Form DEFM14A TEAM HEALTH HOLDINGS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant ☒   Filed by a Party other than the Registrant ☐

Check the appropriate box:

Preliminary Proxy Statement

​

​

☒

Definitive Proxy Statement

​

Definitive Additional Materials

​

Soliciting Material Pursuant to §240.14a-12

​

Team Health Holdings, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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:
   

​

(2)

Aggregate number of securities to which transaction applies:
   

​

(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):
   

​

(4)

Proposed maximum aggregate value of transaction:
   

​

(5)

Total fee paid:
   

​

☒

Fee paid previously with preliminary materials.

​

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:
   

​

(2)

Form, Schedule or Registration Statement No.:
   

​

(3)

Filing Party:
   

​

(4)

Date Filed:
   

​

December 12, 2016​

Dear Fellow Stockholder:

You are cordially invited to attend a special meeting of the stockholders of Team Health Holdings, Inc. (“TeamHealth”) to be held at TeamHealth’s office at 265 Brookview Centre Way, 2nd floor, Knoxville, Tennessee 37919 on Wednesday, January 11, 2017 at 2:00 p.m., Eastern Time (the “special meeting”).

At the special meeting, stockholders will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of October 30, 2016 (as amended or modified from time to time, the “merger agreement”), among TeamHealth, Tennessee Parent, Inc. (“Parent”) and Tennessee Merger Sub, Inc. (“Merger Sub”). Subject to the terms and conditions of the merger agreement, Merger Sub will be merged with and into TeamHealth and TeamHealth will survive the merger as a wholly owned subsidiary of Parent (the “merger”). Parent and Merger Sub were formed by Blackstone Capital Partners VII L.P. (the “Sponsor”) on behalf of itself and certain limited partner co-investors.

If the merger is completed, our stockholders will have the right to receive $43.50 in cash, without interest and subject to any applicable withholding taxes, for each share of common stock, par value $0.01 per share, of TeamHealth (“TeamHealth common stock”), other than excluded shares (as defined in the accompanying proxy statement), that they own immediately prior to the effective time of the merger, which represents a premium of approximately 33% of TeamHealth’s closing stock price on October 3, 2016, the last trading day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction. Approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of TeamHealth common stock entitled to vote thereon.

TeamHealth common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “TMH”. The closing price of TMH common stock on the NYSE on December 8, 2016, the most recent practicable date prior to the date of the accompanying proxy statement, was $42.65 per share.

The TeamHealth board of directors has reviewed and considered the terms and conditions of the merger and unanimously determined that the merger, the merger agreement, and the other transactions contemplated by the merger agreement, are advisable, fair to and in the best interests of TeamHealth and its stockholders and has unanimously declared advisable and approved the merger, the merger agreement and the other transactions contemplated by the merger agreement. The TeamHealth board of directors made its determination after consultation with its outside legal counsel and financial advisor and consideration of a number of factors more fully described in the accompanying proxy statement. The TeamHealth board of directors unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement.

At the special meeting, stockholders will also be asked to vote on (i) a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid to TeamHealth’s named executive officers by TeamHealth based on or otherwise relating to the merger, as required by the rules adopted by the U.S. Securities and Exchange Commission and (ii) a proposal to approve an adjournment of the special meeting, from time to time, if necessary or appropriate, to solicit additional votes for the approval of the proposal to adopt the merger agreement. The TeamHealth board of directors unanimously recommends that you vote “FOR” each of these proposals.

The TeamHealth board of directors is soliciting your proxy to assure that a quorum is present and that your shares are represented and voted at the special meeting and any postponement or adjournment thereof.

If your shares are held in “street name,” you should instruct your broker, bank or other nominee how to vote your shares on each proposal in accordance with your voting instruction form.

The merger cannot be completed unless TeamHealth stockholders adopt the merger agreement. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares

may be represented and voted at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you fail to return your proxy or to attend the special meeting in person, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote “AGAINST” the adoption of the merger agreement. Similarly, if you hold your shares in “street name” and fail to instruct your broker, bank or other nominee how to vote your shares, your shares will not be counted for purposes of determining whether a quorum is present and will have the same effect as a vote “AGAINST” the adoption of the merger agreement.

The obligations of TeamHealth, Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver of certain conditions. The accompanying proxy statement contains detailed information about TeamHealth, the special meeting, the merger agreement, the merger and the merger-related named executive officer compensation proposal. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement and is incorporated therein by reference. We urge you to, and you should, read the entire proxy statement carefully, including the merger agreement and the other annexes and the documents referred to or incorporated by reference in the accompanying proxy statement. You may obtain additional information about TeamHealth from documents we have filed with the U.S. Securities and Exchange Commission.

If you have any questions or need assistance voting your shares of our common stock, please contact Innisfree M&A Incorporated, our proxy solicitor, by calling (212) 750-5833.

Thank you for your confidence in TeamHealth.

Sincerely,

H. Lynn Massingale, M.D.
Executive Chairman

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the merger, passed upon the merits of the merger agreement or the merger or determined if the accompanying proxy statement is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated December 12, 2016 and, together with the enclosed form of proxy card, is first being mailed to TeamHealth stockholders on or about December 12, 2016.

Team Health Holdings, Inc.
265 Brookview Centre Way
Suite 400
Knoxville, Tennessee 37919

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Wednesday, January 11, 2017 at 2:00 p.m., Eastern Time

TeamHealth’s office at 265 Brookview Centre Way, 2nd floor, Knoxville, Tennessee 37919

ITEMS OF BUSINESS

•

To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of October 30, 2016 (as amended or modified from time to time, the “merger agreement”), among Team Health Holdings, Inc. (“TeamHealth”), Tennessee Parent, Inc. (“Parent”) and Tennessee Merger Sub, Inc. (“Merger Sub”) (the “merger proposal”); a copy of the merger agreement is attached to the accompanying proxy statement as Annex A and is incorporated therein by reference;

​

•

To consider and vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid by TeamHealth to its named executive officers that is based on or otherwise relates to the merger (the “named executive officer merger-related compensation proposal”);

​

•

To consider and vote on a proposal to approve an adjournment of the special meeting of TeamHealth stockholders (the “special meeting”) from time to time, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the merger proposal (the “adjournment proposal”); and

​

•

To transact such other business as may properly be brought before the special meeting, or any adjournments or postponements of the special meeting, by or at the direction of the TeamHealth board of directors (the “TeamHealth Board”).

​

Only holders of record of our common stock, par value $0.01 per share (“TeamHealth common stock”), at the close of business on December 8, 2016 (the “record date”) are entitled to notice of, and to vote at, the special meeting and at any adjournment or postponement of the special meeting.

Your vote is very important, regardless of the number of shares you own. The TeamHealth Board is soliciting your proxy to assure that a quorum is present and that your shares are represented and voted at the special meeting. For information on submitting your proxy over the Internet, by telephone or by mailing back the traditional proxy card (no extra postage is needed for the provided envelope if mailed in the U.S.), please see the attached proxy statement and enclosed proxy card. If you later decide to vote in person at the special meeting, information on revoking your proxy prior to the special meeting is also provided.

The TeamHealth Board unanimously recommends that you vote:

•

“FOR” the merger proposal;

​

•

“FOR” the named executive officer merger-related compensation proposal; and

​

•

“FOR” the adjournment proposal.

​

TeamHealth stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of TeamHealth common stock, as determined in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”), if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all the requirements of Delaware law, including Section 262 of the DGCL, which are summarized in the accompanying proxy statement. Section 262 of the DGCL is reproduced in its entirety in Annex C to the accompanying proxy statement and is incorporated therein by reference.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE SUBMIT A PROXY TO VOTE YOUR SHARES OVER THE INTERNET OR BY TELEPHONE PURSUANT TO THE INSTRUCTIONS CONTAINED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SUBMITTED. IF YOU DO NOT SUBMIT YOUR PROXY OR VOTE IN PERSON AT THE SPECIAL MEETING ON THE MERGER PROPOSAL, IT WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL. IF YOU HOLD YOUR SHARES IN “STREET NAME” AND DO NOT INSTRUCT YOUR BROKER, BANK OR OTHER NOMINEE HOW TO VOTE YOUR SHARES, IT WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL.

Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

If your shares are held by a broker, bank or other nominee and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting. Please also bring to the special meeting your account statement evidencing your beneficial ownership of TeamHealth common stock as of the record date. All stockholders should also bring photo identification.

The proxy statement of which this notice forms a part provides a detailed description of the merger, the merger agreement, the named executive officer merger-related compensation proposal and provides specific information concerning the special meeting. We urge you to read the proxy statement, including any documents incorporated therein by reference, and its annexes carefully and in their entirety. If you have any questions concerning the merger or the proxy statement, would like additional copies of the proxy statement or need help voting your shares of TeamHealth common stock, please contact TeamHealth’s proxy solicitor, Innisfree M&A Incorporated.

By Order of the Board of Directors,

Steven E. Clifton
Executive Vice President, General Counsel and Corporate Secretary

Knoxville, Tennessee
December 12, 2016

TABLE OF CONTENTS

i

ii

SUMMARY TERM SHEET

This summary highlights information contained elsewhere in this proxy statement and may not contain all the information that is important to you with respect to the merger and the other matters being considered at the special meeting of TeamHealth stockholders. We urge you to read carefully the remainder of this proxy statement, including the attached annexes, and the other documents to which we have referred you. For additional information on TeamHealth included in documents incorporated by reference into this proxy statement, see the section entitled “Where You Can Find More Information” beginning on page 123. We have included page references in this summary to direct you to a more complete description of the topics presented below.

All references to “TeamHealth,” “the Company,” “we,” “us,” or “our” in this proxy statement refer to Team Health Holdings, Inc., a Delaware corporation; all references to “Parent” refer to Tennessee Parent, Inc., a Delaware corporation; all references to “Merger Sub” refer to Tennessee Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent formed solely for the purpose of entering into the merger agreement and engaging in the transactions contemplated by the merger agreement; all references to “Sponsor” refer to Blackstone Capital Partners VII L.P.; all references to “TeamHealth common stock” refer to the common stock, par value $0.01 per share, of TeamHealth; all references to the “TeamHealth Board” refer to the board of directors of TeamHealth; all references to the “merger” refer to the merger of Merger Sub with and into TeamHealth with TeamHealth surviving as a wholly owned subsidiary of Parent; unless otherwise indicated or as the context otherwise requires, all references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of October 30, 2016, by and among TeamHealth, Parent and Merger Sub, as amended or modified from time to time, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein. TeamHealth, following the completion of the merger, is sometimes referred to in this proxy statement as the “surviving corporation.”

The Parties

TeamHealth (see page 26)

Team Health Holdings, Inc., is a corporation organized under the laws of the State of Delaware in 2009. We believe we are one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States, based upon revenues, patient visits, and number of clients. We serve approximately 3,400 civilian and military hospitals, clinics and physician groups in 47 states with a team of more than 19,000 affiliated healthcare professionals, including physicians, physician assistants, nurse practitioners, and nurses. We recruit and contract with healthcare professionals who then provide professional services within third-party healthcare facilities. We are a physician-founded organization with physician leadership throughout all levels of our organization. Since our inception in 1979, we have provided outsourced services in emergency departments. We also provide comprehensive programs for anesthesiology, inpatient services (hospitalists comprising the specialties of internal medicine, orthopedic surgery, general surgery and OB/GYN), scribes, ambulatory care, pediatrics, post-acute care and other healthcare services, by providing permanent staffing that enables the management teams of hospitals and other healthcare facilities to outsource certain management, recruiting, hiring, payroll, billing and collection and benefits functions.

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “TMH”. TeamHealth’s headquarters are located at 265 Brookview Centre Way, Suite 400, Knoxville, Tennessee 37919 and our telephone number is (800) 342-2898. Our corporate web address is www.teamhealth.com. The information provided on the TeamHealth website is not part of this proxy statement and is not incorporated in this proxy statement by reference hereby or by any other reference to TeamHealth’s website provided in this proxy statement.

Additional information about TeamHealth is contained in our public filings with the U.S. Securities and Exchange Commission (the “SEC”), which are incorporated by reference herein. See the section entitled “Where You Can Find Additional Information.”

1

Parent (see page 26)

Parent is a Delaware corporation that was formed by Sponsor on October 20, 2016 solely for the purpose of entering into the merger agreement and related agreements and completing the merger and the other transactions contemplated thereby. Parent has not conducted any business operations other than in connection with the transactions contemplated by the merger agreement and the related agreements. Upon completion of the merger, TeamHealth will be a wholly owned subsidiary of Parent. Parent’s principal executive offices are located at 345 Park Avenue, New York, New York 10154, and its telephone number is (212) 583-5722.

Merger Sub (see page 26)

Parent caused Merger Sub, a Delaware corporation and a wholly owned subsidiary of Parent to be formed on October 20, 2016, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Merger Sub has not carried on any activities on or prior to the date of this proxy statement, except for activities incidental to its formation and activities undertaken in connection with Parent’s acquisition of TeamHealth. Upon completion of the merger, Merger Sub will merge with and into TeamHealth, and Merger Sub will cease to exist. Merger Sub’s principal executive offices are located at 345 Park Avenue, New York, New York 10154, and its telephone number is (212) 583-5722.

Parent and Merger Sub are controlled by Sponsor, an affiliate of The Blackstone Group L.P. (“Blackstone”). Blackstone is one of the world’s leading investment firms. Blackstone’s asset management businesses, with over $360 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds.

The Special Meeting

Date, Time and Place (see page 28)

The special meeting of TeamHealth stockholders (the “special meeting”) is scheduled to be held at TeamHealth’s office at 265 Brookview Centre Way, 2nd floor, Knoxville, Tennessee 37919 on Wednesday, January 11, 2017 at 2:00 p.m., Eastern Time.

Purpose of the Meeting (see page 28)

The special meeting is being held in order to consider and vote on the following proposals:

•

To adopt the merger agreement (the “merger proposal”).

​

•

To approve, on a non-binding, advisory basis, certain compensation that will or may be paid by TeamHealth to its named executive officers that is based on or otherwise relates to the merger (the “named executive officer merger-related compensation proposal”).

​

•

To approve the adjournment of the special meeting, from time to time, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the merger proposal (the “adjournment proposal”).

​

Stockholders may also be asked to transact such other business as may properly be brought before the special meeting, or any adjournments or postponements of the special meeting, by or at the direction of the TeamHealth Board.

The TeamHealth Board has reviewed and considered the terms and conditions of the proposed merger. After consulting with its outside legal counsel and financial advisor and after consideration of various factors more fully described in this proxy statement, the TeamHealth Board unanimously determined that the merger, the merger agreement and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of TeamHealth and our stockholders and unanimously declared advisable and approved the merger, the merger agreement and the other transactions contemplated by the merger agreement. The TeamHealth Board unanimously recommends that TeamHealth stockholders vote “FOR” the merger proposal, “FOR” the named executive officer merger-related compensation proposal and “FOR” the adjournment proposal.

2

TeamHealth stockholders must vote to approve the merger proposal as a condition for the merger to occur. If the TeamHealth stockholders fail to approve the merger proposal by the requisite vote, the merger will not occur.

Record Date; Stockholders Entitled to Vote (see page 29)

Only holders of record of TeamHealth common stock at the close of business on December 8, 2016, the record date for the special meeting (the “record date”), will be entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of the special meeting. At the close of business on the record date, 74,590,147 shares of TeamHealth common stock were issued and outstanding, held by approximately 186 holders of record.

Holders of record of TeamHealth common stock are entitled to one vote on each matter submitted to a vote at the special meeting for each share of TeamHealth common stock they own of record at the close of business on the record date.

Quorum (see page 29)

Under our bylaws, the presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of TeamHealth common stock issued and outstanding at the close of business on the record date will constitute a quorum. There must be a quorum for business to be conducted at the special meeting. Failure of a quorum to be represented at the special meeting will necessitate an adjournment or postponement of the special meeting and may subject TeamHealth to additional expense.

If you submit (and do not thereafter revoke) a properly executed proxy card, even if you abstain from voting, your shares of TeamHealth common stock will be counted for purposes of determining whether a quorum is present at the special meeting. In the event that a quorum is not present at the special meeting or additional votes must be solicited to adopt the merger agreement, the meeting may be adjourned or postponed to solicit additional proxies.

Required Vote (see page 29)

The approval of the merger proposal requires the affirmative vote of a majority of the shares of TeamHealth common stock outstanding at the close of business on the record date and entitled to vote thereon.

Approval of the named executive officer merger-related compensation proposal (on a non-binding basis) requires the affirmative vote of a majority of the shares of TeamHealth common stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

Approval of the adjournment proposal requires the affirmative vote of a majority of the shares of TeamHealth common stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

Voting at the Special Meeting (see page 30)

If your shares are registered directly in your name with our transfer agent, you are considered a “stockholder of record.” Stockholders of record can vote their shares of TeamHealth common stock in the following four ways: (i) by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the envelope provided to you, (ii) by submitting your proxy by telephone by dialing the toll-free number 1-800-690-6903, (iii) by submitting your proxy over the Internet by going to www.proxyvote.com or (iv) attending the special meeting and voting your shares in person. Even if you plan to attend the special meeting, TeamHealth encourages you to submit a proxy in advance by Internet, telephone or mail so that your vote will be counted even if you later decide not to attend the special meeting.

If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. You should instruct your broker, bank or other nominee how to vote your shares on each proposal in accordance with your voting instruction

3

form. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, broker or other nominee on how to submit voting instructions. Stockholders who own their shares in “street name” are not able to vote at the special meeting unless they have a “legal proxy,” executed in their favor, from the stockholder of record (broker, bank or other nominee) giving them the right to vote the shares at the special meeting.

You may revoke your proxy at any time prior to the vote at the special meeting by (i) sending a written statement to that effect to our Corporate Secretary, (ii) voting again by Internet or telephone, (iii) submitting a properly signed proxy card with a later date, or (iv) attending the special meeting and voting in person. Attendance at the special meeting will not, in and of itself, result in the revocation of a proxy or cause your shares of TeamHealth common stock to be voted. If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy in person at the special meeting if you obtain a signed proxy from the stockholder of record (broker, bank or other nominee) giving you the right to vote the shares.

TeamHealth recommends that you submit a proxy to vote your shares as soon as possible, even if you are planning to attend the special meeting, to ensure that your shares are represented and voted at the meeting and so that the vote count will not be delayed.

Abstentions and Broker Non-Votes (see page 29)

At the special meeting, abstentions will be counted as present for purposes of determining whether a quorum exists. Abstaining from voting will have the same effect as a vote “AGAINST” the merger proposal, the named executive officer merger-related compensation proposal and the adjournment proposal. If no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will be voted “FOR” (i) approval of the merger proposal, (ii) approval of the named executive officer merger-related compensation proposal and (iii) approval of the adjournment proposal. Broker non-votes are shares held in “street name” by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or other nominee does not have discretionary voting power on such proposal. Because, under NYSE rules, brokers, banks and other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of TeamHealth common stock held in “street name” does not give voting instructions to the broker, bank or other nominee, then those shares will not be counted as present in person or by proxy at the special meeting. As the vote to approve the merger proposal is based on the total number of shares of TeamHealth common stock outstanding at the close of business on the record date, not just the shares that are counted as present in person or by proxy at the special meeting, if you fail to issue voting instructions to your broker, bank or other nominee, it will have the same effect as a vote “AGAINST” the merger proposal.

Solicitation of Proxies (see page 32)

The TeamHealth Board is soliciting your proxy, and TeamHealth will bear the cost of soliciting proxies. Innisfree M&A Incorporated has been retained to assist with the solicitation of proxies. Innisfree M&A Incorporated will be paid approximately $25,000 plus certain additional per-service fees and will be reimbursed for its reasonable fees and expenses for these and other advisory services in connection with the special meeting. In addition, TeamHealth will indemnify Innisfree M&A Incorporated for certain losses arising out of or related to its services. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or other electronic medium without additional compensation by certain of TeamHealth’s directors, officers and employees.

Adjournment (see page 32)

In addition to the merger proposal and the named executive officer merger-related compensation proposal, TeamHealth stockholders are also being asked to approve the adjournment proposal, which will enable the adjournment of the special meeting for the purpose of soliciting additional votes in favor of the

4

merger proposal if there are not sufficient votes at the time of the special meeting to approve the merger proposal. If a quorum is not present, the person presiding at the special meeting or the stockholders holding a majority of the shares of TeamHealth common stock present in person or by proxy at the special meeting and entitled to vote thereat may adjourn the special meeting from time to time until a quorum shall be present. If the adjournment is for more than 30 days, or if a new record date is set for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. In addition, the special meeting could be postponed before it commences, subject to the terms of the merger agreement. If the special meeting is adjourned or postponed, stockholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you return a proxy and do not indicate how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal.

The Merger

The rights and obligations of the parties to the merger agreement are governed by the specific terms and conditions of the merger agreement and not by any summary or other information in this proxy statement. Therefore, the information in this proxy statement regarding the merger agreement and the merger is qualified in its entirety by reference to the merger agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated herein by reference. We encourage you to read the merger agreement carefully and in its entirety because it is the principal legal agreement that governs the merger.

Structure of the Merger (see page 33)

If the merger is completed, then at the effective time of the merger (the “effective time”), Merger Sub will merge with and into TeamHealth, the separate corporate existence of Merger Sub will cease and TeamHealth will survive the merger as a wholly owned subsidiary of Parent.

Merger Consideration (see page 33)

Upon the terms and subject to the conditions of the merger agreement, at the effective time, TeamHealth stockholders will have the right to receive $43.50 in cash, without interest and subject to any applicable withholding taxes, for each share of TeamHealth common stock that they own immediately prior to the effective time of the merger (other than shares (i) owned by Parent, Merger Sub or any other direct or indirect wholly owned subsidiary of Parent, (ii) owned by TeamHealth or any other direct or indirect wholly owned subsidiary of TeamHealth, including shares held in treasury by TeamHealth or (iii) held by holders who have not voted in favor of the merger proposal and who are entitled to and have properly demanded appraisal rights with respect thereto under Delaware law; collectively we refer to all such shares in this proxy statement as “excluded shares”).

Treatment of TeamHealth Equity Awards (see page 33)

The merger agreement provides that outstanding equity-based awards under TeamHealth’s equity plan and employee stock purchase plans will be treated as set forth below.

Stock Options.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding option to purchase shares of TeamHealth common stock (other than any options subject to performance-vesting conditions which are not achieved at or prior to the effective time, which will automatically be forfeited for no consideration as of the effective time) will become immediately vested and be cancelled and the holder will be entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (i) the number of shares subject to the option, multiplied by (ii) the excess, if any, of  $43.50 over the exercise price of the option, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Stock Units.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, any vesting conditions applicable to each outstanding TeamHealth restricted stock unit, deferred stock unit, phantom stock unit, restricted share or similar stock right (in each case, other

5

than a performance share unit or a market share unit, a “Stock Unit”) will automatically accelerate in full, and each Stock Unit will be cancelled and the holder will be entitled to receive, at or promptly following the effective time, an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the total number of shares subject to the Stock Unit immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time. With respect to any Stock Units that are restricted stock units and are subject to an election providing for the deferred delivery of underlying shares on a date following the vesting date of such Stock Units, the amount that would be otherwise payable in respect of such Stock Units pursuant to the merger agreement will instead be credited to notional, book-entry accounts and paid to the respective holders at the time specified pursuant to the applicable deferral election.

PSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding TeamHealth performance share unit (“PSU”) will automatically become immediately vested at target level performance, and each PSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the target number of shares subject to the PSU immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

MSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding TeamHealth market share unit (“MSU”) (all of which are held by our Chief Executive Officer) will automatically become immediately vested with respect to the number of MSUs that have been deemed to have been earned as of the effective time, determined in accordance with the terms of the award agreement governing the MSUs by and between TeamHealth and our Chief Executive Officer (the “earned MSUs”), and each MSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the number of earned MSUs multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

ESPPs.   Under the TeamHealth 2010 Employee Stock Purchase Plan and the TeamHealth 2010 Nonqualified Stock Purchase Plan (together, the “ESPPs”), (i) no offering period will be authorized or commenced on or after the date of the merger agreement, (ii) each ESPP participant’s accumulated contributions under the respective ESPP will be used to purchase shares of TeamHealth common stock in accordance with the terms of the respective ESPP, as of the end of the final offering period (if any offering period is in process at the effective time), and (iii) the ESPPs will terminate immediately prior to the effective time, and no further rights will be granted or exercised under the ESPPs.

Recommendation of the TeamHealth Board (see page 49)

The TeamHealth Board has reviewed and considered the terms and conditions of the proposed merger. After consulting with its outside legal counsel and financial advisor and after consideration of various factors, the TeamHealth Board unanimously (i) determined that it is advisable, fair to and in the best interests of TeamHealth and our stockholders for TeamHealth to enter into the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) declared advisable and approved the merger, the merger agreement and the other transactions contemplated by the merger agreement and (iii) resolved that the merger agreement be submitted to the TeamHealth stockholders for adoption thereby in accordance with applicable law, the merger agreement and the bylaws of TeamHealth at a special meeting of stockholders and recommended that our stockholders vote to adopt the merger agreement. Certain factors considered by the TeamHealth Board in reaching its decision to adopt the merger agreement can be found in “The Merger Proposal (Proposal 1) — Recommendation of the TeamHealth Board and Reasons for the Merger” beginning on page 49.

The TeamHealth Board unanimously recommends that the TeamHealth stockholders vote:

•

“FOR” the merger proposal;

​

•

“FOR” the named executive officer merger-related compensation proposal; and

​

•

“FOR” the adjournment proposal.

​

6

Opinion of TeamHealth’s Financial Advisor (see page 54)

At a meeting of the TeamHealth Board held on October 30, 2016, Goldman, Sachs & Co., which we refer to as “Goldman Sachs,” rendered to the TeamHealth Board its oral opinion, subsequently confirmed in writing, to the effect that, as of the date of its written opinion and based upon and subject to the factors and assumptions set forth in Goldman Sachs’s written opinion, the merger consideration of  $43.50 in cash per share to be paid to the holders (other than TeamHealth, Parent and their respective wholly owned subsidiaries) of the shares of TeamHealth common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated October 30, 2016, which sets forth assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex B and is incorporated by reference herein. The summary of the Goldman Sachs opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs’s written opinion. Goldman Sachs’s advisory services and opinion were provided for the information and assistance of the TeamHealth Board in connection with its consideration of the proposed transaction and the opinion does not constitute a recommendation as to how any holder of TeamHealth common stock should vote with respect to the merger proposal or any other matter. Pursuant to an engagement letter between TeamHealth and Goldman Sachs, TeamHealth has agreed to pay Goldman Sachs for its services in connection with the proposed merger an aggregate fee currently estimated to be approximately $18.4 million, $15.4 million of which is contingent upon consummation of the merger. The foregoing fee will be reduced by $1.5 million, which amount is a portion of the fee previously paid by TeamHealth to Goldman Sachs for its services in connection with the acquisition of shares of TeamHealth common stock by JANA Partners LLC, which we refer to as “JANA”.

For further information, see the section of this proxy statement entitled “Opinion of TeamHealth’s Financial Advisor” beginning on page 54 and Annex B.

Interests of TeamHealth’s Executive Officers and Directors in the Merger (see page 66)

In considering the recommendation of the TeamHealth Board, TeamHealth stockholders should be aware that certain directors and executive officers of TeamHealth will have interests in the proposed merger that are different from, or in addition to, the interests of TeamHealth stockholders generally and which may create potential conflicts of interest. The TeamHealth Board was aware of these interests and considered them when it adopted the merger agreement and approved the merger.

These interests include:

•

TeamHealth’s executive officers are entitled to protections and benefits under their respective employment agreements in the event of certain terminations of employment following the completion of the merger;

​

•

The TeamHealth stock options, Stock Units, PSUs, and MSUs held by TeamHealth’s executive officers and members of the TeamHealth Board will fully vest (unless provided otherwise by the terms of an applicable award agreement or written deferral arrangement, as applicable, as discussed further below) and be converted into the right to receive cash payments based on the merger consideration following the completion of the merger; and

​

•

TeamHealth’s directors and officers are entitled to indemnification and insurance arrangements pursuant to the merger agreement and TeamHealth’s organizational documents and under certain indemnification agreements.

​

These interests are discussed in more detail in the section entitled “The Merger Proposal (Proposal 1) — Interests of TeamHealth’s Executive Officers and Directors in the Merger,” beginning on page 66 of this proxy statement.

Financing of the Merger (see page 76)

Parent has obtained equity financing commitments, and Merger Sub has obtained debt financing commitments (in each case, pursuant to commitment letters) for the transactions contemplated by the merger agreement, the aggregate proceeds of which will be used to fund (i) the consummation of the merger

7

and the other transactions contemplated by the merger agreement, including the payment of the amounts payable under the merger agreement and any fees and expenses incurred in connection therewith, (ii) the repayment in full of all outstanding indebtedness of TeamHealth and its subsidiaries under its existing credit facility and (iii) the prepayment, redemption, repurchase, tender offer, consent solicitation, change of control offer, satisfaction or discharge or other retirement in respect of Team Health, Inc.’s 7.250% Senior Notes due 2023 (the “Existing Notes”). Sponsor has committed to provide capital to Parent with an equity contribution of  $2.7 billion, subject to the terms and conditions set forth in an equity commitment letter. JPMorgan Chase Bank, N.A., Barclays Bank PLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc. and PSP Investments Credit USA LLC have committed to provide, severally but not jointly, upon the terms and subject to the conditions set forth in the debt commitment letter, acquisition debt financing in the aggregate amount of up to $4.015 billion, consisting of a $400 million senior secured revolving credit facility, a $2.6 billion senior secured term facility and a $1.015 billion senior unsecured bridge facility (which senior unsecured bridge facility amount will be reduced on a dollar for dollar basis to the extent any of the Existing Notes are expected to remain outstanding after the closing date of the merger). The consummation of the merger is not subject to any financing conditions.

Limited Guarantee (see page 79)

Subject to the terms and conditions set forth in a limited guarantee, dated October 30, 2016 (the “limited guarantee”), Sponsor has guaranteed the payment obligations of Parent with respect to (i) the obligation of Parent under the merger agreement to pay the reverse termination fee if the merger agreement is terminated by the Company under specified circumstances (see the section entitled “The Merger Agreement — Termination Fees and Expenses”), (ii) Parent’s obligation to pay certain interest and expenses and certain reimbursement and indemnification obligations of Parent under the merger agreement and (iii) any other monetary damages that may become payable by Parent under the merger agreement (subject to the limitations set forth therein and in the limited guarantee).

Sponsor’s obligations under the limited guarantee are subject to an aggregate cap equal to the amount of  $206,700,000.

Antitrust Reviews Required for the Merger and Other Regulatory Filings (see page 79)

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), we cannot complete the merger until we have given notification and furnished information to the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”), and until the applicable waiting period has expired or has been terminated. On November 14, 2016, TeamHealth and Parent each filed a premerger notification and report form under the HSR Act, as a result of which the applicable waiting period under the HSR Act is scheduled to expire on December 14, 2016 at 11:59 p.m., Eastern Time, unless otherwise earlier terminated or extended if the DOJ or FTC requests additional information and documentary material. On November 28, 2016, the FTC granted early termination of the waiting period under the HSR Act.

While the antitrust review has been completed in a timely manner, there is no certainty that a regulatory challenge to the merger will not subsequently be made.

The parties have agreed to submit a joint voluntary notification of the merger to the Committee on Foreign Investment in the United States (“CFIUS”) under Section 721 of the Defense Production Act of 1950, as amended. The parties have also agreed that Spectrum Healthcare Resources, Inc., a subsidiary of TeamHealth, will submit a notification of the merger and a proposed plan to mitigate any foreign ownership, control or influence arising out of the merger to the Defense Security Service of the U.S. Department of Defense (“DSS”), the agency with authority over the facility security clearance held by Spectrum Healthcare Resources, Inc. Approval of the merger by CFIUS or DSS is not required to complete the merger, and the parties’ completion of the merger is not contingent upon any such approvals by CFIUS or DSS. On December 9, 2016, the parties filed a pre-filing joint voluntary notice with CFIUS.

Material U.S. Federal Income Tax Consequences of the Merger (see page 119)

The exchange of TeamHealth common stock for cash in the merger generally will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state and local and other

8

tax laws. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 119. The tax consequences of the merger to you will depend on your particular circumstances. You should consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Transaction Litigation (see page 81)

On December 2, 2016, one purported stockholder filed a putative class action complaint, styled Melvyn Klein v. Team Health Holdings, Inc., et al., Case No. 3:16-cv-00675, in the United States District Court for the Eastern District of Tennessee against TeamHealth and the members of the TeamHealth Board. The complaint includes claims for violations of the Exchange Act (as defined below) against TeamHealth and the individual directors, alleging that TeamHealth and the directors violated Section 14(a) of the Exchange Act, Rule 14a-9 and 17 C.F.R. § 244.100 promulgated thereunder and that the directors violated Section 20(a) of the Exchange Act. The plaintiff seeks an order, inter alia, enjoining the defendants from proceeding with the stockholder vote on the merger proposal or consummating the merger unless and until certain information is disclosed, as well as certification of the putative class, an accounting of all damages sustained as a result of the alleged wrongdoing, and attorneys’ fees and expenses.

On December 6, 2016, TeamHealth received a demand letter by James Prochnik, a purported stockholder of TeamHealth, requesting access to certain books and records of TeamHealth to investigate possible breaches of fiduciary duty by the TeamHealth Board in connection with the merger.

Although it is not possible to predict the outcome of the litigation with certainty, TeamHealth and the TeamHealth Board believe that the claims raised in the complaint are without merit and intend to defend their position in this matter vigorously.

Appraisal Rights (see page 81)

Stockholders are entitled to appraisal rights under the General Corporation Law of the State of Delaware (the “DGCL”), in connection with the merger, provided that stockholders comply with the requirements of Section 262 of the DGCL. Any stockholder who does not vote in favor of the merger proposal and who otherwise complies with the requirements of Section 262 has the right to seek appraisal of his, her or its shares of TeamHealth common stock and to receive payment in cash for the “fair value” of his, her or its shares of TeamHealth common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be fair value. The ultimate amount stockholders receive in an appraisal proceeding may be less than, equal to or more than the amount a stockholder would have received under the merger agreement.

To exercise appraisal rights, a stockholder must deliver a written demand for appraisal to TeamHealth before the vote is taken on the adoption of the merger agreement, must not vote, in person or by proxy, in favor of the proposal to adopt the merger agreement and must continue to hold the shares of TeamHealth common stock of record from the date of making the demand for appraisal through the effective time of the merger. As such, merely voting against, abstaining or failing to vote on the proposal to adopt the merger agreement will not preserve your right to appraisal under the DGCL. Further, because a properly submitted proxy not marked “against” or “abstain” will be voted “for” the proposal to adopt the merger agreement, the submission of a proxy not marked “against” or “abstain” will result in the waiver of appraisal rights. A stockholder’s failure to strictly comply with the procedures specified under the DGCL will result in the loss of such stockholder’s appraisal rights. See the section entitled “The Merger Proposal (Proposal 1) — Appraisal Rights” beginning on page 81 and the text of the Delaware appraisal right statute reproduced in its entirety as Annex C to this proxy statement. Only a stockholder of record may submit a demand for appraisal. If you hold your shares of TeamHealth common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such bank, brokerage firm or nominee. In view of the complexity of the DGCL, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly.

9

Expected Timing of the Merger

We expect to complete the merger in the first quarter of 2017. However, the merger is subject to various conditions, and it is possible that factors outside of the control of TeamHealth or Parent could result in the merger being completed at a later time, or not at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required clearances and approvals and the satisfaction or, to the extent permitted, waiver of the other conditions to the consummation of the merger.

Go-Shop Period; Restrictions on Solicitation of Acquisition Proposals (see page 95)

From the date of the merger agreement until 12:01 a.m. (New York time) on December 10, 2016 (the “go-shop period”), TeamHealth and its subsidiaries and affiliated entities and their respective directors, officers, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants and other advisors, affiliates or representatives had the right to:

•

initiate, solicit, facilitate and encourage any inquiry or the making of any proposal or offer that could constitute an acquisition proposal, including by providing information regarding, and affording access to the business, properties, assets, books, records and personnel of, TeamHealth and its subsidiaries and affiliated entities to any person pursuant to an acceptable confidentiality agreement (as defined below), provided that TeamHealth must provide to Parent and Merger Sub any material non-public information or data that is provided to any person given such access that was not previously made available to Parent or Merger Sub prior to or substantially concurrently with the time it is provided to such person (and in any event, within 24 hours); and

​

•

engage in, enter into, continue or otherwise participate in any discussions or negotiations with any persons with respect to any acquisition proposals (or inquiries that could lead to an acquisition proposal) and cooperate with or assist or participate in or facilitate any such inquiries, proposals, offers, discussions or negotiations or any effort or attempt to make any acquisition proposals, including granting a limited waiver, amendment or release under any pre-existing standstill or similar provision with any person to the extent necessary to permit such person to make or amend a confidential acquisition proposal (such limited waiver to include an express acknowledgement by the parties thereto that under no circumstances will such restricted person(s) be permitted to acquire, directly or indirectly, any securities of TeamHealth or any of its subsidiaries or affiliated entities prior to the valid termination of the merger agreement).

