13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from______________to________________.
Commission file number 1-14194
MORRISON HEALTH CARE, INC.
--------------------------
(Exact name of Registrant as specified in charter)
GEORGIA 63-1155966
(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
1955 Lake Park Drive, Suite 400, Smyrna, GA 30080-8855
(Address of principal executive offices) (Zip-Code)
Registrant's telephone number, including area code: (770) 437-3300
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes_X_ No___
12,351,376
(Number of shares of $0.01 par value common stock outstanding
as of March 31, 1998)
INDEX
-----
PART I Financial Information
Page
Number
------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as
of February 28, 1998 and May 31, 1997......... 3
Condensed Consolidated Statements of
Income for the Quarter and Nine Months Ended
February 28, 1998 and March 1, 1997........... 4
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended
February 28, 1998 and March 1, 1997........... 5
Notes to Condensed Consolidated Financial
Statements.................................... 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 8-10
Item 3. Quantitative and Qualitative Disclosures
about Market Risk............................. N/A
PART II Other Information
Item 1. Legal Proceedings............................. 11
Item 2. Changes in Securities......................... None
Item 3. Defaults upon Senior Securities............... None
Item 4. Submission of Matters to a Vote of
Security Holders.............................. None
Item 5. Other Information............................. 11
Item 6. Exhibits and Reports on Form 8-K.............. 11
Signatures................................................... 12
Index to Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.......................................... 13
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
<TABLE>
Morrison Health Care, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
As of As of
February 28, May 31,
1998 1997
------------------------------------
(Unaudited) (Audited)
<CAPTION>
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments............... $ 4,550 $ 6,347
Receivables - accounts and notes (net)........ 25,023 21,271
Inventories................................... 3,052 2,686
Prepaid expenses.............................. 1,094 1,006
Deferred income tax benefits.................. 2,136 1,929
------------------------------------
Total current assets........................ 35,855 33,239
------------------------------------
Property and equipment - at cost................ 20,419 16,343
Less accumulated depreciation................. 9,662 8,471
------------------------------------
10,757 7,872
Cost in excess of net assets acquired, net...... 11,092 4,582
Deferred charges................................ 4,368 2,830
Other assets.................................... 12,905 11,680
------------------------------------
Total assets................................ $74,977 $60,203
====================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable.............................. $10,384 $10,381
Book bank overdrafts.......................... 1,653 2,596
Other accrued liabilities..................... 11,528 11,360
Current portion of long-term debt............. 5,011 5,011
------------------------------------
Total current liabilities................... 28,576 29,348
------------------------------------
Notes payable................................... 26,387 15,022
Other deferred liabilities...................... 10,920 10,205
Stockholders' equity:
Common stock, $0.01 par value
(authorized 100,000 shares;
issued: 12,326 and 12,165 shares,
1998 and 1997, respectively)................ 123 122
Capital in excess of par value................ 11,914 9,717
Unearned ESOP shares.......................... (3,283) (3,517)
Retained earnings............................. 1,727 647
------------------------------------
10,481 6,969
Less cost of treasury stock................... 1,387 1,341
------------------------------------
Total stockholders' equity.................. 9,094 5,628
------------------------------------
Total liabilities and stockholders' equity.. $74,977 $60,203
====================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
Morrison Health Care, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
For the Quarter Ended For the Nine Months Ended
----------------------------- ------------------------------
February 28, March 1, February 28, March 1,
1998 1997 1998 1997
----------------------------- ------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
Revenues.............................. $63,337 $57,483 $181,737 $164,496
Operating costs and expenses:
Operating expenses.................. 52,796 48,067 150,481 135,155
Selling, general and
administrative.................... 5,925 5,517 16,475 15,777
Interest expense, net of
interest income, totaling $107 and
$1,387, respectively, in 1998
and $152 and $566, respectively,
in 1997............................. 324 204 780 602
---------------------------- -------------------------------
59,045 53,788 167,736 151,534
Income before provision for
income taxes........................ 4,292 3,695 14,001 12,962
Provision for federal and state
income taxes........................ 1,695 1,533 5,530 5,378
---------------------------- -------------------------------
Net income............................ $ 2,597 $ 2,162 $ 8,471 $ 7,584
============================ ===============================
Earnings per share - Basic............ $ 0.22 $ 0.18 $ 0.71 $ 0.64
Earnings per share - Diluted.......... $ 0.21 $ 0.18 $ 0.70 $ 0.64
Weighted average common
shares - Basic...................... 11,975 11,785 11,927 11,783
Net effect of dilutive stock options.. 283 58 222 54
---------------------------- --------------------------------
Weighted average common and common
equivalent shares - Diluted......... 12,258 11,843 12,149 11,837
============================ ================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
Morrison Health Care, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
For the Nine Months Ended
---------------------------------
February 28, March 1,
1998 1997
---------------------------------
<CAPTION>
<S> <C> <C>
Operating activities:
Net income........................................ $ 8,471 $ 7,584
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................. 1,858 1,469
Amortization of intangibles................... 220 116
Other, net.................................... 734 811
Deferred income taxes......................... (454) (715)
(Gain)/Loss on disposition of assets.......... (47) 21
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables.......... (3,974) 4,004
Increase in inventories..................... (362) (17)
(Increase)/Decrease in prepaid and
other assets............................. (301) 675
(Decrease)/Increase in accounts payable,
accrued and other liabilities............ (986) 1,988
Increase in income taxes payable............ 506 1,113
---------------------------------
Net cash provided by operating activities......... 5,665 17,049
---------------------------------
Investing activities:
Purchases of property and equipment............... (4,911) (2,933)
Proceeds from disposal of asset................... 242 61
Acquisitions...................................... (6,303) 0
Deferred charges.................................. (2,253) (649)
Other, net........................................ (598) (332)
---------------------------------
Net cash used by investing activities............. (13,823) (3,853)
---------------------------------
Financing activities:
Principal payments on long-term debt.............. (3,761) (11)
Net change in short-term borrowings............... 15,125 (6,761)
Proceeds from exercise of stock options........... 2,139 375
Dividends paid.................................... (7,391) (7,289)
(Increase) in treasury stock held by
Deferred Comp Plan............................ (45) (237)
ESOP shares released.............................. 294 0
---------------------------------
Net cash provided (used) by financing activities.. 6,361 (13,923)
---------------------------------
Decrease in cash and short-term investments....... (1,797) (727)
Cash and short-term investments at the
beginning of the period......................... 6,347 6,088
---------------------------------
Cash and short-term investments at the
end of the period............................... $ 4,550 $ 5,361
=================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
Morrison Health Care, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. The
accompanying unaudited condensed consolidated financial
statements reflect all adjustments for normal recurring
accruals. These adjustments are necessary, in the opinion of
management, for a fair presentation of the financial position,
the results of operations and the cash flows for the interim
periods presented. The results of operations for the interim
periods reported herein are not necessarily indicative of
results to be expected for the full year. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on
Form 10-K for the year ended May 31, 1997.
Certain prior reported amounts have been reclassified to be
consistent with current reporting practices.
