and the future financial condition and results of LifePoint. These
factors include, but are not limited to,
. the highly competitive nature of the health care business,
. the efforts of insurers, health care providers and others to
contain health care costs,
. possible changes in the Medicare and Medicaid programs that may
further limit reimbursements to health care providers and
insurers,
. changes in Federal, state or local regulation affecting the health
care industry,
. the possible enactment of Federal or state health care reform,
. the departure of key executive officers from LifePoint,
. claims and legal actions relating to professional liability,
. fluctuations in the market value of LifePoint common stock,
. changes in accounting practices,
. changes in general economic conditions,
. the complexity of integrated computer systems and the success and
expense of the remediation efforts of Columbia/HCA, LifePoint and
relevant third parties in achieving Year 2000 readiness, and
. other risk factors described in this prospectus.
44
<PAGE>
As a consequence, current plans, anticipated actions and future financial
condition and results may differ from those expressed in any forward-looking
statements made by or on behalf of LifePoint. You are cautioned not to unduly
rely on such forward-looking statements when evaluating the information
presented in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
Investigations
Columbia/HCA is currently the subject of several Federal investigations
into certain of its business practices, as well as governmental investigations
by various states. Columbia/HCA is cooperating in these investigations and
understands, through written notice and other means, that it is a target in
these investigations. Given the breadth of the ongoing investigations,
Columbia/HCA expects additional subpoenas and other investigative and
prosecutorial activity to occur in these and other jurisdictions in the future.
According to published reports, on July 2, 1999, a federal jury in Tampa,
Florida found two Columbia/HCA employees guilty of conspiracy and making false
statements on Medicare and Champus cost reports for the years 1992 and 1993 and
on a Medicaid cost report for 1993. Both were found not guilty of obstructing a
federal auditor. One other employee was acquitted on all counts for which they
had been charged and the jury was unable to reach a verdict with respect to
another employee. Columbia/HCA is a defendant in several qui tam actions
brought by private parties on behalf of the United States of America, which
have been unsealed and served on Columbia/HCA. The actions allege, in general,
that Columbia/HCA and certain subsidiaries and/or affiliated partnerships
violated the False Claims Act for improper claims submitted to the government
for reimbursement. The lawsuits seek damages of three times the amount of all
Medicare or Medicaid claims (involving false claims) presented by the
defendants to the Federal government, civil penalties of not less than $5,000
nor more than $10,000 for each such Medicare or Medicaid claim, attorneys' fees
and costs. To LifePoint's knowledge, the government has intervened in three qui
tam actions against Columbia/HCA. Columbia/HCA is aware of additional qui tam
actions that remain under seal and believes that there are other sealed qui tam
cases of which it is unaware.
Columbia/HCA is a defendant in a number of other suits, which allege, in
general, improper and fraudulent billing, overcharging, coding and physician
referrals, as well as other violations of law. Certain of the suits have been
conditionally certified as class actions.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigations will be commenced. If Columbia/HCA is found to
have violated Federal or state laws relating to Medicare, Medicaid or similar
programs, Columbia/HCA could be subject to substantial monetary fines, civil
and criminal penalties, and exclusion from participation in the Medicare and
Medicaid programs. Similarly, the amounts claimed in the qui tam and other
actions may be substantial, and Columbia/HCA could be subject to substantial
costs resulting from an adverse outcome of one or more of such actions.
Management believes that the ongoing governmental investigations and
related media coverage may have had a negative effect on Columbia/HCA's results
of operations, which includes LifePoint for the periods prior to the
distribution date which are presented in this prospectus. The extent to which
LifePoint may or may not continue to be affected after the distribution by the
ongoing investigations of Columbia/HCA, the initiation of additional
investigations, if any, and the related media coverage cannot be predicted. It
is possible that these matters could have a material adverse effect on the
financial condition or results of operations of LifePoint in future periods.
Pursuant to the distribution agreement entered into by and among
Columbia/HCA, LifePoint and Triad in connection with the distribution,
Columbia/HCA has agreed to indemnify LifePoint in respect of any losses which
it may incur arising from the governmental investigations described above and
from stockholder actions and other legal proceedings related to the
governmental investigations which are currently pending against Columbia/HCA.
Columbia/HCA has also agreed to indemnify LifePoint in respect of any losses
which it may incur as a result of proceedings which may be commenced by
government authorities or by private parties in
45
<PAGE>
the future that arise from acts, practices or omissions engaged in prior to the
distribution date and relate to the proceedings described above. Columbia/HCA
has also agreed that, in the event that any hospital owned by LifePoint is
permanently excluded from participation in the Medicare and Medicaid programs
as a result of the proceedings described above, then Columbia/HCA will make a
cash payment to LifePoint in an amount, if positive, equal to fives times the
excluded hospital's 1998 income from continuing operations before depreciation
and amortization, interest expense, management fees, impairment of long-lived
assets, minority interests and income taxes, as set forth on a schedule to the
distribution agreement, less the net proceeds of the sale or other disposition
of the excluded hospital. LifePoint has agreed that, in connection with the
government investigations described above, it will participate with
Columbia/HCA in negotiating one or more compliance agreements setting forth its
agreements to comply with applicable laws and regulations. See "Arrangements
Relating to the Distribution--Distribution Agreement" for a more detailed
description of such indemnification obligations. If any of such indemnified
matters were successfully asserted against LifePoint, or any of its facilities,
and Columbia/HCA failed to meet its indemnification obligations, then such
losses could have a material adverse effect on the business, financial
position, results of operations or prospects of LifePoint. Columbia/HCA will
not indemnify LifePoint for losses relating to any acts, practices and
omissions engaged in by LifePoint after the distribution date, whether or not
LifePoint is indemnified for similar acts, practices and omissions occurring
prior to the distribution date. See Note 3 and Note 11 of the Notes to Combined
Financial Statements of LifePoint included elsewhere herein for a more detailed
description of such liabilities.
Results of Operations
Revenue/Volume Trends
LifePoint has experienced an increase in revenues and volume growth
during 1998 and for the three months ended March 31, 1999. However, LifePoint
has experienced declines in revenues per equivalent admission. Management
believes three primary factors have contributed to these declines in revenue
per equivalent admission:
(1) the impact of reductions in Medicare payments mandated by the
Balanced Budget Act,
(2) the increasing patient volume related to patients participating in
managed care plans and
(3) the continuing trend toward outpatient services.
LifePoint's revenues continue to be affected by an increasing proportion
of revenue being derived from fixed payment, higher discount sources, including
Medicare, Medicaid and managed care plans. In addition, insurance companies,
government programs (other than Medicare) and employers purchasing health care
services for their employees are also negotiating discounted amounts that they
will pay health care providers rather than paying standard prices. LifePoint
expects patient volumes from Medicare and Medicaid to continue to increase due
to the general aging of the population and the expansion of state Medicaid
programs. However, under the Balanced Budget Act, LifePoint's reimbursement
from the Medicare and Medicaid programs was reduced in 1998 and will be further
reduced as some reductions in reimbursement levels are phased in over the next
two years. The Balanced Budget Act has accelerated a shift, by certain Medicare
beneficiaries, from traditional Medicare coverage to medical coverage that is
provided under managed care plans. LifePoint generally receives lower payments
per patient under managed care plans than under traditional indemnity insurance
plans. With an increasing proportion of services being reimbursed based upon
fixed payment amounts, where the payment is based upon the diagnosis,
regardless of the cost incurred or the level of service provided revenues,
earnings and cash flows are being significantly reduced. Admissions related to
Medicare, Medicaid and managed care plan patients were 87.7% and 86.1% of total
admissions for the years ended December 31, 1998 and 1997, respectively, and
89.0% and 88.4% for the three months ended March 31, 1999 and 1998,
respectively. Revenues from capitation arrangements, or prepaid health service
agreements, are less than 1.0% of revenues. See "Reimbursement."
46
<PAGE>
LifePoint's revenues also continue to be affected by the trend toward
certain services being performed more frequently on an outpatient basis.
LifePoint anticipates that further payment reductions will occur as a result of
the implementation of a scheduled prospective payment system for Medicare
outpatient services pursuant to the Balanced Budget Act. Growth in outpatient
services is expected to continue in the health care industry as procedures
performed on an inpatient basis are converted to outpatient procedures through
continuing advances in pharmaceutical and medical technologies. The redirection
of certain procedures to an outpatient basis is also influenced by pressures
from payers to perform certain procedures as outpatient care rather than
inpatient care. Generally, the payments received for an outpatient procedure
are less than for a similar procedure performed in an inpatient setting.
Outpatient revenues grew to 47.9% of net patient revenues for the year ended
December 31, 1998 from 47.1% during the prior year and 44.3% for the three
months ended March 31, 1999 from 43.7% for the comparable period in 1998.
Management believes that the impact of the ongoing governmental
investigations of certain of Columbia/HCA's business practices and the related
media coverage have created uncertainties with physicians, patients and payers
in certain markets. See "Government Regulation and Other Factors--Governmental
Investigation of Columbia/HCA and Related Litigation."
Reductions in the rate of increase in Medicare and Medicaid
reimbursement, increasing percentages of the patient volume being related to
patients participating in managed care plans and continuing trends toward more
services being performed on an outpatient basis are expected to present ongoing
challenges. The challenges presented by these trends are magnified by
LifePoint's inability to control these trends and the associated risks. To
maintain and improve its operating margins in future periods, LifePoint must
increase patient volumes while controlling the costs of providing services. If
LifePoint is not able to achieve reductions in the cost of providing services
through increased operational efficiencies, and the trend toward declining
reimbursements and payments continues, results of operations and cash flow will
deteriorate.
Management believes that the proper response to these challenges includes
the delivery of a broad range of quality health care services to patients by
assuring that physicians with appropriate specializations practice in the
hospitals, that the appropriate equipment and range of specialized services are
available within the hospitals, and that the hospitals are positioned as
community assets.
As part of Columbia/HCA, LifePoint's facilities were included in managed
care contracts negotiated by Columbia/HCA on a market-wide basis emphasizing
large urban facilities. LifePoint's management believes that independence from
Columbia/HCA will help LifePoint over time to negotiate contract terms that are
generally more favorable for its facilities and to decrease the level of
discount arrangements in which LifePoint participates.
47
<PAGE>
Operating Results Summary
The following are comparative summaries of results from continuing
operations for the years ended December 31, 1996, 1997 and 1998 and for the
three months ended March 31, 1998 and 1999:
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------
1996 1997 1998
----------------- ------------------ ------------------
Amount Percentage Amount Percentage Amount Percentage
------ ---------- ------ ---------- ------ ----------
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $464.0 100.0 $487.6 100.0 $498.4 100.0
Salaries and benefits... 175.2 37.8 196.6 40.3 220.8 44.3
Supplies................ 50.9 11.0 55.0 11.3 62.0 12.4
Other operating
expenses............... 99.3 21.4 119.5 24.5 117.2 23.5
Provision for doubtful
accounts............... 28.0 6.0 34.5 7.1 41.6 8.4
Depreciation and
amortization........... 23.5 5.1 27.4 5.6 28.3 5.7
Interest expense
allocated from
Columbia/HCA........... 14.1 3.0 15.4 3.2 19.1 3.8
Management fees
allocated from
Columbia/HCA........... 6.2 1.3 8.2 1.7 8.9 1.8
Impairment of long-lived
assets................. -- -- -- -- 26.1 5.2
------ ----- ------ ----- ------ -----
397.2 85.6 456.6 93.7 524.0 105.1
------ ----- ------ ----- ------ -----
Income (loss) from
continuing operations
before minority
interests and income
taxes (benefit)........ 66.8 14.4 31.0 6.3 (25.6) (5.1)
Minority interests in
earnings of
consolidated entities.. 1.2 0.3 2.2 0.4 1.9 0.4
------ ----- ------ ----- ------ -----
Income (loss) from
continuing operations
before income taxes
(benefit).............. 65.6 14.1 28.8 5.9 (27.5) (5.5)
Provision for income
taxes (benefit)........ 26.3 5.7 11.7 2.4 (9.8) (2.0)
------ ----- ------ ----- ------ -----
Income (loss) from
continuing operations.. $ 39.3 8.4 $ 17.1 3.5 $(17.7) (3.5)
====== ===== ====== ===== ====== =====
% changes from prior
year:
Revenues.............. 5.1% 2.2%
Income (loss) from
continuing operations
before income taxes.. (56.1) (195.4)
Income (loss) from
continuing
operations........... (56.5) (204.0)
Admissions(a)......... 1.9 2.9
Equivalent
admissions(b)........ 6.3 4.0
Revenues per
equivalent
admission............ (1.2) (1.7)
Same facility % changes
from prior year(c):....
Revenues.............. 2.5 (1.8)
Admissions(a)......... 0.7 (.8)
Equivalent
admissions(b)........ 5.8 .2
Revenues per
equivalent
admission............ (3.1) (2.0)
</TABLE>
- --------
(a) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to LifePoint's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(b) Equivalent admissions are used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
admissions are computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation "equates" outpatient revenue to the volume measure
(admissions) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
(c) "Same facility" information excludes the operations of hospitals and their
related facilities which were either acquired, consolidated or divested
during the current and prior year. The facilities that LifePoint intends to
divest will continue to be included in "same facility" until the date they
are divested.
48
<PAGE>
Operating Results Summary (continued)
<TABLE>
<CAPTION>
Three Months ended March 31,
------------------------------------
1998 1999
----------------- ------------------
Amount Percentage Amount Percentage
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Revenues................................. $130.0 100.0 $134.2 100.0
Salaries and benefits.................... 55.0 42.3 57.1 42.6
Supplies................................. 16.0 12.3 16.4 12.2
Other operating expenses................. 29.3 22.6 28.5 21.3
Provision for doubtful accounts.......... 9.9 7.6 10.3 7.6
Depreciation and amortization............ 6.6 5.0 7.5 5.6
Interest expense allocated from
Columbia/HCA............................ 4.6 3.6 4.7 3.5
Management fees allocated from
Columbia/HCA............................ 2.3 1.8 2.4 1.8
Impairment of long-lived assets..........
------ ----- ------ -----
123.7 95.2 126.9 94.6
Income from continuing operations before
minority interests and income taxes..... 6.3 4.8 7.3 5.4
Minority interests in earnings of
consolidated entities................... 0.6 0.4 0.4 0.3
------ ----- ------ -----
Income from continuing operations before
income taxes............................ 5.7 4.4 6.9 5.1
Provision for income taxes............... 2.3 1.8 2.9 2.1
------ ----- ------ -----
Income from continuing operations........ $ 3.4 2.6 $ 4.0 3.0
====== ===== ====== =====
% changes from prior year:
Revenues................................. 3.2%
Income from continuing operations before
income taxes............................ 19.4
Income from continuing operations........ 15.4
Admissions(a)............................ 7.2
Equivalent admissions(b)................. 8.2
Revenues per equivalent admission........ (4.6)
</TABLE>
- --------
(a) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to LifePoint's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(b) Equivalent admissions are used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
admissions are computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation "equates" outpatient revenue to the volume measure
(admissions) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
Quarters Ended March 31, 1999 and 1998
Revenues increased 3.2% to $134.2 million for the three months ended
March 31, 1999 compared to $130.0 million for the three months ended March 31,
1998. Inpatient admissions increased 7.2%, equivalent admissions, adjusted to
reflect combined inpatient and outpatient volume, increased 8.2% and revenues
per equivalent admission decreased 4.6% for the three months ended March 31,
1999 compared to the three months ended March 31, 1998. The decline in revenues
per equivalent admission was due to several factors, including:
. decreases in Medicare reimbursement rates mandated by the Balanced
Budget Act which became effective October 1, 1997; such rates
lowered revenues by approximately $1.7 million for the three
months ended March 31, 1999,
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. continued increases in discounts from the growing number of
managed care payers; managed care as a percentage of total
admissions increased to 19.0% for the three months ended March 31,
1999 compared to 18.2% for the three months ended March 31, 1998
and
. delays experienced in obtaining Medicare cost report settlements;
cost report filings and settlements resulted in favorable revenue
adjustments of $0.4 million for the three months ended March 31,
1999 compared to favorable adjustments of $0.9 million for the
three months ended March 31, 1998.
Salaries and benefits, as a percentage of revenues, increased to 42.6%
for the three months ended March 31, 1999 from 42.3% for the three months ended
March 31, 1998. The increase was primarily due to a decline in revenues per
equivalent admission, increase in corporate office employees related to the
establishment of LifePoint's corporate office and certain severance costs.
Supply costs decreased slightly to 12.2% as a percentage of revenues for
the three months ended March 31, 1999 from 12.3% for the three months ended
March 31, 1998.
Other operating expenses decreased as a percentage of revenues to 21.3%
for the three months ended March 31, 1999 from 22.6% for the three months ended
March 31, 1998. Other operating expenses consist primarily of contract
services, professional fees, repairs and maintenance, rents and leases,
utilities, insurance, marketing and non-income taxes. The decrease was
primarily due to decreases in professional fees and contract services.
Provision for doubtful accounts, as a percentage of revenues, was 7.6%
for the three months ended March 31, 1999 and 1998.
Interest expense, which is primarily represented by interest incurred on
the net intercompany balance with Columbia/HCA, increased slightly to $4.7
million for the three months ended March 31, 1999 from $4.6 million for the
three months ended March 31, 1998.
Management fees allocated by Columbia/HCA were $2.4 million for the three
months endedMarch 31, 1999 and $2.3 million for the three months ended March
31, 1998. These amounts represent allocations, using revenues as the allocation
basis, of the corporate, general and administrative expenses of Columbia/HCA.
LifePoint's management estimates that if they had managed comparable general
and administrative functions for LifePoint as a separate, independent entity
the costs incurred would be approximately $3.8 million for the three months
ended March 31, 1999, including approximately $1.8 million previously recorded
in LifePoint's 1999 historical financial results.
Minority interests decreased slightly as a percentage of revenues to 0.3%
for the three months ended March 31, 1999 from 0.4% for the three months ended
March 31, 1998.
Income from continuing operations before income taxes increased 19.4% to
$6.9 million for the three months ended March 31, 1999 from $5.7 million for
the three months ended March 31, 1998 due to increases in revenues and
improvements in operating expenses as a percentage of revenues in various line
items as described above.
Net income increased to $4.0 million for the three months ended March 31,
1999 compared to $1.6 million for the three months ended March 31, 1998. For
the three months ended March 31, 1998, LifePoint incurred a $1.8 million after-
tax loss from its discontinued home health operations, primarily due to
declines in Medicare rates of reimbursement under the Balanced Budget Act and
declines in home health visits.
50
<PAGE>
Years Ended December 31, 1998 and 1997
Revenues increased 2.2% to $498.4 million in 1998 compared to $487.6
million in 1997. Inpatient admissions increased 2.9%, equivalent admissions
adjusted to reflect combined inpatient and outpatient volume increased 4.0% and
revenues per equivalent admission decreased 1.7% from 1997. On a same facility
basis, revenues decreased 1.8%, inpatient admissions decreased 0.8%, equivalent
admissions increased 0.2% and revenues per equivalent admission decreased 2.0%.
The decline in revenues on a same facility basis and revenues per equivalent
admission was due to several factors, including:
. decreases in Medicare reimbursement rates mandated by the Balanced
Budget Act which became effective October 1, 1997, which rates
lowered 1998 revenues by approximately $7 million,
. continued increases in discounts from the growing number of
managed care payers; managed care as a percentage of total
admissions increased to 18.6% in 1998 compared to 16.7% in 1997
and
. delays experienced in obtaining Medicare cost report settlements;
cost report filings and settlements resulted in favorable revenue
adjustments of $1.2 million in 1998 compared to favorable
adjustments of $3.3 million in 1997.
Operating expenses increased as a percentage of revenues in every expense
category except for other operating expenses, which decreased 1.0%. The primary
reason for the increases, as a percentage of revenues, was LifePoint's
inability to adjust expenses in line with the decreases experienced in same
facility volume and reimbursement trends. The level of management's attention
being devoted to the governmental investigations, reactions by certain
physicians and patients to the related negative media coverage and management
changes at several levels and locations throughout LifePoint contributed to
LifePoint's inability to implement changes to reduce operating expenses in
response to the revenue and volume growth rate declines on a same facility
basis.
Salaries and benefits, as a percentage of revenues, increased to 44.3% in
1998 from 40.3% in 1997. The increase was due to an 8.0% increase in salaries
and benefits per equivalent admission and a decline in productivity. Man-hours
per equivalent admission increased 2.9% over last year.
Supply costs increased to 12.4% as a percentage of revenues in 1998 from
11.3% in 1997 primarily due to the 1.7% decline in revenues per equivalent
admission, while the cost of supplies per equivalent admission increased 8.4%.
The higher cost of supplies per equivalent admission resulted from significant
increases in pharmaceutical costs and other increases in new product
development costs and general inflation.
Other operating expenses decreased as a percentage of revenues to 23.5%
in 1998 from 24.5% in 1997. Other operating expenses consists primarily of
contract services, professional fees, repairs and maintenance, rents and
leases, utilities, insurance, marketing and non-income taxes. The decrease was
due to small decreases in several of these expense categories as a percentage
of revenues, including lower marketing costs being incurred due to the
cancellation of a national branding campaign.
Provision for doubtful accounts, as a percentage of revenues, increased
to 8.4% in 1998 from 7.1% in 1997 due to internal factors such as computer
information system conversions, including patient accounting systems, at
various facilities and external factors such as payer mix shifts to managed
care plans, which resulted in increased amounts of patient co-payments and
deductibles, and to payer remittance slowdowns. The information system
conversions hampered the business office billing functions and collection
efforts in those facilities as some resources were directed to installing and
converting systems and building new data files, rather than devoting full
effort to billing and collecting receivables. The information systems
conversion was substantially completed in 1998. LifePoint has experienced an
increased occurrence of charge audits from certain payers due to the negative
publicity surrounding the government investigations which have resulted in
delays in the collection of receivables. The delays in collection resulted in
an increase in receivables reserved
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<PAGE>
under LifePoint's bad debt allowance policy. Management is not able to quantify
the effects of each of these factors, but the shift in payer mix is expected to
continue and the provision for doubtful accounts is likely to remain at higher
levels than in past years, 1996 and prior.
Interest expense, which is primarily represented by interest incurred on
the net intercompany balance with Columbia/HCA, increased to $19.1 million in
1998 from $15.4 million in 1997 primarily as a result of an increase in the
average balance of the advances from Columbia/HCA during 1998 compared to the
same period in 1997.
Management fees allocated by Columbia/HCA were $8.9 million in 1998 and
$8.2 million in 1997. These amounts represent allocations using revenues as the
allocation basis of the corporate, general and administrative expenses of
Columbia/HCA. LifePoint management estimates that if they had managed
comparable general and administrative functions for LifePoint as a separate,
independent entity, the costs incurred would be approximately $14.4 million,
including approximately $2.4 million previously recorded in LifePoint's 1998
historical financial results, based upon their 1999 projections.
During 1998, LifePoint, as part of its strategic business plan, decided
to divest three of its facilities. The divestitures are expected to be
completed through sales. The carrying value for these facilities expected to be
sold was reduced to fair value, based upon estimated selling values, resulting
in a pre-tax impairment charge of $24.8 million. An additional pre-tax
impairment loss of approximately $1.3 million was recorded during 1998 related
to the write-off of intangibles and other long lived assets of certain
physician practices where the recorded asset values were not deemed to be fully
recoverable based upon the operating results trends and projected future cash
flows. These assets are now recorded at estimated fair value. See Note 5 of the
Notes to Combined Financial Statements of LifePoint included elsewhere in this
prospectus.
LifePoint incurred a $27.5 million net loss from continuing operations
before income taxes in 1998 compared to net income of $28.8 million in 1997.
The loss is primarily due to the $15.9 million after-tax charge related to
impairment of long-lived assets. Also, the three facilities that management has
determined to divest as part of their plan to establish the structure for the
future operations of LifePoint contributed significantly to the decline in
results of operations. These facilities to be divested incurred losses from
continuing operations before income tax benefit of approximately $9.6 million
and $3.8 million for the years ended December 31, 1998 and 1997, respectively.
Net income declined to a loss of $21.8 million in 1998 compared to income
of $12.5 million in 1997. In addition to the decline in income from continuing
operations, LifePoint incurred a $4.1 million after-tax loss from its
discontinued home health operations in 1998 compared to a $0.6 million after-
tax loss in 1997, primarily due to declines in Medicare rates of reimbursement
under the Balanced Budget Act and declines in home health visits.
Years Ended December 31, 1997 and 1996
Revenues increased 5.1% to $487.6 million in 1997 compared to $464.0
million in 1996. Inpatient admissions increased 1.9%, equivalent admissions
adjusted to reflect combined inpatient and outpatient volume increased 6.3% and
revenues per equivalent admission decreased 1.2% from 1996. The increase in
revenues and equivalent admissions was primarily due to the acquisition of two
hospitals during March and May of 1996. On a same facility basis, revenues
increased 2.5%, admissions increased 0.7%, equivalent admissions increased 5.8%
and revenues per equivalent admission decreased 3.1%. The increase in
outpatient volume, reflected by the increases in equivalent admissions, is
primarily a result of the continuing trend of certain services, previously
provided in an inpatient setting, being converted to an outpatient setting. The
decline in revenues per equivalent admission was due to several factors,
including:
. delays experienced in obtaining cost report settlements, which cost
reports resulted in favorable revenue adjustments of $3.3 million in
1997 compared to $10.6 million in 1996,
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<PAGE>
. decreases in Medicare rates of reimbursement mandated by the Balanced
Budget Act which became effective October 1, 1997, which such rates
lowered fourth quarter 1997 revenues by approximately $1.5 million, and
. increased discounts from the growing number of managed care payers;
managed care as a percentage of total admissions increased to 16.7% in
1997 compared to 13.8% in 1996.
Operating expenses increased as a percentage of revenues in every expense
category primarily due to LifePoint's inability to control expenses in line
with the reimbursement rate declines. The level of management's attention being
devoted to the governmental investigations during the fourth quarter of 1997,
reactions by certain physicians and patients to the related negative media
coverage and management changes at several levels and locations throughout
LifePoint contributed to LifePoint's inability to control operating expenses.
Salaries and benefits, as a percentage of revenues, increased to 40.3% in
1997 from 37.8% in 1996. The increase was primarily due to cost pressures on
labor; salaries and benefits per equivalent admission increased 5.5% over last
year.
Other operating expenses increased to 24.5% of revenues in 1997 compared
to 21.4% in 1996. Included in 1997 are costs associated with start-up
activities whereby in prior years similar costs were previously capitalized and
subsequently amortized. LifePoint changed its policy on accounting for start-up
costs effective January 1, 1997, which resulted in approximately $4.6 million
being recorded as other operating expenses for 1997, compared to similar costs
being capitalized and the related expense recorded as amortization expense
during 1996. (See Note 7 of the Notes to Combined Financial Statements of
LifePoint included elsewhere herein.) The increase was also due, in part, to
small increases in various operating expense categories including contract
services as a percentage of revenues.
Provision for doubtful accounts, as a percentage of revenues, increased
to 7.1% in 1997 from 6.0% in 1996 due to internal factors such as computer
information system conversions, including patient accounting systems, at
various facilities and external factors such as payer mix shifts to managed
care plans, which resulted in increased amounts of patient co-payments and
deductibles, and to payer remittance slowdowns.
Depreciation and amortization increased as a percentage of revenues to
5.6% in 1997 from 5.1% in 1996. The increase was primarily due to increased
capital expenditures related to ancillary services, such as outpatient
services, and information systems.
Interest expense, which is primarily represented by interest incurred on
the net intercompany balance with Columbia/HCA, increased to $15.4 million in
1997 compared to $14.1 million in 1996, primarily as a result of an increase in
the average balance of the advances from Columbia/HCA during 1997 compared to
1996. This was due, in part, to a $18.4 million decline in net cash flows
provided from operations during 1997 compared to 1996.
Income from continuing operations before income taxes declined to $28.8
million in 1997 from $65.6 million in 1996 due to the increases in expenses as
discussed above. Also, the three facilities that LifePoint plans to divest
contributed to the decline in results of operations. These facilities to be
divested incurred losses from continuing operations before income tax benefit
of approximately $3.8 million for the year ended December 31, 1997 compared to
income from continuing operations before income taxes of $1.8 million for the
year ended December 31, 1996.
Net income declined to $12.5 million in 1997 compared to $41.2 million in
1996. In addition to the decline in income from continuing operations,
LifePoint incurred a $4.0 million after-tax loss from its discontinued home
health operations in 1997 compared to $1.9 million in after-tax income in 1996.
The 1997 loss includes a $3.4 million after-tax estimated loss on disposal of
its home health operations. The majority of
53
<PAGE>
the decline in income from operations of the discontinued home health
businesses was due to reductions in Medicare rates of reimbursement under the
Balanced Budget Act.
Liquidity and Capital Resources
Prior to the distribution, LifePoint relied upon Columbia/HCA for
liquidity and sources of capital to supplement any needs not met by operations.
As an independent, publicly-traded company, LifePoint now has direct access to
the capital markets and the ability to enter into its own bank borrowing
arrangements. At March 31, 1999, LifePoint had working capital of $40.8 million
compared to $26.9 million at December 31, 1998.
Cash provided by operating activities was $0.2 million for the three
months ended March 31, 1999 compared to cash provided by operating activities
of $4.5 million for the three months ended March 31, 1998. The decrease was due
to higher growth in accounts receivable balances in the current period due
primarily to an increase in revenues for the three months ended March 31, 1999.
Cash provided by operating activities decreased slightly to $45.3 million
for the year ended December 31, 1998 from $45.4 million for the year ended
December 31, 1997. The decrease was due to reduced income before non-cash
charges and partially offset by higher growth in accounts receivable balances
in the prior period.
For the year ended December 31, 1997, cash provided by operating
activities decreased to $45.4 million from $63.8 million for the year ended
December 31, 1996. The decrease was primarily due to reduced income from
continuing operations and partially offset by a decline in working capital
outflows during 1997 compared to the prior year. The decline in working capital
outflows was primarily due to a higher growth in accounts receivable balances
in the prior year partially offset by a growth in accounts payable in the same
year.
Cash used in investing activities was $14.9 million for the three months
ended March 31, 1999 compared to $7.6 million during the same period last year.
The increase was primarily due to capital expenditures of $14.7 million during
the three months ended March 31, 1999 compared to $8.4 million for the three
months ended March 31, 1998. Cash used in investing activities decreased to
$29.3 million for the year ended December 31, 1998 from $51.9 million during
the same period last year. The decrease was primarily due to decreased
purchases of property and equipment during the year ended 1998 and
approximately $7.2 million in equity investments in joint ventures during the
same period last year. Cash used in investing activities was $51.9 million for
the year ended December 31, 1997 compared to $58.6 million in 1996. Routine
capital expenditures approximated $29.3 million for the year ended December 31,
1998.
Management believes that its capital expenditure program is adequate to
expand, improve and equip LifePoint's existing health care facilities. At March
31, 1999, there were projects under construction which had an estimated cost to
complete and equip over the next twelve months of approximately $55.8 million,
including the construction of a replacement hospital located in Florida that is
estimated to cost approximately $33.0 million.
In connection with the distribution, all intercompany accounts payable by
LifePoint to Columbia/HCA were eliminated, and Holdings ultimately assumed
approximately $260.6 million of debt obligations from Columbia/HCA. Such debt
obligations consist of $110 million of term loans pursuant to the new credit
agreement, the $150 million of notes issued in the private offering and
approximately $0.6 million of other debt obligations assumed from Columbia/HCA.
The new credit agreement also includes an additional term loan commitment of
$35 million available for limited purposes and a revolving credit commitment of
up to $65 million, both of which were undrawn at closing. Borrowings under the
revolving credit facility are available to fund working capital needs and for
other general corporate purposes.
54
<PAGE>
No amounts were outstanding under the revolving credit facility as of May
31, 1999. LifePoint's bank debt is secured by a pledge of substantially all of
its assets. The new credit agreement and the indenture relating to the notes
contain certain covenants that, among other things, limit LifePoint and certain
of its subsidiaries' ability to incur additional indebtedness, pay dividends
on, redeem or purchase its capital stock, make investments and capital
expenditures, engage in transactions with affiliates, create certain liens,
sell assets and consolidate, merge or transfer assets. In addition, LifePoint
is required to comply with various financial ratios and tests, including a
minimum net worth test, a leverage ratio and a minimum fixed charge coverage
ratio. See "The Distribution" for a discussion of the assumption of debt by
Holdings and "Description of New Credit Agreement" for a discussion of the new
credit agreement.
Management does not consider the sale of any assets to be necessary to
repay LifePoint's indebtedness or to provide working capital. However, for
other reasons, certain of LifePoint's hospitals may be sold in the future from
time to time. Three of LifePoint's hospitals are held for sale. See "Business--
General." Although LifePoint's indebtedness will be more substantial than was
historically the case for its predecessor entities, management expects that
operations and working capital facilities will provide sufficient liquidity for
fiscal 1999.
Impact of Year 2000 Computer Issues
Background and General Information
The Year 2000 issues facing LifePoint are the result of two potential
malfunctions that could have an impact on Columbia/HCA's systems and equipment,
including systems and equipment which LifePoint relies upon. The first issue
arises due to computers being programmed to use two rather than four digits to
define the applicable year. The second issue arises in embedded chips, where
microchips and microcontrollers have been designed using two rather than four
digits to define the applicable year. Certain of Columbia/HCA's computer
programs, building infrastructure components, such as alarm systems and HVAC
systems, and medical devices that are date sensitive, may recognize a date
using "00" as the year 1900 rather than the year 2000. If uncorrected, these
issues could result in computer system and program failures or equipment and
medical device malfunctions that could result in a disruption of business
operations or that could affect patient diagnosis and treatment.
In connection with the distribution, Columbia/HCA's wholly owned
subsidiary, Columbia Information Systems, Inc. and LifePoint entered into a
computer and data processing services agreement, pursuant to which LifePoint
obtains most of its information technology and information technology
infrastructure systems. Columbia Information Systems does not warrant that the
software and hardware used by Columbia Information Systems in providing
services to LifePoint will be Year 2000 ready, but Columbia Information Systems
is currently making efforts in a professional, timely and workmanlike manner
that it deems reasonable to address Year 2000 issues with respect to the
software licensed to LifePoint under the computer and data processing services
agreement. In connection with its participation in Columbia/HCA's Year 2000
project, LifePoint has made and will continue to make certain expenditures in
respect of software systems and applications not obtained from Columbia
Information Systems and non-information technology systems, such as vendor
products, medical equipment and other related equipment with embedded chips, to
ensure that they are Year 2000 ready. For more information on LifePoint's
information technology systems, see "Arrangements Relating to the
Distribution--Computer and Data Processing Services Agreement" and "--
Transitional Services Agreement."
Pursuant to the computer and data processing services agreement,
LifePoint relies on Columbia Information Systems to provide virtually all of
its computer support and information technology services. In connection with
the distribution, Columbia/HCA's wholly owned subsidiary CHCA Management
Services, L.P. and LifePoint entered into a Year 2000 professional services
agreement, pursuant to which CHCA will continue its ongoing program to inspect
medical equipment at LifePoint facilities for Year 2000 readiness. LifePoint is
dependent upon Columbia/HCA in substantially all respects for the Year 2000
readiness of its information
55
<PAGE>
technology and non-information technology systems and for contingency planning
in respect of Year 2000-related risks. Any failure by Columbia/HCA to
adequately address such matters could have a material adverse effect on the
business, financial condition, results of operations or prospects of LifePoint.
Columbia/HCA is utilizing both internal and external resources to manage
and implement its Year 2000 program. With the assistance of external resources,
Columbia/HCA has undertaken development of contingency plans in the event that
its Year 2000 efforts, or the Year 2000 efforts of third parties upon which
Columbia/HCA and LifePoint rely, are not accurately or timely completed.
LifePoint management consults regularly with the Columbia/HCA personnel
responsible for development of such contingency plans. LifePoint, in
conjunction with Columbia/HCA, has developed a contingency planning methodology
and will implement contingency plans throughout 1999.
Information Technology Systems
With respect to the information technology systems portion of
Columbia/HCA's Year 2000 project, which address the inventory, assessment,
remediation, testing and implementation of internally developed software,
Columbia/HCA has identified various software applications that are being
addressed on separate time lines. Columbia/HCA has begun remediating all these
software applications and is testing the software applications where
remediation has been completed. Columbia/HCA has also completed the assessment
of mission critical third party software, that is, software which is essential
for day-to-day operations, and has developed testing and implementation plans
with separate time lines. Columbia/HCA has completed and placed into production
99% of software applications and anticipates completing, in all material
respects, remediation, testing and implementation for internally developed and
mission critical third party software by a revised date of October 1, 1999,
from the previously anticipated date of June 30, 1999. Remediation, testing and
implementation of various software applications for certain of LifePoint's
subsidiaries will be completed in the fourth quarter of 1999. These exceptions
to the June 1999 information technology systems goals should not have a
material effect on LifePoint's Year 2000 readiness. The information technology
infrastructure portion of Columbia/HCA's Year 2000 project is currently on
schedule in all material respects.
With respect to the information technology infrastructure portion of
Columbia/HCA's Year 2000 project, LifePoint, in participation with
Columbia/HCA, has undertaken a program to inventory, assess and correct,
replace or otherwise address impacted vendor-supplied products, such as
hardware, systems software, business software, and telecommunication equipment.
Columbia/HCA has implemented a program to contact vendors, analyze information
provided, and remediate, replace or otherwise address information technology
products that pose a material Year 2000 impact. LifePoint and Columbia/HCA
anticipate completion, in all material respects, of the information technology
infrastructure portion of the program by September 30, 1999, as revised from an
expected completion date of June 30, 1999. With respect to such revised date,
the information technology infrastructure portion of Columbia/HCA's Year 2000
project is currently on schedule in all material respects.
LifePoint's management presently believes that with modifications to
existing software or the installation of upgraded software under the
information technology infrastructure portion, the Year 2000 will not pose
material operational problems for its computer systems. However, if such
modifications or upgrades are not accomplished in a timely manner, Year 2000
related failures may present a material adverse impact on the operations of
LifePoint.
Non-Information Technology Systems and Equipment
With respect to the non-information technology infrastructure portion of
Columbia/HCA's Year 2000 project, LifePoint, in participation with
Columbia/HCA, has undertaken a program to inventory, assess and correct,
replace or otherwise address impacted vendor products, medical equipment and
other related equipment with embedded chips. LifePoint, in participation with
Columbia/HCA, has implemented a program to contact vendors, analyze information
provided, and remediate, replace or otherwise address devices or equipment that
56
<PAGE>
could have a material Year 2000 impact. LifePoint anticipates completion, in
all material respects, of the non-information technology infrastructure portion
of its program by a revised date of September 30, 1999. The non-information
technology infrastructure project is currently on schedule in all material
respects.
LifePoint is prioritizing its non-information technology infrastructure
efforts by focusing on equipment and medical devices that will have a direct
impact on patient care and health. LifePoint is directing substantial efforts
to repair, replace, upgrade or otherwise address this equipment and these
medical devices in order to minimize risk to patient safety and health.
LifePoint is relying on information that is being provided to it by equipment
and medical device manufacturers and Columbia/HCA regarding the Year 2000
readiness of their products. While LifePoint is attempting to evaluate
information provided by its previous and current vendors, there can be no
assurance that in all instances accurate information is being provided.
LifePoint also cannot in all instances guarantee that the repair, replacement
or upgrade of all non-information technology infrastructure systems will occur
on a timely basis or that such repairs, replacement or upgrades will avoid all
Year 2000 problems.
Third Party Payers and Intermediaries, and Suppliers
Columbia/HCA and LifePoint have initiated communications with LifePoint's
major third party payers and intermediaries, including government payers and
intermediaries. LifePoint relies on these entities for accurate and timely
reimbursement of claims, often through the use of electronic data interfaces.
Neither LifePoint nor Columbia/HCA received assurances that these interfaces
will be converted in a timely manner. Testing with payers and intermediaries
was not completed by June 30, 1999 because the payers and intermediaries were
not ready to test with LifePoint's systems. Failure of these third party
systems could have a material adverse effect on LifePoint's cash flow or
results of operations.
Columbia/HCA and LifePoint also have initiated communications with
LifePoint's mission critical suppliers and vendors--those suppliers and vendors
whose products and services are essential for day-to-day operations--to verify
their ability to continue to deliver goods and services through the Year 2000.
LifePoint has not received assurances from all mission critical suppliers and
vendors that they will be able to continue to deliver goods and services
through the Year 2000, but LifePoint is continuing its efforts to obtain such
assurances. The failure of these third parties could have a material adverse
effect on the business, financial condition, results of operations or prospects
of LifePoint, and/or the ability of LifePoint to provide health care services.
With the assistance of external resources, including Columbia/HCA,
LifePoint has undertaken the development of contingency plans in the event that
its Year 2000 efforts, or the Year 2000 efforts of third parties upon which
Columbia/HCA and LifePoint rely, are not accurately or timely completed.
LifePoint has developed a contingency planning methodology and will implement
contingency plans throughout 1999.
Year 2000 Risks
While LifePoint is developing contingency plans to address possible
failure scenarios, LifePoint recognizes that there are "worst-case" scenarios
which may develop and are largely outside its or Columbia/HCA's control.
LifePoint recognizes the risks associated with extended infrastructure, such as
power, water and telecommunications, failure, the interruption of insurance and
government program payments to LifePoint and the failure of equipment or
software that could impact patient safety or health despite the assurances of
third parties. LifePoint is addressing these and other failure scenarios in its
contingency planning effort and is engaging third parties in discussions
regarding how to manage common failure scenarios, but neither Columbia/HCA nor
LifePoint can currently estimate the likelihood or the potential cost of such
failures. Currently, LifePoint does not believe that any reasonably likely
worst case scenario will have a material impact on its revenues or operations.
Those reasonably likely worst case scenarios include continued expenditures for
remediation, continued expenditures for replacement or upgrade of equipment,
continued efforts regarding contingency planning, increased staffing for the
periods immediately preceding and after January 1, 2000, and possible
implementation of alternative payment schemes with LifePoint's payers.
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Costs and Expenses
The Year 2000 project costs incurred by Columbia/HCA will have an impact
on the computer and data processing services agreement with LifePoint.
LifePoint is not currently able to reasonably estimate the ultimate cost to be
incurred by it for the assessment, remediation, upgrade, replacement and
testing of its impacted non-information technology systems. The majority of the
costs, except the cost of new equipment, related to the Year 2000 project will
be expensed as incurred and are expected to be funded through operating cash
flows.
The successful completion of the project and completion dates for the
Year 2000 modifications are based on management's best estimates, which were
derived utilizing numerous assumptions of future events, including the
continued availability of certain resources, third party modification plans and
other factors. However, there can be no guarantees that these estimates will be
achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of personnel trained in this area and
the ability to locate and correct all relevant computer codes and all medical
equipment.
Effects of Inflation and Changing Prices
The health care industry is labor intensive. Wages and other expenses
increase during periods of inflation and when shortages in market places occur.
In addition, suppliers pass along rising costs to LifePoint in the form of
higher prices. LifePoint's ability to pass on these increased costs is limited
due to increasing regulatory and competitive pressures, as discussed above.
Health Care Reform
In recent years, an increasing number of legislative proposals have been
introduced or proposed to Congress and in some state legislatures that would
significantly affect the services provided by and reimbursement to health care
providers in LifePoint's markets. The cost of certain proposals would be funded
in significant part by reduction in payments by government programs, including
Medicare and Medicaid, to health care providers or taxes levied on hospitals or
other providers. While LifePoint is unable to predict whether any proposals for
health care reform will be adopted, there can be no assurance that proposals
adverse to the business of LifePoint will not be adopted.
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BUSINESS
General
LifePoint operates 23 general, acute care hospitals located in non-urban
areas with an average population of approximately 27,000, based on 1998 data.
According to industry sources, population in our markets is expected to grow on
average in excess of 5% between 1998 and 2003, compared to the expected
national growth rate of 2.4% over the same period. LifePoint is a successor to
the America Group, a division created by Columbia/HCA in November 1997 to
operate these hospitals. In 21 of its 23 markets, LifePoint's hospital is the
only hospital in the community. LifePoint's hospitals are located in nine
states: Alabama, Florida, Georgia, Kansas, Kentucky, Louisiana, Tennessee, Utah
and Wyoming. Approximately half of LifePoint's facilities are located in the
states of Kentucky and Tennessee. All but seven of LifePoint's hospitals are
located in states that have certificate of need laws, which laws may have the
effect of limiting the development of competing facilities. Three of
LifePoint's hospitals are held for sale. There can be no assurance that any
sale transaction will be consummated or on what terms any sale will occur.
The Non-Urban Health Care Market
LifePoint believes that growing, non-urban health care markets are
attractive to health care service providers as a result of favorable
demographic and economic trends and competitive conditions. All of LifePoint's
facilities are located in non-urban markets.
Because non-urban service areas have smaller populations, there are
generally fewer hospitals and other health care service providers in each
community, resulting in less direct competition for hospital-based services.
Management believes that the smaller populations and relative dominance of the
one or two acute care hospitals in these markets also limit the entry of
alternate non-hospital providers, such as outpatient surgery centers or
rehabilitation or diagnostic imaging centers, as well as managed care plans.
There is generally a lower level of managed care payer penetration, that is,
the relative proportion of the market population enrolled in managed care
programs such as HMOs and PPOs, in LifePoint's markets than there is in urban
markets. In addition, LifePoint believes that non-urban communities generally
view the local hospital as a key part of the local community.
Management believes that the characteristics of the non-urban health care
market provide LifePoint with attractive acquisition opportunities. Currently,
the majority of non-urban hospitals are owned by not-for-profit and
governmental entities that typically have limited access to capital to keep
pace with advances in medical technology. In addition, such entities frequently
lack the management resources necessary to control hospital expenses, recruit
and retain physicians, expand healthcare services and comply with increasingly
complex reimbursement and managed care requirements. As a result, patients may
migrate to, may be referred by local physicians to, or may be lured by
incentives from managed care plans to travel to, hospitals in larger, urban
markets. Management believes that as a result of these pressures, not-for-
profit and governmental owners of non-urban hospitals who wish to preserve the
local availability of quality health care services have sought to sell or lease
these hospitals to companies, like LifePoint, that have the access to capital
and management resources which can better serve the community and are committed
to the local delivery of health care.
