Delaware | 8060 | 20-1764048 | ||
(State or Other Jurisdiction
of Incorporation or Organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification No.) |
Stephen M. Leitzell, Esq.
Dechert LLP Cira Centre 2929 Arch Street Philadelphia, Pennsylvania 19104 (215) 994-4000 |
Richard D. Truesdell, Jr., Esq.
Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 (212) 450-4000 |
Large accelerated
filer
o
|
Accelerated filer o |
Non-accelerated
filer
þ
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Proposed Maximum
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Title of Each Class of
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Aggregate
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Amount of
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||||||||
Securities to be Registered | Offering Price(1)(2) | Registration Fee | ||||||||
Common Stock, par value $0.001 per share
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$ | 100,000,000 | $ | 3,930 | ||||||
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. | |
(2) | Including shares of common stock which may be purchased by the underwriters to cover over-allotments, if any. |
The information in
this prospectus is not complete and may be changed. A
registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These
securities may not be sold until the registration statement is
effective. This preliminary prospectus is not an offer to sell
nor does it seek an offer to buy these securities in any state
where the offer or sale is not permitted.
|
Proceeds to
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||||||||||||||||
Underwriting
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Select
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Proceeds to
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Price to
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Discounts and
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Medical Holdings
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Selling
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|||||||||||||
Public | Commissions | Corporation | Stockholders (1) | |||||||||||||
Per Share
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$ | $ | $ | $ | ||||||||||||
Total
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$ | $ | $ | $ |
(1) | We have agreed to reimburse the selling stockholders for the underwriting discounts and commissions on the shares sold by them. This amount will be approximately $ million. |
Morgan Stanley
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Merrill Lynch & Co. | Goldman, Sachs & Co. | ||
JPMorgan Securities
Inc.
|
Wachovia Securities | Credit Suisse | ||
Jefferies & Company |
Page
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PROSPECTUS SUMMARY
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1 | |||
RISK FACTORS
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13 | |||
FORWARD-LOOKING STATEMENTS
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26 | |||
USE OF PROCEEDS
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27 | |||
DIVIDEND POLICY
|
28 | |||
CAPITALIZATION
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29 | |||
DILUTION
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30 | |||
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
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32 | |||
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
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35 | |||
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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40 | |||
BUSINESS
|
73 | |||
MANAGEMENT
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98 | |||
PRINCIPAL AND SELLING STOCKHOLDERS
|
129 | |||
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
131 | |||
DESCRIPTION OF CAPITAL STOCK
|
134 | |||
DESCRIPTION OF INDEBTEDNESS
|
138 | |||
SHARES ELIGIBLE FOR FUTURE SALE
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143 | |||
MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR
NON-UNITED
STATES HOLDERS
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145 | |||
UNDERWRITERS
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148 | |||
LEGAL MATTERS
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152 | |||
EXPERTS
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152 | |||
INDUSTRY DATA
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152 | |||
WHERE YOU CAN FIND MORE INFORMATION
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152 | |||
INDEX TO FINANCIAL STATEMENTS
|
F-1 |
Focus on Specialized Inpatient Services.
We
serve highly acute patients and patients with debilitating
injuries that cannot be adequately cared for in a less medically
intensive environment, such as a skilled nursing facility.
Generally, patients in our specialty hospitals require longer
stays and higher levels of clinical care than patients treated
in general acute care hospitals. Our patients average
length of stay in our specialty hospitals is 25 days for
the year ended December 31, 2007.
Provide High Quality Care and Service.
We
believe that our specialty hospitals serve a critical role in
comprehensive healthcare delivery. Through our specialized
treatment programs and staffing models, we treat patients with
acute, complex and specialized medical needs who are typically
referred to us by general acute care hospitals. Our specialized
treatment programs focus on specific patient needs and medical
conditions such as specific ventilator weaning programs and
wound care protocols. Our responsive staffing models ensure that
patients have the appropriate clinical resources over the course
of their stay. We believe that we are recognized for providing
quality care and service, as evidenced by accreditation by The
Joint Commission and the Commission on Accreditation of
Rehabilitation Facilities. We also believe we develop brand
loyalty in the local areas we serve allowing us to strengthen
our relationships with physicians and other referral sources and
drive additional patient volume to our hospitals.
Reduce Operating Costs.
We continually seek to
improve operating efficiency and reduce costs at our hospitals
by standardizing operations and centralizing key administrative
functions. These initiatives include optimizing staffing based
on our occupancy and the clinical needs of our patients,
centralizing
1
administrative functions, standardizing management information
systems and participating in group purchasing arrangements.
Increase Higher Margin Commercial Volume.
With
reimbursement rates from commercial insurers typically higher
than the federal Medicare program, we have focused on continued
expansion of our relationships with commercial insurers to
increase our volume of patients with commercial insurance in our
specialty hospitals. Although the level of care we provide is
complex and staff intensive, we typically have lower relative
operating expenses than a general acute care hospital because we
provide a much narrower range of patient services at our
hospitals. We believe that commercial payors seek to contract
with our hospitals because we offer patients high quality,
cost-effective care at more attractive rates than general acute
care hospitals.
Develop New Inpatient Rehabilitation
Facilities.
By leveraging the experience of our
senior management and dedicated development team, we intend to
pursue new inpatient rehabilitation hospital development
opportunities.
Pursue Opportunistic Acquisitions.
In addition
to our development initiatives, we may grow our network of
specialty hospitals through opportunistic acquisitions. Our
immediate focus is on acquisitions of inpatient rehabilitation
facilities, although we will still consider acquisitions of long
term acute care hospitals if they are at attractive valuations.
Provide High Quality Care and Service.
We are
focused on providing a high level of service to our patients
throughout their entire course of treatment. This high quality
of care and service allows us to strengthen our relationships
with referring physicians, employers and health insurers and
drive additional patient volume.
Increase Market Share.
We strive to establish
a leading presence within the local areas we serve. This allows
us to realize economies of scale, heightened brand loyalty,
workforce continuity and increased leverage when negotiating
payor contracts.
Expand Rehabilitation Programs and
Services.
Through our local clinical directors of
operations and clinic managers within their service areas, we
assess the healthcare needs of the areas we serve. Based on
these assessments, we implement additional programs and services
specifically targeted to meet demand in the local community.
Optimize the Profitability of Our Payor
Contracts.
We rigorously review payor contracts
up for renewal and potential new payor contracts to optimize our
profitability. We believe that our size and our strong
reputation enables us to negotiate favorable outpatient
contracts with commercial insurers.
Maintain Strong Employee Relations.
We seek to
retain, motivate and educate our employees whose relationships
with referral sources are key to our success.
Pursue Opportunistic Acquisitions.
We may grow
our network of outpatient rehabilitation facilities through
opportunistic acquisitions. We significantly expanded our
network with the 2007 acquisition of the outpatient
rehabilitation division of HealthSouth Corporation, consisting
of 569 clinics in 35 states and the District of Columbia,
including eighteen states in which we did not previously have
outpatient rehabilitation facilities. We believe our size and
centralized infrastructure allow us to take advantage of
operational efficiencies and increase margins at acquired
facilities.
Leading Operator in Distinct but Complementary Lines of
Business
. We believe that we are a leading
operator in each of our principal business segments, based on
number of facilities in the United States. Our leadership
position and reputation as a high quality, cost-effective health
care provider in each of our
2
business segments allows us to attract patients and employees,
aids us in our marketing efforts to payors and referral sources
and helps us negotiate payor contracts.
Diversified Base of Revenue.
In addition to
our diversification of business mix by segment and geography,
with facilities in 42 states and the District of Columbia,
we are further diversified by payor source within our two
business segments. On a consolidated basis, Medicare, Medicaid,
and commercial and other represented approximately 47%, 2% and
51% of our net operating revenues for the three months ended
March 31, 2008, respectively. Our Medicare revenues are
further diversified because Medicare employs distinct payment
methodologies for services provided in each of long term acute
care hospitals, inpatient rehabilitation facilities and
outpatient rehabilitation clinics.
Proven Financial Performance and Strong Cash
Flow.
We have established a track record of
improving the financial performance of our facilities due to our
disciplined approach to revenue growth, expense reduction and an
intense focus on free cash flow generation.
Significant Scale.
By building significant
scale in each of our business segments, we have been able to
leverage our operating costs by centralizing administrative
functions at our corporate office. As a result, we have been
able to minimize our general and administrative expense as a
percentage of revenues, which was 2.2% for the year ended
December 31, 2007.
Well-Positioned to Capitalize on Consolidation
Opportunities
. We believe that we are
well-positioned to capitalize on consolidation opportunities
within each of our business segments and selectively augment our
internal growth. With our geographically diversified portfolio
of facilities in the United States, we believe that our
footprint provides us with a wide-ranging perspective on
multiple potential acquisition opportunities.
Experience in Successfully Completing and Integrating
Acquisitions
. From our inception in 1997 through
2007, we completed six significant acquisitions for
approximately $894.8 million in aggregate consideration. We
believe that we have improved the operating performance of these
facilities over time by applying our standard operating
practices and by realizing efficiencies from our centralized
operations and management.
Experienced and Proven Management Team
. Prior
to co-founding our company with our current Chief Executive
Officer, our Executive Chairman founded and operated three other
healthcare companies focused on inpatient and outpatient
rehabilitation services. In addition, our four senior operations
executives have an average of over 30 years of experience
in the healthcare industry, including extensive experience
working together for our company and for past companies focused
on operating acute rehabilitation hospitals and outpatient
rehabilitation facilities.
3
4
shares,
or shares
if the underwriters exercise their over-allotment option in full.
shares,
or shares
if the underwriters exercise their over-allotment option in full.
The number of shares offered by the selling stockholders
includes shares
of common stock into which the preferred stock held by them will
convert immediately prior to the consummation of the offering.
shares,
or shares
if the underwriters exercise their over-allotment option in full.
We estimate that we will receive net proceeds from the sale of
shares of our common stock in this offering of
$ million, or
$ million if the underwriters
exercise their over-allotment option in full, after deducting
estimated underwriting discounts and commissions and estimated
offering expenses payable by us. We intend to use the net
proceeds of this offering to:
Any remaining net proceeds will be used for general corporate
purposes. Affiliates of J.P. Morgan Securities Inc.,
Wachovia Capital Markets, LLC and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, underwriters in this
offering, are parties to our senior secured credit facility and
will receive a portion of the proceeds from this offering.
We will not receive any of the proceeds from the sale of shares
of common stock by the selling stockholders. See Use of
Proceeds, Principal and Selling Stockholders
and Underwriters.
We do not anticipate paying any dividends on our common stock in
the foreseeable future. Any future determination relating to our
dividend policy will be made at the discretion of our board of
directors and will depend on then existing conditions, including
our financial condition, results of operations, contractual
restrictions, capital requirements, business prospects and other
factors our board of directors may deem relevant. In addition,
our ability to declare and pay dividends is restricted by
covenants in our senior secured credit facility and the
indentures governing Selects senior subordinated notes due
2015, which we refer to as Selects
7
5
/
8
% senior
subordinated notes, and our senior floating rate notes due
2015, which we refer to as the
5
senior floating rate notes. See Description of
Indebtedness Senior Secured Credit
Facility Restrictive Covenants and Other
Matters and Risk Factors.
SLC.
Investment in our common stock involves substantial risks. You
should read this prospectus carefully, including the section
entitled Risk Factors and the consolidated financial
statements and the related notes to those statements included
elsewhere in this prospectus before investing in our common
stock.
dividing the original cost of a share of the preferred stock
($26.90 per share) plus all accrued and unpaid dividends thereon
less the amount of any previously declared and paid special
dividends, or the accreted value of such preferred
stock by the initial public offering price per share in this
offering; plus
one share of common stock for each share of participating
preferred shares owned.
dividing % of the accreted value of
such share of preferred stock by the initial public offering
price per share in this offering; plus
one share of common stock for each share of participating
preferred shares owned.
120,000 shares of our common stock issuable upon exercise of
options granted under our director stock option plan. See
Management Compensation Discussion and
Analysis Director Compensation Table
Option Awards.
4,584,175 shares of our common stock issuable upon exercise of
options granted under the Select Medical Holdings Corporation
2005 Equity Incentive Plan. See Management
Compensation Discussion and Analysis Elements of
Compensation Equity Compensation.
assumes that the underwriters do not exercise their
over-allotment option; and
other than historical financial information, reflects the
conversion
of shares
of our issued and outstanding preferred stock
into shares
of common stock at a conversion ratio of
1: immediately prior to the consummation
of this offering, based upon an assumed public offering price of
$ per
share, the midpoint of the range set forth on the cover page of
this prospectus.
6
8
9
11
7
Predecessor
Period
Successor Period
Period from
Period from
January 1
February 25
Year Ended December 31,
through
through
Pro Forma
February 24,
December 31,
As Adjusted
2005
2005
2006
2007
2007
(in thousands, except per share data)
$
277,736
$
1,580,706
$
1,851,498
$
1,991,666
373,418
1,322,068
1,546,956
1,740,484
5,933
37,922
46,668
57,297
(101,615
)
220,716
257,874
193,885
(42,736
)
(12,025
)
267
1,092
(167
)
(4,128
)
(101,441
)
(130,538
)
(138,052
)
(160,237
)
120,367
127,336
55,666
330
1,776
1,414
1,537
(160,567
)
118,591
125,922
54,129
(59,794
)
49,336
43,521
18,699
(100,773
)
69,255
82,401
35,430
522
3,072
12,478
(100,251
)
72,327
94,879
35,430
23,519
22,663
23,807
$
(100,251
)
$
48,808
$
72,216
$
11,623
$
(0.99
)
$
0.23
$
0.30
$
0.05
0.01
0.02
0.06
$
(0.98
)
$
0.25
$
0.36
$
0.05
$
(0.99
)
$
0.22
$
0.28
$
0.05
0.01
0.02
0.06
$
(0.98
)
$
0.24
$
0.34
$
0.05
$
35,861
$
81,600
$
4,529
77,556
59,468
14,730
2,168,385
2,182,524
2,495,046
1,628,889
1,538,503
1,755,635
444,765
467,395
491,194
(244,658
)
(169,139
)
(165,889
)
$
202,781
$
1,169,702
$
1,378,543
$
1,386,410
44,384
263,760
283,270
217,175
73,344
407,367
470,339
603,413
9,848
56,109
64,823
75,437
Three Months Ended March 31,
Pro Forma
As Adjusted
2007
2008
2008
(in thousands, except per share data)
$
466,829
$
548,278
394,800
476,537
11,704
17,397
60,325
54,344
1,173
(31,274
)
(36,793
)
30,224
17,551
323
309
29,901
17,242
12,430
8,542
17,471
8,700
5,759
6,084
$
11,712
$
2,616
$
0.06
$
0.01
0.06
0.01
$
37,536
$
8,180
33,372
105,278
2,192,191
2,554,414
1,537,256
1,826,364
473,145
496,983
(159,665
)
(174,203
)
$
354,228
$
378,604
66,031
63,243
112,380
169,577
17,618
20,097
Combined
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2005
2006
2007
86
101
96
3
3
17
(2
)
(4
)
(8
)
(4
)
(4
)
101
96
87
3,829
3,867
3,819
39,963
39,668
40,008
985,025
969,590
987,624
25
24
25
$
1,370
$
1,392
$
1,378
70
%
69
%
69
%
75
%
73
%
69
%
589
553
477
570
22
12
15
(58
)
(88
)
(144
)
553
477
918
55
67
81
608
544
999
3,308,620
2,972,243
4,032,197
$
89
$
94
$
100
10
Three Months Ended
March 31,
2007
2008
96
87
5
(1
)
(3
)
92
92
3,899
4,111
10,416
10,736
252,476
259,559
25
25
$
1,378
$
1,432
72
%
71
%
72
%
67
%
477
918
1
4
5
(5
)
(18
)
477
905
68
80
545
985
646,651
1,155,907
$
101
$
103
(1)
Operating expenses include cost of
services, general and administrative expenses, and bad debt
expenses.
(2)
Includes stock compensation expense
related to the repurchase of outstanding stock options in the
Predecessor period from January 1 through February 24,
2005, compensation expense related to restricted stock, stock
options and long term incentive compensation in the Successor
Periods from February 25 through December 31, 2005, and for
the years ended December 31, 2006 and 2007 and for the
three months ended March 31, 2007 and 2008.
(3)
In connection with the Merger
Transactions, Select completed tender offers for all of its
9
1
/
2
% senior
subordinated notes due 2009 and all of its
7
1
/
2
% senior
subordinated notes due 2013. The loss in the Predecessor period
of January 1 through February 24, 2005 consists of the
tender premium cost of $34.8 million and the remaining
write-off of unamortized deferred financing costs of
$7.9 million.
(4)
As a result of the Merger
Transactions, Select incurred costs in the Predecessor period of
January 1 through February 24, 2005 directly related to the
Merger. This included the cost of the investment advisor hired
by the special committee of Selects board of directors to
evaluate the Merger, legal and accounting fees, costs associated
with the
Hart-Scott-Rodino
filing relating to the Merger, the cost associated with
purchasing a six year extended reporting period under our
directors and officers liability insurance policy and other
associated expenses.
(5)
Net interest equals interest
expense minus interest income.
(6)
Reflects interests held by other
parties in subsidiaries, limited liability companies and limited
partnerships owned and controlled by us.
(7)
Specialty hospitals consist of long
term acute care hospitals and inpatient rehabilitation
facilities.
(8)
We define Adjusted EBITDA as net
income before interest, income taxes, depreciation and
amortization, income from discontinued operations, loss on early
retirement of debt, merger related charges, stock compensation
expense, long term incentive compensation, other income/expense
and minority interest. We believe that the presentation of
Adjusted EBITDA is important to investors because Adjusted
EBITDA is commonly used as an analytical indicator of
performance by investors within the healthcare industry.
Adjusted EBITDA is used by management to evaluate financial
performance and determine resource allocation for each of our
operating units. Adjusted EBITDA is not a measure of financial
performance under generally accepted accounting principles.
Items excluded from Adjusted EBITDA are significant components
in understanding and assessing financial performance. Adjusted
EBITDA should not be considered in isolation or as an
alternative to, or substitute for, net income, cash flows
generated by operations, investing or financing activities, or
other financial statement data presented in the consolidated
financial statements as indicators of financial performance or
liquidity. Because Adjusted
EBITDA is not a measurement
determined in accordance with generally accepted accounting
principles and is thus susceptible to varying calculations,
Adjusted EBITDA as presented may not be comparable to other
similarly titled measures of other companies. See footnote 13 to
our audited consolidated financial statements and footnote 7 to
our interim unaudited consolidated financial statements for the
period ended March 31, 2008 for a reconciliation of net
income to Adjusted EBITDA as utilized by us in reporting our
segment performance in accordance with SFAS No. 131.
(9)
Net revenue per patient day is
calculated by dividing specialty hospital patient service
revenues by the total number of patient days.
(10)
Clinic data has been restated to
remove the clinics operated by Canadian Back Institute Limited,
which we refer to as CBIL, which was sold on
March 31, 2006 and is being reported as a discontinued
operation in 2005 and 2006.
(11)
The number of clinics closed/sold
for the year ended December 31, 2007 relate primarily to
clinics closed in connection with the restructuring plan for
integrating the acquisition of HealthSouth Corporations
outpatient rehabilitation division.
(12)
Net revenue per visit is calculated
by dividing outpatient rehabilitation clinic revenue by the
total number of visits. For purposes of this computation,
outpatient rehabilitation clinic revenue does not include
contract services revenue.
12
facility and professional licensure, including certificates of
need;
conduct of operations, including financial relationships among
healthcare providers, Medicare fraud and abuse, and physician
self-referral;
addition of facilities and services and enrollment of newly
developed facilities in the Medicare program;
payment for services; and
safeguarding protected health information.
13
14
15
16
17
18
difficulty and expense of integrating acquired personnel into
our business;
diversion of managements time from existing operations;
potential loss of key employees or customers of acquired
companies; and
assumption of the liabilities and exposure to unforeseen
liabilities of acquired companies, including liabilities for
failure to comply with healthcare regulations.
19
20
requires us to dedicate a substantial portion of our cash flow
from operations to payments on our indebtedness, reducing the
availability of our cash flow to fund working capital, capital
expenditures, development activity, acquisitions and other
general corporate purposes;
21
limits our flexibility in planning for, or reacting to, changes
in our business or the industries in which we operate;
makes us more vulnerable to increases in interest rates, as
borrowings under our senior secured credit facility and the
senior floating rate notes, are at variable rates;
limits our ability to obtain additional financing in the future
for working capital or other purposes, such as raising the funds
necessary to repurchase all notes tendered to us upon the
occurrence of specified changes of control in our
ownership; or
places us at a competitive disadvantage compared to our
competitors that have less indebtedness.
our quarterly or annual earnings or those of other companies in
our industry;
changes in laws or regulations, or new interpretations or
applications of laws and regulations, that are applicable to our
business;
the publics reaction to our press releases, our other
public announcements and our filings with the SEC;
changes in accounting standards, policies, guidance,
interpretations or principles;
additions or departures of our senior management personnel;
sales of common stock by our directors and executive officers;
22
sales or distribution of common stock by our sponsors;
adverse market reaction to any indebtedness we may incur or
securities we may issue in the future;
downgrades of our stock or negative research reports published
by securities or industry analysts;
actions by stockholders; and
changes in general conditions in the United States and global
economies or financial markets, including those resulting from
Acts of God, war, incidents of terrorism or responses to such
events.
shares
are shares that we and the selling stockholders are selling in
this offering and, unless purchased by affiliates, may be resold
in the public market immediately after this offering; and
shares
will be restricted securities, as defined in
Rule 144 under the Securities Act, and eligible for sale in
the public market pursuant to the provisions of Rule 144,
of
which shares
are subject to
lock-up
agreements and will become available for resale in the public
market beginning 180 days after the date of this prospectus.
23
prohibition on stockholder action through written consents;
a requirement that special meetings of stockholders be called
only by our board of directors;
advance notice requirements for stockholder proposals and
nominations;
availability of blank check preferred stock;
establish a classified board of directors so that not all
members of our board of directors are elected at one time;
the right of the board of directors to elect a director to fill
a vacancy created by the expansion of the board of directors or
due to the resignation or departure of an existing board member;
the prohibition of cumulative voting in the election of
directors, which would otherwise allow less than a majority of
stockholders to elect director candidates;
the ability of our board of directors to alter our bylaws
without obtaining stockholder approval;
limitations on the removal of directors; and
the required approval of at least
66
2
/
3
%
of the shares entitled to vote at an election of directors to
adopt, amend or repeal our bylaws or repeal the provisions of
our amended and restated certificate of incorporation
24
regarding the election and removal of directors and the
inability of stockholders to take action by written consent in
lieu of a meeting.