NOTE B - ACQUISITION OF DRAKE MANAGEMENT SERVICES
In January 1998, the Company acquired for approximately $6
million all of the outstanding common stock of Drake
Management Services (DMS). The purchase price may increase
contingent on the future earnings of DMS as defined in the
purchase agreement. The acquisition was accounted for using
the purchase method. The resulting goodwill is being amortized
over twenty years using the straight-line method. The results
of Drake Management Services have been included from the
acquisition date.
NOTE C - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No.
128, "Earnings Per Share." The provisions of SFAS No. 128 are
applicable to reporting periods after December 15, 1997, and
supercede Accounting Principles Board Opinion No. 15,
"Earnings Per Share." Under SFAS No. 128 basic earnings per
share ("EPS") are computed by dividing income available to
common shareholders by the weighted average number of shares
outstanding during the period. Diluted EPS are computed based
on the weighted average number of shares outstanding during
the period plus the effect of outstanding stock options using
the treasury stock method. As required, the Company adopted
SFAS No. 128 during the quarter ended February 28, 1998 and
restated its EPS for all prior periods presented.
NOTE D - SUBSEQUENT EVENTS
Declaration of Quarterly Dividend
On March 26, 1998, the Company's Board of Directors declared a
quarterly cash dividend of $0.205 per share of outstanding
common stock payable on April 30, 1998 to shareholders of
record at the close of business on April 10, 1998.
Strategic Dividend Decision and Stock Repurchase Program
Also on March 26, 1998, the Board of Directors adopted a new
dividend policy which calls for the payment of annual dividends
at a rate of $0.16 per share effective with the quarterly
dividend payment in July 1998.
Morrison Health Care, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued
(UNAUDITED)
At the same Board of Directors meeting, the Board authorized a
program to repurchase up to 1,000,000 shares of common stock
from time to time in open market and other negotiated
transactions. The timing and actual number of shares that will
be purchased will depend on a variety of factors, including the
Company's liquidity and financial resources, and the market price
of the stock and other market conditions. The Company may, at
its discretion, extend or terminate the stock repurchase program
at any time.
Acquisition - Spectra Services, Inc.
In March 1998, the Company acquired Chicago-based Spectra
Services, Inc. ("Spectra") in a cash transaction. The
acquisition will be accounted for using the purchase method.
The resulting goodwill will be amortized over twenty years
using the straight-line method. The results of Spectra will
be included from the acquisition date.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Morrison Health Care, Inc. ("MHCI" or the "Company"), a Georgia
corporation, was spun off from Morrison Restaurants Inc.
("MRI") in March 1996. The discussion below relates to the
results of operations of the Company for the quarter and nine
months ended February 28, 1998 compared with the results for
the comparable periods of the prior year.
Results of Operations
The Company's net income from continuing operations increased
20.1% to $2.6 million for the quarter and 11.7% to $8.5 million
for the nine months ended February 28, 1998, compared with net
income of $2.2 and $7.6 million reported for the corresponding
periods of the prior fiscal year. Earnings before interest and
taxes increased 18.4% or $0.7 million to $4.6 million for the
quarter and increased 9.0% or $1.2 million to $14.8 million for
the nine months ended February 28, 1998.
Revenue
Revenue from operations increased $5.9 million or 10.2% to
$63.3 million for the quarter and increased $17.2 million or
10.5% to $181.7 million for the nine months ended February 28,
1998. The increase was primarily attributable to the conversion
of client paid payroll to MHCI paid payroll in continuing
accounts and the revenue from the accounts acquired from Drake
Management Services.
Managed volume (which is the amount of estimated total
operating costs managed) from operations increased $11.4
million or 9.7% to $129.3 million for the quarter and increased
$22.4 million or 6.5% to $367.7 million for the nine months
ended February 28, 1998 from the prior year period due to the
expansion of the vending and branded concepts programs in
continuing accounts.
Operating Costs
Operating costs increased $4.7 million or 9.8% to $52.8 million
for the quarter and increased $15.3 million or 11.3% for the
nine months ended February 28, 1998. On a year to date basis,
these costs have increased as a percentage of revenue from the
prior year primarily as a result of the conversion of client
paid payroll to MHCI paid payroll in continuing accounts.
Selling, general and administrative expenses increased $0.4
million or 7.4% for the quarter and increased $0.7 million or
4.4% for the nine months ended February 28, 1998 as compared to
the same periods of the prior year. Selling, general and
administrative expenses as percentage of revenue were
relatively flat when compared to the corresponding periods of
the prior year.
Interest Expense (net of Interest Income)
Net interest expense increased from $0.2 million to $0.3
million for the quarter and increased to $0.8 million for the
nine months ended February 28, 1998 from $0.6 million for the
same period of the prior year. Interest on funds used to
finance construction of significant additions to property and
equipment is capitalized. The capitalized interest is recorded
as part of the asset to which it relates and will be amortized
over the asset's estimated useful life. The Company
capitalized interest totaling $33,000 and $62,000 for the three
and nine months ended February 28, 1998, respectively, related
to the construction of the Advanced Culinary Centers and the
development of a new computer information system.
Income Taxes
The effective income tax rate on continuing operations for the
three months and nine months ended February 28, 1998 was 39.5%
as compared to 41.5% for the same periods of the prior year.
The Company has lowered its estimated effective income tax rate
for the current year based upon anticipated tax credits and a
review of the first full year of tax filings.
Earnings per Share
The Company has adopted Financial Accounting Standards Board
Statement (SFAS) No. 128, "Earnings Per Share", and has
restated earnings per share amounts reported in prior periods
in accordance with SFAS No. 128. Basic earnings per share is based
on the weighted average number of shares outstanding during
each quarter. Diluted earnings per share is based on the
weighted average number of shares outstanding during each
quarter plus the effect of outstanding stock options using the
treasury stock method.
Liquidity and Capital Resources
Total assets at February 28, 1998 were $75.0 million, a $14.8
million increase from $60.2 million as of the prior fiscal year
end. This increase is attributable to the following: 1) an
increase of $3.8 million in accounts and notes receivable due
in part to the month of February having only 28 days; 2) an
increase of $2.9 million in net fixed assets primarily due to
the construction of the Advanced Culinary Centers and the
development of a new computer information system, 3) an
increase of $1.5 million in client investments, 4) $0.6 million
increase in investments due to the increase in the cash
surrender value of company owned life insurance policies and 5)
an increase in net costs in excess of assets acquired primarily
due to the January 1998 acquisition of Drake Management Services.
Total liabilities at February 28, 1998 were $65.9 million, a
$11.3 million increase from $54.6 million as of the end of the
prior fiscal year. This increase was primarily due to an $11.3
million increase in debt.
The Company expects that funds generated from operations and
existing lines of credit will be sufficient to meet its normal
operating requirements over the near term.
Subsequent Events
Declaration of Quarterly Dividend
On March 26, 1998, the Company's Board of Directors declared a
quarterly cash dividend of $0.205 per share of outstanding
Common Stock payable on April 30, 1998 to shareholders of
record at the close of business on April 10, 1998.
Strategic Dividend Decision and Stock Repurchase Program
In order to create a more flexible financial structure moving
forward, the Board of Directors has determined that it is in
the Company's best interests to reduce its dividend. In
accordance with the new dividend policy adopted on March 26,
1998, the annual dividend rate will be reduced to $0.16 per
share effective with the quarterly dividend payment in July
1998. This policy change will make the Company's dividend
payment as a percent of earnings more comparable with other
companies in its industry.