Business Strategy
LifePoint's strategic goals are centered around the unique patient and
health care provider needs and opportunities in its non-urban markets.
LifePoint intends to manage its facilities so that they operate in accordance
with the strategies described below:
. Develop Facility-Specific Strategies for Non-Urban
Markets. LifePoint has developed facility-specific strategies
tailored for its non-urban markets. These strategies are intended
to
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improve the quality and breadth of health care services, to
provide an outstanding workplace for its employees, to recognize
and expand the hospitals' roles as community assets and to improve
financial performance. By contrast, Columbia/HCA's strategy has
been developed on a system-wide basis and has focused on building
well-integrated facility networks with large urban facilities as
the primary providers of specialty services.
. Expand Breadth of Service and Reduce Patient
Outmigration. LifePoint intends to increase revenues by broadening
the scope of health care services available at its facilities,
particularly in markets where significant outmigration is
occurring, and to recruit physicians with a broader range of
specialties. As an entity separate from Columbia/HCA, LifePoint
will not have to compete with the Columbia/HCA facilities located
in larger, urban markets for management attention, support
resources and capital to finance expansion of the range of
services offered at its hospitals. LifePoint has recently
undertaken projects in the majority of its hospitals targeted at
expanding or renovating specialty service facilities including
emergency room facilities, obstetric care, surgical capacity and
outpatient services. Management believes that this expansion of
available treatments and community focus should help to encourage
local residents in the non-urban markets that LifePoint serves to
seek care at facilities within their communities and limit
outmigration.
. Strengthen Physician Recruiting and Retention. LifePoint seeks to
enhance the quality of care available locally, and the revenue
derived therefrom, and believes that recruiting physicians in
local communities is critical to increasing the quality of health
care and the breadth of available services. LifePoint recruited 88
physicians in 1998, the majority of whom were added during the
second half of the year. LifePoint believes that its recent
recruiting success is largely attributable to the announcement of
its spin-off as an independent company and the community-based
focus of its new management team. As part of LifePoint's physician
recruitment program in 1999, it plans to focus primarily on
recruiting additional specialty care physicians. LifePoint also
intends to take advantage of its management focus to work more
effectively with individual physicians and physician practices.
Management believes that expansion of the range of available
treatments at its hospitals should also assist in physician
recruiting.
. Retain and Develop Stable Management. Management believes that
achieving long-term retention of executive teams at its hospitals
will enhance medical staff relations and maintain continuity of
relationships within the community. LifePoint intends to focus its
recruitment of managers and health care professionals on those who
wish to live and practice in the communities in which LifePoint's
hospitals are located. In the past, managers and health care
professionals employed at LifePoint hospitals sometimes relocated
to advance their careers elsewhere within the Columbia/HCA system.
LifePoint expects that its ability to provide equity-based
compensation linked to its performance should assist in management
retention.
. Improve Managed Care Position. As part of Columbia/HCA,
LifePoint's facilities typically were included in managed care
contracts negotiated by Columbia/HCA on a market-wide basis
emphasizing large urban facilities. LifePoint believes that
independence from Columbia/HCA and the lower managed care
penetration in our markets will enable it to negotiate contract
terms that are generally more favorable for its facilities and to
decrease the level of discount arrangements in which it
participates. LifePoint does not participate in capitation
arrangements and does not expect to do so in the future.
. Improve Expense Management. LifePoint has begun to implement cost
control initiatives designed to reduce labor costs and improve
labor productivity, control supplies expense and reduce
uncollectible revenues. These initiatives include adjusting
staffing levels according to patient volumes, modifying supply
purchases according to usage patterns and providing training to
hospital staff in more efficient billing and collection processes.
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. Acquire Other Hospitals. Management intends to pursue a
disciplined acquisition strategy that will seek to identify and
acquire attractive hospitals in non-urban markets. In the past,
Columbia/HCA has been reluctant to pursue acquisitions of such
facilities because non-urban hospitals were not consistent with
Columbia's urban market focus. LifePoint will seek to acquire
hospitals that are located in non-urban markets with above average
population growth, a strong economic base and a favorable payor
mix.
Operations
LifePoint's general, acute care hospitals usually provide the range of
medical and surgical services commonly available in hospitals in non-urban
markets. These hospitals also provide diagnostic and emergency services, as
well as outpatient and ancillary services such as outpatient surgery,
laboratory, radiology, respiratory therapy and physical therapy.
Each of LifePoint's hospitals is governed by a board of trustees, which
includes members of the hospital's medical staff as well as community leaders.
The board of trustees establishes policies concerning medical, professional and
ethical practices, monitors such practices, and is responsible for ensuring
that these practices conform to established standards. LifePoint maintains
quality assurance programs to support and monitor quality of care standards and
to meet accreditation and regulatory requirements. Patient care evaluations and
other quality of care assessment activities are monitored on a continuing
basis.
Like most hospitals located in non-urban areas, LifePoint's hospitals do
not engage in extensive medical research and medical education programs.
However, a number of LifePoint's hospitals have an affiliation with medical
schools, including the clinical rotation of medical students.
In addition to providing capital resources, LifePoint makes available a
variety of management services to its health care facilities. These services
include information systems; ethics and compliance programs; leasing contracts;
accounting, financial and clinical systems; legal support; personnel
management; internal auditing; and resource management. Some of these services
initially are being provided through transitional arrangements made with
Columbia/HCA. LifePoint also participates and has an equity interest, along
with Columbia/HCA and Triad, in a group purchasing organization which will make
certain national supply and equipment contracts available to LifePoint's
facilities. See "Arrangements Relating to the Distribution."
Services and Utilization
LifePoint believes that two important factors relating to the overall
utilization of a hospital are the quality and market position of the hospital
and the number, quality and specialties of physicians providing patient care
within the facility. Generally, LifePoint believes that the ability of a
hospital to meet the health care needs of its community is determined by its
breadth of services, level of technology, emphasis on quality of care and
convenience for patients and physicians. Other factors which impact utilization
include the size of and growth in local population, local economic conditions,
the availability of reimbursement programs such as Medicare and Medicaid and
market penetration of managed care programs. Utilization across the industry
also is being affected by improved treatment protocols as a result of advances
in medical technology and pharmacology.
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The following table sets forth certain operating statistics for
consolidated hospitals owned by LifePoint for each of the past five years ended
December 31 and for the three months ended March 31, 1999. Medical/surgical
hospital operations are subject to certain seasonal fluctuations, including
decreases in patient utilization during holiday periods and increases in
patient utilization during the cold weather months.
<TABLE>
<CAPTION>
Three Months
Ended
Years Ended December 31, March 31,
---------------------------------------- ------------
1994 1995 1996 1997 1998 1999
------ ------ ------ ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
Number of hospitals at
end of period.......... 20 20 22 22 23 23
Number of licensed beds
at end of period(a).... 1,843 1,881 2,074 2,080 2,169 2,169
Weighted average
licensed beds(b)....... 1,783 1,862 2,060 2,078 2,127 2,169
Admissions(c)........... 52,681 54,549 59,381 60,487 62,264 18,051
Equivalent
admissions(d).......... 81,708 88,915 98,869 105,126 109,336 30,741
Average length of stay
(days)(e).............. 4.9 4.8 4.7 4.4 4.4 4.3
Average daily
census(f).............. 713 713 755 733 742 863
Occupancy rate(g)....... 40% 38% 37% 35% 35% 40%
</TABLE>
- --------
(a) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(b) Represents the average number of licensed beds weighted based on periods
owned.
(c) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to LifePoint's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(d) Equivalent admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
admissions is computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The equivalent
admissions computation "equates" outpatient revenue to the volume measure
(admissions) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
(e) Represents the average number of days admitted patients stay in LifePoint's
hospitals. Average length of stay has declined due to the continuing
pressures from managed care and other payers to restrict admissions and
reduce the number of days that are covered by the payers for certain
procedures, and by technological and pharmaceutical improvements.
(f) Represents the average number of patients in LifePoint's hospital beds each
day.
(g) Represents the percentage of hospital licensed beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services, that were previously
performed in an inpatient setting, being performed on an outpatient basis
and the decline in average length of stay per admission.
LifePoint's hospitals have experienced significant shifts from inpatient
to outpatient care as well as decreases in average lengths of inpatient stay,
primarily as a result of improvements in technology and clinical practices and
hospital payment changes by Medicare, insurance carriers and self-insured
employers. These hospital payment changes generally encourage the utilization
of outpatient, rather than inpatient, services whenever possible, and shortened
lengths of stay for inpatient care. In response to this shift toward outpatient
care, LifePoint is reconfiguring certain hospitals to more effectively
accommodate outpatient services and restructuring existing surgical capacity to
permit additional outpatient volume and a greater variety of outpatient
services.
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Sources of Revenue
LifePoint receives payment for patient services from the Federal
government primarily under the Medicare program, state governments under their
respective Medicaid programs, HMOs, PPOs and other private insurers, as well as
directly from patients. The approximate percentages of net patient revenues
from continuing operations of LifePoint's facilities from such sources during
the periods specified below were as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Medicare..................................... 40.9% 39.4% 37.8%
Medicaid..................................... 11.5 11.1 11.1
Other sources................................ 47.6 49.5 51.1
-------- -------- --------
Total...................................... 100.0% 100.0% 100.0%
======== ======== ========
</TABLE>
Medicare is a Federal program that provides certain hospital and medical
insurance benefits to persons age 65 and over, some disabled persons and
persons with end-stage renal disease. Medicaid is a Federal-state program
administered by the states which provides hospital benefits to qualifying
individuals who are unable to afford care. All of LifePoint's hospitals are
certified as providers of Medicare and Medicaid services. Amounts received
under the Medicare and Medicaid programs are generally significantly less than
the hospital's customary charges for the services provided.
To attract additional volume, most of LifePoint's hospitals offer
discounts from established charges to certain large group purchasers of health
care services, including private insurance companies, employers, HMOs, PPOs and
other managed care plans. These discount programs limit LifePoint's ability to
increase charges in response to increasing costs. See "--Competition."
In addition to government programs, LifePoint is reimbursed by private
payers including HMOs, PPOs, private insurance companies, employers and
individual private payers. Patients are generally not responsible for any
difference between customary hospital charges and amounts reimbursed for such
services under Medicare, Medicaid, some private insurance plans, HMOs or PPOs,
but are responsible for services not covered by such plans, exclusions,
deductibles or co-insurance features of their coverage. The amount of such
exclusions, deductibles and co-insurance has generally been increasing each
year. Collection of amounts due from individuals is typically more difficult
than from governmental or business payers. For more information on the
reimbursement programs on which LifePoint's revenues are dependent, see
"Reimbursement."
Competition
The primary bases of competition among hospitals in non-urban markets are
the quality and scope of medical services, availability of physicians,
location, community reputation and, to a lesser extent, price. Generally,
LifePoint serves markets in which its hospital is the only hospital in the
community. Therefore, most of LifePoint's hospitals face less competition in
their immediate patient service areas than would be expected in larger
communities. While LifePoint's hospitals are generally the primary provider of
institutional health care services in their respective communities, its
hospitals face competition from hospitals in surrounding communities, including
larger tertiary care centers and, in some cases, other non-urban hospitals.
Some of the hospitals that compete with LifePoint are owned by tax-supported
governmental agencies or by not-for-profit entities supported by endowments and
charitable contributions which can finance capital expenditures on a tax-exempt
basis.
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One of the most significant factors in the competitive position of a
hospital is the number and quality of physicians affiliated with the hospital.
Although physicians may at any time terminate their affiliation with a hospital
operated by LifePoint, LifePoint's hospitals seek to retain physicians of
varied specialties on the hospitals' medical staffs and to attract other
qualified physicians. LifePoint believes that physicians refer patients to a
hospital primarily on the basis of the quality of services it renders to
patients and physicians, the quality of other physicians on the medical staff,
the location of the hospital and the quality of the hospital's facilities,
equipment and employees. Accordingly, LifePoint strives to maintain high
ethical and professional standards and quality facilities, equipment, employees
and services for physicians and their patients.
Another factor in the competitive position of a hospital is management's
ability to negotiate service contracts with purchasers of group health care
services. HMOs and PPOs attempt to direct and control the use of hospital
services through managed care programs and to obtain discounts from hospitals'
established charges. In addition, employers and traditional health insurers are
increasingly interested in containing costs through negotiations with hospitals
for managed care programs and discounts from established charges. Generally,
hospitals compete on the basis of market reputation, geographic location,
quality and range of services, quality of the medical staff, convenience and
price for service contracts with group health care service purchasers. The
importance of obtaining contracts with managed care organizations varies from
market to market, depending on the market strength of such organizations.
Managed care contracts generally are less important in the non-urban markets
served by LifePoint than they are in urban and suburban markets where there is
typically a higher level of managed care penetration.
State certificate of need ("CON") laws, which place limitations on a
hospital's ability to expand hospital services and add new equipment, also may
have the effect of restricting competition. Every state in which LifePoint
operates has CON laws except Kansas, Louisiana, Utah and Wyoming. The
application process for approval of covered services, facilities, changes in
operations and capital expenditures is, therefore, highly competitive. In those
states which have no CON laws or which set relatively high thresholds before
expenditures become reviewable by state authorities, competition in the form of
new services, facilities and capital spending may be more prevalent. LifePoint
has not experienced, and does not expect to experience, any material adverse
effects from state CON requirements or from the imposition, elimination or
relaxation of such requirements. See "Government Regulation and Other Factors."
LifePoint, and the health care industry as a whole, face the challenge of
continuing to provide quality patient care while dealing with rising costs,
strong competition for patients and a general reduction of reimbursement rates
by both private and government payers. As both private and government payers
reduce the scope of what may be reimbursed and reduce reimbursement levels for
what is covered, Federal and state efforts to reform the health care system may
further impact reimbursement rates. Changes in medical technology, existing and
future legislation, regulations and interpretations and competitive contracting
for provider services by private and government payers may require changes in
LifePoint's facilities, equipment, personnel, rates and/or services in the
future.
The hospital industry and LifePoint's hospitals continue to have
significant unused capacity. Inpatient utilization, average lengths of stay and
average inpatient occupancy rates continue to be negatively affected by payer-
required pre-admission authorization, utilization review, and payment
mechanisms to maximize outpatient and alternative health care delivery services
for less acutely ill patients. Admissions constraints, payer pressures and
increased competition are expected to continue. LifePoint will endeavor to meet
these challenges by expanding its facilities' outpatient services, offering
appropriate discounts to private payer groups, upgrading facilities and
equipment, and offering new programs and services.
One element of LifePoint's business strategy is expansion through the
acquisition of acute care hospitals in growing non-urban markets. The
competition to acquire non-urban hospitals is significant, and there can be no
assurance that suitable acquisitions, for which other health care companies,
including those with greater financial resources than LifePoint, may be
competing, can be accomplished on terms favorable to
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LifePoint or that financing, if necessary, can be obtained for such
acquisitions. LifePoint believes that often the acquiror will be selected for a
variety of reasons and not exclusively on the basis of price. LifePoint
believes that its strategic goals align its interests with those of the local
communities served by its hospitals. LifePoint believes that its commitment to
maintaining the local availability of health care services, together with the
reputation of LifePoint's hospitals for providing market-specific, high quality
health care, its focus on physician recruiting and retention, its management's
operating experience, and its direct access to capital will enable LifePoint to
compete successfully for acquisitions.
Properties
The following table lists the hospitals owned, except as otherwise
indicated, by LifePoint as of March 31, 1999:
<TABLE>
<CAPTION>
Licensed
Facility Name City State Beds
- ------------- ------------ ----- --------
<S> <C> <C> <C>
Andalusia Hospital.................................. Andalusia AL 101
Bartow Memorial Hospital (1)........................ Bartow FL 56
Barrow Medical Center(2)............................ Winder GA 56
Western Plains Regional Hospital (3)................ Dodge City KS 110
Halstead Hospital(2)................................ Halstead KS 177
Georgetown Community Hospital....................... Georgetown KY 75
PineLake Regional Hospital.......................... Mayfield KY 107
Meadowview Regional Medical Center.................. Maysville KY 111
Bourbon Community Hospital.......................... Paris KY 58
Logan Memorial Hospital............................. Russellville KY 100
Lake Cumberland Regional Hospital................... Somerset KY 227
Riverview Medical Center............................ Gonzales LA 104
Springhill Medical Center........................... Springhill LA 63
Smith County Memorial Hospital...................... Carthage TN 63
Trinity Hospital(2)................................. Erin TN 40
Crockett Hospital................................... Lawrenceburg TN 107
Livingston Regional Hospital........................ Livingston TN 112
Hillside Hospital................................... Pulaski TN 95
Emerald-Hodgson Hospital............................ Sewanee TN 50
Southern Tennessee Medical Center................... Winchester TN 166
Castleview Hospital................................. Price UT 82
Ashley Valley Medical Center........................ Vernal UT 39
Riverton Memorial Hospital.......................... Riverton WY 70
</TABLE>
- --------
(1) LifePoint operates and is general partner of a partnership that leases and
operates Bartow Memorial Hospital.
(2) These facilities are held for sale.
(3) LifePoint operates and holds a majority equity interest in a consolidated
joint venture which owns and operates Western Plains Regional Hospital.
Medical office buildings also are operated in conjunction with its
hospitals. These office buildings are primarily occupied by physicians who
practice at LifePoint's hospitals.
LifePoint's headquarters are located in approximately 17,280 square feet
of space in one office building in Nashville, Tennessee. After the distribution
date, LifePoint will sub-lease this space from Columbia/HCA. See "Arrangements
Relating to the Distribution--Lease Agreements."
LifePoint's headquarters, hospitals and other facilities are suitable for
their respective uses and are, in general, adequate for LifePoint's present
needs.
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Employees and Medical Staff
At March 31, 1999, LifePoint had approximately 6,700 employees, including
approximately 1,700 part-time employees. No LifePoint employees are subject to
collective bargaining agreements. LifePoint considers its employee relations to
be good. While some of LifePoint's hospitals experience union organizing
activity from time to time, LifePoint does not expect such efforts to
materially affect its future operations. LifePoint's hospitals, like most
hospitals, have experienced labor costs rising faster than the general
inflation rate. There can be no assurance as to future availability and cost of
qualified medical personnel.
LifePoint's hospitals are staffed by licensed physicians who have been
admitted to the medical staff of individual hospitals. Any licensed physician
may apply to be admitted to the medical staff of any of LifePoint's hospitals,
but admission to the staff must be approved by the hospital's medical staff and
the appropriate governing board of the hospital in accordance with established
credentialing criteria. With certain exceptions, physicians generally are not
employees of LifePoint's hospitals. However, LifePoint has conducted a
physician practice management program pursuant to which some physicians provide
services in LifePoint's hospitals by contract. After the distribution,
LifePoint intends to limit the scope of its physician practice management
program.
LifePoint's Regulatory Compliance Program
It is LifePoint's policy that its business be conducted with integrity
and in compliance with the law. LifePoint has in place and continues to develop
a corporate-wide compliance program, which focuses on all areas of regulatory
compliance, including physician recruitment, reimbursement and cost reporting
practices and laboratory operations.
This regulatory compliance program is intended to ensure that high
standards of conduct are maintained in the operation of LifePoint's business
and to help ensure that policies and procedures are implemented so that
employees act in full compliance with all applicable laws, regulations and
company policies. Under the regulatory compliance program, LifePoint will
provide initial and periodic legal compliance and ethics training to every
employee, review various areas of LifePoint's operations, and develop and
implement policies and procedures designed to foster compliance with the law.
LifePoint will regularly monitor its ongoing compliance efforts. The program
also will include a mechanism for employees to report, without fear of
retaliation, any suspected legal or ethical violations to their supervisors or
designated compliance officers in the LifePoint's hospitals.
Legal Proceedings
LifePoint is, from time to time, subject to claims and suits arising in
the ordinary course of business, including claims for damages for personal
injuries, breach of management contracts or for wrongful restriction of or
interference with physicians' staff privileges. In certain of these actions,
plaintiffs request punitive or other damages that may not be covered by
insurance. LifePoint is currently not a party to any such proceeding which, in
management's opinion, would have a material adverse effect on LifePoint's
business, financial condition or results of operations.
Where You Can Get More Information
LifePoint is required to comply with the reporting requirements of the
Exchange Act and must file annual, quarterly and other reports with the
Commission. LifePoint is also subject to the proxy solicitation requirements of
the Exchange Act and, accordingly, will furnish audited financial statements to
their respective stockholders in connection with their annual meetings of
stockholders.
Holdings has filed with the Commission a registration statement under the
Securities Act covering the notes to be issued in the exchange offer. As
permitted by the Commission rules, this prospectus omits certain
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information included in the registration statement. For further information
pertaining to the notes, we refer you to the registration statement, including
its exhibits. Any statements made in this prospectus concerning the contents of
any contract, agreement or other document is not necessarily complete. If we
have filed any such contract, agreement or other document as an exhibit to the
registration statement, you should read the exhibit for a more complete
understanding of the document or matter involved. You may read and copy any of
the information we file with the Commission at the Commission's public
reference rooms at Room 1024, 450 Fifth Street, N.W., Washington, D.C., at 7
World Trade Center, 13th Floor, New York, New York 10048 and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You
can also obtain copies of filed documents by mail from the public reference
section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Please call the Commission at 1-800-SEC-0330
for further information on the public reference rooms. Filed documents are also
available to the public on the Commission's web site at http://www.sec.gov.
Following the exchange offer, Holdings will be required to file annual,
quarterly and special reports, proxy statements and other information with the
Commission. Our obligation to file periodic reports with the Commission will be
suspended if the notes issued in the exchange offer are held of record by fewer
than 300 holders as of the beginning of any year. However, to the extent
permitted, the indenture governing the notes requires us to file with the
Commission financial and other information for public availability. In
addition, the indenture governing the notes requires us to deliver to you
copies of all reports that we file with the Commission without any cost to you.
We will also furnish such other reports as we may determine or as the law
requires.
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REIMBURSEMENT
Medicare. Under the Medicare program, acute care hospitals receive
reimbursement under a prospective payment system ("PPS") for inpatient hospital
services. Psychiatric, long-term care, rehabilitation, specially designated
children's hospitals and certain designated cancer research hospitals, as well
as psychiatric or rehabilitation units that are distinct parts of a hospital
and meet Health Care Financing Administration criteria for exemption, are
currently exempt from PPS and are reimbursed on a cost-based system, subject to
certain cost limits known as TEFRA limits. All of LifePoint's hospitals are
reimbursed under PPS, and certain psychiatric, long-term care and
rehabilitation units are exempt from PPS, subject to transition to PPS.
Under the PPS, fixed payment amounts per inpatient discharge are
established based on the patient's assigned diagnosis related group ("DRG").
DRGs classify treatments for illnesses according to the estimated intensity of
hospital resources necessary to furnish care for each principal diagnosis. DRG
rates have been established for each hospital participating in the Medicare
program and are based upon a statistically normal distribution of severity.
When treatments for certain patients fall well outside the normal distribution,
providers receive additional payments. DRG payments do not consider a specific
hospital's costs, but are adjusted for area wage differentials. The majority of
capital costs for acute care facilities are reimbursed on a prospective payment
system based on DRG weights times a federal rate adjusted for a geographic
rate.
DRG rates are updated and re-calibrated annually and have been affected
by several recent Federal enactments. The index used to adjust the DRG rates,
known as the "market basket index," gives consideration to the inflation
experienced by hospitals and entities outside of the health care industry in
purchasing goods and services. However, for several years the percentage
increases to the DRG rates have been lower than the percentage increases in the
costs of goods and services purchased by hospitals. The DRG rates are adjusted
each Federal fiscal year, which begins on October 1. The historical DRG rate
increases were 1.1%, 1.5% and 2.0% for Federal fiscal years 1995, 1996 and
1997, respectively. For Federal fiscal year 1998, there was no increase. The
budgeted updates for Federal fiscal years 1999 through 2002 are market basket
index minus 1.9%, 1.8%, 1.1% and 1.1%, respectively. LifePoint anticipates that
future legislation may decrease the future rate of increase for DRG payments,
but is not able to predict the amount of the reduction.
Outpatient services provided at general, acute care hospitals typically
are reimbursed by Medicare at the lower of customary charges or approximately
82% of actual cost, subject to additional limits on the reimbursement of
certain outpatient services. The Balanced Budget Act, enacted August 5, 1997,
contains provisions that affect outpatient hospital services, including a
requirement that HCFA adopt a prospective payment system for outpatient
hospital services to begin January 1, 1999. However, implementation of the PPS
will be delayed because of Year 2000 systems concerns. The outpatient PPS will
be implemented as soon as possible after January 1, 2000. At such time as the
PPS is implemented, the rates will be based on the rates that would have been
in effect January 1, 1999, updated by the rate of increase in the hospital
market basket minus one percentage point. LifePoint is not able to predict the
effect, if any, that the new payment system will have on its financial results.
After the fee schedule is established for this new system, the fee schedule is
to be updated by the market basket minus 1.0% for each of Federal fiscal years
2000 through 2002. Similarly, effective January 1, 1999, therapy services
rendered by hospitals to outpatients and inpatients not reimbursed under
Medicare, Part A are reimbursed according to the Medicare physician fee
schedule.
The Balanced Budget Act mandates a prospective payment system for skilled
nursing facility services for Medicare cost reporting periods commencing after
June 30, 1998, hospital outpatient services beginning January 1, 1999, home
health services for Medicare cost reporting periods beginning after September
30, 1999, and inpatient rehabilitation hospital services for Medicare cost
reporting periods beginning after September 30, 2000. Prior to the commencement
of the prospective payment systems, payment constraints will be applied to PPS-
exempt hospitals and units for Medicare cost reporting periods beginning on or
after October 1, 1997. For the year ended December 31, 1998, LifePoint had 49
units that were reimbursed under this methodology.
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Payments to PPS-exempt hospitals and units, such as inpatient
psychiatric, rehabilitation and long-term hospital services, are based upon
reasonable cost, subject to a cost per discharge target. These limits are
updated annually by a market basket index. For Federal fiscal years 1995, 1996
and 1997, the market basket index rate of increase was 3.7%, 3.4%, and 2.5%
respectively. For Federal fiscal year 1998, there was no increase. For Federal
fiscal year 1999, the market basket index is projected to be 2.4%. The update
for cost reporting periods from October 1, 1998 to September 30, 1999 is the
market basket index less a percentage point between 0% and 2.4% depending on
the hospital's or unit's costs in relation to the ceiling. Furthermore, limits
have been established for the cost per discharge target at the 75th percentile
for each category of PPS-exempt hospitals and hospital units, i.e.,
psychiatric, rehabilitation and long-term hospitals. For Federal fiscal year
1998, these limits were $10,534, $19,104, and $37,688 per discharge,
respectively. For Federal fiscal year 1999, these limits are $10,787, $19,562
and $38,593 per discharge, respectively. In addition, the cost per discharge
for new hospitals/hospital units cannot exceed 110% of the national median
target rate for hospitals in the same category. For Federal fiscal year 1998,
these amounts were $8,517, $16,738, and $18,947 per discharge for psychiatric,
rehabilitation and long-term hospital services, respectively. For Federal
fiscal year 1999, these amounts are $8,686, $17,077 and $22,010 per discharge,
respectively.
Skilled nursing facilities have historically been reimbursed by Medicare
on the basis of actual costs, subject to certain limits. The Balanced Budget
Act requires the establishment of a prospective payment system for Medicare
skilled nursing facilities under which facilities will be paid a Federal per
diem rate for virtually all covered services. The new payment system will be
phased in over three cost reporting periods, starting with cost reporting
periods beginning on or after July 1, 1998. The law also institutes
consolidated billing for skilled nursing facility services, under which
payments for most non-physician Part B services for beneficiaries no longer
eligible for Part A skilled nursing facility care will be made to the facility,
regardless of whether the item or service was furnished by the facility, by
others under arrangement, or under any other contracting or consulting
arrangement. Consolidated billing is being implemented on a transition basis.
As of December 31, 1998, 10 of LifePoint's hospitals operated skilled nursing
facilities.
Currently, physicians are paid by Medicare according to the physician fee
schedule. However, physicians working in rural health clinics, such as those
maintained by LifePoint, are reimbursed for their professional and
administrative services through the rural health clinic subject to per visit
limits unless the rural health clinic is based at a rural hospital with less
than 50 beds. There are 10 rural health clinics affiliated with LifePoint.
Medicare has special payment provisions for "sole community hospitals." A
sole community hospital is generally the only hospital in at least a 35-mile
radius. Five of LifePoint's facilities qualify as sole community hospitals
under Medicare regulations. Special payment provisions related to sole
community hospitals include a higher reimbursement rate, which is based on a
blend of hospital-specific costs and the national reimbursement rate, and a 90%
payment "floor" for capital costs which guarantees the sole community hospital
capital reimbursement equal to 90% of capital cost. In addition, the CHAMPUS
program has special payment provisions for hospitals recognized as sole
community hospitals for Medicare purposes.
Medicaid. Most state Medicaid payments are made under a prospective
payment system or under programs which negotiate payment levels with individual
hospitals. Medicaid reimbursement is often less than a hospital's cost of
services. Medicaid is currently funded jointly by the state and Federal
governments. The Federal government and many states are currently considering
significant reductions in the level of Medicaid funding while at the same time
expanding Medicaid benefits, which could adversely affect future levels of
Medicaid reimbursement received by the hospitals of LifePoint.
On November 27, 1991, Congress enacted the Medicaid Voluntary
Contribution and Provider-Specific Tax Amendments of 1991, which limit the
amount of voluntary contributions and provider-specific taxes that
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can be used by states to fund Medicaid and require the use of broad-based taxes
for such funding. As a result of enactment of these amendments, certain states
in which LifePoint operates have adopted broad-based provider taxes to fund
their Medicaid programs. The impact of these new taxes upon LifePoint has not
been materially adverse. However, LifePoint cannot predict whether any
additional broad-based provider taxes will be adopted by the states in which it
operates and, accordingly, it is not able to assess the effect of such
additional taxes on its results of operations or financial position.
Annual Cost Reports. All hospitals participating in the Medicare program,
whether paid on a reasonable cost basis or under PPS, are required to meet
certain financial reporting requirements. Federal regulations require
submission of annual cost reports covering medical costs and expenses
associated with the services provided by each hospital to Medicare
beneficiaries. Review of previously submitted annual cost reports and the cost
report preparation process are areas included in the ongoing government
investigations of Columbia/HCA. It is too early to predict the outcome of these
investigations, but if LifePoint, or any of its facilities, were found to be in
violation of Federal or state laws relating to Medicare, Medicaid or similar
programs, they could be subject to substantial monetary fines, civil and
criminal penalties and exclusion from participation in the Medicare and
Medicaid programs. Any such sanctions could have a material adverse effect on
the financial position and results of operations of LifePoint. Columbia/HCA has
agreed to indemnify LifePoint in respect of any losses arising from such
government investigations. See "Arrangements Relating to the Distribution--
Distribution Agreement" and "Government Regulation and Other Factors--
Governmental Investigation of Columbia/HCA and Related Litigation" for more
information regarding such arrangement.
Annual cost reports required under the Medicare and Medicaid programs are
subject to routine audits, which may result in adjustments to the amounts
ultimately determined to be due to LifePoint under these reimbursement
programs. These audits often require several years to reach the final
determination of amounts earned under the programs. Providers also have rights
of appeal, and it is common to contest issues raised in audits of prior years'
reports. Pursuant to the terms of the distribution agreement, LifePoint will be
responsible for the Medicare, Medicaid and Blue Cross cost reports, and
associated receivables and payables, for its facilities for all periods ending
after the distribution date. Columbia/HCA will indemnify LifePoint with respect
to the Medicare, Medicaid and Blue Cross cost reports for the LifePoint
facilities relating to periods ending on or prior to the distribution date. See
"Arrangements Relating to the Distribution--Distribution Agreement."
Managed Care. Pressures to control the cost of health care have resulted
in increases to the percentage of admissions and net revenues attributable to
managed care payers. The percentage of LifePoint's admissions attributable to
managed care payers increased from 16.7% for the year ended December 31, 1997
to 18.6% for the year ended December 31, 1998. The percentage of LifePoint's
net revenue from continuing operations attributable to managed care payers
increased from 15.9% for the year ended December 31, 1997 to 20.1% for the year
ended December 31, 1998. LifePoint expects that the trend toward increasing
percentages related to managed care payers will continue in the future.
LifePoint generally receives lower payments from managed care payers than from
traditional commercial/indemnity insurers; however, as part of its business
strategy, LifePoint intends to take steps to improve its managed care position.
See "Business--Business Strategy" for a more detailed discussion of such
strategy.
Commercial Insurance. The hospitals of LifePoint provide services to some
individuals covered by private health care insurance. Private insurance
carriers make direct payments to such hospitals or, in some cases, reimburse
their policy holders, based upon the particular hospital's established charges
and the particular coverage provided in the insurance policy.
Commercial insurers are continuing efforts to limit the payments for
hospital services by adopting discounted payment mechanisms, including
prospective payment or DRG based payment systems, for more inpatient and
outpatient services. To the extent that such efforts are successful and reduce
the insurers' reimbursement to hospitals and the costs of providing services to
their beneficiaries, such reduced levels of reimbursement may have a negative
impact on the operating results of the hospitals of LifePoint.
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GOVERNMENT REGULATION AND OTHER FACTORS
Licensure, Certification and Accreditation. Health care facility
construction and operation is subject to Federal, state and local regulations
relating to the adequacy of medical care, equipment, personnel, operating
policies and procedures, fire prevention, rate-setting and compliance with
building codes and environmental protection laws. Facilities are subject to
periodic inspection by governmental and other authorities to assure continued
compliance with the various standards necessary for licensing and
accreditation. All of the health care facilities of LifePoint are properly
licensed under appropriate state laws. All of the hospitals affiliated with
LifePoint are certified under the Medicare program and are accredited by the
Joint Commission on Accreditation of Healthcare Organizations, the effect of
which is to permit the facilities to participate in the Medicare and Medicaid
programs. Should any facility lose its accreditation by this Joint Commission,
or otherwise lose its certification under the Medicare program, the facility
would be unable to receive reimbursement from the Medicare and Medicaid
programs. The facilities of LifePoint are in substantial compliance with
current applicable Federal, state, local and independent review body
regulations and standards. The requirements for licensure, certification and
accreditation are subject to change and, in order to remain qualified, it may
be necessary for LifePoint to effect changes in their facilities, equipment,
personnel and services.
Certificates of Need. The construction of new facilities, the acquisition
of existing facilities, and the addition of new beds or services may be subject
to review by state regulatory agencies under a CON program. LifePoint operates
some hospitals in states that require approval under a CON program. Such laws
generally require appropriate state agency determination of public need and
approval prior to the addition of beds or services or certain other capital
expenditures. Failure to obtain necessary state approval can result in the
inability to expand facilities, add services, complete an acquisition or change
ownership. Further, violation may result in the imposition of civil sanctions
or the revocation of a facility's license.
Utilization Review. Federal law contains numerous provisions designed to
ensure that services rendered by hospitals to Medicare and Medicaid patients
meet professionally recognized standards, are medically necessary and that
claims for reimbursement are properly filed. These provisions include a
requirement that a sampling of admissions of Medicare and Medicaid patients
must be reviewed by peer review organizations, which review the appropriateness
of Medicare and Medicaid patient admissions and discharges, the quality of care
provided, the validity of DRG classifications and the appropriateness of cases
of extraordinary length of stay or cost. Peer review organizations may deny
payment for services provided, may assess fines and also have the authority to
recommend to HHS that a provider which is in substantial noncompliance with the
standards of the peer review organization be excluded from participation in the
Medicare program. Utilization review is also a requirement of most non-
governmental managed care organizations.
Medicare Regulations and Fraud and Abuse. Participation in the Medicare
program is heavily regulated by Federal statute and regulation. If a hospital
provider fails substantially to comply with the numerous conditions of
participation in the Medicare program or performs certain prohibited acts, such
hospital's participation in the Medicare program may be terminated or civil or
criminal penalties may be imposed upon it under certain provisions of the
Social Security Act. Prohibited acts include:
. making false claims to Medicare, including claims for services not
rendered, misrepresenting actual services rendered in order to
obtain higher reimbursement or cost report fraud;
. making claims for items or services that are "medically
unnecessary";
. routinely waiving co-payments or deductibles to induce patients to
order items or services from a specific provider;
. contracting with individuals that they know or should know have
been excluded from participation in a federal healthcare program;
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. offering, paying or receiving any remuneration (including
kickbacks, bribes or rebates) in return for referrals or
purchasing items or services reimbursable under a federal health
program;
. failing to stabilize any individual who comes to a hospital's
emergency room with an "emergency medical condition," within the
scope of services available from the facility; and
. transferring any stabilized patient to another health care
facility before the other facility has agreed to the transfer of
the patient, if the other facility does not have sufficient room
and staff to treat the patient, without the patient's emergency
department medical records, or without appropriate life support
equipment.
The provisions of the Anti-Kickback Statute prohibit providers and others
from soliciting, receiving, offering or paying, directly or indirectly, any
remuneration in return for either making a referral for a service or item
covered by a federal healthcare program or ordering any covered service or
item. Violations of this statue may be punished by a fine of up to $50,000 or
imprisonment for each violation and damages up to three times the total amount
of remuneration. In addition, the Medicare Patient and Program Protection Act
of 1987, as amended by the Health Insurance Portability and Accountability Act
of 1996 ("HIPAA") and the Balanced Budget Act (as so amended, the "Protection
Act"), imposes civil penalties for a violation of these prohibitions, including
exclusion from participation in federal healthcare programs, such as Medicare
and Medicaid.
The Protection Act authorized the Office of the Inspector General ("OIG")
to publish regulations outlining certain categories of activities that would be
deemed not to violate the Anti-Kickback Statute. In 1991, the OIG published
final safe harbor regulations implementing the Congressional intent expressed
in the Protection Act. Currently there are safe harbors for certain physician
investments, rental of space or equipment, personal services and management
contracts, warranties, discounts, payments to employees, group repurchasing
organizations and waivers of deductibles. The preamble to the Safe Harbor
regulations states that the failure of a particular business arrangement to
comply with the regulations does not determine whether the arrangement violates
the Anti-Kickback Statute because the regulations do not make conduct illegal.
Any conduct that could be construed to be illegal after the promulgation of
this rule would have been illegal prior to the publication of the regulations.
Additional safe harbors have been proposed, including a safe harbor for
physician investments in entities located in rural areas as well as a safe
harbor for physician investments in freestanding ambulatory surgery centers.
LifePoint is not able to determine if or when such proposed safe harbors will
be enacted, and if enacted whether it will be able to meet the requirements for
protection.
HIPAA, which became effective January 1, 1997, amends, among other
things, Title XI (42 U.S.C. (S)1301 et seq.) to broaden the scope of certain
fraud and abuse laws to include all health care services, whether or not they
are reimbursed under a Federal program, and creates new enforcement mechanisms
to combat fraud and abuse, including an incentive program under which
individuals can receive up to $1,000 for providing information on Medicare
fraud and abuse that leads to the recovery of at least $100 of Medicare funds.
Under HIPAA, health care fraud, now defined as knowingly and willfully
executing or attempting to execute a "scheme or device" to defraud any health
care benefit program, is made a Federal criminal offense. In addition, for the
first time, Federal enforcement officials will have the ability to exclude from
Medicare and Medicaid any investors, officers and managing employees associated
with business entities that have committed health care fraud, even if the
investor, officer or employee had no knowledge of the fraud. HIPAA also
establishes a new violation for the payment of inducements to Medicare or
Medicaid beneficiaries in order to influence those beneficiaries to order or
receive services from a particular provider or practitioner. The Balanced
Budget Act also allows civil monetary penalties to be imposed on a provider
contracting with individuals or entities that the provider knows or should know
is excluded from a federal healthcare program.
The OIG at HHS is responsible for identifying and eliminating fraud,
abuse and waste in HHS programs and for promoting efficiency and economy in HHS
departmental operations. The OIG carries out this mission through a nationwide
program of audits, investigations and inspections. In order to provide guidance
to health care providers, the OIG has from time to time issued "fraud alerts"
which, although they do not have
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the force of law, identify features of transactions, which may indicate that
the transaction could violate the Anti-Kickback Statute or other federal
healthcare laws. The OIG has identified the following incentive arrangements as
potential violations:
. "gainsharing," or the practice of giving physicians a percentage
share of any reduction in the hospital's costs for patient care
attributable in part to the physician's efforts;
. payment of any sort of incentive by the hospital each time a
physician refers a patient to the hospital;
. the use of free or significantly discounted office space or
equipment, in facilities usually located close to the hospital;
. provision of free or significantly discounted billing, nursing or
other staff services;
. free training for a physician's office staff in areas such as
management techniques and laboratory techniques;
. guarantees which provide that, if the physician's income fails to
reach a predetermined level, the hospital will supplement the
remainder up to a certain amount;
. low-interest or interest-free loans, or loans which may be
forgiven if a physician refers patients, or some number of
patients, to the hospital;
. payment of the costs of a physician's travel and expenses for
conferences;
. coverage on the hospital's group health insurance plans at an
inappropriately low cost to the physician; or
. payment for services, which may include consultations at the
hospital, which require few, if any, substantive duties by the
physician, or payment for services in excess of the fair market
value of services rendered.
The OIG has encouraged persons having information about hospitals who
offer the above types of incentives to physicians to report such information to
the OIG.
Section 1877 of the Social Security Act, commonly known as the "Stark
Law," prohibits referrals of Medicare and Medicaid patients by physicians to
entities with which the physician has a financial relationship and which
provide certain "designated health services" which are reimbursable by Medicare
or Medicaid. "Designated health services" include, among other things, clinical
laboratory services, physical and occupational therapy services, radiology
services, durable medical equipment, home health services, and inpatient and
outpatient hospital services. Sanctions for violating the Stark Law include
civil money penalties up to $15,000 per prohibited service provided,
assessments equal to twice the dollar value of each such service provided and
exclusion from the Medicare and Medicaid programs. There are a number of
exceptions to the self-referral prohibition, including an exception if the
physician has an ownership interest in the entire hospital. In addition, a
physician may have an ownership interest in and refer patients to an entity
providing designated health services if the entity is located in a rural area.
The requirements of the "rural provider" exception are:
(1) the provider is located in an area that is not considered a
metropolitan statistical area, and
(2) at least 75 percent of the patients served by the facility reside
in a rural area.
Proposed regulations implementing the Stark Law, as amended, have not
been implemented. LifePoint cannot predict the final form that such regulations
will take or the effect that the Stark Law or the regulations promulgated
thereunder will have on LifePoint.
LifePoint provides financial incentives to recruit physicians into the
communities served by its hospitals, including loans and minimum revenue
guarantees. Although HHS has proposed a safe harbor for certain physician
recruitment, no safe harbor for physician recruitment is currently in force.
One Lifepoint hospital, Western Plains Regional Hospital, has physician
investors. LifePoint also enters into employment agreements, independent
contractor agreements, leases and other agreements with physicians. Although
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LifePoint believes that its arrangements with physicians comply with current
law, since some of these arrangements do not meet the requirements for safe
harbor protection there can be no assurance that regulatory authorities who
enforce such laws will not determine that such physician recruiting activities
or other physician arrangements violate the Anti-Kickback Statute or other
applicable laws. Such a determination could subject LifePoint to liabilities
under the Social Security Act, including criminal penalties, civil monetary
penalties and/or exclusion from participation in Medicare, Medicaid or other
Federal health care programs, any of which could have a material adverse effect
on the business, financial condition or results of operations of LifePoint.
Evolving interpretations of current, or the adoption of new, Federal or
state laws or regulations could affect many of the arrangements entered into by
each of LifePoint's hospitals. There is increasing scrutiny by law enforcement
authorities, HHS, OIG, the courts and Congress of arrangements between health
care providers and potential referral sources to ensure that the arrangements
are not designed as a mechanism to exchange remuneration for patient care
referrals and opportunities. Investigators have also demonstrated a willingness
to look behind the formalities of a business transaction to determine the
underlying purpose of payments between health care providers and potential
referral sources.
The Social Security Act also imposes criminal and civil penalties for
submitting false claims to Medicare and Medicaid. False claims include, but are
not limited to, billing for services not rendered, misrepresenting actual
services rendered in order to obtain higher reimbursement and cost report
fraud. Like the Anti-Kickback Statute, this statute is very broad. Careful and
accurate coding of claims for reimbursement, including cost reports, must be
performed to avoid liability under the false claims statutes.
Many of the states in which LifePoint operates also have adopted, or are
considering adopting, laws that prohibit payments to physicians in exchange for
referrals similar to the Anti-Kickback Statute, some of which apply regardless
of the source of payment for care. These statutes typically provide criminal
and civil penalties as well as loss of licensure. Many states also have passed
self-referral legislation similar to the Stark Law, prohibiting the referral of
patients to entities with which the physician has a financial relationship
regardless of the source of payment for care. Little precedent exists for the
interpretation or enforcement of these state laws.
Corporate Practice of Medicine. Some of the states in which LifePoint
operates have laws that prohibit corporations and other entities from employing
physicians or that prohibit certain direct and indirect payments or fee-
splitting arrangements between health care providers. In addition, some states
restrict certain business relationships between physicians and pharmacies.
Possible sanctions for violation of these restrictions include loss of a
physician's license and civil and criminal penalties. These statutes vary from
state to state, are often vague and have seldom been interpreted by the courts
or regulatory agencies. Although LifePoint exercises care to structure its
arrangements with health care providers to comply with the relevant state law,
and believes such arrangements comply with applicable laws in all material
respects, there can be no assurance that governmental officials charged with
responsibility for enforcing these laws will not assert that LifePoint, or
certain transactions in which it is involved, are in violation of such laws, or
that such laws ultimately will be interpreted by the courts in a manner
consistent with the interpretations of LifePoint.
