sec document
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.)
Filed by the Registrant /_/
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Under Rule 14a-12
LifePoint Hospitals, Inc.
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(Name of Registrant as Specified in Its Charter)
Accipiter Life Sciences Fund, LP
Accipiter Life Sciences Fund II, LP
Accipiter Life Sciences Fund (Offshore), Ltd.
Accipiter Life Sciences Fund II (Offshore), Ltd.
Accipiter Life Sciences Fund II (QP), LP
Accipiter Capital Management, LLC
Candens Capital, LLC
Gabe Hoffman
Mohsin Y. Meghji
Earl P. Holland
Nicole Viglucci
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/_/ Fee paid previously with preliminary materials:
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/_/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
ACCIPITER LIFE SCIENCES FUND, LP
April 21, 2006
Dear Fellow Stockholder:
Accipiter Life Sciences Fund, LP ("Accipiter") and certain of its
affiliates are the beneficial owners of an aggregate of 985,394 shares of Common
Stock of LifePoint Hospitals, Inc. ("LifePoint" or the "Company"), representing
approximately 1.8% of the outstanding Common Stock of the Company. Accipiter
does not believe that the current Board of Directors of the Company is acting in
your best interests as discussed in further detail in the attached Proxy
Statement. Accipiter is therefore seeking your support at the annual meeting of
stockholders scheduled to be held on Monday, May 8, 2006 at 3:00 p.m. local time
at 511 Union Street, Suite 2700, Nashville, Tennessee 37219 for the following:
1. To elect Accipiter's slate of nominees to the Board of
Directors to serve as Class I directors, and
2. To adopt a proposal recommended by the Board of Directors of
the Company and included in the Company's proxy statement to
ratify the appointment of Ernst & Young LLP as the Company's
independent registered public accounting firm for 2006.
Accipiter urges you to carefully consider the information contained in
the attached Proxy Statement and then support its efforts by signing, dating and
returning the enclosed GOLD proxy card today. The attached Proxy Statement and
the enclosed GOLD proxy card are first being furnished to the stockholders on or
about April 21, 2006.
If you have already voted for the incumbent management slate you have
every right to change your votes by either voting in person at the Annual
Meeting or by signing, dating and returning a later dated proxy card either
directly to Accipiter in care of MacKenzie Partners, Inc. at the address set
forth on the following page, or to LifePoint with a photostatic copy to
Accipiter in care of MacKenzie Partners, Inc. at the address set forth on the
following page.
If you have any questions or require any assistance with your vote,
please contact MacKenzie Partners, Inc., which is assisting us, at their address
and toll-free numbers listed on the following page.
Thank you for your support,
Gabe Hoffman
Accipiter Life Sciences Fund, LP
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IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GOLD PROXY CARD,
OR NEED ADDITIONAL COPIES OF ACCIPITER'S PROXY
MATERIALS, PLEASE CALL MACKENZIE PARTNERS AT THE
PHONE NUMBERS LISTED BELOW.
MACKENZIE
PARTNERS,INC.
105 Madison Avenue
New York, NY 10016
PROXY@MACKENZIEPARTNERS.COM
(212) 929-5500 (Call Collect)
or
TOLL-FREE (800) 322-2885
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-2-
ANNUAL MEETING OF STOCKHOLDERS
OF
LIFEPOINT HOSPITALS, INC.
-------------------------
PROXY STATEMENT
OF
ACCIPITER LIFE SCIENCES FUND, LP
-------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
Accipiter Life Sciences Fund, LP ("Accipiter" or "we"), a Delaware
limited partnership, together with certain of its affiliates who are named as
participants in this Proxy Statement are stockholders of LifePoint Hospitals,
Inc., a Delaware corporation ("LifePoint" or the "Company"). Accipiter is
writing to you in connection with the election of three nominees to the board of
directors of LifePoint (the "LifePoint Board") at the annual meeting of
stockholders scheduled to be held on Monday, May 8, 2006 at 3:00 p.m. local time
at 511 Union Street, Suite 2700, Nashville, Tennessee 37219, including any
adjournments or postponements thereof and any meeting which may be called in
lieu thereof (the "Annual Meeting"). This Proxy Statement and the enclosed GOLD
proxy card are first being furnished to stockholders on or about April 21, 2006.
This Proxy Statement and the enclosed GOLD proxy card are being
furnished to stockholders of LifePoint by Accipiter in connection with the
solicitation of proxies from LifePoint's stockholders for the following:
1. To elect Accipiter's director nominees, Mohsin Y. Meghji, Earl
P. Holland and Nicole Viglucci (the "Nominees") to serve as
Class I directors of the Company, in opposition to LifePoint's
incumbent directors whose terms expire at the Annual Meeting,
and
2. To adopt a proposal recommended by the LifePoint Board and
included in the Company's proxy statement to ratify the
appointment of Ernst & Young LLP as the Company's independent
registered public accounting firm for 2006.
Accipiter and its affiliates Accipiter Life Sciences Fund II, LP, a
Delaware limited partnership ("ALSF II"), Accipiter Life Sciences Fund
(Offshore), Ltd., a Cayman Islands company ("ALSF Offshore"), Accipiter Life
Sciences Fund II (Offshore), Ltd., a Cayman Islands company ("ALSF II
Offshore"), Accipiter Life Sciences Fund II (QP), LP, a Delaware limited
partnership ("ALSF II QP"), Accipiter Capital Management, LLC, a Delaware
limited liability company ("Accipiter Management"), Candens Capital, LLC, a
Delaware limited liability company ("Candens"), Gabe Hoffman and the Nominees
are members of a group (the "Accipiter Group") formed in connection with this
proxy solicitation and are deemed participants in this proxy solicitation.
LifePoint has set the record date for determining stockholders entitled
to notice of and to vote at the Annual Meeting as March 17, 2006 (the "Record
Date"). The mailing address of the principal executive offices of LifePoint is
103 Powell Court, Suite 200, Brentwood, Tennessee 37027. Stockholders of record
at the close of business on the Record Date will be entitled to vote at the
Annual Meeting. According to LifePoint, as of the Record Date, there were
55,492,025 shares of common stock, $.01 par value per share (the "Shares"),
outstanding and entitled to vote at the Annual Meeting. As of the Record Date,
the members of the Accipiter Group were the beneficial owners of an aggregate of
556,880 Shares, which represents approximately 1.0% of the Shares outstanding.
The Accipiter Group intends to vote such Shares for the election of the Nominees
and the ratification of the appointment of Ernst & Young LLP as described
herein.
THIS SOLICITATION IS BEING MADE BY ACCIPITER AND NOT ON BEHALF OF THE BOARD OF
DIRECTORS OR MANAGEMENT OF LIFEPOINT. ACCIPITER IS NOT AWARE OF ANY OTHER
MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING. SHOULD OTHER MATTERS, WHICH
ACCIPITER IS NOT AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT
BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED GOLD
PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
ACCIPITER URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE
ELECTION OF ITS NOMINEES DESCRIBED IN THIS PROXY STATEMENT.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY LIFEPOINT MANAGEMENT TO THE
LIFEPOINT BOARD, YOU MAY REVOKE THAT PROXY AND VOTE FOR EACH OF THE PROPOSALS
DESCRIBED IN THIS PROXY STATEMENT BY SIGNING, DATING AND RETURNING THE ENCLOSED
GOLD PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY
MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN
NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING OR BY VOTING
IN PERSON AT THE ANNUAL MEETING. ALTHOUGH A REVOCATION IS EFFECTIVE IF DELIVERED
TO LIFEPOINT, ACCIPITER REQUESTS THAT EITHER THE ORIGINAL OR PHOTOSTATIC COPIES
OF ALL REVOCATIONS BE MAILED TO ACCIPITER IN CARE OF MACKENZIE PARTNERS, INC. AT
THE ADDRESS SET FORTH ON THE BACK COVER OF THIS PROXY STATEMENT.
