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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---------------- to -----------------
Commission File No. 1-6639
CHARTER MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 58-1076937
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3414 Peachtree Rd., NE, Suite 1400
Atlanta, Georgia 30326
(Address of principal executive offices)
(Zip Code)
(404) 841-9200
(Registrant's telephone number, including area code)
See Table of Additional Registrants below.
___________
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
___________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
--- ---
The number of shares of the Registrant's Common Stock outstanding as of April
30, 1995, was 28,370,255.
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<TABLE>
<S> <C> <C> <C>
Ambulatory Resources, Inc. Georgia 58-1456102 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Atlanta MOB, Inc. Georgia 58-1558215 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Beltway Community Hospital, Texas 58-1324281 3414 Peachtree Rd., N.E.
Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
C.A.C.O. Services, Inc. Ohio 58-1751511 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
CCM, Inc. Nevada 58-1662418 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
CMCI, Inc. Nevada 88-0224620 1061 East Flamingo Road
Suite One
Las Vegas, NV 89119
(702) 737-0282
CMFC, Inc. Nevada 88-0215629 1061 East Flamingo Road
Suite One
Las Vegas, NV 89119
(702) 737-0282
CMSF, Inc. Florida 58-1324269 3550 Colonial Boulevard
Fort Myers, FL 33912
(813) 939-0403
CPS Associates, Inc. Virginia 58-1761039 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Alvarado Behavioral California 58-1394959 7050 Parkway Drive
Health System, Inc. La Mesa, CA 91942-2352
(619) 465-4411
Charter Appalachian Hall North Carolina 58-20978 2760 Caledonia Road
Behavioral Health System, Inc. Asheville, NC 28803
<PAGE>
Charter Augusta Behavioral Georgia 58-1615676 3100 Perimeter Parkway
Health System, Inc. P.O. Box 14939
Augusta, GA 30909
(404) 868-6625
Charter Arbor Indy Indiana 35-1916340 3414 Peachtree Rd., N.E.
Behavioral Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Bay Harbor Behavioral Florida 58-1640244 3414 Peachtree Rd., N.E.
Health System, Inc. Suite 1400
Atlanta, Georgia 30326
(404) 841-9200
Charter Beacon Behavioral Indiana 58-1524996 1720 Beacon Street
Health System, Inc. Fort Wayne, IN 46805
(219) 423-3651
Charter Behavioral Health System New Jersey 58-20978 3219 Prospect Street
at Fair Oaks, Inc. Summit, NJ 07901
(908) 277-9102
Charter Behavioral Health System Maryland 52-186621 2522 Thomas Run Road
at Hidden Brook, Inc. Bel Air, MD 21014
(410) 879-1919
Charter Behavioral Health System California 33-0606642 3414 Peachtree Rd., N.E.
at Los Altos, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System Florida 65-0519663 1324 37th Avenue, East
at Manatee Adolescent Treatment Bradenton, FL 34208
Services, Inc. (813) 746-1388
Charter Behavioral Health System Maryland 52-18662211 4901 Broschart Road
at Potomac Ridge, Inc. Rockville, MD 20850
(301) 251-4500
Charter Behavioral Health System Maryland 52-1866214 3680 Warwick Road, Route 1
of Delmarva, Inc. East New Market, MD 21631
(410) 943-8108
Charter Behavioral Health System Georgia 58-151330 4240 Mitchell Bridge Road
of Athens, Inc. Athens, GA 30606
(404) 546-7277
Charter Behavioral Health System Texas 58-1440665 8402 Cross Park Drive
of Austin, Inc. Austin, TX 78754
(512) 837-1800
<PAGE>
Charter Behavioral Health System Texas 76-043057 1709 Medical Center Boulevard
of Baywood, Inc. Webster, TX 77598
(713) 332-9550
Charter Behavioral Health System Florida 58-1527678 4480 51st Street, West
of Bradenton, Inc. Bradenton, FL 34210
(813) 746-1388
Charter Behavioral Health System California 95-4470774 3414 Peachtree Rd., N.E.
of Canoga Park, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System Georgia 58-1408670 3500 Riverside Drive
of Central Georgia, Inc. Macon, GA 31210
(912) 474-6200
Charter Behavioral Health System South Carolina 58-1761157 2777 Speissegger Drive
of Charleston, Inc. Charleston, SC 29405-8299
(803) 747-5830
Charter Behavioral Health System Virginia 58-1616917 2101 Arlington Boulevard
of Charlottesville, Inc. Charlottesville, VA 22903-1593
(804) 977-1120
Charter Behavioral Health System Illinois 58-1315760 4700 North Clarendon Avenue
of Chicago, Inc. Chicago, IL 60640
(312) 728-7100
Charter Behavioral Health System California 58-1473063 3414 Peachtree Rd., N.E.
of Chula Vista, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System Missouri 61-1009977 200 Portland Street
of Columbia, Inc. Columbia, MO 65201
(314) 876-8000
Charter Behavioral Health System Texas 58-1513305 3126 Rodd Field Road
of Corpus Christi, Inc. Corpus Christi, TX 78414
(512) 993-8893
Charter Behavioral Health System Texas 58-1513306 6800 Preston Road
of Dallas, Inc. Plano, TX 75024
(214) 964-3939
Charter Behavioral Health System Indiana 35-1916338 7200 East Indiana
of Evansville, Inc. Evansville, IN 47715
(812) 476-7200
<PAGE>
Charter Behavioral Health System Texas 58-1643151 6201 Overton Ridge Blvd.
of Fort Worth, Inc. Fort Worth, TX 76132
(817) 292-6844
Charter Behavioral Health System Mississippi 58-1616919 3531 Lakeland Drive
of Jackson, Inc. Jackson, MS 39208
(601) 939-9030
Charter Behavioral Health System Florida 58-1483015 3947 Salisbury Road
of Jacksonville, Inc. Jacksonville, FL 32216
(904) 296-2447
Charter Behavioral Health System Indiana 35-1916342 3414 Peachtree Rd., N.E.
of Jefferson, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System Kansas 58-1603154 8000 West 127th Street
of Kansas City, Inc. Overland Park, KS 66213
(913) 897-4999
Charter Behavioral Health System Louisiana 72-068649 2310 Youngsville Highway
of Lafayettte, Inc. Lafayette, LA 70508
(317) 448-6999
Charter Behavioral Health System Louisiana 62-1152811 4250 Fifth Avenue, South
of Lake Charles, Inc. Lake Charles, LA 70605
(318) 474-6133
Charter Behavioral Health System California 33-0606647 3414 Peachtree Rd., N.E.
of Lakewood, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System Indiana 35-1916343 3714 S. Franklin Street
of Michigan City, Inc. Michigan City, IN 46360
(219) 872-0531
Charter Behavioral Health System Alabama 58-1569921 5800 Southland Drive
of Mobile, Inc. Mobile, AL 36693
(205) 661-3001
Charter Behavioral Health System New Hampshire 02-0470752 29 Northwest Boulevard
of Nashua, Inc. Nashua, NH 03063
(603) 886-5000
Charter Behavioral Health System Nevada 58-1321317 7000 West Spring Mountain Rd.
of Nevada, Inc. Las Vegas, NV 89117
(702) 876-4357
<PAGE>
Charter Behavioral Health System New Mexico 58-1479480 5901 Zuni Road, SE
of New Mexico, Inc. Albuquerque, NM 87108
(505) 265-8800
Charter Behavioral Health System California 58-1857277 101 Cirby Hills Drive
of Northern California, Inc. Roseville, CA 95678
(916) 969-4666
Charter Behavioral Health System Arkansas 58-1449455 4253 Crossover Road
of Northwest Arkansas, Inc. Fayetteville, AR 72703
(501) 521-5731
Charter Behavioral Health System Indiana 58-1603160 101 West 61st Avenue
of Northwest Indiana, Inc. State Road 51
Hobart, IN 46342
(219) 947-4464
Charter Behavioral Health System Kentucky 61-1006115 435 Berger Road
of Paducah, Inc. Paducah, KY 42002-7609
(502) 444-0444
Charter Behavioral Health System Illinois 36-3946945 3414 Peachtree Rd., N.E.
of Rockford, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System California 58-1747020 455 Silicon Valley Boulevard
of San Jose, Inc. San Jose, CA 95138
(408) 224-2020
Charter Behavioral Health System Georgia 58-1750583 1150 Cornell Avenue
of Savannah, Inc. Savannah, GA 31406
(912) 354-3911
Charter Behavioral Health System California 58-1366605 3414 Peachtree Rd., N.E.
of Southern California, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health System Florida 58-1616916 4004 North Riverside Drive
of Tampa Bay, Inc. Tampa, FL 33603
(813) 238-8671
Charter Behavioral Health System Arkansas 71-0752815 801 Arkansas Boulevard
of Texarkana, Inc. Texarkana, AR 75502
(501) 773-3131
Charter Behavioral Health System California 95-2685883 2055 Kellogg Drive
of the Inland Empire, Inc. Corona, CA 91719
(714) 735-2910
<PAGE>
Charter Behavioral Health System Ohio 58-1731068 1725 Timberline Road
of Toledo, Inc. Maumee, Ohio 43537
(419) 891-9333
Charter Behavioral Health System Arizona 86-0757462 7220 E. Rosewood Street
of Tucson, Inc. Tucson, AZ 85710
(602) 296-2828
Charter Behavioral Health System California 33-0606644 1100 S. Akers
of Visalia, Inc. Visalia, CA 93277
Charter Behavioral Health System Minnesota 41-1775626 109 North Shore Drive
of Waverly, Inc. Waverly, MN 55390
(612) 658-4811
Charter Behavioral Health System North Carolina 56-1050502 3637 Old Vineyard Road
of Winston-Salem, Inc. Winston-Salem, NC 27104
(919) 768-7710
Charter Behavioral Health System California 33-0606646 3414 Peachtree Rd., N.E.
of Yorba Linda, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Behavioral Health Georgia 58-1900736 3414 Peachtree Rd., N.E.
Systems of Atlanta, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Brawner Behavioral Georgia 58-0979827 3414 Peachtree Rd., N.E.
Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter By-The-Sea Georgia 58-1351301 2927 Demere Road
Behavioral Health System, Inc. St. Simons Island, GA 31522
(912) 638-1999
Charter Canyon Behavioral Health Utah 58-1557925 175 West 7200 South
System, Inc. Midvale, UT 84047
(801) 561-8181
Charter Canyon Springs California 33-0606640 69696 Ramon Road
Behavioral Health System, Inc. Cathedral City, CA 92234
(619) 321-2000
Charter Centennial Peaks Colorado 58-1761037 2255 South 88th Street
Behavioral Health System, Inc. Louisville, CO 80027
(303) 673-9990
<PAGE>
Charter Community Hospital, California 58-1398708 21530 South Pioneer Boulevard
Inc. Hawaiian Gardens, CA 90716
(310) 860-0401
Charter Community Hospital Iowa 58-1523702 3414 Peachtree Rd., N.E.
of Des Moines, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Contract Services, Inc. Georgia 58-2100699 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Cove Forge Behavioral Pennsylvania 25-1730464 New Beginnings Road
Health System, Inc. Williamsburg, PA 16693
(814) 832-2121
Charter Crescent Pines Behavioral Georgia 58-1249663 3414 Peachtree Rd., N.E.
Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Fairbridge Maryland 52-1866218 14907 Broschart Road
Behavioral Health System, Inc. Rockville, MD 20850
(301) 251-4565
Charter Fairmount Behavioral Pennsylvania 58-1616921 561 Fairthorne Avenue
Health System, Inc. Philadelphia, PA 19128
(215) 487-4000
Charter Fenwick Hall South Carolina 57-0995766 3414 Peachtree Rd., N.E.
Behavioral Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Financial Offices, Inc. Georgia 58-1527680 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Forest Behavioral Louisiana 58-1508454 9320 Linwood Avenue
Health System, Inc. Shreveport, LA 71106
(318) 688-3930
Charter Grapevine Behavioral Texas 58-1818492 2300 William D. Tate Ave.
Health System, Inc. Grapevine, TX 76051
(817) 481-1900
<PAGE>
Charter Greensboro Behavioral North Carolina 58-1335184 700 Walter Reed Drive
Health System, Inc. Greensboro, NC 27403
(919) 852-4821
Charter Health Management Texas 58-2025056 3414 Peachtree Rd., N.E.
of Texas, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of Ohio 58-1598899 3414 Peachtree Rd., N.E.
Columbus, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of Denver, Colorado 58-1662413 3414 Peachtree Rd., N.E.
Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of Ft. Collins, Colorado 58-1768534 3414 Peachtree Rd., N.E.
Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of Laredo, Inc. Texas 58-1491620 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of Miami, Inc. Florida 61-1061599 11100 N.W. 27th Street
Miami, FL 33172
(305) 591-3230
Charter Hospital of Mobile, Inc. Alabama 58-1318870 251 Cox Street
Mobile, AL 36604
(205) 432-4111
Charter Hospital of Northern New Jersey 58-1852138 3414 Peachtree Rd., N.E.
New Jersey, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of Santa New Mexico 58-1584861 3414 Peachtree Rd., N.E.
Teresa, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Hospital of St. Louis, Inc. Missouri 58-1583760 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
<PAGE>
Charter Hospital of Torrance, Inc. California 58-1402481 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Indianapolis Behavioral Indiana 58-1674291 5602 Caito Drive
Health System, Inc. Indianapolis, IN 46226
(317) 545-2111
Charter Lafayette Behavioral Indiana 58-1603158 3700 Rome Drive
Health System, Inc. Lafayette, IN 47905
(317) 448-6999
Charter Lakehurst New Jersey 22-3286879 440 Beckerville Road
Behavioral Health System, Inc. Lakehurst, NJ 08733
(908) 657-4800
Charter Lakeside Behavioral Tennessee 62-0892645 2911 Brunswick Road
Health System, Inc. Memphis, TN 38134
(901) 377-4700
Charter Laurel Heights Georgia 58-1558212 3414 Peachtree Rd., N.E.
Behavioral Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Laurel Oaks Behavioral Florida 58-1483014 3414 Peachtree Rd., N.E.
Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Linden Oaks Illinois 36-3943776 852 West Street
Behavioral Health System, Inc. Naperville, IL 60540
(708) 305-5500
Charter Little Rock Behavioral Arkansas 58-1747019 1601 Murphy Drive
Health System, Inc. Maumelle, AR 72113
(501) 851-8700
Charter Louisville Behavioral Kentucky 58-1517503 1405 Browns Lane
Health System, Inc. Louisville, KY 40207
(502) 896-0495
Charter MOB of Virginia 58-1761158 1023 Millmont Avenue
Charlottesville, Inc. Charlottesville, VA 22901
(804) 977-1120
Charter Meadows Maryland 52-1866216 730 Maryland, Route 3
Behavioral Health System, Inc. Gambrills, MD 21054
(410) 923-6022
<PAGE>
Charter Medfield Behavioral Florida 58-1705131 1950 Benoist Farms Rd.
Health System, Inc. West Palm Beach, FL 33411
(404) 841-9200
Charter Medical - California, Inc. Georgia 58-1357345 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical - Clayton Georgia 58-1579404 3414 Peachtree Rd., N.E.
County, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical - Cleveland, Inc. Texas 58-1448733 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical - Dallas, Inc. Texas 58-1379846 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical - Long California 58-1366604 6060 Paramount Boulevard
Beach, Inc. Long Beach, CA 90805
(310) 220-1000
Charter Medical - New York, Inc. New York 58-1761153 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical (Cayman Cayman Islands, BWI 58-1841857 Caledonian Bank & Trust
Islands) Ltd. Swiss Bank Building
Caledonian House
Georgetown-Grand Cayman
Cayman Islands
(809) 949-0050
Charter Medical Executive Georgia 58-1538092 3414 Peachtree Rd., N.E.