​

No later than one business day after the end of the go-shop period, TeamHealth must (A) notify Parent in writing of the identity of each person from whom TeamHealth received a written acquisition proposal during the go-shop period, (B) provide Parent a list identifying each excluded party (as defined below) as of the end of the go-shop period and (C) provide to Parent (x) a copy of any acquisition proposal made in writing and any other written terms or proposals provided (including financing commitments) to TeamHealth or any of its subsidiaries or affiliated entities in connection with any acquisition proposal and any material modifications thereto and (y) a written summary of the material terms of any acquisition proposal not made in writing (including any material terms proposed orally or supplementally and any material modifications thereto).

From and after 12:01 a.m. (New York time) on December 10, 2016 (the “no-shop period start date”) until the earlier of the effective time and the valid termination of the merger agreement, TeamHealth is subject to restrictions on its ability to solicit third party proposals relating to alternative transactions or to provide information to and engage in discussions or negotiations with a third party in relation to an alternative transaction (subject to certain exceptions with respect to any excluded party and certain exceptions prior to the approval of the merger proposal by TeamHealth stockholders at the special meeting). Specifically, TeamHealth shall not, and shall cause its subsidiaries and affiliated entities not to (and shall direct its and their directors, officers, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants and other advisors, affiliates or representatives not to):

•

initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals or offers with respect to, or the making of, or that could reasonably be expected to lead to, an acquisition proposal;

​

10

•

enter into, continue or otherwise participate or engage in, knowingly facilitate or knowingly encourage, any negotiations or discussions concerning, or that could reasonably be expected to lead to, an acquisition proposal, or provide access to its properties, books, records or any confidential information or data to any person relating to TeamHealth, its subsidiaries and its affiliated entities in connection with the foregoing;

​

•

approve, endorse or recommend (or propose publicly to approve, endorse or recommend) any acquisition proposal;

​

•

take any action to make the provisions of any takeover law, or any restrictive provision of any applicable anti-takeover provision in the certificate of incorporation or bylaws of TeamHealth, inapplicable to any transactions contemplated by any acquisition proposal; or

​

•

execute or enter into, any merger agreement, acquisition agreement or other similar definitive agreement for any acquisition proposal.

​

Additionally, TeamHealth shall not authorize, commit to or agree to do any of the foregoing prohibited activities. For the avoidance of doubt, notwithstanding the commencement of the no-shop period start date, until the date which is ten business days following the no-shop period start date (the “cut-off date”), TeamHealth may continue to engage in the foregoing activities with any person from whom TeamHealth or any of its representatives has received a written acquisition proposal during the go-shop period, which the TeamHealth Board determines in good faith (such determination to be made no later than one business day after the no-shop period start date) constitutes or would be reasonably expected to lead to a superior proposal (any such person, an “excluded party,” provided that any person shall cease to be an “excluded party” if at any time after the no-shop period start date the acquisition proposal submitted by such person is withdrawn or terminated in writing) (but only for so long as such person is an excluded party). Immediately following the no-shop period start date, TeamHealth shall and shall cause each of its subsidiaries and affiliated entities and its and their representatives to immediately (1) cease any solicitations, discussions, communications or negotiations with any person in connection with an acquisition proposal or any potential acquisition proposal and (2) terminate access to any physical or electronic data rooms relating to any potential acquisition proposal, except as it may relate to any excluded party, but only for so long as such person is an excluded party. Except as it may relate to an excluded party, TeamHealth also agrees that following the no-shop period start date it will promptly (and in any event within two business days thereof) deliver a written notice to each such person to the effect that TeamHealth is ending all solicitations, discussions, communications and negotiations with such person, which notice shall also request that each such person who has executed a confidentiality agreement prior to the date of the merger agreement in connection with a potential acquisition of TeamHealth promptly return or destroy all confidential information furnished by or on behalf of TeamHealth or any of its subsidiaries prior to the date of the merger agreement.

However, notwithstanding the foregoing non-solicitation restrictions and TeamHealth’s obligations under the merger agreement relating to the special meeting, prior to obtaining the approval of the merger proposal by the TeamHealth stockholders at the special meeting, we may (x) contact and engage in discussions, negotiations or communications with any person and its representatives who has made an acquisition proposal that was not the result of a material breach of the non-solicitation restrictions described above and (y) provide access to TeamHealth’s or any of its subsidiaries or affiliated entities properties, books and records and provide information and data in response to a request therefor by any person who has made a bona fide acquisition proposal that was not the result of a material breach of the non-solicitation restrictions described above, if the TeamHealth Board (A) determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes or would reasonably be expected to constitute or lead to a superior proposal, (B) determines in good faith, after consultation with its outside legal counsel, that the failure to provide such access or engage in such negotiations or discussions would be reasonably likely to be inconsistent with its fiduciary duties, and (C) has entered into an acceptable confidentiality agreement with such person; provided that TeamHealth must provide to Parent and Merger Sub any material non-public information or data that is provided to any person given such access that was not previously made available to Parent or Merger Sub prior to or substantially concurrently with the time it is provided to such person (and in any event within 24 hours).

11

Conditions to the Closing of the Merger (see page 106)

Each party’s obligation to effect the merger is subject to the satisfaction or, to the extent permitted, waiver of various conditions, including the following:

•

the merger agreement has been adopted by the affirmative vote of the holders of a majority of the outstanding shares of TeamHealth common stock entitled to vote thereon at the special meeting;

​

•

the waiting period (and any extension thereof) applicable to the consummation of the merger under the HSR Act shall have expired or been earlier terminated and any required approvals thereunder shall have been obtained, as further described in the sections entitled “Antitrust Reviews Required for the Merger and Other Regulatory Filings” and “The Merger Agreement — Conditions to the Closing of the Merger” beginning on pages 79 and 106, respectively;

​

•

no law, statute, rule, regulation, executive order, decree, ruling, injunction, judgment or other order (whether temporary, preliminary or permanent) shall have been enacted, entered, promulgated or enforced by any governmental entity of competent jurisdiction which prohibits, restrains, makes illegal or enjoins the consummation of the merger and shall remain in effect;

​

•

TeamHealth’s, Parent’s and Merger Sub’s respective representations and warranties in the merger agreement shall be true and correct as of the date of the merger agreement and as of the effective time in the manner described under “The Merger Agreement — Conditions to the Closing of the Merger” beginning on page 106;

​

•

TeamHealth, Parent and Merger Sub have performed or complied in all material respects or in all respects, as applicable, with each of their respective obligations, agreements and covenants under the merger agreement at or prior to the effective time in the manner described under “The Merger Agreement — Conditions to the Closing of the Merger” beginning on page 106; and

​

•

the delivery of an officer’s certificate by each of TeamHealth and Parent certifying that the conditions with respect to accuracy of representations and warranties and compliance with obligations, agreements and covenants under the merger agreement.

​

Termination of the Merger Agreement (see page 107)

TeamHealth or Parent may terminate the merger agreement under the following circumstances:

•

by mutual written consent of TeamHealth, Parent and Merger Sub;

​

•

if any court or other governmental entity of competent jurisdiction has issued a final order, decree, judgment, injunction, or ruling, or taken any other final action permanently restraining, enjoining or otherwise prohibiting the consummation of the merger and such order, decree, judgment, injunction, ruling or other action is or shall have become final and non-appealable, provided that the party seeking to terminate the merger agreement under this circumstance has used the efforts required to be taken pursuant to the terms and conditions of the merger agreement to prevent, oppose and remove such restraint, injunction or other prohibition;

​

•

if the merger has not occurred on or before April 30, 2017 (the “end date”), provided that the right to terminate the merger agreement under this circumstance will not be available to any party if such party (or, in the case of Parent, Merger Sub, or the Company, its subsidiaries and affiliated entities) is in material breach of any provision of the merger agreement where such breach was the primary cause of the merger not having occurred on or prior to the end date (such breach, a “disqualifying breach”) (for the avoidance of doubt, Parent’s failure to consummate the closing due to the unavailability of the debt financing (or, if alternative financing is being used, such alternative financing) shall not in itself be deemed to be an action or failure to act for purposes of this circumstance; provided that Parent has not otherwise committed a disqualifying breach); or

​

•

if the adoption of the merger agreement by TeamHealth’s stockholders has not been obtained at the special meeting or at any adjournment or postponement thereof at which a vote on the approval of the merger proposal was taken.

​

12

TeamHealth may terminate the merger agreement by written notice to Parent:

•

if there shall have been a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub contained in the merger agreement, or any such representation or warranty shall be untrue such that the conditions to TeamHealth’s obligation to consummate the closing would not be satisfied (and such breach or condition is not curable or, if curable, is not cured prior to the earlier of  (i) 30 days after written notice thereof is given by TeamHealth to Parent or (ii) the end date), provided that the right to terminate the merger agreement under this circumstance will not be available to TeamHealth if TeamHealth is then in material breach of any of its representations, warranties, covenants or agreements contained in the merger agreement that would cause a condition to Parent’s and Merger Sub’s obligation to consummate the closing not to be satisfied;

​

•

prior to the adoption of the merger agreement by the TeamHealth stockholders at the special meeting or any adjournment or postponement thereof, in order to enter into a definitive acquisition agreement providing for a superior proposal, subject to the terms and conditions of the non-solicitation provisions and related notice procedures in the merger agreement and payment of the applicable termination fee; or

​

•

if  (i) the conditions to Parent’s and Merger Sub’s obligation to consummate the closing (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions at the closing) have been and continue to be satisfied or waived in accordance with the merger agreement, (ii) Parent and Merger Sub fail to consummate the merger within two business days of the date on which the closing should have occurred pursuant to the terms and conditions of the merger agreement and (iii) at all times during such two business day period, TeamHealth stood ready willing and able to consummate the merger and the other transactions contemplated by the merger agreement and TeamHealth gave Parent a written notice on or prior to the end of such two day period confirming such fact.

​

Parent may terminate the merger agreement by written notice to TeamHealth:

•

if there shall have been a breach of any representation, warranty, covenant or agreement on the part of TeamHealth contained in the merger agreement, or any such representation or warranty shall be untrue such that the conditions to Parent’s and Merger Sub’s obligation to consummate the closing would not be satisfied (and such breach or condition is not curable or, if curable, is not cured prior to the earlier of  (i) 30 days after written notice thereof is given by Parent to TeamHealth or (ii) the end date), provided that the right to terminate the merger agreement under this circumstance will not be available to Parent if Parent or Merger Sub is then in material breach of any of its representations, warranties, covenants or agreements contained in the merger agreement that would cause a condition to TeamHealth’s obligation to consummate the closing not to be satisfied; or

​

•

if the TeamHealth Board prior to the adoption of the merger agreement by the TeamHealth stockholders at the special meeting or any adjournment or postponement thereof, shall have made a change of recommendation with respect to the merger proposal.

​

Termination Fees and Expenses (see page 108)

Upon termination of the merger agreement, under certain specified circumstances, TeamHealth may be required to pay a termination fee of either $50.4 million or $100.8 million to Parent pursuant to the terms and conditions of the merger agreement. Upon termination of the merger agreement, under certain specified circumstances, Parent may be required to pay TeamHealth a reverse termination fee of  $201.7 million pursuant to the terms and conditions of the merger agreement. See the section entitled “The Merger Agreement — Termination Fees and Expenses” beginning on page 108 for a discussion of the circumstances under which either party will be required to pay a termination fee.

Directors’ and Officers’ Indemnification and Insurance (see page 102)

For a period of six years from the effective time, the surviving corporation shall maintain in effect provisions in the surviving corporation’s organizational documents related to indemnification and

13

advancement of expenses that are no less favorable than those set forth in TeamHealth’s organizational documents as of the date of the merger agreement. Additionally, for a period of six years, Parent will maintain, or will cause the surviving corporation to maintain, either TeamHealth’s existing directors’ and officers’ insurance policies or insurance policies for the directors and officers that are no less favorable than TeamHealth’s existing directors’ and officers’ insurance policies, subject to the cost limitations set forth in the merger agreement. In lieu of providing such coverage, Parent may direct TeamHealth to purchase a six-year prepaid “tail policy” containing terms and conditions that are no less advantageous to the insured than the current policies of TeamHealth’s directors’ and officers’ insurance policies, subject to the cost limitations set forth in the merger agreement, and Parent will maintain such “tail policy” in full force and effect for such six year period.

Delisting and Deregistration of TeamHealth Common Stock (see page 101)

As promptly as practicable following the completion of the merger, TeamHealth common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Market Prices of TeamHealth Common Stock (see page 114)

On October 3, 2016, the last trading day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction, the closing price per share of TeamHealth common stock on the NYSE was $32.80. The closing price of the TeamHealth common stock on the NYSE on December 8, 2016, the most recent practicable date prior to the filing of this proxy statement, was $42.65 per share. You are encouraged to obtain current market prices of TeamHealth common stock in connection with voting your shares of TeamHealth common stock.

14

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following are brief answers to certain questions that you may have regarding the merger, the special meeting and the proposals being considered at the special meeting. We urge you to carefully read the remainder of this proxy statement because the information in this section does not provide all of the information that might be important to you with respect to the merger and the special meeting. Additional important information is also contained in the annexes attached to this proxy statement and the documents referred to or incorporated by reference into this proxy statement.

Q.

Why am I receiving these proxy materials?

​

A.

On October 30, 2016, TeamHealth entered into a merger agreement providing for the merger of Merger Sub with and into TeamHealth, pursuant to which TeamHealth will survive the merger as a wholly owned subsidiary of Parent. A copy of the merger agreement is attached to this proxy statement as Annex A and is incorporated by reference herein. In order to complete the merger, TeamHealth stockholders must vote to adopt the merger agreement. The approval of this proposal by our stockholders is a condition to the consummation of the merger. See the section entitled “Conditions to the Closing of the Merger” beginning on page 106. You are receiving this proxy statement in connection with the solicitation by the TeamHealth Board of proxies of TeamHealth stockholders in favor of the merger proposal.

​

You are also being asked to vote on a proposal to approve on a non-binding, advisory basis, certain compensation that will or may be paid by TeamHealth to its named executive officers that is based on or otherwise relates to the merger and on a proposal to approve the adjournment of the special meeting, from time to time, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the merger proposal.

This proxy statement, which you should read carefully, contains important information about the merger, the merger agreement and the special meeting of our stockholders and the matters to be voted on thereat. The enclosed materials allow you to submit a proxy to vote your shares without attending the special meeting and to ensure that your shares are represented and voted at the special meeting.

Your vote is very important. Even if you plan to attend the special meeting, we encourage you to submit a proxy as soon as possible.

Q.

What is the proposed transaction?

​

A.

If the merger proposal is approved by TeamHealth stockholders and the other conditions to the consummation of the merger contained in the merger agreement are satisfied or waived, Merger Sub will merge with and into TeamHealth. TeamHealth will be the surviving corporation in the merger and will become privately held as a wholly owned subsidiary of Parent.

​

Q.

What will I receive in the merger if it is completed?

​

A.

Under the terms of the merger agreement, if the merger is completed, you will be entitled to receive $43.50 in cash, without interest and subject to any applicable withholding taxes, for each share of TeamHealth common stock you own (other than any excluded shares), which represents a premium of approximately 33% of TeamHealth’s closing stock price on October 3, 2016, the last trading day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction. For example, if you own 100 shares of TeamHealth common stock, you will be entitled to receive $4,350.00 in cash in exchange for your shares (other than any excluded shares), without interest and subject to any applicable withholding taxes. You will not be entitled to receive shares in the surviving corporation or in Parent.

​

Q.

Where and when is the special meeting, and who may attend?

​

A.

The special meeting will be held at TeamHealth’s office at 265 Brookview Centre Way, 2nd floor, Knoxville, Tennessee 37919 on Wednesday, January 11, 2017 at 2:00 p.m., Eastern Time. The meeting room will open at 1:30 p.m., Eastern Time, and registration will begin at that time. Stockholders who

​

15

are entitled to vote at the special meeting may attend the meeting. All stockholders will need proof of identification along with their proxy card or proof of stock ownership to enter the special meeting. Beneficial owners of shares held in “street name” who wish to attend the meeting must present proof of ownership of TeamHealth common stock as of the record date, such as a bank or brokerage account statement and will only be able to vote at the special meeting if they have a proxy, executed in their favor, from the stockholder of record (broker, bank or other nominee) giving them the right to vote the shares at the special meeting.

Q.

Who can vote at the Special Meeting?

​

A.

All TeamHealth stockholders of record as of the close of business on December 8, 2016, the record date for the special meeting, are entitled to receive notice of, attend and vote at the special meeting, or any adjournment or postponement thereof. Each share of TeamHealth common stock is entitled to one vote on all matters that come before the meeting. At the close of business on the record date, there were 74,590,147 shares of TeamHealth common stock issued and outstanding, held by approximately 186 holders of record.

​

Q.

What matters will be voted on at the special meeting?

​

A.

At the special meeting, you will be asked to consider and vote on the following proposals:

​

•

the merger proposal;

​

•

the named executive officer merger-related compensation proposal; and

​

•

the adjournment proposal.

​

Stockholders may also be asked to transact such other business as may properly be brought before the special meeting or any adjournments or postponements of the special meeting, by or at the direction of the TeamHealth Board.

Q.

What is the position of the TeamHealth Board regarding the merger?

​

A.

After consulting with its outside legal counsel and financial advisor and after consideration of various factors, the TeamHealth Board has unanimously (i) determined that it is advisable, fair to and in the best interests of TeamHealth and our stockholders for TeamHealth to enter into the merger, the merger agreement and the other transactions contemplated by the merger agreement, (ii) declared advisable and approved the merger agreement and the transactions contemplated by the merger agreement and (iii) resolved that the merger agreement be submitted to the TeamHealth stockholders for adoption thereby in accordance with applicable law, the merger agreement and the bylaws of TeamHealth at a special meeting of stockholders.

​

Q.

How does the TeamHealth Board recommend that I vote on the proposals?

​

A.

TeamHealth’s Board unanimously recommends that you vote:

​

•

“FOR” the merger proposal;

​

•

“FOR” the named executive officer merger-related compensation proposal; and

​

•

“FOR” the adjournment proposal.

​

Q.

What vote is required to approve the merger proposal?

​

A.

The merger proposal will be approved if stockholders holding a majority of the shares of TeamHealth common stock outstanding and entitled to vote at the close of business on the record date vote “FOR” the proposal.

​

Q.

What vote is required to approve the named executive officer merger-related compensation proposal and the adjournment proposal?

​

A.

Each of the named executive officer merger-related compensation proposal and the adjournment proposal will be approved if the holders of a majority of the shares of TeamHealth common stock

​

16

present or represented by proxy at the special meeting and entitled to vote thereon at the close of business on the record date vote “FOR” each such the proposal.

Q.

Do you expect the merger to be taxable to TeamHealth stockholders?

​

A.

The exchange of TeamHealth common stock for cash in the merger generally will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state, local or other tax laws. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 119. The tax consequences of the merger to you will depend on your particular circumstances. You should consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

​

Q.

What other effects will the merger have on TeamHealth?

​

A.

If the merger is completed, TeamHealth common stock will be delisted from the NYSE and deregistered under the Exchange Act, and TeamHealth will no longer be required to file periodic reports with the SEC with respect to TeamHealth common stock, in each case in accordance with applicable law, rules and regulations. Following the completion of the merger, TeamHealth common stock will no longer be publicly traded and you will no longer have any interest in TeamHealth’s future earnings or growth. In addition, each share of TeamHealth common stock (other than excluded shares) you hold will represent only the right to receive $43.50 in cash, without interest and subject to any applicable withholding taxes. TeamHealth will also become a wholly owned subsidiary of Parent at the effective time.

​

Q.

When is the merger expected to be completed?

​

A.

Assuming timely satisfaction of necessary closing conditions, including the approval by our stockholders of the merger proposal, the parties to the merger agreement expect to complete the merger in the first quarter of 2017. However, TeamHealth cannot assure completion by any particular date, if at all. Because the merger is subject to a number of conditions, including the receipt of stockholder approval of the merger proposal and the receipt of approval under the HSR Act, the exact timing of the merger cannot be determined at this time and we cannot guarantee that the merger will be completed.

​

Q.

What happens if the merger is not completed?

​

A.

If the merger proposal is not approved by TeamHealth stockholders, or if the merger is not completed for any other reason, TeamHealth stockholders will not receive any payment for their shares of TeamHealth common stock in connection with the merger. Instead, TeamHealth will remain an independent public company and shares of TeamHealth common stock will continue to be listed and traded on the NYSE. TeamHealth may be required to pay Parent a termination fee of  $50.4 million if the merger agreement is terminated in order for TeamHealth to enter into a definitive agreement for a superior proposal with an excluded party within ten business days of the end of the go-shop period or a higher fee of  $100.8 million if the merger agreement is terminated under certain other specified circumstances pursuant to the terms of the merger agreement. Under certain specified circumstances, Parent may be required to pay TeamHealth a reverse termination fee of  $201.7 million pursuant to the terms of the merger agreement. See the section entitled “The Merger Agreement — Termination Fees and Expenses” beginning on page 108 for a discussion of the circumstances under which either party will be required to pay a termination fee.

​

Q.

How will our directors and executive officers vote on the merger proposal?

​

A.

The directors and officers of TeamHealth have informed TeamHealth that, as of the date of this proxy statement, they intend to vote in favor of the merger proposal.

​

As of the record date for the special meeting, the directors and executive officers of TeamHealth owned and were entitled to vote, in the aggregate, 249,118 shares of TeamHealth common stock, representing 0.33% of the issued and outstanding TeamHealth common stock entitled to vote at the special meeting.

17

Q.

Do any of TeamHealth’s directors or officers have interests in the merger that may differ from or be in addition to my interests as a stockholder?

​

A.

Yes. In considering the recommendation of the TeamHealth Board with respect to the merger proposal, you should be aware that our directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our stockholders generally. The TeamHealth Board was aware of and considered these differing interests, to the extent such interests existed at the time, among other matters, in evaluating and negotiating the merger agreement and the merger, and in unanimously recommending that the merger agreement be adopted by the TeamHealth stockholders. See the section entitled “The Merger Proposal (Proposal 1) — Interests of TeamHealth’s Executive Officers and Directors in the Merger.”

​

Q.

Are there any stockholders already committed to voting in favor of the merger agreement?

​

A.

Yes. JANA has entered into a voting and support agreement with Parent and Merger Sub requiring it to vote all of its shares in favor of approval of the merger agreement, subject to certain rights of termination. As of the record date for the special meeting, JANA and its affiliates held approximately 7.9% of the outstanding shares of TeamHealth common stock. See the section entitled “Voting Agreement”.

​

Q.

Why am I being asked to consider and vote on the named executive officer merger-related compensation proposal?

​

A.

The SEC rules require TeamHealth to seek approval on a non-binding, advisory basis with respect to certain payments that will or may be made to TeamHealth’s named executive officers in connection with the merger. Approval of the named executive officer merger-related compensation proposal is not required to complete the merger.

​

Q.

Who is soliciting my vote? Who will pay for the cost of this proxy solicitation?

​

A.

The TeamHealth Board is soliciting your proxy, and TeamHealth will bear the cost of soliciting proxies. Innisfree M&A Incorporated has been retained to assist with the solicitation of proxies. Innisfree M&A Incorporated will be paid approximately $25,000 plus certain additional per-service fees and will be reimbursed for its reasonable fees and expenses for these and other advisory services in connection with the special meeting. In addition, TeamHealth will indemnify Innisfree M&A Incorporated for certain losses arising out of or relating to its services. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or other electronic medium without additional compensation by certain of TeamHealth’s directors, officers and employees.

​

Q.

What do I need to do now? If I am going to attend the special meeting, should I still submit a proxy?

​

A.

Carefully read and consider the information contained in and incorporated by reference into this proxy statement, including the attached annexes. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting.

​

Q.

How do I vote if my shares are registered directly in my name?

​

A.

If your shares are registered directly in your name with our transfer agent, you are considered a “stockholder of record.” Stockholders of record can vote their shares of TeamHealth common stock in the following four ways:

​

•

By Internet — You may submit your proxy by going to www.proxyvote.com and by following the instructions on how to complete an electronic proxy card. You will need the 16-digit number included on your proxy card in order to vote by Internet.

​

•

By Telephone — You may submit your proxy by dialing 1-800-690-6903 and by following the recorded instructions. You will need the 16-digit number included on your proxy card in order to vote by telephone.

​

18

•

By Mail — You may vote by mail by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the envelope provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity.

​

•

At the Special Meeting — If you are a stockholder of record and prefer to vote your shares at the special meeting, you must bring proof of identification along with your proxy card or proof of ownership.

​

Even if you plan to attend the special meeting, we encourage you to submit a proxy in advance by Internet, telephone or mail so that your shares will be voted if you later decide not to attend the special meeting. Telephone and Internet facilities for the submission of a proxy to vote shares will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on January 10, 2017. Proxy cards mailed with respect to shares must be received no later than January 10, 2017 in order to be counted in the vote.

If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, broker or other nominee on how to submit voting instructions. Stockholders who own their shares in “street name” are not able to vote at the special meeting unless they have a proxy, executed in their favor, from the stockholder of record (broker, bank or other nominee) giving them the right to vote the shares.

Q.

How do I vote if my shares are held in the name of my broker, bank or other nominee?

​

A.

If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, broker or other nominee on how to submit voting instructions. Stockholders who own their shares in “street name” are not able to vote at the special meeting unless they have a proxy, executed in their favor, from the stockholder of record (broker, bank or other nominee) giving them the right to vote the shares.

​

Q.

What is a proxy?

​

A.

A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of TeamHealth common stock. The written document describing the matters to be considered and voted on at the special meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of TeamHealth common stock is called a “proxy card.”

​

Q.

If a stockholder gives a proxy, how are the shares voted?

​

A.

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way you indicate. When completing the Internet or telephone process for submitting a proxy, you may specify whether your shares would be voted “FOR” or “AGAINST” or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

​

If you properly sign and return your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted as recommended by the TeamHealth Board with respect to each proposal.

19

Q.

Can I change or revoke my proxy after it has been submitted?

​

A.

Yes. You can change or revoke your proxy at any time before the final vote at the special meeting. If you are the stockholder of record, you may change or revoke your proxy by:

​

•

sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than January 10, 2017;

​

•

submitting a new proxy by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. (Eastern Time) on January 10, 2017;

​

•

submitting a properly signed proxy card with a later date that is received no later than January 10, 2017; or

​

•

attending the special meeting and voting in person.

​

If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy in person at the special meeting if you obtain a proxy, executed in your favor, from the stockholder of record (broker, bank or other nominee) giving you the right to vote the shares.

If you submit a proxy or provide instructions to vote your shares and do not thereafter revoke such proxy or change such instructions in accordance with one of the methods set forth above, your shares will be represented and voted at the special meeting.

Q.

How many shares of TeamHealth common stock must be present to constitute a quorum for the meeting? What if there is no quorum?

​

A.

Under our bylaws, the presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of TeamHealth common stock issued and outstanding at the close of business on the record date will constitute a quorum. There must be a quorum for business to be conducted at the special meeting. If a quorum is not present, the person presiding at the special meeting or the stockholders holding a majority of the shares of TeamHealth common stock present in person or by proxy at the special meeting and entitled to vote thereat may adjourn the special meeting from time to time until a quorum shall be present. Failure of a quorum to be present at the special meeting will necessitate an adjournment or postponement of the special meeting and may subject TeamHealth to additional expense. If the adjournment is for more than 30 days, or if a new record date is set for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. As of the close of business on the record date, there were 74,590,147 shares of TeamHealth common stock outstanding. Accordingly, 37,295,074 shares of TeamHealth common stock must be present or represented by proxy at the special meeting to constitute a quorum.

​

Q.

What if I abstain from voting on any proposal?

​

A.

If you attend the special meeting or submit (and do not thereafter revoke) a properly executed proxy card, even if you abstain from voting, your shares of TeamHealth common stock will still be counted for purposes of determining whether a quorum is present at the special meeting, but will not be voted on the proposals. As a result, your abstention from voting will have the same effect as a vote “AGAINST” the merger proposal, the named executive officer merger-related compensation proposal and the adjournment proposal.

​

Q.

Will my shares be voted if I do not sign and return my proxy card or vote by telephone or over the Internet or in person at the special meeting?

​

A.

If you are a stockholder of record of TeamHealth and you do not attend the special meeting, sign and return your proxy card by mail, submit your proxy by telephone or over the Internet, your shares will not be voted at the special meeting and will not be counted as present for purposes of determining whether a quorum exists. The failure to return your proxy card or otherwise vote your shares at the special meeting will have no effect on the outcome of the named executive officer merger-related compensation proposal or the adjournment proposal, assuming that a quorum exists. However, the

​

20

vote to approve the merger proposal is based on the total number of shares of TeamHealth common stock outstanding as of the close of business on the record date, not just the shares that are counted as present in person or by proxy at the special meeting. As a result, if you fail to return your proxy card or otherwise vote your shares at the special meeting, it will have the same effect as a vote “AGAINST” the merger proposal.

You will have the right to receive the merger consideration if the merger proposal is approved and the merger is completed even if your shares are not voted at the special meeting. However, if your shares are not voted at the special meeting, it will have the same effect as a vote “AGAINST” the merger proposal.

Q.

What is a broker non-vote?

​

A.

Broker non-votes are shares held in “street name” by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or other nominee does not have discretionary voting power on such proposal. Because, under NYSE rules, brokers, banks and other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of TeamHealth common stock held in “street name” does not give voting instructions to the broker, bank or other nominee, then those shares will not be counted as present in person or by proxy at the special meeting. As a result, it is expected that there will not be any broker non-votes in connection with any of the three proposals described in this proxy statement. The failure to issue voting instructions to your broker, bank or other nominee will have no effect on the outcome of the named executive officer merger-related compensation proposal or adjournment proposal, assuming that a quorum exists. However, the vote to approve the merger proposal is based on the total number of shares of TeamHealth common stock outstanding at the close of business on the record date, not just the shares that are counted as present in person or by proxy at the special meeting. As a result, if you fail to issue voting instructions to your broker, bank or other nominee, it will have the same effect as a vote “AGAINST” the merger proposal.

​

Q.

Will my shares held in “street name” or another form of record ownership be combined for voting purposes with shares I hold of record?

​

A.

No. Because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, any shares held in “street name” will not be combined for voting purposes with shares you hold of record. Similarly, if you own shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for each of those shares because they are held in a different form of record ownership. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. Shares held in an individual retirement account must be voted under the rules governing the account.

​

Q.

Am I entitled to exercise appraisal rights under the DGCL instead of receiving the per share merger consideration for my shares of TeamHealth common stock?

​

A.

Yes. If you are a record holder of TeamHealth common stock, you are entitled to exercise appraisal rights under Section 262 of the DGCL in connection with the merger if you comply with the requirements of Section 262 of the DGCL. See the section entitled “The Merger Proposal (Proposal 1) — Appraisal Rights” beginning on page 81. In addition, a copy of Section 262 of the DGCL is attached to this proxy statement as Annex C.

​

Failure to strictly comply with all procedures required by Section 262 of the DGCL will result in a loss of your right to appraisal. We encourage you to read these provisions carefully and in their entirety and, in view of their complexity, to promptly consult with your legal and financial advisors if you wish to pursue your appraisal rights in connection with the merger.

21

Q.

What happens if I sell my shares of TeamHealth common stock before the completion of the merger?

​

A.

If you transfer your shares of TeamHealth common stock and the merger is completed, you will lose your right to receive the merger consideration or to exercise appraisal rights. In order to receive the merger consideration, you must hold your shares of TeamHealth common stock through the completion of the merger.

​

Q.

Should I send in my evidence of ownership now?

​

A.

No. After the merger is completed, you will receive transmittal materials from the paying agent for the merger with detailed written instructions for exchanging your shares of TeamHealth common stock for the consideration to be paid to former TeamHealth stockholders in connection with the merger. If you are the beneficial owner of shares of TeamHealth common stock held in “street name,” you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of such shares.

​

Q.

What does it mean if I get more than one proxy card or voting instruction card?

​

A.

If your shares are registered differently or are held in more than one account, you will receive more than one proxy card or voting instruction card. Please complete and return all of the proxy cards or voting instruction cards you receive (or submit each of your proxies over the Internet or by telephone) to ensure that all of your shares are voted.

​

Q.

What is householding and how does it affect me?

​

A.

The SEC’s proxy rules permit companies and intermediaries, such as brokers and banks, to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing an address by delivering a single proxy statement to those stockholders, unless contrary instructions have been received. This procedure reduces the amount of duplicate information that stockholders receive and lowers printing and mailing costs for companies. Certain brokerage firms may have instituted householding for beneficial owners of common stock held through brokerage firms. If your family has multiple accounts holding common stock, you may have already received a householding notification from your broker. You may decide at any time to revoke your decision to household, and thereby receive multiple copies of proxy materials. If you wish to opt out of this procedure and receive a separate set of proxy materials in the future, or if you are receiving multiple copies and would like to receive only one, you should contact your broker, trustee or other nominee or TeamHealth at the address and telephone number below. A separate copy of these proxy materials will be promptly delivered upon request by writing Steven E. Clifton, 265 Brookview Centre Way, Suite 400, Knoxville, Tennessee 37919 or by calling (865) 293-5500.

​

Q.

What will the holders of outstanding TeamHealth equity awards receive in the merger?

​

A.

Stock Options.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding option to purchase shares of TeamHealth common stock (other than any options subject to performance-vesting conditions which are not achieved at or prior to the effective time, which will automatically be forfeited for no consideration as of the effective time) will become immediately vested and be cancelled and the holder will be entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of (i) the number of shares subject to the option, multiplied by (ii) the excess, if any, of  $43.50 over the exercise price of the option, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

​

Stock Units.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, any vesting conditions applicable to each outstanding Stock Unit (which does not include PSUs or MSUs) will automatically accelerate in full, and each Stock Unit will be cancelled and the holder will be entitled to receive, at or promptly following the effective time, an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the total number of shares subject to the Stock Unit immediately prior to the effective time multiplied by (y) $43.50,

22

payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time. With respect to any Stock Units that are restricted stock units and are subject to an election providing for the deferred delivery of underlying shares on a date following the vesting date of such Stock Units, the amount that would be otherwise payable in respect of such Stock Units pursuant to the merger agreement will instead be credited to notional, book-entry accounts and paid to the respective holders at the time specified pursuant to the applicable deferral election.

PSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding PSU will automatically become immediately vested at target level performance, and each PSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the target number of shares subject to the PSU immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

MSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding MSU (all of which are held by our Chief Executive Officer) will automatically become immediately vested with respect to the number of earned MSUs, determined in accordance with the terms of the award agreement governing the MSUs by and between TeamHealth and our Chief Executive Officer and each MSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the number of earned MSUs multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Q.

When will TeamHealth announce the voting results of the special meeting, and where can I find the voting results?

​

A.

TeamHealth intends to announce the preliminary voting results at the special meeting, and will report the final voting results of the special meeting in a Current Report on Form 8-K filed with the SEC within four business days after the meeting. All reports that TeamHealth files with the SEC are publicly available when filed.

​

Q.

Where can I find more information about TeamHealth?

​

A.

You can find more information about us from various sources described in the section entitled “Where You Can Find Additional Information” beginning on page 123 of this proxy statement.

​

Q.

Who can help answer my other questions?

​

A.

If you have questions about the merger, require assistance in submitting your proxy or voting your shares, or need additional copies of this proxy statement or the enclosed proxy card, please contact Innisfree M&A Incorporated, which is acting as the proxy solicitation agent for TeamHealth in connection with the merger, or TeamHealth.

​

Innisfree M&A Incorporated
501 Madison Ave.
20th Floor
New York, New York 10022-5606
(212) 750-5833

or

Team Health Holdings, Inc.
265 Brookview Centre Way
Suite 400
Knoxville, Tennessee 37919

If your broker, bank or other nominee holds your shares, you should also call your broker, bank or other nominee for additional information.

23

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and businesses of the Company. Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “could,” “should,” “may,” “plan,” “project,” “predict” and similar expressions. The Company cautions readers of this communication that such “forward looking statements,” including without limitation, those relating to the acquisition being completed within the anticipated timeframe or at all, the realization of the expected benefits of the acquisition, the Company’s future business prospects, revenue, working capital, professional liability expense, liquidity, capital needs, interest costs and income, wherever they occur in this communication or in other statements attributable to the Company, are not guarantees of future performance, are necessarily estimates reflecting the judgment of the Company’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward looking statements.”

Factors that could cause the Company’s actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filings on Forms 10-K and 10-Q, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

•

the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;

​

•

the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction;

​

•

risks related to disruption of management’s attention from the Company’s ongoing business operations due to the proposed transaction;

​

•

the effect of the announcement of the proposed merger on the Company’s relationships with its customers, operating results and business generally;

​

•

the potential difficulties in employee retention as a result of the merger;

​

•

the Company may be adversely affected by other economic, business, and/or competitive factors;

​

•

the risk that the proposed merger will not be consummated in a timely manner or at all;

​

•

the amount of the costs, fees, expenses and charges related to the merger agreement or the merger and the risk of exceeding the expected costs;

​

•

the failure of Parent and Merger Sub to obtain the necessary debt financing arrangements set forth in the debt commitment letters received in connection with the merger;

​

•

the risk that the merger agreement may be terminated in circumstances that require us to pay Parent a termination fee;

​

•

the outcome of any legal proceedings that may be instituted against us and others related to the merger agreement;

​

•

the fact that, if the merger is completed, stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of the TeamHealth’s current strategy as an independent company;

​

•

risks that our stock price may decline significantly if the merger is not completed; and

​

•

the possibility that Parent could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of TeamHealth’s assets to one or more purchasers, that could conceivably produce a higher aggregate value than that available to stockholders in the merger.