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IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN. ACCIPITER
URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED GOLD PROXY CARD TODAY TO VOTE
FOR THE ELECTION OF ACCIPITER'S NOMINEES.
o If your Shares are registered in your own name, please sign and date
the enclosed GOLD proxy card and return it to Accipiter, c/o MacKenzie
Partners, Inc., in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution on the Record Date, only it can vote
such Shares and only upon receipt of your specific instructions.
Accordingly, please contact the person responsible for your account and
instruct that person to execute on your behalf the GOLD proxy card.
Accipiter urges you to confirm your instructions in writing to the
person responsible for your account and to provide a copy of such
instructions to Accipiter, c/o MacKenzie Partners, Inc., who is
assisting in this solicitation, at the address and telephone numbers
set forth below, and on the back cover of this Proxy Statement, so that
we may be aware of all instructions and can attempt to ensure that such
instructions are followed.
YOU MAY ALSO BE ABLE TO VOTE BY TELEPHONE OR INTERNET.
SINCE THERE IS NOT MUCH TIME UNTIL THE ANNUAL MEETING, PLEASE CALL MACKENZIE
PARTNERS FOR ASSISTANCE IN VOTING YOUR SHARES BY TELEPHONE OR INTERNET.
MACKENZIE
PARTNERS,INC.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
PROXY@MACKENZIEPARTNERS.COM
or
CALL TOLL FREE (800) 322-2885
-3-
BACKGROUND TO SOLICITATION
The following is a chronology of events leading up to this proxy
solicitation:
o Accipiter began accumulating Shares of LifePoint in August 2005.
o Over the past several months, representatives of Accipiter have closely
followed the public statements of individual members of LifePoint
management and have talked at length with LifePoint management about
various issues facing the Company which were subsequently communicated
to LifePoint in a letter described in the following bullet.
o On March 24, 2006, Accipiter Management delivered a letter to LifePoint
expressing its concern with LifePoint's operations and encouraging the
LifePoint Board to improve stockholder value by terminating the
proposed acquisition of five hospitals from HCA Inc., instituting
rigorous procedures for determining capital allocation for Share
repurchase or debt repayment, making additions and/or changes to both
the management team and the LifePoint Board and aligning management
compensation with operational performance. Accipiter Management also
expressed its wish to engage management and the LifePoint Board in a
constructive dialogue regarding actions to enhance stockholder value.
o The Chairman of the Board of LifePoint delivered a three-sentence
letter to Accipiter Management responding to its March 24 letter
without substantively addressing any of Accipiter's concerns. The
Chairman indicated that the LifePoint Board would communicate on these
matters with all of the stockholders in the near future.
o On March 31, 2006, Accipiter delivered to LifePoint what it believed to
be a timely notice nominating the Nominees for election to the
LifePoint Board at the Annual Meeting.
o On April 4, 2006, LifePoint advised Accipiter that its notice of
nomination was untimely. LifePoint stated that on February 6, 2006,
LifePoint had issued a press release announcing the date of the Annual
Meeting and that stockholder nominations of candidates for election as
directors therefore had been due within 10 days thereafter, or February
16, 2006, in accordance with the advance notice requirements for
stockholder nominations contained in the Company's Amended and Restated
By-Laws.
o On April 10, 2006, Accipiter filed a Complaint for Injunctive Relief in
the Court of Chancery of the State of Delaware alleging that the
members of the LifePoint Board had breached their fiduciary duties by
triggering the advance notice requirements in a manner foreseeably
adverse to any stockholders potentially interested in nominating an
opposing slate. The Complaint seeks to, among other things, enjoin
LifePoint from proceeding with the Annual Meeting without first waiving
the advance notice requirement as to Accipiter and the Nominees and
affording Accipiter a fair opportunity to solicit proxies on behalf of
the Nominees. See "Legal Proceedings."
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The LifePoint Board is currently composed of eight directors divided
into three classes serving staggered three-year terms. The terms of three Class
I directors of the LifePoint Board - Ricki Tigert Helfer, John E. Maupin, Jr.
and Owen G. Shell, Jr. - expire at the Annual Meeting. Accipiter is seeking your
support at the Annual Meeting to elect its Nominees in opposition to LifePoint's
director nominees.
REASONS WHY ACCIPITER IS CHALLENGING THE INCUMBENT DIRECTORS
Accipiter believes the election of the Nominees represents the best
means for LifePoint stockholders to maximize the value of their Shares. As a
stockholder of LifePoint, Accipiter has a vested interest in the maximization of
the value of the Shares. Additionally, Accipiter's Nominees have extensive
experience in the healthcare industry as well as in private and public
investment, corporate governance and business management. LifePoint's three
incumbent director nominees on the other hand have no actual management
experience with any for-profit healthcare companies based on their biographical
extracts contained in the LifePoint proxy statement. If elected to the LifePoint
Board, the Nominees will use their best efforts to improve the Company's
operating performance and implement corporate governance reform while exploring
all available alternatives to maximize stockholder value. Specifically, the
Nominees intend to steer LifePoint away from value dilutive acquisitions,
including currently proposed acquisitions discussed herein. The Nominees also
intend to focus the Company on operating core facilities and fixing problems at
recently acquired facilities.
There can be no assurance that the actions our Nominees intend to take
as described herein will be implemented if they are elected or that the election
of our Nominees will improve the Company's business or otherwise enhance
stockholder value. Your vote to elect the Nominees does not constitute a vote in
favor of our value enhancing plans for LifePoint. Your vote to elect the
Nominees will have the legal effect of replacing three incumbent directors of
LifePoint with our Nominees. If elected, the Nominees will represent a minority
of the members of the LifePoint Board.
WE BELIEVE THAT INADEQUATE DUE DILIGENCE OF AND POOR EXECUTION ON THE
RECENT ACQUISITIONS OF BOTH PROVINCE HEALTHCARE AND DANVILLE REGIONAL MEDICAL
CENTER HAVE CONTRIBUTED TO A DECLINE IN STOCKHOLDER VALUE
On April 15, 2005, LifePoint merged with Province Healthcare Company
("Province"). Province was a public company that, prior to the merger, operated
21 general acute care hospitals in non-urban communities in the United States.
Numerous problems with the former Province hospitals have arisen since the
merger and we have questions as to why these issues were not discovered either
in due diligence or during the eight months between the announcement and closing
of the merger. These include but are not limited to the following items
discussed below.
COASTAL CAROLINA MEDICAL CENTER ("COASTAL"): Coastal was a de novo former
Province hospital which opened in November 2004. LifePoint management
acknowledged during their January 9, 2006 conference call that Coastal has been
a drain on earnings by $0.02 to $0.03 per share per quarter. We question why the
hospital is still operating at such a large loss after having been open for 16
months and operated by LifePoint for nearly a year. Management's 2006 guidance
provided earlier this year assumes that Coastal will achieve break-even in the
second half of 2006. However, population growth is not expected to dramatically
expand over the near term in the county in which Coastal is located. We believe
that this may be an important indicator that Coastal may continue to operate at
a loss. We believe an operating plan should be instituted to turn around
Coastal. To date, management has not provided any specifics regarding such a
plan.
VALLEY VIEW MEDICAL CENTER ("VALLEY VIEW"): Valley View has been a second
problematic de novo former Province hospital. Valley View was opened by
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LifePoint in the fourth quarter of 2005 and failed to receive Medicare
certification during the inspection by the Centers for Medicare and Medicaid
Services ("CMS") in January 2006. As a result, Valley View is treating Medicare
patients but is not receiving Medicare reimbursement. Our understanding is that
the hospital CEO appointed by LifePoint management only a few months ago has
already been replaced. Neither we nor our industry contacts are aware of any
for-profit hospital company that has failed to be certified for Medicare
reimbursement for such a long period. Management stated during their January 9,
2006 conference call that this hospital is currently operating at a loss of
$0.04 to $0.05 per share per quarter.
