<PAGE>
As filed with the Securities and Exchange Commission on May 16, 1996
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
Michigan 38-2986640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26500 Northwestern Highway, Suite 400
Southfield, Michigan 48076
(810) 353-1450
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Eugene E. Jennings, Chairman, President
and Chief Executive Officer
26500 Northwestern Highway
Southfield, Michigan 48076
(810) 353-1450
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copy to:
Thomas S. Vaughn, Esq.
Dykema Gossett PLLC
400 Renaissance Center
Detroit, MI 48243
Approximate date of commencement of proposed sale to public: From
time to time after this Registration Statement is declared effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or investment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please 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(c) 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 delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Maximum
Aggregate Amount of
Title of Each Class of Offering Registration
Securities to be Registered Price(1) Fee
- -------------------------------------------------------------------
Common Stock $212,063.68 $100.00
- -------------------------------------------------------------------
(1) Estimated solely for purposes of computing the registration fee.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date 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.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 15, 1996
PROSPECTUS
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
47,789 SHARES
COMMON STOCK, NO PAR VALUE
The 47,789 shares of Common Stock of Universal Standard Medical
Laboratories, Inc. (the "Company") offered by this Prospectus are presently
outstanding shares that may be sold from time to time in the market or in
other transactions by certain shareholders of the Company (the "Selling
Shareholders") listed under "Selling Shareholders". See "Selling
Shareholders" and "Plan of Distribution". None of the proceeds of these
sales will be received by the Company. This offering is not underwritten.
The Company's principal executive offices are located at 26500 Northwestern
Highway, Suite 400, Southfield, Michigan 48076 (telephone number: (810)
353-1450).
The Common Stock is traded on the Nasdaq Stock Market's National
Market (the "National Market"). The average of the high and low sales
prices of the Common Stock on May 13, 1996 on the National Market was $4.44.
See "Risk Factors" on page 4 for certain information which should be
carefully considered before purchasing shares of Common Stock offered
hereby.
The shares of Common Stock offered hereby will be sold at market
prices prevailing from time to time or otherwise at prices then obtainable.
Expenses relating to this offering, estimated at approximately $16,000, will
be paid by the Company.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is ---------, 1996
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
FEDERAL LAW PROHIBITS A PHYSICIAN FROM REFERRING MEDICARE- OR
MEDICAID-COVERED BUSINESS TO THE COMPANY IF THE PHYSICIAN OR ANY OF THE
PHYSICIAN'S IMMEDIATE FAMILY MEMBERS HAVE CERTAIN PROSCRIBED FINANCIAL
RELATIONSHIPS WITH THE COMPANY, INCLUDING OWNERSHIP OF ITS COMMON STOCK.
ACCORDINGLY, AN INVESTMENT IN THE COMPANY'S COMMON STOCK BY A PHYSICIAN OR
ANY OF THE PHYSICIAN'S IMMEDIATE FAMILY MEMBERS IS PROHIBITED IF THE
PHYSICIAN IS REFERRING MEDICARE- OR MEDICAID-COVERED BUSINESS TO THE
COMPANY.
FEDERAL LAW REQUIRES THAT ALL PERSONS PURCHASING THE COMMON STOCK
OFFERED HEREBY WHO ARE PHYSICIANS OR WHO HAVE PHYSICIANS IN THEIR IMMEDIATE
FAMILY MUST REPORT THE PHYSICIAN'S NAME AND PHYSICIAN ID NUMBER TO THE
COMPANY PROMPTLY AFTER PURCHASES PURSUANT TO THIS OFFERING.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation other than as contained in this
Prospectus in connection with the offering described herein and, if given or
made, such information or representation must not be relied upon as having
been authorized by the Company or the Selling Shareholders. The delivery of
this Prospectus at any time does not imply that the information herein is
correct as of any time subsequent to the date hereof or that there has been
no change in the affairs of the Company. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is
unlawful.
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports, proxy statements
and other information may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following regional offices of the
Commission: New York Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10048; and Chicago Regional Office, Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661-2511. In addition, copies of such
material can be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus is a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain of the information
included in such Registration Statement. The Registration Statement may be
inspected by anyone at the office of the Commission without charge, and
copies of all or any part of it may be obtained upon payment of the
Commission's charge for copying. For further information about the Company
and its securities, reference is hereby made to such Registration Statement,
and to the exhibits and financial schedules filed as part thereof or
otherwise incorporated herein. Each summary herein of additional
information included in the Registration Statement or any exhibit thereto is
qualified in its entirety by reference to such information or exhibit.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (and the amendments thereto) filed by the
Company with the Commission are hereby incorporated by reference and made a
part hereof:
(a) The description of the Company's Common Stock included in
the Registration Statement on Form S-1 (No. 33-49092)
(incorporated by reference into the Company's Exchange Act
Registration Statement on Form 8-A, filed on July 10, 1992);
(b) Annual Report on Form 10-K for the year ended December 31,
1995;
(c) Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1996; and
(d) Current Reports on Form 8-K filed January 4, 1996 and
January 16, 1996.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering of the
securities covered by this Prospectus shall be deemed to be incorporated
herein by reference and to be a part hereof from the respective date of
filing of each such document. Any statement contained in a document
incorporated by reference or deemed to be incorporated by reference in this
<PAGE>
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
To the extent the foregoing documents are incorporated by reference
herein, copies may be obtained without charge (other than for exhibits to
such documents) upon written request directed to: Shareholder Relations,
26500 Northwestern Highway, Suite 400, Southfield, Michigan 48076 (telephone
number: (810) 353-1450).
