<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)
Charter Medical Corporation
- --------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.25 par value 161241708
- ----------------------------------- -----------------------------------
(Title of class of securities) (CUSIP number)
David E. Zeltner, Esq.
Weil, Gotshal & Manges
767 Fifth Ave., New York, NY 10153
(212) 310-8000 January 27, 1995
- ----------------------------------- -----------------------------------
(Name, address and telephone number (Date of event which requires
of person authorized to receive filing of this statement)
notices and communications)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [_].
Check the following box if a fee is being paid with the statement [x].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Harris & Harris Group, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF Delaware
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 158,736
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 158,736
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 158,736
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.6%
14 TYPE OF REPORTING PERSON:* CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Gregory T. Torres
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 43,140
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 43,140
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 43,140
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.2%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Gerald M. Bereika
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 10,969
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 10,969
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 10,969
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Peter P. Polloni
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 10,531
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 10,531
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 10,531
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Peter W. Mair
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 19,266
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 19,266
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 19,266
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Elizabeth J. Hopper
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 22,012
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 22,012
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 22,012
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Eric J. Gleacher
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 204,569**
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 11,029***
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 204,569**
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 11,029***
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 215,598****
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.8%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 23,991 shares held by Mr. Gleacher as custodian for three of
his children.
*** Includes 11,029 shares held by Gleacher 7 Investors, L.P. Mr. Gleacher
is the controlling shareholder, sole director, Chairman, Chief Executive
Officer and Secretary of Gleacher & Co., Inc., the sole general partner
of Gleacher 7 Investors, L.P.
**** The filing of this Statement on Schedule 13D shall not be construed as
an admission by Mr. Gleacher that, other than with respect to the 180,578
shares held directly by Mr. Gleacher, Mr. Gleacher is the beneficial owner
of the shares described above.
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: James Goodwin
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 75,571
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 75,571
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 75,571
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.3%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Charles G. Phillips
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 111,875
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 111,875
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 111,875
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.4%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: H. Conrad Meyer
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 27,640
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 27,640
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 27,640
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Richard A. Derbes
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 23,970
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 23,970
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 23,970
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Emil W. Henry, Jr.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 16,309
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 16,309
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 16,309
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Robert W. Kitts
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 11,995
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 11,995
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 11,995
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Jeffrey H. Tepper
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 5,577
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 5,577
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 5,577
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Robert A. Engel
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 4,808
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 4,808
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 4,808
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Andrew Gilman
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 3,199
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 3,199
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,199
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Marie A. Gentile
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 1,921
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 1,921
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 1,921
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Gleacher 7 Investors, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF Delaware
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 11,029
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 11,209
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 11,029
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Olsten Service Corp.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF Delaware
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 127,534
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 127,534
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 127,534
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.4%
14 TYPE OF REPORTING PERSON:* CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: James E. Gleacher
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 7,997
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 7,997
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 7,997
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: John G. Gleacher
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 7,997
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 7,997
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 7,997
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Sarah E. Gleacher
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 7,997
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 7,997
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 7,997
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Diane Hensley Ramponi
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 1,857**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,857**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 1,857**
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 1,857 shares held in a trust of which Ms. Ramponi is a joint
trustee. The filing of this Statement on Schedule 13D shall not be
construed as an admission by Ms. Ramponi that she is the beneficial owner
of the shares held by such trust.
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Christina Hensley Bair
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 1,857
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 1,609**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 1,857
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,609**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,466**
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 1,609 shares held in various trusts, of which Ms. Bair is a joint
trustee. The filing of this Statement on Schedule 13D shall not be
construed as an admission by Ms. Bair that she is the beneficial owner of
the shares held by such trusts.
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Martha Faye Koysh
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 2,476
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 2,476
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,476
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Lana Hensley Hoffman
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 2,476
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 2,476
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,476
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Ruth Ann Roberts
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 2,476
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 2,476
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,476
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: E. Byron Hensley, Jr.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 385,253
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 385,253
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 385,253
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 1.4%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Susan MacKenzie
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 5,572**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 5,572**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 5,572**
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 5,572 shares held by trusts, of which Ms. MacKenzie is a joint
trustee. The filing of this Statement on Schedule 13D shall not be
construed as an admission by Ms. MacKenzie that she is the beneficial owner
of the shares held by such trusts.
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Mark Morin
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 5,572**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 5,572**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 5,572**
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 5,572 shares held by trusts of which Mr. Morin is a joint trustee.
The filing of this Statement on Schedule 13D shall not be construed as an
admission by Mr. Morin that he is the beneficial owner of the shares held
by such trusts.
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Thomas P. Riley
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 123,042
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 1,609**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 123,042
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,609**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 124,651**
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.4%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 1,609 shares held in various trusts, of which Mr. Riley is a
joint trustee. The filing of this Statement on Schedule 13D shall not be
construed as an admission by Mr. Riley that he is the beneficial owner of
the shares held by such trusts.
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Donald R. Monack
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 3,831
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 3,831
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,831
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Leonard O. Henry
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 4,598
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 4,598
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 4,598
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Janice L. Quiram
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 3,831
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 3,831
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,831
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Alan L. Hollis
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 3,831
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 3,831
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,831
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Lois Simon
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 3,065
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 3,065
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,065
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Wayne J. Stelk
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 766
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 766
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 766
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: William F. Murdy
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 2,648
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 2,648
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,648
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
CUSIP No. 161241708
1 NAME OF REPORTING PERSON: Frank N. Liguori
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS:* SC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United States
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 5,056
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 127,534**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 5,056
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER: 127,534**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 132,590**
PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_]
CERTAIN SHARES:*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.5%
14 TYPE OF REPORTING PERSON:* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Includes 127,534 shares owned by Olsten Service Corporation, a wholly-
owned subsidiary of Olsten Corporation. Mr. Liguori is the Chairman of the
Board of Olsten Corporation. The filing of this Statement on Schedule 13D
shall not be construed as an admission by Mr. Liguori that he is the
beneficial owner of the shares held by Olsten Service Corp.
<PAGE>
<PAGE>
Item 1. Security and Issuer.
-------------------
This Statement on Schedule 13D (the "Statement") relates to
the common stock, par value $.25 per share (the "Shares"), of Charter
Medical Corporation, a Delaware corporation (the "Company"). The
principal executive offices of the Company are located at 3414
Peachtree Road, N.E., Suite 1400, Atlanta, Georgia 30326.
Item 2. Identity and Background.
-----------------------
(a)-(c) This Statement is being filed by and on behalf of
the persons listed on Schedule A hereto (each, a "Reporting Person"
and, collectively, the "Reporting Persons"). Schedule A sets forth
for each Reporting Person the following information, which is
incorporated herein by reference: (i) the name of such Reporting
Person; (ii) the business address of such Reporting Person; and (iii)
the principal business, occupation or employment of such Reporting
Person. Schedule B sets forth the information described in clauses
(i) through (iii) above for each director, executive officer and other
persons controlling Olsten Service Corp. and Olsten Corporation, the
sole shareholder of Olsten Service Corp. Schedule C sets forth the
information described in clauses (i) through (iii) above for Gleacher
& Co. Inc., the general partner of Gleacher 7 Investors, L.P., and
each director, executive officer and other persons controlling such
general partner. Schedule D sets forth the information described
NYFS12...:\99\48499\0005\2468\SCH2035P.08C
<PAGE>
<PAGE>
in clauses (i) through (iii) above for each director, executive
officer and other persons controlling Harris & Harris Group, Inc. The
information set forth on Schedules B, C and D hereto is incorporated
herein by reference.
(d)-(e) During the last five years, none of the persons or
entities identified on Schedules A, B, C or D hereto has been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) Each natural person listed on Schedules A, B, C or D
hereto is a United States Citizen.
The Reporting Persons could be deemed to be a group for
purposes of this Statement by virtue of the provisions of the
Stockholders Agreement (described in Item 6 below) relating to the
holding and/or disposition of Shares. The Reporting Persons disclaim
that they have acted as a group for purposes of acquiring, holding,
voting or disposing of Shares, and each Reporting Person disclaims
beneficial ownership of Shares owned by the other Reporting Persons.
<PAGE>
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
The Reporting Persons were formerly stockholders of Magellan
Health Services, Inc., a Delaware corporation ("Magellan"). Pursuant
to an Agreement of Merger dated as of December 19, 1994, among
Magellan, the Company and Charter Acquisition Subsidiary, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Company (the
"Merger Sub"), on January 27, 1995, Magellan merged with the Merger
Sub (the "Merger"), and the shares of Magellan's capital stock, and
options to purchase such capital stock, outstanding at the time of the
Merger were automatically converted into the right to receive an
aggregate of 1,398,968 Shares. In addition, Messrs. James Goodwin, H.
Conrad Meyer and Emil W. Henry, Jr. each received 3,670 shares (as
designees of Gleacher & Co. Inc.) in satisfaction of certain financial
advisory fees owed by Magellan to Gleacher & Co. Inc., and Mr. Frank
N. Liguori received 2,908 Shares as compensation for consulting
services provided by him to Magellan prior to the Merger. Also, (i)
Harris & Harris Group, Inc. purchased 50,000 additional Shares in the
open market for $768,750 using its working capital, (ii) Thomas P.
Riley purchased 5,000 additional Shares in the open market for $81,250
using his personal funds, (iii) Peter P. Polloni purchased 500
additional Shares in the open market for $7,875 using his
<PAGE>
<PAGE>
personal funds and (iv) William F. Murdy purchased 500 additional
Shares in the open market for $7,625 using his personal funds.
Item 4. Purpose of the Transaction.
--------------------------
The Reporting Persons have acquired the Shares of the
Company pursuant to or in connection with the Merger, and such Shares
are being held for investment purposes only. Any Reporting Person may
determine to acquire additional Shares in the open market, or dispose
of some or all of the Shares held by such Reporting Person, in
privately negotiated transactions or otherwise, depending on
circumstances existing from time to time.
Messrs. E. Byron Hensley, Jr. and Thomas P. Riley have entered
into Noncompete and Confidentiality Agreements, dated as of January 27,
1995, with the Company, pursuant to which the Company has agreed to
issue additional Shares to Messrs. Hensley and Riley in July, 1995.
Except as set forth above, the Reporting Persons have no
present plans or intentions which would result in or relate to any of
the transactions described in subparagraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) The responses of the Reporting Persons to Items 7, 8,
9, 10 and 11 of the Cover Sheets, which relate to the beneficial
ownership of Shares of the Company, are incorporated herein by
reference. In the aggregate, the Reporting Persons own
<PAGE>
<PAGE>
1,468,886 Shares, representing 5.2% of the Company's outstanding
Shares. The percentage of Shares owned is based in each case upon
28,355,113 outstanding Shares, consisting of 26,942,227 Shares
outstanding on January 23, 1995, as set forth in an opinion of counsel
delivered by King & Spalding, counsel to the Company, in connection
with the Merger, together with the 1,412,886 Shares issued pursuant to
or in connection with the Merger.
(b) Each of the Reporting Persons has the sole power to
vote and to dispose or direct the disposition of the Shares listed on
such person's respective Cover Sheet as being beneficially owned by
such person, except as otherwise disclosed in the footnotes to such
Cover Page.
(c) On January 27, 1995, 1,412,886 Shares were issued to
the Reporting Persons pursuant to or in connection with the Merger in
the amounts set forth on the respective Cover Pages of the Reporting
Persons. In addition, certain of the Reporting Persons have purchased
additional Shares pursuant to transactions effected during the past
sixty days, which are described on Schedule E attached hereto, which
Schedule E is incorporated herein by reference. Except as set forth
in this paragraph or Schedule E hereto, to the best knowledge and
belief of the Reporting Persons, none of the Reporting Persons has
effected any
<PAGE>
<PAGE>
transaction in any equity security of the Company during the past
sixty days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of
the Company.
--------------------------------------------
The Reporting Persons and Magellan are parties to a
Stockholders Agreement dated as of January 27, 1995 (the "Stockholders
Agreement"), pursuant to which each Reporting Person has agreed not to
transfer more than 50% of the Shares received pursuant to the Merger
prior to the second anniversary of the Merger, in order to preserve
the Merger as a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986.
In connection with the Merger, the Reporting Persons entered
into (i) an Investment and Registration Rights Agreement, dated as of
January 27, 1995, with the Company (the "Registration Rights
Agreement"), and (ii) an Indemnification Agreement, dated as of
January 27, 1995, with the Company, Gleacher & Co. Inc., as
Representative, and E. Byron Hensley, Jr., as Representative (the
"Indemnification Agreement"). The Registration Rights Agreement
provides that the Company will prepare and file with the Securities
and Exchange Commission a shelf registration statement with respect to
resales of the Shares by Reporting Persons within
<PAGE>
<PAGE>
30 days after the Merger and use its best efforts (i) to cause such
registration statement to be declared effective as soon as reasonably
practicable thereafter and (ii) to keep such registration statement
current and continuously effective for a period of two years following
the Merger. The Indemnification Agreement provides that certain
indemnification obligations of the Reporting Persons to the Company
may be satisfied by the surrender of Shares, which, pursuant to a side
letter of the Company, will be valued at $23.00 per share with respect
to an aggregate of 139,898 shares, and at $17.39 with respect to
additional Shares. In addition, the Indemnification Agreement
provides that 10% of the Shares which each Reporting Person would be
entitled to receive pursuant to the Merger will be held in escrow by
First Union National Bank of North Carolina, as escrow agent (the
"Escrow Agent"), pursuant to an Escrow Agreement dated as of January
27, 1995, among the Company, the Escrow Agent, E. Byron Hensley, Jr.,
as Representative, and Gleacher & Co. Inc., as Representative, until
the earlier of (i) the date of the first audit of financial statements
containing combined operations of Magellan and the Company and (ii)
the first anniversary of the Merger.
E. Byron Hensley, Jr. and Thomas P. Riley have each entered
into a Noncompete and Confidentiality Agreement, dated as of January
27, 1995, with the Company (respectively, the "Hensley
<PAGE>
<PAGE>
Noncompete Agreement" and the "Riley Noncompete Agreement"), pursuant
to which the Company has agreed to issue additional Shares to Messrs.
Hensley and Riley in July, 1995.
The Reporting Persons have entered into an agreement, dated
as of February 6, 1995 (the "Filing Agreement"), with respect to the
filing of this Statement and any amendment hereto, and pursuant to the
Filing Agreement certain Reporting Persons have granted a power-of-
attorney to Gleacher & Co. Inc., or to each of E. Byron Hensley and
Thomas P. Riley, to execute this Statement and any amendment hereto on
behalf of such Reporting Persons.
Item 7. Materials to be Filed as Exhibits.
---------------------------------
The following Exhibits are filed herewith:
1. Stockholders Agreement, dated as of January 27, 1995,
among Magellan and the Reporting Persons.
2. Investment and Registration Rights Agreement, dated as
of January 27, 1995, among the Company and the
Reporting Persons.
3. Indemnification Agreement, dated as of January 27,
1995, among the Company, the Reporting Persons, E.
Byron Hensley, Jr., as Representative, and Gleacher &
Co. Inc., as Representative.
4. Letter dated January 27, 1995, from the Company
addressed to E. Byron Hensley, Jr., as Representative,
and Gleacher & Co. Inc., as Representative.
5. Escrow Agreement, dated as of January 27, 1995, among
the Company, First Union National Bank of North
Carolina, as Escrow Agent, E. Byron Hensley, Jr., as
Representative, and Gleacher & Co. Inc., as
Representative.
<PAGE>
<PAGE>
6. Noncompete and Confidentiality Agreement, dated as of
January 27, 1995, between the Company and E. Byron
Hensley, Jr.
7. Noncompete and Confidentiality Agreement, dated as of
January 27, 1995, between the Company and Thomas P.
Riley.
8. Agreement, dated as of February 6, 1995, among the
Reporting Persons.
<PAGE>
<PAGE>
SIGNATURES
----------
After reasonable inquiry and to the best of their knowledge
and belief, the undersigned certify that the information contained in
this Statement is true, complete and correct.
Dated: February 13, 1995
/s/ Gregory T. Torres
-----------------------
Gregory T. Torres
/s/ Gerald M. Bereika
-----------------------
Gerald M. Bereika
/s/ Peter P. Polloni
-----------------------
Peter P. Polloni
/s/ Peter W. Mair
-----------------------
Peter W. Mair
/s/ Elizabeth J. Hopper
-----------------------
Elizabeth J. Hopper
*
-----------------------
Eric J. Gleacher
*
-----------------------
James Goodwin
*
-----------------------
Charles G. Phillips
*
-----------------------
H. Conrad Meyer
*
-----------------------
Richard A. Derbes
<PAGE>
<PAGE>
*
-----------------------
Emil W. Henry, Jr.
*
-----------------------
Robert W. Kitts
*
-----------------------
Jeffrey H. Tepper
*
-----------------------
Robert A. Engel
*
-----------------------
Andrew Gilman
*
-----------------------
Marie A. Gentile
GLEACHER 7 INVESTORS L.P.
By: Gleacher & Co. Inc., its
General Partner
By: *
-----------------------------
Name:
Title:
OLSTEN SERVICE CORP.
By: /s/ Laurin L. Laderoute, Jr.
-----------------------------
Name: Laurin L. Laderoute, Jr.
Title: Vice President
*
-----------------------
Eric J. Gleacher,
as custodian
for Jay S. Gleacher
*
-----------------------
Eric J. Gleacher,
as custodian for
Patricia G. Gleacher
*
-----------------------
Eric J. Gleacher,
as custodian
for William R. Gleacher
<PAGE>
<PAGE>
*
--------------------------
James E. Gleacher
*
--------------------------
John G. Gleacher
*
--------------------------
Sarah E. Gleacher
/s/ Diane Hensley Ramponi
--------------------------
Diane Hensley Ramponi,
as Trustee of the
Lauren Carroll
Education Trust
/s/ Thomas P. Riley
--------------------------
Thomas P. Riley,
as Trustee of the
Lauren Carroll
Education Trust
/s/ Christina Hensley Bair
--------------------------
Christina Hensley Bair
/s/ Christina Hensley Bair
--------------------------
Christina Hensley Bair,
as Trustee of the Emily
Cristina Bair Education
Trust
/s/ Thomas P. Riley
--------------------------
Thomas P. Riley,
as Trustee of the Emily
Cristina Bair Education
Trust
/s/ Christina Hensley Bair
--------------------------
Christina Hensley Bair,
as Trustee of the
Nicholas Hensley Bair
Education Trust
/s/ Thomas P. Riley
--------------------------
Thomas P. Riley,
as Trustee of the
Nicholas Hensley Bair
Education Trust
<PAGE>
<PAGE>
/s/ Martha Faye Koysh
--------------------------
Martha Faye Koysh
/s/ Lana Hensley Hoffman
--------------------------
Lana Hensley Hoffman
/s/ Ruth Ann Roberts
--------------------------
Ruth Ann Roberts
/s/ E. Byron Hensley, Jr.
--------------------------
E. Byron Hensley, Jr.
/s/ Susan MacKenzie
--------------------------
Susan MacKenzie,
as Trustee of the
Jameson Robert Riley
Education Trust
/s/ Mark Morin
--------------------------
Mark Morin,
as Trustee of the
Jameson Robert Riley
Education Trust
/s/ Susan MacKenzie
--------------------------
Susan MacKenzie,
as Trustee of the
Katlyn MacKenzie Riley
Education Trust
/s/ Mark Morin
--------------------------
Mark Morin,
as Trustee of the
Katlyn MacKenzie Riley
Education Trust
/s/ Susan MacKenzie
--------------------------
Susan MacKenzie,
as Trustee of the
Bethany Ann Riley
Education Trust
/s/ Mark Morin
--------------------------
Mark Morin,
as Trustee of the
Bethany Ann Riley
Education Trust
<PAGE>
<PAGE>
/s/ Thomas P. Riley
--------------------------
Thomas P. Riley
/s/ Donald R. Monack
--------------------------
Donald R. Monack
/s/ Leonard O. Henry
--------------------------
Leonard O. Henry
/s/ Janice L. Quiram
--------------------------
Janice L. Quiram
/s/ Alan L. Hollis
--------------------------
Alan L. Hollis
/s/ Lois Simon
--------------------------
Lois Simon
/s/ Wayne J. Stelk
--------------------------
Wayne J. Stelk
/s/ William F. Murdy
--------------------------
William F. Murdy
/s/ Frank N. Liguori
--------------------------
Frank N. Liguori
HARRIS & HARRIS GROUP, INC.
By: /s/ Robert B. Schulz
----------------------------
Name: Robert B. Schulz
Title: President and CEO
* By: GLEACHER AND CO. INC.,
as Attorney-in-fact
By: /s/ Emil W. Henry, Jr.
-------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
<PAGE>
<PAGE>
SCHEDULE A
Identity and Background
The following table sets forth for each Reporting Person (i) the
name of such Reporting Person; (ii) the business address of such
Reporting Person; and (iii) the principal business, occupation or
employment of such Reporting Person:
1. (i) Gregory T. Torres
(ii) Magellan Health Services, Inc.