25
additional changes in government reimbursement for our services
may result in a reduction in net operating revenues, an increase
in costs and a reduction in profitability;
the failure of our long term acute care hospitals to maintain
their status as such may cause our net operating revenues and
profitability to decline;
the failure of our facilities operated as hospitals within
hospitals to qualify as hospitals separate from their host
hospitals may cause our net operating revenues and profitability
to decline;
implementation of modifications to the admissions policies for
our inpatient rehabilitation facilities, as required to achieve
compliance with Medicare guidelines, may result in a loss of
patient volume at these hospitals and, as a result, may reduce
our future net operating revenues and profitability;
a government investigation or assertion that we have violated
applicable regulations may result in sanctions or reputational
harm and increased costs;
integration of acquired operations (such as the outpatient
rehabilitation division of HealthSouth Corporation) and future
acquisitions may prove difficult or unsuccessful, use
significant resources or expose us to unforeseen liabilities;
private third-party payors for our services may undertake future
cost containment initiatives that limit our future net operating
revenues and profitability;
the failure to maintain established relationships with the
physicians in the areas we serve could reduce our net operating
revenues and profitability;
shortages in qualified nurses or therapists could increase our
operating costs significantly;
competition may limit our ability to grow and result in a
decrease in our net operating revenues and profitability;
the loss of key members of our management team could
significantly disrupt our operations;
the effect of claims asserted against us or lack of adequate
available insurance could subject us to substantial uninsured
liabilities;
the ability to obtain any necessary or desired waiver or
amendment from our existing lenders may be difficult due to the
current uncertainty in the credit markets;
concentration of ownership among our existing executives,
directors and principal stockholders may prevent new investors
from influencing significant corporate decisions; and
other factors discussed under the headings Risk
Factors, Managements Discussion and Analysis
of Financial Condition and Results of Operations, and
Business.
26
To repay approximately
$ million of loans
outstanding under our senior secured credit facilities, and any
related prepayment costs. The average interest rate for the year
ended December 31, 2007 of our indebtedness under our
senior secured credit facilities was 6.9%. Our term loan
facility matures on February 24, 2012. The revolving loan
facility terminates on February 24, 2011. JPMorgan Chase
Bank, N.A., an affiliate of J.P. Morgan Securities Inc.,
Wachovia Bank, National Association, an affiliate of Wachovia
Capital Markets, LLC, and Merrill Lynch, Pierce,
Fenner & Smith Incorporated are lenders under our
senior secured credit facilities and therefore affiliates of
these underwriters may each receive more than 10% of the entire
net proceeds from this offering, including proceeds from the
sale of shares by the selling stockholders. See
Underwriters.
To make payments under the Long Term Cash Incentive Plan in the
amount of approximately
$ million, which will be
recognized as an expense in the quarter in which the offering
occurs. We expect approximately
$ will be paid to Rocco A.
Ortenzio, approximately $ will be
paid to Robert A. Ortenzio, approximately
$ will be paid to Patricia A. Rice,
approximately $ will be paid to
Martin F. Jackson, approximately
$ will be paid to S. Frank Fritsch,
approximately $ will be paid to
David W. Cross, approximately
$ will be paid to James J. Talalai
and approximately $ will be paid
to Michael E. Tarvin.
To pay approximately $ to the
holders of our preferred stock who are not selling stockholders
in this offering in payment for a portion of the value of their
preferred shares.
To reimburse the selling stockholders approximately
$ for the underwriting discount on
the shares sold by them in this offering, which will be
recognized as an expense in the quarter in which the offering
occurs.
27
28
As of March 31, 2008
Pro
Pro Forma As
Actual
Forma
Adjusted
(4)
$
8,180
$
$
175,000
134,465
190,000
658,718
660,000
8,181
1,826,364
496,983
(174,203
)
$
2,149,144
$
$
(1)
Reflects the balance sheet
liability of our 10% senior subordinated notes calculated
in accordance with GAAP. The balance sheet liability so
reflected is less than the $150.0 million aggregate
principal amount of such notes because such notes were issued
with original issue discount. The remaining unamortized original
issue discount is $15.5 million at March 31, 2008.
Interest on our 10% senior subordinated notes accrues on
the full principal amount thereof, and we will be obligated to
repay the full principal amount thereof at maturity or upon any
mandatory or voluntary prepayment thereof. On any interest
payment date on or after February 24, 2010, Holdings will
be obligated to pay an amount of accrued original issue discount
on the 10% senior subordinated notes if necessary to ensure that
the notes will not be considered applicable high yield
discount obligations within the meaning of the Internal
Reserve Code of 1986, as amended. The $150.0 million
aggregate principal payable at maturity on our 10% senior
subordinated notes would be reduced by prior payments of accrued
original issue discount.
(2)
The revolving credit facility is a
part of our senior secured credit facility and provides for
borrowings of up to $300.0 million of which
$80.3 million was available as of March 31, 2008 for
working capital and general corporate purposes (after giving
effect to $29.7 million of outstanding letters of credit at
March 31, 2008).
(3)
We borrowed $680.0 million in
term loans under our existing senior secured credit facility.
Between February 24, 2005 and March 31, 2008 we repaid
approximately $21.3 million of our outstanding term loans.
(4)
A $1.00 increase (decrease) in the
assumed initial public offering price of
$ per share, which is the midpoint
of the range set forth on the cover page of this prospectus,
would increase (decrease) each of total stockholders
equity and total capitalization by
$ million, assuming the
number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same and after deducting
estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
29
Per Share
$
$
$
$
30
Shares Purchased
Total Consideration
Average Price
Number
Percentage
Amount
Percentage
per Share
$
%
$
%
$
%
%
100
%
100
%
31
33
34
Predecessor Period
Successor Period
Period from
Period from
January 1
February 25
Year Ended
through
through
Year Ended
December 31,
February 24,
December 31,
December 31,
2003
2004
2005
2005
2006
2007
(in thousands, except per share data)
(in thousands, except per share data)
$
1,341,657
$
1,601,524
$
277,736
$
1,580,706
$
1,851,498
$
1,991,666
1,165,814
1,340,068
373,418
1,322,068
1,546,956
1,740,484
33,663
38,951
5,933
37,922
46,668
57,297
142,180
222,505
(101,615
)
220,716
257,874
193,885
(42,736
)
(12,025
)
824
1,096
267
1,092
(167
)
(24,499
)
(30,716
)
(4,128
)
(101,441
)
(130,538
)
(138,052
)
118,505
192,885
(160,237
)
120,367
127,336
55,666
1,661
2,608
330
1,776
1,414
1,537
116,844
190,277
(160,567
)
118,591
125,922
54,129
46,238
76,551
(59,794
)
49,336
43,521
18,699
70,606
113,726
(100,773
)
69,255
82,401
35,430
3,865
4,458
522
3,072
12,478
74,471
118,184
(100,251
)
72,327
94,879
35,430
23,519
22,663
23,807
$
74,471
$
118,184
$
(100,251
)
$
48,808
$
72,216
$
11,623
32
Predecessor Period
Successor Period
Period from
Period from
January 1
February 25
Year Ended
through
through
Year Ended
December 31,
February 24,
December 31,
December 31,
2003
2004
2005
2005
2006
2007
(in thousands, except per share data)
(in thousands, except per share data)
$
0.72
$
1.11
$
(0.99
)
$
0.23
$
0.30
$
0.05
0.04
0.04
0.01
0.02
0.06
$
0.76
$
1.15
$
(0.98
)
$
0.25
$
0.36
$
0.05
$
0.68
$
1.07
$
(0.99
)
$
0.22
$
0.28
$
0.05
0.04
0.04
0.01
0.02
0.06
$
0.72
$
1.11
$
(0.98
)
$
0.24
$
0.34
$
0.05
97,452
102,165
102,026
171,330
180,183
190,286
103,991
106,529
102,026
181,070
188,287
192,748
$
165,507
$
247,476
$
35,861
$
81,600
$
4,529
188,380
313,715
77,556
59,468
14,730
1,078,998
1,113,721
2,168,385
2,182,524
2,495,046
367,503
354,590
1,628,889
1,538,503
1,755,635
419,175
515,943
(244,658
)
(169,139
)
(165,889
)
Successor Period
For the Quarter Ended March 31,
2007
2008
(in thousands, except per share data)
$
466,829
$
548,278
394,800
476,537
11,704
17,397
60,325
54,344
1,173
(31,274
)
(36,793
)
30,224
17,551
323
309
29,901
17,242
12,430
8,542
17,471
8,700
5,759
6,084
$
11,712
$
2,616
$
0.06
$
0.01
0.06
0.01
186,463
196,503
186,463
201,997
$
37,536
$
8,180
33,372
105,278
2,192,191
2,554,414
1,537,256
1,826,364
(159,665
)
(174,203
)
(1)
Operating expenses include cost of
services, general and administrative expenses, and bad debt
expenses.
(2)
Includes stock compensation expense
related to the repurchase of outstanding stock options in the
Predecessor Period from January 1 through February 24,
2005, compensation expense related to restricted stock, stock
options and long term incentive compensation in the Successor
Periods from February 25 through December 31, 2005, and for
the years ended December 31, 2006 and 2007 and for the
three months ended March 31, 2007 and 2008.
(3)
In connection with the Merger,
Select completed tender offers for all of its
9
1
/
2
% senior
subordinated notes due 2009 and all of its
7
1
/
2
% senior
subordinated notes due 2013. The loss in the Predecessor Period
of January 1 through February 24, 2005 consists of the
tender premium cost of $34.8 million and the remaining
write-off of unamortized deferred financing costs of
$7.9 million.
(4)
As a result of the Merger, Select
incurred costs in the Predecessor Period of January 1 through
February 24, 2005 directly related to the Merger. This
included the cost of the investment advisor hired by the special
committee of Selects board of directors to evaluate the
Merger, legal and accounting fees, costs associated with the
Hart-Scott-Rodino
filing relating to the Merger, the cost associated with
purchasing a six year extended reporting period under our
directors and officers liability insurance policy and other
associated expenses.
(5)
Net interest equals interest
expense minus interest income.
(6)
Reflects interests held by other
parties in subsidiaries, limited liability companies and limited
partnerships owned and controlled by us.
35
36
Year Ended December 31, 2007
Adjustments
Pro Forma
Preferred Stock
for
As
Historical
Conversion
Pro Forma
Offering
Adjusted
(in thousands, except per share data)
$
1,991,666
$
1,991,666
$
1,991,666
1,740,484
1,740,484
1,740,484
57,297
57,297
57,297
1,797,781
1,797,781
1,797,781
193,885
193,885
193,885
(167
)
(167
)
(138,052
)
(138,052
)
(4)
55,666
55,666
1,537
1,537
1,537
54,129
54,129
18,699
18,699
(4)
35,430
35,430
23,807
(3)
(4)
$
11,623
$
$
$
$
$
0.05
$
$
$
$
190,286
(3)
(4)
$
0.05
$
$
$
$
192,748
(3)
(4)
37
Three Months Ended March 31, 2008
Adjustments
Pro Forma
Preferred Stock
for
As
Historical
Conversion
Pro Forma
Offering
Adjusted
(in thousands, except per share data)
$
548,278
$
548,278
$
548,278
476,537
476,537
476,537
17,397
17,397
17,397
493,934
493,934
493,934
54,344
54,344
54,344
(36,793
)
(36,793
)
(4)
17,551
17,551
309
309
309
17,242
17,242
8,542
8,542
(4)
8,700
8,700
6,084
(3)
(4)
$
2,616
$
$
$
$
$
0.01
$
$
$
$
196,503
(3)
(4)
$
0.01
$
$
$
$
201,997
(3)
(4)
38
(i)
our issuance of shares in this
offering;
(ii)
the repayment of
$ million
of loans outstanding under our senior secured credit facilities;
(iii)
the payments under the Long Term Cash Investment Plan in the
amount of
$ million
reduced by
$
million of income tax benefit;
(iv)
the payment of
$ in
cash to the holders of our preferred stock who are not selling
stockholders in this offering in payment for a portion of the
value of their preferred shares; and
(v)
the payment of
$
million to reimburse the selling stockholders for the
underwriting discounts and commissions incurred on shares sold
by them in this offering reduced by
$
million of income tax benefit.
(i)
the reduction in interest expense of
$ million
and
$ million
for the year ended December 31, 2007 and the three months
ended March 31, 2008 for the repayment of
$ million
of % senior debt under our
bank credit facility;
(ii)
the issuance of shares in this offering; and
(iii)
additional tax expense of
$ million
and
$ million
for the year ended December 31, 2007 and the three months
ended March 31, 2008, respectively, related to the
reduction in interest expense.
39
51
54
56
58
82
83
F-22
F-35
F-37
F-39
II-4
II-5
II-6
II-7
II-8
II-9
II-10
II-14
II-15
II-16
II-17
II-18
II-19
II-20
AND RESULTS OF OPERATIONS
40
41
42
43
44
45
46
47
Balance as of December 31,
Balance as of March 31,
2006
2007
2008
0-90
Over 90
0-90
Over 90
0-90
Over 90
Days
Days
Days
Days
Days
Days
$
56,558
$
15,216
$
76,927
$
15,131
$
117,931
$
15,862
116,552
66,907
175,152
60,052
186,849
66,244
$
173,110
$
82,123
$
252,079
$
75,183
$
304,780
$
82,106
As of
As of
December 31,
March 31,
2006
2007
2008
67.8
%
77.0
%
78.8
%
10.8
%
10.0
%
9.9
%
8.4
%
6.0
%
5.7
%
13.0
%
7.0
%
5.6
%
100.0
%
100.0
%
100.0
%
As of
As of
December 31,
March 31,
2006
2007
2008
99.1
%
99.7
%
99.7
%
0.9
%
0.3
%
0.3
%
100.0
%
100.0
%
100.0
%
48
49
Combined
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2005
2006
2007
86
101
96
3
3
17
(2
)
(4
)
(8
)
(4
)
(4
)
101
96
87
3,829
3,867
3,819
39,963
39,668
40,008
985,025
969,590
987,624
25
24
25
$
1,370
$
1,392
$
1,378
70
%
69
%
69
%
75
%
73
%
69
%
589
553
477
570
22
12
15
(58
)
(88
)
(144
)
553
477
918
55
67
81
608
544
999
3,308,620
2,972,243
4,032,197
$
89
$
94
$
100
50
Three Months Ended
March 31,
2007
2008
96
87
5
(1
)
(3
)
92
92
3,899
4,111
10,416
10,736
252,476
259,559
25
25
$
1,378
$
1,432
72
%
71
%
72
%
67
%
477
918
1
4
5
(5
)
(18
)
477
905
68
80
545
985
646,651
1,155,907
$
101
$
103
(1)
Specialty hospitals consist of long
term acute care hospitals and inpatient rehabilitation
facilities.
(2)
Net revenue per patient day is
calculated by dividing specialty hospital patient service
revenues by the total number of patient days.
(3)
Clinic data has been restated to
remove the clinics operated by CBIL. CBIL was sold on
March 31, 2006 and is being reported as a discontinued
operation in 2005 and 2006.
(4)
The number of clinics closed/sold
for the year ended December 31, 2007 relate primarily to
clinics closed in connection with the restructuring plan for
integrating the acquisition of HealthSouth Corporations
outpatient rehabilitation division.
(5)
Net revenue per visit is calculated
by dividing outpatient rehabilitation clinic revenue by the
total number of visits. For purposes of this computation,
outpatient rehabilitation clinic revenue does not include
contract services revenue.
Predecessor
Successor
Combined
Period from
Period from
January 1
February 25
through
through
Year Ended
February 24,
December 31,
December 31,
2005
2005
2005
(in thousands)
$
277,736
$
1,580,706
$
1,858,442
244,321
1,244,361
1,488,682
122,509
59,494
182,003
6,588
18,213
24,801
5,933
37,922
43,855
379,351
1,359,990
1,739,341
(101,615
)
220,716
119,101
(42,736
)
(42,736
)
(12,025
)
(12,025
)
267
1,092
1,359
523
767
1,290
(4,651
)
(102,208
)
(106,859
)
(160,237
)
120,367
(39,870
)
330
1,776
2,106
(160,567
)
118,591
(41,976
)
(59,794
)
49,336
(10,458
)
(100,773
)
69,255
(31,518
)
522
3,072
3,594
$
(100,251
)
$
72,327
$
(27,924
)
52
Combined
Year
Year
Year
Ended
Ended
Ended
December 31,
December 31,
December 31,
2005
(1)
2006
2007
100.0
%
100.0
%
100.0
%
80.1
80.2
83.3
9.8
2.4
2.2
1.3
1.0
1.9
2.4
2.5
2.9
6.4
13.9
9.7
(2.3
)
(0.7
)
0.1
(5.7
)
(7.1
)
(6.9
)
(2.2
)
6.8
2.8
0.1
0.1
0.1
(2.3
)
6.7
2.7
(0.6
)
2.4
0.9
(1.7
)
4.3
1.8
0.2
0.7
(1.5
)%
5.0
%
1.8
%
53
Three Months Ended March 31,
2007
2008
100.0
%
100.0
%
80.9
82.5
2.5
2.1
1.2
2.3
2.5
3.2
12.9
9.9
0.3
(6.7
)
(6.7
)
6.5
3.2
0.1
6.4
3.2
2.7
1.6
3.7
%
1.6
%
Combined
Year
%
%
Ended
Year Ended
Year Ended
Change
Change
December 31,
December 31,
December 31,
2005-
2006-
2005
(1)
2006
2007
2006
2007
(in thousands)
$
1,372,483
$
1,378,543
$
1,386,410
0.4
%
0.6
%
480,711
470,339
603,413
(2.2
)
28.3
5,248
2,616
1,843
(50.2
)
(29.5
)
$
1,858,442
$
1,851,498
$
1,991,666
(0.4
)%
7.6
%
$
280,789
$
252,539
$
180,090
(10.1
)%
(28.7
)%
56,052
51,859
57,979
(7.5
)
11.8
(217,740
)
(46,524
)
(44,184
)
78.6
5.0
$
119,101
$
257,874
$
193,885
116.5
%
(24.8
)%
$
308,144
$
283,270
$
217,175
(8.1
)%
(23.3
)%
65,957
64,823
75,437
(1.7
)
16.4
(44,167
)
(39,769
)
(37,684
)
10.0
5.2
22.5
%
20.5
%
15.7
%
(8.9
)%
(23.4
)%
13.7
13.8
12.5
0.7
(9.4
)
N/M
N/M
N/M
N/M
N/M
$
1,656,224
$
1,742,803
$
1,882,476
293,720
258,773
513,397
218,441
180,948
99,173
$
2,168,385
$
2,182,524
$
2,495,046
$
102,323
$
146,291
$
146,901
3,750
6,527
14,737
3,873
2,278
4,436
$
109,946
$
155,096
$
166,074
55
Three Months Ended March 31,
2007
2008
% Change
(in thousands)
$
354,228
$
378,604
6.9
%
112,380
169,577
50.9
221
97
(56.1
)
$
466,829
$
548,278
17.4
%
$
57,683
$
52,501
(9.0
)%
14,861
14,304
(3.7
)
(12,219
)
(12,461
)
(2.0
)
$
60,325
$
54,344
(9.9
)%
$
66,031
$
63,243
(4.2
)%
17,618
20,097
14.1
(10,693
)
(10,845
)
(1.4
)
18.6
%
16.7
%
(10.2
)%
15.7
11.9
(24.2
)
N/M
N/M
N/M
$
1,795,902
$
1,922,107
258,372
520,418
137,917
111,889
$
2,192,191
$
2,554,414
$
35,879
$
9,988
2,021
3,851
199
1,217
$
38,099
$
15,056
Year Ended December 31,
2005
(1)
2006
(in thousands)
$
1,372,483
$
1,378,543
49,046
23,764
$
1,323,437
$
1,354,779
$
308,144
$
283,270
5,404
(9,344
)
$
302,740
$
292,614
22.5
%
20.5
%
22.9
%
21.6
%
Year Ended December 31,
2006
2007
$
1,378,543
$
1,386,410
106,940
81,514
$
1,271,603
$
1,304,896
$
283,270
$
217,175
5,867
(13,524
)
$
277,403
$
230,699
20.5
%
15.7
%
21.8
%
17.7
%
57
Three Months Ended March 31,
2007
2008
(in thousands)
$
354,228
$
378,604
18,442
8,928
$
335,786
$
369,676
$
66,031
$
63,243
911
(6,036
)
$
65,120
$
69,279
18.6
%
16.7
%
19.4
%
18.7
%
N/M Not Meaningful.
(1)
The financial data for the period
after the Merger, February 25 through December 31, 2005
(Successor Period), have been added to the financial data for
the period from January 1 through February 24, 2005
(Predecessor Period) to arrive at the combined year ended
December 31, 2005.
(2)
Cost of services includes salaries,
wages and benefits, operating supplies, lease and rent expense
and other operating costs.
(3)
We define Adjusted EBITDA as net
income before interest, income taxes, depreciation and
amortization, income from discontinued operations, loss on early
retirement of debt, merger related charges, stock compensation
expense, long term incentive compensation, other income/expense
and minority interest. We believe that the presentation of
Adjusted EBITDA is important to investors because Adjusted
EBITDA is commonly used as an analytical indicator of
performance by investors within the healthcare industry.
Adjusted EBITDA is used by management to evaluate financial
performance and determine resource allocation for each of our
operating units. Adjusted EBITDA is not a measure of financial
performance under generally accepted accounting principles.
Items excluded from Adjusted EBITDA are significant components
in understanding and assessing financial performance. Adjusted
EBITDA should not be considered in isolation or as an
alternative to, or substitute for, net income, cash flows
generated by operations, investing or financing activities, or
other financial statement data presented in the consolidated
financial statements as indicators of financial performance or
liquidity. Because Adjusted EBITDA is not a measurement
determined in accordance with generally accepted accounting
principles and is thus susceptible to varying calculations,
Adjusted EBITDA as presented may not be comparable to other
similarly titled measures of other companies. See footnote 13 to
our audited consolidated financial statements and footnote 7 to
our interim unaudited consolidated financial statements for the
period ended March 31, 2008 for a reconciliation of net
income to Adjusted EBITDA as utilized by us in reporting our
segment performance in accordance with SFAS No. 131.
(4)
Other includes our general and
administrative services, as well as businesses associated with
the sale of home medical equipment, infusion/intravenous
services and non-healthcare services.
59
60
61
62
63
64
65
Three Months Ended March 31,
2007
2008
(in thousands)
$
(7,485
)
$
(24,865
)
(37,353
)
(19,302
)
774
47,818
(44,064
)
3,651
81,600
4,529
$
37,536
$
8,180
66
Year Ended December 31,
2005
2006
2007
(in thousands)
$
57,211
$
227,651
$
86,013
(220,811
)
(81,481
)
(382,676
)
(48,510
)
(100,466
)
219,592
495
35
(211,615
)
45,739
(77,071
)
247,476
35,861
81,600
$
35,861
$
81,600
$
4,529
67
a $300.0 million revolving loan facility that will
terminate on February 24, 2011, including both a letter of
credit sub-facility and a swingline loan sub-facility, and
a $680.0 million term loan facility that matures on
February 24, 2012.
68
69
Payments Due by Year
Total
2008
2009-2011
2012-2013
After 2013
(in thousands)
$
660,000
$
$
$
$
660,000
783,300
6,800
615,775
160,725
134,110
134,110
175,000
175,000
633
233
400
2,286
635
1,651
306
81
225
1,755,635
7,749
618,051
160,725
969,110
805,678
137,812
386,410
166,245
115,211
29,706
29,706
6,244
3,903
2,169
172
8,689
8,689
56,382
2,559
8,040
5,676
40,107
473,348
100,215
171,536
46,937
154,660
35,918
3,069
9,237
6,433
17,179
$
3,171,600
$
263,996
$
1,225,149
$
386,188
$
1,296,267
(1)
Reflects the balance sheet
liability of our 10% senior subordinated notes calculated
in accordance with GAAP. The balance sheet liability so
reflected is less than the $150.0 million aggregate
principal amount of such notes that were issued with an original
issue discount. The remaining unamortized original issue
discount was $15.9 million at December 31, 2007.