RISK FACTORS
Recent Profit Declines; Variability of Operating Results
The Company's level of profitability has declined in recent periods.
The Company reported a net loss for 1994 of $2.1 million, including an
extraordinary item of approximately $0.2 million and restructuring and
special charge of approximately $2.9 million, net of taxes. The Company
reported a net loss of $1.0 million for 1995, including an accounts
receivable adjustment of $1.1 million, net of taxes, recognized in the third
quarter of 1995. These declines in profitability are believed to be
principally due to recent changes in the health care industry, including
those described in "Risk Factors - Changes in the Health Care Industry".
The Company has implemented, and intends to continue to implement,
programs intended to reduce and contain its costs, including consolidation
of facilities, termination of long-term consulting and employment contracts
and severance of employees. There can be no assurance that the Company will
be successful in its cost containment efforts or that increases in operating
costs and decreases in reimbursement levels will not offset any benefits
derived from these efforts. In addition, cost reduction efforts such as
those initiated by the Company, by their nature, result in a reduction of
customer service to customers in general, with greater impact on customers
in certain outlying geographic markets. As a result of these reductions in
service, the Company may experience increased customer attrition, especially
in its outlying geographic markets. During the quarter ended March 31,
1996, the Company reported a net loss of $320,000, principally due to the
reduction in its testing facilities as a result of its cost reduction
efforts. Although the Company will attempt to reduce the negative impact on
revenues and profitability from its cost reduction efforts, there can be no
assurance that it will be successful in such efforts.
Tax Indemnification Liability
In connection with the acquisition of the business of the Company's
predecessor, MML, Inc. (the "Predecessor"), in 1991, the Company agreed to
indemnify the Predecessor and its shareholders (including certain officers,
directors and shareholders of the Company) under certain circumstances for
federal and state income tax liabilities arising from such acquisition, as
well as federal and state income tax liabilities arising from such
indemnification, including tax deficiencies that would arise if the
acquisition was not treated as a tax-free transaction. The Predecessor and
its shareholders have received notices of deficiency, dated July 13, 1995,
from the Internal Revenue Service ("IRS"). The IRS deficiency assessments
relating to the acquisition total approximately $4.9 million, excluding
interest and penalties, if assessed. In October 1995, the Company (pursuant
to its rights under the related acquisition agreement) filed petitions with
the United States Tax Court contesting the deficiency. The Company believes
that the acquisition has been treated properly for federal income tax
purposes and intends to vigorously defend its position. However, there can
be no assurance that the Company will resolve the Predecessor's dispute with
the IRS in a manner favorable to the Company. The failure to resolve the
Predecessor's dispute with the IRS in a manner favorable to the Company
would result in a current period charge to earnings and would have a
material adverse effect on the business, financial condition, including
working capital, and results of operations of the Company. While management
<PAGE>
believes its indemnification liability, if any, will not be material to the
Company, the ultimate effect, if any, can not be determined at this time.
The foregoing statement may be a "forward looking statement" within the
meaning of the Securities Exchange Act of 1934. The outcome of the
Predecessor's dispute with the IRS involves a number of uncertainties,
including those inherent in interpreting and applying the Internal Revenue
Code to actual transactions, those relating to the valuation of the
Predecessor and those inherent in pursuing any legal action of the type
instituted by the Company. The Company has not accrued a liability relating
to the deficiency assessments.
Changes in the Health Care Industry
The Company believes that the health care industry is experiencing a
period of dramatic and rapid change. Many of these changes have negatively
affected the Company's operations and may continue to negatively affect the
Company in the future.
Beginning August 1, 1993, third-party payors (such as Medicare,
Medicaid and insurance companies) have significantly reduced the amounts
they pay for laboratory-related services, such as those furnished by the
Company, which has negatively affected the Company's fee-for-service revenue
and overall profitability. Further significant changes in reimbursement
policies are under consideration from time to time and such changes, if
instituted, could further negatively affect the Company's fee-for-service
revenue and overall profitability by reducing amounts received for the
Company's services, increasing testing costs and increasing collection costs
and bad debt expenses.
The Company's fee-for-service revenues have also been negatively
affected by changes in payor and test mixes being experienced by the Company
and the clinical laboratory industry generally. These changes result from a
variety of factors, including the shift from traditional fee-for-service to
discounted or managed care arrangements and changes in the level and nature
of tests ordered.
Increasing numbers of patients, including Medicaid and Medicare
recipients, are participating in managed health care delivery systems such
as health maintenance organizations ("HMOs"), preferred provider
organizations ("PPOs"), employer-, employer group-, union- and
government-sponsored programs and various managed health care organizations.