Corporation Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical Information Georgia 58-1530236 3414 Peachtree Rd., N.E.
Services, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
<PAGE>
Charter Medical International, Cayman Islands, BWI N/A Caledonian Bank & Trust
Inc. Swiss Bank Building
Caledonian House
Georgetown-Grand Cayman
Cayman Islands
(809) 949-0050
Charter Medical International, Nevada 58-1605110 3414 Peachtree Rd., N.E.
S.A., Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical Management Georgia 58-1195352 3414 Peachtree Rd., N.E.
Company Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical of East Arizona 58-1643158 2190 N. Grace Boulevard
Valley, Inc. Chandler, AZ 85224-2195
(602) 899-8989
Charter Medical of England, Ltd. United Kingdom N/A 111 Kings Road
Box 323
London SW3 4PB
London, England
44-71-351-1272
Charter Medical of Florida, Inc. Florida 58-2100703 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical of North Arizona 58-1643154 6015 W. Peoria Avenue
Phoenix, Inc. P.O. Box 3469
Glendale, AZ 85302
(602) 878-7878
Charter Medical of Orange Florida 58-1615673 3414 Peachtree Rd., N.E.
County, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Medical of Puerto Commonwealth of 58-1208667 Caso Building, Suite 1504
Rico, Inc. Puerto Rico 1225 Ponce De Leon Avenue
Santurce, P.R. 00907
(809) 723-8666
Charter Mental Health Florida 58-2100704 3414 Peachtree Rd., N.E.
Options, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
<PAGE>
Charter Mid-South Behavioral Tennessee 58-1860496 3414 Peachtree Rd., N.E.
Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Milwaukee Behavioral Wisconsin 58-1790135 11101 West Lincoln Avenue
Health System, Inc. West Allis, WI 53227
(414) 327-3000
Charter Mission Viejo Behavioral California 58-1761156 23228 Madero
Health System, Inc. Mission Viejo, CA 92691
(714) 830-4800
Charter North Behavioral Alaska 58-1474550 2530 DeBarr Road
Health System, Inc. Anchorage, AK 99508-2996
(907) 258-7575
Charter Northbrooke Wisconsin 39-1784461 3414 Peachtree Rd., N.E.
Behavioral Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter North Counseling Alaska 58-2067832 2530 DeBarr Road
Center, Inc. Anchorage, AL 99508-2996
(907) 258-7575
Charter Northridge Behavioral North Carolina 58-1463919 400 Newton Road
Health System, Inc. Raleigh, NC 27615
(919) 847-0008
Charter Northside Hospital, Inc. Georgia 58-1440656 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Oak Behavioral California 58-1334120 1161 East Covina Boulevard
Health System, Inc. Covina, CA 91724
(818) 966-1632
Charter of Alabama, Inc. Alabama 63-0649546 3414 Peachtree Rd., N.E.
Suite 1400
Macon, Georgia 31298
(404) 841-9200
Charter Palms Behavioral Texas 58-1416537 1421 E. Jackson Avenue
Health System, Inc. P.O. Box 5239
McAllen, TX 78502
(512) 631-5421
Charter Peachford Behavioral Georgia 58-1086165 2151 Peachford Road
Health System, Inc. Atlanta, GA 30338
(404) 455-3200
<PAGE>
Charter Pines Behavioral North Carolina 58-1462214 3621 Randolph Road
Health System, Inc. Charlotte, NC 28211
(704) 365-5368
Charter Plains Behavioral Texas 58-1462211 801 N. Quaker Avenue
Health System, Inc. Lubbock, TX 79408
(806) 744-5505
Charter-Provo School, Inc. Utah 58-1647690 4501 North University Ave.
Provo, UT 84604
(801) 227-2000
Charter Acquisition Subsidiary, Delaware 58-1852072 3414 Peachtree Rd., N.E.
Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Real Behavioral Texas 58-1485897 8550 Huebner Road
Health System, Inc. San Antonio, TX 78240
(512) 699-8585
Charter Regional Medical Texas 74-1299623 3414 Peachtree Rd., N.E.
Center, Inc. Suite 1400
Atlanta, Georgia 30326
(404) 841-9200
Charter Richmond Behavioral Virginia 58-1761160 3414 Peachtree Rd., N.E.
Health System, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Ridge Behavioral Kentucky 58-1393063 3050 Rio Dosa Drive
Health System, Inc. Lexington, KY 40509
(606) 269-2325
Charter Rivers Behavioral South Carolina 58-1408623 2900 Sunset Boulevard
Health System, Inc. West Columbia, SC 29169
(803) 796-9911
Charter San Diego Behavioral California 58-1669160 11878 Avenue of Industry
Health System, Inc. San Diego, CA 92128
(619) 487-3200
Charter Sioux Falls Behavioral South Dakota 58-1674278 2812 South Louise Avenue
Health System, Inc. Sioux Falls, SD 57106
(605) 361-8111
Charter South Bend Behavioral Indiana 58-1674287 6704 N. Gumwood Drive
Health System, Inc. Granger, IN 46530
(219) 272-9799
<PAGE>
Charter Springs Behavioral Florida 58-1517461 3130 S.W. 27th Avenue
Health System, Inc. Ocala, FL 32674
(904) 237-7293
Charter Springwood Virginia 58-2097829 Route 4, Box 50
Behavioral Health System, Inc. Leesburg, VA 22075
(703) 777-0800
Charter Suburban Hospital Texas 75-1161721 3414 Peachtree Rd., N.E.
of Mesquite, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Terre Haute Behavioral Indiana 58-1674293 1400 Crossing Boulevard
Health System, Inc. Terre Haute, IN 47802
Charter Thousand Oaks Behavioral California 58-1731069 150 Via Merida
Health System, Inc. Thousand Oaks, CA 91361
(805) 495-3292
Charter Treatment Center of Michigan 58-2025057 3414 Peachtree Rd., N.E.
Michigan, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charter Westbrook Behavioral Virginia 54-0858777 1500 Westbrook Avenue
Health System, Inc. Richmond, VA 23227
(804) 266-9671
Charter White Oak Maryland 52-1866223 Post Office Box 56
Behavioral Health System, Inc. 1441 Taylors Island Road
Woolford, MD 21677
(410) 228-7000
Charter Wichita Behavioral Kansas 58-1634296 8901 East Orme
Health System, Inc. Wichita, KS 67207
(316) 686-5000
Charter Woods Behavioral Alabama 58-1330526 700 Cottonwood Road
Health System, Inc. Dothan, AL 36301
(205) 794-4357
Charter Woods Hospital, Inc. Alabama 58-2102628 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Charterton/LaGrange, Inc. Kentucky 61-0882911 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
<PAGE>
Desert Springs Hospital, Inc. Nevada 88-0117696 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, Georgia 30326
(404) 841-9200
Employee Assistance Services, Inc. Georgia 58-1501282 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Florida Health Facilities, Inc. Florida 58-1860493 21808 State Road 54Lutz, FL 33549
(813) 948-2441
Gulf Coast EAP Services, Inc. Alabama 58-2101394 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Gwinnett Immediate Care Georgia 58-1456097 3414 Peachtree Rd., N.E.
Center, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
HCS, Inc. Georgia 58-1527679 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Holcomb Bridge Immediate Georgia 58-1374463 3414 Peachtree Rd., N.E.
Care Center, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Hospital Investors, Inc. Georgia 58-1182191 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Illinois Mentor, Inc. Illinois 36-3643670 45 Milk Street
Boston, MA 02109
Magellan Health Services, Inc. Delaware 04-3250732 45 Milk Street
Boston, MA 02109
Mandarin Meadows, Inc. Florida 58-1761155 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
<PAGE>
Massachusetts Mentor, Inc. Massachusetts 04-2799071 45 Milk Street
Boston, MA 02109
Metropolitan Hospital, Inc. Georgia 58-1124268 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Middle Georgia Hospital, Inc. Georgia 58-1121715 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
National Mentor, Inc. Delaware 04-2794857 45 Milk Street
Boston, MA 02109
National Mentor Healthcare, Inc. Massachusetts 04-2893910 45 Milk Street
Boston, MA 02109
NEPA - Massachusetts, Inc. Massachusetts 58-2116751 #6 Courthouse Lane
Chelmsford, MA 01863
(508) 441-2332
NEPA - New Hampshire, Inc. New Hampshire 58-2116398 29 Northwest Boulevard
Nashua, NH 03063
(603) 886-5000
North Carolina Mentor, Inc. North Carolina 45 Milk Street
Boston, MA 02109
Ohio Mentor, Inc. Ohio 31-1098345 45 Milk Street
Boston, MA 02109
Pacific-Charter Medical, Inc. California 58-1336537 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Pennsylvania Mentor, Inc. Pennsylvania 52-1638594 45 Milk Street
Boston, MA 02109
South Carolina Mentor, Inc. South Carolina 57-0782160 45 Milk Street
Boston, MA 02109
Southeast Behavioral Systems, Georgia 58-2100700 3414 Peachtree Rd., N.E.
Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
<PAGE>
Rivoli, Inc. Georgia 58-1686160 3414 Peachtree Rd., N.E.
Suite 1400
Atlanta, GA 30326
(404) 841-9200
Schizophrenia Treatment and Georgia 58-1672912 209 Church Street
Rehabilitation, Inc. Decatur, GA 30030
(404) 377-1986
Shallowford Community Hospital, Georgia 58-1175951 3414 Peachtree Rd., N.E.
Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Sistemas De Terapia Georgia 58-1181077 3414 Peachtree Rd., N.E.
Respiratoria, S.A., Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
Stuart Circle Hospital Virginia 54-0855184 3414 Peachtree Rd., N.E.
Corporation Suite 1400
Atlanta, GA 30326
(404) 841-9200
Western Behavioral California 58-1662416 3414 Peachtree Rd., N.E.
Systems, Inc. Suite 1400
Atlanta, GA 30326
(404) 841-9200
(1) The Additional Registrants listed are wholly-owned subsidiaries of the Registrant and are guarantors of the Registrant's 11 1/4%
Series A Senior Subordinated Notes due 2004. The Additional Registrants have been conditionally exempted, pursuant to Section 12(h)
of the Securities Exchange Act of 1934, from filing reports under Section 13 of the Securities Exchange Act of 1934.
</TABLE>
<PAGE>
FORM 10-Q
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I - Financial Information:
Condensed Consolidated Balance Sheets -
September 30, 1994 and March 31, 1995 . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Operations -
For the Six Months and Quarters ended
March 31, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . . . 6
Condensed Consolidated Statement of Changes in
Stockholders' Equity - For the Six Months and
Quarter ended March 31, 1995. . . . . . . . . . . . . . . . . . . . . 7
Condensed Consolidated Statements of Cash Flows -
For the Six Months ended
March 31, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . . . 8
Notes to Condensed Consolidated Financial Statements . . . . . . . . . 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . .17
PART II - Other Information:
Item 4. - Submission of Matters to Vote of Security Holders. . . . . .21
Item 6. - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .21
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
</TABLE>
<PAGE>
CHARTER MEDICAL CORPORATION
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
PART I - FINANCIAL INFORMATION
<PAGE>
<TABLE>
<CAPTION>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
September 30 March 31
ASSETS 1994 1995 --
--------- --------
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents . . . . . . . $129,603 $ 69,181
Accounts receivable, net. . . . . . . . 170,295 219,655
Supplies. . . . . . . . . . . . . . . . 6,097 6,548
Other current assets. . . . . . . . . . 18,632 15,276
------- -------
Total Current Assets . . . . . . . 324,627 310,660
Property and Equipment
Land. . . . . . . . . . . . . . . . . . 96,373 99,408
Buildings and improvements. . . . . . . 360,586 397,567
Equipment . . . . . . . . . . . . . . . 92,044 107,070
------- -------
549,003 604,045
Accumulated depreciation. . . . . . . . (56,967) (75,352)
------- -------
492,036 528,693
Construction in progress. . . . . . . . 2,309 5,705
------- -------
494,345 534,398
Assets Restricted for Settlement
of Unpaid Claims. . . . . . . . . . . . . . 74,532 88,192
Other Long-Term Assets . . . . . . . . . . . 41,975 77,276
Reorganization Value in Excess of Amounts
Allocable to Identifiable Assets, net. . . 26,001 10,400
---------- ----------
$ 961,480 $1,020,926
---------- ----------
---------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except shares and per share data)
September 30 March 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1995
------------ --------
<S> <C> <C> <C>
Current Liabilities
Accounts payable. . . . . . . . . . . . $50,745 $ 63,381
Note payable. . . . . . . . . . . . . . -- 947
Accrued expenses and other current
liabilities. . . . . . . . . . . . . . 161,650 145,970
Current maturities of long-term debt and
capital lease obligations . . . . . . 2,653 6,653
------- -------
Total Current Liabilities . . . . . . . 215,048 216,951
Long-Term Debt and Capital Lease Obligations 533,476 560,584
Deferred Income Taxes. . . . . . . . . . . . 12,380 10,983
Reserve for Unpaid Claims. . . . . . . . . . 100,250 110,524
Deferred Credits and Other
Long-Term Liabilities . . . . . . . . . . . 44,105 49,392
Stockholders' Equity
Common Stock, par value $0.25 per share
Authorized - 80,000,000 shares
Issued and outstanding - 26,899,471
shares at September 30, 1994
and 28,370,255 shares at
March 31, 1995 . . . . . . . . . 6,725 7,093
Other Stockholders' Equity
Additional paid-in capital . . . . 244,339 250,251
Accumulated deficit. . . . . . . . (119,042) (133,628)
Unearned compensation
under ESOP . . . . . . . . . . . (73,527) (46,754)
Warrants outstanding . . . . . . . 180 75
Common Stock in Treasury,
42,000 shares. . . . . . . . . . -- (729)
Note Receivable for shares . . . . -- (3,889)
Cumulative foreign currency
adjustments. . . . . . . . . . . (2,454) 73
------ -----
Stockholders' Equity. . . . . 56,221 72,492
Commitments and Contingencies
------- ---------
$ 961,480 $ 1,020,926
------- ---------
------- ---------
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
For the Three Months ended For the Six Months ended
March 31 March 31
-------------------------- ------------------------
1994 1995 1994 1995
---------- ---------- --------- --------
<S> <C> <C> <C>
Net revenue . . . . . . . . . . . . . $212,610 $299,817 $421,427 $563,658
Costs and expenses
Salaries, supplies and other
operating expenses . . . . . . . . 153,147 221,526 305,589 421,166
Bad debt expense. . . . . . . . . . 16,159 23,743 32,288 44,962
Depreciation and amortization . . . 6,904 10,061 13,579 18,418
Amortization of reorganization
value in excess of amounts
allocable to identifiable
assets . . . . . . . . . . . . . . 7,800 7,800 15,600 15,600
Interest, net . . . . . . . . . . . 8,418 13,537 16,785 27,401
ESOP expense. . . . . . . . . . . . 12,300 14,273 24,599 26,773
Stock option expense (credit) . . . 656 (956) 6,851 (3,317)
Unusual item. . . . . . . . . . . . -- 29,800 -- 26,840
------- ------ ------ ------
205,384 319,784 415,291 577,843
------- ------ ------ ------
