As filed with the Securities and Exchange Commission on April 20, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERIPATH, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0642485
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
James C. New
Chief Executive Officer
AmeriPath, Inc.
7289 Garden Road, Suite 200
Riviera Beach, Florida 33404
Telephone: (561) 845-1850
Facsimile: (561) 845-0129
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices and agent for service)
The Commission is requested to send copies of all communications to:
J. Vaughan Curtis, Esq.
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Shares Amount to be Offering Aggregate Offering Amount of
to be Registered Registered(2) Price Per Share(3) Price(3) Registration Fee
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Common Stock, $.01 par value per
share (with attached Rights to 864,849 shares $23.065 $19,947,742 $4,987
purchase Series A Junior
Participating Preferred Stock)(1)
==============================================================================================================================
(1) Prior to the occurrence of certain events, the Rights will not be
evidenced or traded separately from the registrant's common stock.
Value, if any, of the Rights is reflected in the market price of the
registrant's common stock. Accordingly, no separate fee is paid.
(2) Plus such additional shares as may be issued by reason of stock splits,
stock dividends or similar transactions.
(3) Estimated solely for the purpose of calculating the registration fee
and computed pursuant to Rule 457(c) based on the average of the high
and low sales prices of the registrant's common stock on the Nasdaq
National Market on April 16, 2001.
------------------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement relating to these securities that we have filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
Subject to Completion, Dated April 20, 2001
PROSPECTUS
864,849 Shares
AMERIPATH, INC.
Common Stock
The stockholders named in the table included in the "Selling
Stockholders" section of this prospectus, which begins on page 14, are offering
and selling up to 864,849 shares of our common stock under this prospectus. We
will not receive any of the proceeds from the sale of shares of our common stock
by the selling stockholders.
Of the 864,849 shares covered by this prospectus, 859,764 shares are
presently issued and outstanding and 5,085 shares have been reserved for
issuance pursuant to the exercise of warrants held by some of the selling
stockholders. Those selling stockholders must first exercise the warrants and
acquire the underlying shares from us before they can resell those shares under
this prospectus.
The selling stockholders may sell their shares of common stock at
various times in the future through public or private transactions at prevailing
market prices or at privately negotiated prices. See "Plan of Distribution."
Our common stock is listed on the Nasdaq National Market under the
symbol "PATH". On April 19, 2001, the last sale price of our common stock as
reported by Nasdaq was $23.15 per share.
------------------------
This investment involves risks. See "Risk Factors" beginning on
page 3.
------------------------
Neither the Securities and Exchange Commission nor any state commission
has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is ___________ ___, 2001
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY............................................................3
RISK FACTORS..................................................................3
USE OF PROCEEDS..............................................................13
SELLING STOCKHOLDERS.........................................................14
PLAN OF DISTRIBUTION.........................................................18
LEGAL MATTERS................................................................19
EXPERTS......................................................................19
WHERE YOU CAN FIND MORE INFORMATION..........................................19
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................20
2
PROSPECTUS SUMMARY
We are the largest physician and laboratory company focused on
providing anatomic pathology, cancer diagnostics, genomics, and healthcare
information services. Since the first quarter of 1996, we have completed the
acquisition of 49 physician practices located in 21 states. These practices are
either directly owned or managed by us through one of our subsidiaries. Our 425
pathologists provide medical diagnostic services in outpatient laboratories
owned, operated and managed by us, and in hospitals and outpatient ambulatory
surgery centers. Of these pathologists, 419 are board certified in anatomic and
clinical pathology, and 190 are also board certified in a subspecialty of
anatomic pathology, including dermatopathology (study of diseases of the skin),
hematopathology (study of diseases of the blood) and cytopathology (study of
abnormalities of the cells).
On November 30, 2000, we consummated a merger with Inform DX in which
we (1) issued an aggregate of approximately 2.6 million shares of our common
stock in exchange for all of the outstanding shares of capital stock of Inform
DX and (2) assumed certain outstanding stock options and warrants of Inform DX.
We also granted the former stockholders and warrant holders of Inform DX rights
to register for resale up to one-third of the shares of our common stock they
received in the merger or have the right to receive pursuant to the warrants we
assumed. We have prepared this prospectus and registered the shares offered by
the selling stockholders in order to comply with these registration rights. The
selling stockholders acquired all of the shares of our common stock that they
are offering under this prospectus or warrants to purchase such shares in
connection with the Inform DX merger.
Our principal executive offices are located at 7289 Garden Road, Suite
200, Riviera Beach, Florida 33404. Our telephone number is (561) 845-1850. Our
Internet address is www.ameripath.com. The information contained on our web site
is not part of this prospectus.
RISK FACTORS
You should carefully consider each of the following risks and all of
the other information set forth in this prospectus. The risks and uncertainties
described below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently believe to be
immaterial may also adversely affect our business.
If any of the following risks actually occur, our business prospects,
financial condition and results of operations could be materially adversely
affected and the trading price of our common stock could decline. In any such
case, you could lose all or part of your investment in our company.
Our business could be harmed by future interpretation or implementation of state
laws regarding prohibitions on the corporate practice of medicine.
We acquire or affiliate with physician practices located in many states
across the country. However, the laws of many states prohibit business
corporations, including AmeriPath and its subsidiaries, from owning corporations
that employ physicians, or from exercising control over the medical judgments or
decisions of physicians. These laws and their interpretations vary from state to
state and are enforced by both the courts and regulatory authorities, each with
broad discretion. The manner in which we operate each practice is determined
primarily by the corporate practice of medicine restrictions of the State in
which the practice is located and other applicable regulations.
We believe that we are currently in material compliance with the
corporate practice of medicine laws in each of the states in which we operate.
Nevertheless, it is possible that regulatory authorities or other parties may
assert that we are engaged in the unauthorized corporate practice of medicine.
If such a
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claim were successfully asserted in any jurisdiction, we could be subject to
civil and criminal penalties under such jurisdiction's laws and could be
required to restructure our contractual and other arrangements. Alternatively,
some of our existing contracts could be found to be illegal and unenforceable.
In addition, expansion of our operations to other "corporate practice" states
may require structural and organizational modification to the form of
relationship that we currently have with physicians, affiliated practices and/or
hospitals. Such results or the inability to successfully restructure contractual
arrangements could have a material adverse effect on our business, financial
condition and results of operations.
We could be hurt by future interpretation or implementation of federal
anti-kickback laws.
The federal anti-kickback law and regulations prohibit any knowing and
willful offer, payment, solicitation and receipt of any form of remuneration,
either directly or indirectly, in return for, or to induce the referral of an
individual for a service for which payment may be made by Medicare and Medicaid
or certain other federal health care programs, or the purchasing, leasing,
ordering or arranging for, or recommending the purchase, lease or order of, any
service or item for which payment may be made by Medicare, Medicaid or certain
other federal health care programs. Violations of federal anti-kickback law are
punishable by monetary fines, civil and criminal penalties and exclusion from
participation in Medicare, Medicaid and other federal health care programs.
Several states have similar laws.
The federal government has published regulations that provide
"safe-harbors" that protect business transactions that meet enumerated
requirements from prosecution under the federal anti-kickback law. The failure
to meet the requirements of a safe harbor does not necessarily mean that a
transaction violates the anti-kickback law. While arrangements that we enter
into with physicians and third parties may not satisfy all requirements under
applicable safe harbors, we believe our operations are in material compliance
with applicable Medicare and fraud and abuse laws, including the anti-kickback
law. There is a risk however, that the federal government might investigate
arrangements which do not satisfy the safe harbors. If our arrangements with
physicians and third parties were found to be illegal, we would be subject to
civil and criminal penalties, including exclusion from the participation in
government payor programs, which could materially adversely affect our business,
financial condition and results of operations.