These organizations often contract with one or a limited number of
laboratories to provide all laboratory services for their members at
significantly discounted rates or fixed rates for each person covered by
such contracts ("capitated rates"), rather than fees for each service
performed. While this change creates new opportunities for the Company's
Managed Care Programs, its fee-for-service revenues are being negatively
affected. In addition, such change is causing the Company to become
increasingly dependent on contracts with a few large managed care
organizations. Beginning January 1, 1995, Blue Cross/Blue Shield of
Michigan implemented a new PPO in which the Company is not currently a
participating provider. Two HMOs informed the Company during 1994 that they
will use their affiliated hospitals to perform laboratory testing. The
exclusion of the Company from such programs negatively affects
fee-for-service revenues directly, through the loss of revenues from persons
covered by such contracts, and indirectly, through a reduction in referrals
of patients not covered by such contracts to the Company by physicians
participating in such programs.
The Company, principally through its Managed Care Programs, has and
will in the future actively seek contracts with these large organizations.
See "Risk Factors - Dependence on Managed Care Programs, Subcontractors and
Key Customers". However, there can be no assurance that the Company will be
successful in those efforts. If it is not successful, the Company could face
a significantly smaller market for its fee-for-service business, and if it
is successful, it could receive significantly lower fees for the services it
performs.
<PAGE>
Limitations on Medicare and Medicaid Reimbursement; Possible Slowdowns in
Third Party Payments
Medicare and Medicaid reimbursement accounts for a significant
portion of the Company's net revenues. Government reimbursement to the
clinical laboratory industry has been the subject of heightened legislative
and regulatory scrutiny in recent years, including periodic compliance
reviews and adjustments to reimbursement levels. Medicare and Medicaid
reimbursement for services provided by clinical laboratories was reduced
several times in recent years from previously authorized levels. Further
changes in Medicare and Medicaid reimbursement policies are under
consideration and such changes, if instituted, could negatively affect the
Company's fee-for-service revenue and overall profitability. Medicare and
Medicaid reimbursement programs contain various restrictions on prices that
can be charged by laboratories. For most of the tests performed for
Medicare beneficiaries or Medicaid recipients, laboratories are required to
bill Medicare or Medicaid directly and, for all such tests, to accept
Medicare or Medicaid approved amounts as payment in full. In addition,
Medicaid programs are prohibited from paying more than the Medicare fee
schedule amount for testing Medicaid recipients. Future changes in Federal,
state or local regulation (or in the interpretation of current regulations)
affecting government reimbursement for laboratory-testing or taxation could
have a material adverse effect on the Company's business, financial
condition, including working capital, and results of operations. In
addition, the Company's liquidity may be affected by how promptly the
Company is reimbursed by Medicare, Medicaid and other third-party payors.
The Company from time to time has experienced a slowdown in payments from
third-party payors. Delays in payments by third-party payors could have an
adverse effect on the Company's business, financial condition, including
working capital, and results of operations.
Dependence on Managed Care Programs
The Company's Managed Care Programs represented 27.6% of the
Company's net revenues for the year ended December 31, 1995. Under the
Managed Care Programs, for a fixed payment, the Company is the designated
provider of substantially all specialty medical services covered by the
program that are ordered by a Covered Person's physician of choice,
including non-hospital clinical laboratory tests, in the case of the
Company's laboratory programs; durable medical equipment, respiratory
therapy and orthotic and prosthetic appliances (devices supporting joints or
muscles or artificially replacing body parts), in the case of the Company's
home medical services ("HMS") programs; and diagnostic imaging services, in
the case of the Company's future imaging programs. Therefore, the Company's
revenues under these programs are fixed and its costs depend on the extent
to which its services are used by Covered Persons. A "Covered Person" is a
person who is entitled to benefits under a specific Managed Care Program
contract. There can be no assurance that higher than anticipated
utilization rates over an extended period of time will not cause the
expenses associated with the Managed Care Programs to exceed net revenues,
which would have a material adverse effect on the Company's business,
financial condition, including working capital, and results of operations.
The fixed payments established by the Company generally are guaranteed by
the Company for multi-year terms, while the contracts governing the Managed
Care Programs are generally renewable on an annual basis and are terminable
upon 30 or 60 days' written notice by the customer. Some of the Managed
Care Programs are not evidenced by formal written agreements. There can be
no assurance that the Company will not lose a significant Managed Care
Program, which could have a material adverse effect on the Company's
business, financial condition, including working capital, and results of
operations.