Income (Loss) before provision
for income taxes. . . . . . . . . . . . 7,226 (19,967) 6,136 (14,185)
Provision for (benefit from)
income taxes. . . . . . . . . . . . . . 6,103 (4,867) 8,879 566
Net income (loss). . . . . . . . . . . . $ 1,123 $(15,100) $ (2,743) $(14,751)
------- ------ ------ ------
------- ------ ------ ------
Average number of common shares
outstanding . . . . . . . . . . . . . . 26,743 28,332 25,936 27,613
------- ------ ------ ------
------- ------ ------ ------
Net income (loss) per common share . . . $.04 $(.53) $(.11) $(.53)
------- ------ ------ ------
------- ------ ------ ------
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands)
Common Stock
Common Stock in Treasury Additional
---------------- ---------------- Paid-in Accumlated
Shares Amount Shares Amount Capital Deficit
------ ------ ------ ------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1994 26,899 $6,725 -- -- $244,339 (119,042)
Additions (Deductions):
Net income. . . . . . . . . . -- -- -- -- -- 349
ESOP expense. . . . . . . . . -- -- -- -- -- --
Stock option expense
(credit) . . . . . . . . . . -- -- -- -- (2,361) --
Exercise of warrants. . . . . 25 6 -- -- 184 --
Foreign currency
translation loss . . . . . . -- -- -- -- -- --
------ ----- ---- ---- ------- --------
Balance at December 31, 1994 . . . 26,924 6,731 -- -- 242,162 (118,693)
Additions (Deductions):
Net income. . . . . . . . . . -- -- -- -- -- (15,100)
ESOP expense. . . . . . . . . -- -- -- -- -- --
Stock option
expense (credit) . . . . . . -- -- -- -- (956) --
Exercise of options . . . . . 18 5 -- -- 162 --
Exercise of warrants. . . . . 18 5 -- -- 134 --
Foreign currency
translation gain . . . . . . -- -- -- -- -- --
Pooling of Mentor . . . . . . 1,410 352 -- -- 8,749 165
Purchase of Common Stock
for Treasury . . . . . . . . -- -- 42 (729) -- --
--------- --------- -------- -------- ----------- ------------
Balance at March 31, 1995. . . . . 28,370 $ 7,093 42 $ (729) $ 250,251 $ (133,628)
------ ----- ---- ---- ------- --------
------ ----- ---- ---- ------- --------
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (continued)
(Unaudited)
(In thousands)
Cumulative Notes
Unearned Foreign Receivable
Compensation Warrants Currency for
Under ESOP Outstanding Adjustments Shares
------------ ----------- ----------- ----------
Balance at September 30, 1994. . $(73,527) $ 180 $(2,454) --
Additions (Deductions):
Net income. . . . . . . . . -- -- -- --
ESOP expense. . . . . . . . -- -- -- --
Stock option expense
(credit) . . . . . . . . . 12,500 -- -- --
Exercise of warrants. . . . -- (61) -- --
Foreign currency
translation loss . . . . . -- -- (372) --
-------- ----- ----- -----
Balance at December 31, 1994 . . (61,027) 119 (2,826) --
Additions (Deductions):
Net income. . . . . . . . . -- -- -- --
ESOP expense. . . . . . . . 14,273 -- -- --
Stock option
expense (credit) . . . . . -- -- -- --
Exercise of options . . . . -- -- -- --
Exercise of warrants. . . . 18 5 -- --
Foreign currency
translation gain . . . . . -- -- 2,899 --
Pooling of Mentor . . . . . -- -- -- (3,889)
Purchase of Common Stock
for Treasury . . . . . . . -- -- -- --
-------- ----- ----- -----
Balance at March 31, 1995. . . . $(46,754) $ 75 $ 73 $ (3,889)
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Six Months ended
March 31
------------------------
1994 1995
--------- ---------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net loss . . . . . . . . . . . . . . . . . . $(2,743) $(14,751)
------ -------
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization . . . 29,179 34,018
ESOP expense. . . . . . . . . . . . 24,599 26,773
Non-cash portion of unusual items . -- 18,800
Stock option expense (credit) . . . 6,851 (3,317)
Non-cash interest expense . . . . . 1,375 1,186
Gain on sale of assets. . . . . . . -- (2,961)
Cash flows from changes in assets
and liabilities, net of effects
from sales and acquisitions of
businesses:
Accounts receivable, net. . . . . . (9,475) (16,051)
Other assets. . . . . . . . . . . . 4,443 (10,133)
Accounts payable and other
accrued liabilities. . . . . . . . (21,829) (9,739)
Reserve for unpaid claims . . . . . (847) 6,044
Income taxes payable. . . . . . . . (9,057) (1,700)
Other liabilities . . . . . . . . . (5,464) (13,654)
Other . . . . . . . . . . . . . . . 1,515 656
------ -------
Total adjustments . . . . . . . . . 21,290 29,922
------ -------
Net cash provided by
operating activities. . . . . 18,547 15,171
------ -------
Cash Flows From Investing Activities
Capital expenditures. . . . . . . . . . . . . (6,964) (9,402)
Acquisitions of businesses. . . . . . . . . . (1,733) (64,970)
(Increase) Decrease in assets restricted
for settlement of unpaid claims. . . . . . . 4,058 (13,660)
Proceeds from sale of assets. . . . . . . . . 7,857 5,879
------ -------
Net cash provided by (used in)
investing activities . . . . . . . 3,218 (82,153)
------ -------
Cash Flows From Financing Activities
Proceeds from issuance of debt. . . . . . . . -- 28,009
Payments on debt and capital lease
obligations . . . . . . . . . . . . . . . (60,527) (21,111)
Treasury stock transactions . . . . . . . . . -- (729)
Proceeds from exercise of stock options
and warrants . . . . . . . . . . . . . . . 866 391
Tax benefit related to the exercise
of stock options . . . . . . . . . . . . . . 9,424 --
Income tax payments made on behalf of
stock optionee . . . . . . . . . . . . . . . (14,214) --
Increase in cash collateral account . . . . . (2,781) --
------ -------
Net cash (used in) provided by
financing activities . . . . . . . (67,232) 6,560
------ -------
Net decrease in cash and cash equivalents. . . . . (45,467) (60,422)
Cash and cash equivalents at beginning
of period . . . . . . . . . . . . . . . 86,002 129,603
------ -------
Cash and cash equivalents at end of period . . . . $ 40,535 $ 69,181
------ -------
------ -------
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting of normal recurring
adjustments considered necessary for a fair presentation, have been included.
These financial statements should be read in conjunction with the audited
consolidated financial statements of the Company for the year ended September
30, 1994, included in the Company's Annual Report on Form 10-K.
NOTE B - NATURE OF BUSINESS
The Company's business is seasonal in nature, with a reduced demand for
certain services generally occurring in the fourth fiscal quarter and around
major holidays, such as Thanksgiving and Christmas. The Company's business is
also subject to general economic conditions and other factors. Accordingly, the
results of operations for the interim periods are not necessarily indicative of
the actual results expected for the year.
NOTE C - SUPPLEMENTAL CASH FLOW INFORMATION
Below is supplemental cash flow information related to the six months
ended March 31, 1994 and 1995:
<TABLE>
<CAPTION>
For the Six Months ended
March 31
------------------------
1994 1995
--------- -------
(In thousands)
<S> <C> <C>
Income taxes paid, net of refunds received . . . $8,532 $2,431
Interest paid, net of amounts capitalized. . . . 16,331 26,241
</TABLE>
NOTE D - LONG-TERM DEBT AND LEASES
Information with regard to the Company's long-term debt and capital lease
obligations at September 30, 1994 and March 31, 1995 follows:
<TABLE>
<CAPTION>
September 30 March 31
1994 1995
------------ --------
(In thousands)
<S> <C> <C> <C>
Revolving Credit Agreement due
through 1999 (8.19% at March
31, 1995) . . . . . . . . . . . . . . . $ 72,584 $100,593
11.25% Senior Subordinated
Notes due 2004. . . . . . . . . . . . . . 375,000 375,000
6.06% to 10.75% Mortgage and other
notes payable through 1999. . . . . . . . 6,434 11,106
Variable rate secured notes due
through 2013 (4.15% to 4.75% at
March 31, 1995) . . . . . . . . . . . . . 63,125 62,775
7.5% Swiss Bonds . . . . . . . . . . . . . 6,443 6,443
4.15% to 12.5% Capital lease
obligations due through 2014. . . . . . . 12,870 12,648
------ ------
536,456 568,565
Less amounts due within one year. . . . 2,653 6,653
Less note payable . . . . . . . . . . . -- 947
Less debt service funds . . . . . . . . 327 381
------- ------
$533,476 $560,584
------- ------
------- ------
</TABLE>
<PAGE>
NOTE E - ACQUISITIONS
The Company purchased substantially all of the assets of 29 psychiatric
hospitals, eight chemical-dependency treatment facilities, two residential
treatment centers and one physician outpatient practice, including related
outpatient facilities and other associated assets from National Medical
Enterprises, Inc. (the "Acquired Hospitals"). The acquisition occurred in three
phases with the purchase of 27, three and ten of the Acquired Hospitals on June
30, October 31, and November 30, 1994, respectively. The Company accounted for
the acquisition using the purchase method of accounting.
The Company's Consolidated Statement of Operations for the six months ended
March 31, 1995 includes results of operations of 27 of the Acquired Hospitals
for the six months, results of operations of three of the Acquired Hospitals for
two months and results of operations of ten of the Acquired Hospitals for four
months. The purchases have been considered one transaction for pro forma
disclosure. Below are unaudited pro forma results of operations for the six
months ended March 31, 1994 and 1995 as though the Acquired Hospitals had been
purchased on October 1, 1993 and 1994, respectively. The pro forma information
does not purport to be indicative of the results which would actually have been
attained had the acquisition been completed on such date or which may be
attained in the future. (In thousands, except for per share data.)
<TABLE>
<CAPTION>
For the Six Months Ended
------------------------------------------------------
March 31, 1994 March 31, 1995
------------------------ ------------------------
Actual Pro Forma Actual Pro Forma
------ --------- ------ --------
<S> <C> <C> <C> <C>
Net revenue. . . . . . $421,427 $573,009 $563,658 $576,008
Net loss . . . . . . . $(2,743) $ (26) $(14,751) $(14,148)
Net loss per share . . $(.11) $(.00) $(.53) $(.51)
</TABLE>
In January 1995, the Company issued 1,409,978 common shares in exchange for
all the outstanding common and preferred stock of Magellan Health Services, Inc.
("Magellan"). Magellan owns National Mentor, Inc., which provides specialized
health services in mentor homes. The acquisition was accounted for as a pooling
of interests, effective January 1, 1995.
In February 1995, the Company acquired Westwood Pembroke Health System which
includes two psychiatric hospitals and a professional group practice.
NOTE F - UNUSUAL ITEM
In December 1994, the Company recorded an unusual item of approximately $3
million which represented the pre-tax gain on the sale of three psychiatric
hospitals.
In March 1995, the Company and a group of insurance carriers resolved
disputes that arose in fiscal 1995 related to claims paid predominantly in the
1980's. As part of the resolution, the Company will pay the insurance carriers
$29.8 million in five installments over a three year period. The Company and
the insurance carriers intend to continue to do business with each other and
maintain business at the same or similar general levels. No existing agreement,
contract, joint venture, or other business relationship in existence at the time
of the settlement will be terminated or affected as a result of the settlement.
Furthermore, the parties will negotiate in good faith concerning additional
business opportunities.
NOTE G - CONTINGENCIES
The Company is self-insured for a substantial portion of general and
professional liability risks. The reserves for self-insured general and
professional liability losses, including loss adjustment expenses, are based on
actuarial estimates using the Company's historical claims experience adjusted
for current industry trends. The reserve for unpaid claims is adjusted as such
claims mature, to reflect revised actuarial estimates based on actual
experience. While management and its actuaries believe that the present reserve
is reasonable, ultimate settlement of losses may vary from the amount provided.
<PAGE>
In addition to general and professional liability claims, the Company is
subject to other claims, suits, surveys and investigations. In the opinion of
management, the ultimate resolution of such other pending legal proceedings will
not have a material adverse effect on the Company's financial position or
results of operations.
The Resolution Trust Corporation ("RTC"), for itself or in its capacity as
conservator or receiver for 12 financial institutions, formerly held certain
debt securities that were issued by the Company in 1988. RTC has indicated to
the Company that it believes that certain financial statements and other
disclosures made by the Company in connection with such debt securities
contained materially misleading statements or material omissions and that such
misleading statements or omissions resulted in an overvaluation of such debt
securities. Specifically, the RTC has indicated its belief that the Company's
financial statements overstated net income for the 1987 fiscal year and the
first three quarters of the 1988 fiscal year due to understatement of
contractual allowances and the allowance for bad debts and that the Company
believed, but did not disclose, that certain negative industry factors or trends
would occur in the foreseeable future. The Company believes that the financial
institutions represented by RTC purchased in 1988 and 1989 $103.4 million face
amount of subordinated debt securities originally issued by the Company in
September 1988. Although the RTC has not disclosed to the Company its (or its
financial institutions') trading losses from the purchases and sales of these
subordinated debts securities, the RTC has disclosed the dates purchases and
sales were made and the face amounts of the subordinated debt securities
involved in these transactions. The Company believes that the trading losses
were approximately $45 million. The Company has agreed to a tolling of the
statute of limitations applicable to RTC's claims. Based on a review of
relevant law and the facts known to the Company, the Company believes it has a
substantial defense to a potential claim by RTC and that such claim would not
have a material adverse effect on the Company's financial position or future
results of operations.