The Department of Health and Human Services Office of the Inspector
General issues advisory opinions that provide advice on whether proposed
business arrangements violate the anti-kickback statute. In Advisory Opinion
99-13, the OIG opined that when prices for laboratory services for
non-governmental patients are discounted below Medicare reimbursable rate, the
anti-kickback statute may be implicated. The OIG found prices discounted below
the laboratory supplier's costs to be particularly problematic. In the same
opinion, OIG suggests that a laboratory may be excluded from federal health care
programs if it charges Medicare or Medicaid amounts substantially in excess of
discounted charges to the physician. In the OIG's opinion, charges are likely
excessive if the profit margin for Medicare business exceeds profit margin for
non-federally reimbursed business.
The OIG also has addressed physician practice management arrangements
in an advisory opinion. In Advisory Opinion 98-4, the OIG found that management
fees based on a percentage of practice revenues may violate the anti-kickback
statute. Although these advisory opinions only apply to the parties who request
them, in the event that we our found to have arrangements that are inconsistent
with the OIG's opinions, the OIG might take the position that the arrangements
violate the anti-kickback law. Any such finding could have a material adverse
impact on us.
4
Our business could be harmed by future interpretation or implementation of the
federal Stark Law and other state and federal anti-referral laws.
We are also subject to federal and state statutes and regulations
banning payments for referral of patients and referrals by physicians to health
care providers with whom the physicians have a financial relationship. The
federal Stark Law applies to Medicare and Medicaid and prohibits a physician
from referring patients for certain services, including laboratory services, to
an entity with which a physician has a financial relationship. Financial
relationship includes both investment interests in an entity and compensation
arrangements with an entity. If an arrangement is covered by the Stark Law, all
of the requirements of the Stark Law exception must be satisfied. Many states
also have laws that are similar to the Stark Law. These statutes and regulations
generally apply to services reimbursed by both governmental and private payors.
Violations of these laws may result in prohibition of payment for services
rendered, loss of licenses as well as fines and criminal penalties. In addition,
violation of the Stark Law may result in exclusion from Medicare and Medicaid.
State statutes and regulations affecting the referral of patients to health care
providers range from statutes and regulations that are substantially the same as
the federal laws and the safe harbor regulations to a requirement that
physicians or other health care professionals disclose to patients any financial
relationship the physicians or health care professionals have with a health care
provider that is being recommended to the patients. These laws and regulations
vary significantly from state to state, are often vague and, in many cases, have
not been interpreted by courts or regulatory agencies. Adverse judicial or
administrative interpretations of any of these laws could have a material
adverse effect on our business, financial condition and results of operations.
In addition, expansion of our operations to new jurisdictions, or new
interpretations of laws in existing jurisdictions, could require structural and
organizational modifications of our relationships with physicians to comply with
that jurisdiction's laws. Such structural and organizational modifications could
have a material adverse effect on our business, financial condition and results
of operations.
We have financial relationships with our physicians, as defined by the
federal Stark Law, in the form of compensation arrangements, ownership of our
shares, contingent promissory notes issued by us in connection with
acquisitions, or a combination of the above. We believe that such existing
compensation arrangements are structured to comply with an applicable Stark Law
exception. We also believe that the ownership of our shares by physicians should
fall within the publicly traded stock exception to the Stark Law's definition of
financial relationship. However, certain physician-owned shares do have transfer
restrictions and, as a result, the government could take the position that all
of the requirements of this exception are not met. The contingent notes held by
some physicians do not meet an exception to the Stark Law's definition of
financial relationship. In either case, however, we believe that our current
operations comply with the Stark law because physicians affiliated with us
ordinarily do not make referrals and in any event have been instructed, and are
believed to be following such instructions, not to make referrals to us. To the
extent physicians affiliated with us may make a referral to us and a financial
relationship exists between us and the referring physician through either the
ownership of our shares or contingent notes, the government might take the
position that the arrangement does not comply with the federal Stark Law. Any
such finding may have a material adverse impact on our business, financial
conditions or results from operations.
5
We could be hurt by future interpretation or implementation of state and federal
anti-trust laws.
In connection with the corporate practice of medicine laws, the
physician practices with which we are affiliated in some states are organized as
separate legal entities. As such, the physician practice entities may be deemed
to be persons separate both from us and from each other under the antitrust laws
and, accordingly, subject to a wide range of laws that prohibit anti-competitive
conduct among separate legal entities. In addition, we are seeking to acquire or
affiliate with established and reputable practices in our target geographic
markets. We believe that we are in compliance with these laws and intend to
comply with any state and federal laws that may affect our development of
integrated health care delivery networks. Nevertheless, a review of our business
by courts or regulatory authorities could adversely affect our business,
financial condition or results from operations.
Our business could be harmed by future interpretation or implementation of the
Health Care Insurance Portability and Accountability Act
The Health Care Insurance Portability and Accountability Act, or HIPAA,
created criminal provisions, which impose criminal penalties for fraud against
any health care benefit program for theft or embezzlement involving health care
and for false statements in connection with the payment of any health benefits.
HIPAA also provided broad prosecutorial subpoena authority and authorized
property forfeiture upon conviction of a federal health care offense.
Significantly, the HIPAA provisions apply not only to federal programs, but also
to private health benefit programs as well. HIPAA also broadened the authority
of the OIG to exclude participants from federal health care programs. Because of
the uncertainties as to how the HIPAA provisions will be enforced, we are
currently unable to predict their ultimate impact on us. Although we are unaware
of any current violations of HIPAA, the government may in the future seek
penalties against us for violations of HIPAA, which could have a material
adverse effect on business, financial condition or results from operations.
We charge our clients on a fee-for-service basis, so we incur financial risk
related to collections as well as potentially long collection cycles when
seeking reimbursement from third party payors.
Substantially all of our net revenues are derived from our practices'
charging for services on a fee-for-service basis. Accordingly, we assume the
financial risk related to collection, including the potential uncollectability
of accounts, long collection cycles for accounts receivable and delays attendant
to reimbursement by third party payors, such as governmental programs, private
insurance plans and managed care organizations. Increases in write-offs of
doubtful accounts, delays in receiving payments or potential retroactive
adjustments and penalties resulting from audits by payors may require us to
borrow funds to meet our current obligations or may otherwise have a material
adverse effect on our business, financial condition and results of operations.
We rely upon reimbursement from government programs for a significant portion of
our revenues, and if reimbursement rates from government programs decline, it
could have a material adverse effect on our business.
We derive approximately 20% of our collections from payments made by
government sponsored health care programs (principally Medicare and Medicaid).
These programs are subject to substantial regulation by federal and state
governments. Any change in reimbursement regulations, policies, practices,
interpretations or statutes that places limitations on reimbursement amounts, or
changes in reimbursement coding, or practices could materially and adversely
affect our business, financial condition and results of operations. Increasing
budgetary pressures at both the federal and state level and concerns over
escalating costs of health care have led, and may continue to lead, to
significant reductions in health care reimbursements. State concerns over the
growth in Medicaid also could result in payment reductions.