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
2. (i) Gerald M. Bereika
(ii) Lifetime Healthcare, U.K.
28 Crofton Avenue
London W4 3EW
United Kingdom
(iii) Vice President, Lifetime Healthcare, U.K.
3. (i) Peter P. Polloni
(ii) Magellan Health Services, Inc.
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
4. (i) Peter W. Mair
(ii) Magellan Health Services, Inc.
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
5. (i) Elizabeth J. Hopper
(ii) Magellan Health Services, Inc.
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
<PAGE>
<PAGE>
6. (i) Eric J. Gleacher
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Chairman and Chief Executive Officer,
Gleacher & Co. Inc.
7. (i) James Goodwin
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Managing Director, Gleacher & Co. Inc.
8. (i) Charles G. Phillips
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Managing Director, Gleacher & Co. Inc.
9. (i) H. Conrad Meyer
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Managing Director, Gleacher & Co. Inc.
10. (i) Richard A. Derbes
(ii) Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
(iii) Managing Director,
Morgan Stanley & Co. Incorporated
11. (i) Emil W. Henry, Jr.
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Managing Director, Gleacher & Co. Inc.
12. (i) Robert W. Kitts
(ii) Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
(iii) Principal,
Morgan Stanley & Co. Incorporated
<PAGE>
<PAGE>
13. (i) Jeffrey H. Tepper
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Vice President, Gleacher & Co. Inc.
14. (i) Robert A. Engel
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Vice President, Gleacher & Co. Inc.
15. (i) Andrew Gilman
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Associate, Gleacher & Co. Inc.
16. (i) Marie A. Gentile
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Office Manager, Gleacher & Co. Inc.
17. (i) Gleacher 7 Investors, L.P.
(ii) c/o Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Equity investments
18. (i) Olsten Service Corp.
(ii) 11615 Angus Road
Austin, Texas 78759
(iii) Holding company for non-operating assets
19. (i) James E. Gleacher
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Salesman
20. (i) John G. Gleacher
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Attorney
<PAGE>
<PAGE>
21. (i) Sarah E. Gleacher
(ii) Gleacher & Co. Inc.
660 Madison Avenue
New York, New York 10021
(iii) Student
22. (i) Diane Hensley Ramponi
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) None
23. (i) Thomas P. Riley
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) President and Chief Operating Officer,
Magellan Health Services, Inc.
24. (i) Christina Hensley Bair
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) None
25. (i) Martha Faye Koysh
(ii) 828 Beardsley Road
Gallin, Ohio 44833
(iii) Administrator, United Church Directories
26. (i) Lana Hensley Hoffman
(ii) 1011 Pavilon Tower Circle
Columbia, South Carolina 29201
(iii) Personnel Assistant, City of
Columbia, South Carolina
27. (i) Ruth Ann Roberts
(ii) 2632 Scott Court
Grove City, Ohio 43123
(iii) Nurse, St. Ann's Hospital
28. (i) E. Byron Hensley, Jr.
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Chairman and Chief Executive Officer,
Magellan Health Services, Inc.
<PAGE>
<PAGE>
29. (i) Susan MacKenzie,
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) None
30. (i) Mark Morin
(ii) 10907 Mill Creek Road
Marshfield, Wisconsin 54449
(iii) Ophthalmologist
31. (i) Donald R. Monack
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
32. (i) Leonard O. Henry
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
33. (i) Janice L. Quiram
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
34. (i) Alan L. Hollis
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
35. (i) Lois Simon
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
36. (i) Wayne J. Stelk
(ii) Magellan Health Services
45 Milk Street
Boston, MA 02109
(iii) Vice President, Magellan Health Services, Inc.
<PAGE>
<PAGE>
37. (i) William F. Murdy
(ii) General Investment and Development Company
600 Atlantic Avenue, Suite 2000
Boston, MA 02210
(iii) Chief Executive Officer,
General Investment and Development Company
38. (i) Frank N. Liguori
(ii) Olsten Corporation
175 Broad Hollow Road
Melville, New York 11747
(iii) Chairman of the Board,
Olsten Corporation
39. (i) Harris & Harris Group, Inc.
(ii) One Rockefeller Plaza
14 West 49th Street
New York, New York 10020
(iii) Closed-end investment fund.
<PAGE>
<PAGE>
SCHEDULE B
Identity and Background
of Directors, Executive Officers and
Control Persons of Olsten Corporation
and Olsten Service Corp.
1. The following table sets forth the name and principal occupation
or employment of the directors, executive officers and other persons
controlling Olsten Corporation, a Delaware corporation, the sole
shareholder of Olsten Service Corp. Olsten Corporation is a holding
company, with subsidiaries engaged in the healthcare and temporary
staffing businesses. The business address of each person listed below
is Olsten Corporation, 175 Broad Hollow Road, Melville, New York
11747.
Name Present Principal Occupation
----
or Employment
------------------------------
Frank N. Liguori Chairman of the Board, Olsten
Corporation
Stuart Olsten Vice Chairman, President and
controlling shareholder, Olsten
Corporation
Allan Tod Gittleson Director of Olsten Corporation and
President of Hofstra Health Dome
Incorporated
Andrew N. Heine Director of Olsten
Corporation, Attorney
John M. May Director of Olsten Corporation,
Management Consultant
Miriam Olsten Director and controlling
shareholder of Olsten Corporation
Raymond S. Troubh Director of Olsten
Corporation, Financial
Consultant
<PAGE>
<PAGE>
Richard Sharoff Director of Olsten Corporation,
President and Chief Executive
Officer of Hai Foods, Inc.
Robert A. Fusco Executive Vice President of Olsten
Corporation, President of Olsten
Kimberly QualityCare
Gerald J. Kapalko Executive Vice President, Olsten
Corporation
Richard A. Piske, III Executive Vice President of Olsten
Corporation, President of Olsten
Staffing Services
William P. Costantini Senior Vice President and General
Counsel, Olsten Corporation
Anthony J. Puglisi Senior Vice President-Finance and
Treasurer, Olsten Corporation
Laurin L. Laderoute, Jr. Vice President and Secretary,
Olsten Corporation
Cheryl Olsten Ashburn Controlling shareholder, Olsten
Corporation
2. The following table sets forth the name and principal occupation
or employment of the directors, executive officers and other persons
controlling Olsten Service Corp., a Delaware corporation. Olsten
Service Corp. is principally engaged in the business of holding
certain non-operating assets. The business address of each person
listed below is Olsten Service Corp., 11615 Angus Road, Austin, Texas
78759.
Name Present Principal Occupation
----
or Employment
------------------------------
Daniel Thompson Director and President of Olsten
Service Corp., Reimbursement
Specialist of Olsten Kimberly
QualityCare.
<PAGE>
<PAGE>
Michael Bauman Director of Olsten Service Corp.,
Area Vice President of Olsten
Staffing Services.
William P. Constantini Senior Vice President and General
Counsel of Olsten Service Corp. and
Olsten Corporation.
Laurin L. Laderoute, Jr. Vice President and Secretary of
Olsten Service Corp. and Olsten
Corporation.
Olsten Corporation Sole shareholder.
<PAGE>
<PAGE>
SCHEDULE C
Identity and Background
of Directors, Executive Officers and Control Persons of Gleacher & Co.
Inc., the General Partner of Gleacher 7 Investors, L.P.
The following table sets forth the name and principal occupation
or employment of the directors, executive officers and other persons
controlling, Gleacher & Co. Inc., a Delaware corporation and the
General Partner of Gleacher 7 Investors, L.P., a Delaware limited
partnership. Gleacher & Co. Inc. is principally engaged in the
business of providing financial advisory services. The business
address of each person listed below is Gleacher & Co. Inc., 660
Madison Avenue, New York, New York 10021.
Name Present Principal Occupation
----
or Employment
------------------------------
Eric J. Gleacher Controlling Shareholder, Sole Director,
Chairman, Chief Executive Officer
and Secretary of Gleacher & Co.
Inc.
Martin C. Breslin Treasurer of Gleacher & Co. Inc.
<PAGE>
<PAGE>
SCHEDULE D
Identity and Background
of Directors, Executive Officers and Control
Persons of Harris & Harris Group, Inc.
The following table sets forth the name and principal occupation
or employment of the directors, executive officers and other persons
controlling Harris & Harris Group, Inc., a Delaware corporation and a
closed-end investment fund. The business address of each person
listed below is Harris & Harris Group, One Rockefeller Plaza, 14 West
49th Street, New York, New York 10020.
Name Present Principal
Occupation or Employment
---- ---------------------------------
Charles E. Harris Chairman, Chief Executive Officer
and Director of Harris & Harris
Group, Inc.
Robert B. Schulz President, Chief Operating Officer
and Chief Compliance Officer of
Harris & Harris Group, Inc.
C. Richard Childress Executive Vice President and Chief
Financial Officer of Harris &
Harris Group, Inc.
David C. Johnson, Jr. Executive Vice President of Harris
& Harris Group, Inc.
Rachel M. Pernia Vice President, Controller and
Treasurer of Harris & Harris Group,
Inc.
<PAGE>
<PAGE>
C. Wayne Bardin, M.D. Director of Harris & Harris Group,
Inc., Vice-President of The
Population Council, Professor of
Medicine at Pennsylvania State
University, Senior Investigator of
the National Cancer Institute
G. Morgan Browne Director of Harris & Harris Group,
Inc., Administrative Director of
Cold Spring Harbor Laboratory
Harry E. Ekblom Director of Harris & Harris Group,
Inc., Vice Chairman of A.T. Hudson
& Co., Inc., President of Harry E.
Ekblom & Co., Inc.
Marin Jaffe Director of Harris & Harris Group,
Inc., Managing Director and Chief
Operating Officer of Wood,
Struthers and Winthrop Management
Corp.
Jon J. Masters Director of Harris & Harris Group,
Inc., Attorney with Christy &
Viener
Glenn E. Mayer Director of Harris & Harris Group,
Inc., Senior Vice President of
Reich & Co.
William R. Polk Director of Harris & Harris Group,
Inc., Author and Self-Employed
Consultant
Philip M. Skidmore Director of Harris & Harris Group,
Inc., Director and Group Vice
President of Advest, Inc.
<PAGE>
<PAGE>
SCHEDULE E
Transactions in Shares
Within the Past 60 Days
-----------------------
Date of Number of Shares Price Per
Name Transaction Purchased (1) Share (2)
---- ----------- --------------- ---------
Harris & Harris
Group, Inc. 1/11/95 50,000 $15.375
Thomas P. Riley 1/23/95 5,000 $16.25
Peter P. Polloni 1/12/95 500 $15.75
William F. Murdy 1/23/95 500 $15.25
-----------------------------------------------------------------
(1) All purchases were effected in open market transactions,
principally on the American Stock Exchange.
(2) Represents the price paid excluding brokerage commissions.
<PAGE>
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT
NO EXHIBIT
------ -------
1 Stockholders Agreement, dated as of January 27, 1995,
among Magellan and the Reporting Persons.
2 Investment and Registration Rights Agreement, dated as
of January 27, 1995, among the Company and the
Reporting Persons.
3 Indemnification Agreement, dated as of January 27,
1995, among the Company, the Reporting Persons, E.
Byron Hensley, Jr., as Representative, and Gleacher &
Co. Inc., as Representative.
4 Letter dated January 27, 1995, from the Company
addressed to E. Byron Hensley, Jr., as Representative,
and Gleacher & Co. Inc., as Representative.
5 Escrow Agreement, dated as of January 27, 1995, among
the Company, First Union National Bank of North
Carolina, as Escrow Agent, E. Byron Hensley, Jr., as
Representative, and Gleacher & Co. Inc., as
Representative.
6 Noncompete and Confidentiality Agreement, dated as of
January 27, 1995, between the Company and E. Byron
Hensley, Jr.
7 Noncompete and Confidentiality Agreement, dated as of
January 27, 1995, between the Company and Thomas P.
Riley.
8 Agreement, dated as of February 6, 1995, among the
Reporting Persons.
<PAGE>
EXHIBIT 1
---------
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (the "Agreement") is made and
entered into as of this 27th day of January, 1995 by and among each of
the parties signatory hereto (each, a "Stockholder") and Magellan
Health Services, Inc., a Delaware corporation ("Magellan").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Charter Medical Corporation ("Charter"), Charter
Acquisition Subsidiary, Inc. ("Charter Acquisition") and Magellan have
entered into that certain Agreement of Merger, dated as of December
19, 1994 (the "Merger Agreement"), pursuant to which Charter
Acquisition, a direct wholly-owned subsidiary of Charter, will merge
with and into Magellan and Magellan will be the surviving entity (the
"Merger"); and
WHEREAS, pursuant to the Merger, the Stockholders will
receive shares of common stock of Charter ("Charter Common Stock") in
exchange for their shares of capital stock (or options exercisable for
shares of capital stock) of Magellan; and
WHEREAS, the parties intend that the Merger shall qualify as
a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code") and wish to enter into
certain agreements with a view to maintaining such qualification; and
WHEREAS, it is a condition precedent to the consummation of
the Merger that the Stockholders enter into an Indemnification
Agreement in the form attached to the Merger Agreement as Exhibit E
and the Stockholders desire to provide for just and equitable
contribution among them with respect to any payments required
thereunder; and
WHEREAS, the parties wish to expressly consent to the Merger
and set forth certain rights and obligations relating thereto.
NOW THEREFORE, In consideration of the foregoing, and in
order to ensure that the Merger qualifies as a reorganization within
the meaning of Section 368(a) of the Code, the parties, intending to
be legally bound, agree as follows:
NYFS12...:\99\48499\0005\2550\AGRD0194.K7F
<PAGE>
<PAGE>
1. Definitions. For purposes of this Agreement,
-----------
capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Merger Agreement.
2. Stockholders; Consent to Merger; Execution of
---------------------------------------------
Agreements. Each Stockholder acknowledges and agrees that such
----------
Stockholder's equity interest in Magellan is accurately set forth on
Schedule I hereto and that the Stockholders shall be entitled to
receive allocations of the Aggregate Magellan Consideration in
accordance with the exchange ratios set forth on Schedule I hereto.
Each Stockholder hereby consents to the execution and delivery by
Magellan of the Merger Agreement, the performance of its obligations
thereunder and the consummation of the Merger. Each Stockholder
hereby agrees to execute and deliver the Registration Rights Agreement
and the Indemnification Agreement in substantially the forms attached
to the Merger Agreement as Exhibits A and E, respectively, upon the
consummation of the Merger.
3. Tax Representations and Warranties. Each Stockholder
----------------------------------
hereby agrees, represents and warrants that such Stockholder has no
plan or intention, directly or indirectly, to Sell (as hereinafter
defined) shares of Charter Common Stock which constitute, in the
aggregate, 50% or more of the Charter Common Stock to be received by
such Stockholder pursuant to the Merger. Such Stockholder
acknowledges that he is giving this representation to ensure that the
Merger constitutes a reorganization within the meaning of Section
368(a) of the Code and further recognizes that significant adverse tax
consequences might result if such representation is not true. For
purposes of this Agreement, the term "Sell" shall mean, with respect
to any shares of Charter Common Stock, to sell, exchange or otherwise
dispose of such shares, to reduce the risk of loss with respect to
such shares by short sale or otherwise, or to enter into any agreement
to effect any such sale, exchange, disposition or reduction.
4. Tax Covenants. Each Stockholder hereby agrees that,
-------------
prior to the second anniversary of the date of the Merger, such
Stockholder will not Sell shares of Charter Common Stock which
constitute, in the aggregate, 50% or more of the number of shares of
Charter Common Stock received by such Stockholder pursuant to the
Merger. Notwithstanding the foregoing, (i) Eric J. Gleacher, in the
case of any Stockholder listed on Schedule II hereto, or E. Byron
Hensley, Jr., in the case of any Stockholder listed in Schedule III
hereto, may agree to permit a Stockholder to sell more than the number
of shares of Charter Common Stock permitted by the immediately
preceding sentence prior to the
<PAGE>
<PAGE>
second anniversary of the date of the Merger upon receipt of a written
undertaking from one or more other Stockholders listed on the same
Schedule not to Sell such number of shares (in addition to the number
of shares then subject to the restriction contained in the immediately
preceding sentence) prior to such second anniversary, (ii) the
restriction contained in the immediately preceding sentence may be
reduced or eliminated by a written agreement signed by Stockholders
who were issued not less than 66 2/3% of the Charter Common Stock
issued in the Merger and (iii) no Stockholder shall have any liability
to any other Stockholder for any action taken in conformity with this
sentence (whether or not such action affects the qualification of the
Merger as a reorganization within the meaning of Section 368(a) of the
Code).
5. Termination of Existing Share Purchase Agreement and
----------------------------------------------------
Shareholders' Agreement. Magellan and the Stockholders party thereto
-----------------------
hereby agree that, effective upon the consummation of the Merger, the
Share Purchase Agreement and the Shareholders' Agreement, each dated
as of December 17, 1993, among Magellan and such Stockholders, shall
automatically terminate and be of no further force or effect and any
claims outstanding thereunder shall automatically be released.
6. Contribution. In order to provide for just and
------------
equitable contribution among the Stockholders with respect to their
obligations under the Indemnification Agreement, other than with
respect to representations and warranties made by each Stockholder
pursuant to Section 7(b) of the Indemnification Agreement or Sections
3 or 4 of the Registration Rights Agreement (the "Excluded Claims"),
each Stockholder hereby agrees that, if one or more Stockholders
satisfy or exceed their pro rata shares of a claim by an Indemnified
Party pursuant to the Indemnification Agreement (other than an
Excluded Claim) or any claim by the Escrow Agent for indemnification
under the Escrow Agreement, such Stockholders (collectively, the
"Indemnifying Stockholders") shall be entitled to recover from each
Stockholder that does not satisfy or exceed its pro rata share of such
claim (each a "Contributing Stockholder") an amount (the "Contribution
Amount") equal to (i) the fraction obtained by dividing the number of
shares of Charter Common Stock issued to such Contributing Stockholder
in the Merger by the total number of shares of Charter Common Stock
issued to all Stockholders in the Merger, multiplied by (ii) the
-------------
amount of the claim satisfied by such Indemnifying Stockholders.
Within 5 business days of a Contributing Stockholder's receipt of
notice from any of the Indemnifying Stockholders of a claim for
contribution hereunder, such Contributing Stockholder shall deliver to
each of the Indemnifying Stockholders its "proportionate share" of the
<PAGE>
<PAGE>
Contribution Amount in cash (or wire transfer of immediately available
funds), or by the delivery of shares of Charter Common Stock (duly
endorsed or accompanied by duly executed instruments of transfer
reasonably satisfactory to such Indemnifying Stockholder) having a
fair market value, as of the closing under the Merger Agreement, equal
to such Indemnifying Stockholder's proportionate share of the
Contribution Amount. An Indemnifying Stockholder's "proportionate
share" of any Contribution Amount shall be equal to such Contribution
Amount multiplied by the fraction obtained by dividing the number of
shares of Charter Common Stock issued to such Indemnifying Stockholder
in the Merger by the total number of Shares of Charter Common Stock
issued to all Indemnifying Stockholders in the Merger.
7. Survival. The representations, warranties and
--------
covenants contained herein shall survive the consummation of the
Merger.
8. Miscellaneous.
-------------
a. Entire Agreement. This Agreement constitutes the
----------------
entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter hereof.
b. Certain Events. Each Stockholder agrees that this
--------------
Agreement and the obligations hereunder shall be binding upon such
Stockholder's heirs, guardians, administrators or successors.
c. Assignment. This Agreement shall not be assigned
----------
by operation of law or otherwise without the prior written consent of
the other parties.
d. Amendments, Waivers, Etc. This Agreement may not
------------------------
be amended, changed, supplemented, waived or otherwise modified or
terminated, except upon the execution and delivery of a written
agreement executed by Stockholders who were issued not less than 91%
of the number of shares of Charter Common Stock issued in the Merger.
e. Notices. All notices, requests, claims, demands
-------
and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if so given) by
hand delivery, telegram, telex or telecopy, or by mail (registered or
certified mail, postage prepaid, return receipt requested) or by any
courier service,
<PAGE>
<PAGE>
such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties
(i) in the case of any Stockholder listed on Schedule II hereto, c/o
Gleacher & Co. Inc., 660 Madison Avenue, 19th Floor, New York, New
York 10021 (telecopier: (212) 752-2711), (ii) in the case of Magellan
or any Stockholder listed on Schedule III hereto, c/o Magellan Health
Services, Inc., 45 Milk Street, Boston, Massachusetts 02109
(telecopier: (617) 654-0527), (iii) in the case of Frank N. Liguori or
Olsten Holding Co., 175 Broad Hollow Road, Melville, New York 11747,
Attention: Frank N. Liguori (telecopier: (516) 844-7266), or (iv) to
such other address as the person to whom notice is to be given may
have previously furnished to the others in writing in the manner set
forth above.
f. Severability. Whenever possible, each provision
------------
or portion of any provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law but if
any provision or portion of any provision of this Agreement is held to
be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or
portion of any provision in such jurisdiction, and this Agreement will
be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
g. Remedies Cumulative. All rights, powers and
-------------------
remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise or beginning or the exercise of any
thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
h. No Waiver. The failure of any party hereto to
---------
exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations
hereunder, and any custom or practice of the parties at variance with
the terms hereof, shall not constitute a waiver by such party of its
right to exercise any such or other right, power or remedy or to
demand such compliance.
i. No Third Party Beneficiaries. This Agreement is
----------------------------
not intended to be for the benefit of, and shall not be enforceable
by, any person or entity who or which is not a party hereto.
