<PAGE> 1
As filed with the Securities and Exchange Commission on August 15, 1995
REGISTRATION NO. 33-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
CHAMPION HEALTHCARE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 14340 TORREY CHASE, SUITE 320 58-2283872
(State of Other Jurisdiction HOUSTON, TEXAS 77014 (I.R.S. Employer
of Incorporation or Organization) (713) 583-5491 Identification No.)
(Address including zip code, and
telephone number, including area
code of Registrants)
</TABLE>
JAMES G. VANDEVENDER, EXECUTIVE VICE-PRESIDENT
CHAMPION HEALTHCARE CORPORATION
14340 TORREY CHASE, SUITE 320
HOUSTON, TEXAS 77014
713-583-5491
(Name, address, including zip code, telephone number,
including area code of Agent for Service):
With Copy to
WAYNE M. WHITAKER
MICHENER, LARIMORE, SWINDLE, WHITAKER, FLOWERS, SAWYER, REYNOLDS & CHALK, L.L.P.
3500 CITY CENTER TOWER II
301 COMMERCE STREET
FORT WORTH, TEXAS 76102
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this registration.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
TITLE OF AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(1)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$0.01 par value 422,538 $7.28 $3,076,077 $1,061
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee and based upon the average of the high and low
prices on the American Stock Exchange on August 11, 1995.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED August 15, 1995
PROSPECTUS
422,538 SHARES
CHAMPION HEALTHCARE CORPORATION
COMMON STOCK
$0.01 PAR VALUE
The 422,538 shares of Common Stock of Champion Healthcare Corporation
(the "Company") offered by this Prospectus are being offered by the selling
shareholders (the "Selling Shareholders") named herein. No part of the proceeds
of the offering of these shares will be received by the Company.
The Company has been advised that sales of the shares may be made from
time to time by or for the account of the Selling Shareholders on the American
Stock Exchange, in the over-the-counter market, in private transactions, or
otherwise, through broker-dealers. These sales will be made either at market
prices prevailing at the time of sale or at negotiated prices. Broker-dealers
may either act as agent for a Selling Shareholder or may purchase any of the
shares as principal and thereafter may sell such shares from time to time in
transactions on the American Stock Exchange or in the over-the-counter market at
market prices prevailing at the time of sale or at negotiated prices.
A Selling Shareholder may be considered to be an underwriter within the
meaning of the Securities Act of 1933, with respect to the Common Stock offered
hereby, although no Selling Shareholder hereby admits to being of such status.
Pursuant to an agreement with the Company, all expenses incurred by the
Company in connection with this offering are to be borne by the Company except
for brokers' commissions, taxes and other similar selling expenses which are to
be borne by the Selling Shareholders.
Sales of these 422,538 shares on behalf of the Selling Shareholders
under this Prospectus will terminate 120 days after the date hereof.
The closing price per share of the Common Stock of the Company on the
American Stock Exchange on August 11, 1995, was $7.125.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
**********
The date of this Prospectus is August 15, 1995.
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), in Washington, D.C., a registration statement on Form S-3
(together with all amendments and exhibits, referred to as the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Shares. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information pertaining to the Shares and the Company, reference is made
to the Registration Statement. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Commission.
Reports, proxy statements and other information filed by the Company, including
the Registration Statement, can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661-2511; and at Room 1400, 75 Park Place, New York, New
York 10007; and copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
The Company's Common Stock is traded on the American Stock Exchange and
reports, proxy statements and other information can be inspected at such
exchange at 86 Trinity Place, New York, New York 10006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
Company's: (i) Annual Report on Form 10-K for the year ended December 31, 1994
(as amended by Form 10-K/A Amendment No. 3); (ii) Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995; and (iii) Current Report on Form 8-K dated
April 13, 1995 (as amended by Form 8-K/A Amendment No. 1). All documents filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination of
the offering of the Shares described in this Prospectus shall be deemed to be
incorporated herein by reference and to be a part hereof from the respective
dates of the filing of such documents.
In addition the Company hereby incorporates in this Prospectus by
reference the following:
(1) For AmeriHealth, Inc.
From its Form 10-K dated December 31, 1993, as amended;
Consolidated Statement of Financial Position as of December 31,
1993 and 1992;
Consolidated Statement of Operations for the years ended
December 31, 1993 and 1992;
Consolidated Statement of Cash Flows for the years ended
December 31, 1993 and 1992;
Consolidated Statement of Shareholders' Equity for the years
ended December 31, 1993 and 1992;
Notes to Consolidated Financial Statements; and
Report of Independent Public Accountants.
From the Company's Form 8-K/A Amendment No. 2, dated December
6, 1994;
Condensed Consolidated Statement of Operations for the eleven
months ended November 30,1994 (Unaudited);
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<PAGE> 4
Condensed Consolidated Statement of Cash Flows for the eleven
months ended November 30,1994 (Unaudited); and
Notes to Condensed Consolidated Financial Statements
(Unaudited).
(2) For Gulf Coast Hospital
From the AmeriHealth, Inc. Proxy Statement dated November 11,
1994, as amended;
Condensed Statement of Operations for the eight months ended
August 31, 1992 (Unaudited);
Condensed Statement of Cash Flows for the eight months ended
August 31, 1992 (Unaudited); and
Notes to Condensed Financial Statements (Unaudited).
(3) For Psychiatric Healthcare Corporation
From the AmeriHealth, Inc. Proxy Statement dated November 11,
1994, as amended;
Consolidated Statement of Operations for the year ended
December 31, 1993;
Consolidated Statement of Cash Flows for the year ended
December 31, 1993; and
Report of Independent Auditors.
From the Company's Form 8-K/A Amendment No. 1, dated December
6, 1994;
Condensed Consolidated Statement of Operations for the nine
months ended September 30, 1994 (Unaudited);
Condensed Consolidated Statement of Cash Flows for the nine
months ended September 30,1994 (Unaudited); and
Notes to Condensed Consolidated Financial Statements
(Unaudited).
(4) For Dakota Hospital
From the Company's Form 8-K dated December 21,1994;
Dakota Hospital Balance Sheets dated September 30, 1993 and
1994;
Dakota Hospital Statements of Revenue and Expenses and Changes
in Fund Balance for the years ended September 30, 1993
and 1994;
Dakota Hospital Statements of Cash Flows for the years ended
September 30, 1993 and 1994;
Notes to Financial Statements; and
Independent Auditor's Report.
From the Company's Form 8-K/A Amendment No. 2 dated December
21, 1994;
Condensed Statement of Revenue and Expenses and Changes in Fund
Balance for the three months ended December 31, 1994
(Unaudited);
Condensed Statement of Cash Flows for the three months ended
December 31, 1994 (Unaudited); and
Notes to Condensed Financial Statements (Unaudited).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
-3-
<PAGE> 5
The Company will provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein, other than
certain exhibits to such documents. Such requests should be addressed to James
G. VanDevender, Executive Vice-President, Champion Healthcare Corporation, 14340
Torrey Chase, Suite 320, Houston, Texas 77014; telephone (713) 583-5491.