PHYSICIAN RELATIONS AT FORMER PROVINCE HOSPITALS: LifePoint management
acknowledged during their January 9, 2006 conference call that they were
surprised by the extent and pervasiveness of the poor relations between Province
and their physicians. Bill Gracey, COO of LifePoint, stated during that call,
"Long story short, we have uncovered more physician competition we believe than
we initially anticipated, I think is a fair statement." We do not understand why
this was not anticipated - after all, Province's troubled physician relations
were well highlighted over a year before the merger. In fact, management of
Province acknowledged during their January 31, 2003 conference call that "recent
results were [affected] primarily by the unusually large number of physicians
lost during the year."
Danville Regional Medical Center ("Danville") is a hospital facility
located in Danville, Virginia that was acquired by LifePoint in July 2005.
According to LifePoint's public filings, the acquisition of Danville was in
furtherance of the Company's strategy of acquiring hospitals that are the sole
or significant market provider of healthcare services in their communities. As
with the Province hospitals, there are numerous problems with Danville that we
believe should have been discovered by LifePoint management prior to the
acquisition. The CEO of Danville, like the CEO at Valley View, has been replaced
after just a short tenure. In addition, LifePoint management has cited the local
economy in Danville as a reason for weaker than expected results. During their
February 2006 conference call, management stated the following in response to a
question regarding the local economy: "In Danville, you referred to the fact
that we recently mentioned that the key employer there was going to be cutting
down employment substantially. Yes, that's a challenge; yes, it's been a shock
for the community...." We do not think the economic outlook should have been a
surprise for LifePoint management due to evidence of rising unemployment in the
region prior to the acquisition. Dan River, the area's former largest employer,
filed for bankruptcy in March 2004 and has been steadily laying off employees
since then. Given that LifePoint planned significant personnel reductions at
Danville Regional Medical Center, it is surprising that they should be caught
off-guard by higher than expected unemployment in Danville. Dimon Tobacco, the
former fifth largest employer, closed its factory, laying off over 500 employees
in April 2005, over a month before LifePoint signed the Danville acquisition
agreement.
WE BELIEVE THAT THE PROPOSED ACQUISITION OF HOSPITALS FROM HCA INC. IN
WEST VIRGINIA AND VIRGINIA HAS ALSO DETERIORATED STOCKHOLDER VALUE.
On July 14, 2005, LifePoint announced the acquisition of five hospitals
in West Virginia and Virginia from HCA Inc. ("HCA"). Management stated during
their July 28, 2005 conference call reporting second quarter 2005 earnings that
the deal would be accretive to earnings. However, management stated during their
January 9, 2006 conference call that the performance at these hospitals has
deteriorated significantly since the deal was announced and that as a result,
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the proposed transaction was now expected to be dilutive by $0.02 to $0.03 per
share per quarter upon closing. Amazingly, this potential dilution was not
incorporated into LifePoint's financial projections, leaving room for additional
downward revisions to earnings estimates. We also question management's decision
to invest a substantial portion of the $330 million transaction value in the
West Virginia market and we have concerns as to why LifePoint would choose to
concentrate itself in this state. If the HCA transaction closes, West Virginia
would amount to over 10% of the Company's revenues. We believe that West
Virginia is unattractive due to the fact that the West Virginia Healthcare
Authority sets reimbursement rates for hospitals. Based upon the foregoing
concerns and the problems encountered with the Province and Danville facilities
subsequent to acquisition, we believe that the proposed acquisitions from HCA
are not in the best interest of the Company's stockholders.
We also believe that the decline in Share price since the announcement
of the HCA acquisition demonstrates how the proposed acquisition has already
deteriorated stockholder value:
o On July 14, 2005, the day LifePoint announced the acquisition
of the HCA hospitals, the Share price closed at $47.38, just
off an all-time high closing price of $51.47 achieved earlier
that month.
o Since July 14, 2005, the Share price has declined to $29.87 as
of April 19, 2006, the day prior to the filing of this Proxy
Statement with the SEC, representing an alarming 37% decline.
We are concerned that the Share price will continue to decline if the
acquisition of the HCA hospitals is consummated.
WE BELIEVE LIFEPOINT SHOULD IMMEDIATELY REDUCE ITS LEVERAGE AND/OR COMMENCE
A STOCK REPURCHASE PROGRAM
Instead of focusing on ill-conceived acquisitions that have not been
accretive to stockholder value, we believe LifePoint should implement the
following value enhancing alternatives:
o REDUCE LEVERAGE BY FOCUSING ON CORE OPERATIONS, IMPROVING
OPERATIONS OF RECENTLY ACQUIRED BUSINESSES AND MAXIMIZING FREE
CASH FLOW. Given that LifePoint has already increased leverage
from approximately 1.0x debt / EBITDA just prior to the
Province transaction to over 3.0x currently, we do not think
it wise to increase leverage further to complete the HCA
acquisition or any other acquisition.
o AGGRESSIVELY BUY BACK LIFEPOINT STOCK AT CURRENT MARKET
PRICES. We estimate that LifePoint is trading at 7x EBITDA
which is less expensive than acquiring the HCA hospitals, for
which we estimate the multiple to be 10x EBITDA. We believe
-7-
that buying back its own stock would require less of LifePoint
management's time and attention than integrating problem
hospitals and results in a significantly lower risk profile.
We believe the foregoing alternatives are less risky and have higher
upside than completing the HCA transaction.
ACCIPITER BELIEVES LIFEPOINT SHOULD REDEEM ITS POISON PILL AND SHOULD
ELIMINATE FROM ITS CERTIFICATE OF INCORPORATION AND BY-LAWS CERTAIN
ANTI-TAKEOVER PROVISIONS
In April 2005, the LifePoint Board adopted, without stockholder
approval, a rights agreement or "poison pill". We believe the poison pill has
the effect of entrenching the LifePoint Board and management. In addition,
LifePoint's Amended and Restated Certificate of Incorporation ("Charter") and
Amended and Restated By-Laws ("By-Laws") contain numerous anti-takeover
provisions that we believe infringe on the stockholders' rights to determine
what is best for the Company and serve to entrench the LifePoint Board and
current management. These anti-takeover provisions include, but are not limited
to, the following:
o CHARTER PROVISION CLASSIFYING THE COMPOSITION OF THE LIFEPOINT
BOARD INTO THREE CLASSES.
o BY-LAW PROVISION SPECIFICALLY DENYING STOCKHOLDERS THE ABILITY
TO CALL A SPECIAL MEETING OF STOCKHOLDERS.
o CHARTER PROVISION SPECIFICALLY DENYING STOCKHOLDERS THE
ABILITY TO TAKE ACTION BY WRITTEN CONSENT.
o CHARTER PROVISION ALLOWING STOCKHOLDERS TO REMOVE DIRECTORS
FOR CAUSE ONLY BY A VOTE OF AT LEAST 80% OF THE OUTSTANDING
VOTING STOCK.
o CHARTER PROVISION GENERALLY REQUIRING A VOTE OF AT LEAST 85%
OF THE OUTSTANDING VOTING STOCK TO APPROVE CERTAIN BUSINESS
COMBINATIONS WITH 10% STOCKHOLDERS, SUBJECT TO CERTAIN
EXCEPTIONS.
o CHARTER PROVISION REQUIRING A VOTE OF AT LEAST 80% OF THE
OUTSTANDING VOTING STOCK TO ALTER, AMEND OR REPEAL MOST OF THE
ARTICLES OF THE CHARTER.
o CHARTER AND BYLAW PROVISION ALLOWING STOCKHOLDERS TO ALTER,
AMEND OR REPEAL THE BY-LAWS ONLY BY A VOTE OF AT LEAST 80% OF
THE OUTSTANDING VOTING STOCK.
If elected, the Nominees will, subject to their fiduciary duties, be
committed to lobbying the other members of the LifePoint Board to eliminate the
poison pill and the anti-takeover provisions contained in the Charter and
By-Laws. We note that Kenneth C. Donahey currently serves as both the Chairman
of the Board and CEO of LifePoint. If elected, the Nominees would also encourage
the other members of the LifePoint Board to adopt a By-Law provision separating
the Chairman and CEO positions in order to increase transparency and
independence at the Board level.