Health Care Reform. Health care, as one of the largest industries in the
United States, continues to attract much legislative interest and public
attention. In recent years, an increasing number of legislative proposals have
been introduced or proposed in Congress and in some state legislatures that
would effect major changes in the health care system, either nationally or at
the state level. Proposals that have been considered include cost controls on
hospitals, insurance market reforms to increase the availability of group
health insurance to small businesses, patients' bill of rights and requirements
that all businesses offer health insurance coverage to their employees. The
costs of certain proposals would be funded in significant part by reductions in
payments by governmental programs, including Medicare and Medicaid, to health
care providers such as hospitals. There can be no assurance that future health
care legislation or other changes in the administration or interpretation of
governmental health care programs will not have a material adverse effect on
the business, financial condition or results of operations of LifePoint.
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Conversion Legislation. Many states have enacted or are considering
enacting laws affecting the conversion or sale of not-for-profit hospitals.
These laws, in general, include provisions relating to attorney general
approval, advance notification and community involvement. In addition, state
attorneys general in states without specific conversion legislation may
exercise authority over these transactions based upon existing law. In many
states there has been an increased interest in the oversight of not-for-profit
conversions. The adoption of conversion legislation and the increased review of
not-for-profit hospital conversions may increase the cost and difficulty or
prevent the completion of transactions with not-for-profit organizations in
certain states in the future.
Revenue Ruling 98-15. During March 1998, the IRS issued guidance
regarding the tax consequences of joint ventures between for-profit and not-
for-profit hospitals. LifePoint has not determined the impact of the tax ruling
on its existing joint ventures, or the development of future ventures, and is
consulting with its joint venture partners and tax advisers to develop an
appropriate course of action. The tax ruling could limit joint venture
development with not-for-profit hospitals, require the restructuring of certain
existing joint ventures with not-for-profits and influence the exercise of "put
agreements"--agreements that require the purchase of the partner's interest in
the joint venture--by certain existing joint venture partners.
Environmental Matters. LifePoint is subject to various Federal, state and
local statutes and ordinances regulating the discharge of materials into the
environment. LifePoint does not expect that it will be required to expend any
material amounts in order to comply with these laws and regulations or that
compliance will materially affect its capital expenditures, earnings or
competitive position.
Insurance. As is typical in the health care industry, LifePoint is
subject to claims and legal actions by patients in the ordinary course of
business. To cover these claims, LifePoint maintains professional malpractice
liability insurance and general liability insurance in amounts which it
believes to be sufficient for its operations, although some claims may exceed
the scope of the coverage in effect. LifePoint also maintains umbrella
coverage. At various times in the past, the cost of malpractice and other
liability insurance has risen significantly. Therefore, there can be no
assurance that such insurance will continue to be available at reasonable
prices which will allow LifePoint to maintain adequate levels of coverage.
Substantially all losses in periods prior to the distribution are insured
through a wholly-owned insurance subsidiary of Columbia/HCA and excess loss
policies maintained by Columbia/HCA. Columbia/HCA has agreed to indemnify
LifePoint in respect of claims covered by such insurance policies and workers
compensation claims arising prior to the distribution. See "Arrangements
Relating to the Distribution--Distribution Agreement" and "--Insurance
Allocation and Administration Agreement" for a more detailed discussion of such
arrangements.
Because substantially all liability for general and professional
liability claims incurred is insured through a wholly-owned insurance
subsidiary of Columbia/HCA and excess loss policies maintained by Columbia/HCA,
and Columbia/HCA maintains the related reserve, no reserve for general and
professional liability risks is recorded on the balance sheets of LifePoint.
Any losses incurred in excess of amounts maintained under such insurance will
be funded from working capital. There can be no assurance that the cash flow of
LifePoint will be adequate to provide for professional and general liability
claims in the future.
Governmental Investigation of Columbia/HCA and Related Litigation. In
March 1997, various facilities of Columbia/HCA's El Paso, Texas operations were
searched by Federal authorities pursuant to search warrants, and government
agents removed various records and documents. In February 1998, an additional
warrant was executed and a single computer was seized.
In July 1997, various Columbia/HCA affiliated facilities and offices were
searched pursuant to search warrants. During July, September and November 1997,
Columbia/HCA also was served with subpoenas requesting records and documents
related to laboratory billing and DRG coding in various states and home health
operations in various jurisdictions, including, but not limited to, Florida. In
January 1998, Columbia/HCA received a subpoena which requested records and
documents relating to physician relationships.
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The United States District Court for the Middle District of Florida, in
Fort Myers, issued an indictment against three employees of a subsidiary of
Columbia/HCA in July 1997. The indictment related to the alleged false
characterization of interest payments on certain debt resulting in Medicare and
CHAMPUS overpayments since 1986 to Columbia Fawcett Memorial Hospital, a Port
Charlotte, Florida hospital that was acquired by Columbia/HCA in 1992.
Columbia/HCA was served with subpoenas for various records and documents. In
July 1998, a fourth employee of a subsidiary of Columbia/HCA was indicted by a
superseding indictment. According to published reports, on July 2, 1999, a
federal jury in Tampa, Florida found two Columbia/HCA employees guilty of
conspiracy and making false statements on Medicare and Champus cost reports for
the years 1992 and 1993 and on a Medicaid cost report for 1993. Both were found
not guilty of obstructing a federal auditor. One other employee was acquitted
on all counts for which he had been charged and the jury was unable to reach a
verdict with respect to another employee.
Several hospital facilities affiliated with Columbia/HCA in various
states have received individual Federal and/or state government inquiries, both
informal and formal, requesting information related to reimbursement from
government programs. Columbia/HCA is cooperating in these investigations and
understands, through written notice and other means, that it is a target in
these investigations. Given the scope of the ongoing investigations,
Columbia/HCA expects additional subpoenas and other investigative and
prosecutorial activity to occur in these and other jurisdictions in the future.
Columbia/HCA also is the subject of a formal order of investigation by
the Commission. Columbia/HCA understands that the investigation includes the
anti-fraud, periodic reporting and internal accounting control provisions of
the Federal securities laws.
Columbia/HCA is a defendant in several qui tam actions, or actions under
state statutes which are brought by private parties on behalf of the United
States of America, which have been unsealed and served on Columbia/HCA. The
actions allege, in general, that Columbia/HCA and certain subsidiaries and/or
affiliated partnerships violated the False Claims Act, 31 U.S.C. (S)3729 et
seq., for improper claims submitted to the government for reimbursement. The
lawsuits seek damages of three times the amount of all Medicare or Medicaid
claims involving false claims presented by the defendants to the Federal
government, civil penalties of not less than $5,000 nor more than $10,000 for
each such Medicare or Medicaid claim, attorneys' fees and costs. To the
knowledge of Columbia/HCA, the government has intervened in three qui tam
actions. Columbia/HCA is aware of additional qui tam actions that remain under
seal and believes that there may be other sealed qui tam cases of which it is
unaware.
Since April 8, 1997, numerous Federal securities class action and
derivative lawsuits have been brought against Columbia/HCA and a number of its
current and former directors, officers and employees. On October 10, 1997, all
of the securities class action claims were consolidated into a single-captioned
case which seeks the certification of a class of persons or entities who
acquired Columbia/HCA's common stock from April 9, 1994 to September 9, 1997.
The lawsuit alleges, among other things, that the defendants committed
violations of the Federal securities laws by materially inflating
Columbia/HCA's revenues and earnings through a number of practices, including
upcoding, maintaining reserve cost reports, disseminating false and misleading
statements, cost shifting, illegal reimbursements, improper billing, unbundling
and violating various Medicare laws. The lawsuit seeks compensatory damages,
costs and expenses. On October 10, 1997, all of the derivative law claims were
consolidated into a single-captioned case. The lawsuit alleges, among other
things, derivative claims against the individual defendants that they
intentionally or negligently breached their fiduciary duties to Columbia/HCA by
authorizing, permitting or failing to prevent Columbia/HCA from engaging in
various schemes to improperly increase revenue, upcoding, improper cost
reporting, improper referrals, improper acquisition practices and overbilling.
In addition, the lawsuit asserts a derivative claim against some of the
individual defendants for breaching their fiduciary duties by engaging in
insider trading. The lawsuit seeks restitution, damages, recoupment of fines or
penalties paid by Columbia/HCA, restitution and pre-judgment interest against
the alleged insider trading defendants, and costs and disbursements.
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<PAGE>
In addition, the lawsuit seeks orders prohibiting Columbia/HCA from
paying individual defendants employment benefits, terminating all improper
business relationships with individual defendants, and requiring Columbia/HCA
to implement effective corporate governance and internal control mechanisms
designed to monitor compliance with Federal and state laws and ensure reports
to the Board of material violations of law.
Several derivative actions have been filed in state court by certain
purported stockholders of Columbia/HCA against certain of Columbia/HCA's
current and former officers and directors alleging breach of fiduciary duty and
failure to take reasonable steps to ensure that Columbia/HCA did not engage in
illegal practices which exposed Columbia/HCA to significant damages.
A suit filed on November 7, 1997 against Columbia/HCA and certain members
of the retirement committee alleges violations of the Employee Retirement
Income Security Act of 1974. The suit alleges Columbia/HCA breached its
fiduciary duty to participants in Columbia/HCA's stock bonus plan, fraudulently
concealed information from the public and fraudulently inflated Columbia/HCA's
stock price through billing fraud, over charges, inaccurate medical cost
reports and illegal kickbacks for physician referrals.
Columbia/HCA also is a defendant in a number of Federal and state court
actions filed by patients and/or payers, alleging, in general, improper and
fraudulent billing, overcharging, coding and physician referrals, as well as
other violations of law. Certain of the lawsuits have been conditionally
certified as class actions and others are purported class actions.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam, stockholder derivative and class action lawsuits, or
whether any additional investigations or litigation will be commenced. If
Columbia/HCA is found to have violated Federal or state laws relating to
Medicare, Medicaid or similar programs, then Columbia/HCA could be subject to
substantial monetary fines, civil and criminal penalties, and exclusion from
participation in the Medicare and Medicaid programs. Similarly, the amounts
claimed in the qui tam, stockholder derivative and class action lawsuits may be
substantial and Columbia/HCA could be subject to substantial costs resulting
from an adverse outcome of one or more of such lawsuits. Any such sanctions or
losses could have a material adverse effect on Columbia/HCA's financial
position and results of operations.
Pursuant to the distribution agreement entered into by and among
Columbia/HCA, LifePoint and Triad, Columbia/HCA has agreed to indemnify
LifePoint and Triad in respect of any losses which they may incur as a result
of the proceedings described above. Columbia/HCA has also agreed to indemnify
LifePoint and Triad in respect of any losses which they may incur as a result
of proceedings which may be commenced by government authorities or by private
parties in the future that arise from acts, practices or omissions engaged in
prior to the distribution date and relate to the proceedings described above.
Columbia/HCA has also agreed that, in the event that any hospital owned by
LifePoint or Triad is permanently excluded from participation in the Medicare
and Medicaid programs as a result of the proceedings described above, then
Columbia/HCA will make a cash payment to LifePoint or Triad, as the case may
be, in an amount (if positive) equal to five times the excluded hospital's 1998
income from continuing operations before depreciation and amortization,
interest expense, management fees, impairment of long-lived assets, minority
interests and income taxes, as set forth on a schedule to the distribution
agreement, less the net proceeds of the sale or other disposition of the
excluded hospital. Each of LifePoint and Triad has agreed that, in connection
with the government investigations described above, it will participate with
Columbia/HCA in negotiating one or more compliance agreements setting forth
each of their agreements to comply with applicable laws and regulations. See
"Arrangements Relating to the Distribution--Distribution Agreement" for a more
detailed discussion of such arrangement. If any of such indemnified matters
were successfully asserted against LifePoint, or any of its facilities, and
Columbia/HCA failed to meet its indemnification obligations, then such losses
could have a material adverse effect on the business, financial position,
results of operations or prospects of LifePoint. Columbia/HCA will not
indemnify LifePoint for losses relating to any acts, practices and omissions
engaged in by LifePoint after the distribution date, whether or not LifePoint
is indemnified for similar acts, practices and omissions occurring prior to the
distribution date.
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MANAGEMENT
Directors and Executive Officers
The following table sets forth information regarding the directors and
executive officers of LifePoint.
<TABLE>
<C> <C> <S>
Name Age Position with LifePoint
---- --- -----------------------
Chairman and Chief Executive
Scott L. Mercy........................ 37 Officer; Director
President and Chief Operating
James M. Fleetwood, Jr. .............. 51 Officer
Senior Vice President, General
William F. Carpenter III.............. 44 Counsel and Secretary
Senior Vice President and Chief
Kenneth C. Donahey.................... 48 Financial Officer
Neil D. Hemphill...................... 45 Senior Vice President of
Administration and Human Resources
William Gracey........................ 45 Division President
Dan Slipkovich........................ 41 Division President
Ricki Tigert Helfer................... 54 Director
John E. Maupin, Jr., D.D.S............ 51 Director
DeWitt Ezell, Jr. .................... 60 Director
William V. Lapham..................... 60 Director
</TABLE>
The LifePoint certificate of incorporation provides that the LifePoint
Board of Directors will be divided into three classes, with the classes to be
as nearly equal in number as possible, and that, of the initial LifePoint
directors following the distribution, one-third will continue to serve until
the 2000 annual meeting of stockholders, one-third will continue to serve
until the 2001 annual meeting of stockholders, and one-third will continue to
serve until the 2002 annual meeting of stockholders. Of the initial directors,
Ms. Helfer and Dr. Maupin will serve until the 2000 annual meeting of
stockholders; Messrs. Ezell and Lapham will serve until the 2001 annual
meeting of directors; and Mr. Mercy will serve until the 2002 annual meeting
of directors. Starting with the 2000 annual meeting of stockholders, one class
of directors will be elected each year for a three-year term.
Scott L. Mercy is the Chairman and Chief Executive Officer and a Director
of LifePoint since May 11, 1999. From September 1, 1998 until May 11, 1999,
Mr. Mercy served as the Chief Executive Officer of the America Group of
Columbia/HCA. Mr. Mercy served as President and Chief Executive Officer of
America Service Group, Inc. (health care services for correctional facilities)
from 1996 through September 1, 1998; Senior Vice President--Financial
Operations of Columbia/HCA from 1994 through 1995; and as Vice President--
Financial Operations and Director--Financial Operations Support of Hospital
Corporation of America prior thereto. Mr. Mercy is also a Director of America
Service Group, Inc.
James M. Fleetwood, Jr. is the President and Chief Operating Officer of
LifePoint since May 11, 1999. From January 1, 1998 until May 11, 1999, Mr.
Fleetwood served as President of the America Group of Columbia/HCA. Mr.
Fleetwood served as President of the Florida Group of Columbia/HCA from May
1996 to January 1, 1998; President of the North Florida Division of
Columbia/HCA from April 1995 to May 1996; and as Regional Vice President of
Healthtrust, Inc.--The Hospital Company prior thereto.
William F. Carpenter III is a Senior Vice President, General Counsel and
Secretary of LifePoint since May 11, 1999. From November 16, 1998 until May
11, 1999, Mr. Carpenter served as General Counsel of the America Group of
Columbia/HCA. Mr. Carpenter served as a member of the law firm of Waller
Lansden Dortch & Davis, PLLC prior thereto.
Kenneth C. Donahey is a Senior Vice President and Chief Financial Officer
of LifePoint since May 11, 1999. From November 5, 1998 until May 11, 1999, Mr.
Donahey served as Chief Financial Officer of the America Group of
Columbia/HCA. Mr. Donahey served as Senior Vice President and Controller of
Columbia/HCA from April 1995 through November 4, 1998; and as Senior Vice
President and Controller of Healthtrust, Inc.--The Hospital Company prior
thereto.
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<PAGE>
Neil D. Hemphill is the Senior Vice President of Administration and Human
Resources of LifePoint since May 11, 1999. From September 1, 1998 until May 11,
1999, Mr. Hemphill served as Senior Vice President of Administration and Human
Resources of the America Group of Columbia/HCA. Mr. Hemphill served as Senior
Vice President of Human Resources of Columbia/HCA from February 1994 to
September 1, 1998; and as Vice President of Human Resources of Columbia
Healthcare Corporation prior thereto.
William Gracey is a Division President of LifePoint since May 11, 1999.
From July 1998 until May 11, 1999, Mr. Gracey served as a Division President of
the America Group of Columbia/HCA. Mr. Gracey served as President of Operations
Support for the Atlantic Group of Columbia/HCA from January 1998 through June
1998; Division President of Columbia/HCA from September 1995 to December 1997;
Chief Operating Officer of the Pacific Division of Columbia/HCA from February
1995 to September 1995; and as Chief Executive Officer of other facilities of
Hospital Corporation of America prior thereto.
Dan Slipkovich is a Division President of LifePoint since May 11, 1999.
From October 1998 until May 11, 1999, Mr. Slipkovich served as a Division
President of the America Group of Columbia/HCA. Mr. Slipkovich served as Chief
Financial Officer of the America Group of Columbia/HCA from January 1998 to
October 1998; Chief Financial Officer and Vice President of the Florida Group
of Columbia/HCA from July 1996 to January 1998; Chief Financial Officer and
Vice President of the North Florida Division of Columbia/HCA from April 1995 to
July 1996; and as Regional Assistant Vice President of Healthtrust, Inc.--The
Hospital Company prior thereto.
Ricki Tigert Helfer has been a non-resident Senior Fellow at the
Brookings Institution since February 1998. Since June 1997, Ms. Helfer has been
a Consultant, International Banking; the Chairman of the Board of Directors and
Chief Executive Officer of the Federal Deposit Insurance Corporation (banking
regulation) from October 1994 to May 1997; and a partner at Gibson, Dunn &
Crutcher prior thereto. Ms. Helfer is a Governor of the Philadelphia Stock
Exchange. Ms. Helfer became a director of LifePoint on the date of the
distribution.
John E. Maupin, Jr., D.D.S. has been the President of Meharry Medical
College since July 1994 and served as the Executive Vice President of Morehouse
School of Medicine prior thereto. Dr. Maupin is a member of the Nashville
Advisory Board, First American National Bank and a Director of American General
Series Portfolio Company, Monarch Dental Corporation and USLIFE Income Fund,
Inc. Dr. Maupin became a director of LifePoint on the date of the distribution.
DeWitt Ezell, Jr. has served as State President, BellSouth Corporation
since November 1990 and will retire from such position on April 30, 1999. Mr.
Ezell is a member of the Girl Scout Advisory Board, Tennessee State University
Advisory Board, Vanderbilt University-College Cabinet and the Baptist Hospital
Advisory Board. Mr. Ezell became a director of LifePoint on the date of the
distribution.
William V. Lapham served as a Partner at Ernst & Young LLP for 26 years
until his retirement on December 31, 1997. He was a Member of the Ernst & Young
International Council until December 31, 1997. Mr. Lapham became a director of
LifePoint on the date of the distribution.
Committees of the Board of Directors
The LifePoint board of directors has a number of standing committees,
including an audit and compliance committee and a compensation committee.
The audit and compliance committee of the board of directors reviews and
makes reports and recommendations to the board of directors with respect to the
selection of the independent auditors of LifePoint and its subsidiaries, the
arrangements for and the scope of the audits to be performed by them and the
internal audit activities, accounting procedures and controls of LifePoint, and
reviews the annual consolidated financial statements of LifePoint. The
committee also monitors adherence to LifePoint's regulatory compliance program.
The members of the audit and compliance committee are Ms. Helfer, Dr. Maupin
and Messrs. Ezell and Lapham, with Mr. Lapham serving as chair.
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The compensation committee of the board of directors is responsible for
approving compensation arrangements for executive management of LifePoint,
reviewing compensation plans relating to officers, grants of options and other
benefits under LifePoint's employee benefit plans and reviewing generally
LifePoint's employee compensation policy. The members of the compensation
committee are Ms. Helfer, Dr. Maupin and Messrs. Ezell and Lapham, with Mr.
Ezell serving as chair.
Compensation of Directors
The annual retainer for outside directors who are neither officers nor
employees of LifePoint is $18,000 and the board meeting fee is $1,500 per
meeting. Committee members receive a fee of $1,000 per meeting payable only
for attendance at committee meetings not held in conjunction with a meeting of
the board of directors. Directors also are reimbursed for expenses incurred
relating to attendance at meetings. Under the outside directors stock and
incentive compensation plan, each non-employee director may elect to receive,
in lieu of all or any portion, in multiples of 25%, of his annual retainer,
deferred stock units, the payout of which, at the election of the director,
may be deferred for two years or until the end of such director's term of
office.
The payment of deferred stock units will be made through the issuance of
a stock certificate for a number of shares equal to the number of deferred
stock units.
The plan further provides that each non-employee director will receive a
one-time grant of an option, as of a date to be selected by the LifePoint
board of directors, to acquire shares of LifePoint common stock, exercisable
at the fair market value of LifePoint common stock on the date of grant, for a
number of shares to be determined by the LifePoint board of directors. Each
person who is a non-employee director on the day of the annual meeting of
LifePoint's stockholders will be granted on a date to be selected by the
LifePoint board of directors an option to acquire shares of LifePoint common
stock, exercisable at the fair market value of LifePoint common stock on the
date of grant, for a number of shares to be determined by the LifePoint board
of directors. The one-time options described above will become exercisable as
to all of the shares covered by the option on the third anniversary of the
date of grant. The annual options will become exercisable as to one-third of
the shares covered by the option on the date of grant and each of the two next
succeeding anniversaries of the date of grant. Upon the occurrence of a change
in control of LifePoint, each outstanding option shall become fully and
immediately exercisable.
The plan further provides that non-employee directors may receive
discretionary option grants.
Executive Compensation
The information under this heading relates to the compensation paid by
Columbia/HCA to the Chief Executive Officer of LifePoint and the four
executive officers of LifePoint who were, based on such compensation, the most
highly compensated LifePoint executive officers for the year ended December
31, 1998. All cash compensation was paid by Columbia/HCA and all stock
compensation was in the form of Columbia/HCA common stock or options to
purchase shares of Columbia/HCA common stock. The principal positions listed
in the table are those that such persons currently hold with LifePoint.
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<PAGE>
LifePoint Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------- -------------------------
Securities
Other Annual Restricted Underlying All Other
Name and Principal Salary Bonus Compensation Stock Awards Options/SARS Compensation
Position Year ($)(2) ($)(3) ($)(4) ($)(5) (#)(6) ($)(7)
- ------------------ ---- -------- -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Scott L. Mercy.......... 1998 $133,333 $ 66,849 $ -- $ -- -- $ --
Chairman and Chief Ex-
ecutive 1997 $ -- $ -- $ -- $ -- -- $ --
Officer(1)
James M. Fleetwood,
Jr..................... 1998 $481,250 $ -- $31,978 $ 58,319 -- $10,864
President and Chief Op-
erating 1997 $350,000 $175,000 $76,799 $ -- 340,000 $ 8,439
Officer
Kenneth C. Donahey...... 1998 $412,500 $ -- $ -- $ -- -- $15,738
Senior Vice President
and 1997 $275,000 $ -- $ -- $183,369 290,000 $15,903
Chief Financial Officer
William Gracey.......... 1998 $299,250 $ 80,000(8) $ -- $ 20,985 -- $14,480
Division President 1997 $210,000 $ 52,500 $ -- $ 70,011 72,000 $12,084
Dan Slipkovich.......... 1998 $263,359 $ -- $63,408 $ 31,902 -- $13,380
Division President 1997 $191,500 $ 95,750 $ -- $ -- 125,000 $13,530
</TABLE>
- --------
(1) Mr. Mercy became employed by Columbia/HCA in September 1998 and therefore
received no compensation in 1997.
(2) 1998 salary amounts do not include the value of restricted stock awards
granted in lieu of a portion of annual salary.
(3) Reflects bonus earned during 1997 and 1998. In some instances, all or a
portion of the bonus was paid during 1998 and 1999. Each of the executive
officers identified in the table had the option to take all or part of
their bonus in shares of Columbia/HCA restricted stock at a 25% discount
from the fair market value at the time of grant, which is reflected in the
Restricted Stock Awards column. Columbia/HCA's cash bonus program was
discontinued in August 1997.
(4) Perquisites and other personal benefits did not exceed the lesser of either
$50,000 or 10% of the total of annual salary and bonus for any executive
officer identified in the table. Other compensation consists principally of
relocation expenses.
(5) 1998 amounts represent the average of the closing prices of Columbia/HCA
shares issued pursuant to Columbia/HCA's Amended and Restated 1995
Management Stock Purchase Plan in lieu of a portion of annual salary on
trading days during the deferral period. 1997 amounts represent the average
of the closing prices on the five trading days prior to the grant date of
Columbia/HCA shares granted pursuant to Columbia/HCA's Amended and Restated
1995 Management Stock Purchase Plan in lieu of all or a portion of a cash
bonus. As of January 1, 1999, Messrs. Fleetwood, Donahey, Gracey and
Slipkovich held an aggregate of 5,659, 13,733, 3,192 and 2,117 shares of
restricted stock, respectively. Pursuant to Commission rules, after
deducting the consideration paid therefor, the shares held by Messrs.
Gracey and Slipkovich had a net pre-tax value of $10,770 and $3,215,
respectively, and the shares held by Messrs. Fleetwood and Donahey were
without value. Dividends will be payable on shares of restricted stock if
and to the extent paid on Columbia/HCA's common stock generally, regardless
of whether or not the shares are vested.
(6) Options to acquire shares of Columbia/HCA common stock. Columbia/HCA
granted options at two separate times in 1997. The 1997 regular grant was
issued in February 1997. A special grant was issued in November 1997 to
help ensure the retention and motivation of key executives, including
Messrs. Fleetwood, Donahey, Gracey and Slipkovich, at the time Columbia/HCA
was reorganizing. On average, the size of the November 1997 grant is two
times a competitive median long-term grant for a two year period (1998-99).
(7) Consists of Columbia/HCA contributions to Columbia/HCA's savings and
investment plan, money purchase plan and stock bonus plan.
(8) In 1998, Columbia/HCA paid Mr. Gracey $80,000 in connection with his
services regarding the divestiture of the Atlantic Group Division.
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<PAGE>
Aggregated Option/SAR Exercises In Last Fiscal Year and FY-End Option/SAR
Values
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised In-the-
Underlying Unexercised Money Options/SARs at
Options/SARs at Fiscal Fiscal
Year-End(#) Year-End($)(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Scott L. Mercy............ 7,500 -- $ 184,542 $ 0
James M. Fleetwood, Jr.... 131,745 396,250 1,241,673 0
Kenneth C. Donahey........ 161,984 346,250 1,459,010 0
William Gracey............ 21,374 94,876 0 0
Dan Slipkovich............ 33,026 141,125 294,813 0
</TABLE>
- --------
(1) The closing price for the Columbia/HCA common stock, as reported by the
NYSE, on December 31, 1998 was $24.75. Value is calculated on the basis of
the difference between the option exercise price and $24.75, multiplied by
the number of shares of Columbia/HCA common stock underlying the option.
Benefits and Employment Matters Agreement
In connection with the distribution, Columbia/HCA, LifePoint and Triad
entered into a benefits and employment matters agreement, which allocates
responsibilities for employee compensation, benefits, labor, benefit plan
administration and certain other employment matters on and after the
distribution date. Among other things, the benefits and employment matters
agreement generally provides for grants to LifePoint employees of options to
purchase shares of LifePoint common stock and Triad common stock in respect of
vested options to purchase Columbia/HCA common stock, other than incentive
stock options, and grants to purchase LifePoint stock in replacement of
incentive stock options covering Columbia/HCA common stock. The benefits and
employment matters agreement also provides for the establishment of certain of
the benefit plans described in this section. See "Arrangements Relating to the
Distribution--Benefits and Employment Matters Agreement" for a more detailed
description of such arrangements.
The 1998 Long-Term Incentive Plan
Reservation of Shares. LifePoint adopted the 1998 long-term incentive
plan, pursuant to which 5,425,000 shares of LifePoint common stock have been
reserved for issuance. The shares of LifePoint common stock to be issued will
be made available from authorized but unissued shares of LifePoint common stock
or issued shares that have been reacquired by LifePoint. If any shares of
LifePoint common stock that are the subject of an award are not issued and
cease to be issuable for any reason, such shares will no longer be charged
against the maximum share limitations and may again be made subject to awards.
In the event of certain corporate reorganizations, recapitalizations or other
specified corporate transactions affecting LifePoint or the LifePoint common
stock, proportionate adjustments may be made to the number of shares available
for grant, and the number of shares under outstanding grants as well as the
other maximum share limitations, under the long-term incentive plan, and the
number of shares and prices under outstanding awards.
Duration. The long-term incentive plan has a term of 10 years, subject to
earlier termination or amendment by the LifePoint board of directors.
Administration. The long-term incentive plan is administered by the
compensation committee of the Board of Directors. Subject to the limitations
set forth in the long-term incentive plan, the compensation committee has the
authority to determine the persons to whom awards are granted, the types of
awards to be
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granted, the time at which awards will be granted, the number of shares, units
or other rights subject to each award, the exercise, base or purchase price of
an award (if any), the time or times at which the award will become vested,
exercisable or payable, and the duration of the award.
Eligibility. All employees of LifePoint and its subsidiaries and, in the
case of awards other than incentive stock options, any consultant or
independent contractor providing services to LifePoint or a subsidiary, are
eligible to be granted awards under the long-term incentive plan, as selected
from time to time by the compensation committee in its sole discretion.
Types of Awards. The long-term incentive plan authorizes the grant of the
following types of awards:
. Stock Options (nonqualified and incentive stock options). The
maximum number of shares that may be covered under options granted
to any individual in any calendar year is 700,000 shares. The
exercise price of an option may be determined by the compensation
committee, provided that the exercise price per share of an option
may not be less than the fair market value of a share of LifePoint
common stock on the date of grant. The value of LifePoint common
stock, determined at the time of grant, that may be subject to
incentive stock options that become exercisable by an employee in
any one year is limited to $100,000. The maximum term of any stock
option will be 10 years from the date of grant. The compensation
committee is to determine the extent to which an option will
become and/or remain exercisable in the event of termination of
employment or service of a participant under various
circumstances, including retirement, death or disability, subject
to certain limitations for incentive stock options. Subject to
certain terms and conditions, an option may be exercised in whole
or in part at any time during the term thereof by written notice
to LifePoint, together with payment of the aggregate exercise
price of the option. In addition to the exercise price, the
participant must pay LifePoint in cash or, at the compensation
committee's discretion, in LifePoint common stock, the full amount
of all applicable income tax and employment tax amounts required
to be withheld in connection with the exercise of the option.
. Stock Appreciation Rights. A stock appreciation right may be
granted either in tandem with an option or without a related
option. A stock appreciation right entitles the holder, upon
exercise, to receive a payment based on the excess of the fair
market value of a share of LifePoint common stock on the date of
exercise over the base price of the stock appreciation right,
which may not be less than the fair market value of a share of
LifePoint common stock on the date of grant, multiplied by the
number of shares as to which such stock appreciation right is
being exercised. The maximum term of a stock appreciation right
will be 10 years from the date of grant. No more than 700,000
shares of LifePoint common stock may be subject to stock
appreciation rights granted to any one participant during any
calendar year. Stock appreciation rights are payable, in the
discretion of the compensation committee, in cash, in shares of
LifePoint common stock, or in a combination of cash and shares of
LifePoint common stock
. Performance Awards. Performance awards are units denominated on
the date of grant either in shares of LifePoint common stock or in
specified dollar amounts. The compensation committee may grant
performance awards that are intended to qualify as performance-
based compensation under Section 162(m) of the Internal Revenue
Code of 1986, as amended, as well as performance awards that are
not Section 162(m) awards. Performance awards are payable upon the
achievement of performance criteria established by the
compensation committee at the beginning of the applicable
performance period. At the time of grant, the compensation
committee establishes the number of units, the duration of the
performance period or periods, the applicable performance
criteria, and, in the case of performance units,
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<PAGE>
the target unit value or range of unit values for the performance
awards. At the end of the performance period, the compensation
committee determines the payment to be made, based on the extent
to which the performance goals have been achieved. Performance
awards are payable, in the discretion of the compensation
committee, in cash, in shares of LifePoint common stock, or in a
combination of cash and shares of LifePoint common stock. The
maximum amount of compensation that may be payable to a
participant during any one calendar year with respect to a
performance unit shall be $4.2 million. The maximum number of
performance shares granted to a participant during any one
calendar year shall be 280,000 performance shares.
. Phantom Stock. An award of phantom stock gives the participant the
right to receive payment at the end of a fixed vesting period
based on the value of a share of LifePoint common stock at the
time of vesting. Phantom stock units are subject to such
restrictions and conditions to payment as the compensation
committee determines are appropriate. An award of phantom stock
may be granted, at the discretion of the compensation committee,
together with an award of dividend equivalent rights for the same
number of shares covered thereby. Phantom stock awards are
payable, in the discretion of the compensation committee, in cash,
in shares of LifePoint common stock having an equivalent fair
market value on the applicable vesting dates, or in a combination
thereof.
. Restricted Stock Awards. An award of restricted stock represents
shares of LifePoint common stock that are issued subject to such
restrictions on transfer and incidents of ownership, and such
forfeiture conditions, as the compensation committee deems
appropriate. The committee may grant awards of restricted stock
that are intended to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code. The
restrictions imposed upon an award of restricted stock will lapse
in accordance with the vesting requirements specified by the
compensation committee in the award agreement. Such vesting
requirements may be based on the continued employment of the
participant for a specified time period or on the attainment of
specified business goals or performance criteria established by
the compensation committee. The compensation committee may, in
connection with an award of restricted stock, require the payment
of a specified purchase price. Subject to the transfer
restrictions and forfeiture restrictions relating to the
restricted stock award, the participant will have the rights of a
stockholder of LifePoint, including all voting and dividend
rights, during the restriction period, unless the compensation
committee determines otherwise at the time of the grant. The
maximum number of shares of common stock that may be subject to a
restricted stock award granted to a participant during any one
calendar year shall be 280,000 shares.
. Dividend Equivalents. Dividend equivalent awards entitle the
holder to a right to receive cash payments determined by reference
to dividends declared on the LifePoint common stock during the
term of the award, which will not exceed 10 years from the date of
grant. Dividend equivalent awards may be granted on a stand-alone
basis or in tandem with other awards under the long-term incentive
plan. Dividend equivalent awards are payable in cash or in shares
of LifePoint common stock, as determined by the compensation
committee.
Change in Control. The compensation committee may, in an award agreement,
provide for the effect of a change in control, as defined in the long-term
incentive plan, on the award. Such provisions may include the acceleration of
an award's vesting or extension of the time for exercise, the elimination or
modification of performance or other conditions, the cash settlement of an
award or other adjustments that the compensation committee considers
appropriate.
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Executive Stock Purchase Plan
Reservation of Shares. Under the executive stock purchase plan, 1,000,000
shares of LifePoint common stock have been reserved for issuance pursuant to
all rights granted under the plan. The shares of LifePoint common stock to be
issued will be made available from authorized but unissued shares of LifePoint
common stock or issued shares that have been reacquired by LifePoint. To the
extent that any right to purchase LifePoint common stock granted under the plan
is forfeited, cancelled or otherwise terminated, the shares of LifePoint common
stock covered hereunder will no longer be charged against the maximum share
limitation and may again be made subject to rights granted under the plan. In
the event of certain corporate reorganizations, recapitalizations or other
specified corporate transactions affecting LifePoint or the LifePoint common
stock, proportionate adjustments may be made to the number of shares available
for grant, and the number of shares under outstanding grants.
Duration. The executive stock purchase plan has a term of 10 years,
subject to earlier termination or amendment by the board of directors.
Administration. The executive stock purchase plan is administered by the
compensation committee of the board of directors. Subject to limitations to be
set forth in the executive stock purchase plan, the compensation committee has
the authority to determine the persons to whom rights are granted, the time at
which rights will be granted, the number of shares that may be purchased under
a right, the date or period during which such right may be exercised and all
other terms of the right. With the consent of the affected participant, the
compensation committee has the authority to cancel and replace outstanding
rights previously granted with new rights for the same or a different number of
shares and to amend the terms of any outstanding right.
Eligibility. All executive employees of LifePoint and its subsidiaries
are eligible to receive rights under the executive stock purchase plan.
Initial Grants. The executive stock purchase plan specifically provides
for initial grants of rights to certain executive officers (the "initial
participants"). These rights were to be exercised for a period beginning on the
distribution date and ending on the 21st trading date of the LifePoint common
stock. Messrs. Mercy, Fleetwood, Donahey, Carpenter, Hemphill, Gracey and
Slipkovich purchased 292,683, 146,341, 146,341, 146,341, 68,293, 73,171 and
73,171 shares, respectively, prior to the expiration of the exercise period,
which shares reflect the maximum possible number of shares such officers could
purchase under their initial grants.
Exercise of Rights. A right will be exercised by written notice to
LifePoint on or prior to a specified exercise date. Such written notice will be
an agreement by the participant to pay the full purchase price of the LifePoint
common stock by means of a purchase loan, except to the extent the notice is
accompanied by a cash payment.
Purchase Loan. LifePoint will loan each participant 100% of the purchase
price of LifePoint common stock acquired by the participant under a right, on a
full recourse basis, to the extent the participant does not elect to pay the
purchase price in cash. The purchase price of the LifePoint common stock
acquired shall equal the fair market value of such common stock on the date
preceding the purchase. The loans will be secured by the shares purchased. For
those initial participants with multiple share purchase loans, each loan will
be secured by all shares purchased within the exercise period. Interest will be
paid upon the loan's maturity or upon the loan's prepayment and will accrue at
the applicable Federal rate, compounded semi-annually. However, if the
participant's employment terminates for cause or the participant voluntarily
terminates employment, other than for a good reason, within three years of
purchasing the shares or, in the case of initial participants, three years from
the distribution date, or, if earlier, the date of a change in control, in
addition to any amounts otherwise due under the loan, including accrued
interest, the participant will be required to pay LifePoint the additional
interest that would have been payable in respect of the loan, if the regular
interest rate on such purchase loan had been the prime rate, and interest
thereon at such rate to the actual date of payment.
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Loan Maturity and Repayment. A loan will mature upon the earlier of
(1) the fifth anniversary following the purchase of the shares,
(2) termination of the participant's employment for any reason, or
(3) bankruptcy of the participant.
Within 120 days following the loan's maturity, the participant will be
required to pay LifePoint the full amount remaining due on the loan, including
all unpaid accrued interest.
Loan Prepayments. The loan may be prepaid, in whole or in part, at any
time. At any time following the earlier of the second anniversary following the
purchase of the shares, or, in the case of initial participants, two years from
the distribution date, or a change in control, such shares may, at the
participant's election, be sold to repay the loan. Any cash dividends received
on the purchased shares prior to payment of the full amount due on such loan,
net of assumed Federal, state and local income taxes, will be used to prepay
the loan.
Transfer Restrictions. A participant will not be entitled to delivery of
the stock certificates representing the shares purchased and none of such
shares may be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of, except by will or the applicable laws of descent and
distribution, until the later of
(a) full repayment of the purchase price and accrued interest and any
additional amount that may be due under the executive stock purchase plan, and
(b) the earlier of
(1) the third anniversary of the date the shares were purchased,
or, in the case of initial participants, three years from the
distribution date,
(2) the participant's termination of employment or bankruptcy, and
(3) a change in control.
However, such shares may be sold to pay the loan at maturity, or to
voluntarily prepay such loan at any time after the earlier of the second
anniversary of the date the shares were purchased, or, in the case of initial
participants, two years from the distribution date, or a change in control.
Death or Disability Benefit. In the event of termination of employment
because of death or disability, where the amount remaining due on the loan,
including accrued interest, is greater than the fair market value of the shares
purchased, as of the date of such death or disability, LifePoint will pay a
death or disability benefit equal to the amount of such payment remaining due
over the shares' fair market value as of the date of such death or disability.
For those initial participants with multiple share purchase loans, the death or
disability benefit will be calculated on a consolidated basis, so that the
benefit equals
(1) the aggregate payments remaining due for all such loans divided by
(2) the aggregate related purchased shares' fair market value, as defined
in the plan, as of the date of death or disability.
Annual Cash Bonus Plan
LifePoint plans to adopt an annual cash bonus plan that will provide for
the payment of annual cash bonuses following the close of each plan year, based
upon the achievement of objective performance goals. The annual bonus plan will
be administered by the Office of the Senior Vice President of Human Resources
and Administration. A plan committee, the compensation committee and the Chief
Executive Officer of LifePoint will also have administrative functions.
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Participation will be limited to key management employees. An appropriate
senior officer will recommend non-officer employees for participation in the
annual bonus plan as well as the related performance targets for such bonus.
Such recommendations will be subject to final review and approval by the Chief
Executive Officer. All recommendations regarding officers are to be made by the
Chief Executive Officer, subject to final review and approval by the
compensation committee. For a participant added during the plan year, the bonus
shall be determined pursuant to the plan and prorated appropriately.
Participation in any given plan year will not connotate participation in any
subsequent plan year. The plan committee may remove any participant from the
plan at any time, specifying the effective date of such action for the purpose
of prorating their eventual bonus, if any.
As soon as practicable after the end of each plan year and after
receiving the recommendation of the plan committee, the Chief Executive Officer
will review and approve bonus payments for all non-officer participants. The
compensation committee may consider recommendations for retroactive adjustments
to performance objectives in order to avoid unwarranted penalties or unearned
windfalls. The compensation committee will review and approve bonus payments
for all participating officers. Bonus payments will be based on the achievement
of specific performance objectives, based on criteria determined in accordance
with the annual bonus plan's terms. Such criteria may include constituency
satisfaction, the financial performance of LifePoint and other selected
strategic components. Performance objectives may be subject to retroactive
adjustments to reflect equitably unforeseen circumstances.
In the event a bonus is payable pursuant to the plan and a participant's
employment with LifePoint is terminated prior to the payment of the bonus by
reason of retirement, total and permanent disability or death, such
participant, or estate in event of death, will receive a pro rata bonus payment
as soon as practical after the plan year. The proration considered above shall
equal 100% of the earned bonus for the portion of the plan year the participant
was employed. A participant who is otherwise voluntarily or involuntarily
separated from LifePoint prior to the payment of any bonus shall cease to be a
participant.
The Chief Executive Officer, with the approval of the compensation
committee, may modify, amend or terminate the bonus plan, in whole or in part,
at any time, except that no such action may negatively affect bonuses for any
prior year.
Management Stock Purchase Plan
Reservation of Shares. 250,000 shares of LifePoint common stock may be
issued pursuant to all awards of restricted shares or in respect of restricted
share units under the management stock purchase plan. The shares of LifePoint
common stock to be issued will be made available from authorized but unissued
shares of LifePoint common stock or issued shares that have been reacquired by
LifePoint. If any shares of LifePoint common stock that are the subject of an
award are forfeited, the related shares will no longer be charged against such
maximum share limitation and may again be made subject to awards. In the event
of certain corporate reorganizations, recapitalizations, or other specified
corporate transactions affecting LifePoint or the LifePoint common stock, such
substitution or adjustment shall be made in the aggregate number of LifePoint
common stock that may be distributed as restricted shares or in respect of
restricted share units under the management stock purchase plan, and the number
of restricted shares and/or restricted share units outstanding under the
management stock purchase plan, as may be determined to be appropriate by the
compensation committee in its sole discretion.
Duration. The management stock purchase plan has a term of ten years,
subject to earlier termination or amendment by the LifePoint board of
directors.
Administration. The management stock purchase plan is administered by the
compensation committee of the LifePoint board of directors. The compensation
committee has authority to administer the plan and to exercise all the powers
and authorities either specifically granted to it under, or necessary or
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advisable in the administration of, the management stock purchase plan,
including, without limitation, to interpret the plan, to prescribe, amend and
rescind rules and regulations relating to the plan, to determine the terms and
provisions of agreements, which need not be identical, entered into under the
plan and to make all other determinations deemed necessary or advisable for
the administration of the plan.
Eligibility. All LifePoint employees or groups of employees designated
by the compensation committee in its sole discretion are eligible to be
granted awards.
Restricted Share Awards. The compensation committee may make awards of
restricted shares. Under the management stock purchase plan, a participant may
elect to reduce his base salary up to a maximum percentage established by the
compensation committee with respect to his employee classification and, in
lieu of salary, receive a number of restricted shares equal to the amount of
such salary reduction divided by a dollar amount equal to 75% of the average
market value, as defined in the plan, of LifePoint common stock on the date on
which such restricted share is granted. Restricted shares will be granted on
June 30 and December 31 of each calendar year for which a salary reduction
election is in effect.
An award of restricted shares represents shares of LifePoint common
stock that are issued subject to such restrictions on transfer and incidents
of ownership, and such forfeiture conditions, as set forth in the plan and as
the compensation committee deems appropriate. Generally, the restricted period
of restricted shares granted under the management stock purchase plan will be
three years from the date of grant. Subject to such transfer and forfeiture
restrictions, the participant shall have all rights of a stockholder with
respect to such restricted shares, including the right to receive dividends
and the right to vote such restricted shares.
Conversion of Restricted Shares into Restricted Share Units. If during
the restricted period the compensation committee determines that LifePoint may
lose its Federal income tax deduction in connection with the future lapsing of
the restrictions on restricted shares because of the deductibility cap of
Section 162(m) of the Code, the compensation committee, in its discretion, may
convert some or all of the restricted shares into an equal number of share
units, as to which payment will be postponed until such time as LifePoint will
not lose its Federal income tax deduction for such payment under Section
162(m). Until payment of the restricted share units is made, the participant
will be credited with dividend equivalents on the restricted share units,
which dividend equivalents will be converted into additional restricted share
units.
Termination of Employment During the Restricted Period. If during the
restricted period the participant's employment is terminated by LifePoint
either for cause, as defined in the plan, or for any reason by the
participant, the participant will forfeit his or her rights in the restricted
shares, which shall automatically be considered to be cancelled, and shall
have only an unfunded right to receive from LifePoint's general assets a cash
payment equal to the lesser of
(1) the fair market value of such restricted shares on the participant's
last day of employment or
(2) the aggregate base salary foregone by the participant as a condition
of receiving the restricted shares.
