<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1999
REGISTRATION NO. 333-77533
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RENAL CARE GROUP, INC.
(Exact name of Registrant as specified in its charter)
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<TABLE>
<CAPTION>
DELAWARE 8092 62-1622383
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>
2100 WEST END AVE, SUITE 800
NASHVILLE, TENNESSEE 37203
(615) 345-5500
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
-----------------
DOUGLAS B. CHAPPELL, ESQ.
GENERAL COUNSEL
RENAL CARE GROUP, INC.
2100 WEST END AVE, SUITE 800
NASHVILLE, TENNESSEE 37203
(615) 345-5500
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
-----------------
COPIES TO:
STEVEN L. POTTLE, ESQ.
ALSTON & BIRD
ONE ATLANTIC CENTER
1201 WEST PEACHTREE STREET
ATLANTA, GEORGIA 30309-3424
(404) 881-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable on or after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment 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, 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. [ ]
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> 2
SUBJECT TO COMPLETION, DATED JUNE 18, 1999
PROSPECTUS
1,980,646 SHARES
RENAL CARE GROUP, INC.
COMMON STOCK
The shareholders named in the table included in the "Selling
Shareholders" section of this prospectus, which begins on page 8, are offering
all of the shares of common stock covered by this prospectus.
The selling shareholders will sell their shares as described in the
"Plan of Distribution" section, which begins on page 11. We will not receive any
of the proceeds from the sale of shares of common stock by the selling
shareholders.
Our common stock is listed on the Nasdaq National Market System under
the symbol RCGI. The last reported sales price of the common stock on June 17,
1999, was $25.44 per share.
------------------------
THIS INVESTMENT INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _______ ___, 1999
<PAGE> 3
PROSPECTUS SUMMARY
We provide dialysis services to patients with chronic kidney failure,
also known as end-stage renal disease. As of March 31, 1999, we provided
dialysis and ancillary services to more than 13,000 patients through 174
outpatient dialysis centers in 21 states. In addition to our outpatient dialysis
center operations, we provided acute dialysis services at 102 hospitals. As an
adjunct to our dialysis business, we provide limited practice management and
administrative services to physician practices with a total of 66 physicians,
including 63 of the 190 nephrologists affiliated with our outpatient dialysis
centers. A group of leading nephrologists formed Renal Care Group in 1996 with
the objective of creating a company with the clinical and financial capability
to manage the full range of care for end-stage renal disease patients on a
cost-effective basis.
Effective January 29, 1999, we acquired Dialysis Centers of America,
Inc. in a merger. In this merger we issued an aggregate of approximately 3.2
million shares of our common stock in exchange for all outstanding shares of
capital stock of Dialysis Centers of America. We also granted the former
shareholders of Dialysis Centers of America rights to register for resale a
portion (up to 60%) of the shares we issued to them. We have prepared this
prospectus and registered the shares offered by the Selling Shareholders to
comply with these registration rights. The selling shareholders acquired all of
the shares of common stock they are offering under this prospectus in this
merger.
RISK FACTORS
You should carefully consider the risks described below before
investing in Renal Care Group. The risks and uncertainties described below ARE
NOT the only ones facing Renal Care Group. Other risks and uncertainties that we
have not predicted or assessed may also adversely affect our company.
If any of the following risks occur, our earnings, financial condition
or business could be materially harmed, and the trading price of our common
stock could decline, resulting in the loss of all or part of your investment.
IF WE FAIL TO INTEGRATE ACQUIRED COMPANIES, WE WILL BE LESS PROFITABLE
Renal Care Group has grown significantly by acquisitions of other
dialysis providers since its formation in February 1996. We have completed some
of our acquisitions as recently as January and February of 1999, and we intend
to acquire more dialysis businesses in the future. After an acquisition, we face
the challenge of integrating the acquired company's management and other
personnel, clinical operations, and financial and operating systems with ours,
often without the benefit of continued services from key personnel of the
acquired company. We may be unable to integrate the businesses we acquire
successfully or to achieve anticipated benefits from an acquisition in a timely
manner, which could lead to substantial costs and delays or other operational,
technical or financial problems, including diverting management's attention from
our existing business. Any of these results could damage our profitability and
our prospects for future growth.