6
Although governmental payment reductions have not materially affected us in the
past, it is possible that such changes in the future could have a material
adverse effect on our business, financial condition and results of operations.
In addition, Medicare, Medicaid and other government sponsored health care
programs are increasingly shifting to some form of managed care. Some states
have recently enacted legislation to require that all Medicaid patients be
converted to managed care organizations, and similar legislation may be enacted
in other states, which could result in reduced payments to us for such patients.
In addition, a state-legislated shift in a Medicaid plan to managed care could
cause the loss of some, or all, Medicaid business for us in that state if we
were not selected as a participating provider. Additionally, funds received
under all health care reimbursement programs are subject to audit with respect
to the proper billing for physician services and, accordingly, retroactive
adjustments of revenue from these programs could occur. We expect that there
will continue to be proposals to reduce or limit Medicare and Medicaid
reimbursements.
There has been an increasing number of state and federal investigations of
hospitals and hospital laboratories, which may increase the likelihood of
investigations of our business practices to the extent that we have
relationships with the hospitals being investigated.
Significant media and public attention has been focused on the health
care industry due to ongoing federal and state investigations reportedly related
to certain referral and billing practices, laboratory and home health care
services and physician ownership and joint ventures involving hospitals. Most
notably, HCA is under investigation with respect to such practices. We operate
laboratories on behalf of and have numerous contractual agreements with
hospitals, including 27 pathology service contracts with HCA hospitals as of
December 31, 2000. The government's ongoing investigation of HCA could result in
a governmental investigation of one or more of our operations that have
arrangements with HCA. In addition, the OIG and the Department of Justice have
initiated hospital laboratory billing review projects in certain states and are
expected to extend such projects to additional states, including states in which
we operate hospital laboratories. These projects increase the likelihood of
governmental investigations of laboratories owned and operated by us. Although
we monitor our billing practices and hospital arrangements for compliance with
prevailing industry practices under applicable laws, such laws are complex and
constantly evolving and it is possible that governmental investigators may take
positions that are inconsistent with our practices or industry practices. The
government's investigations of entities with which we contract may have other
effects which could materially and adversely affect us, including termination or
amendment of one or more of our contracts or the sale of hospitals potentially
disrupting the performance of services under such contracts. In addition, in
certain instances indemnity insurers and other non-governmental payors have
sought repayment from providers, including laboratories, for alleged
overpayments.
There has been a heightened scrutiny of Medicare and Medicaid billing practices
in recent years, which may increase our possibility of being subject to costly
investigations.
Payors periodically reevaluate the services they reimburse. In some
cases, government payors such as Medicare also may seek to recoup payments
previously made for services determined not to be reimbursable. Any such action
by payors would have an adverse affect on our revenues and earnings.
Moreover, the federal government has become more aggressive in
examining laboratory billing and seeking repayments and penalties as the result
of improper billing for services (e.g., the billing codes used), regardless of
whether carriers had furnished clear guidance on this subject. The primary focus
of this initiative has been on hospital laboratories and on routine clinical
chemistry tests, which comprise only a portion of our revenues. Although the
scope of this initiative could expand, it is not possible to predict whether or
in what direction the expansion might occur. We believe that our practices are
proper and do not include any allegedly improper practices now being examined.
However, the government
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could broaden its initiative to focus on the type of services furnished by us
and, if this were to happen, we might be required to repay money.
Furthermore, HIPAA and Operation Restore Trust have strengthened the
powers of the OIG and increased the funding for Medicare and Medicaid audits and
investigations. As a result, the OIG is currently expanding the scope of its
health care audits and investigations. Federal and state audits and inspections,
whether on a scheduled or unannounced basis, are conducted from time to time at
our facilities. If a negative finding is made as a result of such an
investigation, we could be required to change coding practices or repay amounts
paid for incorrect practices either of which could have a material adverse
effect on our business, financial condition and results from operations.
We are dependent on hospital contracts for a significant portion of our
revenues, which are short term and can easily be terminated.
Our hospital contracts typically have terms of one to five years from
their date of execution and automatically renew for additional terms of one year
unless otherwise terminated by either party. The contracts generally provide
that the hospital may terminate the agreement prior to the expiration of the
initial or any renewal term. Loss of any particular hospital contract would not
only result in a loss of net revenue to us under that contract, but may also
result in a loss of outpatient net revenue that may be derived from our
relationship with the hospital and its medical staff. Continuing consolidation
in the hospital industry may result in fewer hospitals or fewer laboratories as
hospitals move to combine their operations. As of December 31, 2000, our
practices had contracts with 224 hospitals, of which the majority are exclusive,
and 27 of which are executed with HCA. Such contracts with hospitals may be
terminated or may not be renewed in the future.
If we are unable to make acquisitions in the future, our rate of growth will
slow.
Much of our historical growth has come from acquisitions, and we expect
to continue to pursue growth through the acquisition and development of
laboratories. However, we may be unable to continue to identify and complete
suitable acquisitions at prices we are willing to pay or to obtain the necessary
financing. In addition, since we are a bigger company, the amount that acquired
businesses contribute to our revenue and profits will likely be smaller on a
percentage basis. We also compete with other companies to identify and complete
suitable acquisitions. We expect this competition to intensify, making it more
difficult to acquire suitable companies on favorable terms. Further, the
businesses we acquire may not perform well enough to justify our investment. If
we are unable to make additional acquisitions on suitable terms, we may not meet
our growth expectations.
Our future growth will depend on our ability to secure adequate capital
resources and to effectively integrate newly acquired practices.
In addition to acquisitions of and affiliations with practices, we
intend to continue to grow through internal expansion. We derive our net revenue
from the net revenue of our practices. Our growth strategy requires: (i) capital
investment; (ii) compliance with present or future laws and regulations that may
differ from those to which we are currently subject; (iii) further development
of our corporate management and operational, financial and accounting resources
to accommodate and manage growth; and (iv) the ability to expand our physician
and employee base and to train, motivate and manage employees. Failure to meet
these requirements could limit our growth potential and may have a material
adverse effect on our business, financial condition and results of operations.
Although we are taking steps to manage our growth, we cannot assure you that we
will be able to do so efficiently or that our growth rate will continue in the
future.
8
Our expansion into new markets will require us to maintain and
establish payor and customer relationships and to convert the patient tracking
and financial reporting systems of new practices to our systems. Significant
delays or expenses with regard to this process could have a material adverse
effect on the integration of additional practices and on our financial condition
and results of operations. We cannot assure you that we will be able to maintain
or establish payor and customer relationships, convert management information
systems or integrate new practices into our combined network.
The integration of additional practices typically requires the
implementation and centralization of purchasing, accounting, human resources,
management information systems, cash management and other systems, which may be
difficult, costly and time-consuming. Our operating results in fiscal quarters
immediately following a new practice affiliation may be adversely affected while
we attempt to complete the integration process. We may encounter significant
unanticipated costs or other problems associated with the future integration of
practices into our combined network of affiliated practices. Future affiliations
could have a material adverse effect on our business, financial condition and
results of operations, particularly during the period immediately following
completion of such affiliations.
We may inherit significant liabilities from practices that we acquire.