THE COMPANY
Champion Healthcare Corporation ( including, where appropriate, its
wholly-owned and majority-owned subsidiaries and controlled partnerships, the
"Company"), is engaged in the ownership and management of general acute care and
specialty hospitals and related health care facilities. The Company currently
owns and operates five general acute care hospitals with a total of 716 licensed
beds in Alabama, North Dakota, Texas, Utah and Virginia, two psychiatric
hospitals with a total of 219 licensed beds in Missouri and Louisiana and one
skilled nursing facility with a total of 72 licensed beds in Alabama. The
Company also owns a 50% interest in a partnership that owns and operates two
general acute care hospitals with a total of 341 licensed beds in Fargo, North
Dakota which it accounts for under the equity method of accounting. The
Company's principal executive offices are located at 14340 Torrey Chase, Suite
320, Houston, Texas 77014, and its telephone number is (713) 583-5491.
On December 6, 1994, the Company merged with AmeriHealth, Inc. ("AHH"),
a Delaware corporation, with AHH being the surviving corporation (the "Combined
Company") resulting from the merger (the "Merger"). The merger was accounted for
as a recapitalization of the Company with the Company as the acquiror (a reverse
acquisition). Concurrent with the merger, the name of the Combined Company was
changed to Champion Healthcare Corporation, and the Combined Company adopted the
Company's certificate of incorporation provisions. The Company's common stock
trades on the American Stock Exchange under the symbol "CHC".
THE SELLING SHAREHOLDERS AND THE OFFERED SHARES
BACKGROUND. In connection with the Merger, the Company, AHH, Lenox
Healthcare, Inc. ("Lenox"), and certain other individuals (together with Lenox,
the "Lenox Group") on October 17, 1994, entered into an agreement (the "Lenox
Agreement") providing, among other things, that the Company would provide
certain registration rights for any shareholder of AHH (including members of the
Lenox Group) holding shares of the Common Stock whose trading was restricted
(other than affiliates of the Company who remained affiliates after the Merger).
AGREEMENT WITH SELLING SHAREHOLDERS. Under the Lenox Agreement the
Company agreed to use its best efforts to cause a registration statement to
become and remain effective for a period of 120 days and the Company agreed to
pay all expenses incurred by it in connection with the registration of the
Shares; provided, however, the Company is not required to pay or reimburse any
expenses incurred by the Selling Shareholders in connection with the
registration of the Shares or underwriting discounts and commissions.
The Company agreed in the Lenox Agreement to indemnify the Selling
Shareholders against certain civil liabilities, including liabilities under the
Securities Act and the Exchange Act. In addition, certain Selling Shareholders
have agreed in the Lenox Agreement to indemnify the Company, its directors and
officers and each person, if any, who controls the Company within the meaning of
either the Securities Act or the Exchange Act against certain liabilities
including civil liabilities under the Securities Act.
-4-
<PAGE> 6
Selling Shareholder Information. The following table sets forth
information with respect to the Selling Shareholders:
<TABLE>
<CAPTION>
Amount of
Relationship with Amount of Amount of Common Stock
Company during Common Stock Owned Common Stock Owned After
Name Last Three Years Prior to Offering Offered Offering(1)
---- ----------------- ------------------ ------------ ------------
<S> <C> <C> <C> <C>
Stockbridge Investment None 101,690 101,690 -0-
Partners, Inc.
Lenox Healthcare, Inc. None 54,175 54,175 -0-
John L. Hunt None 28,052 28,052 -0-
John C. Orestis None 28,052 28,052 -0-
Patricia E. Greenberg None 31,734 26,475 5,259
Alan Gordich None 184,094 184,094 -0-
</TABLE>
(1) Assumes that the Selling Shareholders sell all the Common Stock offered
hereby.
DIVIDENDS
Other than a distribution of $0.085 per share paid to the shareholders
of the common stock of AHH in connection with the Merger, the Company has not
paid cash dividends on its Common Stock and does not anticipate the declaration
or payment of dividends on Common Stock for the foreseeable future. Payment of
cash dividends, if any, in the future will be determined by the Company's Board
of Directors in light of the Company's earnings, financial condition and other
relevant considerations. Currently, payments of cash dividends or other
distributions or repurchases of any capital stock is prohibited by the Company's
Senior Bank Loan Agreement. Cash dividends on Common Stock are also prohibited
under the Company's subordinated debt agreements. Further, agreements with the
Company's preferred shareholders and the Company's Certificate of Incorporation,
as amended, contain provisions that limit the payment of dividends on Common
Stock. The Company has outstanding five classes of Preferred Stock, each of
which ranks senior to the Common Stock with respect to the declaration and
payment of dividends. See "Description of Capital Stock - Preferred Stock".
PRICE RANGE OF COMMON STOCK
The common stock price is regularly quoted on the American Stock
Exchange Composite Transaction Listing under the ticker symbol "CHC". Prior to
the Merger the shares of AHH were traded under the symbol "AHH".
For purposes of reporting stock information, AHH is considered the
predecessor of the Company; accordingly, the following table sets forth the high
and low sales prices for the common stock of AHH through December 6, 1994, the
date of the Merger, and the Company thereafter. The sales prices have been
adjusted to reflect the effect of a 5.70358 to 1 reverse stock split effective
December 6, 1994.
-5-
<PAGE> 7
<TABLE>
<CAPTION>
JANUARY 1, 1995 TO
TO AUGUST 11, 1995 1994 1993
------------------ ---- ----
HIGH LOW HIGH LOW HIGH LOW
---- --- ---- --- ---- ---
<C> <C> <C> <C> <C> <C> <C>
1st Quarter $9.13 $7.50 $4.63 $3.21 $9.63 $5.35
2nd Quarter $8.625 $6.25 $5.70 $3.21 $8.20 $4.28
3rd Quarter $7.875 $6.75 $6.42 $3.21 $5.35 $3.21
4th Quarter $10.00 $6.42 $4.63 $2.85
</TABLE>
INFORMATION REGARDING CAPITAL STOCK
COMMON STOCK.
The Company has authority to issue 25,000,000 shares of Common Stock,
$0.01 par value ("Common Stock"), of which approximately 4,243,975 shares are
issued and outstanding as of April 10, 1995. (The foregoing number of
outstanding shares does not take into account the conversion of any shares of
Preferred Stock or the exercise of any options, warrants or other rights.)
Holders of Common Stock are entitled to such dividends as may be
declared from time to time by the Board of Directors of the Company in its
discretion, on a ratable basis, out of funds legally available therefor, and to
a pro rata share of all assets available for distribution upon liquidation,
dissolution or winding up of the affairs of the Company, after payment of debts
and liquidation preferences of the Preferred Stock (as described below).
Payments of dividends and/or distributions in respect of the Common Stock can
only be made if funds for the same are available after payment (or provisions
for such payments) have been made in respect of Preferred Stock. Certain credit
agreements of the Company prohibit the payment of dividends. See "Dividends".
Each share of Common Stock entitles the holder thereof to one vote. Under the
Company's Certificate of Incorporation and Bylaws, no rights to cumulative
voting exist for the election of the directors of the Company, which means that
the holders of more than 50% of the shares voting for the election of the
directors can elect 100% of the Directors if they choose to do so. The holders
of the remaining shares may therefore not be able to elect any person or persons
to the Board of Directors. Holders of Common Stock, as such, do not have
preemptive rights to subscribe for any securities of the Company. All of the
outstanding shares of the Company are fully paid and non-assessable.