-8-
THE NOMINEES
The following information sets forth the name, age, business address,
present principal occupation, and employment and material occupations,
positions, offices, or employments for the past five years of each of the
Nominees. This information has been furnished to Accipiter by the Nominees. The
Nominees are citizens of the United States of America.
MOHSIN Y. MEGHJI (AGE 41) is a Principal and co-founder of Loughlin Meghji
+ Company ("LM+Co"), a New York based financial advisory firm specializing in
advising management, investors and lenders. LM+Co was founded in February 2002.
Prior to that, Mr. Meghji spent 11 years with the Global Corporate Finance Group
of Arthur Andersen LLP, including as a partner in the New York office. From May
2002 to December 2004 upon its sale, Mr. Meghji served on the board of directors
of Mariner Health Care Inc., a $1.5 billion publicly-held, integrated health
care services provider. He currently serves on the board of directors of Dan
River, Inc. (since January 2006), a subsidiary of GHCL Ltd., an Indian
conglomerate. Mr. Meghji graduated with a Bachelor of Business Administration
from the Schulich School of Business of York University in Canada and has
completed the Advanced Corporate Finance Program at the INSEAD Business School
in France. The principal business address of Mr. Meghji is c/o Loughlin Meghji +
Company, 148 Madison Avenue, New York, New York 10016-6700. Mr. Meghji does not
beneficially own, and has not purchased or sold during the past two years, any
securities of LifePoint.
EARL P. HOLLAND (AGE 60) served from 1981 to January 2001 in a number
of capacities, and most recently as the Chief Operating Officer and Vice
Chairman, of Health Management Associates, Inc., a hospital company operator
that trades on the New York Stock Exchange. He retired in January 2001 and is
now a private investor. Mr. Holland currently serves as a director of Team
Health, a supplier of physician staffing for hospitals and military bases that
was recently acquired by The Blackstone Group, and serves as a member of its
compensation committee. He is also a director of Orion Bancorp, a large private
bank in Florida, where he serves as the chairman of each of the audit committee
and compensation committee. Mr. Holland is also the Vice Chairman of the board
of directors of Cornerstone National Insurance Co., a private automobile
insurance company, and serves on its compensation committee. Other current
directorships of Mr. Holland include Ultra Watt, Inc., a private research and
development company specializing in energy-efficient lighting technologies, and
Medical Diagnostic Technology, a company specializing in early cancer detection.
Mr. Holland's principal address is c/o Accipiter Capital Management, LLC, 399
Park Avenue, 38th Floor, New York, New York 10022. Mr. Holland does not
beneficially own, and has not purchased or sold during the past two years, any
securities of LifePoint.
NICOLE VIGLUCCI (AGE 30) currently serves as a healthcare analyst at
Accipiter Capital Management, LLC, a private investment management firm. She has
served in that capacity since July 2005. From April 2002 to March 2005, she
served as an analyst at JL Advisors, LLC, a private investment firm. From May
2000 to April 2002 she served as a healthcare associate at The Carlyle Group, a
private global investment firm that originates, structures and acts as lead
equity investor in management-led buyouts, strategic minority equity
investments, equity private placements, consolidations and buildups, and growth
capital financings. The principal business address of Ms. Viglucci is c/o
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Accipiter Capital Management, LLC, 399 Park Avenue, 38th Floor, New York, New
York 10022. Ms. Viglucci does not beneficially own, and has not purchased or
sold during the past two years, any securities of LifePoint and disclaims
beneficial ownership of the Shares owned by Accipiter and its affiliates.
The Nominees will not receive any compensation from any other member of
the Accipiter Group for their services as directors of LifePoint. Pursuant to
letter agreements dated March 30, 2006, Accipiter agreed to indemnify each of
the Nominees against claims arising from the solicitation of proxies from the
Company's stockholders in connection with the Annual Meeting and any related
transactions. Other than as stated herein, there are no arrangements or
understandings between the Nominees and any other member of the Accipiter Group
or any other person or persons pursuant to which the nomination described herein
is to be made, other than the consent by each of the Nominees to be named in
this Proxy Statement and to serve as a director of LifePoint if elected as such
at the Annual Meeting. Except as discussed in the Section entitled "Legal
Proceedings", no participant in this solicitation is a party adverse to
LifePoint or any of its subsidiaries or has a material interest adverse to
LifePoint or any of its subsidiaries in any material pending legal proceedings.
Accipiter does not expect that the Nominees will be unable to stand for
election, but, in the event that such persons are unable to serve or for good
cause will not serve, the Shares represented by the enclosed GOLD proxy card
will be voted for substitute nominees, to the extent this is not prohibited
under the By-Laws and applicable law. In addition, Accipiter reserves the right
to nominate substitute persons if LifePoint makes or announces any changes to
its By-Laws or takes or announces any other action that has, or if consummated
would have, the effect of disqualifying the Nominees, to the extent this is not
prohibited under the By-Laws and applicable law. In any such case, Shares
represented by the enclosed GOLD proxy card will be voted for such substitute
nominees. Accipiter reserves the right to nominate additional persons, to the
extent this is not prohibited under the By-Laws and applicable law, if LifePoint
increases the size of the LifePoint Board above its existing size or increases
the number of directors whose terms expire at the Annual Meeting. Additional
nominations made pursuant to the preceding sentence are without prejudice to the
position of Accipiter that any attempt to increase the size of the current
LifePoint Board or to reconstitute or reconfigure the classes on which the
current directors serve constitutes an unlawful manipulation of LifePoint's
corporate machinery.
YOU ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED GOLD
PROXY CARD.
-10-
PROPOSAL NO. 2
LIFEPOINT PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
As discussed in further detail in LifePoint's proxy statement, prior to
the Annual Meeting, LifePoint's Audit and Compliance Committee selected Ernst &
Young LLP as the Company's independent registered public accounting firm for
2006. Ernst & Young LLP has audited the Company's financial statements since
1999. LifePoint is asking stockholders to ratify the appointment of Ernst &
Young LLP as the independent registered public accounting firm of the Company
for 2006.
Accipiter does not object to the ratification of the appointment of
Ernst & Young LLP as the Company's independent registered public accounting firm
for 2006.
-11-
VOTING AND PROXY PROCEDURES
Only stockholders of record on the Record Date will be entitled to
notice of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Stockholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Stockholders of
record on the Record Date will retain their voting rights in connection with the
Annual Meeting even if they sell such Shares after the Record Date. Based on
publicly available information, Accipiter believes that the only outstanding
class of securities of LifePoint entitled to vote at the Annual Meeting is the
Shares.
Shares represented by properly executed GOLD proxy cards will be voted
at the Annual Meeting as marked and, in the absence of specific instructions,
will be voted FOR the election of the Nominees to the LifePoint Board and FOR
the ratification of the appointment of Ernst & Young LLP, and in the discretion
of the persons named as proxies on all other matters as may properly come before
the Annual Meeting.
We are asking you to elect our Nominees. The enclosed GOLD proxy card
may only be voted for our Nominees and does not confer voting power with respect
to the Company's nominees. Accordingly, you will not have the opportunity to
vote for any of LifePoint's nominees. You can only vote for LifePoint's nominees
by signing and returning a proxy card provided by LifePoint. Stockholders should
refer to the Company's proxy statement for the names, backgrounds,
qualifications and other information concerning the Company's nominees. The
participants in this solicitation intend to vote all of their Shares in favor of
the Nominees and the ratification of the appointment of Ernst & Young LLP and
will not vote their Shares in favor of any of LifePoint's nominees.
QUORUM
In order to conduct any business at the Annual Meeting, a quorum must
be present in person or represented by valid proxies. A quorum consists of a
majority of the Shares issued and outstanding on the Record Date. All Shares
that are voted "FOR", "AGAINST" or "ABSTAIN" (or "WITHHOLD" in the case of
election of directors) on any matter will count for purposes of establishing a
quorum and will be treated as Shares entitled to vote at the Annual Meeting (the
"Votes Present").