If a participant's employment is terminated by LifePoint without cause
during the restricted period, the participant will forfeit his rights in the
restricted shares, which shall automatically be considered to be cancelled,
and shall have only an unfunded right to receive from LifePoint's general
assets a cash payment equal to either
(1) the fair market value of such restricted shares on the participant's
last day of employment or
(2) the aggregate base salary foregone by the participant as a condition
of receiving the restricted shares, with the compensation committee to have
the sole discretion as to which of such amounts shall be payable.
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If the employment of a participant holding restricted share units
terminates during the restricted period relating to the restricted share
units, they shall be treated in a manner substantially equivalent to the
treatment of restricted shares set forth above.
Upon a termination of employment which results from a participant's
death or disability, all restrictions then outstanding with respect to
restricted shares held by the participant automatically will expire. Upon the
retirement of a participant, the compensation committee shall determine, in
its discretion, whether all restrictions then outstanding with respect to
restricted shares held by the participant shall expire or whether the
participant shall instead be treated as though the participant's employment
had been terminated by LifePoint without cause, as described above.
Change in Control. Upon the occurrence of a change in control of
LifePoint, the restricted period automatically will terminate as to all
restricted shares awarded under the plan.
Employee Stock Ownership Plan
LifePoint established for the benefit of its employees a leveraged ESOP
which, on June 10, 1999, purchased 2,796,719 newly issued shares of LifePoint
common stock. The purchase price of the shares was financed primarily by
issuing a promissory note to LifePoint. Initially, all such shares are held in
a suspense account under the LifePoint ESOP. LifePoint will contribute
annually to the LifePoint ESOP the funds required to repay the ESOP loan. As
the ESOP loan is repaid, shares will be released from the suspense account and
will be allocated to accounts established for participants under the LifePoint
ESOP. The loan will be repaid over a 10 year period. Generally, each employee
of LifePoint and its participating subsidiaries will participate in the
LifePoint ESOP as of the first January 1 after his or her date of hire. Each
participant in the LifePoint ESOP will be fully vested in his accounts after
completion of seven years of service with LifePoint, including any pre-
distribution service with Columbia/HCA and its affiliates.
Employment Contracts, Termination Of Employment Agreements and Change in
Control Arrangements
Employment Agreement of Scott Mercy
Columbia/HCA entered into an employment agreement with Scott Mercy,
which LifePoint assumed and became bound by following the distribution. In
addition, Mr. Mercy received stock option awards in connection with entering
into the employment agreement.
The employment agreement provides for a term of employment of five years
with automatic one-year renewals on the fourth and each subsequent anniversary
of the effective date of such employment agreement, absent notice of non-
extension, subject to earlier termination as provided in the employment
agreement, and provides that Mr. Mercy will serve as Chief Executive Officer,
a Director and Chairman of the Board of Directors of LifePoint after the
distribution date at an annual base salary of $300,000, subject to review at
least annually. The employment agreement also provides for guaranteed bonuses
in amounts equal to
(1) $66,849, payable as promptly as practicable after the execution of
the employment agreement,
(2) $450,000, payable within 90 days following the distribution date and
(3) 50% of Mr. Mercy's base salary in effect on December 31, 1999
payable as promptly as practicable following the close of 1999.
Effective for LifePoint's first fiscal year beginning after 1999, the
employment agreement provides that Mr. Mercy will have an opportunity to earn
an annual target bonus equal to not more than 100% of his base salary, based
upon certain annual targets. Mr. Mercy will also be given an initial grant
under the executive stock purchase plan. See "--Executive Stock Purchase
Plan."
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In the event that Mr. Mercy's employment is involuntarily terminated
without "cause" or if he resigns with "good reason", each as defined in the
employment agreement, Mr. Mercy will be entitled to payment of his then-current
base salary and targeted bonus for the shorter of 24 months or the then-
remaining term of the employment agreement, his benefit rights, payments for
certain other accrued amounts and the costs of continued insurance coverage. In
addition, Mr. Mercy will be entitled to certain payments if his employment is
terminated for death or disability. In the event that Mr. Mercy's employment is
terminated following the term of the employment agreement, in addition to his
benefit rights and a lump-sum payment equal to his accrued payments, under
certain circumstances Mr. Mercy will be entitled to a pro rata portion of 50%
of his then-current base salary. Mr. Mercy will be indemnified in the event
that any payment or benefit provided to him under the employment agreement
would subject Mr. Mercy to an excise tax under Section 4999 of the Internal
Revenue Code.
The employment agreement includes certain restrictive covenants for the
benefit of Columbia/HCA and LifePoint relating to non-disclosure by Mr. Mercy
of Columbia/HCA or LifePoint's confidential business information and trade
secrets and non-competition by Mr. Mercy with regards to any business that is
in competition with the hospitals owned by either Columbia/HCA or LifePoint.
Certain Termination Arrangements
Each of Messrs. Fleetwood, Donahey and Gracey will participate in an
enhanced severance plan through December 31, 1999. In the event that either Mr.
Fleetwood or Mr. Donahey is terminated without cause during 1999, he will
receive continued payment of his then-current base salary and his target bonus
for 36 months after such termination. In the event that Mr. Gracey is
terminated without cause during 1999, he will receive continued payment of this
then-current base salary and his target bonus for 24 months after such
termination. Severance policies for termination occurring subsequent to
December 31, 1999 have not yet been established.
Certain One-Time Payments
Each of Messrs. Mercy, Fleetwood, Donahey, Gracey and Slipkovich received
from Columbia/HCA a one-time payment of $450,000, $787,500, $787,500, $270,000,
and $186,900, respectively, to compensate them for a reduction in salary at the
time of the distribution. In return, it is expected that their base salaries
will remain fixed until the third anniversary of the distribution date.
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CERTAIN TRANSACTIONS
LifePoint made loans to certain executive officers in connection with
such officers' initial purchases of LifePoint common stock under the LifePoint
executive stock purchase plan as follows: Messrs. Mercy--$2,977,134;
Fleetwood--$1,488,567; Donahey--$1,488,567; Carpenter--$1,488,567; Hemphill--
$695,290; Gracey--$744,284; and Slipkovich--$744,284. See "Management--
Executive Stock Purchase Plan" for a more detailed description of such plan and
loans.
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PRINCIPAL STOCKHOLDER
The following table sets forth information regarding the beneficial
ownership of LifePoint common stock as of June 30, 1999, by each person known
by LifePoint to be a beneficial owner of 5% or more of the outstanding
LifePoint common stock, beneficial ownership of LifePoint common stock by each
director and named executive officer and all directors and executive officers
as a group:
<TABLE>
<CAPTION>
Number of Percent
Name of Beneficial Owner Shares(1)(2) of Class
- ------------------------ ------------ --------
<S> <C> <C>
LifePoint Hospitals, Inc. Retirement Plan............... 2,796,719 8.3%
FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson(3)............................................. 2,486,463 7.6%
Wellington Management Company, LLP(4)................... 3,637,299 12.2%
Scott L. Mercy(5)....................................... 482,467 *
Ricki Tigert Helfer(5).................................. 1,388 *
Dr. John E. Maupin, Jr., D.D.S.(5)...................... 555 *
DeWitt Ezell, Jr.(5) ................................... 2,272 *
William V. Lapham(5).................................... 555 *
William F. Carpenter(5)................................. 251,219 *
Neil D. Hemphill(5)..................................... 139,366 *
James M. Fleetwood, Jr.(5).............................. 271,419 *
Kenneth C. Donahey(5)................................... 281,181 *
William Gracey(5)(6).................................... 130,439 *
Dan Slipkovich(5)....................................... 138,451 *
All directors and executive officers as a group (11
persons)(5)............................................ 1,699,312 5.2%
</TABLE>
- --------
* Less than one percent.
(1) Unless otherwise indicated, each stockholder shown on the table has sole
voting and investment power with respect to the shares beneficially owned.
The number of shares shown does not include the interest of certain
persons in shares held by family members in their own right.
(2) Each named person or group is deemed to be the beneficial owner of
securities which may be acquired within 60 days through the exercise or
conversion of options, warrants and rights, if any, and such securities
are deemed to be outstanding for the purpose of computing the percentage
beneficially owned by such person or group. Such securities are not deemed
to be outstanding for the purpose of computing the percentage beneficially
owned by any other person or group. Accordingly, the indicated number of
shares includes shares issuable upon conversion of convertible securities
or upon exercise of options (including employee stock options) held by
such person or group.
(3) The ownership given for FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson is based on information contained in the Schedule 13G dated
February 1, 1999, filed with the Commission by FMR Corp. in respect of its
beneficial ownership of Columbia/HCA common stock. The address of FMR
Corp. is 82 Devonshire Street, Boston, Massachusetts 02109.
(4) The ownership given for Wellington Management Company, LLP is based on
information contained in the Schedule 13G dated June 10, 1999, filed with
the Commission by Wellington Management Company, LLP in respect of its
beneficial ownership of LifePoint Hospitals, Inc. common stock. The
address of Wellington Management Company, LLP is 75 State Street, Boston,
Massachusetts 02109.
(5) Includes shares that are issuable by options that are exercisable within
60 days (Mr. Mercy, 186,150; Ms. Helfer, 555; Dr. Maupin, 555; Mr. Ezell,
555; Mr. Lapham, 555; Mr. Carpenter, 104,878; Mr. Hemphill, 69,884; Mr.
Fleetwood, 124,037; Mr. Donahey, 125,112; Mr. Gracey, 56,256; Mr.
Slipkovich, 62,336).
(6) Includes 698 shares held by Mr. Gracey's wife, as to which he disclaims
beneficial ownership.
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ARRANGEMENTS RELATING TO THE DISTRIBUTION
Immediately prior to the distribution, LifePoint was a wholly owned
subsidiary of Columbia/HCA and, until the distribution, the results of
operations of the assets and entities that constitute LifePoint were included
in Columbia/HCA's consolidated financial statements. Following the
distribution, Columbia/HCA no longer has any ownership interest in LifePoint,
which is an independent, publicly-traded company, although certain Columbia/HCA
benefit plans received shares of LifePoint in the distribution. On the
distribution date, Columbia/HCA also distributed to its stockholders all
outstanding shares of the common stock of Triad, a recently formed company
comprising the former Pacific Group of Columbia/HCA. After the distribution,
Columbia/HCA no longer has any ownership interest in Triad and neither
LifePoint nor Triad has any ownership interest in the other.
Immediately prior to the distribution, Columbia/HCA, LifePoint and Triad
entered into certain agreements to define their ongoing relationships after the
distribution and to allocate tax, employee benefits and certain other
liabilities and obligations arising from periods prior to the distribution
date. A copy of each of these agreements has previously been filed with the
Commission by LifePoint, and each agreement is incorporated by reference to the
registration statement of which this prospectus forms a part. The following
descriptions include a summary of the material terms of these agreements but do
not purport to be complete and are qualified in their entirety by reference to
the complete text of the agreements.
Distribution Agreement
Columbia/HCA, LifePoint and Triad entered into a distribution agreement
which provided for, among other things, certain corporate transactions required
to effect the distribution and other arrangements among Columbia/HCA, LifePoint
and Triad subsequent to the distribution. The distribution agreement also sets
forth the conditions to the distribution.
Transfers of Assets to LifePoint and Triad
The distribution agreement provided that Columbia/HCA would transfer all
of its right, title and interest in the assets constituting the America Group
business to LifePoint and all of its right, title and interest in the assets
constituting the Pacific Group business to Triad. The distribution agreement
further provided that each of LifePoint and Triad would take such action, if
any, as may be necessary to transfer assets owned by it so that, upon
completion of all asset transfers by Columbia/HCA, LifePoint and Triad, the
assets constituting the America Group business would be owned by LifePoint and
the assets constituting the Pacific Group business would be owned by Triad.
Each party to the distribution agreement agreed to exercise its
reasonable efforts to obtain promptly any necessary consents and approvals and
to take such actions as may be reasonably necessary or desirable to carry out
the purposes of the distribution agreement and the other agreements summarized
below. In the event that any transfers contemplated by the distribution
agreement were not effected on or prior to the distribution date, the parties
agreed to cooperate to effect such transfers as promptly as practicable
following the distribution date, and pending any such transfers, to hold any
asset not so transferred in trust for the use and benefit of the party entitled
thereto, at the expense of the party entitled thereto, and to retain any
liability not so transferred for the account of the party by whom such
liability was to be assumed. All assets were transferred without any
representation or warranty, on an "as is-where is" basis and the relevant
transferee assumed the risk that any necessary consent to transfer was not
obtained.
Allocation of Financial Responsibility
The distribution agreement provides for, among other things, assumptions
of liabilities and cross-indemnities designed to allocate, effective as of the
distribution date, financial responsibility for the liabilities arising out of
or in connection with:
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. the assets and entities that constitute LifePoint and its
subsidiaries, including liabilities arising in respect of the
transfer of such assets and entities to LifePoint, as well as the
LifePoint Form 10 registration statement, subject to limited
exceptions, to LifePoint; and
. the assets and entities that constitute Triad and its
subsidiaries, including liabilities arising in respect of the
transfer of such assets and entities to Triad, as well as the
Triad Form 10 registration statement, subject to limited
exceptions, to Triad.
Pursuant to the distribution agreement, Columbia/HCA will indemnify
LifePoint and Triad for any losses which they may incur arising from the
pending governmental investigations of certain of Columbia/HCA's business
practices. Columbia/HCA will also indemnify LifePoint and Triad for any losses
which they may incur arising from stockholder actions and other legal
proceedings related to the governmental investigations which are currently
pending against Columbia/HCA, and from proceedings which may be commenced by
government authorities or by private parties in the future that arise from
acts, practices or omissions engaged in prior to the distribution date and
relate to the pending proceedings. Columbia/HCA has also agreed that, in the
event that any hospital owned by LifePoint or Triad is permanently excluded
from participation in the Medicare and Medicaid programs as a result of the
proceedings described above, then Columbia/HCA will make a cash payment to
LifePoint or Triad, as the case may be, in an amount, if positive equal to five
times the excluded hospitals' 1998 income from continuing operations before
depreciation and amortization, interest expense, management fees, impairment of
long-lived assets, minority interests and income taxes, as set forth on a
schedule to the distribution agreement less the net proceeds of the sale or
other disposition of the excluded hospital. Each of LifePoint and Triad has
agreed that, in connection with the government investigations described above,
it will participate with Columbia/HCA in negotiating one or more compliance
agreements setting forth each of their agreements to comply with applicable
laws and regulations. Columbia/HCA will not indemnify LifePoint or Triad for
losses relating to any acts, practices and omissions engaged in by LifePoint or
Triad after the distribution date, whether or not LifePoint or Triad is
indemnified for similar acts, practices and omissions occurring prior to the
distribution date. See "Risk Factors--Potential Adverse Impact of Columbia/HCA
Investigations and Litigation" and "Government Regulation and Other Factors--
Governmental Investigation of Columbia/HCA and Related Litigation."
Prior to the distribution, Columbia/HCA, through its wholly owned
insurance subsidiary and through third party carriers, maintained insurance for
the businesses of LifePoint and Triad. The distribution agreement provides that
Columbia/HCA also will be solely responsible for:
. claims against LifePoint or Triad covered by an insurance policy
maintained by Columbia/HCA, without regard to deductible amounts,
coinsurance amounts and policy limits, which are based upon facts
and circumstances occurring prior to the distribution date; and
. workers' compensation claims against LifePoint or Triad if the
underlying injury or condition was incurred before the
distribution.
Government Programs
LifePoint and Triad are responsible for the Medicare, Medicaid and Blue
Cross cost reports, and associated receivables and payables, for their
facilities for all periods ending after the distribution date. Columbia/HCA has
agreed to indemnify LifePoint and Triad with respect to the Medicare, Medicaid
and Blue Cross cost reports, and associated receivables and payables, for the
LifePoint and Triad facilities relating to periods ending on or prior to the
distribution date. LifePoint and Triad are responsible for their own cost
report functions after the distribution date, as well as for any terminating
cost reports required to be filed in respect of the distribution.
Other Matters
Each of Columbia/HCA, LifePoint and Triad generally agrees to provide to
the other parties reasonable access to certain corporate records and
information reasonably requested by another party. Each of
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Columbia/HCA, LifePoint and Triad is generally required to maintain the
confidentiality of confidential information it possesses regarding another
party. The parties will endeavor to resolve any disputes which may arise
through discussion among senior management of the affected parties. If such
discussions do not succeed in resolving a disputed matter, the parties retain
the right to commence a legal action.
The distribution agreement also provides that, generally, the costs and
expenses incurred through the distribution date in connection with the
distribution are properly allocable to, and will be paid by, Columbia/HCA.
Except as set forth in the distribution agreement or any related agreement,
each party bears its own costs and expenses after the distribution.
Tax Sharing and Indemnification Agreement
Columbia/HCA, LifePoint and Triad entered into a tax sharing and
indemnification agreement, which allocates tax liabilities among Columbia/HCA,
LifePoint and Triad and addresses certain other tax matters such as
responsibility for filing tax returns, control of and cooperation in tax
litigation, and qualification of the distribution as a tax-free transaction.
Generally, Columbia/HCA will be responsible for taxes that are allocable to
periods prior to the distribution date, and each of Columbia/HCA, LifePoint and
Triad will be responsible for its own tax liabilities, including its allocable
share of taxes shown on any consolidated, combined or other tax return filed by
Columbia/HCA, for periods after the distribution date. The tax sharing and
indemnification agreement prohibits LifePoint and Triad from taking actions
that could jeopardize the tax treatment of either the distribution or the
internal restructuring that preceded the distribution, and requires LifePoint
and Triad to indemnify each other and Columbia/HCA for any taxes or other
losses that result from any such actions. In connection with preserving the tax
treatment of the distribution and the internal restructuring that preceded the
distribution, LifePoint and Triad agreed to take such actions as Columbia/HCA
may request and LifePoint and Triad each made certain covenants including
covenants that, for a period of three years following the distribution, they
generally will not authorize, undertake or facilitate any of the following
absent the consent of Columbia/HCA:
(1)an issuance of additional stock or other equity instrument,
(2)any merger, dissolution, consolidation, redemption or complete
or partial liquidation,
(3)a transfer or disposition of assets, other than the disposition
of certain assets that have been identified for divestiture, or
(4)a recapitalization or other change in capital structure.
Benefits and Employment Matters Agreement
Columbia/HCA, LifePoint and Triad entered into a benefits and employment
matters agreement, which allocates responsibilities for employee compensation,
benefits, labor, benefit plan administration and certain other employment
matters on and after the distribution date.
General Allocation
Each of LifePoint and Triad assumed responsibility as employer in respect
of its employees from and after the distribution date. Subject to specific
exceptions, Columbia/HCA retains the liabilities in respect of former employees
associated with the facilities and operations of LifePoint and Triad who
terminated employment on or prior to the distribution date. Benefit plans
established by LifePoint or Triad generally will recognize past service with
Columbia/HCA.
Defined Contribution and Welfare Benefit Plans
The benefits and employment matters agreement provides that each of
LifePoint and Triad will adopt a new defined contribution plan for its
respective employees, as well as for the respective former employees
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associated with the facilities and operations of LifePoint and Triad.
Generally, assets of the current Columbia/HCA money purchase pension, stock
bonus and salary deferral plans that are attributable to current and former
employees of LifePoint and Triad were transferred, effective immediately prior
to the distribution date, to the new plans, and LifePoint and Triad thereafter
will provide benefits under such plans to their current and former employees.
Except for such transferred assets, Columbia/HCA retains sole responsibility
for all liabilities and obligations under the existing Columbia/HCA defined
contribution plans.
LifePoint and Triad adopted welfare benefit plans for their employees
that are substantially identical to the benefit plans of Columbia/HCA.
Generally, Columbia/HCA is responsible for all liabilities and obligations
relating to claims incurred or premiums owed in respect of welfare plans for
periods prior to the distribution date and LifePoint or Triad, as appropriate,
assumed such responsibility for periods thereafter with respect to its current
or former employees.
Columbia/HCA provided certain administrative services through May 31,
1999 in respect of LifePoint welfare plans and will provide such services
through the end of 1999 in respect of Triad welfare plans. LifePoint and Triad
have agreed to indemnify Columbia/HCA and its agents in respect of the services
performed for such plans, so long as Columbia/HCA and its agents shall have
acted in good faith in performing such services.
The LifePoint ESOP and the Triad ESOP
Each of LifePoint and Triad established an ESOP. On June 10, 1999, the
distribution, the LifePoint ESOP purchased, at fair market value, 2,796,719
newly issued shares of LifePoint common stock, and the Triad ESOP purchased, at
fair market value, 3,000,000 newly issued shares of Triad common stock. Each
purchase was financed primarily by issuing a promissory note to LifePoint in
the case of the LifePoint ESOP or issuing a promissory note to Triad in the
case of the Triad ESOP. Each loan will be amortized over a period of not more
than 10 years.
Treatment of Columbia/HCA Common Stock Options
Pursuant to the benefits and employment matters agreement, each of
LifePoint and Triad established new stock option plans, and adjusted
outstanding Columbia/HCA common stock options to reflect the distribution. The
nature of the adjustment depended on the type of option, as follows:
. Incentive Stock Options: The option spread, whether positive or
negative, at the distribution date with respect to each of the
existing Columbia/HCA options intended to qualify as incentive
stock options under Section 422 of the Code ("ISOs") was preserved
by having each such ISO replaced entirely by an ISO issued by the
appropriate post-distribution date employer.
. Vested Nonqualified Stock Options: Except in the case of vested
Columbia/HCA nonqualified stock options to acquire a small number
of shares, the option spread, whether positive or negative, at the
distribution date with respect to each of the existing vested
Columbia/HCA nonqualified stock options was preserved by adjusting
the exercise price of such Columbia/HCA options and having
LifePoint and Triad issue additional vested nonqualified stock
options. This rule applied regardless of which post-distribution
date employer employs the optionee. Similar adjustments were made
with respect to vested Columbia/HCA nonqualified stock options
held by non-employee directors. In the case of vested Columbia/HCA
nonqualified stock options to acquire a small number of shares,
such
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Columbia/HCA options were adjusted in a manner that preserved the
pre-distribution value of such Columbia/HCA options.
. Non-Vested Nonqualified Stock Options: Non-vested non-qualified
options to acquire LifePoint and Triad stock were issued to
certain employees of Columbia/HCA.
See "Management--The 1998 Long-Term Incentive Plan" for a more detailed
description of such plan.
Insurance Allocation and Administration Agreement
Columbia/HCA has maintained various insurance policies for the benefit
of the America Group and the Pacific Group Divisions. Substantially all losses
in periods prior to the distribution are insured through a wholly-owned
insurance subsidiary of Columbia/HCA and excess loss policies maintained by
Columbia/HCA. In connection with the distribution, Columbia/HCA, LifePoint and
Triad entered into an insurance allocation and administration agreement to
provide for their continuing rights and obligations in respect of such
insurance after the distribution date and to define their relationship
regarding the insurance on their respective properties.
The insurance allocation and administration agreement provides that any
claims against insurers outstanding on the distribution date will be for the
benefit of the party who will own the asset which is the basis for the claim,
or, in the case of a liability claim, which is the owner of the facility at
which the activity which is the subject of the claim occurred. Columbia/HCA
will pay to LifePoint or Triad, as the case may be, any portion of such a
claim that is unpaid by an insurer to satisfy deductible, co-insurance or
self-insurance amounts, unless such amounts were paid to or accounted for by
the affected entity prior to the distribution date. Columbia/HCA, LifePoint
and Triad will do all things necessary to ensure that all of the insurance
policies which provide coverage to LifePoint and Triad remain available after
the distribution date to the same extent they were available prior to the
distribution date. Any retroactive rate adjustments for periods ending on or
before the distribution date in respect of such insurance policies will be
paid or received by Columbia/HCA.
Columbia/HCA, LifePoint and Triad will cooperate with each other in the
purchase of insurance coverage for periods after the distribution date,
although each retains the right to obtain separate insurance under certain
circumstances. LifePoint and Triad expect to purchase continuous coverage
under extensions or renewals of existing, or new, policies issued by Health
Care Indemnity, Inc., a subsidiary of Columbia/HCA. They also will endeavor to
obtain coverage for claims incurred but not reported prior to the distribution
date which would have been covered by the insurance policies existing at that
time, if the policies obtained to cover periods after the distribution do not
cover such claims. Columbia/HCA will bear the cost of any such additional
coverage.
Columbia/HCA will defend any claim made against two or more of the
parties, if indemnification for the claim is available to LifePoint or Triad,
as the case may be, under the distribution agreement. If indemnification under
the distribution agreement is not available and there is no other agreement or
indemnification in respect of such claim, the parties to the claim will
jointly defend the claim and will attempt to agree upon an appropriate
allocation of liability, subject to arbitration in the event the parties
disagree.
Columbia/HCA, or an affiliate of Columbia/HCA, will continue to
administer all claims under the insurance policies in effect prior to the
distribution date and, for an interim period, will also administer claims
under the new policies that will cover periods after the distribution date,
for an interim period.
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Computer and Data Processing Services Agreement
Columbia/HCA's wholly owned subsidiary Columbia Information Systems, Inc.
entered into a computer and data processing services agreement with LifePoint.
Pursuant to this agreement, Columbia Information Systems provides computer
installation, support, training, maintenance, data processing and other related
services to LifePoint. The initial term of the agreement is seven years, which
will be followed by a wind-down period of up to one year. Columbia Information
Systems charges fees to LifePoint for services provided under this agreement
that are market competitive based on Columbia Information Systems's costs
incurred in providing such services. In the event the agreement is terminated
by LifePoint, it will be required to pay a termination fee equal to the first
month's billed fees, multiplied by the remaining number of months in the
agreement. Columbia Information Systems does not warrant that the software that
is used by Columbia Information Systems in providing services to LifePoint will
be Year 2000 ready. Columbia Information Systems is currently making efforts in
a professional, timely and workmanlike manner that it deems reasonable to
address Year 2000 issues with respect to other software and hardware licensed
to LifePoint under the computer and data processing services agreement.
Lease Agreement
Columbia/HCA entered into an agreement with LifePoint, pursuant to which
LifePoint sub-leases from Columbia/HCA its principal executive offices at the
same price per square foot as is payable under the existing Columbia/HCA lease.
The LifePoint sub-lease will terminate on February 28, 2002, but either party
may terminate the sub-lease upon six months prior written notice.
Transitional Services Agreement
Columbia/HCA entered into a transitional services agreement with
LifePoint. Pursuant to this agreement, Columbia/HCA continues to furnish
various administrative services to LifePoint. These services include support in
various aspects of payroll processing and tax reporting for employees of
LifePoint, real estate design and construction management, and legal, human
resources, insurance and accounting matters. The agreement will terminate on
December 31, 2000, but may be terminated by LifePoint as to specific services
before December 31, 2000. LifePoint pays fees to Columbia/HCA for services
provided in amounts equal to Columbia/HCA's costs incurred in providing such
services.
Other Agreements
Columbia/HCA entered into agreements with LifePoint whereby Columbia/HCA
shares telecommunications services with LifePoint under Columbia/HCA's
agreements with its telecommunications services provider and whereby
Columbia/HCA will make certain account collection services available to
LifePoint. LifePoint will also participate, along with Columbia/HCA, in a group
purchasing organization which will make certain national supply and equipment
contracts available to its facilities. LifePoint has also agreed to pay
Columbia/HCA an arms'-length fee for its guarantee of the notes. Pursuant to a
Year 2000 professional services agreement Columbia/HCA also will continue its
ongoing program of inspecting medical equipment at each of LifePoint's
hospitals to assure Year 2000 compliance. Under such agreement LifePoint
remains solely responsible for any lack of Year 2000 compliance. The agreement
terminates June 30, 2000.
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DESCRIPTION OF NEW CREDIT AGREEMENT
In connection with the distribution of LifePoint stock to Columbia/HCA
shareholders, Holdings assumed certain indebtedness under a $210 million new
credit agreement with a syndicate of banks, and Fleet National Bank as lead
arranger. Capitalized terms not otherwise defined in this section shall have
the meanings ascribed to such terms in the new credit agreement, a copy of
which has previously been filed with the Commission by LifePoint, and is
incorporated by reference to the registration statement, of which this
prospectus forms a part. The $210 million new credit agreement consists of:
. a $60 million term loan A facility, $35 million of which may be
available for limited purposes subsequent to the distribution,
. an $85 million term loan B facility, and
. a $65 million revolving credit facility.
Repayments. Repayments under the term loan facilities are due in
quarterly installments. The final payment under the term loan A facility will
be due and payable in November 2004 and the final payment under the term loan B
facility will be due and payable in November 2005. In addition to the scheduled
amortization, Holdings will be required to repay borrowings under the term loan
and revolving facilities with proceeds from asset sales, subject to certain
exceptions, with proceeds from issuance of equity securities or the incurrence
of certain debt obligations other than the notes, and a portion of excess cash
flow, which amounts may not be re-borrowed. The revolving credit facility,
which was undrawn at the time of the distribution, is available for working
capital, other general corporate purposes and issuance of letters of credit,
and any outstanding amounts thereunder will be due and payable in November
2004.
Any voluntary prepayment of the term loan B facility made at any time
prior to the first anniversary of the distribution date will be in the amount
equal to 102% of the principal amount of such prepayment, and any voluntary
prepayment of the Tranche B term loan facility made after the first anniversary
of the distribution date but prior to the second anniversary of the
distribution date will be in an amount equal to 101% of the principal amount of
such prepayment.
Interest. At Holdings' option, the loans under the new credit agreement
will bear interest at a rate per annum equal to:
. LIBOR plus an applicable margin; or
. the higher of the administrative agent's prime rate or 0.5% above the
federal funds rate, in each case plus an applicable margin.
The applicable margin will be determined based on the ratio of Holdings'
consolidated funded indebtedness to its consolidated adjusted EBITDA as defined
in the new credit agreement.
Collateral and Guarantees. LifePoint has guaranteed the borrowings and
other obligations under the new credit agreement, which guarantee will be
secured by a first priority pledge of the capital stock of Holdings. Holdings
has also granted a first priority pledge of its assets to secure the new credit
agreement. Holdings' subsidiaries have guaranteed the borrowings under the new
credit agreement, which guarantees are secured by a first priority pledge of
assets of the subsidiaries. Columbia/HCA has also guaranteed, on a senior
basis, the borrowings under the new credit agreement to the same extent as its
guarantee of the notes.
Covenants. The new credit agreement contains covenants that, among other
things, limit Holdings' and certain of its subsidiaries' ability to incur
additional indebtedness, pay dividends on, redeem or purchase its capital
stock, make investments and capital expenditures, engage in transactions with
affiliates, create certain liens, sell assets and consolidate, merge or
transfer assets. In addition, Holdings is required to comply with various
financial ratios and tests, including a minimum net worth test, a consolidated
funded debt to consolidated adjusted EBITDA ratio and a minimum fixed charge
coverage ratio. The new credit agreement
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also contains provisions that prohibit any modification of the Indenture in any
manner adverse to the lenders under the new credit agreement and that limit the
ability of Holdings to refinance the notes without first obtaining consent
under the new credit agreement. In addition, certain change in control events
constitute an event of default under the new credit agreement.
The above summary highlights the material provisions of the new credit
agreement but does not purport to be complete. You should read the complete
text of the new credit agreement, a copy of which has previously been filed
with the Commission by LifePoint, and is incorporated by reference to the
registration statement of which this prospectus is a part.
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DESCRIPTION OF THE NOTES
You can find definitions of certain terms used in this description under
the subheading "--Certain Definitions." In this description, the word
"Holdings" refers only to LifePoint Hospitals Holdings, Inc. and not to any of
its subsidiaries.
The notes were issued under an indenture dated as of May 11, 1999 between
Healthtrust and Citibank N.A. as trustee. LifePoint assumed the obligations of
Healthtrust and Holdings assumed the obligations of LifePoint with respect to
the notes through a supplemental indenture dated as of May 11, 1999. The
following summary highlights certain material terms of the indenture. Because
this is a summary, it does not contain all of the information that is included
in the indenture. You should read the entire indenture, including the
definitions of certain terms used below, because it, and not this summary,
defines your rights as holders of the notes. The indenture is subject to and
governed by the Trust Indenture Act of 1939, as amended. LifePoint has
previously filed a copy of the indenture with the Commission, and the indenture
is incorporated by reference to the registration statement of which this
prospectus forms a part.
Brief Description of the Exchange Notes
These notes:
. are our unsecured senior subordinated obligations;
. are identical, in all material respects, to the form and terms of
the old notes, except that the exchange notes have been registered
under the Securities Act;
. mature on May 15, 2009;
. bear interest at the rate of 10 3/4% per year from May 11, 1999,
or from the most recent interest payment date to which interest
has been paid or provided for; and
. are guaranteed by the guarantors on a senior subordinated basis.
Principal, Maturity and Interest
The notes will mature on May 15, 2009, are limited to $150,000,000
aggregate principal amount and are Holdings' unsecured senior subordinated
obligations. Holdings will pay interest semiannually on May 15 and November 15
every year, beginning November 15, 1999, to the Person in whose name the note,
or any predecessor note, is registered at the close of business on the May 1 or
November 1 next preceding such interest payment date. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
Holdings will pay principal of, premium, if any, and interest on the
notes at the office of Holdings in New York City maintained for such purposes,
which is currently the corporate trust office of the trustee. You may exchange
your notes or register any transfer of notes at that office as well. At the
option of Holdings, interest may be paid by check mailed to the registered
address of the holder of the notes.
The notes will be issued only in registered form without coupons, in
denominations of $1,000 and integral multiples of $1,000. No service charge
will be made for any registration of transfer or exchange or redemption of
notes, but Holdings may require payment of an amount sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Optional Redemption
Holdings may, at its option, redeem all or any portion of the notes at
the following redemption prices, expressed as percentages of their principal
amounts, at any time on or after May 15, 2004, if redeemed during
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the twelve-month period beginning on May 15 of the year set forth below, plus,
in each case, any accrued and unpaid interest:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2004.......................................................... 105.375%
2005.......................................................... 103.583%
2006.......................................................... 101.792%
2007 and thereafter........................................... 100.000%
</TABLE>
Optional Redemption upon Qualified Equity Offerings. At any time and from
time to time prior to May 15, 2002, Holdings may use the net proceeds of one or
more Qualified Equity Offerings to redeem up to 35% of the aggregate principal
amount of the notes originally issued at a redemption price equal to 110.75% of
the principal amount thereof, plus accrued interest, if any, to the date of
redemption; provided:
(1) at least 65% of the aggregate principal amount of the notes
originally issued plus 65% of the aggregate principal amount of any notes
issued pursuant to a supplemental indenture remains outstanding after the
redemption; and
(2) the redemption occurs within 60 days of the closing of the Qualified
Equity Offering.
Selection and Notice of Redemption
If less than all the notes are to be redeemed at any time, the trustee
will select the particular notes to be redeemed not more than 60 days prior to
the redemption date by such method as the trustee will deem fair and
appropriate. No notes of a principal amount of $1,000 or less shall be redeemed
in part. Notice of redemption will be mailed by first-class mail, at least 30
but not more than 60 days before the redemption date, to each holder of notes
to be redeemed at its registered address. On and after the redemption date,
interest will cease to accrue on notes or portions of notes called for
redemption.
Sinking Fund
The notes will not be entitled to the benefit of any sinking fund.
Note Guarantees
The guarantors jointly and severally guarantee Holdings' obligations
under the notes on an unsecured senior subordinated basis. Each guarantee will
be subordinated to the prior payment in full of all Guarantor Senior
Indebtedness of that guarantor. The obligations of each guarantor under its
guarantee will be limited as necessary to prevent that guarantee from
constituting a fraudulent conveyance or fraudulent transfer under applicable
law. The guarantee of Dodge City Healthcare Group L.P. is limited to 50% of the
value of its assets, as determined from its audited financial statements as of
the close of the immediately preceding fiscal year. In addition, the guarantee
of Bartow Healthcare System Ltd. is limited to $1,000,000. These limitations
will no longer be applicable once the relevant partnership agreement of the
guarantor has been modified to eliminate such limitations. Until such time,
Columbia/HCA has guaranteed the notes in an amount equal to the difference
between the amount that would have been recovered under the note guarantees of
all the guarantors without giving effect to the limitations and the amount
recovered under the note guarantees of all guarantors after giving effect to
the limitations. The Columbia/HCA guarantee will be released with respect to
each such guarantor when the relevant limitation is eliminated or the
guarantor's guarantee is released.
Each guarantor that makes a payment or distribution of more than its
proportionate share under a guarantee shall be entitled to a contribution from
each other such guarantor which has not paid its proportionate share of such
payment or distribution.
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Under certain circumstances, Holdings will be able to designate current
or future subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries
will not be subject to the restrictive covenants set forth in the indenture.
The indenture provides that, so long as no Default exists or would exist,
the guarantee issued by any guarantor and any Liens securing such guarantee
shall be automatically and unconditionally released and discharged upon
(a) any sale, exchange or transfer to any Person that is not an Affiliate
of Holdings of all of Holdings' Capital Stock in, or all or substantially all
of the assets of, such guarantor, which transaction is otherwise in compliance
with the indenture or
(b) the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of the indenture.
Ranking
The payment of principal of, premium, if any, Additional Interest, if
any, and interest on the notes is subordinated in right of payment to the prior
payment in full in cash or cash equivalents of all Senior Indebtedness of
Holdings.
The holders of Senior Indebtedness will be entitled to receive payment in
full in cash or cash equivalents of all Senior Indebtedness, or provision shall
be made for such payment in full, before the holders of notes will be entitled
to receive any payment with respect to the notes. In the event of any
distribution to creditors of Holdings:
(1) in an insolvency, bankruptcy, receivership, liquidation,
reorganization or similar proceeding relating to Holdings or to its
assets,
(2) in a liquidation, dissolution or other winding-up of Holdings,
whether voluntary or involuntary,
(3) in an assignment for the benefit of creditors or other
marshaling of assets or liabilities of Holdings, except in connection
with the consolidation or merger of Holdings or its liquidation or
dissolution following the conveyance, transfer or lease of its
properties and assets substantially as an entirety upon the terms and
conditions described under "Consolidation, Merger and Sale of Assets"
below.
The above provision will not apply to any payment or distribution in the
form of equity securities or subordinated securities of Holdings or any
successor obligor that, in the case of any such subordinated securities, are
subordinated in right of payment to all Senior Indebtedness that may at the
time be outstanding to at least the same extent as the notes are so
subordinated (such equity securities or subordinated securities hereinafter
being "Permitted Junior Securities") and any payment made pursuant to the
provisions described under "--Certain Covenants--Defeasance or Covenant
Defeasance of Indenture" from monies or U.S. Government Obligations previously
deposited with the trustee.
Because the notes are subordinate to the Senior Indebtedness, any such
payment or distribution of the assets of Holdings, other than a payment or
distribution in the form of Permitted Junior Securities and
payments made pursuant to the provisions described under "--Certain Covenants--
Defeasance or Covenant Defeasance of Indenture" from monies or U.S. Government
Obligations previously deposited with the trustee, will first be paid to the
holders of Senior Indebtedness ratably according to the amounts of Senior
Indebtedness remaining unpaid to the extent necessary to make payment in full
of all Senior Indebtedness, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
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Other than Permitted Junior Securities and payments made pursuant to the
provisions described under "--Certain Covenants--Defeasance or Covenant
Defeasance of Indenture" from monies or U.S. Government Obligations previously
deposited with the trustee. Holdings also may not make any payment with respect
to the notes:
(1) if a payment default on Designated Senior Indebtedness occurs,
until such payment default shall have been cured or waived in writing or
shall have ceased to exist or such Designated Senior Indebtedness shall
have been discharged or paid in full in cash or cash equivalents; or
(2) for the period specified below (a "Payment Blockage Period")
upon
(a) the occurrence of any default or event of default with
respect to any Designated Senior Indebtedness, other than any
payment default, pursuant to which the maturity thereof may be
accelerated (a "Non-Payment Default"), and
(b) receipt by the trustee of written notice of the
occurrence of such default or event of default from the
representative of holders of Designated Senior Indebtedness.
The Payment Blockage Period will commence upon the date of receipt by the
trustee of written notice from the representative of the holders of the
Designated Senior Indebtedness in respect of which the Non-Payment Default
exists and shall end on the earliest of:
(1) 179 days thereafter, provided that any Designated Senior
Indebtedness as to which notice was given shall not theretofore have
been accelerated;
(2) the date on which such Non-Payment Default is cured, waived or
ceases to exist;
(3) the date on which such Designated Senior Indebtedness is
discharged or paid in full in cash or cash equivalents; or
(4) the date on which such Payment Blockage Period shall have been
terminated by written notice to the trustee or Holdings from the trustee
or such other representative initiating such Payment Blockage Period,
after which Holdings will resume making any and all required payments in
respect of the notes, including any missed payments, unless the holders of the
Designated Senior Indebtedness or their representatives have accelerated the
maturity of such Designated Senior Indebtedness. In any event, not more than
one Payment Blockage Period may be commenced during any period of 360
consecutive days. No event of default that existed or was continuing on the
date of the commencement of any Payment Blockage Period will be, or can be
made, the basis for the commencement of a subsequent Payment Blockage Period,
unless such default has been cured or waived for a period of not less than 90
consecutive days after the commencement of the initial Payment Blockage Period.
In the event that any payment shall be made to the trustee which is not
paid over to the holders of the notes, and which is prohibited by the
provisions of the preceding three paragraphs, then such payment will be paid
over and delivered by the trustee to the representative of holders of
Designated Senior Indebtedness, for application thereto. After all Senior
Indebtedness is paid in full and until the notes are paid in full, holders of
the notes shall be subrogated, equally and ratably with all other Indebtedness
that is pari passu in right of payment with the notes, to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness.
Failure by Holdings to make any required payment in respect of the notes
when due or within any applicable grace period, whether or not occurring during
a Payment Blockage Period, will result in an Event of Default and, thereafter,
holders of the notes will have the right to accelerate the maturity of the
notes. See "--Events of Default."
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By reason of the subordination provisions described above, in the event
of liquidation, receivership, reorganization or insolvency of Holdings,
creditors of Holdings who are holders of Senior Indebtedness may recover more,
ratably, than the holders of the notes, and assets which would otherwise be
available to pay obligations in respect of the notes will be available only
after all Senior Indebtedness has been paid in full, and, consequently, there
may not be sufficient assets remaining to pay amounts due on any or all of the
notes. Moreover, the notes will be structurally subordinated to the liabilities
of subsidiaries of Holdings which are not guarantors.
At March 31, 1999, on a pro forma basis, after giving effect to the
private offering of notes and the Spin-Off Transactions:
(a) outstanding Senior Indebtedness of Holdings would have been
approximately $110 million;
(b) Holdings would have had no Senior Subordinated Indebtedness other
than the notes; and
(c) Restricted Subsidiaries would have had approximately $124.5 million
of indebtedness and other obligations, including trade payables and lease
obligations and excluding the guarantees of the notes.
Each guarantee will be an unsecured senior subordinated obligation of the
respective guarantor issuing such guarantee, ranking pari passu in right of
payment with all other existing and future Senior Subordinated Indebtedness of
such guarantor, if any. The Indebtedness evidenced by each such guarantee will
be subordinated on the same basis to the Guarantor Senior Indebtedness as the
notes are subordinated to Senior Indebtedness. Notwithstanding anything else
contained herein, neither the trustee nor the holders of the notes may receive
or accept payments under the guarantees at a time when they are not entitled to
receive payment under the notes pursuant to the provisions under this caption
"Ranking."
At March 31, 1999, on a pro forma basis, after giving effect to the
private offering of the notes and the Spin-Off Transactions:
(a) outstanding Guarantor Senior Indebtedness of the subsidiary
guarantors would have been approximately $110 million; and
(b) the subsidiary guarantors would have had no Guarantor Senior
Subordinated Indebtedness other than the note guarantees.
Although the indenture limits the amount of Indebtedness that Holdings
and its Restricted Subsidiaries may incur, such Indebtedness may be substantial
and all of it may be Senior Indebtedness or Guarantor Senior Indebtedness, as
the case may be.
Certain Covenants
Limitation on Indebtedness. Other than Permitted Indebtedness, Holdings
will not, and will not permit any of its Restricted Subsidiaries to, create,
issue, assume, guarantee or in any manner become directly or indirectly liable
for the payment of, or otherwise incur (collectively, "incur"), any
Indebtedness including any Acquired Indebtedness. However, so long as no
Default or Event of Default has occurred and is continuing, Holdings or any
guarantor may incur Indebtedness, including Acquired Indebtedness, if at the
time of the incurrence of such Indebtedness, the Consolidated Fixed Charge
Coverage Ratio of Holdings for the four full fiscal quarters immediately
preceding the incurrence of such Indebtedness, taken as one period, would have
been at least equal to 2.0 to 1.0, if such Indebtedness is incurred on or prior
to December 31, 1999, or 2.25 to 1.0, if such Indebtedness is incurred
thereafter, after giving pro forma effect to
(1) the incurrence of such Indebtedness and, if applicable, the
application of the net proceeds from the Indebtedness, including to refinance
other Indebtedness, as if such Indebtedness was incurred, and the application
of such proceeds occurred, on the first day of such four-quarter period,
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(2) the incurrence, repayment or retirement of any other Indebtedness by
Holdings and its Restricted Subsidiaries since the first day of such four-
quarter period as if such Indebtedness was incurred, repaid or retired on the
first day of such four-quarter period, except that, in making such computation,
the amount of Indebtedness under any revolving credit facility shall be
computed based upon the average daily balance of such Indebtedness during such
four-quarter period, and
(3) the acquisition or disposition, whether by sale, merger or otherwise,
of any company, entity or business, including, without limitation, a Hospital,
acquired or disposed of by Holdings or its Restricted Subsidiaries, as the case
may be, since the first day of such four-quarter period, as if such acquisition
or disposition occurred on the first day of such four-quarter period.
For purposes of determining compliance with this covenant, in the event
that an item of proposed Indebtedness meets the criteria of more than one of
the categories described in clauses (a) through (n) of the definition of
Permitted Indebtedness as of the date of incurrence thereof or is entitled to
be incurred pursuant to the first paragraph of this covenant as of the date of
incurrence thereof, Holdings may, in its sole discretion, classify or
reclassify such item of Indebtedness in any manner that complies with this
covenant.