Dependence on Managed Care Subcontractors
Under the Company's Managed Care Programs, in markets not serviced
by the Company's laboratories (principally markets outside of Michigan),
the Company generally subcontracts, on a discounted fee-for-service basis,
with other clinical laboratories, principally Laboratory Corporation of
America ("LCA") and, to a lesser extent, SmithKline Beecham Clinical
Laboratories, Inc. ("SmithKline"), to provide laboratory services to
<PAGE>
Covered Persons located in those markets. The Company's subcontracts with
LCA are generally terminable on short notice. In the event that LCA
terminates these subcontracts or is unable or unwilling to perform its
services under these subcontracts, the Company would be required to locate
another national clinical laboratory or a group of smaller laboratories
throughout the country to provide such services on short notice and,
potentially, at a significantly greater cost. While the Company believes it
could replace LCA's services without a significant increase in cost, there
can be no assurance to that effect. The foregoing statement may be a
"forward looking statement" within the meaning of the Securities Exchange
Act of 1934. The ability of the Company to replace LCA's services without a
significant increase in cost is subject to a number of uncertainties,
including the level of interest of another national laboratory in providing
services to the Company and the willingness of the Company's customers to
accept services from another laboratory or group of laboratories. As a
result, the termination by LCA of these subcontracts could have a material
adverse effect on the Company's business, financial condition, including
working capital, and results of operations. Because the Company does not
have long-term agreements with LCA, it may be subject to increases in LCA's
prices to provide services under these agreements, which may adversely
affect the Company's profit margins. Similarly, under the Company's HMS
and diagnostic imaging Managed Care Programs, all services are subcontracted
to third parties. While these subcontractors will generally receive a
capitated rate under the program, if a subcontractor did not or was not able
to provide services, the Company would be obligated to locate other
providers to do so, potentially at a significantly greater cost. In
addition, the Company is required to indemnify Ford Motor Company ("Ford")
for any expenses incurred by Ford in replacing the HMS Program in the event
that Ford cancels such program due to the Company's or any of its
subcontractors' non-performance. While the subcontractors under the HMS
Program have indemnified the Company for liability arising from their
non-performance, there can be no assurance that these subcontractors will be
able to satisfy such indemnification liability or that the Company will not
have liability to Ford in a situation where the subcontractors'
indemnification is not applicable. The success of the HMS Program is
currently dependent on the continued participation of Ivonyx, Inc., Apria
Healthcare, Inc. and Becker Orthopedic Appliance Company. The subcontracts
generally run for the term of the Ford HMS Program contract and cannot be
terminated earlier by the subcontractor without substantial penalty. The
refusal of one of these subcontractors to participate in future HMS Programs
could have a material adverse effect on the Company's ability to offer
these programs and on the Company's costs of providing these programs.
Dependence on Key Managed Care Customers
Although many of the Company's new Managed Care Programs are with
groups not affiliated with the automobile industry, during 1995 a majority
of the Company's Managed Care Program revenues were from contracts with
companies and unions affiliated with the automobile industry. A decrease in
the number of employees and retirees under these programs, downsizing in the
automobile industry or an adverse change in the Company's relationships with
the employers and unions with whom it has Managed Care Programs could have a
material adverse effect on the Company's business, financial condition,
including working capital, and results of operations. In addition, during
1995 revenues from Managed Care Programs with two of the Company's
automobile industry-related customers accounted for approximately 57% of the
Company's Managed Care Program revenues. The loss of either of these
customers could have a material adverse effect on the Company's business,
financial condition, including working capital, and results of operations.
In addition, because of the relatively small costs of the services provided
by the Company in its Managed Care Programs (relative to total health care
costs), the market for the Company's Managed Care Programs is limited to
sponsors of significant size who are willing to administer the health care
services offered by the Company separately from their other health care
benefits.
<PAGE>
Competition
The clinical laboratory industry is characterized by intense
competition. The Company may face competition with regard to its
fee-for-service and Managed Care Programs from other clinical laboratories,
insurance companies, HMOs, PPOs, third-party administrators and managed care
organizations. The Company also faces increasing competition from
hospitals, particularly those which control HMOs, PPOs or other managed care
organizations.
The Company competes for fee-for-service business primarily on the
basis of the quality of its testing, specimen collection, reporting and
information services, its reputation in the medical community, the
introduction of new testing procedures and its ability to perform virtually
all clinical laboratory tests in-house. Under federal and Michigan law,
physicians are prohibited from marking-up the cost of third-party laboratory
tests. Accordingly, the Company competes for fee-for-service business
primarily on the basis of quality and service, with a particular emphasis on
rapid reporting of test results and responsiveness to customer requests.
Some of the independent laboratories which compete with the Company have a
national presence and have substantially greater financial resources than
the Company. The Company must also maintain competitive pricing for both
its fee-for-service and Managed Care Programs.
With respect to its Managed Care Programs, the Company competes on
the basis of price, service and its experience in providing this type of
health care program. The Company believes its experience, reputation and
long-standing relationships offer it a competitive advantage with respect to
maintaining its existing Managed Care Programs and establishing new Managed
Care Programs. However, the Company is experiencing increased competition
with regard to its Managed Care Programs from other clinical laboratories,
insurance companies, HMOs, PPOs, third-party administrators and other
managed care organizations which offer similar programs. In particular, the
Company is facing aggressive pricing of these programs by its principal
competitors.
There can be no assurance that competition in existing or new
markets will not have a material adverse effect on the Company's business,
financial condition, including working capital, and results of operations.
Changes in the regulatory environment in which the Company operates could
also affect the basis for competition in the clinical laboratory industry
and could thereby have a material adverse effect on the Company's business,
financial condition, including working capital, and results of operations.