IF MEDICARE OR MEDICAID CHANGE THEIR PROGRAMS FOR DIALYSIS, OUR REVENUE AND
EARNINGS COULD DECREASE
If the government changes the Medicare, Medicaid or similar government
programs or the rates paid by those programs for our services, then our revenue
and earnings may decline. We estimate that approximately 68% of our net revenue
for 1996, 64% of our net revenue for 1997 and 60% of our net revenue for 1998
consisted of reimbursements from Medicare, including the administration of EPO
to treat anemia. EPO is the commonly-used name for the drug erythropoietin,
which is sold under the brand name Epogen(R). We also estimate that
approximately 6% of our net revenue for 1996, 7% of our net revenue for 1997,
and 5% of our net revenue for 1998, consisted of
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<PAGE> 4
reimbursements from Medicaid or comparable state programs. Any of the following
actions in connection with these programs could cause our revenue and earnings
to decline:
- a reduction of the amount paid to us under government programs;
- an increase in the costs associated with performing our services that
are subject to inflation, such as labor and supply costs, without a
corresponding increase in reimbursement rates;
- the inclusion of some or all ancillary services, for which we are now
reimbursed separately, in the flat composite rate for a standard
dialysis treatment; or
- changes in laws, or the interpretations of laws, which could cause us
to modify our operations.
IF REIMBURSEMENT FOR EPO DECREASES, ITS COST INCREASES OR IT BECOMES IN SHORT
SUPPLY, THEN WE COULD BE LESS PROFITABLE
If government or private payors decrease reimbursement rates for EPO,
for which we are currently reimbursed separately outside of the flat composite
rate, our revenue and earnings may decline. EPO is a bio-engineered hormone that
is used to treat anemia. Our revenues from EPO were approximately 19% of net
revenue for 1996, 21% of net revenue for 1997, and 23% of net revenue for 1998.
Most of our payments for EPO come from government programs. President Clinton
has included a proposal to decrease the reimbursement for EPO by $1 per thousand
units in his fiscal year 2000 budget, which would represent a 10% reduction from
the current government reimbursement rate. For the quarter ended March 31, 1999,
government reimbursement represented approximately 65% of the total revenue we
derived from EPO. Because we are unable to predict accurately the possible
effect that the proposed reduction would have on the cost of EPO or private
reimbursement rates, we cannot quantify what the net effect would be on our
revenue and earnings. Further, EPO is produced by a single manufacturer, and
if the manufacturer or other factors interrupt the supply of EPO or the
manufacturer raises its prices, then our revenue and earnings may decline.
IF PAYMENTS BY PRIVATE INSURERS, HOSPITALS OR MANAGED CARE ORGANIZATIONS
DECREASE, THEN OUR REVENUE AND EARNINGS COULD DECREASE
If private insurers, hospitals or managed care organizations reduce
their rates or we experience a significant shift in our revenue mix toward
additional Medicare or Medicaid reimbursement, then our revenue and earnings may
decline. We estimate that approximately 26% of our net revenue for 1996, 29% of
our net revenue for 1997, and 35% of our net revenue for 1998, were derived from
sources other than Medicare and Medicaid. In general, payments we receive from
private insurers and hospitals for our services are at rates significantly
higher than the Medicare or Medicaid rates. As a result, any of the following
events could have a material adverse effect on our revenue and earnings:
- an increase in dialysis procedures reimbursed by private insurers,
hospitals or managed care companies could cause these payor
organizations to reduce the rates they pay us;
- a portion of our business that is currently reimbursed by private
insurers or hospitals may become reimbursed by managed care
organizations, which currently have lower rates for our services; or
- the scope of coverage by Medicare or Medicaid under the flat composite
rate could expand and, as a result, reduce the extent of our services
being reimbursed at the higher private-insurance rates.
IF WE ARE UNABLE TO MAKE ACQUISITIONS IN THE FUTURE, OUR RATE OF GROWTH WILL
SLOW
Much of our historical growth has come from acquisitions, and we expect
to continue to pursue growth through the acquisition and development of dialysis
centers. However, we may be unable to continue to identify and complete suitable
acquisitions or obtain the necessary financing. We also compete with other
companies to identify and complete suitable acquisitions. We expect this
competition to intensify, making it more difficult to acquire suitable companies
on favorable terms. Further, the businesses we acquire may not perform well
enough to justify our investment. If we are unable to make additional
acquisitions on suitable terms, we may not meet our growth expectations.
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<PAGE> 5
IF WE COMPLETE FUTURE ACQUISITIONS, WE MAY DILUTE EXISTING STOCKHOLDERS BY
ISSUING MORE OF OUR COMMON STOCK OR WE MAY INCUR ADDITIONAL EXPENSES RELATED TO
DEBT AND GOODWILL, WHICH COULD REDUCE OUR EARNINGS
We may issue equity securities in future acquisitions that could be
dilutive to our shareholders. We also may incur additional debt and amortization
expense related to goodwill and other intangible assets in future acquisitions.
We have used the "pooling of interests" accounting method for many of our
acquisitions, which does not result in recording goodwill (the excess of
acquisition cost over identifiable tangible assets). In those instances where we
have used the "purchase" accounting method in acquisitions, we have recorded
goodwill and other intangible assets, which are then amortized yearly against
our earnings at a blended average life of 35 years. We had approximately $213
million of goodwill and other intangibles, net as of March 31, 1999. The SEC and
accounting policy makers have announced that they are considering substantially
or completely curtailing the pooling of interests method, which would result in
more goodwill and associated amortization expense for future and, possibly,
prior acquisitions. Further, the SEC and accounting policy makers have announced
that they may reduce the allowable life over which goodwill may be amortized,
which would thereby increase amortization expense in each year. Interest expense
on additional debt and amortization expense from acquisitions may significantly
reduce our profitability.