​

24

Consequently, all of the forward-looking statements that we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including (1) the information contained under this caption, and (2) the information contained under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and information in our consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K filed with the SEC on February 22, 2016 and in the Company’s Quarterly Reports on Form 10-Q filed on May 9, 2016, August 2, 2016 and November 4, 2016. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

The Company’s forward-looking statements speak only as of the date of this communication or as of the date they are made. The Company disclaims any intent or obligation to update any “forward looking statement” made in this communication to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

25

THE PARTIES TO THE MERGER

TeamHealth

Team Health Holdings, Inc.
265 Brookview Centre Way
Suite 400
Knoxville, Tennessee 37919
(800) 342-2898

Team Health Holdings, Inc., is a corporation organized under the laws of the State of Delaware in 2009. We believe we are one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States, based upon revenues, patient visits, and number of clients. We serve approximately 3,400 civilian and military hospitals, clinics and physician groups in 47 states with a team of more than 19,000 affiliated healthcare professionals, including physicians, physician assistants, nurse practitioners, and nurses. We recruit and contract with healthcare professionals who then provide professional services within third-party healthcare facilities. We are a physician-founded organization with physician leadership throughout all levels of our organization. Since our inception in 1979, we have provided outsourced services in emergency departments. We also provide comprehensive programs for anesthesiology, inpatient services (hospitalists comprising the specialties of internal medicine, orthopedic surgery, general surgery and OB/GYN), scribes, ambulatory care, pediatrics, post-acute care and other healthcare services, by providing permanent staffing that enables the management teams of hospitals and other healthcare facilities to outsource certain management, recruiting, hiring, payroll, billing and collection and benefits functions.

Our common stock is traded on the NYSE under the ticker symbol “TMH”. TeamHealth’s headquarters are located at 265 Brookview Centre Way, Suite 400, Knoxville, Tennessee 37919 and its telephone number is (800) 342-2898. Our corporate web address is www.teamhealth.com. The information provided on the TeamHealth website is not part of this proxy statement and is not incorporated in this proxy statement by reference hereby or by any other reference to TeamHealth’s website provided in this proxy statement.

Additional information about TeamHealth is contained in our public filings with the SEC, which are incorporated by reference herein. See the section entitled “Where You Can Find Additional Information” on page 123.

Parent

Tennessee Parent, Inc.
c/o The Blackstone Group L.P.
345 Park Avenue
New York, New York 10154
(212) 583-5722

Parent is a Delaware corporation that was formed by Sponsor on October 20, 2016, solely for the purpose of entering into the merger agreement and related agreements and completing the merger and the other transactions contemplated thereby. Parent has not conducted any business operations other than in connection with the transactions contemplated by the merger agreement and the related agreements. Upon completion of the merger, TeamHealth will be a wholly owned subsidiary of Parent.

Merger Sub

Tennessee Merger Sub, Inc.
c/o The Blackstone Group L.P.
345 Park Avenue
New York, New York 10154
(212) 583-5722

26

Parent caused Merger Sub, a Delaware corporation and a wholly owned subsidiary of Parent to be formed on October 20, 2016, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Merger Sub has not carried on any activities on or prior to the date of this proxy statement, except for activities incidental to its formation and activities undertaken in connection with Parent’s acquisition of TeamHealth. Upon completion of the merger, Merger Sub will merge with and into TeamHealth, and Merger Sub will cease to exist.

Parent and Merger Sub are controlled by Sponsor, an affiliate of Blackstone. Blackstone is one of the world’s leading investment firms. Blackstone’s asset management businesses, with over $360 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds.

27

THE SPECIAL MEETING

This proxy statement is being provided to the TeamHealth stockholders as part of a solicitation by the TeamHealth Board of proxies for use at the special meeting to be held at the time and place specified below, and at any properly convened meeting following an adjournment or postponement of the special meeting.

Date, Time and Place

The special meeting is scheduled to be held at TeamHealth’s office at 265 Brookview Centre Way, 2nd floor, Knoxville, Tennessee 37919 on Wednesday, January 11, 2017 at 2:00 p.m., Eastern Time.

Purpose of the Special Meeting

At the special meeting, TeamHealth stockholders will be asked to consider and vote on the following proposals:

•

the merger proposal, which is further described in the sections entitled “The Merger Proposal (Proposal 1)” and “The Merger Agreement,” beginning on pages 33 and 86, respectively, and a copy of the merger agreement is attached to this proxy statement as Annex A and is incorporated herein by reference;

​

•

the named executive officer merger-related compensation proposal, which is further described in the sections entitled “The Merger Proposal (Proposal 1) — Interests of TeamHealth’s Executive Officers and Directors in the Merger” and “Advisory Vote On Named Executive Officer Merger-Related Compensation Proposal (Proposal 2)” beginning on pages 66 and 112, respectively; and

​

•

the adjournment proposal, which is further described in the section entitled “The Adjournment Proposal (Proposal 3)” beginning on page 113.

​

Stockholders may also be asked to transact such other business as may properly be brought before the special meeting or any adjournments or postponements of the special meeting, by or at the direction of the TeamHealth Board.

The holders of a majority of the outstanding shares of TeamHealth common stock entitled to vote must vote to adopt the merger agreement at the special meeting as a condition to the completion of the merger. If the TeamHealth stockholders fail to approve the merger proposal, the merger will not occur. The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote to approve the merger proposal. Accordingly, a stockholder may vote to approve the merger proposal and vote not to approve the named executive officer merger-related compensation proposal, and vice versa. Because the vote on the named executive officer merger-related compensation proposal is only advisory in nature, it will not be binding on TeamHealth, Parent or the surviving corporation. Accordingly, because TeamHealth is contractually obligated to pay such merger-related compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the merger proposal is approved, regardless of the outcome of the advisory vote.

Other than the matters described above, TeamHealth does not expect a vote to be taken on any other matters at the special meeting or any adjournment or postponement thereof. However, if any other matters are properly brought before the special meeting or any adjournment or postponement thereof for consideration, the holders of the proxies will have discretion to vote on such matters in accordance with their best judgment.

Recommendation of the TeamHealth Board

The TeamHealth Board has unanimously determined that the merger, the merger agreement and the other transactions contemplated by the merger agreement, are advisable, fair to and in the best interests of TeamHealth and its stockholders and has unanimously approved and declared advisable the merger, the merger agreement and the other transactions contemplated by the merger agreement. The TeamHealth

28

Board made its determination after consultation with its outside legal counsel and financial advisor and consideration of a number of factors more fully described in the section entitled “The Merger Proposal (Proposal 1) — Recommendation of the TeamHealth Board and Reasons for the Merger” beginning on page 49.

The TeamHealth Board unanimously recommends that the TeamHealth stockholders vote “FOR” the merger proposal, “FOR” the named executive officer merger-related compensation proposal and “FOR” the adjournment proposal.

Record Date; Stockholders Entitled to Vote

Only holders of record of TeamHealth common stock at the close of business on December 8, 2016, the record date for the special meeting, will be entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting. At the close of business on the record date, 74,590,147 shares of TeamHealth common stock were issued and outstanding.

Holders of record of TeamHealth common stock are entitled to one vote for each share of TeamHealth common stock they own of record at the close of business on the record date.

Quorum

Under our bylaws, the presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of TeamHealth common stock issued and outstanding at the close of business on the record date will constitute a quorum. There must be a quorum for business to be conducted at the special meeting. If a quorum is not present, the person presiding at the special meeting or the stockholders holding a majority of the shares of TeamHealth common stock present in person or by proxy at the special meeting and entitled to vote thereat may adjourn the special meeting from time to time until a quorum shall be present. Failure of a quorum to be represented at the special meeting will necessitate an adjournment or postponement of the special meeting and may subject TeamHealth to additional expense.

If you submit (and do not thereafter revoke) a properly executed proxy card, even if you abstain from voting, your shares of TeamHealth common stock will be counted for purposes of determining whether a quorum is present at the special meeting. In the event that a quorum is not present at the special meeting or additional votes must be solicited to adopt the merger agreement, the meeting may be adjourned or postponed to solicit additional proxies.

Required Vote

The approval of the merger proposal requires the affirmative vote of the holders of a majority of the shares of TeamHealth common stock outstanding at the close of business on the record date and entitled to vote thereon.

Approval of the named executive officer merger-related compensation proposal (on a non-binding basis) requires the affirmative vote of the holders of a majority of the shares of TeamHealth common stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the shares of TeamHealth common stock present in person or represented by proxy at the special meeting and entitled to vote thereon.

At the close of business on the record date, 74,590,147 shares of TeamHealth common stock were issued and outstanding, held by approximately 186 holders of record.

Abstentions and Broker Non-Votes

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting. At the special meeting, abstentions will be counted as present for purposes of determining whether a quorum exists. Abstaining from voting will have the same effect as a vote “AGAINST” the merger proposal, the named executive officer merger-related compensation proposal and the adjournment proposal.

29

If no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will be voted “FOR” (i) approval of the merger proposal, (ii) approval of the named executive officer merger-related compensation proposal and (iii) approval of the adjournment proposal.

Broker non-votes are shares held in “street name” by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or other nominee does not have discretionary voting power on such proposal. Because, under NYSE rules, brokers, banks and other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of TeamHealth common stock held in “street name” does not give voting instructions to the broker, bank or other nominee, then those shares will not be permitted under NYSE rules to be voted at the special meeting, and thus will not be counted as present in person or by proxy at the special meeting. The vote to approve the merger proposal is based on the total number of shares of TeamHealth common stock outstanding at the close of business on the record date, not just the shares that are counted as present in person or by proxy at the special meeting. As a result, if you fail to issue voting instructions to your broker, bank or other nominee, it will have the same effect as a vote “AGAINST” the merger proposal, but will have no effect on the approval of the named executive officer merger-related compensation proposal or the adjournment proposal.

Failure to Vote

If you are a stockholder of record and you do not sign and return your proxy card by mail or vote over the Internet, by telephone or in person at the special meeting, your shares will not be voted at the special meeting, will not be counted as present in person or by proxy at the special meeting and will not be counted as present for purposes of determining whether a quorum exists.

As discussed above, under NYSE rules, brokers and other record holders do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. Accordingly, if you are the beneficial owner of shares held in “street name” and you do not issue voting instructions to your broker, bank or other nominee, your shares will not be voted at the special meeting and will not be counted as present in person or by proxy at the special meeting or counted as present for purposes of determining whether a quorum exists.

A failure to vote will have no effect on the outcome of the named executive officer merger-related compensation proposal or the adjournment proposal, assuming that a quorum exists. However, the vote to approve the merger proposal is based on the total number of shares of TeamHealth common stock outstanding at the close of business on the record date, not just the shares that are counted as present in person or by proxy at the special meeting. As a result, if you fail to vote your shares, it will have the same effect as a vote “AGAINST” the merger proposal.

Voting by TeamHealth’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of TeamHealth were entitled to vote 249,118 shares of TeamHealth common stock, or approximately 0.33% of the shares of TeamHealth common stock issued and outstanding on that date. TeamHealth’s directors and executive officers have informed us that they intend to vote their shares in favor of the merger proposal and the other proposals to be considered at the special meeting, although none of TeamHealth’s directors and executive officers is obligated to do so.

Voting at the Special Meeting

If your shares are registered directly in your name with our transfer agent, you are considered a “stockholder of record.” Stockholders of record can vote their shares of TeamHealth common stock in the following four ways: (i) by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the envelope provided to you, (ii) by submitting your proxy by telephone by dialing the toll-free number 1-800-690-6903, (iii) by submitting your proxy over

30

the Internet by going to www.proxyvote.com or (iv) attending the special meeting and voting your shares in person. Even if you plan to attend the special meeting, TeamHealth encourages you to submit a proxy in advance by Internet, telephone or mail so that your shares will be voted if you later decide not to attend the special meeting. Telephone and Internet facilities for the submission of proxies to vote shares will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on January 10, 2017. Proxy cards mailed with respect to shares must be received no later than January 10, 2017 in order to be counted in the vote.

•

By Internet — You may submit your proxy by going to www.proxyvote.com and by following the instructions on how to complete an electronic proxy card. You will need the 16-digit number included on your proxy card in order to vote by Internet.

​

•

By Telephone — You may submit your proxy by dialing 1-800-690-6903 and by following the recorded instructions. You will need the 16-digit number included on your proxy card in order to vote by telephone.

​

•

By Mail — You may vote by mail by indicating your vote by completing, signing and dating the proxy card where indicated and by mailing or otherwise returning the card in the envelope provided to you. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity.

​

•

At the Special Meeting — If you are a stockholder of record and prefer to vote your shares at the special meeting, you must bring proof of identification along with your proxy card or proof of ownership.

​

If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. You should instruct your broker, bank or other nominee how to vote your shares on each proposal in accordance with your voting instruction form. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your bank, broker or other nominee on how to submit voting instructions. Stockholders who hold their shares in “street name” are not able to vote at the special meeting unless they have a proxy, executed in their favor, from the stockholder of record (broker, bank or other nominee) giving them the right to vote the shares at the special meeting.

Stockholders who are entitled to vote at the special meeting may attend the special meeting. If you are a stockholder of record, you should bring the proxy card and proof of identification. If you are a beneficial owner of shares held in “street name,” you should present proof of ownership of TeamHealth common stock as of the record date, such as a bank or brokerage account statement, along with proof of identification.

Revocation of Proxies

You can change or revoke your proxy at any time before the final vote at the special meeting. If you are the stockholder of record, you may change or revoke your proxy by:

•

sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than January 10, 2017;

​

•

voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. (Eastern Time) on January 10, 2017;

​

•

submitting a properly signed proxy card with a later date that is received no later than January 10, 2017; or

​

•

attending the special meeting and voting in person.

​

If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy in person at the special meeting if you obtain a proxy, executed in your favor, from the stockholder of record (broker, bank or other nominee) giving you the right to vote the shares.

31

If you submit a proxy or provide instructions to vote your shares and do not thereafter revoke such proxy or change such instructions in accordance with one of the methods set forth above, your shares will be represented and voted at the special meeting in accordance with your instructions.

Solicitation of Proxies

The TeamHealth Board is soliciting your proxy, and TeamHealth will bear the cost of soliciting proxies. Innisfree M&A Incorporated has been retained to assist with the solicitation of proxies. Innisfree M&A Incorporated will be paid approximately $25,000 plus certain additional per-service fees and will be reimbursed for its reasonable fees and expenses for these and other advisory services in connection with the special meeting. In addition, TeamHealth will indemnify Innisfree M&A Incorporated for certain losses arising out of or relating to its services. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or other electronic medium without additional compensation by certain of TeamHealth’s directors, officers and employees.

Adjournment

In addition to the merger proposal and the named executive officer merger-related compensation proposal, TeamHealth stockholders are also being asked to approve the adjournment proposal, which will enable the adjournment of the special meeting for the purpose of soliciting additional votes in favor of the merger proposal if there are not sufficient votes at the time of the special meeting to approve the merger proposal. If a quorum is not present, the person presiding at the special meeting or the stockholders holding a majority of the shares of TeamHealth common stock present in person or by proxy at the special meeting and entitled to vote thereat may adjourn the special meeting from time to time until a quorum shall be present. If the adjournment is for more than 30 days, or if a new record date is set for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. In addition, the special meeting could be postponed before it commences, subject to the terms of the merger agreement. If the special meeting is adjourned or postponed, stockholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you return a proxy and do not indicate how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal.

The TeamHealth Board unanimously recommends a vote “FOR” the adjournment proposal, if necessary or appropriate, to solicit additional proxies.

Other Information

You should not send documents representing TeamHealth common stock with the proxy card. If the merger is completed, the paying agent for the merger will send you transmittal materials and instructions for exchanging your shares of TeamHealth common stock for the consideration to be paid to the former TeamHealth stockholders in connection with the merger.

Questions

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact Innisfree M&A Incorporated, our proxy solicitor, by calling (212) 750-5833.

32

THE MERGER PROPOSAL
(PROPOSAL 1)

The discussion of the merger in this proxy statement is qualified in its entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex A and hereby is incorporated by reference into this proxy statement.

Structure of the Merger

Subject to the terms and conditions of the merger agreement and in accordance with the DGCL, at the effective time, Merger Sub will merge with and into TeamHealth, the separate corporate existence of Merger Sub will cease and TeamHealth will survive the merger as a wholly owned subsidiary of Parent.

What Stockholders Will Receive in the Merger

At the effective time, each outstanding share of TeamHealth common stock (other than excluded shares) will be automatically converted into the right to receive $43.50 in cash, without interest and subject to any applicable withholding taxes. After the merger is completed, holders of TeamHealth common stock will have only the right to receive a cash payment in respect of their shares of TeamHealth common stock, and will no longer have any rights as holders of TeamHealth common stock, including voting or other rights. Shares of TeamHealth common stock held by us or by Parent, Merger Sub or any of Parent’s other direct or indirect wholly owned affiliates will be cancelled at the effective time.

Treatment of TeamHealth Equity Awards

Stock Options.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding option to purchase shares of TeamHealth common stock (other than any options subject to performance-vesting conditions which are not achieved at or prior to the effective time, which will automatically be forfeited for no consideration as of the effective time) will become immediately vested and be cancelled and the holder will be entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (i) the number of shares subject to the option, multiplied by (ii) the excess, if any, of  $43.50 over the exercise price of the option, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Stock Units.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, any vesting conditions applicable to each outstanding Stock Unit will automatically accelerate in full, and each Stock Unit will be cancelled and the holder will be entitled to receive, at or promptly following the effective time, an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the total number of shares subject to the Stock Unit immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time. With respect to any Stock Units that are restricted stock units and are subject to an election providing for the deferred delivery of underlying shares on a date following the vesting date of such Stock Units, the amount that would be otherwise payable in respect of such Stock Units pursuant to the merger agreement will instead be credited to notional, book-entry accounts and paid to the respective holders at the time specified pursuant to the applicable deferral election.

PSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding PSU will automatically become immediately vested at target level performance, and each PSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the target number of shares subject to the PSU immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

MSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding MSU (all of which are held by our Chief Executive Officer) will automatically become immediately vested with respect to the number of earned MSUs, determined in

33

accordance with the terms of the award agreement governing the MSUs by and between TeamHealth and our Chief Executive Officer, and each MSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the number of earned MSUs multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

ESPPs.   Under the ESPPs (i) no offering period will be authorized or commence on or after the date of the merger agreement, (ii) each ESPP participant’s accumulated contributions under the respective ESPP shall be used to purchase shares of TeamHealth common stock in accordance with the terms of the respective ESPP, as of the end of the final offering period (if any offering period is in process at the effective time), and (iii) the ESPPs will terminate immediately prior to the effective time, and no further rights will be granted or exercised under the ESPPs.

Effects on TeamHealth if the Merger Is Not Completed

If the merger proposal is not approved by TeamHealth stockholders or if the merger is not completed for any other reason, TeamHealth stockholders will not receive any payment for their shares in connection with the merger. Instead, TeamHealth will remain an independent public company and shares of TeamHealth common stock will continue to be listed and traded on the NYSE. In addition, if the merger is not completed, TeamHealth expects that management will operate TeamHealth’s business in a manner similar to that in which it is being operated today and that TeamHealth stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, without limitation, risks related to the highly competitive industry in which TeamHealth operates and adverse economic conditions.

Furthermore, if the merger is not completed, and depending on the circumstances that would have caused the merger not to be completed, it is likely that the price of TeamHealth’s common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of TeamHealth’s common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of TeamHealth common stock. If the merger is not completed, the TeamHealth Board will continue to evaluate and review TeamHealth’s business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate, and continue to seek to identify strategic alternatives to enhance stockholder value. If the merger proposal is not approved by TeamHealth stockholders or if the merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to TeamHealth will be offered or that TeamHealth’s business, prospects or results of operation will not be adversely impacted.

Further, upon termination of the merger agreement, under certain specified circumstances, TeamHealth may be required to pay a termination fee of either $100.8 million or $50.4 million to Parent pursuant to the terms and conditions of the merger agreement. Upon termination of the merger agreement, under certain specified circumstances, Parent may be required to pay TeamHealth a reverse termination fee of  $201.7 million pursuant to the terms and conditions of the merger agreement. See the section entitled “The Merger Agreement — Termination Fees and Expenses” beginning on page 108 for a discussion of the circumstances under which either party will be required to pay a termination fee.

Background of the Merger

The TeamHealth Board regularly reviews and assesses TeamHealth’s performance, risks, opportunities and strategy. Additionally, from time to time the TeamHealth Board and TeamHealth management, together with their legal and financial advisors, review and evaluate strategic opportunities and alternatives available to TeamHealth with a view to maximizing stockholder value. Such opportunities and alternatives have included remaining as a stand-alone entity and acquiring other companies and physician and clinician practices, as well as business combinations, change of control transactions and other similar transactions.

TeamHealth’s growth strategy has included successfully identifying, consummating and integrating strategic acquisition targets. To that end, in the summer of 2015 TeamHealth identified the acquisition of IPC Healthcare, Inc. (“IPC”) as an opportunity to capitalize on key trends in the U.S. healthcare industry,

34

including the movement towards value-based reimbursement and to bolster TeamHealth’s post-acute care offerings. TeamHealth engaged Citigroup Global Markets Inc. (“Citi”) as its financial advisor in connection with such acquisition based on, among other things, Citi’s overall reputation and experience as an investment banking firm, and its knowledge of the healthcare services industry generally and TeamHealth’s business and operations in particular. On August 4, 2015, TeamHealth announced that it had entered into a definitive agreement to acquire IPC in a transaction valued at approximately $1.6 billion, which was TeamHealth’s largest acquisition to date.

On August 21, 2015, the TeamHealth Board conducted an offsite meeting with representatives of senior management to discuss, among other topics, the pending IPC transaction in the context of the company’s long term strategic plan.

On September 30, 2015, while TeamHealth was working to successfully consummate the IPC acquisition, a representative of AmSurg Corp. (“AmSurg”) met with Dr. Lynn Massingale, Executive Chairman of the TeamHealth Board to raise the possibility of mutually exploring a strategic business combination of the two companies, but without any indication of relative values or consideration. After discussions with members of the TeamHealth Board, the TeamHealth executive chairman responded to AmSurg on October 5, 2016 that, although TeamHealth was open-minded about potentially discussing a strategic business combination in the future, for the near term the company was focused on consummating the IPC acquisition and arranging the financing necessary to do so.

On October 12, 2015, while TeamHealth was continuing to work towards consummating the IPC acquisition, AmSurg privately submitted a non-binding proposal (subject to, among other things, due diligence and financing) regarding a business combination with TeamHealth involving pro forma ownership by each company’s stockholders of 50%, together with cash consideration to the TeamHealth stockholders of  $11.49 per share. AmSurg’s proposal indicated its desire to assist in securing “replacement financing” for both TeamHealth and IPC in lieu of the committed financing TeamHealth had in place for purposes of the IPC transaction.

On October 14, 2015, the TeamHealth Board met telephonically with representatives of senior management, Citi and Simpson Thacher & Bartlett LLP (“Simpson Thacher”), TeamHealth’s legal counsel. The TeamHealth Board, senior management and financial and legal advisors discussed the proposal in the context of the anticipated closing timing of the IPC transaction and the post-closing integration process. Citi reviewed TeamHealth management’s financial projections for TeamHealth pro forma for its acquisition of IPC, a summary and analysis of the AmSurg proposal, illustrative transaction structures and implied transaction values, and projected pro forma financial information for a potential business combination with AmSurg. The TeamHealth Board also discussed recent consolidation in the healthcare services industry, recent stock price volatility of industry participants, other strategic alternatives potentially available to TeamHealth, and TeamHealth’s stand-alone prospects. Representatives of Simpson Thacher also discussed with the TeamHealth Board their fiduciary duties in connection with their review of the AmSurg proposal. The TeamHealth Board ultimately concluded that the AmSurg proposal did not present a transaction that was in the best interests of TeamHealth’s stockholders at such time for a variety of reasons, including the risks and uncertainties inherent in the AmSurg proposal, such as concerns related to AmSurg’s then-current trading multiple and the risks it presented to consummating the pending acquisition of IPC and successfully integrating IPC. The TeamHealth Board further concluded that if it were to consider a potential business combination it would want to assess the broader landscape of potential strategic partners.

On October 15, 2015, TeamHealth responded to AmSurg that it was not interested in pursuing the AmSurg proposal due to insufficient value and heightened execution risks relative to TeamHealth’s current strategic plan.

On October 20, 2015, AmSurg publicly announced its proposal regarding a business combination with TeamHealth. In connection with such public overture, TeamHealth engaged Goldman Sachs & Co. (“Goldman Sachs”) as an additional financial advisor based on, among other things, Goldman Sachs’s overall reputation and experience as an investment banking firm, including in connection with unsolicited transactions in particular, as well as its knowledge of the healthcare services industry. On October 20, 2015, the TeamHealth Board met with representatives of senior management, Citi, Goldman Sachs and Simpson

35

Thacher to again discuss the AmSurg proposal, including the public release thereof by AmSurg. Representatives of management also reviewed for the TeamHealth Board the fact that TeamHealth had issued a press release in response to AmSurg’s release, which press release confirmed that TeamHealth had previously rejected the AmSurg proposal (noting it was the same proposal previously reviewed, considered and rejected by the TeamHealth Board at the prior meeting). In addition to reviewing again the AmSurg proposal and the details of its financial terms, the TeamHealth Board was informed by Dr. Massingale that following the public announcement by AmSurg of its proposal earlier that day, the Chairman of the Board of Directors, President and Chief Executive Officer of a potential strategic partner that we refer to as “Party A,” which had engaged in exploratory discussions with TeamHealth regarding a strategic combination earlier that year, contacted Dr. Massingale to convey Party A’s continuing interest in exploring a potential transaction between Party A and TeamHealth. In light of the potential for further overtures from AmSurg and the need to react and respond promptly to developments, the TeamHealth Board established a transaction committee (the “Transaction Committee”) comprised of non-executive directors James L. Bierman, Glenn A. Davenport, Vicky B. Gregg and Joseph L. Herring to facilitate expeditious feedback to the management team and TeamHealth’s advisors as necessary. The TeamHealth Board then instructed Citi and Goldman Sachs to perform additional financial analyses to assist the TeamHealth Board in further evaluating and assessing potential strategic alternatives available to TeamHealth, including with respect to business combinations with AmSurg and Party A.

On October 21, 2015, the Transaction Committee met telephonically to discuss the unsolicited proposal received from AmSurg.

On October 24, 2015, AmSurg orally indicated to representatives of TeamHealth that it could be willing to increase the cash portion of its proposed consideration by $4 per share.

On October 29, 2015, the Transaction Committee met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to further discuss the unsolicited proposal received from AmSurg and to discuss certain preliminary financial analyses prepared by the financial advisors in advance of their discussion with the full TeamHealth Board the following day.

On October 30, 2015, the TeamHealth Board met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to again discuss the AmSurg proposal, including the increase to the cash portion of the proposal that AmSurg had conveyed to TeamHealth orally on October 24, 2015. Citi and Goldman Sachs first discussed prior relationships or engagements with AmSurg and Party A that could be considered relevant to the TeamHealth Board’s assessment of Citi’s and Goldman Sachs’s representation of TeamHealth. Citi and Goldman Sachs then discussed with the TeamHealth Board certain preliminary financial analyses of TeamHealth, the financial terms and synergy assumptions in the revised AmSurg proposal and other strategic alternatives potentially available to TeamHealth. Representatives of Citi and Goldman Sachs also discussed their preliminary views on other potential transaction partners. TeamHealth management, Citi and Goldman Sachs then conveyed to the TeamHealth Board their perspectives on the current state of the healthcare services industry, noting the increasing headwinds, as well as the disappointing third quarter earnings of certain competitors and other industry participants, including Party A. The TeamHealth Board also discussed the status of the IPC transaction and the anticipated timing for closing, as well as their continuing concern that pursuing a transaction with AmSurg at such time, especially now that AmSurg had made its proposal (including its desire to replace TeamHealth’s committed financing for the IPC acquisition) public, could jeopardize the successful financing and closing of the IPC transaction. At the suggestion of the Transaction Committee, the TeamHealth Board also determined that for good order, during each meeting of the TeamHealth Board, the non-executive members of the TeamHealth Board should be provided with an opportunity to conduct a separate executive session attended only by such members and outside counsel.

Following the October 30, 2015 TeamHealth Board meeting, TeamHealth indicated to AmSurg that it was committed to consummating the financing and closing of the IPC transaction and therefore did not intend to pursue a transaction with AmSurg based on its latest proposal at that time, and that if it were to consider such a transaction, it would likely only do so in the context of a broader evaluation of strategic alternatives.

36

On November 2, 2015, AmSurg publicly disclosed its revised proposal and TeamHealth’s rejection thereof, indicating that it would remain open until the end of the following day. Later that same day, AmSurg publicly withdrew its revised proposal.

On November 2, 2015 the Transaction Committee met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to further discuss the current state of affairs, including changes in the healthcare landscape, recent volatility and compression of EBITDA multiples in healthcare stock prices, and potential next steps. The Transaction Committee recommended that the full TeamHealth Board be convened the following day for a comprehensive update.

On November 3, 2015, the TeamHealth Board met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss feedback received from TeamHealth’s institutional stockholders and the merits of pursuing private discussions with AmSurg and other potential third parties on a timeline and in a manner that would fit TeamHealth’s strategic objectives to ensure TeamHealth would be best positioned to maximize stockholder value and avoid being pressured to consider a transaction at a time (and on terms) not in the stockholders’ best interests. The TeamHealth Board and senior management concluded that their primary near-term focus continued to be successfully financing and closing the IPC transaction, but that TeamHealth should remain open to exploring strategic alternatives that could potentially increase long term stockholder value. The TeamHealth Board, senior management and their legal and financial advisors discussed a process for potentially satisfying both objectives. This process included contacting AmSurg and Party A privately to begin assessing the desirability of a transaction from the TeamHealth stockholders’ perspective.

On November 10, 2015, TeamHealth and AmSurg entered into a mutual non-disclosure agreement to facilitate the exchange of due diligence information, and thereafter representatives of TeamHealth and AmSurg met to discuss their respective businesses and the rationale for a business combination between TeamHealth and AmSurg. Such non-disclosure agreement included a mutual standstill provision that would automatically expire upon a party entering into a definitive agreement relating to certain extraordinary transactions, including the transactions contemplated by the merger agreement.

On November 19, 2015, the TeamHealth Board met in person with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss the status of the IPC acquisition, to receive an update on discussions with AmSurg and to further discuss its strategic alternatives more generally. After further discussion, the members of management, including Michael D. Snow, President and Chief Executive Officer, and Dr. Massingale as the management members of the TeamHealth Board, and financial advisors were then excused so that the non-executive directors could meet in executive session to continue discussions. The non-executive directors concluded that TeamHealth management should focus rigorously on closing the IPC transaction, and Citi and Goldman Sachs should conduct further analysis of the merits and considerations of certain strategic alternatives that might be available to TeamHealth, including, but not limited to, a potential combination with AmSurg.

On November 23, 2015 TeamHealth closed the IPC acquisition.

At various times in December 2015 and early January 2016, the TeamHealth Board and the Transaction Committee met to, among other things, receive updates on the integration and preliminary financial performance of IPC, as well as the increasing challenges faced by TeamHealth and participants in the healthcare industry more generally.

On January 5, 2016, the TeamHealth Board met in person with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to continue discussing possible strategic alternatives and the optimal process for assessing such alternatives, taking into account the merits and risks of a broad, potentially public exploration of potential business combination partners relative to a more targeted, private process. The members of management, including the management members of the TeamHealth Board, and the financial advisors were then excused so that the non-executive directors could meet in executive session to continue discussions. The non-executive directors concluded that TeamHealth should pursue private discussions with a limited number of third parties to explore a potential strategic combination, but should not commence a broad-based process given the associated risks, including potential management distraction and risk of disruptive leaks. The assessment of such non-executive directors at that time, taking into account input from their financial advisors, was to focus on strategic partners rather than private equity firms in light of, among other things, the challenging financing markets.

37

On January 11, 2016, TeamHealth entered into a mutual non-disclosure agreement with Party A. Such non-disclosure agreement included a mutual standstill provision that would automatically expire upon a party entering into a definitive agreement relating to certain extraordinary transactions, including the transactions contemplated by the merger agreement.

During January 2016, TeamHealth re-engaged with AmSurg and began discussions with Party A. TeamHealth also shared due diligence information and held management presentations with such parties, indicating to both parties that it sought to engage in a limited process to preliminarily explore the merits of a potential business combination.

Following a management presentation with Party A on January 19, 2016, Party A indicated to TeamHealth that it would not be submitting a transaction proposal to TeamHealth at this time.

On January 29, 2016, the TeamHealth Board met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to receive an update regarding the discussions with AmSurg and Party A. The TeamHealth Board concluded that notwithstanding Party A’s indication that it did not intend to further pursue a transaction, there was merit to continuing discussions with AmSurg.

On February 2, 2016, AmSurg conveyed to TeamHealth a proposal to engage in a business combination transaction with TeamHealth in an all-stock transaction resulting in pro forma ownership of the combined company of approximately 54% by AmSurg’s existing stockholders and 46% by TeamHealth’s existing stockholders.

On February 5, 2016, the TeamHealth Board met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss AmSurg’s proposal. TeamHealth management and TeamHealth’s financial advisors discussed the details of the proposal, noting that AmSurg’s most recent proposal reflected a lower exchange ratio than AmSurg proposed in October 2015 and did not contain any cash consideration. TeamHealth’s financial advisors discussed various financial analyses of the proposal. TeamHealth’s financial advisors also discussed the context provided by AmSurg’s financial advisors when they delivered the proposal, including AmSurg’s financial advisors’ observation regarding the challenging state of the financial markets generally and the poor performance of the healthcare sector in particular. After further discussion, the members of management, including the management members of the TeamHealth Board, and the financial advisors were then excused so that the non-executive directors could meet in executive session to continue discussions. The non-executive directors concluded that TeamHealth should continue to pursue discussions with AmSurg about a potential strategic combination but at a valuation that was more favorable to TeamHealth’s stockholders.

On February 8, 2016, the Transaction Committee met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss the strategy and process for responding to AmSurg as per the direction of the TeamHealth Board.

On February 8, 2016, Dr. Massingale, at the direction of the TeamHealth Board and Transaction Committee, informed AmSurg that its proposal did not deliver sufficient value to the TeamHealth stockholders and proposed instead an exchange ratio that would result in pro forma ownership of 50% by AmSurg’s existing stockholders and 50% by TeamHealth’s existing stockholders.

On February 11, 2016, AmSurg contacted TeamHealth to reject its counterproposal and instead propose an all-stock combination resulting in pro forma ownership of the combined company of 53% by AmSurg’s existing stockholders and 47% by TeamHealth’s existing stockholders.

On February 12, 2016 the TeamHealth Board met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss AmSurg’s revised proposal. Representatives of senior management conveyed the context provided by AmSurg when it delivered its revised proposal, including AmSurg’s perspective regarding the risks related to the integration and financial performance of IPC and TeamHealth’s first quarter results. TeamHealth’s financial advisors discussed various financial analyses of AmSurg’s revised proposal. The representatives of senior management and the TeamHealth Board then discussed the value creation potentially available to TeamHealth’s stockholders based on the revised offer, taking into account TeamHealth’s standalone prospects. After further discussion,

38

the members of management, including the management members of the TeamHealth Board, and the financial advisors were then excused so that the non-executive directors could meet in executive session to continue discussions. After discussion, the non-executive directors directed management to respond to AmSurg that, while the TeamHealth Board and management continued to appreciate the merits of a potential business combination with AmSurg, they believed that the fair valuation for both companies’ stockholders would result in a 50%/50% pro forma ownership split and that the companies appeared to be too far apart to productively engage in further discussions at that time.

On February 19, 2016, TeamHealth received a letter from JANA Master Fund, Ltd. indicating, among other things, that it and its affiliates had acquired over 7% of TeamHealth’s outstanding shares and that it intended to nominate three individuals for election to the TeamHealth Board at the 2016 annual stockholders meeting. JANA Partners LLC (“JANA”) made its letter public the same day.

On February 23, 2016, TeamHealth released its 2015 fourth quarter and full year financial results. During the earnings call that day, TeamHealth’s chief executive officer noted that, in late 2015, the TeamHealth Board had formed a special advisory committee to review potential “value creating alternatives” and that the TeamHealth Board was focused on enhancing long term stockholder value.