Mellon Securities Transfer Services, 85 Challenger Road, Overpeck
Centre, Ridgefield Park, New Jersey 07660, is the transfer agent for the Common
Stock.
PREFERRED STOCK.
SERIES D -- The Company has authority to issue 2,200,000 shares of
Series D Cumulative convertible preferred stock, $0.01 par value ("Series D"),
of which 2,112,819 shares are issued and outstanding as of April 10, 1995. Each
share of the Series D preferred stock is convertible, at the holder's option,
into two shares of Common Stock until redemption date. The conversion rate is
subject to adjustment upon the sale or issuance by the Company of additional
Common Stock, including stock rights, options and convertible securities, for
consideration less than the conversion price in effect immediately prior to the
sale or issuance in question. The Series D shares are mandatorily redeemable on
June 1, 2000 at $18.00 per share plus any accrued and unpaid dividends. Subject
to certain limitations, Series D shareholders may require redemption of their
stock within 90 days of receipt of written notice from the Company of a Change
in Control Event or Default Event (as defined); and no redemption of Series D
shares shall occur unless all the outstanding Series C and Series D shares can
be redeemed, subject to prorations between Series D and Series C shares if
sufficient funds to redeem all such shares
-6-
<PAGE> 8
are not available. The term "Change in Control Event" is defined in the
Company's Certificate of Incorporation to include, generally, (i) certain
reductions in the amount of shares of Common Stock beneficially owned by Charles
R. Miller as of certain dates, (ii) the acquisition by certain persons of
beneficial ownership of securities representing 50% or more of combined voting
power of the Company's then outstanding voting securities, (iii) the sale,
transfer or other disposition of substantially all the Company's assets, (iv)
the merger or consolidation of the Company with or into another entity (other
than a wholly-owned subsidiary), which results in a reclassification,
conversion, exchange or cancellation of any outstanding shares of Common Stock
of the Company, (v) the Company proceeding to acquire its Common Stock or
undertaking a corporate reorganization or recapitalization or other action in
certain circumstances, and (vi) the liquidation or dissolution of the Company or
one or more of its subsidiaries. The term "Default Event" is defined in the
Company's Certificate of Incorporation to include, generally, (i) failure by the
Company to redeem the full number of shares of, or pay certain dividends on,
certain classes of Preferred Stock when required to do so, or the breach or
failure to perform certain covenants, (ii) any payment default under any
material evidence of indebtedness, (iii) acceleration of indebtedness due under
any material evidence of indebtedness, whether due to a payment or other
default, which renders the Company insolvent, (iv) breach or failure to perform
by the Company of certain covenants set forth in the Note and Stock Purchase
Agreement dated May 27, 1992 to which the Company is a party, (v) the occurrence
of a Change in Control Event, (vi) an "Event of Default" as defined in the Loan
Agreement among the Company and Banque Paribas, as Agent, dated as of May 31,
1995, (vii) breach or failure to perform by the Company of certain covenants in
the Company's Series D Note and Stock Purchase Agreement dated December 31,
1993, and (viii) the commencement by the Company of any proceedings under any
bankruptcy, reorganization, insolvency, readjustment of debts, dissolution or
other liquidation law of any jurisdiction, or an assignment for the benefit of
creditors or request for receivership. Dividends on the Series D shares accrue
at a rate of 8% of the stated value of $18.00 per share and are payable in cash
in certain events, including, among others, a Change in Control or a Successful
Secondary Public Offering of the Company's Common Stock resulting in receipt by
the Company of gross proceeds not less than $25,000,000 (the term "Successful
Secondary Public Offering" being defined in the Company Certificate of
Incorporation, however, as a registered public offering of Common Stock by the
Company following its merger with AmeriHealth, Inc. which shall have resulted in
receipt by the Company of gross proceeds of a minimum of $15,000,000). All
accrued dividends shall be paid upon conversion of Series BB through D preferred
stock. Series D preferred stock has preference to the Series A through Series C
preferred stock and Common Stock as to dividends and redemption and has
preference to Series C in liquidation.
The Company has the right to convert all or any shares of Series D into
Common Stock after a Successful Secondary Public Offering of the Company's
Common Stock (resulting in receipt by the Company of gross proceeds not less
than $25,000,000), provided that prior thereto or concurrently therewith all
outstanding Series A through Series C preferred stock shall also have been
converted.
SERIES C -- The Company has authority to issue 500,000 shares of
Series C cumulative convertible preferred stock, $0.01 par value ("Series C"),
of which 448,811 shares are issued and outstanding as of April 10, 1995. Each
share of the Series C preferred stock is convertible, at the holder's option,
into two shares of Common Stock until the redemption date. The conversion rate
is adjustable upon the same terms and conditions as the other series of
preferred stock. The Series C shares are mandatorily redeemable on June 1, 2000
at $18.00 per share plus any accrued and unpaid dividends; however, no
redemption of Series C shall occur unless all the outstanding Series C and
Series D shares can be redeemed, subject to prorations between Series D and
Series C shares if sufficient funds to redeem all such shares are not
available. Dividends on the Series C shares accrue at a rate of 8% of the
stated value of $18.00 per share and are payable in cash under certain events,
including, among others, a Change in Control or a Successful Secondary Public
Offering of the Company's Common Stock. As to dividends and redemption, the
Series C has preference to the Series A, A-1 and Common Stock and is generally
equal to the Series BB and Series D.
-7-
<PAGE> 9
The Company has the right to convert all or any shares of Series C into
Common Stock after a Successful Secondary Public Offering of the Company's
Common Stock, provided that prior thereto or concurrently therewith all
outstanding Series A, A-1, and BB preferred stock shall have been converted.
SERIES BB -- The Company has authority to issue 2,300,000 shares of
Series BB cumulative convertible preferred stock, $0.01 par value ("Series
BB"), of which 1,577,546 shares are issued and outstanding as of April 10,
1995. Each share of the Series BB preferred stock is convertible, at the
holder's option, into two shares of Common Stock until redemption date. The
conversion rate is adjustable upon the same terms and conditions as the other
series of preferred stock. The Series BB shares are mandatorily redeemable on
June 30, 2000 at $11.80 per share plus any accrued and unpaid dividends;
however, no redemption of Series BB shall occur prior to the redemption of
Series C and Series D preferred stock. Dividends on the Series BB shares accrue
at a rate of 8% of the stated value of $11.80 per share and are payable in cash
under certain events, including, among others, a Change in Control or a
Successful Secondary Public Offering of the Company's Common Stock. The Series
BB has preference to the Series A and A-1 convertible redeemable preferred
stock and Common Stock as to redemption, liquidation and dividends.
The Company has the right to convert all or any shares of Series BB
into Common Stock after a Successful Secondary Public Offering of the Company's
Common Stock, provided that prior thereto or concurrently therewith all
outstanding Series A and A-1 preferred stock shall have been converted.