Interest on our 10% senior subordinated notes accrued on
the full principal amount thereof, and Holdings will be
obligated to repay the full principal thereof, at maturity or
upon any mandatory or voluntary prepayment thereof. On any
interest payment date on or after February 24, 2010,
Holdings will be obligated to pay an amount of accrued original
issued discount on the 10% senior subordinated notes if
necessary to ensure that the notes will not be considered
applicable high yield discount obligations within
the meaning of the Internal Revenue Code of 1986, as amended.
The $150.0 million aggregate principal payable at maturity
on our 10% senior subordinated notes would be reduced by prior
payments of accrued original issue discount.
(2)
The interest obligation was
calculated using the average interest rate at December 31,
2007 of 6.8% for the senior secured credit facility, the stated
interest rate for Selects
7
5
/
8
% senior
subordinated notes and our 10% senior subordinated notes,
10.2% for the senior floating rate notes and 6.0% for seller
notes, capital lease obligations and other debt obligations.
70
71
72
Distribution
of Patients
38
%
23
11
7
21
100
%
73
74
optimizing staffing based on our occupancy and the clinical
needs of our patients;
centralizing administrative functions such as accounting,
finance, payroll, legal, reimbursement, compliance, human
resources and billing and collection;
standardizing management information systems to aid in financial
reporting as well as billing and collecting; and
participating in group purchasing arrangements to receive
discounted prices for pharmaceuticals and medical supplies.
75
76
77
78
Three
Months
Year Ended December 31,
Ended March 31,
2005
(2)
2006
2007
2007
2008
56.4
%
53.2
%
48.0
%
53.0
%
46.5
%
36.8
%
40.0
%
44.2
%
40.4
%
45.8
%
4.7
%
5.0
%
5.5
%
4.8
%
5.7
%
2.1
%
1.8
%
2.3
%
1.8
%
2.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
(1)
This table excludes the net
operating revenues of our Canadian operations which were sold on
March 1, 2006 and are now reported as a discontinued
operation.
(2)
The net operating revenues for the
period after the Merger, February 25 through December 31,
2005 (Successor Period), has been added to the net operating
revenues for the period from January 1 through February 24,
2005 (Predecessor Period), to arrive at the combined year ended
December 31, 2005.
(3)
Includes commercial healthcare
insurance carriers, health maintenance organizations, preferred
provider organizations, workers compensation and managed
care programs.
(4)
Includes self payors, contract
management services and non-patient related payments. Self pay
revenues represent less than 1% of total net operating revenues.
79
80
State
Beds
Birmingham
AL
38
Fort Smith
AR
34
Little Rock
AR
43
Phoenix
AZ
33
Phoenix
AZ
48
Scottsdale
AZ
29
Colorado Springs
CO
30
Denver
CO
37
Denver
CO
28
Wilmington
DE
35
Edgewood
FL
40
Gainesville
FL
44
Lake Worth
FL
60
Miami
FL
47
Orlando
FL
35
Panama City
FL
30
Pensacola
FL
54
Tallahassee
FL
29
Atlanta
GA
27
Augusta
GA
80
Savannah
GA
40
Davenport
IA
50
Beech Grove
IN
40
Evansville
IN
60
Fort Wayne
IN
32
Greenwood
IN
51
81
State
Beds
Hammond
IN
70
Overland Park
KS
40
Topeka
KS
34
Wichita
KS
60
Lexington
KY
41
Detroit
MI
36
Flint
MI
32
Grosse Pointe Farms
MI
30
Kalamazoo
MI
25
Mount Clemens
MI
36
Muskegon
MI
31
Pontiac
MI
30
Saginaw
MI
32
Taylor
MI
40
Ypsilanti
MI
36
Kansas
MO
34
Springfield
MO
44
St. Louis
MO
33
Gulfport
MS
61
Jackson
MS
53
Durham
NC
30
Winston-Salem
NC
42
Omaha
NE
36
Chester
NJ
72
Rochelle Park
NJ
62
Saddle Brook
NJ
102
West Orange
NJ
148
Akron
OH
31
Akron
OH
34
Canton
OH
30
Cincinnati
OH
36
Columbus
OH
152
Columbus
OH
24
Youngstown
OH
31
Youngstown
OH
20
Zanesville
OH
35
Oklahoma City
OK
72
Tulsa
OK
30
Camp Hill
PA
31
Danville
PA
30
State
Beds
Erie
PA
50
Harrisburg
PA
32
Johnstown
PA
39
Latrobe
PA
40
McKeesport
PA
30
Pittsburgh
PA
32
York
PA
23
Sioux Falls
SD
24
Bristol
TN
33
Knoxville
TN
35
Knoxville
TN
33
Memphis
TN
37
Nashville
TN
47
Carrolton
TX
60
Conroe
TX
46
DeSoto
TX
100
Houston
TX
130
Houston
TX
86
Houston
TX
56
Longview
TX
32
Midland
TX
29
San Antonio
TX
44
Madison
WI
58
Milwaukee
WI
34
Milwaukee
WI
29
Charleston
WV
32
4,111
84
85
86
87
88
89
90
91
92
93
94
95
96
97
75
Director and Executive Chairman
51
Director and Chief Executive Officer
64
Director
51
Director
58
Director
65
Director
50
Director
68
Director
39
Director
61
President and Chief Operating Officer
61
Executive Vice President and Chief Development Officer
56
Executive Vice President and Chief Human Resources Officer
54
Executive Vice President and Chief Financial Officer
46
Executive Vice President and Chief Information Officer
48
Executive Vice President, General Counsel and Secretary
48
Senior Vice President, Controller and Chief Accounting Officer
39
Vice President, Compliance and Audit Services and Corporate
Compliance Officer
98
99
100
101
serve as an independent and objective party to monitor our
financial reporting process and internal control systems;
review and appraise the audit efforts of our independent
accountants and exercise ultimate authority over the
relationship between us and our independent accountants; and
provide an open avenue of communication among the independent
accountants, financial and senior management and the board of
directors.
discuss with management and the independent accountants our
annual and interim financial statements, earnings press
releases, earnings guidance and any reports or other financial
information submitted to the stockholders, the SEC, analysts,
rating agencies and others, including any certification, report,
opinion or review rendered by the independent accountants;
review the regular internal reports to management prepared by
the internal auditors and managements response;
discuss with management and the independent accountants the
Quarterly Reports on
Form 10-Q,
the Annual Reports on
Form 10-K,
including our disclosures under Managements
Discussion and Analysis of Financial Conditions and Results of
Operations, and any related public disclosure prior to its
filing;
have sole authority for the appointment, compensation,
retention, oversight, termination and replacement of our
independent accountants (subject, if applicable, to stockholder
ratification) and the independent accountants will report
directly to the audit committee;
pre-approve all auditing services and all non-audit services to
be provided by the independent accountants;
review the performance of the independent accountants with both
management and the independent accountants;
periodically meet with the independent accountants separately
and privately to hear their views on the adequacy of our
internal controls, any special audit steps adopted in light of
material control deficiencies and the qualitative aspects of our
financial reporting, including the quality and consistency of
both accounting policies and the underlying judgments, or any
other matters raised by them;
obtain and review a report from the independent accountants at
least annually regarding (1) the independent
accountants internal quality-control procedures,
(2) any material issues raised by the most recent
quality-control review, or peer review, of the firm, or by any
inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or
more independent audits carried out by the firm, (3) any
steps taken to deal with any such issues, and (4) all
relationships between the independent accountants and their
related entities and us and our related entities;
review with financial management and the independent accountants
the quality and consistency, not just the acceptability, of the
judgments and appropriateness of the accounting principles and
financial disclosure
102
practices used by us, including an analysis of the effects of
any alternative GAAP methods on the financial statements;
approve any significant changes to our auditing and accounting
principles and practices after considering the advice of the
independent accountants and management;
focus on the reasonableness of control processes for identifying
and managing key business, financial and regulatory reporting
risks;
discuss with management our major financial risk exposures and
the steps management has taken to monitor and control such
exposures, including our risk assessment and risk management
policies;
periodically meet with appropriate representatives of management
and the internal auditors separately and privately to consider
any matters raised by them, including any audit problems or
difficulties and managements response;
periodically review the effect of regulatory and accounting
initiatives, as well as any off-balance sheet structures, on our
financial statements;
following the completion of the annual audit, review separately
with management and the independent accountants any difficulties
encountered during the course of the audit, including any
restrictions on the scope of work or access to required
information;
periodically review any processes and policies for communicating
with investors and analysts;
review and resolve any disagreement between management and the
independent accountants in connection with the annual audit or
the preparation of the financial statements;
review with the independent accountants and management the
extent to which changes or improvements in financial or
accounting practices, as approved by the audit committee, have
been implemented;
review our code of conduct and review managements
processes for communicating and enforcing this code of conduct;
review managements monitoring of our compliance with our
code of conduct and ensure that management has the proper review
system in place to ensure that our financial statements,
reports, and other financial information disseminated to
governmental organizations and to the public satisfy legal
requirements;
review, with our counsel, any legal matter that could have a
significant impact on our financial statements and any legal
compliance matters;
review and approve all related-party transactions;
establish and review periodically procedures for (1) the
receipt, retention and treatment of complaints received by us
regarding accounting, internal accounting controls or auditing
matters and (2) the confidential, anonymous submission by
our employees of concerns regarding questionable accounting or
auditing matters;
review and reassess the audit committees charter at least
annually and submit any recommended changes to the board of
directors for its consideration;
provide the report for inclusion in our Annual Proxy Statement
that is required by Item 306 of
Regulation S-K
of the Securities and Exchange Commission;
103
report periodically, as deemed necessary or desirable by the
audit committee, but at least annually, to the full board of
directors regarding the audit committees actions and
recommendations, if any;
establish policies for our hiring of employees or former
employees of the independent accountants who were engaged on our
account;
perform any other activities consistent with the audit
committees charter, our bylaws and governing law, as the
audit committee or the board of directors deems necessary or
appropriate; and
annually evaluate the audit committees performance and
report the results of such evaluation to the board of directors.
identify individuals qualified to serve as our directors;
nominate qualified individuals for election to our board of
directors at annual meetings of stockholders;
recommend to our board the directors to serve on each of our
board committees; and
recommend to our board a set of corporate governance guidelines.
review periodically the composition of our board;
identify and recommend director candidates for our board;
recommend to our board nominees for election as directors;
recommend to our board the composition of the committees of the
board;
review periodically our corporate governance guidelines and
recommend governance issues that should be considered by our
board;
review periodically our code of conduct and obtain confirmation
from management that the policies included in the code of
conduct are understood and implemented;
evaluate periodically the adequacy of our conflicts of interest
policy;
review related party transactions;
consider with management public policy issues that may affect us;
review periodically our committee structure and operations and
the working relationship between each committee and the
board; and
consider, discuss and recommend ways to improve our boards
effectiveness.
104
have the sole authority to retain and terminate any compensation
consultant used to assist us, the board of directors or the
compensation committee in the evaluation of the compensation of
our executive officers and directors;
to the extent necessary or appropriate to carry out its
responsibilities, have the authority to retain special legal,
accounting, actuarial or other advisors;
review and approve annually corporate goals and objectives to
serve as the basis for the compensation of our executive
officers, evaluate the performance of our executive officers in
light of such goals and objectives, and determine and approve
the compensation level of our executive officers based on such
evaluation;
interpret, implement, administer, review and approve all aspects
of remuneration to our executive officers and other key
officers, including their participation in
incentive-compensation plans and equity-based compensation plans;
review and approve all employment agreements, consulting
agreements, severance arrangements and change in control
agreements for our executive officers;
develop, approve, administer and recommend to the board of
directors and our stockholders for their approval (to the extent
such approval is required by any applicable law, regulation or
New York Stock Exchange rule) all of our stock ownership, stock
option and other equity-based compensation plans and all related
policies and programs;
make individual determinations and grant any shares, stock
options, or other equity-based awards under all equity-based
compensation plans, and exercise such other power and authority
as may be required or permitted under such plans, other than
with respect to non-employee directors, which determinations are
subject to the approval of board of directors;
have the authority to form and delegate authority to
subcommittees;
report regularly to our board of directors, but not less
frequently than annually;
annually review and reassess the adequacy of its charter and
recommend any proposed changes to our board of directors for its
approval; and
annually review its own performance, and report the results of
such review to our board of directors.
105
106
Base Salary
Annual Performance-Based Bonuses
Annual Discretionary Bonuses
Long Term Cash Incentive Plan
Equity Compensation
Perquisites and Personal Benefits
General Benefits
107
108
Target Bonus
(% of Base Salary)
80
%
80
%
50
%
50
%
50
%
109
Cash Plan Units
35,000
25,000
15,000
7,000
5,000
110
111
112
113
Non-Equity
Change in
Stock
Option
Incentive Plan
Pension
All Other
Total
Salary
Bonus
Awards
Awards
Compensation
Value
Compensation
Compensation
Year
($)
($)
($)
(1)
($)
($)
($)
($)
(2)
($)
2007
824,000
229,000
132,451
1,185,451
2006
824,000
137,605
961,605
2007
824,000
229,000
2,604,033
108,077
3,765,110
2006
824,000
2,604,032
150,040
3,578,072
2007
592,250
164,645
444,618
234,555
1,436,068
Operating Officer
2006
592,250
444,617
158,230
1,195,097
2007
371,315
103,225
222,309
28,216
725,065
2006
371,315
50,000
222,309
6,600
650,224
2007
275,834
76,680
77,067
5,625
435,206
Chief Human Resources Officer
2006
275,834
50,000
77,067
5,500
408,401
(1)
The dollar amounts reported in this
column represent the expense recognized by us in accordance with
Statements of Financial Accounting Standards No. 123R,
Share-Based Payment on outstanding restricted stock
awards granted pursuant to the 2005 Equity Incentive Plan. No
such expense was recorded for Mr. Rocco Ortenzios
award because the restricted stock award was fully vested prior
to 2006. See Note 10 to the Consolidated Financial
Statements included in this prospectus for a discussion of the
relevant assumptions used in calculating value pursuant to
FAS 123R. See also the Option Exercises and Stock
Vested Table, which shows the corresponding number of
shares vesting under each such restricted stock award with
respect to which we recognized an expense under FAS 123R.
(2)
Mr. Robert A. Ortenzio,
Ms. Rice and Mr. Jackson each received an employer
matching contribution to our 401(k) plan in the amount of $6,750
in 2007 and $6,600 in 2006. Mr. Fritsch received a matching
contribution of $5,625 in 2007 and $5,500 in 2006. The other
items reported in this column include the value of personal use
of our aircraft and the incremental cost to us of the
executives participation in our executive physical exam
program, each in the amounts set forth in the Personal
Benefits table below. The incremental cost to us of each
of the personal benefits for Mr. Jackson in 2006 and for
Mr. Fritsch in both 2006 and 2007 did not exceed $10,000,
and accordingly, are not described below.
Aircraft
Executive
Usage ($)
Physical ($)
2007
132,451
2006
137,605
2007
94,071
7,256
2006
143,440
2007
227,805
2006
149,023
2,607
2007
12,734
8,732
2006
114
Stock Awards
Equity
Incentive Plan
Equity Incentive
Awards:
Market Value
Plan Awards:
Market or
of Shares or
Number of
Payout Value of
Number of
Units of
Unearned Shares,
Unearned
Shares or Units
Stock
Units or Other
Shares, Units or
of Stock That
That Have
Rights That Have
Other Rights
Have Not Vested
Not Vested
Not Vested
That Have Not
(#)
($)
(1)
(#)
Vested (#)
751,877
1,495,969
2,808,609
1,404,305
486,826
(1)
The values shown in this column are
equal to the assumed initial public offering price of
$ per
share (the midpoint of the price range set forth on the cover
page of this prospectus) multiplied by the number of shares of
stock held by our named executive officers that had not vested
as December 31, 2007.
Stock Awards
Number of Shares
Value Realized
Acquired on Vesting
on Vesting
(#)
($)
(1)
6,835,390
1,307,699
653,849
226,668
(1)
Values shown in this column are
equal to the assumed initial public offering price of
$ per
share (the midpoint of the price range set forth on the cover
page of this prospectus) multiplied by the number of shares
vested during the year ended December 31, 2007.
115
Without Cause/Good Reason
Disability
Death
Retirement
Base
Equity
Equity
Equity
Health and
Salary and
Vesting
Base Salary
Vesting
Vesting
Dental
Bonus
Value
(1)
Continuation
(2)
Value
(1)
Other
(3)
Value
(1)
Other
(3)
Benefits
(4)
($)
($)
($)
($)
($)
($)
($)
($)
2,838,334
8,240,001
10,719,140
10,719,140
2,838,334
9,135,995
4,120,000
9,193,995
15,006,795
9,193,995
15,006,795
2,040,104
10,624,837
2,961,251
10,624,837
6,431,484
10,624,837
6,431,484
9,703
(1)
Valuation is based on an assumed
initial public offering price of
$
per share (the midpoint of the price range set forth on the
cover page of this prospectus).
(2)
The amount reported in this column
represents the amount of salary continuation payable each year
for ten years following the date of termination of employment
for disability, subject to termination if the named executive
officer becomes physically able to resume employment.
(3)
Represents the value of 50% of the
units in such named executive officers account under the Cash
Plan as of the date of death or disability. Such payments will
be due on January 31st of the second year following such death
or disability only in the event of an initial public offering,
change of control, or preferred stock liquidity event as defined
under the Cash Plan.
(4)
The value reported in this column
reflects our current cost of providing health and dental
coverage to Ms. Rice and her eligible dependents for one
year. We are responsible for paying the costs of health and
dental coverage for Ms. Rice and her eligible dependents
(less her portion of the premiums) each year until Ms. Rice
reaches the age of 65 in the event she retires before
age 65. The actual cost to us of providing such benefits
following Ms. Rices retirement will depend on the
rates of the carrier selected and accordingly, may be more or
less than the amount reported.
116
117
Equity
Base Salary
Vesting
Cash Plan
Tax
and Bonus
(100%)
(1)
Payout
Gross-
Up
(1)
($)
($)
($)
($)
4,439,000
21,438,279
4,439,000
30,013,591
2,681,395
12,862,968
1,731,170
6,002,718
1,230,182
4,287,656
(1)
Market value is based on an assumed
initial public offering price of
$
per share (the midpoint of the price range set forth on the
cover page of this prospectus).
Change
in Pension
Value and
Nonqualified
Non-Equity
Deferred
All
Fees Earned or
Stock
Option
Incentive Plan
Compensation
Other
Paid in Cash
Awards
Awards
Compensation
Earnings
Compensation
($)
($)
(1)
($)
(2)
($)
($)
($)
Total ($)
34,000
160
34,160
54,800
160
54,960
6,817
6,817
54,500
160
54,660
(1)
Represents vesting of restricted
shares granted in connection with the Merger Transactions.
(2)
The dollar amounts reported in this
column represents the FAS 123R expense recognized by us on
outstanding option awards granted to non-employee directors
pursuant to the Director Plan. See Note 10 to the
Consolidated Financial Statements included in this prospectus
for a
118
discussion of the relevant
assumptions used in calculating value pursuant to FAS 123R.
As of December 31, 2007, the total number of outstanding
stock and option awards for each director listed in the table
above are set forth below:
Shares Outstanding
Shares Outstanding
Subject to Stock
Subject to Option
Awards (#)
Awards (#)
40,000
40,000
43,066
40,000
119
Number of
Securities
Number of
Remaining
Securities to be
Available
Issued Upon
Weighted-Average
for Future
Exercise of
Exercise Price of
Issuance Under
Outstanding
Outstanding
Equity
Options, Warrants
Options, Warrants
Compensation
and Rights
and Rights
Plans
4,584,175
$
1.92
18,055,239
120,000
$
1.75
130,000
120
select the employees, non-employee directors and consultants who
will receive Awards pursuant to the Plan;
determine the type or types of Awards to be granted to each
participant;
determine the number of shares to which an Award will relate,
the terms and conditions of any Award granted under the Plan and
all other matters to be determined in connection with an Award;
determine whether, to what extent, and under what circumstances
an Award may be canceled, forfeited, or surrendered;
determine whether, and to certify that, performance goals to
which the settlement of an Award is subject are satisfied;
correct any defect or supply any omission or reconcile any
inconsistency in the Plan;
adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan;
determine the effect, if any, of a change in control on
outstanding Awards; and
construe and interpret the Plan and make all other
determinations as it may deem necessary or advisable for the
administration of the Plan.
the price of shares of Holdings stock;
the market share of Holdings, its subsidiaries or affiliates (or
any business unit thereof);
sales by Holdings, its subsidiaries or affiliates (or any
business unit thereof);
earnings per share of Holdings stock;
Holdings return on stockholder equity;
costs of Holdings, its subsidiaries or affiliates (or any
business unit thereof);
cash flow of Holdings, its subsidiaries or affiliates (or any
business unit thereof);
return on total assets of Holdings, its subsidiaries or
affiliates (or any business unit thereof);
return on invested capital of Holdings, its subsidiaries or
affiliates (or any business unit thereof);
return on net assets of Holdings, its subsidiaries or affiliates
(or any business unit thereof);
operating income of Holdings, its subsidiaries or affiliates (or
any business unit thereof);
121
net income of Holdings, its subsidiaries or affiliates (or any
business unit thereof); or
any other financial or other measurement deemed appropriate by
the Committee, as it relates to the results of operations or
other measurable progress of Holdings, its subsidiaries or
affiliates (or any business unit thereof).
122
the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 Act (the 1934 Act))
of beneficial ownership (within the meaning of
Rule 13d-3
promulgated under the 1934 Act) of more than 50% of the
total voting power of the voting securities of Holdings entitled
to vote generally in the election of directors (the Voting
Securities); provided, however, that the following
acquisitions will not constitute a change in control:
(1) any acquisition, directly or indirectly by or from
Holdings or any subsidiary of Holdings, by any employee benefit
plan (or related trust) sponsored or maintained by Holdings or
any subsidiary of Holdings (whether directly or indirectly),
(2) any acquisition by any underwriter in connection with
any firm commitment underwriting of securities to be issued by
Holdings, or (3) any acquisition by any corporation if,
immediately following such acquisition, 50% or more of the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation (entitled to vote generally in the election
of directors), are beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who,
immediately prior to such acquisition, were the beneficial
owners of the Voting Securities in substantially the same
proportions, respectively, as their ownership, immediately prior
to such acquisition of the Voting Securities;
the consummation of (1) a complete liquidation or
substantial dissolution of Holdings, or (2) the sale or
other disposition, during any
12-month
period ending on the date of the most recent sale or
disposition, of assets of Holdings that have a total gross fair
market value equal to or more than 40% of the total gross fair
market value of all of the assets of Holdings immediately before
such sale or disposition, in each case, other than to a
subsidiary, wholly-owned, directly or indirectly, by Holdings or
to a holding company of which Holdings is a direct or indirect
wholly owned subsidiary prior to such transaction; or
during any period of 12 consecutive months, the individuals
at the beginning of any such period who constitute the Board and
any new director (other than a director designated by a person
or entity who has entered into an agreement with Holdings or
another person or entity to effect a transaction described
above)
123
whose election by the Board or nomination for election by
Holdings stockholders was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of any such period or whose election
or nomination for election was previously so approved, cease for
any reason to constitute a majority of the Board.