Subsequent Events - continued
At the same Board of Directors meeting, the Board authorized a
program to repurchase up to 1,000,000 shares of common stock
from time to time in open market and other negotiated
transactions. The timing and actual number of shares that will
be purchased will depend on a variety of factors, including the
Company's liquidity and financial resources, and the market
price of the stock and other market conditions. The Company
believes that the reduction in the long-term capital gains tax
makes it more efficient to return capital to its shareholders
through a stock repurchase program instead of dividends. The
Company may, at its discretion, extend or terminate the stock
repurchase program at any time.
Acquisition - Spectra Services, Inc.
The Company has identified investment opportunities in the
Senior Living Dining Services, a market the Company believes is
under-penetrated and rapidly expanding. The Company's plans
for future growth in the senior living market are to result
from acquisitions and internal development. In March 1998, the
Company acquired Chicago-based Spectra Services, Inc. in a cash
transaction.
Special Note Regarding Forward-Looking Information
The foregoing sections contain "forward-looking" statements
which represent the Company's expectations or beliefs
concerning future events, including statements regarding
liquidity and capital resources. The Company cautions that a
number of important factors could, individually or in the
aggregate, cause actual results to differ materially from such
forward-looking statements including, without limitation, the
following: health care spending trends; the growth of systems
and group purchasing organizations; changes in health care
regulations; increased competition in the health care food and
nutrition market; customer acceptance of the Company's cost
savings programs; and changes in laws and regulations affecting
labor and employee benefit costs.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
The Company is presently, and from time to time, subject to
pending claims and suits arising in the ordinary course of its
business. In the opinion of Management, the ultimate
resolution of these pending legal proceedings will not have a
material adverse effect on the Company's operations or
consolidated financial position.
ITEM 2 CHANGES IN SECURITIES
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 3.2 Bylaws of Morrison Health Care, Inc., as amended
Exhibit 27.1 Financial Data Schedule - For the Nine
Months ended February 28, 1998 (for SEC use only)
Exhibit 27.2 Financial Data Schedule - For the Six
Months ended November 30, 1997 and
November 30, 1996 (for SEC use only)
Exhibit 27.3 Financial Data Schedule - For the Three
Months ended August 31, 1997 and
August 31, 1996 (for SEC use only)
Exhibit 27.4 Financial Data Schedule - For the Nine
Months ended March 1, 1997 (for SEC use only)
Exhibit 27.5 Financial Data Schedule - For the Year
ended May 31, 1997 (for SEC use only)
(b) Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
MORRISON HEALTH CARE, INC.
(Registrant)
04/13/98 By: /S/ K. WYATT ENGWALL
DATE K. WYATT ENGWALL
Senior Vice President, Finance
(Senior Vice President and Principal Accounting Officer)
MORRISON HEALTH CARE, INC.
LIST OF EXHIBITS
Exhibit
Number Description
- ------ --------------------------------------------------------
3.2 Bylaws of Morrison Health Care, Inc., as amended
27.1 Financial Data Schedule - For the Nine Months ended
February 28, 1998 (for SEC use only)
27.2 Financial Data Schedule - For the Six Months ended
November 30, 1997 and November 30, 1996 (for SEC use only)
27.3 Financial Data Schedule - For the Three Months ended
August 31, 1997 and August 31, 1996 (for SEC use only)
27.4 Financial Data Schedule - For the Nine Months ended
March 1, 1997 (for SEC use only)
27.5 Financial Data Schedule - For the Year ended
May 31, 1997 (for SEC use only)
14
BYLAWS, AS AMENDED
OF
MORRISON HEALTH CARE, INC.
As adopted December 14, 1995 and amended January 7, 1998
INDEX
Page
ARTICLE I OFFICES......................................... 1
ARTICLE II STOCKHOLDERS' MEETINGS.......................... 1
2.1 PLACES OF MEETINGS.............................. 1
2.2 ANNUAL MEETINGS................................. 1
2.3 SPECIAL MEETINGS................................ 1
2.4 MEETINGS WITHOUT NOTICE......................... 1
2.5 VOTING.......................................... 2
2.6 QUORUM.......................................... 2
2.7 LIST OF STOCKHOLDERS............................ 2
2.8 ACTION WITHOUT MEETING.......................... 2
ARTICLE III BOARD OF DIRECTORS.............................. 2
3.1 POWERS.......................................... 2
3.2 NUMBER, QUALIFICATION AND TERM.................. 3
3.3 COMPENSATION.................................... 3
3.4 MEETINGS AND QUORUM............................. 4
3.5 EXECUTIVE COMMITTEE............................. 4
3.6 OTHER COMMITTEES................................ 5
3.7 CONFERENCE TELEPHONE MEETINGS................... 5
3.8 ACTION WITHOUT MEETING.......................... 5
ARTICLE IV OFFICERS........................................ 6
4.1 TITLES AND ELECTION............................. 6
4.2 DUTIES.......................................... 6
(A) PRESIDENT................................. 6
(B) VICE PRESIDENT............................ 7
(C) SECRETARY................................. 7
(D) TREASURER................................. 7
4.3 CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING
OFFICER......................................... 8
4.4 CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING
OFFICER......................................... 8
4.5 DELEGATION OF AUTHORITY......................... 8
4.6 COMPENSATION.................................... 8
ARTICLE V RESIGNATIONS, VACANCIES AND REMOVALS............ 8
5.1 RESIGNATIONS.................................... 8
5.2 VACANCIES....................................... 8
(A) DIRECTORS................................. 8
(B) OFFICERS.................................. 9
5.3 REMOVALS........................................ 9
(A) DIRECTORS................................. 9
(B) OFFICERS.................................. 9
ARTICLE VI CAPITAL STOCK................................... 9
6.1 CERTIFICATES OF STOCK........................... 9
6.2 TRANSFER OF STOCK............................... 9
6.3 STOCK TRANSFER RECORDS.......................... 10
6.4 RECORD DATES.................................... 10
6.5 LOST CERTIFICATES............................... 10
ARTICLE VII FISCAL YEAR, BANK DEPOSITS, CHECKS, ETC......... 10
7.1 FISCAL YEAR..................................... 10
7.2 BANK DEPOSITS, CHECKS, ETC...................... 10
ARTICLE VIII BOOKS AND RECORDS............................... 11
8.1 PLACE OF KEEPING BOOKS.......................... 11
8.2 EXAMINATION OF BOOKS............................ 11
ARTICLE IX NOTICES......................................... 11
9.1 REQUIREMENTS OF NOTICE.......................... 11
9.2 WAIVERS......................................... 11
ARTICLE X SEAL............................................ 11
ARTICLE XI POWERS OF ATTORNEY.............................. 12
ARTICLE XII INDEMNIFICATION OF DIRECTORS, OFFICERS,
AND OTHER PERSONS............................... 12
12.1 INDEMNIFIED ACTIONS............................. 12
12.2 INDEMNIFICATION AGAINST EXPENSES SUCCESSFUL
PARTY........................................... 12
12.3 ADVANCES OF EXPENSES............................ 12
12.4 RIGHT OF AGENT TO INDEMNIFICATION UPON
APPLICATION; PROCEDURE UPON APPLICATION......... 13
12.5 OTHER RIGHTS AND REMEDIES....................... 13
12.6 INSURANCE OF AGENTS............................. 13
12.7 CERTAIN DEFINITIONS............................. 13
12.8 INDEMNIFICATION AND INSURANCE OF OTHER PERSONS.. 14
12.9 SURVIVAL OF INDEMNIFICATION..................... 14
12.10 SAVINGS CLAUSE.................................. 14
ARTICLE XIII AMENDMENTS...................................... 14
MORRISON HEALTH CARE, INC.