IF ACQUIRED BUSINESSES HAVE UNKNOWN LIABILITIES THAT ARE NOT COVERED BY AN
INDEMNIFICATION OBLIGATION, THEN WE COULD BE EXPOSED TO LIABILITIES THAT COULD
HARM OUR BUSINESS AND PROFITABILITY
Businesses we acquire may have unknown or contingent liabilities,
including liabilities for failure to comply with health care laws. Although we
generally attempt to identify any practices that may give rise to unknown or
contingent liabilities and conform them to our standards after the acquisition,
private plaintiffs or governmental agencies may still assert claims. Even though
we generally seek to obtain indemnification from prospective sellers, unknown
and contingent liabilities may not be covered by indemnification or may exceed
contractual limits or the financial capacity of the indemnifying party.
IF OUR REFERRING PHYSICIANS WERE TO CEASE REFERRING TO OUR CENTERS OR WERE
PROHIBITED FROM REFERRING FOR REGULATORY REASONS, OUR REVENUE AND EARNINGS WOULD
DECLINE
Our dialysis centers depend on referrals from local nephrologists.
Typically, one or a few physicians account for all or a significant portion of
the patient base at a center, and the loss of one or more referring physicians
could have a material adverse effect on the operations of that center. The loss
of a significant number of referring physicians could cause our revenue and
earnings to decline. In many instances, the primary referral sources for our
centers are physicians who are also stockholders and serve as medical directors
of our centers. If stock ownership or the medical director relationship were
deemed to violate applicable federal or state law, including fraud and abuse
laws and laws prohibiting self-referrals, the physicians owning our stock or
acting as medical directors may be forced to stop referring to our centers.
Further, we may not be able to renew or renegotiate our medical director
agreements successfully, which could result in a loss of patients as physicians
typically have their patients treated at a center where they serve as a medical
director.
IF OUR BUSINESS IS ALLEGED OR FOUND TO VIOLATE HEATH CARE OR OTHER
APPLICABLE LAWS, OUR REVENUE AND EARNINGS COULD DECREASE
We are subject to extensive federal, state and local regulation
regarding the following:
- fraud and abuse prohibitions under health care reimbursement laws;
- prohibitions and limitations on patient referrals;
- false claims prohibitions under health care reimbursement laws;
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- facility licensure;
- health and safety requirements;
- environmental compliance; and
- medical and toxic waste disposal.
Much of this regulation, particularly in the areas of fraud and abuse and
patient referral, is complex and open to differing interpretations. Due to the
broad application of the statutory provisions and the absence in many instances
of regulations or court decisions addressing the specific arrangements by which
we conduct our business, including our medical director and physician
stockholder arrangements, governmental agencies could challenge some of our
practices under these laws. If any of our operations are found to violate these
laws, we may be subject to severe sanctions or be required to alter or
discontinue the challenged conduct. If we are required to alter our practices,
we may not be able to do so successfully. The occurrence of any of these events
could cause our revenue and earnings to decline.
CHANGES IN THE HEALTHCARE DELIVERY, FINANCING OR REIMBURSEMENT SYSTEMS COULD
ADVERSELY AFFECT OUR BUSINESS
The health care industry in the United States is in a period of rapid
change and uncertainty. Health care organizations, public or private, may
dramatically change the way they operate and pay for services. Our business is
designed to function within the current health care financing and reimbursement
system. During the past several years, the health care industry has been subject
to increasing levels of government regulation of, among other things,
reimbursement rates and capital expenditures. In addition, proposals to reform
the health care system have been considered by Congress. These proposals, if
enacted, may further increase government regulation of or other involvement in
health care, lower reimbursement rates and otherwise change the operating
environment for health care companies. We cannot predict the likelihood of those
events or what impact they may have on our business.
THE DIALYSIS BUSINESS IS HIGHLY COMPETITIVE AND IF WE DO NOT COMPETE EFFECTIVELY
IN OUR MARKET, WE COULD LOSE MARKET SHARE AND OUR RATE OF GROWTH COULD SLOW
The dialysis industry is fragmented and rapidly consolidating. There
are several large dialysis companies that compete for the acquisition of
existing dialysis centers and the development of relationships with referring
physicians. Several of our competitors are part of larger companies that also
manufacture dialysis equipment, which allows them to lower equipment costs.
Several of our competitors, including these equipment manufacturers, are much
larger than we are and have substantially greater financial resources and more
established operations and infrastructure than us. We also experience
competition from referring physicians who open their own dialysis centers. There
can be no assurance that we will be able to compete effectively with any of our
competitors.