124
select the non-employee directors who will receive Awards
pursuant to the Plan;
determine the number of shares to which an Award will relate,
the terms and conditions of any Award granted under the Plan and
all other matters to be determined in connection with an Award;
determine whether, to what extent, and under what circumstances
an Award may be canceled, forfeited, or surrendered;
determine whether, and to certify that, performance goals to
which the settlement of an Award is subject are satisfied;
correct any defect or supply any omission or reconcile any
inconsistency in the Plan;
adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan;
determine the effect, if any, of a change in control on
outstanding Awards; and
construe and interpret the Plan and make all other
determinations as it may deem necessary or advisable for the
administration of the Plan.
the price of shares of Holdings stock;
the market share of Holdings, its subsidiaries or affiliates (or
any business unit thereof);
sales by Holdings, its subsidiaries or affiliates (or any
business unit thereof);
earnings per share of Holdings stock;
Holdings return on stockholder equity;
costs of Holdings, its subsidiaries or affiliates (or any
business unit thereof);
cash flow of Holdings, its subsidiaries or affiliates (or any
business unit thereof);
return on total assets of Holdings, its subsidiaries or
affiliates (or any business unit thereof);
return on invested capital of Holdings, its subsidiaries or
affiliates (or any business unit thereof);
return on net assets of Holdings, its subsidiaries or affiliates
(or any business unit thereof);
operating income of Holdings, its subsidiaries or affiliates (or
any business unit thereof);
net income of Holdings, its subsidiaries or affiliates (or any
business unit thereof); or
125
any other financial or other measurement deemed appropriate by
the Committee, as it relates to the results of operations or
other measurable progress of Holdings, its subsidiaries or
affiliates (or any business unit thereof).
126
the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 Act (the 1934 Act))
of beneficial ownership (within the meaning of
Rule 13d-3
promulgated under the 1934 Act) of more than 50% of the
total voting power of the voting securities of Holdings entitled
to vote generally in the election of directors (the Voting
Securities); provided, however, that the following
acquisitions will not constitute a change in control:
(1) any acquisition, directly or indirectly by or from
Holdings or any subsidiary of Holdings, by any employee benefit
plan (or related trust) sponsored or maintained by Holdings or
any subsidiary of Holdings (whether directly or indirectly),
(2) any acquisition by any underwriter in connection with
any firm commitment underwriting of securities to be issued by
Holdings, or (3) any acquisition by any corporation if,
immediately following such acquisition, 50% or more of the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation (entitled to vote generally in the election
of directors), are beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who,
immediately prior to such acquisition, were the beneficial
owners of the Voting Securities in substantially the same
proportions, respectively, as their ownership, immediately prior
to such acquisition of the Voting Securities;
the consummation of (1) a complete liquidation or
substantial dissolution of Holdings, or (2) the sale or
other disposition, during any
12-month
period ending on the date of the most recent sale or
disposition, of assets of Holdings that have a total gross fair
market value equal to or more than 40% of the total gross fair
market value of all of the assets of Holdings immediately before
such sale or disposition, in each case, other than to a
subsidiary, wholly-owned, directly or indirectly, by Holdings or
to a holding company of which Holdings is a direct or indirect
wholly owned subsidiary prior to such transaction; or
during any period of twelve (12) consecutive months, the
individuals at the beginning of any such period who constitute
the Board and any new director (other than a director designated
by a person or entity who has entered into an agreement with
Holdings or another person or entity to effect a transaction
described above) whose election by the Board or nomination for
election by Holdings stockholders was approved by a vote
of at least a majority of the directors then still in office who
either were directors at the beginning of any such period or
whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the
Board.
127
Target Bonus
(% of Base Salary)
80
%
80
%
50
%
50
%
50
%
128
each person known to us to beneficially own more than 5% of the
outstanding shares of common stock;
each of the named executive officers;
each of our directors; and
all directors and executive officers as a group.
Number of
Before Offering
Number of
Additional
After
Offering
(2)
Number of
Shares of
Shares of
Number of
Shares
Percent of
Common
Common
Shares of
Percent of
of Common
Common
Stock to be
Stock to be
Common
Common
Stock
Stock
Sold
Sold at
Stock
Stock
Beneficially
Beneficially
in This
Underwriters
Beneficially
Beneficially
Owned
Owned
Offering
Option
Owned
Owned
*
Less than 1%
(1)
Unless otherwise indicated, the
address of each of the beneficial owners identified is
c/o Select
Medical Holdings Corporation, 4714 Gettysburg Road,
P.O. Box 2034, Mechanicsburg, Pennsylvania 17055.
(2)
Immediately prior to the
consummation of the offering, all shares of our issued and
outstanding preferred stock will convert into shares of common
stock. Therefore, no shares of participating preferred stock
will be outstanding after the offering.
(3)
Represents
(i)
common shares held by Welsh, Carson, Anderson & Stowe
IX, L.P., or WCAS IX, over which WCAS IX has sole voting and
investment power,
(ii)
common shares held by WCAS Management Corporation, over which
WCAS Management Corporation has sole voting and investment
power,
(iii)
common shares held by WCAS Capital Partners IV, L.P., over which
129
WCAS Capital Partners IV, L.P. has
sole voting and investment power, (iv) an aggregate
of
common shares held by individuals who are general partners of
WCAS IX Associates LLC, the sole general partner of WCAS IX
and/or otherwise employed by an affiliate of Welsh, Carson,
Anderson & Stowe, and (v) an
aggregate
common shares held by other co-investors, over which WCAS IX has
sole voting power. Each of the following individuals are
managing members of WCAS IX Associates, LLC, the sole general
partner of WCAS IX, and WCAS CP IV Associates, LLC, the sole
general partner of WCAS Capital Partners IV, L.P.: Patrick J.
Welsh, Russell L. Carson, Bruce K. Anderson, Thomas E.
Mclnerney, Robert A. Minicucci, Anthony J. de Nicola, Paul B.
Queally, D. Scott Mackesy, Sanjay Swani, John D. Clark, James R.
Matthews, Sean M. Traynor, John Almeida and Jonathan M. Rather.
In addition, Thomas A. Scully is also a managing member of WCAS
CP IV Associates, LLC. Each of the following individuals are
shareholders of WCAS Management Corporation: Patrick J. Welsh,
Russell L. Carson, Bruce K. Anderson, Thomas E. Mclnerney and
Robert A. Minicucci. The principal executive offices of Welsh,
Carson, Anderson & Stowe are located at 320 Park
Avenue, Suite 2500, New York, New York 10022.
(4)
Represents
(i)
common shares held by Thoma Cressey Fund VI, L.P. over
which Thoma Cressey Fund VI, L.P. has shared voting and
investment power,
(ii)
common shares held by Thoma Cressey Friends Fund VI, L.P.,
over which Thoma Cressey Friends Fund VI, L.P. has shared
voting and investment power,
(iii)
common shares held by Thoma Cressey Fund VII, L.P., over which
Thoma Cressey Fund VII, L.P. has shared voting and
investment power, and
(iv)
common shares held by Thoma Cressey Friends Fund VII, L.P.,
over which Thoma Cressey Friends Fund VII, L.P. has shared
voting and investment power. The sole general partner of each of
Thoma Cressey Fund VII, L.P. and Thoma Cressey Friends
Fund VII, L.P. , or collectively, Thoma Cressey
Fund VII, is TC Partners VII, L.P., or the
Fund VII GP. The sole general partner of
Fund VII GP is Thoma Cressey Equity Partners Inc., or the
Ultimate GP. The sole general partner of each of
Thoma Cressey Fund VI, L.P. and Thoma Cressey Friends
Fund VI, L.P., or collectively, Thoma Cressey
Fund VI, is TC Partners VI, L.P., or the
Fund VI GP. The sole general partner of
Fund VI GP is the Ultimate GP. The sole shareholder of the
Ultimate GP is Carl D. Thoma. The officers of the Ultimate GP
are Carl D. Thoma, Bryan C. Cressey and Lee M. Mitchell. The
principal executive offices of the Ultimate GP are located at
233 South Wacker, Chicago, IL 60606.
(5)
Includes
common shares owned by the Rocco A. Ortenzio Revocable Trust for
which Mr. Rocco Ortenzio acts as sole trustee,
and
common shares held by the Rocco A. Ortenzio Descendants Trust,
for which Mr. Rocco Ortenzio is the investment advisor.
Mr. Rocco Ortenzio disclaims beneficial ownership of shares
held by the Rocco A. Ortenzio Descendants Trust except in his
capacity as a fiduciary of such trust.
(6)
Includes
common shares owned by the Robert A. Ortenzio Descendants Trust
for which Mr. Robert Ortenzio is the investment trustee.
Mr. Robert Ortenzio disclaims beneficial ownership of
shares held by the Robert A. Ortenzio Descendants Trust
except in his capacity as a fiduciary of such trust.
Includes
common shares which are subject to restrictions on transfer set
forth in a restricted stock award agreement entered into at the
time of the consummation of the Merger Transactions.
(7)
In addition to shares owned by
Bryan C. Cressey in his individual capacity, includes
(i)
common shares held by Thoma Cressey Fund VI, L.P.,
(ii)
common shares held by Thoma Cressey Friends Fund VI, L.P.,
(iii)
common shares held by Thoma Cressey Fund VII, L.P., and
(iv)
common shares held by Thoma Cressey Friends Fund VII, L.P.
Mr. Cressey is a principal of Thoma Cressey Equity Partners
Inc. Mr. Cressey may be deemed to beneficially own the
shares beneficially owned by Thoma Cressey Fund VI, L.P.,
Thoma Cressey Friends Fund VI, L.P., Thoma Cressey Fund
VII, L.P. and Thoma Cressey Friends Fund VII, L.P.
Mr. Cressey disclaims beneficial ownership of such shares.
The principal address of Mr. Cressey is 9200 Sears Tower,
233 South Wacker Drive, Chicago, IL 60606.
(8)
Represents
common shares held by David S. Chernow and Elizabeth A. Chernow
as tenants in common.
(9)
Includes
common shares which are subject to restrictions on transfer set
forth in a restricted stock award agreement entered into at the
time of the consummation of the Merger Transactions.
(10)
Includes
common shares which are subject to restrictions on transfer set
forth in a restricted stock award agreement entered into at the
time of the consummation of the Merger Transactions. In addition
to shares held by Patricia A. Rice in her individual capacity,
includes
common shares owned by The Patricia Ann Rice Living Trust for
which Ms. Rice acts as a trustee,
and
common shares owned by the 2005 Rice Family Trust for which
Ms. Rice acts as investment trustee.
(11)
Includes
common shares which are subject to restrictions on transfer set
forth in a restricted stock award agreement entered into at the
time of the consummation of the Merger Transactions
(12)
Includes
common shares which are subject to restrictions on transfer set
forth in a restricted stock award agreement entered into at the
time of the consummation of the Merger Transactions. In addition
to shares held by Martin F. Jackson in his individual capacity,
includes an
aggregate
common shares owned by Mr. Jacksons children who live
in his household and over which Mr. Jackson acts as
custodian.
(13)
Includes an
aggregate
common shares which are subject to restrictions on transfer set
forth in restricted stock award agreements entered into at the
time of the consummation of the Merger Transactions.
130
131
132
133
134
135
136
137
a $300.0 million revolving loan facility that will
terminate on February 24, 2011, including both a letter of
credit sub-facility and a swingline loan sub-facility, and
a $680.0 million term loan facility that matures on
February 24, 2012.
138
50% (as may be reduced based on Selects ratio of total
indebtedness to its consolidated EBITDA) of Selects annual
excess cash flow (as defined in the credit agreement);
100% of the net cash proceeds from asset sales and casualty and
condemnation events, subject to reinvestment rights and certain
other exceptions;
50% (as may be reduced based on Selects ratio of total
indebtedness to its consolidated EBITDA) of the net cash
proceeds from specified issuances of equity securities; and
100% of the net cash proceeds from certain incurrences of debt.
139
incur, assume, permit to exist or guarantee additional debt and
issue or sell or permit any subsidiary to issue or sell
preferred stock;
amend, modify or waiver any rights under the certificate of
indebtedness, credit agreements, certificate of incorporation,
bylaws or other organizational documents which would be
materially adverse to the creditors;
pay dividends or other distributions on, redeem, repurchase,
retire or cancel capital stock;
purchase or acquire any debt or equity securities of, make any
loans or advances to, guarantee any obligation of, or make any
other investment in, any other company;
incur or permit to exist certain liens on property or assets
owned or accrued or assign or sell any income or revenues with
respect to such property or assets;
sell or otherwise transfer property or assets to, purchase or
otherwise receive property or assets from, or otherwise enter
into transactions with affiliates;
merge, consolidate or amalgamate with another company or permit
any subsidiary to merge, consolidate or amalgamate with another
company;
sell, transfer, lease or otherwise dispose of assets, including
any equity interests;
repay, redeem, repurchase, retire or cancel any subordinated
debt;
incur capital expenditures;
engage to any material extent in any business other than
business of the type currently conducted by Select or reasonably
related businesses; and
incur obligations that restrict the ability of its subsidiaries
to incur or permit to exist any liens on its property or assets
or to make dividends or other payments to us.
140
Redemption Price
103.813
%
102.542
%
101.271
%
100.000
%
Redemption Price
102.000
%
101.000
%
100.000
%
141
142
no shares will be eligible for sale on the date of this
prospectus;
shares
will be eligible for sale upon the expiration of the
lock-up
agreements, as more particularly described below, beginning
180 days after the date of this prospectus; and
shares
will be eligible for sale, upon the exercise of vested options,
upon the expiration of the
lock-up
agreements, as more particularly described below, beginning
180 days after the date of this prospectus.
143
1% of the number of shares of common stock then outstanding,
which will
equal shares
immediately after this offering; or
the average weekly trading volume of the common stock during the
four calendar weeks preceding the filing of a notice on
Form 144 with respect to such sale.
144
NON-UNITED
STATES HOLDERS
an individual who is a citizen or resident of the United States;
a corporation (or other business entity treated as a
corporation) created or organized in the United States or under
the laws of the United States, any state thereof or the District
of Columbia;
an estate the income of which is subject to United States
federal income taxation; or
a trust that (1) is subject to the primary supervision of a
court within the United States and the control of one or more
U.S. persons, or (2) otherwise has elected to be
treated as a U.S. domestic trust.
145
the gain is U.S. trade or business income, as described
above;
the
non-U.S. holder
is an individual who is present in the United States for 183 or
more days in the taxable year of the disposition and meets other
conditions; or
we are or have been a U.S. real property holding
corporation, which we refer to as USRPHC,
under section 897 of the Code at any time during the
shorter of the five year period ending on the date of
disposition and the
non-U.S. holders
holding period for our common stock.
146
147
Number of Shares
Incorporated
148
Paid by Us
Paid by Selling Stockholders
Total
No Exercise
Full Exercise
No Exercise
Full Exercise
No Exercise
Full Exercise
$
$
$
$
$
$
$
$
$
$
$
$
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of directly or indirectly, any
shares of common stock or any securities convertible into or
exercisable or exchangeable for common stock;
file any registration statement with the SEC relating to the
offering of any shares of common stock or any securities
convertible into or exercisable or exchangeable for common
stock; or
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of the common stock;
the sale of shares to the underwriters;
the issuance by us of shares of common stock upon the exercise
of an option or a warrant or the conversion of a security
outstanding on the date of this prospectus of which the
underwriters have been advised in writing;
the issuance by us of options to purchase our common stock under
stock option or similar plans as in effect on the date of the
underwriting agreement and as described in this prospectus;
sales of shares of common stock underlying employee stock
options that are scheduled to expire during such 180 day
period in connection with cashless exercises of those stock
options by former employees of the Company; provided that no
filing under Section 16(a) of the Exchange Act shall be
required or shall be voluntarily made in connection with such
transaction other than a filing on Form 5 after the
expiration of such 180 day period;
the filing by us of any registration statement on From
S-8
relating
to the offering of securities pursuant to the terms of a stock
option or similar plan in effect on the date of the underwriting
agreement and described in this prospectus;
transfers of common stock or any security convertible into
common stock as a bona fide gift (including for estate planning
purposes), by will or intestacy, or transfers to any trust for
the direct or indirect benefit of the transferor or the
immediate family of the transferor; provided that no filing
under Section 16(a) of the Exchange Act shall be required
or shall be voluntarily made in connection with such transaction
other than a filing on Form 5 after the expiration of such
180 day period; and provided further that the transferee
agrees with the underwriters to be bound by such restrictions
for the remainder of such 180 day period;
149
the establishment of a trading plan pursuant to Rule 10b5-1
under the Exchange Act for the transfer of shares of common
stock, provided that such plan does not provide for the transfer
of common stock during the restricted periods;
distributions by a stockholder who is subject to a
lock-up
of
common stock or any security convertible into common stock to
limited partners, limited liability company members, affiliates
or stockholders of such stockholder; provided that no filing
under Section 16(a) of the Exchange Act shall be required
or shall be voluntarily made in connection with such transaction
other than a filing on Form 5 after the expiration of such
180 day period; and provided further that the transferee
agrees with the underwriters to be bound by such restrictions
for the remainder of such 180 day period; or
transactions by any person other than us relating to common
stock or other securities acquired in open market transactions
after the completion of the offering of the shares hereby;
provided that no filing under Section 16(a) of the Exchange
Act shall be required or shall be voluntarily made in connection
with such transaction.
150
151
152
Page
F-2
F-4
F-5
F-6
F-7
F-8
F-44
F-45
F-46
F-47
F-48
F-49
F-1
of Select Medical Holdings Corporation:
F-2
of Select Medical Holdings Corporation:
F-3
F-4
Predecessor
Period
Select
Medical
Corporation
Successor Period
Period from
Period from
January 1
February 25
through
through
For the Year Ended
February 24,
December 31,
December 31,
2005
2005
2006
2007
(in thousands,
(in thousands, except per share data)
except per share
data)
$
277,736
$
1,580,706
$
1,851,498
$
1,991,666
244,321
1,244,361
1,484,632
1,660,049
122,509
59,494
43,514
42,863
6,588
18,213
18,810
37,572
5,933
37,922
46,668
57,297
379,351
1,359,990
1,593,624
1,797,781
(101,615
)
220,716
257,874
193,885
(42,736
)
(12,025
)
267
1,092
(167
)
523
767
1,293
2,103
(4,651
)
(102,208
)
(131,831
)
(140,155
)
(160,237
)
120,367
127,336
55,666
330
1,776
1,414
1,537
(160,567
)
118,591
125,922
54,129
(59,794
)
49,336
43,521
18,699
(100,773
)
69,255
82,401
35,430
522
3,072
12,478
(100,251
)
72,327
94,879
35,430
23,519
22,663
23,807
$
(100,251
)
$
48,808
$
72,216
$
11,623
$
(0.99
)
$
0.23
$
0.30
$
0.05
0.01
0.02
0.06
$
(0.98
)
$
0.25
$
0.36
$
0.05
$
(0.99
)
$
0.22
$
0.28
$
0.05
0.01
0.02
0.06
$
(0.98
)
$
0.24
$
0.34
$
0.05
$
F-5
Accumulated
Common
Other
Common
Stock Par
Capital in
Retained
Comprehensive
Comprehensive
Stock Issued
Value
Excess of Par
Earnings
Income
Loss
(in thousands)
101,954
$
1,020
$
275,281
$
230,535
$
9,107
(100,251
)
$
(100,251
)
(1,019
)
(1,019
)
$
(101,270
)
267
3
1,020
(1,617
)
1,507
102,221
$
1,023
$
276,191
$
130,284
$
8,088
Accumulated
Common
Other
Common
Stock Par
Capital in
Retained
Comprehensive
Comprehensive
Stock Issued
Value
Excess of Par
Earnings
Income (Loss)
Income
148,253
$
148
$
(310,092
)
$
72,327
$
72,327
$
3,539
3,539
1,818
1,818
$
77,684
808
1
808
56,347
56
10,247
9
(23,519
)
205,408
205
(299,028
)
48,808
5,357
94,879
$
94,879
1,438
1,438
924
924
(2,831
)
(2,831
)
$
94,410
200
1
3,769
(680
)
(1
)
(24
)
(10
)
13
(22,663
)
204,904
205
(295,256
)
121,024
4,888
35,430
$
35,430
(10,451
)
(10,451
)
$
24,979
(1,931
)
200
3,923
65
66
23
(3
)
(3
)
(23,807
)
205,166
$
205
$
(291,247
)
$
130,716
$
(5,563
)
F-6
Predecessor
Period
Select Medical
Corporation
Successor Period
Period from
Period from
January 1
February 25
through
through
February 24,
December 31,
For the Year Ended December 31,
2005
2005
2006
2007
(in thousands)
(in thousands)
$
(100,251
)
$
72,327
$
94,879
$
35,430
6,177
39,060
46,844
57,297
6,661
18,600
18,897
37,572
810
(11,507
)
2,424
7,977
10,312
3,782
3,746
881
1,176
1,325
(63,863
)
19,822
13,327
2,460
469
3,018
1,754
1,537
(48,976
)
(2,908
)
30,804
(75,540
)
1,816
312
2,015
1,406
(622
)
4,887
6,441
6,251
5,250
1,879
12,081
(112
)
667
(1,757
)
711
2,186
203,751
(129,088
)
6,447
10,031
19,056
38,155
227,651
86,013
(2,586
)
(107,360
)
(155,096
)
(166,074
)
74,966
9,605
6,438
108
578
2,010
4,335
(108,279
)
(3,272
)
(3,361
)
(236,980
)
(110,757
)
(110,054
)
(81,481
)
(382,676
)
281,000
215,000
449,000
(196,000
)
(300,000
)
(329,000
)
175,000
580,000
100,000
(4,350
)
(5,800
)
(6,550
)
660,000
(350,000
)
(60,269
)
(528
)
(4,161
)
(721
)
(1,323
)
19,355
(7,142
)
8,911
(1,687,994
)
(41
)
(14
)
200
1,023
66
(175,000
)
724,042
(8,686
)
(401
)
(1,541
)
(1,762
)
(1,698
)
94
(48,604
)
(100,466
)
219,592
(149
)
644
35
(91,756
)
(119,859
)
45,739
(77,071
)
247,476
155,720
35,861
81,600
$
155,720
$
35,861
$
81,600
$
4,529
$
10,630
$
59,725
$
124,251
$
134,527
$
1,502
$
10,712
$
22,572
$
9,009
F-7
1.
Organization
and Significant Accounting Policies
a cash common and preferred equity investment in Holdings by
Welsh Carson and other equity investors of $570.0 million;
F-8
a senior subordinated notes offering by Holdings of
$150.0 million;
borrowing by Select of $580.0 million in term loans and
$200.0 million on the revolving loan facility under a new
senior secured credit facility;
the issuance by Select of $660.0 million in aggregate
principle amount of
7
5
/
8
% senior
subordinated notes; and
$131.1 million of cash on hand at Select at the closing
date.