BYLAWS, AS AMENDED
ARTICLE I
OFFICES
The Corporation shall at all times maintain a registered
office in the State of Georgia and a registered agent at that
address but may have other offices located in or outside of the
State of Georgia as the Board of Directors may from time to time
determine.
ARTICLE II
STOCKHOLDERS' MEETINGS
2.1 Places of Meetings. All meetings of stockholders shall
be held at such place or places in or outside of the State of
Georgia as the Board of Directors may from time to time determine
or as may be designated in the notice of meeting or waiver of
notice thereof, subject to any provisions of the laws of the
State of Georgia.
2.2 Annual Meetings. The annual meeting of stockholders
shall be held on such date in the month of September each year
and at such time as shall be determined by the Board of Directors
from time to time or with respect to any particular annual
meeting for the purpose of electing directors and transacting
such other business as may come properly before the meeting.
Written notice of the date, time and place of the annual meeting
shall be given by mail to each stockholder entitled to vote at
his address as it appears on the records of the Corporation not
less than ten (10) nor more than sixty (60) days prior to the
scheduled date thereof, unless such notice is waived as provided
by Article IX of these Bylaws.
2.3 Special Meetings. A special meeting of stockholders
may be called at any time by the Board of Directors, the Chairman
of the Board of Directors or the President. Written notice of
the time, place and specific purposes of such meeting shall be
given by mail to each stockholder entitled to vote thereat at his
address as it appears on the records of the Corporation not less
than ten (10) nor more than sixty (60) days prior to the
scheduled date thereof, unless such notice is waived as provided
in Article IX of these Bylaws.
2.4 Meetings Without Notice. Meetings of the stockholders
may be held at any time without notice when all the stockholders
entitled to vote thereat are present in person or by proxy.
2.5 Voting. At all meetings of stockholders, each
stockholder entitled to vote on the record date as determined
under Article VI, Section 6.4 of these Bylaws, or if not so
determined, as prescribed under the laws of the State of Georgia,
shall be entitled to one vote for each share of common stock, or
such other number of votes prescribed in the Articles of
Incorporation for each share of stock other than common stock,
standing of record in his name, subject to any restrictions or
qualifications set forth in the Articles of Incorporation, and
may vote either in person or by proxy.
2.6 Quorum. At any meeting of stockholders, a majority of
the number of shares of stock outstanding and entitled to vote
thereat, present in person or by proxy, shall constitute a
quorum, but a smaller interest may adjourn any meeting from time
to time, and the meeting may be held as adjourned without further
notice, subject to such limitation as may be imposed under the
laws of the State of Georgia. At any such adjourned meeting at
which a quorum is present, any business may be transacted which
might have been transacted at the originally scheduled meeting.
When a quorum is present at any meeting, a majority of the
number of shares of stock entitled to vote present thereat shall
decide any question brought before such meeting, unless the
question is one upon which a different vote is required by
express provision of the laws of the State of Georgia, or the
Articles of Incorporation or these Bylaws, in which case such
express provision shall govern.
2.7 List of Stockholders. At least one (1) day before
every meeting, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order and showing
the address of and the number of shares registered in the name of
each stockholder, shall be prepared by the Secretary or the
transfer agent in charge of the stock ledger of the Corporation.
Such list shall be open for examination by any stockholder at the
time and place of the meeting. The stock ledger shall be the
only evidence as to who are the stockholders entitled to examine
such list or the books of the Corporation or to vote in person or
by proxy at such meeting.
2.8 Action Without Meeting. Any action required by the
laws of the State of Georgia or the Articles of Incorporation to
be taken at any annual or special meeting of stockholders, or any
action which may be taken at any annual or special meeting of
such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by all the holders of
outstanding shares of stock entitled to vote on such action.
ARTICLE III
BOARD OF DIRECTORS
3.1 Powers. The business and affairs of the Corporation
shall be carried on by or under the direction of the Board of
Directors, which shall have all the powers authorized by the laws
of the State of Georgia, subject to such limitations as may be
provided by the Articles of Incorporation or these Bylaws.
3.2 Number, Qualification and Term. The initial number of
directors shall be such as may be determined by the
incorporator(s) and thereafter the number of directors shall be
not less than three (3) and not more than twelve (12), the exact
number within such minimum and maximum limits to be fixed and
determined from time to time by resolution of a majority of the
Board of Directors or by the affirmative vote of the holders of
at least 80% of all outstanding shares of capital stock entitled
to vote in the election of directors, voting together as a single
class, as provided in the Articles of Incorporation.
Directors shall be of full age, and no person shall be
nominated for the Board of Directors who shall have attained the
age of seventy (70) on or before the annual meeting of
stockholders at which directors are elected, provided, however,
under special conditions in the best interests of the
Corporation, as determined by the Board of Directors or the
shareholders, a person may be nominated for the Board of
Directors who has attained the age of seventy (70) before such
meeting. Directors need not be residents of the State of
Georgia, however, directors must be stockholders of the
Corporation.
The initial Board of Directors shall be elected by the
incorporator(s). Thereafter, Directors shall be elected at the
annual meeting of stockholders by a plurality of the votes cast
at such election. Each director shall serve until the election
and qualification of his successor or until his earlier death,
resignation or removal as provided in the Articles of
Incorporation and these Bylaws. In case of an increase in the
number of directors between elections by the stockholders, the
additional directorships shall be considered vacancies and shall
be filled in the manner prescribed in Article V of these Bylaws.
The Board of Directors may, by majority vote, elect a
Chairman of the Board of Directors and a Vice Chairman of the
Board of Directors. The Chairman shall be a member of the Board
and shall preside at all meetings of the stockholders and of the
Board of Directors and shall have such other powers and perform
such other duties as the Board of Directors may prescribe from
time to time. The Vice Chairman shall be a member of the Board
and, in the absence of the Chairman of the Board, shall preside
at all meetings of the stockholders and of the Board of Directors
and shall have such other powers and perform such other duties as
the Board of Directors may prescribe from time to time.
3.3 Compensation. The Board of Directors, or a committee
thereof, may from time to time by resolution authorize the
payment of fees or other compensation to the directors for
services as such to the Corporation, including, but not limited
to, fees for attendance at all meetings of the Board of Directors
or any committee thereof, and determine the amount of such fees
and compensation. Directors shall in any event be paid their
traveling expenses for attendance at all meetings of the Board of
Directors or any committee thereof. Nothing herein contained
shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation
therefor in amounts authorized or otherwise approved from time to
time by the Board of Directors or a committee thereof.