IF WE LOSE ANY OF OUR EXECUTIVE OFFICERS, OR ARE UNABLE TO ATTRACT AND RETAIN
QUALIFIED MANAGEMENT PERSONNEL AND MEDICAL DIRECTORS, OUR ABILITY TO RUN OUR
BUSINESS COULD BE ADVERSELY AFFECTED AND OUR REVENUE AND EARNINGS COULD DECLINE.
We are dependent upon the services of our executive officers Sam A.
Brooks, Jr., our Chairman, Chief Executive Officer and President, and Raymond
Hakim, M.D., Ph.D., Ronald Hinds and Gary Brukhardt, each an Executive Vice
President, each of whom has been with Renal Care Group since its formation. We
have entered into employment agreements with Messrs. Brooks, Hinds and Brukhardt
and Dr. Hakim. The employment agreements for each of these executive officers
other than Dr. Hakim contain restrictive covenants prohibiting the officer from
competing with Renal Care Group for a period of one year following the end of
the officer's employment term. The services of these individuals would be very
difficult to replace. We do not carry key-man life insurance on any of our
officers. Further, our growth will depend in part upon our ability to attract
and retain skilled employees, for whom competition is intense. We also believe
that our future success will depend on our ability to attract and retain
qualified physicians to serve as medical directors of our dialysis centers. We
have entered into medical director agreements with the physicians serving as
medical directors of our dialysis centers, most of which contain noncompetition
covenants of varying durations.
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IF OUR BOARD OF DIRECTORS DOES NOT APPROVE AN ACQUISITION OR CHANGE IN CONTROL
OF RENAL CARE GROUP, OUR STOCKHOLDERS MAY NOT REALIZE THE FULL VALUE OF THEIR
STOCK
Our certificate of incorporation and bylaws contain a number of
provisions that may delay, deter or inhibit a future acquisition or change in
control of Renal Care Group that is not first approved by our board of
directors. This could occur even if our stockholders are offered an attractive
value for their shares or if a substantial number or even a majority of our
stockholders believe the takeover may be in their best interest. These
provisions are intended to encourage any person interested in acquiring Renal
Care Group to negotiate with and obtain approval from our board of directors
prior to pursuing the transaction. Provisions that could delay, deter or inhibit
a future acquisition or change in control of Renal Care Group include the
following:
- a staggered board of directors that would require two annual meetings
to replace a majority of the board of directors;
- restrictions on calling special meetings at which an acquisition or
change in control might be brought to a vote of the stockholders;
- blank check preferred stock that may be issued by our board of
directors without stockholder approval and that may be substantially
dilutive or contain preferences or rights objectionable to an acquiror;
and
- a poison pill that would substantially dilute the interest sought by
an acquiror.
These provisions could also discourage bids for our common stock at a premium
and cause the market price of our common stock to decline.
OUR STOCK PRICE IS VOLATILE AND AS A RESULT THE VALUE OF YOUR INVESTMENT MAY GO
DOWN FOR REASONS UNRELATED TO THE PERFORMANCE OF OUR BUSINESS
Our common stock is traded on the Nasdaq National Market. The market
price of our common stock has been volatile, ranging from a low of $14.875 per
share to a high of $34.375 per share during the first quarter of 1999, and could
fluctuate substantially based on a variety of factors, including the following:
- future announcements concerning us, our competitors or the health care
market;
- changes in government regulations; and
- changes in earnings estimates by analysts.
Furthermore, stock prices for many companies fluctuate widely for
reasons that may be unrelated to their operating results. These fluctuations,
coupled with changes in demand or reimbursement levels for our services and
general economic, political and market conditions, could cause the market price
of our common stock to decline.
YEAR 2000 ISSUES MAY RESULT IN LOSS OF REVENUE OR INCREASE IN COSTS
Many existing computer programs use only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century and, if not
corrected, could fail or create erroneous results by or at the year 2000. We
have undertaken, but not completed, an assessment of our year 2000 issues. Until
we have completed our assessment, we cannot be sure that our efforts to address
our year 2000 issues are appropriate, adequate or complete. Our year 2000 issues
could reside in our own systems and in the systems of third parties with whom we
have relationships that are material to our operations, such as reimbursement to
us from fiscal intermediaries and governmental agencies and the provision of
significant utilities and supplies to our
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centers. Year 2000 issues could cause significant disruptions in our cash flow
and operations, which could cause our costs to increase and our revenue and
earnings to decline. Matters related to our year 2000 issues are discussed in
further detail under the heading "Supplemental Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Impact of Year
2000" in our current report on Form 8-K filed with the SEC on April 22, 1999.
FORWARD LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "intend," "estimate" and "continue" or similar words.
You should read statements that contain these words carefully for the following
reasons:
- the statements discuss our future expectations;
- the statements contain projections of our future earnings or of our
financial condition; and
- the statements state other "forward-looking" information.