<PAGE>
<TABLE>
<CAPTION>
NOTE H - GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(In thousands, except shares and per share amounts)
March 31, 1995
-------------------------------------------------------------------------------------------
Charter Medical
Corporation Consolidated
Guarantor Nonguarantor (Parent Elimination Consolidated
ASSETS Subsidiaries Subsidiaries Corporation) Entries Total
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents . . . . . $ 44,948 $ 1,652 $ 22,581 $ -- $ 69,181
Accounts receivable, net. . . . . . 210,467 5,240 3,948 -- 219,655
Supplies .. . . . . . . . . . . . . 6,085 90 373 -- 6,548
Other current assets. . . . . . . . 9,352 413 10,565 (5,054) 15,276
------- ------- -------- --------- -------
Total Current Assets . . . . . 270,852 7,395 37,467 (5,054) 310,660
Property and Equipment
Land. . . . . . . . . . . . . . . . 91,600 6,794 1,014 -- 99,408
Buildings and improvements. . . . . 405,951 6,414 (14,798) -- 397,567
Equipment . . . . . . . . . . . . . 102,063 1,950 3,057 -- 107,070
------- ------- -------- --------- -------
599,614 15,158 (10,727) -- 604,045
Accumulated depreciation. . . . . . (74,097) (1,540) 285 -- (75,352)
Construction in progress. . . . . . 5,323 356 26 - 5,705
------- ------- -------- --------- -------
530,840 13,974 (10,416) - 534,398
Assets restricted for settlement
of unpaid claims. . . . . . . . . . . . -- 71,273 16,919 -- 88,192
Other Long-Term Assets(1). . . . . . . . 106,747 24,109 1,079,826 (1,133,406) 77,276
Reorganization Value in Excess
of Amounts Allocable to
Identifiable Assets, net. . . . . . . . -- -- 10,400 -- 10,400
------- ------- -------- --------- -------
$908,439 $116,751 $1,134,196 $(1,138,460) $ 1,020,926
------- ------- -------- --------- -------
------- ------- -------- --------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable. . . . . . . . . . $ 47,297 $ 2,705 $ 13,379 $ -- $ 63,381
Note payable. . . . . . . . . . . . -- 947 -- -- 947
Accrued expenses and other
current liabilities. . . . . . . . 59,106 1,430 83,930 1,504 145,970
Current maturities of long-
term debt and capital
lease obligations. . . . . . . . . 6,530 123 -- -- 6,653
------- ------- -------- --------- -------
Total Current
Liabilities . . . . . . . . . 112,933 5,205 97,309 1,504 216,951
Long-Term Debt and Capital
Lease Obligations . . . . . . . . . . . (269,318) (2,108) 832,010 -- 560,584
Deferred Income Taxes. . . . . . . . . . -- 730 11,744 (1,491) 10,983
Reserve for Unpaid Claims. . . . . . . . -- 71,149 44,429 (5,054) 110,524
Deferred Credits and Other
Long-Term Liabilities (1) . . . . . . . 360,971 595 76,212 (388,386) 49,392
Stockholders' Equity
Common Stock, par value
$0.25 per share
Authorized - 80,000,000
shares
Issued and outstanding -
28,370,255 shares . . . . . . 2,872 837 7,093 (3,709) 7,093
Other Stockholders' Equity
Additional paid-in
capital . . . . . . . . . . . 716,655 30,455 250,251 (747,110) 250,251
Retained earnings
(Accumulated deficit) . . . . (11,116) 7,506 (133,628) 3,610 (133,628)
Unearned compensation
under ESOP. . . . . . . . . . -- -- (46,754) -- (46,754)
Warrants outstanding . . . . . -- -- 75 -- 75
Common shares in
Treasury. . . . . . . . . . . -- -- (729) -- (729)
Notes Receivable for
Shares. . . . . . . . . . . . (3,889) -- (3,889) 3,889 (3,889)
Cumulative foreign
currency adjustments. . . . . (669) 2,382 73 (1,713) 73
------- ------- -------- --------- -------
703,853 41,180 72,492 (745,033) 72,492
Commitments and Contingencies ------- ------- -------- --------- -------
$908,439 $ 116,751 $1,134,196 $(1,138,460) $1,020,926
------- ------- -------- --------- -------
------- ------- -------- --------- -------
(1) Elimination entry related to intercompany receivables and payables and investment in consolidated subsidiaries.
The accompanying Notes to Condensed Consolidating Financial Statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE H - GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(In thousands, except shares and per share amounts)
September 30, 1994
-------------------------------------------------------------------------------------------
Charter Medical
Corporation Consolidated
Guarantor Nonguarantor (Parent Elimination Consolidated
ASSETS Subsidiaries Subsidiaries Corporation) Entries Total
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents . . . . $ 71,850 $ 8,606 $ 49,147 $ -- $129,603
Accounts receivable, net. . . . . 166,191 2,780 1,324 -- 170,295
Supplies .. . . . . . . . . . . . 5,713 75 309 -- 6,097
Other current assets. . . . . . . 11,461 177 19,018 (12,024) 18,632
------- ------- -------- --------- -------
Total Current Assets . . . . 255,215 11,638 69,798 (12,024) 324,627
Property and Equipment
Land. . . . . . . . . . . . . . . 89,340 6,019 1,014 -- 96,373
Buildings and improvements. . . . 369,518 5,666 (14,598) -- 360,586
Equipment . . . . . . . . . . . . 88,483 1,262 2,299 -- 92,044
------- ------- -------- --------- -------
547,341 12,947 (11,285) -- 549,003
Accumulated depreciation. . . . . (55,505) (1,056) (406) -- (56,967)
Construction in progress. . . . . 2,143 166 -- - 2,309
------- ------- -------- --------- -------
493,979 12,057 (11,691) - 494,345
Assets restricted for settlement
of unpaid claims. . . . . . . . . . . -- 61,475 13,057 -- 74,532
Other Long-Term Assets(1). . . . . . . 52,438 14,385 988,259 (1,013,107) 41,975
Reorganization Value in Excess
of Amounts Allocable to
Identifiable Assets, net. . . . . . . -- -- 26,001 -- 26,001
------- ------- --------- --------- -------
$801,632 $99,555 $1,085,424 $(1,025,131) $961,480
------- ------- --------- --------- -------
------- ------- --------- --------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable. . . . . . . . . $ 43,476 $ 1,107 $ 6,162 $ -- $ 50,745
Accrued expenses and other
current liabilities. . . . . . . 63,742 1,684 96,224 -- 161,650
Current maturities of long-
term debt and capital
lease obligations. . . . . . . . 2,537 116 -- -- 2,653
------- ------- -------- --------- -------
Total Current
Liabilities . . . . . . . . 109,755 2,907 102,386 -- 215,048
Long-Term Debt and Capital
Lease Obligations . . . . . . . . . . (258,010) 1,497 789,989 -- 533,476
Deferred Income Taxes. . . . . . . . . -- 647 11,733 -- 12,380
Reserve for Unpaid Claims. . . . . . . -- 54,759 57,515 (12,024) 100,250
Deferred Credits and Other
Long-Term Liabilities (1) . . . . . . 349,146 669 67,580 (373,290) 44,105
Stockholders' Equity
Common Stock, par value
$0.25 per share
Authorized - 80,000,000
shares
Issued and outstanding -
28,370,255 shares . . . . . 2,866 587 6,725 (3,453) 6,725
Other Stockholders' Equity
Additional paid-in
capital . . . . . . . . . . 707,744 30,455 244,339 (738,199) 244,339
Retained earnings
(Accumulated deficit) . . . (109,093) 7,734 (119,042) 101,359 (119,042)
Unearned compensation
under ESOP. . . . . . . . . -- -- (73,527) -- (73,527)
Warrants outstanding . . . . -- -- 180 -- 180
Cumulative foreign
currency adjustments. . . . (776) 300 (2,454) 476 (2,454)
------- ------ --------- ---------- --------
600,741 39,076 56,221 (639,817) 56,221
Commitments and Contingencies ------- ------ --------- ---------- --------
$801,632 $99,555 $1,085,424 $(1,025,131) $961,480
------- ------- --------- --------- -------
------- ------- --------- --------- -------
(1) Elimination entry related to intercompany receivables and payables and investment in consolidated subsidiaries.
The accompanying Notes to Condensed Consolidating Financial Statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE H - GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(In thousands, except shares and per share amounts)
For the Quarter ended March 31, 1995
-------------------------------------------------------------------------------------------
Charter Medical
Corporation Consolidated
Guarantor Nonguarantor (Parent Elimination Consolidated
Subsidiaries Subsidiaries Corporation) Entries Total
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue. . . . . . . . . . . . . $297,171 $10,802 $ (2,701) $ (5,455) 299,817
Costs and expenses
Salaries, general and
administrative expenses. . . . . 207,425 10,162 9,029 (5,090) 221,526
Bad debt expense. . . . . . . . . 23,586 168 (11) -- 23,743
Depreciation and
amortization . . . . . . . . . . 9,652 395 237 (223) 10,061
Amortization of
reorganization value in
excess of amounts allocable
to identifiable assets . . . . . -- -- 7,800 -- 7,800
Interest, net . . . . . . . . . . (8,470) 30 21,968 9 13,537
ESOP expense. . . . . . . . . . . 13,431 -- 842 -- 14,273
Stock option
expense (credit) . . . . . . . . -- -- (956) -- (956)
Unusual item. . . . . . . . . . . -- -- 29,800 -- 29,800
------- ------ ------ ----- ------
245,624 10,755 68,709 (5,304) 319,784
------- ------ ------ ----- -------
Income (loss) before income taxes
and equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 51,547 47 (71,410) (151) (19,967)
Provision for (benefit from )
income taxes. . . . . . . . . . . . . 554 -- -- (5,421) (4,867)
------- ------ ------ ----- -------
Income (loss) before equity in
earnings (loss) of
subsidiaries. . . . . . . . . . . . . 50,993 47 (71,410) 5,270 (15,100)
Equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 668 -- 56,310 (56,978) --
------- ------ ------ ----- -------
Net income (loss). . . . . . . . . . . $ 51,661 $ 47 $(15,100) $(51,708) $(15,100)
------- ------ ------ ----- -------
------- ------ ------ ----- -------
</TABLE>
<TABLE>
<CAPTION>
For the Quarter ended March 31, 1994
-------------------------------------------------------------------------------------------
Charter Medical
Corporation Consolidated
Guarantor Nonguarantor (Parent Elimination Consolidated
Subsidiaries Subsidiaries Corporation) Entries Total
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue. . . . . . . . . . . . . . $210,109 $5,308 $ 858 $ (3,665) $212,610
Costs and expenses
Salaries, general and
administrative expenses. . . . . 145,179 4,518 7,096 (3,646) 153,147
Bad debt expense. . . . . . . . . 15,722 1 436 -- 16,159
Depreciation and
amortization . . . . . . . . . . 6,454 291 109 50 6,904
Amortization of
reorganization value in
excess of amounts allocable
to identifiable assets . . . . . -- -- 7,800 -- 7,800
Interest, net . . . . . . . . . . (4,344) 11 12,757 (6) 8,418
ESOP expense. . . . . . . . . . . 11,254 -- 1,045 1 12,300
Stock option
expense . . . . . . . . . . . . -- -- 656 -- 656
------- ------ ------ ----- -------
174,265 4,821 29,899 (3,601) 205,384
------- ------ ------ ----- -------
Income (loss) before income taxes
and equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 35,844 487 (29,041) (64) 7,226
Provision for income taxes . . . . . . -- -- -- 6,103 6,103
------- ------ ------ ----- -------
Income (loss) before equity in
earnings (loss) of
subsidiaries. . . . . . . . . . . . . 35,844 487 (29,041) (6,167) 1,123
Equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 484 -- 30,164 (30,648) --
------- ------ ------ ------ -------
Net income (loss). . . . . . . . . . . $ 36,328 $ 487 $ 1,123 $(36,815) $ 1,123
------- ------ ------ ------ -------
------- ------ ------ ------ -------
The accompanying Notes to Condensed Consolidating Financial Statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE H - GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(In thousands, except shares and per share amounts)
For the Six Months ended March 31, 1995
-------------------------------------------------------------------------------------------
Charter Medical
Corporation Consolidated
Guarantor Nonguarantor (Parent Elimination Consolidated
Subsidiaries Subsidiaries Corporation) Entries Total
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue. . . . . . . . . . . . . . $553,157 $24,866 $ (3,680) $ (10,685) $563,658
Costs and expenses
Salaries, general and
administrative expenses. . . . . 396,945 24,156 10,526 (10,461) 421,166
Bad debt expense. . . . . . . . . 46,796 177 (2,011) -- 44,962
Depreciation and
amortization . . . . . . . . . . 18,123 722 (204) (223) 18,418
Amortization of
reorganization value in
excess of amounts allocable
to identifiable assets . . . . . -- -- 15,600 -- 15,600
Interest, net . . . . . . . . . . (15,800) 38 43,163 -- 27,401
ESOP expense. . . . . . . . . . . 26,969 -- (191) (5) 26,773
Unusual item. . . . . . . . . . . -- -- 26,840 -- 26,840
Stock option
expense (credit) . . . . . . . . -- -- (3,317) -- (3,317)
------- ------ ------ ------ -------
473,033 25,093 90,406 (10,689) 577,843
------- ------ ------ ------ -------
Income (loss) before income taxes
and equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 80,124 (227) (94,086) 4 (14,185)
Provision for income taxes . . . . . . 554 -- -- 12 566
------- ------ ------ ----- -------
Income (loss) before equity in
earnings (loss) of
subsidiaries. . . . . . . . . . . . . 79,570 (227) (94,086) (8) (14,751)
Equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 1,255 -- 79,335 (80,590) --
------- ------ ------ ------ -------
Net income (loss). . . . . . . . . . . $ 80,825 $ (227) $(14,751) $(80,598) $(14,751)
------- ------ ------ ------ -------
------- ------ ------ ------ -------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash provided by (used in)
operating activities. . . . . . . . . $21,773 $11,475 $(18,077) $ -- $15,171
------- ------ ------ ------ -------
Cash Flows from Investing Activities:
Capital expenditures. . . . . . . (8,089) (396) (917) -- (9,402)
Proceeds from sale of assets. . . -- -- 5,879 -- 5,879
Acquisitions of businesses . . . (61,280) (3,690) -- -- (64,970)
Increase in assets
restricted for settlement
of unpaid claims . . . . . . . . -- (9,798) (3,862) -- (13,660)
------- ------ ------ ------ -------
Cash provided by (used in)
investing activities. . . . . . . (69,369) (13,884) 1,100 -- (82,153)
------- ------ ------ ------ -------
Cash Flows from Financing Activities:
Proceeds from issuance
of debt. . . . . . . . . . . . . 28,009 -- -- -- 28,009
Payments on debt and capital
obligations. . . . . . . . . . . (7,315) (4,545) (9,251) -- (21,111)
Treasury Stock transactions . . . -- -- (729) -- (729)
Proceeds from exercise of
stock option and warrants. . . . -- -- 391 -- 391
------- ------ ------ ------ -------
Cash provided by (used in)
financing activities. . . . . . . . . 20,694 (4,545) (9,589) -- 6,560
------- ------ ------ ------ -------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . (26,902) (6,954) (26,566) -- (60,422)
Cash and cash equivalents at
beginning of period . . . . . . . . . 71,850 8,606 49,147 -- 129,603
------- ------ ------ ------ -------
Cash and cash equivalents at
end of period . . . . . . . . . . . . $ 44,948 $ 1,652 $ 22,581 $ -- $ 69,181
------- ------ ------ ------ -------
------- ------ ------ ------ -------
The accompanying Notes to Condensed Consolidating Financial Statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE H - GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(In thousands, except shares and per share amounts)
For the Six Months ended March 31, 1994
-------------------------------------------------------------------------------------------
Charter Medical
Corporation Consolidated
Guarantor Nonguarantor (Parent Elimination Consolidated
Subsidiaries Subsidiaries Corporation) Entries Total
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue. . . . . . . . . . . . . . $415,888 $10,591 $ 2,421 $ (7,473) $421,427
Costs and expenses
Salaries, general and
administrative expenses. . . . . 290,814 8,708 13,541 (7,474) 305,589
Bad debt expense. . . . . . . . . 32,559 (44) (227) -- 32,288
Depreciation and
amortization . . . . . . . . . . 12,768 454 357 -- 13,579
Amortization of
reorganization value in
excess of amounts allocable
to identifiable assets . . . . . -- -- 15,600 -- 15,600
Interest, net . . . . . . . . . . (8,310) 11 25,090 (6) 16,785
ESOP expense. . . . . . . . . . . 22,406 -- 2,090 103 24,599
Stock option
expense. . . . . . . . . . . . . -- -- 6,851 -- 6,851
------- ------ ------ ------ -------
350,237 9,129 63,302 (7,377) 415,291
------- ------ ------ ------ -------
Income (loss) before income taxes
and equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 65,651 1,462 (60,881) (96) 6,136
Provision for income taxes . . . . . . -- -- -- 8,879 8,879
------- ------ ------ ----- -------
Income (loss) before equity in
earnings (loss) of
subsidiaries. . . . . . . . . . . . . 65,651 1,462 (60,881) (8,975) (2,743)
Equity in earnings (loss)
of subsidiaries . . . . . . . . . . . 1,035 -- 58,138 (59,173) --
------- ------ ------ ------ -------
Net income (loss). . . . . . . . . . . $ 66,686 $ 1,462 $(2,743) $(68,148) $(2,743)
------- ------ ------ ------ -------
------- ------ ------ ------ -------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash provided by (used in)
operating activities. . . . . . . . . $350,315 $3,633 $(3,381) $(332,020) $18,547
------- ------ ------ ------- -------
Cash Flows from Investing Activities:
Capital expenditures. . . . . . . (6,613) (144) (207) -- (6,964)
Proceeds from sale of assets. . . 7,857 -- -- -- 7,857
Acquisitions of businesses . . . (1,733) -- -- -- (1,733)
Increase in assets
restricted for settlement
of unpaid claims . . . . . . . . -- 2,456 1,602 -- 4,058
------- ------ ------ ------- -------
Cash provided by (used in)
investing activities. . . . . . . (489) 2,312 1,395 -- 3,218
------- ------ ------ ------- -------
Cash Flows from Financing Activities:
Increase in cash
collateral account . . . . . . . -- -- (2,781) -- (2,781)
Payments on debt and capital
obligations. . . . . . . . . . . (365,499) (27) (27,021) 332,020 (60,527)
Tax benefit related to the
exercise of stock options. . . . -- -- 9,424 -- 9,424
Income tax payments made on
behalf of stock optionee . . . . -- -- (14,214) -- (14,214)
Proceeds from exercise of
stock option and warrants. . . . -- -- 866 -- 866
------- ------ ------ ------- -------
Cash provided by (used in)
financing activities. . . . . . . . . (365,499) (27) (33,726) 332,020 (67,232)
------- ------ ------ ------- -------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . (15,673) 5,918 (35,712) -- (45,467)
Cash and cash equivalents at
beginning of period . . . . . . . . . 45,147 2,756 38,099 -- 86,002
------- ------ ------ ------- -------
Cash and cash equivalents at
end of period . . . . . . . . . . . . $ 29,474 $ 8,674 $ 2,387 $ -- $ 40,535
------- ------ ------ ------- -------
------- ------ ------ ------- -------
The accompanying Notes to Condensed Consolidating Financial Statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
March 31, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ACQUISITIONS
The Company purchased substantially all of the assets of 29 psychiatric
hospitals, eight chemical-dependency treatment facilities, two residential
treatment centers and one physician outpatient practice, including related
outpatient facilities and other associated assets from National Medical
Enterprises, Inc. (the "Acquired Hospitals"). The acquisition occurred in three
phases with the purchase of 27, three and ten of the Acquired Hospitals on June
30, October 31, and November 30, 1994, respectively. The Company accounted for
the acquisitions using the purchase method of accounting. The purchase price
for the Acquired Hospitals was approximately $120.4 million in cash plus an
additional cash amount of approximately $51 million, subject to adjustment, for
the net working capital of the Acquired Hospitals.