3.4 Meetings and Quorum. Meetings of the Board of
Directors may be held either in or outside of the State of
Georgia. A quorum shall be one-third (1/3) of the number of
directors then fixed in the manner provided in Section 3.2 of
this Article but not less than two (2) directors. The act of a
majority of the directors present at a meeting at which there is
a quorum shall be the act of the Board of Directors. If a quorum
is not present at any meeting, the Directors who are present may
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is obtained, subject
to such limitation as may be imposed under the laws of the State
of Georgia.
The Board of Directors shall, at the close of each annual
meeting of stockholders and without further notice other than
these Bylaws, if a quorum of directors is then present or as soon
thereafter as may be convenient, hold a regular meeting for the
election of officers and the transaction of any other business.
The Board of Directors may from time to time provide for the
holding of regular meetings with or without notice and may fix
the times and places at which such meetings are to be held.
Meetings other than regular meetings may be called at any time by
the Chairman of the Board of Directors or the President and must
be called by the Chairman of the Board, the President, the
Secretary or an Assistant Secretary upon the request of at least
three (3) directors.
Notice of each meeting, other than a regular meeting (unless
required by the Board of Directors), shall be given to each
director by mailing the same to each director at his residence or
business address at least two (2) days before the meeting or by
delivering the same to him personally or by telephone, facsimile
transmission or telegraph at least one (1) day before the meeting
unless, in case of exigency, the Chairman of the Board of
Directors, the President, the Secretary or an Assistant
Secretary, as the case may be, shall prescribe a shorter notice
to be given personally or by telephone, telegraph, cable or
facsimile transmission to all or any one or more of the directors
at their respective residences or places of business. Notice
will be deemed to have been given at the time it is mailed,
postage-prepaid, or sent by telegraph, cable or facsimile
transmission, or given by telephone, as the case may be.
Notice of any meeting shall state the time and place of such
meeting, but need not state the purposes thereof unless otherwise
required by the laws of the State of Georgia, the Articles of
Incorporation or the Board of Directors.
3.5 Executive Committee. The Board of Directors, by
resolution adopted by a majority of the number of directors then
fixed in the manner provided in Section 3.2 of this Article, may
provide for an Executive Committee of three (3) or more directors
and shall elect the members thereof to serve during the pleasure
of the Board of Directors. The Executive Committee shall elect
its own chairman, unless a chairman has been designated by the
Board of Directors. Special meetings of the Executive Committee
may be called by the chairman of the committee or by the Board of
Directors, and notice of meetings of the Executive Committee
shall be given by the chairman of the committee or by the
Secretary, in the manner provided in Article IX of these Bylaws.
The Board of Directors may at any time change the membership
of the Executive Committee, fill vacancies in it, designate
alternate members to replace any absent or disqualified members
at any meeting of the Executive Committee, or dissolve it.
During the intervals between the meetings of the Board of
Directors, the Executive Committee shall possess and may exercise
any or all of the powers of the Board of Directors in the
management or direction of the business and affairs of the
Corporation to the extent authorized by resolution adopted by a
majority of the number of directors then fixed in the manner
provided in Section 3.2 of this Article, subject to such
limitations as may be imposed by the laws of the State of
Georgia.
Except as inconsistent with these Bylaws or the resolution
of the Board of Directors from time to time, the Executive
Committee may determine its rules of procedure and the notice to
be given of its meeting, and it may appoint such committees as it
shall from time to time deem necessary. A majority of the
members of the Executive Committee shall constitute a quorum.
The Executive Committee shall keep minutes of its meetings and
shall report the same to the Board of Directors.
3.6 Other Committees. The Board of Directors may by
resolution provide for such other committees as it deems
desirable and may discontinue the same at its pleasure. Each
such committee shall have the powers and perform such duties, not
inconsistent with law, as may be assigned to it by the Board of
Directors.
Each such committee shall elect its own chairman, unless a
chairman has been designated by the Board of Directors.
Except as inconsistent with these Bylaws or the resolution
of the Board of Directors from time to time, each such committee
may determine its rules of procedure and the notice to be given
of its meeting, and it may appoint such committees as it shall
from time to time deem necessary. Special meetings of any such
committee may be called by the chairman of that committee or by
the Board of Directors, and notice of any meeting of any such
committee shall be given by the chairman of that committee or by
the Secretary in the manner provided in Article IX of these
Bylaws. A majority of the members of any such committee then in
office shall constitute a quorum. Each such committee shall keep
minutes of its meetings and report the same to the Board of
Directors.
3.7 Conference Telephone Meetings. Any one or more members
of the Board of Directors or any committee thereof may
participate in a meeting by means of a conference telephone or
similar communication equipment by means of which all persons
participating in the meeting can hear each other, and such
participation shall constitute presence in person at such
meeting.
3.8 Action Without Meeting. To the extent authorized by
Georgia law, any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be
taken without a meeting if all members of the Board of Directors
or committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of the
proceedings of the Board of Director or committee.
ARTICLE IV
OFFICERS
4.1 Titles and Election. The officers of the Corporation
shall be the President, one or more Vice Presidents, the
Secretary and the Treasurer, who shall have such authority and
perform such duties as may be prescribed by the Board of
Directors or as otherwise provided in these Bylaws.
The Board of Directors, in its discretion, may also at any
time elect or appoint such other officers as it may deem
advisable, each of whom shall have such authority and shall
perform such duties as may be prescribed or determined from time
to time by the Board of Directors or, if not prescribed or
determined by the Board of Directors, as the President or the
then senior executive officer may prescribe or determine.
The Board of Directors may assign such additional titles and
duties to one or more of the officers as it shall deem
appropriate.
Any person may hold more than one office if the duties can
be consistently performed by the same person.
The officers of the Corporation shall initially be elected
as soon as convenient by the Board of Directors and thereafter,
in the absence of earlier deaths, resignations or removals, shall
be elected at the first meeting of the Board of Directors
following each annual meeting of stockholders. Each officer
shall hold office at the pleasure of the Board of Directors
except as may otherwise be approved by the Board of Directors, or
until his earlier resignation, removal or other termination of
his employment.
The Board of Directors may require any officer or other
employee or agent to give bond for the faithful performance of
his duties in such form and with such sureties as the Board may
require.
4.2 Duties. Subject to such extension, limitations, and
other provisions as the Board of Directors may from time to time
prescribe or determine, the following officers shall have the
following powers and duties:
(a) President. The President shall exercise the
powers and authority and perform all of the duties commonly
incident to his office and shall perform such other duties
as the Board of Directors shall specify from time to time.
In the absence or disability of the Chairman of the Board,
the President shall perform those duties of the Chairman of
the Board not assigned to the Vice Chairman of the Board,
unless otherwise provided by the Board of Directors.
(b) Vice President. The Vice President or Vice
Presidents shall perform such duties and have such powers as
may be assigned to them from time to time by the Board of
Directors or the President. Any Vice President may have the
title of Executive Vice President, Senior Vice President,
Assistant Vice President or such other title deemed
appropriate by the Board of Directors from time to time.
In the absence or disability of the President, the Vice
Presidents in order of seniority may, unless otherwise
determined by the Board of Directors, exercise the powers
and perform the duties pertaining to the office of the
President.