We believe it is important to communicate our expectations to our
investors. There may be events in the future, however, that we are not
accurately able to predict or over which we have no control. The risk factors
listed above, as well as any cautionary language in or incorporated by reference
into this prospectus, provide examples of risks, uncertainties and events that
may cause our actual results to differ materially from the expectations we
describe in our forward-looking statements. The SEC allows us to "incorporate by
reference" the information we file with them, which means we can disclose
important information to you by referring you to those documents. Before you
invest in our common stock, you should be aware that the occurrence of any of
the events described in the above risk factors, elsewhere in or incorporated by
reference into this prospectus and other events that we have not predicted or
assessed could have a material adverse effect on our earnings, financial
condition and business. If the events described above or other unpredicted
events occur, then the trading price of our common stock could decline and you
may lose all or part of your investment.
AVAILABLE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Those reports, proxy statements and other
information may be obtained:
- At the Public Reference Room of the SEC, Room 1024 -- Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549;
- At the public reference facilities at the SEC's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York
10048 or Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661;
- From the SEC, Public Reference Room, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549;
- At the offices of The Nasdaq Stock Market, Inc., Reports Section,
1735 K Street, N.W., Washington, D.C. 20006; or
- From the internet site maintained by the SEC at http://www.sec.gov,
which contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC.
Some locations may charge prescribed rates or modest fees for copies.
For more information on the public reference rooms, call the SEC at
1-800-SEC-0330.
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC (Registration No. 333-77533). The registration statement
contains more information than this prospectus
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regarding Renal Care Group and our common stock, including exhibits. You can get
a copy of the registration statement from the SEC at the addresses listed above
or from its Internet site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The information incorporated by reference is considered to be part of
this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
the selling shareholders sell all the shares:
- Quarterly report on Form 10-Q for the fiscal quarter ending on March
31, 1999;
- Current report on Form 8-K filed with the SEC on April 22, 1999,
containing supplemental financial statements and other supplemental
financial information giving effect to the acquisition of Dialysis
Centers of America, Inc.;
- Annual report on Form 10-K for the fiscal year ended December 31, 1998,
including those portions of our proxy statement for our 1999 annual
meeting of stockholders incorporated in the Form 10-K by reference; and
- The descriptions of our common stock and series A junior participating
preferred stock purchase rights set forth in our registration
statements filed under Section 12 of the Exchange Act, and any
amendment or report filed for the purpose of updating any description.
On request, we will provide at no cost to each person, including any
beneficial owner, who receives a copy of this prospectus, a copy of any or all
of the documents incorporated in this prospectus by reference. We will not
provide exhibits to any of the documents listed above, however, unless those
exhibits are specifically incorporated by reference into those documents. You
should direct your request to the Secretary of Renal Care Group, Inc., 2100 West
End Avenue, Suite 800, Nashville, Tennessee 37203, telephone number (615)
345-5500.
You should rely only on the information that we incorporate by
reference or provide in this prospectus or any supplement. We have not
authorized anyone else to provide you with different information. The selling
shareholders will not make an offer of these shares in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any supplement is accurate as of any date other than the date on the front of
those documents.
SELLING SHAREHOLDERS
The following table sets forth:
- the name of each of the selling shareholders;
- the number of shares of common stock beneficially owned by each selling
shareholder prior to the offering and being offered under this
prospectus; and
- the number of shares of common stock beneficially owned by each selling
shareholder after the completion of the offering.
The table assumes that the selling shareholders will sell all shares they are
offering under this prospectus, and that the selling shareholders will not
acquire additional shares of our common stock prior to completion of this
offering. Each selling shareholder owns less than 1% of the total number of
shares of common stock outstanding, except for AJM Family Limited Partnership
which owns 1.26% of our common stock outstanding based upon 44,468,498 shares
outstanding as of June 3, 1999. After completion of this offering, each selling
shareholder will own less than 1% of the total number of shares of common stock
outstanding.