We perform due diligence investigations with respect to potential
liabilities of acquired and affiliated practices and obtain indemnification with
respect to liabilities from the sellers of such practices. Nevertheless,
undiscovered claims may subsequently arise and liabilities for which we become
responsible may be material or may exceed either the limitations of any
applicable indemnification provisions or the financial resources of the
indemnifying parties. Furthermore, through our corporate compliance program, we
regularly review each practice's compliance with federal and state health care
laws and regulations and revise, as appropriate, the operations, policies and
procedures of our practices to conform to our policies and procedures and
applicable law. While we believe that the operations of our practices prior to
their acquisition were generally in compliance with such laws and regulations,
we cannot assure you that the prior operations of such practices were in full
compliance with such laws, as such laws may ultimately be interpreted. Moreover,
although we maintain an active compliance program, it is possible that the
government might challenge some of our current practices as not being in full
compliance with such laws. A violation of such laws by a practice could result
in civil and criminal penalties, exclusion of the physician, the practice or us
from participation in Medicare and Medicaid programs and/or loss of a
physician's license to practice medicine.
We have significant contingent liabilities payable to many of the sellers of
practices that we recently acquired.
In connection with our practice acquisitions, we typically agree to pay
to sellers of the practices additional consideration in the form of debt
obligations, payment of which is contingent upon the practice achieving certain
specified profitability criteria over periods ranging from three to five years
from the date of acquisition. The principal amount and accrued interest of the
contingent amount to be paid cannot be determined until the contingency periods
terminate and achievement of the profitability criteria is determined. As of
December 31, 2000, if the maximum criteria for the contingency payments with
respect to all prior acquisitions were achieved, we would be obligated to make
payments, including principal and interest, of approximately $198.4 million over
the next three to five years. Lesser amounts of cash would be paid if the
maximum financial criteria are not met. Although we believe that we will be able
to make such cash payments from internally generated funds or proceeds of future
borrowings, we cannot assure you that we will be able to do so. Payments of
these contingent amounts will affect our earnings per share and may cause
volatility in the market price of our common stock. We expect to continue to use
contingent notes as partial consideration for acquisitions and affiliations.
While we believe that the contingent notes do not violate federal or state
"anti-kickback" or "self-referral" statutes, it is nevertheless
9
possible that such arrangements may get challenged by regulatory authorities
seeking to enforce such laws.
We have recorded a significant amount of intangible assets, which may never be
realized.
Our acquisitions have resulted in significant increases in net
identifiable intangible assets and goodwill. Net identifiable intangible assets,
which include hospital contracts, physician client lists, management service
agreements and laboratory contracts acquired in acquisitions were approximately
$268.6 million at December 31, 2000, representing approximately 47.8% of our
total assets. Net identifiable intangible assets are recorded at fair value on
the date of acquisition and are being amortized over periods ranging from 10 to
40 years. Goodwill, which relates to the excess of cost over the fair value of
net assets of businesses acquired, was approximately $177.3 million at December
31, 2000, representing approximately 31.5% of our total assets. We amortize
goodwill on a straight-line basis over periods ranging from 15 to 35 years. On
an ongoing basis, we make an evaluation to determine whether events and
circumstances indicate that all or a portion of the carrying value of intangible
assets may no longer be recoverable, in which case an additional charge to
earnings may be necessary. We cannot assure you that we will ever realize the
value of our intangible assets. Any future determination requiring the write off
of a significant portion of unamortized intangible assets could have a material
adverse effect on our business, financial condition and results of operations.
Our business is highly dependent on the recruitment and retention of qualified
pathologists.
Our business is dependent upon recruiting and retaining pathologists,
particularly those with subspecialties, such as dermatopathology. While our
practices have been able to recruit (principally through practice acquisitions)
and retain pathologists, we cannot assure you that we or our practices will be
able to continue to do so successfully or on terms similar to our current
arrangements. The relationship between the pathologists and their respective
local medical communities is important to the operation and continued
profitability of each practice. In the event that a significant number of
pathologists terminate their relationships with our practices or become unable
or unwilling to continue their employment, or in the event non-compete
agreements with a number of physicians were terminated or determined to be
invalid or unenforceable, our business, financial condition and results from
operation could be materially and adversely affected.
Proposals to reform the health care industry may have a material adverse effect
on our business.
Federal and state governments have recently focused significant
attention on health care reform. It is not possible to predict which, if any,
proposal will be adopted. It is possible that the health care regulatory
environment will change so as to restrict our existing operations, impose
additional requirements on us or limit our expansion. Costs of compliance with
changes in government regulations may not be subject to recovery through price
increases. Some of the proposals under consideration, or others that may be
introduced, could, if adopted, have a material adverse effect on our business,
financial condition and results of operations.
Competition from other providers of pathology services may adversely affect our
business.
Our services include the provision of physician practice management
services to pathology practices and the provision of pathology and cytology
diagnostic services. Competition may result from other anatomic pathology
practices, companies in other health care industry segments, such as other
hospital-based specialties, national clinical laboratories, large physician
group practices or pathology physician practice management companies that may
enter our markets, some of which may have greater financial and other resources
than us.
10
We compete with several companies, and such competition can reasonably
be expected to increase. In addition, companies in other health care segments,
such as hospitals, national clinical laboratories, third party payors, and
health maintenance organizations, many of which have greater financial resources
than us, may become competition in the employment and management of pathology
practices. We compete for acquisitions and affiliations on the basis of our
reputation, management experience, status and resources as a public company and
our focus on anatomic pathology. We cannot assure you that we will be able to
compete effectively, and it is possible that additional competitors will enter
our markets and make it more difficult for us to acquire or affiliate with
practices on favorable terms.
We may be subject to significant professional liability claims and we cannot
assure you that our insurance coverage limits will be sufficient to cover such
claims.
Our business entails an inherent risk of claims of physician
professional liability for acts or omissions of our physicians and laboratory
personnel. We and our physicians periodically become involved as defendants in
medical malpractice lawsuits, some of which are currently ongoing, and are
subject to the attendant risk of substantial damage awards. Generally, we have
consolidated our physician professional liability insurance coverages with the
St. Paul Fire and Marine Insurance Company, whereby each of the pathologists is
insured under claims-made policies with primary limits of $1.0 million per
occurrence and $5.0 million in the annual aggregate, and share with us in
surplus coverage of up to $20.0 million in the aggregate. The policy also
provides "prior acts" coverage for each of our physicians with respect to our
practices prior to their acquisition by us. Further, we have provided reserves
for incurred but not reported claims in connection with our claims-made
policies. The terms of the purchase agreements relating to each practice
acquisition contain certain limited rights of indemnification from the sellers
of the practices. While we believe that we have adequate professional liability
insurance coverage, we can give no assurances that a future claim or claims will
not be successful and, if successful, will not exceed the limits of available
insurance coverage or that such coverage will continue to be available at
acceptable costs or on favorable terms. In addition, our insurance does not
cover all potential liabilities arising from governmental fines and penalties,
indemnification agreements and certain other uninsurable losses. A malpractice
claim asserted against us, a management subsidiary, a practice subsidiary, an
affiliated practice or an affiliated physician could, in the event of an adverse
outcome exceeding limits of available insurance coverage, have a material
adverse effect on our business, financial condition and results of operations.
The continued growth of managed care may have a material adverse effect on our
business.
The number of individuals covered under managed care contracts or other
similar arrangements has grown over the past several years and may continue to
grow in the future. Entities providing managed care coverage have been
successful in reducing payments for medical services in numerous ways, including
entering into arrangements under which payments to a service provider are
capitated, limiting testing to specified procedures, denying payment for
specified services unless prior authorization for such services has been
obtained and refusing to increase fees for specified services. The continued
growth of the managed care industry and its continued success in reducing
payments to medical service providers could have a material adverse effect on
our business, financial condition and results of operation.