For purposes of this covenant
(1) accrual of interest, the accretion of accreted value and the payment
of interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness, and
(2) the payment of dividends on Redeemable Capital Stock in the form of
additional shares of the same class of Redeemable Capital Stock will not be
deemed an issuance of Redeemable Capital Stock.
Limitation on Restricted Payments.
(a) Holdings will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, take any of the following actions:
(1) declare or pay any dividend on, or make any distribution to
direct or indirect holders of, any shares of the Capital Stock of
Holdings, other than dividends or distributions payable solely in shares
of Qualified Capital Stock of Holdings or options, warrants or other
rights to acquire such shares of Qualified Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock of Holdings or any
Affiliate of Holdings, including, without limitation, in connection with
any merger or consolidation involving Holdings, or any options, warrants
or other rights to acquire such shares of Capital Stock, other than any
Capital Stock owned by Holdings or any wholly owned Restricted
Subsidiary or any direct or indirect parent of Holdings;
(3) declare or pay any dividend, or make any distribution to
holders of, any shares of Capital Stock of any Restricted Subsidiary,
other than to Holdings or any of its wholly owned Restricted
Subsidiaries or to all holders of Capital Stock of such Restricted
Subsidiary on a pro rata basis;
(4) make any principal payment on, or repurchase, redeem, defease
or otherwise acquire or retire for value, prior to any scheduled
principal payment, sinking fund payment or maturity, any Indebtedness of
Holdings or any guarantor or any guarantee of the notes that is
subordinate in right of payment to the notes; or
(5) make any Investment, other than any Permitted Investment, in
any Person.
All such payments or other actions described in clauses (1) through (5) are
collectively referred to as "Restricted Payments."
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However, Holdings or a Restricted Subsidiary may make a Restricted
Payment if, at the time of and immediately after giving effect to such
Restricted Payment:
(A) no Default or Event of Default shall have occurred and be
continuing;
(B) Holdings would, after giving pro forma effect to such
Restricted Payment as if it had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least
$1.00 of additional Indebtedness, other than Permitted Indebtedness,
pursuant to the "Limitation on Indebtedness" covenant; and
(C) the aggregate amount of all Restricted Payments, including
proposed Restricted Payments, made after the date of the indenture shall
not exceed the sum of:
(1) 50% of the cumulative Consolidated Adjusted Net Income, or, if
such cumulative Consolidated Adjusted Net Income shall be a loss, minus
100% of such loss, of Holdings accrued during the period beginning on
January 1, 1999 and ending on the last day of Holdings' last fiscal
quarter ending prior to the date of such proposed Restricted Payment;
plus
(2) 100% of the aggregate net cash proceeds received after the
date of the indenture by Holdings from the issuance or sale, other than
to any Restricted Subsidiary of shares of Qualified Capital Stock of
Holdings, including upon the exercise of options, warrants or rights, or
warrants, options or rights to purchase shares of Qualified Capital
Stock of Holdings; plus
(3) the aggregate net cash proceeds received after the date of the
indenture by Holdings from the issuance or sale, other than to any
Restricted Subsidiary, of debt securities or Redeemable Capital Stock
that have been converted into or exchanged for Qualified Capital Stock
of Holdings, to the extent such securities were originally sold for
cash, together with the aggregate net cash proceeds received by Holdings
at the time of such conversion or exchange; plus
(4) without duplication of any amounts included in clause (C)(1)
above, to the extent that any Investment constituting a Restricted
Payment that was made after the date of the Indenture is sold or is
otherwise liquidated or repaid, an amount equal to the lesser of
(x) the cash proceeds with respect to such Investment, less
the cost of the disposition of such Investment and net of taxes,
and
(y) the initial amount of such Investment; plus
(5) without duplication, an amount equal to the sum of
(x) the net reduction in Investments in Unrestricted
Subsidiaries resulting from cash dividends, repayments of loans or
advances or other transfers of assets, in each case to Holdings or
any Restricted Subsidiary from Unrestricted Subsidiaries, plus
(y) the portion, proportionate to Holdings' equity interest
in such subsidiary, of the fair market value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary, in each case
since January 1, 1999;
provided, however, that the sum of clauses (5)(x) and (5)(y) above
shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made, and treated as a Restricted
Payment, by Holdings or any Restricted Subsidiary in such
Unrestricted Subsidiary; plus
(6) other Restricted Payments in an aggregate amount not to exceed
$10.0 million.
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(b) So long as, with respect to clauses (2), (3), (4), (5), (6) and (12)
below, no Default or Event of Default has occurred and is continuing or would
be caused thereby, the preceding provision will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would
have complied with the provisions of paragraph (a) above;
(2) the acquisition of any shares of Capital Stock of Holdings
either
(x) in exchange for, shares of Qualified Capital Stock of
Holdings; or
(y) out of the net cash proceeds of a substantially
concurrent issuance and sale, other than to a Restricted
Subsidiary, of shares of Qualified Capital Stock of Holdings.
(3) the acquisition of any Indebtedness that is subordinate to the
notes either
(x) in exchange for shares of Qualified Capital Stock of
Holdings; or
(y) out of the net cash proceeds of a substantially
concurrent issuance and sale, other than to a Restricted
Subsidiary, of shares of Qualified Capital Stock Holdings
(4) the purchase of any Indebtedness that is subordinate to the
notes at a purchase price no greater than 101% of the principal amount
thereof in the event of a Change in Control in accordance with
provisions similar to the "Purchase of Notes upon a Change in Control"
covenant; provided that prior to such purchase Holdings has made the
Change in Control Offer as provided in such covenant and has purchased
all notes validly tendered for payment in connection with such Change in
Control Offer;
(5) the purchase of any Indebtedness that is subordinate to the
notes from Net Cash Proceeds to the extent permitted by the "Limitation
on Sale of Assets" covenant; provided, however, that such purchase will
be excluded in subsequent calculations in the amount of Restricted
Payments;
(6) the acquisition or retirement for value of any Indebtedness
that is subordinate to the notes, other than Redeemable Capital Stock,
in exchange for, or out of the Net Cash Proceeds of a substantially
concurrent incurrence, other than to a Restricted Subsidiary of, new
subordinated Indebtedness so long as
(x) the principal amount of such new subordinated
Indebtedness does not exceed the principal amount, or, if such
subordinated Indebtedness being refinanced provides for an amount
less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, such lesser amount as of
the date of determination, of
(A) the Indebtedness being so purchased, redeemed, defeased,
acquired or retired, plus
(B) the lesser of the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the
Indebtedness as refinanced or the amount of any premium reasonably
determined as necessary to accomplish such refinancing, plus,
(C) the amount of reasonable expenses of Holdings incurred in
connection with such refinancing, and
(y) such new subordinated Indebtedness is in parity with or
subordinated to, as applicable, the notes to the same extent as
such Indebtedness so purchased, redeemed, defeased, acquired or
retired and
(z) such new Indebtedness has an Average Life longer than
the Average Life of the notes and a final stated maturity date of
principal later than the final stated maturity date of principal
of the notes;
(7) payments to LifePoint to pay its operating and administrative
expenses incurred in the ordinary course of business, including payroll
expenses, directors' fees, legal and audit expenses, Commission
compliance expenses and corporate franchise and other taxes, in an
amount not to exceed
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$2.5 million in any fiscal year; provided that any such payments shall
be treated as expense items in the consolidated financial statements of
Holdings;
(8) payments to LifePoint to pay expenses incurred under the
corporate integrity program referenced in the distribution agreement;
(9) payments to LifePoint to pay expenses incurred under the
Transition Agreements;
(10) repurchases by Holdings of Capital Stock of LifePoint
pursuant to any stockholder's agreement, management equity subscription
plan or agreement, stock option plan or agreement or employee benefit
plan of LifePoint or Holdings, in an aggregate amount not to exceed $2.0
million in any fiscal year, with any unused amounts in any fiscal year
being carried over to the next fiscal year;
(11) payments to LifePoint pursuant to the tax sharing agreement
between LifePoint, Holdings and its subsidiaries to the extent required
for LifePoint to pay any Federal, state or local income taxes, but only
to the extent that such income taxes are attributable to the income of
Holdings and its subsidiaries; and
(12) the redemption, repurchase, acquisition or retirement of
equity interests in any Restricted Subsidiary or any Permitted Joint
Venture of Holdings or a Restricted Subsidiary; provided that if
Holdings or any Restricted Subsidiary incurs Indebtedness in connection
with such redemption, repurchase, acquisition or retirement, after
giving effect to such incurrence and such redemption, repurchase,
acquisition or retirement, Holdings would have been permitted to incur
$1.00 of additional Indebtedness pursuant to the first paragraph of "--
Limitation on Indebtedness" above.
The actions described in clauses (1), (2), (3), (10), to the extent not
related to the ESOP, and (12) of this paragraph (b) shall be Restricted
Payments that shall be permitted to be taken in accordance with this paragraph
(b) but shall reduce the amount that would otherwise be available for
Restricted Payments under clause (3) of paragraph (a) above. The actions
described in all other clauses of this paragraph (b), including without
limitation clause (10) to the extent related to the ESOP, shall be Restricted
Payments that shall be permitted to be taken in accordance with this paragraph
(b), but shall not reduce the amount that would otherwise be available for
Restricted Payments under clause (3) of paragraph (a).
The amount of all Restricted Payments other than cash shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by Holdings or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the board of directors of Holdings or the Restricted Subsidiary, as
applicable, whose determination with respect thereto shall be conclusive. If
Holdings or a Restricted Subsidiary makes a Restricted Payment which, at the
time of the making of such Restricted Payment would in the good faith
determination of Holdings be permitted under the provisions of the indenture,
such Restricted Payment shall be deemed to have been made in compliance with
the indenture notwithstanding any subsequent adjustments made in good faith to
Holdings' financial statements affecting Consolidated Adjusted Net Income of
Holdings for any period.
Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries. Holdings will not permit:
(1) any Restricted Subsidiary to issue any Capital Stock, other
than to Holdings or a wholly owned Restricted Subsidiary, and
(2) any Person, other than Holdings or a wholly owned Restricted
Subsidiary, to own any Capital Stock of any Restricted Subsidiary;
provided, however, that this covenant shall not prohibit
(a) the issuance or any sale, transfer, lease, conveyance,
or other disposition of all, but not less than all, of the issued
and outstanding Capital Stock of any Restricted Subsidiary
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owned by Holdings or any of its Restricted Subsidiaries in
compliance with the other provisions of the indenture, so long as
the Net Cash Proceeds, if any, from such sale, transfer, lease,
conveyance or other disposition is applied in accordance with the
"Limitation on Sale of Assets" covenant,
(b) the ownership by other Persons of Qualified Capital
Stock issued prior to the time such Restricted Subsidiary became a
subsidiary of Holdings that was neither issued in contemplation of
such subsidiary becoming a subsidiary nor acquired at that time,
(c) the ownership by directors of director qualifying shares
or the ownership by foreign nationals of Capital Stock of any
Restricted Subsidiary, to the extent mandated by applicable law,
(d) arrangements existing on the original issuance date of
the notes,
(e) any issuance, sale or other disposition of Capital
Stock, other than preferred stock, of a Restricted Subsidiary if,
immediately after giving effect thereto, such Restricted
Subsidiary would remain a Restricted Subsidiary, or
(f) any issuance, sale or other disposition of Capital Stock
of a Restricted Subsidiary if, immediately after giving effect
thereto, such Person would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after
giving effect thereto would have been permitted to be made, and
shall be deemed to have been made, under the "Limitation on
Restricted Payments" covenant on the date of such issuance, sale
or other disposition.
Limitation on Transactions with Affiliates. Holdings will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, enter into,
amend or permit to exist any agreement, loan advance, guarantee or other
transaction or series of related transactions, including, without limitation,
the sale, purchase, exchange or lease of assets, property or services, with, or
for the benefit of, any Affiliate of Holdings or any Restricted Subsidiary,
other than Holdings or a Restricted Subsidiary, unless:
(1) such transaction or series of transactions are on terms that
are no less favorable to Holdings or such Restricted Subsidiary, as the
case may be, than would have been able to be obtained at such time in a
comparable transaction on an arm's-length basis with an unrelated third
party,
(2) with respect to any transaction or series of related
transactions involving aggregate consideration equal to or greater than
$2,000,000 in the aggregate, Holdings has delivered an officers'
certificate to the trustee certifying that such transaction or series of
transactions complies with clause (1) above and such transaction or
series of related transactions shall have been approved by the board of
directors of Holdings, including a majority of the disinterested
directors of Holdings, and
(3) with respect to any transaction or series of related
transactions involving aggregate consideration equal to or greater than
$10,000,000, Holdings has obtained a written opinion as to the fairness
to Holdings or such Restricted Subsidiary, of such transaction or series
of transactions from a financial point of view.
The restrictions set forth in the above paragraphs shall not apply
to:
(a) reasonable and customary directors' fees,
indemnification and similar arrangements, consulting fees,
employee salaries, bonuses or employment agreements, compensation
or employee benefit arrangements and incentive arrangements with
any officer, director or employee of Holdings or a Restricted
Subsidiary entered into in the ordinary course of business,
(b) any transactions made in compliance with the "Limitation
on Restricted Payments" covenant,
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(c) loans and advances to officers, directors and employees
of Holdings or any Restricted Subsidiary in the ordinary course of
business in accordance with the past practices of Holdings or any
Restricted Subsidiary not exceeding $13.0 million in the aggregate
outstanding at any time,
(d) the Spin-Off Transactions and
(e) any transactions made in accordance with and pursuant to
the Transition Agreements.
Limitation on Liens. (1) Holdings will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
permit to exist any Lien securing Indebtedness of Holdings that ranks pari
passu in right of payment with the notes or that is subordinate to the notes
upon or against any of its property or assets including any shares of stock or
Indebtedness of any Restricted Subsidiary or any proceeds therefrom, or assign
or otherwise convey any right to receive income thereon, unless:
(a) in the case of any Lien securing Indebtedness of Holdings that
ranks pari passu in right of payment with the notes, the notes are
secured by a Lien on such property, assets or proceeds that is senior in
priority to or pari passu with such Lien and
(b) in the case of any Lien securing Indebtedness of Holdings that
is subordinate to the notes, the notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Lien.
provided, however, that the preceding restriction will not apply
to Permitted Liens;
(2) Holdings will not permit any subsidiary guarantor to, directly or
indirectly, create, incur, assume or permit to exist any Lien securing
Indebtedness of such guarantor that ranks pari passu in right or payment with
the note guarantees or that is subordinate to the note guarantees or with
respect to such Restricted Subsidiary's properties or assets, including any
shares of stock or Indebtedness of any subsidiary of Holdings or such
guarantor, whether owned at the date of the indenture or thereafter acquired,
or any income, profits or proceeds therefrom, or assign or otherwise convey any
right to receive income thereon, unless
(a) in the case of any Lien securing Indebtedness of the guarantor
that ranks pari passu in right of payment with the note guarantee, the
guarantee of such guarantor is secured by a Lien or such property,
assets or proceeds that is senior in priority to or pari passu with such
Lien and
(b) in the case of any Lien securing Indebtedness of such
guarantor that is subordinate to the note guarantee, the guarantee of
such guarantor is secured by a Lien on such property, assets or proceeds
that is senior in priority to such Lien.
Purchase of Notes upon a Change in Control. If a Change in Control
occurs, each holder of notes will have the right to require Holdings to
repurchase all or any part of that holder's notes, pursuant to the offer
described below (the "Change in Control Offer"), at a purchase price in cash
equal to 101% of the aggregate principal amount of notes purchased, plus
accrued and unpaid interest thereon, if any, to the date of purchase.
Within 30 days following any Change in Control, Holdings will notify the
trustee thereof and give written notice of the Change in Control to each holder
of notes by first-class mail at the registered address of such holder,
describing the transaction or transactions that constitute the Change in
Control and stating, among other things,
(a) the Change in Control purchase price and the purchase date,
which must be a business day no earlier than 30 days nor more than 60
days from the date such notice is mailed, other than as may be required
by law;
(b) that any note not tendered will continue to accrue interest;
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(c) that, unless Holdings defaults in the payment of the Change in
Control purchase price, any notes accepted for payment pursuant to the
Change in Control Offer shall cease to accrue interest after the Change
in Control purchase date; and
(d) the procedures that a holder of notes must follow to accept a
Change in Control Offer or to withdraw such acceptance.
On the Change in Control purchase date, Holdings will, to the extent
lawful,
(1) accept for payment all notes or portions of notes properly
tendered pursuant to the Change in Control Offer,
(2) deposit with the paying agent an amount equal to the Change in
Control purchase price in respect of all notes or portions of notes so
tendered and
(3) deliver or cause to be delivered to the trustee the notes so
accepted together with an officers' certificate stating the aggregate
principal amount of notes or portions of notes being purchased by
Holdings.
The paying agent will promptly mail to each holder of notes so tendered
the Change in Control purchase price for such notes, and the trustee will
promptly authenticate and mail, or cause to be transferred by book entry, to
each holder a new note equal in principal amount in a principal amount of
$1,000 or an integral multiple thereof.
Within 90 days following any Change in Control, but prior to the
repurchase of notes as provided above, Holdings will either repay all
outstanding Senior Indebtedness or obtain the requisite consents, if any, under
all agreements governing Senior Indebtedness to permit the repurchase of notes
as provided above.
Holdings will publicly announce the results of the Change in Control
Offer on or as soon as practicable after the Change of Control purchase date.
Holdings shall not be required to make a Change in Control Offer upon a Change
in Control if a third party makes the Change in Control Offer in compliance
with the Change in Control Offer requirements made by Holdings and purchases
all notes validly tendered and not withdrawn under such Change in Control
Offer.
The Change in Control provisions described above will be applicable
whether or not any other provisions of the indenture are applicable. Except as
described above with respect to a Change in Control, the indenture does not
contain provisions that permit the holders of the notes to require Holdings to
repurchase or redeem the notes in the event of a takeover, recapitalization or
similar transaction.
The senior credit agreement prohibits, and other future agreements
relating to Senior Indebtedness to which Holdings becomes a party may prohibit,
Holdings from purchasing any notes following a Change in Control and provide
that certain Change in Control events with respect to Holdings would constitute
a default under such agreements. If a Change in Control occurs at a time when
Holdings is prohibited from purchasing notes, Holdings could seek the consent
of its lenders to the purchase of notes or could attempt to refinance the
borrowings that contain such prohibition. If Holdings does not obtain such a
consent or repay such borrowings, Holdings will remain prohibited from
purchasing notes. Holdings' failure to purchase tendered notes following a
Change in Control would constitute an Event of Default under the indenture
which, in turn, constitutes a default under the senior credit agreement. In
such circumstance, the subordination provisions in the indenture would likely
restrict payments to the holders of notes. See "--Ranking."
One of the events which constitutes a Change in Control under the
indenture is the disposition of "all or substantially all" of Holdings' assets.
With respect to the disposition of property or assets, the phase "all or
substantially all" as used in the indenture varies according to the facts and
circumstances of the subject transaction, has no clearly established meaning
under relevant law and is subject to judicial interpretation.
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Accordingly, in certain circumstances, there may be a degree of uncertainty in
ascertaining whether a particular transaction would involve a disposition of
"all or substantially all" of the property or assets of an entity, and
therefore it may be unclear whether a Change in Control has occurred and
whether Holdings is required to make a Change in Control Offer.
The existence of a holder's right to require Holdings to purchase such
holder's notes upon a Change in Control may deter a third party from acquiring
Holdings in a transaction that constitutes a Change in Control.
Holdings will comply with the applicable tender offer rules, including
Rule 14e-1 under the Exchange Act, and any other applicable securities laws and
resolutions in connection with a Change in Control Offer.
Limitation on Sale of Assets. (a) Holdings will not, and will not permit
any of its Restricted Subsidiaries to, engage in any Asset Sale unless
(1) Holdings or the Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to
the fair market value of the assets sold and
(2) at least 75% of such consideration is in the form of cash or
Cash Equivalents or Replacement Assets.
For purposes of this provision, each of the following shall be
deemed to be cash:
(A) Indebtedness, other than Subordinated Indebtedness, of
Holdings or a Restricted Subsidiary that is actually assumed by the
transferee in such Asset Sale and from which Holdings and the Restricted
Subsidiaries are fully released; and
(B) notes, securities or other similar obligations received by
Holdings or any Restricted Subsidiary from such transferee that are
converted into cash within 30 days of the related Asset Sale by Holdings
or the Restricted Subsidiaries to the extent of the cash received in the
conversion.
Notwithstanding the foregoing, the 75% limitation referred to in clause
(2) will not apply to any Asset Sale in which the cash or Cash Equivalents
portion of the consideration received is equal to or greater than what the
after-tax proceeds would have been had such Asset Sale complied with the 75%
limitation.
(b) Within 12 months after the receipt of any Net Cash Proceeds from an
Asset Sale, Holdings may use such Net Cash Proceeds to:
(1) prepay any then outstanding Senior Indebtedness of Holdings or
any Restricted Subsidiary, or
(2) invest, or enter into a legally binding agreement to invest,
(A) in other properties or assets to replace the properties or
assets that were the subject of the Asset Sale or
(B) in properties and assets that will be used in business of
Holdings or its Restricted Subsidiaries, as the case may be, existing at
the time such assets are sold, or
(C) in any Related Business or in Capital Stock of a Person, the
principal portion of whose assets consist of such property or assets;
provided that Holdings or such Restricted Subsidiary shall acquire at
least the same percentage of equity and voting interest in such Person
as Holdings or such Restricted Subsidiary held with respect to the
assets disposed of in such Asset Sale.
The assets referred to in clauses (A) (B) and (C) constitute "Replacement
Assets."
Pending the final application of any such Net Cash Proceeds, Holdings may
temporarily reduce Senior Indebtedness or otherwise invest such Net Cash
Proceeds in any manner that is not prohibited by the indenture. If any such
legally binding agreement to invest such Net Cash Proceeds is terminated, then
Holdings may, within 90 days of such termination or within 12 months of such
Asset Sale, whichever is later, invest such Net
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Cash Proceeds as provided in clause (1) or (2). The amount of such Net Cash
Proceeds not so used as set forth above in this paragraph (b) constitutes
"Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $7.5 million,
Holdings shall, within 30 business days, make an offer to purchase (an "Excess
Proceeds Offer") from all holders of notes, on a pro rata basis, the maximum
principal amount of notes that may be purchased with the Excess Proceeds. The
offer price as to each note shall be payable in cash in an amount equal to 100%
of the principal amount of such note plus accrued and unpaid interest thereon,
if any, to the date of purchase. To the extent that the aggregate principal
amount of notes tendered pursuant to an Excess Proceeds Offer is less than the
Excess Proceeds, Holdings may use such deficiency for any lawful purposes not
prohibited by the indenture. If the aggregate principal amount of notes validly
tendered by holders of notes exceeds the Excess Proceeds, notes to be purchased
will be selected on a pro rata basis.
Notwithstanding the foregoing, if Holdings is required to commence an
Excess Proceeds Offer at any time when the terms of any outstanding securities
of Holdings ranking pari passu in right of payment with the notes provide that
a similar offer must be made with respect to such securities, then:
(1) the Excess Proceeds Offer for the notes shall be made
concurrently with such other offers and
(2) securities of each issue will be accepted on a pro rata
basis in proportion to the aggregate principal amount of
securities of each issue which the holders thereof elect to have
purchased.
Any Excess Proceeds Offer will be made only to the extent permitted
under, and subject to prior compliance with, the terms of agreements governing
Senior Indebtedness. Upon completion of an Excess Proceeds Offer, the amount of
Excess Proceeds shall be reset to zero.
Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries. (a) Holdings will not permit any Restricted Subsidiary, directly
or indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of Holdings that is pari passu in right of payment
with the notes or subordinated to the notes unless, with respect to any
guarantee by a Restricted Subsidiary of pari passu Indebtedness of Holdings,
any such guarantee shall be pari passu with such Restricted Subsidiary's note
guarantee, and with respect to any guarantee by a Restricted Subsidiary of
subordinated Indebtedness of Holdings, any such guarantee shall be subordinated
to such Restricted Subsidiary's note guarantee at least to the same extent as
such guaranteed Indebtedness is subordinated to the notes.
(b) Notwithstanding the foregoing, any guarantee of the notes created
pursuant to the provisions described in the foregoing paragraph (a) will
provide by its terms that it will automatically and unconditionally be released
and discharged upon
(1) any sale, exchange or transfer to any Person not an
Affiliate of Holdings of all of Holdings' Capital Stock of such
Restricted Subsidiary, which sale, exchange or transfer is
otherwise in compliance with the indenture, or
(2) the designation of such Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with the terms of the
indenture.
Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries. Holdings will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to
(a) pay dividends or make any other distributions on its Capital
Stock or with respect to any other interest or participation in, or
measured by, its profits to Holdings or any other Restricted Subsidiary,
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(b) pay any Indebtedness owed to Holdings or any other Restricted
Subsidiary,
(c) make loans or advances to Holdings or any other Restricted
Subsidiary,
(d) transfer any of its properties or assets to Holdings or any
other Restricted Subsidiary or
(e) guarantee any Indebtedness of Holdings or any other Restricted
Subsidiary.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) applicable law,
(2) customary provisions restricting subletting or
assignment of any lease or assignment of any other contract to
which Holdings or any Restricted Subsidiary is a party or to which
any of their respective properties or assets are subject,
(3) any agreement or other instrument of a Person acquired
by Holdings or any Restricted Subsidiary in existence at the time
of such acquisition but not created in contemplation thereof,
which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, so long as
the agreement containing the restriction does not violate any
other provision of the indenture,
(4) encumbrances and restrictions in effect on the issuance
date of the notes, including pursuant to the senior credit
agreement and its related documentation,
(5) any encumbrance or restriction contained in contracts
for sales of assets permitted by the "Limitation on Sale of
Assets" covenant with respect to the assets to be sold pursuant to
such contract,
(6) in the case of clause (4) above, restrictions contained
in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary permitted under the indenture to the extent
such restrictions restrict the transfer of the property subject to
such security agreements or mortgages and
(7) any encumbrance or restriction existing under any
agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the
foregoing clauses (3) and (4); provided that the terms and
conditions of any such encumbrances or restrictions are no more
restrictive than those contained in such agreement.
Limitation on Other Senior Subordinated Indebtedness. Neither Holdings
nor any subsidiary guarantor will incur, create, assume, guarantee or in any
other manner become directly or indirectly liable with respect to or
responsible for, or permit to remain outstanding, any Indebtedness, other than
the notes, that is subordinate or junior in right of payment to any Senior
Indebtedness, or, in the case of any subsidiary guarantor, Guarantor Senior
Indebtedness, unless such Indebtedness is also on parity with, or subordinate
in right of payment to, the notes or the note guarantee of such guarantor, as
applicable, pursuant to subordination provisions substantially similar to those
contained in the indenture.
Limitation on Unrestricted Subsidiaries. Holdings will not make, and will
not permit any of its Restricted Subsidiaries to make, any Investments in
Unrestricted Subsidiaries if, at the time thereof, the aggregate amount of such
Investments would exceed the amount of Restricted Payments then permitted to be
made pursuant to the "Limitation on Restricted Payments" covenant. Any
Investments in Unrestricted Subsidiaries permitted to be made pursuant to this
covenant
(a) will be treated as the making of a Restricted Payment in
calculating the amount of Restricted Payments made by Holdings or a
Restricted Subsidiary and
(b) may be made in cash or property.
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Reports. For as long as the notes are outstanding, Holdings will file on
a timely basis with the Commission, to the extent such filings are accepted by
the Commission and whether or not Holdings has a class of securities registered
under the Exchange Act, the annual reports, quarterly reports and other
documents that Holdings would be required to file pursuant to Section 13 or
15(d) of the Exchange Act if it were subject thereto. Holdings will also
deliver to the trustee, and mail to each holder of notes, copies of such
reports and documents within 15 days after the date on which Holdings files
such reports and documents with the Commission or the date on which Holdings
would be required to file such reports and documents if Holdings were so
required. If filing such reports and documents with the Commission is not
accepted by the Commission or is prohibited under the Exchange Act, Holding
will supply copies of such reports and documents to any prospective holder of
notes promptly upon written request.
Consolidation, Merger and Sale of Assets
Holdings will not, in a single transaction or through a series of
transactions,
(a) consolidate with or merge with or into any other Person;
(b) sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any other Person; or
(c) permit any of its Restricted Subsidiaries to enter into any such
transaction or series of transactions which would result in the sale,
assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the properties and assets of Holdings and its Restricted
Subsidiaries on a consolidated basis to any other Person,
unless at the time and immediately after giving effect thereto:
(1) either
(A) Holdings is the continuing corporation or
(B) the Person, if other than Holdings, formed by or
surviving such consolidation or merger or to which such sale,
assignment, conveyance, transfer, lease or disposition of all
or substantially all the properties and assets of Holdings and
its Restricted Subsidiaries on a consolidated basis shall have
been made,
(x) is a corporation duly organized and validly existing
under the laws of the United States of America, any state
thereof or the District of Columbia and
(y) expressly assumes, by a supplemental indenture in
form reasonably satisfactory to the trustee, Holdings'
obligation for the due and punctual payment of the principal
of, premium, if any, and interest on all the notes and the
performance and observance of every covenant of the indenture
on the part of Holdings to be performed or observed;
(2) immediately before and immediately after giving effect
to such transaction or series of transactions on a pro forma
basis, and treating any obligation of Holdings or any Restricted
Subsidiary incurred in connection with or as a result of such
transaction or series of transactions as having been incurred at
the time of the transaction, no Default or Event of Default will
have occurred and be continuing;
(3) immediately before and immediately after giving effect
to such transaction or series of transactions on a pro forma
basis, on the assumption that the transaction or series of
transactions occurred on the first day of the four-quarter period
immediately prior to the consummation of such transaction or
series of transactions with the appropriate adjustments with
respect to the transaction or series of transactions being
included in such pro forma calculation, Holdings, or the surviving
entity if Holdings is not the continuing obligor under the
indenture, shall be able to incur at least $1.00 of additional
Indebtedness, other than Permitted Indebtedness, under the
provisions of the "Limitation on Indebtedness" covenant;
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(4) immediately after giving effect to such transaction on a
pro forma basis, the Consolidated Net Worth of Holdings, or the
surviving entity if Holdings is not the continuing obligor under
the indenture, is equal to or greater than the Consolidated Net
Worth of Holdings immediately prior to such transaction; and
(5) each guarantor, if any, unless it is the other party to
the transactions described above, shall have by supplemental
indenture confirmed that its note guarantee will apply to the
obligations of Holdings or the surviving entry, as the case may
be, under the indenture and the notes.
In connection with any such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition, Holdings or the surviving
entity will deliver to the trustee, in form and substance reasonably
satisfactory to the trustee, an officers' certificate and an opinion of
counsel, each stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition, and if applicable, the
supplemental indenture, comply with the requirements of the indenture and that
all conditions precedent provided for in the indenture relating to such
transaction have been complied with.
Each guarantor, other than any subsidiary of Holdings whose note
guarantee is being released pursuant to the provisions under "--Note
Guarantees" or "--Certain Covenants--Limitation on Guarantees of Indebtedness
by Restricted Subsidiaries" as a result of such transaction, will not, and
Holdings will not permit a guarantor to:
(a) merge or consolidate with or into any other corporation or entity,
other than Holdings or any guarantor, or
(b) sell, assign, convey, transfer, lease or otherwise dispose of its
properties and assets on a consolidated basis substantially as an entirety to
any entity, other than Holdings or any guarantor,
unless
(1) either
(A) such guarantor is the continuing corporation or
partnership, or
(B) the Person, if other than such guarantor, formed by
or surviving such consolidation or merger or to which
such sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all of the
properties and assets of such guarantor shall have been
made,
(x) is a corporation or partnership organized and
validly existing under the laws of the United States,
any state thereof or the District of Columbia, and
(y) expressly assumes by a supplemental indenture,
executed and delivered to the trustee, in form
satisfactory to the trustee, all the obligations of such
guarantor under the notes and the indenture,
(2) immediately before and immediately after giving effect
to such transaction on a pro forma basis, no Default or Event of
Default shall have occurred and be continuing, and
(3) such guarantor shall have delivered to the trustee an
officers' certificate and an opinion of counsel, each stating that
such consolidation, merger, sale, assignment, conveyance,
transfer, lease or disposition and such supplemental indenture
comply with the indenture.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties
and assets of Holdings or any guarantor in accordance with the immediately
preceding paragraphs, the successor Person formed by such consolidation or into
which Holdings or such guarantor, as the case may be, is merged or the
successor Person to which such sale, assignment, conveyance, transfer, lease or
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, Holdings or such guarantor, as the case may be, under
the indenture and/or the note
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guarantees, as the case may be, with the same effect as if such successor had
been named as Holdings or such guarantor, as the case may be, therein and/or in
the note guarantees, as the case may be. When a successor assumes all the
obligations of its predecessor under the indenture, the notes or a note
guarantee, as the case may be, the predecessor shall be released from those
obligations; provided that in the case of a transfer by lease, the predecessor
shall not be released from the payment of principal and interest on the notes
or a note guarantee, as the case may be.
Events of Default
Each of the following is an "Event of Default" under the indenture:
(1) default for 30 days in the payment when due of any interest on
any note;
(2) default in the payment of the principal of or premium, if any,
on any note at its maturity, upon acceleration, optional redemption,
mandatory redemption, required purchase or otherwise;
(3) default in the performance, or breach, of the provisions
described in "Consolidation, Merger and Sale of Assets," the failure to
make or consummate a Change in Control Offer in accordance with the
provisions of the "Purchase of Notes upon a Change in Control" covenant
or the failure to make or consummate an Excess Proceeds Offer in
accordance with the provisions of the "Limitation on Sale of Assets"
covenant;
(4) without duplication, default in the performance, or breach, of
any covenant or warranty of Holdings or any guarantor contained in the
indenture or any note guarantee, which default or breach continues for a
period of 30 days after Holdings receives written notice from the
trustee or the holders of at least 25% of the outstanding principal
amount of the notes;
(5) Either
(A) one or more defaults in the payment when due of the
principal of or premium, if any, on Indebtedness of Holdings or any
Restricted Subsidiary aggregating $10.0 million or more, which
default continues after any applicable grace period and is not have
been cured or waived or
(B) Indebtedness of Holdings or any Restricted Subsidiary
aggregating $10.0 million or more shall have been accelerated or
otherwise declared due and payable, or required to be prepaid or
repurchased, other than by regularly scheduled required prepayment,
prior to the stated maturity date thereof;
(6) failure by Holdings or any Restricted Subsidiary to pay final,
non-appealable judgments aggregating in excess of $10.0 million, which
judgements are not discharged, paid or stayed for a period of 60
consecutive days;
(7) except as permitted by the indenture, any note guarantee of a
Material Subsidiary or group of Restricted Subsidiaries that, taken
together, would constitute a Material Subsidiary ceases to be in full
force and effect or is declared null and void or any Material Subsidiary
or group of Restricted Subsidiaries that, taken together, would
constitute a Material Subsidiary denies that it has any further
liability under any note guarantee, or gives notice to such effect; or
(8) certain events of bankruptcy, insolvency or reorganization
with respect to Holdings or any Material Subsidiary or group of
Restricted Subsidiaries that, taken together, would constitute a
Material Subsidiary.
If an Event of Default other than an event of bankruptcy or insolvency
occurs and is continuing, the trustee or the holders of not less than 25% in
principal amount of the notes then outstanding may declare all of the
outstanding notes to be immediately due and payable by notice in writing to
Holdings, and the same shall become immediately due and payable.
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If an Event of Default due to an event of bankruptcy or insolvency occurs
and is continuing, then the outstanding notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the trustee or any holder of notes.
At any time after a declaration of acceleration under the indenture, but
before a judgment or decree for payment of the money due has been obtained by
the trustee, the holders of a majority in aggregate principal amount of the
outstanding notes, by written notice to Holdings and the trustee, may rescind
such declaration and its consequences if
(a) Holdings has paid or deposited with the trustee an amount sufficient
to pay
(1) all overdue interest on all outstanding notes,
(2) all unpaid principal of and premium, if any, on any
outstanding notes that has become due otherwise than by such declaration
of acceleration and interest thereon at the rate borne by the notes,
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate borne
by the notes, and
(4) all sums paid or advanced by the trustee under the indenture
and the reasonable compensation, expenses, disbursements and advances of
the trustee, its agents and counsel; and
(b) all Events of Default, other than the non-payment of amounts of
principal of, premium, if any, or interest on the notes that has become due
solely by such declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
No individual holder of any of the notes has any right to institute any
proceeding with respect to the indenture or any remedy thereunder, unless:
(1) the holders of at least 25% in aggregate principal amount of
the outstanding notes have made written request, and offered reasonable
indemnity, to the trustee to institute such proceeding,
(2) the trustee has failed to institute such proceeding within 60
days after receipt of such notice, and
(3) the trustee, within such 60-day period, has not received
directions inconsistent with such written request by holders of a
majority in principal amount of the outstanding notes.
Such limitations do not apply, however, to a suit instituted by a
holder of a note for the enforcement of the payment of the principal of,
premium, if any, or interest on such note when due.
The holders of at least a majority in aggregate principal amount of the
outstanding notes may, on behalf of the holders of all the notes, waive any
past Defaults under the indenture, except a Default in the payment of the
principal of, premium, if any, or interest on any note, or in respect of a
covenant or provision which under the indenture cannot be modified or amended
without the consent of the holder of each note outstanding.
If a Default or an Event of Default occurs and is continuing and is known
to the trustee, the trustee will mail to each holder of the notes notice of the
Default or Event of Default within 10 days after the occurrence thereof. Except
in the case of a Default or an Event of Default in payment of principal of,
premium,
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if any, or interest on any notes, the trustee may withhold the notice to the
holders of such notes if a committee of its trust officers in good faith
determines that withholding the notice is in the interests of the holders of
the notes.
Holdings is required to furnish to the trustee annual and quarterly
statements as to the performance by Holdings and the guarantors of their
respective obligations under the indenture and as to any default in such
performance. Holdings is also required to notify the trustee within five
business days of the occurrence of any Default or Event of Default.
Legal Defeasance or Covenant Defeasance of Indenture
Holdings may, at its option and at any time, elect to have its
obligations and the guarantors with respect to the outstanding notes discharged
("legal defeasance"). Such legal defeasance means that Holdings will be deemed
to have paid and discharged the entire Indebtedness represented by the
outstanding notes except for:
(1) the rights of holders of the outstanding notes to receive
payments in respect of the principal of, premium, if any, and interest
on such notes when such payments are due,
(2) Holdings' obligations to issue temporary notes, register the
transfer or exchange of any notes, replace mutilated, destroyed, lost or
stolen notes, maintain an office or agency for payments in respect of
the notes and segregate and hold such payments in trust,
(3) the rights, powers, trusts, duties and immunities of the
trustee and
(4) the legal defeasance provisions of the indenture.
In addition, Holdings may, at its option and at any time, elect to have
the obligations of Holdings and any guarantor released with respect to certain
covenants set forth in the indenture ("covenant defeasance"), and thereafter
any omission to comply with such obligations will not constitute a Default or
an Event of Default with respect to the notes. In the event covenant defeasance
occurs, certain events, not including non-payment, bankruptcy, receivership,
reorganization and insolvency events described under "Events of Default", will
no longer constitute an Event of Default with respect to the notes.
In order to exercise either legal defeasance or covenant defeasance,
(1) Holdings must irrevocably deposit with the trustee, as trust
funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the notes, money or non-
callable U.S. Government Obligations, or a combination thereof, in an
amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay and discharge the principal of,
premium, if any, and interest on the outstanding notes on the stated
maturity date for payment thereof or on the applicable redemption date,
as the case may be,
(2) no Default or Event of Default will have occurred and be
continuing on the date of such deposit or, insofar as an Event of
Default from bankruptcy or insolvency is concerned, at any time during
the period ending on the 91st day after the date of deposit,
(3) such legal defeasance or covenant defeasance will not result
in a breach or violation of, or constitute a default under, the
indenture, the senior credit agreement or any other material agreement
or instrument to which Holdings or any guarantor is a party or by which
it is bound,
(4) in the case of legal defeasance, Holdings shall have delivered
to the trustee an opinion of counsel stating
(A) that Holdings has received from, or there has been
published by, the Internal Revenue Service a ruling, or
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(B) since the date of the final offering memorandum, there
has been a change in applicable federal income tax law,
in either case to the effect that, and based thereon such opinion shall
confirm that the holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
legal defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such legal defeasance had not occurred,
(5) in the case of covenant defeasance, Holdings shall have
delivered to the trustee an opinion of counsel to the effect that the
holders of the notes outstanding will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant defeasance
and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
covenant defeasance had not occurred,
(6) in the case of legal defeasance or covenant defeasance,
Holdings shall have delivered to the trustee an opinion of counsel to
the effect that
(A) the trust funds will not be subject to any rights of
holders of Senior Indebtedness under the subordination provisions
of the indenture and
(B) after the 91st day following the deposit or after the
date such opinion is delivered, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally,
(7) Holdings shall have delivered to the trustee an officers'
certificate stating that the deposit was not made by Holdings with the
intent of preferring the holders of the notes or any note guarantee over
the other creditors of either Holdings or any guarantor with the intent
of hindering, delaying or defrauding creditors of either Holdings or any
guarantor, and
(8) Holdings shall have delivered to the trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent relating to either the legal defeasance or the covenant
defeasance, as the case may be, have been complied with.
Satisfaction and Discharge
The indenture will cease to be of further effect when:
(a) either
(1) all the notes theretofore authenticated and delivered,
other than destroyed, lost or stolen notes which have been
replaced or paid and notes for whose payment money has been
deposited in trust or segregated and held in trust by Holdings and
thereafter repaid to Holdings or discharged from such trust, have
been delivered to the trustee for cancellation or
(2) all notes not theretofore delivered to the trustee for
cancellation
(x) have become due and payable,
(y) will become due and payable at the applicable date
of maturity within one year or
(z) are to be called for redemption within one year
under arrangements satisfactory to the trustee, and Holdings
has irrevocably deposited with the trustee funds in an
amount sufficient to pay and discharge the entire
Indebtedness on the notes not theretofore delivered to the
trustee for cancellation, for principal of, premium, if any,
and interest on the notes to the date of deposit, or to the
applicable date of maturity or redemption date, as the case
may be,
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(b) Holdings has paid or caused to be paid all sums payable under
the indenture by Holdings, and
(c) Holdings has delivered to the trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent
provided in the indenture relating to the satisfaction and discharge of
the indenture have been complied with.
This satisfaction and discharge shall not apply to surviving
rights of registration or transfer or exchange of the notes, as
expressly provided for in the indenture.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the
indenture. The registrar and the trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and
Holdings may require a holder to pay any taxes and fees required by law or
permitted by the indenture. Holdings is not required to transfer or exchange
any note selected for redemption. Also, Holdings is not required to transfer
or exchange any note for a period of 15 days before a selection of notes to be
redeemed. The registered holder of a note will be treated as the owner of it
for all purposes.
Amendments and Waivers
With certain exceptions, modifications and amendments of the indenture
may be made by a supplemental indenture entered into by Holdings, the
guarantors and the trustee with the consent of the holders of a majority in
aggregate outstanding principal amount of the notes then outstanding;
provided, however, no such modification or amendment may, without the consent
of the holder of each outstanding note affected thereby:
(1)change the stated maturity date of the principal of, or any
installment of interest on, any note;
(2)reduce the principal amount of, or premium, if any, or the rate
of interest on any note;
(3)make any notes payable in money other than that stated in the
notes;
(4)impair the right to institute suit for the enforcement of any
such payment after the stated maturity date of any note, or, in
the case of redemption, on or after the redemption date;
(5)following the occurrence of an Asset Sale, amend, change or
modify the obligation of Holdings to make and consummate an Excess
Proceeds Offer with respect to any Asset Sale in accordance with
the "Limitation on Sale of Assets" covenant, including amending,
changing or modifying any definition relating thereto in any
manner materially adverse to the holders of the notes affected
thereby;
(6)following the occurrence of a Change in Control, amend, change
or modify the obligation of Holdings to make and consummate a
Change in Control Offer in the event of a Change in Control in
accordance with the "Purchase of Notes Upon a Change in Control"
covenant, including amending, changing or modifying any definition
relating thereto in any manner materially adverse to the holders
of the notes affected thereby;
(7)reduce the amount of notes whose holders must consent to any
supplemental indenture or any waiver of compliance with certain
provisions of the indenture;
(8)modify any of the provisions relating to supplemental
indentures requiring the consent of holders or relating to the
waiver of past defaults or relating to the waiver of certain
covenants, except
(a)to increase the percentage of outstanding notes required
for such actions or
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(b)to provide that certain other provisions of the indenture
cannot be modified or waived without the consent of the holder of
each note affected thereby; or
(9) amend or modify any of the provisions of the indenture
relating to any note guarantee in any manner adverse to the
holders of the notes.
In addition, any amendment to the provisions of the indenture which
relate to subordination will require the consent of the holders of at least 66
2/3% in aggregate principal amount of the notes then outstanding if such
amendment would adversely affect the rights of holders of the notes.
Notwithstanding the foregoing, without the consent of any holder of the
notes, Holdings, any guarantor and the trustee may modify or amend the
indenture:
(a)to evidence the succession of another Person to Holdings,
a guarantor or any other obligor on the notes, and the assumption
by any such successor of the covenants of Holdings or such obligor
or guarantor in the indenture and in the notes and in any note
guarantee in accordance with "--Consolidation, Merger and Sale of
Assets;"
(b)to add to the covenants of Holdings, any guarantor or any
other obligor upon the notes for the benefit of the holders of the
notes or to surrender any right or power conferred upon Holdings
or any other obligor upon the notes, as applicable, in the
indenture, in the notes or in any note guarantee;
(c)to cure any ambiguity, or to correct or supplement any
provision in the indenture, the notes or any note guarantee which
may be defective or inconsistent with any other provision in the
indenture, the notes or any note guarantee or make any other
provisions with respect to matters or questions arising under the
indenture, the notes or any note guarantee; provided that, in each
case, such provisions shall not adversely affect the interest of
the holders of the notes;
(d)to comply with the requirements of the Commission in
order to effect or maintain the qualification of the indenture
under the Trust Indenture Act;
(e)to add a guarantor under the indenture;
(f)to evidence and provide the acceptance of the appointment
of a successor trustee under the indenture; or
(g)to mortgage, pledge, hypothecate or grant a security
interest in favor of the trustee for the benefit of the holders of
the notes as additional security for the payment and performance
of Holdings' and any guarantor's obligations under the indenture,
in any property, or assets.
