SEC FORM 4

SEC Form 4

FORM 4

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

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

DAUGHERTY PATRICK H

(Last)

(First)

(Middle)

13455 NOEL ROAD

SUITE 1300

(Street)

DALLAS

75240

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
MARINER HEALTH CARE INC [ MHCA ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
12/31/2003

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common stock, par value $0.01 per share								725,700	I	By Highland Crusader⁽¹⁾
Common stock, par value $0.01 per share								39,893	I	By Prospect Street⁽²⁾
Common stock, par value $0.01 per share								37,277	I	By Highland Equity⁽³⁾
Common stock, par value $0.01 per share								2,800	D
Common stock, par value $0.01 per share	12/31/2003⁽⁴⁾		J⁽⁴⁾		74,552	D	$0⁽⁴⁾	0	I	By KZH Pamco

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Options to purchase common stock	$20.12							⁽⁵⁾	05/15/2012	Common Stock	25,000		25,000	D⁽⁶⁾

Explanation of Responses:

1. Common stock held by Highland Crusader Offshore Partners, LP ("Highland Crusader"). Mr. Daugherty is General Counsel and Senior Portfolio Manager of Highland Capital Management, L.P. ("Highland Capital"), the general partner of Highland Crusader. Mr. Daugherty disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all the reported shares for purposes of Section 16 or for any other person.

2. Common stock held by Prospect Street High Income Portfolio, Inc. ("Prospect Street"). Mr. Daugherty is General Counsel and Senior Portfolio Manager of Highland Capital, the investment advisor for Prospect Street. Mr. Daugherty disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all the reported shares for purposes of Section 16 or for any other person.

3. Common stock held by Highland Equity Focus Fund, LP ("Highland Equity"). Mr. Daugherty is General Counsel and Senior Portfolio Manager of Highland Capital, the general partner of Highland Equity. Mr. Daugherty disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all the reported shares for purposes of Section 16 or for any other person.

4. On December 31, 2003, Highland Capital ceased being the investment advisor for KZH Pamco. Therefore, Mr. Daugherty, as General Counsel and Senior Portfolio Manager of Highland Capital, is no longer required to report these securities as indirectly owned.

5. Option to vest and become exercisable with respect to (i) 25% of the shares of Common Stock originally subject to the option on the date of grant, which was May 15, 2002, and (ii) an additional 25% on each of the three subsequent anniversaries of the grant date provided that Mr. Daugherty shall continue to serve as a director of Mariner Health Care, Inc. (the "Company") except as otherwise provided by the terms set forth in the 2002 Outside Directors' Stock Option Plan and the form of Stock Option Agreement issued pursuant thereto.

6. Mr. Daugherty has agreed to assign or remit all compensation, including stock options, received as a director of the Company to his employer, Highland Capital. Accordingly, Mr. Daugherty disclaims beneficial ownership of these securities except to the extent of his pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all the reported shares for purposes of Section 16 or for any other person.

Remarks:

	Stefano M. Miele, Attorney-in-Fact for Patrick H. Daugherty	01/05/2004
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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