<PAGE>
<PAGE>
j. Governing Law. This Agreement shall be governed
-------------
and construed in accordance with the laws of the State of New York,
without giving effect to the conflicts of law principles thereof.
k. Descriptive Headings. The descriptive headings
--------------------
used herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of
this Agreement.
l. Counterparts. This Agreement may be executed in
------------
one or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same original
instrument.
IN WITNESS WHEREOF, the undersigned have executed this
agreement as of the day and year first above written.
MAGELLAN HEALTH SERVICES, INC.
By: /s/ Thomas P. Riley
-------------------------------
Name: Thomas P. Riley
Title: President and Chief
Operating Officer
/s/ Gregory T. Tornes
----------------------------------
Gregory T. Torres
/s/ Gerald M. Bereika
----------------------------------
Gerald M. Bereika
/s/ Peter P. Polloni
----------------------------------
Peter P. Polloni
/s/ Peter W. Mair
----------------------------------
Peter W. Mair
/s/ Elizabeth J. Hopper
----------------------------------
Elizabeth J. Hopper
<PAGE>
<PAGE>
/s/ Eric J. Gleacher
----------------------------------
Eric J. Gleacher
/s/ James Goodwin
----------------------------------
James Goodwin
/s/ Charles G. Phillips
----------------------------------
Charles G. Phillips
/s/ H. Conrad Meyer
----------------------------------
H. Conrad Meyer
/s/ Richard A. Derbes
----------------------------------
Richard A. Derbes
/s/ Emil W. Henry, Jr.
----------------------------------
Emil W. Henry, Jr.
/s/ Robert W. Kitts
----------------------------------
Robert W. Kitts
/s/ Jeffrey H. Tepper
----------------------------------
Jeffrey H. Tepper
/s/ Robert A. Engel
----------------------------------
Robert A. Engel
/s/ Andrew Gilman
----------------------------------
Andrew Gilman
<PAGE>
<PAGE>
/s/ Marie A. Gentile
----------------------------------
Marie A. Gentile
GLEACHER 7 INVESTORS L.P.
By: Gleacher & Co. Inc.,
its General Partner
By: /s/ Emil W. Henry, Jr
---------------------------------
Name: Emil W. Henry, Jr.
Title: Vice President
OLSTEN HOLDING CO.
By: /s/ William Costantini
---------------------------------
Name: William Costantini
Title: Sr. Vice President and
General Counsel
/s/ Eric J. Gleacher
----------------------------------
Eric J. Gleacher,
as custodian for
Jay S. Gleacher
/s/ Eric J. Gleacher
----------------------------------
Eric J. Gleacher
as custodian for
Patricia G. Gleacher
/s/ Eric J. Gleacher
----------------------------------
Eric J. Gleacher,
as custodian for
William R. Gleacher
/s/ James E. Gleacher
----------------------------------
James E. Gleacher
/s/ John G. Gleacher
----------------------------------
John G. Gleacher
<PAGE>
<PAGE>
/s/ Sarah E. Gleacher
----------------------------------
Sarah E. Gleacher
/s/ Diane Hensley Ramponi
----------------------------------
Diane Hensley Ramponi,
as Trustee of the Lauren
Carroll Education Trust
/s/ Thomas P. Riley
----------------------------------
Thomas P. Riley,
as Trustee of the Lauren
Carroll Education Trust
/s/ Christina Hensley Bair
----------------------------------
Christina Hensley Bair
/s/ Christina Hensley Bair
----------------------------------
Christina Hensley Bair,
as Trustee of the Emily
Cristina Bair Education Trust
/s/ Thomas P. Riley
----------------------------------
Thomas P. Riley,
as Trustee of the Emily
Cristina Bair Education Trust
/s/ Christina Hensley Bair
----------------------------------
Christina Hensley Bair
as Trustee of the Nicholas
Hensley Bair Education Trust
/s/ Thomas P. Riley
----------------------------------
Thomas P. Riley,
as Trustee of the Nicholas
Hensley Bair Education Trust
/s/ Martha Faye Koysh
----------------------------------
Martha Faye Koysh
<PAGE>
<PAGE>
/s/ Lana Hensley Hoffman
----------------------------------
Lana Hensley Hoffman
/s/ Ruth Ann Roberts
----------------------------------
Ruth Ann Roberts
/s/ E. Byron Hensley, Jr.
----------------------------------
E. Byron Hensley, Jr.
/s/ Susan MacKenzie
----------------------------------
Susan MacKenzie,
as Trustee of the Jameson
Robert Riley Education Trust
/s/ Mark Morin
----------------------------------
Mark Morin,
as Trustee of the Jameson
Robert Riley Education Trust
/s/ Susan MacKenzie
----------------------------------
Susan MacKenzie,
as Trustee of the Katlyn
MacKenzie Riley Education Trust
/s/ Mark Morin
----------------------------------
Mark Morin,
as Trustee of the Katlyn
MacKenzie Riley Education Trust
/s/ Susan MacKenzie
----------------------------------
Susan MacKenzie,
as Trustee of the Bethany
Ann Riley Education Trust
/s/ Mark Morin
----------------------------------
Mark Morin,
as Trustee of the Bethany
Ann Riley Education Trust
<PAGE>
<PAGE>
/s/ Thomas P. Riley
----------------------------------
Thomas P. Riley
HARRIS & HARRIS GROUP, INC.
By: /s/ Robert B. Schulz
-------------------------------
Name: Robert B. Schulz
Title: President and Chief
Operating Officer
/s/ Donald R. Monack
----------------------------------
Donald R. Monack
/s/ Leonard O. Henry
----------------------------------
Leonard O. Henry
/s/ Janice L. Quiram
----------------------------------
Janice L. Quiram
/s/ Alan L. Hollis
----------------------------------
Alan L. Hollis
/s/ Lois Simon
----------------------------------
Lois Simon
/s/ Wayne J. Stelk
----------------------------------
Wayne J. Stelk
/s/ William F. Murdy
----------------------------------
William F. Murdy
/s/ Frank N. Liguori
----------------------------------
Frank N. Liguori
<PAGE>
EXHIBIT 2
---------
INVESTMENT AND REGISTRATION RIGHTS AGREEMENT
THIS INVESTMENT AND REGISTRATION RIGHTS AGREEMENT (the
"Agreement") is made and entered into this 27th day of January, 1995,
among: CHARTER MEDICAL CORPORATION, a Delaware corporation
(hereinafter called the "Company"), and the former stockholders of
MAGELLAN HEALTH SERVICES, INC., a Delaware corporation ("Magellan"),
listed on Exhibit "A" hereto (hereinafter referred to collectively as
"Holders" and individually as a "Holder").
RECITALS
========
A. Concurrently with the execution of this Agreement, the
Company has issued to the Holders 1,398,989 shares of the $.25 par
value per share common stock of the Company (hereinafter the "Shares")
pursuant to that certain Agreement of Merger, dated as of December 19,
1994 (the "Merger Agreement"), among the Company, Magellan and Charter
Acquisition Subsidiary, Inc.
B. The Shares have been issued to the Holders without
registration under the Securities Act of 1933, as amended (the
"Securities Act"), and the Company and the Holders desire to provide
for compliance with the Securities Act and for the registration of the
Shares upon the terms and conditions set forth below.
NOW, THEREFORE, the parties agree as follows:
1. Certain Other Definitions. Capitalized terms used but
==========================
not otherwise defined in this Agreement shall have the meanings
ascribed to such terms in the Merger Agreement. The capitalized terms
set forth below (in their singular and plural forms as applicable)
shall have the following meanings:
1.1. "Commission" shall mean the United States
==========
Securities and Exchange Commission and any successor federal agency
having similar powers.
1.2. "Common Stock" shall mean the $.25 par value per
============
share common stock of the Company.
1.3. The terms "register", "registered" and
======== ==========
"registration" refer to a registration effected by preparing and
============
filing a registration statement in compliance with the Securities Act,
and the declaration or ordering of the effectiveness of such
registration statement.
1.4. "Registrable Securities" shall mean the Securities
======================
that have not been sold to the public.
1.5. "Registration Expenses" shall mean all expenses
=====================
incurred by the Company in complying with Section 5, including, with-
out limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel for the
<PAGE>
<PAGE>
Company, blue sky fees and expenses, and accountants' expenses,
including, without limitation, any special audits or "comfort" letters
incident to or required by any such registration, transfer taxes, fees
of transfer agents and registrars, costs of insurance, and any fees
and disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding underwriting discounts and
commissions.
1.6. "Securities" shall mean the Shares, together with
==========
any other securities which are hereafter issued with respect thereto
by way of exchange, reclassification, dividend or distribution,
whether or not such Shares and securities have been sold to the
public.
2. Representations and Warranties of Company. The
=========================================
representations and warranties of the Company contained in Section 5
of the Merger Agreement are incorporated by reference into this
Agreement. The Holders are entitled to rely on such representations
and warranties as if they were set forth in this Agreement. The
Holders agree that they shall not bring any action based on a breach
of any such representation and warranty against Charter, any
Subsidiary, any affiliate or any officer, director, employee or agent
of any of them with respect to a claim made after the first
anniversary of the date of this Agreement.
3. Representations and Warranties of Holders. Each Holder,
=========================================
severally and not jointly, hereby represents, acknowledges, covenants
and agrees as follows: (i) the Shares are being acquired for his own
account for investment and not with a view to any distribution or
public offering within the meaning of the Securities Act or any state
securities law; (ii) the Shares have not been registered under the
Securities Act or any state securities law; (iii) he is an "accredited
investor" within the meaning of Rule 501 promulgated by the Commission
pursuant to the Securities Act, or if not, he, either alone or with
his purchaser representative, has such knowledge and experience in
financial and business matters that he is capable of evaluating the
merits and risks of the prospective investment in the Shares; and
(iv) he will not sell or otherwise transfer any of the Shares except
upon the terms and conditions specified herein and he will cause any
subsequent Holder of his Shares to agree to take and hold the Shares
subject to the terms and conditions of this Agreement, provided that
========
any Holder may sell the Shares in one or more private transactions not
requiring registration under the Securities Act or any state
securities law.
4. Restrictions on Transfer.
========================
4.1. Legend. Except as provided in Section 4.3, each
======
certificate representing the Shares issued to the Holders or to a
subsequent Holder pursuant to Section 4.2 shall include a legend in
substantially the following form, provided that such
========
<PAGE>
<PAGE>
legend shall not be required if such transfer is being made in
connection with a sale that is exempt from registration pursuant to
Rule 144 under the Securities Act or if the opinion of counsel
referred to in Section 4.2 is to the further effect that neither such
legend nor the restrictions on transfer in this Section 4 are required
in order to ensure compliance with the Securities Act:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURI-
TIES ACT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM. SUCH SHARES MAY BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN
THE INVESTMENT AND REGISTRATION RIGHTS AGREEMENT DATED AS OF
JANUARY 27, 1995, BETWEEN THE ISSUER AND THE OTHER ENTITIES
AND INDIVIDUALS NAMED THEREIN, A COMPLETE AND CORRECT COPY OF
WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
ISSUER AND WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE.
4.2. Additional Restrictions. Each Holder further
=======================
represents, acknowledges, covenants and agrees with the Company that
he will not sell, transfer or otherwise dispose of any Securities
received in the Merger or any other shares of Common Stock until after
such time as results covering at least 30 days of combined operations
of Magellan Health Services, Inc. and the Company have been published
by the Company, in the form of a quarterly earnings report, an
effective registration statement filed with the Commission, a report
to the Commission on Form 10-K, Form 10-Q or Form 8-K, or any other
public filing or announcement which includes such combined results of
operations. Notwithstanding the foregoing, each Holder understands
that he will not be prohibited from selling up to 10% of the
securities received by such Holder in the Merger during the
aforementioned period. In addition, each Holder further represents,
acknowledges, covenants and agrees that he has not, and from the date
of this Agreement, shall not take any action, or fail to take any
action, with the intention of jeopardizing the treatment of the Merger
as a "pooling of interest" for accounting purposes.
4.3. Notice of Transfer. Prior to any proposed
==================
assignment, transfer or sale of any Shares, the Holder of such Shares
shall give written notice to the Company of Holder's intention to
effect such assignment, transfer or sale, which notice shall set forth
the date of such proposed assignment, transfer or sale. Holder shall
also furnish to the Company an agreement by the transferee that it is
taking and holding the same subject to the terms and conditions
specified in this Agreement and a written opinion of Holder's counsel,
in form reasonably satisfactory to the Company, to the effect that the
proposed transfer may be effected without registration under the
Securities Act.
<PAGE>
<PAGE>
4.4. Termination of Restrictions. The restrictions set
===========================
forth in this Section 4 shall terminate and cease to be effective with
respect to any of the Shares (i) upon the sale of any such Shares
which has been registered under the Securities Act, (ii) upon receipt
by the Company of an opinion of counsel, in form reasonably
satisfactory to the Company, to the effect that compliance with such
restrictions is not necessary in order to comply with the Securities
Act with respect to the sale of the Shares or (iii) upon the
expiration of the three-year period referred to in Rule 144(k)
promulgated pursuant to the Securities Act. Whenever such restric-
tions shall so terminate, the Holder of such Shares shall be entitled
to receive from the Company, without expense (other than transfer
taxes, if any), certificates for such Shares not bearing the legend
set forth in Section 4.1 at which time the Company shall rescind any
transfer restrictions relating thereto.
5. Registration under Securities Act, etc.
=======================================
5.1. Shelf-Registration. (a) General. The Company shall
================== =======
prepare and file with the Commission on or prior to 30 days after
the date hereof, a registration statement on an appropriate form under
the Act relating to the offer and sale of the Shares by the Holders
in accordance with the methods of distribution set forth in such
registration statement and Rule 415 under the Act (hereafter, a
"Shelf Registration Statement") and shall use its best efforts to cause
the Shelf Registration Statement to be declared effective as soon as
reasonably practicable thereafter.
(b) Effective Period. The Company agrees to use its best
================
efforts to keep the Shelf Registration Statement current and
continuously effective in order to permit the prospectus included in
the Shelf Registration Statement to be usable by the holders of the
Shares for a period of two years from the Closing Date or such shorter
period that shall terminate when all the Shares covered by the Shelf
Registration Statement have been sold; provided that the Company shall
========
be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in holders of the
Shares covered by the Shelf Registration Statement not being able to
offer and sell such Shares during that period, unless such action is
required by applicable law, and provided, further, that the foregoing
======== =======
shall not apply to actions taken by the Company in good faith and for
valid business reasons (not including avoidance of the Company's
obligations pursuant to this Agreement), including, without
limitation, the acquisition or divestiture of a material portion of
its assets, the offering of shares of Common Stock pursuant to the
registration rights referred to in Section 10 or the offering of
shares of Common Stock by the Company for its own account, so long as
the Company promptly complies with the requirements of Section
5.3(f), if applicable. Any such period during which the Company fails
to keep the Shelf Registration Statement effective and usable for
offers and sales of Shares is hereafter referred
<PAGE>
<PAGE>
to as a "Suspension Period." A Suspension Period shall commence on
and include the date on which the Company provides notice that the
Shelf Registration Statement is no longer effective, that the
prospectus included in the Shelf Registration Statement is no longer
usable for offers and sales of Shares or that the Company is required
to suspend the sale of Shares because of the occurrence of an
underwritten offering in connection with the demand registrations or
primary registrations referred to above and shall end on the date when
each seller of Shares covered by the Shelf Registration Statement
either receives the copies of the supplemented or amended prospectus
contemplated by Section 5.3(f) or is advised in writing by the Company
that use of the prospectus may be resumed. If one or more Suspension
Periods occur, the time period referenced above shall be extended by a
period which is not less than the aggregate number of days included in
all Suspension Periods.
(c) Block-out Period. Each Holder of Registrable Securities
================
agrees by acquisition of such Registrable Securities, if so requested
by the Company, not to effect any sale of Shares pursuant to the Shelf
Registration Statement for any period reasonably deemed necessary by
the Company in connection with the offering of shares of Common Stock
pursuant to an underwritten offering pursuant to demand registration
rights granted to another entity pursuant to Section 10 or the
offering of shares of Common Stock by the Company for its own account.
The Company agrees that the time period during which the Company shall
keep the Shelf Registration Statement current and continuously
effective as referred to in Section 5.1(a) shall be extended by a
period which is not less than the aggregate number of days included in
the periods during which Holders suspended sales of Shares pursuant to
the Shelf Registration Statement at the Company's request, without
duplication of the extension of such period referred to in Section
5.1(b).
5.2. Incidental Registration. Right to Include Registrable
======================= ============================
Securities. If at any time prior to the date on which the Shelf
==========
Registration Statement is declared effective, the Company proposes
to register any of its equity securities under the Securities Act
for sale for its own account on a form and in a manner which
would permit registration of Registrable Securities for sale to the
public under the Securities Act, it will each such time give notice at
least 20 days prior to the proposed filing date to all Holders of
Registrable Securities of its intention to do so, describing such
securities and specifying the form and manner and the other relevant
facts involved in such proposed registration, and upon the written
request of any such Holder delivered to the Company within 10 business
days after the giving of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such Holder
and the intended method or methods of disposition thereof), the
Company shall prepare and file with the Commission, and shall use its
best efforts to cause to be declared effective, a registration
statement on an appropriate form covering all
<PAGE>
<PAGE>
Registrable Securities that the Company has been so requested to
register by the Holders of Registrable Securities (hereinafter
"Requesting Holder"), to the extent requisite to permit the
disposition (in accordance with the intended methods of disposition)
of the Registrable Securities so to be registered, provided that:
========
(i) if, at any time after giving such written notice of its
intention to register any of its securities and prior to the
effective date of the registration statement filed in connection
with such registration, the Company shall determine for any
reason not to register such securities, the Company may, at its
election, give written notice of such determination to each
Holder of Registrable Securities and upon giving such notice
shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection with
the Registration as provided in Section 5.7);
(ii) if (A) the registration so proposed by the Company
=
involves an underwritten offering of the securities so being
registered to be distributed by or through one or more
underwriters of recognized standing under underwriting terms ap-
propriate for such a transaction, (B) the Company proposes that
=
the securities to be registered in such underwritten offering
will not include all of the Registrable Securities requested to
be so included, and (C) the managing underwriter of such
=
underwritten offering shall advise the Company in writing that,
in its opinion, the distribution of all or a specified portion of
such Registrable Securities concurrently with the securities
being distributed by such underwriters will materially and
adversely affect the distribution of such securities by such
underwriters (such opinion to state the reasons for such advice),
then the Company will promptly furnish each such Holder of
Registrable Securities with a copy of such opinion and may
require, by written notice to each such Holder accompanying such
opinion, that the distribution of all or a specified portion of
such Registrable Securities be excluded from such distribution
(in case of an exclusion of a portion of such Registrable
Securities, such portion to be allocated among such Holders in
proportion to the respective numbers of shares of Registrable
Securities so requested to be registered by such Holders); and
(iii) the Company shall not be obligated to effect any
registration of Registrable Securities under this Section 5.2
incidental to the registration of any of its securities in
connection with mergers, acquisitions, exchange offers, dividend
reinvestment plans or stock option or other employee benefit
plans or incidental to the registration of any non-equity
securities not convertible into equity securities.