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<TABLE>
<CAPTION>
Shares Beneficially Shares
Owned Before Shares Being Beneficially
Name the Offering(1) Offered Owned After
the Offering
<S> <C> <C> <C>
AJM Family Limited Partnership........................ 557,064 289,880 267,184
Norman E. Alexander.................................. 51,396 40,118 11,278
George P. Anastos and Joan M. Anastos................. 6,424 5,014 1,410
Kent Armbruster....................................... 18,016 9,375 8,641
Bear Sterns & Co...................................... 90,079 70,312 19,767
Arnold Berns.......................................... 13,512 7,031 6,481
Ira J. Checkla, as Trustee U/A Leila Meyerson, dated
September 14, 1995, for the benefit of Stuart
Meyerson........................................... 7,872 4,096 3,776
Ira J. Checkla and David Meyerson, as Trustees
under a Trust Agreement dated September 14,
1995, between Leila Meyerson, as Settlor, and Ira
J. Checkla and David Meyerson, as Trustees for
the benefit of Jessica Shoshana Meyerson.......... 22,520 11,719 10,801
Ira J. Checkla and Ronald A. Savas, as Trustees
under a Trust Agreement, dated September 14,
1995, between Leila Meyerson, as Settlor, and Ira
J. Checkla and Ronald A. Savas, as Trustees for
the benefit of David Meyerson..................... 45,039 23,438 21,601
Ira J. Checkla and Cindie Kastenbaum, as Trustees
under a Trust Agreement, dated September 14,
1995, between Leila Meyerson, as Settlor, and Ira
J. Checkla and Cindie Kastenbaum, as Trustees
for the benefit of Julie Sara Kastenbaum........... 22,520 11,719 10,801
Ira J. Checkla and Cindie Kastenbaum, as Trustees
under a Trust Agreement, dated September 14,
1995, between Leila Meyerson, as Settlor, and Ira
J. Checkla and Cindie Kastenbaum, as Trustees
for the benefit of Harry Michael Kastenbaum........ 22,520 11,719 10,801
Ira J. Checkla, as Trustee U/A Leila Meyerson
dated, September 14, 1995, for the benefit of
David Meyerson..................................... 7,872 4,096 3,776
Ira J. Checkla and Ronald A. Savas, as Trustees
under a Trust Agreement, dated September 14,
1995, between Leila Meyerson, as Settlor, and
Ira J. Checkla and Ronald A. Savas, as Trustees
for the benefit of Stuart Meyerson................. 30,026 15,625 14,401
Richard A. Colby...................................... 2,272 1,773 499
Richard A. Colby Profit Sharing Plan
f/b/o Richard Colby................................ 4,152 3,241 911
Manoochehr Darab...................................... 49,665 25,845 23,820
DJ-DI Corp............................................ 38,547 30,088 8,459
W. Brian Duffy........................................ 22,520 11,719 10,801
William Evans......................................... 49,665 25,845 23,820
FLM Partners.......................................... 37,533 19,531 18,002
Lloyd Goldman......................................... 33,780 26,367 7,413
Bruce Goodman......................................... 37,525 29,291 8,234
Barbara Gutkin........................................ 4,690 2,441 2,249
Jeff Gutkin........................................... 2,814 1,464 1,350
</TABLE>
-9-
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
Laura Gutkin.......................................... 2,814 1,464 1,350
Ronald Hamburger...................................... 45,039 23,438 21,601
Sheldon Hirsch........................................ 4,504 2,344 2,160
Holmes-Peck Investments Limited Partnership........... 49,665 25,845 23,820
Cindie Kastenbaum..................................... 52,911 27,534 25,377
Fred Kastenbaum....................................... 18,767 9,766 9,001
Sidney Kastenbaum..................................... 37,533 19,532 18,001
Curtis Lane........................................... 3,212 2,507 705
Jeffrey B. Laos, Sr................................... 22,587 11,754 10,833
Edna Lapp, as Trustee of Edna Lapp
Revocable Trust.................................... 3,284 1,709 1,575
Glenn Lapp............................................ 5,628 2,929 2,699
Seymour Lapp, as Trustee of Seymour Lapp
Revocable Trust.................................... 11,729 6,104 5,625
Sol Levine............................................ 126,836 99,003 27,833
Madison Dearborn Capital Partners, L.P................ 128,491 100,294 28,197
McGee Family Corporation.............................. 1,116 581 535
Allen D. McGee, as Trustee of the Joseph Holton
McGee 1995 Indenture of Trust...................... 112,598 58,593 54,005
David Mednick......................................... 13,675 7,117 6,558
Leila Mann Meyerson................................... 394,402 205,236 189,166
Stuart Mann Meyerson.................................. 15,013 7,813 7,200
Stuart Mann Meyerson and Ronald Savas,
as Trustees........................................ 22,520 11,719 10,801
New Ballantrae Partners, L.P.......................... 128,491 100,294 28,197
Joseph Oyama.......................................... 45,039 23,438 21,601
RLR Family Partners, L.P.............................. 50,735 39,601 11,134
RLR Partners, L.P..................................... 76,102 59,402 16,700
Joe M. Roberts........................................ 3,212 2,507 705
Peter H. Rothschild................................... 3,212 2,507 705
Selma Ruben........................................... 19,273 15,044 4,229
Ronald D. Savas....................................... 11,260 5,859 5,401
Dennis Sloan, as Trustee of the Dennis E. Sloan
Revocable Trust, dated November 6, 1992............ 90,079 46,875 43,204
Joel E. Smilow........................................ 56,030 0 56,030
Joel E. Smilow Charitable Remainder Unitrust.......... 199,297 199,297 0
Robert Steinberg...................................... 6,424 5,014 1,410
Trefoil/Garnet Capital Partners, L.P.................. 38,547 30,088 8,459
Widdco Holdings, Inc.................................. 126,835 99,002 27,833
Wifleur Inc........................................... 32,123 25,074 7,049
Daniel Yohay.......................................... 5,630 2,930 2,700
Demetrios Zikos....................................... 6,756 3,516 3,240
Allen D. McGee........................................ 11,827 6,155 5,672
James Yeung........................................... 13,512 7,031 6,481
Total........................................... 3,174,731 1,980,646 1,194,085
</TABLE>
PLAN OF DISTRIBUTION
The selling shareholders or their pledgees, donees, transferees or
other successors may sell the shares offered under this prospectus from time to
time. These sales may be made:
- in transactions (which may include block sales) on the Nasdaq National
Market or any other national securities exchange or automated
interdealer quotation system on which shares of Renal Care Group common
stock are then listed,
-10-
<PAGE> 12
- in negotiated transactions, or
- through a combination of the methods of sale described above, at fixed
prices, that may be changed, at market prices prevailing at the time of
sale, at prices related to prevailing market prices, or at negotiated
prices.