The holders of a majority in aggregate principal amount of the notes
outstanding may waive compliance with certain restrictive covenants and
provisions of the indenture.
The Trustee
The indenture provides that, except during the continuance of an Event of
Default, the trustee will perform only such duties as are specifically set
forth in the indenture. If an Event of Default has occurred and is continuing,
the trustee will exercise such rights and powers vested in it by the indenture
and use the same degree of care and skill in its exercise as a prudent Person
would exercise under the circumstances in the conduct of such Person's own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
holder of notes, unless such holder shall have offered to the trustee security
and indemnity satisfactory to it against any loss, liability or expense.
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If the trustee becomes a creditor of Holdings or any guarantor, the
indenture limits its rights to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of any such claims, as
security or otherwise. The trustee is permitted to engage in other
transactions; however, if it acquires any conflicting interest it must
eliminate such conflict or resign.
Governing Law
The indenture, the notes and the note guarantees will be governed by, and
construed in accordance with, the laws of the State of New York.
Certain Definitions
Set forth below are certain defined terms used in the indenture.
Reference is made to the indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Acquired Indebtedness" means Indebtedness of a Person
(a) existing at the time such Person becomes a Restricted
Subsidiary or
(b) assumed in connection with the acquisition of assets
constituting substantially all the assets of such Person, any division
or line of business of such Person or any other properties or assets of
such Person other than in the ordinary course of business from such
Person. Acquired Indebtedness shall be deemed to be incurred on the date
of the related acquisition of assets from any Person or the date the
acquired Person becomes a Restricted Subsidiary.
"Additional Interest" has the meaning set forth in the Registration
Rights Agreement.
"Affiliate" means, with respect to any specified Person,
(a) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such
specified Person or
(b) any other Person that owns, directly or indirectly, 10% or
more of such specified Person's Capital Stock or
(c) any executive officer or director of any such specified Person
or other Person.
For the purposes of this definition, "control," when used with respect to
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition, including, without limitation, by way or merger,
consolidation or sale and leaseback transaction (collectively, a "transfer"),
directly or indirectly, in one of a series of related transactions, of
(a) any Capital Stock of any Restricted Subsidiary,
(b) all or substantially all of the properties and assets of any
division or line of business of Holdings or any Restricted Subsidiary,
or
(c) any other properties or assets of Holdings or any Restricted
Subsidiary other than in the ordinary course of business.
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For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties or assets
(1) that is governed by the provisions of the indenture described
under "--Consolidation, Merger and Sale of Assets,"
(2) between or among Holdings and Restricted Subsidiaries in
accordance with the terms of the indenture,
(3) a Hospital Swap,
(4) with an aggregate fair market value of less than $1.0 million,
(5) long-term leases, in effect on the date the notes were issued,
of Hospitals to another Person,
(6) long-term leases of Hospitals to another Person; provided that
the aggregate book value of the properties subject to such leases at any
one time outstanding does not exceed 15% of the Total Assets of Holdings
at the time any such lease is entered into,
(7) that are obsolete, damaged or worn out equipment or inventory
that is no longer useful in the conduct of Holdings' or its
subsidiaries' business and that is disposed of in the ordinary course of
business,
(8) that constitutes a sale or other disposition of accounts
receivable in the ordinary course of business, including for purposes of
financing, for cash and in an amount at least equal to the fair market
value of such accounts receivable, or
(9) that is made the subject of an Investment consummated in
compliance with "Certain Covenants--Limitation of Restricted Payments."
"Attributable Debt" of any Person in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of such Person as lessee for net rental payments excluding all
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water, utilities and similar charges to the extent included
in such rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Average Life" means, as of the date of determination with respect to any
Indebtedness, the quotient obtained by dividing
(a) the sum of the products of
(1) the number of years from the date of determination to
the date or dates of each successive scheduled principal payment,
including, without limitation, any sinking fund requirements of
such Indebtedness multiplied by
(2) the amount of each such principal payment, by
(b) the sum of all such principal payments.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, partnership interests, participation, rights in or other equivalents
of such Person's capital stock, and any rights, other than debt securities
convertible into capital stock, warrants or options exchangeable for or
convertible into such capital stock, whether now outstanding or issued after
the date of the Indenture.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation of such Person under a lease of, or other agreement conveying the
right to use, any property, whether real, personal or mixed,
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that is required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of the Indenture, the amount of
such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Cash Equivalents" means
(a) any evidence of Indebtedness with a maturity of one year or
less issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof, provided that the full
faith and credit of the United States is pledged in support thereof;
(b) certificates of deposit or acceptances with a maturity of one
year or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500.0 million;
(c) commercial paper with a maturity of one year or less issued by
a corporation that is not an Affiliate of Holdings and is organized
under the laws of any state of the United States or the District of
Columbia and rated at least A-1 by S&P or any successor rating agency or
at least P-1 by Moody's or any successor rating agency;
(d) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (a) and (b)
above;
(e) demand and time deposits with a domestic commercial bank that
is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500.0 million; and
(f) investments in funds investing solely in investments of the
types described in clauses (a) through (e) above.
"Change in Control" means the occurrence of any of the following events:
(a) any "person" or "group," as such terms are used in Sections
13(d) and 14(d) of the Exchange Ac,) is or becomes the "beneficial
owner," as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of
all securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time,
directly or indirectly, of more than 35% of the total outstanding voting
stock of LifePoint or Holdings;
provided that neither of the following events by itself shall not
constitute a Change in Control under this clause (a):
(1) LifePoint is the "beneficial owner" of more than 35% of
the total outstanding voting stock of Holdings or
(2) the ESOP is the "beneficial owner" of more than 35% of
the total outstanding voting stock of LifePoint;
(b) LifePoint or Holdings consolidates with, or merges with or
into, another Person or conveys, transfers, leases or otherwise disposes
of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, LifePoint or Holdings, in any
such event pursuant to a transaction in which the outstanding voting
stock of LifePoint or Holdings is converted into or exchanged for cash,
securities or other property, other than any such transaction
(1) where the outstanding voting stock of LifePoint or
Holdings is not converted or exchanged at all, except to the
extent necessary to reflect a change in the jurisdiction of
incorporation of LifePoint or Holdings or is converted into or
exchanged for
(A) voting stock, other than Redeemable Capital Stock,
of the surviving or transferee corporation and/or
(B) cash, securities and other property, other than
Capital Stock of the surviving or transferee corporation, in
an amount that could be paid by Holdings as a Restricted
Payment as described under, or is otherwise not prohibited
by, the "Limitation on Restricted Payments" covenant and,
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(2) immediately after such transaction, no "person" or
"group," as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, is the "beneficial owner," as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such
Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, directly or
indirectly, of more than 35% of the total outstanding voting stock
of the surviving or transferee corporation;
(c) during any consecutive two year period, individuals who at the
beginning of such period constituted the board of directors of LifePoint
or Holdings, together with any new directors whose election to such board
of directors, or whose nomination for election by the stockholders of
LifePoint or Holdings, was approved by a vote of 66 2/3% of the directors
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the board of
directors of LifePoint or Holdings then in office;
(d) LifePoint or Holdings is liquidated or dissolved or adopts a
plan of liquidation or dissolution other than, in the case of Holdings,
in a transaction which complies with the provisions described under
"Consolidation, Merger and Sale of Assets;" or
(e) for as long as a holding company ownership structure is
maintained over Holdings, LifePoint or a company 100% of the Capital
Stock of which is owned directly by LifePoint ceases to own at least a
majority of the total outstanding voting stock and Capital Stock of
Holdings.
"Consolidated Adjusted Net Income" means, for any period, the
consolidated net income (or loss) of Holdings and all Restricted Subsidiaries
for such period as determined in accordance with GAAP, adjusted by excluding,
without duplication,
(a) any net after-tax extraordinary gains or losses, less all fees
and expenses relating thereto,
(b) any net after-tax gains or losses, less all fees and expenses
relating thereto, attributable to asset dispositions other than in the
ordinary course of business,
(c) the portion of net income (or loss) of any Person, other than
Holdings or a Restricted Subsidiary but including Unrestricted
Subsidiaries, in which Holdings or any Restricted Subsidiary has an
ownership interest, except to the extent of the amount of dividends or
other distributions actually paid to Holdings or any Restricted
Subsidiary in cash dividends or distributions during such period,
(d) for purposes of "Certain Covenants--Limitation on Restricted
Payments" above, the net income (or loss) of any Person combined with
Holdings or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination,
(e) the net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is not at the date of determination permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary or its
stockholders, except to the extent of the amount of cash dividends or
other distributions actually paid to Holdings or a Restricted Subsidiary
not subject to such restriction by such Restricted Subsidiary during such
period and
(f) for purposes of calculating Consolidated Adjusted Net Income
under the "Limitation on Restricted Payment" covenant any net income (or
loss) from any Restricted Subsidiary while it was an Unrestricted
Subsidiary at any time during such period other than any amounts actually
received from such Restricted Subsidiary during such period.
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"Consolidated Fixed Charge Coverage Ratio" of Holdings means, for any
period, the ratio of
(a) the sum of Consolidated Adjusted Net Income and, to the extent
deducted in computing Consolidated Adjusted Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-
Cash Charges, less all non-cash items increasing Consolidated Adjusted
Net Income, in each case, for such period to
(b) the sum of
(1) Consolidated Interest Expense and
(2) cash dividend payments on preferred stock of Holdings or
any Restricted Subsidiary and non-cash dividends due on preferred
stock of any Restricted Subsidiary for such period.
"Consolidated Income Tax Expense" means, for any period, the provision
for federal, state, local and foreign income taxes of Holdings and all
Restricted Subsidiaries for such period as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of
(a) the interest expense of Holdings and its Restricted
Subsidiaries for such period, including, without limitation,
(1) amortization of debt discount,
(2) the net cost (benefit) of Interest Rate Agreements,
including amortization of discounts,
(3) the interest portion of any deferred payment obligation,
(4) commissions, discounts, and other fees and charges owed
with respect to letters of credit and bankers acceptance financing
and similar transactions, and
(5) amortization of debt issuance costs,
plus
(b) the interest component of Capitalized Lease Obligations of
Holdings and its Restricted Subsidiaries during such period, plus
(c) the interest of Holdings and its Restricted Subsidiaries that
was capitalized during such period, plus
(d) interest on Indebtedness of another Person that is guaranteed
by Holdings or any Restricted Subsidiary or secured by a Lien on assets
of Holdings or a Restricted Subsidiary, to the extent such interest is
actually paid by Holdings or such Restricted Subsidiary, in each case as
determined on a consolidated basis in accordance with GAAP;
provided that
(x) the Consolidated Interest Expense attributable to interest on
any Indebtedness computed on a pro forma basis and bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation had been the applicable rate for the entire period, and
(y) in making such computation, the Consolidated Interest Expense
attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.
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Notwithstanding the foregoing, the interest rate with respect to any
Indebtedness covered by any Interest Rate Agreement shall be deemed to be the
effective interest rate with respect to such Indebtedness after taking into
account such Interest Rate Agreement.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of Holdings and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of Holdings ending prior to the taking of any action for the
purpose of which the determination is being made, as
(a) the aggregate paid-in capital relating to such Capital Stock
plus
(b) any retained earnings or earned surplus less
(1) any accumulated deficit and
(2) any amounts attributable to Redeemable Capital Stock.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization, depletion and other non-cash expenses, including,
without limitation, non-cash ESOP expenses, of Holdings and any Restricted
Subsidiary reducing Consolidated Adjusted Net Income for such period,
determined on a consolidated basis in accordance with GAAP, excluding any such
non-cash charge that requires an accrual of or reserve for cash charges for any
future period.
"Currency Agreements" means any spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by Holdings or any of its Restricted
Subsidiaries in the ordinary course of business and designated to protect
against or manage exposure to fluctuations in foreign currency exchange rates.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means:
(1) all Senior Indebtedness under the senior credit agreement; and
(2) any other Senior Indebtedness which, at the time of
determination, has an aggregate principal amount outstanding of at least
$20.0 million and that has been specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" of Holdings.
"ESOP" means the LifePoint Hospitals, Inc. Retirement Plan.
"ESOP Loans" means loans to the ESOP by Holdings or guarantees by
Holdings of loans to the ESOP by a third party lender, in either case in
connection with the purchase as promptly as practicable of shares of LifePoint
common stock by the ESOP.
"fair market value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy. Fair market value shall be determined
by the board of directors of Holdings in good faith.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the date of determination.
"guarantee" means, as applied to any obligation,
(a) a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, of any part or all of such obligation and
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(b) an agreement, direct or indirect, contingent or otherwise, the
practical effect of which is to assure in any way the payment or
performance, or payment of damages in the event of non-performance, of
all or any part of such obligation, including, without limiting the
foregoing, the payment of amounts drawn by letters of credit.
"guarantor" means each Restricted Subsidiary as of the date that Holdings
executes and delivers its supplemental indenture to the indenture and any
Restricted Subsidiary that incurs a guarantee; provided that upon the release
and discharge of any Person from its note guarantee in accordance with the
indenture, such Person shall cease to be a guarantor.
"Guarantor Senior Indebtedness" of a guarantor means Indebtedness of such
guarantor consisting of:
(1) a guarantee of any Senior Indebtedness under the senior credit
agreement or any other Senior Indebtedness; and
(2) the principal of, premium, if any, and interest on all other
Indebtedness of such a guarantor, other than the guarantee issued by such
guarantor, whether outstanding on the date of the indenture or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the indebtedness or
pursuant to which the indebtedness is outstanding expressly provides that
such Indebtedness shall not be senior in right of payment to such
guarantee.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" of a
guarantor shall not include:
(a) Indebtedness evidenced by the guarantee of such guarantor;
(b) Indebtedness of such guarantor that is expressly subordinated in
right of payment to any Guarantor Senior Indebtedness of such guarantor;
(c) Indebtedness of such guarantor that by operation of law is
subordinate to any general unsecured obligations of such guarantor;
(d) Indebtedness of such guarantor to the extent incurred in
violation of any covenant of the indenture;
(e) any liability for federal, state or local taxes or other taxes,
owed or owing by such guarantor;
(f) accounts payable or other liabilities owed or owing by such
guarantor to trade creditors, including guarantees thereof or instruments
evidencing such liabilities;
(g) amounts owed by such guarantor for compensation to employees or
for services rendered to such guarantor;
(h) Indebtedness of such guarantor to any Affiliate of Holdings;
(i) Capital Stock of such guarantor; and
(j) Indebtedness which when incurred and without respect to any
election under Section 1111(b) of Title 11 of the United States Code is
without recourse to such guarantor or any subsidiary of Holdings.
"Hospital" means a hospital, outpatient clinic, long-term care facility,
medical office building or other facility or business that is used or useful
in or related to the provision of healthcare services.
"Hospital Swap" means an exchange of assets and, to the extent necessary
to equalize the value of the assets being exchanged, cash by Holdings or a
Restricted Subsidiary for one or more Hospitals and/or one or more Related
Businesses or for 100% of the Capital Stock of any Person owning or operating
one or more Hospitals and/or one or more Related Businesses, provided that
cash does not exceed 20% of the sum of the
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amount of the cash and the fair market value of the Capital Stock or assets
received or given by Holdings or a Restricted Subsidiary in such transaction.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all liabilities of such Person for borrowed money, including
overdrafts, or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current liabilities
incurred in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit and acceptances issued under
letter of credit facilities, acceptance facilities or other similar
facilities,
(b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments,
(c) indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person, even if the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property, but excluding trade
payables arising in the ordinary course of business,
(d) all Capitalized Lease Obligations of such Person,
(e) all obligations of such Person under or in respect of Interest
Rate Agreements or Currency Agreements,
(f) all indebtedness referred to in the preceding clauses of other
Persons and all dividends of other Persons, the payment of which is
secured by, or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by, any Lien or with
respect to property owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, the
amount of such obligation being deemed to be the lesser of the value of
such property or asset or the amount of the obligation so secured,
(g) all guarantees by such Person of Indebtedness referred to in
this definition or any other Person,
(h) all Redeemable Capital Stock of such Person valued at the
greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends and
(i) all Attributable Debt of such Person.
For purposes of this definition, the "maximum fixed repurchase price" of
any Redeemable Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Capital Stock as
if such Redeemable Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the indenture, and
if such price is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be determined in good
faith by the board of directors of the issuer of such Redeemable Capital Stock.
"Interest Rate Agreements" means any interest rate protection agreements
and other types of interest rate hedging agreements, including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements,
designed to protect against or manage exposure to fluctuations in interest
rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee or other extension of credit or capital contribution
to, by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others, or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.
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In addition, the portion, proportionate to Holdings' or a Restricted
Subsidiary's equity interest in each of its subsidiaries, of the fair market
value of the net assets of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary shall be deemed
to be an "Investment" made by Holdings in such Unrestricted Subsidiary at such
time.
Upon a redesignation of such subsidiary as a Restricted Subsidiary,
Holdings shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to
(x) Holdings' or one of its subsidiaries' "Investment" in such
subsidiary at the time of such redesignation less
(y) the portion proportionate to Holdings' or one of its
subsidiaries equity interest in such subsidiary, of the fair market
value of the net assets of such subsidiary at the time of such
redesignation.
"Investment" shall exclude extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
security interest, hypothecation, assignment for security, claim, or preference
of priority or other encumbrance upon or with respect to any property of any
kind, real or personal, movable or immovable, now owned or hereafter acquired.
A Person shall be deemed to own subject to a Lien any property which such
Person has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement having substantially the same economic effect as the foregoing.
"Material Subsidiary" of a Person means any Restricted Subsidiary that
would be a significant subsidiary of such person, as defined in rule 1-02 of
Regulation S-X promulgated by the Commission.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or Cash Equivalents, except to the extent that
such obligations are financed or sold with recourse to Holdings or any
Restricted Subsidiary, net of
(a) brokerage commissions and other fees and expenses, including, without
limitation, fees and expenses of legal counsel and investment banks, recording
fees, transfer fees and appraiser fees, related to such Asset Sale,
(b) provisions for all taxes payable as a result of such Asset Sale,
(c) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties which are the subject of
such Asset Sale or where such Indebtedness must by its terms, or as required by
applicable law, be repaid out of the proceeds of such Asset Sale,
(d) amounts required to be paid to any Person, other than Holdings or any
Restricted Subsidiary, owning a beneficial interest in or having a Lien on the
assets subject to the Asset Sale,
(e) all distributions and other payments required to be made to non-
majority interest holders in Holdings' subsidiaries or Permitted Joint Ventures
as a result of such Asset Sale and
(f) appropriate amounts to be provided by Holdings or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and retained by
Holdings or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an officers' certificate delivered to the trustee.
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"Permitted Indebtedness" means any of the following:
(a) Indebtedness of Holdings or any Restricted Subsidiary under the
senior credit agreement in an aggregate principal amount at any one time
outstanding not to exceed $210.0 million less the aggregate amount of all
repayments of the principal amount of any term loans under the senior
credit agreement or a permanent reduction of the commitments with respect
to any revolving credit indebtedness under the senior credit agreement in
either case made in accordance with the covenant described under "Certain
Covenant--Limitation on Sale of Assets;"
(b) Indebtedness of Holdings pursuant to the notes or of any
Restricted Subsidiary pursuant to a note guarantee;
(c) without duplication, Indebtedness of Holdings or any Restricted
Subsidiary outstanding on the date of the indenture and immediately
following consummation of the Spin-Off Transactions in an amount not to
exceed $2.0 million;
(d) Indebtedness of Holdings owing to any Restricted Subsidiary;
provided that any disposition, pledge or transfer of any such
Indebtedness to a Person, other than a disposition, pledge or transfer to
Holdings or another Restricted Subsidiary, shall be deemed to be an
incurrence of such Indebtedness by Holdings not permitted by this clause
(d);
(e) Indebtedness of a Restricted Subsidiary owing to Holdings or to
another Restricted Subsidiary; provided that any disposition, pledge or
transfer of any such Indebtedness to a Person, other than a disposition,
pledge or transfer to Holdings or a Restricted Subsidiary, shall be
deemed to be an incurrence of such Indebtedness by such Restricted
Subsidiary not permitted by this clause (e);
(f) guarantees of any Restricted Subsidiary made in accordance with
the provisions of the "Limitation on Guarantees of Indebtedness by
Restricted Subsidiaries" or the "Limitation on Other Restricted Senior
Subordinated Indebtedness" covenants;
(g) obligations of Holdings or any guarantor entered into in the
ordinary course of business
(1) pursuant to Interest Rate Agreements designed to protect
Holdings or any Restricted Subsidiary against fluctuations in
interest rates in respect of Indebtedness of Holdings or any
Restricted Subsidiary, which obligations do not exceed the
aggregate principal amount of such Indebtedness and
(2) pursuant to Currency Agreements entered into by Holdings
or any of its Restricted Subsidiaries in respect of its assets or
obligations, as the case may be, denominated in a foreign currency;
(h) Indebtedness of Holdings or any guarantor in respect of Purchase
Money Obligations and Capitalized Lease Obligations of Holdings or any
guarantor in an aggregate amount which does not exceed $17.5 million at
any one time outstanding;
(i) Indebtedness of Holdings or any guarantor consisting of
guarantees, indemnities, hold backs or obligations in respect of purchase
price adjustments in connection with the acquisition or disposition of
assets, including, without limitation, shares of Capital Stock of
Restricted Subsidiaries, or contingent payment obligations incurred in
connection with the acquisition of assets which are contingent on the
performance of the assets acquired, other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such assets of
shares of Capital Stock of such Restricted Subsidiary for the purpose of
financing such acquisition; provided that the maximum allowable liability
in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by Holdings and its Restricted Subsidiaries;
(j) Indebtedness of Holdings or any guarantor represented by
(1) letters of credit for the account of Holdings or any
Restricted Subsidiary or
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(2) other obligations to reimburse third parties pursuant to
any surety bond or other similar arrangements,
which letters of credit or other obligations, as the case
may be, are intended to provide security for workers' compensation
claims, payment obligations in connection with self-insurance or
other similar requirements in the ordinary course of business;
(k) any renewals, extensions, substitutions, refinancing or
replacements (each, for purposes of this clause, a "refinancing") of any
Indebtedness incurred pursuant to the first paragraph under "Certain
Covenants--Limitation on Indebtedness" or referred to in clauses (b) or
(c) of this definition, including any successive refinancings, so long
as
(1) any such new indebtedness shall be in a principal amount
that does not exceed the principal amount so refinanced, plus the
lesser of the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the
Indebtedness refinanced or the amount of any premium reasonably
determined as necessary to accomplish such refinancing,
(2) in the case of any refinancing by Holdings of
Indebtedness that is on parity in right of payment with the notes
or is subordinate to the notes, such new Indebtedness is made on
parity with or subordinate to the notes at least to the same
extent as the Indebtedness being refinanced,
(3) in the case of any refinancing by any guarantor of
Indebtedness that is on parity in right of payment with its
guarantee or is subordinate to its guarantee, such new
Indebtedness is made on parity with or subordinate to the note
guarantee of such guarantor at least to the same extent as the
Indebtedness being refinanced,
(4) such new Indebtedness has an Average Life no shorter
than the Average Life of the Indebtedness being refinanced and
final stated maturity date of principal no earlier than the final
stated maturity date of principal of the Indebtedness being
refinanced and
(5) Indebtedness of Holdings or a guarantor may only be
refinanced with Indebtedness of Holdings or a guarantor, as the
case may be;
(l) payments to or by Holdings to fund the payment of or payment
by LifePoint of dividends, loans, distributions or annual contributions
calculated in accordance with the requirements of Section 415 of the
Internal Revenue Code to the ESOP in amounts equal to amounts expended
by LifePoint or Holdings to repurchase shares of its Capital Stock from
deceased or retired employees in accordance with the terms of the ESOP
as in effect on the date of the indenture and from employees whose
employment with Holdings or any of its subsidiaries has terminated for
any reason, in each case contemplated by this clause (l) only to the
extent mandatorily required by the ESOP as in effect on the date of the
indenture, the Internal Revenue Code or ERISA; and, provided, further,
that in each such case Holdings or LifePoint has deferred making any
cash payments in respect of such repurchase obligations to the maximum
extent possible under the ESOP as in effect on the date of the indenture
or as modified from time to time to comply with law;
(m) Physician Support Obligations incurred by Holdings or any
Restricted Subsidiary; and
(n) Indebtedness of Holdings or any guarantor not otherwise
permitted by the foregoing clauses (a) through (m) in an aggregate
principal amount not in excess of $30.0 million at any one time
outstanding.
"Permitted Investments" means any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in Holdings or any Restricted Subsidiary;
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(c) intercompany Indebtedness to the extent permitted under
clauses (d) or (e) of the definition of "Permitted Indebtedness;"
(d) Investments in an amount not to exceed $5.0 million at any one
time outstanding;
(e) Investments by Holdings or any Restricted Subsidiary in
another Person, if as a result of such Investment
(1) such other Person becomes a Restricted Subsidiary or
(2) such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all of its
assets to, Holdings or a Restricted Subsidiary;
(f) Investments acquired in the Spin-Off Transactions;
(g) bonds, notes, debentures and other securities received as
consideration for Assets Sales to the extent permitted under the
"Limitation on Sale of Assets" covenant;
(h) any Investment in a Person engaged principally in a Related
Business prior to such Investment if
(1) Holdings would, at the time of such Investment and after
giving pro forma effect thereto as if such Investment had been
made at the beginning of the most recently ended four full fiscal
quarter period for which consolidated financial statements are
available immediately preceding the date of such Investment, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio test set
forth in the first paragraph under the "Limitation on
Indebtedness" covenant and
(2) the aggregate amount, including cash and the book value
of property other than cash, as determined by the board of
directors, of all Investments made pursuant to this clause (h) by
Holdings and its Restricted Subsidiaries, determined as of the
time made, does not exceed in the aggregate 15% of the Total
Assets of Holdings at the time the Investment is made; provided
that Investments of up to $20.0 million shall be permitted under
this paragraph (h) without regard to the requirements of clause
(1) of this paragraph (h);
(i) Physician Support Obligations;
(j) in the event Holdings or a Restricted Subsidiary shall
establish a subsidiary for the purpose of insuring the healthcare
businesses or facilities owned or operated by Holdings, any subsidiary,
any Permitted Joint Venture or any physician employed by or on the
medical staff of any such business or facility (the "Insurance
Subsidiary"), Investments in an amount which do not exceed the minimum
amount of capital required under the laws of the jurisdiction in which
the Insurance Subsidiary is formed, and any Investment by such Insurance
Subsidiary which is a legal investment for an insurance company under
the laws of the jurisdiction in which the Insurance Subsidiary is formed
and made in the ordinary course of business and rated in one of the four
highest rating categories;
(k) Investments made in connection with Hospital Swaps;
(l) Investments in prepaid expenses, negotiable instruments held
for collection and lease, utility and workers' compensation, performance
and other similar deposits made in the ordinary course of business;
(m) loans and advances to officers, directors and employees made
in the ordinary course of business of less than $13.0 million in the
aggregate at any one time outstanding;
(n) Interest Rate Agreements and Currency Agreements permitted
under "Certain Covenants--Limitation on Indebtedness;"
(o) Investments represented by accounts receivable created or
acquired in the ordinary course of business;
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(p) Investments existing on the date on which the notes were
originally issued and any renewal or replacement thereof on terms and
conditions no less favorable than that being renewed or replaced;
(q) any Investment to the extent that the consideration therefor
is Qualified Capital Stock;
(r) shares of Capital Stock or other securities received in
settlement of debts owed to Holdings or any Restricted Subsidiary as a
result of foreclosure, perfection or enforcement of any Lien or
indebtedness or in connection with any good faith settlement of a
bankruptcy proceeding;
(s) the ESOP Loans; or
(t) Investments in connection with Bartow Memorial Hospital
through the date of commencement of operations thereof.
"Permitted Joint Venture" means, with respect to any Person,
(a) any corporation, association, limited liability company or other
business entity, other than a partnership, of which 50% or more of the total
voting power of shares of Capital Stock entitled, without regard to the
occurrence of any contingency, to vote in the election of directors, managers
or trustees thereof and 50% or more of the total equity interests is at the
time of determination owned or controlled, directly or indirectly, by such
Person or one or more of the Restricted Subsidiaries of that Person or a
combination thereof and
(b) any partnership of which 50% or more of the general or limited
partnership interests are owned or controlled, directly or indirectly, by such
Person or one or more of the Restricted Subsidiaries of that Person or a
combination thereof,
which in the case of each of clauses (a) and (b) is engaged in a Related
Business.
"Permitted Liens" means
(a) Liens existing on the issuance date of the notes;
(b) Liens securing any Interest Rate Agreements of Holdings or any
Restricted Subsidiary;
(c) Liens securing any Indebtedness incurred under clause (k) of
the definition of "Permitted Indebtedness," the proceeds of which are
used to refinance Indebtedness of Holdings or any Restricted Subsidiary;
provided that such Liens extend to or cover only the assets currently
securing the Indebtedness being refinanced;
(d) Liens securing Acquired Indebtedness incurred by Holdings and
any Restricted Subsidiary and permitted under the "Limitation on
Indebtedness" covenant, provided that such Liens attach solely to the
assets acquired;
(e) Liens securing Indebtedness owing to Holdings or a Restricted
Subsidiary;
(f) Liens securing Purchase Money Obligations incurred in
accordance with the Indenture;
(g) Liens for taxes, assessments or governmental charges or claims
either
(1) not delinquent or
(2) contested in good faith by appropriate proceedings and
as to which Holdings or its Restricted Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to
GAAP;
(h) statutory Liens of landlords and Liens or carriers,
warehousement, mechanics, suppliers, materialmen, repairment and other
Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if Holdings or
its Restricted Subsidiaries shall have made such reserves, as required
by GAAP;
(i) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
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performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations;
(j) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall
not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(k) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the conduct of the business of
Holdings or any of its Restricted Subsidiaries; or
(l) any interest or title of a lessor in assets or Property
subject to Capitalized Lease Obligations or an operating lease of
Holdings or any Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Physician Support Obligation" means a loan to or on behalf of, or a
guarantee of indebtedness of, a physician or healthcare professional providing
service to patients in the service area of a Hospital or other health care
facility operated by Holdings or any of its Restricted Subsidiaries made or
given by Holdings or any subsidiary of Holdings
(a) in the ordinary course of its business and
(b) pursuant to a written agreement having a period not to exceed
five years.
"Public Equity Offering" means an offer and sale of common stock which is
Qualified Capital Stock of LifePoint or Holdings made on a primary basis by
LifePoint or Holdings pursuant to a registration statement that has been
declared effective by the Commission pursuant to the Securities Act, other than
a registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of LifePoint or Holdings.
"Purchase Money Obligations" means any Indebtedness of Holdings or any
Restricted Subsidiary incurred to finance the acquisition or construction of
any property or business, including Indebtedness incurred within 90 days
following such acquisition or construction, and including Indebtedness of a
Person existing at the time such Person becomes a subsidiary of Holdings or
assumed by Holdings or a subsidiary of Holdings in connection with the
acquisition of assets from such person; provided, however, that any Lien on
such Indebtedness shall not extend to any property other than the property so
acquired or constructed.
"Qualified Capital Stock" of any Person means any and all Capital Stock
of such Person other than Redeemable Capital Stock.
"Qualified Equity Offering" means
(a) any Public Equity Offering or
(b) an offering of Qualified Capital Stock of LifePoint or
Holdings to non-Affiliates with gross proceeds to LifePoint or Holdings
in excess of $35.0 million.
"Redeemable Capital Stock" means any class of Capital Stock that, either
by its terms, by the terms of any securities into which it is convertible or
exchangeable or by contract or otherwise, is, or upon the happening of an event
or passage of time would be, required to be redeemed, whether by sinking fund
or otherwise, prior to the date that is 91 days after the final stated maturity
date of the notes or is redeemable at the option of the holder thereof at any
time prior to such date, or is convertible into or exchangeable for debt
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securities at any time prior to such date, unless it is convertible or
exchangeable solely at the option of Holdings.
"Related Business" means a healthcare business affiliated or associated
with a Hospital or any business related or ancillary to the provision of
healthcare services or information or the investment in, or the management,
leasing or operation of, a Hospital.
"Restricted Subsidiary" means any subsidiary other than an Unrestricted
Subsidiary.
"sale and leaseback transaction" means any transaction or series of
related transactions pursuant to which Holdings or a Restricted Subsidiary
sells or transfers any property or assets in connection with the leasing of
such property or asset to the seller or transferor.
"senior credit agreement" means the credit agreement to be dated as of
May 11, 1999 among Healthtrust, the lenders party thereto, Fleet National Bank,
as arranger and administrative agent, and the other agents and co-arrangers
party thereto, as such agreement may be amended, renewed, extended,
substituted, refinanced, restructured, replaced, supplemented or otherwise
modified from time to time.
"Senior Indebtedness" means:
(1) all obligations of Holdings, now or hereafter existing, under
or in respect of the senior credit agreement, whether for principal,
premium, if any, interest, including interest accruing after the filing
of, or which would have accrued but for the filing of, a petition by or
against Holdings under applicable bankruptcy laws, whether or not such
interest is lawfully allowed as a claim after such filing and other
amounts due in connection therewith, including any fees, premiums,
expenses and indemnities; and
(2) the principal of, premium, if any, and interest on all other
Indebtedness of Holdings, other than the notes, whether outstanding on
the date of the indenture or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the Indebtedness or pursuant to which the
Indebtedness is outstanding expressly provides that such Indebtedness
shall not be senior in right of payment to the notes.
Notwithstanding the foregoing, "Senior Indebtedness" does not
include:
(a) Indebtedness evidenced by the notes;
(b) Indebtedness of Holdings that is expressly subordinated in
right of payment to any Senior Indebtedness of Holdings or the notes;
(c) Indebtedness of Holdings that by operation of law is
subordinate to any general unsecured obligations of Holdings,
(d) Indebtedness of Holdings to the extent incurred in violation
of any covenant prohibiting the incurrence of Indebtedness under the
indenture;
(e) any liability for federal, state or local taxes or other
taxes, owed or owing by Holdings;
(f) accounts payable or other liabilities owed or owing by
Holdings to trade creditors, including guarantees thereof or instruments
evidencing such liabilities;
(g) amounts owed by Holdings for compensation to employees or for
services rendered to Holdings;
(h) Indebtedness of Holdings to any subsidiary or any other
Affiliate of Holdings;
(i) Capital Stock of Holdings; and
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(j) indebtedness which when incurred and without respect to any
election under Section 1111(b) of Title 11 of the United States Code is
without recourse to Holdings or any Restricted Subsidiary.
"Spin-Off-Distribution" means the distribution to holders of Columbia/HCA
stock of all of the outstanding shares of LifePoint.
"Spin-Off Transactions" means the transactions described in this
prospectus under the caption "The Distribution."
"stated maturity" means, when used with respect to any note or any
installment of interest thereon, the date specified in such note as the fixed
date on which the principal of such note or such installment of interest is
due and payable, and, when used with respect to any other Indebtedness, means
the date specified in the instrument governing such indebtedness as the fixed
date on which the principal of such indebtedness or any installment of
interest thereon is due and payable.
"subsidiary" means any Person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by
Holdings or by one or more other subsidiaries. For purposes of this
definition, any directors' qualifying shares shall be disregarded in
determining the ownership of a Subsidiary.
"Total Assets" of Holdings means the total consolidated assets of
Holdings and its Restricted Subsidiaries as shown on the most recent balance
sheet of Holdings.
"Transition Agreements" means the collective reference to the
(a) distribution agreement among Columbia/HCA, LifePoint and Triad
(b) tax sharing and indemnification agreement among Columbia/HCA,
LifePoint and Triad;
(c)benefits and employment matters agreement among Columbia/HCA,
LifePoint and Triad;
(d)insurance allocation and administration agreement among
Columbia/HCA, LifePoint and Triad;
(e)computer and data processing services agreement between Columbia
Information Systems, Inc. and LifePoint;
(f)sublease between Columbia/HCA and LifePoint relating to
LifePoint's principal executive offices;
(g)transitional services agreement between Columbia/HCA and
LifePoint;
(h)agreement to share telecommunications services between Columbia
Information Systems and LifePoint; and
(i)agreements between Columbia/HCA and LifePoint relating to the
provision of account collection services, relating to LifePoint's
participation in a group purchasing organization with Columbia/HCA, and
relating to the joint ownership of a corporate aircraft.
"Unrestricted Subsidiary" means
(a)any direct or indirect subsidiary of Holdings that at the time of
determination shall be an Unrestricted Subsidiary, as designated by the
board of directors of Holdings, as provided below, and
(b)any subsidiary of any Unrestricted Subsidiary;
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provided, however, that in no event shall any guarantor be an Unrestricted
Subsidiary. The board of directors of Holdings may designate any subsidiary,
including any newly acquired or newly formed subsidiary, to be an Unrestricted
Subsidiary so long as
(1) neither Holdings nor any Restricted Subsidiary is directly or
indirectly liable for any Indebtedness of such subsidiary,
(2) no default with respect to any Indebtedness of such subsidiary would
permit, upon notice, lapse of time or otherwise, any holder of any
other Indebtedness of Holdings or any Restricted Subsidiary, except
any nonrecourse guarantee given solely to support the pledge by
Holdings or a Restricted Subsidiary of the Capital Stock of an
Unrestricted Subsidiary, to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity date and
(3) any Investment in such subsidiary made as a result of designating such
subsidiary an Unrestricted Subsidiary will not violate the provisions
of the "Limitation on Unrestricted Subsidiaries" covenant.
Any such designation by the board of directors of Holdings shall be
evidenced to the trustee by filing a board resolution with the trustee giving
effect to such designation. The board of directors of Holdings may designate
any Unrestricted Subsidiary as a Restricted Subsidiary if immediately after
giving effect to such designation, there would be no Default or Event of
Default under the indenture and Holdings would be permitted to incur $1.00 of
additional Indebtedness, other than Permitted Indebtedness, pursuant to the
"Limitation on Indebtedness" covenant.
"U.S. Government Obligations" means securities that are
(a)direct obligations of the United States of America for
the timely payment of which its full faith and credit is pledged
or
(b)obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of
America,
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that, except as required by law, such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
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BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the exchange notes will be issued in the form
of one or more fully registered notes in global form without coupons (each a
"Global Security"). The Global Securities will be deposited with, or on behalf
of, DTC, and registered in the name of DTC or a nominee thereof. The old notes,
to the extent validly tendered and accepted and directed by their holders in
their letters of transmittal, will be exchanged through book-entry electronic
transfer for the Global Securities.
The Global Securities. Pursuant to procedures established by DTC,
interests in the Global Securities will be shown on, and the transfer of such
interest will be effected only through, records maintained by DTC or its
nominee with respect to interests of persons who have accounts with DTC
("participants") and the records of participants with respect to interests of
persons other than participants.
So long as DTC or its nominee is the registered owner or holder of the
notes, DTC or such nominee will be considered the sole owner or holder of the
notes represented by such Global Securities for all purposes under the
indenture. No beneficial owner of an interest in the Global Securities will be
able to transfer such interest except in accordance with DTC's procedures, in
addition to those provided for under the indenture with respect to the notes.
Payments of the principal, premium, interest and other amounts on the
notes represented by the Global Securities will be made to DTC or its nominee,
as the case may be, as the registered owner thereof. None of LifePoint, the
trustee or any paying agent under the indenture will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interest.
The laws of some states require that certain persons take physical
delivery in definitive form of securities that they own. Consequently, your
ability to transfer your beneficial interests in a Global Security to such
persons may be limited to that extent. Because DTC can act only on behalf of
its participants, which in turn act on behalf of indirect participants and
certain banks, your ability to pledge your interests in a Global Security to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
LifePoint expects that DTC or its nominee, upon receipt of any payment of
the principal, premium, interest or other amounts on the notes represented by
the Global Securities, will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the Global
Securities as shown on the records of DTC or its nominee. LifePoint also
expects that payments by participants to owners of beneficial interests in the
Global Securities held through such Participants will be governed by standing
instructions and customary practice as is now the case with securities held for
the accounts of customers registered in the names of nominees for such
customers. Such payment will be the responsibility of such participants.
Transfers between participants in DTC will be effected in accordance with
DTC rules and will be settled in immediately available funds.
Notes that are issued as described below under "Certificated Securities"
will be issued in registered definitive form without coupons (each, a
"Certificated Security"). Upon transfer of Certificated Securities, such
Certificated Securities may, unless the Global Security has previously been
exchanged for Certificated Securities, be exchanged for an interest in the
Global Security representing the principal amount of notes being transferred.
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DTC has advised LifePoint that DTC will take any action permitted to be
taken by a holder of notes, including the presentation of notes for exchange
as described below, only at the direction of one or more participants to whose
account the DTC interests in the Global Securities are credited and only in
respect of the aggregate principal amount of as to which such participant has
or participants have given such direction.
DTC has advised LifePoint that it is
(1) a limited purpose trust company organized under the laws of
the State of New York,
(2) a member of the Federal Reserve System,
(3) a "clearing corporation" within the meaning of the Uniform
Commercial Code and
(4) a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and facilitate
the clearance and settlement of securities transactions between participants
through electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations and certain other organizations. Indirect access to the DTC
system is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Securities among participants
of DTC, DTC is under no obligation to perform such procedures, and such
procedures may be discontinued at any time. None of LifePoint, the trustee or
the paying agent will have any responsibility for the performance by DTC or
its direct or indirect participants of their respective obligations under the
rules and procedures governing their operations.
DTC management is aware that some computer applications, systems and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the
financial community (the "Industry") that it has developed and is implementing
a program so that its Systems, as the same relate to the timely payment of
distributions, including principal and interest payments, to securityholders,
book-entry deliveries and settlement of trades within DTC, continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan includes
a testing phase, which is expected to be completed within appropriate time
frames.
However, DTC's ability to perform properly its services is also
dependent upon other parties, including, but not limited to, issuers and their
agents, as well as third party vendors from whom DTC licenses software and
hardware and third party vendors from whom DTC relies for information or the
provision of services, including telecommunication and electrical utility
service providers, among others. DTC has informed the Industry that it is
contacting and will continue to contact third party vendors from whom DTC
acquires services to:
(1) impress upon them the importance of such services being Year
2000 compliant; and
(2) determine the extent of their efforts for Year 2000
remediation and, as appropriate, testing, of their services.
In addition, DTC is in the process of developing such contingency plans,
as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and it not intended
to serve as a representation, warranty or contract modification of any kind.
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Certificated Securities. Interests in the Global Securities will be
exchanged for physical delivery of certificates ("Certificated Securities")
only if:
(1) DTC notifies Holdings that it is unwilling or unable to
continue as depositary for the Global Securities, or DTC ceases to be a
"clearing agency" registered under the Exchange Act, and in either case,
Holdings thereupon fails to appoint a successor depositary within 90
days;
(2) Holdings, at its option, notifies the trustee in writing that
it is electing to issue the notes in certificated form; or
(3) an Event of Default under the indenture shall have occurred
and be continuing with respect to the notes.
In all cases, Certificated Securities delivered in exchange for any
Global Security or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the depositary in accordance with its customary procedures.
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MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal income tax
considerations relevant to the exchange of notes for the exchange notes
pursuant to the exchange offer. This discussion is based upon currently
existing provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change, possibly on a retroactive basis. There can be no
assurance that the Internal Revenue Service will not take positions contrary to
those taken in this discussion, and no ruling from the Internal Revenue Service
has been or will be sought. This discussion does not address all of the U.S.
federal income tax considerations that may be relevant to particular holders of
notes in light of their individual circumstances, nor does it address the U.S.
federal income tax considerations that may be relevant to holders subject to
special rules, including, for example, banks and other financial institutions,
insurance companies, tax-exempt entities, dealers in securities, and persons
holding notes as part of a hedging or conversion transaction or a straddle.
Holders are urged to consult their own tax advisors as to the particular
U.S. federal income tax consequences to them of exchanging notes for exchange
notes, as well as the tax consequences under state, local, foreign and other
tax laws, and the possible effects of changes in tax laws.
Holdings believes that the exchange of notes for the exchange notes
pursuant to the exchange offer will not be treated as an "exchange" for U.S.
federal income tax purposes. Consequently, Holdings believes that a holder that
exchanges notes for exchange notes pursuant to the exchange offer will not
recognize taxable gain or loss on such exchange, such holder's adjusted tax
basis in the exchange notes will be the same as its adjusted tax basis in the
notes exchanged therefor immediately before such exchange, and such holder's
holding period for the exchange notes will include the holding period for the
notes exchanged therefor.
144
<PAGE>
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives exchange notes for its
own account pursuant to the exchange offer must acknowledge that it will
deliver a prospectus in connection with any resale of such exchange notes.
This prospectus, as it may be amended or supplemented from time to time, may
be used by a Participating Broker-Dealer in connection with resales of
exchange notes received in exchange for notes where such notes were acquired
as a result of market-making activities or other trading activities. We have
agreed that, for a period of 180 days after the expiration date, we will make
this prospectus, as it may be amended or supplemented, available to any
Participating Broker-Dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of exchange notes by
Participating Broker-Dealers.
Exchange notes received by Participating Broker-Dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions
. in the over-the-counter market,
. in negotiated transactions,
. through the writing of options on the exchange notes or
. a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices.
Any such resale may be made
. directly to purchasers or
. to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such Participating
Broker-Dealer or the purchasers of any such exchange notes.