Possible Adverse Effects of Government Regulation
The Company is subject to licensing and certification requirements
and other regulation under Federal, state and local laws relating to
clinical laboratory conditions and operations, protection of the environment
and public safety, handling and disposal practices for wastes and special
materials, and worker safety and health. The Company also must comply with
various Federal and state laws, regulations and restrictions governing its
Managed Care Programs, business practices such as referrals from health care
providers, and reimbursement for services under Medicare and Medicaid. The
Company must also comply with restrictions imposed by insurance companies
and other third-party payors. The Company's third-party payors, including
Medicare and Medicaid, from time to time conduct audits and reviews of the
Company's activities to determine compliance with these laws, regulations
and restrictions. In recent years, these third-party and governmental
payors have significantly expanded their efforts to detect instances of
non-compliance and related enforcement activities. The Company has from
time to time experienced compliance reviews, including reviews of its
billing practices, by its third-party payors and, from time to time, has
been required to return monies paid to it by such payors. The Company has
not yet received final determination notices or decision letters relating to
compliance reviews conducted by two of its largest third-party payors.
Failure to comply with these laws, regulations or restrictions could result
in the imposition of significant fines, civil and criminal penalties,
third-party liability, exclusion from Medicare and Medicaid, and loss of
licenses and approvals necessary for the Company to conduct its business
<PAGE>
operations, any of which could have a material adverse effect on the
Company's business, financial condition, including working capital, and
results of operations. The Company is also subject to the requirements of a
federal law (the "Stark Law") that prohibits the Company from receiving
referrals of business from physicians if the physician or his or her
immediate family members have a financial relationship with the Company.
This law also requires the Company to make periodic reports on any financial
relationships the Company has with any physicians or immediate family
members of physicians. Although the Company endeavors to comply with all
laws, regulations, restrictions and other legal requirements applicable to
its operations, there can be no assurance that applicable statutes and
regulations, including the prohibitions and reporting requirements of the
Stark Law, might not be interpreted by a regulatory or judicial authority in
a manner that would adversely affect the Company's operating results or that
any new governmental requirements will not have a material adverse effect on
the Company's business, financial condition, including working capital, and
results of operations.
Several health care reforms have been proposed both at the federal
and state levels, including controls on health care spending, price controls
and fundamental changes in the health care delivery system. While the
Company cannot predict whether any of these proposals will become law,
changes in the level of support by federal and state governments of health
care services, the methods by which such services may be delivered and the
prices which may be charged for such services may all have a material
adverse impact on the Company's business, financial condition, including
working capital, and results of operations. A national health care delivery
system could eliminate the need for the Company's Managed Care Programs. In
addition, even consideration of reform proposals can have an adverse effect
on the Company's Managed Care Programs because the Company believes health
care plan sponsors are less willing to consider changes in their plans when
they think the government will mandate the types of benefits that must be
provided or the method of delivery of benefits. The Company cannot predict
which, if any, health care reform proposals will be adopted or, if adopted,
their effect on the Company's business.
Risks Associated with Acquisitions
The Company's expansion strategy includes possible acquisitions,
including joint ventures. Competition in the clinical laboratory industry
for acquisition candidates can be intense, and there can be no assurance
that candidates will continue to be available to the Company on favorable
terms or at all. The purchase consideration for these acquisitions may be
cash, equity or debt securities or a combination of the foregoing. A
portion of the total purchase price may be contingent or adjustable based
upon the achievement of certain post-acquisition financial targets. The
Company's ability to complete acquisitions is dependent upon its ability to
obtain satisfactory financing. Financing for acquisitions may be obtained
from the seller or from a financial institution or other lender. Additional
borrowings require the consent of the Company's principal bank lender and
may be secured or unsecured. There can be no assurance that the bank will
permit acquisition borrowings or that the Company's future financial
performance will permit it to obtain financing for acquisitions. The
Company's ability to consummate additional acquisitions of other clinical
laboratories will be limited by available acquisition opportunities, the
Company's financial resources and operation limitations. In addition, there
can be no assurance that the Company will be able to profitably integrate
any acquired company into the Company's operations.
Increased Levels of Cash Flow Required
The Company has experienced reduced levels of operating cash flows
in recent months due to decreases in its fee-for-service revenues. The
Company needs increased levels of cash in future periods to meet its
anticipated cash needs. The Company is attempting to generate additional
cash through increased collections of unbilled and billed accounts
receivable, principally by developing and implementing new computer programs
to improve the efficiency of the Company's collection process. The
foregoing statement may be a "forward looking statement" within the meaning
of the Securities Exchange Act of 1934. The Company's ability to generate
<PAGE>
increased levels of operating cash flow involves a number of uncertainties.
For example, any such increases in operating cash flow generated from
improvements in the collection process may be more than offset by decreases
in revenues, particularly if third-party reimbursement levels continue to
decrease or the Company continues to experience declines in accessions or
fee-for-service revenue per accession. In addition, the Company may not be
able to develop and implement the new computer programs needed to improve
the efficiency of the Company's collection process in a timely fashion or at
all. In the event that the Company is not able to generate increased levels
of operating cash flow as anticipated, the Company may need to seek
additional financing to meet its operating cash needs.