11
We could be damaged by the loss of our key personnel.
Our success is dependent upon the efforts and abilities of our key
management personnel, particularly James C. New, our Chairman and Chief
Executive Officer, Brian C. Carr, our President, Gregory A. Marsh, our Vice
President and Chief Financial Officer, Alan Levin, M.D., our Chief Operating
Officer and Dennis M. Smith, Jr., M.D., our Senior Vice President and Medical
Director. The loss of service of any of these persons could have a material
adverse effect on our business, financial condition and results of operations.
Because of the complex nature of our billing and reimbursement arrangements, we
may be at a greater risk of Internal Revenue Service Examinations.
The Internal Revenue Service, or IRS, conducted an examination of our
federal income tax returns for the tax years ended December 31, 1996 and 1997
and concluded that no changes to the tax reported needed to be made. Although we
believe that we are in compliance with all applicable IRS rules and regulations,
if the IRS should determine that we are not in compliance in any other years, it
could have a material adverse effect on the our financial position and results
of operations.
Our stock price is volatile and the value of your investment may decrease, for
various reasons including reasons that are unrelated to the performance of our
business.
There has been significant volatility in the market price of securities
of health care companies that often has been unrelated to the operating
performance of such companies. In fact, our common stock, which trades on the
Nasdaq national market, has traded from a low of $8 per share to a high of $26
15/16 per share for the year ended December 31, 2000. We believe that various
factors, such as legislative and regulatory developments, quarterly variations
in our actual or anticipated results of operations, lower revenues or earnings
than those anticipated by securities analysts, the overall economy and the
financial markets could cause the price of our common stock to fluctuate
substantially.
Anti-Takeover provisions in our charter documents could make it more difficult
for a third party to acquire us.
Certain provisions of our Amended and Restated Certificate of Incorporation,
Amended and Restated Bylaws and Preferred Share Purchase Rights Plan may be
deemed to have anti-takeover effects and may delay, defer or prevent a takeover
attempt that a stockholder might consider in its best interest. Any of these
anti-takeover provisions could lower the value of our common stock.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Statements contained anywhere in this prospectus that are not limited to
historical information are considered forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including, without limitation, statements
regarding our expectations, beliefs, intentions, plans or strategies regarding
the future. These forward-looking statements are based largely on our
expectations which are subject to a number of known and unknown risks,
uncertainties and other factors discussed in this prospectus and in other
documents filed by us with the Securities and Exchange Commission, which may
cause actual results to be materially different from those anticipated,
expressed or implied by the forward-looking statements. All forward-looking
statements included in this prospectus are based on information available to us
on the date hereof, and we assume no obligation to update any such
forward-
12
looking statements to reflect future events or circumstances. Forward-looking
statements are sometimes indicated by words such as "may," "should," "believe,"
"expect," "anticipate" and similar expressions.
In addition to the risks and uncertainties identified elsewhere herein
and in other documents filed by us with the Securities and Exchange Commission,
the following factors should be carefully considered when evaluating our
business and future prospects: general economic conditions; competition and
changes in competitive factors; the extent of success of our operating
initiatives and growth strategies (including without limitation, our continuing
efforts to (1) achieve continuing improvements in performance of our current
operations, by reason of various synergies, marketing efforts, revenue growth,
cost savings or otherwise, (2) transition into becoming a fully integrated
healthcare diagnostic information provider, including our efforts to develop,
and our investment in, new products, services, technologies and related
alliances, such as the alliance with Genomics Collaborative, Inc., (3) acquire
or develop additional pathology practices (as further described below), and (4)
develop and expand our managed care and national clinical lab contracts);
federal and state healthcare regulation (and compliance); reimbursement rates
under government-sponsored and third party healthcare programs and the payments
received under such programs; changes in coding; changes in technology;
dependence upon pathologists and contracts; the ability to attract, motivate,
and retain pathologists; labor and technology costs; marketing and promotional
efforts; the availability of pathology practices in appropriate locations that
we are able to acquire on suitable terms or develop; the successful completion
and integration of acquisitions (and achievement of planned or expected
synergies); access to sufficient amounts of capital on satisfactory terms; and
tax laws. In addition, our strategy to penetrate and develop new markets
involves a number of risks and challenges and it is possible that the healthcare
regulations of the new states in which we enter and other factors will have a
material adverse effect on us. The factors which may influence our success in
each targeted market in connection with this strategy include: the selection of
appropriate qualified practices; negotiation, execution and consummation of
definitive acquisition, affiliation, management and/or employment agreements;
the economic stability of each targeted market; compliance with state, local and
federal healthcare and/or other laws and regulations in each targeted market
(including health, safety, waste disposal and zoning laws); compliance with
applicable licensing approval procedures; and restrictions under labor and
employment laws, especially non-competition covenants. Past performance is not
necessarily indicative of future results. Some of the risks, uncertainties and
other factors discussed or noted above are more fully described elsewhere in
this prospectus, including under the caption "Risk Factors" beginning on page 3.
USE OF PROCEEDS
The shares of our common stock offered under this prospectus are for
the account of the selling stockholders. We will not receive any proceeds from
the sale of common stock by the selling stockholders. However, 5,085 of the
shares covered by this prospectus are subject to issuance by us pursuant to the
exercise of warrants held by some of the selling stockholders, 3,746 of which
have an exercise price of $0.12 per share and 1,339 of which have an exercise
price of $3.73 per share. We may receive cash proceeds from the exercise of
these warrants if the warrant holders elect not to make "cashless" exercises as
permitted under the terms of the warrants. Any cash proceeds that we receive
from the exercise of these warrants would be used for general corporate
purposes.
13
SELLING STOCKHOLDERS
The following table provides:
o The name of each of the selling stockholders;
o The number of shares of common stock beneficially owned by each
selling stockholder before this offering;
o The number of shares of common stock being offered by each selling
stockholder under this prospectus; and
o The number of shares of common stock beneficially owned by each
selling stockholder after completion of the offering.
The table assumes that the selling stockholders will sell all shares
they are offering under this prospectus, that the selling stockholders will not
acquire additional shares of our common stock prior to completion of this
offering, and that the selling stockholders will not dispose of any shares of
our common stock not covered by this prospectus. Each selling stockholder
beneficially owns less than 1% of the total number of shares of common stock
outstanding based on 24,941,749 shares of common stock outstanding as of April
16, 2001.