SERIES B -- The Company has authority to issue 400,000 shares of Series
B $2.125 Increasing Rate Cumulative Convertible Preferred Stock $.01 par value
("Series B"); provided, however that any such issuance must first be approved
by unanimous consent of the holders of all Series A, A-1, BB, C and D Preferred
Stock. There are currently no shares of Series B preferred stock outstanding
and the Company has no intention to issue any such shares.
SERIES A-1 -- The Company has authority to issue 6,500,000 shares of
Series A-1 convertible preferred stock, $0.01 par value ("Series A-1"), of which
2,769,109 shares are issued and outstanding as of July 1, 1995. Series A-1
preferred stock is convertible, at the holder's option, into Common Stock at a
conversion rate of one share of Common Stock for each four shares of Series A-1
preferred stock. The conversion rate is adjustable upon the same terms and
conditions as the other series of preferred stock. Series A-1 shares are
mandatorily redeemable, at the holder's option, at $1.00 per share within 90
days of receipt of written notice of a Change in Control Event or a Default
Event; however, no redemption of Series A-1 shall occur prior to the redemption
of Series BB through Series D preferred stock. Dividends on Series A-1 accrue at
a rate of $.08 per share per annum cumulative and accruing from December 28,
1993. Prior to December 28, 1993, cumulative dividends accrued from the date of
issuance at a dividend rate of $0.0467 per share per annum. Dividends are
payable in Common Stock and/or cash in the event of a Change in Control, subject
to the Company's existing agreement with senior secured lenders and the approval
of two-thirds of all outstanding Series BB, C and D preferred stock. Subject to
the prior liquidation rights of the Series BB through D preferred shareholders,
the Series A-1 preferred shareholders shall receive liquidation payments of
$1.00 per share plus all accrued but unpaid dividends or ratable payments among
all Series A and A-1 preferred shareholders if less than $1.00 plus all accrued
but unpaid dividends are available.
The Company has the right to convert the shares of Series A-1 into
Common Stock after a Successful Secondary Public Offering, or upon a qualified
merger, consolidation or other similar transaction, as defined.
SERIES A -- The Company has authority to issue 3,500,000 shares of
Series A cumulative convertible preferred stock, $0.01 par value ("Series A"),
of which 3,500,000 shares are issued and outstanding as of July 1, 1995. Series
A preferred stock is convertible, at the holder's option, into Common Stock at
a conversion rate of 1 share of Common Stock for each 3.685 shares of Series A
preferred stock. All other rights and preferences that apply to Series A-1
preferred stock apply to Series A preferred stock.
-8-
<PAGE> 10
VOTING RIGHTS FOR SERIES A, A-1, BB, C, AND D PREFERRED STOCK. All
series of preferred stock have voting rights on all matters according to the
number of common shares into which the preferred stock is convertible at the
time of any shareholders' vote. The issuance of a new class of stock or the
increase of shares within an existing class of stock that either ranks on parity
with or is superior to a given series of preferred stock as to dividends,
redemption and liquidation requires the following approvals by the then
outstanding class or classes: (1) 66.66% of Series A and A-1 voting together as
a class; (2) 75% of Series BB and C, voting together as a class; and (3) 75% of
Series D, voting as a class. No amendment of voting powers, designations,
preferences or rights and no amendments of Articles or Bylaws that materially
adversely affect the rights of Series A, BB, C, and D preferred stock shall
occur without the following approvals by then outstanding class or classes: (1)
90% vote of Series A, voting as a class; (2) 90% of Series BB and C, voting
together as a class; and (3) 90% of the Series D, voting as a class. Upon the
occurrence of a Default Event, the preferred stock shareholders will have the
right to enlarge the Board of Directors and elect a controlling number of
directors as described in a Change in Control Event in the section entitled
"Certain Anti-Takeover Provisions" herein below.
At January 31, 1995, preferred stock was convertible into Common Stock
as follows:
<TABLE>
<CAPTION>
PREFERRED CONVERSION COMMON
STOCK RATIO SHARES
----- ----- ------
<S> <C> <C> <C>
Series D 2,112,819 2:1 4,225,638
Series C 448,811 2:1 897,622
Series BB 1,577,546 2:1 3,155,092
Series A-1 2,769,109 1:4 692,277
Series A 3,500,000 1:3.685 949,796
---------- ---------
Total 10,408,285 9,920,425
========== =========
</TABLE>
VOTING AGREEMENT FOR ELECTION OF DIRECTORS
The holders of all classes of the Company's preferred and common stock
and the Company executed on December 31, 1993, the D Stockholders Agreement (the
"D Agreement"), which contains, among other things, a voting agreement that
requires that the Board of Directors consist of eight persons and provides
nominee designation rights among specified groups (and agreed voting) for each
of these eight positions. The D Agreement was amended in the connection with the
December 6, 1994 merger to provide for two additional directors of the Company,
which seats were filled by William G. White and Richard D. Sage, two of the
former directors of AHH. By virtue of the voting control that the preferred
shareholders have in the Company as noted above, such shareholders will, by
virtue of the D Agreement, determine who is elected to the Board of Directors of
the Company. Neither the Certificate of Incorporation or the Bylaws of the
Company provide for cumulative voting rights to elect directors.
In addition to the voting rights, the D Agreement contains restrictions
on transfers of stock, and limited preemptive rights to future Common Stock
issues or sales by the Company.
CERTAIN ANTI-TAKEOVER PROVISIONS
Under the terms of the Company's Certificate of Incorporation, as
amended, the occurrence of a "Change in Control Event" results in a "Default
Event". During the period of a "Default Event," the control of the Board of
Directors changes such that a majority of the seats shall be held by nominees
elected by the Series D preferred shareholders, and a majority of the remaining
seats shall be filled by the nominees elected by the holders of the Series A,
A-1, BB and C Preferred Stock voting as a class.
In addition, upon a Change in Control Event or a Default Event, the
holders of Series A, A-1, BB, C and D Preferred Stock have redemption rights.
-9-
<PAGE> 11
LEGAL MATTERS
Certain legal matters with respect to the Shares will be passed upon
for the Company by Michener, Larimore, Swindle, Whitaker, Flowers, Sawyer,
Reynolds & Chalk, L.L.P. ("Michener Larimore"), 3500 City Center Tower II, 301
Commerce Street, Fort Worth, Texas 76102. Certain partners and associates of
Michener Larimore are common Shareholders of the Company.
EXPERTS
The consolidated balance sheets of Champion Healthcare Corporation and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of operations, shareholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1994, and related consolidated
financial statement schedules, which appear in Champion Healthcare Corporation's
Annual Report on Form 10-K/A Amendment No.3 for the year ended December 31,
1994, have been incorporated herein in reliance upon the report, dated March 30,
1995 of Coopers & Lybrand L.L.P., independent auditors, incorporated by
reference herein, and upon the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of AmeriHealth, Inc. and
subsidiaries as of December 31, 1993 and 1992, appearing in AmeriHealth Inc.'s
Annual Report (Form 10K, as amended) for the year ended December 31, 1993, and
incorporated herein by reference, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such report contains an explanatory paragraph
with respect to the existence of substantial doubt regarding the ability of
AmeriHealth to continue as a going concern mentioned in Note B to the
consolidated financial statements. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Psychiatric Healthcare
Corporation (formerly Pinnacle Healthcare Corporation) and subsidiaries as of
December 31, 1993, included in the AmeriHealth Proxy Statement dated
November 11, 1994, as amended, and incorporated herein by reference, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The balance sheets of Dakota Hospital as of September 30, 1994 and
1993, and the related statements of revenues, fund balances, and cash flows for
each of the years in the two-year period ended September 30, 1994, which appear
in the Company's Report on Form 8-K dated December 21, 1994, have been
incorporated herein in reliance upon the report, dated November 8, 1994 (except
for Note 13 as to which the date is December 21, 1994) of Charles Bailly &
Company P.L.L.P., independent auditors, incorporated by reference herein, and
upon the authority of said firm as experts in auditing and accounting.