<PAGE>
<PAGE>
5.3. Registration Procedures. The Company shall:
=======================
(a) cause any registration statement filed pursuant to
Section 5.1 or 5.2 and the related prospectus and any amendment
or supplement, as of the effective date of such registration
statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act
and the rules and regulations of the Commission promulgated under
the Securities Act and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection with such registration statement as may be
necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities and other
securities covered by such registration statement until the
earlier of such time as all such Registrable Securities and
securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth
in such registration statement or, in the case of the Shelf
Registration Statement, for a period of two years from the
Closing Date and, in the case of a registration of Registrable
Securities pursuant to Section 5.2, 90 days, after such registra-
tion statement becomes effective; and will furnish, upon request,
to each such seller and each Requesting Holder a copy of any
amendment or supplement to such registration statement or
prospectus prior to filing it and shall not file any such
amendment or supplement to which any such seller or Requesting
Holder shall have reasonably objected on the grounds that such
amendment or supplement does not comply in all material respects
with the requirements of the Securities Act or of the rules or
regulations thereunder;
(c) furnish to each seller of such Registrable Securities
and each Requesting Holder such number of conformed copies of
such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the
Securities Act, such documents, if any, incorporated by reference
in such registration statement or prospectus, and such other
documents, as such seller or Requesting Holder may reasonably
request;
(d) use its best efforts to register or qualify all
<PAGE>
<PAGE>
Registrable Securities and other securities covered by such reg-
istration statement under such other securities or blue sky laws
of the states of the United States as each seller or Requesting
Holder shall reasonably request, to keep such registration or
qualification in effect for so long as such registration
statement remains in effect, and do any and all other acts and
things which may be necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of its Reg-
istrable Securities covered by such registration statement,
except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign
corporation in any jurisdiction in which it is not and would not,
but for the requirements of this Section 5.3(d), be obligated to
be so qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any
such jurisdiction;
(e) upon request, furnish to each seller of Registrable
Securities and each Requesting Holder a signed counterpart,
addressed to such seller and such Requesting Holder, of (i) an
=
opinion of counsel for the Company, dated the effective date of
such registration statement (and, if such registration includes
an underwritten public offering, dated the date of the closing
under the underwriting agreement), and (ii) a "comfort" letter,
==
signed by the independent public accountants who have certified
the Company's financial statements included in such registration
statement, dated the effective date of such registration
statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the
underwriting agreement), covering substantially the same matters
with respect to such registration statement (and the prospectus
included in such registration statement) and, in the case of such
accountants' letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters
delivered to underwriters in underwritten public offerings of
securities and, in the case of the accountants' letter, such
other financial matters, as the principal underwriter for such
sellers, or any of such Requesting Holders, may reasonably
request;
(f) immediately notify each seller of Registrable Securities
covered by such registration statement and each Requesting
Holder, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of
<PAGE>
<PAGE>
the circumstances then existing, which untrue statement or
omission requires amendment of the registration statement or
supplementation of the prospectus, and at the request of any such
seller or Requesting Holder, prepare and furnish to such seller
and each Requesting Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances then existing; provided, however, that each Holder
of Registrable Securities registered pursuant to such registra-
tion statement agrees that he will not sell any Registrable
Securities pursuant to such registration statement during the
time that the Company is preparing and filing with the Commission
a supplement to or an amendment of such prospectus or
registration statement;
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its securities holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning
with the first month of the first fiscal quarter after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(h) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the
effective date of such registration statement.
Each seller of Registrable Securities as to which any registration is
being effected shall furnish to the Company such information regarding
such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be
required by law or by the Commission in connection therewith.
5.4. Underwritten Offerings. (a) Incidental
====================== ==========
Underwritten Offerings. If the Company at any time proposes to
======================
register any of its securities under the Securities Act as
contemplated by Section 5.2 and such securities are to be distributed
by or through one or more underwriters, the Company will use its best
efforts, if requested by any Holder of Registrable Securities who
requests incidental registration of Registrable Securities in
connection therewith pursuant to Section 5.2, to arrange for such
underwriters to include, on the same terms as the other shares being
distributed, the Registrable Securities to be offered and sold by such
Holder among the securities to be distributed by or through such
underwriters,
<PAGE>
<PAGE>
provided that, for purposes of this sentence, best efforts shall not
========
require the Company to reduce the amount or sale price of such
securities proposed to be distributed on behalf of the Company by or
through such underwriters. The Holders of Registrable Securities to
be distributed by such underwriters shall be parties to the underwrit-
ing agreement between the Company and such underwriters and the
representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters,
shall also be made to and for the benefit of such Holders of
Registrable Securities, and the Company will cooperate with such
Holders of Registrable Securities to the end that the conditions
precedent to the obligations of such Holders of Registrable Securities
under such underwriting agreement shall not include conditions that
are not customary in underwriting agreements with respect to combined
primary and secondary distributions and shall be otherwise
satisfactory to such Holders. Such Holders of Registrable Securities
shall not be required by the Company to make any representations or
warranties to or agreements (including indemnity agreements customary
in secondary offerings) with the Company or the underwriters other
than reasonable representations, warranties or agreements regarding
such Holder, such Holder's Registrable Securities and such Holder's
intended method or methods of distribution and any other repre-
sentation required by law.
(b) Holdback Agreements.
===================
(i) If any registration pursuant to Section 5.2 shall be
in connection with an underwritten public offering, each Holder
of Registrable Securities agrees by acquisition of such
Registrable Securities, if so required by the managing
underwriter, not to effect any public sale or distribution of
Registrable Securities (other than as part of such underwritten
public offering) within seven days prior to the effective date of
such registration statement or 120 days after the effective date
of such registration statement.
(ii) The Company agrees (A) not to effect any public
=
sale or distribution of any of its equity securities or securi-
ties convertible into or exchangeable or exercisable for any of
such securities during the seven days prior to and the earlier of
120 days after any underwritten registration pursuant to Section
5.2 has become effective and the date on which all securities
under such registration statement are sold, except as part of
such underwritten registration and except pursuant to regis-
trations on Form S-4 or S-8 or any successor thereto, and (B) to
=
use its best efforts to cause each holder of its equity secu-
rities or any securities convertible into or exchangeable or ex-
ercisable for any of such securities, in each case purchased from
the Company at any time after the date of this Agreement (other
than in a public offering) to agree not to effect any such
<PAGE>
<PAGE>
public sale or distribution of such securities during such
period.
5.5. Preparation; Reasonable Investigation. In
=====================================
connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities
Act, the Company will give the Holders of Registrable Securities
on whose behalf such Registrable Securities are to be so
registered and their underwriters, if any, and their respective
counsel and accountants, the opportunity to participate in the
preparation of such registration statement, each prospectus
included in such registration statement or filed with the
Commission and each amendment or supplement, and will give each
of them such reasonable access to its books and records and such
opportunities to discuss the business of the Company with its
officers and the independent public accountants who have
certified its financial statements as shall be necessary in the
opinion of such Holders and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning
of the Securities Act. To minimize disruption and expense to the
Company during the course of the registration process, sellers of
Registrable Securities to be covered by any such registration
statement shall coordinate their investigation and due diligence
efforts and, to the extent practicable, will act through a single
set of counsel and a single set of accountants and will enter
into appropriate confidentiality agreements with the Company in a
form satisfactory to the Company.
5.6. Indemnification. (a) Indemnification by the
=============== ======================
Company. The Company shall indemnify and hold harmless the
=======
seller of any Registrable Securities covered by any registration
statement filed pursuant to Section 5.1 or 5.2, its directors,
trustees and officers, each other person who participates as an
underwriter in the offering or sale of such securities and each
other person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act against any
losses, claims, damages, liabilities or expenses, joint or
several, to which such seller or Requesting Holder or any such
director or officer or participating or controlling person may
become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or related
actions or proceedings) arise out of or are based upon (x) any
=
untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such
securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus
contained in such registration statement, or any amendment or
supplement to such registration statement, or any document
incorporated by reference in such registration statement, or (y)
=
any omission or alleged omission to state therein a material fact
required to be stated therein or
<PAGE>
<PAGE>
necessary to make the statements therein not misleading, and the
Company will reimburse such seller, Requesting Holder and each
such director, trustee, officer, participating person and
controlling person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending
any such loss, claim, liability, action or proceeding, provided
========
that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense
(or action or proceeding in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
through an instrument duly executed by such seller or such
Requesting Holder or any such director, trustee, officer,
participating person or controlling person specifically stating
that it is for use in the preparation of such registration
statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such
seller or such Requesting Holder or any such director, officer,
participating person or controlling person and shall survive the
transfer of such securities by such seller. The Company shall
agree to make provision for contribution relating to such
indemnity as shall be reasonably requested by any seller of
Registrable Securities or the underwriters.
(b) Indemnification by the Sellers. The Company may
==============================
require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Sections 5.1 or
5.2, that the Company shall have received an undertaking
satisfactory to it from each prospective seller of such
securities, severally and not jointly, to indemnify and hold
harmless (in the same manner and to the same extent as set forth
in Section 5.6(a)) the Company, each director of the Company,
each officer of the Company who shall sign such registration
statement and each other person, if any, who controls the Company
within the meaning of the Securities Act, with respect to any
untrue statement in or omission from such registration statement,
any preliminary prospectus, final prospectus or summary
prospectus included in such registration statement, or any
amendment or supplement to such registration statement, of a
material fact if such statement or omission was made in reliance
upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller
specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such
director, officer or controlling
<PAGE>
<PAGE>
person and shall survive the transfer of such securities by such
seller.
(c) Notice of Claims, etc. Promptly after receipt by
======================
an indemnified party of notice of the commencement of any action
or proceeding involving a claim referred to in Sections 5.6(a)
and (b), such indemnified party will, if a claim is to be made
against an indemnifying party, give written notice to the latter
of the commencement of such action, provided that the failure of
========
any indemnified party to give notice shall not relieve the
indemnifying party of its obligations under Sections 5.6(a) or
(b), except to the extent that the indemnifying party is actually
and materially prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment (i) a
conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, or (ii) the
indemnified party has available to it reasonable defenses which
are different from or additional to those available to the
indemnifying party, the indemnifying party shall be entitled to
participate in and to assume the defense of such action, jointly
with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense of such action, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the
defense of such action other than reasonable costs of
investigation. Notwithstanding the foregoing, in any such
action, any indemnified party shall have the right to retain its
own counsel but the fees and disbursements of such counsel shall
be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for the
indemnified party, or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of
such counsel. It is understood that the indemnifying party shall
not, in connection with any action or related actions in the same
jurisdiction, be liable for the fees and disbursements of more
than one separate firm qualified in such jurisdiction to act as
counsel for the indemnified parties, unless in any indemnified
party's reasonable judgment (i) a conflict of interest between
such indemnified party and any other indemnified party may exist
in respect of such claims, or (ii) the indemnified party has
available to it reasonable defenses which are different from or
additional to those available to another indemnified party. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to
<PAGE>
<PAGE>
indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No
indemnifying party shall, without the consent of the indemnified
party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term the
giving by the claimant or plaintiff to such indemnified party of
a release from all liability in respect to such claim or
litigation.
(d) Other Indemnification. Indemnification similar to
=====================
that specified in the Sections 5.6(a) and 5.6(b) (with
appropriate modifications) shall be given by the Company and each
seller of Registrable Securities with respect to any required
registration or other qualification of such Registrable
Securities under any federal or state law or regulation of
governmental authority other than the Securities Act.
(e) Contribution. If the indemnification provided for
============
in this Section 5.6 is unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses described as indemnifiable
pursuant to Sections 5.6(a) or 5.6(b), then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified
party, as a result of such losses, claims, damages, liabilities
or expenses in such proportion as appropriate to reflect the
relative fault of the Company, on the one hand, or such seller of
Registrable Securities, on the other hand, and to the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent any untrue statement or omission giving
rise to such indemnification obligation. The Company and the
Holders of Registrable Securities agree that it would not be just
and equitable if contributions pursuant to this Section 5.6(e)
were determined by pro rata allocation (even if the Holders of
Registrable Securities were treated as one entity for such
purpose) or by any other method of allocation which did not take
account of the equitable considerations referred to above in this
Section 5.6(e). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation.
(f) Indemnification Payments. Periodic payments of
========================
amounts required to be paid pursuant to this Section 5.6 shall be
made during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is
incurred.
(g) Limitation on Seller's Payments. Notwithstanding
===============================
any provision of this Agreement to the contrary, the liability of
any seller of Registrable
<PAGE>
<PAGE>
Securities under this Section 5.6 shall in no event exceed the
proceeds received by such seller from the sale of Registrable
Securities covered by the registration statement giving rise to
such liability.
5.7. Registration Expenses. The Company shall bear all
=====================
expenses incurred in connection with the performance of its
obligations under Sections 5.1 and 5.2 of this Agreement and, in
the event of a Shelf Registration Statement, shall bear or
reimburse the holders of the Registerable Securities for the
reasonable fees and disbursements of one firm of counsel
designated by the holders of a majority in principal amount of
the Registerable Securities to act as counsel for all holders of
Registerable Securities in connection therewith.
6. Rule 144. The Company shall comply with the
========
requirements of Rule 144 under the Securities Act, as such Rule
may be amended from time to time (or any similar rule or
regulation hereafter adopted by the Commission), regarding the
availability of current public information to the extent required
to enable any Holder of Registrable Securities to sell shares of
Registrable Securities without registration under the Securities
Act pursuant to Rule 144 (or any similar rule or regulation).
Upon the request of any Holder of Registrable Securities, the
Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
7. Amendments and Waivers. This Agreement may be
======================
amended and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it,
only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the Holder or
Holders of 51% or more of the shares of Registrable Securities
(and, in the case of any amendment, action or omission to act
which adversely affects any specific Holder of Registrable
Securities or a specific group of Holders of Registrable
Securities, the written consent of each such Holder or Holders of
51% or more of the Registrable Securities held by such group).
Each Holder of any Registrable Securities at the time shall be
bound by any consent authorized by this Section 7, whether or not
such Registrable Securities shall have been marked to indicate
such consent.
8. Nominees for Beneficial Owners. In the event that
==============================
any Registrable Securities are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at
its election, be treated as the Holder of such Registrable
Securities for purposes of any request or other action by any
Holder or Holders of Registrable Securities pursuant to this
Agreement or any determination of any number or percentage of
shares of Registrable Securities
<PAGE>
<PAGE>
held by any Holder or Holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require
assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
9. Notices. All notices, communications and deliveries
=======
required or permitted by this Agreement shall be made in writing
signed by the Party making the same, shall specify the Section of
this Agreement pursuant to which it is given or being made and
shall be deemed given or made (i) on the date delivered if
delivered by telecopy or in person, (ii) on the third (3rd)
business day after it is mailed if mailed by registered or
certified mail (return receipt requested) (with postage and other
fees prepaid) or (iii) on the day after it is delivered, prepaid,
to an overnight express delivery service that confirms to the
sender delivery on such day, as follows:
(a) if to any Holder of Registrable Securities, at
the address shown on the stock transfer books of the
Company unless such Holder has advised the Company in
writing of a different address as to which notices shall
be sent under this Agreement, and
(b) if to the Company, at 3414 Peachtree Road, N.E.,
Suite 1400, Atlanta, Georgia 31326, Attn: Steve J. Davis,
Telecopy No.: (404) 814-5795, with a copy to King & Spalding,
191 Peachtree Street, Atlanta, Georgia 30303-1763, Attention:
Mr. Robert W. Miller, Telecopy No: (404) 572-5144,
or to such other representative or at such other address of a Party as
such Party hereto may furnish to the other Parties in writing. If
notice is given pursuant to this Section 9 of any assignment to a
permitted successor or assign of a Party hereto, the notice shall be
given as set forth above to such successor or assign of such Party.
10. Miscellaneous. The Company shall not after the date of
=============
this Agreement enter into any agreement with respect to its securities
which is inconsistent with or violates the rights granted to Holders
of Registrable Securities in this Agreement; provided, however, that
the Company shall be permitted to enter into registration rights
agreements with respect to Common Stock issued in connection with
acquisitions consummated after the date of this Agreement. This
Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties to
this Agreement, whether so expressed or not, and, in particular, shall
inure to the benefit of and be enforceable by any Holder or Holders of
Registrable Securities. This Agreement and the Merger Agreement
embody the entire agreement and understanding between the Company
<PAGE>
<PAGE>
and the other parties to this Agreement and supersede all prior
agreements and understandings relating to the subject matter of this
Agreement. This Agreement shall be construed and enforced in
accordance with and governed by the law of the State of Delaware. The
headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute
one instrument.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective duly authorized officers
as of the date first above written.
CHARTER MEDICAL CORPORATION
===========================
By: /s/ Michael Catalano
------------------------------------
Name: Michael Catalano
Title: Vice President Planning
and Development
STOCKHOLDERS
============
/s/ Gregory T. Torres
---------------------------------
Gregory T. Torres
/s/ Gerald M. Bereika
---------------------------------
Gerald M. Bereika
/s/ Peter P. Polloni
---------------------------------
Peter P. Polloni
/s/ Peter W. Mair
---------------------------------
Peter W. Mair
/s/ Elizabeth J. Hopper
---------------------------------
Elizabeth J. Hopper
<PAGE>
<PAGE>
/s/ James Goodwin
---------------------------------
James Goodwin
/s/ Charles G. Phillips
---------------------------------
Charles G. Phillips
/s/ H. Conrad Meyer
---------------------------------
H. Conrad Meyer
/s/ Richard A. Derbes
---------------------------------
Richard A. Derbes
/s/ Emil W, Henry, Jr.
---------------------------------
Emil W. Henry, Jr.
/s/ Robert W. Kitts
---------------------------------
Robert W. Kitts
/s/ Jeffrey H. Tepper
---------------------------------
Jeffrey H. Tepper
/s/ Robert A. Engel
---------------------------------
Robert A. Engel
/s/ Andrew A. Gilman
---------------------------------
Andrew Gilman
/s/ Maria A. Gentile
---------------------------------
Marie A. Gentile
GLEACHER 7 INVESTORS L.P.
=========================
By: /s/ Emil W. Henry, Jr.
-----------------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
<PAGE>
<PAGE>
OLSTEN HOLDING CO.
=================
By: /s/ Laurin L. Laderoute, Jr.
-----------------------------------
Name: Laurin L. Laderoute, Jr.
Title: Vice President
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher, as Custodian
for Jay S. Gleacher
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher, as Custodian
for Patricia G. Gleacher
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher, as Custodian
for William R. Gleacher
/s/ James E. Gleacher
---------------------------------
James E. Gleacher
/s/ John G. Gleacher
---------------------------------
John G. Gleacher
/s/ Sarah E. Gleacher
---------------------------------
Sarah E. Gleacher
/s/ Thomas P. Riley
---------------------------------
Thomas P. Riley
/s/ Dianne Hensley Ramponi
---------------------------------
Dianne Hensley Ramponi, Trustee
/s/ Thomas P. Riley
---------------------------------
Thomas P. Riley, Trustee
<PAGE>
<PAGE>
/s/ Christina Hensley Blair
---------------------------------
Christina Hensley Blair
/s/ Christina Hensley Blair
---------------------------------
Christina Hensley Blair, Trustee
/s/ Thomas P. Riley
---------------------------------
Thomas P. Riley, Trustee
/s/ Martha Faye Koysh
---------------------------------
Martha Faye Koysh
/s/ Lana Hensley Hoffman
---------------------------------
Lana Hensley Hoffman
/s/ Ruth Ann Roberts
---------------------------------
Ruth Ann Roberts
/s/ E. Byron Hensley, Jr.
---------------------------------
E. Byron Hensley, Jr.
/s/ Susan Mackenzie
---------------------------------
Susan MacKenzie, Trustee
/s/ Mark Morin
---------------------------------
Mark Morin, Trustee
HARRIS & HARRIS GROUP INC.
=========================
By: /s/ Robert B. Schulz
-----------------------------------
Name: Robert B. Schulz
Title: President and CEO
<PAGE>
EXHIBIT 3
---------
INDEMNIFICATION AGREEMENT
=========================
THIS INDEMNIFICATION AGREEMENT ("Agreement") is made and entered
into as of the 27th day of January, 1995, among all of the
stockholders of MAGELLAN HEALTH SERVICES, INC., a Delaware corporation
("Magellan") and holders of options to purchase shares of Magellan's
Capital Stock, which stockholders and holders of options are listed on
Exhibit A hereto (collectively, the "Stockholders"), GLEACHER & CO.
and E. BYRON HENSLEY, JR., acting jointly as representatives of the
Stockholders (collectively, the "Representative"), and CHARTER MEDICAL
CORPORATION, a Delaware corporation ("Charter").
RECITALS:
========
1. Charter, Magellan and Charter Acquisition Subsidiary, Inc.
("Merger Sub") have entered into an Agreement of Merger, dated as of
December 19, 1994 (the "Merger Agreement"), pursuant to which Merger
Sub will be merged with and into Magellan;
2. Pursuant to the terms of the Merger Agreement, and as a
condition to Charter's obligations under the Merger Agreement, the
Stockholders have agreed to provide certain indemnification rights to
Charter; and
3. In consideration of the foregoing, and the representations,
warranties, covenants and agreements set forth in this Agreement, the
parties agree as follows:
1. Definitions. Capitalized terms used but not otherwise
===========
defined in this Agreement shall have the meanings ascribed to such
terms in the Merger Agreement.