Shares Beneficially Shares Beneficially
Owned Before Shares Owned After
Name Offering Offered Offering
---- -------------------- ------- --------------------
Haywood D. Cochrane, Jr. 8,113 2,704 5,409
Brian C. Carr(1) 40,486 13,495 26,991
James E. Billington 8,676 2,892 5,784
William H. Brownie 4,498 1,499 2,999
Norman O. Hill 1,446 482 964
Douglas A. Olson 2,678 893 1,785
Richland Ventures, L.P. 29,607 9,869 19,738
Richland Ventures II, L.P. 11,805 3,935 7,870
DFW Capital Partners, L.P. 27,692 9,231 18,461
Calver Fund, Inc. 17,282 5,761 11,521
Noro - Moseley Partners III, L.P. 17,193 6,731 11,462
J.G. Partnership, LTD. 15,189 5,063 10,126
HLM Partners VII, L.P. 13,905 4,635 9,270
HLM Partners V, L.P. 12,516 4,172 8,344
Chrysalis Ventures I, Ltd. 11,522 3,841 7,681
SSM Venture Partners, L.P. 11,462 3,821 7,641
J. David Grissom 11,143 3,714 7,429
Thomas McColl Chesney, M.D. 12,378 4,126 8,252
Allen D. Berry III, M.D.(2) 12,940 4,313 8,627
Carolyn McIntyre Chesney, M.D. 12,378 4,126 8,252
William A. Wesche, M.D. 3,615 1,205 2,410
A. Weldon Schott, D.O. 1,232 411 821
14
Shares Beneficially Shares Beneficially
Owned Before Shares Owned After
Name Offering Offered Offering
---- -------------------- ------- --------------------
Cheng C. Tsai, M.D. 1,003 334 669
Daniel J. Santa Cruz, M.D. 2,276 759 1,517
Eugene C. Wienke, M.D. 1,232 411 821
Kathryn DeSchryver, M.D. 546 182 364
Mark A. Hurt, M.D. 636 212 424
Oscar Lazcano, M.D. 546 182 364
Robert W. Brangle, M.D. 1,232 411 821
Paul D. Cook, D.O. 318 106 212
Charles B. Bramlett Jr., M.D. 803 268 535
Jack Teryle Pearson, M.D. 803 268 535
Joseph C. Moore, M.D. 2,142 714 1,428
H.W. Ferrell, M.D. 2,401 800 1,601
John R. Olson, M.D. 2,401 800 1,601
Carlene Ann Hawksley, 100% Trustee of the
Hawksley Trust 1997 Created by Declaration of
Trust, February 12, 1997 4,670 1,557 3,113
Kelly R. O'Keefe and Patricia O'Keefe,
Trustee of the O'Keefe Family Trust dated
December 20, 1995 3,866 1,289 2,577
Robert M. Rinehart and Julie M. Rinehart as
Trustee of the Rinehart Living Trust Dated
November 2, 1989 4,670 1,557 3,113
Simon S. Chan and Julia S. Chan 1993
Intervivos Trust 4,670 1,557 3,113
Winterling Martin 1997 Revocable Trust 4,670 1,557 3,113
Kenneth W. Westphal, M.D. 803 268 535
William R. Beach, III 377 126 251
William H. West, M.D. 1,915 638 1,277
William H. Lomicka 1,391 464 927
Wachovia Bank of Georgia, N.A. - Custodian
for Alan I. Jacobson IRA 377 126 251
UMB Bank, N.A., Trustee Melissa S. Elliot 98 33 65
UMB Bank, N.A., Trustee Max L. Elliot, M.D. 75 25 50
Thomas W. Beasley 377 126 251
Thomas L. West, M.D. Profit Sharing Trust 1,842 614 1,228
Steven F. Drake 20,083 6,694 13,389
Steffanie N. Drake Heritage Trust 161 54 107
Samuel W. Bartholomew 461 154 307
Rose Marie Anderson Trust 4,500 1,500 3,000
Robert R. West 37,861 12,620 25,241
Robert LaFollette West 444 148 296
Robert E. Brierty & Joan C. Brierty 151 50 101
Robert Armistead First IRA Rollover 3,954 1,318 2,636
Robert A. Frist 965 322 643
15
Shares Beneficially Shares Beneficially
Owned Before Shares Owned After
Name Offering Offered Offering
---- -------------------- ------- --------------------
Nickel Medical Laboratory, Inc. 342 114 228
Michael W. Blackburn 38 13 25
Melissa D. Springer 117 39 78
McKenzie Investment Company 2,167 722 1,445
Mark T. Springer 117 39 78
Marianna L. Dennison 1,712 571 1,141
Kristine Margaret West 444 148 296
Trico & Co. 1,285 428 857
Jackson W. and Elizabeth W. Moore 4,788 1,596 3,192
Jack Roy Anderson Trust Fund 4,500 1,500 3,000
Jack R. Anderson 4,356 1,452 2,904
Gerald M. Bordin & Sheila W. Bordin 188 63 125
Frederick C. Glavin & Martha G. Glavin 377 126 251
Ernest S. Tucker, III 151 50 101
Douglas Crawford Huber 226 75 151
Delaware Charter Guarantee & Trust - FBO
Robert Nakamura IRA 151 50 101
Dawn Dixie Drake Heritage Trust 161 54 107
Cora S. Humberson & Michael Whittaker 90 30 60
Brian Datnow, M.D. 377 126 251
Bobbye Williams 151 50 101
Arthur S. Demoss Foundation 7,141 2,380 4,761
Andres Aquino 151 50 101
James R. Miller Lifetime Trust 471 157 314
Vincent H. Stack Living Trust 188 63 125
Stephen M. Russell, M.D. 161 54 107
Rodgers Business Interests 461 154 307
ABS Capital Partners II, LP 601,471 200,490 400,981
James M. Shapiro and Sarah B. Shapiro Trustee
FBO James M. Shapiro and Sarah B. Shapiro
Trust 1,004 335 669
Union Street Partners, L.P. 40,165 13,388 26,776
Questor Partners Fund, L.P. 701,166 233,722 467,444
Questor Side-by-Side Partners, L.P. 50,328 16,776 33,552
Robert J. Friedman, M.D. 113,625 37,875 75,750
Edward Heilman, M.D. 113,625 37,875 75,750
Richard Jacoby, M.D. 70,644 20,252 50,392
Mario DiLeonardo, M.D. 70,644 20,252 50,392
Waine C. Johnson, M.D. 29,664 9,888 19,776
Thomas D. Griffin, M.D. 29,664 9,888 19,776
Gary R. Kantor, M.D. 29,664 9,888 19,776
Richard L. Spielvogel, M.D. 29,664 9,888 19,776
Finova Mezzanine Capital Inc. 21,034 7,011 14,023
Ben F. Martin, M.D. 20,113 6,704 13,409
John H. Parker, M.D. 20,113 6,704 13,409
Roxanne Perryman, M.D. 1,607 536 1,071
George F. Bale, M.D. 12,137 4,046 8,091
16
Shares Beneficially Shares Beneficially
Owned Before Shares Owned After
Name Offering Offered Offering
---- -------------------- ------- --------------------
Robert M. Bradley, M.D. 12,137 4,046 8,091
Michael F. Bugg, M.D. 12,137 4,046 8,091
Thomas R. Callihan, M.D. 12,137 4,046 8,091
Kenneth D. Groshart, M.D. 12,137 4,046 8,091
Johnnie Cameron Hall, M.D. 12,137 4,046 8,091
Shamim M. Moinuddin, M.D. 12,137 4,046 8,091
Gene D. Spencer, Jr., M.D. 12,137 4,046 8,091
Bruce L. Webber, M.D. 12,137 4,046 8,091
Richard C. Olshock, M.D. 12,353 4,118 8,235
James A. Hopfenbeck, M.D. 12,353 4,118 8,235
Cathy Van Blerkom, M.D. 3,088 1,029 2,059
John E. Boline, M.D. 6,176 2,059 4,117
Mary E. Corkhill, M.D. 12,353 4,118 8,235
William F. Cox, Jr., M.D. 12,353 4,118 8,235
Donald K. McClure, M.D. 8,235 2,745 5,490
Timothy W. Morgan, M.D. 12,353 4,118 8,235
Steven J. Temple, M.D. 12,353 4,118 8,235
Carlton L. Wallis, Jr., M.D. 6,176 2,059 4,117
Michael J. Pushchak, M.D. 12,353 4,118 8,235
Craig MacNab(3) 1,606 535 1,071
Robert A. Reeves(3) 803 268 535
H. Richard Pascoe, M.D.(3) 321 107 214
Russell T. Ray(3) 803 268 535
Gerardo Rosencranz(3) 481 160 321
Stuart F. Smith(3) 321 107 214
R. Riley Sweat(3) 321 107 214
David Wilson(3) 481 160 321
Guarantee and Trust F/B/O. Edward S. Brokaw(3) 1,606 535 1,071
SunTrust Equitable Securities Corporation(3) 8,032 2,678 5,354
Mark R. Klausner(3) 160 53 107
------------
(1) Shareholdings include 321 shares issuable pursuant to the exercise of
warrants, 107 of which are being offered pursuant to this prospectus.