The Company's Consolidated Statement of Operations for the six months ended
March 31, 1995 includes results of operations of 27 of the Acquired Hospitals
for the six months, results of operations of three of the Acquired Hospitals for
two months and results of operations of ten of the Acquired Hospitals for four
months.
In January 1995, the Company issued 1,409,978 common shares in exchange for
all the outstanding common and preferred stock of Magellan Health Services, Inc.
("Magellan"). Magellan owns National Mentor, Inc., which provides specialized
health services in mentor homes. The acquisition was accounted for as a pooling
of interests, effective January 1, 1995.
In February 1995, the Company acquired Westwood Pembroke Health System
which includes two psychiatric hospitals and a professional group practice.
RESULTS OF OPERATIONS
Selected statistics (from the date of acquisition for acquired facilities)
for the 110 psychiatric hospitals in operation at March 31, 1995, by quarter for
fiscal 1994 and fiscal 1995 follows:
<TABLE>
<CAPTION>
FISCAL FISCAL %
1994 1995 CHANGE
------ ------ ------
<S> <C> <C> <C> <C>
Licensed beds at:
December 31 . . . . . . . . 6,985 9,467 36%
March 31 . . . . . . . . . . 6,970 9,682 39
June 30. . . . . . . . . . . 6,970
September 30 . . . . . . . . 8,840
Net revenue (in thousands):
Quarter:
First. . . . . . . . . . $198,129 $241,038 22%
Second . . . . . . . . . 198,947 265,991 34
Third. . . . . . . . . . 207,023
Fourth . . . . . . . . . 244,453
-------
Year . . . . . . . . . . . . $848,552
-------
-------
Patient days:
Quarter:
First. . . . . . . . . . 320,664 406,794 27%
Second . . . . . . . . . 329,267 456,316 39
Third. . . . . . . . . . 331,297
Fourth . . . . . . . . . 398,049
-------
Year . . . . . . . . . . . . 1,379,277
<PAGE>
FISCAL FISCAL %
1994 1995 CHANGE
------ ------ ------
Equivalent patient days:
Quarter:
First. . . . . . . . . . 349,947 453,631 30%
Second . . . . . . . . . 362,538 508,481 40
Third. . . . . . . . . . 368,554
Fourth . . . . . . . . . 442,466
---------
Year . . . . . . . . . . . . 1,523,505
---------
---------
Net revenue per equivalent patient day:
Quarter:
First. . . . . . . . . . $566 $531 (6)%
Second . . . . . . . . . 549 523 (5)
Third. . . . . . . . . . 562
Fourth . . . . . . . . . 552
Year . . . . . . . . . . . . 557
Admissions:
Quarter:
First. . . . . . . . . . 21,875 29,964 37%
Second . . . . . . . . . 25,037 34,698 39
Third. . . . . . . . . . 25,103
Fourth . . . . . . . . . 30,548
------
Year . . . . . . . . . . . . 102,563
------
------
Average length of stay:
Quarter:
First. . . . . . . . . . 14.5 13.3 (8)%
Second . . . . . . . . . 13.4 12.7 (5)
Third. . . . . . . . . . 13.1
Fourth . . . . . . . . . 13.4
Year . . . . . . . . . . . . 13.6
Selected statistics for the same-store psychiatric hospitals in operations
during the quarters and six months ending March 31, 1994 and 1995.
FOR THE QUARTER ENDED MARCH 31, 1995
FISCAL FISCAL %
1994 1995 CHANGE
------ ------ ------
*Number of psychiatric
hospitals . . . . . . . . . . 75 74 (1)
Average licensed beds. . . . . 6,975 6,868 (2)
Net revenue (in thousands) . . $198,947 $197,767 (1)
Patient days . . . . . . . . . 329,267 323,501 (2)
Equivalent patient days. . . . 362,538 361,062 (0)
Net revenue per equivalent
patient day . . . . . . . . . $549 $548 (0)
Admissions . . . . . . . . . . 25,037 26,827 7
Average length of stay . . . . 13.4 11.8 (12)
<PAGE>
FOR THE SIX MONTHS ENDED MARCH 31, 1995
FISCAL FISCAL %
1994 1995 CHANGE
------ ------ ------
*Number of psychiatric
hospitals . . . . . . . . . . 75 74 (1)
Average licensed beds. . . . . 6,980 6,887 (1)
Net revenue (in thousands) . . $397,076 $384,283 (3)
Patient days . . . . . . . . . 649,931 631,211 (3)
Equivalent patient days. . . . 712,485 704,303 (1)
Net revenue per equivalent
patient day . . . . . . . . . $557 $546 (2)
Admissions . . . . . . . . . . 46,912 51,179 9
Average length of stay . . . . 13.9 12.1 (13)
*The change in number of psych hospitals from 1994 to 1995 is due to the merger
of two facilities.
</TABLE>
Patient days at the Company's hospitals increased 39% and 33% for the quarter
and six months ended March 31, 1995, respectively, as compared to the same
period of fiscal 1994. The increase resulted from the Acquired Hospitals.
Patient days at the same store hospitals decreased 2% and 3% for the quarter and
six month period ended March 31, 1995 compared to the comparable periods of the
prior fiscal year, due to decreases in the average length of stay of 12% and 13%
in the first and second quarters of fiscal 95 compared to the prior year. Total
admissions increased by 37% and 38% for the quarter and six months ended March
31, 1995 compared to the prior fiscal year. On a same store hospital basis,
admissions increased by 7% and 9% for the quarter and six months ended March 31,
1995 compared to the prior fiscal year.
The Company's total net revenue for the quarter and six months ended March
31, 1995 increased 41% and 34% respectively, primarily due to the Acquired
Hospitals. Net revenue per equivalent patient day decreased in the quarter and
six months ending March 31, 1995 by 5% compared to comparable periods in the
prior fiscal year. The decreases were primarily due to lower net revenue per
equivalent patient day for the Acquired Hospitals and from a continued shift in
payor mix toward Medicare and Medicaid programs. Net revenue in the quarter
ending March 31, 1995, includes $3.7 million more than the same quarter of the
prior fiscal year for the normal settlement of reimbursement issues. Services
to Medicare and Medicaid patients have increased due to increased recognition
and treatment of behavioral illnesses of the elderly and disabled and, in some
states, improved coverage of behavioral services in psychiatric hospitals for
Medicaid beneficiaries. The Company believes that, at the same time, revenue
from Blue Cross and commercial insurance payors has declined because of a shift
by purchasers of health coverage to HMOs, PPOs, and other managed care plans.
The Company's salaries, general, and administrative expenses increased 45%
and 38% in the second quarter and first six months of fiscal 1995 compared to
fiscal 1994, primarily due to expenses incurred by the Acquired Hospitals.
The Company's bad debt expense increased 47% and 39% in the quarter and six
months ended March 31, 1995 compared to the same periods in fiscal 1994,
primarily due to expenses incurred by the Acquired Hospitals. Bad debt expense
as a percent of net revenue increased to 7.9% in the second quarter of fiscal
1995 from 7.6% in the second quarter of fiscal 1994. Bad debt expense as a
percent of net revenue increased to 8.0% in the first six months of fiscal 1995
from 7.7% in the first six months of fiscal 1994. The Company anticipates
future increases in bad debt expenses due to increased deductibles and co-
insurance and reduced annual and lifetime psychiatric maximum payment limits for
individual patients, which will result in the Company not collecting full
charges on an increasing number of patients.
Depreciation and amortization increased 46% in the second quarter of fiscal
1995 and 36% in the first six months of fiscal 1995 compared to comparable
periods in fiscal 1994. The increases resulted primarily from depreciation of
the Acquired Hospitals and other acquisitions, and the amortization of the
related covenants not to compete and goodwill.
Reorganization value in excess of amounts allocable to identifiable assets is
being amortized over the three-year period ending July 1995.
Net interest expense for the second quarter and first six months of fiscal
1995 increased 61% and 63%, respectively, from the previous fiscal year due to
the issuance of the 11.25% Senior Subordinated Notes (the "Notes") in May 1994
and to borrowings under the Revolving Credit Agreement used for acquisitions.
<PAGE>
ESOP expense for the second quarter and first six months of fiscal 1995
increased 16% and 9%, respectively, from the previous fiscal year.
Stock option expense for the second quarter and first six months of fiscal
1995 decreased from the previous year due to fluctuations in the market price of
the Company's common stock.
In March 1995, the Company and a group of insurance carriers resolved
disputes that arose in fiscal 1995 related to claims paid predominantly in the
1980's. As part of the resolution, the Company will pay the insurance carriers
$29.8 million in five installments over a three year period. The Company and
the insurance carriers intend to continue to do business with each other and
maintain business at the same or similar general levels. No existing agreement,
contract, joint venture, or other business relationship in existence at the time
of the settlement will be terminated or affected as a result of the settlement.
Furthermore, the parties will negotiate in good faith concerning additional
business opportunities. Also, in the first quarter of fiscal 1995, the Company
recorded an unusual item of approximately $3 million which represented the pre-
tax gain on the sale of three psychiatric hospitals.
LIQUIDITY AND SOURCES OF CAPITAL
During the first six months of fiscal 1995, the Company incurred
approximately $74.4 million in capital expenditures, including $9.4 for routine
capital replacement and $65.0 million for acquisitions. The capital outlays
were financed from borrowings under the Revolving Credit Agreement, proceeds
from the issuance of the Notes and from cash provided by operations. The
Company anticipates that capital expenditures for fiscal 1995 relating to
existing hospitals will be approximately $20 million and will be financed from
cash provided by operations.
The number of days gross patient revenue in gross patients accounts
receivable was 65 days at March 31, 1995 and 62 days at September 30, 1994.
<PAGE>
<TABLE>
FORM 10-Q
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
<S> <C> <C> <C> <C> <C>
PART II - OTHER INFORMATION
Item 4. - Submission of Matters to Vote of Security Holders.
The Company held an annual meeting of stockholders on March 9, 1995.
The tabulation of votes with respect to each matter voted upon at the
meeting is as follows:
Votes cast
--------------------------------
Authority Broker Non-
For Withheld Abstain Votes
--- --------- ------- -----------
Election of:
Andre C.
Dimitriadis as a
Director (term
expiring in 1998) 22,122,589 99,042 N/A N/A
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
3(a) Bylaws of the Company, as amended, effective March 9, 1995.
4(a) Amendment No. 5, dated as of March 17, 1995, to Second Amended
and Restated Credit Agreement, dated as of May 2, 1994, among the
Company, Bankers Trust Company, as Agent, First Union National
Bank of North Carolina, as Co-Agent, and the lenders listed on
Annex I.
27 Financial Data Schedule
(b) Report on Form 8-K
There were no current reports on Form 8-K filed by the Registrant
with the Securities and Exchange Commission during the quarter
ended March 31, 1995.