Throughout February and March, representatives of TeamHealth engaged in discussions with representatives of JANA, which discussions included, among other things, JANA’s perspective on TeamHealth’s strategic plan, financial performance and board composition. The TeamHealth Board met with representatives of management and TeamHealth’s legal and financial advisors throughout such period to discuss the engagement with JANA.

On March 18, 2016, following additional discussions between representatives of TeamHealth and AmSurg following the public disclosure by JANA of its letter, AmSurg submitted a proposal to combine with TeamHealth, the terms of which were essentially identical to the terms contained in its February 11th proposal. AmSurg cited in its proposal, as rationale for failing to improve upon terms TeamHealth had previously rejected as not in the best interests of its stockholders, general industry headwinds, as well as AmSurg’s perception that TeamHealth was facing integration obstacles with IPC and pressure from an activist stockholder.

On March 19, 2016, the Transaction Committee met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss AmSurg’s proposal of March 18th and the responses thereto, including in light of the ongoing discussions with JANA. The Transaction Committee concluded that further discussion of these topics was warranted at the full board meeting scheduled for the following day.

On March 20, 2016, the Team Health Board met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss AmSurg’s proposal of March 18th. The TeamHealth Board concluded that it was in the best interests of the company to continue discussions with JANA regarding a potential settlement and to notify AmSurg that the TeamHealth Board would consider its proposal in due course. The TeamHealth Board further concluded that it was prudent to defer responding substantively to AmSurg pending resolution of the discussions with JANA.

On March 22, 2016, TeamHealth entered into a cooperation agreement with JANA, which, among other things, provided that in return for JANA agreeing to a standstill, which included an agreement not to commence a proxy contest in support of an alternative slate of directors at TeamHealth’s 2016 annual meeting of stockholders, TeamHealth agreed to add Scott Ostfeld, Partner of JANA and Co-Portfolio Manager of JANA Strategic Investments, and Edwin (Mac) Crawford, former Chairman of CVS Caremark Corporation, to the TeamHealth Board effective concurrently with the execution of the cooperation agreement. Additionally, TeamHealth agreed to appoint Nancy M. Schlichting, Chief Executive Officer of Henry Ford Health System, to the TeamHealth Board in January 2017. On March 23, 2016, TeamHealth issued a press release announcing such entry into a cooperation agreement with JANA. Pursuant to the cooperation agreement, Messrs. Ostfeld and Crawford were also added to the Transaction Committee and, as of the TeamHealth annual meeting of stockholders held on May 25, 2016, Mr. Herring ceased serving on the committee and the TeamHealth Board.

39

On March 30, 2016, the TeamHealth Board, including Messrs. Ostfeld and Crawford, met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss AmSurg’s revised proposal of March 18th, including the anticipated synergies from any such combination and the potential value to be delivered to the TeamHealth stockholders and perspectives as to AmSurg’s then-current trading multiple and to obtain an update on the discussions at the Transaction Committee meeting the prior day. Representatives of management discussed with the TeamHealth Board their updated financial projections for the years 2016 through 2021, which were circulated to the TeamHealth Board prior to the meeting. Representatives of management updated the TeamHealth Board as to the key drivers of and the rationale for the revised financial projections, including visibility into soft first quarter performance, challenging results and outlook at IPC, and the prospective impact of the same on full year 2016 performance.

Later on March 30, 2016, at the direction of the TeamHealth Board, Mr. Bierman, a non-executive director on the TeamHealth Board whom we refer to as the “Lead Director,” contacted AmSurg to further discuss the potential business combination and to convey a counterproposal reflecting an all-stock combination resulting in greater pro forma ownership of the combined company for TeamHealth’s existing stockholders than was reflected in AmSurg’s March 18th proposal.

On April 3, 2016, the Transaction Committee and, thereafter, the full TeamHealth Board, met telephonically with representatives of senior management, Citi, Goldman Sachs and Simpson Thacher to discuss the status of discussions with AmSurg and the concern that AmSurg would pursue a transaction with another third party, including potentially Party A, instead of TeamHealth. Discussion ensued regarding the complexion of a transaction between AmSurg and Party A and how such a transaction would compare financially and strategically with a transaction between TeamHealth and either AmSurg or Party A.

On April 4, 2016, at the direction of the TeamHealth Board, Dr. Massingale contacted a representative of Party A to reaffirm its interest in exploring a potential business combination and to convey the support of the TeamHealth Board in pursuing a transaction with Party A. TeamHealth representatives followed up on its proposal by submitting a proposal letter to Party A on April 7, 2016 reflecting an all-stock combination resulting in pro forma ownership of the combined company of 60% by Party A’s existing stockholders and 40% by TeamHealth’s existing stockholders.

On April 7, 2016, a representative of AmSurg contacted the Lead Director to indicate that AmSurg had decided not to continue exploring a transaction with TeamHealth at that time.

On April 13, 2016, a representative of Party A contacted a representative of TeamHealth to indicate that Party A had decided not to continue exploring a transaction with TeamHealth.

On May 17, 2016, at a meeting between Dr. Massingale and a private equity firm, which we refer to as “Party B,” Party B indicated it would be interested in exploring a potential acquisition of the company. Party B did not discuss any transaction details, and following the meeting Dr. Massingale conveyed the indication of interest to the Lead Director.

On May 26, 2016, the TeamHealth Board met in person with members of senior management to discuss various operational updates, including the status of TeamHealth’s Bundled Payments for Care Improvement initiative, as well as certain strategic options potentially available to TeamHealth, including the potential acquisition of Florida Emergency Physicians, an emergency medicine staffing provider based in Orlando, Florida, which was referred to as “Project Zeus,” and the preliminary overture from Party B. The TeamHealth Board expressed skepticism as to the feasibility of a transaction with a private equity buyer, but concluded that it was in the best interests of the company to explore the potential value proposition contemplated by Party B and to test the seriousness of Party B’s interest. To that end, the TeamHealth Board indicated that Party B should be asked to provide a written proposal outlining key matters, such as valuation, its financing plan and its due diligence requirements.

On June 1, 2016, the Lead Director contacted Party B to indicate that Party B should submit a written proposal if it wished to have the TeamHealth Board consider exploring a potential transaction with Party B.

On June 3, 2016, Party B submitted to the Lead Director a preliminary proposal letter reflecting an acquisition of TeamHealth at a valuation range of  $52-$56 per share in cash. The proposal letter outlined Party B’s financing plans as well as its preliminary expectations with respect to due diligence.

40

On June 12, 2016, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher to discuss Party B’s proposal and the status of Project Zeus. Representatives of Simpson Thacher discussed the TeamHealth Board’s fiduciary duties in connection with their review and consideration of Party B’s preliminary proposal, as well as the various process-related and substantive considerations in connection with the consideration of an all-cash transaction of the type proposed by Party B, including the heightened potential conflicts of management directors in this context. The TeamHealth Board asked Goldman Sachs to continue to advise TeamHealth to assist it in efficiently exploring a potential transaction with Party B as well as other potential strategic alternatives. Goldman Sachs discussed their view of the transaction proposed by Party B, as well as their views regarding other credible private equity buyers. Goldman Sachs noted that the amount of equity required for such a transaction could be challenging and would likely limit credible private equity buyers to a small number, and therefore the TeamHealth Board might consider proceeding with Party B to determine the feasibility of such a transaction and, following such determination, then consider contacting other parties to assess their interest in a potential transaction. The TeamHealth Board discussed the fact that circumstances had changed significantly since the beginning of the year, and that, as a result of such changes, it was prudent for TeamHealth to consider a transaction with Party B and potentially other private equity buyers. Such changes included the improved financing markets, which made a transaction with a private equity firm more feasible than earlier in the year, TeamHealth’s unsuccessful discussions with AmSurg and Party A regarding a strategic business combination and the possibility that AmSurg and Party A would themselves agree to a strategic combination, which, among other things, would create a more formidable competitor to TeamHealth.

On June 15, 2016, AmSurg and Envision Healthcare Holdings, Inc. announced they had entered into a merger agreement.

On June 24, 2016, in order to facilitate the further exploration of discussions regarding a transaction with Party B, TeamHealth and Party B entered into a non-disclosure agreement. Such non-disclosure agreement included a standstill provision that would automatically expire upon TeamHealth entering into a definitive agreement relating to certain extraordinary transactions, including the transactions contemplated by the merger agreement. The non-disclosure agreement also contained a prohibition on Party B contacting debt or equity financing sources without TeamHealth’s prior approval.

On June 27, 2016, representatives of the TeamHealth Board met with another healthcare company that we refer to as “Party C,” which TeamHealth understood may have expressed an interest earlier in June about an acquisition of the anesthesia division of TeamHealth, about whether they may be interested in exploring a potential business combination between Party C and TeamHealth. Party C indicated that it was not interested in exploring a business combination with TeamHealth, and the parties did not further pursue a transaction involving the anesthesia division.

During the remainder of June and the beginning of July, Party B conducted business and financial due diligence.

On July 15, 2016, members of senior management of TeamHealth and Party B met to conduct a high level due diligence meeting, which due diligence was focused on areas that were critical to Party B establishing a more specific value proposal. Given TeamHealth’s interest in affirming the feasibility of a transaction with Party B, including with respect to Party B’s financing, TeamHealth permitted two potential co-investors of Party B to also attend the meeting.

On July 18, 2016, the TeamHealth Board met telephonically with members of senior management to discuss various financial and operational updates, including TeamHealth’s second quarter results, as well as Project Zeus and the preliminary discussions with Party B. Representatives of management reported that, while not yet finalized, second quarter results were likely to underperform Wall Street consensus estimates in several respects. The TeamHealth Board and management further discussed and concluded that the management team would again revise the full year 2016 projections to take into account actual operating results which fell short of the company’s prior forecasts. Representatives of management updated the TeamHealth Board on the due diligence activities of Party B, including the due diligence meeting on July 15th in particular. After further discussion, the members of management, including the management members of the TeamHealth Board, were then excused so that the non-executive directors could meet in

41

executive session to continue discussions. The non-executive directors concluded that TeamHealth management and TeamHealth’s advisors should continue to facilitate Party B’s due diligence to determine if Party B, following completion of its due diligence, would continue to demonstrate interest in a transaction at a valuation that would, in the TeamHealth Board’s determination, deliver sufficient value to the TeamHealth stockholders. The non-executive directors also reaffirmed the expectation that, should Party B continue to demonstrate such an interest, there could be merit in engaging with one or more other potential private equity acquirors to, among other things, enhance competitive tension to drive the highest value possible, and authorized the Lead Director to work with Goldman Sachs to pursue appropriate leads.

On July 22, the updated financial projections, which projections are described further below as the “July Projections” under the heading “— Certain Financial Projections,” were shared with Party B.

During the remainder of July and early August, Party B continued its due diligence.

On August 9, 2016, Party B submitted to the Lead Director a revised proposal letter reflecting an acquisition of TeamHealth for $46 per share in cash. In addition to referencing certain diligence findings in relation to the reduced proposed purchase price, the revised proposal outlined in more detail Party B’s financing plans. In particular, the proposal letter indicated that Party B believed between itself and two co-investors it could fund over 80% of the necessary equity financing, but that it would need to contact additional limited partners to obtain commitments for the remaining equity financing.

Also on August 9, 2016, representatives of Goldman Sachs, at the direction of the Lead Director, contacted Blackstone, who had indicated in late July to representatives of TeamHealth an interest in exploring a potential change of control transaction, to assess its interest in TeamHealth. Blackstone indicated that it remained interested in exploring a potential transaction with TeamHealth and that it was prepared to commence the necessary due diligence and related work immediately to pursue such a transaction, but sought to do so on an exclusive basis. Goldman Sachs indicated that it would convey such interest to the TeamHealth Board and respond in due course.

On August 10, 2016, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher to discuss Party B’s revised proposal of August 9th and to assess whether to pursue discussions with, and solicit a proposal from, Blackstone in light of its recent expression of interest. Representatives of Goldman Sachs summarized Party B’s revised proposal, its due diligence efforts to date, including their reaction to TeamHealth’s second quarter earnings, and Party B’s explanation for its reduced valuation. Representatives of Goldman Sachs then discussed a potential process for engaging with Blackstone and other potentially interested parties, but noted that no other parties had made similar overtures to Goldman Sachs. Representatives of Simpson Thacher then discussed the TeamHealth Board’s fiduciary duties in connection with its review and consideration of Party B’s revised proposal and the Blackstone overture. Following discussion with the TeamHealth Board, representatives of management indicated that the company’s financial projections for the years 2016 through 2021 should be updated in light of more recent operating information. The TeamHealth Board requested that management prepare such updates. The TeamHealth Board considered the Blackstone overture and also discussed concerns associated with contacting additional parties regarding a transaction, including the risk of further distracting the management team. The TeamHealth Board concluded that there was merit in permitting Blackstone to commence preliminary due diligence, and that at their next meeting the TeamHealth Board would further consider the desirability of continuing to explore a transaction with Party B or Blackstone in the context of reviewing the company’s revised financial projections.

On August 15, 2016, in order to facilitate such due diligence, TeamHealth and an affiliate of Blackstone entered into a non-disclosure agreement. Such non-disclosure agreement included a standstill provision that would automatically expire upon TeamHealth entering into a definitive agreement relating to certain extraordinary transactions, including the transactions contemplated by the merger agreement. The non-disclosure agreement also contained a prohibition on Blackstone contacting debt or equity financing sources without TeamHealth’s prior approval. Thereafter, the revised financial projections, which projections are described further below as the “August Projections” under the heading “— Certain Financial Projections,” were shared with Blackstone and Party B. The non-disclosure agreement also provided notice to Blackstone that TeamHealth had engaged Simpson Thacher (which had represented

42

Blackstone in connection with its ownership of the company from 2005 up to and following TeamHealth’s IPO in 2009), as its legal counsel in connection with the potential transaction, and provided a consent from and waiver by Blackstone for such representation of TeamHealth since Simpson Thacher currently represented Blackstone and its affiliates in matters unrelated to Blackstone’s exploration of a potential transaction with TeamHealth. Additionally, on August 16, 2016, TeamHealth provided Simpson Thacher with a waiver with respect to its ongoing representation of Blackstone in matters unrelated to Blackstone’s exploration of a potential transaction with TeamHealth.

On August 16, 2016, members of senior management of TeamHealth and Blackstone met to conduct a high level due diligence meeting, which due diligence was focused on areas that were critical to Blackstone establishing a specific value proposal.

Party B and Blackstone continued to conduct due diligence, including via access to an electronic data room, throughout the remainder of August and September.

On August 24, 2016, an affiliate of Blackstone, on behalf of Blackstone Core Equity Partners L.P., submitted a preliminary proposal letter reflecting an acquisition of TeamHealth at a valuation range of $48-$50 per share in cash. The proposal letter outlined Blackstone’s valuation assumptions, financing plans and additional due diligence requirements, noting its familiarity with the business given its prior ownership of TeamHealth. The proposal also indicated that it was predicated on TeamHealth granting Blackstone eight weeks of exclusivity.

On August 25, 2016, the TeamHealth Board met in person with representatives of senior management for a regularly scheduled board meeting. Representatives of Goldman Sachs and Simpson Thacher joined portions of the meeting to discuss the status of the respective efforts by Party B and Blackstone to further explore a potential transaction, as well as Blackstone’s preliminary proposal of August 24th. In addition to operational and compliance matters, the TeamHealth Board discussed the engagement with Party B and Blackstone and Blackstone’s request for exclusivity in particular. Representatives of Goldman Sachs reviewed a standalone financial analysis of TeamHealth, as well as financial analyses of the Blackstone offer, including in relation to Party B’s most recent offer, and discussed the process for continuing to engage with Party B and Blackstone as well as the landscape of other parties that may be interested in a potential transaction with TeamHealth. The TeamHealth Board instructed Goldman Sachs to indicate to Blackstone that it was premature to discuss exclusivity, but that the company remained willing to further pursue exploration of a transaction in light of Blackstone’s preliminary proposal.

On August 26, 2016, Blackstone indicated to Goldman Sachs that it remained enthusiastic about a transaction and would continue, for the time being, to conduct due diligence in the absence of exclusivity.

On August 28, 2016, at the direction of the TeamHealth Board, the Lead Director separately contacted representatives of Party B and Blackstone to indicate that the TeamHealth Board was amenable to continuing to explore a potential transaction and to provide details regarding the process for such exploration.

On September 6, 2016, TeamHealth announced the appointment of Leif Murphy as its new President and Chief Executive Officer to succeed Michael D. Snow and to replace him as a member of the TeamHealth Board. Mr. Murphy’s appointment followed an extensive search process led by non-executive directors Vicky B. Gregg, Chair of the TeamHealth Compensation Committee, Glenn A. Davenport and Messrs. Ostfeld and Crawford. Mr. Murphy was thereafter thoroughly briefed by other members of management, other directors and TeamHealth’s financial and legal advisors on a range of issues, including the status of discussions with Party B and Blackstone.

The week of September 12, 2016, Mr. Murphy met with Party B and Blackstone, respectively, to introduce himself to both parties and to reiterate TeamHealth’s willingness to continue discussions regarding a transaction notwithstanding the leadership change. Both parties expressed their enthusiasm for the company and the healthcare services space in general. During that week Blackstone and Party B continued their due diligence efforts, including through telephonic meetings with representatives of TeamHealth to discuss legal and regulatory matters and their review of TeamHealth’s business model and financial projections.

43

On September 13, 2016, at the direction of the TeamHealth Board, representatives of Goldman Sachs separately informed Party B and Blackstone that if they remained interested in pursuing a transaction with TeamHealth they should conclude substantially all of their critical due diligence and submit a revised proposal by September 19th.

On September 19, 2016, Blackstone submitted a revised proposal reflecting an acquisition of TeamHealth for $50 per share in cash and Party B submitted a revised proposal reflecting a valuation range of  $43-$44 per share in cash. In its proposal letter, and as separately conveyed to Goldman Sachs, Blackstone indicated that it would not proceed further unless it was granted four weeks of exclusivity.

On September 21, 2016, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher to discuss, among other things, the revised proposals from Party B and Blackstone and the status of Project Zeus. Following a discussion of Project Zeus, representatives of management also provided an update as to the company’s interim financial results for the third quarter, noting that performance was likely to fall short of the quarterly budget, as it had in the prior two quarters. The TeamHealth Board explored the details of the preliminary assessment of the shortfall with management. Representatives of Goldman Sachs then summarized the proposals and presented further financial analyses of the two proposals. Goldman Sachs also discussed Blackstone’s request for four weeks of exclusivity. Among other things, the TeamHealth Board discussed the value differential in the two proposals and the feasibility of each bidder’s proposals and related financing. In the context of considering Blackstone’s request for exclusivity, they also discussed the various mechanisms for ensuring that TeamHealth retain flexibility to pursue a competing proposal while at the same time definitively locking in the potential deal with Blackstone. Representatives of Goldman Sachs and Simpson Thacher then discussed their perspective regarding including a “go-shop” provision in any definitive merger agreement with Blackstone to affirmatively permit TeamHealth and its advisors to solicit competing proposals following execution of a definitive merger agreement. Goldman Sachs indicated that it had not received any indications of interest from other third parties regarding a potential acquisition of or merger with TeamHealth. Representatives of Goldman Sachs also discussed the amount and substance of diligence conducted by Party B and Blackstone and indicated that while Party B had done more diligence during the past few months, Blackstone’s assessment may have been facilitated by its historic knowledge of the business obtained during its ownership of the company from 2005 up to and following its IPO in 2009. Finally, representatives of management provided an update on Project Zeus and indicated their view that it was in the best interests of the company to pursue the transaction notwithstanding the ongoing discussions with Party B and Blackstone. After further discussion, the members of management, including the management members of the TeamHealth Board, and Goldman Sachs were then excused so that the non-executive directors could meet in executive session to continue discussions. The non-executive directors concluded that TeamHealth should grant Blackstone the requested exclusivity given Blackstone’s position that it would not proceed without exclusivity and its proposed valuation relative to Party B’s proposal. The non-executive directors further concluded that TeamHealth’s management and advisors should be instructed to work to finalize a transaction with Blackstone. They also indicated that TeamHealth should move forward with Project Zeus given that there was still uncertainty as to whether a transaction with Blackstone (or Party B) would ultimately materialize.

On September 22, 2016, at the direction of the TeamHealth Board, Goldman Sachs contacted Blackstone to indicate that TeamHealth would agree to exclusivity in order to finalize a transaction expeditiously. Later that day Goldman Sachs contacted Party B to indicate that TeamHealth would not be pursuing a transaction with them at that time.

On September 23, 2016, TeamHealth and Blackstone entered into an exclusivity agreement that provided, among other things, that TeamHealth would cease ongoing discussions with third parties regarding an acquisition proposal and through October 21, 2016 TeamHealth would not solicit alternative acquisition proposals from any third parties. As it commenced diligence, Blackstone requested that TeamHealth provide a waiver to Simpson Thacher permitting its funds lawyers, who serve as Blackstone’s regular funds counsel, to provide fund level assistance and topside structuring support to Blackstone in connection with the potential transaction, subject to the use of separate teams and customary information barriers. TeamHealth provided such waiver on September 27, 2016.

From late September and into October Blackstone continued its due diligence process, covering business, finance, accounting, tax, insurance, human resources, legal and intellectual property matters,

44

which continued throughout October, including through various calls with members of TeamHealth senior management and certain of TeamHealth’s external advisors.

On September 27, 2016, Party B submitted a letter to the Lead Director that noted the significant due diligence work conducted by Party B, provided background context for its most recently reduced proposal and indicated a continued enthusiasm for the TeamHealth business. Pursuant to the terms of the exclusivity agreement with Blackstone, TeamHealth did not engage with Party B.

On October 1, 2016, TeamHealth signed and closed the Project Zeus acquisition.

On October 3, 2016, Simpson Thacher provided a draft merger agreement to Kirkland & Ellis LLP (“Kirkland”), counsel to Blackstone and Parent. The draft merger agreement contemplated, among other things, a 45-day “go-shop” period, a company termination fee equal to 2.75% of transaction equity value and a reverse termination fee equal to 7.5% of transaction equity value. Additionally, the draft merger agreement contemplated that in the event the merger agreement was terminated to accept a superior proposal from a party who had submitted an acquisition proposal during the go-shop period, the company termination fee would be 1.25% of the transaction equity value rather than 2.75%.

On October 4, 2016, The Wall Street Journal reported that TeamHealth was exploring a sale to a private equity firm, citing unnamed sources familiar with the matter. Following that story and related news stories, several third parties, including AmSurg, Party A and certain private equity firms, inquired regarding a potential transaction with TeamHealth. Pursuant to the terms of the exclusivity agreement with Blackstone, TeamHealth did not engage with such parties.

On October 7, 2016, TeamHealth agreed to permit Blackstone to contact J.P. Morgan Securities LLC (“J.P. Morgan”) as a debt financing source to facilitate Blackstone’s efforts to arrange its debt financing. TeamHealth had previously agreed to permit Blackstone to contact certain other debt financing sources, but in light of J.P. Morgan’s role as bookrunner and joint lead arranger, joint bookrunner and administrative agent with respect to TeamHealth’s existing bonds and bank facility, respectively, TeamHealth and J.P. Morgan entered into a letter agreement memorializing the terms of such permission, including an express prohibition on J.P. Morgan disclosing to Blackstone any confidential information it has received from TeamHealth.

On October 12, 2016, Kirkland provided a revised draft of the merger agreement to Simpson Thacher. The revised draft of the merger agreement requested that JANA enter into a support agreement pursuant to which it would agree to vote its shares in favor of the deal, reduced the go shop period to 30 days, contemplated a reverse termination fee of 6% of the transaction equity value, added an expense reimbursement of  $25 million in the event the TeamHealth stockholders vote down the proposed transaction and suggested that additional regulatory closing conditions could be added upon completion of Blackstone’s due diligence. The revised draft also contemplated a company termination fee equal to 3.50% of transaction equity value, payable in certain other situations, including in the event of a willful breach of the merger agreement by TeamHealth, which would be reduced to 2.0% of the transaction equity value in instances where the merger agreement was terminated in connection with a superior proposal made during, and agreed to within 10 days of the end of, the go-shop period.

On October 14, 2016, Kirkland sent Simpson Thacher a draft of the proposed JANA support agreement. Later on October 14th, Simpson Thacher provided Kirkland with the initial draft of the disclosure letter to the merger agreement.

On October 16, 2016, Simpson Thacher provided Kirkland with a revised draft of the merger agreement, which, among other things, noted that JANA was reviewing the request to sign a support agreement and rejected the request for an expense reimbursement upon a vote down by TeamHealth’s stockholders and the suggestion that additional regulatory closing conditions would be considered. The revised draft also increased the go-shop period to 40 days (to be followed by a 10 business day period to reach agreement with respect to any acquisition proposal submitted during the go-shop period). Simpson Thacher’s revised draft also increased the reverse termination fee to 7% of transaction equity value, reduced the company termination fee to 3% of transaction equity value, further reduced to 1.5% of the transaction equity value in instances where the merger agreement was terminated in connection with a superior proposal made during, and agreed to within 10 business days of the end of, the go-shop period.

45

On October 18, 2016, Kirkland provided a revised draft of the merger agreement to Simpson Thacher, which draft reflected continued disagreement over the key outstanding issues, but reflected agreement on many of the less significant issues.

On October 20, 2016, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher to receive an update on the status of discussions with Blackstone and to discuss the company’s third quarter results. Representatives of senior management indicated they were wrapping up the September and full third quarter results and expected the challenges faced in 2016 to continue to be evident in such results. They further indicated that they would update the financial projections to reflect the third quarter actual results and share such revised projections with Blackstone. These projections were generally consistent with the projections previously reviewed by the TeamHealth Board and shared with Blackstone other than the updates to reflect the most recent operating results. The Lead Director then conveyed a call he had with a representative of Blackstone earlier in the day in which the Blackstone representative reiterated Blackstone’s enthusiasm about a transaction, but noted certain valuation issues arising from headwinds facing the business and the healthcare services sector more generally that would make a transaction at its previously proposed price challenging. Blackstone did not, however, convey a revised proposal during such call. The Lead Director also noted the unsolicited inquiries he, Goldman Sachs and other directors had received from third parties, including private equity and strategic parties, since the October 4th news stories. Representatives of Simpson Thacher provided an update with respect to the negotiations surrounding the terms of the merger agreement, including a summary of its key terms as reflected in the current draft, and the draft JANA support agreement. After further discussion, the members of management, including the management members of the TeamHealth Board, and Goldman Sachs were then excused so that the non-executive directors could meet in executive session to continue discussions. The non-executive directors concluded that in light of the progress made up to that point there was merit in remaining open to pursuing the transaction with Blackstone and to further assess moving forward definitively after understanding Blackstone’s revised view on valuation.

On October 22, 2016, Blackstone provided a revised proposal which, among other things, indicated that while Blackstone continued to have a favorable view of TeamHealth’s business, it was revising its proposal to $43 per share in cash following its extensive due diligence in light of, among other things, TeamHealth’s reduced forecast for the second half of 2016 and certain items Blackstone identified in its continuing due diligence. The proposal also noted that the equity for the transaction would be entirely committed by Blackstone Capital Partners VII, Blackstone’s current $18 billion private equity fund, although Blackstone expected to separately invite certain limited partner co-investors to participate in some of the equity commitment. The proposal letter indicated that the proposal would terminate if TeamHealth took any of the actions that would have been restricted by the exclusivity agreement as if the exclusivity period in such agreement had been extended (from the expiration date of October 21st) and also outlined several outstanding due diligence items. Blackstone also furnished TeamHealth with its draft debt and equity commitment letters and limited guarantee.

On October 23, 2016, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher to discuss the revised proposal. Representatives of Goldman Sachs discussed Blackstone’s reduced valuation and Blackstone’s remaining due diligence items, which included additional discussions with TeamHealth’s regulatory counsel. Goldman Sachs discussed with the TeamHealth Board certain other financial analyses, including a discounted cash flow (“DCF”) analysis based on TeamHealth’s projections, which had been updated to reflect TeamHealth’s actual third quarter results. These projections are described further below as the “Management Projections” under the heading “— Certain Financial Projections” and, which as described further below, reflected certain refinements after this date that were not significant in nature and which did not impact the DCF analysis. Following discussion, the members of management, including the management members of the TeamHealth Board, and Goldman Sachs, were excused so that the non-executive directors could meet in executive session to continue discussions. The non-executive directors first discussed the financial analyses presented by Goldman Sachs as well as the company’s future prospects, including their view that the Management Projections were likely optimistic in light of the risks and challenges TeamHealth was facing. The non-executive directors concluded that in light of the reduced valuation and outstanding diligence, TeamHealth should facilitate the finalization of Blackstone’s remaining due diligence but should not engage in any further substantive negotiations.

46

From October 24, 2016 through October 27, 2016, Blackstone and its advisors conducted their remaining due diligence, and reviewed the new civil investigative demand TeamHealth had received from the United States Department of Justice on October 25, 2016 pursuant to the Federal False Claims Act concerning the submission of claims to federal healthcare programs for certain professional services furnished by TeamHealth’s affiliated provider groups at certain healthcare facilities, including healthcare facilities located in Colorado and Texas.

On October 26, 2016, Blackstone submitted another proposal letter to the Lead Director indicating that it had completed its remaining due diligence and remained prepared to move forward with a transaction at $43 per share in cash. The proposal letter also indicated that the proposal would terminate if TeamHealth took any of the actions that would have been restricted by the exclusivity agreement as if the exclusivity period in such agreement had been extended. Also on October 26th, Mr. Murphy and Dr. Massingale had a due diligence call with Blackstone during which they discussed compliance and operational matters, as well as their perspective on opportunities that exist for the business.

On October 27, 2016, at the direction of the TeamHealth Board, the Lead Director contacted a representative of Blackstone to reiterate that TeamHealth was unlikely to pursue a transaction with Blackstone at $43 per share in cash. The Blackstone representative indicated that he would assess the feasibility of a price increase but signaled that any increase would be extremely challenging.

On October 28, 2016, a representative of Blackstone contacted the Lead Director to increase Blackstone’s proposal to $43.50 per share in cash. Later on October 28th, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher to discuss the revised proposal. Representatives of Goldman Sachs provided observations on market conditions, including third quarter earnings results of certain healthcare companies, and the revised Blackstone proposal, and discussed a potential process should the TeamHealth Board decide to move forward with Blackstone. The Lead Director then conveyed the substance of the price discussions with Blackstone. As part of discussion regarding Blackstone’s revised offer, a representative of Goldman Sachs noted that TeamHealth’s projections formed the basis of the DCF analysis Goldman Sachs had prepared and shared at the prior meeting. Following discussion, the members of management, including the management members of the TeamHealth Board, and Goldman Sachs, were excused so that the non-executive directors could meet in executive session to continue discussions. The Lead Director began by noting that both Blackstone and the members of senior management confirmed that, consistent with the instructions of the TeamHealth Board, such members of management had not engaged in any discussions regarding their potential retention or compensation with Blackstone following completion of a transaction. The non-executive directors concluded that any such discussions should continue to be deferred to ensure continued alignment of interests between management and the TeamHealth stockholders. The non-executive directors then discussed the revised proposal by Blackstone as well as their view that such proposal likely represented the highest price Blackstone was willing to pay as well as the best value reasonably attainable under the circumstances for the TeamHealth stockholders.

Later on October 28, 2016, Simpson Thacher provided Kirkland with revised drafts of the merger agreement and related disclosure letter, equity commitment letter, limited guarantee and JANA support agreement.

Also on October 28th, Party B provided the Lead Director with a letter indicating that it remained interested in re-engaging and, furthermore, that if TeamHealth were to enter into a definitive agreement for a transaction with another party, it would be Party B’s likely intent to participate in any go-shop process.

Throughout October 29, 2016, and October 30, 2016, representatives of Simpson Thacher and Kirkland exchanged multiple drafts of the transaction documents.

On October 29, 2016, at the direction of the TeamHealth Board, Goldman Sachs contacted Blackstone to request a further increase to the purchase price. Later on October 29th, Blackstone contacted Goldman Sachs to state that it did not have the ability to increase its price.

On the afternoon of October 30th, Simpson Thacher, TeamHealth, Kirkland and Blackstone discussed and agreed to the key open points in the merger agreement. 

47

On October 30, 2016, the TeamHealth Board met telephonically with representatives of senior management, Goldman Sachs and Simpson Thacher. Prior to the meeting, Steven E. Clifton, Executive Vice President, General Counsel and Corporate Secretary, furnished to the TeamHealth Board an updated disclosure statement provided by Goldman Sachs, which identified prior engagements or relationships between Goldman Sachs and Blackstone (and its affiliates). Representatives of Simpson Thacher provided the TeamHealth Board with an update on the near final draft of the merger agreement and a summary of the changes made to the material terms of the merger agreement since the TeamHealth Board’s meeting on October 20, 2016. After responding to questions, at the request of the TeamHealth Board, Goldman Sachs delivered to the TeamHealth Board an oral opinion, which was subsequently confirmed by delivery of a written opinion, to the effect that, as of the date of its written opinion and based upon and subject to the factors and assumptions set forth in Goldman Sachs’s written opinion, the merger consideration of  $43.50 per share in cash to be paid to the holders (other than Parent and its affiliates) of the shares of Team Health common stock pursuant to the merger agreement was fair from a financial point of view to such holders. The full text of the written opinion of Goldman Sachs is attached to this proxy statement as Annex B and is incorporated by reference in this proxy statement in its entirety. See also “The Merger Proposal (Proposal 1) — Opinion of TeamHealth’s Financial Advisor.” Representatives of Simpson Thacher then described the resolutions before the TeamHealth Board. After further discussion by the TeamHealth Board, including further discussion of the resolutions to be adopted by the TeamHealth Board, the TeamHealth Board unanimously approved and declared advisable and fair to and in the best interests of TeamHealth and its stockholders, the merger agreement, the limited guarantee and the JANA support agreement, in each case, substantially in the form presented to the TeamHealth Board, and the merger, and unanimously recommended that TeamHealth stockholders vote to adopt the merger agreement.

Following the approval of the TeamHealth Board of the merger and the merger agreement, and also on October 30, 2016, the parties finalized and executed the merger agreement and the other documentation related to the proposed transaction. Blackstone provided executed financing commitment papers providing for its committed financing concurrently with the execution of the merger agreement, and Blackstone and JANA executed the JANA support agreement concurrently with the execution of the merger agreement.

On October 31, 2016, prior to commencement of trading of TeamHealth’s common stock on the NYSE, TeamHealth and Blackstone issued a joint press release announcing the proposed transaction.

Beginning on October 31, 2016, at the direction of the TeamHealth Board, representatives of Goldman Sachs began the go-shop process by contacting the parties that Goldman Sachs had identified during the discussion of the go-shop process with the TeamHealth Board at the board meeting held on October 30, 2016. Representatives of Goldman Sachs contacted eight potential strategic bidders and 22 potential financial bidders, for a total of 30 potential bidders, including AmSurg, Party A, Party B and Party C.

Between November 1, 2016 and November 3, 2016, Party B and four other financial bidders, whom we refer to as “Party D,” “Party E,” “Party F” and “Party G,” respectively, indicated interest in exploring a transaction with TeamHealth and were provided with confidentiality agreements in order to facilitate such exploration. On November 2, 2016, AmSurg also indicated interest and was provided with a confidentiality agreement.

On November 2, 2016, Party A and Party C declined to participate in the go-shop process.

Party D, Party E and Party F each entered into confidentiality agreements with TeamHealth on November 2, 2016, which confidentiality agreements constituted acceptable confidentiality agreements (as defined below) under the merger agreement. On November 2, 2016, Party B also entered into a confidentiality agreement, which superseded in its entirety the existing confidentiality agreement it signed with TeamHealth on June 24, 2016 and which constituted an acceptable confidentiality agreement. On November 3, 2016, Party G also entered into a confidentiality agreement.

Following execution of the confidentiality agreements, Party B, Party D, Party E, Party F and Party G were provided with due diligence materials, including the Management Projections. Party B was also provided with a schedule that showed the changes to the Management Projections from the August Projections (which had been previously provided to Party B). Subsequently, Party E and Party G declined, without submitting an acquisition proposal, to continue to participate in the go-shop process.

48

On November 4, 2016, TeamHealth filed its Form 10-Q for the quarterly period ended September 30, 2016.

During the week of November 7, 2016, Party B continued its due diligence, including business, financial, legal and regulatory due diligence. On November 10, 2016, Party B and two potential co-investors conducted further business and financial due diligence, including a session with members of TeamHealth management.

During the week of November 14, 2016, Party B continued its due diligence.

Based on continued expressions of interest and in response to its request, on November 16, 2016, Party B was granted full access, via an electronic data room, to all diligence materials that had been provided to Blackstone. On November 17, 2016, in response to its request, Party B was also provided with a draft disclosure letter to a potential merger agreement.

Following continued due diligence, including a session with members of TeamHealth management, on November 16, 2016, Party F declined, without submitting an acquisition proposal, to continue to participate in the go-shop process.

On November 17, 2016, following additional due diligence, Party B notified representatives of Goldman Sachs that it intended to disengage from the go-shop process, without submitting an acquisition proposal.

Following continued due diligence, including a session with members of TeamHealth management, on November 30, 2016, Party D declined, without submitting an acquisition proposal, to continue to participate in the go-shop process.

