THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Psychiatric Solutions, Inc. (PSYS)

4/21/2006 Proxy Information

In connection with the PMR Merger, PMR designated Mark P. Clein, former director of PMR, as a director of the Company.

Grant of Options to Certain Directors and Executive Officers

Directors and members of the Company’s management have been granted options to purchase Common Stock. See “Corporate Governance — Compensation of Directors,” “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation.”

Additional Relationships and Related Party Transactions

William M. Petrie, M.D., a member of the Company’s Board of Directors, serves as President of Psychiatric Consultants, P.C., a practice group managed by the Company (“PCPC”), and owns a 14% interest in PCPC. The initial term of the management agreement was for three years. It was renewed for additional three year terms on April 11, 2000 and April 11, 2003. The management agreement will continue to automatically renew for three year terms unless terminated by either party. The Company’s management fee was $124,605 for the year ended December 31, 2005.

Affiliates of Citigroup Inc. (“Citigroup”), the beneficial owner of more than 5% of the Company’s Common Stock, have provided, and may continue to provide, investment and commercial banking and financial advisory services from time to time for us in the ordinary course of business for which they have received customary fees. In 2005, such affiliates of Citigroup received an aggregate amount of approximately $15.2 million in fees and interest in connection with: (i) merger advisory services related to the Company’s acquisition of the capital stock of Ardent Health Services, Inc. from Ardent Health Services LLC, (ii) a senior unsecured term loan that was satisfied in July 2005, (iii) the Company’s senior credit facility, (iv) serving as the lead underwriter in connection with the Company’s issuance of $220 million of 7 3/4% Senior Subordinated Notes Due 2015 and (v) serving as a joint-book running manager for the Company’s September 2005 public offering of Common Stock. In addition, affiliates of Citigroup also have received interest on their portion of the funds loaned to the Company under the Company’s senior credit facility.

4/22/2005 Proxy Information

Grant of Options and Stock Awards to Certain Directors and Executive Officers

Directors and members of the Company’s management have been granted options to purchase Common Stock. See “Compensation of Directors,” “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation.”

Indebtedness of Certain Directors

In January 2000, PMR loaned Mr. Clein, PMR’s chief executive officer at the time and currently one of the Company’s directors, $467,500 pursuant to promissory notes for the purchase of stock in connection with the exercise of stock options (the “Stock Notes”). The Stock Notes, which were paid in full in September 2004, bore interest at the rate of 6.21% per annum and were with recourse in addition to being secured by stock under pledge agreements. PMR also received promissory notes from Mr. Clein for up to $257,208 for tax liabilities related to the purchase of such stock (the “Tax Notes”). The Tax Notes, which were paid in full in September 2004, bore interest at the rate of 6.21% and were secured by stock pledges, but were otherwise without recourse. The largest aggregate amount of indebtedness owed by Mr. Clein during 2004 was $349,864.

Additional Relationships and Related Party Transactions

On February 4, 2003, the Company’s stockholders approved the private placement of $25 million of Series A Preferred Stock with affiliates of Oak Investment Partners (“Oak”) and Salix Ventures (“Salix”) and The 1818 Mezzanine Fund II, L.P. (the “1818 Fund”). The 1818 Fund invested an aggregate of $999,999 and received an aggregate of 181,818 shares of Series A Preferred Stock, all of which were converted into 192,368 shares of Common Stock in 2004. Oak invested an aggregate of $20,000,001 and received an aggregate of 3,636,364 shares of Series A Preferred Stock, all of which were converted into 3,853,252 shares of Common Stock in 2004. Salix invested an aggregate of $3,999,996 and received an aggregate of 727,272 shares of Series A Preferred Stock, all of which were converted into 767,850 shares of Common Stock in 2004. One half of the Series A Preferred Stock was issued on April 1, 2003. The other half was issued on June 19, 2003. The proceeds of the sale of the Series A Preferred Stock were used to acquire Ramsay Youth Services, Inc., six facilities from The Brown Schools, Inc. and to pay down a portion of the Company’s long-term debt. Mr. Grant is President of Salix Management Corporation, the manager of venture capital partnerships Salix Ventures, L.P., Salix Ventures II, L.P. and Salix Affiliates II, L.P. Ms. Lamont is General Partner of Oak Investment Partners and President and Chief Executive Officer of Psychiatric Solutions, Inc.

William M. Petrie, M.D., a member of the Company’s Board of Directors, serves as President of Psychiatric Consultants, P.C., a practice group managed by the Company (“PCPC”), and owns a 14% interest in PCPC. The initial term of the management agreement was for three years. It was renewed for additional three year terms on April 11, 2000 and April 11, 2003. The management agreement will continue to automatically renew for three year terms unless terminated by either party. The Company’s management fee was $137,077 for the year ended December 31, 2004.

4/9/2004 Proxy Information

Indebtedness of Certain Directors

In January 2000, PMR loaned Mr. Clein, PMR’s chief executive officer at the time and currently one of the Company’s directors, $467,500 pursuant to promissory notes for the purchase of stock in connection with the exercise of stock options (the “Stock Notes”). The Stock Notes, due December 31, 2004, bear interest at the rate of 6.21% per annum and are with recourse in addition to being secured by stock under pledge agreements. PMR also received promissory notes from Mr. Clein for up to $257,208 for tax liabilities related to the purchase of such stock (the “Tax Notes”). The Tax Notes, due December 31, 2004, bear interest at the rate of 6.21% and are secured by stock pledges, but are otherwise without recourse. In May 2002, the Stock Notes and Tax Notes were amended to include a provision that allowed the principal and interest on the notes to be paid, at anytime prior to December 31, 2003, through the delivery to the Company of Common Stock valued at the higher of (i) $7.92 or (ii) the average closing sales prices of Common Stock for the five trading days prior to the delivery of such stock. The amendments also eliminated the provision in each Note that required any dividends received with respect to shares being purchased with the proceeds of such Note to be immediately applied toward the payment of amounts outstanding under such note. The largest aggregate amount of indebtedness owed by Mr. Clein during 2003 was $341,052. As of March 15, 2004, Mr. Clein owed $60,325 under the Stock Notes and $284,101 under the Tax Notes.

Additional Relationships and Related Party Transactions

Joey A. Jacobs, the Company’s Chairman, President and Chief Executive Officer, serves as a member of the Board of Directors of Stones River Hospital, a hospital in which the Company manages a unit pursuant to a management agreement. The term of the third amendment to the management agreement is two years and automatically renews for one year terms unless terminated by either party. Total revenue from this management agreement was $783,000 for the year ended December 31, 2003. The Company believes the terms of the management agreement are consistent with management agreements negotiated at arms-length.

On February 4, 2003, the Company’s stockholders approved the private placement of $25 million of Series A Preferred Stock with affiliates of Oak Investment Partners (“Oak”) and Salix Ventures (“Salix”) and The 1818 Mezzanine Fund II, L.P. (the “1818 Fund”). The 1818 Fund invested an aggregate of $999,999 and received an aggregate of 181,818 shares of Series A Preferred Stock. Oak invested an aggregate of $20,000,001 and received an aggregate of 3,636,364 shares of Series A Preferred Stock. Salix invested an aggregate of $3,999,996 and received an aggregate of 727,272 shares of Series A Preferred Stock. One half of the Series A Preferred Stock was issued on April 1, 2003. The other half was issued on June 19, 2003. The proceeds of the sale of the Series A Preferred Stock were used to acquire Ramsay Youth Services, Inc., six facilities from The Brown Schools, Inc. and to pay down a portion of the Company’s long-term debt.