VOTES REQUIRED FOR APPROVAL
ELECTION OF DIRECTORS. A plurality of the total votes cast ("Votes
Cast") by holders of the Shares is required for the election of directors and
the three nominees who receive the most votes will be elected (assuming a quorum
is present). A vote to "WITHHOLD" for any nominee for director will be counted
for purposes of determining the Votes Present, but will have no other effect on
the outcome of the vote on the election of directors. A stockholder may cast
such votes for the Nominees either by so marking the ballot at the Annual
Meeting or by specific voting instructions sent with a signed proxy to either
Accipiter in care of MacKenzie Partners, Inc. at the address set forth on the
back cover of this Proxy Statement or to LifePoint at 103 Powell Court, Suite
200, Brentwood, Tennessee 37027 or any other address provided by LifePoint.
-12-
RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP. The affirmative vote
of a majority of the Votes Present is required in order to ratify the
appointment of Ernst & Young LLP as the Company's independent registered public
accounting firm for 2006.
ABSTENTIONS AND BROKER NON-VOTES
Abstentions and broker non-votes will count as Votes Present for the
purpose of determining whether a quorum is present. Abstentions and broker
non-votes will not be counted as Votes Cast in the election of directors.
Abstentions will have the effect of a vote against the proposal to ratify the
appointment of Ernst & Young LLP. Broker non-votes will have no effect on the
proposal to ratify the appointment of Ernst & Young LLP.
The term "broker non-vote" refers to shares held in street name that
are not voted with respect to a particular matter, generally because the
beneficial owner did not give any instructions to the broker as to how to vote
such shares on that matter and the broker is not permitted under applicable
rules to vote such shares in its discretion because of the subject matter of the
proposal, but whose shares are present on at least one matter.
DISCRETIONARY VOTING
Accipiter only plans on mailing proxy materials to stockholders who own
100 or more Shares. Accordingly, brokerage firms will not have discretionary
authority to vote Shares held in street name by stockholders who own 100 or more
Shares while brokerage firms will have discretionary authority to vote Shares
held in street name by stockholders who own less than 100 Shares.
REVOCATION OF PROXIES
Stockholders of LifePoint may revoke their proxies at any time prior to
exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered either to
Accipiter in care of MacKenzie Partners, Inc. at the address set forth on the
back cover of this Proxy Statement or to LifePoint at 103 Powell Court, Suite
200, Brentwood, Tennessee 37027 or any other address provided by LifePoint.
Although a revocation is effective if delivered to LifePoint, Accipiter requests
that either the original or photostatic copies of all revocations be mailed to
Accipiter in care of MacKenzie Partners, Inc. at the address set forth on the
back cover of this Proxy Statement so that Accipiter will be aware of all
revocations and can more accurately determine if and when proxies have been
received from the holders of record on the Record Date of a majority of the
outstanding Shares. Additionally, MacKenzie Partners, Inc. may use this
information to contact stockholders who have revoked their proxies in order to
solicit later dated proxies for the election of the Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE LIFEPOINT BOARD OR
FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP, PLEASE SIGN, DATE
AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID ENVELOPE
PROVIDED.
-13-
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is being
made by Accipiter. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. Accipiter will not solicit proxies
via the Internet.
Accipiter has entered into an agreement with MacKenzie Partners, Inc.
for solicitation and advisory services in connection with this solicitation, for
which MacKenzie Partners, Inc. will receive a fee of $150,000, together with
reimbursement for its reasonable out-of-pocket expenses, and will be indemnified
against certain liabilities and expenses, including certain liabilities under
the federal securities laws. MacKenzie Partners, Inc. will solicit proxies from
individuals, brokers, banks, bank nominees and other institutional holders.
Accipiter has requested banks, brokerage houses and other custodians, nominees
and fiduciaries to forward all solicitation materials to the beneficial owners
of the Shares they hold of record. Accipiter will reimburse these record holders
for their reasonable out-of-pocket expenses in so doing. It is anticipated that
MacKenzie Partners, Inc. will employ approximately 25 persons to solicit
LifePoint's stockholders for the Annual Meeting.
The entire expense of soliciting proxies is being borne by Accipiter
Management. Costs of this solicitation of proxies are currently estimated to be
approximately $500,000. Accipiter Management estimates that through the date
hereof, its expenses in connection with this solicitation are approximately
$100,000.
OTHER PARTICIPANT INFORMATION
Each member of the Accipiter Group is a participant in this
solicitation. Gabe Hoffman is the managing member of Candens which in turn is
the general partner of each of Accipiter, ALSF II and ALSF II QP. Mr. Hoffman is
also the managing member of Accipiter Management which in turn is the investment
manager of ALSF Offshore and ALSF II Offshore. The principal business of Mr.
Hoffman is serving as the managing member of Candens and Accipiter Management.
The principal business of Candens is serving as the general partner of
Accipiter, ALSF II and ALSF II QP. The principal business of Accipiter
Management is serving as the investment manager of ALSF Offshore and ALSF II
Offshore. The principal business of Accipiter, ALSF II, ALSF II QP, ALSF
Offshore and ALSF II Offshore is investing in securities. The principal business
address of Mr. Hoffman, Accipiter, Candens, Accipiter Management, ALSF II and
ALSF II QP is 399 Park Avenue, 38th Floor, New York, New York 10022. The
principal business address of ALSF Offshore and ALSF II Offshore is c/o Ogier
Fiduciary Services (Cayman) Limited, Queensgate House, South Church Street, P.O.
Box 1234, George Town, Grand Cayman, Cayman Islands. As of the date hereof,
Accipiter, ALSF II, ALSF Offshore, ALSF II Offshore and ALSF II QP own directly,
340,787 Shares (1,000 Shares of which are held of record), 173,555 Shares,
326,102 Shares, 96,603 Shares and 48,347 Shares, respectively. As the general
partner of Accipiter, ALSF II and ALSF II QP, Candens may be deemed to
beneficially own the aggregate of 562,689 Shares held by such entities. As the
investment manager of ALSF Offshore and ALSF II Offshore, Accipiter Management
may be deemed to beneficially own the aggregate of the 422,705 Shares held by
such entities. As the managing member of Candens and Accipiter Management, Mr.
Hoffman may be
-14-
deemed to beneficially own the aggregate of the 985,394 Shares held by
Accipiter, ALSF II, ALSF II QP, ALSF Offshore and ALSF II Offshore. Each of Mr.
Hoffman, Candens and Accipiter Management disclaims beneficial ownership of the
Shares held by the other members of the Accipiter Group except to the extent of
their pecuniary interest therein. For information regarding purchases and sales
of securities of LifePoint during the past two years by the members of the
Accipiter Group, see Schedule I.
Except as set forth in this Proxy Statement (including the Schedules
hereto), (i) during the past 10 years, no participant in this solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) no participant in this solicitation directly or indirectly
beneficially owns any securities of LifePoint; (iii) no participant in this
solicitation owns any securities of LifePoint which are owned of record but not
beneficially; (iv) no participant in this solicitation has purchased or sold any
securities of LifePoint during the past two years; (v) no part of the purchase
price or market value of the securities of LifePoint owned by any participant in
this solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
LifePoint, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of LifePoint; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any securities of any
parent or subsidiary of LifePoint; (ix) no participant in this solicitation or
any of his/her/its associates was a party to any transaction, or series of
similar transactions, since the beginning of LifePoint's last fiscal year, or is
a party to any currently proposed transaction, or series of similar
transactions, to which LifePoint or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $60,000; (x) no participant in this
solicitation or any of his/her/its associates has any arrangement or
understanding with any person with respect to any future employment by LifePoint
or its affiliates, or with respect to any future transactions to which LifePoint
or any of its affiliates will or may be a party; and (xi) no person, including
the participants in this solicitation, who is a party to an arrangement or
understanding pursuant to which the Nominees are proposed to be elected has a
substantial interest, direct or indirect, by security holdings or otherwise in
any matter to be acted on at the Annual Meeting.