Seasonal Fluctuations in Operating Results
The volume of tests performed by the Company tends to decrease
during the summer months, year-end holiday periods and periods of inclement
weather. Although these seasonal effects are partially offset by the
Company's Managed Care Programs, which provide monthly revenues based upon
capitated rates rather than based upon testing volume, these seasonal
decreases in testing volume tend to reduce net revenue and net income for
the third and fourth quarters each year. As a result, comparisons of the
results of successive quarters may not accurately reflect trends or results
for the full year.
Dependence Upon Senior Management and Key Laboratory Personnel
The Company's future success depends upon the continued services of
certain members of its senior management. The Company's operations also
depend upon its ability to recruit and retain skilled laboratory
professionals. Competition among clinical laboratories for qualified
personnel is intense. The loss of the services of certain members of senior
management for any reason or the inability to attract and retain skilled
laboratory personnel may have a material adverse effect on the Company's
business, financial condition, including working capital, and results of
operations.
Restrictions on Cash Distributions From Managed Care Subsidiaries
The Company conducts its Managed Care Programs through subsidiaries
("Managed Care Subsidiaries") which are required to be licensed in certain
states, including the state of Michigan, and must comply with applicable
state regulations as a condition to continued licensure. Such regulations
include requirements relating to maintaining minimum levels of net worth,
working capital and cash reserves and limitations on distributions by the
Managed Care Subsidiaries to the Company. If, in the future, the Company
were not able to transfer adequate levels of cash from its Managed Care
Subsidiaries, it is possible that the Company would not have sufficient cash
available to fund its working capital needs and debt service requirements.
Litigation and Limits of Liability Insurance Coverage
The Company may be subject to legal actions arising out of the
performance of its laboratory testing services. Damages assessed in
connection with, and the cost of defending, any legal actions could be
substantial. The Company currently maintains professional liability
insurance and customary liability insurance coverage in types and amounts
that management believes are adequate in view of the risks associated with
the Company's operations. There can be no assurance that this coverage will
be sufficient. Furthermore, there can be no assurance that the Company will
be able to maintain this coverage at an acceptable cost, or that the Company
will have other resources sufficient to satisfy any liability or litigation
expenses that may result from any uninsured or underinsured claims.
Control by Existing Shareholders
The Company's directors, executive officers and their affiliates in
the aggregate beneficially own a majority of the outstanding shares of
Common Stock. As a result, these shareholders as a group are able to
determine the outcome of corporate actions requiring shareholder approval,
<PAGE>
including the election of directors, and otherwise control the business of
the Company.
Shares Eligible for Sale
Over one-half of the outstanding shares of Common Stock are
"restricted securities" within the meaning of Rule 144 promulgated under the
Securities Act. Substantially all of these restricted shares have been
registered on behalf of the holders of such shares and may be sold without
limitation. Sales of these restricted shares could have an adverse effect
on the market price of the Common stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
the shares of Common Stock offered hereby.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they may from
time to time offer and sell the shares of Common Stock offered hereby on the
National Market or otherwise at market prices then prevailing or at prices
and upon terms then obtainable. Sales may be made in ordinary brokerage
transactions, in block transactions, in privately negotiated transactions or
otherwise. The Company will not receive any of the proceeds of the sales.
The Company will bear the costs of the offering, including those incurred by
the Selling Shareholders, except that the Selling Shareholders will pay all
applicable broker-dealer fees and charges.
SELLING SHAREHOLDERS
General. There are 47,789 shares of Common Stock (approximately
less than 1% of the outstanding Common Stock) being offered by this
Prospectus.
Number of
Shares Owned
Number of Assuming All
Number Shares Shares Being
of Shares Being Registered
Selling Shareholder Owned Registered Are Sold
- ------------------- --------- ---------- ------------
Mark Lauhoff............... 17,161 17,161 -0-
Todd Overholser............ 2,744 2,744 -0-
Kenneth Phillips........... 19,583 13,219 6,364
Labib Shamiyeh............. 26,393 10,000 16,393
Dennis Vanlerberghe........ 12,292 4,665 7,627
Each of the five individuals who are Selling Shareholders (the
"Salesmen"), was a part-time sales employee of the Company until November
1993, when each agreed to terminate employment and sell a customer list to
the Company in exchange for future contingent payments. In 1994, Mr.
Lauhoff was reemployed as a part-time sales person. In September 1995, each
of the Salesmen agreed to accept shares of Common Stock from the Company in
lieu of any remaining cash payments and the Company agreed to register such
shares with the Commission and to pay the expenses associated therewith.
The Salesmen are referred to collectively herein as the "Selling
Shareholders".
The 47,789 shares being offered by this Prospectus were issued on
behalf of the Selling Shareholders into escrow. The agreements between the
Company and the Salesmen provide for a fixed value of shares of Common Stock
to be released from the escrow to each of the Salesmen in three installments
during the nine months following the closing of such agreements, with the
number of shares in any such installment to be determined based upon the
average closing price during the period preceding the release date. The
first two of these installments resulted in a total of 78,176 shares being
released from escrow to the Selling Shareholders. Because the number of
shares to be released from escrow as the third installment under such
agreements is a function of the Company's stock price, the total number of
shares available for sale under this Registration Statement by the Selling
Shareholders at any time may be less than 47,789 shares.