(2) Shareholdings include 803 shares owned jointly with Dr. Berry's spouse,
Dianne J. Berry.
(3) Shareholdings represent shares issuable pursuant to the exercise of
warrants.
Certain Relationships among the Selling Stockholders and AmeriPath
We acquired Inform DX on November 30, 2000 in a stock-for-stock merger
transaction. Each of the selling stockholders was a stockholder or warrant
holder of Inform DX at the time of the merger. The shares covered by this
prospectus were issued pursuant to the merger or are issuable pursuant to
warrants assumed by us in connection with the merger.
In connection with the Inform DX merger, AmeriPath agreed to take
certain actions necessary to register the resale of the shares covered by this
prospectus, including the preparation and filing of the registration statement
of which this prospectus forms a part and the payment of expenses associated
with the registration statement and this prospectus.
17
Some of the selling stockholders were employees, officers or directors
of Inform DX prior to the merger.
Some of the selling stockholders currently are employees of AmeriPath
or of medical practices managed by AmeriPath.
Brian C. Carr is the President of AmeriPath and James E. Billington is
the Senior Vice President, Operations of AmeriPath.
Brian C. Carr is also a director of AmeriPath.
PLAN OF DISTRIBUTION
Our common stock is quoted on the Nasdaq National Market under the
symbol "PATH". This prospectus is intended to be used to comply with the
prospectus delivery requirements of the Securities Act of 1933 in connection
with any offers or resales. Any or all of the shares of our common stock offered
under this prospectus may be sold from time to time by the selling stockholders,
or by pledgees, donees, transferees, or other successors in interest. These
sales may be made:
o to or through underwriters, agents, brokers or dealers;
o directly to one or more purchasers;
o through agents on a best efforts basis; or
o through a combination of any such methods of sale.
In addition, such sales may be made in the over-the-counter market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price or in negotiated transactions. Any or all of the
shares of common stock may be sold by one or more of the following:
o a block trade in which the broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the
exchange or any automated interdealer quotation system on which the
common stock is then listed;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o writing options on the shares.
Any underwriters, agents or broker-dealers involved in the distribution
of the shares may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of the shares
for which such underwriters, agents or broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to an underwriter,
agent or particular broker-dealer will be negotiated prior to the sale and may
be in excess of customary compensation). If required by applicable law at the
time a particular offer of shares is made, the terms and conditions of that
transaction will be set forth in a supplement to this prospectus.
The selling stockholders and any underwriters, agents or broker-dealers
who act in connection with the sale of the shares under this prospectus may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any compensation received by them might be deemed to be
underwriting discounts and commissions under the Securities Act.
18
The selling stockholders will pay all applicable stock transfer taxes,
transfer fees and brokerage commissions or underwriting or other discounts. We
will bear all expenses in connection with the registration of the shares being
offered by the selling stockholders. We have agreed to indemnify the selling
stockholders against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Alston & Bird LLP, Atlanta, Georgia, will pass upon the status of the
shares offered under this prospectus as legally and validly issued, fully paid
and nonassessable.
EXPERTS
The financial statements of AmeriPath, Inc. and its consolidated
subsidiaries, as of December 31, 2000 and 1999 and for each of the three years
in the period ended December 31, 2000, except Pathology Consultants of America,
Inc. (d/b/a "InformDX") as of December 31, 1999 and for the years ended December
31, 1999 and 1998, incorporated by reference in this prospectus have been
audited by Deloitte & Touche LLP as stated in their reports incorporated by
reference herein. The financial statements of InformDX, consolidated with those
of AmeriPath, Inc. and not presented separately herein, have been audited by
Ernst & Young LLP as stated in their reports incorporated by reference herein.
Such financial statements of the Company and its consolidated subsidiaries are
incorporated by reference herein in reliance upon the respective reports of such
firms given upon their authority as experts in accounting and auditing. All of
the foregoing firms are independent auditors.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. These reports,
proxy statements and other information may be obtained:
o At the public reference room of the Commission, Room 1024 --
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
o At the public reference facilities at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York,
New York 10048 or Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661;
o From the Commission, Public Reference Room, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549;
o At the offices of The Nasdaq Stock Market, Inc., Reports Section,
1735 K Street, N.W., Washington, D.C. 20006; or
o From the internet site maintained by the Commission at
http://www.sec.gov, which contains reports, proxy and information
statements and other information regarding issuers that file
electronically with the Commission.
Some locations may charge prescribed rates or modest fees for copies.
For more information on the public reference room, call the Commission at
1-800-SEC-0330.
We filed with the Securities and Exchange Commission a registration
statement on Form S-3 (which contains this prospectus) under the Securities Act
of 1933, as amended, to register with the Securities and Exchange Commission the
resale by the selling stockholders of our common stock. This prospectus does not
contain all the information you can find in the registration statement or the
exhibits and schedules to the registration statement. For further information
with respect to us, and our common
19
stock, please refer to the registration statement, including the exhibits and
schedules. You may inspect and copy the registration statement, including the
exhibits and schedules, as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information that we file with them in other documents, which
means that we can disclose important information to you by referring to those
documents. The information incorporated by reference is considered to be part of
this prospectus, and later information that we file with the Securities and
Exchange Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and all future documents
filed with the Securities and Exchange Commission under Sections 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934 until the termination of the
offering to which this prospectus relates:
o Current Report on Form 8-K, filed March 6, 2001;
o Current Report on Form 8-K, filed April 6, 2001;
o Annual Report on Form 10-K for the year ended December 31, 2000,
filed April 2, 2001;
o The description of common stock set forth in our registration
statement filed pursuant to Section 12 of the Exchange Act, and any
amendment or report filed for the purpose of updating such
description; and
o The description of rights to purchase Series A Junior Participating
Preferred Stock set forth in our registration statement filed
pursuant to Section 12 of the Exchange Act, and any amendment or
report filed for the purpose of updating such description.
On written or oral request, we will provide at no cost to each person
who receives a copy of this prospectus, a copy of any or all of the documents
incorporated in this prospectus by reference. We will not provide exhibits to
any of the documents listed above, however, unless those exhibits are
specifically incorporated by reference into those documents. You should direct
your request to the Secretary of AmeriPath, 7289 Garden Road, Suite 200, Riviera
Beach, Florida 33404, telephone number (561) 845-1850.
You should rely only on the information that we incorporate by
reference or provide in this prospectus or any supplement. We have not
authorized anyone else to provide you with different information. Neither we nor
the selling stockholders will make an offer of these shares in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of those documents.