F-9
$
570,000
151,992
721,992
(449,510
)
272,482
(8,686
)
1,590,000
$
1,853,796
$
34,484
280,891
69,858
20,955
177,634
31,879
12,970
(267,831
)
(7,052
)
(6,661
)
347,127
55,392
92,988
1,358,289
$
1,853,796
For the Year Ended
December 31,
2005
(unaudited)
$
1,858,442
(39,044
)
F-10
F-11
5 years
3 - 20 years
40 years
F-12
Indefinite
Indefinite
Indefinite
Indefinite
6 - 7 years
5 years
F-13
Predecessor
Period from January 1
through February 24,
2005
(in thousands)
$
(100,251
)
87,927
14,931
$
(27,255
)
(1)
No stock options were granted in
the period from January 1, 2005 through February 24,
2005.
F-14
F-15
2.
Acquisitions
F-16
$
105,085
22,143
4,718
9,265
242
(14,150
)
(1,203
)
21,015
2,000
82,070
$
105,085
F-17
$
236,899
35,743
12,596
39,347
808
(14,104
)
(2,381
)
72,009
5,100
(18,700
)
178,490
$
236,899
Predecessor
Successor
Period from
Period from
January 1
February 25,
through
through
For the Year Ended
February 24,
December 31,
December 31,
2005
2005
2006
2007
(in thousands)
(in thousands)
$
108,279
$
3,276
$
3,261
$
236,980
60
108,279
3,336
3,261
236,980
19,924
148
36,458
128,203
3,484
3,261
273,438
41,295
165
88,625
2,000
5,100
800
666
1,581
$
84,908
$
2,653
$
1,680
$
178,913
F-18
For the Year Ended December 31,
2006
2007
(unaudited)
(in thousands)
$
2,162,162
$
2,092,114
100,657
36,046
3.
Discontinued
Operations and Assets and Liabilities Held For Sale
Predecessor
Successor
Period from
Period from
January 1
February 25
For the Year
through
through
Ended
February 24,
December 31,
December 31,
2005
2005
2006
(in thousands)
(in thousands)
$
10,051
$
60,161
$
12,902
950
8,130
15,547
428
5,058
3,069
$
522
$
3,072
$
12,478
(1)
Income from discontinued operations
before income tax expense for the 12 months ended
December 31, 2006 includes a gain on sale of approximately
$14.0 million.
(2)
The period from February 25 through
December 31, 2005 (Successor) includes income tax of
$1.4 million related to undistributed earnings of the
Companys foreign subsidiary that were previously
permanently reinvested.
F-19
4.
Property
and Equipment
December 31,
2006
2007
(in thousands)
$
24,263
$
40,582
56,777
72,010
106,126
171,736
116,881
175,964
100,478
104,862
404,525
565,154
48,189
78,128
$
356,336
$
487,026
5.
Intangible
Assets
F-20
As of December 31, 2006
Gross Carrying
Accumulated
Amount
Amortization
(in thousands)
$
20,456
$
(7,501
)
20,809
(6,819
)
$
41,265
$
(14,320
)
$
1,323,572
47,058
3,523
1,704
$
1,375,857
F-21
As of December 31, 2007
Gross Carrying
Accumulated
Amount
Amortization
(in thousands)
$
20,456
$
(11,592
)
25,909
(11,219
)
$
46,365
$
(22,811
)
$
1,499,485
47,858
6,421
1,339
$
1,555,103
Amount
$
8,831
8,831
4,247
1,306
339
Specialty
Outpatient
Hospitals
Rehabilitation
Total
(in thousands)
$
1,221,776
$
83,434
$
1,305,210
5,359
10,800
16,159
398
1,282
1,680
100
100
423
423
1,227,533
96,039
1,323,572
423
178,490
178,913
(3,000
)
(3,000
)
$
1,227,956
$
271,529
$
1,499,485
(1)
In conjunction with recording the
gain on sale of CBIL (Note 3), the Company determined that
deferred taxes should have been recorded as of the date of the
Merger related to differences between the Companys book
and tax investment basis in CBIL. Also during 2006, the Company
determined that additional deferred taxes should have been
recorded as of the date of the Merger related to a
step-up
in
fair value of a fixed asset and a difference in timing related
to the deductibility of an accrued expense. These adjustments
are not considered to be material on a qualitative or
quantitative basis.
6.
Restructuring
Reserves
F-23
Lease
Termination
Costs
Severance
Other
Total
(in thousands)
$
3,225
$
1,699
$
4,924
(197
)
(392
)
(589
)
3,028
1,307
4,335
(2,638
)
(1,307
)
(3,945
)
390
390
(165
)
(165
)
225
225
12,063
5,775
$
862
18,700
(1,611
)
(1,830
)
(3,441
)
$
10,677
$
3,945
$
862
$
15,484
7.
Long term
Debt and Notes Payable
As of December 31,
2006
2007
(in thousands)
$
660,000
$
660,000
569,850
783,300
132,785
134,110
175,000
175,000
413
633
455
2,592
1,538,503
1,755,635
6,209
7,749
$
1,532,294
$
1,747,886
F-24
a $300.0 million revolving loan facility that will
terminate on February 24, 2011, including both a letter of
credit sub-facility and a swingline loan sub-facility, and
a $680.0 million term loan facility that matures on
February 24, 2012.
F-25
Redemption Price
103.813
%
102.542
%
101.271
%
100.000
%
F-26
Redemption Price
102.00
%
101.00
%
100.00
%
F-27
$
7,749
8,897
6,912
602,242
160,725
969,110
8.
Stockholders
Equity
9.
Long term
Incentive Compensation
F-28
10.
Stock
Option and Restricted Stock Plans
F-29
2008
2009
2010
2011
2012
(in thousands)
$
2,101
$
1,097
$
183
$
3
$
0
Price per
Weighted Average
Share
Shares
Exercise Price
(in thousands, except per share amounts)
$
1.00
1,984
$
1.00
1.00 - 2.50
1,913
2.42
1.00 - 2.50
(124
)
1.22
1.00 - 2.50
3,773
1.71
2.50
1,219
2.50
1.00 - 2.50
(65
)
1.02
1.00 - 2.50
(371
)
2.01
$
1.00 - 2.50
4,556
$
1.91
Weighted Average
Number
Remaining
Number
Outstanding
Contractual Life
Exercisable
(in thousands, except per share amounts)
$
1.00
1,794
7.14
707
2.50
2,762
8.60
371
Price per
Weighted Average
Share
Shares
Exercise Price
(in thousands, except per share amounts)
$
1.00
60
$
1.00
2.50
30
2.50
1.00 - 2.50
90
1.50
2.50
30
2.50
$
1.00 - 2.50
120
$
1.75
F-30
Weighted Average
Number
Remaining
Number
Outstanding
Contractual Life
Exercisable
(in thousands, except per share amounts)
$
1.00
60
7.61
24
2.50
60
9.24
6
Predecessor
Successor
Period from
Period from
January 1
February 25
through
through
February 24,
December 31,
For the Year Ended December 31,
2005
2005
2006
2007
(in thousands)
(in thousands)
$
115,025
$
10,134
$
3,551
$
3,555
27,188
178
231
191
$
142,213
$
10,312
$
3,782
$
3,746
11.
Income
Taxes
Predecessor
Successor
Period from
Period from
January 1
February 25
through
through
February 24,
December 31,
For the Year Ended December 31,
2005
2005
2006
2007
(in thousands)
(in thousands)
$
3,632
$
26,585
$
24,706
$
11,004
437
2,929
5,488
5,235
4,069
29,514
30,194
16,239
(63,863
)
19,822
13,327
2,460
$
(59,794
)
$
49,336
$
43,521
$
18,699
F-31
Predecessor
Successor
Period from
Period from
January 1
February 25
through
through
For the Year Ended
February 24,
December 31,
December 31,
2005
2005
2006
2007
35.0
%
35.0
%
35.0
%
35.0
%
4.6
5.7
3.0
0.7
3.4
0.9
1.5
(1.5
)
(1.4
)
2.7
3.8
(6.9
)
(6.5
)
(0.9
)
(1.1
)
(0.1
)
37.2
%
41.6
%
34.6
%
34.5
%
December 31,
2006
2007
(in thousands)
$
14,555
$
7,440
18,743
26,746
10,856
10,867
90
6,216
2,769
2,899
47,013
54,168
101
101
20,886
24,693
(2,918
)
(1,426
)
(3,397
)
3,708
(36,719
)
(41,595
)
3,134
(22,047
)
(11,385
)
24,966
42,783
(14,428
)
(16,761
)
$
10,538
$
26,022
F-32
$
21,305
(2,249
)
2,357
$
21,413
F-33
12.
Retirement
Savings Plan
13.
Segment
Information
Predecessor
Period from January 1 through February 24, 2005
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
202,781
$
73,344
$
1,611
$
277,736
44,384
9,848
(7,701
)
46,531
904,754
239,019
87,640
1,231,413
1,165
408
1,013
2,586
F-34
Successor
Period from February 25 through December 31,
2005
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
1,169,702
$
407,367
$
3,637
$
1,580,706
263,760
56,109
(36,466
)
283,403
1,656,224
293,720
218,441
2,168,385
101,158
3,342
2,860
107,360
Successor
Year Ended December 31, 2006
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
1,378,543
$
470,339
$
2,616
$
1,851,498
283,270
64,823
(39,769
)
308,324
1,742,803
258,773
180,948
2,182,524
146,291
6,527
2,278
155,096
Successor
Year Ended December 31, 2007
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
1,386,410
$
603,413
$
1,843
$
1,991,666
217,175
75,437
(37,684
)
254,928
1,882,476
513,397
99,173
2,495,046
146,901
14,737
4,436
166,074
(1)
The Outpatient Rehabilitation
segment includes $75.3 million in assets held for sale
related to the sale of CBIL (Note 3).
(2)
The Specialty Hospital segment
includes $14.6 million in real estate assets held for sale
(Note 3).
Predecessor
Period from January 1, through February 24, 2005
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
44,384
$
9,848
$
(7,701
)
(3,934
)
(1,460
)
(539
)
(142,213
)
$
40,450
$
8,388
$
(150,453
)
$
(101,615
)
(42,736
)
(12,025
)
267
(4,128
)
(330
)
$
(160,567
)
Successor
Period from February 25 through December 31,
2005
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
263,760
$
56,109
$
(36,466
)
(23,421
)
(8,445
)
(6,056
)
(10,312
)
(14,453
)
$
240,339
$
47,664
$
(67,287
)
$
220,716
1,092
(101,441
)
(1,776
)
$
118,591
F-36
Successor
Year Ended December 31, 2006
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
283,270
$
64,823
$
(39,769
)
(30,731
)
(12,964
)
(2,973
)
(3,782
)
$
252,539
$
51,859
$
(46,524
)
$
257,874
(130,538
)
(1,414
)
$
125,922
Successor
Year Ended December 31, 2007
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
217,175
$
75,437
$
(37,684
)
(37,085
)
(17,458
)
(2,754
)
(3,746
)
$
180,090
$
57,979
$
(44,184
)
$
193,885
(167
)
(138,052
)
(1,537
)
$
54,129
(1)
Included in general and
administrative expenses on the Companys consolidated
statement of operations.
14.
Income
(Loss) per Share
(a)
Income (loss) from continuing operations is reduced by the
contractual amount of dividends in the current period for each
class of stock.
(b)
The remaining income (loss) is allocated to common stock and
preferred stock to the extent that each security may share in
income (loss), as if all of the income (loss) for the period had
been distributed. The total income (loss) allocated to each
security is determined by adding together the amount allocated
for dividends and the amount allocated for participation
features.
(c)
The income (loss) allocated to common stock is then divided by
the weighted average number of outstanding shares to which the
earnings are allocated to determine the income (loss) per share
for common stock.
Predecessor
Successor
Period from
Period from
January 1
February 25
For the Year
through
through
Ended
February 24,
December 31,
December 31,
2005
2005
2006
2007
(in thousands,
(in thousands, except per share data)
except per
share data)
$
(100,773
)
$
69,255
$
82,401
$
35,430
23,519
22,663
23,807
5,230
6,543
1,213
$
(100,773
)
$
40,506
$
53,195
$
10,410
$
552
$
3,072
$
12,478
$
351
1,367
$
552
$
2,721
$
11,111
$
F-38
Predecessor
Successor
Period from
Period from
January 1
February 25
For the Year
through
through
Ended
February 24,
December 31,
December 31,
2005
2005
2006
2007
(in thousands,
(in thousands, except per share data)
except per
share data)
102,026
171,330
180,183
190,286
9,740
8,104
2,462
102,026
181,070
188,287
192,748
$
(0.99
)
$
0.23
$
0.30
$
0.05
0.01
0.02
0.06
$
(0.98
)
$
0.25
$
0.36
$
0.05
$
(0.99
)
$
0.22
$
0.28
$
0.05
0.01
$
0.02
0.06
$
(0.98
)
$
0.24
$
0.34
$
0.05
15.
Fair
Value of Financial Instruments
16.
Related
Party Transactions
F-40
$
3,069
3,096
3,073
3,068
3,158
20,454
$
35,918
17.
Commitments
and Contingencies
$
100,215
77,477
55,894
38,165
27,174
174,423
$
473,348
F-41
F-42
18.
Supplemental
Disclosures of Cash Flow Information
Predecessor
Successor
Period from
Period from
January 1
February 25
For the Year
through
through
Ended
February 24,
December 31,
December 31,
2005
2005
2006
2007
(in thousands)
(in thousands)
$
$
60
$
$
19,924
148
36,458
8,436
2,616
1,507
19.
Selected
Quarterly Financial Data (Unaudited)
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
(in thousands)
$
479,743
$
482,141
$
443,872
$
445,742
66,451
77,993
54,313
59,117
18,171
27,271
12,544
24,415
10,018
2,460
$
28,189
$
27,271
$
12,544
$
26,875
$
466,829
$
506,484
$
500,385
$
517,968
60,325
60,576
31,292
41,692
$
17,471
$
14,315
$
(3,106
)
$
6,750
F-43
Balance at
Charged
Beginning
to Cost and
Balance at
Description
of Year
Expenses
Acquisitions
(A)
Deductions
(B)
End of Year
$
55,306
$
37,572
$
9,061
$
(46,083
)
$
55,856
$
74,891
$
18,810
$
$
(38,395
)
$
55,306
$
94,622
$
24,801
$
7,847
$
(52,379
)
$
74,891
$
14,428
$
2,507
$
$
(174
)
$
16,761
$
11,961
$
3,485
$
$
(1,018
)
$
14,428
$
10,506
$
2,322
$
823
$
(1,690
)
$
11,961
(A)
Represents opening balance sheet
allowances from acquired companies.
(B)
Allowance for doubtful accounts
deductions represent write-offs against the reserve for 2006 and
2007. In 2006, allowance for doubtful accounts deductions
represents: (1) write-offs against the reserve of
$52.1 million and (2) $0.3 million reclassified
to assets held for sale resulting from the sale of the
Companys Canadian subsidiary. Income tax valuation
allowance deductions primarily represent the disposition of
certain subsidiaries.
F-44
F-45
For the Quarter Ended March 31,
2007
2008
(unaudited)
(in thousands, except
per share data)
$
466,829
$
548,278
377,627
452,271
11,584
11,651
5,589
12,615
11,704
17,397
406,504
493,934
60,325
54,344
1,173
929
126
(32,203
)
(36,919
)
30,224
17,551
323
309
29,901
17,242
12,430
8,542
17,471
8,700
5,759
6,084
$
11,712
$
2,616
$
0.06
$
0.01
$
0.06
$
0.01
$
F-46
Accumulated
Common
Common
Capital in
Other
Stock
Stock Par
Excess of
Retained
Comprehensive
Comprehensive
Issued
Value
Par
Earnings
Loss
Loss
(unaudited)
(in thousands)
205,166
$
205
$
(291,247
)
$
130,716
$
(5,563
)
8,700
$
8,700
(11,610
)
(11,610
)
$
(2,910
)
749
5
20
26
(100
)
(100
)
(6,084
)
205,086
$
205
$
(290,567
)
$
133,332
$
(17,173
)
F-47
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ending March 31,
2007
2008
(unaudited)
(in thousands)
$
17,471
$
8,700
11,704
17,397
5,589
12,615
(868
)
(114
)
927
754
315
355
323
309
(33,210
)
(71,861
)
423
(412
)
(1,013
)
4,505
3,967
15,917
(5,961
)
(10,165
)
(19,134
)
(10,590
)
11,982
7,725
(7,485
)
(24,865
)
(38,099
)
(15,056
)
880
(53
)
(81
)
(4,246
)
(37,353
)
(19,302
)
196,000
(126,000
)
(1,450
)
(4,582
)
(111
)
(1,322
)
(14
)
(395
)
200
26
2,992
(15,494
)
(843
)
(415
)
774
47,818
(44,064
)
3,651
81,600
4,529
$
37,536
$
8,180
$
52,001
$
55,069
$
443
$
803
F-48
1.
Basis of
Presentation
2.
Accounting
Policies
F-49
F-50
3.
Intangible
Assets
As of March 31, 2008
Gross Carrying
Accumulated
Amount
Amortization
(in thousands)
$
20,456
$
(12,615
)
25,909
(12,404
)
$
46,365
$
(25,019
)
$
1,503,263
47,858
7,892
1,339
$
1,560,352
Three Months Ended March 31,
2007
2008
(in thousands)
$
1,952
$
2,208
$
8,831
8,831
4,247
1,306
339
F-51
Specialty
Outpatient
Hospitals
Rehabilitation
Total
(in thousands)
$
1,227,956
$
271,529
$
1,499,485
3,778
3,778
$
1,227,956
$
275,307
$
1,503,263
4.
Restructuring
Reserves
Lease
Termination
Costs
Severance
Other
Total
(in thousands)
$
10,677
$
3,945
$
862
$
15,484
(1,126
)
(1,143
)
(301
)
(2,570
)
$
9,551
$
2,802
$
561
$
12,914
5.
Accumulated
Other Comprehensive Loss
6.
Fair
Value Measurements
Level 1:
Observable inputs such as quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
F-52
Level 2:
Inputs other than quoted prices
that are observable for the asset or liability, either directly
or indirectly. These include quoted prices for similar assets or
liabilities in active markets and quoted prices for identical or
similar assets or liabilities in markets that are not active.
Level 3:
Unobservable inputs that reflect
the reporting entitys own assumptions.
7.
Segment
Information
Three Months Ended March 31, 2007
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
354,228
$
112,380
$
221
$
466,829
66,031
17,618
(10,693
)
72,956
1,795,902
258,372
137,917
2,192,191
35,879
2,021
199
38,099
Three Months Ended March 31, 2008
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
(in thousands)
$
378,604
$
169,577
$
97
$
548,278
63,243
20,097
(10,845
)
72,495
1,922,107
520,418
111,889
2,554,414
9,988
3,851
1,217
15,056
F-53
Three Months Ended March 31, 2007
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
$
66,031
$
17,618
$
(10,693
)
( 8,348
)
(2,757
)
(599
)
(927
)
$
57,683
$
14,861
$
(12,219
)
$
60,325
1,173
(31,274
)
(323
)
$
29,901
Three Months Ended March 31, 2008
Specialty
Outpatient
Hospitals
Rehabilitation
All Other
Total
$
63,243
$
20,097
$
(10,845
)
(10,742
)
(5,793
)
(862
)
(754
)
$
52,501
$
14,304
$
(12,461
)
$
54,344
(36,793
)
(309
)
$
17,242
F-54
8.
Net
Income per Share
For the Quarter Ended March 31,
2007
2008
(in thousands, except
per share data)
$
17,471
$
8,700
5,759
6,084
1,244
265
$
10,468
$
2,351
186,463
196,503
5,494
186,463
201,997
$
0.06
$
0.01
$
0.06
$
0.01
For the Quarter Ended March 31,
2007
2008
(in thousands)
3,844
4,610
18,138
9.
Commitments
and Contingencies
F-55
F-56
Item 13.
Other
Expenses of Issuance and Distribution.
$3,930
*
*
*
*
*
*
*
*
*
*
To be completed by amendment.
Item 14.
Indemnification
of Directors and Officers.
II-1
Item 15.
Recent
Sales of Unregistered Securities.
II-2
Item 16.
Exhibits
and Financial Statement Schedules.
Exhibit
1
.1*
Form of Underwriting Agreement
2
.1
Stock Purchase Agreement, dated as of January 27, 2007,
between HealthSouth Corporation and Select Medical Corporation,
incorporated by reference to Exhibit 2.1 of Select Medical
Corporations Current Report on Form 8-K filed January 30,
2007 (Reg. No. 001-31441).
2
.2
Letter Agreement, dated as of May 1, 2007, between
HealthSouth Corporation and Select Medical Corporation,
incorporated by reference to Exhibit 2.2 of Select Medical
Corporations Current Report on Form 8-K filed May 7, 2007
(Reg. No. 001-31441).
2
.3
Acquisition Agreement, dated as of December 23, 2005,
between Select Medical Corporation, SLMC Finance Corporation and
Callisto Capital L.P., incorporated by reference to Exhibit 2.1
of Select Medical Corporations Current Report on Form 8-K
filed December 28, 2005 (Reg. No. 001-31441).
2
.4
Amendment to Acquisition Agreement, dated as of February 9,
2006, among Select Medical Corporation, SLMC Finance
Corporation, Callisto Capital L.P. and Canadian Back Institute
Limited, incorporated by reference to Exhibit 2.1 of Select
Medical Corporations Current Report on Form 8-K filed
February 10, 2006 (Reg. No. 001-31441).
3
.3*
Amended and Restated Certificate of Incorporation of Select
Medical Holdings Corporation.
3
.4*
Amended and Restated Bylaws of Select Medical Holdings
Corporation.
4
.1
Stockholders Agreement, dated as of February 24, 2005, by and
among Select Medical Holdings Corporation, Welsh, Carson,
Anderson & Stowe IX, L.P., WCAS Capital Partners IV, L.P.,
and each of the other individuals and entities from time to time
named therein, incorporated by reference to Exhibit 10.76 of
Select Medical Holdings Corporations Form S-4 filed April
13, 2006 (Reg. No. 333-133284).
4
.2
Registration Rights Agreement, dated as of February 24, 2005,
among Select Medical Holdings Corporation, Welsh, Carson,
Anderson & Stowe IX, L.P., WCAS Capital Partners IV, L.P.,
each of the entities and individuals listed on Schedule I
thereto and each of the other entities and individuals from time
to time listed on Schedule II thereto, incorporated by
reference to Exhibit 10.77 of Select Medical Holdings
Corporations Form S-4 filed April 13, 2006 (Reg. No.
333-133284).
4
.3
Registration Rights Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation, WCAS Capital
Partners IV, L.P., Rocco A. Ortenzio, Robert A. Ortenzio, John
M. Ortenzio, Martin J. Ortenzio, Martin J. Ortenzio
Descendants Trust and Ortenzio Family Foundation, incorporated
by reference to Exhibit 10.78 of Select Medical Holdings
Corporations Form S-4 filed April 13, 2006 (Reg. No.