2. Indemnification by Stockholders.
===============================
(a) Subject to the other provisions of this Agreement, from
and after the Closing, the Stockholders shall indemnify and hold
harmless, severally and not jointly, in accordance with their
proportionate interests as reflected on Exhibit A, Charter and its
subsidiaries and affiliates, each of their respective officers,
directors, employees, agents and representatives, and each of the
heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Indemnified Parties"), against any losses, claims,
damages, liabilities or expenses whenever arising or incurred
(including, without limitation, amounts paid in settlement, reasonable
costs of investigation and reasonable attorneys' fees and expenses)
(hereinafter "Losses") arising out of or relating to (i) any breach of
any representation or warranty made by (x) Magellan in the Merger
Agreement, including the Magellan Disclosure Schedule, or (y) the
Stockholders in Sections 3 and 4 of the Registration Rights Agreement
and Section 7(b) of this Agreement (the "Documents") and (ii) the
Shareholder's Agreement, dated as of December 17, 1993, among Magellan
(formerly known as National Mentor Holding Corp.),
<PAGE>
<PAGE>
Olsten Holding Company, the Management Shareholders (as such term is
defined in the Shareholder's Agreement) and the Gleacher Shareholders
(as such term is defined in the Shareholder's Agreement); provided,
=========
however, that, with respect to any breach of any representation or
=======
warranty made by a Stockholder pursuant to Sections 3 and 4 of the
Registration Rights Agreement or Section 7(b) of this Agreement, no
Stockholder (other than the Stockholder who commits such breach) shall
have liability for such breach. In addition to the foregoing, if
Magellan asserts a claim for indemnity against The Olsten Corporation,
a Delaware corporation or its successors or assigns ("Olsten"),
pursuant to Section 7.1(a) of that certain Stock Purchase Agreement,
dated October 1, 1993, between Mentor Acquisition Corp. (now known as
National Mentor, Inc.), and Olsten for any breach of Olsten's
representation and warranty set forth in Section 1.6 of such agreement
(a "Tax Claim"), or would have asserted a claim except for the
$1,000,000 threshold set forth in Section 7.1(a), any amount of such
claim, not in excess of $1,000,000, awarded to Magellan or which would
have been awarded to Magellan except for the $1,000,000 threshold (as
a result of proceedings against Olsten, resolution of the claim
pursuant to the procedure set forth in Section 2(c)(iii) of this
Agreement or otherwise) and not paid by Olsten shall be paid to
Magellan by the Stockholders, severally and not jointly, in accordance
with their proportionate interests as reflected on Exhibit A.
(b) No Indemnified Party shall be entitled to make any
claim for indemnification pursuant to this Agreement after the Claims
Period (as defined below).
(c) Indemnification Procedure.
(i) Promptly after receipt by an Indemnified Party of
notice of the commencement of any action or proceeding
involving a claim to which indemnification is being sought,
such Indemnified Party will, if a claim is to be made
against the Stockholders, give written notice to the
Representative of the commencement of such action or
proceeding; provided, however, that failure so to notify the
======== =======
Representative shall not relieve the Stockholders from any
liability which the Stockholders may have with respect to
such claim, except to the extent that the Stockholders are
actually materially prejudiced by such failure to give
notice.
(ii) In case any such action is brought against an
Indemnified Party, unless in such Indemnified Party's
reasonable judgment (i) a conflict of interest between the
Indemnified Party and the Stockholders may exist in respect
of such claim, or (ii) the Indemnified Party has available
to it reasonable defenses which are different from or
additional to those available to the
<PAGE>
<PAGE>
Stockholders, the Representative shall be entitled to assume
and control the defense of such action to the extent that it
may wish, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from the Representative
to such Indemnified Party of its election so to assume and
control the defense of such action, the Stockholders shall
not be liable to such Indemnified Party for any legal or
other expenses subsequently incurred by the latter in
connection with the defense of such action other than
reasonable costs of investigation. Notwithstanding the
foregoing, in any such action, any Indemnified Party shall
have the right to retain its own counsel, but the fees and
disbursements of such counsel shall be at the expense of
such Indemnified Party unless (i) the Representative shall
have failed to retain counsel for the Indemnified Party, or
(ii) the Representative and such Indemnified Party shall
have mutually agreed to the retention of such counsel. It
is understood that the Stockholders shall not, in connection
with any action or related actions in the same jurisdiction,
be liable for the fees and disbursements of more than one
separate firm qualified in such jurisdiction to act as
counsel for all Indemnified Parties, unless in any such
Indemnified Party's reasonable judgment (i) a conflict of
interest between such Indemnified Party and any other
Indemnified Party may exist in respect of such claim or
(ii) such Indemnified Party has available to it reasonable
defenses which are different from or additional to those
available to other Indemnified Parties. The Stockholders
shall not be liable for any settlement of any proceeding
effected without the written consent of the Representative
but if settled with such consent or if there be a final
judgment for the plaintiff, the Stockholders agree to
indemnify the Indemnified Party, severally and not jointly,
in accordance with their proportionate interests as
reflected on Exhibit A, from and against any loss or
liability by reason of such settlement or judgment. Other
than with respect to claims relating to Taxes, the
Stockholders shall not, without the consent of the
Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an
unconditional term the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Within five
business days of the final determination of any such
settlement or judgment, each Stockholder, severally, but not
jointly, in accordance with its proportionate interest as
set forth on Exhibit A, shall deliver to the Indemnified
Party an amount of cash in immediately available funds, or
shares of Charter Common Stock issued to such Stockholder in
the Merger
<PAGE>
<PAGE>
(including, without limitation, the Escrowed Shares) in an
amount or having a value, in the case of shares of Charter
Common Stock, sufficient to satisfy its pro rata share of
such claim.
(iii) In the event that an Indemnified Party shall claim
a right to payment pursuant to this Agreement with respect
to which there has been no action or proceeding involving
such claim pursuant to Section 2(c)(i) above, such
Indemnified Party shall send written notice of such claim to
the Representative. Such notice shall specify the basis for
such claim. As promptly as possible after the Indemnified
Party has given such notice, such Indemnified Party and the
Representative shall establish the merits and amount of such
claim (by mutual agreement, litigation, arbitration or
otherwise) and, within five business days of the final
determination of the merits and amount of such claim, each
Stockholder, severally, but not jointly, in accordance with
its proportionate interest as set forth on Exhibit A, shall
deliver to the Indemnified Party an amount of cash in
immediately available funds, or shares of Charter Common
Stock issued to such Stockholder in the Merger (including,
without limitation, the Escrowed Shares) in an amount or
having a value, in the case of shares of Charter Common
Stock, sufficient to satisfy its pro rata share of such
claim. For purposes of Paragraphs 2(c)(ii) and 2(c)(iii),
shares of Charter Common Stock issued in the Merger that are
delivered in satisfaction of a Stockholder's pro rata
portion of a claim made hereunder shall be valued at $23.00
per share.
3. Liability Limits.
================
(a) The Stockholders shall be liable for Losses solely to
the extent that any such Losses exceed, in the aggregate, $500,000.
(b) Solely for purposes of this Agreement, a Loss or series
of related Losses shall be deemed to have a Magellan Material Adverse
Effect if such Loss or series of related Losses exceed $25,000.
(c) Notwithstanding the preceding, the Stockholders'
liability for Losses shall not exceed the Aggregate Magellan
Consideration.
4. Claim Periods. Except as provided in this Paragraph 4, no
=============
claim for indemnification under this Agreement may be asserted by an
Indemnified Party after the end of the claims period (the "Claims
Period") which shall commence on the date of this Agreement and end on
the first to occur of the following: (i) the
<PAGE>
<PAGE>
first anniversary of the date of this Agreement and (ii) the date of
the first audit of financial statements containing combined operations
of the Company and Magellan. In addition, no claim for
indemnification may be asserted by an Indemnified Party for any Loss
arising from or relating to any breach by Magellan of the
representations and warranties set forth in Section 4.17(d) of the
Merger Agreement (relating to the federal employment tax treatment of
mentors) to the extent such Loss is attributable to Taxes assessed
with respect to any payment to a mentor that is made after the Closing
Date.
5. Escrow of Shares. The Stockholders hereby agree that a
================
number of shares of Charter Common Stock equal to ten percent (10%) of
the total number of shares delivered to each of them (the "Escrow
Shares") shall be delivered by the Exchange Agent to First Union
National Bank, as escrow agent (the "Escrow Agent"), pursuant to the
terms of an Escrow Agreement (the "Escrow Agreement") in the form
attached as Exhibit B. The Escrow Shares shall secure the obligations
of the Stockholders to Charter pursuant to Paragraph 2 of this
Agreement in accordance with the terms of the Escrow Agreement. Each
Stockholder shall be entitled to direct the Escrow Agent to deliver
all or any portion of the Escrow Shares owned by such Stockholder to
any Indemnified Party as provided in Paragraphs 2(c)(ii) and 2(c)(iii)
hereof.
6. Jurisdiction and Forum.
======================
(a) By the execution and delivery of this Agreement, each
of the Stockholders (i) irrevocably designates and appoints The
Corporation Trust Company ("CTCD") at The Corporation Trust Center,
====
1209 Orange Street in the City of Wilmington, County of New Castle,
State of Delaware 19801 as its authorized agent upon which process may
be served in any suit or proceeding arising out of or relating to this
Agreement that may be instituted in any state or federal court in the
State of Delaware and (ii) submits to the personal jurisdiction of any
such court in any such suit or proceeding, and agrees that service of
process upon CTCD shall be deemed in every respect effective service
of process upon each Stockholder in any such suit or proceeding. Each
Stockholder further agrees to take any and all action reasonably
requested by an Indemnified Party, including the execution and filing
of any and all such documents and instruments, as may be necessary to
continue such designation and appointment of CTCD in full force and
effect so long as this Agreement shall be in effect. The foregoing
shall not limit the rights of any party to serve process in any other
manner permitted by law.
(b) To the extent that any Stockholder has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, each Stockholder hereby irrevocably
waives such immunity in
<PAGE>
<PAGE>
respect of its obligations with respect to this Agreement.
(c) The parties agree that an appropriate forum and venue
for any disputes between any of the parties arising out of this
Agreement shall be any state or federal court in the State of
Delaware. The foregoing shall not limit the rights of any party to
obtain execution of judgment in any other jurisdiction. The parties
further agree, to the extent permitted by law, that a final and
unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the
judgment, a certified or exemplified copy of which shall be conclusive
evidence of the fact and amount of such judgment.
7. Representations and Warranties of the Representative and the
============================================================
Stockholders.
============
(a) The Representative hereby represents and warrants to
each other party hereto that:
(i) this Agreement has been duly authorized, executed and
delivered by it and constitutes the legal, valid and binding agreement
of it, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, or other laws affecting creditors' rights and remedies
generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law); and
(ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement will not violate or conflict with, constitute a breach
of or default under, result in the loss of any material benefit under,
or permit the acceleration of or entitle any party to accelerate any
obligation under or pursuant to any material mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment or decree to
which it is a party or by which it or any of its assets are bound.
(b) Each Stockholder hereby represents and warrants to each
other party hereto that:
(i) this Agreement has been duly authorized, executed and
delivered by such Stockholder and constitutes the legal, valid and
binding agreement of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, or other laws
affecting creditors' rights and remedies generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and
<PAGE>
<PAGE>
(ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement will not violate or conflict with, constitute a breach
of or default under, result in the loss of any material benefit under,
or permit the acceleration of or entitle any party to accelerate any
obligation under or pursuant to any material mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment or decree to
which such Stockholder is a party or by which it or any of its assets
are bound.
8. Representative. Each of the Stockholders hereby constitutes
==============
and appoints the Representative to act as the Representative under
this Agreement. Each of the Stockholders agrees to indemnify and hold
harmless the Representative by reason of its acting or failing to act
in connection with any of the transactions contemplated hereby or by
the Merger Agreement and against any loss, liability or expense the
Representative may sustain or incur as a result of serving as
Representative hereunder and, except such losses, liabilities and
expenses which are determined in a final judgment of a court to have
resulted primarily from the gross negligence or willful misconduct of
the Representative. Each of the Stockholders agrees that the
Representative shall have no liability whatsoever to any Indemnified
Party, any Stockholder or such Indemnified Party's or Stockholder's
beneficiaries, heirs or personal representatives for any matters
arising out of this Agreement, the Merger Agreement, the Registration
Rights Agreement or the Escrow Agreement except, in the case of the
Stockholders, for liability for such matters which are determined in
a final judgment of a court to have resulted primarily from the gross
negligence or willful misconduct of the Representative. Each of the
Stockholders hereby agrees to reimburse the Representative upon the
request of the Representative for all reasonable expenses,
disbursements and advances incurred or made by the Representative in
the performance of its duties under this Agreement. The
Representative shall have the authority to act on behalf of and to
bind the Stockholders, in accordance with their proportionate
interests as set forth on Exhibit A, for purposes of the provisions of
this Agreement to the extent set forth in this Agreement. In no event
shall the Representative be liable to any Indemnified Party for any
Stockholder's obligations under this Agreement or the collection of
any claim against any Stockholder.
9. Notices. All notices, communications and deliveries
=======
required or permitted by this Agreement shall be made in writing
signed by the Party making the same, shall specify the Section of this
Agreement pursuant to which it is given or being made, and shall be
deemed given or made (i) on the date delivered if delivered by
telecopy or in person, (ii) on the third business day after it is
mailed if mailed by registered or certified mail (return receipt
requested) (with postage and other fees prepaid), or (iii) on the day
after it is delivered, prepaid, to an overnight express delivery
service that confirms to the sender
<PAGE>
<PAGE>
delivery on such day, as follows:
To Charter:
Charter Medical Corporation
3414 Peachtree Road NE
Suite 1400
Atlanta, Georgia 31326
Attn: Steve J. Davis
Telecopy No.: (404) 814-5795
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30309
Attn: Mr. Robert W. Miller
Telecopy No.: (404) 572-5144
To Stockholders and Representative:
Gleacher & Co.
667 Madison Avenue
4th Floor
New York, New York 10021
Attn: Mr. Emil Henry
Telecopy No.: (212) 752-2711
and
Mr. E. Byron Hensley, Jr.
1 Mason Road
Brookline, MA 02146
with a copy to:
Weil Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Attn: Mr. David E. Zeltner
Telecopy No.: (212) 310-8007
and
Sullivan & Worcester
One Post Office Square
Boston, MA 02109
Attn: Mr. Richard E. Teller
Telecopy No.: (617) 338-2880
or to such other representative or at such other address of a Party as
such Party hereto may furnish to the other Parties in writing. If
notice is given pursuant to this Paragraph 9 of any
<PAGE>
<PAGE>
assignment to a permitted successor or assign of a Party hereto, the
notice shall be given as set forth above to such successor or assign
of such Party.
10. Time of the Essence; Computation of Time. Time is of the
========================================
essence for each and every provision of this Agreement. Whenever the
last day for the exercise of any privilege or the discharge of any
duty under this Agreement shall fall upon a Saturday, Sunday or any
date on which banks in Atlanta, Georgia, Boston, Massachusetts or New
York, New York are closed, the Party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding
day which is a regular business day.
11. Successors in Interest. This Agreement shall be binding
======================
upon and shall inure to the benefit of the Parties and their permitted
successors and assigns, and any reference to a Party shall also be a
reference to a permitted successor or assign.
12. Number; Gender. Whenever the context so requires, the
==============
singular number shall include the plural and the plural shall include
the singular, and the gender of any pronoun shall include the other
genders.
13. Captions. The titles and captions contained in this
========
Agreement are inserted in this Agreement only as a matter of
convenience and for reference and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision of
this Agreement. Unless otherwise specified to the contrary, all
references to Sections are references to Sections of this Agreement.
14. Amendments. To the extent permitted by law, this Agreement
==========
may be amended by a subsequent writing signed by all of the Parties
(other than the Stockholders) and Stockholders having an aggregate
proportionate interest, as reflected on Exhibit A, at least equal to
91%.
15. Controlling Law; Integration; Waiver. This Agreement shall
====================================
be governed by and construed and enforced in accordance with the laws
of the State of Delaware, including but not limited to the Delaware
Law. This Agreement supersedes all negotiations, agreements and
understandings among the Parties with respect to the subject matter of
this Agreement and constitutes the entire agreement among the Parties
to this Agreement. No prior drafts of this Agreement shall constitute
evidence of the purposes or intentions of the parties with respect to
any provisions of this Agreement. The failure of any Party at any
time or times to require performance of any provisions of this
Agreement shall in no manner affect the right to enforce the same. No
waiver by any Party of any conditions, or of the breach of any term,
provision, warranty, representation, agreement or covenant contained
in this
<PAGE>
<PAGE>
Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed or construed as a further or continuing
waiver of any such condition or breach of any other term, provision,
warranty, representation, agreement or covenant contained in this
Agreement.
16. No Limitation. The Parties agree that the rights and
=============
remedies of any Party under this Agreement shall not operate to limit
any other rights and remedies otherwise available to any Party under
the Merger Agreement.
17. Severability. Any provision of this Agreement which is
============
prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by law,
the Parties waive any provision of law which renders any such
provision prohibited or unenforceable in any respect.
18. Pooling of Interest. If any provision of this Agreement or
===================
the application of any such provision to any person or circumstance
shall preclude the use of "pooling of interest" accounting treatment
in connection with the Merger, then such provision shall be of no
force and effect to the extent, and solely to the extent, necessary to
preserve such accounting treatment for the Merger, and in that event,
the remainder of this Agreement shall not be affected, and in lieu of
such provision there shall be added as part of this Agreement a
provision as similar in terms as may be possible for the Merger to be
treated as a "pooling of interests" for accounting purposes.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
CHARTER MEDICAL CORPORATION
===========================
By: /s/ Michael Catalano
-----------------------------------
Name: Michael Catalano
Title: Vice President Planning
and Development
GLEACHER & CO.,
as Representative
By: /s/ Emil W. Henry, Jr.
-----------------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
/s/ E. Byron Hensley, Jr.
---------------------------------------
E. Byron Hensley, Jr.
as Representative
STOCKHOLDERS
============
/s/ Gregory T. Torres
---------------------------------
Gregory T. Torres
/s/ Gerald M. Bereika
---------------------------------
Gerald M. Bereika
/s/ Peter P. Polloni
---------------------------------
Peter P. Polloni
/s/ Peter W. Mair
---------------------------------
Peter W. Mair
/s/ Elizabeth J. Hopper
---------------------------------
Elizabeth J. Hopper
<PAGE>
<PAGE>
/s/ James Goodwin
---------------------------------
James Goodwin
/s/ Charles G. Phillips
---------------------------------
Charles G. Phillips
/s/ H. Conrad Meyer
---------------------------------
H. Conrad Meyer
/s/ Richard A. Derbes
---------------------------------
Richard A. Derbes
/s/ Emil W, Henry, Jr.
---------------------------------
Emil W. Henry, Jr.
/s/ Robert W. Kitts
---------------------------------
Robert W. Kitts
/s/ Jeffrey H. Tepper
---------------------------------
Jeffrey H. Tepper
/s/ Robert A. Engel
---------------------------------
Robert A. Engel
/s/ Andrew A. Gilman
---------------------------------
Andrew Gilman
/s/ Maria A. Gentile
---------------------------------
Marie A. Gentile
GLEACHER 7 INVESTORS L.P.
========================
By: /s/ Emil W. Henry, Jr.
-----------------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
<PAGE>
<PAGE>
OLSTEN HOLDING CO.
=================
By: /s/ Laurin L. Laderoute, Jr.
-----------------------------------
Name: Laurin L. Laderoute, Jr.
Title: Vice President
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher, as Custodian
for Jay S. Gleacher
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher, as Custodian
for Patricia G. Gleacher
/s/ Eric J. Gleacher
---------------------------------
Eric J. Gleacher, as Custodian
for William R. Gleacher
/s/ James E. Gleacher
---------------------------------
James E. Gleacher
/s/ John G. Gleacher
---------------------------------
John G. Gleacher
/s/ Sarah E. Gleacher
---------------------------------
Sarah E. Gleacher
/s/ Thomas P. Riley
---------------------------------
Thomas P. Riley
/s/ Dianne Hensley Ramponi
---------------------------------
Dianne Hensley Ramponi, Trustee
/s/ Thomas P. Riley
---------------------------------
Thomas P. Riley, Trustee
<PAGE>
<PAGE>
/s/ Christina Hensley Blair
---------------------------------
Christina Hensley Blair
/s/ Christina Hensley Blair
---------------------------------
Christina Hensley Blair, Trustee
/s/ Thomas P. Riley
---------------------------------
Thomas P. Riley, Trustee
/s/ Martha Faye Koysh
---------------------------------
Martha Faye Koysh
/s/ Lana Hensley Hoffman
---------------------------------
Lana Hensley Hoffman
/s/ Ruth Ann Roberts
---------------------------------
Ruth Ann Roberts
/s/ E. Byron Hensley, Jr.
---------------------------------
E. Byron Hensley, Jr.
/s/ Susan Mackenzie
---------------------------------
Susan MacKenzie, Trustee
/s/ Mark Morin
---------------------------------
Mark Morin, Trustee
HARRIS & HARRIS GROUP INC.
=========================
By: /s/ Robert B. Schulz
-----------------------------------
Name: Robert B. Schulz
Title: Robert B. Schulz
<PAGE>
EXHIBIT 4
---------
January 27, 1995
Gleacher & Co.