LEGAL PROCEEDINGS
On April 10, 2006, Accipiter filed a Complaint for Injunctive Relief
(the "Complaint") in the Court of Chancery of the State of Delaware in and for
New Castle County (the "Court") against LifePoint and all the members of the
LifePoint Board. The Complaint was filed after LifePoint advised Accipiter that
its notice of nomination of the Nominees was not timely delivered to the
Company. According to LifePoint's By-Laws, for nominations to be properly
brought by a stockholder before an annual meeting of stockholders, the
stockholders notice must be delivered to the Company not less than 90 days prior
to the first anniversary of the preceding year's annual meeting of stockholders;
provided however, that if the date of the annual meeting is advanced by more
than 30 days prior to or delayed by more than 60 days after such anniversary
date, notice by the stockholder to be timely must be so delivered by the later
of the close of business on the 90th day prior to such annual meeting or the
-15-
10th day following the day on which public announcement of the date of such
meeting is first made. On March 31, 2006, Accipiter submitted to LifePoint what
it believed to be a timely notice of its intention to nominate the Nominees at
the Annual Meeting. On April 4, 2006, LifePoint advised Accipiter that its
notice was untimely on the ground that LifePoint had publicly announced the date
of the Annual Meeting in a February 6, 2006 press release, and that, pursuant to
a provision of LifePoint's By-Laws, stockholder nominations of candidates for
election as directors were therefore due within 10 days thereafter (the "Notice
Provision"), or by February 16, 2006. The announcement of the date of the Annual
Meeting was contained in a nine-page press release that was otherwise devoted to
announcing financial results and presenting unaudited financial statements and
statistics. The Complaint alleges that the members of the LifePoint Board
breached their fiduciary duties by triggering the Notice Provision in a manner
foreseeably adverse to any stockholders potentially interested in nominating an
opposing slate of nominees. The Complaint seeks to (a) enjoin LifePoint from
proceeding with the Annual Meeting without first waiving application of the
Notice Provision as to Accipiter and the Nominees and affording Accipiter a fair
opportunity to solicit proxies on behalf of the Nominees, (b) set aside the
election and order a new election in the event the Annual Meeting proceeds
without a full opportunity for Accipiter to solicit proxies on behalf of the
Nominees and (c) award Accipiter the costs of the action. The Court has
scheduled a hearing for April 25, 2006 on Accipiter's motion for a preliminary
injunction enjoining LifePoint from proceeding with the Annual Meeting without
first waiving the Notice Provision as to Accipiter.
If we do not prevail in this action, any Gold proxy card returned to
Accipiter or the Company will be counted for purposes of determinig whether a
quorum is present, but will not be counted for purposes of electing the
Nominees.
OTHER MATTERS AND ADDITIONAL INFORMATION
OTHER MATTERS
Accipiter is unaware of any other matters to be considered at the
Annual Meeting. However, should other matters, which Accipiter is not aware of a
reasonable time before this solicitation, be brought before the Annual Meeting,
the persons named as proxies on the enclosed GOLD proxy card will vote on such
matters in their discretion.
STOCKHOLDER NOMINATIONS AND PROPOSALS
According to LifePoint's proxy statement, nominations of persons for
election as directors (other than persons nominated by or at the direction of
the LifePoint Board) and proposals of business to be transacted by the
stockholders (other than proposals submitted by or at the direction of the
LifePoint Board) at an annual meeting of stockholders may be made by any
stockholder of record who is entitled to vote and who provides proper notice. In
order for any such nomination or submission to be proper, the notice must
contain certain information concerning the nominating or proposing stockholder
and the nominee or the proposal, as the case may be, and must be delivered to
the Secretary of the Company at the Company's principal executive offices not
less than 90 days prior to the first anniversary of the preceding year's annual
meeting of stockholders. If, however, the date of the annual meeting is advanced
more than 30 days prior to or delayed more than 60 days after such anniversary
date, notice by the stockholder to be timely must be delivered not later than
the close of business on the later of the 90th day prior to such annual meeting
or the tenth day following the day on which the public announcement of the date
of such meeting is first made.
-16-
According to LifePoint's proxy statement, in the event that the number
of directors to be elected to the LifePoint Board is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board made by the Company at least 100 days prior to the
first anniversary of the preceding year's annual meeting, a stockholder's notice
required by the By-Laws shall also be considered timely, but only with respect
to nominees for any new positions created by such increase, if it is delivered
not later than the close of business on the tenth day following the day on which
such public announcement is first made by the Company.
According to LifePoint's proxy statement, nominations by stockholders
of persons for election to the LifePoint Board may be made at a special meeting
of stockholders if the stockholder's notice required by the By-Laws is delivered
not later than the close of business on the later of 90 days prior to such
special meeting or the tenth day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the LifePoint Board to be elected at such meeting.
According to LifePoint's proxy statement, if a stockholder wishes to
have a proposal considered for inclusion in the Company's proxy materials for
the next annual meeting of stockholders, the proposal must comply with the SEC's
proxy rules, be stated in writing and be received by the Company on or before
the close of business on February 7, 2007. Any proposals should be mailed to the
Company at 103 Powell Court, Suite 200, Brentwood, Tennessee 37027, Attention:
Corporate Secretary.
INCORPORATION BY REFERENCE
ACCIPITER HAS OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE
REQUIRED BY APPLICABLE LAW THAT IS ALREADY INCLUDED IN LIFEPOINT'S PROXY
STATEMENT RELATING TO THE ANNUAL MEETING. THIS DISCLOSURE INCLUDES, AMONG OTHER
THINGS, CURRENT BIOGRAPHICAL INFORMATION ON LIFEPOINT'S CURRENT DIRECTORS,
INFORMATION CONCERNING EXECUTIVE COMPENSATION, AND AN ANALYSIS OF CUMULATIVE
TOTAL RETURNS ON AN INVESTMENT IN THE SHARES DURING THE PAST FIVE YEARS.
ALTHOUGH WE DO NOT HAVE ANY KNOWLEDGE INDICATING THAT ANY STATEMENT MADE BY
ACCIPITER HEREIN IS UNTRUE, WE DO NOT TAKE ANY RESPONSIBILITY FOR THE ACCURACY
OR COMPLETENESS OF STATEMENTS TAKEN FROM PUBLIC DOCUMENTS AND RECORDS THAT WERE
NOT PREPARED BY OR ON OUR BEHALF, OR FOR ANY FAILURE BY LIFEPOINT TO DISCLOSE
EVENTS THAT MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF SUCH INFORMATION. SEE
SCHEDULE II FOR INFORMATION REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5%
OF THE SHARES AND THE OWNERSHIP OF THE SHARES BY THE DIRECTORS AND MANAGEMENT OF
LIFEPOINT.
The information concerning LifePoint contained in this Proxy Statement
and the Schedules attached hereto has been taken from, or is based upon,
publicly available information.