The consolidated balance sheets of Salt Lake Regional Medical Center
and subsidiaries as of April 13, 1995 and May 31, 1994 and the related
statements of income, equity, and cash flows for the period from June 1, 1994
through April 13, 1995 and the year ended May 31, 1994, respectively, which
appear in the Company's Report on Form 8-K/A Amendment No.1 dated April 13,
1995, have been incorporated herein in reliance upon the report, dated June 11,
1995 of Coopers & Lybrand L.L.P., independent auditors, incorporated by
reference herein, and upon the authority of said firm as experts in auditing and
accounting.
-10-
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will bear all expenses in connection with the issuance and
distribution of the Shares, including those set forth below.
<TABLE>
<S> <C> <C>
Registration Fee $ 1,061
Blue Sky Fees and Expenses (including counsel fees)* 1,000
Legal Fees and Expenses* 10,000
Accounting Fees and Expenses* 30,000
Miscellaneous* 939
-------
Total $43,000
=======
</TABLE>
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides,
generally, that a corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any suit or proceeding
(except actions by or in the right of the corporation) by reason of the fact
that such person is or was a director or officer of the corporation against all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such 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. A corporation may similarly indemnify such person for expenses
actually and reasonably incurred by him in connection with the defense or
settlement of any action or suit by or in the right of the corporation, provided
such person 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, in the case of
claims, issues and matters as to which such person shall have been adjudged
liable to the corporation, provided that a court shall have determined, upon
application, that, despite the adjudication of liability but in view of all of
the facts and circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Section 102(b)(7) of the DGCL provides, generally, that the certificate
of incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
may not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its shareholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of Title 8 of the DGCL, or
(iv) for any transaction from which the director derived an improper personal
benefit. No such provision may eliminate or limit the liability of a director
for any act or omission occurring prior to the date when such provision becomes
effective.
Article VI of the Company's Certificate of Incorporation provides as
follows:
"A director of the Corporation shall not be personally liable
to the corporation or its shareholders for monetary damages for any
breach of fiduciary duty as a director, except for liability (i) for
any breach by the director of his duty of loyalty to the Corporation or
its shareholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct
II-1
<PAGE> 13
or a knowing violation of law, (iii) under Section 174 of the DGCL or
(iv) for any transaction from which the director derived an improper
personal benefit.
No repeal, modification or amendment of, or adoption of any
provision inconsistent with this Article VI nor, to the fullest extent
permitted by law, any modification of law shall adversely affect any
right or protection of a director of the Corporation existing at the
time of such repeal, amendment, adoption of modification or affect the
liability of any director of the Corporation for any action taken or
any omission that occurred prior to the time of such repeal, amendment,
adoption or modification.
If the DGLC, shall be amended after the date hereof to
authorize corporation action further eliminating or limiting the
liability of directors, then a director of the Corporation, in addition
to the circumstances in which he is not liable immediately prior to
such amendment, shall be free of liability to the fullest extent
permitted by the DGLC, as so amended."
Article VII of the Company's by-laws also contains an indemnity
provision, requiring the Company to indemnify members of the Board of Directors
and officers of the Company and their respective heirs, personal representatives
and successors in interest, to the extent provided by the Delaware Corporation
statutes and by the Company's Certificate of Incorporation.
The Company may purchase liability insurance policies covering its
directors and officers.
In addition, certain Selling Shareholders have agreed in the Lenox
Agreement to indemnify the Company, its directors and officers and each person,
if any, who controls the Company within the meaning of either the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, against
certain liabilities including civil liabilities under the Securities Act.
ITEM 16. EXHIBITS.
4.01(a) Form of Common Stock certificate of the registrant.
4.01(b)* Certificate of Incorporation, as amended (Incorporated by
reference to Exhibit 3.01 of the registrant's Form 10-K for the
year ended December 31, 1987 and to Exhibit 4 of the
registrant's Form 10-Q for the quarter ended September 30,
1989).
4.01(c)* Amended Certificate of Incorporation dated December 6, 1994
(Incorporated by reference to Exhibit 3.01(b) of the
registrant's Form 10-K for the year ended December 31, 1994).
4.01(d) Bylaws as amended, of the Registrant.
5** Opinion of Michener, Larimore, Swindle, Whitaker, Flowers,
Sawyer, Reynolds & Chalk, L.L.P., counsel to registrant.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young LLP
23.3** Consent of Charles Bailly & Company, P.L.L.P.
23.4 Consent of Coopers & Lybrand L.L.P.
23.5** Consent of Michener, Larimore, Swindle, Whitaker, Flowers,
Sawyer, Reynolds & Chalk, L.L.P. (included in Exhibit 5).
II-2
<PAGE> 14
24 Powers of Attorney (included herein at page II-5)
----------------------------------------------
* Incorporated by reference as indicated.
** To be filed by Amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that the undertakings set forth in paragraph
(1)(i) and (1)(ii) above do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in this
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the registrant pursuant to the
provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the
II-3
<PAGE> 15
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer, on controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel that matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on August 15, 1995.
CHAMPION HEALTHCARE
CORPORATION
BY: /s/ James G. VanDevender
---------------------------
James G. VanDevender
Executive Vice-President,
Chief Financial Officer and
Director
II-4
<PAGE> 16
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James G. VanDevender, Deborah H.
Frankovich, Suzanne S. Miskin, Esq, and Wayne M. Whitaker, Esq., and each of
them, his true and lawful attorneys-in-fact and agents with full power of
substitution and re-substitution for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any state Securities regulatory board,
agency or commission, granting unto said attorneys-in-fact and agents and each
of them full power and authority, to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, to all intents and
purposes and as fully as they might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ CHARLES R. MILLER President, CEO & Director August 15, 1995
------------------------
Charles R. Miller
/s/ JAMES G. VANDEVENDER Executive Vice-President, CFO
------------------------ and Director
James G. VanDevender August 15, 1995
/s/ NOLAN LEHMANN Director August 15, 1995
------------------------
Nolan Lehmann
/s/ PAUL B. QUEALLY Director August 15, 1995
------------------------
Paul B. Queally
/s/ JAMES A. CONROY Director August 15, 1995
------------------------
James A. Conroy
/s/ DAVID S. SPENCER Director August 15, 1995
------------------------
David S. Spencer
/s/ Director
------------------------
Scott F. Meadow
/s/ MANUEL M. FERRIS Director August 15, 1995
------------------------
Manuel M. Ferris
/s/ WILLIAM G. WHITE Director August 15, 1995
------------------------
William G. White
/s/ Director
------------------------
Richard D. Stage
/s/ ROBERT M. STARLING Vice President and Controller August 15, 1995
------------------------
Robert M. Starling
</TABLE>
II-5
<PAGE> 17
INDEX TO EXHIBITS
Exhibit
Number
4.01(a) Form of Common Stock certificate of the registrant.