</TABLE>
<PAGE>
<TABLE>
FORM 10-Q
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
SIGNATURES
----------
<S> <C> <C>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHARTER MEDICAL CORPORATION
---------------------------
(Registrant)
Date: ____________________________ /s/ Lawrence W. Drinkard
----------------------------
Lawrence W. Drinkard
Executive Vice President - Finance
(Chief Financial Officer)
Date: ____________________________ /s/ John R. Day
-----------------------------
John R. Day
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
FORM 10-Q
CHARTER MEDICAL CORPORATION AND SUBSIDIARIES
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHARTER MEDICAL CORPORATION
---------------------------
(Registrant)
Date: ____________________________ ----------------------------
Lawrence W. Drinkard
Executive Vice President - Finance
(Chief Financial Officer)
Date: ____________________________ ----------------------------
John R. Day
Vice President and Controller
(Principal Accounting Officer)
</TABLE>
BYLAWS
OF
CHARTER MEDICAL CORPORATION
As Amended 3/9/95
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
----------------- ----
<S> <C> <C>
ARTICLE I. OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Registered Office . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. MEETINGS OF STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . 1
Section 1. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Date of Meetings. . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Notice of Meetings. . . . . . . . . . . . . . . . . . . . . . 2
Section 4. List of Stockholders. . . . . . . . . . . . . . . . . . . . . 2
Section 5. Special Meetings. . . . . . . . . . . . . . . . . . . . . . . 2
Section 6. Notice of Special Meetings. . . . . . . . . . . . . . . . . . 2
Section 7. Limitations on Special Meetings . . . . . . . . . . . . . . . 2
Section 8. Quorum and Adjournment. . . . . . . . . . . . . . . . . . . . 2
Section 9. Stockholder Action. . . . . . . . . . . . . . . . . . . . . . 3
Section 10. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 11. Proxies and Voting Rights . . . . . . . . . . . . . . . . . . 3
Section 12. Action by Consent . . . . . . . . . . . . . . . . . . . . . . 3
Section 13. Inspectors of Elections . . . . . . . . . . . . . . . . . . . 4
Section 14. Presiding Officer . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III. DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1. Number, Election and Term of Office . . . . . . . . . . . . . 4
Section 2. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Powers of Directors . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 5
Section 6. Time of Meetings. . . . . . . . . . . . . . . . . . . . . . . 5
Section 7. Regular Meetings. . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. Special Meetings. . . . . . . . . . . . . . . . . . . . . . . 6
Section 9. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 10. Action by Consent . . . . . . . . . . . . . . . . . . . . . . 6
Section 11. Telephone Conference Call . . . . . . . . . . . . . . . . . . 6
Section 12. Executive and Other Committees. . . . . . . . . . . . . . . . 7
Section 13. Minutes of Committee Meetings . . . . . . . . . . . . . . . . 7
Section 14. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2. Waiver and Consent. . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2. Election of Officers. . . . . . . . . . . . . . . . . . . . . 9
Section 3. Additional Officers . . . . . . . . . . . . . . . . . . . . . 9
Section 4. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5. Tenure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. President - Powers and Duties . . . . . . . . . . . . . . . . 9
Section 7. President - Execution of Documents. . . . . . . . . . . . . . 9
<PAGE>
Section 8. Vice Presidents - Powers and Duties . . . . . . . . . . . . .10
Section 9. Secretary - Powers and Duties . . . . . . . . . . . . . . . .10
Section 10. Assistant Secretary . . . . . . . . . . . . . . . . . . . . .10
Section 11. Treasurer - Powers and Duties . . . . . . . . . . . . . . . .10
Section 12. Treasurer - Disbursements and Accounting. . . . . . . . . . .10
Section 13. Assistant Treasurer . . . . . . . . . . . . . . . . . . . . .11
Section 14. Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE VI. CERTIFICATES FOR SHARES OF STOCK. . . . . . . . . . . . . . . . .11
Section 1. Right to Certificate. . . . . . . . . . . . . . . . . . . . .11
Section 2. Classes of Stock - Rights . . . . . . . . . . . . . . . . . .11
Section 3. Officers' Signatures. . . . . . . . . . . . . . . . . . . . .12
Section 4. Lost Certificates . . . . . . . . . . . . . . . . . . . . . .12
Section 5. Transfer of Stock . . . . . . . . . . . . . . . . . . . . . .12
Section 6. Fixing of Record Date . . . . . . . . . . . . . . . . . . . .13
Section 7. Registered Stockholders . . . . . . . . . . . . . . . . . . .13
ARTICLE VII. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .14
Section 1. Actions Not By Or In The Right
Of The Corporation. . . . . . . . . . . . . . . . . . . . . .14
Section 2. Actions By Or In The Right
Of The Corporation. . . . . . . . . . . . . . . . . . . . . .14
Section 3. Indemnification Where Director or Officer
Successfully Defends Action . . . . . . . . . . . . . . . . .15
Section 4. Determinations Required Prior
To Indemnification. . . . . . . . . . . . . . . . . . . . . .15
Section 5. Advances. . . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 6. General . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 7. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 8. The Corporation . . . . . . . . . . . . . . . . . . . . . . .16
Section 9. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . .16
Section 10. Continuation. . . . . . . . . . . . . . . . . . . . . . . . .16
Section 11. Future Amendments . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE VIII. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . .17
Section 1. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 2. Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 3. Annual Statements . . . . . . . . . . . . . . . . . . . . . .17
Section 4. Checks. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 5. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 6. Seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 7. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE IX. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
</TABLE>
<PAGE>
BYLAWS
OF
CHARTER MEDICAL CORPORATION
ARTICLE I
---------
OFFICES
-------
SECTION 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
SECTION 2. The corporation may also have offices at such other places both
within
and without the State of Delaware as the board of directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
SECTION 1. All meetings of the stockholders for the election of directors
shall be held in the City of Atlanta, State of Georgia, at such place as may be
fixed from time to time by the Board of Directors, or at such other place either
within or without the State of Delaware as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
SECTION 2. Annual meetings of stockholders shall be held not later than
six months following the end of each fiscal year of the corporation on a date
and at a time as shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting, at which the stockholders shall elect
members of the Board of Directors and transact such other business as may
properly be brought before the meeting. Election of directors need not be by
written ballot.
SECTION 3. Written notice of the annual meeting stating the place, date
and hour
of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than ten nor more than sixty days before the date of the
meeting.
<PAGE>
SECTION 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, or cause to be prepared and made, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
SECTION 5. Special meetings of the stockholders, for any purpose or
purposes,
unless otherwise prescribed by statute or by the certificate of incorporation,
may be called only by the affirmative vote of a majority of the Board of
Directors.
SECTION 6. Written notice of a special meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than ten nor more than sixty days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
SECTION 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
SECTION 8. The holders of a majority of the shares of all classes of stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business, except as otherwise provided by
statute or by the certificate of incorporation. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
<PAGE>
SECTION 9. Except as provided in Section 3 of Article III of these Bylaws,
or unless the question is one upon which, by express provision of statute or the
certificate of incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question: (1)
in all matters other than the election of directors, the affirmative vote of the
majority of shares present in person or represented by proxy at the meeting and
entitled to vote on the subject matter shall be the act of the stockholders; (2)
directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors; and (3) in voting on such questions, every stockholder of
record who is entitled to vote shall be entitled to one vote for each share of
stock held by him on the record date for such meeting.
SECTION 10. Except as otherwise provided by law or by the certificate of
incorporation, the holders of shares of all classes of stock shall have the
right to vote, in person or by proxy, together on all matters to come before a
meeting of the stockholders.
SECTION 11. No proxy shall be voted on after three years from its date,
unless the proxy provides for a longer period. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power.
A proxy may be made irrevocable regardless of whether the interest with which it
is coupled is an interest in the stock itself or an interest in the corporation
generally. In the event that any proxy shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or if only
one be present that one, shall have all of the powers conferred by the proxy
upon all of the persons so designated unless the proxy shall otherwise provide.
SECTION 12. The stockholders may not take any actions required to be taken
at an annual or special meeting of the stockholders, or any actions which may be
taken at an annual meeting or special meeting of the stockholders, by written
consent in lieu of a meeting.
SECTION 13. The Board of Directors, in advance of any meeting of the
stockholders of the Corporation, shall appoint one or more inspectors of
elections to act at such meeting, and any adjournment thereof. In case any
person who has been designated as an <PAGE>
inspector of elections fails to appear or act, the vacancy may be filled by an
alternate appointed by the Board, in advance of the meeting, or at the meeting
by the person presiding thereat. An inspector, before entering upon discharge
of his duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his ability.
The inspector or inspectors so appointed shall perform the duties required by
Section 231 of the Delaware General Corporation Law.
SECTION 14. The Chairman of the Board of Directors, or in his absence the
President, shall serve as Chairman of every stockholders' meeting unless some
other person is elected to serve as Chairman by a majority vote of the voting
power of the shares represented at the meeting. The Chairman shall appoint the
Secretary of the corporation, or in his absence an Assistant Secretary, as
Secretary of every stockholders' meeting and such other persons as he deems
required to assist with the meeting.
ARTICLE III
-----------
DIRECTORS
---------
SECTION 1. The number of directors which shall constitute the whole Board
shall be eight. A change in the number of directors shall only occur by an
affirmative vote of at least seventy-five percent (75%) of the issued and
outstanding shares of the corporation entitled to vote thereon cast at a meeting
of the stockholders called for such purpose. The Board of Directors shall be
divided into three classes, as nearly equal in numbers as the then total number
of directors constituting the whole Board permits, with the term of office of
one class expiring each year. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Sections 2 and 3 of this
Article, and each director elected shall hold office until his successor is
elected and qualifies. Directors need not be stockholders or a resident of the
State of Delaware.
SECTION 2. Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the authorized number
of directors, may be filled by a majority of the directors then in office,
though less than a quorum, or by a sole remaining director, and the directors so
chosen shall hold office until the next election of the respective class or
classes for which such directors shall have been chosen and until their
successors are duly elected and shall qualify, unless sooner displaced. If
there are no directors in office, then an election of directors may be held in
the manner provided by statute.
SECTION 3. Notwithstanding any other provision of these Bylaws (and
notwithstanding the fact that some lesser percentage may be specified by law),
any director or the entire Board of Directors of the corporation may be removed
from office at any time, but only (i) for cause by the affirmative vote of the
<PAGE>
holders of a majority of the issued and outstanding shares of the capital stock
of the corporation entitled to vote thereon cast at a meeting of the
stockholders called for that purpose, or (ii) without cause by the affirmative
vote of the holders of at least seventy-five percent (75%) of the issued and
outstanding shares of capital stock of the corporation entitled to vote thereon
cast at a meeting of the stockholders called for that purpose.
SECTION 4. The business of the corporation shall be managed by its Board
of Directors which may exercise all such powers of the corporation and do all
such lawful acts and things as are not by statute or by the certificate of
incorporation or by these Bylaws directed or required to be exercised or done by
the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
----------------------------------
SECTION 5. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware. The
Board of Directors shall appoint from its members a Chairman of the Board of
Directors who shall preside at all meetings of the stockholders and the Board of
Directors. In the absence of the Chairman of the Board of Directors from a
meeting of the Board of Directors, the Board of Directors shall appoint from its
members, by a majority vote of all directors constituting a quorum, another
director who shall preside at such meeting. The Chairman of the Board of
Directors may but need not be an officer of or employed in an executive or any
other capacity by the corporation.
SECTION 6. A meeting of the Board of Directors shall be held immediately
following the annual meeting of stockholders at the same place as such annual
meeting or, in the alternative, at such time and place as shall be fixed by the
vote of the stockholders at the annual meeting. No notice of such meeting shall
be necessary, provided a quorum shall be present. In the event such meeting is
not held at the time and place determined under the preceding sentence, the
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board of Directors, or
as shall be specified in a written waiver signed by all of the directors.
SECTION 7. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as shall from time to time be determined
by the Board of Directors.
SECTION 8. Special meetings of the Board of Directors may be called by the
Chairman of the Board of Directors, the President, or a majority of the
directors then in office (a) by written notice mailed to each director first
class postage prepaid, not later than the fifth day before the meeting, or (b)
by either
<PAGE>
written or oral notice given personally or by telephone or other means of
electronic communication, in which case the meeting may be held as soon after
such notice is given as a quorum shall be assembled at the place of the meeting
or by telephone conference call, unless another time shall be specified in the
notice.
SECTION 9. At all meetings of the Board of Directors, a majority of the
directors then in office shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
SECTION 10. Unless otherwise restricted by the certificate of
incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
SECTION 11. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
-----------------------
SECTION 12. The Board of Directors may, by resolution adopted by a
majority of the whole Board of Directors, appoint three or more of its members
to constitute an Executive Committee which to the extent provided by the Board
of Directors shall have and exercise all of the authority of the Board of
Directors, except as otherwise provided by law, in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it. All action taken
by the Executive Committee shall be reported to the Board of Directors at its
first meeting thereafter.
The Board of Directors may also from time to time by resolution passed by a
majority of the whole Board appoint other
<PAGE>
committees, consisting of one or more members, from among its members; and such
committee or committees shall have such powers and duties as the Board of
Directors may from time to time prescribe.
Unless otherwise provided by the Board of Directors, a majority of the
members of any committee appointed by the Board of Directors pursuant to this
Section 12 shall constitute a quorum at any meeting thereof and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee. Action may be taken by any such committee without
a meeting by a writing as provided in Section 10 of this Article III. Any such
committee shall, subject to any rules prescribed by the Board of Directors,
prescribe its own rules for calling, giving notice of and holding meetings and
its method of procedure at such meetings and shall keep a written record of all
action taken by it.
SECTION 13. Each committee shall keep regular minutes of its meetings and
periodically report the same to the Board of Directors.
COMPENSATION OF DIRECTORS
-------------------------
SECTION 14. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director or a combination thereof. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
ARTICLE IV
----------
NOTICES
-------
SECTION 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these Bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given as provided in Section 8 of Article III.
SECTION 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of
<PAGE>
incorporation or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
Notice of all stockholders' meetings, whether annual or special, shall be
given in writing and may be given by the Chairman of the Board of Directors or
the Secretary (or in case of their refusal, by the person or persons entitled to
call meetings under the provisions of these Bylaws). The notice shall state the
general nature of the business to be transacted at the meeting and the place,
day and hour thereof. If such notice is mailed or telegraphed, it shall be
deemed to have been given when deposited in the United States mail or with a
telegraph office for transmission, as the case may be. If any meeting is
adjourned to another time or place, no notice as to such adjourned meeting or of
the business to be transacted thereat need be given other than by announcement
at the meeting at which such adjournment is given, except as otherwise expressly
provided in Section 8 of Article II.
ARTICLE V
---------
OFFICERS
--------
SECTION 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a President, a Vice President, a Secretary and a
Treasurer. The Board of Directors may also choose additional Vice Presidents,
and one or more Assistant Secretaries and Assistant Treasurers.
SECTION 2. The Board of Directors at its first meeting after each annual
meeting of stockholders shall choose a President, one or more Vice Presidents, a
Secretary and a Treasurer, or shall continue the incumbents in office.
SECTION 3. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board of Directors.
SECTION 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors or by a duly authorized committee.
SECTION 5. Each officer of the Corporation shall hold office until the
earliest to occur of (a) his successor is elected and qualifies, (b) death or
retirement of such officer, (c) resignation of such officer or (d) removal of
such officer in the manner provided by these bylaws. Any officer elected or
appointed
<PAGE>
by the Board of Directors may be removed at any time by the affirmative vote of
a majority of the Board of Directors or, in the case of all officers except the
President, by the President. Any vacancy occurring in any office of the
Corporation and all newly created officer positions shall be filled by the Board
of Directors.
PRESIDENT
---------
SECTION 6. The President shall be and perform the duties and
responsibilities of the Chief Executive Officer of the corporation and as such
shall have general supervision and control over all the affairs of the
corporation, its officers and employees. The President may, but need not, be
designated the Chief Operating Officer of the corporation. The President shall
report to the Board of Directors regarding the affairs of the corporation and
shall have such other duties and powers as may be assigned to or vested in him
from time to time by the Board of Directors or by the Executive Committee and as
prescribed by these Bylaws.
SECTION 7. The President shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be delegated by the Board of
Directors or the Executive Committee to some other officer or agent of the
corporation.
THE VICE PRESIDENTS
-------------------
SECTION 8. The Vice President, or if there shall be more than one the Vice
Presidents, shall perform such duties and have such powers as the Board of
Directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
---------------------------------------
SECTION 9. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record or cause to be
recorded all the proceedings of the meetings of the corporation and of the Board
of Directors in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or Chairman of the Board of Directors, under whose supervision he
shall be. He shall have custody of the corporate seal of the corporation, and
he, or an Assistant Secretary, shall have authority to affix the same to any
instrument requiring it; when so affixed, it may be attested by his signature or
by the signature of such Assistant Secretary.
<PAGE>
The Board of Directors may give general authority to any other officer to affix
the seal of the corporation and to attest the affixing by his signature.
SECTION 10. The Assistant Secretary, or if there be more than one the
Assistant Secretaries in the order determined by the Board of Directors, shall,
in the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary and shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
THE TREASURER, CONTROLLER AND ASSISTANT TREASURERS
--------------------------------------------------
SECTION 11. The Treasurer shall have custody of the corporate funds and
securities, shall together with the Controller keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors.
SECTION 12. The Treasurer and Controller shall disburse the funds of the
corporation as may be ordered by the Board of Directors, and shall render to the
Board of Directors, at its regular meetings, or when the Board of Directors so
requires, an account of the financial condition of the corporation.