<PAGE>
LEGAL MATTERS
The validity under Michigan law of the authorization and issuance of
the shares offered hereby will be passed upon for the Company by Dykema
Gossett PLLC, Detroit, Michigan.
EXPERTS
The audited consolidated financial statements and schedule as of
December 31, 1994 and 1995, and for each of the three years in the period
ended December 31, 1995, included in the Company's Annual Report on Form
10-K for the year ended December 31, 1995 and incorporated by reference in
this Prospectus have been incorporated herein in reliance upon the report of
Coopers & Lybrand L.L.P., independent accountants, which report appears in
the Form 10-K and is given upon their authority as experts in accounting and
auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following statement sets forth the estimated amounts of
expenses, all of which will be borne by the Company in connection with the
distribution of the Common Stock offered hereby:
Securities and Exchange Commission Registration Fee ....$ 100
Accounting Fees and Expenses ...........................* 5,000
Legal Fees and Expenses ................................* 10,000
Miscellaneous Expenses .................................$ 900
Total Expenses .........................................$ 16,000
* Estimated.
Item 15. Indemnification of Directors and Officers
The Company is organized under the Michigan Business Corporation Act
(the "MBCA") which, in general, empowers Michigan corporations to indemnify
a person who is a party or threatened to be made a party to any civil,
criminal, administrative or investigative action, suit or proceeding (other
than actions by or in the right of the corporation) by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, or of another enterprise at such corporation's request, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection therewith if such person acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation or its shareholders and, in the
case of a criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. If a person is successful in defending
against a derivative action or third-party action, the MBCA requires that a
Michigan corporation indemnify the person against expenses incurred in the
action.
The MBCA also empowers Michigan corporations to provide similar
indemnity against amounts paid in settlement and expenses actually and
reasonably incurred by such a person in actions or suits by or in the right
of the corporation except in respect of any claim, issue or matter as to
which such person is adjudged to be liable to the corporation, unless and
only to the extent that a court determines that, despite the adjudication of
the liability but in view of all circumstances of the case, such person is
fairly and reasonably entitled to indemnity.
The Company's bylaws generally require the Company to indemnify its
directors and officers to the fullest extent permissible under Michigan law,
require the advancement and reimbursement of expenses under certain
circumstances and establish a procedure for determination of when
indemnification is proper.
<PAGE>
The MBCA permits Michigan corporations to limit the personal
liability of directors for a breach of their fiduciary duty. The Company's
Articles of Incorporation, which limit liability to the maximum extent
permitted by law, provide that a director of the Company shall not be
personally liable to the Company or its shareholders for monetary damages
for breach of the director's fiduciary duty. However, the MBCA and the
Articles of Incorporation do not eliminate or limit the liability of a
director for any of the following: (i) a breach of the director's duty of
loyalty to the Company or its shareholders; (ii) acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of
law; (iii) declaration of a unlawful dividend, stock purchase or redemption;
(iv) a transaction from which the director derives an improper personal
benefit; and (v) an act or omission occurring prior to the date when the
provision becomes effective. As a result of the inclusion of such a
provision, shareholders of the Company may be unable to recover monetary
damages against directors for actions taken by them which constitute
negligence or gross negligence or which are in violation of their fiduciary
duties, although it may be possible to obtain injunctive or other equitable
relief with respect to such actions.
Under an insurance policy maintained by the Company, the directors
and officers of the Company are insured, within the limits and subject to
the limitations of the policy, against certain expenses and liabilities
incurred in connection with the defense of certain claims, actions, suits or
proceedings which may be brought against them by reason of being or having
been directors or officers. In addition, a certain stockholders agreement
and registration rights agreement to which the Company is a party provide
that the Company will indemnify, to the extent permitted by law, each holder
of "registrable securities" (as defined in such agreements), and their
officers, directors and controlling persons, against all losses, claims
damages, liabilities and expenses caused by misstatements or omissions in
any registration statement, prospectus or preliminary prospectus, except
insofar as such misstatements are caused by or contained in information
furnished to the Company by such holders.
Item 16. Exhibits
A list of exhibits included as part of this Registration Statement
is set forth in the Exhibit Index which immediately precedes such exhibits
and is incorporated herein by reference.
Item 17. Undertakings
1. Except to the extent that the information is contained in
periodic reports filed by the Company pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 and incorporated by reference into this
registration statement, the undersigned registrant hereby undertakes 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 and
(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 the volume of securities offered (if the total value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the 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.
2. 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 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
<PAGE>
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 herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof, and (c) to
remove from registration by means of a post-effective amendment any of the
securities which remain unsold at the termination of the offering.
3. 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 that is incorporated by
reference in this 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.
4. Insofar as indemnification for liabilities arising under the
Securities Act 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 Securities Act of 1933 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Southfield, State of Michigan on
the 14th day of May, 1996.
UNIVERSAL STANDARD MEDICAL
LABORATORIES, INC.
By: /S/ Eugene E. Jennings
----------------------------
Eugene E. Jennings, Chairman,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on May 16, 1996.