667 Madison Avenue
4th Floor
New York, New York 10021
Mr. E. Byron Hensley, Jr.
1 Mason Road
Brookline, Massachusetts 02146
Re: Indemnification Agreement, dated the date hereof,
among Charter Medical Corporation, Gleacher & Co.
and E. Byron Hensley, Jr., as representatives
-------------------------------------------------
Dear Sirs:
As a material inducement to your entering into the above-
referenced Indemnification Agreement, Charter Medical Corporation,
intending to be legally bound, hereby agrees, for the avoidance of
doubt and at your request, as follows: (A) notwithstanding the
reference to Aggregate Magellan Consideration in Section 3(c) of the
Indemnification Agreement, the Stockholder's liability for Losses
shall not exceed the sum of (i) $3,217,674 plus (ii) the product of
(a) 1,259,090 and (b) the fair market value of a share of Charter
Common Stock as of the closing date and (B) shares of Charter Common
Stock surrendered in satisfaction of an indemnity claim shall be
valued (i) at $33.00 per share to the extent that the number of shares
surrendered does not exceed 139,896 and (ii) at the fair market value
of a share of Charter Common Stock as of the closing date to the
extent the number of shares surrendered exceeds 139,898.
Please indicate your receipt of this letter by signing a
copy of this letter in the place indicated below.
Sincerely,
Charter Medical Corporation
By: /s/ Michael Catalano
-------------------------
Michael Catalano
Vice President Planning
& Development
<PAGE>
<PAGE>
Gleacher & Co.
Mr. E. Byron Hensley, Jr.
January 27, 1995
Page
Acknowledged:
Gleacher & Co.,
as Representative
By: /s/ Emil W. Henry, Jr.
-------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
/s/ E. Byron Hensley
----------------------------
E. Byron Hensley,
as Representative
NYFS12...:\99\48499\0004\2468\LTR2065K.340
<PAGE>
EXHIBIT 5
---------
ESCROW AGREEMENT
================
THIS ESCROW AGREEMENT, ("Agreement") is made and entered
into as of the 27th day of January, 1995, among CHARTER MEDICAL
CORPORATION, a Delaware corporation ("Charter"), GLEACHER & CO. INC.
and E. BYRON HENSLEY, JR., acting jointly as representatives
(collectively, the "Representative") of all of the stockholders of
MAGELLAN HEALTH SERVICES, INC., a Delaware corporation ("Magellan"),
(collectively, the "Stockholders"), and FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national banking association, as escrow agent (the
"Escrow Agent").
RECITALS:
========
A. Charter, Magellan and Charter Acquisition Subsidiary,
Inc. ("Merger Sub") have entered into an Agreement of Merger, dated as
of December 19, 1994 (the "Merger Agreement"), pursuant to which
Merger Sub will be merged with and into Magellan;
B. Pursuant to the terms of the Merger Agreement, and as a
condition to Charter's obligations under the Merger Agreement, the
Stockholders have agreed to provide certain indemnification rights to
Charter; and
C. In order to provide such indemnification rights,
Charter, the Stockholders and the Representatives have entered into an
Indemnification Agreement dated the date hereof the "Indemnification
Agreement"); and
D. Pursuant to Section 5 of the Indemnification Agreement
the parties have agreed to enter into this Agreement; and
E. Escrow Agent is willing to act as escrow agent under
this Agreement; and
F. In consideration of the foregoing, and the
representations, warranties, covenants and agreements set forth in
this Agreement, the parties agree as follows:
1. Definitions. Charter, the Representative, the
===========
Stockholders and the Escrow Agent are each referred to herein as a
"Party" and collectively as the "Parties." Capitalized terms used but
not otherwise defined in this Agreement shall have the meanings
ascribed to such terms in the Indemnification Agreement and the Merger
Agreement.
2. Establishment of Escrow Fund. Simultaneously with the
============================
execution of this Agreement, the Exchange Agent has delivered to
Escrow Agent 139,898 shares of Charter Common Stock (the "Escrow
Shares"). Exhibit A attached to this Agreement lists the name of each
Stockholder depositing shares of Charter Common
<PAGE>
<PAGE>
Stock with the Escrow Agent and the number of shares deposited by
each. The Exchange Agent will provide stock powers duly executed in
blank by the respective Stockholders to the Escrow Agent. The Escrow
Shares shall be held by Escrow Agent in trust subject to the terms and
conditions hereinafter set forth. If the Escrow Agent should receive
any cash or other property with respect to the Escrow Shares, the
Escrow Agent shall invest and reinvest the such cash and the income
therefrom in any money market fund substantially all of which is
invested in direct obligations of the United States of America or
obligations the principal of and the interest on which are
unconditionally guaranteed by the United States of America, including
any such money market fund managed by Escrow Agent or any of its
affiliates and shall hold such other property in trust subject to the
terms and conditions hereinafter set forth.
3. Claims Against the Escrow Fund. The Escrow Shares
==============================
shall secure the obligations of the Stockholders to the Indemnified
Parties pursuant to Paragraph 2 of the Indemnification Agreement and
in accordance with the terms of this Agreement. In the event that a
claim for indemnity results from the final determination of a
settlement or judgment, as contemplated by paragraph 2(c)(ii) of the
Indemnification Agreement, Charter and the Representative shall send
the Escrow Agent notice of such fact in a writing signed by both
Charter and the Representative. Such notice shall state the name of
the Indemnified Party, the amount of the indemnity to which the
Indemnified Party is entitled, the names of the Stockholders from whom
indemnity is sought and the number of shares of Charter Common Stock
that each such Stockholder would be required to transfer to the
Indemnified Party to satisfy its proportionate share of such claim for
indemnity. Pursuant to the Indemnification Agreement, each such
Stockholder shall have five business days from the date of such notice
to deliver to the Indemnified Party an amount of cash in immediately
available funds, or shares of Charter Common Stock (including, without
limitation, the Escrow Shares) in an amount or having a value, in the
case of shares of Charter Common Stock, sufficient to satisfy its pro
rata share of such claim. If after such fifth business day Charter
advises the Escrow Agent that any such Stockholder has not satisfied
its pro rata share of such indemnity claim, the Escrow Agent shall
promptly deliver to Charter such number of Escrow Shares sufficient to
satisfy such Stockholder's pro rata share of such claim for indemnity,
together with the stock powers executed by such Stockholder.
In the event that Charter shall claim a right to payment
pursuant to Section 2(c)(iii) of the Indemnification Agreement,
Charter shall send written notice of such claim to the Escrow Agent
and the Representative. As promptly as possible after Charter has
given such notice, Charter and the Representative shall establish the
merit and accuracy of such claim in accordance with the terms of the
Indemnification Agreement and, upon final determination of the merits
of such
<PAGE>
<PAGE>
claim, shall notify the Escrow Agent and the Stockholders from whom
indemnity is sought (either by means of a certified copy of the
judgment, a certified copy of the arbitration decision, or a written
instrument executed by Charter and the Representative) of the terms of
such determination (such notice is hereinafter referred to as a
"Claims Notice"). After such Claims Notice has been delivered to the
Escrow Agent, pursuant to the Indemnification Agreement, each such
Stockholder shall, within five business days after receipt of a Claims
Notice, deliver to the Indemnified Party an amount of cash in
immediately available funds, or shares of Charter Common Stock having
a value sufficient to satisfy its pro rata share of such claim. If
after such fifth business day, Charter advises the Escrow Agent that
any such Stockholder has not satisfied its pro rata share of such
indemnity claim, the Escrow Agent shall promptly deliver to Charter
such number of the Escrow Shares sufficient to satisfy such
Stockholder's pro rata share of such claim for indemnity, together
with the stock powers executed by such Stockholder.
For purposes of this paragraph, each Escrow Share shall be
valued at $23.00.
4. Termination of Escrow Fund. The escrow provided for
==========================
hereunder shall terminate completely upon the later of the following
dates: the earlier of (i) January 27, 1996 and (ii) the date of the
first audit of financial statements containing combined operations of
Charter and Magellan.
5. Payment Upon Termination. Upon termination of the
========================
escrow, the Escrow Agent shall pay over to the Representative the
balance, if any, of the Escrow Shares and any cash or other property
then held by the Escrow Agent, for disbursement by the Representative
to the Stockholders in accordance with their respective interests as
set forth on Exhibit A to this Indemnification Agreement.
6. Escrow Agent.
============
a. Duties. Escrow Agent shall have no liability or
======
obligation with respect to the Escrow Fund except for Escrow Agent's
willful misconduct or gross negligence. Escrow Agent's sole
responsibility shall be for the safekeeping, investment, and
disbursement of the Escrow Fund in accordance with the terms of this
Escrow Agreement. Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice of any
fact or circumstance not specifically set forth herein. Escrow Agent
may rely upon any instrument, not only as to its due execution,
validity and effectiveness, but also as to the truth and accuracy of
any information contained therein, which Escrow Agent shall in good
faith believe to be genuine, to have been signed or presented by the
person or parties purporting to sign the same and to conform to the
provisions of this Escrow Agreement. In no event shall Escrow Agent
be liable for incidental, indirect, special, consequential or punitive
damages.
<PAGE>
<PAGE>
Escrow Agent shall not be obligated to take any legal action or
commence any proceeding in connection with the Escrow Fund, any
account in which the Escrow Fund is deposited, this Escrow Agreement
or the Indemnification Agreement, or to appear in, prosecute or defend
any such legal action or proceedings. Escrow Agent may consult legal
counsel selected by it in the event of any dispute or question as to
the construction of any of the provisions hereof or of any other
agreement or of its duties hereunder, and shall incur no liability and
shall be fully protected from any liability whatsoever in acting in
accordance with the opinion or instruction of such counsel. Charter
and the Stockholders, jointly and severally, shall promptly pay, upon
demand, the reasonable fees and expenses of any such counsel.
b. Indemnification. From and at all times after the date
===============
of this Escrow Agreement, Charter and the Stockholders, jointly and
severally, shall, to the fullest extent permitted by law and to the
extent provided herein, indemnify and hold harmless Escrow Agent and
each director, officer, employee, attorney, agent and affiliate of
Escrow Agent (collectively, the "Indemnified Parties") against any and
all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever
(including without limitation reasonable attorneys' fees, costs and
expenses) incurred by or asserted against any of the Indemnified
Parties from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating
to any claim, demand, suit, action or proceeding (including any
inquiry or investigation) by any person, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against
any person under any statute or regulation, including, but not limited
to, any federal or state securities laws, or under any common law or
equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of
performance of this Escrow Agreement or any transactions contemplated
herein, whether or not any such Indemnified Party is a party to any
such action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have
======== =======
the right to be indemnified hereunder for any liability finally
determined by a court of competent jurisdiction, subject to no further
appeal, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. If any such action or claim
shall be brought or asserted against any Indemnified Party, such
Indemnified Party shall promptly notify Charter and the Stockholders
in writing, and Charter and the Stockholders shall assume the defense
thereof, including the employment of counsel and the payment of all
expenses. Such Indemnified Party shall, in its sole discretion, have
the right to employ separate counsel in any such action and to
participate in the defense thereof, and the fees and expenses of such
counsel shall be paid by such Indemnified Party unless (a) Charter and
the Stockholders agree to pay such fees and expenses, or (b) Charter
or the Stockholders shall fail to assume the defense
<PAGE>
<PAGE>
of such action or proceeding or shall fail, in the reasonable
discretion of such Indemnified Party, to employ counsel satisfactory
to the Indemnified Party in any such action or proceeding, or (c) the
named parties to any such action or proceeding (including any
impleaded parties) include both Indemnified Party and Charter or the
Stockholder, and Indemnified Party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to Charter or the
Stockholders. All such fees and expenses payable by Charter or the
Stockholder pursuant to the foregoing sentence shall be paid from time
to time as incurred, both in advance of and after the final
disposition of such action or claim. All of the foregoing losses,
damages, costs and expenses of the Indemnified Parties shall be
payable by Charter and the Stockholders, jointly and severally, upon
demand by such Indemnified Party. The obligations of Charter and the
Stockholders under this Paragraph b. shall survive any termination of
this Escrow Agreement and the resignation or removal of Escrow Agent.
The parties agree that neither the payment by Charter or the
Stockholders of any claim by Escrow Agent for indemnification
hereunder nor the disbursement of any amounts to Escrow Agent from the
Escrow Fund in respect of a claim by Escrow Agent for indemnification
shall impair, limit, modify, or affect, as between Charter and the
Stockholders, the respective rights and obligations of the
Stockholders, on the one hand, and Charter, on the other hand, under
the Indemnification Agreement.
c. Disputes. If, at any time, there shall exist any
========
dispute between Charter, the Stockholders or the Representative with
respect to the holding or disposition of any portion of the Escrow
Fund or any other obligations of Escrow Agent hereunder, or if at any
time Escrow Agent is unable to determine, to Escrow Agent's sole
satisfaction, the proper disposition of any portion of the Escrow Fund
or Escrow Agent's proper actions with respect to its obligations
hereunder, or if the Representative has not within 30 days of the
furnishing by Escrow Agent of a notice of resignation pursuant to
Paragraph d hereof, appointed a successor Escrow Agent to act
hereunder, then Escrow Agent may, in its sole discretion, take either
or both or the following actions:
(i) suspend the performance of any of its obligations
under this Escrow Agreement until such dispute or
uncertainty shall be resolved to the sole satisfaction of
Escrow Agent or until a successor Escrow Agent shall have
been appointed (as the case may be); provided, however, that
======== =======
Escrow Agent shall continue to invest the Escrow Funds in
accordance with Section 2 hereof; and/or
=========
(ii) petition (by means of an interpleader action or
any other appropriate method) any court of competent
jurisdiction in Charlotte, North Carolina, for
<PAGE>
<PAGE>
instructions with respect to such dispute or uncertainty,
and pay into or deposit with such court all funds and Escrow
Shares held by it in the Escrow Fund for holding and
disposition in accordance with the instructions of such
court.
Escrow Agent shall have no liability to Charter, the
Stockholders or the Representative or any other person with respect to
any such suspension of performance or disbursement into court,
specifically including any liability that may arise, or be alleged to
have arisen, out of or as a result of any delay in the disbursement of
funds held in the Escrow Fund or any delay in or with respect to any
other action required or requested of Escrow Agent.
d. Resignation of Escrow Agent. Escrow Agent may resign
===========================
from the performance of its duties hereunder at any time by giving ten
(10) days' prior written notice to Charter and the Representative or
may be removed, with or without cause, by Charter and the
Representative, acting jointly, at any time by the giving of ten (10)
days' prior written notice to Escrow Agent. Such resignation or
removal shall take effect upon the appointment of a successor Escrow
Agent as provided herein. Upon any such notice of resignation or
removal, Charter and the Representative jointly shall appoint a
successor Escrow Agent hereunder, which shall be a commercial bank,
trust company or other financial institution with a combined capital
and surplus in excess of $100,000,000. Upon the acceptance in writing
of any appointment as Escrow Agent hereunder by a successor Escrow
Agent, such successor Escrow Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
the retiring Escrow Agent, and the retiring Escrow Agent shall be
discharged from its duties and obligations under this Escrow
Agreement, but shall not be discharged from any liability for actions
taken as Escrow Agent hereunder prior to such succession. After any
retiring Escrow Agent's resignation or removal, the provisions of this
Escrow Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Escrow Agent under this Escrow
Agreement.
e. Receipt. By its execution and delivery of this
=======
Agreement, Escrow Agent acknowledges receipt of the Escrow Shares.
f. Fees. Charter shall compensate Escrow Agent for its
====
services hereunder in accordance with Schedule I attached hereto and,
in addition, shall reimburse Escrow Agent for all of its reasonable
out-of-pocket expenses, including attorneys' fees, travel expenses,
telephone and facsimile transmission costs, postage (including express
mail and overnight delivery charges), copying charges and the like.
All of the compensation and reimbursement obligations set forth in
this paragraph f. shall be payable upon demand by Escrow Agent. The
obligations of Charter
<PAGE>
<PAGE>
under this paragraph f. shall survive any termination of this Escrow
Agreement and the resignation or removal of Escrow Agent.
If Charter has not paid the amount of any compensation or
reimbursement for out-of-pocket expenses demanded by Escrow Agent
within a reasonable time following such demand, Escrow Agent is
authorized to, and may, disburse to itself from any cash contained in
the Escrow Fund, from time to time, the amount of any compensation and
reimbursement of out-of-pocket expenses due and payable hereunder
(including any amount to which Escrow Agent or any Indemnified Party
is entitled to seek indemnification pursuant to paragraph b hereof).
Escrow Agent shall notify Charter and the Representative of any
disbursement from the Escrow Fund to itself or any Indemnified Party
in respect of any compensation or reimbursement hereunder. Charter,
the Stockholders and the Representative hereby grant to Escrow Agent
and the Indemnified Parties a security interest in and lien upon the
Escrow Fund and all funds or other property therein to secure all
obligations hereunder to Escrow Agent and the Indemnified Parties, and
Escrow Agent and Indemnified Parties shall have the right to offset
the amount of any compensation or reimbursement due any of them
hereunder (including any claim for indemnification pursuant to
paragraph b hereof) against the cash on deposit in the Escrow Fund, if
Charter shall not have paid the amount of such compensation or
reimbursement within a reasonable time following Escrow Agent's demand
therefor. If for any reason funds in the Escrow Fund are insufficient
to cover such compensation and reimbursement, Charter shall promptly
pay such amounts to Escrow Agent or any Indemnified Party upon receipt
of an itemized invoice.
7. Notices. All notices, communications and deliveries
=======
required or permitted by this Agreement shall be made in writing
signed by the Party making the same, shall specify the Section of this
Agreement pursuant to which it is given or being made, and shall be
deemed given or made (i) on the date delivered if delivered by
telecopy or in person, (ii) on the third business day after it is
mailed if mailed by registered or certified mail (return receipt
requested) (with postage and other fees prepaid), or (iii) on the day
after it is delivered, prepaid, to an overnight express delivery
service that confirms to the sender delivery on such day, as follows:
To Charter:
Charter Medical Corporation
3414 Peachtree Road NE
Suite 1400
Atlanta, Georgia 31326
Attn: Steve J. Davis, General Counsel
Telecopy No.: (404) 814-5795
<PAGE>
<PAGE>
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30309
Attn: Mr. Robert W. Miller
Telecopy No.: (404) 572-5144
To Stockholders and Representative:
Gleacher & Co.
667 Madison Avenue
4th Floor
New York, New York 10021
Attn: Mr. Emil Henry
Telecopy No.: (212) 752-2711
Mr. E. Byron Hensley, Jr.
1 Mason Road
Brookline, MA 02146
with a copy to:
Weil Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Attn: Mr. David E. Zeltner
Telecopy No. (212) 310-8007
and
Sullivan & Worcester
One Post Office Square
Boston, MA 02109
Attn: Mr. Richard E. Teller
Telecopy No. (617) 338-2880
To Escrow Agent:
First Union National Bank of
North Carolina, as Escrow Agent
Corporate Trust Department
230 South Tryon Street, 8th Floor
Charlotte, North Carolina 28288-1179
Attn.: Karen Atkinson
Telecopy No.: (704) 383-7316
or to such other representative or at such other address of a Party as
such Party hereto may furnish to the other Parties in writing. If
notice is given pursuant to this Section 7 of any assignment to a
permitted successor or assign of a Party hereto, the notice shall be
given as set forth above to such successor or assign of such Party.
<PAGE>
<PAGE>
8. Time of the Essence; Computation of Time. Time is of
========================================
the essence for each and every provision of this Agreement. Whenever
the last day for the exercise of any privilege or the discharge of any
duty under this Agreement shall fall upon a Saturday, Sunday or any
date on which banks in Atlanta, Georgia, Boston, Massachusetts,
Charlotte, North Carolina or New York, New York are closed, the Party
having such privilege or duty may exercise such privilege or discharge
such duty on the next succeeding day which is a regular business day.
9. Successors in Interest. This Agreement shall be
======================
binding upon and shall inure to the benefit of the Parties and their
permitted successors and assigns, and any reference to a Party shall
also be a reference to a permitted successor or assign.
10. Number; Gender. Whenever the context so requires, the
==============
singular number shall include the plural and the plural shall include
the singular, and the gender of any pronoun shall include the other
genders.
11. Captions. The titles and captions contained in this
========
Agreement are inserted in this Agreement only as a matter of
convenience and for reference and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision of
this Agreement. Unless otherwise specified to the contrary, all
references to Sections are references to Sections of this Agreement.
12. Amendments. To the extent permitted by law, this
==========
Agreement may be amended by a subsequent writing signed by all of the
Parties.