4.01(b)* Certificate of Incorporation, as amended (Incorporated by reference
to Exhibit 3.01 of the registrant's Form 10-K for the year ended
December 31, 1987 and to Exhibit 4 of the registrant's Form 10-Q
for the quarter ended September 30, 1989).
4.01(c)* Amended Certificate of Incorporation dated December 6, 1994
(Incorporated by reference to Exhibit 3.01(b) of the registrant's
Form 10-K for the year ended December 31, 1994).
4.01(d) Bylaws as amended, of the Registrant.
5** Opinion of Michener, Larimore, Swindle, Whitaker, Flowers, Sawyer,
Reynolds & Chalk, L.L.P., counsel to registrant.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young LLP
23.3** Consent of Charles Bailly & Company, P.L.L.P.
23.4 Consent of Coopers & Lybrand L.L.P.
23.5** Consent of Michener, Larimore, Swindle, Whitaker, Flowers, Sawyer,
Reynolds & Chalk, L.L.P. (included in Exhibit 5).
24 Powers of Attorney (included herein at page II-5).
------------------------------------------------------------------
* Incorporated by reference as indicated.
** To be filed by Amendment.
<PAGE> 1
General Description of
Champion Healthcare Corporation
Common Stock Certificate
The front of the certificate is engraved with blue ornamental border and
additional blue ornamentation upon white paper, bearing a stylized letter design
of the words "Champion Healthcare Corporation" in dark blue and substantive text
in black.
The back of the certificate bears no border and no ornamentation except
for the stylized letter design of the words "Champion Healthcare Corporation" in
black. All text is in black.
<PAGE> 2
[Form of Common Stock Certificate]
[Front]
Number CHAMPION HEALTHCARE Shares
CHC CORPORATION
---- ------
COMMON STOCK
THIS CERTIFICATE IS INCORPORATED UNDER THE LAWS CUSIP 15850B 10 4
TRANSFERABLE OF THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN
IN NEW YORK, NEW YORK DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE COMMON SHARES, WITH A PAR VALUE OF $.01 PER
SHARE, OF
Champion Healthcare Corporation transferable in person or by duly authorized
attorney on the books of the Corporation upon surrendering of this certificate
properly endorsed. This certificate is not valid until countersigned and
registered by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
CERTIFICATE OF STOCK
Dated:
/s/Charles R. Miller
President Countersigned and Registered:
/s/James G. VanDevender [FACSIMILE CORPORATE SEAL] MELLON SECURITIES TRUST
Secretary COMPANY
(NEW YORK)
Transfer Agent and Registrar
By:
Authorized Signature
<PAGE> 3
[Form of Common Stock Certificate]
[Back]
CHAMPION HEALTHCARE
CORPORATION
The Company will furnish upon request and without charge to each
stockholder the powers, designations, preferences and relative participating,
optional and other special rights of each class of stock and series within a
class of stock of the Company, as well as the qualifications, limitations and
restrictions relating to those preferences and/or rights. A stockholder may make
the request to the Company or to its Transfer Agent and Registrar.
The following abbreviations, when used in the
inscription on the fact of this certificate, shall be construed as
though they were written out in full according to applicable laws
or regulations:
<TABLE>
<S> <C>
TEN COMM -- as tenants in common UNIF GIFT MIN ACT -- ______ Custodian _______
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right
of survivorship and not as under Uniform Gifts to Minors
tenants in common Act ________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, __________________________________
hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Shares of the Stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________
Attorney to transfer the said stock on the books of the within-named
Company with full power of substitution in the premises.
Dated______________________________
X________________________________
NOTICE (Signature)
THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRES-
POND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTER-
ATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER X_________________________________
NOTICE (Signature)
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT
TO S.E.C. rULE 17Ad-15
SIGNATURE(S) GUARANTEED BY:
<PAGE> 1
BYLAWS OF
CHAMPION HEALTHCARE CORPORATION
(THE "CORPORATION")
ARTICLE I
OFFICES
SECTION 1.1. OFFICES. The principal business office of the
Corporation shall be at 14340 Torrey Chase Boulevard, Suite 320, Houston, Texas.
The registered office of the Corporation shall be in the County of New Castle,
State of Delaware. The Corporation may have such other offices within or without
the State of Delaware as the Board of Directors may from time to time establish.
ARTICLE II
CAPITAL STOCK
SECTION 2.1. CERTIFICATE REPRESENTING SHARES. Shares of the
classes of capital stock of the Corporation shall be represented by certificates
in such form or forms as the Board of Directors may approve; provided that, such
form or forms shall comply with all applicable requirements of law and of the
Certificate of Incorporation. Such certificates shall be signed by the president
or a vice president, and by the secretary or an assistant secretary, of the
Corporation and may be sealed with the seal of the Corporation or imprinted or
otherwise marked with a facsimile of such seal. In the case of any certificate
countersigned by any transfer agent or registrar, provided such countersigner is
not the Corporation itself or an employee thereof, the signature of any or all
of the foregoing officers of the Corporation may be represented by a printed
facsimile thereof. If any officer whose signature, or a facsimile thereof, shall
have been set upon any certificate shall cease, prior to the issuance of such
certificate, to occupy the position in right of which his signature, or
facsimile thereof, was so set upon such certificate, the Corporation may
nevertheless adopt and issue such certificate with the same effect as if such
officer occupied such position as of such date of issuance; and, issuance and
delivery of such certificate by the Corporation shall constitute adoption
thereof by the Corporation. The certificates shall be consecutively numbered,
and as they are issued, a record of such issuance shall be entered in the books
of the Corporation.
SECTION 2.2. STOCK CERTIFICATE BOOK AND STOCKHOLDERS OF RECORD.
The secretary of the Corporation shall maintain, among other records, a stock
certificate book, the stubs in which shall set forth the names and addresses of
the holders of all issued shares of the Corporation, the number of shares held
by each, the number of certificates representing such shares, the date of issue
of such certificates, and whether or not such shares originate from original
issue or from transfer.
-1-
<PAGE> 2
The names and addresses of stockholders as they appear on the stock certificate
book shall be the official list of stockholders of record of the Corporation for
all purposes. The Corporation shall be entitled to treat the holder of record of
any shares as the owner thereof for all purposes, and shall not be bound to
recognize any equitable or other claim to, or interest in, such shares or any
rights deriving from such shares on the part of any other person, including, but
without limitation, a purchaser, assignee, or transferee, unless and until such
other person becomes the holder of record of such shares, whether or not the
Corporation shall have either actual or constructive notice of the interest of
such other person.
SECTION 2.3. STOCKHOLDER'S CHANGE OF NAME OR ADDRESS. Each
stockholder shall promptly notify the secretary of the Corporation, at its
principal business office, by written notice sent by certified mail, return
receipt requested, of any change in name or address of the stockholder from that
as it appears upon the official list of stockholders of record of the
Corporation. The secretary of the Corporation shall then enter such changes into
all affected Corporation records, including, but not limited to, the official
list of stockholders of record.