The selling shareholders and other sellers may sell the shares offered
under this prospectus directly to purchasers or through underwriters, agents or
broker-dealers by one or more of the following means:
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- purchases by a broker or dealer as principal and resale by that broker
or dealer for its account under this prospectus;
- a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- an exchange distribution in accordance with the rules of the exchange
or automated interdealer quotation system on which the common stock is
then listed; and
- the writing of options on the shares.
Any underwriters, agents or broker-dealers involved in the distribution
of the shares may receive compensation in the form of discounts, concessions or
commissions from the selling shareholders and/or the purchasers of the shares
for which such underwriters, agents or broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to an underwriter,
agent or particular broker-dealer will be negotiated prior to the sale and may
be in excess of customary compensation). If required by applicable law at the
time a particular offer of shares is made, the terms and conditions of that
transaction will be set forth in a supplement to this prospectus.
The selling shareholders and any underwriters, agents or broker-dealers
who act in connection with the sale of the shares under this prospectus may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any compensation received by them might be deemed to be
underwriting discounts and commissions under the Securities Act.
The selling shareholders will pay all applicable stock transfer taxes,
transfer fees and brokerage commissions or underwriting or other discounts. The
selling shareholders will bear all expenses in connection with the registration
of the shares being offered by the selling shareholders. Renal Care Group has
agreed to indemnify the selling shareholders against certain liabilities,
including liabilities under the Securities Act.
-11-
<PAGE> 13
LEGAL MATTERS
Alston & Bird LLP, Atlanta, Georgia, will pass upon the status of
shares offered under this prospectus as legally and validly issued, fully paid
and nonassessable.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our (i)
consolidated financial statements and schedule included in our annual report on
Form 10-K for the year ended December 31, 1998, and (ii) our supplemental
consolidated financial statements and schedule included in our current report
(Form 8-K), as set forth in their reports, which are incorporated by reference
in the prospectus and elsewhere in the registration statement. Our financial
statements and schedule and supplemental financial statements and supplemental
schedule are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
-12-
<PAGE> 14
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY RENAL CARE GROUP OR THE SELLING
SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER TO SELL OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUMMARY......................... 2
RISK FACTORS............................... 2
AVAILABLE INFORMATION...................... 7
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE........................... 8
SELLING SHAREHOLDERS....................... 8
PLAN OF DISTRIBUTION....................... 11
LEGAL MATTERS.............................. 12
EXPERTS.................................... 12
</TABLE>
1,980,646 SHARES
RENAL CARE GROUP, INC.
COMMON STOCK
PROSPECTUS
_________, 1999
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC Registration Fee................................................... 11,000
Accounting Fees and Expenses........................................... 7,500
Legal Fees and Expenses................................................ 25,000
Miscellaneous Expenses................................................. 5,000
-------
Total.................................................................. $48,500
</TABLE>
The foregoing items, except for the registration fee to the Securities
and Exchange Commission, are estimated. RCG has agreed to bear all expenses in
connection with the registration of the shares being offered by the Selling
Shareholders, except that the Selling Shareholders will bear all underwriting
discounts and commissions and transfer taxes, if any. RCG has agreed to
indemnify the Selling Shareholders against certain liabilities, including
liabilities under the Securities Act.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
RCG's Amended and Restated Certificate of Incorporation provides that
RCG shall to the fullest extent permitted by Section 145 of the General
Corporation Law of the State of Delaware, as amended from time to time,
indemnify its officers and directors.
Section 145 of the General Corporation Law of the State of Delaware
permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnify for such expenses despite such
adjudication of liability.