Representatives of Goldman Sachs contacted representatives of AmSurg several times after November 2, 2016 to follow up on AmSurg’s previously expressed interest in exploring a transaction with TeamHealth. AmSurg did not respond to Goldman Sachs’s inquiries, did not enter into a confidentiality agreement with TeamHealth and did not express any further interest in participating in the go-shop process.

During the month of November, each of the other parties contacted by Goldman Sachs also declined to explore a transaction with TeamHealth.

TeamHealth did not receive any acquisition proposals during the go-shop period ending at 12:01 a.m. (New York time) on December 10, 2016.

Recommendation of the TeamHealth Board and Reasons for the Merger

The TeamHealth Board recommends that you vote “FOR” the merger proposal.

At a meeting of the TeamHealth Board held on October 30, 2016, the TeamHealth Board, acting in consultation with its outside legal counsel and financial advisor, unanimously determined that the merger, the merger agreement and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of TeamHealth and the TeamHealth stockholders, declared advisable and approved the merger, the merger agreement and the other transactions contemplated by the merger agreement, resolved that the merger agreement be submitted to the TeamHealth stockholders for adoption thereby in accordance with applicable law, the merger agreement and the bylaws of TeamHealth at a special meeting of stockholders and recommended that the TeamHealth stockholders vote to adopt the merger agreement.

When you consider the TeamHealth Board’s recommendation, you should be aware that TeamHealth’s directors may have interests in the merger that may be different from, or in addition to, the interests of TeamHealth stockholders generally. These interests are described in the section entitled “The Merger Proposal (Proposal 1) — Interests of TeamHealth Executive Officers and Directors in the Merger.”

In the course of reaching its decision, the TeamHealth Board consulted with our senior management, financial and legal advisors, reviewed a significant amount of information and considered a number of potentially positive factors with respect to the merger and the other transactions contemplated by the merger agreement, including, among others, the following (not necessarily in order of relative importance):

49

•

Merger consideration.   The TeamHealth Board considered the $43.50 per share in cash to be paid as merger consideration in relation to (i) the TeamHealth Board’s estimate of the current and future value of TeamHealth as an independent entity, (ii) the multiple of enterprise value to EBITDA implied by such price and (iii) the market price of TeamHealth’s common stock on October 3, 2016, the last trading day prior to news reports that TeamHealth was considering a possible sale of the Company.

​

•

Premium.   The TeamHealth Board considered that the $43.50 per share in cash to be paid as merger consideration represents a premium of approximately 33% to the $32.80 per share closing price of TeamHealth’s stock on October 3, 2016, the last trading day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction.

​

•

Cash consideration.   The TeamHealth Board considered the fact that the merger consideration would be paid solely in cash, which, compared to non-cash consideration, provides certainty and immediate liquidity and value to our stockholders, enabling our stockholders to realize value that has been created at TeamHealth while eliminating long-term business and execution risk.

​

•

Strategic alternatives.   The TeamHealth Board considered the potential values, benefits, risks and uncertainties facing TeamHealth’s stockholders associated with possible strategic alternatives to the merger (including alternative acquisition proposals and scenarios involving the possibility of remaining independent), and the timing and likelihood of accomplishing such alternatives, taking into account the fact that TeamHealth had engaged in extensive discussions with potential acquirors over the course of the prior year preceding the negotiation of the transaction with Parent. The TeamHealth Board also considered its alternatives in light of the risks associated with remaining an independent, stand-alone company, including what appeared to be increasing difficulties in meeting management financial projections. Based on the foregoing, the TeamHealth Board considered that none of these options, on a risk adjusted basis, was reasonably likely to create value for TeamHealth stockholders greater than the merger consideration. The TeamHealth Board also considered that, during the go-shop period, TeamHealth may, subject to the terms and conditions of the merger agreement, solicit, initiate, or encourage, or engage in discussions or negotiations regarding, an acquisition proposal from a person other than Parent, and may ultimately terminate the merger agreement to accept a superior proposal from such person, as more fully described in the section entitled “The Merger Agreement — Go-Shop Period; Restrictions on Solicitation of Acquisition Proposals” on page 95.

​

•

Fairness opinion.   The TeamHealth Board considered the financial analyses presented by Goldman Sachs, as well as the oral opinion of Goldman Sachs rendered to the TeamHealth Board on October 30, 2016, which was subsequently confirmed in writing in an opinion, dated October 30, 2016, to the TeamHealth Board to the effect that, as of such date and based upon and subject to the factors and assumptions set forth in Goldman Sachs’s written opinion, the merger consideration of  $43.50 per share in cash to be paid to holders (other than Parent and its affiliates) of shares of TeamHealth common stock pursuant to the merger agreement was fair from a financial point of view to such holders. The Goldman Sachs opinion is more fully described in “The Merger Proposal (Proposal 1) — Opinion of TeamHealth’s Financial Advisor” and the full text of the opinion is attached to this proxy statement as Annex B.

​

•

Negotiations with Parent.   The TeamHealth Board considered the benefits that we and our advisors were able to obtain during our extensive negotiations with Parent and that the merger agreement was the product of arm’s-length negotiations and contained terms and conditions that were, in the TeamHealth Board’s view, advisable and favorable to TeamHealth and its stockholders.

​

•

Timing of Parent’s Offer.   The timing of the merger and the risk that if TeamHealth did not accept Parent’s offer, which Parent had indicated was the highest offer it would make, at the time that it did, the TeamHealth Board might not have had another opportunity to do so.

​

•

TeamHealth’s current condition.   The TeamHealth Board considered information with respect to our financial condition, results of operations, competitive position and business strategy, on both a historical and prospective basis, as well as current industry, regulatory, economic and market conditions, trends and cycles.

​

50

•

TeamHealth’s future prospects.   The TeamHealth Board considered TeamHealth’s future prospects if we were to remain independent, including the competitive landscape and the business, financial and execution risks, our relationships with clients, physicians, providers and suppliers, and the risks associated with continued independence discussed below.

​

•

Risks associated with continued independence.   While the TeamHealth Board remained supportive of our strategic plan and optimistic about our prospects on a standalone basis, it also considered the risks associated with operating as a standalone company, including the potential execution risks associated with the strategic plan, the achievability of meeting financial projections and the potential risk associated with the possibility that even if our strategic plan is successfully executed, the market may not reflect such execution in TeamHealth’s stock price. The TeamHealth Board also considered risks associated with laws and regulations affecting our industry, including current U.S. and state health reform legislative or implementation initiatives that could affect our operations and business condition and laws and regulations that regulate payments for medical services made by government sponsored or government regulated healthcare programs that could cause our revenues to decrease. The TeamHealth Board concluded that the merger consideration enabled TeamHealth’s stockholders to realize a substantial portion of TeamHealth’s potential future value without the market or execution risks associated with continued independence.

​

•

Economic conditions.   The TeamHealth Board considered the current state of the economy, debt financing markets and uncertainty surrounding forecasted economic conditions both in the near term and the long term, generally, and within our industry in particular which could reduce net revenue generated by our clients.

​

•

Merger agreement.   The TeamHealth Board considered, in consultation with its counsel, the terms of the merger agreement, including:

​

•

the right of TeamHealth to initiate, solicit or encourage and engage in, enter into, continue or otherwise participate in any discussions or negotiations with regard to any acquisition proposal from any person other than Parent during the go-shop period and if TeamHealth receives during such period a written acquisition proposal from any such person that the TeamHealth Board determines in good faith, after consultation with its outside legal counsel and financial advisor, would reasonably be expected to lead to a superior proposal TeamHealth may continue to initiate, engage in, continue or otherwise participate in any discussions or negotiations with such “excluded party” regarding any acquisition proposal, including with respect to an amended proposal, submitted by such excluded party, for up to ten business days following the conclusion of the go-shop period. If the merger agreement is terminated by TeamHealth (subject to certain notice requirements and “matching rights” in favor of Parent) in connection with its entering into a definitive agreement with such an excluded party with respect to a superior proposal, then TeamHealth would have an obligation to pay Parent a reduced termination fee of  $50.4 million;

​

•

the representations, warranties and covenants of the parties, the conditions to the parties’ obligations to complete the merger and their ability to terminate the merger agreement;

​

•

the fact that the consummation of the merger is not conditioned on Parent’s ability to obtain financing;

​

•

the fact that TeamHealth has sufficient operating flexibility to conduct its business in the ordinary course between the execution of the merger agreement and consummation of the merger;

​

•

the obligation of Parent under certain circumstances to pay us a reverse termination fee of $201.7 million, including the guarantee thereof pursuant to the terms and conditions of the limited guarantee;

​

•

the fact that the definition of  “material adverse effect” has a number of customary exceptions and is generally a very high standard as applied by courts;

​

51

•

the right of TeamHealth and the TeamHealth Board to respond to a competing superior proposal from any bidder after the no-shop period start date and prior to obtaining the TeamHealth stockholder approval if the TeamHealth Board determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal either constitutes a superior proposal or is reasonably likely to lead to a superior proposal and that failure to take such action would be reasonably likely to be inconsistent with the directors’ fiduciary duties under applicable law, subject to certain notice requirements and “matching rights” in favor of Parent and the entry into an acceptable confidentiality agreement and its ability to terminate the merger agreement to accept an acquisition proposal that the TeamHealth Board determines, after consultation with its outside legal counsel and financial advisor, would, if consummated, result in a superior proposal, provided that we pay Parent the applicable termination fee;

​

•

the belief of the TeamHealth Board that, although the termination fee provisions might have the effect of discouraging competing third-party proposals, such provisions are customary for transactions of this type, and its belief that the $50.4 million termination fee with respect to terminations for superior proposals made by third parties who made superior proposals during the go-shop period, and the higher $100.8 million termination fee with respect to terminations made for superior proposals made after the no-shop period start date by any person other than an excluded party, were reasonable in the context of comparable transactions and the likelihood that fees of such sizes would not be a meaningful deterrent to alternative acquisition proposals;

​

•

the TeamHealth Board’s right to change its recommendation in connection with an intervening event or a superior proposal prior to obtaining the TeamHealth stockholder approval if the TeamHealth Board has determined in good faith, after consultation with its outside legal counsel and, in the case of a superior proposal, its financial advisor, that the failure to make such change in recommendation would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, subject to certain notice requirements and “matching rights”; and

​

•

TeamHealth’s right, under specified circumstances, to specifically enforce Parent’s obligations under the merger agreement, including Parent’s obligation to enforce the equity commitment letter in order to consummate the merger.

​

•

Financing.   The TeamHealth Board considered the fact that Parent has obtained committed debt financing for the transaction from reputable financial institutions, and that Parent has obtained committed equity financing from Blackstone Capital Partners VII for the full amount of equity required in connection with such committed debt financing, as well as the fact that Parent must use its reasonable best efforts to consummate the debt financing and the equity financing and that such funding provides for funding of an amount sufficient to cover the aggregate per share merger consideration, all fees and expenses required to be paid by Parent, Merger Sub and the surviving corporation in connection with the merger and the financing, the refinancing of any outstanding indebtedness of TeamHealth and all other payment obligations of Parent, Merger Sub and the surviving corporation.

​

•

Likelihood of consummation.   The TeamHealth Board considered the likelihood that the merger would be completed, in light of, among other things, the conditions to the merger and the absence of a financing condition, the relative likelihood of obtaining required regulatory approvals, and the remedies available to us under the merger agreement, as well as the level of commitment by Parent to obtain the applicable consents imposed by regulators in connection with securing such approvals, including the commitment to sell, divest, dispose of or license assets, properties, products, rights, services or businesses of TeamHealth or TeamHealth’s subsidiaries and affiliated physician groups.

​

•

Blackstone’s reputation.   The TeamHealth Board considered the business reputation and capabilities of Blackstone and its management, and Blackstone’s general ability to complete acquisition transactions.

​

52

•

Appraisal Rights.   The TeamHealth Board considered the fact that stockholders who do not vote to adopt the merger agreement and who comply with the requirements of the DGCL will have the right to dissent from the merger and to demand appraisal of the fair value of their shares under the DGCL.

​

•

Stockholders’ ability to reject the merger.   The TeamHealth Board considered the fact that the merger is subject to the adoption of the merger agreement by the affirmative vote of holders of a majority of the outstanding shares of TeamHealth common stock entitled to vote thereon.

​

In the course of reaching its decision, the TeamHealth Board also considered a number of potentially negative factors with respect to the merger and the other transactions contemplated by the merger agreement including, among others, the following (not necessarily in the order of relative importance):

•

Participation in future gains.   The TeamHealth Board considered the fact that we will no longer exist as an independent public company and TeamHealth stockholders will forgo any future increase in TeamHealth’s value that might result from our earnings or possible growth as an independent company. The TeamHealth Board was optimistic about our prospects on a standalone basis, but concluded that the premium reflected in the merger consideration constituted fair compensation for the loss of the potential stockholder benefits that could be realized by our strategic plan particularly on a risk-adjusted basis and in light of the achievability of our financial projections.

​

•

Regulatory risk.   The TeamHealth Board considered the risk that the completion of necessary regulatory reviews, the completion of which is beyond TeamHealth’s control, may be delayed, conditioned or denied.

​

•

Risks associated with a failure to consummate the merger.   The TeamHealth Board considered the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the merger will be satisfied and as a result the possibility that the merger might not be completed, and the fact that any reverse termination fee may not fully compensate TeamHealth for the costs of non-consummation in the circumstances in which it is payable. The TeamHealth Board noted the fact that, if the merger is not completed, (i) we will have incurred significant risk, transaction expenses and opportunity costs, including the possibility of disruption to our operations, diversion of management and employee attention, employee attrition and a potentially negative effect on our business and client relationships, (ii) depending on the circumstances that caused the merger not to be completed, it is likely that the price of TeamHealth’s common stock will decline, potentially significantly and (iii) the market’s perception of our prospects could be adversely affected.

​

•

Financing risk.   The TeamHealth Board considered the risk that, while the merger agreement is not subject to any financing condition, if Parent fails to obtain sufficient financing, the merger is unlikely to be consummated.

​

•

Restrictions on the operation of our business.   The TeamHealth Board considered the restrictions on the conduct of our business prior to the completion of the merger, including restrictions on realizing certain business opportunities or taking certain actions with respect to our operations we would otherwise take absent the pending merger.

​

•

Non-solicitation provision.   The TeamHealth Board considered the fact that the merger agreement precludes us from actively soliciting alternative proposals after the no-shop period start date.

​

•

Termination fees.   The TeamHealth Board considered the possibility that the $50.4 million termination fee payable to Parent with respect to terminations for superior proposals made by excluded parties, and the higher $100.8 million termination fee payable to Parent with respect to terminations made for superior proposals made after the no-shop period start date by any person other than an excluded party, might have the effect of discouraging alternative acquisition proposals or reducing the price of such proposals.

​

•

Parent Termination Fee.   The TeamHealth Board considered the fact that TeamHealth’s monetary remedy in connection with a breach of the merger agreement by Parent or Merger Sub is limited

​

53

to the amount of the $201.7 million Parent termination fee plus reasonable and documented out-of-pocket costs and expenses up to $5 million in connection with enforcing the payment of the Parent termination fee, and may not be sufficient to compensate TeamHealth for losses suffered as a result of a breach of the merger agreement by Parent or Merger Sub.

•

Tax treatment.   The TeamHealth Board considered the fact that any gains arising from the receipt of the merger consideration would generally be taxable to TeamHealth’s stockholders that are U.S. holders for U.S. federal income tax purposes.

​

•

Stockholder Litigation.   The TeamHealth Board considered the likelihood of distracting litigation from stockholder suits in connection with the merger.

​

While the TeamHealth Board considered potentially positive and potentially negative factors, the TeamHealth Board concluded that, overall, the potentially positive factors outweighed the potentially negative factors. Accordingly, the TeamHealth Board unanimously determined that the merger, merger agreement and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of TeamHealth and its stockholders.

The foregoing discussion is not intended to be an exhaustive list of the information and factors considered by the TeamHealth Board in its consideration of the merger, but includes the material positive factors and material negative factors considered by the TeamHealth Board in that regard. In view of the number and variety of factors and the amount of information considered, the TeamHealth Board did not find it practicable to, nor did it attempt to, make specific assessments of, quantify, or otherwise assign relative weights to, the specific factors considered in reaching its determination. In addition, individual members of the TeamHealth Board may have given different weights to different factors. Based on the totality of the information presented, the TeamHealth Board collectively reached the unanimous decision to approve and declare advisable and fair to and in the best interests of TeamHealth and its stockholders, the merger, the merger agreement and the other transactions contemplated by the merger agreement in light of the factors described above and other factors that the members of the TeamHealth Board felt were appropriate.

Portions of this explanation of TeamHealth’s reasons for the merger and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Opinion of TeamHealth’s Financial Advisor

At a meeting of the TeamHealth Board held on October 30, 2016, Goldman Sachs rendered to the TeamHealth Board its oral opinion, subsequently confirmed in writing, to the effect that, as of the date of its written opinion and based upon and subject to the factors and assumptions set forth in Goldman Sachs’s written opinion, the merger consideration of  $43.50 in cash per share to be paid to the holders (other than Parent and its affiliates) of the shares of TeamHealth common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated October 30, 2016, which sets forth assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex B and is incorporated by reference herein. The summary of the Goldman Sachs opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs’s written opinion. Goldman Sachs’s advisory services and opinion were provided for the information and assistance of the TeamHealth Board in connection with its consideration of the proposed transaction and the opinion does not constitute a recommendation as to how any holder of TeamHealth common stock should vote with respect to the merger proposal or any other matter.

54

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

•

the merger agreement;

​

•

annual reports to stockholders and Annual Reports on Form 10-K of TeamHealth for the five fiscal years ended December 31, 2015;

​

•

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of TeamHealth;

​

•

certain other communications from TeamHealth to its stockholders;

​

•

certain publicly available research analyst reports for TeamHealth; and

​

•

certain internal financial analyses and forecasts for TeamHealth prepared by its management, as approved for Goldman Sachs’s use by TeamHealth, which are referred to below as “Management Projections” and which are summarized below under “— Certain Financial Projections”.

​

Goldman Sachs also held discussions with members of the senior management of TeamHealth regarding their assessment of the past and current business operations, financial condition and future prospects of TeamHealth; reviewed the reported price and trading activity for shares of TeamHealth common stock; compared certain financial and stock market information for TeamHealth with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the outsourced physician services industry and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

For purposes of rendering its opinion, Goldman Sachs, with the consent of TeamHealth, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, Goldman Sachs, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the consent of TeamHealth that the Management Projections have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of TeamHealth. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of TeamHealth or any of its subsidiaries, and Goldman Sachs was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the proposed transaction will be obtained without any adverse effect on the expected benefits of the proposed transaction in any way meaningful to its analysis. Goldman Sachs assumed that the proposed transaction will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs’s opinion does not address the underlying business decision of TeamHealth to engage in the proposed transaction, or the relative merits of the proposed transaction as compared to any strategic alternatives that may be available to TeamHealth; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, TeamHealth or any other alternative transaction. Goldman Sachs’s opinion addresses only the fairness from a financial point of view to the holders (other than Parent and its affiliates) of shares of TeamHealth common stock, as of the date of the opinion, of the merger consideration of  $43.50 in cash per share to be paid to such holders pursuant to the merger agreement. Goldman Sachs did not express any view on, and its opinion does not address, any other term or aspect of the merger agreement, the proposed transaction or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the proposed transaction, including, the fairness of the proposed transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of TeamHealth; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of TeamHealth, or class of such persons, in connection with the proposed transaction, whether relative to the merger consideration of  $43.50 in cash per share to be paid to the holders (other than Parent and its affiliates) of shares of TeamHealth common

55

stock pursuant to the merger agreement or otherwise. Goldman Sachs did not express any opinion as to the impact of the proposed transaction on the solvency or viability of TeamHealth or Parent or the ability of TeamHealth or Parent to pay their respective obligations when they come due. Goldman Sachs’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of the opinion, and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of the opinion. Goldman Sachs’s advisory services and its opinion were provided for the information and assistance of the TeamHealth Board in connection with its consideration of the proposed transaction, and the opinion does not constitute a recommendation as to how any holder of shares of TeamHealth common stock should vote with respect to the proposed transaction or any other matter. Goldman Sachs’s opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to the TeamHealth Board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’s financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before October 28, 2016 and is not necessarily indicative of current market conditions.

Implied Premia and Multiple Analysis

Goldman Sachs analyzed the merger consideration of  $43.50 in cash per share to be paid to the holders of shares of TeamHealth common stock pursuant to the merger agreement in relation to:

•

the closing price per share of TeamHealth common stock as of October 3, 2016, the day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction;

​

•

the closing price per share of TeamHealth common stock as of October 28, 2016;

​

•

the volume weighted average price for the shares of TeamHealth common stock over the 30 calendar day period ended October 3, 2016;

​

•

the volume weighted average price for the shares of TeamHealth common stock over the 90 calendar day period ended October 3, 2016; and

​

•

the highest trading price for the shares of TeamHealth common stock over the 52 week period ended October 28, 2016.

​

The results of this analysis are as follows:

In addition, Goldman Sachs calculated the implied enterprise value for TeamHealth, referred to as the “Implied Transaction Enterprise Value,” by multiplying the merger consideration of  $43.50 per share by the total number of fully diluted shares of TeamHealth common stock outstanding calculated using the shares and other equity securities outstanding as of October 21, 2016 as provided by TeamHealth management,

56

and adding to the result the amount of TeamHealth’s net debt (debt less cash, referred to as “Net Debt”) as of June 30, 2016, adjusted (except as noted below) to take into account the debt incurred by TeamHealth for its acquisition of Florida Emergency Physicians, or “FEP,” and certain one-time expenses as provided by TeamHealth management.

Goldman Sachs then calculated the Implied Transaction Enterprise Value as multiples of:

•

TeamHealth’s earnings before interest, taxes, depreciation and amortization as adjusted as described below, or “Adjusted EBITDA,” for the four quarter period ended June 30, 2016, on a pro forma basis giving effect to TeamHealth’s acquisition of IPC, but excluding the effect of TeamHealth’s acquisition of FEP, referred to below as “PF LTM 6/30 Adjusted EBITDA” (and also excluding for purposes of calculating the Implied Transaction Enterprise Value, the debt incurred by TeamHealth for its acquisition of FEP and certain one-time expenses as discussed with management);

​

•

TeamHealth’s Adjusted EBITDA for the four quarter period ended September 30, 2016, on a pro forma basis giving effect to TeamHealth’s acquisition of IPC but excluding the effect of TeamHealth’s acquisition of FEP, referred to below as “PF LTM 9/30 Adjusted EBITDA” (and excluding for purposes of calculating the Implied Transaction Enterprise Value, the debt incurred by TeamHealth for its acquisition of FEP and certain one-time expenses as discussed with management);

​

•

the estimate of TeamHealth’s Adjusted EBITDA for 2016 as reflected in the Management Projections, referred to below as “2016E Adjusted EBITDA”;

​

•

the estimate of TeamHealth’s Adjusted EBITDA for 2016 on a pro forma basis giving effect to TeamHealth’s acquisition of IPC and FEP as reflected in the Management Projections, referred to below as “PF 2016E Adjusted EBITDA”;

​

The Adjusted EBITDA used by Goldman Sachs for purposes of its analyses includes adjustments to reflect historical and projected transaction-related and integration costs and expenses including fees paid to TeamHealth’s advisors related to the negotiation of the cooperation agreement with JANA, costs related to equity-based compensation, insurance subsidiary income and other non-operating and non-recurring items as directed by TeamHealth’s management.

The results of these calculations were as follows:

Illustrative Present Value of Future Stock Price Analyses

Goldman Sachs performed an illustrative analysis of the implied present value of the future value per share of TeamHealth common stock as of June 30, 2016.

Using the Management Projections, Goldman Sachs first derived a range of theoretical per share future values for the shares of TeamHealth common stock as of December 31 of each of 2016 through 2020, by: (i) applying illustrative one year forward enterprise value / Adjusted EBITDA multiples ranging from 9.0x to 11.5x, to estimates of TeamHealth’s Adjusted EBITDA for the following full year, as reflected in the Management Projections, to derive a range of implied enterprise values for TeamHealth as of December 31 of the applicable year; (ii) subtracting estimated Net Debt of TeamHealth as of December 31 of such year as reflected in the Management Projections from the resulting range of implied enterprise values as of December 31 of such year, to yield a range of implied equity values for TeamHealth as of December 31 of such year; and (iii) dividing the resulting range of implied equity values by the total number of fully diluted shares of TeamHealth common stock, as projected by TeamHealth management, to be outstanding as of December 31 of such year.

57

Using an illustrative discount rate of 10.2%, reflecting an estimate of TeamHealth’s cost of equity, Goldman Sachs discounted to present value as of June 30, 2016 the range of theoretical future values per share it derived as of December 31 of each of 2016 through 2020 to yield illustrative present values per share of TeamHealth common stock ranging from $33.55 to $71.10.

Premiums Paid Analysis

Goldman Sachs analyzed the premiums paid in 100% cash acquisitions of publicly traded companies in the United States from January 2011 to October 2016 with enterprise value ranging from $4 to $8 billion. For each year, using publicly available information, Goldman Sachs calculated the median premiums of the price paid in the transactions to the last undisturbed closing stock price of the target company prior to the announcement of the transaction. This analysis indicated median premiums paid of: 41.6% for 2011; 43.0% for 2012; 31.1% for 2013; 24.8% for 2014; 28.9% for 2015; and 21.6% for 2016. This data was presented to the TeamHealth Board in summary fashion, without providing details as to the transactions utilized for purposes of this analysis or the ranges of premia paid in each corresponding year. Based on this analysis, Goldman Sachs applied a range of illustrative premiums of 20.0% to 45.0% to the closing price per share of TeamHealth common stock on October 3, 2016, the day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction. This analysis resulted in a range of implied values from $39.35 to $47.55 per share of TeamHealth common stock.

Selected Precedent Transactions Analysis

Goldman Sachs analyzed certain publicly available information relating to the selected acquisition transactions listed below announced since October 2005 involving target companies in the outsourced physician services industry.

With respect to each of the selected transactions, Goldman Sachs calculated the implied enterprise value of the applicable target company using the announced consideration paid in the applicable transaction, as a multiple of the target company’s EBITDA for the four quarter period ended prior to announcement of the respective transaction, which we refer to as “LTM EBITDA,” based on information in public filings. The results of these calculations are set forth below.

Although none of the selected transactions are directly comparable to the proposed transaction, the target companies in the selected transactions were companies with operations that, for the purposes of analysis, may be considered similar to certain of TeamHealth’s financial results, and as such, for purposes of the analysis, the selected transactions may be considered similar to the proposed transaction.

Using the results of the foregoing calculations and Goldman Sachs’s analyses of the various transactions and its professional judgment, Goldman Sachs applied a reference range of LTM EBITDA multiples of 8.4x to 12.6x to TeamHealth’s PF LTM 6/30 Adjusted EBITDA to derive a range of implied enterprise values for TeamHealth. Goldman Sachs subtracted from the range of implied enterprise values the amount of TeamHealth’s Net Debt as of June 30, 2016 (adjusted to take into account the debt incurred by TeamHealth for its acquisition of FEP and certain one-time expenses as provided by TeamHealth

58

management) and divided the result by the total number of fully diluted shares of TeamHealth common stock outstanding calculated using the shares and other equity securities outstanding as of October 21, 2016 as provided by TeamHealth management, to derive a reference range of implied per share values for TeamHealth of  $16.85 to $42.95.

Illustrative Discounted Cash Flow Analyses

Using the Management Projections, Goldman Sachs performed an illustrative discounted cash flow analysis for TeamHealth.

Using mid-year convention and discount rates ranging from 7.5% to 8.5%, reflecting estimates of the weighted average cost of capital of TeamHealth, Goldman Sachs discounted to present value as of June 30, 2016, (a) estimates of unlevered free cash to be generated by TeamHealth for the period from June 30, 2016 to December 31, 2021, as reflected in the Management Projections, and (b) a range of illustrative terminal values for TeamHealth, which were calculated by applying perpetuity growth rates ranging from 2.0% to 3.0% to a terminal year estimate of the unlevered free cash flow to be generated by TeamHealth as reflected in the Management Projections. Goldman Sachs then derived a range of illustrative enterprise values for TeamHealth by adding the ranges of present values it derived as described above.

Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for TeamHealth the Net Debt of TeamHealth as of June 30, 2016 (adjusted to take into account the debt incurred by TeamHealth for its acquisition of FEP) to derive an illustrative range of equity values for TeamHealth. Goldman Sachs then divided the range of illustrative equity values it derived for TeamHealth by the total number of fully diluted shares of TeamHealth common stock outstanding calculated based on the shares and other equity securities outstanding as of October 21, 2016 as provided by TeamHealth management, to derive a range of illustrative present values per share of TeamHealth common stock ranging from $43.20 to $74.65.

Selected Publicly Traded Companies Analysis

Using publicly available information, Goldman Sachs compared certain ratios and financial and operating information for TeamHealth with corresponding information for a selected group of publicly traded companies in the outsourced physician services industry. Goldman Sachs selected these companies because they are companies with operations that for purposes of analysis may be considered similar to certain operations of TeamHealth. The selected companies were:

•

Amsurg Corp.

​

•

MEDNAX, Inc.

​

•

Envision Healthcare Holdings, Inc.

​

Goldman Sachs calculated an implied equity value for TeamHealth based on the closing price per share of TeamHealth common stock on October 3, 2016, the day before The Wall Street Journal published an article stating that TeamHealth was exploring a potential sale transaction, and each of the selected companies based on their respective closing share prices as of October 28, 2016 and the number of fully diluted shares of each of TeamHealth and the selected companies, calculated based on its most recent publicly available SEC filings. Goldman Sachs calculated an implied enterprise value for TeamHealth and each selected company by adding to the implied equity value it calculated for TeamHealth and each selected company the amount of TeamHealth’s and each selected company’s Net Debt as reflected in its most recent publicly available balance sheet.

Using estimates of EBITDA for the twelve month period ended October 3, 2017 for TeamHealth and October 28, 2017 for each of the selected companies, referred to below as “NTM EBITDA,” derived from IBES median estimates or Wall Street research analyst consensus estimates, and the implied enterprise values it calculated for TeamHealth and each selected company as described above, Goldman Sachs calculated implied enterprise value as a multiple of NTM EBITDA. The results of these calculations are set forth below.

59

(1)

Enterprise value and NTM EBITDA exclude minority interest.

​

None of the selected comparable companies is identical to TeamHealth. Accordingly, a complete analysis of the results of the foregoing calculations cannot be limited to a quantitative review of the results and involves complex considerations and judgments concerning differences in financial and operating characteristics of the selected comparable companies and other factors that could affect the public trading dynamics of the selected comparable companies, as well as those of TeamHealth.

General

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’s opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to TeamHealth or the proposed transaction.

Goldman Sachs prepared these analyses for purposes of providing its opinion to the TeamHealth Board as to the fairness from a financial point of view to the holders (other than Parent and its affiliates) of TeamHealth common stock, as of the date of the opinion, of the merger consideration of  $43.50 in cash per share of TeamHealth common stock to be paid to such holders pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of TeamHealth, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The merger consideration was determined through arm’s-length negotiations between TeamHealth and Blackstone (and its affiliates) and was approved by the TeamHealth Board. Goldman Sachs provided advice to TeamHealth during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to TeamHealth or that any specific amount of consideration constituted the only appropriate consideration for the proposed merger.

As described above, Goldman Sachs’s opinion was one of many factors taken into consideration by the TeamHealth Board in considering the proposed transaction. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the delivery of its fairness opinion to the TeamHealth Board and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B to this proxy statement.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments

60

of TeamHealth, Parent and any of their respective affiliates and third parties, including Blackstone and its affiliates and portfolio companies, or any currency or commodity that may be involved in the proposed transaction. Goldman Sachs has acted as financial advisor to TeamHealth in connection with, and has participated in certain of the negotiations leading to, the proposed transaction. Goldman Sachs expects to receive fees for its services in connection with the proposed transaction, the principal portion of which is contingent upon consummation of the proposed transaction, and TeamHealth has agreed to reimburse certain of Goldman Sachs’s expenses arising, and indemnify Goldman Sachs against certain liabilities that may arise, out of Goldman Sachs’s engagement. Goldman Sachs has provided certain financial advisory and/or underwriting services to TeamHealth and/or its affiliates from time to time for which its Investment Banking Division has received, and may receive, compensation, including having acted as a joint bookrunner with respect to private placement of TeamHealth’s 7.25% Senior Notes due 2023 (aggregate principal amount $545,000,000) in November 2015; as a joint lead arranger and joint bookrunner with respect to the “Tranche B” term loans under TeamHealth’s credit facility (aggregate principal amount $1,315,000,000) in November 2015; and as TeamHealth’s financial advisor in connection with the acquisition of shares of TeamHealth common stock by JANA in February 2016. During the two-year period ended October 30, 2016, Goldman Sachs has received compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to TeamHealth and/or its affiliates of approximately $5.3 million. Goldman Sachs also has provided certain financial advisory and/or underwriting services to Blackstone and/or its affiliates and portfolio companies from time to time for which its Investment Banking Division has received, and may receive, compensation, including having acted as joint bookrunner with respect to an offering of 5.625% Senior Secured Notes due 2025 (aggregate principal amount $2,000,000,000) of Sabine Pass Liquefaction, LLC, a wholly owned subsidiary of Cheniere Energy Partners LP, a portfolio company of Blackstone, in February 2015; as advisor with respect to the sale of AmREIT, Inc., a former portfolio company of Blackstone, in February 2015; as advisor with respect to the sale of the northern California portfolio of Equity Office Properties Trust, a portfolio company of Blackstone, in April 2015; as joint bookrunner with respect to (i) a public offering of 22,222,222 shares of Class A common stock of Summit Materials LLC (“Summit”), a portfolio company of Blackstone, in March 2015, and (ii) a public offering of 19,500,000 shares of Class A common stock of Summit, in August 2015; as co-financial advisor with respect to the sale of SunGard Data Systems, Inc., a former portfolio company of Blackstone, in November 2015; and as a joint lead arranger with respect to Blackstone’s investment in JDA Software Group, Inc., in September 2016. During the two-year period ended October 30, 2016, Goldman Sachs has received compensation for financial advisory and/or underwriting services provided by its Investment Banking Division directly to Blackstone and/or to its affiliates and portfolio companies (which may include companies that are not controlled by Blackstone) of approximately $165 million. The information disclosed in this paragraph is based upon information provided by Goldman Sachs. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to TeamHealth and its affiliates and Blackstone and its affiliates and portfolio companies for which its Investment Banking Division may receive compensation. Affiliates of Goldman Sachs also may have co-invested with Blackstone and its affiliates from time to time and may have invested in limited partnership units of affiliates of Blackstone from time to time and may do so in the future. As publicly reported on Goldman Sachs’s Form 13-F filing with the SEC, as of September 30, 2016, Goldman Sachs and its affiliates held an aggregate of approximately 5.74 million common units of Blackstone, representing less than 1% of the number of Blackstone units outstanding, which interests were not held in Goldman Sachs’ Investment Banking Division, funds in which Goldman Sachs’ Investment Banking Division has a direct investment, or funds managed by Goldman Sachs’ Merchant Banking Division (which Division operates on the private side of the firm’s informational wall), and may have increased or decreased over time.

TeamHealth selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the proposed transaction. Pursuant to an engagement letter between TeamHealth and Goldman Sachs, TeamHealth has agreed to pay Goldman Sachs for its services in connection with the proposed merger an aggregate fee currently estimated to be approximately $18.4 million, $15.4 million of which is contingent upon consummation of the proposed transaction. The foregoing fee will be reduced by $1.5 million, which amount is a portion of the fee previously paid by TeamHealth to Goldman Sachs for its services in connection with the acquisition of shares of TeamHealth common stock by JANA. In addition, TeamHealth agreed to reimburse Goldman

61

Sachs for certain of its expenses, including reasonable attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Certain Financial Projections

TeamHealth does not, as a matter of course, publicly disclose projections as to its future financial performance. However, we provided Goldman Sachs with certain non-public financial forecasts prepared by TeamHealth’s management, which Goldman Sachs relied on in performing its financial analyses summarized under “Opinion of TeamHealth’s Financial Advisor”. TeamHealth initially prepared financial projections, which we refer to as the “July Projections,” largely based on a strategic plan previously prepared for the TeamHealth Board. In August 2016, the July Projections were updated, which updated projections we refer to as the “August Projections,” based on updated operating information and on TeamHealth management’s refined perspectives on TeamHealth’s future margin expansion. The financial projections were again updated in October 2016 to reflect actual operating results for the third quarter of 2016, further refinements in TeamHealth management’s views as to the company’s performance, including with respect to the treatment of operating assets and liabilities and the methodology regarding the treatment of certain contingent payments, as well as updated information regarding certain one-time expenses. We refer to this final set of financial projections as the “Management Projections”. The August Projections were provided to Party B and Blackstone in the course of their due diligence. The Management Projections, which were prepared subsequent to Party B ceasing its due diligence, were also provided to Blackstone in the course of its due diligence, as well as to Party B and each other party that signed a confidentiality agreement during the go-shop process. The July Projections, August Projections and Management Projections were provided to Goldman Sachs, and the Management Projections were approved by TeamHealth for Goldman Sachs’s use for purposes of its financial analyses summarized under “Opinion of TeamHealth’s Financial Advisor”. Neither the July Projections nor the August Projections were approved by TeamHealth for Goldman Sachs’s use for purposes of its financial analyses summarized under “Opinion of TeamHealth’s Financial Advisor”. While the July Projections were provided to Party B prior to being updated with the August Projections, the July Projections were not utilized by Blackstone in the course of its due diligence. A summary of the August Projections and the Management Projections (which we refer to collectively as the “Financial Projections”) is set forth below.