(c) Secretary. The Secretary, or in his absence an
Assistant Secretary, shall keep the minutes of all meetings
of stockholders and of the Board of Directors and any
committee thereof, cause all notices to be duly given to and
served on the stockholders and directors, attend to such
correspondence as may be assigned to him, keep or cause to
be kept in safe custody the seal and corporate records of
the Corporation and affix such seal to all such instruments
properly executed as may require it, have general charge of
the stock transfer books of the Corporation and shall in
general perform all duties incident to his office, and shall
have such other duties and powers as may be prescribed or
determined from time to time by the Board of Directors or
the President.
In the absence or disability of the Secretary, the
Assistant Secretary, or if there he more than one, the
Assistant Secretaries in the order determined by the Board
of Directors, or if no such determination has been made, in
the order of their election, shall perform the duties and
exercise the powers of the Secretary. Each Assistant
Secretary also shall perform such other duties and have such
other powers as may be assigned to him from time to time by
the Board of Directors or the President.
(d) Treasurer. The Treasurer shall have the care and
custody of and be responsible for the monies, funds,
securities, financial records and other valuable papers of
the Corporation (other than his own bond, if any, which
shall be in the custody of the President); shall keep full
and accurate accounts of receipts and disbursements and
shall render account thereof whenever required by the Board
of Directors or the President; shall have and perform, under
the supervision of the Board of Directors and the President
all the powers and duties commonly incident to his office:
shall deposit or cause to be deposited all funds of the
Corporation in such bank or banks, trust company or trust
companies, or with such firm or firms doing a banking
business as may be designated by the Board of Directors or
the President; may endorse for deposit or collection all
checks, notes, and similar instruments payable to the
Corporation or to its order; and shall have such other
duties as may be prescribed or determined from time to time
by the Board of Directors or the President.
In the absence or disability of the Treasurer, the
Assistant Treasurer, or if there be more than one, the
Assistant Treasurers in the order determined by the Board of
Directors, or if no such determination has been made, in the
order of their election, shall perform the duties and
exercise the powers of the Treasurer and such other duties
as may be assigned to them from time to time by the Board of
Directors or the President.
4.3 Chief Executive Officer and Chief Operating Officer.
In its discretion, the Board of Directors may designate the
President or the Chairman of the Board, if any, to serve as the
Chief Executive Officer or the Chief Operating Officer, or both,
of the Corporation.
The Chief Executive Officer shall, subject to the direction
and control of the Board of Directors, have general supervision,
direction and control of the business and officers of the
Corporation and have the powers and duties otherwise customary to
the office.
The Chief Operating Officer shall, subject to the direction
and control of the Board of Directors, have general supervision,
management and control of the operations and personnel of the
Corporation and the powers and duties otherwise customary to the
office.
4.4 Chief Financial Officer and Chief Accounting Officer.
In its discretion, the Board of Directors may at any time
designate any officer as the Chief Financial Officer, the Chief
Accounting Officer, or both, of the Corporation.
4.5 Delegation of Authority. The Board of Directors may at
any time delegate the powers and duties of any officer for the
time being to any other officer, director or employee.
4.6 Compensation. The compensation of the officers shall
be fixed by the Board of Directors or a committee thereof and the
fact that any officer is a director shall not preclude him from
receiving compensation or from voting upon the resolution
providing the same.
ARTICLE V
RESIGNATIONS, VACANCIES AND REMOVALS
5.1 Resignations. Any director or officer may resign at
any time by giving written notice thereof to the Board of
Directors, the Chairman of the Board, the President or the
Secretary. Any such resignation shall take effect at the time
specified therein or, if the time be not specified, upon receipt
thereof; and unless otherwise specified therein, the acceptance
of any resignation shall not be necessary to make it effective.
5.2 Vacancies.
(a) Directors. Any vacancy in the Board of Directors
caused by reason of death, incapacity, resignation, removal,
increase in the authorized number of directors or otherwise
may be filled by a majority vote of the remaining directors
though less than a quorum, or by the sole remaining
director.
Any director so elected by the Board of Directors shall
serve until the next annual meeting of stockholders at which
directors of the class in which such director serves are to
be elected and until the election and qualification of his
successor or until his earlier death, resignation or removal
as provided in the Articles of Incorporation or these
Bylaws. The Board of Directors also may reduce their
authorized number by the number of vacancies in the Board,
provided such reduction does not reduce the Board to less
than the minimum authorized by the laws of the State of
Georgia or to less than the number of directors then in
office.
(b) Officers. The Board of Directors may at any time
or from time to time fill any vacancy among the officers of
the Corporation.
5.3 Removals.
(a) Directors. The entire Board of Directors, or any
individual member thereof, may be removed only as provided
in the Articles of Incorporation.
(b) Officers. Subject to the provisions of any
validly existing agreement, the Board of Directors may at
any meeting remove from office any officer, with or without
cause, and may elect or appoint a successor.
ARTICLE VI
CAPITAL STOCK
6.1 Certificates of Stock. Every stockholder shall be
entitled to a certificate or certificates for shares of the
capital stock of the Corporation in such form as may be
prescribed or authorized by the Board of Directors, duly numbered
and setting forth the number and kind of shares represented
thereby. Such certificates shall be signed by the Chairman of
the Board, the Vice Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary. If and to the extent
permitted by Georgia law, any or all of such signatures may be in
facsimile if the certificate is countersigned by a transfer agent
or registered by a registrar other than the Corporation itself or
an employee of the Corporation. The transfer agent or registrar
may sign either manually or by facsimile.
In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed on a
certificate has ceased to be such officer, transfer agent or
registrar before the certificate has been issued, such
certificate may nevertheless be issued and delivered by the
Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
6.2 Transfer of Stock. Shares of the capital stock of the
Corporation shall be transferable only upon the books of the
Corporation upon the surrender of the certificate or certificates
properly assigned and endorsed for transfer.
The Board of Directors may appoint a transfer agent and one
or more co-transfer agents and a registrar and one or more co-
registrars and may make or authorize such agents to make all such
rules and regulations deemed expedient concerning the issue,
transfer and registration of shares of stock. If the Corporation
has a transfer agent or registrar acting on its behalf, the
signature of any officer or representative thereof may be in
facsimile.
6.3 Stock Transfer Records. Unless the Corporation has a
stock transfer agent to keep such records, the Secretary shall
keep a stock book or books containing the names, alphabetically
arranged, with the address of every stockholder showing the
number of shares of each kind, class or series of stock held of
record.
The person in whose name shares of stock stand on the books
of the Corporation shall be deemed by the Corporation to be the
owner thereof for all purposes.
6.4 Record Dates. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of
Directors shall fix in advance a record date which, in the case
of a meeting, shall not be less than ten (10) nor more than sixty
(60) days prior to the scheduled date of such meeting and which,
in the case of any other action, shall be not more than sixty
(60) days prior to any such action permitted by the laws of the
State of Georgia.
A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
6.5 Lost Certificates. In case of loss, mutilation or
destruction of a stock certificate, a duplicate certificate may
be issued upon such terms as may be determined or authorized by
the Board of Directors, the Chairman of the Board or the
President.