RCG's Amended and Restated Certificate of Incorporation contains a
provision which eliminates, to the fullest extent permitted by the General
Corporation Law of Delaware, director liability for monetary damages for
breaches of the fiduciary duty of care or any other duty as a director.
II-1
<PAGE> 16
ITEM 16. EXHIBITS.
The following exhibits are filed as part of the Registration Statement:
<TABLE>
<S> <C>
4.1.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit No. 3.1 to the Registration
Statement on Form S-1 (Registration No. 333-80221)).
4.1.2 Certificate of Amendment to the Restated Certificate of
Incorporation of the Company (incorporated by reference to
Exhibit 3.1.2 to the Quarterly Report on Form 10-Q for the fiscal
quarter ended June 1997).
4.1.3 Certificate of Designation, Preferences, and Rights of Series A
Junior Participating Preferred Stock of Renal Care Group, Inc.
(incorporated by reference to Exhibit 3.1.3 to the Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1997).
4.2 Amended and Restated By-Laws of the Company (incorporated herein
by reference to Exhibit No. 3.2 to the Registration Statement on
Form S-1 (Registration No. 333-80221)).
4.3 Specimen stock certificate for the Common Stock of the Company
(incorporated herein by reference to Exhibit 4.2 to the
Registration Statement on Form S-1 (Registration No. 333-80221)).
5.1 Opinion of Alston & Bird, LLP, including consent.*
23.1 Consent of Alston & Bird, LLP (Contained in Exhibit 5.1).*
23.2 Consent of Ernst & Young LLP.*
24.1 Power of Attorney.*
</TABLE>
- ----------------------------
*Previously Filed
II-2
<PAGE> 17
ITEM 17. UNDERTAKINGS.
A. RULE 415 OFFERING.
The undersigned Registrant hereby undertakes:
(1) 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;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereto) which individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in the 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 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above shall not apply if the information required to be included in a
post-effective amendment to those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement;
(2) 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; and
(3) 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.
B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned Registrant hereby further 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
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
C. INDEMNIFICATION OF OFFICERS, DIRECTORS AND CONTROLLING PERSONS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
II-3
<PAGE> 18
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 hereunder, 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.
D. PROSPECTUS IN A REGISTRATION STATEMENT AT THE TIME OF EFFECTIVENESS.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-4
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 Nashville, State of Tennessee, on June 18, 1999.
RENAL CARE GROUP, INC.
By: /s/ Sam A. Brooks, Jr.
---------------------------------
Sam A. Brooks, Jr., President
and Chief Executive Officer
II-5
<PAGE> 20
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Sam A. Brooks, Jr. President, Chief Executive Officer June 18, 1999
- ------------------------------- and Chairman of the Board
Sam A. Brooks, Jr. (Principal Executive Officer)
/s/ Ronald Hinds Executive Vice President June 18, 1999
- ------------------------------- Chief Financial Officer
Ronald Hinds (Principal Financial Officer and
Principal Accounting Officer)
Director June 18, 1999
- -------------------------------
Joseph C. Hutts
* Director June 18, 1999
- -------------------------------
Harry R. Jacobson, M.D.
* Director June 18, 1999
- -------------------------------
Thomas A. Lowery, M.D.
* Director June 18, 1999
- -------------------------------
John D. Bower, M.D.
* Director June 18, 1999
- -------------------------------
Stephen D. McMurray, M.D.
* Director June 18, 1999
- -------------------------------
W. Tom Meredith, M.D.
* Director June 18, 1999
- -------------------------------
Kenneth Johnson, Jr., M.D.
*BY: /S/ RONALD HINDS
---------------------------
RONALD HINDS
ATTORNEY-IN-FACT
</TABLE>
II-6
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
<S> <C>
4.1.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit No. 3.1 to the Registration
Statement on Form S-1 (Registration No. 333-80221)).
4.1.2 Certificate of Amendment to the Restated Certificate of
Incorporation of the Company (incorporated by reference to
Exhibit 3.1.2 to the Quarterly Report on Form 10-Q for the fiscal
quarter ended June 1997).
4.1.3 Certificate of Designation, Preferences, and Rights of Series A
Junior Participating Preferred Stock of Renal Care Group, Inc.
(incorporated by reference to Exhibit 3.1.3 to the Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 1997).
4.2 Amended and Restated By-Laws of the Company (incorporated herein
by reference to Exhibit No. 3.2 to the Registration Statement on
Form S-1 (Registration No. 333-80221)).
4.3 Specimen stock certificate for the Common Stock of the Company
(incorporated herein by reference to Exhibit 4.2 to the
Registration Statement on Form S-1 (Registration No. 333-80221)).
5.1 Opinion of Alston & Bird, LLP, including consent.*
23.1 Consent of Alston & Bird, LLP (Contained in Exhibit 5.1).*
23.2 Consent of Ernst & Young LLP.*
24.1 Power of Attorney.*
</TABLE>
- ---------------------------
*Previously Filed