Financial Projections

(1)

“Adjusted EBITDA” is defined as net earnings before interest expense (net), provision for income taxes, depreciation, amortization, transaction-related costs including contingent purchase expenses, costs related to equity-based compensation, insurance subsidiary income, and other non-operating and non-recurring items.

​

(2)

“Unlevered Free Cash Flow” is defined as net earnings before interest expense (net), depreciation and amortization, other investing cash flow, and transaction costs; less the difference in taxes for elimination of interest expense, maintenance capital expenditures and acquisition spend; plus (less) changes in net working capital.

​

(3)

Unlevered Free Cash Flow projection is for second half of 2016 only.

​

62

Set forth below are reconciliations of each of Adjusted EBITDA and Unlevered Free Cash Flow to net income for each of the periods indicated above in the August Projections:

(1)

Second half of 2016 only.

​

(1)

“Adjusted EBITDA” is defined as net earnings before interest expense (net), provision for income taxes, depreciation, amortization, transaction-related costs including contingent purchase expenses, costs related to equity-based compensation, insurance subsidiary income, and other non-operating and non-recurring items.

​

(2)

“Unlevered Free Cash Flow” is defined as net earnings before interest expense (net), depreciation and amortization, other investing cash flow, and transaction costs; less the difference in taxes for elimination of interest expense, maintenance capital expenditures and acquisition spend; plus (less) changes in operating assets/liabilities including the impact of contingent payments.

​

(3)

Unlevered Free Cash Flow projection is for second half of 2016 only.

​

63

Set forth below are reconciliations of each of Adjusted EBITDA and Unlevered Free Cash Flow to net income for each of the periods indicated above in the Management Projections:

(1)

Second half of 2016 only.

​

The July Projections projected $4,658, $5,164, $5,686, $6,257, $6,875 and $7,554 in revenue (in millions) for the years 2016, 2017, 2018, 2019, 2020 and 2021, respectively, and $512, $618, $709, $782, $863 and $951 in Adjusted EBITDA (in millions) for the years 2016, 2017, 2018, 2019, 2020 and 2021, respectively. “Adjusted EBITDA” is defined as net earnings before interest expense (net), provision for income taxes, depreciation, amortization, transaction-related costs including contingent purchase expenses, costs related to equity-based compensation, insurance subsidiary income, and other non-operating and non-recurring items. Unlevered free cash flow is generally utilized for purposes of performing a DCF analysis. Goldman Sachs did not use or rely upon the July Projections for purposes of performing its financial analysis, including its DCF analysis, prepared in connection with rendering its fairness opinion, and therefore the July Projections did not include, and were not used to derive, unlevered free cash flow.

64

Set forth below is a reconciliation of Adjusted EBITDA to net income for each of the periods indicated above in the July Projections:

The Financial Projections were not prepared with a view to public disclosure and are included in this proxy statement only because portions of such information were made available to Parent and certain of its affiliates and representatives in connection with their due diligence review of TeamHealth, and the information with respect to the Financial Projections was made available to Goldman Sachs for use in connection with its financial analysis summarized under “The Merger Proposal (Proposal 1) — Opinion of TeamHealth’s Financial Advisor.” The Financial Projections were not prepared with a view to compliance with generally accepted accounting principles as applied in the United States, which we refer to as “GAAP,” the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, Ernst & Young LLP, our independent auditor, has not examined, reviewed, compiled or otherwise applied procedures to the Financial Projections and, accordingly, assumes no responsibility for, and expresses no opinion on, them. The Financial Projections included in this proxy statement have been prepared by, and are the responsibility of, our management. The Financial Projections were prepared solely for internal use of TeamHealth and are subjective in many respects.

Although this summary of the Financial Projections is presented with numerical specificity, the projections reflect numerous variables, assumptions and estimates as to future events made by our management that our management believed were reasonable at the time the Financial Projections were prepared, taking into account the relevant information available to management at the time. However, such variables, assumptions and estimates are inherently uncertain and many of which are beyond the control of our management. Because the Financial Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year. This information is not fact and should not be relied upon as being necessarily indicative of actual future results. Important factors that may affect actual results and cause the Financial Projections not to be achieved include general economic conditions or political uncertainty in some regions adversely affecting our business, results or financial condition, current expansion efforts adversely impacting our business or results, any developments related to antitrust investigations adversely affecting our financial condition, results, cash flows or reputation, our reliance on reimbursement by third-party payors, as well as payments by individuals, pricing pressures from our clients adversely affecting our profitability, technological changes and competition adversely affecting our sales, profitability or financial condition, any disruption in our information technology systems adversely impacting our business and operations, our ability to find suitable acquisition candidates or successfully integrate completed acquisitions and realize their expected benefits, including with respect to our completed acquisition of IPC Healthcare, Inc., changes in existing laws or regulations, adverse judicial or administrative interpretations of these laws and regulations or enactment or repeal of legislation our contingent liabilities and tax matters causing us to incur losses or costs, any inability to protect our intellectual property rights adversely affecting our business or our competitive position, inflationary pressures adversely affecting our profitability or supply base, costs or adverse effects on our business,

65

reputation or results from governmental regulations, work stoppages or other labor issues at our facilities or those of our clients or vendors adversely affecting our business, results or financial condition, any increase in the expense of our pension and other postretirement benefits or the funding requirements of our pension plans reducing our profitability, unsuccessful execution of cost saving strategies, inaccuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, and changes in tax laws. In addition, the Financial Projections do not take into account any circumstances or events occurring after the date that they were prepared and do not give effect to the merger. As a result, there can be no assurance that the Financial Projections will be realized, and actual results may be materially better or worse than those contained in the Financial Projections. The inclusion of this information should not be regarded as an indication that the TeamHealth Board, TeamHealth, Goldman Sachs, Parent, Parent’s representatives and affiliates (including Blackstone and the Sponsor) or any other recipient of this information considered, or now considers, the Financial Projections to be predictive of actual future results. The summary of the Financial Projections is not included in this proxy statement in order to induce any stockholder to vote in favor of the merger proposal or any of the other proposals to be voted on at the special meeting.

The Financial Projections are forward-looking statements. For information on factors that may cause TeamHealth’s future results to materially vary, see the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Financial Projections to reflect circumstances existing after the date when TeamHealth prepared the Financial Projections or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the Financial Projections are shown to be in error. By including in this document a summary of certain financial projections, neither TeamHealth nor any of its representatives or advisors (including Goldman Sachs) nor Parent, Parent’s representatives and affiliates (including Blackstone and Sponsor) makes any representation to any person regarding the ultimate performance of TeamHealth or the surviving corporation compared to the information contained in such financial forecasts and should not be read to do so.

Certain of the measures included in the Financial Projections may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by TeamHealth may not be comparable to similarly titled amounts used by other companies.

Interests of TeamHealth’s Executive Officers and Directors in the Merger

In considering the recommendation of the TeamHealth Board that you vote to approve the merger proposal, you should be aware that, aside from their interests as TeamHealth stockholders, TeamHealth’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of TeamHealth stockholders generally, which may create potential conflicts of interest. These interests are described in more detail below, and with respect to the named executive officers of TeamHealth, are quantified in the “Golden Parachute Compensation” table below. The TeamHealth Board was aware of these interests and considered them when it adopted the merger agreement and approved the merger.

With regard to our directors serving on the TeamHealth Board, these interests relate to the impact of the transaction on the directors’ outstanding equity awards and the provision of indemnification, the advancement of expenses, exculpation and insurance arrangements pursuant to the merger agreement and TeamHealth’s certificate of incorporation and bylaws, which reflect that such directors may be subject to claims arising from their service on the TeamHealth Board, subject in all respects to the limitations set forth in the merger agreement. In addition, Parent has agreed in the merger agreement to perform the indemnification agreements between TeamHealth and the directors serving on the TeamHealth Board, subject in all respects to the limitations set forth in the merger agreement. We estimate that the aggregate amount that would become payable to our directors serving on the TeamHealth Board (other than each of Leif Murphy and H. Lynn Massingale, M.D., whose respective interests are as an executive officer and further described below) in settlement of their unvested equity awards if the effective time was December 8, 2016, based on a price per share of TeamHealth common stock of  $43.50, is approximately $2 million.

66

TeamHealth’s current executive officers are: H. Lynn Massingale, M.D., Executive Chairman and Director; Leif M. Murphy, President and Chief Executive Officer and Director; David P. Jones, Executive Vice President and Chief Financial Officer; Steven E. Clifton, Executive Vice President, General Counsel and Corporate Secretary; Oliver V. Rogers, Executive Vice President and Chief Operating Officer; and Miles Snowden, M.D., Chief Medical Officer. Michael D. Snow, formerly our President and Chief Executive Officer, and a member of the TeamHealth Board, resigned from all such positions effective as of September 2, 2016, and is currently receiving certain severance payments and benefits pursuant to a separation agreement. Mr. Snow will not be entitled to receive any incremental payments or benefits in connection with the consummation of the merger, either alone or in connection with any other event. Heidi S. Allen, formerly our Senior Vice President and General Counsel, transitioned out of such role with the company upon Mr. Clifton’s commencement of employment with TeamHealth on September 14, 2015, and is currently receiving certain severance payments and benefits pursuant to her employment agreement and transition services agreement. Ms. Allen will not be entitled to receive any incremental payments or benefits in connection with the consummation of the merger, either alone or in connection with any other event.

With regard to our executive officers, these interests relate to the possible receipt of the following types of payments and benefits that may be triggered by or otherwise relate to the merger, assuming the merger occurred on December 8, 2016 and, where applicable, the executive officer experiences a qualifying termination immediately thereafter, and coverage under indemnification, advancement of expenses and insurance arrangements, in each case as further described below:

•

accelerated vesting of executive officer equity awards, in the aggregate amount of approximately $31.9 million for all executive officers;

​

•

possible cash severance payments and other termination benefits pursuant to employment agreements with each of our executive officers, in an aggregate amount of approximately $14.8 million for all executive officers;

​

•

certain retention payments that may be payable to certain executive officers pursuant to either the “project completion bonus” program or the cash-based retention program, established in connection with the merger; and

​

•

the provision of indemnification, advancement of expenses and insurance arrangements pursuant to the merger agreement and TeamHealth’s certificate of incorporation and bylaws, and performance under indemnification agreements between TeamHealth and its executive officers.

​

Treatment of Director and Executive Officer Common Stock

As is the case for any stockholder of TeamHealth, TeamHealth’s directors and executive officers will receive $43.50 in cash, without interest, and less any applicable withholding taxes, for each share of TeamHealth common stock that they own at the effective time. For information regarding beneficial ownership of TeamHealth common stock by each of TeamHealth’s current directors, TeamHealth’s named executive officers and all directors and executive officers as a group, see the section entitled “Security Ownership of Certain Beneficial Owners and Management” beginning on page 116.

Treatment of Director and Executive Officer Equity Awards

As described under “The Merger Agreement — Treatment TeamHealth Equity Awards” beginning on page 88, the merger agreement provides that each option to purchase shares of TeamHealth common stock, each PSU, each MSU, and each Stock Unit will be treated as set forth below.

Treatment of Stock Options

Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding option to purchase shares of TeamHealth common stock (other than any options subject to performance-vesting conditions which are not achieved at or prior to the effective time, which will automatically be forfeited for no consideration as of the effective time) will become immediately vested and be cancelled and the holder will be entitled to receive an amount in cash, without interest and less any

67

applicable withholding taxes, equal to the product of  (i) the number of shares subject to the option, multiplied by (ii) the excess, if any, of  $43.50 over the exercise price of the option, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Treatment of Stock Units

Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, any vesting conditions applicable to each outstanding Stock Unit will automatically accelerate in full, and each Stock Unit will be cancelled and the holder thereof will be entitled to receive, at or promptly following the effective time, an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the total number of shares subject to the Stock Unit immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time. With respect to any Stock Units that are restricted stock units and are subject to an election providing for the deferred delivery of underlying shares on a date following the vesting date of such Stock Units, the amount that would be otherwise payable in respect of such Stock Units pursuant to the merger agreement will instead be credited to notional, book-entry accounts and paid to the respective holders at the time specified pursuant to the applicable deferral election.

Treatment of PSUs

Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding PSU will automatically become immediately vested at target level performance, and each PSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the target number of shares subject to the PSU immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Treatment of MSUs

Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding MSU (all of which are held by our Chief Executive Officer) will automatically become immediately vested with respect to the number of earned MSUs, determined in accordance with the terms of the award agreement governing the MSUs by and between TeamHealth and our Chief Executive Officer, and each MSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the number of earned MSUs multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Payments for Unvested Equity Awards

The following table sets forth the amounts that each director, named executive officer and all other executive officers as a group of TeamHealth would receive with respect to unvested stock options, Stock Units, MSUs, and PSUs, assuming the completion of the merger occurred on December 8, 2016. The number of outstanding vested options beneficially owned as of December 8, 2016 by each individual listed in the table below is included in the “Security Ownership of Certain Beneficial Owners and Management” table beginning on page 116. The numbers set forth below do not attempt to forecast any grants, additional issuances, dividends, additional deferrals or forfeitures of equity-based awards following the date of this proxy statement. Depending on when the effective date occurs, certain equity-based awards shown in the table below may vest in accordance with their terms.

68

Estimated Payments for Unvested Equity Awards Table

(1)

This amount includes the estimated value that each executive officer or director would receive in respect of unvested stock options based on the merger consideration and the assumed closing of the merger on December 8, 2016 on a “single-trigger” basis, pursuant to the terms of the merger agreement solely as a result of the closing of the merger.

​

(2)

This amount includes the estimated value that each executive officer or director would receive in respect of Stock Units based on the merger consideration and the assumed closing of the merger on December 8, 2016 on a “single-trigger” basis solely as a result of the closing of the merger. With respect to Dr. Massingale, this amount does not include the value of an additional grant of RSUs in an amount not to exceed 15,794 RSUs, which may be granted to Dr. Massingale prior to or following the effective time.

​

(3)

This amount includes the estimated value that our CEO would receive in respect of his unvested MSUs based on the merger consideration and the assumed closing of the merger on December 8, 2016 on a “single-trigger” basis solely as a result of the closing of the merger.

​

(4)

This amount includes the estimated value of unvested PSUs at deemed “target” level performance based on the merger consideration and the assumed closing of the merger on December 8, 2016 on a “single-trigger” basis, pursuant to the terms of the merger agreement solely as a result of the closing of the merger.

​

(5)

This group includes Mr. Clifton and Ms. Allen. Ms. Allen does not hold any outstanding TeamHealth equity awards.

​

69

Employment Agreements

Each TeamHealth executive officer, including each named executive officer is party to an employment agreement with TeamHealth (or a subsidiary thereof), pursuant to which the executive officer is entitled to certain payments and benefits upon a termination without “cause” or a resignation for “good reason” (each, as defined in the respective employment agreement), or a termination for any reason other than for “cause” in the case of Dr. Massingale, (i) at any time (with respect to Dr. Snowden and Mr. Clifton), (ii) within one year (with respect to Dr. Massingale and Messrs. Jones and Rogers), or (iii) within two years (with respect to Mr. Murphy) following the completion of the merger. Mr. Snow, formerly our President and Chief Executive Officer, and a member of the TeamHealth Board, resigned all such positions effective as of September 2, 2016, and is currently receiving certain severance payments and benefits pursuant to a separation agreement. Mr. Snow will not be entitled to receive any incremental additional payments or benefits in connection with the consummation of the merger, either alone or in connection with any other event, and as such, is not included in the following.

The term “good reason” is generally defined in all of our employment agreements with our executive officers to mean (i) a substantial adverse change to the executive’s primary responsibilities (which, in the case of Mr. Murphy, would also include an adverse change in the nature or status of reporting relationship, duties, or authority, or Mr. Murphy’s removal as the chief executive officer of TeamHealth or TeamHealth’s ultimate parent following a change in control, in the case of Mr. Jones, would also include an adverse change in the executive’s authority, and in the case of Dr. Massingale, would also include his removal as director or chairman or his requirement to report to any person other than directly to the TeamHealth Board), (ii) reduction of the executive’s base salary or, in the case of all executive officers other than Messrs. Murphy and Clifton, our failure to make bonus payments in accordance with the terms of the executive’s employment agreement (or, in the case of Mr. Murphy, any reduction in bonus opportunity), (iii) in the case of all executive officers other than Messrs. Murphy and Clifton, relocation of the executive to a place of business more than 50 miles away from the executive’s current place of business (or in the case of Mr. Murphy, the relocation of corporate headquarters outside the state of Tennessee) or (iv) any other material breach by us of the executive’s employment agreement.

The term “cause” is generally defined in all of our employment agreements with our executive officers to mean (i) the executive’s conviction of or the entering into a guilty plea or plea of no contest with respect to a felony, or any other crime involving fraud, dishonesty, or moral turpitude and which is materially detrimental to us or materially affects the executive’s ability to perform his duties, (ii) the executive’s intentional neglect of or material inattention to the executive’s duties and which neglect remains uncorrected for more than ten days following notice from us, (iii) the commission of an intentional and material act to defraud us or embezzlement or dishonesty against us, (iv) the executive willfully impedes or endeavors to influence, obstruct or impede or fails to materially cooperate with an investigation authorized by us, a self-regulatory organization or a governmental department or agency, or (v) (in the case of Mr. Clifton only) the executive’s material breach of his employment agreement.

Dr. Massingale’s Employment Agreement.   We entered into an amended and restated employment agreement with Dr. Massingale as of November 25, 2009 and subsequently amended as of August 1, 2011, January 1, 2012, May 20, 2014 and December 18, 2014, pursuant to which Dr. Massingale serves as our Executive Chairman. The term of Dr. Massingale’s employment agreement ends on December 31, 2017.

In the event that Dr. Massingale terminates employment for any reason other than for “cause” within one year following a “Sale of the Company” (as defined in his employment agreement, which the completion of the merger will constitute), subject to his continued compliance with certain restrictive covenants (as described below), Dr. Massingale will be entitled to receive severance in an amount equal to: (i) a pro rata portion of his annual bonus for the current bonus period calculated through the date of termination paid at the time bonuses are normally paid with respect to the year of termination, (ii) two times his base salary plus an amount equal to two times his annual bonus for the most recently completed bonus period paid in 12 equal monthly installments beginning on the date of termination, and (iii) the aggregate premiums that would be necessary to continue group medical benefits provided to Dr. Massingale and his applicable family members until he reaches the age of 65 payable in monthly installments, beginning on the date of termination.

70

These payments, however, will be reduced by the amount of any life or disability proceeds that are paid to Dr. Massingale (or his estate) from any life insurance or disability insurance policy that we maintain for his benefit.

Furthermore, Dr. Massingale’s employment agreement provides that we will indemnify him against any excise taxes that may be imposed under Section 4999 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”) on any payments or benefits to be received by him from us so that he will be in the same position as if no such taxes had been imposed.

Dr. Massingale’s outstanding TeamHealth equity awards will vest pursuant to the terms of the merger agreement, as described herein.

Pursuant to the restrictive covenants contained in his employment agreement, Dr. Massingale has agreed not to disclose our confidential information at any time, and, for the period during which he provides services to us and for the two-year period thereafter, he has also agreed not to solicit our employees or contractors, compete with us or interfere with our business.

Mr. Murphy’s Employment Agreement.   We entered into an employment agreement with Mr. Murphy as of September 2, 2016, pursuant to which he serves as our President and Chief Executive Officer. Mr. Murphy’s employment agreement does not have a fixed term.

In the event that Mr. Murphy’s employment is terminated by us without “cause,” or Mr. Murphy resigns for “good reason,” (each, as defined in his employment agreement), in each case, within two years following a “Change in Control” (as defined in the TeamHealth Amended & Restated 2009 Stock Incentive Plan, which the completion of the merger will constitute), subject to his execution and non-revocation of a release of claims and his continued compliance with certain restrictive covenants (as described below), Mr. Murphy will be entitled to receive severance in an amount equal to (i) three times the sum of  (x) his annual base salary, plus (y) average annual bonus over the preceding two performance years (except that in the event that Mr. Murphy experiences such termination prior to his second fully completed performance period, his target bonus amount shall be utilized in lieu of average bonus amount for severance calculation purposes), payable in bi-weekly installments for a three-year period beginning on the date of termination, (ii) two years of COBRA premium payments for health benefits, payable in bi-weekly installments beginning on the date of termination, and (iii) a pro rata bonus based on actual performance for his year of termination, payable in a lump sum at the same time when such bonuses are paid to other senior executives.

Pursuant to the restrictive covenants contained in his employment agreement, Mr. Murphy has agreed not to disclose our confidential information at any time, and, for the duration of his employment and for the two-year period thereafter, he has also agreed not to solicit our employees or contractors or compete with us.

Mr. Murphy’s outstanding TeamHealth equity awards will vest (or be forfeited, with respect to a portion of the maximum potential number of shares subject to Mr. Murphy’s MSU award) pursuant to the terms of the merger agreement, as described herein. Mr. Murphy’s MSUs will vest above target (100%) level, but below maximum (200%) level, based on the achievement of the relevant performance thresholds measured based on the per share merger consideration of  $43.50.

Messrs. Jones’ and Rogers’ Employment Agreements.   We entered into amended and restated employment agreements with each of Messrs. Jones and Rogers, each of which are substantially in the same form and pursuant to the same terms, as of August 1, 2011, with Mr. Rogers’ employment agreement being further amended as of September 1, 2014, and pursuant to which Messrs. Jones and Rogers serve as our Executive Vice President and Chief Financial Officer, and Executive Vice President and Chief Operating Officer, respectively. Messrs. Jones’ and Rogers’ employment agreements had initial three-year terms, subject to automatic one-year renewal periods upon the expiration of the initial term or subsequent term unless earlier terminated pursuant to either such employment agreement.

In the event that either of Messrs. Jones’ or Rogers’ employment is terminated by us for any reason (other than death or disability) or due to either such individual’s resignation for “good reason” (as defined in each such employment agreement), in each case, within one year following a “Sale of the Company” (as defined in each such employment agreement, which the completion of the merger will constitute), subject to

71

the applicable executive’s execution and non-revocation of a release of claims and continued compliance with certain restrictive covenants (as described below), each of Messrs. Jones and Rogers will be entitled to receive severance in an amount equal to (i) two times the executive’s base salary plus two times the executive’s annual bonus (based on the average bonus that the executive received during the two most recently completed bonus periods) paid in bi-weekly installments for a two-year period beginning on the date of termination, and (ii) the aggregate premiums due that would be necessary to continue group medical benefits provided to the executive and the executive’s applicable family members for two years, paid in bi-weekly installments, beginning on the date of termination.

Pursuant to the restrictive covenants contained in the employment agreements with Messrs. Jones and Rogers, each such individual has agreed not to disclose our confidential information at any time, and, for the period during which each such individual provides services to us and for the two-year period thereafter, each such individual has also agreed not to solicit our employees or contractors, compete with us or interfere with our business.

Messrs. Jones’ and Rogers’ outstanding TeamHealth equity awards will vest pursuant to the terms of the merger agreement, as described herein.

Dr. Snowden’s Employment Agreement.   We entered into an employment agreement with Dr. Snowden as of August 5, 2014, pursuant to which he serves as of Chief Medical Officer. Dr. Snowden’s employment agreement has the same renewal provision as do Messrs. Jones’ and Rogers’ employment agreements.

In the event that Dr. Snowden’s employment is terminated by us for any reason (other than death or disability) or due to Dr. Snowden’s resignation for “good reason” (as defined in his employment agreement) at any time, subject to Dr. Snowden’s execution and non-revocation of a release of claims and continued compliance with certain restrictive covenants (as described below), Dr. Snowden will be entitled to receive severance in an amount equal to (i) one times Dr. Snowden’s base salary plus one times Dr. Snowden’s annual bonus (based on the average bonus that the executive received during the two most recently completed bonus periods) paid in bi-weekly installments for a one-year period beginning on the date of termination, and (ii) the aggregate premiums due that would be necessary to continue group medical benefits provided to Dr. Snowden and his applicable family members for one year, paid in bi-weekly installments, beginning on the date of termination.

Pursuant to the restrictive covenants contained in his employment agreement, Dr. Snowden has agreed not to disclose our confidential information at any time, and, for the period during which he provides services to us and for the two-year period thereafter he has also agreed not to solicit our employees or contractors, compete with us or interfere with our business.

Dr. Snowden’s outstanding TeamHealth equity awards will vest pursuant to the terms of the merger agreement, as described herein.

Mr. Clifton’s Employment Agreement.   We entered into an employment agreement with Mr. Clifton as of August 28, 2015, pursuant to which he serves as our Executive Vice President, General Counsel and Corporate Secretary. The initial term of Mr. Clifton’s employment agreement ends on September 14, 2018, after which he will be subject to the same renewal provision contained in Messrs. Jones’ and Rogers’ and Dr. Snowden’s employment agreements.

In the event that Mr. Clifton’s employment is terminated by us without “cause” or due to Mr. Clifton’s resignation for “good reason” (each, as defined in his employment agreement) at any time, subject to Mr. Clifton’s execution and non-revocation of a release of claims and continued compliance with certain restrictive covenants (as described below), Mr. Clifton will be entitled to receive severance in an amount equal to (i) two times Mr. Clifton’s base salary plus two times Mr. Clifton’s annual bonus (based on the average bonus that the executive received during the two most recently completed bonus periods) paid in bi-weekly installments for a two-year period beginning on the date of termination, and (ii) the aggregate premiums due that would be necessary to continue group medical benefits provided to Mr. Clifton and his applicable family members for two years, paid in bi-weekly installments, beginning on the date of termination.

Pursuant to the restrictive covenants contained in his employment agreement, Mr. Clifton has agreed not to disclose our confidential information at any time, and, for the period during which he provides

72

services to us and for the two-year period thereafter he has also agreed not to solicit our employees or contractors, compete with us or interfere with our business.

Mr. Clifton’s outstanding TeamHealth equity awards will vest pursuant to the terms of the merger agreement, as described herein.

Although it is not currently anticipated that any of TeamHealth’s executive officers will experience a termination of employment in connection with the completion of the merger, for an estimate of the amounts that would become payable to each of TeamHealth’s named executive officers under the Severance Plan if a severance-qualifying termination of employment were to occur immediately following consummation of the merger, see “— Potential Merger-Related Payments to Named Executive Officers” below.

Indemnification and Insurance

The merger agreement provides that from and after the effective time, Parent shall cause the surviving corporation to indemnify and hold harmless each present and former director and officer of TeamHealth or any of its subsidiaries (in each case, when acting in such capacity) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities or awards paid in settlement incurred in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative and whether formal or informal arising out of, relating to or in connection with matters existing or occurring at or prior to the effective time to the fullest extent that TeamHealth would have been permitted under Delaware law and its certificate of incorporation and bylaws in effect on the date of the merger agreement to indemnify such person (and Parent or the surviving corporation shall advance expenses (including reasonable legal fees and expenses) incurred in the defense of any such proceeding (subject to such person providing an undertaking to repay such advancement if it is ultimately determined that such person is not entitled to indemnification), subject to certain limitations).

The provisions in the surviving corporation’s certificate of incorporation and bylaws with respect to indemnification, advancement of expenses and exculpation of former or present directors and officers shall be no less favorable to such directors and officers than such provisions contained in TeamHealth’s certificate of incorporation and bylaws in effect as of the date of the merger agreement, which provisions shall not be amended, repealed or otherwise modified for a period of six years after the effective time in any manner that would adversely affect the rights thereunder of any such individuals except as required by applicable law. For a period of six years after the effective time, Parent will honor and perform under, and will cause the surviving corporation to honor and perform under certain indemnification agreements entered into by TeamHealth or any of its subsidiaries with and its or their directors and officers.

The merger agreement also provides that Parent will maintain, or will cause the surviving corporation to maintain, at no expense to the beneficiaries, for at least six years from the effective time the current policies of the directors’ and officers’ liability insurance and fiduciary liability insurance maintained by us (provided that Parent or the surviving corporation may substitute therefor policies of at least the same coverage containing terms and conditions which are not less advantageous to any beneficiary thereof) with respect to matters existing or occurring at or prior to the effective time and from insurance carriers having at least an “A” rating by A.M. Best with respect to directors’ and officers’ liability insurance; provided, however, that after the effective time, Parent and the surviving corporation shall not be required to pay an annual premium for such coverage under each such policy more than 250% of the last annual premium paid by TeamHealth prior to the date of the merger agreement in respect of the coverage required to be obtained pursuant to the merger agreement under each such policy, but in such case shall purchase as much coverage as reasonably practicable for such amount. Additionally, at Parent’s option and in satisfaction of the foregoing obligations, TeamHealth may purchase from insurance carriers with comparable credit ratings, no later than the effective time, a six-year prepaid “tail policy” providing at least the same coverage and amounts containing terms and conditions that are no less advantageous to the insured than the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by TeamHealth and its subsidiaries with respect to claims arising from facts or events that occurred at or before the effective time, including the transactions contemplated hereby, and from insurance carriers having at least an “A” rating by A.M. Best with respect to directors’ and officers’ liability insurance;

73

provided, however, that after the effective time, Parent and the surviving corporation shall not be required to pay in the aggregate for such coverage under each such policy more than 250% of the last annual premium paid by TeamHealth prior to the date of the merger agreement in respect of the coverage required to be obtained pursuant hereto under each such policy, but in such case shall purchase as much coverage as reasonably practicable for such amount. If TeamHealth elects to purchase such a “tail policy,” the surviving corporation shall (and Parent shall cause the surviving corporation to) maintain such “tail policy” in full force and effect and continue to honor their respective obligations thereunder.

The indemnification and insurance provisions of the merger agreement are intended to benefit, and are enforceable by, the indemnified persons and their respective heirs or representatives.

Continuation of Employee Compensation and Benefit Levels

Under the merger agreement, for a period of at least one year following the effective time, Parent has agreed to provide, or to cause the surviving corporation to provide, to each employee of TeamHealth or its subsidiaries, including our executive officers, who continued to be employed by the surviving corporation or any subsidiary immediately following the closing date (which we refer to as “continuing employees” herein) with (i) a salary, wage, non-equity target bonus opportunity and commissions opportunity that is no less favorable in the aggregate to the salary, wage, target non-equity bonus opportunity and commissions opportunity that was provided to such continuing employee immediately prior to the effective time and (ii) employee pension, welfare and other benefits (other than any defined benefit pension, retiree medical, or other post-termination medical and welfare benefits) that are substantially comparable in the aggregate to the employee pension, welfare and other benefits (other than any defined benefit pension, retiree medical, or other post-termination medical and welfare benefits) provided to such continuing employee, including our executive officers, immediately prior to the effective time. For a period of at least one year following the effective time, Parent or one of its affiliates will maintain for the benefit of each continuing employee, including our executive officers, a severance or termination arrangement no less favorable than the severance or termination arrangement provided to such continuing employee immediately prior to the effective time, including the severance payments and benefits provided for in each such executive officer’s respective employment agreement.

Project Completion Bonus and Retention Bonus Programs

Under the merger agreement and the related company disclosure letter, TeamHealth, in consultation with Parent, may establish a “project completion bonus” program in the aggregate amount not to exceed $1,500,000 in recognition of the efforts of certain key employees of TeamHealth (which may include certain reporting executive officers of TeamHealth) related to the signing of the merger agreement and consummation of the merger. Amounts under the “project completion bonus” program shall be allocated among such key employees of TeamHealth, and in the amounts and on the terms determined by our Chief Executive Officer (or his designee) in consultation with Parent.

Under the merger agreement and the related company disclosure letter, TeamHealth, in consultation with Parent, may also establish a cash-based retention program in the aggregate amount not to exceed $5,500,000 to promote retention and to incentivize efforts to consummate the closing of the merger. Amounts under the retention program shall be allocated among the employees of TeamHealth and its subsidiaries identified (which may include certain reporting executive officers of TeamHealth), and in the amounts and on the terms determined by, our Chief Executive Officer (or his designees). If a retention award or portion thereof under the retention program is forfeited by a participant, our Chief Executive Officer (or his designees) may reallocate the award (or unpaid portion thereof) to existing employees or new hires of TeamHealth and its subsidiaries.

As of the date of this proxy statement, the recipients, individual award amounts and terms of the project completion bonus and retention bonus awards have not yet been determined.

Other Interests

As of the date of this proxy statement, other than the arrangements discussed in this proxy statement, none of our executive officers has entered into any agreement with Parent regarding employment with, or compensation from, or equity participation or reinvestment in, the surviving corporation or Parent on a

74

going-forward basis following the completion of the merger. However, Parent (or its representatives) and some or all of our executive officers may from time to time have discussions with respect to, or enter into, such arrangements, including, but not limited to, arrangements related to the “project completion bonus” program or the cash-based retention program.

Potential Merger-Related Payments to Named Executive Officers

The following table sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for TeamHealth’s named executive officers based on the merger, assuming that the merger was completed on December 8, 2016; and the named executive officers are terminated without cause immediately following the completion of the merger. The actual amounts payable would depend on the date of termination, the manner of the termination and the terms of the agreements in effect at such time. Note that Mr. Snow, formerly our President and Chief Executive Officer, and a member of the TeamHealth Board, resigned all such positions effective as of September 2, 2016, and is currently receiving certain severance payments and benefits pursuant to a separation agreement. Mr. Snow will not be entitled to receive any incremental additional payments or benefits in connection with the consummation of the merger, either alone or in connection with any other event, and as such, is not included in the following table. More detail on the included payments and benefits are set forth above in the section entitled “— Interests of TeamHealth’s Executive Officers and Directors in the Merger.”

Golden Parachute Compensation

(1)

This amount includes the estimated total cash severance payments (comprised of the relevant multiples of salary and bonus, as described under the respective employment agreements) which would be payable under the respective named executive officer’s employment agreement assuming a termination date of, and the completion of the merger occurring on, December 8, 2016, but does not include (i) any pro-rata bonus, as described under the respective employment agreements, as receipt of such amounts is dependent upon actual performance for the year of termination, or (ii) any amounts payable (to the extent awarded and earned) pursuant to either of the “project completion bonus” program or the cash-based retention program, as described herein.

​

All components of the cash severance amount are “double-trigger” (i.e., they are contingent upon a qualifying termination of employment during the one year (or two year, with respect to Mr. Murphy) period following the completion of the merger), except in the case of Dr. Massingale whose “single-trigger” severance benefit would be payable even in the event of a voluntary resignation by Dr. Massingale within one year following the merger. As a condition of receiving the severance benefits under their respective employment agreement, each named executive officer must execute (and not revoke) a general release of claims in favor of TeamHealth, and comply with the terms and conditions of such release (other than Dr. Massingale, whose employment agreement does not require that he execute a release to receive severance), and comply with certain restrictive covenants therein. The estimated amount of each component of the cash severance (excluding the pro-rata bonus, as noted above) payment is set forth in the table below.

75

(2)

This amount includes the estimated value of unvested stock options, PSUs, MSUs, and Stock Units the vesting of which would be accelerated immediately prior to the effective time. With respect to Dr. Massingale, this amount (i) reflects the value of any outstanding equity awards that will become fully vested upon any termination of his employment (other than for “cause”), whether voluntary or involuntary (i.e., which are no longer subject to continued service-based vesting requirements), pursuant to the terms of Dr. Massingale’s employment agreement, but (ii) does not include the value of an additional grant of RSUs in an amount not to exceed 15,794 RSUs, which may be granted to Dr. Massingale prior to the effective time. The value set forth in the “Equity” column in the table above attributable to each type of accelerated equity held by TeamHealth’s named executive officers is set forth above in the section entitled “— Payments for Unvested Equity Awards”.

​

(3)

The amounts in this column include (i) with respect to Dr. Massingale, the aggregate premiums that would be necessary to continue group medical benefits provided to Dr. Massingale and his applicable family members until he reaches the age of 65 payable in monthly installments, beginning on the date of termination, (ii) with respect to Messrs. Murphy, Jones, and Rogers, the aggregate premiums due that would be necessary to continue group medical benefits provided to the executive and the executive’s applicable family members for two years, paid in bi-weekly installments, beginning on the date of termination, and (iii) with respect to Dr. Snowden, the aggregate premiums due that would be necessary to continue group medical benefits provided to the Dr. Snowden and his applicable family members for one year, paid in bi-weekly installments, beginning on the date of termination.

​

(4)

Represents the “golden parachute” excise tax indemnity that we would be required to pay under the terms of Dr. Massingale’s employment agreement. Other than with respect to Dr. Massingale, TeamHealth has no obligation to any named executive officer to offset golden parachute excise taxes under the Code or to reimburse the named executive officer for related taxes.

​

(5)

None of the named executive officers have any other benefits that would be paid out upon a qualifying termination following completion of the merger.

​

(6)

Includes the aggregate dollar value of the sum of all estimated amounts reported in the preceding columns.