13. Controlling Law; Integration; Waiver. This Agreement
====================================
shall be governed by and construed and enforced in accordance with the
laws of the State of North Carolina, without giving effect to the
conflicts of law principles thereof. This Agreement supersedes all
negotiations, agreements and understandings among the Parties with
respect to the subject matter of this Agreement and constitutes the
entire agreement among the Parties to this Agreement. The failure of
any Party at any time or times to require performance of any
provisions of this Agreement shall in no manner affect the right to
enforce the same. No waiver by any Party of any conditions, or of the
breach of any term, provision, warranty, representation, agreement or
covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances shall be deemed or construed as a further
or continuing waiver of any such condition or breach of any other
term, provision, warranty, representation, agreement or covenant
contained in this Agreement, the Indemnification Agreement or the
Merger Agreement.
14. No Limitation. The Parties agree that the rights and
=============
remedies of any Party under this Agreement shall not operate
<PAGE>
<PAGE>
to limit any other rights and remedies otherwise available to any
Party under the Indemnification Agreement or the Merger Agreement.
15. Additional Actions and Documents. Each of the Parties
================================
agrees to take or cause to be taken such further actions, to execute,
deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents as may
be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Agreement.
16. Severability. Any provision of this Agreement which is
============
prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by law,
the Parties waive any provision of law which renders any such
provision prohibited or unenforceable in any respect.
17. Pooling of Interest. If any provision of this
===================
Agreement or the application of any such provision to any person or
circumstance shall preclude the use of "pooling of interest"
accounting treatment in connection with the Merger, then such
provision shall be of no force and effect to the extent, and solely to
the extent, necessary to preserve such accounting treatment for the
Merger, and in that event, the remainder of this Agreement shall not
be affected, and in lieu of such provision there shall be added as
part of this Agreement a provision as similar in terms as may be
possible for the Merger to be treated as a "pooling of interests" for
accounting purposes.
18. Jurisdiction and Venue. In the event that any party
======================
hereto commences a lawsuit or other proceeding relating to or arising
from this Agreement, the parties hereto agree that the United States
District Court of the Western District of North Carolina shall have
the sole and exclusive jurisdiction over any such proceeding. If such
court lacks federal subject matter jurisdiction, the parties agree
that the Superior Court Division of the General Court of Justice of
Mecklenburg County, North Carolina shall have sole and exclusive
jurisdiction. Any of these courts shall be proper venue for any such
lawsuit or judicial proceeding and the parties hereto waive any
objection to such venue. The parties hereto consent to and agree to
submit to the jurisdiction of any of the courts specified herein and
agree to accept service or process to vest personal jurisdiction over
them in any of these courts.
19. Purchase of Securities. The Escrow Agent and any
======================
stockholder, director, officer or employee of the Escrow Agent
<PAGE>
<PAGE>
may buy, sell, and deal in any of the securities of Charter and become
pecuniarily interested in any transaction in which Charter may be
interested, and contract and lend money to Charter and otherwise act
as fully and freely as though it were not Escrow Agent under this
Agreement. Nothing herein shall preclude the Escrow Agent from acting
in any other capacity for Charter or for any other entity.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed as of the date first above written.
GLEACHER & CO. INC.
as Representative
By: /s/ Emil W. Henry, Jr.
------------------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
/s/ E. Byron Hensley, Jr.
------------------------------
E. Byron Hensley, Jr.,
as Representative
CHARTER MEDICAL CORPORATION
By: /s/ Michael Catalano
----------------------------------
Name: Michael Catalano
Title: Vice President Planning
and Development
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Escrow Agent
By: /s/ Karen E. Atkinson
-----------------------------------
Name: Karen E. Atkinson
Title: Asssistant Vice President
<PAGE>
EXHIBIT 6
---------
NONCOMPETE AND CONFIDENTIALITY AGREEMENT
========================================
THIS AGREEMENT (the "Agreement") is made and entered into as of
this 27th day of January, 1995, by and between CHARTER MEDICAL
CORPORATION, a Delaware corporation with its corporate headquarters in
Atlanta, Georgia (the "Company"), and E. BYRON HENSLEY, JR. ("Mr.
Hensley").
R E C I T A L S :
---------------
1. National Mentor, Inc. ("Mentor") is a private provider of
behavioral healthcare services in the homes of trained
paraprofessionals and operates an outpatient clinic located in the
Boston, Massachusetts, metropolitan area (the "Business"). Mentor is
a wholly-owned subsidiary of Magellan Health Services, Inc., a
Delaware corporation ("Magellan").
2. Magellan merged with Charter Acquisition Subsidiary, Inc., a
wholly-owned subsidiary of the Company, on January 27, 1995, pursuant
to the Agreement of Merger, dated as of December 19, 1994, among the
Company, Charter Acquisition Subsidiary, Inc. and Magellan (the
"Merger Agreement").
3. Mr. Hensley is a former stockholder of Magellan and an
executive officer of Mentor.
4. In connection with the Merger Agreement, the Company
acquired the "Confidential Information" and "Trade Secrets" (both as
defined below) of Mentor and, to protect the Company's substantial
investment in the Confidential Information and Trade Secrets, and to
protect the goodwill associated with the Company's customer
relationships, Mr. Hensley and the Company (together, the "Parties")
have agreed to abide by the terms and conditions of this Agreement.
In consideration of the foregoing, and the representations,
warranties, covenants and agreements set forth in this Agreement and
in the Merger Agreement, the Parties hereby agree as follows:
1. Definitions. The following terms shall have the
===========
following meanings when used in this Agreement:
(a) "Competitor" shall mean any person or Entity engaged,
==========
wholly or partly, in the Business.
(b) "Competitive Position" shall mean: (i) the direct or
====================
indirect equity ownership (excluding equity ownership of a
publicly held company through the ownership of less than five
percent (5%) of its outstanding shares) of all or any portion of
a Competitor; or (ii) any employment, consulting or independent
contractor arrangement with any Competitor
<PAGE>
<PAGE>
for the Services described in this Agreement; provided that the
=============
foregoing shall not apply to any employment, consulting or
independent contractor arrangement with the parent company, a
division or a subsidiary of a Competitor which parent company,
division or subsidiary is not a Competitor.
(c) "Confidential Information" shall mean the proprietary
========================
and confidential data or information of the Company or Mentor,
other than "Trade Secrets" (as defined below), which is of
tangible or intangible value to the Company and is not public
information or is not generally known or available to the
Company's competitors but is known only to the Company and those
of its employees, independent contractors, consultants, customers
or agents to whom it must be confided in order to apply it to the
uses intended, including, without limitation, informal
information regarding the Company's customers or prospective
customers (such as lists containing the names, addresses and
telephone numbers and/or account information of customers and
prospective customers, but not including information that is
available to the public), marketing methods and business plans
gained by Mr. Hensley as a result of his relationship with the
Company or Mentor.
(d) "Entity" shall mean any partnership, joint venture,
======
agency, governmental subdivision, association, firm, corporation
or entity.
(e) "Restricted Territory" shall mean the continental
====================
United States, except with respect to the operation of an
outpatient clinic, the Restricted Territory shall be the Boston,
Massachusetts, metropolitan area. The Parties agree to amend
this definition of "Restricted Territory" to reflect any
significant contraction of the areas where the Company conducts
the Business.
(f) "Services" shall mean Mr. Hensley's performance of
========
executive services to Mentor in his capacity as its Chairman and
Chief Executive Officer.
(g) "Trade Secrets" shall mean information of the Company
=============
or Mentor, including, but not limited to, technical or
nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial
data, financial plans, products plans, or lists of actual or
potential customers or suppliers, which: (x) derives economic
value, actual or potential from not being generally known to, and
not being readily ascertainable by proper means by, other persons
who can obtain economic value from their disclosure or use; and
(y) is the subject of efforts that are reasonable under the
<PAGE>
<PAGE>
circumstances to maintain their secrecy; including, without
limitation, formalized business, pricing, marketing, and customer
or prospective customer information.
(h) "Work Product" shall mean work product, property, data,
============
documentation or information of any kind, prepared, conceived,
discovered, developed or created by Mr. Hensley for the Company
or Mentor or any of the Company's clients or customers while Mr.
Hensley is employed by Mentor.
2. Consideration. The Company shall pay to Mr. Hensley the sum
=============
of $230,839.00 in consideration of his undertakings set forth herein.
Such sum shall be paid to Mr. Hensley on July 17, 1995, at Charter's
option, either in cash or by the issuance to him of such number of
freely transferrable whole shares of Charter Common Stock, valued at
the closing sale price on July 14, 1995, as reported by AMEX, together
with an amount of cash equal to any fractional shares, having a value
of $230,839.00. Mr. Hensley acknowledges and agrees that such payment
constitutes sufficient and adequate consideration for the covenants
and agreements contained in this Agreement.
3. Nondisclosure; Ownership of Proprietary Property.
================================================
(a) Mr. Hensley hereby acknowledges that by virtue of Mr.
Hensley's relationship with Mentor, Mr. Hensley has been exposed
to and will continue to be exposed to the Trade Secrets and
Confidential Information. Mr. Hensley further acknowledges that
it is in the best business interest of the Company to maintain
the strict confidentiality of such Trade Secrets and Confidential
Information.
(b) In recognition of the need of the Company to protect
its legitimate business interests, Mr. Hensley hereby covenants
and agrees that (i) with regard to each item constituting a Trade
Secret, at all times during his affiliation with the Company and
all times thereafter during which such item continues to
constitute a Trade Secret under applicable law; and (ii) with
regard to any Confidential Information, for five (5) years after
the date of this Agreement, he shall regard and treat each item
constituting a Trade Secret or Confidential Information as
strictly confidential and wholly owned by Company and will not,
for any reason in any fashion, either directly or indirectly,
use, sell, lend, lease, distribute, license, give, transfer,
assign, show, disclose, disseminate, reproduce, copy, appropriate
or otherwise communicate any such item or information to any
Entity for any person or purpose other than strictly in
accordance with the express terms of this Agreement.
<PAGE>
<PAGE>
(c) To the greatest extent possible, any Work Product shall
be deemed to be "work made for hire" (as defined in the Copyright
Act, 17 U.S.C.A. 101 et. seq., as amended) and owned
== ===
exclusively by the Company. Mr. Hensley hereby unconditionally
and irrevocably transfers and assigns to the Company all rights,
title and interest he may currently have or in the future may
have by operation of law or otherwise in or to any Work Product,
including, without limitation, all patents, copyrights,
trademarks, service marks and other intellectual property rights.
Mr. Hensley agrees to execute and deliver to the Company any
transfers, assignments, documents or other instruments which the
Company may deem necessary or appropriate to vest complete title
and ownership of any Work Product, and all rights therein,
exclusively in the Company.
(d) Mr. Hensley shall notify the Company as soon as
practicable of any unauthorized disclosure or use of any Trade
Secrets or Confidential Information by him or any other person of
which he becomes aware. Mr. Hensley shall use reasonable efforts
to assist Company in the procurement or any protection of
Company's rights to or in any of the Trade Secrets or
Confidential Information; provided, however, that the foregoing
shall not require Mr. Hensley to institute litigation to procure
or protect such rights.
(e) Immediately upon termination of his affiliation with
the Company, or at any point upon the specific request of the
Company, Mr. Hensley shall return to the Company all written or
descriptive materials of any kind in his possession that
constitute or contain any Confidential Information or Trade
Secrets, and the confidentiality obligations of this Agreement
shall continue until their expiration under the terms of this
Agreement.
4. Non-Competition. Mr. Hensley agrees that for five (5) years
===============
after the date of this Agreement, he will not accept or enter into a
Competitive Position with a Competitor located in the Restricted
Territory. So long as he is affiliated with the Company, Mr. Hensley
shall not accept or enter into a Competitive Position with a
Competitor, no matter where located.
5. Nonsolicitation of Employees and Customers. Mr. Hensley
==========================================
covenants and agrees that for five (5) years after the date of this
Agreement, he will not, either directly or indirectly, alone or in
conjunction with any other person or Entity: (a) solicit any employee,
consultant, contractor or other personnel of the Company, Magellan or
Mentor, to terminate, alter or lessen his affiliation with the
Company, Magellan or Mentor; or (b) solicit, divert or appropriate any
customer or actively sought prospective customer of the Company,
Magellan or Mentor
<PAGE>
<PAGE>
for or on behalf of any Competitor (provided, however, that after
termination of his affiliation with the Company, this restriction
shall only apply to his solicitation of customers or actively sought
prospective customers with whom he had material contact in connection
with his performing the Services for or on behalf of the Company).
6. Acknowledgment. Mr. Hensley and the Company acknowledge and
==============
agree that the covenants set forth in Sections 3, 4, and 5 are
reasonable as to time, scope and territory given the Company's need
to protect its Trade Secrets, Confidential Information and its
substantial investment in its customer base, particularly given
(a) the complexity and competitive nature of the Company's business,
and (b) that he has sufficient skills to find alternative,
commensurate employment or consulting work in his field of expertise
that would not violate Section 3, 4, or 5.
7. Remedies: Damages, Injunctions and Specific Performance.
=======================================================
The Parties expressly understand and agree that the covenants and
agreements to be rendered and performed by Mr. Hensley pursuant to
Section 3, 4 or 5 are special, unique, and of extraordinary character,
and in the event of any default, breach or threatened breach by him of
Section 3, 4 or 5 (collectively, the "Material Paragraphs"), the
Company shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction, either at law or
in equity, and shall be entitled to such legal and equitable relief,
including, without limitation, any proceedings to: (i) obtain damages
for any breach of this Agreement by him; (ii) order the specific
performance thereof by him; or (iii) enjoin him from breaching such
provisions.
If the Company shall seek to enjoin Mr. Hensley from defaulting
in the performance of or breaching any provision or Section of this
Agreement, he shall waive and hereby waives the defense that the
Company has or will have an adequate remedy at law.
8. Miscellaneous Provisions.
========================
(a) Interpretation. Should any provision of this Agreement
==============
require judicial interpretation, the Parties agree that the judicial
body interpreting or construing such provision shall not apply the
assumption that the terms of this Agreement shall be more strictly
construed against either one or the other party because of the rule of
construction that an instrument is to be construed more strictly
against the drafting party, it being agreed that all of the Parties
and/or their agents have participated in the preparation of this
Agreement.
<PAGE>
<PAGE>
(b) Assignment; Successors in Interest. Neither this Agreement
==================================
nor any rights or obligations of Mr. Hensley hereunder shall be
transferable or assignable by him without the prior written consent of
the Company, and any attempted transfer or assignment of this
Agreement by him not in accordance with this subsection shall be null
and void. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their permitted successors and assigns, and
any reference to a Party shall also be a reference to a permitted
successor or assign.
(c) Severability. All paragraphs and subparagraphs of this
============
Agreement are severable, and the unenforceability or invalidity of any
of the paragraphs or subparagraphs of this Agreement shall not affect
the validity or enforceability of the remaining paragraphs or
subparagraphs of this Agreement, but such remaining paragraphs or
subparagraphs shall be interpreted and construed in such a manner as
to carry out fully the intention of the Parties, provided, however,
-------- --------
that should any judicial body interpreting this Agreement deem any
provision of this Agreement to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the
Parties that such judicial body, to the greatest extent possible,
reduce the breadth of such provision to the maximum legally allowable
parameters rather than deeming such provision totally unenforceable or
invalid. Mr. Hensley acknowledges and agrees that the covenants and
agreements contained in this Agreement, including, without limitation,
the covenants and agreements contained in the Material Paragraphs,
shall be construed as covenants and agreements independent of each
other and of any other provision of this Agreement or any other
contract between the Parties and that the existence of any claim or
cause of action by him against the Company, whether predicated upon
this Agreement or any other contract, shall not constitute a defense
to the enforcement by the Company of such covenants, agreements and
the Material Paragraphs.
(d) Notices. All notices, communications and deliveries by this
=======
Agreement shall be made in writing signed by the Party making the
same, shall specify the Section of this Agreement pursuant to which it
is given or being made, and shall be deemed given or made on the date
delivered if delivered by telecopy or in person or on the third (3rd)
business day after it is mailed if mailed by registered or certified
mail (return receipt requested) (with postage and other fees prepaid)
as follows:
To Charter:
Charter Medical Corporation
3414 Peachtree Road, N.E.
Suite 1400
Atlanta, Georgia 31326
Attn: Steve J. Davis
Telecopy No.: (404) 814-5795
<PAGE>
<PAGE>
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attn: Mr. Robert W. Miller
Telecopy No.: (404) 572-5144
To Mr. Hensley:
1 Mason Road
Brookline, MA 02146
with a copy to:
Sullivan & Worcester
One Post Office Square
Boston, MA 02109
Attn: Richard E. Teller
Telecopy No.: 617/338-2880
or to such other representative or at such other address of a
Party as such Party hereto may furnish to the other Parties in
writing. If notice is given pursuant to this subsection of any
assignment to a permitted successor or assign of a Party hereto
in accordance with this subsection, the notice shall be given as
set forth above to such successor or assign of such Party.
(e) Amendments. To the extent permitted by law, this
==========
Agreement may be amended by a subsequent writing signed by all of
the Parties.
(f) Controlling Law; Integration; Waiver. This Agreement
====================================
shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware. This Agreement
supersedes all negotiations, agreements and understandings among
the Parties with respect to the subject matter of this Agreement
and constitutes the entire agreement among the Parties to this
Agreement. The failure of any Party at any time or times to
require performance of any provisions of this Agreement shall in
no manner affect the right to enforce the same. No waiver by any
Party of any conditions, or of the breach of any term, provision,
<PAGE>
<PAGE>
warranty, representation, agreement or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed or construed as a further or continuing
waiver of any such condition or breach of any other term,
provision, warranty, representation, agreement or covenant
contained in this Agreement.
(g) Time of the Essence; Computation of Time. Time is of
========================================
the essence for each and every provision of this Agreement.
Whenever the last day for the exercise of any privilege or the
discharge of any duty under this Agreement shall fall upon a
Saturday, Sunday or any date on which banks in Atlanta, Georgia
are closed, the Party having such privilege or duty may exercise
such privilege or discharge such duty on the next succeeding day
which is a regular business day.
(h) Captions. The titles, captions and table of contents
========
contained in this Agreement are inserted in this Agreement only
as a matter of convenience and for reference and in no way
define, limit, extend or describe the scope of this Agreement or
the intent of any provision of this Agreement. Unless otherwise
specified to the contrary, all references to Sections are
references to Sections of this Agreement.
(i) Counterparts. This Agreement may be executed in two or
============
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement or
the terms of this Agreement to produce or account for more than
one of such counterparts.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed, as of the date first above written.
CHARTER MEDICAL CORPORATION:
===========================
(Corporate Seal)
Attest: By: /s/ Michael Catalano
--------------------------
Name: Michael Catalano
Title: Vice President Planning
and Development
By: /s/ Kirk D. McConnell
--------------------------
Name: Kirk D. McConnell
Title: Assistant Secretary
/s/ E. Byron Hensley, Jr.
-----------------------------
E. BYRON HENSLEY, JR.
Witness:
/s/ Richard E. Teller
---------------------------
<PAGE>
EXHIBIT 7
---------
NONCOMPETE AND CONFIDENTIALITY AGREEMENT
========================================
THIS AGREEMENT (the "Agreement") is made and entered into as of
this 27th day of January, 1995, by and between CHARTER MEDICAL
CORPORATION, a Delaware corporation with its corporate headquarters in
Atlanta, Georgia (the "Company"), and THOMAS P. RILEY ("Mr. Riley").
R E C I T A L S :
---------------
1. National Mentor, Inc. ("Mentor") is a private provider of
behavioral healthcare services in the homes of trained
paraprofessionals and operates an outpatient clinic located in the
Boston, Massachusetts, metropolitan area (the "Business"). Mentor is
a wholly-owned subsidiary of Magellan Health Services, Inc., a
Delaware corporation ("Magellan").
2. Magellan merged with Charter Acquisition Subsidiary, Inc., a
wholly-owned subsidiary of the Company, on January 27, 1995, pursuant
to the Agreement of Merger, dated as of December 19, 1994, among the
Company, Charter Acquisition Subsidiary, Inc. and Magellan (the
"Merger Agreement").
3. Mr. Riley is a former stockholder of Magellan and an
executive officer of Mentor.
4. In connection with the Merger Agreement, the Company
acquired the "Confidential Information" and "Trade Secrets" (both as
defined below) of Mentor and, to protect the Company's substantial
investment in the Confidential Information and Trade Secrets, and to
protect the goodwill associated with the Company's customer
relationships, Mr. Riley and the Company (together, the "Parties")
have agreed to abide by the terms and conditions of this Agreement.
In consideration of the foregoing, and the representations,
warranties, covenants and agreements set forth in this Agreement and
in the Merger Agreement, the Parties hereby agree as follows:
1. Definitions. The following terms shall have the
===========
following meanings when used in this Agreement:
(a) "Competitor" shall mean any person or Entity engaged,
==========
wholly or partly, in the Business.
(b) "Competitive Position" shall mean: (i) the direct or
====================
indirect equity ownership (excluding equity ownership of a
publicly held company through the ownership of less than five
percent (5%) of its outstanding shares) of all or any portion of
a Competitor; or (ii) any employment, consulting or independent
contractor arrangement with any Competitor for the Services
described in this Agreement; provided that the foregoing shall
=============
not apply to any employment, consulting
<PAGE>
<PAGE>
or independent contractor arrangement with the parent company, a
division or a subsidiary of a Competitor which parent company,
division or subsidiary is not a Competitor.