SECTION 2.4. TRANSFER OF STOCK. The shares represented by any
certificate of the Corporation are transferable only on the books of the
Corporation by the holder of record thereof or by his duly authorized attorney
or legal representative upon surrender of the certificate for such shares,
properly endorsed or assigned. The Board of Directors may make such rules and
regulations concerning the issue, transfer, registration and replacement of
certificates as they deem desirable or necessary.
SECTION 2.5. TRANSFER AGENT AND REGISTRAR. The Board of
Directors may appoint one or more transfer agents or registrars of the shares,
or both, and may require all share certificates to bear the signature of a
transfer agent or registrar, or both.
SECTION 2.6. LOST, STOLEN OR DESTROYED CERTIFICATES. The
Corporation may issue a new certificate for shares of stock in the place of any
certificate theretofore issued and alleged to have been lost, stolen or
destroyed; but, the Board of Directors may require the owner of such lost,
stolen or destroyed certificate, or his legal representative, to furnish an
affidavit as to such loss, theft, or destruction and to give a bond in such form
and substance, and with such surety or sureties, with fixed or open penalty, as
the Board may direct, in order to indemnify the Corporation and its transfer
agents and registrars, if any, against any claim that may be made on account of
the alleged loss, theft or destruction of such certificate.
SECTION 2.7. FRACTIONAL SHARES. Only whole shares of the stock
of the Corporation shall be issued. In case of any transaction by reason of
which a fractional share might otherwise be issued, the directors, or the
officers in the exercise of powers delegated by the directors, shall take such
measures consistent with the law, the Certificate of Incorporation and these
Bylaws, including (for example, and not by way of limitation) the payment in
cash of an amount equal to the fair value of any fractional share, as they may
deem proper to avoid the issuance of any fractional share.
-2-
<PAGE> 3
ARTICLE III
THE STOCKHOLDERS
SECTION 3.1. ANNUAL MEETING. The Annual Meeting of the
Stockholders, for the election of directors and for the transaction of such
other business as may properly come before the meeting, shall be held at the
principal office of the Corporation, at 2:00 p.m. local time, on the second
Friday of April of each year unless such day is a legal holiday, in which case
such meeting shall be held at such hour on the first day thereafter which is not
a legal holiday; or, at such other place and time as may be designated by the
Board of Directors. Failure to hold any annual meeting or meetings shall not
work a forfeiture or dissolution of the Corporation.
SECTION 3.2. SPECIAL MEETINGS. Except as otherwise provided by
law or by the Certificate of Incorporation, special meetings of the stockholders
may be called by the chairman of the Board of Directors, the president, or the
holders of not less than one-tenth of all the shares having voting power at such
meeting, and shall be held at the principal office of the Corporation or at such
other place, and at such time, as may be stated in the notice calling such
meeting. Business transacted at any special meeting of stockholders shall be
limited to the purpose stated in the notice of such meeting given in accordance
with the terms of Section 3.3.
SECTION 3.3. NOTICE OF MEETINGS - WAIVER. Written or printed
notice of each meeting of stockholders, stating the place, day and hour of any
meeting and, in case of a special stockholders' meeting, the purpose or purposes
for which the meeting is called, shall be delivered not less than ten nor more
than sixty days before the date of such meeting, either personally or by mail,
by or at the direction of the president, the secretary, or the persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the stockholder at his address as it appears on the
stock transfer books of the Corporation, with postage thereon prepaid. Such
further or earlier notice shall be given as may be required by law. The signing
by a stockholder of a written waiver of notice of any stockholders' meeting,
whether before or after the time stated in such waiver, shall be equivalent to
the receiving by him of all notice required to be given with respect to such
meeting. Attendance by a person at a stockholders' meeting shall constitute a
waiver of notice of such meeting except when a person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Except as otherwise provided in Section 3.6, no notice of any
adjournment of any meeting shall be required if the time and place thereof are
announced at the meeting at which the adjournment is taken.
SECTION 3.4. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or adjournment thereof, or entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
nor less than ten days before the date of such meeting, nor more than sixty days
prior to any other action. If no record date is fixed, the record date shall be
as follows: the record date for determining stockholders entitled to
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notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held; the record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is necessary, shall be the day on which
the first written consent is delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded; and, the record date for determining
stockholders entitled to express consent to corporate action without a meeting,
when prior action by the Board of Directors is necessary shall be at the close
of business on the day on which the Board of Directors adopts the resolution
relating thereto.
SECTION 3.5. VOTING LIST. The officer or agent having charge of
the stock transfer books for shares of the Corporation shall make, at least ten
days before each meeting of stockholders, a complete list of the stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten days prior to such meeting, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, 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, shall be subject
to lawful inspection by any stockholder at any time during the usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any stockholder during the
whole time of the meeting. Failure to comply with this section shall not affect
the validity of any action taken at such meeting.
SECTION 3.6. QUORUM AND OFFICERS. Except as otherwise provided
by law, by the Certificate of Incorporation or by these Bylaws, the presence in
person or by proxy of the holders of shares of stock having a majority of the
votes which could be cast by the holders of all outstanding shares of stock
entitled to vote at the meeting shall constitute a quorum at a meeting of
stockholders, but the stockholders present at any meeting, although representing
less than a quorum, may from time to time adjourn the meeting to some other day
and hour, without notice other than announcement at the meeting; provided,
however, that if the adjournment is for more than thirty (30) days, or if after
the adjournment a new second date is set for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
SECTION 3.7. VOTING AT MEETINGS. Each outstanding share of
Common Stock shall be entitled to one (1) vote on each matter submitted to a
vote at a meeting of stockholders, except to the extent that the Certificate of
Incorporation or the laws of the State of Delaware provide otherwise. Each
outstanding share of preferred stock shall be entitled to vote, and shall have
such rights, as may be set forth in the Corporation's Certificate of
Incorporation, as amended, from time to time. On all questions other than the
election of directors, the vote of the holders of shares of stock having a
majority of the votes which could be cast by the holders of all shares of stock
entitled to vote thereon and represented in person or by proxy at a meeting at
which a quorum is present shall be the act of
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the stockholders' meeting, unless the vote of a greater number is required by
law or by the Certificate of Incorporation or these Bylaws. The Chairman of the
Board shall preside at, and the secretary shall keep the records of, each
meeting of stockholders, and in the absence of either such officer, his duties
shall be performed by any other officer authorized by these Bylaws or any person
appointed by resolution duly adopted at the meeting. In the case of any
contested election for any directorship, the candidate for such position
receiving a plurality of the votes cast in such election shall be elected to
such position.
SECTION 3.8. PROXIES. A stockholder may vote either in person
or by proxy executed in writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven months from the date of
its execution unless otherwise provided in the proxy. 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.
SECTION 3.9. BALLOTING. All elections of directors shall be by
written ballot. Upon the demand of any stockholder, the vote upon any other
question before the meeting shall be by ballot. At each meeting, inspectors of
election shall be appointed by the presiding officer of the meeting. No director
or candidate for the office of director shall be appointed as such inspector.
The number of votes cast by shares in the election of directors shall be
recorded in the minutes.