20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration fee to Securities and Exchange Commission....... $4,987
Accounting fees and expenses................................. 0
Legal fees and expenses...................................... 5,000
Miscellaneous expenses....................................... 2,000
-------
Total................................................... $11,987
=======
The foregoing items, except for the registration fee to the Securities and
Exchange Commission, are estimated. We have agreed to bear all expenses in
connection with the registration of the shares being offered by the selling
stockholders, except that the selling stockholders will bear all underwriting
discounts and commissions and transfer taxes, if any. We have agreed to
indemnify the selling stockholders against certain liabilities, including
liabilities under the Securities Act.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our amended and restated certificate of incorporation eliminates the
personal liability of our directors to AmeriPath and its stockholders for
monetary damages for breach of fiduciary duty as a director, except that it does
not eliminate the liability of a director:
o for any breach of the duty of loyalty to AmeriPath and its
stockholders;
o for acts or omissions not in good faith which involve intentional
misconduct or a knowing violation of law;
o under the Delaware General Corporation Law for a director's willful
or negligent violation of statutory provisions that prevent the
unlawful payment of a dividend; and
o for any transaction in which a director receives an improper
personal benefit.
In addition, if at any time the Delaware General Corporation Law is
amended to authorize further elimination or limitation of the personal liability
of a director, then the liability of each of our directors shall be eliminated
or limited to the fullest extent permitted by such provisions, as so amended,
without further action by the stockholders, unless otherwise required.
Our bylaws require us to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of AmeriPath) by
reason of the fact that the indemnified person was or is a director, officer,
employee or agent of AmeriPath, or is or was serving at the request of AmeriPath
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such indemnified
person, as long as the indemnified person:
o acted in good faith;
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o acted in a manner reasonably believed to be in or not opposed to the
best interests of AmeriPath; and
o with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful.
Our bylaws also require us to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of AmeriPath to procure a judgment
in AmeriPath's favor by reason of the fact that the indemnified person was or is
a director, officer, employee or agent of AmeriPath, or is or was serving at the
request of AmeriPath as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such indemnified person, as long as the indemnified
person:
o acted in good faith; and
o acted in a manner reasonably believed to be in or not opposed to the
best interests of AmeriPath.
However, no indemnification shall be made by us under the preceding
paragraph in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his or her duty to us unless otherwise determined by court order.
The determination of whether the applicable standard of conduct
described above has been meet shall be made by:
o our Board of Directors by a majority vote of a quorum consisting of
disinterested directors; or
o if such a quorum is not obtainable, or, even if obtainable, a quorum
of disinterested directors so directs, by independent legal counsel
in a written opinion; or
o by the stockholders.
AmeriPath maintains a standard form of officers' and directors'
liability insurance policy that provides coverage to its officers and directors
for certain liabilities, including certain liabilities that may arise out of
this registration statement.
We have agreed to indemnify each selling stockholder, each underwriter,
if any, and each person controlling the selling stockholders or the
underwriters, if any, within the meaning of the Securities Act, from and against
any losses, claims, damages or liabilities, joint or several, to which such
selling stockholders, underwriters or controlling persons may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in this prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violations by us
of applicable federal or state securities laws relating to such registration.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement and Plan of Merger by and among the Registrant, AMP Merger
Corp. and Pathology Consultants of America, Inc. (d/b/a Inform DX),
dated as of November 7, 2000 (incorporated by reference from Exhibit
2.2 to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000)
4.1 Amended and Restated Certificate of Incorporation (incorporated by
reference from Exhibit 3.1 to our registration statement on Form S-1,
Registration No. 333-34265)
4.2 Amended and Restated Bylaws (incorporated by reference from Exhibit 3.2
to our registration statement on Form S-1, Registration No. 333-34265)
4.3 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation (incorporated by reference from Exhibit 3.3 to our
registration statement on Form S-1, Registration No. 333-34265)
4.4 Rights Agreement, dated as of April 8, 1999, between the Registrant and
American Stock Transfer & Trust Company, as Rights Agent including the
form of Certificate of Designations of Series A Junior Participating
Preferred Stock, the form of Rights Certificate, and the form of
Summary of Rights (incorporated by reference to Exhibit 4.1 to our
Current Report on Form 8-K filed April 16, 1999)
4.5 Registration Rights Agreement, dated November 30, 2000, among the
Registrant and the Shareholders and Warrant Holders of Pathology
Consultants of America, Inc. (d/b/a Inform DX) (incorporated by
reference from Exhibit 10.46 to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2000)
5.1 Opinion of Alston & Bird LLP, including consent
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Alston & Bird LLP (filed as part of Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page to this
registration statement)
(b) Financial Statement Schedules
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
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(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this Section do not apply if the registration statement is on Form S-3, Form S-8
or Form F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a
II-4
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Riviera Beach, State of Florida on the 20 day of
April, 2001.
AmeriPath, Inc.
By: /s/ James C. New
----------------------------------------
Name: James C. New
Title: Chairman and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James C. New and Gregory A. Marsh and
each of them, with the power to act without the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, and in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file any of the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature Title Date
--------- ----- ----
/s/ James C. New Chairman and Chief Executive April 20, 2001
------------------------------- Officer(Principal Executive
James C. New Officer)
/s/ Gregory A Marsh Vice President, Chief Financial April 20, 2001
------------------------------- Officer and Secretary (Principal
Gregory A. Marsh Financial and Accounting Officer)
/s/ Brian C. Carr Director April 20, 2001
-------------------------------
Brian C. Carr
/s/ E. Martin Gibson Director April 20, 2001
-------------------------------
E. Martin Gibson
/s/ Alan Levin, M.D. Director April 20, 2001
-------------------------------
Alan Levin, M.D.
/s/ C. Arnold Renschler, M.D. Director April 20, 2001
-------------------------------
C. Arnold Renschler, M.D.
/s/ E. Roe Stamps, IV Director April 20, 2001
-------------------------------
E. Roe Stamps, IV
II-7
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement and Plan of Merger by and among the Registrant, AMP Merger
Corp. and Pathology Consultants of America, Inc. (d/b/a Inform DX),
dated as of November 7, 2000 (incorporated by reference from Exhibit
2.2 to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000)
4.1 Article II of the Articles of Incorporation, as amended (incorporated
by reference from Exhibit 3.1 to our registration statement on Form
S-1, Registration No. 333-34265)
4.2 Amended and Restated Bylaws (incorporated by reference from Exhibit 3.2
to our registration statement on Form S-1, Registration No. 333-34265)
4.3 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation (incorporated by reference from Exhibit 3.3 to our
registration statement on Form S-1, Registration No. 333-34265)
4.4 Rights Agreement, dated as of April 8, 1999, between the Registrant and
American Stock Transfer & Trust Company, as Rights Agent including the
form of Certificate of Designations of Series A Junior Participating
Preferred Stock, the form of Rights Certificate, and the form of
Summary of Rights (incorporated by reference to Exhibit 4.1 to our
Current Report on Form 8-K filed April 16, 1999)
4.5 Registration Rights Agreement, dated November 30, 2000, among the
Registrant and the Shareholders and Warrant Holders of Pathology
Consultants of America, Inc. (d/b/a Inform DX) (incorporated by
reference from Exhibit 10.46 to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2000)
5.1 Opinion of Alston & Bird LLP, including consent
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Alston & Bird LLP (filed as part of Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page to this
registration statement)