​

Financing of the Merger

We anticipate that the total funds needed to complete the merger (including the funds to pay TeamHealth stockholders and to pay the holders of other equity-based interests the amounts due to them under the merger agreement), which would be approximately $6.1 billion, will be funded through a combination of the following:

(i)

debt financing in an aggregate principal amount of  $3.615 billion as well as a committed $400 million senior secured revolving facility, a portion of which will be available at closing. Merger Sub has received firm commitments from a consortium of financial institutions to provide the debt financing. See the section entitled “Financing of the Merger — Debt Financing”; and

​

(ii)

equity commitments by the Sponsor in an aggregate amount of  $2.700 billion. Parent has received equity commitments for the equity financing from the Sponsor. See the section entitled “Financing of the Merger — Equity Financing”.

​

The completion of the merger is not conditioned upon Parent’s receipt of financing.

76

Debt Financing

In connection with the entry into the merger agreement, Merger Sub has obtained a commitment letter (the “debt commitment letter”) from JPMorgan Chase Bank, N.A., Barclays Bank PLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc. and PSP Investments Credit USA LLC to provide, severally but not jointly, upon the terms and subject to the conditions set forth in the debt commitment letter, acquisition debt financing in the aggregate of  $4.015 billion, consisting of a $400 million senior secured revolving credit facility, a $2.600 billion senior secured term facility and a $1.015 billion senior unsecured bridge facility (which senior unsecured bridge facility amount will be reduced on a dollar for dollar basis to the extent any of the Existing Notes are expected to remain outstanding after the closing date of the merger). Parent may, at its option, issue up to $1.015 billion of aggregate principal amount of senior unsecured notes in a private placement, the gross proceeds of which will be used to reduce any borrowings under, or commitments to provide, the senior unsecured bridge facility on a dollar for dollar basis.

The proceeds of the debt financing will be used (i) to finance the consummation of the merger and other transactions contemplated by the merger agreement, including the amounts payable under the merger agreement and any fees and expenses incurred in connection therewith, (ii) to repay in full all outstanding indebtedness of TeamHealth and its subsidiaries under its existing credit facility and (iii) to fund the prepayment, redemption, repurchase, tender offer, consent solicitation, change of control offer, satisfaction or discharge or other retirement in respect of the Existing Notes.

The obligations of the debt commitment parties to provide the debt financing under the debt commitment letter are subject to a number of conditions, including (i) the execution and delivery of definitive documentation consistent with the terms of the debt commitment letter, (ii) the substantially simultaneous completion of the merger in accordance with the merger agreement without giving effect to certain material amendments or waivers absent the consent of the debt commitment parties, (iii) the consummation of the equity financing, prior to, or substantially concurrently with, the initial borrowings under the debt facilities, (iv) since December 31, 2015, there not having occurred any event, development, change, effect or occurrence that has had or would reasonably be expected to have, individually or the aggregate, a material adverse effect (as defined under the section entitled “The Merger Agreement — Representations and Warranties”), (v) delivery of certain audited, unaudited and pro forma financial statements, (vi) as a condition to the availability of the senior unsecured bridge facility, the investment banks having been engaged to privately place senior notes backstopped by such senior unsecured bridge facility and such investment banks having received a marketing period of 12 consecutive business days (subject to certain blackout dates) to market such senior notes following receipt of a customary offering memorandum, which includes certain financial statements, (vii) payment of all applicable invoiced fees and expenses, (viii) the repayment of all outstanding debt of TeamHealth and its subsidiaries under its existing credit facility and the commencement or completion, as applicable, of certain prepayment, redemption, repurchase, tender offer, consent solicitation, change of control offer, satisfaction or discharge or other retirement processes in respect of the Existing Notes, (ix) the receipt of documentation and other information about the borrowers and guarantors required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT Act), (x) the accuracy in all material respects of specified representations and warranties in the loan documents under which the debt financing will be provided and of certain representations and warranties in the merger agreement and (xi) delivery of certain customary closing documents.

The obligations of the debt commitment parties to provide the debt financing under the debt commitment letter will terminate at the earlier of  (i) five business days after the end date (as defined in the section entitled “The Merger Agreement — Termination of the Merger Agreement”) if the initial borrowing in respect of the senior secured term facility shall not have occurred on or prior to such date and (ii) the valid termination of the merger agreement prior to the consummation of the merger. Additionally, the commitment of the debt commitment parties with respect to the senior unsecured bridge facility will terminate on the date of the consummation of the merger (and payment of the consideration therefor) and the related transactions (but not, for the avoidance of doubt, prior to the consummation thereof) without requiring borrowings under the senior unsecured bridge facility.

Parent and Merger Sub are required under the merger agreement to use their respective reasonable best efforts to take all actions and do all things necessary or advisable to arrange and consummate the financing

77

on the terms and conditions contemplated by the debt commitment letter. In the event any portion of the debt financing becomes unavailable on the terms and conditions contemplated in the debt commitment for any reason (other than the breach by TeamHealth of any representation, warranty or covenant contained in the merger agreement or as a result of the failure of a condition contained in the merger agreement to be satisfied by TeamHealth), Parent and Merger Sub are required under the merger agreement to use their reasonable best efforts to obtain alternative third-party financing from alternative sources in an amount that when added with Parent and Merger Sub’s existing cash on hand and the equity financing is sufficient to consummate the transactions contemplated by the merger agreement and on terms and conditions that are not materially less beneficial to Parent or Merger Sub than the terms in the debt commitment letter. In no event will reasonable best efforts of Parent and Merger Sub be deemed or construed to require Parent or Merger Sub to pay any additional fees or to increase any interest rates applicable to the financing in excess of the amount set forth in the debt commitment letter. The documentation governing the debt financing contemplated by the debt commitment letter has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this proxy statement.

The debt commitment parties may invite other banks, financial institutions and institutional lenders to participate in the debt financing contemplated by the debt commitment and to undertake a portion of the commitments to provide such debt financing.

Parent and Merger Sub have agreed in the merger agreement to use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or advisable to arrange and consummate the debt financing and equity financing on the terms and conditions set forth in the financing commitments, including using reasonable best efforts to (i) maintain in effect the financing commitments, (ii) satisfy on a timely basis all conditions to funding in the debt financing commitments, (iii) negotiate and enter into definitive agreements with respect thereto on terms and conditions described in the debt financing commitments prior to closing date and (iv) enforce their rights under the debt financing commitments.

Equity Financing

Parent has received an equity commitment letter, dated as of October 30, 2016 (the “equity commitment letter”), from the Sponsor pursuant to which it has committed, subject to the conditions of the equity commitment letter, to provide equity financing in an aggregate amount of  $2.7 billion.

Funding of the equity financing is subject to the conditions provided in the equity commitment letter, which include: (i) the satisfaction or waiver by Parent of each of the conditions to the Parent’s obligations to consummate the transactions contemplated by the merger agreement (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions at the closing) and (ii) the concurrent consummation of the closing in accordance with the terms of the merger agreement.

The obligation of Sponsor to fund the equity financing will terminate automatically and immediately upon the earliest to occur of  (i) the closing of the merger, (ii) the termination of the merger agreement in accordance with its terms, and (iii) the assertion by TeamHealth or any of its affiliates or representatives (acting at TeamHealth’s direction) of any claim against Sponsor in connection with the merger agreement or any of the transactions contemplated thereby or by the equity commitment letter (other than (A) any claim relating to a breach or seeking to prevent a breach of the confidentiality agreement, dated August 15, 2016, between an affiliate of Parent and TeamHealth or (B) any claim by TeamHealth seeking an injunction or other specific performance against (i) Parent (or Merger Sub) under the merger agreement or (ii) against Sponsor under the equity commitment letter in circumstances where TeamHealth is entitled to specific performance to cause the equity financing to be funded under the merger agreement).

Pursuant to the terms and conditions of the merger agreement Parent and Merger Sub will use their reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary or advisable to arrange and consummate the equity financing on the terms and conditions contemplated by the equity commitment letter.

TeamHealth has the right to enforce the equity financing by the Sponsor as a third party beneficiary solely to the extent TeamHealth is entitled to specific performance under the merger agreement to cause the equity financing to be funded (see the section entitled “The Merger Agreement — Specific Performance”).

78

Limited Guarantee

Subject to the terms and conditions set forth in a limited guarantee, dated October 30, 2016 and executed concurrently with the execution of the merger agreement, Sponsor has guaranteed the payment obligations of Parent with respect to (i) the obligation of Parent under the merger agreement to pay the reverse termination fee if the merger agreement is terminated by the Company under specified circumstances (see the section entitled “The Merger Agreement — Termination Fees and Expenses”), (ii) Parent’s obligation to pay certain interest and expenses and certain reimbursement and indemnification obligations of Parent under the merger agreement and (iii) any other monetary damages that may become payable by Parent under the merger agreement (subject to the limitations set forth therein and in the limited guarantee).

Sponsor’s obligations under the limited guarantee are subject to an aggregate cap equal to the amount of  $206,700,000.

The limited guarantee will terminate and be of no further force and effect and Sponsor will have no further obligation or liability under the limited guarantee, upon the earliest to occur of: (i) the consummation of the closing of the merger, (ii) the six-month anniversary of any termination of the merger agreement if TeamHealth has not presented a claim for payment of any obligations to Parent or Sponsor by such six-month anniversary (or, if TeamHealth has made a claim under the limited guarantee prior to such date, the date that such claim is finally satisfied or otherwise finally resolved) and (iii) the date obligations under the limited guarantee equal to $206,700,000 have been paid in full.

TeamHealth’s recourse under and pursuant and subject to the terms and conditions of the limited guarantee and the equity commitment letter is TeamHealth’s sole and exclusive remedy against (i) Sponsor and (ii) affiliates or representatives of Parent, Merger Sub or Sponsor (but, in the case of this clause (ii) not including Parent, Merger Sub or Sponsor) in respect of any liabilities or obligations arising under, or in connection with, the merger agreement the equity commitment letter or the transactions contemplated thereby.

Antitrust Reviews Required for the Merger and Other Regulatory Filings

U.S. Antitrust

Under the HSR Act and the rules that have been promulgated thereunder by the FTC, we cannot complete the merger until we have given notification and furnished information to the FTC and the DOJ, and until the applicable waiting period has expired or has been terminated. The merger is subject to the waiting period requirements and may not be completed until the expiration of a 30-day waiting period (which may be extended as described below) following the filing of the premerger notification and report forms with the DOJ and the FTC. On November 14, 2016, TeamHealth and Parent each filed a premerger notification and report form under the HSR Act with the DOJ and the FTC, as a result of which the applicable waiting period under the HSR Act is scheduled to expire on December 14, 2016 at 11:59 p.m., Eastern Time, unless otherwise terminated or extended if the DOJ or FTC requests additional information and documentary material. On November 28, 2016, the FTC granted early termination of the waiting period under the HSR Act.

Other Regulatory Notifications

The parties have agreed to submit a joint voluntary notification of the merger to CFIUS under Section 721 of the Defense Production Act of 1950, as amended. The parties have also agreed that Spectrum Healthcare Resources, Inc., a subsidiary of TeamHealth, will submit a notification of the merger and a proposed plan to mitigate any foreign ownership, control or influence arising out of the merger to DSS, the agency with authority over the facility security clearance held by Spectrum Healthcare Resources, Inc. Approval of the merger by CFIUS or DSS is not required to complete the merger and the parties’ completion of the merger is not contingent upon any such approvals by CFIUS or DSS. On December 9, 2016, the parties filed a pre-filing joint voluntary notice with CFIUS.

General

Under the merger agreement, TeamHealth and Parent have both agreed to use their reasonable best efforts to complete the merger, including expiration or termination of the HSR waiting period. Each party

79

is required to use reasonable best efforts to satisfy the closing conditions relating to required antitrust reviews, including (i) cooperating in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, (ii) subject to applicable law, furnishing the other party as promptly as reasonably practicable all information required for any application or other filing to be made by the other party, (iii) promptly notifying the other party of any substantive communication received by such party from, or given by such party to, any U.S. or foreign governmental entity and of any substantive communication received or given in connection with any proceeding by a private party, and, subject to applicable law, furnish the other party promptly with copies of all correspondence, filings and communications between them and the governmental entity regarding the merger, (iv) responding as promptly as reasonably practicable to any inquiries received from, and supply as promptly as reasonably practicable any additional information or documentation that may be requested by any governmental entity in respect of such registrations, declarations and filings or such transactions and (v) permitting the other party to review any substantive communication given by it to, and consult with each other in advance of, and consider in good faith the other party’s reasonable comments in connection with, any communication, meeting or conference with, the governmental entity or, in connection with any proceeding by a private party, with any other person, provided that each party shall be entitled to redact material (1) to comply with contractual arrangements, (2) to address good faith legal privilege or confidentiality concerns or (3) to the extent relating to TeamHealth’s valuation and similar matters relating to the merger.

While the antitrust review has been completed in a timely manner, there is no certainty that a regulatory challenge to the merger will not be made. If a challenge is made, we cannot predict the result. For example, at any time before or after completion of the merger, the FTC or DOJ could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the merger or seeking divestiture of substantial assets of TeamHealth or Parent. Private parties or State Attorney General may also bring actions under the antitrust and other laws under certain circumstances. Pursuant to the merger agreement, Parent will not be required to take any action or omission with respect to (1) any of its affiliates that are engaged in businesses distinct from the private equity business of Blackstone (other than Parent, Merger Sub and TeamHealth and its subsidiaries and affiliated entities) or (2) any direct or indirect portfolio companies of investment funds advised or managed by one or more affiliates of Parent (other than, for the avoidance of doubt, TeamHealth and its subsidiaries and affiliated entities).

The expiration or termination of the HSR waiting period merely implies the satisfaction of certain regulatory criteria, which do not include review of the merger from the standpoint of the adequacy of the consideration to be received by TeamHealth’s stockholders. Further, antitrust reviews do not constitute an endorsement or recommendation of the merger.

Material U.S. Federal Income Tax Consequences of the Merger

The exchange of TeamHealth common stock for cash in the merger generally will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state and local and other tax laws. In general, a U.S. holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 119) whose shares of TeamHealth common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares. Gain or loss will be determined separately for each block of shares of TeamHealth common stock (i.e., shares of TeamHealth common stock acquired at the same cost in a single transaction). The determination of the actual tax consequences of the merger to a holder of TeamHealth common stock will depend on the holder’s specific situation.

The tax consequences of the merger to you will depend on your particular circumstances. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 119 and consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

80

Delisting and Deregistration of TeamHealth Common Stock

As promptly as practicable following the completion of the merger, the TeamHealth common stock currently listed on the NYSE will cease to be listed on the NYSE and will be deregistered under the Exchange Act.

Transaction Litigation

On December 2, 2016, one purported stockholder filed a putative class action complaint, styled Melvyn Klein v. Team Health Holdings, Inc., et al., Case No. 3:16-cv-00675, in the United States District Court for the Eastern District of Tennessee against TeamHealth and the members of the TeamHealth Board. The complaint includes claims for violations of the Exchange Act against TeamHealth and the individual directors, alleging that TeamHealth and the directors violated Section 14(a) of the Exchange Act, Rule 14a-9 and 17 C.F.R. § 244.100 promulgated thereunder and that the directors violated Section 20(a) of the Exchange Act. The plaintiff seeks an order, inter alia, enjoining the defendants from proceeding with the stockholder vote on the merger proposal or consummating the merger unless and until certain information is disclosed, as well as certification of the putative class, an accounting of all damages sustained as a result of the alleged wrongdoing, and attorneys’ fees and expenses.

On December 6, 2016, TeamHealth received a demand letter by James Prochnik, a purported stockholder of TeamHealth, requesting access to certain books and records of TeamHealth to investigate possible breaches of fiduciary duty by the TeamHealth Board in connection with the merger.

Although it is not possible to predict the outcome of the litigation with certainty, TeamHealth and the TeamHealth Board believe that the claims raised in the complaint are without merit and intend to defend their position in this matter vigorously.

Appraisal Rights

If the merger is completed, TeamHealth’s stockholders will be entitled to appraisal rights under Section 262 of the DGCL, provided that they strictly comply with the requirements of Section 262 of the DGCL.

Under the DGCL, if you do not wish to accept the $43.50 per share merger consideration provided for in the merger agreement, you have the right to seek appraisal of your shares of TeamHealth common stock and to receive payment in cash for the “fair value” of your shares of TeamHealth common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be fair value, provided that you strictly comply with the requirements of Section 262 of the DGCL. The “fair value” of your shares of TeamHealth common stock as determined by the Delaware Court of Chancery may be more or less than, or the same as, the $43.50 per share that you are otherwise entitled to receive under the terms of the merger agreement. These rights are known as appraisal rights. TeamHealth’s stockholders who do not vote in favor of the merger proposal and who properly demand appraisal for their shares in compliance with the provisions of Section 262 of the DGCL and who do not thereafter fail to perfect, withdraw or otherwise lose such rights will be entitled to appraisal rights. Strict compliance with the statutory procedures in Section 262 of the DGCL is required. Failure to timely and properly comply with the statutory requirements will result in the loss of your appraisal rights.

This section is intended only as a brief summary of certain provisions of the Delaware statutory procedures that a stockholder must follow in order to demand and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and the law pertaining to appraisal rights under the DGCL, and is qualified in its entirety by reference to Section 262 of the DGCL, the full text of which appears in Annex C to this proxy statement and is incorporated into this proxy statement by reference. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262 of the DGCL. All references in Section 262 of the DGCL and in this summary to a “stockholder” or a “holder” are to the record holder of the shares of TeamHealth common stock as to which appraisal rights are asserted.

81

Under Section 262 of the DGCL where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation must, not less than 20 days before the meeting, notify the stockholders who were stockholders of record on the record date for notice of such meeting with respect to shares for which appraisal rights are available that appraisal rights will be available. A copy of Section 262 of the DGCL must be included with such notice. This proxy statement constitutes TeamHealth’s notice to our stockholders that appraisal rights are available in connection with the merger and the full text of Section 262 of the DGCL is attached to this proxy statement as Annex C, in compliance with the requirements of Section 262 of the DGCL. If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 of the DGCL contained in Annex C. Failure to comply timely and properly with the requirements of Section 262 of the DGCL will result in the loss of your appraisal rights under the DGCL. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of TeamHealth common stock, TeamHealth believes that if a stockholder is considering exercising such rights, such stockholder should seek the advice of legal counsel.

Any stockholder wishing to demand appraisal of his, her or its shares of TeamHealth common stock must deliver to TeamHealth at the address in the next paragraph below a written demand for appraisal of his, her or its shares of TeamHealth common stock before the vote is taken to approve the merger proposal, which written demand must reasonably inform us of the identity of the stockholder and that the stockholder intends to demand appraisal of his, her or its shares of TeamHealth common stock. A stockholder’s failure to deliver to TeamHealth the written demand for appraisal prior to the taking of the vote on the merger proposal at the special meeting of stockholders will result in the loss of appraisal rights. A stockholder seeking to perfect appraisal rights must not vote or submit a proxy in favor of the merger proposal. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted “FOR” the merger proposal, and it will nullify any previously delivered written demand for appraisal and result in the loss of the stockholder’s appraisal rights. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote “AGAINST” the merger proposal or abstain from voting on the merger proposal. Voting against or abstaining from voting or failing to vote on the merger proposal by itself does not constitute a demand for appraisal within the meaning of Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote on the merger proposal. A stockholder seeking to exercise appraisal rights must hold of record the shares of TeamHealth common stock on the date the written demand for appraisal is made and must continue to hold the shares of TeamHealth common stock of record through the effective time. A stockholder will lose his, her or its appraisal rights if the stockholder transfers the shares for which it is seeking appraisal rights before the effective time.

All demands for appraisal should be addressed to Team Health Holdings, Inc., Attention: General Counsel, 265 Brookview Centre Way, Suite 400, Knoxville, Tennessee 37919, and must be delivered to TeamHealth before the vote is taken to approve merger proposal at the special meeting, and must be executed by, or on behalf of, the record holder of the shares of TeamHealth common stock.

Only a holder of record of shares of TeamHealth common stock is entitled to demand an appraisal of the shares registered in that holder’s name. Accordingly, a demand for appraisal must be executed by or on behalf of the record stockholder. The demand should set forth, fully and correctly, the record stockholder’s name as it appears in the transfer agent’s records and should specify the stockholder’s mailing address and the number of shares registered in the stockholder’s name. The demand must state that the stockholder intends to demand appraisal of the stockholder’s shares in connection with the merger. The demand cannot be made by the beneficial owner. The beneficial holder must have the registered owner, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of TeamHealth common stock. If you hold your shares of TeamHealth common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.

If shares of TeamHealth common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal must be made in that capacity. If the shares of TeamHealth common stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be executed by or for all joint owners. An authorized agent,

82

including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner or owners. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of TeamHealth common stock as a nominee for others, may exercise his, her or its right of appraisal with respect to the shares of TeamHealth common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of TeamHealth common stock as to which appraisal is sought. Where no number of shares of TeamHealth common stock is expressly mentioned, the demand will be presumed to cover all shares of TeamHealth common stock held in the name of the record owner. If a stockholder holds shares of TeamHealth common stock through a broker who in turn holds the shares through a central securities depository nominee such as Cede & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as record owner. Stockholders who hold their shares in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers or other nominees to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.

Within 10 days after the effective time, the surviving corporation in the merger must give notice of the date that the merger became effective to each of TeamHealth’s record stockholders who has submitted a demand in compliance with Section 262 of the DGCL and who did not vote in favor of the merger proposal. At any time within 60 days after the effective time of the merger, any stockholder who has not commenced an appraisal proceeding or joined a proceeding as a named party may withdraw the stockholder’s demand and accept the consideration specified by the merger agreement for that stockholder’s shares of TeamHealth common stock by delivering to the surviving corporation a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective date of the merger will require written approval of TeamHealth, as the surviving corporation. Notwithstanding the foregoing, no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just. If a petition for appraisal is filed and the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or, except with respect to any stockholder who withdraws such stockholder’s right to appraisal in accordance with the proviso in the immediately preceding sentence, if the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only payment of the “fair value” of such stockholder’s shares of TeamHealth common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be fair value. The fair value of the shares of TeamHealth common stock determined in any such appraisal proceeding could be less than, equal to or more than the consideration offered pursuant to the merger agreement.

Within 120 days after the effective time, but not thereafter, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 of the DGCL and is entitled to appraisal rights under Section 262 of the DGCL may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of TeamHealth common stock held by all such stockholders. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon the surviving corporation. None of Blackstone, Sponsor, Parent, Merger Sub or TeamHealth, as the surviving corporation, has any obligation to file such a petition or has any present intention to file such a petition, and holders should not assume that any of the foregoing will file a petition. If a petition for appraisal is not timely filed, then the right to appraisal will cease. Accordingly, it is the obligation of the holders of TeamHealth common stock to initiate all necessary petitions to perfect their appraisal rights in respect of shares of TeamHealth common stock within the time prescribed in Section 262 of the DGCL and the failure of a stockholder to file such a petition within the period specified in Section 262 of the DGCL will result in the loss of appraisal rights.

Any stockholder who has properly complied with the requirements of Section 262 of the DGCL and who did not vote in favor of the merger proposal is, within 120 days after the effective date of the merger, entitled upon written request to receive from the surviving corporation a statement setting forth the

83

aggregate number of shares of TeamHealth common stock not voted in favor of the merger proposal and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within 10 days after such written request has been received by the surviving corporation or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A person who is the beneficial owner of shares of TeamHealth common stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition for appraisal or request from the surviving corporation such statement.

If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, then the surviving corporation will be obligated, within 20 days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares of TeamHealth common stock and with whom agreements as to the value of their shares of TeamHealth common stock have not been reached. After notice to stockholders who have demanded appraisal from the Register in Chancery, if such notice is ordered by the Delaware Court of Chancery, the Delaware Court of Chancery will conduct a hearing upon the petition and determine those stockholders who have complied with Section 262 of the DGCL and who have become entitled to the appraisal rights provided by Section 262 of the DGCL. Notwithstanding the foregoing, upon application by the surviving corporation or any stockholder entitled to participate in the appraisal proceeding, the Delaware Court of Chancery may, in its discretion proceed to trial on the appraisal prior to final determination of the stockholders entitled to an appraisal. The Delaware Court of Chancery may require stockholders who have demanded payment for their shares of TeamHealth common stock to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder. In addition, the Delaware Court of Chancery will dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares of TeamHealth common stock entitled to appraisal exceeds 1% of the outstanding shares of TeamHealth common stock, or (2) the value of the consideration provided in the merger for such total number of shares of TeamHealth common stock exceeds $1 million.

The Delaware Court of Chancery will then conduct an appraisal proceeding to determine the fair value of the shares of TeamHealth common stock as of the effective time of the merger exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. When the fair value has been determined, the Delaware Court of Chancery will direct the payment of such value, together with interest, if any, by the surviving corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Delaware Court of Chancery, and (2) interest theretofore accrued, unless paid at that time.

You should be aware that an investment banking opinion as to the fairness from a financial point of view of the consideration to be received in a sale transaction, such as the merger, is not an opinion as to fair value under Section 262 of the DGCL. Although we believe that the per share merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the per share merger consideration. Moreover, none of Blackstone, Sponsor, Parent, Merger Sub or TeamHealth, as the surviving corporation, anticipates offering more than the per share merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262 of the DGCL, the “fair value” of a share of TeamHealth common stock is less than or equal to the per share merger consideration. In determining “fair value,” the Delaware Court of Chancery is required to take into

84

account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of TeamHealth common stock entitled to appraisal. Any stockholder who demanded appraisal rights will not, after the effective time, be entitled to vote shares of TeamHealth common stock subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of TeamHealth common stock, other than with respect to payment as of a record date prior to the effective time. If no petition for appraisal is filed within 120 days after the effective time, or if the stockholder otherwise fails to perfect, validly withdraws or otherwise loses such holder’s right to appraisal, then the right of that stockholder to appraisal will cease and that stockholder’s shares of TeamHealth common stock will be deemed to have been converted at the effective time into the right to receive the $43.50 per share cash payment (without interest and subject to any applicable withholding taxes) for his, her or its shares of TeamHealth common stock pursuant to the merger agreement.

Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL will result in the loss of a stockholder’s appraisal rights.

In view of the complexity of Section 262 of the DGCL, TeamHealth’s stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

85

THE MERGER AGREEMENT

The following discussion sets forth the material provisions of the merger agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this discussion, which is summary by nature. This discussion is not complete and is qualified in its entirety by reference to the complete text of the merger agreement. You are encouraged to read the merger agreement carefully in its entirety, as well as this proxy statement and any documents incorporated by reference herein, before making any decisions regarding the merger. This section is not intended to provide you with any factual information about us. Such information can be found elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled “Where You Can Find More Information,” beginning on page 123.

The Merger

Upon the terms and subject to the conditions of the merger agreement and in accordance with the DGCL, at the effective time, Merger Sub will merge with and into TeamHealth, the separate corporate existence of Merger Sub will cease, and TeamHealth will continue as the surviving corporation and a wholly owned subsidiary of Parent. The merger will have the effects set forth in the merger agreement and the relevant provisions of the DGCL.

Closing and Effectiveness of the Merger

The closing of the merger will take place at 9:00 a.m. (New York City time) on the third business day following the day on which the conditions to closing (described below under “The Merger Agreement — Conditions to Closing of the Merger”) have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing (but subject to the satisfaction or waiver of those conditions at the closing)), or such other time as TeamHealth and Parent may agree, provided that if Parent’s marketing period (described below under “The Merger Agreement — Marketing Period and Efforts”) has not ended at such time, then the closing will occur on the earlier of  (i) a business day during the marketing period specified by Parent with no less than three business days’ notice to TeamHealth and (ii) the third business day following the final day of the marketing period or, if earlier, the business day that is after the final day of the marketing period and that is immediately prior to the end date, in each case subject to the satisfaction of the conditions to closing (other than those conditions that by their nature are to be satisfied at the closing (but subject to the satisfaction or waiver of those conditions at the closing)).

On the closing date, Parent and TeamHealth will file a certificate of merger with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL. The merger will become effective at the time the certificate of merger is filed with the Secretary of State of the State of Delaware or at a later time as Parent and TeamHealth agree upon in writing and specify in the certificate of merger in accordance with the DGCL.

Merger Consideration

At the effective time, each outstanding share of TeamHealth common stock (other than excluded shares) will be converted automatically into the right to receive $43.50 in cash, without interest and subject to any applicable withholding taxes (the “merger consideration”). After the merger is completed, holders of TeamHealth common stock will have only the right to receive the merger consideration, and will no longer have any rights as holders of TeamHealth common stock. Shares of TeamHealth common stock held by us or any direct or indirect wholly owned subsidiary of TeamHealth, including shares held in treasury by us, or by Parent or Merger Sub or any other direct or indirect wholly owned subsidiary of Parent will be cancelled without payment at the effective time. Shares held by stockholders who have properly made and not withdrawn a demand for appraisal rights under the DGCL (which we refer to as “dissenting shares”) will not be converted into the right to receive the merger consideration unless and until such holder has effectively withdrawn or otherwise lost or failed to perfect such holder’s rights to appraisal or payment under the DGCL, at which time such shares will be treated as if they had been converted into and become exchangeable for the right to receive, as of the effective time, the merger consideration, without interest and subject to any applicable withholding tax. TeamHealth will give Parent prompt notice of receiving any

86

demands for appraisal, withdrawals or attempted withdrawals of such demands, and any other instruments served pursuant to applicable law relating to stockholders’ rights of appraisal. Parent will have the right to direct and control all negotiations and proceedings with respect to any such demands, withdrawals or attempted withdrawals of such demands, provided that until the effective time, Parent will consult with TeamHealth with respect to such negotiations and proceedings. TeamHealth will not, without the consent of Parent, and prior to the effective time, Parent will not without the consent of TeamHealth, make any payment with respect to any demands for appraisal or offer to settle or compromise, or settle or compromise or otherwise negotiate, any demands for appraisal, or approve any withdrawal of any such demands, or waive any failure to timely deliver a written demand for appraisal or otherwise to comply with the provisions of the DGCL, or agree to do any of the foregoing. Pursuant to the merger agreement, Parent, the surviving corporation and the paying agent will be entitled to deduct and withhold from the consideration otherwise payable in respect of the TeamHealth common stock, options to purchase shares of TeamHealth common stock, Stock Units, PSUs or MSUs such amounts as it is required to deduct and withhold with respect to the making of such payment by applicable law. To the extent that amounts are withheld or deducted and paid over to the applicable governmental entity, the withheld or deducted amounts will be treated for all purposes of the merger agreement as having been paid to the holder of TeamHealth common stock, options to purchase shares of TeamHealth common stock, Stock Units, PSUs or MSUs in respect of which that deduction and withholding were made. See “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 119 and consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Exchange Procedures

Before the effective time, Parent or Merger Sub will enter into an agreement with a paying agent (the “paying agent”) selected by Parent and approved by TeamHealth, which approval shall not be unreasonably conditioned, withheld or delayed, to receive payment of the aggregate merger consideration as provided by the merger agreement in respect of shares of TeamHealth common stock (other than excluded shares). Concurrently with the effective time, Parent will deposit (or cause to be deposited) with the paying agent in trust for the benefit of holders of TeamHealth common stock (other than excluded shares) a cash amount in immediately available funds (the “exchange fund”) that, when taken together with cash available on TeamHealth’s balance sheet deposited with the paying agent, is sufficient to provide all funds necessary for payment of the aggregate merger consideration in exchange for all of the shares of TeamHealth common stock outstanding immediately prior to the effective time (other than excluded shares). Promptly after the effective time (and in any event within two business days thereafter), the surviving corporation shall cause the paying agent to mail to each former record holder of shares of TeamHealth common stock that have converted into the right to receive the merger consideration with respect thereto (which excludes excluded shares) (A) transmittal materials, including a customer letter of transmittal specifying that delivery shall be effected and risk of loss and title shall pass upon delivery of any certificates (“certificates”) that immediately prior to the effective time represented outstanding shares of TeamHealth common stock or, with respect to shares held in book-entry form, upon delivery of an agent’s message regarding the book-entry transfer of such shares and (B) instructions for use in effecting the surrender of such holder’s certificates or book-entry shares, as applicable. Each record holder of book-entry shares will be entitled to receive the merger consideration for each share represented by such holder’s book-entry shares upon the receipt by the paying agent of a customary “agent’s message” constituting the deemed surrender of such holder’s book-entry shares. Each record holder of certificates will be entitled to receive the merger consideration for each share represented by such holder’s certificates upon surrender of such certificates to the paying agent.

Upon demand, any portion of the exchange fund that remains unclaimed by the former holders of shares of TeamHealth common stock for 12 months after the effective time will be delivered to the surviving corporation. Thereafter, holders of certificates or book-entry shares who have not yet surrendered their certificates or book-entry shares will be entitled to look to the surviving corporation for payment of the merger consideration. Until surrendered, the certificates or book-entry shares will represent only the right to receive upon surrender the aggregate merger consideration as provided in the merger agreement.

87

If payment of the merger consideration in respect of any cancelled share of TeamHealth common stock is to be made to a person other than the person in whose name the surrendered certificate or book-entry share is registered, it will be a condition to payment that the certificate or book-entry share formerly representing such share of TeamHealth common stock is properly presented to the paying agent accompanied by all documents required to evidence, to the reasonable satisfaction of the surviving corporation, and effect such transfer and to evidence that any applicable transfer or other similar taxes have been paid or are not applicable.

The merger consideration paid upon the surrender of certificates or book-entry shares in accordance with the terms of the merger agreement will be deemed to have been paid in full satisfaction of all rights pertaining to the shares of TeamHealth common stock previously represented by such certificates or book-entry shares.

Treatment of TeamHealth Equity Awards

Stock Options.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding option to purchase shares of TeamHealth common stock (other than any options subject to performance vesting conditions which are not achieved at or prior to the effective time, which will automatically be forfeited for no consideration as of the effective time) will become immediately vested and be cancelled and the holder will be entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (i) the number of shares subject to the option, multiplied by (ii) the excess, if any, of  $43.50 over the exercise price of the option, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

Stock Units.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, any vesting conditions applicable to each outstanding Stock Unit will automatically accelerate in full, and each Stock Unit will be cancelled and the holder will be entitled to receive, at or promptly following the effective time, an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the total number of shares subject to the Stock Unit immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time. With respect to any Stock Units that are restricted stock units and are subject to an election providing for the deferred delivery of underlying shares on a date following the vesting date of such Stock Units, the amount that would be otherwise payable in respect of such Stock Units pursuant to the merger agreement will instead be credited to notional, book-entry accounts and paid to the respective holders at the time specified pursuant to the applicable deferral election.

PSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding PSU will automatically become immediately vested at target level performance, and each PSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the target number of shares subject to the PSU immediately prior to the effective time multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

MSUs.   Immediately prior to the effective time, except as otherwise agreed to in writing between a holder and Parent, each outstanding MSU (all of which are held by our Chief Executive Officer) will automatically become immediately vested with respect to the number of earned MSUs, determined in accordance with the terms of the award agreement governing the MSUs by and between TeamHealth and our Chief Executive Officer, and each MSU will be cancelled, with the holder being entitled to receive an amount in cash, without interest and less any applicable withholding taxes, equal to the product of  (x) the number of earned MSUs multiplied by (y) $43.50, payable in a lump sum through TeamHealth’s payroll system or by check as soon as reasonably practicable after the effective time.

ESPPs.   Under the ESPPs (i) no offering period shall be authorized or commenced on or after the date of the merger agreement and (ii) each ESPP participant’s accumulated contributions under the respective ESPP shall be used to purchase shares of TeamHealth common stock in accordance with the

88

terms of the respective ESPP, as of the end of the final offering period (if any offering period is in process at the effective time), and (iii) the ESPPs will terminate immediately prior to the effective time, and no further rights will be granted or exercised under the ESPPs.

Representations and Warranties

The merger agreement contains representations and warranties that we, on the one hand, and Parent and Merger Sub, on the other hand, have made to one another (in some cases, as of specific dates) relating to our and their respective businesses. The assertions embodied in those representations and warranties were made solely for purposes of the merger agreement, and may be subject to important qualifications and limitations (including through the use of exceptions for certain matters disclosed by the party that made the representations and warranties to the other party) agreed to by the parties in connection with negotiating the terms of the merger agreement. Accordingly, TeamHealth stockholders should not rely on representations and warranties as characterizations of the actual state of facts or circumstances, and should bear in mind that the representations and warranties were made solely for the benefit of the parties to the merger agreement, were negotiated for purposes of governing contractual rights and relationships and allocating contractual risk among the parties to the merger agreement as of specific dates, rather than to establish matters as facts, and may be subject to contractual standards of materiality different from those generally applicable to stockholders. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the merger agreement, which subsequent information may or may not be reflected in our public disclosures. None of the representations and warranties will survive the closing of the merger, and, therefore, they will have no legal effect under the merger agreement after the effective time. This description of the representations and warranties is included to provide TeamHealth stockholders with information regarding the terms of the merger agreement. The representations and warranties in the merger agreement and their description in this proxy statement should be read in conjunction with the other information contained in the reports, statements and filings we publicly file with the SEC.