(c) "Confidential Information" shall mean the proprietary
========================
and confidential data or information of the Company or Mentor,
other than "Trade Secrets" (as defined below), which is of
tangible or intangible value to the Company and is not public
information or is not generally known or available to the
Company's competitors but is known only to the Company and those
of its employees, independent contractors, consultants, customers
or agents to whom it must be confided in order to apply it to the
uses intended, including, without limitation, informal
information regarding the Company's customers or prospective
customers (such as lists containing the names, addresses and
telephone numbers and/or account information of customers and
prospective customers, but not including information that is
available to the public), marketing methods and business plans
gained by Mr. Riley as a result of his relationship with the
Company or Mentor.
(d) "Entity" shall mean any partnership, joint venture,
======
agency, governmental subdivision, association, firm, corporation
or entity.
(e) "Restricted Territory" shall mean the continental
====================
United States, except with respect to the operation of an
outpatient clinic, the Restricted Territory shall be the Boston,
Massachusetts, metropolitan area. The Parties agree to amend
this definition of "Restricted Territory" to reflect any
significant contraction of the areas where the Company conducts
the Business.
(f) "Services" shall mean Mr. Riley's performance of
========
executive services to Mentor in his capacity as its President and
Chief Operating Officer.
(g) "Trade Secrets" shall mean information of the Company
=============
or Mentor, including, but not limited to, technical or
nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial
data, financial plans, products plans, or lists of actual or
potential customers or suppliers, which: (x) derives economic
value, actual or potential from not being generally known to, and
not being readily ascertainable by proper means by, other persons
who can obtain economic value from their disclosure or use; and
(y) is the subject of efforts that are reasonable under the
circumstances to maintain their secrecy; including, without
limitation, formalized business, pricing, marketing, and customer
or prospective customer information.
<PAGE>
<PAGE>
(h) "Work Product" shall mean work product, property, data,
============
documentation or information of any kind, prepared, conceived,
discovered, developed or created by Mr. Riley for the Company or
Mentor or any of the Company's clients or customers while Mr.
Riley is employed by Mentor.
2. Consideration. The Company shall pay to Mr. Riley the sum
=============
of $350,339.00 in consideration of his undertakings set forth herein.
Such sum shall be paid to Mr. Riley on July 17, 1995, at Charter's
option, either in cash or by the issuance to him of such number of
freely transferrable whole shares of Charter Common Stock, valued at
the closing sale price on July 14, 1995, as reported by AMEX, together
with an amount of cash equal to any fractional shares, having a value
of $350,339.00. Mr. Riley acknowledges and agrees that such payment
constitutes sufficient and adequate consideration for the covenants
and agreements contained in this Agreement.
In addition to the foregoing, so long as Mr. Riley complies with
the terms of this Agreement in all material respects, the Company, for
one (1) year after the date his employment with the Company is
terminated, shall pay him an amount equal to his base salary and shall
continue to pay the premiums for his health insurance coverage, all to
the extent or as in effect, as the case may be, immediately prior to
the termination of his employment with the Company; provided, however,
that, after the date that is six months following the termination of
Mr. Riley's employment with the Company, the Company shall be entitled
to reduce the amount paid to him with respect to his base salary by
any amount earned by Mr. Riley from other employment taken by him
(other than a Competitive Position.) Such amount shall be paid to Mr.
Riley in accordance with the Company's normal payroll practices and
shall be subject to all applicable state and federal withholdings.
3. Nondisclosure; Ownership of Proprietary Property.
================================================
(a) Mr. Riley hereby acknowledges that by virtue of Mr.
Riley's relationship with Mentor, Mr. Riley has been exposed to
and will continue to be exposed to the Trade Secrets and
Confidential Information. Mr. Riley further acknowledges that it
is in the best business interest of the Company to maintain the
strict confidentiality of such Trade Secrets and Confidential
Information.
(b) In recognition of the need of the Company to protect
its legitimate business interests, Mr. Riley hereby covenants and
agrees that (i) with regard to each item constituting a Trade
Secret, at all times during his affiliation with the Company and
all times thereafter during which such item continues to
constitute a Trade Secret under applicable law; and (ii) with
regard to any Confidential Information, for two (2) years after
the date of the
<PAGE>
<PAGE>
termination of his employment with the Company, he shall regard
and treat each item constituting a Trade Secret or Confidential
Information as strictly confidential and wholly owned by Company
and will not, for any reason in any fashion, either directly or
indirectly, use, sell, lend, lease, distribute, license, give,
transfer, assign, show, disclose, disseminate, reproduce, copy,
appropriate or otherwise communicate any such item or information
to any Entity for any person or purpose other than strictly in
accordance with the express terms of this Agreement.
(c) To the greatest extent possible, any Work Product shall
be deemed to be "work made for hire" (as defined in the Copyright
Act, 17 U.S.C.A. 101 et. seq., as amended) and owned
== ===
exclusively by the Company. Mr. Riley hereby unconditionally and
irrevocably transfers and assigns to the Company all rights,
title and interest he may currently have or in the future may
have by operation of law or otherwise in or to any Work Product,
including, without limitation, all patents, copyrights,
trademarks, service marks and other intellectual property rights.
Mr. Riley agrees to execute and deliver to the Company any
transfers, assignments, documents or other instruments which the
Company may deem necessary or appropriate to vest complete title
and ownership of any Work Product, and all rights therein,
exclusively in the Company.
(d) Mr. Riley shall notify the Company as soon as
practicable of any unauthorized disclosure or use of any Trade
Secrets or Confidential Information by him or any other person of
which he becomes aware. Mr. Riley shall use reasonable efforts
to assist Company in the procurement or any protection of
Company's rights to or in any of the Trade Secrets or
Confidential Information; provided, however, that the foregoing
shall not require Mr. Riley to institute litigation to procure or
protect such rights.
(e) Immediately upon termination of his affiliation with
the Company, or at any point upon the specific request of the
Company, Mr. Riley shall return to the Company all written or
descriptive materials of any kind in his possession that
constitute or contain any Confidential Information or Trade
Secrets, and the confidentiality obligations of this Agreement
shall continue until their expiration under the terms of this
Agreement.
4. Non-Competition. Mr. Riley agrees that for one (1) year
===============
after the date his employment with the Company terminates, he will not
accept or enter into a Competitive Position with a Competitor located
in the Restricted Territory. So long as he is employed by the
Company, Mr. Riley shall not accept or enter into a Competitive
Position with a Competitor, no matter where located.
<PAGE>
<PAGE>
5. Nonsolicitation of Employees and Customers. Mr. Riley
==========================================
covenants and agrees that for one (1) year after his employment with
the Company terminates, he will not, either directly or indirectly,
alone or in conjunction with any other person or Entity: (a) solicit
any employee, consultant, contractor or other personnel of the
Company, Magellan or Mentor, to terminate, alter or lessen his
affiliation with the Company, Magellan or Mentor; or (b) solicit,
divert or appropriate any customer or actively sought prospective
customer of the Company, Magellan or Mentor for or on behalf of any
Competitor (provided, however, that after termination of his
employment with the Company, this restriction shall only apply to his
solicitation of customers or actively sought prospective customers
with whom he had material contact in connection with his performing
the Services for or on behalf of the Company).
6. Acknowledgment. Mr. Riley and the Company acknowledge and
==============
agree that the covenants set forth in Sections 3, 4, and 5 are
reasonable as to time, scope and territory given the Company's need to
protect its Trade Secrets, Confidential Information and its
substantial investment in its customer base, particularly given
(a) the complexity and competitive nature of the Company's business,
and (b) that he has sufficient skills to find alternative,
commensurate employment or consulting work in his field of expertise
that would not violate Section 3, 4, or 5.
7. Remedies: Damages, Injunctions and Specific Performance.
=======================================================
The Parties expressly understand and agree that the covenants and
agreements to be rendered and performed by Mr. Riley pursuant to
Section 3, 4 or 5 are special, unique, and of extraordinary character,
and in the event of any default, breach or threatened breach by him of
Section 3, 4 or 5 (collectively, the "Material Paragraphs"), the
Company shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction, either at law or
in equity, and shall be entitled to such legal and equitable relief,
including, without limitation, any proceedings to: (i) obtain damages
for any breach of this Agreement by him; (ii) order the specific
performance thereof by him; or (iii) enjoin him from breaching such
provisions.
If the Company shall seek to enjoin Mr. Riley from defaulting in
the performance of or breaching any provision or Section of this
Agreement, he shall waive and hereby waives the defense that the
Company has or will have an adequate remedy at law.
8. Miscellaneous Provisions.
========================
(a) Interpretation. Should any provision of this Agreement
==============
require judicial interpretation, the Parties agree that the
<PAGE>
<PAGE>
judicial body interpreting or construing such provision shall not
apply the assumption that the terms of this Agreement shall be more
strictly construed against either one or the other party because of
the rule of construction that an instrument is to be construed more
strictly against the drafting party, it being agreed that all of the
Parties and/or their agents have participated in the preparation of
this Agreement.
(b) Assignment; Successors in Interest. Neither this Agreement
==================================
nor any rights or obligations of Mr. Riley hereunder shall be
transferable or assignable by him without the prior written consent of
the Company, and any attempted transfer or assignment of this
Agreement by him not in accordance with this subsection shall be null
and void. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their permitted successors and assigns, and
any reference to a Party shall also be a reference to a permitted
successor or assign.
(c) Severability. All paragraphs and subparagraphs of this
============
Agreement are severable, and the unenforceability or invalidity of any
of the paragraphs or subparagraphs of this Agreement shall not affect
the validity or enforceability of the remaining paragraphs or
subparagraphs of this Agreement, but such remaining paragraphs or
subparagraphs shall be interpreted and construed in such a manner as
to carry out fully the intention of the Parties, provided, however,
-------- --------
that should any judicial body interpreting this Agreement deem any
provision of this Agreement to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the
Parties that such judicial body, to the greatest extent possible,
reduce the breadth of such provision to the maximum legally allowable
parameters rather than deeming such provision totally unenforceable or
invalid. Mr. Riley acknowledges and agrees that the covenants and
agreements contained in this Agreement, including, without limitation,
the covenants and agreements contained in the Material Paragraphs,
shall be construed as covenants and agreements independent of each
other and of any other provision of this Agreement or any other
contract between the Parties and that the existence of any claim or
cause of action by him against the Company, whether predicated upon
this Agreement or any other contract, shall not constitute a defense
to the enforcement by the Company of such covenants, agreements and
the Material Paragraphs.
(d) Notices. All notices, communications and deliveries
=======
required or permitted by this Agreement shall be made in writing
signed by the Party making the same, shall specify the Section of this
Agreement pursuant to which it is given or being made, and shall be
deemed given or made on the date delivered if delivered by telecopy or
in person or on the third (3rd) business day after it is mailed if
mailed by registered or certified mail (return receipt requested)
(with postage and other fees prepaid) as follows:
<PAGE>
<PAGE>
To Charter:
Charter Medical Corporation
3414 Peachtree Road, N.E.
Suite 1400
Atlanta, Georgia 31326
Attn: Steve J. Davis
Telecopy No.: (404) 814-5795
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attn: Mr. Robert W. Miller
Telecopy No.: (404) 572-5144
To Mr. Riley:
3 Longridge Lane
Ipswich, MA 01938
with a copy to:
Sullivan & Worcester
One Post Office Square
Boston, MA 02109
Attn: Richard E. Teller
Telecopy No.: 617/338-2880
or to such other representative or at such other address of a
Party as such Party hereto may furnish to the other Parties in
writing. If notice is given pursuant to this subsection of any
assignment to a permitted successor or assign of a Party hereto
in accordance with this subsection, the notice shall be given as
set forth above to such successor or assign of such Party.
(e) Amendments. To the extent permitted by law, this
==========
Agreement may be amended by a subsequent writing signed by all of
the Parties.
(f) Controlling Law; Integration; Waiver. This Agreement
====================================
shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware. This Agreement
supersedes all negotiations, agreements and understandings among
the Parties with respect to the subject
<PAGE>
<PAGE>
matter of this Agreement and constitutes the entire agreement
among the Parties to this Agreement. The failure of any Party at
any time or times to require performance of any provisions of
this Agreement shall in no manner affect the right to enforce the
same. No waiver by any Party of any conditions, or of the breach
of any term, provision, warranty, representation, agreement or
covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition
or breach of any other term, provision, warranty, representation,
agreement or covenant contained in this Agreement.
(g) Time of the Essence; Computation of Time. Time is of
========================================
the essence for each and every provision of this Agreement.
Whenever the last day for the exercise of any privilege or the
discharge of any duty under this Agreement shall fall upon a
Saturday, Sunday or any date on which banks in Atlanta, Georgia
are closed, the Party having such privilege or duty may exercise
such privilege or discharge such duty on the next succeeding day
which is a regular business day.
(h) Captions. The titles, captions and table of contents
========
contained in this Agreement are inserted in this Agreement only
as a matter of convenience and for reference and in no way
define, limit, extend or describe the scope of this Agreement or
the intent of any provision of this Agreement. Unless otherwise
specified to the contrary, all references to Sections are
references to Sections of this Agreement.
(i) Counterparts. This Agreement may be executed in two or
============
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement or
the terms of this Agreement to produce or account for more than
one of such counterparts.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed, as of the date first above written.
CHARTER MEDICAL CORPORATION:
===========================
(Corporate Seal)
Attest: By: /s/ Michael Catalano
--------------------------
Name: Michael Catalano
Title: Vice President Planning
and Development
By: Kirk D. McConnell
--------------------------
Name: Kirk D. McConnell
Title: Assistant Secretary
/s/ Thomas P. Riley
----------------------------
THOMAS P. RILEY
Witness:
/s/ Richard E. Teller
-----------------------------
<PAGE>
EXHIBIT 8
---------
AGREEMENT
---------
This will confirm the agreement by and among all the
undersigned that the statement on schedule 13D filed on or about this
date (the "Schedule 13D") with respect to the beneficial ownership by
the undersigned of shares of common stock, $.25 par value, of Charter
Medical Corporation, a Delaware corporation, is being filed on behalf
of each of the signatories named below (each, an "Investor" and
together, the "Investors").
This will also confirm the agreement by and among all the
Investors that any amendment to such Schedule 13D which may be
required to be filed shall be filed on behalf of each of the
Investors.
Each Investor listed on Schedule I hereto, by his, her or
its execution hereof, hereby irrevocably makes, constitutes and
appoints Gleacher & Co. Inc. as his, her or its true and lawful agent
and attorney-in-fact, with full power of substitution and full power
and authority in his, her or its name, place and stead, to make,
execute, sign, acknowledge, swear to, record and file (i) the Schedule
13D and all amendments thereto and (ii) all certificates and other
instruments deemed advisable by Gleacher & Co. Inc. to comply with the
provisions of the Securities Exchange Act of 1934, as amended.
Each Investor listed on Schedule II hereto, by his, her or
its execution hereof, hereby irrevocably makes, constitutes and
appoints each of E. Byron Hensley, Jr. and Thomas P. Riley as his, her
or its true and lawful agent and attorney-in-fact, with full power of
substitution and full power and authority in his, her or its name,
place and stead, to make, execute, sign, acknowledge, swear to, record
and file (i) the Schedule 13D and all amendments thereto and (ii) all
certificates and other instruments deemed advisable by E. Byron
Hensley, Jr. or Thomas P. Riley to comply with the provisions of the
Securities Exchange Act of 1934, as amended.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
Dated: February 13, 1995
/s/ Gregory T. Torres
---------------------
Gregory T. Torres
NYFS12...:\99\48499\0005\2468\EXH2065P.350
<PAGE>
<PAGE>
/s/ Gerald M. Bereika
-----------------------------
Gerald M. Bereika
/s/ Peter P. Polloni
-----------------------------
Peter P. Polloni
/s/ Peter W. Mair
-----------------------------
Peter W. Mair
/s/ Elizabeth J. Hopper
-----------------------------
Elizabeth J. Hopper
/s/ Eric J. Gleacher
-----------------------------
Eric J. Gleacher
/s/ James Goodwin
-----------------------------
James Goodwin
/s/ Charles G. Phillips
-----------------------------
Charles G. Phillips
/s/ H. Conrad Meyer
-----------------------------
H. Conrad Meyer
/s/ Richard A. Derbes
-----------------------------
Richard A. Derbes
/s/ Emil W. Henry, Jr.
-----------------------------
Emil W. Henry, Jr.
/s/ Robert W. Kitts
-----------------------------
Robert W. Kitts
/s/ Jeffrey H. Tepper
-----------------------------
Jeffrey H. Tepper
/s/ Robert A. Engel
-----------------------------
Robert A. Engel
/s/ Andrew Gilman
-----------------------------
Andrew Gilman
/s/ Marie A. Gentile
-----------------------------
Marie A. Gentile
<PAGE>
<PAGE>
GLEACHER 7 INVESTORS L.P.
By: Gleacher & Co. Inc., its
General Partner
By: /s/ Emil W. Henry, Jr.
------------------------------
Name: Emil W. Henry, Jr.
Title: Managing Director
OLSTEN SERVICE CORP.
By: /s/ Laurin L. Laderoute, Jr.
------------------------------
Name: Laurin L. Laderoute, Jr.
Title: Vice President
/s/ Eric J. Gleacher
-----------------------------
Eric J. Gleacher,
as custodian
for Jay S. Gleacher
/s/ Eric J. Gleacher
-----------------------------
Eric J. Gleacher,
as custodian
for Patricia G. Gleacher
/s/ Eric J. Gleacher
-----------------------------
Eric J. Gleacher,
as custodian
for William R. Gleacher
/s/ James E. Gleacher
-----------------------------
James E. Gleacher
/s/ John G. Gleacher
-----------------------------
John G. Gleacher
/s/ Sarah E. Gleacher
-----------------------------
Sarah E. Gleacher
/s/ Diane Hensley Ramponi
-----------------------------
Diane Hensley Ramponi,
as Trustee of the Lauren Carroll Education Trust
/s/ Thomas P. Riley
-----------------------------
Thomas P. Riley,
as Trustee of the Lauren Carroll Education Trust
<PAGE>
<PAGE>
/s/ Christina Hensley Bair
-----------------------------
Christina Hensley Bair
/s/ Christina Hensley Bair
-----------------------------
Christina Hensley Bair,
as Trustee of the Emily Cristina Bair Education Trust
/s/ Thomas P. Riley
-----------------------------
Thomas P. Riley,
as Trustee of the Emily Cristina Bair Education Trust
/s/ Christina Hensley Bair
-----------------------------
Christina Hensley Bair,
as Trustee of the Nicholas Hensley Bair Education Trust
/s/ Thomas P. Riley
-----------------------------
Thomas P. Riley,
as Trustee of the Nicholas Hensley Bair Education Trust
/s/ Martha Faye Koysh
-----------------------------
Martha Faye Koysh
/s/ Lana Hensley Hoffman
-----------------------------
Lana Hensley Hoffman
/s/ Ruth Ann Roberts
-----------------------------
Ruth Ann Roberts
/s/ E. Byron Hensley, Jr.
-----------------------------
E. Byron Hensley, Jr.
/s/ Susan MacKenzie
-----------------------------
Susan MacKenzie,
as Trustee of the Jameson Robert Riley Education Trust
/s/ Mark Morin
-----------------------------
Mark Morin,
as Trustee of the Jameson Robert Riley Education Trust
/s/ Susan MacKenzie
-----------------------------
Susan MacKenzie,
as Trustee of the Katlyn MacKenzie Riley Education Trust
/s/ Mark Morin
-----------------------------
Mark Morin,
as Trustee of the Katlyn MacKenzie Riley Education Trust
<PAGE>
<PAGE>
/s/ Susan MacKenzie
------------------------------
Susan MacKenzie,
as Trustee of the Bethany Ann Riley Education Trust
/s/ Mark Morin
------------------------------
Mark Morin,
as Trustee of the Bethany Ann Riley Education Trust
/s/ Thomas P. Riley
------------------------------
Thomas P. Riley
/s/ Donald R. Monack
------------------------------
Donald R. Monack
/s/ Leonard O. Henry
------------------------------
Leonard O. Henry
/s/ Janice L. Quiram
------------------------------
Janice L. Quiram
/s/ Alan L. Hollis
------------------------------
Alan L. Hollis
/s/ Lois Simon
------------------------------
Lois Simon
/s/ Wayne J. Stelk
------------------------------
Wayne J. Stelk
/s/ William F. Murdy
------------------------------
William F. Murdy
/s/ Frank N. Liguori
------------------------------
Frank N. Liguori
<PAGE>
<PAGE>
HARRIS & HARRIS GROUP, INC.
By: /s/ Robert B. Schulz
------------------------------
Name: Robert B. Schulz
Title: President and CEO