333-133284).
4
.4*
Form of Common Stock Certificate.
5
.1*
Opinion of Dechert LLP.
10
.1
Credit Agreement, dated as of February 24, 2005, among Select
Medical Holdings Corporation, Select Medical Corporation, as
Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.1 of Select Medical Corporations Form S-4 filed June
16, 2005 (Reg. No. 333-125846).
10
.2
Guarantee and Collateral Agreement, dated as of February 24,
2005, among Select Medical Holdings Corporation, Select Medical
Corporation, the Subsidiaries of Select Medical Corporation
identified therein and JPMorgan Chase Bank, N.A., as Collateral
Agent, incorporated by reference to Exhibit 10.2 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.3
Amended and Restated Senior Management Agreement, dated as of
May 7, 1997, between Select Medical Corporation, John Ortenzio,
Martin Ortenzio, Select Investments II, Select Partners, L.P.
and Rocco Ortenzio, incorporated by reference to Exhibit 10.34
of Select Medical Corporations Registration Statement on
Form S-1 filed October 27, 2000 (Reg. No. 333-48856).
II-3
Exhibit
10
.4
Amendment No. 1, dated as of January 1, 2000, to Amended and
Restated Senior Management Agreement, dated as of May 7, 1997,
between Select Medical Corporation and Rocco A. Ortenzio,
incorporated by reference to Exhibit 10.35 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.5
Employment Agreement, dated as of March 1, 2000, between Select
Medical Corporation and Rocco A. Ortenzio, incorporated by
reference to Exhibit 10.16 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.6
Amendment No. 1 to Employment Agreement, dated as of August
8, 2000, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.17 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.7
Amendment No. 2 to Employment Agreement, dated as of February
23, 2001, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.47 of Select
Medical Corporations Registration Statement on Form S-1
March 30, 2001 (Reg. No. 333-48856).
10
.8
Amendment No. 3 to Employment Agreement, dated as of April 24,
2001, between Select Medical Corporation and Rocco A. Ortenzio,
incorporated by reference to Exhibit 10.50 of Select Medical
Corporations Registration Statement on Form S-4 filed
June 26, 2001 (Reg. No. 333-63828).
10
.9
Amendment No. 4 to Employment Agreement, dated as of September
17, 2001, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.52 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.10
Amendment No. 5 to Employment Agreement, dated as of February
24, 2005, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.10 of Select
Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.11
Restricted Stock Award Agreement, dated as of February 24,
2005, between Select Medical Holdings Corporation and Rocco A.
Ortenzio.
10
.12
Restricted Stock Award Agreement, dated as of November 8,
2005, between Select Medical Holdings Corporation and Rocco A.
Ortenzio.
10
.13
Employment Agreement, dated as of March 1, 2000, between Select
Medical Corporation and Robert A. Ortenzio, incorporated by
reference to Exhibit 10.14 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.14
Amendment No. 1 to Employment Agreement, dated as of August
8, 2000, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.15 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.15
Amendment No. 2 to Employment Agreement, dated as of February
23, 2001, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.48 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.16
Amendment No. 3 to Employment Agreement, dated as of September
17, 2001, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.53 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.17
Amendment No. 4 to Employment Agreement, dated as of December
10, 2004, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 99.3 of Select
Medical Corporations Current Report on Form 8-K filed
December 16, 2004 (Reg. No. 001-31441).
10
.18
Amendment No. 5 to Employment Agreement, dated as of February
24, 2005, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.16 of Select
Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.19
Restricted Stock Award Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation and Robert A.
Ortenzio.
Exhibit
10
.20
Restricted Stock Award Agreement, dated as of November 8,
2005, between Select Medical Holdings Corporation and Robert A.
Ortenzio.
10
.21
Employment Agreement, dated as of March 1, 2000, between Select
Medical Corporation and Patricia A. Rice, incorporated by
reference to Exhibit 10.19 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.22
Amendment No. 1 to Employment Agreement, dated as of August 8,
2000, between Select Medical Corporation and Patricia A. Rice,
incorporated by reference to Exhibit 10.20 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.23
Amendment No. 2 to Employment Agreement, dated as of February
23, 2001, between Select Medical Corporation and Patricia A.
Rice, incorporated by reference to Exhibit 10.49 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.24
Amendment No. 3 to Employment Agreement, dated as of December
10, 2004, between Select Medical Corporation and Patricia A.
Rice, incorporated by reference to Exhibit 99.2 of Select
Medical Corporations Current Report on Form 8-K filed
December 16, 2004 (Reg. No. 001-31441).
10
.25
Amendment No. 4 to Employment Agreement, dated as of February
24, 2005, between Select Medical Corporation and Patricia A.
Rice, incorporated by reference to Exhibit 10.21 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.26
Amendment No. 5 to Employment Agreement, dated as of April 27,
2005, between Select Medical Corporation and Patricia A. Rice,
incorporated by reference to Exhibit 10.46 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.27
Amendment No. 6 to Employment Agreement, dated as of February
13, 2008, between Select Medical Corporation and Patricia A.
Rice.
10
.28
Restricted Stock Award Agreement, dated as of February 24,
2005, between Select Medical Corporation and Patricia A. Rice.
10
.29
Amendment No. 1 to Restricted Stock Award Agreement, dated as of
February 13, 2008, between Select Medical Corporation and
Patricia A. Rice.
10
.30
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and Martin F. Jackson, incorporated
by reference to Exhibit 10.11 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.31
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and Martin F.
Jackson, incorporated by reference to Exhibit 10.52 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.32
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and Martin
F. Jackson, incorporated by reference to Exhibit 10.24 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.33
Restricted Stock Award Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation and Martin F.
Jackson.
10
.34
Employment Agreement, dated as of December 16, 1998, between
Select Medical Corporation and David W. Cross, incorporated by
reference to Exhibit 10.8 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.35
First Amendment to Employment Agreement, dated as of
October 15, 2000 between Select Medical Corporation and
David W. Cross, incorporated by reference to Exhibit 10.33 of
Select Medical Corporations Registration Statement on Form
S-1 filed October 27, 2000 (Reg. No. 333-48856).
10
.36
Change of Control Agreement, dated as of November 21, 2001,
between Select Medical Corporation and David W. Cross,
incorporated by reference to Exhibit 10.61 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2001 (Reg. No. 000-32499).
Exhibit
10
.37
Amendment to Change of Control Agreement, dated as of February
24, 2005, between Select Medical Corporation and David W. Cross,
incorporated by reference to Exhibit 10.28 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.38
Other Senior Management Agreement, dated as of June 2, 1997,
between Select Medical Corporation and S. Frank Fritsch,
incorporated by reference to Exhibit 10.9 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.39
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and S. Frank Fritsch, incorporated by
reference to Exhibit 10.10 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.40
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and S. Frank
Fritsch, incorporated by reference to Exhibit 10.53 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.41
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and S.
Frank Fritsch, incorporated by reference to Exhibit 10.32 of
Select Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.42
Restricted Stock Award Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation and S. Frank Fritsch.
10
.43
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and James J. Talalai, incorporated by
reference to Exhibit 10.58 of Select Medical Corporations
Annual Report on Form 10-K for the fiscal year ended December
31, 2001 (Reg. No. 000-32499).
10
.44
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and James J.
Talalai, incorporated by reference to Exhibit 10.59 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.45
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and James
J. Talalai, incorporated by reference to Exhibit 10.35 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.46
Other Senior Management Agreement, dated as of March 28, 1997,
between Select Medical Corporation and Michael E. Tarvin,
incorporated by reference to Exhibit 10.21 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.47
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and Michael E. Tarvin, incorporated
by reference to Exhibit 10.22 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.48
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and Michael E.
Tarvin, incorporated by reference to Exhibit 10.54 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.49
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and
Michael E. Tarvin, incorporated by reference to Exhibit 10.39 of
Select Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.50
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and Scott A. Romberger, incorporated
by reference to Exhibit 10.56 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2001 (Reg. No. 000-32499).
10
.51
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and Scott A.
Romberger, incorporated by reference to Exhibit 10.57 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.52
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and Scott
A. Romberger, incorporated by reference to Exhibit 10.42 of
Select Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
Exhibit
10
.53
Fifth Amendment to Employment Agreement, dated as of April 18,
2005, between Select Medical Corporation and David W. Cross,
incorporated by reference to Exhibit 10.43 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.54
Form of Unit Award Agreement.
10
.55
Consulting Agreement, dated as of January 1, 2004, between
Select Medical Corporation and Thomas A. Scully, incorporated by
reference to Exhibit 10.1 of Select Medical Corporations
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2004 (Reg. No. 001-31441).
10
.56
First Amendment to Consulting Agreement, dated as of April 18,
2005, between Select Medical Corporation and Thomas A. Scully,
incorporated by reference to Exhibit 10.45 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.57
Office Lease Agreement, dated as of May 18, 1999, between Select
Medical Corporation and Old Gettysburg Associates, incorporated
by reference to Exhibit 10.24 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.58
First Addendum to Lease Agreement, dated as of June 1999,
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.25 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.59
Second Addendum to Lease Agreement, dated as of February 1,
2000, between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.26 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.60
Third Addendum to Lease Agreement, dated as of May 17, 2001,
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.52 of Select
Medical Corporations Registration Statement on Form S-4
filed June 26, 2001 (Reg. No. 333-63828).
10
.61
Fourth Addendum to Lease Agreement, dated as of September 1,
2001, by and between Old Gettysburg Associates and Select
Medical Corporation, incorporated by reference to Exhibit 10.54
of Select Medical Corporations Annual Report on Form 10-K
for the fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.62
Fifth Addendum to Lease Agreement, dated as of February 19,
2004, by and between Old Gettysburg Associates and Select
Medical Corporation, incorporated by reference to Exhibit 10.59
of Select Medical Corporations Form S-4 filed June 16,
2005 (Reg. No. 333-125846).
10
.63
Sixth Addendum to Lease Agreement, dated as of April 25,
2008, by and between Old Gettysburg Associates and Select
Medical Corporation.
10
.64
Office Lease Agreement, dated as of June 17, 1999, between
Select Medical Corporation and Old Gettysburg Associates III,
incorporated by reference to Exhibit 10.27 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.65
First Addendum to Lease Agreement, dated as of April 25,
2008, between Old Gettysburg Associates III.
10
.66
Office Lease Agreement, dated as of May 15, 2001, by and between
Select Medical Corporation and Old Gettysburg Associates II,
incorporated by reference to Exhibit 10.53 of Select Medical
Corporations Registration Statement on Form S-4 filed
June 26, 2001 (Reg. No. 333-63828).
10
.67
First Addendum to Lease Agreement, dated as of February 26,
2002, by and between Old Gettysburg Associates II and
Select Medical Corporation, incorporated by reference to Exhibit
10.2 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Reg. No.
000-32499).
10
.68
Second Addendum to Lease Agreement, dated as of February 26,
2002, by and between Old Gettysburg Associates II and
Select Medical Corporation, incorporated by reference to Exhibit
10.3 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Reg. No.
000-32499).
10
.69
Third Addendum to Lease Agreement, dated as of February 26,
2002, by and between Old Gettysburg Associates II and
Select Medical Corporation, incorporated by reference to Exhibit
10.4 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Reg. No.
000-32499).
Exhibit
10
.70
Office Lease Agreement, dated as of October 29, 2003, by and
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.74 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 (Reg. No. 001-31441).
10
.71
Office Lease Agreement, dated as of October 29, 2003, by and
between Select Medical Corporation and Old Gettysburg Associates
II, incorporated by reference to Exhibit 10.75 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2003 (Reg. No. 001-31441).
10
.72
Office Lease Agreement, dated as of March 19, 2004, by and
between Select Medical Corporation and Old Gettysburg Associates
II, incorporated by reference to Exhibit 10.3 of Select Medical
Corporations Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2004 (Reg. No. 001-31441).
10
.73
Office Lease Agreement, dated as of March 19, 2004, by and
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.4 of Select
Medical Corporations Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2004 (Reg. No. 001-31441).
10
.74
Office Lease Agreement, dated August 25, 2006, between Old
Gettysburg Associates IV, L.P. and Select Medical Corporation,
incorporated by reference to Exhibit 10.1 of Select Medical
Corporations Quarterly Report on Form 10-Q for the quarter
ended September 30, 2006 (Reg. No. 001-31441).
10
.75
Office Lease Agreement, dated August 10, 2005, among Old
Gettysburg Associates II and Select Medical Corporation,
incorporated by reference to Exhibit 10.1 of Select Medical
Corporations Current Report on Form 8-K filed August 16,
2005 (Reg. No. 001-31441).
10
.76
Office Lease Agreement, dated October 5, 2006, by and between
Select Medical Corporation and Old Gettysburg Associates.
10
.77
Naming, Promotional and Sponsorship Agreement, dated as of
October 1, 1997, between NovaCare, Inc. and the Philadelphia
Eagles Limited Partnership, assumed by Select Medical
Corporation in a Consent and Assumption Agreement dated November
19, 1999 by and among NovaCare, Inc., Select Medical Corporation
and the Philadelphia Eagles Limited Partnership, incorporated by
reference to Exhibit 10.36 of Select Medical Corporations
Registration Statement on Form S-1 filed December 7, 2000
(Reg. No. 333-48856).
10
.78
First Amendment to Naming, Promotional and Sponsorship
Agreement, dated as of January 1, 2004, between Select Medical
Corporation and Philadelphia Eagles, LLC, incorporated by
reference to Exhibit 10.63 of Select Medical Corporations
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
10
.79
Amended and Restated Select Medical Holdings Corporation 2005
Equity Incentive Plan, incorporated by reference to Exhibit 10.1
of Select Medical Corporations Current Report on Form 8-K
filed November 14, 2005 (Reg. No. 001-31441).
10
.80
Select Medical Holdings Corporation 2005 Equity Incentive Plan
for Non-Employee Directors, incorporated by reference to Exhibit
10.2 of Select Medical Corporations Current Report on
Form 8-K
filed November 14, 2005 (Reg. No. 001-31441).
10
.81
Select Medical Holdings Corporation Long Term Cash Incentive
Plan, as amended.
10
.82
Amendment No. 1, dated as of September 26, 2005, to Credit
Agreement, dated as of February 24, 2005, among Select Medical
Holdings Corporation, Select Medical Corporation, as Borrower,
the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.2 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended September 30, 2005 (Reg.
No. 001-31441).
Exhibit
10
.83
Amendment No. 2 and Waiver, dated as of March 19, 2007, to
Credit Agreement, dated as of February 24, 2005, among Select
Medical Holdings Corporation, Select Medical Corporation, as
Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.1 of Select Medical Corporations Current Report on Form
8-K filed March 23, 2007 (Reg. No. 001-31441).
10
.84
Incremental Facility Amendment, dated as of March 28, 2007, to
Credit Agreement, dated as of February 24, 2005, among Select
Medical Holdings Corporation, Select Medical Corporation, as
Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.1 of Select Medical Corporations Current Report on Form
8-K filed March 30, 2007 (Reg. No. 001-31441).
10
.85
Indenture governing
7
5
/
8
% Senior
Subordinated Notes due 2015 among Select Medical Corporation,
the Guarantors named therein and U.S. Bank Trust National
Association, dated February 24, 2005, incorporated by reference
to Exhibit 4.4 of Select Medical Corporations Form S-4
filed June 16, 2005 (Reg. No. 333-125846).
10
.86
Form of
7
5
/
8
% Senior
Subordinated Notes due 2015 (included in Exhibit 4.4),
incorporated by reference to Select Medical Corporations
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
10
.87
Exchange and Registration Rights Agreement, dated as of February
24, 2005, by and among Select Medical Corporation, the
Guarantors named therein, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, J.P. Morgan Securities Inc., Wachovia
Capital Markets, LLC, CIBC World Markets Corp. and PNC Capital
Markets, Inc., incorporated by reference to Exhibit 4.6 of
Select Medical Corporations Form S-4 filed June 16,
2005 (Reg. No. 333-125846).
10
.88
Indenture governing Senior Floating Rate Notes due 2015 among
Select Medical Holdings Corporation and U.S. Bank Trust National
Association, dated September 29, 2005, incorporated by reference
to Exhibit 4.7 of Select Medical Holdings Corporations
Form S-4 filed April 13, 2006 (Reg. No. 333-133284).
10
.89
Form of Senior Floating Rate Notes due 2015 (included in
Exhibit 4.7), incorporated by reference to Select Medical
Holdings Corporations Form S-4 filed April 13, 2006 (Reg.
No. 333-133284).
10
.90
Exchange and Registration Rights Agreement, dated as of
September 29, 2005, by and among Select Medical Holdings
Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Wachovia Capital Markets, LLC and J.P. Morgan
Securities Inc., incorporated by reference to Exhibit 4.9 of
Select Medical Holdings Corporations Form S-4 filed April
13, 2006 (Reg. No. 333-133284).
10
.91
10% Senior Subordinated Note due December 31, 2015 in favor
of WCAS Capital Partners IV, L.P., amended and restated as of
September 29, 2005, incorporated by reference to Exhibit 10.69
of Select Medical Holdings Corporations Form S-4 filed
April 13, 2006 (Reg. No. 333-133284).
10
.92
10% Senior Subordinated Note due December 31, 2015 in favor
of Rocco A. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.70 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
10
.93
10% Senior Subordinated Note due December 31, 2015 in favor
of Robert A. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.71 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
10
.94
10% Senior Subordinated Note due December 31, 2015 in favor
of John M. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.72 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
10
.95
10% Senior Subordinated Note due December 31, 2015 in favor
of Martin J. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.73 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
Exhibit
10
.96
10% Senior Subordinated Note due December 31, 2015 in favor
of Martin J. Ortenzio Descendants Trust, amended and restated as
of September 29, 2005, incorporated by reference to Exhibit
10.74 of Select Medical Holdings Corporations Form S-4
filed April 13, 2006 (Reg. No. 333-133284).
10
.97
10% Senior Subordinated Note due December 31, 2015 in favor
of Ortenzio Family Foundation, amended and restated as of
September 29, 2005, incorporated by reference to Exhibit 10.75
of Select Medical Holdings Corporations Form S-4 filed
April 13, 2006 (Reg. No. 333-133284).
21
.1
Subsidiaries of Select Medical Holdings Corporation.
23
.1
Consent of PricewaterhouseCoopers LLP.
23
.2*
Consent of Dechert LLP (included in Exhibit 5.1).
24
.1
Powers of Attorney (included on the signature page).
*
To be filed by amendment.
Item 17.
Undertakings.
By:
and Secretary
Director and Executive Chairman
July 24, 2008
Director and Chief Executive Officer (principal executive
officer)
July 24, 2008
Executive Vice President and Chief Financial Officer (principal
financial officer)
July 24, 2008
Senior Vice President, Controller and Chief Accounting Officer
(principal accounting officer)
July 24, 2008
Director
July 24, 2008
II-11
Director
July 24, 2008
Director
July 24, 2008
Director
July 24, 2008
Director
July 24, 2008
Director
July 24, 2008
Director
July 24, 2008
II-12
Exhibit
1
.1*
Form of Underwriting Agreement
2
.1
Stock Purchase Agreement, dated as of January 27, 2007,
between HealthSouth Corporation and Select Medical Corporation,
incorporated by reference to Exhibit 2.1 of Select Medical
Corporations Current Report on Form 8-K filed January 30,
2007 (Reg. No. 001-31441).
2
.2
Letter Agreement, dated as of May 1, 2007, between
HealthSouth Corporation and Select Medical Corporation,
incorporated by reference to Exhibit 2.2 of Select Medical
Corporations Current Report on Form 8-K filed May 7, 2007
(Reg. No. 001-31441).
2
.3
Acquisition Agreement, dated as of December 23, 2005,
between Select Medical Corporation, SLMC Finance Corporation and
Callisto Capital L.P., incorporated by reference to Exhibit 2.1
of Select Medical Corporations Current Report on Form 8-K
filed December 28, 2005 (Reg. No. 001-31441).
2
.4
Amendment to Acquisition Agreement, dated as of February 9,
2006, among Select Medical Corporation, SLMC Finance
Corporation, Callisto Capital L.P. and Canadian Back Institute
Limited, incorporated by reference to Exhibit 2.1 of Select
Medical Corporations Current Report on Form 8-K filed
February 10, 2006 (Reg. No. 001-31441).
3
.3*
Amended and Restated Certificate of Incorporation of Select
Medical Holdings Corporation.
3
.4*
Amended and Restated Bylaws of Select Medical Holdings
Corporation.
4
.1
Stockholders Agreement, dated as of February 24, 2005, by and
among Select Medical Holdings Corporation, Welsh, Carson,
Anderson & Stowe IX, L.P., WCAS Capital Partners IV, L.P.,
and each of the other individuals and entities from time to time
named therein, incorporated by reference to Exhibit 10.76
of Select Medical Holdings Corporations Form S-4 filed
April 13, 2006 (Reg. No. 333-133284).
4
.2
Registration Rights Agreement, dated as of February 24, 2005,
among Select Medical Holdings Corporation, Welsh, Carson,
Anderson & Stowe IX, L.P., WCAS Capital Partners IV, L.P.,
each of the entities and individuals listed on Schedule I
thereto and each of the other entities and individuals from time
to time listed on Schedule II thereto, incorporated by
reference to Exhibit 10.77 of Select Medical Holdings
Corporations Form S-4 filed April 13, 2006 (Reg. No.
333-133284).
4
.3
Registration Rights Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation, WCAS Capital
Partners IV, L.P., Rocco A. Ortenzio, Robert A. Ortenzio, John
M. Ortenzio, Martin J. Ortenzio, Martin J. Ortenzio Descendants
Trust and Ortenzio Family Foundation, incorporated by reference
to Exhibit 10.78 of Select Medical Holdings
Corporations Form S-4 filed April 13, 2006 (Reg. No.
333-133284).
4
.4*
Form of Common Stock Certificate.
5
.1*
Opinion of Dechert LLP.
10
.1
Credit Agreement, dated as of February 24, 2005, among Select
Medical Holdings Corporation, Select Medical Corporation, as
Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.1 of Select Medical Corporations Form S-4 filed June
16, 2005 (Reg. No. 333-125846).
10
.2
Guarantee and Collateral Agreement, dated as of February 24,
2005, among Select Medical Holdings Corporation, Select Medical
Corporation, the Subsidiaries of Select Medical Corporation
identified therein and JPMorgan Chase Bank, N.A., as Collateral
Agent, incorporated by reference to Exhibit 10.2 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.3
Amended and Restated Senior Management Agreement, dated as of
May 7, 1997, between Select Medical Corporation, John Ortenzio,
Martin Ortenzio, Select Investments II, Select Partners, L.P.
and Rocco Ortenzio, incorporated by reference to Exhibit
10.34 of Select Medical Corporations Registration
Statement on Form S-1 filed October 27, 2000 (Reg. No.
333-48856).