Our representations and warranties relate to, among other things:

•

our and our subsidiaries’ and affiliated entities’ due organization, valid existence, good standing, corporate power, qualification to do business and similar corporate matters;

​

•

our and our material subsidiaries’ and affiliated entities’ certificate of incorporation, bylaws or equivalent organizational or governing documents;

​

•

our and our subsidiaries’ and affiliated entities’ capitalization, capital structure and equity securities;

​

•

our corporate power and authority to enter into and perform our obligations under the merger agreement and consummate the merger and the other transactions contemplated thereby, and the enforceability and due execution and delivery of the merger agreement;

​

•

TeamHealth stockholder approval required to complete the merger;

​

•

the absence of conflicts with our (and our subsidiaries’ and affiliated entities’) organizational documents or any license or applicable law, rule, regulation, order, judgment or decree (assuming that certain regulatory filings are made, certain regulatory consents are obtained and stockholder approval is obtained) in each case as a result of the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby;

​

•

the absence of defaults, breaches, violations, losses of benefits under, certain rights (including termination, cancellation, amendment or acceleration rights) or consents required under our and our subsidiaries’ and affiliated entities’ contracts, or creation of certain liens on our material assets, in each case as a result of the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby;

​

•

consents, approvals, authorizations, permits, notifications and filings required by governmental entities to enter into the merger agreement, perform thereunder and consummate the transactions contemplated thereby;

​

89

•

our and our subsidiaries’ and affiliated entities’ compliance with applicable law (including applicable anti-corruption laws) and certain regulatory matters;

​

•

accuracy and sufficiency of financial statements and SEC filings, disclosure controls and procedures and internal controls over financial reporting, the Sarbanes Oxley Act of 2002 and absence of undisclosed liabilities (including certain “off-balance sheet” arrangements);

​

•

(a) the absence from June 30, 2016 through the date of the merger agreement of  (except as contemplated by the merger agreement) certain actions that would have required Parent’s consent under the merger agreement, including amendments to TeamHealth’s or any of its subsidiaries’ certificate of incorporation or bylaws, certain acquisitions in excess of  $15 million in the aggregate, the creation of certain liens in excess of  $10 million of notional debt, the incurrence or guarantee of additional indebtedness in excess of  $10 million, material changes to accounting policies or tax procedures and entry into new lines of business and (b) the absence from December 31, 2015 of any event, development, change, effect or occurrence that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect;

​

•

our and our subsidiaries’ and affiliated entities’ material contracts;

​

•

the absence of suits, claims, charges, actions, proceedings, audits, investigations or arbitrations pending or threatened against us or our subsidiaries or affiliated entities or our respective assets or properties and the absence of certain orders or injunctions against us or our subsidiaries or affiliated entities or our respective assets or properties;

​

•

labor and employment matters affecting us or our subsidiaries or affiliated entities, including our benefits plans;

​

•

insurance policies and related matters;

​

•

our real and personal property;

​

•

certain tax matters;

​

•

accuracy of information in this proxy statement;

​

•

intellectual property;

​

•

environmental matters;

​

•

the TeamHealth Board’s receipt of an opinion from Goldman Sachs regarding the fairness, from a financial point of view, of the consideration to be received by holders of TeamHealth common stock (other than Parent and its affiliates);

​

•

brokers’, investment bankers’, and finders’ fees;

​

•

inapplicability of antitakeover statutes to the merger;

​

•

our and our subsidiaries’ and affiliated entities’ compliance with healthcare laws and certain healthcare regulatory matters; and

​

•

certain matters related to our and our subsidiaries’ and affiliated entities’ government contracts.

​

Some of our representations and warranties are qualified as to materiality or by exceptions related to circumstances or events or occurrences that would not reasonably be expected to prevent or delay our consummation of the transactions contemplated by the merger agreement or related to a material adverse effect with respect to TeamHealth and our subsidiaries and affiliated entities, taken as a whole. Under the merger agreement, “material adverse effect” with respect to TeamHealth and our subsidiaries and affiliated entities means any event, development, change, effect or occurrence that, individually or in the aggregate, has, or would reasonably be expected to have, a material adverse effect on or with respect to the business, results of operation or condition (financial or otherwise), assets or liabilities of TeamHealth and our subsidiaries and affiliated entities, taken as a whole; provided, that no events, developments, changes, effects or occurrences relating to, arising out of or in connection with or resulting from any of the following, either alone or in combination, shall constitute or contribute to a material adverse effect (provided, that with

90

respect to the first, second, fourth and fifth bullet points below, to the extent that TeamHealth and our subsidiaries and affiliated entities, taken as a whole, are disproportionately affected thereby as compared with other participants in the industries in which we and our subsidiaries and affiliated entities operate (in which case solely the incremental disproportionate impact or impacts may be taken into account in determining whether there has been or would reasonably be expected to be a material adverse effect)):

•

general changes or developments in the economy or the financial, debt, capital, credit or securities markets in the United States or elsewhere in the world in which TeamHealth, our subsidiaries or affiliated entities have material operations, including as a result of changes in geopolitical conditions;

​

•

general changes or developments in the industries in which TeamHealth or its subsidiaries or affiliated entities operate;

​

•

the execution and delivery of the merger agreement or the public announcement or pendency of the merger or other transactions contemplated thereby, including any impact on relationships, contractual or otherwise, with customers, suppliers, vendors, investors, lenders, partners, contractors or employees of TeamHealth and its subsidiaries and affiliated entities, or the performance of the merger agreement and the transactions contemplated thereby, including compliance with the covenants set forth in the merger agreement (other than the covenants set forth in section 5.1 of the merger agreement) and any action taken or omitted by TeamHealth at the express written request of or with the express written consent of Parent or Merger Sub (except that the above event will not apply to certain representations and warranties of TeamHealth regarding absence of conflicts, company benefit plans and employee compensation, brokers and antitakeover statutes);

​

•

changes in any applicable laws or regulations or applicable accounting regulations or principles or interpretation or enforcement thereof;

​

•

any hurricane, tornado, earthquake, flood, tsunami, natural disaster, act of God or other comparable events or outbreak or escalation of hostilities or war (whether or not declared), military actions or any act of sabotage or terrorism, or national or international political or social conditions;

​

•

any decline in the market price or trading volume of the shares of common stock of TeamHealth or the credit rating of TeamHealth (except the facts, circumstances, developments, events, changes, effects or occurrences giving rise to or contributing to such decline may be deemed to constitute or be taken into account in determining whether there has been or would reasonably be expected to be, a material adverse effect); or

​

•

any failure by TeamHealth to meet any published analyst estimates or expectations of TeamHealth’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by TeamHealth to meet its internal or published projections, budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (except the facts, circumstances, developments, events, changes, effects or occurrences giving rise to or contributing to such decline may be deemed to constitute or be taken into account in determining whether there has been or would reasonably be expected to be, a material adverse effect).

​

Parent and Merger Sub also make a number of representations and warranties to us regarding various matters pertinent to the merger. The topics covered by these representations and warranties include the following:

•

due organization, valid existence, good standing, corporate power, qualification to do business and similar corporate matters;

​

•

corporate power and authority to enter into and perform their obligations under the merger agreement and consummate the merger and the other transactions contemplated thereby, and the enforceability and due execution and delivery of the merger agreement;

​

91

•

the absence of conflicts with their respective organizational documents, or any applicable law, rule, regulation, order, judgement or decree (assuming that certain regulatory filings are made and certain regulatory consents are obtained), in each case as a result of the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby;

​

•

the absence of defaults, breaches, violations, losses of benefit under, or certain rights (including termination, cancellation, amendment or acceleration rights) or consents required under Parent’s or its subsidiaries’ contracts, or creation of liens on Parent’ or, Merger Sub’s material assets in each case as a result of the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby;

​

•

the absence of suits, claims, charges, actions, proceedings, audits, investigations or arbitrations pending or threatened against them and the absence of certain material orders or injunctions against them or their respective material assets or properties;

​

•

no ownership by Parent, Merger Sub and their respective subsidiaries of TeamHealth common stock (other than pursuant to the merger agreement or the voting agreement);

​

•

Parent’s ownership of 100% of Merger Sub and the absence of any liabilities or obligations of Merger Sub other than in connection with the merger agreement, the other transaction documents and liabilities and obligations incidental to its formation and the maintenance of its existence;

​

•

accuracy of information supplied by or on behalf of Parent or Merger Sub specifically for inclusion in or incorporation by reference in this proxy statement;

​

•

brokers’, investment bankers’, financial advisors’ and similar fees;

​

•

the delivery of executed equity and debt commitment letters;

​

•

the committed financing and the availability and sufficiency of funds in accordance with the debt commitment letter and the equity commitment letter to complete the merger;

​

•

the delivery by Parent to TeamHealth of the limited guarantee;

​

•

the solvency of the surviving corporation immediately following the effective time (subject to certain identified assumptions);

​

•

no vote required of the stockholders of Parent, except for the adoption of the plan of merger contained in the merger agreement by Parent as the sole stockholder of Merger Sub;

​

•

that Parent and Merger Sub have had access to information regarding TeamHealth’s business and has conducted their own independent investigation and analysis of TeamHealth; and

​

•

the absence of certain arrangements between Parent, Merger Sub or any of their respective affiliates and any member of TeamHealth’s stockholders, management or directors.

​

Some of Parent’s and Merger Sub’s representations and warranties are qualified as to materiality or by exceptions related to the absence of any circumstances which would or would reasonably be expected to prevent, materially delay or have a material adverse effect on the ability of Parent or Merger Sub to consummate of the transactions contemplated by the merger agreement.

The representations and warranties of each of the parties to the merger agreement will expire upon the completion of the merger or the termination of the merger agreement.

Conduct of Business Pending the Merger

We have agreed to restrictions on the operation of our business until the earlier of the effective time or the valid termination of the merger agreement. Except (i) as otherwise expressly required or permitted by the merger agreement, (ii) as set forth in the company disclosure letter, (iii) as required by applicable laws or (iv) as Parent consents to in writing (not to be unreasonably withheld, conditioned or delayed), (a) we have agreed to and will cause our subsidiaries and affiliated entities to conduct our and their respective businesses in the ordinary and usual course of business and use our and their respective reasonable best

92

efforts to preserve substantially intact our and each of our subsidiaries’ and affiliated entities’ business organization and material business relationships (including with governmental entities, customers, suppliers, creditors, and lessors), and (b) without limiting the foregoing, we shall not and shall cause each of our subsidiaries not to:

•

(A) amend, adopt any amendment to or otherwise change our certificate of incorporation or bylaws or other applicable governing instruments, (B) enter into any agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganizational document or (C) adopt any “poison pill” or similar stockholder rights plan;

​

•

other than in the ordinary course of business consistent with past practices, acquire (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any business or any corporation, partnership or other business organization or division thereof or any property or assets, in each case, except for (A) purchases of inventory and other assets in the ordinary course of business consistent with past practices or pursuant to existing contracts in effect as of the date of the merger agreement, (B) acquisitions in the ordinary course of business consistent with past practices not to exceed $15 million in the aggregate, or (C) any of our wholly owned subsidiaries or affiliated entities;

​

•

issue, sell, grant, authorize, pledge, encumber or dispose of  (or authorize the issuance, sale, grant, authorization, pledge, encumbrance or disposition of), any shares of capital stock, voting securities or other ownership interest, or any options, warrants, convertible securities or other rights of any kind to acquire or receive, or that are convertible into or exchangeable or exercisable for, any shares of capital stock, any voting securities or other ownership interest (including stock appreciation rights, phantom stock or similar instruments), of TeamHealth or any of its subsidiaries (except (a) for the issuance of shares of TeamHealth common stock upon the exercise, vesting or settlement of options, PSUs, MSUs or stock units as required under the terms thereof in effect as of the date of the merger agreement that have been made available to Parent, (b) for any issuance, sale or disposition to TeamHealth or a wholly owned subsidiary or affiliated entity of TeamHealth by any subsidiary or affiliated entity of TeamHealth or (c) the grant of MSUs, PSUs, options, stock units or any other award required to be granted under the terms of the company stock plan in effect as of the date of the merger agreement and made available to Parent);

​

•

reclassify, combine, split, reverse split, consolidate, recapitalize, subdivide, redeem, purchase or otherwise acquire any shares of capital stock or other ownership interests of TeamHealth or any of its subsidiaries or affiliated entities (or any warrants, options or other rights to acquire the foregoing) or consummate or authorize any other similar transaction with respect to shares of capital stock or ownership interests of TeamHealth or any of its subsidiaries (or any warrants, options or other rights to acquire the foregoing) (except (a) for the acquisition of shares of TeamHealth common stock tendered by directors or employees in connection with a cashless exercise of options or in order to pay taxes in connection with the exercise of options or (b) for the settlement of any PSUs or stock units as required under the terms of the company stock plan as in effect as of the date of the merger agreement and made available to Parent);

​

•

except under TeamHealth’s credit facility in the ordinary course of business consistent with past practices, create or incur certain liens in excess of  $10 million of notional debt in the aggregate on any material assets of TeamHealth or its subsidiaries or affiliated entities;

​

•

make any loans, advances or capital contributions to, or investment in, any person, other than us or our wholly-owned subsidiaries or affiliated entities, not in excess of  $5 million in the aggregate;

​

•

sell, transfer or otherwise dispose of  (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell, lease, assign, license, transfer, exchange, swap, abandon, grant an easement with respect to, or subject to certain liens, allow to expire, or dispose of any assets, rights or properties (including intellectual property) other than (A) sales, dispositions or licensing of equipment and/or inventory and other assets in the ordinary course of business consistent with

​

93

past practices and/or pursuant to existing contracts in effect as of the date of the merger agreement, (B) leases or sub-leases, in each case, in the ordinary course of business consistent with past practices or (C) other sales, leases, assignments, licenses, transfers, exchanges, swaps, abandonments, expirations or dispositions of assets, rights or properties to TeamHealth or any wholly owned subsidiary or affiliated entity of TeamHealth or of assets, rights or properties with a value of less than $5 million in the aggregate;

•

declare, set aside, establish a record date for, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to our or our subsidiaries’ or affiliated entities’ capital stock (except for any dividend or distribution by a subsidiary of TeamHealth or affiliated entity to TeamHealth or any wholly owned subsidiary or affiliated entity of TeamHealth);

​

•

authorize or make any capital expenditures which are, in the aggregate, in excess of  $2 million other than as set forth in the annual budget made available to Parent (or, with respect to periods following the final period reflected in such annual budget (i.e., Q1 2017 and Q2 2017), similar in nature, type and size to the capital expenditures as set forth in such annual budget for the comparable prior year period (i.e., Q1 2016 and Q2 2016));

​

•

other than (A) in the ordinary course of business consistent with past practices with respect to a contract that either has a term no longer than one (1) year or can be terminated by TeamHealth without material penalty or other material adverse effect on TeamHealth or its subsidiaries or affiliated entities upon notice of ninety (90) days or less or (B) as required by law, (1) enter into any contract that would have been a material contract if it had been in effect as of the date of the merger agreement, (2) extend or renew any material contract or any contract that would have been a material contract if it had been in effect as of the date of the merger agreement, or (3) otherwise modify, amend, terminate or waive any material rights or obligations under any material contract or any contract that would have been a material contract if it had been in effect as of the date of the merger agreement;

​

•

except for borrowings under TeamHealth’s credit facility in the ordinary course of business consistent with past practices and except for intercompany loans between TeamHealth and any of its wholly owned subsidiaries or affiliated entities or between any wholly owned subsidiaries or affiliated entities of TeamHealth, incur, prepay, issue, syndicate, refinance, or otherwise become liable for, indebtedness for borrowed money in excess of  $10 million, or modify in any material respect the terms of any such indebtedness for borrowed money, or assume, guarantee or endorse the obligations of any person (other than a wholly owned subsidiary or affiliated entity of TeamHealth), in each case, in excess of  $10 million, other than (A) indebtedness to fund amounts required to be paid pursuant to acquisitions permitted by or consented to under the merger agreement or (B) guarantees incurred in compliance with the merger agreement by TeamHealth of indebtedness of subsidiaries of TeamHealth;

​

•

except as required pursuant to the merger agreement or the terms of any company plan as in effect on the date of the merger agreement and disclosed to Parent (A) increase the compensation or benefits (including, without limitation, change in control, retention, severance or termination pay) of any of its directors, officers or employees (except base salary or wage increases in the ordinary course of business consistent with past practices with respect to employees who are not directors or executive officers and whose annual compensation is less than $250,000 prior to any such increase, including pursuant to TeamHealth’s regular merit review process), (B) grant any change in control, retention, severance or termination pay to any current or former TeamHealth employee (except as required by applicable law), (C) establish, adopt, enter into, amend or terminate any company plan or any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment or promotions in the ordinary course of business consistent with past practices or in connection with a replacement hiring, in each case, for employees whose annual compensation is less than $250,000, (D) grant any equity or equity-based awards except as permitted under the merger agreement, (E) loan or advance any money or any other property to any present or former

​

94

director, officer, or employee of TeamHealth or any subsidiary, (F) allow for the commencement of any new offering periods under either of the ESPPs, (G) hire (other than as an ordinary course non-executive replacement hire) or terminate (other than for cause) any employee with an annual compensation in excess of  $250,000, or (H) take any action to accelerate the vesting, funding or payment of any compensation, or benefits under, any company plan;

•

make any material change in any accounting principles, procedures, policies or practices except as may be required to conform to changes in applicable law or GAAP or regulatory requirements with respect thereto;

​

•

other than as required by applicable law or GAAP, (A) make any material change to any method of tax accounting, (B) make, revoke, or change any material tax election, (C) surrender any claim for a refund of a material amount of taxes, (D) enter into any closing agreement with respect to any material taxes, (E), amend any material income tax return, or (F) settle or compromise any material tax liability;

​

•

other than as required by applicable law, enter into any material collective bargaining agreement, recognize or certify any labor union, labor organization, works council or group of employees of the Company or any of its subsidiaries or affiliated entities as the bargaining representative for any TeamHealth employees;

​

•

change the exempt/nonexempt classification of any group of TeamHealth employees unless required by applicable laws;

​

•

waive, release settle or compromise any action other than settlements or compromises of litigation that do not impose any material non-monetary obligations on TeamHealth or its subsidiaries’ or affiliated entities and where the amount paid does not exceed $2 million;

​

•

enter any new line of business outside of our existing business as of the date of the merger agreement; or

​

•

agree, authorize, or commit, to take any of the foregoing actions.

​

Parent and Merger Sub have agreed to restrictions on the operation of their businesses until the earlier of the effective time or the valid termination of the merger agreement. Parent and Merger Sub will not take any action (including any action with respect to a third party) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or have a material adverse effect on the ability of Parent or Merger Sub to consummate the transactions contemplated by the merger agreement.

Go-Shop Period; Restrictions on Solicitation of Acquisition Proposals

Acquisition Proposals

During the go-shop period, TeamHealth and its subsidiaries and affiliated entities and their respective directors, officers, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants and other advisors, affiliates or representatives had the right to:

•

initiate, solicit, facilitate and encourage any inquiry or the making of any proposal or offer that could constitute an acquisition proposal, including by providing information regarding, and affording access to the business, properties, assets, books, records and personnel of, TeamHealth and its subsidiaries and affiliated entities to any person pursuant to an acceptable confidentiality agreement, provided that TeamHealth must provide to Parent and Merger Sub any material non-public information or data that is provided to any person given such access that was not previously made available to Parent or Merger Sub prior to or substantially concurrently with the time it is provided to such person (and in any event, within 24 hours); and

​

•

engage in, enter into, continue or otherwise participate in any discussions or negotiations with any persons with respect to any acquisition proposals (or inquiries that could lead to an acquisition proposal) and cooperate with or assist or participate in or facilitate any such inquiries, proposals, offers, discussions or negotiations or any effort or attempt to make any acquisition proposals, including granting a limited waiver, amendment or release under any pre-existing standstill or

​

95

similar provision with any person to the extent necessary to permit such person to make or amend a confidential acquisition proposal (such limited waiver to include an express acknowledgement by the parties thereto that under no circumstances will such restricted person(s) be permitted to acquire, directly or indirectly, any securities of TeamHealth or any of its subsidiaries or affiliated entities prior to the valid termination of the merger agreement).

No later than one business day after the end of the go-shop period, TeamHealth must (A) notify Parent in writing of the identity of each person from whom TeamHealth received a written acquisition proposal during the go-shop period, (B) provide Parent a list identifying each excluded party (as defined below) as of the end of the go-shop period and (C) provide to Parent (x) a copy of any acquisition proposal made in writing and any other written terms or proposals provided (including financing commitments) to TeamHealth or any of its subsidiaries or affiliated entities in connection with any acquisition proposal and any material modifications thereto and (y) a written summary of the material terms of any acquisition proposal not made in writing (including any material terms proposed orally or supplementally and any material modifications thereto).

Non-Solicitation Provisions and Exceptions

From the no-shop period start date until the earlier of the effective time and the valid termination of the merger agreement, TeamHealth is subject to restrictions on its ability to solicit third party proposals relating to alternative transactions or to provide information to and engage in discussions or negotiations with a third party in relation to an alternative transaction (subject to certain exceptions with respect to any excluded party and certain exceptions prior to the approval of the merger proposal by TeamHealth stockholders at the special meeting). Specifically, TeamHealth shall not, and shall cause its subsidiaries and affiliated entities not to (and shall direct its and their directors, officers, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants and other advisors, affiliates or representatives not to):

•

initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals or offers with respect to, or the making of, or that could reasonably be expected to lead to, an acquisition proposal;

​

•

enter into, continue or otherwise participate or engage in, knowingly facilitate or knowingly encourage, any negotiations or discussions concerning, or that could reasonably be expected to lead to, an acquisition proposal, or provide access to its properties, books, records or any confidential information or data to any person relating to TeamHealth, its subsidiaries and its affiliated entities in connection with the foregoing;

​

•

approve, endorse or recommend (or propose publicly to approve, endorse or recommend) any acquisition proposal;

​

•

take any action to make the provisions of any takeover law, or any restrictive provision of any applicable anti-takeover provision in the certificate of incorporation or bylaws of TeamHealth, inapplicable to any transactions contemplated by any acquisition proposal; or

​

•

execute or enter into, any merger agreement, acquisition agreement or other similar definitive agreement for any acquisition proposal.

​

Additionally, TeamHealth shall not authorize, commit to or agree to do any of the foregoing prohibited activities. For the avoidance of doubt, notwithstanding the commencement of the no-shop period start date, until the cut-off date, TeamHealth may continue to engage in the foregoing activities with any excluded party, but only for so long as such person is an excluded party. Immediately following the no-shop period start date, TeamHealth shall and shall cause each of its subsidiaries and affiliated entities and its and their representatives to immediately (1) cease any solicitations, discussions, communications or negotiations with any person in connection with an acquisition proposal or any potential acquisition proposal and (2) terminate access to any physical or electronic data rooms relating to any potential acquisition proposal, except as it may relate to any excluded party, but only for so long as such person is an excluded party. Except as it may relate to an excluded party, TeamHealth also agrees that following the no-shop period start date it will promptly (and in any event within two business days thereof) deliver a

96

written notice to each such person to the effect that TeamHealth is ending all solicitations, discussions, communications and negotiations with such person, which notice shall also request that each such person who has executed a confidentiality agreement prior to the date of the merger agreement in connection with a potential acquisition of TeamHealth promptly return or destroy all confidential information furnished by or on behalf of TeamHealth or any of its subsidiaries prior to the date of the merger agreement.

After the no-shop period start date or, with respect to an excluded party after ten business days following the no-shop period start date, we must provide prompt (and in any event within one business day after our knowledge of any such event) notice to Parent of receipt of any acquisition proposal, any inquiry, proposal, offer or request for information with respect to, or that could reasonably be expected to result in, an acquisition proposal or any discussions or negotiations sought to be initiated or continued with us or any of our subsidiaries or affiliated entities or our or their representatives concerning an acquisition proposal, including a summary of the material terms of such acquisition proposal, inquiry, offer, proposal or request for information (including copies of any acquisition proposal, inquiry, offer, proposal or request for information made in writing and a summary of terms and conditions of any acquisition proposal, inquiry, offer, proposal or request for information not made in writing) and the identity of the person making such acquisition proposal, inquiry, offer, proposal or request for information.

Notwithstanding the foregoing non-solicitation restrictions and TeamHealth’s obligations under the merger agreement relating to the special meeting, nothing contained in the merger agreement prevents us from taking and disclosing a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the Exchange Act, making a customary “stop-look-and-listen” communication pursuant to Rule 14d-9(f) under the Exchange Act or making any legally required disclosure to stockholders with regard to the transactions contemplated by the merger agreement or an acquisition proposal (provided, that any public disclosure (other than any “stop-look-and-listen” statement) by TeamHealth or the TeamHealth Board relating to any determination or other action by the TeamHealth Board with respect to an acquisition shall be deemed to be a change of recommendation concerning the merger proposal unless the TeamHealth Board expressly publicly reaffirms its recommendation concerning the merger proposal in such disclosure).

Further, notwithstanding the foregoing non-solicitation restrictions and TeamHealth’s obligations under the merger agreement relating to the special meeting, prior to obtaining the approval of the merger proposal by the TeamHealth stockholders at the special meeting, we may (x) contact and engage in discussions, negotiations or communications with any person and its representatives who has made an acquisition proposal that was not the result of a material breach of the non-solicitation restrictions described above and (y) provide access to TeamHealth’s or any of its subsidiaries or affiliated entities properties, books and records and provide information and data in response to a request therefor by any person who has made a bona fide acquisition proposal that was not the result of a material breach of the non-solicitation restrictions described above, if the TeamHealth Board (A) determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes or would reasonably be expected to constitute or lead to a superior proposal, (B) determines in good faith, after consultation with its outside legal counsel, that the failure to provide such access or engage in such negotiations or discussions would be reasonably likely to be inconsistent with its fiduciary duties, and (C) has entered into with such person an acceptable confidentiality agreement; provided that TeamHealth must provide to Parent and Merger Sub any material non-public information or data that is provided to any person given such access that was not previously made available to Parent or Merger Sub prior to or substantially concurrently with the time it is provided to such person (and in any event within 24 hours).

TeamHealth Board Recommendation and Change of Recommendation

Under the terms of the merger agreement, subject to the exceptions described below, the TeamHealth Board has agreed to recommend that the TeamHealth stockholders vote in favor of the merger proposal. If the TeamHealth Board (1) fails to include its recommendation in this proxy statement, (2) withdraws, modifies, qualifies or changes its recommendation, (3) fails to reaffirm the recommendation within five business days of a request therefor in writing by Parent following the public disclosure of certain acquisition proposals with a third party (subject to certain limitations), (4) fails to recommend, in a Solicitation/Recommendation Statement on Schedule 14D-9 against any acquisition proposal that is a tender offer or exchange offer subject to Regulation 14D promulgated under the Exchange Act within ten business days after the commencement of such tender offer or exchange offer, or (5) formally resolves to

97

effect or publicly announces an intention or resolution to do any of the foregoing, it constitutes a “change of recommendation” of the TeamHealth Board.

The TeamHealth Board may, prior to obtaining the approval of the merger proposal by the TeamHealth stockholders at the special meeting, (x) effect a change of recommendation contemplated by clauses (1) and (2) of the definition thereof if an event, fact, development, circumstance or occurrence (but specifically excluding any acquisition proposal or superior proposal) that materially improves business, assets, operations or prospects of us or any of our subsidiaries that was not known and was not reasonably foreseeable (or the implications and effects of which were not fully known and the consequences of which were not reasonably foreseeable to the TeamHealth Board) as of October 30, 2016, becomes known to us or the TeamHealth Board after October 30, 2016 (each, an “intervening event”) and if as a result thereof the TeamHealth Board determines in good faith after consultation with its outside legal counsel that failure to do so would be reasonably likely to be inconsistent with its fiduciary duties or (y) notwithstanding the non-solicitation restrictions in the merger agreement, in response to an unsolicited bona fide acquisition proposal that did not result from a material breach of the non-solicitation restrictions in the merger agreement and that the TeamHealth Board has determined in good faith, after consultation with its outside legal counsel and financial advisor would if consummated, result in a superior proposal (i) make a change of recommendation or (ii) terminate the merger agreement to enter into a definitive agreement with respect to such superior proposal (provided that prior to or concurrently with such termination TeamHealth pays Parent the associated termination fee), in each case of  (x) and (y) after complying with the following notice procedures (and, in the case of  (x), as if such procedures related to an intervening event):

•

in the case of a superior proposal, we must not be in material breach of the non-solicitation restrictions in the merger agreement;

​

•

we must provide written notice to Parent advising Parent that we propose to take such action, which notice must include a copy of the agreement in respect of the superior proposal that is the basis of the proposed action (or, if there is no such agreement, a written summary of the material terms and conditions of the superior proposal) and the identity of the party making the superior proposal;

​

•

if requested by Parent, during the notice period, we must, cause our subsidiaries and affiliated entities to, and use reasonable best efforts to cause our and their representatives to, negotiate with Parent and its representatives in good faith to make such adjustments in the terms and conditions of the merger agreement such that the superior proposal would cease to be a superior proposal; and

​

•

at the end of the three business day period following delivery of such notice (we refer to such three business day period ending at 5:00 pm (New York City time) on such third business day as the “notice period”) the TeamHealth Board must reaffirm in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal continues to constitute a superior proposal and that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law.

​

Notwithstanding the foregoing, any material revision, amendment, update or supplement to the terms and conditions of a superior proposal shall be considered a new superior proposal, including with respect to the notice period, and we must follow the requirements set forth in the above bullet points with respect to such new proposal, except that the three business day period shall be reduced to a two business day period.

TeamHealth has agreed that it shall not nor shall it permit its subsidiaries or affiliated entities to enter into any agreement that prohibits or restricts it from providing to Parent the information contemplated by the non-solicitation provisions of the merger agreement.

98

Stockholders Meeting

TeamHealth has agreed to, as promptly as practicable following the date on which TeamHealth is informed that the SEC has no further comments to this proxy statement, (i) take all action required under the DGCL, the certificate of incorporation and by-laws of TeamHealth and the applicable requirements of the NYSE necessary to promptly and duly call, give notice of, convene and hold as promptly as practicable a special meeting of the TeamHealth stockholders for the purpose of approving and adopting the merger agreement and (ii) mail this proxy statement to the TeamHealth stockholders (but in any event no more than five business days of the SEC’s clearance of this proxy statement). TeamHealth may postpone, recess or adjourn the special meeting solely (w) to the extent required by law, (x) to allow reasonable additional time to solicit additional proxies to the extent TeamHealth reasonably believes necessary in order to obtain approval of the merger proposal by the TeamHealth stockholders at the special meeting or (y) if as of the time for which the special meeting is originally scheduled (as set forth in this proxy statement) there are insufficient shares of common stock of TeamHealth represented (either in person or by proxy) and voting to constitute a quorum necessary to conduct the business of the special meeting.

In addition, TeamHealth has agreed to, by acting through the TeamHealth Board, (a) make the recommendation that the TeamHealth stockholders vote in favor of the merger proposal and include in this proxy statement the recommendation and (subject to the consent of its financial advisor) the written opinion of its financial advisor and (b) use its reasonable best efforts to obtain the approval of the merger proposal by the TeamHealth stockholders, provided that the TeamHealth Board may change its recommendation in the manner described above in the first paragraph of the section entitled “— TeamHealth Board Recommendation and Change of Recommendation” and following such change of recommendation, may fail to use such reasonable best efforts.

Certain Definitions

In this proxy statement, we refer to a confidentiality agreement that contains confidentiality and standstill provisions on terms no less favorable to TeamHealth than those contained in the confidentiality agreement, dated August 15, 2016, between an affiliate of Parent and TeamHealth (the “parent confidentiality agreement”) (except for such changes specifically necessary in order for TeamHealth to be able to comply with its obligations under the merger agreement and such non-material changes requested by the counterparty to ensure the confidentiality agreement is consistent with such counterparty’s customary policies, procedures and practices with respect to confidentiality agreements; provided that the foregoing exception shall not apply to changes to the standstill provisions) as an “acceptable confidentiality agreement,” provided that in the event TeamHealth enters into a confidentiality agreement that contains provisions (other than those referred to in the preceding parenthetical) that are more favorable in any economic respect to the counterparty than those contained in the parent confidentiality agreement, TeamHealth shall allow Parent the option to amend the terms of the parent confidentiality agreement so as to give Parent the benefit of such provisions.

In this proxy statement, we refer to any proposal or offer from any person (other than Parent, Merger Sub or their respective affiliates) relating to (1) any direct or indirect acquisition, license or purchase of a business that constitutes 20% or more of the net revenues, net income or assets of TeamHealth and its subsidiaries and affiliated entities, taken as a whole, (2) any direct or indirect acquisition, purchase or issuance of 20% or more of the total voting power of the equity securities of TeamHealth, (3) any tender offer or exchange offer that if consummated would result in any person beneficially owning 20% or more of the total voting power of the equity securities of TeamHealth, or (4) any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving TeamHealth (or any subsidiary or affiliated entity of TeamHealth whose business constitutes 20% of more of the net revenues, net income or assets of TeamHealth and its subsidiaries, taken as a whole), as an “acquisition proposal”.

In this proxy statement, we refer to a bona fide written acquisition proposal involving (A) assets that generate more than 50% of the consolidated total revenues of TeamHealth and its subsidiaries and affiliated entities, taken as a whole, (B) assets that constitute more than 50% of the consolidated total assets of TeamHealth and its subsidiaries and affiliated entities, taken as a whole, or (C) more than 50% of the total voting power of the equity securities of TeamHealth, in each case, that the TeamHealth Board in good faith

99

determines is reasonably likely to be consummated in accordance with its terms and would, if consummated, result in a transaction that is more favorable from a financial point of view to the stockholders of TeamHealth than the transactions contemplated by the merger agreement, in each case, after taking into account all such factors and matters deemed relevant in good faith by the TeamHealth Board, including legal, financial (including the financing terms of any such proposal), regulatory, timing or other aspects of such proposal and the transactions contemplated by the merger agreement and after taking into account any changes to the terms of the merger agreement irrevocably offered in writing by Parent in response to such superior proposal pursuant to and in accordance with the non-solicitation provisions of the merger agreement, as a “superior proposal”.

Efforts to Complete the Merger

Each of the parties will use its reasonable best efforts to take or cause to be taken all actions and to do or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to cause the conditions to closing to be satisfied, including making, as promptly as reasonably practicable (and within the time limits set forth in the merger agreement) the regulatory filings and obtaining expiration or termination of the HSR waiting period described in more detail under “The Merger Proposal (Proposal 1) — Antitrust Reviews Required for the Merger and Other Regulatory Filings” beginning on page 79, including (i) cooperating in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, (ii) subject to applicable law, furnishing the other party as promptly as reasonably practicable all information required for any application or other filing to be made by the other party, (iii) promptly notifying the other party of any substantive communication received by such party from, or given by such party to, any U.S. or foreign governmental entity and of any substantive communication received or given in connection with any proceeding by a private party, and, subject to applicable law, furnish the other party promptly with copies of all correspondence, filings and communications between them and the governmental entity regarding the merger, (iv) responding as promptly as reasonably practicable to any inquiries received from, and supply as promptly as reasonably practicable any additional information or documentation that may be requested by any governmental entity in respect of such registrations, declarations and filings or such transactions and (v) permitting the other party to review any substantive communication given by it to, and consult with each other in advance, and consider in good faith the other party’s reasonable comments in connection with, any communication, meeting or conference with, the governmental entity or, in connection with any proceeding by a private party, with any other person.

No party will independently participate in any substantive meeting or communication with any governmental entity in respect of any such filings, investigation or other inquiry relating to the above without giving the other parties sufficient prior notice. Notwithstanding anything to the contrary in the merger agreement, Parent will and will cause its affiliates and subsidiaries to, take any and all steps necessary to (i) resolve, avoid, or eliminate impediments or objections, if any, that may be asserted with respect to the transactions contemplated by the merger agreement under any antitrust law or (ii) avoid the entry of, effect the dissolution of, and have vacated, lifted, reversed or overturned, any decree, order or judgment under any antitrust law in connection with an action commenced by a governmental entity in a U.S. federal district court that would prevent, prohibit, restrict or delay the consummation of the contemplated transactions, so as to enable the parties to close the contemplated transactions expeditiously (but in no event later than the end date), including (a) the sale, divestiture disposition or license of any assets, properties, products, rights, services or businesses of TeamHealth or its subsidiaries or affiliated entities or any interest therein and (b) taking actions that would limit Parent’s, Parent’s subsidiaries, Parent’s affiliates or TeamHealth or its subsidiaries’ or affiliated entities’ freedom of action with respect to, or its or their ability to retain any assets, properties, products, rights, services or businesses of TeamHealth or its subsidiaries or affiliated entities or any interest therein. Parent shall not be required to take any action or omission with respect to (1) any of its affiliates that are engaged in businesses distinct from the private equity business of Blackstone (other than Parent, Merger Sub and TeamHealth and its subsidiaries and affiliated entities) or (2) any direct or indirect portfolio companies of investment funds advised or managed by one or more affiliates of Parent (other than, for the avoidance of doubt, TeamHealth and its subsidiaries and affiliated entities).

100