ARTICLE VII
FISCAL YEAR, BANK DEPOSITS, CHECKS, ETC.
7.1 Fiscal Year. The fiscal year of the Corporation shall
begin on the 1st day of June of each year and end on the
following May 31st.
7.2 Bank Deposits, Checks, Etc. The funds of the
Corporation shall be deposited in the name of the Corporation or
of any division thereof in such banks or trust companies in the
United States or elsewhere as may be designated from time to time
by the Board of Directors, or by such officer or officers as the
Board of Directors may authorize to make such designations.
All checks, drafts or other orders for the withdrawal of
funds from any bank account shall be signed by such person or
persons as may be designated from time to time by the Board of
Directors. The signatures on checks, drafts or other orders for
the withdrawal of funds may be in facsimile if authorized in the
designation.
ARTICLE VIII
BOOKS AND RECORDS
8.1 Place of Keeping Books. The books and records of the
Corporation may be kept in or outside of the State of Georgia, as
the Board of Directors may from time to time determine.
8.2 Examination of Books. Except as may otherwise be
provided by the laws of the State of Georgia, the Articles of
Incorporation or these Bylaws, the Board of Directors shall have
power to determine from time to time whether and to what extent
and at what times and places and under what conditions any of the
accounts, records and books of the Corporation are to be open to
the inspection of any stockholder. No stockholder shall have any
right to inspect any account or book or document of the
Corporation except as prescribed by law or authorized by express
resolution of the stockholders or of the Board of Directors.
ARTICLE IX
NOTICES
9.1 Requirements of Notice. Whenever notice is required to
be given by statute, the Articles of Incorporation or these
Bylaws, it shall not mean personal notice unless so specified,
but such notice may be given in writing by depositing the same in
a post office, letter box, or mail chute postage prepaid and
addressed to the person to whom such notice is directed at the
address of such person on the records of the Corporation, and
such notice shall be deemed given at the time when the same shall
be thus mailed.
9.2 Waivers. Any stockholder, director or officer may, in
writing or by telegram or cable, at any time waive any notice or
other formality required by statute, the Articles of
Incorporation or these Bylaws. Such waiver of notice, whether
given before or after any meeting or action, shall be deemed
equivalent to notice. Presence of a stockholder either in person
or by proxy at any meeting of stockholders and presence of any
director at any meeting of the Board of Directors shall
constitute a waiver of such notice as may be required by any
statute, the Articles of Incorporation or these Bylaws.
ARTICLE X
SEAL
The corporate seal of the Corporation shall be in such form
as the Board of Directors shall determine from time to time and
may consist of a facsimile thereof or the words "Corporate Seal"
or "Seal" enclosed in parentheses.
In the absence of the Secretary, any other officer of the
Corporation may affix and attest the seal of the Corporation to
any instrument requiring it, unless otherwise provided by
resolution of the Board of Directors.
ARTICLE XI
POWERS OF ATTORNEY
The Board of Directors may authorize one or more of the
officers of the Corporation to execute powers of attorney
delegating to named representatives or agents power to represent
or act on behalf of the Corporation, with or without power of
substitution.
In the absence of any action by the Board of Directors, any
officer of the Corporation may execute for and on behalf of the
Corporation waivers of notice of meetings of stockholders and
proxies for such meetings of any company in which the Corporation
may hold voting securities.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHER PERSONS
12.1 Indemnified Actions. The Corporation shall indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, and whether
external or internal to the Corporation (including a judicial
action or suit brought by or in the right of the Corporation), by
reason of the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise (all such
persons being referred to hereafter as an "Agent"), against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding, except
that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged
liable to the Corporation or subjected to injunctive relief in
favor of the Corporation: (a) for any appropriation, in violation
of his duties, of any business opportunity of the Corporation;
(b) for acts or omissions which involve intentional misconduct or
a knowing violation of law; (c) for unlawful distributions
pursuant to Section 14-2-832 of the Georgia Business Corporation
Code; or (d) for any transaction from which he received an
improper personal benefit.
12.2 Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article XII, to the
extent that an Agent has been successful on the merits or
otherwise in defense of any proceeding or in defense of any
claim, issue or matter therein, such Agent shall be indemnified
against all expenses incurred in connection therewith.
12.3 Advances of Expenses. Expenses incurred in defending
or investigating any action, suit, proceeding or investigation
shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall provide the
Corporation with (i) a written affirmation of his good faith
belief that his conduct does not constitute behavior of the kind
described in any of the clauses (a) through (d) of Section 12.1,
and (ii) a written undertaking, executed personally or on his
behalf, to repay any advances if it is ultimately determined that
he is not entitled to indemnification under Section 12.1.
12.4 Right of Agent to Indemnification Upon Application;
Procedure Upon Application. Any indemnification under
Sections 12.1 and 12.2 hereof or advance under Section 12.3
hereof shall be made promptly and in any event within forty-five
(45) days after receipt of the written request of the Agent,
unless the Agent is not entitled to such indemnification or
advance pursuant to the terms of such sections. The right to
indemnification or advances as granted by this Article XIl shall
be enforceable by the Agent in any court of competent
jurisdiction if the Corporation denies the claim, in whole or in
part, or if no disposition of such claim is made within forty-
five (45) days of the Agent's request. The Agent's expenses
incurred in connection with successfully establishing his right
to indemnification, in whole or in part, in any such proceeding
shall also be indemnified by the Corporation.
12.5 Other Rights and Remedies. The indemnification
provided by this Article XII shall not be deemed exclusive of any
other rights to which an Agent seeking indemnification may be
entitled under any agreement, vote of stockholders or
disinterested directors, court order or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding such office. It is the policy of the
Corporation that indemnification of Agents shall be made to the
fullest extent permitted by law. All rights to indemnification
under this Article XII shall be deemed to be provided by a
contract between the Corporation and the Agent who serves in such
capacity at any time while these Bylaws and other relevant
provisions of the Georgia Business Corporation Code and other
applicable law, if any, are in effect. Any repeal or
modification thereof shall not affect any rights or obligations
then existing.
12.6 Insurance of Agents. To the extent permitted by
Georgia law, the Corporation may purchase and maintain insurance
on behalf of any person who is or was an Agent against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not
the Corporation would have the power to indemnify him against
such liability under the provisions of this Article XII.
12.7 Certain Definitions. For purposes of this Article XII,
references to the "Corporation" shall include, in addition to the
resulting or surviving corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had
continued, would have had power to indemnify its directors,
officers and employees or agents, so that any person who is or
was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under this
Article XII with respect to the resulting or surviving
corporation as he would have with respect to such constituent
corporation if its separate existence had continued; references
to "other enterprise" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed a
person with respect to any employee benefit plan; and references
to "serving at the request of the Corporation" shall include any
service as a director or officer of the Corporation which imposes
duties on, or involves services by, such director or officer with
respect to any employee benefit plan, its participants, or
beneficiaries.