Any Participating Broker-Dealer that resells exchange notes that were
received by it for its own account pursuant to the exchange offer and any
broker or dealer that participates in a distribution of such new notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of exchange notes and any commission or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly
send additional copies of this prospectus and any amendment or supplement to
this prospectus to any Participating Broker-Dealer that requests such
documents in the letter of transmittal. We have agreed to pay all expenses
incident to the exchange offer, including the expenses of one counsel for the
holders of the notes, other than commissions and concessions of any
Participating Broker-Dealer and will indemnify the holders of the notes,
including any Participating Broker-Dealers, against certain liabilities
including liabilities under the Securities Act.
145
<PAGE>
LEGAL MATTERS
The validity of the exchange notes offered hereby will be passed upon for
Holdings by Dewey Ballantine LLP, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the combined
financial statements of LifePoint Hospitals, Inc. at December 31, 1998 and
1997, and for each of the three years in the period ended December 31, 1998, as
set forth in their report included in this prospectus. We have included the
combined financial statements of LifePoint Hospitals, Inc. in the prospectus
and elsewhere in the registration statement in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing. Ernst &
Young LLP, independent auditors, have audited the consolidated financial
statements of Columbia/HCA Healthcare Corporation included in Columbia/HCA's
Annual Report on Form 10-K for the year ended December 31, 1998, as set forth
in their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. The consolidated financial statements
of Columbia/HCA Healthcare Corporation are incorporated by reference in
reliance on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.
INCORPORATION BY REFERENCE
The Commission allows "incorporation by reference" into this prospectus
of the information filed with it by Columbia/HCA, a guarantor of the notes,
which means that important information can be disclosed to you by referring you
to those documents. The information incorporated by reference is considered to
be part of this prospectus, and later information that Columbia/HCA files with
the Commission will automatically update and supersede this information. The
following documents are incorporated by reference:
. Columbia/HCA's Annual Report on Form 10-K for the year ended
December 31, 1998;
. Columbia/HCA's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999;
. Columbia/HCA's Current Reports on Form 8-K dated February 23, 1999,
April 21, 1999 and May 11, 1999; and
. any future filings made by Columbia/HCA with the Commission under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until the exchange offer is completed.
You may obtain copies of the above information, including exhibits, upon
written or oral request, without charge. You should direct requests to Mark
Kimbrough, Columbia/HCA Healthcare Corporation, One Park Plaza, Nashville,
Tennessee 37203 or by telephone at (615) 344-9551. Filed documents are also
available to the public on the Commission's website at http://www.sec.gov.
146
<PAGE>
INDEX TO FINANCIAL STATEMENTS
LIFEPOINT HOSPITALS, INC. COMBINED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors............................................ F-2
Combined Statements of Operations--for the years ended December 31,
1998, 1997 and 1996.................................................... F-3
Combined Balance Sheets--December 31, 1998 and 1997..................... F-4
Combined Statements of Equity--for the years ended December 31, 1998,
1997 and 1996.......................................................... F-5
Combined Statements of Cash Flows--for the years ended December 31,
1998, 1997 and 1996.................................................... F-6
Notes to Combined Financial Statements.................................. F-7
Condensed Combined Statements of Income--for the three months ended
March 31, 1999 and 1998 (unaudited).................................... F-19
Condensed Combined Balance Sheets--March 31, 1999 and December 31, 1998
(unaudited)............................................................ F-20
Condensed Combined Statements of Cash Flows--for the three months ended
March 31, 1998 and 1997 (unaudited).................................... F-21
Notes to Combined Financial Statements.................................. F-22
</TABLE>
Explanatory Note: The historical combined financial statements presented
herein are those of the America Group of Columbia/HCA Healthcare Corporation.
Prior to the distribution date, the assets and liabilities of the America Group
were contributed to LifePoint Hospitals, Inc., a newly-formed Delaware holding
company. On the distribution date, the assets and liabilities of the America
Group constituted substantially all of the assets and liabilities of LifePoint
Hospitals, Inc.
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Columbia/HCA Healthcare Corporation
We have audited the accompanying combined balance sheets of the net
assets and operations to be contributed to LifePoint Hospitals, Inc. (see Note
1) as of December 31, 1998 and 1997 and the related combined statements of
operations, equity and cash flows for each of the three years in the period
ended December 31, 1998. These combined financial statements are the
responsibility of the management of Columbia/HCA Healthcare Corporation (the
"Company"). Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the combined financial position of the net
assets and operations to be contributed to LifePoint Hospitals, Inc. (see Note
1) at December 31, 1998 and 1997 and the combined results of their operations
and their cash flows for each of the three years in the period ended December
31, 1998 in conformity with generally accepted accounting principles.
As explained in Note 7 to the combined financial statements, effective
January 1, 1997, the Company changed its method of accounting for start-up
costs.
Ernst & Young LLP
Nashville, Tennessee
March 5, 1999
F-2
<PAGE>
LIFEPOINT HOSPITALS, INC.
COMBINED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Revenues................................................ $498.4 $487.6 $464.0
Salaries and benefits................................... 220.8 196.6 175.2
Supplies................................................ 62.0 55.0 50.9
Other operating expenses................................ 117.2 119.5 99.3
Provision for doubtful accounts......................... 41.6 34.5 28.0
Depreciation and amortization........................... 28.3 27.4 23.5
Interest expense allocated from Columbia/HCA............ 19.1 15.4 14.1
Management fees allocated from Columbia/HCA............. 8.9 8.2 6.2
Impairment of long-lived assets......................... 26.1 -- --
------ ------ ------
524.0 456.6 397.2
------ ------ ------
Income (loss) from continuing operations before minority
interests and
income taxes (benefit)................................. (25.6) 31.0 66.8
Minority interests in earnings of consolidated
entities............................................... 1.9 2.2 1.2
------ ------ ------
Income (loss) from continuing operations before income
taxes (benefit)........................................ (27.5) 28.8 65.6
Provision for income taxes (benefit).................... (9.8) 11.7 26.3
------ ------ ------
Income (loss) from continuing operations................ (17.7) 17.1 39.3
Discontinued operations:
Income (loss) from operations, net of income taxes
(benefit) of $(2.6), $(0.1) and $1.2 for the years
ended December 31, 1998, 1997 and 1996,
respectively......................................... (4.1) (.6) 1.9
Estimated loss on disposal, net of income tax benefit
of $2.4.............................................. -- (3.4) --
Cumulative effect of accounting change, net of income
tax benefit of $0.4.................................... -- (.6) --
------ ------ ------
Net income (loss)................................... $(21.8) $ 12.5 $ 41.2
====== ====== ======
Basic earnings (loss) per share (see Note 13):
Income (loss) from continuing operations.............. $(0.59) $.57 $1.31
Income (loss) from discontinued operations............ (0.14) (0.14) 0.06
Cumulative effect of accounting change................ -- (0.02) --
------ ------ ------
Net income (loss)................................... $(0.73) $ 0.41 $ 1.37
====== ====== ======
Diluted earnings (loss) per share (see Note 13):
Income (loss) from continuing operations.............. $(0.59) $ 0.57 $ 1.30
Income (loss) from discontinued operations............ (0.14) (0.14) 0.06
Cumulative effect of accounting change................ -- (0.02) --
------ ------ ------
Net income (loss).................................. $(0.73) $ 0.41 $ 1.36
====== ====== ======
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-3
<PAGE>
LIFEPOINT HOSPITALS, INC.
COMBINED BALANCE SHEETS
December 31, 1998 and 1997
(Dollars in millions)
<TABLE>
<CAPTION>
Pro Forma
Liabilities
and Equity
1998
ASSETS (See Note 2) 1998 1997
------ ------------ ------ ------
(unaudited)
<S> <C> <C> <C>
Current assets:
Accounts receivable, less allowances for
doubtful accounts of $48.3 and $37.5 at
December 31, 1998 and 1997..................... $ $ 36.4 $ 53.1
Inventories..................................... 14.0 13.0
Deferred taxes and other current assets......... 18.6 14.4
------ ------ ------
69.0 80.5
Property and equipment, at cost:
Land............................................ 7.2 7.2
Buildings....................................... 203.1 222.9
Equipment....................................... 221.9 198.8
Construction in progress (estimated cost to
complete and equip after December 31, 1998--
$61.8)......................................... 10.4 10.7
------ ------ ------
442.6 439.6
Accumulated depreciation.......................... (176.2) (154.2)
------ ------ ------
266.4 285.4
Intangible assets, net of accumulated amortization
of $7.7 and $6.6 at December 31, 1998 and 1997... 15.2 17.8
Other............................................. 4.4 14.2
------ ------ ------
$ $355.0 $397.9
====== ====== ======
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Accounts payable................................ $ 15.5 $ 15.5 $ 15.3
Accrued salaries................................ 11.7 11.7 11.7
Other current liabilities....................... 14.9 14.9 12.4
------ ------ ------
42.1 42.1 39.4
Intercompany balances payable to Columbia/HCA..... -- 167.6 182.5
Long-term debt.................................... 260.3 .3 1.4
Deferred taxes and other liabilities.............. 21.4 21.4 28.9
Minority interests in equity of consolidated
entities......................................... 4.9 4.9 5.2
Equity, investments by Columbia/HCA............... 26.3 118.7 140.5
------ ------ ------
$355.0 $355.0 $397.9
====== ====== ======
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-4
<PAGE>
LIFEPOINT HOSPITALS, INC.
COMBINED STATEMENTS OF EQUITY
For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in millions)
<TABLE>
<S> <C> <C> <C> <C>
Pro Forma
1998
(See Note 2) 1998 1997 1996
------------ ------ ------ ------
<CAPTION>
(unaudited)
<S> <C> <C> <C> <C>
Equity at beginning of period.............. $140.5 $140.5 $128.0 $ 86.8
Net income (loss)........................ (21.8) (21.8) 12.5 41.2
Recapitalization upon assumption of
debt..................................... (92.4) -- -- --
------------ ------ ------ ------
Equity at end of period.................... $ 26.3 $118.7 $140.5 $128.0
============ ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-5
<PAGE>
LIFEPOINT HOSPITALS, INC.
COMBINED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in millions)
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)...................................... $(21.8) $12.5 $41.2
Adjustments to reconcile net income (loss) to net cash
provided by
operating activities:
Provision for doubtful accounts...................... 41.6 34.5 28.0
Depreciation and amortization........................ 28.3 27.4 23.5
Deferred income taxes (benefit)...................... (12.4) 4.1 15.3
Impairment of long-lived assets...................... 26.1 -- --
Loss (income) from discontinued operations........... 4.1 4.0 (1.9)
Cumulative effect of accounting change............... -- .6 --
Increase (decrease) in cash from operating assets and
liabilities:
Accounts receivable................................ (21.3) (37.9) (46.4)
Inventories and other assets....................... .2 .1 (3.8)
Accounts payable and accrued expenses.............. .9 (.1) 7.2
Other................................................ (.4) .2 .7
------ ----- -----
Net cash provided by operating activities.......... 45.3 45.4 63.8
Cash flows from investing activities:
Purchase of property and equipment..................... (29.3) (51.8) (53.4)
Investments in and advances to affiliates.............. .1 (7.2) (2.8)
Other.................................................. (.1) 7.1 (2.4)
------ ----- -----
Net cash used in investing activities.............. (29.3) (51.9) (58.6)
Cash flows from financing activities:
Increase (decrease) in long-term debt, net............. (1.1) -- (.4)
Increase (decrease) in intercompany balances with
Columbia/HCA, net..................................... (14.9) 6.5 (4.8)
------ ----- -----
Net cash provided by (used in) financing
activities........................................ (16.0) 6.5 (5.2)
------ ----- -----
Change in cash and cash equivalents...................... $ -- $ -- $ --
====== ===== =====
Interest payments........................................ $ 19.1 $15.4 $14.1
Income tax payments (refunds), net....................... $ -- $ 4.7 $14.2
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-6
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 1--COLUMBIA/HCA'S PROPOSED SPIN-OFF OF AMERICA GROUP
In 1998, the Board of Directors of Columbia/HCA Healthcare Corporation
("Columbia/HCA" or the "Company") approved in principle the spin-off of its
operations comprising the America Group to its shareholders (the
"Distribution") as an independent, publicly-traded company. The America Group
and the independent, publicly-traded company to which its assets and
liabilities will be contributed are hereinafter referred to as "LifePoint
Hospitals, Inc." or "LifePoint." The Distribution is subject to obtaining a tax
ruling by the Internal Revenue Service ("IRS") that would allow it to be tax-
free to Columbia/HCA and its shareholders, various regulatory approvals and
approval of a definitive plan by Columbia/HCA's Board of Directors. LifePoint
is comprised of 23 general, acute care hospitals and related health care
entities. The entities are located in non-urban areas in the states of Alabama,
Florida, Georgia, Kansas, Kentucky, Louisiana, Tennessee, Utah and Wyoming. The
accompanying financial statements, prepared on the pushed down basis of the
historical cost to Columbia/HCA, represent the combined financial position,
results of operations and cash flows of LifePoint.
In connection with the Distribution, all intercompany amounts payable by
LifePoint to Columbia/HCA will be eliminated, and LifePoint will assume certain
indebtedness from Columbia/HCA. In addition, LifePoint will enter into various
agreements with Columbia/HCA which are intended to facilitate orderly changes
for both companies in a way which would be minimally disruptive to each entity.
The combined financial statements included herein may not necessarily be
indicative of the results of operations, financial position and cash flows of
LifePoint in the future or had it operated as a separate, independent company
during the periods presented. The combined financial statements included herein
do not reflect any changes that may occur in the financing and operations of
LifePoint as a result of the Distribution.
NOTE 2--ACCOUNTING POLICIES
Principles of Combination
The combined financial statements include the accounts of LifePoint and
all affiliated subsidiaries and entities controlled by LifePoint through
LifePoint's direct or indirect ownership of a majority voting interest or other
rights granted to LifePoint by contract as the sole general partner to manage
and control the ordinary course of the affiliates business. Significant
intercompany transactions within LifePoint have been eliminated. Investments in
entities which LifePoint does not control, but in which it has a substantial
ownership interest and can exercise significant influence, are accounted for
using the equity method.
The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Equity
Equity represents the net investment in LifePoint by Columbia/HCA. It
includes common stock, additional paid-in-capital and net earnings.
Revenues
LifePoint's health care facilities have entered into agreements with
third-party payers, including government programs and managed care health
plans, under which the facilities are paid based upon established charges, the
cost of providing services, predetermined rates per diagnosis, fixed per diem
rates or discounts from established charges.
F-7
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
Revenues are recorded at estimated amounts due from patients and third-
party payers for the health care services provided. Settlements under
reimbursement agreements with third-party payers are estimated and recorded in
the period the related services are rendered and are adjusted in future periods
as final settlements are determined. The net adjustments to estimated
settlements resulted in increases to revenues of $1.2 million, $3.3 million and
$10.6 million for the years ended December 31, 1998, 1997 and 1996,
respectively. In association with the ongoing Federal investigation into
certain of Columbia/HCA's business practices, the applicable governmental
agencies have ceased the settlement of cost reports. Since the cost reports are
not being settled, the Company is not receiving updated information which has
historically been the basis used to adjust estimated settlement amounts. At
this time, the Company cannot predict when, or if, the historical cost report
settlement process will be resumed. Management believes that adequate
provisions have been made for adjustments that may result from final
determination of amounts earned under these programs. Columbia/HCA will retain
sole responsibility for, and be entitled to, any Medicare, Medicaid or cost-
based Blue Cross settlements relating to cost reporting periods ending on or
prior to the distribution date. The net settlement payable estimated as of
December 31, 1998 and included in accounts receivable in the accompanying
balance sheet approximated $14.5 million.
LifePoint provides care without charge to patients who are financially
unable to pay for the health care services they receive. Because LifePoint does
not pursue collection of amounts determined to qualify as charity care, they
are not reported in revenues.
Accounts Receivable
LifePoint receives payment for services rendered from federal and state
agencies (under the Medicare, Medicaid and CHAMPUS programs), managed care
health plans, commercial insurance companies, employers and patients. During
the years ended December 31, 1998, 1997 and 1996, approximately 37.8%, 39.4%
and 40.9%, respectively, of LifePoint's revenues related to patients
participating in the Medicare program. LifePoint recognizes that revenues and
receivables from government agencies are significant to its operations, but it
does not believe that there are significant credit risks associated with these
government agencies. LifePoint does not believe that there are any other
significant concentrations of revenues from any particular payer that would
subject it to any significant credit risks in the collection of its accounts
receivable.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market.
Long-Lived Assets
(a)Property and Equipment
Property and equipment are stated at cost. Routine maintenance and
repairs are charged to expense as incurred. Expenditures that increase
capacities or extend useful lives are capitalized.
Depreciation expense, computed using the straight-line method, was $27.1
million, $25.1 million and $21.9 million for the years ended December 31, 1998,
1997 and 1996, respectively. Buildings and improvements are depreciated over
estimated useful lives ranging generally from 10 to 40 years. Estimated useful
lives of equipment vary generally from 3 to 10 years.
(b)Intangible Assets
Intangible assets consist primarily of costs in excess of the fair value
of identifiable net assets of acquired entities and are amortized using the
straight-line method, generally over periods ranging from 30 to 40 years for
hospital acquisitions and periods ranging from 5 to 20 years for physician
practice and clinic
F-8
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
acquisitions. Noncompete agreements and debt issuance costs are amortized based
upon the terms of the respective contracts or loans.
When events, circumstances and operating results indicate that the
carrying values of certain long-lived assets and the related identifiable
intangible assets might be impaired, LifePoint prepares projections of the
undiscounted future cash flows expected to result from the use of the assets
and their eventual disposition. If the projections indicate that the recorded
amounts are not expected to be recoverable, such amounts are reduced to
estimated fair value.
Income Taxes
Columbia/HCA files consolidated Federal and state income tax returns
which includes all of its eligible subsidiaries, including LifePoint. The
provisions for income taxes (benefits) in the combined statements of operations
for all periods presented have been computed on a separate return basis (i.e.,
assuming LifePoint had not been included in a consolidated income tax return
with Columbia/HCA). All income tax payments are made by LifePoint through
Columbia/HCA.
Deferred tax assets and liabilities result principally from certain
revenue and expense items being recognized for tax purposes in years other than
the year in which they are reflected in the combined financial statements.
General and Professional Liability Risks
Columbia/HCA assumes the liability for all general and professional
liability claims incurred through the distribution date. Accordingly, no
reserve for professional and general liability risks is recorded in the
accompanying combined balance sheet. The cost of general and professional
liability coverage is allocated by Columbia/HCA's captive insurance company to
LifePoint based on actuarially determined estimates. LifePoint intends to
continue the general and professional liability coverage with Columbia/HCA
under the same general terms through December 31, 1999. The cost for the years
ended December 31, 1998, 1997 and 1996 was approximately $6.8 million, $6.1
million and $5.6 million, respectively.
LifePoint participates in a self-insured program for workers'
compensation and health insurance administered by Columbia/HCA. Columbia/HCA
will retain sole responsibility for all workers' compensation and health claims
incurred prior to the distribution date. Accordingly, no reserve for workers'
compensation and health claims liability risks are recorded in the accompanying
combined balance sheets. The cost for these programs is based upon claims paid,
plus an actuarially determined amount for claims incurred but not reported. The
cost was approximately $5.6 million for each of the years ended December 31,
1998, 1997 and 1996.
Management Fees
Columbia/HCA incurs various corporate general and administrative
expenses. These corporate overhead expenses are allocated to LifePoint based on
net revenues. In the opinion of Columbia/HCA management, this allocation method
is reasonable.
The management fees allocated to LifePoint are less than management's
estimate of the general and administrative costs that would have been incurred
if LifePoint had been a separate, independent entity and had otherwise managed
comparable general and administrative functions. Based upon LifePoint's
management projections for 1999, if LifePoint had managed comparable general
and administrative functions, LifePoint would have incurred approximately $14.4
million for general and administrative expenses compared to the $8.9
F-9
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
million of management fees allocated from Columbia/HCA for the year ended
December 31, 1998. Subsequent to the Distribution, LifePoint will be required
to manage these functions and will be responsible for the expenses associated
with the management of a separate public corporation.
Pro Forma Data (unaudited)
The pro forma combined balance sheet and statement of equity as of
December 31, 1998 includes adjustments to reflect the elimination of
intercompany balances payable to Columbia/HCA and the assumption of $260.6
million (including $0.3 million included in other current liabilities) in debt
financing in connection with the Distribution. The debt financing, which is
currently being arranged for, is expected to consist of senior term loans and
subordinated notes.
Disclosures about Segments of an Enterprise
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS 131"). SFAS 131 establishes standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that these enterprises
report selected information about operating segments in interim financial
reports. Management has determined that LifePoint does not have separately
reportable segments as defined under SFAS 131. Rather, LifePoint's facilities
are all similar in their business activities and the economic environments in
which they operate (i.e, non-urban markets). LifePoint intends to monitor its
facilities individually and to develop facility specific strategies. Assessment
of performance and corresponding management decisions will be based upon
individual facility results.
NOTE 3--COLUMBIA/HCA INVESTIGATIONS, LITIGATION AND INDEMNIFICATION RIGHTS
Columbia/HCA is currently the subject of several Federal investigations
into certain of its business practices, as well as governmental investigations
by various states. Columbia/HCA is cooperating in these investigations and
understands, through written notice and other means, that it is a target in
these investigations. Given the breadth of the ongoing investigations,
Columbia/HCA expects additional subpoenas and other investigative and
prosecutorial activity to occur in these and other jurisdictions in the future.
Columbia/HCA is a defendant in several qui tam actions brought by private
parties on behalf of the United States of America, which have been unsealed and
served on Columbia/HCA. The actions allege, in general, that Columbia/HCA and
certain subsidiaries and/or affiliated partnerships violated the False Claims
Act for improper claims submitted to the government for reimbursement. The
lawsuits seek damages of three times the amount of all Medicare or Medicaid
claims (involving false claims) presented by the defendants to the Federal
government, civil penalties of not less than $5,000 nor more than $10,000 for
each such Medicare or Medicaid claim, attorneys' fees and costs. The government
has intervened in two qui tam actions. Columbia/ HCA is aware of additional qui
tam actions that remain under seal and believes that there are other sealed qui
tam cases of which it is unaware.
Columbia/HCA is a defendant in a number of other suits, which allege, in
general, improper and fraudulent billing, overcharging, coding and physician
referrals, as well as other violations of law. Certain of the suits have been
conditionally certified as class actions.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigation will be commenced. If Columbia/HCA is found to
have violated Federal or state laws relating to Medicare, Medicaid or similar
programs, Columbia/HCA could be subject to substantial monetary fines, civil
and criminal penalties, and exclusion from participation in the Medicare and
Medicaid programs. Similarly, the amounts claimed in the qui tam and other
F-10
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
actions may be substantial, and Columbia/HCA could be subject to substantial
costs resulting from an adverse outcome of one or more of such actions. Any
such sanctions or losses could have a material adverse effect on Columbia/HCA's
financial position and results of operations.
Columbia/HCA has agreed to indemnify LifePoint in respect of any losses
which it may incur as a result of the proceedings described above. Columbia/HCA
has also agreed to indemnify LifePoint in respect of any losses which it may
incur as a result of proceedings which may be commenced by government
authorities or by private parties in the future that arise from acts, practices
or omissions engaged in prior to the distribution date and relate to the
proceedings described above. If any of such indemnified matters were
successfully asserted against LifePoint, or any of its facilities, and
Columbia/HCA failed to meet its indemnification obligations, then such losses
could have a material adverse effect on the business, financial position,
results of operations and prospects of LifePoint. (See Note 11--Contingencies).
Columbia/HCA will not indemnify LifePoint for losses relating to any acts,
practices and omissions engaged in by LifePoint after the distribution date,
whether or not LifePoint is indemnified for similar acts, practices and
omissions occurring prior to the distribution date.
NOTE 4--INCOME TAXES
The provision for income taxes (benefit) for the years ended December 31,
1998, 1997 and 1996 consists of the following (dollars in millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Current:
Federal......................................... $ 2.6 $ 6.5 $ 9.3
State........................................... -- 1.1 1.7
Deferred:
Federal......................................... (10.5) 3.6 12.9
State........................................... (1.9) 0.5 2.4
------ ----- -----
$ (9.8) $11.7 $26.3
====== ===== =====
A reconciliation of the federal statutory rate to the effective income
tax rate for the years ended December 31, 1998, 1997 and 1996 follows:
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Federal statutory rate............................ 35.0% 35.0% 35.0%
State income taxes, net of federal income tax ben-
efit............................................. 3.9 4.1 4.0
Non-deductible intangible assets.................. (2.6) 1.1 0.7
Other items, net.................................. (0.7) 0.5 0.4
------ ----- -----
Effective income tax rate......................... 35.6% 40.7% 40.1%
====== ===== =====
</TABLE>
A summary of the items comprising the deferred tax assets and liabilities
at December 31 follows (dollars in millions):
<TABLE>
<CAPTION>
1998 1997
------------------ ------------------
Assets Liabilities Assets Liabilities
------ ----------- ------ -----------
<S> <C> <C> <C> <C>
Depreciation and fixed asset basis
differences...................... $ -- $24.8 $ -- $32.4
Doubtful accounts................. 11.4 -- 6.6 --
Compensation...................... 2.6 -- 2.6 --
Other............................. 4.5 0.6 4.5 0.6
----- ----- ----- -----
$18.5 $25.4 $13.7 $33.0
===== ===== ===== =====
</TABLE>
F-11
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
Current deferred income tax assets totaled $14.4 million and $9.5 million
at December 31, 1998 and 1997, respectively. Noncurrent deferred income tax
liabilities totaled $21.3 million and $28.8 million at December 31, 1998 and
1997, respectively.
Columbia/HCA and LifePoint will enter into a tax sharing and
indemnification agreement which will provide that Columbia/HCA will generally
be responsible for all taxes that are allocable to periods prior to the
distribution date and Columbia/HCA and LifePoint will each be responsible for
its own tax liabilities for periods after the distribution date.
The agreement will not have an impact on the realization of deferred tax
assets or the payment of deferred tax liabilities of LifePoint except to the
extent that the temporary differences give rise to such deferred tax assets and
liabilities as of the distribution date and are adjusted as a result of final
tax settlements after the distribution date. In the event of such adjustments,
the tax sharing and indemnification agreement will provide for certain payments
between Columbia/HCA and LifePoint as appropriate.
NOTE 5--IMPAIRMENT OF LONG-LIVED ASSETS
LifePoint adopted Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of ("SFAS 121") during the first quarter of 1996. SFAS 121 addresses
accounting for the impairment of long-lived assets and long-lived assets to be
disposed of, certain identifiable intangibles and goodwill related to those
assets, and provides guidance for recognizing and measuring impairment losses.
The statement requires that the carrying amount of impaired assets be reduced
to fair value.
During the fourth quarter of 1998, LifePoint decided to sell three
hospital facilities that were identified as not compatible with LifePoint's
operating plans, based upon management's review of all facilities, and giving
consideration to current and expected market conditions and the current and
expected capital needs in each market. The carrying value of the long-lived
assets related to these hospital facilities of approximately $47.0 million was
reduced to fair value, based on estimates of selling values, for a total non-
cash charge of $24.8 million. LifePoint expects to complete the sales of these
facilities during 1999. For the years ended December 31, 1998, 1997 and 1996,
respectively, these facilities to be divested had net revenues of approximately
$48.0 million, $50.6 million and $42.1 million and incurred income (losses)
from continuing operations before income taxes (benefits) and the asset
impairment charge of approximately $(9.6) million, $(3.8) million and $1.8
million.
LifePoint recorded, during the third quarter of 1998, an impairment loss
of approximately $1.3 million related to the write-off of intangibles and other
long-lived assets of certain physician practices where the recorded asset
values were not deemed to be fully recoverable based upon the operating results
trends and projected future cash flows. These assets being held and used are
now recorded at estimated fair value based upon discounted, estimated future
cash flows.
The impairment charges did not have a significant impact on LifePoint's
cash flows and are not expected to significantly impact cash flows for future
periods. As a result of the write-downs, depreciation and amortization expense
related to these assets will decrease in future periods. In the aggregate, the
net effect of the change in depreciation and amortization expense is not
expected to have a material effect on operating results for future periods.
F-12
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 6--DISCONTINUED OPERATIONS
During the fourth quarter of 1998, Columbia/HCA and LifePoint completed
the divestiture of their home health businesses and received proceeds of
approximately $3.8 million which approximated the carrying value of the net
assets of discontinued operations, which amount was included in other
(noncurrent) assets in the accompanying balance sheet at December 31, 1997.
Columbia/HCA and LifePoint implemented plans to sell the home health businesses
during the third quarter of 1997. The combined financial statements reflect the
results of operations and net assets of the home health businesses as
discontinued operations.
LifePoint recorded a loss from discontinued operations of $4.1 million
(net of tax benefits) in 1998. LifePoint was not able to reasonably estimate,
at the time the decision was made to sell the home health businesses, whether
these businesses would incur losses during the period they were being held for
sale. The ability to estimate operating results during the period these
businesses were being held for sale was negatively impacted by certain changes
in Medicare reimbursement rates, and the need to obtain certain regulatory
approvals affected the ability to estimate the timing of the completion of the
sales.
Revenues for the home health businesses disposed of were approximately
$18.9 million, $55.3 million and $52.5 million for the years ended December 31,
1998, 1997 and 1996, respectively.
The after-tax loss incurred upon the divestiture of the home health
businesses of $3.4 million was recorded during the fourth quarter of 1997 and
is presented in the "Discontinued operations" section of the combined
statements of operations.
NOTE 7--ACCOUNTING CHANGE
During 1997, LifePoint changed its method of accounting for start-up
costs. The change involved expensing these costs as incurred, rather than
capitalizing and subsequently amortizing such costs. LifePoint believes the new
method is preferable due to certain changes in business strategy and reviews of
emerging accounting guidance on accounting for similar (i.e., start-up,
software system training and process reengineering) costs.
The change in accounting principle resulted in the write-off of the costs
capitalized as of January 1, 1997. The cumulative effect of the write-off,
which totals $0.6 million (net of tax benefit), has been expensed and reflected
in the statement of operations for the year ended December 31, 1997. Had the
new method been used in the past, the pro forma effect on prior years would
have primarily affected 1996 (such costs incurred for periods prior to 1996 are
considered immaterial to operations for those periods). The pro forma effect on
the years ended December 31, 1997 and 1996 follows (dollars in millions):
<TABLE>
<CAPTION>
1997 1996
--------------------- ---------------------
As Reported Pro Forma As Reported Pro Forma
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Income from continuing op-
erations.................. $17.1 $17.1 $39.3 $38.7
Net income................. $12.5 $13.1 $41.2 $40.6
</TABLE>
NOTE 8--LONG TERM DEBT AND INTERCOMPANY BALANCES PAYABLE TO COLUMBA/HCA
Long-term debt consists of various notes payable to third parties with an
average life of 6 years and rates averaging 9%. Current portion of long-term
debt totaled $.3 million and $.2 million at December 31, 1998 and 1997,
respectively, and is included in other current liabilities on the combined
balance sheets.
F-13
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
Intercompany balances represent the net excess of funds transferred to or
paid on behalf of LifePoint over funds transferred to the centralized cash
management account of Columbia/HCA. Generally, this balance is increased by
cash transfers from and payments of debt made by Columbia/HCA, construction
project additions paid by Columbia/HCA, and certain fees and services provided
by Columbia/HCA, including information systems services and other operating
expenses, such as payroll, interest, insurance and income taxes. Generally, the
balance is decreased through daily cash deposits by LifePoint to the account.
LifePoint is charged interest on the intercompany balances at various rates
ranging from 6% to 10% and the interest computations are based on the
outstanding balance at month end. The net intercompany balances were $167.6
million and $182.5 million at December 31, 1998 and 1997, respectively.
Interest expense related to the net intercompany balances was $19.1 million,
$15.4 million and $14.1 million for the years ended December 31, 1998, 1997,
and 1996, respectively.
In connection with the Distribution, all intercompany amounts payable by
LifePoint to Columbia/HCA will be eliminated, and LifePoint will assume certain
indebtedness from Columbia/HCA.
NOTE 9--STOCK BENEFIT PLANS
LifePoint employees have participated in the Columbia/HCA Healthcare
Corporation 1992 Stock and Incentive Plan (the "1992 Plan"). Under the 1992
Plan, stock options are generally granted at no less than the market price on
the date of grant. Options are exercisable in whole or in part beginning two to
five years after the grant and ending ten years after the grant. The number of
options granted to LifePoint employees under Columbia/HCA's stock option plan
was approximately 185,000 options, 1,324,800 options, and 357,000 options,
during 1998, 1997 and 1996, respectively.
Immediately following the Distribution, nonvested Columbia/HCA stock
options held by LifePoint employees will be cancelled and LifePoint may, in its
discretion, grant stock option awards. The vested Columbia/HCA stock options
held by LifePoint employees will generally be converted into a combination of
LifePoint stock options, Columbia/HCA stock options and stock options of
Columbia/HCA's other spin-off company, Triad Hospitals, Inc., in a manner that
preserves the pre-spin-off intrinsic value and the pre-spin-off ratio of the
exercise prices to the underlying market value of the related common stock.
At December 31, 1998 there were approximately 2,527,300 Columbia/HCA
stock options held by LifePoint employees. That amount includes an aggregate of
approximately 1,937,800 unvested options that will be cancelled. LifePoint
cannot currently determine the number of shares of its common stock that will
be subject to any discretionary grants of options by LifePoint after the
Distribution.
The following table summarizes information regarding the options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------- --------------------
Weighted
Average Weighted Weighted
Number Remaining Average Number Average
Outstanding Contractual Exercise Exercisable Exercise
Range of Exercise Prices at 12/31/98 Life Price at 12/31/98 Price
- ------------------------ ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$11.17 to $13.92......... 260,100 4 years $12.62 260,100 $12.62
0.40 to 25.75.......... 124,800 5 years 23.50 100,800 22.96
26.75 to 32.50.......... 268,100 6 years 27.97 131,900 27.98
33.67 to 37.67.......... 357,000 7 years 37.24 89,200 37.24
6.47 to 39.88..........1,509,800 9 years 30.93 -- --
0.14................ 7,500 15 years 0.14 7,500 0.14
--------- -------
2,527,300 589,500
========= =======
</TABLE>
F-14
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
LifePoint has adopted the disclosure provisions of Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), Accounting for Stock-Based
Compensation, but continues to measure stock-based compensation cost in
accordance with Accounting Principles Board Opinion No. 25 and its related
interpretations. Accordingly, no compensation cost has been recognized for
LifePoint's stock benefit plans. If LifePoint had measured compensation cost
for the Columbia/HCA stock options granted to its employees during 1998, 1997
and 1996 under the fair value based method prescribed by SFAS 123, the net
income (loss) would have been changed to the pro forma amounts set forth below
(dollars in millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- ------
<S> <C> <C> <C>
Net income (loss)
Reported........................................... $(21.8) $12.5 $ 41.2
Pro forma.......................................... $(22.7) $11.7 $ 40.9
Basic earnings (loss) per share:
As reported........................................ ($0.73) $0.41 $ 1.37
Pro forma.......................................... ($0.76) $0.39 $ 1.36
Diluted earnings (loss) per share:
As reported........................................ ($0.73) $0.41 $ 1.36
Pro forma.......................................... ($0.76) $0.39 $ 1.35
</TABLE>
The fair values of Columbia/HCA stock options granted to LifePoint
employees used to compute pro forma net income (loss) disclosures were
estimated on the date of grant using the Black-Scholes option-pricing model
based on the following weighted average assumptions used by Columbia/HCA:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Risk free interest rate............................ 4.74% 5.61% 5.81%
Expected life...................................... 6 years 6 years 6 years
Expected volatility................................ 23.90% 23.90% 23.90%
Expected dividend yield............................ .30% .23% .19%
</TABLE>
The weighted-average fair values of Columbia/HCA stock options granted to
LifePoint employees during the years ended 1998, 1997 and 1996 were $8.77,
$11.23 and $13.52 per option, respectively.
The pro forma amounts above are not necessarily representative of the
effects of stock-based awards on future pro forma net income because (1) future
grants of employee stock options by management may not be comparable to awards
made to employees while LifePoint was a part of Columbia/HCA, (2) the
assumptions used to compute the fair value of any stock option awards will be
specific to LifePoint and therefore may not be comparable to the Columbia/HCA
assumptions used and (3) they exclude the pro forma compensation expense
related to unvested stock options granted before 1996.
NOTE 10--RETIREMENT PLANS
LifePoint participates in Columbia/HCA's defined contribution retirement
plans, which cover substantially all employees. Benefits are determined
primarily as a percentage of a participant's earned income and are vested over
specific periods of employee service. Certain plans also require LifePoint to
make matching contributions at certain percentages. The cost of these plans was
$5.3 million, $5.9 million and $4.4 million during 1998, 1997 and 1996,
respectively. Amounts approximately equal to expense for these plans are funded
annually.
F-15
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 11--CONTINGENCIES
Significant Legal Proceedings
Various lawsuits, claims and legal proceedings have been and are expected
to be instituted or asserted against Columbia/HCA and LifePoint, including
those relating to shareholder derivative and class action complaints; purported
class action lawsuits filed by patients and payers alleging, in general,
improper and fraudulent billing, coding and physician referrals, as well as
other violations of law; certain qui tam or "whistleblower" actions alleging,
in general, unlawful claims for reimbursement or unlawful payments to
physicians for the referral of patients, as well as other violations and
litigation matters. While the amounts claimed may be substantial, the ultimate
liability cannot be determined or reasonably estimated at this time due to the
considerable uncertainties that exist. Therefore, it is possible that
Columbia/HCA's and LifePoint's results of operations, financial position and
liquidity in a particular period could be materially, adversely affected upon
the resolution of certain of these contingencies. (See Note 3--Columbia/HCA
Investigations, Litigation and Indemnification Rights, for a description of the
ongoing government investigations and Columbia/HCA's obligations to indemnify
LifePoint with respect to losses incurred by LifePoint arising from such
governmental investigations and related proceedings.)
General Liability Claims
LifePoint is subject to claims and suits arising in the ordinary course
of business, including claims for personal injuries or wrongful restriction of,
or interference with, physicians' staff privileges. In certain of these actions
claimants may ask for punitive damages against LifePoint, which are usually not
covered by insurance. It is management's opinion that the ultimate resolution
of pending claims and legal proceedings will not have a material adverse effect
on LifePoint's results of operations or financial position.
Physician Commitments
LifePoint has committed to provide certain financial assistance pursuant
to recruiting agreements with various physicians practicing in the communities
it serves. In consideration for a physician relocating to one of its
communities and agreeing to engage in private practice for the benefit of the
respective community, LifePoint may loan certain amounts of money to a
physician normally over a period of one year to assist in establishing his or
her practice. Amounts committed to be advanced approximated $11.9 million at
December 31, 1998. The actual amount of such commitments to be subsequently
advanced to physicians often depends upon the financial results of a
physician's private practice during the guaranteed period. Generally, amounts
advanced under the recruiting agreements may be forgiven prorata over a period
of 48 months contingent upon the physician continuing to practice in the
respective community. It is management's opinion that amounts actually advanced
and not repaid will not have a material adverse effect on LifePoint's results
of operations or financial position.
NOTE 12--OTHER CURRENT LIABILITIES AND ALLOWANCES FOR DOUBTFUL ACCOUNTS
A summary of other current liabilities as of December 31 follows (in
millions):
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Employee benefit plans........................................ $ 7.0 $ 7.0
Taxes other than income....................................... 3.6 3.2
Other......................................................... 4.3 2.2
----- -----
$14.9 $12.4
===== =====
</TABLE>
F-16
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
A summary of activity in LifePoint's allowances for doubtful accounts
follows (in millions):
<TABLE>
<CAPTION>
Additions
Charged Accounts
Balances at to Costs Written off, Balance
Beginning and Net of at end of
of Period Expenses Recoveries Period
----------- --------- ------------ ---------
<S> <C> <C> <C> <C>
Allowances for doubtful accounts:
Year ended December 31, 1996.... $12.7 $28.0 $(11.2) $29.5
Year ended December 31, 1997.... 29.5 34.5 (26.5) 37.5
Year ended December 31, 1998.... 37.5 41.6 (30.8) 48.3
</TABLE>
NOTE 13--EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share from continuing operations (dollars and shares in millions,
except per share amounts):
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Numerator (a):
Income (loss) from continuing operations................. $(17.7) $17.1 $39.3
Denominator (b):
Share reconciliation:
Shares used for basic earnings per share................. 30.0 30.0 30.0
Effect of dilutive securities:
Stock options and other (c).......................... -- 0.2 0.3
------ ----- -----
Shares used for diluted earnings per share............... 30.0 30.2 30.3
====== ===== =====
Earnings (loss) per share:
Basic earnings (loss) per share from continuing
operations.............................................. $(0.59) $0.57 $1.31
====== ===== =====
Diluted earnings (loss) per share from continuing
operations.............................................. $(0.59) $0.57 $1.30
====== ===== =====
</TABLE>
- --------
(a) Amount is used for both basic and diluted earnings per share computations
since there is no earnings effect related to the dilutive securities.
(b) LifePoint expects to issue 30,000,000 shares of LifePoint common stock on
the distribution date. Earnings per share information has been presented as
if 30,000,000 shares had been outstanding for all periods presented.
(c) The dilutive effect of approximately 0.2 million shares, related to stock
options, for the year ended December 31, 1998 was not included in the
computation of diluted earnings per share because to do so would have been
antidilutive for that period.
F-17
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 14--UNAUDITED QUARTERLY FINANCIAL INFORMATION
The quarterly interim financial information shown below has been prepared
by the Company's management and is unaudited. It should be read in conjunction
with the audited combined financial statements appearing herein (dollars in
millions, except per share amounts).
<TABLE>
<CAPTION>
1998
--------------------------------
First Second Third Fourth
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues................................. $130.0 $124.4 $124.7 $119.3
Net income (loss)........................ $ 1.6 $ 1.5 $ (2.2)(a) $(22.7)(b)
Basic and diluted earnings (loss) per
share (see Note 13...................... $ .05 $ .05 $ (.07)(a) $ (.76)(b)
<CAPTION>
1997
--------------------------------
First Second Third Fourth
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues................................. $130.7 $128.5 $116.1 $112.3
Net income (loss):
Income (loss) before accounting
change................................ $ 15.3 $ 13.2 $ 0.2 $(15.6)
Cumulative effect of accounting
change................................ (0.6) -- -- --
------ ------ ------ ------
Net income (loss).................... $ 14.7 $ 13.2 $ 0.2 $(15.6)
====== ====== ====== ======
Basic and diluted earnings (loss) per
share (see Note 13):
Income (loss) before accounting
change................................ $ .51 $ .44 $ -- $ (.52)
Cumulative effect of accounting
change................................ (.02) -- -- --
------ ------ ------ ------
Net income (loss).................... $ .49 $ .44 $ -- $ (.52)
====== ====== ====== ======
</TABLE>
- --------
(a) During the third quarter of 1998, LifePoint recorded a $1.3 million pre-tax
charge ($0.8 million after-tax) related to the impairment of certain long-
lived assets. (See Note 5--Impairment of Long-Lived Assets).
(b) During the fourth quarter of 1998, LifePoint recorded a $24.8 million pre-
tax charge ($15.1 million after-tax) related to the impairment of certain
long-lived assets. (See Note 5--Impairment of Long-Lived Assets).
F-18
<PAGE>
LIFEPOINT HOSPITALS, INC.
CONDENSED COMBINED STATEMENTS OF INCOME
For the Quarters Ended March 31, 1999 and 1998
Unaudited
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Revenues..................................................... $ 134.2 $ 130.0
Salaries and benefits........................................ 57.1 55.0
Supplies..................................................... 16.4 16.0
Other operating expenses..................................... 28.5 29.3
Provision for doubtful accounts.............................. 10.3 9.9
Depreciation and amortization................................ 7.5 6.6
Interest expense allocated from Columbia/HCA................. 4.7 4.6
Management fees allocated from Columbia/HCA.................. 2.4 2.3
------- -------
126.9 123.7
------- -------
Income from continuing operations before minority interests
and income taxes ........................................... 7.3 6.3
Minority interests in earnings of consolidated entities...... 0.4 0.6
------- -------
Income from continuing operations before income taxes ....... 6.9 5.7
Provision for income taxes .................................. 2.9 2.3
------- -------
Income from continuing operations............................ 4.0 3.4
Loss from discontinued operations, net of tax benefit of
($1.2)...................................................... -- (1.8)
------- -------
Net income............................................... $ 4.0 $ 1.6
======= =======
Basic and diluted earnings per share:
Income from continuing operations.......................... $ 0.13 $ 0.11
Loss from discontinued operations.......................... -- (0.06)
------- -------
Net income .............................................. $ 0.13 $ 0.05
======= =======
Shares used in earnings per share calculations ((000s):
Basic...................................................... 29,899 29,899
Dilutive securities--stock options....................... 269 150
------- -------
Diluted.................................................... 30,168 30,049
======= =======
</TABLE>
See the notes to the condensed combined financial statements.
F-19
<PAGE>
LIFEPOINT HOSPITALS, INC.
CONDENSED COMBINED BALANCE SHEETS
Unaudited
(Dollars in millions)
<TABLE>
<CAPTION>
Pro Forma
Liabilities
and Equity
March 31, March 31, December 31,
ASSETS 1999 1999 1998
------ ----------- --------- ------------
<S> <C> <C> <C>
Current assets:
Accounts receivable, less allowance for
doubtful accounts of $48.5 and $48.3 at
March 31, 1999 and December 31, 1998.... $ $ 48.8 $ 36.4
Inventories.............................. 13.9 14.0
Deferred taxes and other current assets.. 21.3 18.6
------ ------- -------
84.0 69.0
Property and equipment, at cost:
Land..................................... 7.1 7.2
Buildings................................ 204.9 203.1
Equipment................................ 225.9 221.9
Construction in progress (estimated cost
to complete and equip after March 31,
1999--$55.8)............................ 15.3 10.4
------ ------- -------
453.2 442.6
Accumulated depreciation................... (175.5) (176.2)
------ ------- -------
277.7 266.4
Intangible assets, net of accumulated
amortization of $7.0 and $6.9 at March 31,
1999 and December 31, 1998................ 15.1 15.2
Other...................................... 4.6 4.4
------ ------- -------
$ $ 381.4 $ 355.0
====== ======= =======
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Accounts payable......................... $ 15.2 $ 15.2 $ 15.5
Accrued salaries......................... 11.4 11.4 11.7
Other current liabilities................ 16.6 16.6 14.9
------ ------- -------
43.2 43.2 42.1
Intercompany balances payable to
Columbia/HCA.............................. -- 188.0 167.6
Long-term debt............................. 260.3 0.3 0.3
Deferred taxes and other liabilities....... 22.4 22.4 21.4
Minority interests in equity of
consolidated entities..................... 4.8 4.8 4.9
Equity, investments by Columbia/HCA........ 50.7 122.7 118.7
------ ------- -------
$381.4 $ 381.4 $ 355.0
====== ======= =======
</TABLE>
See the notes to the condensed combined financial statements.