II-13
Exhibit
10
.4
Amendment No. 1, dated as of January 1, 2000, to Amended and
Restated Senior Management Agreement, dated as of May 7, 1997,
between Select Medical Corporation and Rocco A. Ortenzio,
incorporated by reference to Exhibit 10.35 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.5
Employment Agreement, dated as of March 1, 2000, between Select
Medical Corporation and Rocco A. Ortenzio, incorporated by
reference to Exhibit 10.16 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.6
Amendment No. 1 to Employment Agreement, dated as of
August 8, 2000, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.17 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.7
Amendment No. 2 to Employment Agreement, dated as of February
23, 2001, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.47 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.8
Amendment No. 3 to Employment Agreement, dated as of April 24,
2001, between Select Medical Corporation and Rocco A. Ortenzio,
incorporated by reference to Exhibit 10.50 of Select Medical
Corporations Registration Statement on Form S-4 filed
June 26, 2001 (Reg. No. 333-63828).
10
.9
Amendment No. 4 to Employment Agreement, dated as of September
17, 2001, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.52 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.10
Amendment No. 5 to Employment Agreement, dated as of February
24, 2005, between Select Medical Corporation and Rocco A.
Ortenzio, incorporated by reference to Exhibit 10.10 of Select
Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.11
Restricted Stock Award Agreement, dated as of February 24,
2005, between Select Medical Holdings Corporation and
Rocco A. Ortenzio.
10
.12
Restricted Stock Award Agreement, dated as of November 8,
2005, between Select Medical Holdings Corporation and
Rocco A. Ortenzio.
10
.13
Employment Agreement, dated as of March 1, 2000, between Select
Medical Corporation and Robert A. Ortenzio, incorporated by
reference to Exhibit 10.14 of Select Medical Corporations
Registration Statement on Form S-1 filed October 27, 2000
(Reg. No. 333-48856).
10
.14
Amendment No. 1 to Employment Agreement, dated as of August
8, 2000, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.15 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.15
Amendment No. 2 to Employment Agreement, dated as of February
23, 2001, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.48 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.16
Amendment No. 3 to Employment Agreement, dated as of September
17, 2001, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.53 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.17
Amendment No. 4 to Employment Agreement, dated as of December
10, 2004, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 99.3 of Select
Medical Corporations Current Report on Form 8-K filed
December 16, 2004 (Reg. No. 001-31441).
10
.18
Amendment No. 5 to Employment Agreement, dated as of February
24, 2005, between Select Medical Corporation and Robert A.
Ortenzio, incorporated by reference to Exhibit 10.16 of Select
Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.19
Restricted Stock Award Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation and Robert A.
Ortenzio.
Exhibit
10
.20
Restricted Stock Award Agreement, dated as of November 8,
2005, between Select Medical Holdings Corporation and
Robert A. Ortenzio.
10
.21
Employment Agreement, dated as of March 1, 2000, between Select
Medical Corporation and Patricia A. Rice, incorporated
by reference to Exhibit 10.19 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.22
Amendment No. 1 to Employment Agreement, dated as of August 8,
2000, between Select Medical Corporation and Patricia A. Rice,
incorporated by reference to Exhibit 10.20 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.23
Amendment No. 2 to Employment Agreement, dated as of February
23, 2001, between Select Medical Corporation and Patricia A.
Rice, incorporated by reference to Exhibit 10.49 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.24
Amendment No. 3 to Employment Agreement, dated as of December
10, 2004, between Select Medical Corporation and Patricia A.
Rice, incorporated by reference to Exhibit 99.2 of Select
Medical Corporations Current Report on Form 8-K filed
December 16, 2004 (Reg. No. 001-31441).
10
.25
Amendment No. 4 to Employment Agreement, dated as of February
24, 2005, between Select Medical Corporation and Patricia A.
Rice, incorporated by reference to Exhibit 10.21 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.26
Amendment No. 5 to Employment Agreement, dated as of April 27,
2005, between Select Medical Corporation and Patricia A. Rice,
incorporated by reference to Exhibit 10.46 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.27
Amendment No. 6 to Employment Agreement, dated as of February
13, 2008, between Select Medical Corporation and Patricia A.
Rice.
10
.28
Restricted Stock Award Agreement, dated as of February 24,
2005, between Select Medical Corporation and Patricia A. Rice.
10
.29
Amendment No. 1 to Restricted Stock Award Agreement, dated as of
February 13, 2008, between Select Medical Corporation and
Patricia A. Rice.
10
.30
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and Martin F. Jackson, incorporated
by reference to Exhibit 10.11 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.31
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and Martin F.
Jackson, incorporated by reference to Exhibit 10.52 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.32
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and Martin
F. Jackson, incorporated by reference to Exhibit 10.24 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.33
Restricted Stock Award Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation and Martin F.
Jackson.
10
.34
Employment Agreement, dated as of December 16, 1998, between
Select Medical Corporation and David W. Cross, incorporated
by reference to Exhibit 10.8 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.35
First Amendment to Employment Agreement, dated as of
October 15, 2000, between Select Medical Corporation and
David W. Cross, incorporated by reference to Exhibit 10.33 of
Select Medical Corporations Registration Statement on Form
S-1 filed October 27, 2000 (Reg. No. 333-48856).
10
.36
Change of Control Agreement, dated as of November 21, 2001,
between Select Medical Corporation and David W. Cross,
incorporated by reference to Exhibit 10.61 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2001 (Reg. No. 000-32499).
Exhibit
10
.37
Amendment to Change of Control Agreement, dated as of February
24, 2005, between Select Medical Corporation and David W. Cross,
incorporated by reference to Exhibit 10.28 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.38
Other Senior Management Agreement, dated as of June 2, 1997,
between Select Medical Corporation and S. Frank Fritsch,
incorporated by reference to Exhibit 10.9 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.39
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and S. Frank Fritsch,
incorporated by reference to Exhibit 10.10 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.40
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and S. Frank
Fritsch, incorporated by reference to Exhibit 10.53 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.41
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and S.
Frank Fritsch, incorporated by reference to Exhibit 10.32 of
Select Medical Corporations Form S-4 filed June 16,
2005 (Reg. No. 333-125846).
10
.42
Restricted Stock Award Agreement, dated as of February 24, 2005,
between Select Medical Holdings Corporation and S. Frank Fritsch.
10
.43
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and James J. Talalai,
incorporated by reference to Exhibit 10.58 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2001 (Reg. No. 000-32499).
10
.44
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and James J.
Talalai, incorporated by reference to Exhibit 10.59 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.45
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and James
J. Talalai, incorporated by reference to Exhibit 10.35 of Select
Medical Corporations Form S-4 filed June 16, 2005 (Reg.
No. 333-125846).
10
.46
Other Senior Management Agreement, dated as of March 28, 1997,
between Select Medical Corporation and Michael E. Tarvin,
incorporated by reference to Exhibit 10.21 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.47
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and Michael E. Tarvin, incorporated
by reference to Exhibit 10.22 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.48
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and Michael E.
Tarvin, incorporated by reference to Exhibit 10.54 of Select
Medical Corporations Registration Statement on Form S-1
filed March 30, 2001 (Reg. No. 333-48856).
10
.49
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and
Michael E. Tarvin, incorporated by reference to Exhibit 10.39 of
Select Medical Corporations Form S-4 filed June 16,
2005 (Reg. No. 333-125846).
10
.50
Change of Control Agreement, dated as of March 1, 2000, between
Select Medical Corporation and Scott A. Romberger,
incorporated by reference to Exhibit 10.56 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2001 (Reg. No. 000-32499).
10
.51
Amendment to Change of Control Agreement, dated as of February
23, 2001, between Select Medical Corporation and Scott A.
Romberger, incorporated by reference to Exhibit 10.57 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 (Reg. No. 000-32499).
Exhibit
10
.52
Second Amendment to Change of Control Agreement, dated as of
February 24, 2005, between Select Medical Corporation and Scott
A. Romberger, incorporated by reference to Exhibit 10.42 of
Select Medical Corporations Form S-4 filed June 16, 2005
(Reg. No. 333-125846).
10
.53
Fifth Amendment to Employment Agreement, dated as of April 18,
2005, between Select Medical Corporation and David W. Cross,
incorporated by reference to Exhibit 10.43 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.54
Form of Unit Award Agreement.
10
.55
Consulting Agreement, dated as of January 1, 2004, between
Select Medical Corporation and Thomas A. Scully,
incorporated by reference to Exhibit 10.1 of Select Medical
Corporations Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2004 (Reg. No. 001-31441).
10
.56
First Amendment to Consulting Agreement, dated as of April 18,
2005, between Select Medical Corporation and Thomas A. Scully,
incorporated by reference to Exhibit 10.45 of Select Medical
Corporations Form S-4 filed June 16, 2005 (Reg. No.
333-125846).
10
.57
Office Lease Agreement, dated as of May 18, 1999, between Select
Medical Corporation and Old Gettysburg Associates, incorporated
by reference to Exhibit 10.24 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.58
First Addendum to Lease Agreement, dated as of June 1999,
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.25 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.59
Second Addendum to Lease Agreement, dated as of February 1,
2000, between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.26 of Select
Medical Corporations Registration Statement on Form S-1
filed October 27, 2000 (Reg. No. 333-48856).
10
.60
Third Addendum to Lease Agreement, dated as of May 17,
2001, between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.52 of Select
Medical Corporations Registration Statement on Form S-4
filed June 26, 2001 (Reg. No. 333-63828).
10
.61
Fourth Addendum to Lease Agreement, dated as of September 1,
2001, by and between Old Gettysburg Associates and Select
Medical Corporation, incorporated by reference to Exhibit 10.54
of Select Medical Corporations Annual Report on Form 10-K
for the fiscal year ended December 31, 2001 (Reg. No. 000-32499).
10
.62
Fifth Addendum to Lease Agreement, dated as of February 19,
2004, by and between Old Gettysburg Associates and Select
Medical Corporation, incorporated by reference to Exhibit 10.59
of Select Medical Corporations Form S-4 filed June 16,
2005 (Reg. No. 333-125846).
10
.63
Sixth Addendum to Lease Agreement, dated as of April 25,
2008, by and between Old Gettysburg Associates and Select
Medical Corporation.
10
.64
Office Lease Agreement, dated as of June 17, 1999, between
Select Medical Corporation and Old Gettysburg Associates III,
incorporated by reference to Exhibit 10.27 of Select Medical
Corporations Registration Statement on Form S-1 filed
October 27, 2000 (Reg. No. 333-48856).
10
.65
First Addendum to Lease Agreement, dated as of April 25,
2008, between Old Gettysburg Associates III.
10
.66
Office Lease Agreement, dated as of May 15, 2001, by and between
Select Medical Corporation and Old Gettysburg Associates II,
incorporated by reference to Exhibit 10.53 of Select Medical
Corporations Registration Statement on Form S-4 filed
June 26, 2001 (Reg. No. 333-63828).
10
.67
First Addendum to Lease Agreement, dated as of February 26,
2002, by and between Old Gettysburg Associates II and
Select Medical Corporation, incorporated by reference to Exhibit
10.2 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Reg. No.
000-32499).
Exhibit
10
.68
Second Addendum to Lease Agreement, dated as of February 26,
2002, by and between Old Gettysburg Associates II and
Select Medical Corporation, incorporated by reference to Exhibit
10.3 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Reg. No.
000-32499).
10
.69
Third Addendum to Lease Agreement, dated as of February 26,
2002, by and between Old Gettysburg Associates II and
Select Medical Corporation, incorporated by reference to Exhibit
10.4 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002 (Reg. No.
000-32499).
10
.70
Office Lease Agreement, dated as of October 29, 2003, by and
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.74 of Select
Medical Corporations Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 (Reg. No. 001-31441).
10
.71
Office Lease Agreement, dated as of October 29, 2003, by and
between Select Medical Corporation and Old Gettysburg Associates
II, incorporated by reference to Exhibit 10.75 of Select Medical
Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2003 (Reg. No. 001-31441).
10
.72
Office Lease Agreement, dated as of March 19, 2004, by and
between Select Medical Corporation and Old Gettysburg Associates
II, incorporated by reference to Exhibit 10.3 of Select Medical
Corporations Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2004 (Reg. No. 001-31441).
10
.73
Office Lease Agreement, dated as of March 19, 2004, by and
between Select Medical Corporation and Old Gettysburg
Associates, incorporated by reference to Exhibit 10.4 of Select
Medical Corporations Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2004 (Reg. No. 001-31441).
10
.74
Office Lease Agreement, dated August 25, 2006, between Old
Gettysburg Associates IV, L.P. and Select Medical Corporation,
incorporated by reference to Exhibit 10.1 of Select Medical
Corporations Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2006 (Reg. No.
001-31441).
10
.75
Office Lease Agreement, dated August 10, 2005, among Old
Gettysburg Associates II and Select Medical Corporation,
incorporated by reference to Exhibit 10.1 of Select Medical
Corporations Current Report on Form 8-K filed August 16,
2005 (Reg. No. 001-31441).
10
.76
Office Lease Agreement, dated October 5, 2006, by and between
Select Medical Corporation and Old Gettysburg Associates.
10
.77
Naming, Promotional and Sponsorship Agreement, dated as of
October 1, 1997, between NovaCare, Inc. and the Philadelphia
Eagles Limited Partnership, assumed by Select Medical
Corporation in a Consent and Assumption Agreement dated November
19, 1999 by and among NovaCare, Inc., Select Medical Corporation
and the Philadelphia Eagles Limited Partnership, incorporated by
reference to Exhibit 10.36 of Select Medical Corporations
Registration Statement on Form S-1 filed December 7, 2000
(Reg. No. 333-48856).
10
.78
First Amendment to Naming, Promotional and Sponsorship
Agreement, dated as of January 1, 2004, between Select Medical
Corporation and Philadelphia Eagles, LLC, incorporated by
reference to Exhibit 10.63 of Select Medical Corporations
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
10
.79
Amended and Restated Select Medical Holdings Corporation 2005
Equity Incentive Plan, incorporated by reference to Exhibit 10.1
of Select Medical Corporations Current Report on Form 8-K
filed November 14, 2005 (Reg. No. 001-31441).
10
.80
Select Medical Holdings Corporation 2005 Equity Incentive Plan
for Non-Employee Directors, incorporated by reference to Exhibit
10.2 of Select Medical Corporations Current Report on Form
8-K filed November 14, 2005 (Reg. No. 001-31441).
10
.81
Select Medical Holdings Corporation Long Term Cash Incentive
Plan, as amended.
Exhibit
10
.82
Amendment No. 1, dated as of September 26, 2005, to Credit
Agreement, dated as of February 24, 2005, among Select Medical
Holdings Corporation, Select Medical Corporation, as Borrower,
the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.2 of Select Medical Corporations Quarterly Report on
Form 10-Q for the quarter ended September 30, 2005 (Reg.
No. 001-31441).
10
.83
Amendment No. 2 and Waiver, dated as of March 19, 2007, to
Credit Agreement, dated as of February 24, 2005, among Select
Medical Holdings Corporation, Select Medical Corporation, as
Borrower, the Lenders party thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent, Wachovia Bank,
National Association, as Syndication Agent and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and CIBC Inc., as
Co-Documentation Agents, incorporated by reference to Exhibit
10.1 of Select Medical Corporations Current Report on Form
8-K filed March 23, 2007 (Reg. No. 001-31441).
10
.84
Incremental Facility Amendment, dated as of March 28, 2007, to
Credit Agreement, dated as of February 24, 2005, among
Select Medical Holdings Corporation, Select Medical Corporation,
as Borrower, the Lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent and Collateral Agent, Wachovia
Bank, National Association, as Syndication Agent and Merrill
Lynch, Pierce, Fenner & Smith Incorporated and CIBC Inc.,
as Co-Documentation Agents, incorporated by reference to Exhibit
10.1 of Select Medical Corporations Current Report on Form
8-K filed March 30, 2007 (Reg. No. 001-31441).
10
.85
Indenture governing
7
5
/
8
% Senior
Subordinated Notes due 2015 among Select Medical Corporation,
the Guarantors named therein and U.S. Bank Trust National
Association, dated February 24, 2005, incorporated by reference
to Exhibit 4.4 of Select Medical Corporations Form S-4
filed June 16, 2005 (Reg. No. 333-125846).
10
.86
Form of
7
5
/
8
% Senior
Subordinated Notes due 2015 (included in Exhibit 4.4),
incorporated by reference to Select Medical Corporations
Form S-4 filed June 16, 2005 (Reg. No. 333-125846).
10
.87
Exchange and Registration Rights Agreement, dated as of February
24, 2005, by and among Select Medical Corporation, the
Guarantors named therein, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, J.P. Morgan Securities Inc., Wachovia
Capital Markets, LLC, CIBC World Markets Corp. and PNC Capital
Markets, Inc., incorporated by reference to Exhibit 4.6 of
Select Medical Corporations Form S-4 filed June 16,
2005 (Reg. No. 333-125846).
10
.88
Indenture governing Senior Floating Rate Notes due 2015 among
Select Medical Holdings Corporation and U.S. Bank Trust National
Association, dated September 29, 2005, incorporated by reference
to Exhibit 4.7 of Select Medical Holdings Corporations
Form S-4 filed April 13, 2006 (Reg. No. 333-133284).
10
.89
Form of Senior Floating Rate Notes due 2015 (included in
Exhibit 4.7), incorporated by reference to Select Medical
Holdings Corporations Form S-4 filed April 13, 2006 (Reg.
No. 333-133284).
10
.90
Exchange and Registration Rights Agreement, dated as of
September 29, 2005, by and among Select Medical Holdings
Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Wachovia Capital Markets, LLC and J.P. Morgan
Securities Inc., incorporated by reference to Exhibit 4.9 of
Select Medical Holdings Corporations Form S-4 filed April
13, 2006 (Reg. No. 333-133284).
10
.91
10% Senior Subordinated Note due December 31, 2015 in favor
of WCAS Capital Partners IV, L.P., amended and restated as of
September 29, 2005, incorporated by reference to Exhibit 10.69
of Select Medical Holdings Corporations Form S-4 filed
April 13, 2006 (Reg. No. 333-133284).
10
.92
10% Senior Subordinated Note due December 31, 2015 in favor
of Rocco A. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.70 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
Exhibit
10
.93
10% Senior Subordinated Note due December 31, 2015 in favor
of Robert A. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.71 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
10
.94
10% Senior Subordinated Note due December 31, 2015 in favor
of John M. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.72 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
10
.95
10% Senior Subordinated Note due December 31, 2015 in favor
of Martin J. Ortenzio, amended and restated as of September 29,
2005, incorporated by reference to Exhibit 10.73 of Select
Medical Holdings Corporations Form S-4 filed April 13,
2006 (Reg. No. 333-133284).
10
.96
10% Senior Subordinated Note due December 31, 2015 in favor
of Martin J. Ortenzio Descendants Trust, amended and restated as
of September 29, 2005, incorporated by reference to Exhibit
10.74 of Select Medical Holdings Corporations Form S-4
filed April 13, 2006 (Reg. No. 333-133284).
10
.97
10% Senior Subordinated Note due December 31, 2015 in favor
of Ortenzio Family Foundation, amended and restated as of
September 29, 2005, incorporated by reference to Exhibit 10.75
of Select Medical Holdings Corporations Form S-4 filed
April 13, 2006 (Reg. No. 333-133284).
21
.1
Subsidiaries of Select Medical Holdings Corporation.
23
.1
Consent of PricewaterhouseCoopers LLP.
23
.2*
Consent of Dechert LLP (included in Exhibit 5.1).
24
.1
Powers of Attorney (included on the signature page).
*
To be filed by amendment.
2
3
SELECT MEDICAL HOLDINGS
CORPORATION |
||||
By: | /s/ Sean M. Traynor | |||
Name: | ||||
Title: | ||||
PARTICIPANT:
|
||||
/s/ Rocco A. Ortenzio | ||||
Rocco A. Ortenzio | ||||
4
-2-
-3-
SELECT MEDICAL HOLDINGS CORPORATION
|
||||
By: | /s/ Michael E. Tarvin | |||
Name: | Michael E. Tarvin | |||
Title: | Senior Vice President | |||
PARTICIPANT:
|
||||
/s/ Rocco A. Ortenzio | ||||
Rocco A. Ortenzio | ||||
Cumulative Shares of Restricted Stock | ||||
Vesting Date | Vested at Each Anniversary | |||
|
||||
February 24, 2006
|
5,085,392 | |||
February 24, 2007
|
10,170,784 | |||
February 24, 2008
|
15,256,176 |
2
3
SELECT MEDICAL HOLDINGS CORPORATION
|
||||
By: | /s/ Sean M. Traynor | |||
Name: | ||||
Title: | ||||
PARTICIPANT:
|
||||
/s/ Robert A. Ortenzio | ||||
Robert A. Ortenzio |
4
Cumulative Shares of Restricted | ||||
Vesting Date | Stock Vested at Each Anniversary | |||
November 8, 2006
|
1,750,000 | |||
November 8, 2007
|
3,500,000 | |||
November 8, 2008
|
5,250,000 |
-2-
-3-
-4-
SELECT MEDICAL HOLDINGS CORPORATION
|
||||
By: | /s/ Michael E. Tarvin | |||
Name: | Michael E. Tarvin | |||
Title: | Senior Vice President | |||
PARTICIPANT:
|
||||
/s/ Robert A. Ortenzio | ||||
Robert A. Ortenzio |
SELECT MEDICAL CORPORATION
|
||||
By: | /s/ Robert A. Ortenzio | |||
Robert A. Ortenzio, | ||||
Chief Executive Officer | ||||
/s/ Patricia A. Rice | ||||
Patricia A. Rice | ||||
-2-
Cumulative Shares of Restricted Stock | ||||
Vesting Date | Vested at Each Anniversary | |||
February 24, 2006
|
1,307,672 | |||
February 24, 2007
|
2,615,344 | |||
February 24, 2008
|
3,923,017 | |||
February 24, 2009
|
5,230,689 | |||
February 24, 2010
|
6,538,361 |
2
3
SELECT MEDICAL HOLDINGS CORPORATION
|
||||
By: | /s/ Sean M. Traynor | |||
Name: | ||||
Title: | ||||
PARTICIPANT:
|
||||
/s/ Patricia A. Rice | ||||
Patricia A. Rice |
4
SELECT MEDICAL HOLDINGS CORPORATION
|
|||||
By: | /s/ Robert A. Ortenzio | ||||
Robert A. Ortenzio, | |||||
Chief Executive Officer | |||||
/s/ Patricia A. Rice | ||||
Patricia A. Rice | ||||
-2-
Cumulative Shares of Restricted Stock | ||||
Vesting Date | Vested at Each Anniversary | |||
|
||||
February 24, 2006
|
653,836 | |||
February 24, 2007
|
1,307,672 | |||
February 24, 2008
|
1,961,509 | |||
February 24, 2009
|
2,615,345 | |||
February 24, 2010
|
3,269,181 |
2
3
SELECT MEDICAL HOLDINGS CORPORATION
|
||||
By: | /s/ Sean M. Traynor | |||
Name: | ||||
Title: | ||||
PARTICIPANT:
|
||||
/s/ Martin F. Jackson | ||||
Martin F. Jackson |
4
Cumulative Shares of Restricted Stock | ||||
Vesting Date | Vested at Each Anniversary | |||
|
||||
February 24, 2006
|
226,663 | |||
February 24, 2007
|
453,326 | |||
February 24, 2008
|
679,990 | |||
February 24, 2009
|
906,653 | |||
February 24, 2010
|
1,133,316 |
2
3
SELECT MEDICAL HOLDINGS CORPORATION
|
||||
By: | /s/ Sean M. Traynor | |||
Name: | ||||
Title: | ||||
PARTICIPANT:
|
||||
/s/ S. Frank Fritsch | ||||
S. Frank Fritsch |
4
-2-
SELECT MEDICAL HOLDINGS
CORPORATION |
||||
By: | ||||
PARTICIPANT:
|
||||
A. | Landlord and Tenant are parties to that certain Office Lease Agreement dated May 18, 1999 (as amended by the First, Second, Third, Fourth, Fifth addendum thereto, the Lease) pursuant to which Landlord leased to Tenant, and Tenant leased from Landlord, approximately 12,225 rentable square feet of space in the building located at 4718 Gettysburg Road, Mechanicsburg, Pennsylvania . All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Lease. | |
B. | Landlord and Tenant now desire to amend the Lease as hereinafter set forth. |
1. | The term of the 4,635 RSF that is Suite 109 (now known as Suite 101-102 data Center) in the original lease dated May 18, 1999 shall be extended to January 31, 2023. |
Landlord: Old Gettysburg Associates | ||||||||
|
||||||||
|
||||||||
WITNESS:
|
/s/ Molly Fidler | By: | /s/ John Ortenzio | |||||
|
||||||||
Select Capital Commercial Properties, Inc.