ACCIPITER LIFE SCIENCES FUND, LP
APRIL 21, 2006
-17-
SCHEDULE I
TRANSACTIONS IN SECURITIES OF LIFEPOINT
DURING THE PAST TWO YEARS
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit ($) Purchase/Sale
----------- ---------------- -------- -------------
ACCIPITER LIFE SCIENCES FUND, LP
----------------------------------------------------------------------------------------------
Common Stock 60,343 45.6113 8/04/05
Common Stock (19,734) 46.8194 8/09/05
Common Stock 19,740 45.0663 8/16/05
Common Stock (4,200) 46.3054 8/24/05
Common Stock 5,640 44.9650 8/30/05
Common Stock 14,100 44.2670 9/14/05
Common Stock 5,640 43.1200 9/20/05
Common Stock 10,152 42.7770 9/21/05
Common Stock 14,100 41.8432 10/25/05
Common Stock 28,200 40.2248 10/26/05
Common Stock (28,200) 38.9984 10/31/05
Common Stock 32,200 40.0200 11/18/05
Common Stock (15,400) 38.4484 12/01/05
Common Stock (352) 38.2747 12/02/05
Common Stock (16,800) 38.2747 12/02/05
Common Stock (26,450) 40.2552 12/13/05
Common Stock 26,811 29.5785 1/10/06
Common Stock 1,615 29.2700 1/10/06
Common Stock 34,987 29.5500 1/10/06
Common Stock (4,170) 31.1990 1/27/06
Common Stock (6,800) 31.1990 2/02/06
Common Stock 11,501 29.1040 3/06/06
Common Stock 1,548 30.0838 3/08/06
Common Stock 58,553 30.0258 3/08/06
Common Stock 2,143 28.6209 3/17/06
Common Stock 4,153 28.5900 3/17/06
Common Stock 14,617 29.1516 3/20/06
Common Stock 2,643 28.7050 3/20/06
I-1
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit ($) Purchase/Sale
----------- ---------------- -------- -------------
Common Stock 10,123 28.7188 3/20/06
Common Stock 7,765 29.2595 3/21/06
Common Stock 942 29.1678 3/21/06
Common Stock 79,019 29.3266 3/22/06
Common Stock 8,429 29.3327 3/23/06
ACCIPITER LIFE SCIENCES FUND II, LP
Common Stock 130 36.7200 12/07/05
Common Stock (950) 39.8875 12/13/05
Common Stock 20,078 36.4167 1/03/06
Common Stock 8,946 34.4959 1/05/06
Common Stock 12,650 29.4945 1/10/06
Common Stock 5,611 31.1687 1/20/06
Common Stock 7,500 30.7500 1/23/06
Common Stock 2,037 30.4393 1/25/06
Common Stock 13,114 31.3137 3/01/06
Common Stock 4,417 29.1040 3/06/06
Common Stock 552 30.0838 3/08/06
Common Stock 3,604 30.0258 3/08/06
Common Stock 6,545 28.6209 3/17/06
Common Stock 12,682 28.5900 3/17/06
Common Stock 1,451 29.1516 3/20/06
Common Stock 262 28.7050 3/20/06
Common Stock 1,005 28.7188 3/20/06
Common Stock 56 29.2595 3/21/06
Common Stock 7 29.1671 3/21/06
Common Stock 34,704 29.3266 3/22/06
Common Stock 15,837 29.3327 3/23/06
Common Stock 4,905 30.5682 3/31/06
Common Stock 547 30.8000 3/31/06
ACCIPITER LIFE SCIENCES FUND (OFFSHORE), LTD.
I-2
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit ($) Purchase/Sale
----------- ---------------- -------- -------------
Common Stock 46,657 45.6113 8/04/05
Common Stock (15,266) 46.8194 8/09/05
Common Stock 15,260 45.0663 8/16/05
Common Stock (3,300) 46.3054 8/24/05
Common Stock 4,360 44.9650 8/30/05
Common Stock 10,900 44.2670 9/14/05
Common Stock 4,360 43.1200 9/20/05
Common Stock 7,848 42.7770 9/21/05
Common Stock 10,900 41.8432 10/25/05
Common Stock 21,800 40.2248 10/26/05
Common Stock (21,800) 38.9984 10/31/05
Common Stock 24,900 40.0200 11/18/05
Common Stock (12,100) 38.4484 12/01/05
Common Stock (12,448) 38.2747 12/02/05
Common Stock (20,550) 40.2552 12/13/05
Common Stock 5,944 34.4959 1/05/06
Common Stock 23,189 29.5785 1/10/06
Common Stock 1,385 29.2700 1/10/06
Common Stock 30,013 29.5500 1/10/06
Common Stock (3,830) 31.1990 1/27/06
Common Stock 10,486 29.1040 3/06/06
Common Stock 1,453 30.0838 3/08/06
Common Stock 54,946 30.0258 3/08/06
Common Stock 2,024 28.6209 3/17/06
Common Stock 3,919 28.5900 3/17/06
Common Stock 13,720 29.1516 3/20/06
Common Stock 2,481 28.7050 3/20/06
Common Stock 9,503 28.7188 3/20/06
Common Stock 7,302 29.2595 3/21/06
Common Stock 886 29.1678 3/21/06
Common Stock 74,192 29.3266 3/22/06
Common Stock 7,900 29.3327 3/23/06
Common Stock 6,200 30.8000 3/31/06
I-3
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit ($) Purchase/Sale
----------- ---------------- -------- -------------
ACCIPITER LIFE SCIENCES FUND II (OFFSHORE), LTD.
Common Stock 22,237 36.4167 1/03/06
Common Stock 9,377 34.4959 1/05/06
Common Stock 13,220 29.4945 1/10/06
Common Stock 5,817 31.1687 1/20/06
Common Stock 1,285 30.4393 1/25/06
Common Stock 8 31.3138 3/01/06
Common Stock 2,356 29.1040 3/06/06
Common Stock 293 30.0838 3/08/06
Common Stock 1,895 30.0258 3/08/06
Common Stock 3,463 28.6209 3/17/06
Common Stock 6,709 28.5900 3/17/06
Common Stock 772 29.1516 3/20/06
Common Stock 140 28.7050 3/20/06
Common Stock 534 28.7188 3/20/06
Common Stock 24 29.2596 3/21/06
Common Stock 3 29.1667 3/21/06
Common Stock 18,391 29.3266 3/22/06
Common Stock 8,404 29.3327 3/23/06
Common Stock 2,730 30.5682 3/31/06
Common Stock 4,748 30.8000 3/31/06
ACCIPITER LIFE SCIENCES FUND II (QP), LP
Common Stock 13,685 36.4167 1/03/06
Common Stock 5,733 34.4959 1/05/06
Common Stock 8,130 29.4945 1/10/06
Common Stock 3,572 31.1687 1/20/06
Common Stock 678 30.4393 1/25/06
Common Stock 378 31.3137 3/01/06
Common Stock 1,240 29.1040 3/06/06
Common Stock 154 30.0838 3/08/06
Common Stock 1,002 30.0258 3/08/06
I-4
Class Quantity Price Per Date of
of Security Purchased/(Sold) Unit ($) Purchase/Sale
----------- ---------------- -------- -------------
Common Stock 1,825 28.6209 3/17/06
Common Stock 3,537 28.5900 3/17/06
Common Stock 407 29.1516 3/20/06
Common Stock 74 28.7050 3/20/06
Common Stock 282 28.7188 3/20/06
Common Stock 13 29.2592 3/21/06
Common Stock 2 29.1700 3/21/06
Common Stock 9,694 29.3266 3/22/06
Common Stock 4,430 29.3327 3/23/06
Common Stock 1,365 30.5682 3/31/06
Common Stock 5 30.8000 3/31/06
Accipiter Capital Management, LLC
---------------------------------
NONE
Candens Capital, LLC
--------------------
NONE
Gabe Hoffman
------------
NONE
Mohsin Y. Meghji
----------------
NONE
Earl P. Holland
---------------
NONE
Nicole Viglucci
---------------
NONE
I-5
SCHEDULE II
THE FOLLOWING TABLE IS REPRINTED FROM LIFEPOINT'S PROXY STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 2006
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information as of December 31,
2005 (unless otherwise indicated) regarding beneficial ownership of Common Stock
by (i) each director, nominee for director and executive officer of the Company
who owns Common Stock, (ii) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock of the Company
and (iii) all directors and executive officers as a group. As of December 31,
2005, there were 57,102,882 shares of Common Stock outstanding. Except as
otherwise indicated, the beneficial owners listed below have sole voting and
investment power with respect to all shares owned by them, except to the extent
such power is shared by a spouse under applicable law.
Shares
Beneficially Percent of
Name of Beneficial Owner Owned Class
--------------------------------------------------------------------------------------- ------------- ----------
Janus Capital Management, LLC (1) 3,683,890 6.4%
U.S. Trust Corporation (2) 3,034,813 5.32
Kenneth C. Donahey (3)(4)(5)(6) 1,012,836 1.75
William F. Carpenter III (3)(4)(5)(6) 609,335 1.06
William M. Gracey (3)(4)(5)(6)(7) 392,739 *
Michael J. Culotta (3)(4)(5)(6) 387,002 *
Jone Law Koford (3)(4)(5)(6) 100,549 *
DeWitt Ezell, Jr. (3)(8) 39,855 *
William V. Lapham (3)(9) 37,070 *
John E. Maupin, Jr., D.D.S. (3)(8) 31,136 *
Ricki Tigert Helfer (3)(8) 24,906 *
Richard H. Evans (3)(8) 24,686 *
Owen G. Shell (3)(8) 23,742 *
Michael P. Haley (10) 11,083 *
All directors and executive officers as a group (12 persons) (3)(4)(5)(6)(7)(8)(9)(10) 2,694,939 4.56
-----------------
* Less than one percent.