SECTION 13. The Assistant Treasurer, or if there shall be more than one
the Assistant Treasurers in the order determined by the Board of Directors,
shall, in the absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer and shall perform such other duties and
have such other powers as the Board of Directors may from time to time
prescribe. Any one or more of the duties of the Treasurer may be delegated by
the Board of Directors to the Controller, an Assistant Treasurer or any other
officer of the corporation.
BONDS
-----
SECTION 14. If required by the Board of Directors, any officer shall give
the corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
<PAGE>
ARTICLE VI
----------
CERTIFICATES FOR SHARES OF STOCK
--------------------------------
SECTION 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation, by the
Chairman of the Board of Directors, the President or a Vice President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the corporation, certifying the number of shares of capital stock of the
corporation owned by him in the corporation.
SECTION 2. If the corporation shall be authorized to issue more than one
class of stock, or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class of stock; provided, however, that, except as
otherwise provided in Section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements there may be set forth on the face or back of
the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests, the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
SECTION 3. Where a certificate is signed (1) by a transfer agent or an
assistant transfer agent or (2) a registrar, the signature of any such officer
may be facsimile. In case any officer or officers who have signed, or whose
facsimile signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the corporation.
LOST CERTIFICATES
-----------------
SECTION 4. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an
<PAGE>
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
TRANSFERS OF STOCK
------------------
SECTION 5. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, in each case with
signatures guaranteed, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
FIXING OF RECORD DATE
---------------------
SECTION 6. The Board of Directors shall fix in advance a date, not less
than ten nor more than sixty days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining a
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting, and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion or
exchange of capital stock, or to give such consent, and in such case such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
-----------------------
SECTION 7. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered
<PAGE>
on its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
ARTICLE VII
-----------
INDEMNIFICATION
---------------
SECTION 1. ACTIONS NOT BY OR IN THE RIGHT OF THE CORPORATION. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer or employee of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer or employee of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in
<PAGE>
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
SECTION 3. INDEMNIFICATION WHERE DIRECTOR OR OFFICER SUCCESSFULLY DEFENDS
ACTION. To the extent that a director, officer or employee of the corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article VII, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
SECTION 4. DETERMINATIONS REQUIRED PRIOR TO INDEMNIFICATION. Except as
provided in Section 3 of this Article VII and except as may be ordered by a
court, any indemnification under Sections 1 and 2 of this Article VII shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer or employee is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Sections 1 and 2 of this Article VII, as the case may be.
Such determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders.
SECTION 5. ADVANCES. Expenses (including attorney's fees) incurred by an
officer or director in defending any civil, criminal, administrative, or
investigative action, suit or proceeding shall be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this Article. Such expenses
(including attorney's fees) incurred by other employees may be so paid upon such
terms and conditions, if any, as the Board of Directors deems appropriate.
SECTION 6. GENERAL. The indemnification and advancement of expenses
provided by or granted pursuant to these Bylaws shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be or shall become entitled under any agreement, vote of
stockholders or disinterested directors or otherwise, both as to actions in an
<PAGE>
official capacity and as to actions in another capacity while holding such
office.
SECTION 7. INSURANCE. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liabilities under the certificate of incorporation, the provisions of these
Bylaws or under the provisions of the General Corporation Law of the State of
Delaware.
SECTION 8. THE CORPORATION. For purposes of this Article VII, references
to "the corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its directors,
officers and employees, so that any person who is or was a director, officer or
employee of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article VII with respect to
the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
SECTION 9. EMPLOYEE BENEFIT PLANS. For purposes of this Article VII,
references to "other enterprises" shall include employee benefit plans; the
reference to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the corporation" shall include any service as a director, officer, employee
or agent of the corporation which imposes duties on, or involves services by,
such director, officer or employee with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Article VII.
SECTION 10. CONTINUATION. The indemnification and advancement of expenses
provided by, or granted pursuant to, these Bylaws shall continue as to a person
who has ceased to be a
<PAGE>
director, officer or employee and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 11. FUTURE AMENDMENTS. In the event of any amendment or addition
to Section 145 of the General Corporation Law of the State of Delaware or the
addition of any other section of such law with regard to indemnification, the
corporation shall indemnify to the fullest extent authorized or permitted by
such then-existing General Corporation Law of the State of Delaware, as amended,
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of the corporation), by reason of the fact that he is or was a director,
officer or employee of the corporation or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding.
ARTICLE VIII
------------
GENERAL PROVISIONS
------------------
SECTION 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the certificate of incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
Board of Directors from time to time, in their absolute discretion, think proper
as a reserve or reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the corporation, or for such other
purpose as the Board of Directors shall think conducive to the interest of the
corporation, and the Board of Directors may modify or abolish any such reserve
in the manner in which it was created.
ANNUAL STATEMENT
----------------
SECTION 3. The Board of Directors shall present at each annual meeting,
and at any special meeting, of the stockholders when called for by vote of the
stockholders a concise statement of the business and condition of the
corporation.
<PAGE>
CHECKS
------
SECTION 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
FISCAL YEAR
-----------
SECTION 5. The fiscal year of the corporation shall be determined by the
Board of Directors, and shall be from October 1 through September 30, unless
otherwise determined by the Board of Directors.
SEAL
----
SECTION 6. The corporate seal shall be in the form prescribed by the Board
of Directors. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
MISCELLANEOUS
-------------
SECTION 7. Unless otherwise ordered by the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary or the
Treasurer in person or by proxy appointed by any of them shall have full power
and authority on behalf of the corporation to vote, act and consent with respect
to any shares of stock issued by other corporations which the corporation may
own or as to which the corporation has the right to vote, act or consent.
ARTICLE IX
----------
AMENDMENTS
----------
These Bylaws may be altered or repealed at any regular meeting of the
stockholders or of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if such notice of such alteration or
repeal be contained in the notice of such special meeting. No Bylaw adopted by
vote of the stockholders shall be subject to amendment by the Board of Directors
if such Bylaw so provides. Notwithstanding the foregoing, neither Sections 5
nor 12 of Article II may be amended, altered, changed or repealed except by the
affirmative vote of the holders of at least seventy-five percent (75%) of the
issued and outstanding shares of capital stock of the Corporation entitled to
vote thereon cast at a meeting of the stockholders called for that purpose.
AMENDMENT NO. 5
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------
AMENDMENT NO. 5 dated as of March 17, 1995 (this "Amendment") to the
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 2, 1994 (as amended
by Amendment No. 1 thereto dated as of June 9, 1994, Amendment No. 2 thereto
dated as of September 30, 1994, Amendment No. 3 thereto dated as of December 12,
1994 and Amendment No. 4 thereto dated as of January 11, 1995, the "Credit
Agreement"), each among CHARTER MEDICAL CORPORATION, a Delaware corporation (the
"Company"), the banking and other financial institutions from time to time party
thereto (the "Lenders"), BANKERS TRUST COMPANY, as agent for the Lenders, and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Co-Agent. Capitalized terms
used herein and not defined herein shall have the respective meanings set forth
for such terms in the Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company has requested that: (a) the Lenders consent to
certain amendments to the definition of the term "Net Income" contained in the
Senior Subordinated Notes Indenture; (b) the Credit Agreement be amended to
permit the Collateral Agent, upon the request of the Company, to enter into a
non-disturbance and attornment agreement in respect of any Facility that is
leased or subleased by the Company or a Wholly-Owned Restricted Subsidiary to a
Permitted Joint Venture pursuant to Section 8.2(i) of the Credit Agreement; and
(c) the respective definitions contained in the Credit Agreement of the terms
"Base Core EBITDA" and "Core EBITDA" be amended to give the Company credit for
the pre-acquisition net income of certain Domestic Guarantors acquired by the
Company in January, 1995;
WHEREAS, subject to and upon the terms and conditions hereinafter set
forth, the Lenders party hereto are willing to agree to the foregoing;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. CONSENT. The Company may amend the definition of "Net
Income" contained in the Senior Subor-
<PAGE>
dinated Notes Indenture to read as set forth in the section entitled "The
Proposed Amendment" of the Consent Solicitation dated March 3, 1995 that is
attached hereto as Exhibit A; PROVIDED that (a) the aggregate amount of the fees
paid or payable to or for the benefit of the Holders (as defined in such Consent
Solicitation) in connection therewith does not exceed $2,812,500 (i.e., 0.75% of
the aggregate outstanding principal amount of the Senior Subordinated Notes),
and (b) the aggregate amount of fees paid or payable to or for the benefit of
the Solicitation Agent (as defined in such Consent Solicitation) in connection
therewith does not exceed such amount as is customary in the industry for
services of the type to be provided by the Solicitation Agent in connection with
such Consent Solicitation.
Section 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is
hereby amended as follows:
(a) The last paragraph of Section 8.2 of the Credit Agreement is
hereby amended by inserting the words "or paragraph (i) of this Section" after
the word "Section" in the fourth line of such paragraph.
(b) The following is inserted after the definition in Section 10
thereof of the term "Accumulated Excess Cash Flow":
"'ACQUIRED MENTOR EBITDA' shall mean, for any period, the
consolidated 'EBITDA' of the Domestic Guarantors acquired by the Company
pursuant to the Mentor Merger Agreement for the portion of such period that
precedes the date on which such Domestic Guarantors were so acquired. For
purposes of the foregoing, (a) each such Domestic Guarantor shall be deemed
to have been so acquired as of the end of the month in which it was so
acquired, and (b) the consolidated 'EBITDA' of such Domestic Guarantors for
such portion of such period shall be deemed to be the sum of the respective
amounts listed on Schedule 10.1(e) for each month that occurs during such
portion of such period."
(c) The definition of the term "Base Core EBITDA" in Section 10
thereof is amended by: (i) inserting the words "sum of the" after the word "the"
in clause (c) thereof, and (ii) inserting the phrase ", plus the
<PAGE>
Acquired Mentor EBITDA, if any" after the word "any" in such clause (c).
(d) The definition of the term "Core EBITDA" in Section 10 thereof is
amended by: (i) inserting the words "sum of the" after the word "the" in clause
(d) thereof, and (ii) inserting the phrase ", plus the Acquired Mentor EBITDA,
if any" after the word "any" in such clause (d).
(e) The following is inserted after the definition in Section 10
thereof of the term "Measurement Date":
"'MENTOR MERGER AGREEMENT' shall mean the Merger Agreement dated
as of December 19, 1994 among the Company, Charter Acquisition Subsidiary,
a Delaware corporation, and Magellan Health Services, Inc., a Delaware
corporation, pursuant to which Charter Acquisition Subsidiary merged with
and into Magellan Health Services, Inc."
(f) Exhibit B hereto is added as Schedule 10.1(e) to the Credit
Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to the Agent and the Lenders that:
(a) each amount set forth opposite a month on Exhibit B hereto is the
true and correct consolidated EBITDA for such month of the Domestic Guarantors
acquired by the Company pursuant to the Mentor Merger Agreement (as defined in
the Credit Agreement as amended hereby), and (ii) each such amount was
calculated for such month in conformity with the respective definitions of the
terms "EBITDA" and "Net Income" contained in the Credit Agreement;
(b) the execution and delivery by the Company of this Amendment and
the performance by the Company of the Credit Agreement as amended hereby are
within the Company's corporate powers, have been duly authorized by all
necessary corporate or other action and will not (i) contravene the certificate
or articles of incorporation or the bylaws of the Company, (ii) contravene any
law, regulation, order, writ, judgment, decree, determination
<PAGE>
or award currently in effect binding on or affecting the Company or any of its
Subsidiaries or any of their respective assets, except where such contravention
would not have a Material Adverse Effect, or (iii) conflict with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
(except pursuant to the Security Documents) upon any of the property or assets
of the Company or any of its Subsidiaries pursuant to the terms of, any inden-
ture, mortgage, deed of trust, agreement or other instrument (including, without
limitation, the Senior Subordinated Notes Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company, any of its Subsidiaries
or any of their respective properties or assets is bound or subject to, except
to the extent such conflict, breach, default or creation or imposition would not
have a Material Adverse Effect;
(c) this Amendment, the Credit Agreement as amended hereby and, after
giving effect to this Amendment, the other Credit Documents constitute the
legal, valid and binding obligations of the Company and the Credit Parties party
thereto, enforceable against the Company and such Credit Parties in accordance
with their respective terms, except to the extent such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally, and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(d) on and as of the date hereof, and both before and after giving
effect to this Amendment, no Default or Event of Default has occurred and is
continuing; and
(e) the representations and warranties of the Company and the other
Credit Parties contained in the Credit Agreement and the other Credit Documents
are true and correct on and as of the date hereof as if made on and as of the
date hereof, except to the extent such representations and warranties expressly
relate to a specific date.
Section 4. EFFECTIVENESS. This Amendment shall become effective when
the Agent shall have received
<PAGE>
duly executed counterparts of this Amendment from the Company, each Subsidiary
of the Company that is a party to any Credit Document and as many of the Lenders
as shall be necessary to comprise the "Required Lenders".
Section 5. STATUS OF CREDIT DOCUMENTS. This Amendment is limited
solely for the purposes and to the extent expressly set forth herein, and,
except as expressly modified hereby, the terms, provisions and conditions of the
Credit Documents and the Liens granted thereunder shall continue in full force
and effect and are hereby ratified and confirmed in all respects.
Section 6. COUNTERPARTS. This Amendment may be executed and
delivered in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Company and
the Agent.
Section 7. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their respective
duly authorized officers to execute and deliver this Amendment No. 5 to the
Second Amended and Restated Credit Agreement as of the date first above written.