John Ortenzio, President Agent for Owner |
||||||||
|
||||||||
|
||||||||
Tenant: Select Medical Corporation | ||||||||
|
||||||||
|
||||||||
|
ATTEST:
|
Illegible | By: | /s/ Michael E. Tarvin | |||||
|
Name:
|
Michael E. Tarvin | Title: | Executive Vice President | |||||
|
A. | Landlord and Tenant are parties to that certain Office Lease Agreement dated June 17, 1999 pursuant to which Landlord leased to Tenant, and Tenant leased from Landlord, approximately 43,919 rentable square feet of space in the building located at 4716 Gettysburg Road, Mechanicsburg, Pennsylvania . All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Lease. | |
B. | Landlord and Tenant now desire to amend the Lease as hereinafter set forth. |
1. | This lease shall be extended to Jan 31, 2023. |
Landlord: Old Gettysburg Associates | ||||||||
|
||||||||
|
||||||||
|
||||||||
WITNESS:
|
/s/ Molly Fidler | By: | /s/ John Ortenzio | |||||
|
||||||||
Select Capital Commercial Properties, Inc.
John Ortenzio, President Agent for Owner |
||||||||
|
||||||||
|
||||||||
Tenant: Select Medical Corporation | ||||||||
|
||||||||
|
||||||||
|
ATTEST:
|
Illegible | By: | /s/ Michael E. Tarvin | |||||
|
Name:
|
Michael E. Tarvin | Title: | Executive Vice President | |||||
|
1.
|
Date: | October 5, 2006 | ||
|
||||
|
||||
2.
|
Landlord: | Old Gettysburg Associates | ||
|
||||
|
||||
3.
|
Tenant: | Select Medical Corporation | ||
|
||||
|
||||
4.
|
Guarantor: | None | ||
|
||||
|
||||
5.
|
Building: | Executive Park West I, 4718 Old Gettysburg Rd, Mechanicsburg, PA 17055 | ||
|
||||
|
||||
6.
|
Premises: | Suite 201 | ||
|
7.
|
Commencement Date: | 3/1/07 | ||
|
||||
|
||||
8.
|
Expiration Date: | 2/28/12 | ||
|
9.
|
Rentable Area of the Building: | Approx. 36,626 | Rentable square feet | |||
|
||||||
|
||||||
10.
|
Rentable Area of the Premises: | Approx. 1,606 | Rentable square feet | |||
|
11. | Tenants Proportionate Share | 4.4% | ||||
|
||||||
12. | Initial Annual Base Rental: | $29,935.84 | ||||
|
||||||
13.
|
Initial Annual Base Rental Rate: | $18.64 | per Rentable square foot | |||
|
||||||
|
||||||
14.
|
Annual Base Rental Increase (cumulative) | 3.5% | ||||
|
||||||
|
||||||
15. | Annual Operating Expense Allowance | N/A | ||||
|
||||||
16. | Annual Operating Expense Base Year | N/A | ||||
17. | Fiscal Year: | Twelve Months ending December 31 | ||||
|
||||||
18.
|
Security Deposit: | 0 | payable at the time the Lease is signed. (Article #26) | |||
|
||||||
|
||||||
19.
|
First Rent Check: | $2,494.63 | payable at the time the Lease is signed. (Article #26) | |||
|
||||||
|
||||||
20. | Broker: | None | ||||
21.
|
Landlords Address for Notices: | Old Gettysburg Associates | ||
|
||||
|
||||
|
c/o Select Capital Commercial Properties | |||
|
||||
|
||||
|
4718 Old Gettysburg Road, Suite 405 | |||
|
||||
|
||||
|
Mechanicsburg, PA 17055 | |||
|
||||
|
||||
|
Attention: | Attn: Molly Fidler | ||
|
1
22.
|
Tenants Address for Notices: | Select Medical Corporation | ||
|
||||
|
||||
|
4716 Old Gettysburg Rd. | |||
|
||||
|
||||
|
Mechanicsburg, PA 17055 | |||
|
||||
|
||||
|
Attention: |
|
Exhibit A,
|
Description of Premises | |
|
||
Exhibit B,
|
Description of Leasehold Improvements/Finish Schedule | |
|
||
Exhibit C,
|
Description of Parking Rights | |
|
||
Exhibit D,
|
Security Card/Key Access | |
|
||
Exhibit E,
|
Rules and Regulations | |
|
||
Exhibit F,
|
Guaranty N/A Intentionally Left Blank | |
|
|
Landlord : | Old Gettysburg Associates | ||||||
|
||||||||
|
By: | SELECT CAPITAL COMMERCIAL PROPERTIES, INC. | ||||||
|
Its general partner | |||||||
|
||||||||
WITNESS:
|
|
By: | /s/ John M. Ortenzio | |||||
|
||||||||
|
||||||||
|
John M. Ortenzio, President | |||||||
|
||||||||
|
Date: | 3/27/2007 | ||||||
|
||||||||
|
||||||||
|
Tenant : | Select Medical Corporation | ||||||
|
||||||||
ATTEST:
|
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By: | /s/ Michael E. Tarvin | |||||
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Date: | 4/1/2007 | ||||||
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ARTICLE 1 Premises
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ARTICLE 2 Term
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ARTICLE 3 Delivery of the Premises to Tenant
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ARTICLE 4 Acceptance of the Premises and Building by Tenant
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ARTICLE 5 Rental
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ARTICLE 6 Operating Expenses
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ARTICLE 7 Services by Landlord
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ARTICLE 9 Use
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ARTICLE 10 Laws, Ordinances and Requirements of Public Authorities
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ARTICLE 11 Observance of Rules and Regulations
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ARTICLE 12 Alterations
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ARTICLE 13 Liens
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ARTICLE 14 Ordinary Repairs
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ARTICLE 15 Insurance
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ARTICLE 16 Damage by Fire or Other Cause
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ARTICLE 17 Condemnation
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ARTICLE 18 Assignment and Subletting
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ARTICLE 19 Indemnification
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ARTICLE 20 Surrender of the Premises
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ARTICLE 21 Estoppel Certificates
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ARTICLE 22 Subordination
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ARTICLE 23 Parking
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ARTICLE 24 Default and Remedies
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ARTICLE 25 Waiver by Tenant
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ARTICLE 26 Security Deposit
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ARTICLE 27 Attorneys Fees and Legal Expenses
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ARTICLE 28 Notices
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ARTICLE 29 Miscellaneous
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EXHIBIT A Floor Plan
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EXHIBIT B Description of Leasehold Improvements
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EXHIBIT C Parking
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EXHIBIT D Security Card Access
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EXHIBIT E Rules and Regulations
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EXHIBIT F Guaranty N/A
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(a) | specified in the Basic Lease Information provided Landlord has delivered the Premises with the Building Standard Leasehold Improvements as set forth on Exhibit A and B substantially completed: or |
(b) | of Tenants occupancy of the Premises for the conduct of Tenants business (i.e. not occupancy for construction purposes) (the Commencement Date). |
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(a) | accepts the Premises as suitable for the purposes for which they are leased |
(b) | accepts the Building and every part and appurtenance thereof as being in a good and satisfactory condition; and |
(c) | waives any defects in the Premises and its appurtenances, except for the completion of those items, if any, on any punch list remaining on Exhibit A and B attached hereto. |
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(a) | passenger elevator service (where applicable) in common with other Tenants for access to and from the Premises, reasonably limited after normal business hours and on Saturdays, Sundays, and holidays; |
(b) | janitorial cleaning services will be provided 5 nights a week to Tenants as is customary in comparable office buildings in the greater Harrisburg area; and |
(c) | utility services provided for in Article 8 below. |
(a) | potable water |
(b) | heating, ventilating, and/or air conditioning in season on business days from 7:00 a.m. to 6:00 p.m. |
(c) | electric lighting for public areas and special Services Areas of the Building |
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(a) | special mainframe type computers and/or electronic data processing equipment, |
(b) | special lighting which has electrical consumption in excess of the Building Standard lighting, or |
(c) | any item that consumes more than 0.5 kilowatts at rated capacity or requires a voltage other than 120 volt single phase |
(i) | in no event shall lighting have a design load greater than an average of 2.00 watts per Usable square foot, and |
(ii) | collectively, Tenants equipment and lighting shall not have an electrical design load greater than an average of 3.75 watts per Usable square foot. |
(i) | by a survey performed by a reputable consultant selected by Landlord (and paid for by Tenant when such additional consumption is proven), or |
(ii) | by separate meter in the Premises to be installed, maintained and read by Landlord at Tenants sole expense. |
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(i) | comply with all laws, orders, ordinances, and regulations of federal, state, county, and municipal authorities having jurisdiction over the Premises, |
(ii) | comply with any direction made pursuant to law of any public officer or officers requiring abatement of any nuisance, or imposing any obligation, order, or duty upon Landlord or Tenant arising from Tenants use of the Premises or from conditions which have been created by or at the insistence of Tenant or required by reason of a breach of any of Tenants obligations hereunder, and |
(iii) | indemnify Landlord and hold Landlord harmless from any loss, cost, claim, or expense which Landlord may incur or suffer by reason of Tenants failure to comply with its obligations under clauses (i) or (ii) above. If Tenant receives written notice of violation of any such law, order, ordinance, or regulation, it shall promptly notify Landlord thereof. |
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(a) | All Risk Insurance (including fire, extended coverage, vandalism, malicious mischief, extended perils, sprinkler leakage and debris removal) upon property of every description and kind owned by Tenant and located in the Building or for which Tenant is legally liable or installed by or on behalf of Tenant including, without limitation, fittings, installations, fixtures, removable trade fixtures, Non-Building Standard Leasehold Improvements (as defined in Exhibit B ), and alterations, in an amount not less than the full replacement cost thereof. If there is a dispute as to the amount which comprises full replacement cost, the decision of Landlord or the mortgagees of Landlord shall be conclusive and binding. |
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(b) | Commercial liability insurance coverage to include death, personal injury, bodily injury (not less that $1,000,000 limits), broad form property damage (not less than $1,000,000 limits), fire sprinkler hazard, operations hazard, owners protective coverage, contractual liability, and products and completed operations liability, with combined single liability limits not less than $1,000,000. Such coverage shall insure against all liability of Tenant and its authorized representatives and visitors arising out of, and in connection with, Tenants use or occupancy of the Premises. |
(c) | Workers Compensation and Employers Liability Insurance, with a waiver of subrogation endorsement, in form and amount satisfactory to Landlord. |
(d) | Any other form or forms of insurance as Tenant or Landlord or the mortgagees of Landlord may reasonably require from time to time in form, in amounts, and for insurance risks against which a prudent Tenant of a comparable size and in a comparable business would protect itself. |
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(i) | are free from collection by Landlords mortgagee, ground or primary lessor, and |
(ii) | are sufficient) |
(a) | the Building is damaged or destroyed to the extent that, in Landlords reasonable opinion it would not be economically feasible to repair or restore such damage or destruction, or |
(b) | in Landlords reasonable judgment, the damage or destruction to the Building cannot be repaired or restored within 60 days after such damage or destruction, |
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(a) | to terminate this Lease as to the space so affected by Tenant in its notice, in which event Tenant, subject to the provisions of this Lease which expressly survive the termination hereof, shall be relieved of all further obligations hereunder as to such space; |
(b) | to permit Tenant to assign or sublet such space, subject, however, to the subsequent written approval of the proposed assignee or subtenant by Landlord, and provided that if the Rental rate agreed upon between Tenant and its proposed subtenant is greater than the Rental rate that Tenant must pay Landlord hereunder, then 100% of such excess Rental shall be considered additional Rental owed by Tenant to Landlord, and shall be paid by Tenant to Landlord in the same manner that Tenant pays Annual Base Rental; or |
(c) | to refuse to consent to Tenants assignment or subleasing of such space and to continue this Lease in full force and effect as to the entire Premises, in which case, any judgment against Landlord for unreasonable denial shall be limited to specific performance of approval of said assignment or sublease. |
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(a) | all ground or primary Leases in existence at the date hereof and to any supplements, modifications, and extensions thereof heretofore or hereafter made, and |
(b) | utility easements and agreements, covenants, restrictions, and other encumbrances which do not materially adversely effect Tenants intended use of the Premises, both existing and future. |
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(a) | if Tenant shall fail to pay any Rental or other sums payable by Tenant hereunder within 10 days of written notice thereof from Landlord (provided, however, if such event of default shall occur more than once in every 6 months period, Landlord shall not be required to provide any written notice of default and an event of default shall occur as and when such Rental or other sums becomes due and payable); |
(b) | if Tenant shall fail to perform or observe any other term hereof or any of the Rules and Regulations and such failure shall continue for more than 30 days after notice thereof from Landlord; |
(c) | if Tenant fails to take occupancy within 30 days following substantial completion; |
(d) | if Tenant deserts or vacates any substantial portion of the Premises; |
(e) | if any petition is filed by or against Tenant or any guarantor of Tenants obligations under this Lease under any section or chapter of the present or any future Federal Bankruptcy Code or under any similar law or statute of the United States or any state thereof; |
(f) | if Tenant or any guarantor of Tenants obligations under this Lease becomes insolvent or makes a transfer in fraud of creditors; |
(g) | if Tenant or any guarantor of this Lease makes an assignment for the benefit of creditors; or |
(h) | if a receiver, custodian, or trustee is appointed for Tenant or for any of the assets of Tenant which appointment is not vacated within 30 days of the date of such appointment. |
(a) | Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord. If Tenant fails to do so, Landlord may, without notice and without prejudice to any other remedy Landlord may have, enter upon and take possession of the Premises and expel or remove Tenant and its effects without being liable to prosecution or any claim for damages therefore; and Tenant shall be liable to Landlord for all loss and damage which |
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Landlord may suffer by reason of such termination, whether through inability to relet the Premises or otherwise, including any loss of Rental for the remainder of the Term. Any such loss of Rental shall be offset by any Rental received by Landlord as a result of reletting the Premises during the remainder of the Term. |
(b) | Terminate this Lease, in which event Tenants event of default shall be considered a total breach of Tenants obligations under this Lease and Tenant immediately shall become liable for such damages for such breach amount, equal to the total of: |
(1) | the costs of recovering the Premises; |
(2) | the unpaid Rental due for the remaining term as of the date of termination, plus interest thereon at a rate per annum from the due date equal to 5% percent over the Prime Rate; provided, however, that such interest shall never exceed the Highest Lawful Rate; |
(3) | the total Rental and other benefits which Landlord would have received under the Lease for the remainder of the Term, at the rates then in effect, together with all other expenses incurred by Landlord in connection with Tenants default, |
(4) | all other sums of money and damages owing by Tenant and Landlord. |
(c) | Enter upon and take possession of the Premises as Tenants agent without terminating this Lease and without being liable to prosecution or any claim for damages therefore, and Landlord may relet the Premises as Tenants agent and receive the Rental therefore, in which event Tenant shall pay to Landlord on demand the cost of renovating, repairing, and altering the Premises for a new Tenant or Tenants and any deficiency that may arise by reason of such reletting; provided, however, that Landlord shall have no duty to relet the Premises and Landlords failure to relet the Premises shall not release or affect Tenants liability for Rental or for damages. |
(d) | Do whatever Tenant is obligated to do under this Lease and may enter the Premises without being liable to prosecution or any claim for damages therefore, to accomplish this purpose. Tenant shall reimburse Landlord immediately upon demand for any expenses which Landlord incurs in thus effecting compliance with this Lease on Tenants behalf, and Landlord shall not be liable for any damages suffered by Tenant from such action, whether caused by the negligence of Landlord or otherwise. |
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(a) | any right and privilege which it or any of them may have under any present or future constitution, statute, or rule of law to redeem the Premises or to have a continuance of this Lease for the Term after termination of Tenants right of occupancy by order or judgment of any court or by any legal process or writ, under the terms of this Lease, or after the termination of the Term as herein provided, |
(b) | the benefits of any present or future constitution, statute, or rule of law which exempts property form liability for debt or for distress for rent, and |
(c) | the provisions of law relating to notice and/or delay in levy of execution in case of eviction of a Tenant for non-payment of rent. |
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Landlord : Old Gettysburg Associates | |||||
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By: SELECT CAPITAL COMMERCIAL PROPERTIES, INC.
Its general partner |
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WITNESS:
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By: | /s/ John M. Ortenzio | ||||
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John M. Ortenzio, President | |||||
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Date: | 3/27/07 | ||||
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Tenant : Select Medical Corporation | |||||
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ATTEST:
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By: | /s/ Michael E. Tarvin | ||||
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Date: | 4/1/07 | ||||
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1. | Throughout the Term, Tenant shall Lease from Landlord parking spaces in the Parking Area. All such parking spaces shall be leased by Tenant on an unassigned basis and shall be used in common with the other Tenants. |
2. | Landlord shall have the right to reserve parking spaces as it elects and condition use thereof on such terms as it elects. |
3. | Landlord shall have the right to: add parking decks, change curb cuts, change traffic patterns, re-stripe the parking surfaces as to size and location of spaces, temporarily displace vehicles (for the purpose of improving and expanding Parking Area), |
4. | If a card system is utilized, lost cards will be replaced on request, but a charge of $15.00 per card will be required to reimburse Landlord for administrative costs of card replacement and reprogramming of card entry processing unit. |
5. | Tenant shall cooperate fully in Landlords efforts to maintain the designated use of the various Parking Facilities and parking areas, and shall follow all regulations issued by the Landlord with respect thereto. |
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JURISDICTION
OF |
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NAME | ORGANIZATION | |
Advantage Rehabilitation Clinics, Inc.
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Massachusetts | |
American Transitional Hospitals, Inc.
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Delaware | |
Argosy Health, LLC
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Delaware | |
Athens Sports Medicine Clinic, Inc.
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Georgia | |
C.E.R. West, Inc.
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Michigan | |
Caritas Rehab Services, LLC
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Kentucky | |
Cedar Cliff Acquisition Corporation
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Delaware | |
Community Rehab Centers of Massachusetts, Inc.
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Massachusetts | |
Crowley Physical Therapy Clinic, Inc.
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Louisiana | |
Dade Physical Therapy Rehab, Inc.
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Florida | |
Douglas Avery & Associates, Ltd.
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Virginia | |
Eagle Rehab Corporation
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Delaware | |
Eagle Rehab Corporation
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Washington | |
Elizabethtown Physical Therapy, P.S.C.
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Kentucky | |
Elk County Physical Therapy, Inc.
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Pennsylvania | |
Fine, Bryant & Wah, Inc.
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Maryland | |
Garrett Rehab Services, LLC
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Maryland | |
Georgia Physical Therapy, Inc.
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Georgia | |
GP Therapy, L.L.C.
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Georgia | |
Gulf Breeze Physical Therapy, Inc.
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Florida | |
HealthSouth/Baptist Health Sports Medicine & Rehabilitation Center, LLC
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Alabama | |
HealthSouth Rehabilitation Center of Connecticut Limited Partnership
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Alabama | |
Indianapolis Physical Therapy and Sports Medicine, Inc.
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Indiana | |
Intensiva Healthcare Corporation
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Delaware | |
Intensiva Hospital of Greater St. Louis, Inc.
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Missouri | |
Jeff Ayres, PT Therapy Center, Inc.
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Kentucky | |
Jeffersontown Physical Therapy, LLC
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Kentucky | |
Johnson Physical Therapy, Inc.
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Ohio | |
Joyner Sportsmedicine Institute, Inc.
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Pennsylvania | |
Kentucky Orthopedic Rehabilitation, LLC
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Delaware | |
Kentucky Rehabilitation Services, Inc.
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Kentucky | |
Kessler Care Center at Cedar Grove, Inc.
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New Jersey | |
Kessler Core PT, OT and Speech Therapy at New York, LLC
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New York | |
Kessler Institute for Rehabilitation, Inc.
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New Jersey | |
Kessler Orthotic & Prosthetic Services, Inc.
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Delaware | |
Kessler Professional Services, LLC
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Delaware | |
Kessler Rehab Centers, Inc.
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Delaware | |
Kessler Rehabilitation Corporation
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Delaware | |
Kessler Rehabilitation Services, Inc.
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New Jersey |
JURISDICTION
OF
NAME
ORGANIZATION
Kentucky
Connecticut
Texas
Massachusetts
Michigan
New York
Massachusetts
New Hampshire
New York
Massachusetts
Delaware
Delaware
Kansas
Minnesota
Ohio
Florida
Ohio
Delaware
Kentucky
Delaware
Pennsylvania
California
North Carolina
North Carolina
South Carolina
Virginia
North Carolina
Delaware
Ohio
Tennessee
Connecticut
Cayman Islands
Delaware
Delaware
Illinois
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
New Jersey
JURISDICTION
OF
NAME
ORGANIZATION
Delaware
Maryland
Indiana
Michigan
New Jersey
Ohio
Pennsylvania
Colorado
Florida
New Mexico
North Carolina
Delaware
Texas
Delaware
Delaware
Massachusetts
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Nevada
New York
Arizona
Delaware
Delaware
Delaware
Alabama
Alabama
Alabama
Alabama
Illinois
Alabama
Alabama
Alabama
Alabama
Alabama
JURISDICTION
OF
NAME
ORGANIZATION
Alabama
Alabama
Alabama
Alabama
Delaware
Alabama
Alabama
Alabama
Alabama
Alabama
Delaware
Alabama
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Delaware
Missouri
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
JURISDICTION
OF
NAME
ORGANIZATION
Missouri
Delaware
Missouri
Missouri
Missouri
Delaware
Delaware
Delaware
Mississippi
Hawaii
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Missouri
Delaware
JURISDICTION
OF
NAME
ORGANIZATION
Missouri
Delaware
Missouri
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Missouri
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Missouri
Delaware
Delaware
Delaware
Missouri
Delaware
Missouri
Missouri
Delaware
Missouri
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
JURISDICTION
OF
NAME
ORGANIZATION
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Florida
Ohio
Tennessee
Tennessee
Delaware
Pennsylvania
New Jersey
Florida