(1) The ownership for Janus Capital Management, LLC is based on information
contained in the Schedule 13G filed with the SEC on February 14, 2006.
Janus Capital Management, LLC has sole voting power with respect to
1,033,271 shares, shared voting power with respect to 2,650,619 shares,
sole dispositive power with respect to 1,033,271 shares and shared
dispositive power with respect to 2,650,619 shares. The address of
Janus Capital Management, LLC is 151 Detroit Street, Denver, Colorado
80206.
(2) The ownership for U.S. Trust Corporation and its affiliates on behalf
of the Employee Stock Ownership Plan ("ESOP") component of the
Retirement Plan is based on information contained in the Schedule 13G
filed with the SEC on February 15, 2006. U.S. Trust Corporation has
shared voting power with respect to 2,383,820 shares (2,342,110 ESOP)
and shared dispositive power with respect to 2,383,820 shares
II-1
(2,342,110 ESOP). U.S. Trust Corporation has sole voting power with
respect to 197,858 shares and sole dispositive power with respect to
636,298 shares. The address of U.S. Trust Corporation is 114 W. 47th
Street, New York, New York 10036.
(3) In computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of Common Stock subject
to options held by that person that are currently exercisable, or will
become exercisable within 60 days from December 31, 2005, are deemed
outstanding. The total number of options, pursuant to which such
persons have rights to acquire beneficial ownership of Common Stock
within 60 days, is as follows:
Name Options
---------------------------------------------------- ----------
Kenneth C. Donahey 704,756
William F. Carpenter III 452,756
William M. Gracey 305,613
Michael J. Culotta 300,000
Jone Law Koford 70,000
DeWitt Ezell, Jr. 24,640
William V. Lapham 24,640
Ricki Tigert Helfer 12,835
John E. Maupin, Jr., D.D.S. 24,640
Richard H. Evans 16,606
Owen G. Shell, Jr. 11,000
(4) The ownership given for each individual includes shares indirectly
owned through the Retirement Plan as set forth in the table below.
Share amounts are estimates based on unit accounting and based upon a
December 30, 2005 value of $37.50 per share.
Name Shares
--------------------------------------------------- --------
Kenneth C. Donahey 2,776
William F. Carpenter III 1,031
William M. Gracey 2,222
Michael J. Culotta 2,109
Jone Law Koford 549
(5) The ownership for each individual includes restricted stock awards
granted in 2005 under the Amended and Restated 1998 Long-Term Incentive
Plan ("Incentive Plan") as set forth in the table below. Generally,
such shares will be forfeited in their entirety unless the individual
continues to be an employee of the Company on April 22, 2008.
Name Shares
--------------------------------------------------- --------
Kenneth C. Donahey 40,000
William F. Carpenter III 18,000
William M. Gracey 18,000
Michael J. Culotta 18,000
Jone Law Koford 10,000
(6) The ownership for each individual includes restricted stock awards
granted in 2005 under the Incentive Plan as set forth in the table
II-2
below. Generally, these shares become unrestricted in three equal
installments on April 22, 2008, April 22, 2009 and April 22, 2010 and,
with respect to Messrs. Donahey, Culotta, Carpenter and Gracey, upon
realization of certain predetermined performance criteria.
Name Shares
--------------------------------------------------- --------
Kenneth C. Donahey 80,000
William F. Carpenter III 36,000
William M. Gracey 36,000
Michael J. Culotta 36,000
Jone Law Koford 20,000
(7) The ownership for Mr. Gracey includes options to purchase 52 shares of
Common Stock held by Mr. Gracey's wife, as to which he disclaims
beneficial ownership.
(8) The ownership for each individual includes deferred stock units,
granted under the Outside Directors Plan, payable in shares of Common
Stock as follows:
Deferred Stock
Name Units
--------------------------------------------------- ---------------
DeWitt Ezell, Jr. 1,488
Ricki Tigert Helfer 5,024
John E. Maupin, Jr., D.D.S. 2,832
Richard H. Evans 1,082
Owen G. Shell, Jr. 744
--------------------------------------------------------------------------------
(9) The ownership for Mr. Lapham includes 2,250 shares held by Mr. Lapham's
wife and 380 shares held by Mr. Lapham's daughter, as to which he
disclaims beneficial ownership.
(10) The ownership for Mr. Haley includes 7,000 shares of restricted stock
granted under the Outside Directors Plan. Generally, these shares will
be forfeited in their entirety unless Mr. Haley continues to serve as a
director of the company on April 22, 2008.
II-3
IMPORTANT
Tell your Board what you think! Your vote is important. No matter how
many Shares you own, please give Accipiter your proxy FOR the election of
Accipiter's Nominees by taking three steps:
o SIGNING the enclosed GOLD proxy card,
o DATING the enclosed GOLD proxy card, and
o MAILING the enclosed GOLD proxy card TODAY in the envelope
provided (no postage is required if mailed in the United
States).
If any of your Shares are held in the name of a brokerage firm, bank,
bank nominee or other institution, only it can vote such Shares and only upon
receipt of your specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD proxy
card representing your Shares. Accipiter urges you to confirm in writing your
instructions to Accipiter in care of MacKenzie Partners, Inc. at the address
provided below so that Accipiter will be aware of all instructions given and can
attempt to ensure that such instructions are followed.
If you have any questions or require any additional information
concerning this Proxy Statement, please contact MacKenzie Partners, Inc. at the
address set forth below.
MACKENZIE
PARTNERS,INC.
105 Madison Avenue
New York, New York 10016
(212) 929-5500 (Call Collect)
PROXY@MACKENZIEPARTNERS.COM
or
CALL TOLL FREE (800) 322-2885
GOLD PROXY
LIFEPOINT HOSPITALS, INC.
2006 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF ACCIPITER LIFE SCIENCES FUND, LP
THE BOARD OF DIRECTORS OF LIFEPOINT HOSPITALS, INC.
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints Gabe Hoffman and Nicole Viglucci, and each of them,
attorneys and agents with full power of substitution to vote all shares of
common stock of LifePoint Hospitals, Inc. (the "Company") which the undersigned
would be entitled to vote if personally present at the 2006 Annual Meeting of
Stockholders of the Company scheduled to be held on Monday, May 8, 2006 at 3:00
p.m. local time at 511 Union Street, Suite 2700, Nashville, Tennessee 37219, and
including at any adjournments or postponements thereof and at any meeting called
in lieu thereof (the "Annual Meeting").
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of common stock of the Company held by
the undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of the herein named attorneys and proxies or their
substitutes with respect to any other matters as may properly come before the
Annual Meeting that are unknown to Accipiter Life Sciences Fund, LP
("Accipiter") a reasonable time before this solicitation.
IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] PLEASE MARK VOTE AS IN THIS EXAMPLE
ACCIPITER RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW
AND "FOR" PROPOSAL NO. 2
1. APPROVAL OF ACCIPITER'S PROPOSAL TO ELECT DIRECTORS:
FOR ALL EXCEPT
WITHHOLD AUTHORITY TO NOMINEE(S) WRITTEN
FOR ALL NOMINEES VOTE FOR ALL NOMINEES BELOW
Nominees: Mohsin Y. Meghji [ ] [ ] [ ]
Earl P. Holland
Nicole Viglucci ________________
2. APPROVAL OF THE COMPANY'S PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST &
YOUNG LLP AS THE COMPANY'S REGISTERED PUBLIC ACCOUNTING FIRM:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.