CHARTER MEDICAL CORPORATION
By:________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Agent and a Lender
By:________________________
Name:
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Co-Agent
and a Lender
By:________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:________________________
Name:
Title:
<PAGE>
CREDIT LYONNAIS,
Cayman Islands Branch
By:________________________
Name:
Title:
DRESDNER BANK AG, New York and
Grand Cayman Islands Branches
By:________________________
Name:
Title:
By:________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By:________________________
Name:
Title:
THE BANK OF NEW YORK
By:________________________
Name:
Title:
THE MITSUBISHI BANK, LIMITED,
New York Branch
By:________________________
Name:
Title:
<PAGE>
Consented and agreed to as of
the date first above written
by each of the entities listed
on Schedule I hereto:
By:____________________
Name:
Title: ,
of each of the entities
listed on Schedule I hereto
<PAGE>
<TABLE>
DOMESTIC SUBSIDIARIES
- ---------------------
<S> <C>
1. Ambulatory Resources, Inc.
2. Atlanta MOB, Inc.
3. Beltway Community Hospital, Inc.
4. CCM, Inc.
5. Charter Alvarado Behavioral Health System, Inc.
6. Charter Appalachian Hall Behavioral Health System, Inc.
7. Charter Arbor Indy Behavioral Health System, Inc.
8. Charter Augusta Behavioral Health System, Inc.
9. Charter Bay Harbor Behavioral Health System, Inc.
10. Charter Beacon Behavioral Health System, Inc.
11. Charter Behavioral Health System at Fair Oaks, Inc.
12. Charter Behavioral Health System at Hidden Brook, Inc.
13. Charter Behavioral Health System at Los Altos, Inc.
14. Charter Behavioral Health System at Potomac Ridge, Inc.
15. Charter Behavioral Health System of Delmarva, Inc.
16. Charter Behavioral Health System of Athens, Inc.
17. Charter Behavioral Health System of Austin, Inc.
18. Charter Behavioral Health System of Baywood, Inc.
19. Charter Behavioral Health System of Bradenton, Inc.
20. Charter Behavioral Health System of Canoga Park, Inc.
21. Charter Behavioral Health System of Central Georgia, Inc.
22. Charter Behavioral Health System of Charleston, Inc.
23. Charter Behavioral Health System of Charlottesville, Inc.
24. Charter Behavioral Health System of Chicago, Inc.
25. Charter Behavioral Health System of Chula Vista, Inc.
26. Charter Behavioral Health System of Columbia, Inc.
27. Charter Behavioral Health System of Corpus Christi, Inc.
28. Charter Behavioral Health System of Dallas, Inc.
29. Charter Behavioral Health System of Evansville, Inc.
30. Charter Behavioral Health System of Fort Worth, Inc.
31. Charter Behavioral Health System of Jackson, Inc.
32. Charter Behavioral Health System of Jacksonville, Inc.
33. Charter Behavioral Health System of Jefferson, Inc.
34. Charter Behavioral Health System of Kansas City, Inc.
35. Charter Behavioral Health System of Lafayette, Inc.
36. Charter Behavioral Health System of Lake Charles, Inc.
37. Charter Behavioral Health System of Lakewood, Inc.
38. Charter Behavioral Health System of Michigan City, Inc.
39. Charter Behavioral Health System of Mobile, Inc.
40. Charter Behavioral Health System of Nashua, Inc.
41. Charter Behavioral Health System of Nevada, Inc.
42. Charter Behavioral Health System of New Mexico, Inc.
43. Charter Behavioral Health System of Northern California, Inc.
44. Charter Behavioral Health System of Northwest Arkansas, Inc.
45. Charter Behavioral Health System of Northwest Indiana, Inc.
46. Charter Behavioral Health System of Paducah, Inc.
47. Charter Behavioral Health System of Rockford, Inc.
48. Charter Behavioral Health System of San Jose, Inc.
49. Charter Behavioral Health System of Savannah, Inc.
<PAGE>
50. Charter Behavioral Health System of Southern California, Inc.
51. Charter Behavioral Health System of Tampa Bay, Inc.
52. Charter Behavioral Health System of Texarkana, Inc.
53. Charter Behavioral Health System of the Inland Empire, Inc.
54. Charter Behavioral Health System of Toledo, Inc.
55. Charter Behavioral Health System of Tucson, Inc.
56. Charter Behavioral Health System of Visalia, Inc.
57. Charter Behavioral Health System of Waverly, Inc.
58. Charter Behavioral Health System of Winston-Salem, Inc.
59. Charter Behavioral Health System of Yorba Linda, Inc.
60. Charter Behavioral Health System of Atlanta, Inc.
61. Charter Brawner Behavioral Health System, Inc.
62. Charter Canyon Behavioral Health System, Inc.
63. Charter Canyon Springs Behavioral Health System, Inc.
64. Charter Centennial Peaks Behavioral Health System, Inc.
65. Charter Community Hospitals, Inc.
66. Charter Community Hospital of Des Moines, Inc.
67. Charter Contract Services, Inc.
68. Charter Cove Forge Behavioral Health System, Inc.
69. Charter Crescent Pines Behavioral Health System, Inc.
70. Charter Fairbridge Behavioral Health System, Inc.
72. Charter Fenwick Hall Behavioral Health System, Inc.
73. Charter Financial Offices, Inc.
74. Charter Forest Behavioral Health System, Inc.
75. Charter Grapevine Behavioral Health System, Inc.
76. Charter Greensboro Behavioral Health System, Inc.
77. Charter Health Management of Texas, Inc.
78. Charter Hospital of Columbus, Inc.
79. Charter Hospital of Denver, Inc.
80. Charter Hospital of Ft. Collins, Inc.
81. Charter Hospital of Laredo, Inc.
82. Charter Hospital of Miami, Inc.
83. Charter Hospital of Mobile, Inc.
84. Charter Hospital of Northern New Jersey, Inc.
85. Charter Hospital of Santa Teresa, Inc.
86. Charter Hospital of St. Louis, Inc.
87. Charter Hospital of Torrance, Inc.
88. Charter Indianapolis Behavioral Health System, Inc.
89. Charter Lafayette Behavioral Health System, Inc.
90. Charter Lakehurst Behavioral Health System, Inc.
91. Charter Lakeside Behavioral Health System, Inc.
92. Charter Laurel Heights Behavioral Health System, Inc.
93. Charter Laurel Oaks Behavioral Health System, Inc.
94. Charter Linden Oaks Behavioral Health System, Inc.
95. Charter Little Rock Behavioral Health System, Inc.
96. Charter Louisville Behavioral Health System, Inc.
97. Charter Meadows Behavioral Health System, Inc.
98. Charter Medfield Behavioral Health System, Inc.
99. Charter Medical Executive Corporation
100. Charter Medical Information Services, Inc.
<PAGE>
101. Charter Medical International, S.A., Inc.
102. Charter Medical Management Company
103. Charter Medical of East Valley, Inc.
104. Charter Medical of North Phoenix, Inc.
105. Charter Medical of Orange County, Inc.
106. Charter Medical - California, Inc.
107. Charter Medical - Clayton County, Inc.
108. Charter Medical - Cleveland, Inc.
109. Charter Medical - Dallas, Inc.
110. Charter Medical - Long Beach, Inc.
111. Charter Medical - New York, Inc.
112. Charter Mental Health Options, Inc.
113. Charter Mid-South Behavioral Health System, Inc.
114. Charter Milwaukee Behavioral Health System, Inc.
115. Charter Mission Viejo Behavioral Health System, Inc.
116. Charter MOB of Charlottesville, Inc.
117. Charter North Behavioral Health System, Inc.
118. Charter North Counseling Center, Inc.
119. Charter Northbrooke Behavioral Health System, Inc.
120. Charter Northridge Behavioral Health System, Inc.
121. Charter Northside Hospital, Inc.
122. Charter Oak Behavioral Health System, Inc.
123. Charter of Alabama, Inc.
124. Charter Palms Behavioral Health System, Inc.
125. Charter Peachford Behavioral Health System, Inc.
126. Charter Pines Behavioral Health System, Inc.
127. Charter Plaints Behavioral Health System, Inc.
128. Charter Psychiatric Hospitals, Inc.
129. Charter Real Behavioral Health System, Inc.
130. Charter Regional Medical Center, Inc.
131. Charter Richmond Behavioral Health System, Inc.
132. Charter Ridge Behavioral Health System, Inc.
133. Charter Rivers Behavioral Health System, Inc.
134. Charter San Diego Behavioral Health System, Inc.
135. Charter Sioux Falls Behavioral Health System, Inc.
136. Charter South Bend Behavioral Health System, Inc.
137. Charter Springs Behavioral Health System, Inc.
138. Charter Springwood Behavioral Health System, Inc.
139. Charter Suburban Hospital of Mesquite, Inc.
140. Charter Terre Haute Behavioral Health System, Inc.
141. Charter Thousand Oaks Behavioral Health System, Inc.
142. Charter Treatment Center of Michigan, Inc.
143. Charter Westbrook Behavioral Health System, Inc.
144. Charter White Oak Behavioral Health Sytem, Inc.
145. Charter Wichita Behavioral Health System, Inc.
146. Charter Woods Behavioral Health System, Inc.
147. Charter Woods Hospital, Inc.
148. Charter - Provo School, Inc.
149. Charterton/LaGrange, Inc.
150. Charter-By-The-Sea Behavioral Health System, Inc.
151. CMCI, Inc.
<PAGE>
152. CMFC, Inc.
153. CMSF, Inc.
154. CPS Associates, Inc.
155. C.A.C.O. Services, Inc.
156. Desert Springs Hospital, Inc.
157. Employee Assistance Services, Inc.
158. Florida Health Facilities, Inc.
159. Gulf Coast EAP Services, Inc.
160. Gwinnett Immediate Care Center, Inc.
161. HCS, Inc.
162. Holcomb Bridge Immediate Care Center, Inc.
163. Hospital Investors, Inc.
164. Mandarin Meadows, Inc.
165. Metropolitan Hospital, Inc.
166. Middle Georgia Hospital, Inc.
167. Pacific - Charter Medical, Inc.
168. Southeast Behavioral Systems, Inc.
169. Rivoli, Inc.
170. Shallowford Community Hospital, Inc.
171. Sistemas De Terapia Respiratoria S.A., Inc.
172. Stuart Circle Hospital Corporation
173. Charter Medical of Florida, Inc.
174. Western Behavioral Health Systems, Inc.
175. Schizophrenia Treatment and Rehabilitation, Inc.
176. NEPA - Massachusetts, Inc.
177. NEPA - New Hampshire, Inc.
178. Charter Behavioral Health System at Manatee
Palms Therapeutic Group Home
179. Magellan Health Services, Inc.
180. Natioanl Mentor, Inc.
181. Massachusetts Mentor, Inc.
182. Illinois Mentor, Inc.
183. South Carolina Mentor, Inc.
184. Pennsylvania Mentor, Inc.
185. North Carolina Mentor, Inc.
186. Ohio Mentor, Inc.
187. National Mentor Healthcare, Inc.
<PAGE>
FOREIGN SUBSIDIARIES
- --------------------
1. Charter Medical (Cayman Islands) Ltd.
2. Charter Medical International, Inc.
3. Charter Medical of England Limited
4. Charter Medical of Puerto Rico
NOTE: (1) Tampa Bay Behavioral Health Alliance, Inc. changed its name to Charter Medical of Florida, Inc. on 6/14/94.
(2) Charter Behavioral Health System of Wahsington, D.C., Inc. was dissolved on June 30, 1994.
(3) Peachford Professional Network, Inc, changed its name to Southeast Behavioral Systems, Inc. on October 20, 1994.
(4) Charter Psychiatric Hospitals, Inc. changed its name to Charter Acquisition Subsidiary, Inc. on November 28, 1994.
(5) Charter Colonial Institute was dissolved on December 19, 1994.
(6) Charter Behavioral Health System of Virginia Beach, Inc., Charter Tidewater Behavioral Health System, Inc. and
Charter Serenity Lodge Behavioral Health System, Inc. were sold in a stock sale on January 6, 1995.
(7) Charter Behavioral Health System at Warwick Manor, Inc. changed its name to Charter Behavioral Health System of
Delmarva, Inc. on February 27, 1995.
</TABLE>
<PAGE>
Exhibit A to
Amendment No. 5 to
Second Amended and Restated Credit Agreement
--------------------------------------------
CONSENT SOLICITATION
--------------------
<PAGE>
CHARTER
Charter, which was incorporated in 1969 under the laws of the State of
Delaware, is a behavioral healthcare company. At December 31, 1994, Charter
operated 111 acute care psychiatric hospitals and two residential treatment
centers with an aggregate capacity of 9,737 licensed beds. Additionally, all of
Charter's hospitals operate partial hospitalization programs, and Charter
operations 98 oiutpatient centers, staffed by mental health professionals. The
principal executive offices of Charter are located at 3414 Peachtree Road, N.E.,
Atlanta, Georgia 30326. Charter's telephone number is (404) 841-9200.
Charter's business strategy is to develop and operate integrated behavioral
heatlhcare delivery systems in certain markets in which it presently operates
one or more hospitals and in selected other markets in which Charter does not
presently operate a hospital. The integrated delivery systems that Charter is
developing offer a comprehensive range of behavioral healthcare services
including inpatient treatment, day and partial hospitalization services, group
and individual outpaiten treatment, and residential and other less intensive
services. Charter is establishing such systems by using its hospitals as a base
and by arranging for other services through acquisitions, contracts or
affiliations with physicians, psychologists and other mental health
professionals and, in some markets, with general acute care hospitals and other
institutional healthcare providers. Charter also is developing information
systems that will assist in the integration of the financing and delivery of
behavioral healthcare services.
THE PROPOSED AMENDMENT
As amended by the Proposed Amendment, the definition of "Net Income" in
Section 1.01 of the Indenture will read as follows (revisions in bold):
"Net Income" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with
GAAP, excluding, however any gain or loss, together with any
related provision for taxes on such gain or loss, realized
in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale-and-leaseback
transactions), and excluding (i) any extraordinary gain or
loss, (II) IN THE CASE OF THE COMPANY'S FISCAL YEAR ENDING
SEPTEMBER 30, 1994 ANY UNUSUAL ITEMS, AND (III) IN THE
COMPANY'S FISCAL YEAR ENDING SEPTEMBER 30, 1995 OR
THEREAFTER UP TO $30 MILLION OF CHARGES FOR UNUSUAL ITEMS IN
THE AGGREGATE RELATING SOLELY TO SETTLEMENT OF CLAIMS OF
INSURANCE COMPANIES FOR AMOUNTS PREVIOUSLY PAID TO THE
COMPANY BY SUCH INSURANCE COMPANIES, together, IN EACH CASE,
with any related provision for taxes on such extraordinary
gain or loss OR UNUSUAL ITEMS.
EFFECTS AND PURPOSES OF THE PROPOSED AMENDMENT
EFFECTS. The current definition of Net Income in the Indenture excludes
any gian or loss, together with any related provision for taxes on such gain or
loss, realized in connection with any Asset Sale, and excludes extraordinary
gains and losses and related provisions for taxes. In Charter's 1994 fiscal
year ended September 30, 1994, Charter recorded a $71.3 million charge for
unusual items. Teh components of this unusual charge include (i) $37.5 million
(including interest) payable over three years to a group of insurance companies
to resolve disputes relating to claims paid predominantly in the 1980's, (ii) a
$23 million charge to write down certain facilities to their net realizable
value, and (iii) expenses relating to relocation of Charter's executive
offices. The 1994 unusual charge was similar to an extraordinary charge in
that the components of the unusual charge were infrequent. Charter is
negotiating with two insurance companies a resolution of claims similar to the
claims settled in fiscal 1994. Under the Proposed Amendment, the 1994 unusual
items and unusual items in fiscal 1995 or thereafter of up to an aggregate of
$30 million would be excluded from Net Income in the same way that extra-
ordinary charges are presently excluded from the definition of Net Income.
<PAGE>
<TABLE>
Exhibit B to
Amendment No. 5 to
Second Amended and Restated Credit Agreement
--------------------------------------------
ACQUIRED MENTOR EBITDA'S
------------------------
<CAPTION>
Acquired
Month Mentor EBITDA
----- -------------
<S> <C>
March, 1994 $ 376,251
April, 1994 445,021
May, 1994 503,614
June, 1994 510,388
July, 1994 559,105
August, 1994 558,127
September, 1994 568,828
October, 1994 605,579
November, 1994 529,353
December, 1994 533,201
January, 1995 547,822
-------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 3 AND 4 OF THE COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 69,181,000
<SECURITIES> 0
<RECEIVABLES> 219,655,000
<ALLOWANCES> 0
<INVENTORY> 6,548,000
<CURRENT-ASSETS> 310,660,000
<PP&E> 609,750,000
<DEPRECIATION> 75,352,000
<TOTAL-ASSETS> 1,020,926,000
<CURRENT-LIABILITIES> 216,951,000
<BONDS> 560,584,000
<COMMON> 7,093,000
0
0
<OTHER-SE> 65,399,000
<TOTAL-LIABILITY-AND-EQUITY> 1,020,926,000
<SALES> 563,658,000
<TOTAL-REVENUES> 563,658,000
<CGS> 0
<TOTAL-COSTS> 466,128,000
<OTHER-EXPENSES> 84,314,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,401,000
<INCOME-PRETAX> (14,185,000)
<INCOME-TAX> (566,000)
<INCOME-CONTINUING> (14,751,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,751,000)
<EPS-PRIMARY> (.53)
<EPS-DILUTED> 0
</TABLE>