F-20
<PAGE>
LIFEPOINT HOSPITALS, INC.
CONDENSED COMBINED STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 1999 and 1998 (unaudited)
(Dollars in millions)
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Cash flows from continuing operating activities:
Net income................................................... $ 4.0 $ 1.6
Adjustments to reconcile net income to net cash provided by
(used in) continuing operating activities:
Provision for doubtful accounts............................ 10.3 9.9
Depreciation and amortization.............................. 7.5 6.6
Loss from discontinued operations.......................... -- 1.8
Increase (decrease) in cash from operating assets and
liabilities:
Accounts receivable...................................... (22.7) (12.9)
Inventories and other assets............................. (0.3) (1.0)
Accounts payable and accrued expenses.................... 1.1 (1.1)
Other...................................................... (0.1) (0.4)
------ ------
Net cash provided by (used in) operating activities...... (0.2) 4.5
Cash flows from investing activities:
Purchase of property and equipment, net...................... (14.7) (8.4)
Other........................................................ (0.2) 0.8
------ ------
Net cash used in investing activities.................... (14.9) (7.6)
Cash flows from financing activities:
Decrease in long-term debt, net.............................. -- (1.1)
Increase in intercompany balances with Columbia/HCA, net..... 15.1 4.2
------ ------
Net cash provided by financing activities................ 15.1 3.1
------ ------
Change in cash and cash equivalents............................ $ -- $ --
====== ======
Interest payments.............................................. $ 4.7 $ 4.6
Income tax payments, net....................................... $ 2.3 $ 1.1
</TABLE>
See the notes to the condensed combined financial statements.
F-21
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
Unaudited
NOTE 1--BASIS OF PRESENTATION
On May 11, 1999, Columbia/HCA Healthcare Corporation ("Columbia/HCA")
completed the spin-off of its operations comprising the America Group to its
shareholders (the "Distribution") as an independent, publicly-traded company
named LifePoint Hospitals, Inc. (hereinafter referred to as "LifePoint
Hospitals, Inc." or the "Company"). Owners of Columbia/HCA common stock
received one share of the Company's common stock for every 19 shares of
Columbia/HCA common stock which resulted in approximately 29.9 million shares
of the Company's common stock outstanding.
At March 31, 1999, the Company was comprised of 23 general, acute care
hospitals and related health care entities. The entities are located in non-
urban areas in the states of Alabama, Florida, Georgia, Kansas, Kentucky,
Louisiana, Tennessee, Utah and Wyoming. Subsequent to March 31, 1999 and in
connection with the Distribution, all intercompany amounts payable by the
Company to Columbia/HCA were eliminated and the Company assumed certain
indebtedness from Columbia/HCA (see Note 4). In addition, the Company entered
into various agreements with Columbia/HCA which are intended to facilitate
orderly changes for both companies in a way which would be minimally disruptive
to each entity.
The accompanying unaudited condensed combined financial statements,
prepared on the pushed down basis of historical cost to Columbia/HCA, represent
the combined financial position, results of operations and cash flows of the
net assets contributed to the Company. They have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the quarter ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. This Form 10-Q should be read in conjunction with the audited combined
financial statements and notes included in the Company's Form 10 Registration
Statement, as amended. Certain estimates, assumptions and allocations were made
in preparing such financial statements. Therefore such financial statements may
not necessarily be indicative of the results of operations, financial position
or cash flows that would have existed had the Company been a separate,
independent company throughout the periods presented.
On May 11, 1999, Columbia/HCA also completed the spin-off of a separate,
independent company, Triad Hospitals, Inc.
Pro Forma Data
The pro forma liabilities and equity amounts shown on the condensed
combined balance sheet as of March 31, 1999 include adjustments to reflect the
elimination of intercompany balances payable to Columbia/HCA and the assumption
of $260.6 million (including $0.3 million included in other current
liabilities) in debt financing in connection with the Distribution. The debt
financing consists of senior term loans and subordinated notes (See Note 4).
F-22
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS--(Continued)
Unaudited
NOTE 2--CONTINGENCIES
Columbia/HCA Investigations
Columbia/HCA is currently the subject of several Federal investigations
into certain of its business practices, as well as governmental investigations
by various states. Columbia/HCA is cooperating in these investigations and
understands that it is a target in these investigations. Given the breadth of
the ongoing investigations, Columbia/HCA expects additional investigative and
prosecutorial activity to occur in these and other jurisdictions in the future.
Columbia/HCA is a defendant in several qui tam actions brought by private
parties on behalf of the United States of America, which have been unsealed and
served on Columbia/HCA. The actions allege, in general, that Columbia/HCA and
certain subsidiaries and/or affiliated partnerships violated the Federal False
Claims Act for improper claims submitted to the government for reimbursement.
The lawsuits seek damages of three times the amount of all Medicare or Medicaid
claims (involving false claims) presented by the defendants to the Federal
government, civil penalties of not less than $5,000 nor more than $10,000 for
each such Medicare or Medicaid claim, attorneys' fees and costs. To the
Company's knowledge, the government has intervened in three qui tam actions
against Columbia/HCA. Columbia/HCA is aware of additional qui tam actions that
remain under seal and believes that there are other sealed qui tam cases of
which it is unaware.
Columbia/HCA is a defendant in a number of other suits, which allege, in
general, improper and fraudulent billing, overcharging, coding and physician
referrals, as well as other violations of law. Certain of the suits have been
conditionally certified as class actions.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigations will be commenced. If Columbia/HCA is found to
have violated Federal or state laws relating to Medicare, Medicaid or similar
programs, Columbia/HCA could be subject to substantial monetary fines, civil
and criminal penalties, and exclusion from participation in the Medicare and
Medicaid programs. Similarly, the amounts claimed in the qui tam and other
actions may be substantial, and Columbia/HCA could be subject to substantial
costs resulting from an adverse outcome of one or more of such actions.
Management believes that the ongoing governmental investigations and
related media coverage may have had a negative effect on Columbia/HCA's results
of operations (which includes the Company for the periods prior to the date of
the Distribution which are presented herein). The extent to which the Company
may or may not continue to be affected after the Distribution by the ongoing
investigations of Columbia/HCA, the initiation of additional investigations, if
any, and the related media coverage cannot be predicted. It is possible that
these matters could have a material adverse effect on the financial condition
or results of operations of the Company in future periods.
In connection with the Distribution, Columbia/HCA has agreed to indemnify
the Company in respect of any losses which it may incur arising from the
proceedings described above. Columbia/HCA has also agreed to indemnify the
Company in respect of any losses which it may incur as a result of proceedings
which may be commenced by government authorities or by private parties in the
future that arise from acts, practices or omissions engaged in prior to the
date of the Distribution and relate to the proceedings described above.
Columbia/HCA has also agreed that, in the event that any hospital owned by the
Company as of the date of the Distribution is permanently excluded from
participation in the Medicare and Medicaid programs as a result of the
proceedings described above, then Columbia/HCA will make cash payments to the
Company based on
F-23
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS--(Continued)
Unaudited
amounts as defined in the Distribution Agreement by and among Columbia/HCA and
the Company. The Company has agreed that, in connection with the pending
governmental investigations, it will participate with Columbia/HCA in
negotiating with the government one or more compliance agreements setting forth
each of their respective agreements to comply with applicable laws and
regulations. If any of such indemnified matters were successfully asserted
against the Company, or any of its facilities, and Columbia/HCA failed to meet
its indemnification obligations, then such losses could have a material adverse
effect on the business, financial position, results of operations or prospects
of the Company. Columbia/HCA will not indemnify the Company for losses relating
to any acts, practices and omissions engaged in by the Company after the
distribution date, whether or not the Company is indemnified for similar acts,
practices and omissions occurring prior to the date of the Distribution.
Information regarding Columbia/HCA included in this Report on Form 10-Q is
derived from reports and other information filed by Columbia/HCA with the
Securities and Exchange Commission.
General Liability Claims
The Company is subject to claims and suits arising in the ordinary course
of business. In certain of these actions claimants may ask for punitive damages
against the Company, which are usually not covered by insurance. It is
management's opinion that the ultimate resolution of pending claims and legal
proceedings will not have a material adverse effect on the Company's results of
operations or financial position.
Physician Commitments
The Company has committed to provide certain financial assistance
pursuant to recruiting agreements with various physicians practicing in the
communities it serves. In consideration for a physician relocating to one of
its communities and agreeing to engage in private practice for the benefit of
the respective community, the Company may loan certain amounts of money to a
physician normally over a period of one year to assist in establishing his or
her practice. Amounts committed to be advanced approximated $15.8 million at
March 31, 1999. The actual amount of such commitments to be subsequently
advanced to physicians often depends upon the financial results of a
physician's private practice during the guaranteed period. Generally, amounts
advanced under the recruiting agreements may be forgiven pro rata over a period
of 48 months contingent upon the physician continuing to practice in the
respective community. It is management's opinion that amounts actually advanced
and not repaid will not have a material adverse effect on the Company's results
of operations or financial position.
NOTE 3--DISCONTINUED OPERATIONS
Discontinued operations represent the Company's home health care
business. The Company implemented plans to dispose of this business during
1997. During the fourth quarter of 1998, the Company completed the sale of
substantially all of the Company's home health care operations for total
proceeds of approximately $3.8 million. The proceeds were used to repay
intercompany balances to Columbia/HCA. Revenues of the home health care
business totaled approximately $7.5 million for the quarter ended March 31,
1998.
NOTE 4--SUBSEQUENT EVENTS
Assumption of Certain Indebtedness from Columbia/HCA
In connection with and on the distribution date of May 11, 1999, all
intercompany amounts payable by the Company to Columbia/HCA were eliminated,
and the Company assumed certain indebtedness from
F-24
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS--(Continued)
Unaudited
Columbia/HCA. The indebtedness was comprised of a Bank Credit Agreement and
Senior Subordinated Notes.
Bank Credit Agreement
On May 11, 1999, the Company assumed from Columbia/HCA the obligations
under a Bank Credit Agreement (the "Credit Agreement") with a group of lenders
with commitments aggregating $210 million. The Credit Agreement consists of a
$60 million term loan facility, a $85 million term loan facility, and a $65
million revolving credit facility (collectively the "Bank Facilities").
At the time of the Distribution, $25 million of the $60 million term loan
facility had been drawn, with the remaining $35 million available for limited
purposes to be drawn in up to two subsequent draws within one year. The final
payment under this term loan facility is due November 11, 2004.
The $85 million term loan facility was drawn in full at the time of the
Distribution. The final payment under this term loan is due November 11, 2005.
The revolving credit facility, which was undrawn at the time of the
Distribution, is expected to be available for working capital and other general
corporate purposes, and any outstanding amounts thereunder will be due and
payable on November 11, 2004.
Repayments under the term loan facilities are due in quarterly
installments with quarterly amortization based on annual amounts. Interest on
the Bank Facilities are currently based on LIBOR plus an applicable margin
(determined based on certain financial ratios).
The Company's bank debt is secured by a pledge of substantially all of
its assets. The Credit Agreement contains certain covenants that among other
things, will limit the Company and certain of its subsidiaries' ability to
incur additional indebtedness, pay dividends on, redeem or purchase its capital
stock, make investments and capital expenditures, engage in transactions with
affiliates, create certain liens, sell assets and consolidate, merge or
transfer assets. In addition, the Company is required to comply with various
financial ratios and tests, including a minimum net worth test, a leverage
ratio and a minimum fixed charge coverage ratio.
Senior Subordinated Notes
On May 11, 1999, the Company assumed from Columbia/HCA $150 million in
Senior Subordinated Notes maturing on May 15, 2009 and bearing interest at
10.75% (the "Notes"). Interest is payable semi-annually. The Notes are
unsecured obligations and are subordinated in right of payment to all existing
and future senior indebtedness.
The Notes are guaranteed jointly and severally by all of the Company's
operating subsidiaries ("Subsidiary Guarantors"). The Company is a holding
company with no operations apart from its ownership of the Subsidiary
Guarantors. Substantially all of the Subsidiary Guarantors are wholly-owned and
fully and unconditionally guarantee the Notes. Separate financial statements of
the wholly-owned Subsidiary Guarantors are not presented because management
believes that separate financial statements would not provide additional
material information to investors.
F-25
<PAGE>
LIFEPOINT HOSPITALS, INC.
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS--(Continued)
Unaudited
Two of the Company's consolidating subsidiaries are non-wholly owned
limited partnerships, the guarantees of which are currently limited. These
limitations will no longer be applicable once the relevant partnership
agreement of these guarantors have been modified to eliminate such limitations.
Until such time, Columbia/HCA has guaranteed the notes in an amount equal to
the difference between the amount that would have been recovered under the note
guarantees of all the guarantors without giving effect to these limitations and
the amount recovered under the note guarantees of all guarantors after giving
effect to these limitations. The Columbia/HCA guarantee will be released with
respect to each such guarantor when the relevant limitation is eliminated or
the guarantor's guarantee is released. Columbia/HCA is required to periodically
file separate financial statements with the Securities and Exchange Commission.
Separate financial statements of the non-wholly owned Subsidiary
Guarantors are not presented because management believes that these financial
statements would not provide additional material information to investors. The
following is certain summarized combined financial information for the non-
wholly owned Subsidiary Guarantors (dollars in millions):
As of and for
the three months ended
March 31, 1999
<TABLE>
<S> <C>
Summarized Balance Sheet:
Current assets................................................... $ 8.5
Non-current assets............................................... 14.3
-----
Total assets................................................... $22.8
=====
Current liabilities.............................................. $ 4.6
Non-current liabilities.......................................... 22.6
Equity (Deficit)................................................. (4.4)
-----
Total liabilities and equity................................... $22.8
=====
Summarized Statement of Income:
Net revenues..................................................... $13.2
Income from continuing operations................................ $ 0.4
Net income....................................................... $ 0.4
</TABLE>
Non-current liabilities shown above include intercompany payables of
$18.0 million and minority interests of $4.3 million.
The indenture for the Notes contains certain covenants including but not
limited to restrictions on additional indebtedness, payment of dividends,
investments, the pledge or disposition of assets, transactions with affiliates
and the ability to merge or consolidate. The indenture also requires that the
Company offer to repurchase all Notes at 101% of their principal amount in the
event of a change in control of the Company.
F-26
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
All tendered old notes, executed letters of transmittal and other
related documents should be directed to the exchange agent. Questions and
requests for assistance and requests for additional copies of the prospectus,
the letter of transmittal and other related documents should be addressed to
the exchange agent as follows:
By Courier:
Citibank, N.A.
915 Broadway, 5th Floor
New York, N.Y. 10010
By Mail:
Citibank, N.A.
P.O. Box 685
Old Chelsea Station
New York, New York 10113
By Hand:
Citibank, N.A.
Corporate Trust Window
111 Wall Street, 5th Floor
New York, New York 10043
Facsimile for Eligible Institutions:
(212) 505-2248
To Confirm by Telephone:
(800) 270-0808
Originals of all documents submitted by facsimile should be sent
promptly by hand, overnight delivery, or registered by certified mail.
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You
must not rely on any unauthorized information or representations. This
prospectus is an offer to sell only the notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LifePoint Hospitals
Holdings, Inc.
$150,000,000
10 3/4% Series B Senior Subordinated Notes due 2009
----------------
PROSPECTUS
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 13
The Exchange Offer....................................................... 23
Use of Proceeds.......................................................... 35
Capitalization........................................................... 35
Selected Historical Financial Data....................................... 36
Unaudited Pro Forma Condensed Combined Financial Statements.............. 39
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 44
Business................................................................. 59
Reimbursement............................................................ 68
Government Regulation and Other Factors.................................. 71
Management............................................................... 78
Certain Transactions..................................................... 91
Principal Stockholders................................................... 92
Arrangements Relating to the Distribution................................ 93
Description of New Credit Agreement...................................... 99
Description of the Notes................................................. 101
Book-Entry; Delivery and Form............................................ 141
Material Federal Income Tax Considerations............................... 144
Plan of Distribution..................................................... 145
Legal Matters............................................................ 146
Experts.................................................................. 146
Incorporation by Reference............................................... 146
Index To Financial Statements............................................ F-1
</TABLE>
, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Certificate of Incorporation of LifePoint Holdings (the "LifePoint
Holdings Certificate") provides that a director of LifePoint Holdings will not
be liable to LifePoint Holdings or its stockholders for monetary damages for
breach of fiduciary duty as a director, to the full extent permitted by the
Delaware General Corporation Law (the "DGCL"), as amended or interpreted from
time to time.
In addition, the LifePoint Holdings Certificate states that LifePoint
Holdings shall, to the full extent permitted by the DGCL, as amended or
interpreted from time to time, indemnify all directors, officers and employees
whom it may indemnify pursuant thereto and, in addition, LifePoint Holdings
may, to the extent permitted by the DGCL, indemnify agents of LifePoint
Holdings or other persons.
Section 145 of the DGCL permits indemnification against expenses, fines,
judgments and settlements incurred by any director, officer, employee or agent
of a company in the event of pending or threatened civil, criminal,
administrative or investigative proceedings, if such person was, or was
threatened to be made, a party by reason of the fact that he or she is or was a
director, officer, employee or agent of the company. Section 145 also provides
that the indemnification provided for therein shall not be deemed exclusive of
any other rights to which those seeking indemnification may otherwise be
entitled. In addition, LifePoint Holdings maintains a directors' and officers'
liability insurance policy.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
2.1 --Distribution Agreement dated May 11, 1999 by and among
Columbia/HCA, LifePoint Hospitals, Inc. and Triad Hospitals,
Inc., incorporated by reference from Exhibit 2.1 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
3.1 --Certificate of Incorporation of LifePoint Holdings, incorporated
by reference from Exhibit 3.1 to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
3.2 --Bylaws of LifePoint Holdings, incorporated by reference from
Exhibit 3.2 to LifePoint Hospitals' Quarterly Report on Form 10-
Q, for the quarter ended March 31, 1999.
4.1 --Indenture, dated as of May 11, 1999, among Healthtrust, Inc.--
The Hospital Company and Citibank N.A. as Trustee (including form
of 10 3/4% Senior Subordinated Notes due 2009), incorporated by
reference from Exhibit 4.2(a) to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
4.2 --Form of 10 3/4% Senior Subordinated Notes due 2009 (filed as
part of Exhibit 4.1).
4.3 --Registration Rights Agreement, dated as of May 11, 1999 between
Healthtrust and the Initial Purchasers named therein,
incorporated by reference from Exhibit 4.4(a) to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
4.4 --LifePoint Assumption Agreement dated May 11, 1999 between
Healthtrust and LifePoint Hospitals, Inc., incorporated by
reference from Exhibit 4.4(b) to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
4.5 --Holdings Assumption Agreement dated May 11, 1999 between
LifePoint Hospitals, Inc. and LifePoint Holdings, incorporated by
reference from Exhibit 4.4(c) to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
4.6 --Guarantor Assumption Agreements dated May 11, 1999 between
LifePoint Holdings and the Guarantors signatory thereto,
incorporated by reference from Exhibit 4.4(d) to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
5.1 --Opinion of Dewey Ballantine LLP as to the legality of the
securities being registered.*
10.1 --Tax Sharing and Indemnification Agreement dated May 11, 1999 by
and among Columbia/HCA, LifePoint Hospitals, Inc. and Triad
Hospitals, Inc., incorporated by reference from Exhibit 10.1 to
LifePoint Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
10.2 --Benefits and Employment Matters Agreement dated May 11, 1999 by
and among Columbia/HCA, LifePoint Hospitals, Inc. and Triad
Hospitals, Inc., incorporated by reference from Exhibit 10.2 to
LifePoint Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
10.3 --Insurance Allocation and Administration Agreement dated May 11,
1999 by and among Columbia/HCA, LifePoint Hospitals, Inc. and
Triad Hospitals, Inc., incorporated by reference from Exhibit
10.3 to LifePoint Hospitals' Quarterly Report on Form 10-Q, for
the quarter ended March 31, 1999.
10.4 --Transitional Services Agreement dated May 11, 1999 by and
between Columbia/HCA and LifePoint Hospitals, Inc., incorporated
by reference from Exhibit 10.4 to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
10.5 --Computer and Data Processing Services Agreement dated May 11,
1999 by and between Columbia Information Systems, Inc. and
LifePoint Hospitals, Inc., incorporated by reference from
Exhibit 10.5 to LifePoint Hospitals' Quarterly Report on Form
10-Q, for the quarter ended March 31, 1999.
10.6 --Agreement to Share Telecommunications Services dated May 11,
1999 by and between Columbia Information Systems, Inc. and
LifePoint Hospitals, Inc., incorporated by reference from
Exhibit 10.6 to LifePoint Hospitals' Quarterly Report on Form
10-Q, for the quarter ended March 31, 1999.
10.7 --Year 2000 Professional Services Agreement dated May 11, 1999 by
and between CHCA Management Services, L.P. and LifePoint
Hospitals, Inc., incorporated by reference from Exhibit 10.7 to
LifePoint Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
10.8 --Sub-Lease Agreement dated May 11, 1999 by and between
Healthtrust and
LifePoint Hospitals, Inc., incorporated by reference from
Exhibit 10.8 to LifePoint Hospitals' Quarterly Report on Form
10-Q, for the quarter ended March 31, 1999.
10.9 --LifePoint Hospitals, Inc. 1998 Long-Term Incentive Plan,
incorporated by reference from Exhibit 10.9 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.10 --LifePoint Hospitals, Inc. Executive Stock Purchase Plan,
incorporated by reference from Exhibit 10.10 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.11 --LifePoint Hospitals, Inc. Management Stock Purchase Plan,
incorporated by reference from Exhibit 10.11 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.12 --LifePoint Hospitals, Inc. Outside Directors Stock and Incentive
Compensation Plan, incorporated by reference from Exhibit 10.12
to LifePoint Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.13 --Credit Agreement, dated as of May 11, 1999, among Healthtrust,
Inc. --The Hospital Company, as Borrower, the Lenders from time
to time parties thereto, Fleet National Bank as Arranger. Fleet
National Bank, Deutsche Bank Securities, Inc. and ScotiaBanc,
Inc. as Co-Arrangers, ScotiaBanc, Inc. as Documentation Agent,
Deutsche Bank Securities Inc. as Syndication Agent, SunTrust
Bank, Nashville, N.A., as Co-Agent and Fleet National Bank as
Administrative Agent, incorporated by reference from Exhibit
10.13 to LifePoint Hospitals' Quarterly Report on Form 10-Q, for
the quarter ended March 31, 1999.
10.14 --Assumption Agreement dated as of May 11, 1999 by and between
Fleet National Bank and LifePoint Hospitals, Inc., incorporated
by reference from Exhibit 10.14 to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
10.15 --Assumption Agreement dated as of May 11, 1999 by and between
Fleet National Bank and LifePoint Holdings, incorporated by
reference from Exhibit 10.15 to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
12.1 --Statement of Computation of Ratio of Earnings to Fixed Charges.
21.1 --List of the Subsidiaries of LifePoint Holdings.
23.1 --Consent of Dewey Ballantine LLP (included as part of its opinion
filed as Exhibit 5.1 hereto).*
23.2 --Consents of Ernst & Young LLP.
24.1 --Power of Attorney (included in Part II of this Registration
Statement).
25.1 --Form T-1 Statement of Eligibility of Trustee.
99.1 --Form of Letter of Transmittal.*
99.2 --Form of Notice of Guaranteed Delivery.*
99.3 --Form of Letter to Clients.*
99.4 --Form of Letter to Brokers.*
99.5 --Form of Instructions to Registered Holders.*
</TABLE>
- --------
* To be filed by amendment
Item 22. Undertakings.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
II-3
<PAGE>
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
4. The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
5. The undersigned registrant hereby undertakes to supply by means of
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it becomes effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
LifePoint Hospitals Holdings, Inc.
/s/ William F. Carpenter III
By: _________________________________
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Scott L. Mercy Chairman and Chief August 6, 1999
______________________________________ Executive Officer;
Scott L. Mercy Director (Principal
Executive Officer)
/s/ James M. Fleetwood, Jr. President and Chief August 6, 1999
______________________________________ Operating Officer;
James M. Fleetwood, Jr. Director
/s/ Kenneth C. Donahey Senior Vice President and August 6, 1999
______________________________________ Chief Financial Officer
Kenneth C. Donahey (Principal Financial and
Accounting Officer)
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
America Group Offices, LLC
By: Sole Member:
Lifepoint Corporate Services,
General Partnership
By: General Partner:
Lifepoint CSGP, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
America Management Companies, LLC
By: Sole Member:
Lifepoint Corporate Services,
General Partnership
By: General Partner:
Lifepoint CSGP, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Crockett, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Hilcrest, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Hillside, LLC
By: Sole Member:
Lifepoint Medical Group--Hillside,
Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Director (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Director August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Livingston, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Logan, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Southern Tennessee, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
AMG-Trinity, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Ashley Valley Medical Center, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Ashley Valley Physician Practice,
LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Barrow Medical Center, LLC
By: Sole Member:
Lifepoint of Georgia, Limited
Partnership
By: General partner
Lifepoint of GAGP, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Bartow Healthcare Partner, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Bartow Healthcare System Ltd.
By: General Partner
Bartow Healthcare Partner, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Bourbon Community Hospital, LLC
By: Sole Member
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Buffalo Trace Radiation Oncology
Associates, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Castleview Hospital, LLC
By: Sole Member
Castleview Medical, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Castleview Medical, LLC
By: Sole Member
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Castleview Physician Practice, LLC
By: Sole Member:
Castleview Medical, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Community Hospital of Andalusia,
Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Community Medical, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-26
<PAGE>
SIGNATURES
Crockett Hospital, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Dodge City Healthcare Group, LP
By: General Partner:
Dodge City Healthcare Partner, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Dodge City Healthcare Partner, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Georgetown Community Hospital, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Georgetown Rehabilitation, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-31
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Halstead Hospital, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chairman, Chief Executive August 6,1999
___________________________________________ Officer and Director
Scott L. Mercy (Principal Executive
Officer)
/s/ James M. Fleetwood, Jr. President, Chief Operating August 6, 1999
___________________________________________ Officer and Director
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Senior Vice President and August 6, 1999
___________________________________________ Chief Financial Officer
Kenneth C. Donahey (Principal Financial and
Accounting Officer)
</TABLE>
II-32
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
HCK Logan Memorial, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/S/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-33
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
HDP Andalusia, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-34
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
HDP Georgetown, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-35
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Hillside Hospital, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-36
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
HST Physician Practice, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-37
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
HTI Georgetown, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-38
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
HTI Pinelake, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-39
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Integrated Physician Services, LLC
By: Sole Member:
Lifepoint of Georgia, Limited
Partnership
By: General Partner
Lifepoint of GAGP, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-40
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Kansas Healthcare Management
Company, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Kentucky Hospital, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-42
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Kentucky Medserv, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-43
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Kentucky MSO, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-44
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Kentucky Physicians Services, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-45
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lake Cumberland Healthcare, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-46
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lake Cumberland Regional Hospital,
LLC
By: Sole Member:
Lake Cumberland Health Care, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-47
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint Corporate Services,
Limited Partnership
By: General Partner
Lifepoint CSGP, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-48
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint CSGP, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-49
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint CSLP, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-50
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint Holdings 2, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chairman, Chief Executive August 6, 1999
___________________________________________ Officer and Director
Scott L. Mercy (Principal Executive
Officer)
/s/ James M. Fleetwood, Jr. President, Chief Operating August 6, 1999
___________________________________________ Officer and Director
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Senior Vice President and August 6, 1999
___________________________________________ Chief Financial Officer
Kenneth C. Donahey (Principal Financial and
Accounting Officer)
</TABLE>
II-51
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint Holdings 3, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Director (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Director August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-52
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint of GAGP, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-53
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint Medical Group--Hillside,
Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Director (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Director August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-54
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint of Georgia, Limited
Partnership
By: General Partner:
Lifepoint of GAGP, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-55
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint of Kentucky, LLC
By: Sole Member:
Lifepoint Holdings 3, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Director (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Director August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-56
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Lifepoint RC, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Director (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Director August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-57
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Livingston Regional Hospital, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-58
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Logan Medical, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-59
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Logan Memorial Hospital, LLC
By: Sole Member:
Logan of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-60
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Losco, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-61
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Meadowview Physician Practice, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-62
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Meadowview Regional Medical Center,
LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-63
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Meadowview Rights, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-64
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Pinelake Physician Practice, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-65
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Pinelake Regional Hospital, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-66
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Poitras Practice, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-67
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
R. Kendall Brown Practice, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-68
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Riverton Memorial Hospital, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-69
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Riverton Physician Practices, LLC
By: Sole Member:
Lifepoint Hospitals Holdings, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-70
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Riverview Medical Center, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-71
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Select Healthcare, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-72
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Siletchnik Practice, LLC
By: Sole Member:
Lifepoint of Kentucky, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-73
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Smith County Memorial Hospital, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-74
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Southern Tennessee EMS, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-75
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Southern Tennessee Medical Center,
LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
Kenneth C. Donahey Accounting Officer)
</TABLE>
II-76
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Springhill Medical Center, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-77
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Springhill MOB, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-78
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
THM Physician Practice, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-79
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Trinity Hospital, LLC
By: Sole Member:
Lifepoint Holdings 2, LLC
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-80
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Western Plains Regional Hospital,
LLC
By: Sole Member:
Lifepoint Holdings 3, Inc.
By: /s/ William F. Carpenter III
----------------------------------
William F. Carpenter III
Senior Vice President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Scott L. Mercy and
William F. Carpenter III, and each of them, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to the Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that each said
attorney-in-fact and agents or any of them or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott L. Mercy Chief Executive Officer August 6, 1999
___________________________________________ and Manager (Principal
Scott L. Mercy Executive Officer)
/s/ James M. Fleetwood, Jr. President and Manager August 6, 1999
___________________________________________
James M. Fleetwood, Jr.
/s/ Kenneth C. Donahey Chief Financial Officer August 6, 1999
___________________________________________ (Principal Financial and
</TABLE> Kenneth C. Donahey Accounting Officer)
II-81
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Nashville, State of
Tennessee, on August 6, 1999.
Columbia/HCA Healthcare Corporation
/s/ David G. Anderson
By: _________________________________
David G. Anderson
Senior Vice President--Finance and
Treasurer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints John M. Franck II,
David G. Anderson and R. Milton Johnson, and each of them, his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him or her and in his or her name, place and stead, in any
and all capacities to sign any and all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary fully to all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that
each said attorney-in-fact and agents or any of them or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Thomas F. First, Jr., M.D. Chairman of the Board, August 6, 1999
______________________________________ Chief Executive Officer
Thomas F. First, Jr., M.D. and Director (Principal
Executive Officer)
/s/ David G. Anderson Senior Vice President-- August 6, 1999
______________________________________ Finance and Treasurer
David G. Anderson (Principal Financial
Officer)
/s/ R. Milton Johnson Senior Vice President and August 6, 1999
______________________________________ Controller (Principal
R. Milton Johnson Accounting Officer)
</TABLE>
II-82
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Magdalena H. Averhoff, M.D. Director August 6, 1999
______________________________________
Magdalena H. Averhoff, M.D.
</TABLE>
<TABLE>
<S> <C> <C>
/s/ Jack O. Bovender, Jr. Director August 6, 1999
______________________________________
Jack O. Bovender, Jr.
/s/ J. Michael Cook Director August 6, 1999
______________________________________
J. Michael Cook
/s/ Martin Feldstein Director August 6, 1999
______________________________________
Martin Feldstein
/s/ Frederick W. Gluck Director August 6, 1999
______________________________________
Frederick W. Gluck
/s/ T. Michael Long Director August 6, 1999
______________________________________
T. Michael Long
/s/ John H. McArthur Director August 6, 1999
______________________________________
John H. McArthur
/s/ R. Clayton McWhorter Director August 6, 1999
______________________________________
R. Clayton McWhorter
Director
______________________________________
Thomas S. Murphy
Director
______________________________________
Kent C. Nelson
Director
______________________________________
Carl E. Reichardt
/s/ Frank S. Royal, M.D. Director August 6, 1999
______________________________________
Frank S. Royal, M.D.
</TABLE>
II-83
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2.1 --Distribution Agreement dated May 11, 1999 by and among Columbia/HCA,
Triad Hospitals, Inc. and LifePoint Hospitals, Inc., incorporated by
reference from Exhibit 2.1 to LifePoint Hospitals' Quarterly Report
on Form 10-Q, for the quarter ended March 31, 1999.
3.1 --Certificate of Incorporation of LifePoint Holdings, incorporated by
reference from Exhibit 3.1 to LifePoint Hospitals' Quarterly Report
on Form 10-Q, for the quarter ended March 31, 1999.
3.2 --Bylaws of LifePoint Holdings, incorporated by reference from Exhibit
3.2 to LifePoint Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
4.1 --Indenture (including form of 10 3/4% Senior Subordinated Notes due
2009) dated as of May 11, 1999, between Healthtrust, Inc.--The
Hospital Company and Citibank N.A. as Trustee, incorporated by
reference from Exhibit 4.2(a) to LifePoint Hospitals' Form 10-Q, for
the quarter ended March 31, 1999.
4.2 --Form of 10 3/4% Senior Subordinated Notes due 2009 (filed as part of
Exhibit 4.1).
4.3 --Registration Rights Agreement dated as of May 11, 1999 between
Healthtrust and the Initial Purchasers named therein, incorporated by
reference from Exhibit 4.4(a) to LifePoint Hospitals' Form 10-Q, for
the quarter ended March 31, 1999.
4.4 --LifePoint Assumption Agreement dated May 11, 1999 between
Healthtrust and LifePoint Hospitals, incorporated by reference from
Exhibit 4.4(b) to LifePoint Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
4.5 --Holdings Assumption Agreement dated May 11, 1999 between LifePoint
Hospitals and LifePoint Holdings, incorporated by reference from
Exhibit 4.4(c) to LifePoint Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
4.6 --Guarantor Assumption Agreements dated May 11, 1999 between LifePoint
Holdings and the Guarantors signatory thereto, incorporated by
reference from Exhibit 4.4(d) to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
5.1 --Opinion of Dewey Ballantine LLP as to the legality of the securities
being registered.*
10.1 --Tax Sharing and Indemnification Agreement, dated May 11, 1999, by
and among Columbia/HCA, LifePoint Hospitals and Triad Hospitals,
incorporated by reference from Exhibit 10.1 to LifePoint Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.2 --Benefits and Employment Matters Agreement, dated May 11, 1999 by and
among Columbia/HCA, LifePoint Hospitals and Triad Hospitals,
incorporated by reference from Exhibit 10.2 to LifePoint Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.3 --Insurance Allocation and Administration Agreement, dated May 11,
1999, by and among Columbia/HCA, LifePoint Hospitals and Triad
Hospitals, incorporated by reference from Exhibit 10.3 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended March
31, 1999.
10.4 --Transitional Services Agreement dated May 11, 1999 by and between
Columbia/HCA and LifePoint Hospitals, incorporated by reference from
Exhibit 10.4 to LifePoint Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
10.5 --Computer and Data Processing Services Agreement dated May 11, 1999
by and between Columbia Information Systems, Inc. and LifePoint
Hospitals, incorporated by reference from Exhibit 10.5 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended March
31, 1999.
</TABLE>
II-84
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.6 --Agreement to Share Telecommunications Services dated May 11, 1999 by
and between Columbia Information Systems, Inc. and LifePoint
Hospitals, incorporated by reference from Exhibit 10.6 to LifePoint
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended March
31, 1999.
10.7 --Year 2000 Professional Services Agreement dated May 11, 1999 by and
between CHCA Management Services, L.P. and LifePoint Hospitals,
incorporated by reference from Exhibit 10.7 to LifePoint Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.8 --Sub-Lease Agreement dated May 11, 1999 by and between Healthtrust
and LifePoint Hospitals, incorporated by reference from Exhibit 10.8
to LifePoint Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
10.9 --LifePoint Hospitals, Inc. 1998 Long-Term Incentive Plan,
incorporated by reference from Exhibit 10.9 to LifePoint Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.10 --LifePoint Hospitals, Inc. Executive Stock Purchase Plan,
incorporated by reference from Exhibit 10.10 to LifePoint Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.11 --LifePoint Hospitals, Inc. Management Stock Purchase Plan,
incorporated by reference from Exhibit 10.11 to LifePoint Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.12 --LifePoint Hospitals, Inc. Outside Directors Stock and Incentive
Compensation Plan, incorporated by reference from Exhibit 10.12 to
LifePoint Hospitals' Quarterly Report on Form 10-Q, for the quarter
ended March 31, 1999.
10.13 --Credit Agreement, dated as of May 11, 1999 among Healthtrust, Inc.--
The Hospital Company and certain subsidiaries from time to time party
thereto, as Borrower, the several lenders from time to time party
thereto, Citicorp USA, Inc. and The Chase Manhattan Bank as
syndication agents, Credit Lyonnais New York Branch and Societe
Generale as co-agents, Bank of America National Trust and Savings
Association as administrative agent and NationsBanc Montgomery
Securities, LLC as lead arranger and sole book manager, incorporated
by reference from Exhibit 10.13 to LifePoint Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
10.14 --Assumption Agreement dated as of May 11, 1999 by and between Fleet
National Bank and LifePoint Hospitals, incorporated by reference from
Exhibit 10.14 to LifePoint Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
10.15 --Assumption Agreement dated as of May 11, 1999 by and between Fleet
National Bank and LifePoint Holdings, incorporated by reference from
Exhibit 10.15 to LifePoint Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
12.1 --Statement of Computation of Ratio of Earnings to Fixed Charges.
21.1 --List of the Subsidiaries of LifePoint Holdings.
23.1 --Consent of Dewey Ballantine LLP (included as part of its opinion
filed as Exhibit 5.1 hereto).*
23.2 --Consents of Ernst & Young LLP.
24.1 --Power of Attorney (included in Part II of this Registration
Statement).
25.1 --Form T-1 Statement of Eligibility of Trustee.
99.1 --Form of Letter of Transmittal.*
</TABLE>
II-85
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
99.2 --Form of Notice of Guaranteed Delivery.*
99.3 --Form of Letter to Clients.*
99.4 --Form of Letter to Brokers.*
99.5 --Form of Instructions to Registered Holders.*
</TABLE>
- --------
*To be filed by amendment
II-86
<PAGE>
EXHIBIT 12.1
LIFEPOINT HOSPITALS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(Dollars in millions)
<TABLE>
<CAPTION>
Historical
----------------------------------------------------------------------
Three Months ended
Years Ended December 31, March 31,
------------------------------------------------ -------------------
1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
Earnings
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing operations before minority
interests and income taxes $ 24.0 $ 42.7 $ 66.8 $ 31.0 $ (25.6) $ 6.3 $ 7.3
Fixed charges 15.0 13.1 16.2 17.5 21.5 5.2 5.3
------ ------- ------- ------- ------- ------- -------
$ 39.0 $ 55.8 $ 83.0 $ 48.5 $ (4.1) $ 11.5 $ 12.6
====== ======= ======= ======= ======= ======= =======
Fixed charges
Interest charged to expense $ 13.5 $ 11.3 $ 14.1 $ 15.4 $ 19.1 $ 4.6 $ 4.7
Interest portion of rental expense 1.5 1.8 2.1 2.1 2.4 0.6 0.6
------ ------- ------- ------- ------- ------- -------
Fixed charges $ 15.0 $ 13.1 $ 16.2 $ 17.5 $ 21.5 $ 5.2 $ 5.3
====== ======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.6 4.3 5.1 2.8 -- 2.2 2.4
====== ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
EXHIBIT 21.1
Subsidiaries of LifePoint Hospitals Holdings, Inc.
<TABLE>
<CAPTION>
Name State of
Incorporation/
Organization
<S> <C>
1. America Group Offices, LLC Delaware
2. America Management Companies, LLC Delaware
3. AMG - Crockett, LLC Delaware
4. AMG - Hilcrest, LLC Delaware
5. AMG - Hillside, LLC Delaware
6. AMG - Livingston, LLC Delaware
7. AMG - Logan, LLC Delaware
8. AMG - Southern Tennessee, LLC Delaware
9. AMG - Trinity, LLC Delaware
10. Ashley Valley Medical Center, LLC Delaware
11. Ashley Valley Physician Practice, LLC Delaware
12. Barrow Medical Center, LLC Delaware
13. Bartow Healthcare Partner, Inc. Florida
14. Bartow Healthcare System Ltd. Florida
15. Bourbon Community Hospital, LLC (d/b/a (KY) Bourbon
Community, LLC) Delaware
16. Buffalo Trace Radiation Oncology Associates, LLC Kentucky
17. Castleview Hospital, LLC (d/b/a (UT) Castleview, LLC) Delaware
18. Castleview Medical, LLC Delaware
19. Castleview Physician Practice, LLC Delaware
20. Community Hospital of Andalusia, Inc. Alabama
21. Community Medical, LLC Delaware
22. Crockett Hospital, LLC Delaware
23. Dodge City Healthcare Group, LP Kansas
24. Dodge City Healthcare Partner, Inc. Kansas
25. Georgetown Community Hospital, LLC (d/b/a (KY) Georgetown
Community, LLC) Delaware
26. Georgetown Rehabilitation, LLC Delaware
27. Halstead Hospital, LLC Delaware
28. HCK Logan Memorial, LLC Delaware
29. HDP Andalusia, LLC Delaware
30. HDP Georgetown, LLC Delaware
</TABLE>
<PAGE>
<TABLE>
<S> <C>
31. Hillside Hospital, LLC Delaware
32. HST Physician Practice, LLC Delaware
33. HTI Georgetown, LLC Delaware
34. HTI Pinelake, LLC Delaware
35. Integrated Physician Services, LLC Delaware
36. Kansas Healthcare Management Company, Inc. Kansas
37. Kentucky Hospital, LLC Delaware
38. Kentucky Medserv, LLC Delaware
39. Kentucky MSO, LLC Delaware
40. Kentucky Physicians Services, Inc. Kentucky
41. Lake Cumberland Healthcare, Inc. Kentucky
42. Lake Cumberland Regional Hospital, LLC (d/b/a (KY) Lake
Cumberland, LLC) Delaware
43. LifePoint CSGP, LLC Delaware
44. LifePoint CSLP, LLC Delaware
45. LifePoint Corporate Services, Limited Partnership Delaware
46. LifePoint Holdings 2, LLC Delaware
47. LifePoint Holdings 3, Inc. Delaware
48. LifePoint Medical Group - Hillside, Inc. Tennessee
49. LifePoint of Georgia, Limited Partnership Delaware
50. LifePoint of GAGP, LLC Delaware
51. LifePoint of Kentucky, LLC Delaware
52. LifePoint RC, Inc. Delaware
53. Livingston Regional Hospital, LLC Delaware
54. Logan Medical, LLC Delaware
55. Logan Memorial Hospital, LLC Delaware
56. LOSCO, LLC Delaware
57. Meadowview Physician Practice, LLC Delaware
58. Meadowview Regional Medical Center, LLC (d/b/a (KY)
Meadowview, LLC Delaware
59. Meadowview Rights, LLC Delaware
60. PineLake Physician Practice, LLC Delaware
61. PineLake Regional Hospital, LLC Delaware
62. Poitras Practice, LLC Delaware
63. R. Kendall Brown Practice, LLC Delaware
64. Riverton Memorial Hospital, LLC Delaware
65. Riverton Physician Practices, LLC Delaware
66. Riverview Medical Center, LLC Delaware
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
67. Select Healthcare, LLC Delaware
68. Siletchnik Practice, LLC Delaware
69. Smith County Memorial Hospital, LLC (d/b/a (TN) SC
Memorial, LLC) Delaware
70. Southern Tennessee EMS, LLC Delaware
71. Southern Tennessee Medical Center, LLC Delaware
72. Springhill Medical Center, LLC Delaware
73. Springhill MOB, LLC Delaware
74. THM Physician Practice, LLC Delaware
75. Trinity Hospital, LLC Delaware
76. Western Plains Regional Hospital, LLC Delaware
</TABLE>
3
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 5, 1999, in the Registration Statement (Form
S-4) and related Prospectus of LifePoint Hospitals Holdings, Incorporated for
the registration of $150 million 10.75% Series B Senior Subordinated Notes.
/s/ Ernst & Young, LLP
Nashville, Tennessee
August 4, 1999
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of LifePoint Hospitals
Holdings, Incorporated for the registration of $150 million 10.75% Series B
Senior Subordinated Notes and to the incorporation by reference therein of our
report dated February 19, 1999, with respect to the consolidated financial
statements of Columbia/HCA Healthcare Corporation included in its Annual Report
(Form 10-K) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young, LLP
Nashville, Tennessee
August 4, 1999
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ____
________________________
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
_______________________
LIFEPOINT HOSPITALS HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 52-2165845
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
4525 Harding Road
Nashville,Tennessee 37205
(Address of principal executive offices) (Zip Code)
_________________________
10-3/4% Series B Senior Subordinated Notes due 2009
Guarantee of 10-3/4% Series B Senior Subordinated Notes due 2009
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Name Address
---- -------
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
33 Liberty Street
New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as exhibits hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now in
effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to commence
business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise corporate
trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1
to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
<PAGE>
Exhibit 6 - The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement
No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as
of March 31, 1999 attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
__________________
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 20th day
of July, 1999.
CITIBANK, N.A.
By /s/Wafaa Orfy
------------------------
Wafaa Orfy
Assistant Vice President