12.8 Indemnification and Insurance of Other Persons. The
provisions of this Article XII shall not be deemed to preclude
the Corporation from either indemnifying or purchasing and
maintaining insurance on behalf of, or both, any person who is
not an Agent but whom the Corporation has the power or obligation
to indemnify or insure under the provisions of the Georgia
Business Corporation Code or otherwise. The Corporation may, in
its sole discretion, indemnify or insure, or both, an employee,
trustee or other agent as permitted by the Georgia Business
Corporation Code. The Corporation shall indemnify or insure any
employee, trustee or other agent where required by law.
12.9 Survival of Indemnification. The indemnification and
advancement of expenses provided by, or granted pursuant to, this
Article XII shall continue as to a person who has ceased to be an
Agent and shall inure to the benefit of the heirs, executors and
administrators of such Agent.
12.10 Savings Clause. If this Article XII or any
portion thereof shall be invalidated on any ground by any court
of competent jurisdiction, then the Corporation shall
nevertheless indemnify each Agent against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether internal
or external, including a grand jury proceeding and an action or
suit brought by or in the right of the Corporation, to the full
extent permitted by any applicable portion of this Article XII
that shall not have been invalidated or by any other applicable
law.
ARTICLE XIII
AMENDMENTS
Unless otherwise provided by law, the Articles of
Incorporation or another provision of these Bylaws, these Bylaws
may be amended or repealed either:
(a) at any meeting of stockholders at which a quorum
is present by vote of the holders of a majority of the
number of shares of stock entitled to vote present in person
or by proxy at such meeting as provided in Article II,
Sections 2.4 and 2.5 of these Bylaws, or
(b) at any meeting of the Board of Directors by a
majority vote of the directors then in office;
provided the notice of such meeting of stockholders or directors
or waiver of notice thereof contains a statement of the substance
of the proposed amendment or repeal.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and consolidated statements of income in the
Company's Quarterly Report to Shareholders for the quarter ended February 28,
1998 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> FEB-28-1998
<CASH> 4,550
<SECURITIES> 0
<RECEIVABLES> 20,168
<ALLOWANCES> 784
<INVENTORY> 3,052
<CURRENT-ASSETS> 35,855
<PP&E> 20,419
<DEPRECIATION> 9,662
<TOTAL-ASSETS> 74,977
<CURRENT-LIABILITIES> 28,576
<BONDS> 26,387
0
0
<COMMON> 123
<OTHER-SE> 8,971
<TOTAL-LIABILITY-AND-EQUITY> 74,977
<SALES> 181,737
<TOTAL-REVENUES> 181,737
<CGS> 150,481
<TOTAL-COSTS> 150,481
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,166
<INCOME-PRETAX> 14,001
<INCOME-TAX> 5,530
<INCOME-CONTINUING> 8,471
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,471
<EPS-PRIMARY> 0.71
<EPS-DILUTED> 0.70
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Morrison Health Care, Inc. for the six months ended
November 30, 1997 and November 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> MAY-31-1998 MAY-31-1997
<PERIOD-END> NOV-30-1997 NOV-30-1996
<CASH> 5,842 5,991
<SECURITIES> 0 0
<RECEIVABLES> 21,627 18,443
<ALLOWANCES> 744 1,114
<INVENTORY> 2,716 2,713
<CURRENT-ASSETS> 36,881 33,065
<PP&E> 18,031 14,549
<DEPRECIATION> 9,113 8,082
<TOTAL-ASSETS> 68,202 59,744
<CURRENT-LIABILITIES> 31,772 26,349
<BONDS> 16,511 17,522
0 0
0 0
<COMMON> 123 119
<OTHER-SE> 8,457 5,273
<TOTAL-LIABILITY-AND-EQUITY> 68,202 59,744
<SALES> 118,400 107,013
<TOTAL-REVENUES> 118,400 107,013
<CGS> 97,685 87,088
<TOTAL-COSTS> 97,685 87,088
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,736 812
<INCOME-PRETAX> 9,709 9,267
<INCOME-TAX> 3,835 3,845
<INCOME-CONTINUING> 5,874 5,422
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5,874 5,422
<EPS-PRIMARY> 0.49 0.46
<EPS-DILUTED> 0.49 0.46
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Morrison Health Care, Inc. for the three months ended
August 31, 1997 and August 31, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> MAY-31-1998 MAY-31-1997
<PERIOD-END> AUG-31-1997 AUG-31-1996
<CASH> 1,668 8,208
<SECURITIES> 0 0
<RECEIVABLES> 19,240 15,946
<ALLOWANCES> 744 1,114
<INVENTORY> 2,641 2,636
<CURRENT-ASSETS> 31,216 36,550
<PP&E> 16,792 15,520
<DEPRECIATION> 8,674 9,422
<TOTAL-ASSETS> 60,293 60,497
<CURRENT-LIABILITIES> 29,744 26,045
<BONDS> 13,761 18,772
0 0
0 0
<COMMON> 122 118
<OTHER-SE> 6,293 4,939
<TOTAL-LIABILITY-AND-EQUITY> 60,293 60,497
<SALES> 57,754 52,658
<TOTAL-REVENUES> 57,754 52,658
<CGS> 47,727 43,024
<TOTAL-COSTS> 47,727 43,024
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 404 396
<INCOME-PRETAX> 4,674 4,619
<INCOME-TAX> 1,846 1,923
<INCOME-CONTINUING> 2,828 2,696
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,828 2,696
<EPS-PRIMARY> 0.24 0.23
<EPS-DILUTED> 0.24 0.23
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Morrison Health Care, Inc. for the nine months ended
March 1, 1997 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> MAR-01-1997
<CASH> 5,361
<SECURITIES> 0
<RECEIVABLES> 17,721
<ALLOWANCES> 877
<INVENTORY> 2,679
<CURRENT-ASSETS> 30,967
<PP&E> 15,337
<DEPRECIATION> 8,279
<TOTAL-ASSETS> 57,863
<CURRENT-LIABILITIES> 26,034
<BONDS> 16,272
0
0
<COMMON> 119
<OTHER-SE> 5,030
<TOTAL-LIABILITY-AND-EQUITY> 57,863
<SALES> 164,496
<TOTAL-REVENUES> 164,496
<CGS> 135,155
<TOTAL-COSTS> 135,155
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,168
<INCOME-PRETAX> 12,962
<INCOME-TAX> 5,378
<INCOME-CONTINUING> 7,584
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,584
<EPS-PRIMARY> 0.64
<EPS-DILUTED> 0.64
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Morrison Health Care, Inc. for the year ended
May 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> MAY-31-1997
<CASH> 6,347
<SECURITIES> 0
<RECEIVABLES> 17,131
<ALLOWANCES> 744
<INVENTORY> 2,686
<CURRENT-ASSETS> 33,239
<PP&E> 16,343
<DEPRECIATION> 8,471
<TOTAL-ASSETS> 60,203
<CURRENT-LIABILITIES> 29,348
<BONDS> 15,022
0
0
<COMMON> 122
<OTHER-SE> 5,506
<TOTAL-LIABILITY-AND-EQUITY> 60,203
<SALES> 221,011
<TOTAL-REVENUES> 221,011
<CGS> 181,233
<TOTAL-COSTS> 181,233
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,494
<INCOME-PRETAX> 17,576
<INCOME-TAX> 7,290
<INCOME-CONTINUING> 10,286
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,286
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0.87
</TABLE>