Signature
/S/ Eugene E. Jennings
- --------------------------------
Eugene E. Jennings
Chairman of the Board, President,
Chief Executive Officer and
Director (Principal Executive
Officer)
*
- -------------------------------
Alan S. Ker
Vice President-Finance and
Chief Financial Officer
(Principal Financial
and Accounting Officer)
*
- -------------------------------
Eduardo B. Bohorquez
Director
*
- ------------------------------
Anthony A. Bonelli
Director
- ------------------------------
Robert P. DeCresce
Director
*
- ------------------------------
Thomas R. Donahue
Director
*
- ------------------------------
Thomas W. Gorman
Director
*
- ------------------------------
P. Thomas Hirsch
Director
*
- ------------------------------
Nicholas Peters
Director
*
- ------------------------------
Joseph J. Vadapalas
Director
*
- ------------------------------
John T. Watkins
Director
* By: /S/ Eugene E. Jennings
------------------------
Eugene E. Jennings
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibits No.
5.1 Opinion of Dykema Gossett PLLC.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Dykema Gossett PLLC (included in
Exhibit 5.1).
24.1 Power of Attorney of Eduardo B. Bohorquez.
24.2 Power of Attorney of Anthony A. Bonelli.
24.4 Power of Attorney of Thomas R. Donahue.
24.5 Power of Attorney of Thomas W. Gorman.
24.6 Power of Attorney of P. Thomas Hirsch.
24.7 Power of Attorney of Nicholas Peters.
24.8 Power of Attorney of Joseph J. Vadapalas.
24.9 Power of Attorney of John T. Watkins
24.10 Power of Attorney of Alan S. Ker.
May 14, 1996
Universal Standard Medical EXHIBIT 5.1
Laboratories, Inc.
26500 Northwestern Highway
Southfield, Michigan 48076
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Universal Standard Medical
Laboratories, Inc., a Michigan corporation (the "Company"), in connection
with the preparation and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, of a Registration Statement on
Form S-3 (the "Registration Statement") relating to the registration of up
to 47,789 shares of the Company's common stock ("Common Stock") by the
Company on behalf of certain shareholders in the manner described in the
Registration Statement.
In so acting, we have examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such
corporate records, documents, certificates and other instruments as in our
judgment are necessary or appropriate to enable us to render the opinion
expressed below.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is in good
standing under the laws of the State of Michigan.
2. The shares of Common Stock to which the Registration
Statement relates are validly issued, fully paid and
non-assessable.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement. We further consent to the reference to our firm
under the heading "Legal Matters" in the Registration Statement.
Very truly yours,
DYKEMA GOSSETT PLLC
/S/ Mark A. Metz
Mark A. Metz
Coopers & Lybrand
We consent to the incorporation by reference in this Registration
Statement of Universal Standard Medical Laboratories, Inc. on Form S-3 of
our report dated February 29, 1996, on our audits of the consolidated
financial statements and financial statement schedule of Universal Standard
Medical Laboratories, Inc. as of December 31, 1995 and 1994, and for the
years ended December 31, 1995, 1994, and 1993. We also consent to the
reference to our Firm under the caption "Experts."
/S/ Coopers & Lybrand L.L.P.
- ---------------------------
Coopers & Lybrand L.L.P.
Detroit, Michigan
May 9, 1996
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ Eduardo Bohorquez
Dated: April 26, 1996 ---------------------------
Eduardo Bohorquez, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ Anthony A. Bonelli
Dated: April 26, 1996 ----------------------------
Anthony A. Bonelli, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ Thomas R. Donahue
Dated: April 26, 1996 ---------------------------
Thomas R. Donahue, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ Thomas W. Gorman
Dated: April 26, 1996 ------------------------------
Thomas W. Gorman, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ P. Thomas Hirsch
Dated: April 26, 1996 ---------------------------
P. Thomas Hirsch, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and apoints Eugene Jennings and Thomas S. Vaughn, and each of them, his true
and lawful attorneys-in-fact and agents, with full power of substitution,
and resubstitution for him and in his name, place and stead, in any and all
capacities, to sign a certain Registration Statement on Form S-3 to be filed
by Universal Standard Medical Laboratories, Inc. and any and all amendments
thereto, and to file the same with the Securities and Exchange Commission,
granting unto such attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all tht such attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done
by virture hereof.
/S/ Nicholas Peters
Dated: April 26, 1996 --------------------------
Nicholas Peters, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ Joseph J. Vadapalas
Dated: April 26, 1996 -----------------------------
Joseph J. Vadapalas, Director
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints John T. Watkins and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ John T. Watkins
Dated: April 20, 1996 ------------------------------
John T. Watkins, Vice Chairman
of the Board
UNIVERSAL STANDARD MEDICAL LABORATORIES, INC.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Eugene Jennings and Thomas S. Vaughn, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign a certain Registration Statement on Form
S-3 to be filed by Universal Standard Medical Laboratories, Inc. and any and
all amendments thereto, and to file the same with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
/S/ Alan S. Ker
Dated: April 23, 1996 ----------------------------
Alan S. Ker, Treasurer, Vice
President Finance and Chief
Financial Office