SECTION 3.10. PROHIBITION OF CUMULATIVE VOTING FOR DIRECTORS.
No stockholder shall have the right to cumulate his votes for the election of
directors.
SECTION 3.11. RECORD OF STOCKHOLDERS. The Corporation shall
keep at its principal business office, or the office of its transfer agents or
registrars, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
SECTION 3.12. ACTION WITHOUT MEETING. Unless otherwise provided
in the Certificate of Incorporation, any action required to be taken at any
annual or special meeting of stockholders of the Corporation, or any action
which may be taken at any annual or special meeting of such stockholders, may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
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ARTICLE IV
THE BOARD OF DIRECTORS
SECTION 4.1. MANAGEMENT AND CONTROL. The business and affairs
of the Corporation shall be managed and controlled by the Board of Directors;
and, subject to any restrictions imposed by law, by the Certificate of
Incorporation, or by these Bylaws, the Board of Directors may exercise all the
powers of the Corporation. Provided, however, in accordance with Article IV,
Paragraph 7 of the Corporation's Certificate of Incorporation, as amended,
neither the Board of Directors nor the Corporation shall (A) without the
affirmative consent or approval of the holders of shares representing at least
75% of the Series C Preferred Stock and Series BB Preferred Stock then
outstanding, together voting as a class and 66 2/3% of the Series A Preferred
Stock then outstanding, voting as a class (i) authorize the issuance of any new,
or increase the authorized number of shares of any existing, class of capital
stock of the Corporation (or any other series of Preferred Stock) which would be
senior or superior as to dividends, redemption or upon liquidation to any of the
Series C Preferred Stock , Series BB Preferred Stock or Series A Preferred
Stock, or (ii) increase the number of shares of Preferred Stock authorized in
the Certificate of Incorporation or create any other class of stock (or any
other series of Preferred Stock) ranking on a parity with any of the Series C
Preferred Stock or Series BB Preferred Stock as to dividends, redemption or upon
liquidation, or (B) without the affirmative consent or approval of the holders
of shares representing at least 90% of the Series C Preferred Stock and Series
BB Preferred Stock then outstanding, together voting as a class, and 90% of the
Series A Preferred Stock then outstanding, voting as a class (x) amend the
voting powers, designations, preferences, or relative, participating, optional
or other special rights or qualifications, limitations or restrictions in
respect of the Series A Preferred Stock, Series BB Preferred Stock or Series C
Preferred Stock ; (y) reissue any shares of Series C Preferred Stock, Series BB
Preferred Stock or Series A Preferred Stock that have been redeemed or
repurchased; or (z) take any action to cause any amendment, alteration or repeal
of any of the provisions of the Certificate of Incorporation or the by-laws that
would materially adversely affect the rights of holders of Series A Preferred
Stock, Series BB Preferred Stock or Series C Preferred Stock, or (C) without the
affirmative consent or approval of the holders of shares representing at least
75% of the Series D Preferred Stock then outstanding, (i) authorize the issuance
of any new, or increase the authorized number of shares of any existing, class
of capital stock of the Corporation (or any other series of Preferred stock)
which would be senior or superior as to dividends, redemption or upon
liquidation to the Series D Preferred Stock, or (ii) increase the number of
shares of Preferred Stock authorized in the Certificate of Incorporation or
create any other class of stock (or any other series of Preferred Stock) ranking
on a parity with the Series D Preferred Stock as to dividends, redemption or
upon liquidation, or (D) without the affirmative consent or approval of the
holders of shares representing at least 90% of the Series D Preferred Stock then
outstanding (x) amend the voting powers, designations, preferences, or relative,
participating, optional or other special rights or qualifications, limitations
or restrictions in respect of the Series D Preferred Stock, or (y) reissue any
shares of Series D Preferred Stock that have been redeemed or repurchased, or
(z) take any action to cause any amendment, alteration or repeal of any of the
provisions of the Certificate of Incorporation or the by-laws that would
materially adversely affect the rights of the holders of Series D Preferred
Stock.
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SECTION 4.2. NUMBER, QUALIFICATIONS AND TERM. The Board of
Directors may consist of eleven (11) members. Such number may be increased or
decreased by amendment of these Bylaws and the Certificate of Incorporation,
including without limitation Article IV, Paragraph 6, provided that no decrease
shall effect a shortening of the term of any incumbent director. Directors need
not be residents of Delaware or stockholders of the Corporation absent provision
to the contrary in the Certificate of Incorporation or laws of the State of
Delaware. Except as otherwise provided in Section 4.3 of these Bylaws, each
position on the Board of Directors shall be filled by election at the annual
meeting of stockholders. Any such election shall be conducted in accordance with
Section 3.10 of these Bylaws. Each person elected a director shall hold office
until his successor is duly elected and qualified or until his earlier
resignation or removal in accordance with Section 4.3 of these Bylaws.
SECTION 4.3. REMOVAL. Subject to the rights of the holders of
any class or series of stock having preference over the Common Stock as to
dividends or upon liquidation, dissolution or winding up of the Corporation to
elect directors under specified circumstances, if any, any director or the
entire Board of Directors may be removed from office, with or without cause, at
any special meeting of stockholders by the affirmative vote of the holders of a
majority of the shares present in person or by proxy and entitled to vote at
such meeting, if notice of the intention to act upon such matter shall have been
given in the notice calling such meeting. If the notice calling such meeting
shall have so provided, the vacancy caused by such removal may be filled at such
meeting by the affirmative vote of a majority in number of the shares of the
stockholders present in person or by proxy and entitled to vote.
SECTION 4.4. VACANCIES. Subject to the rights of the holders of
any class or series of stock having preference over the Common Stock as to
dividends or upon liquidation, dissolution or winding up of the Corporation to
elect directors under specified circumstances, if any, any vacancy occurring in
the Board of Directors may be filled by the vote of a majority of the remaining
directors, even if such remaining directors comprise less than a quorum of the
Board of Directors. A director elected to fill a vacancy shall be elected for
the unexpired term of his predecessor in office. Subject to the rights of the
holders of any class or series of stock having preference over the Common Stock
as to dividends or upon liquidation, dissolution or winding up of the
Corporation to elect directors under specified circumstances, if any, any
position on the Board of Directors to be filled by reason of an increase in the
number of directors shall be filled by the vote of a majority of the directors,
election at an annual meeting of the stockholders, or at a special meeting of
stockholders duly called for such purpose.
SECTION 4.5. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held no less frequently than quarterly, one of which shall be
held immediately following each annual meeting of stockholders, at the place of
such meeting, and at such other times and places as the Board of Directors shall
determine. No notice of any kind of such regular meetings need be given to
either old or new members of the Board of Directors.
SECTION 4.6. SPECIAL MEETINGS. Special meetings of the Board of
Directors shall be held at any time by call of the Chairman of the Board, the
president, or more than 50% of the members of the Board of Directors. The
secretary shall give notice of each special meeting to each
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director at his usual business or residence address by mail at least three days
before the meeting or by telegraph or telephone at least one day before such
meeting. Except as otherwise provided by law, by the Certificate of
Incorporation, or by these Bylaws, such notice need not specify the business to
be transacted at, or the purpose of, such meeting. No notice shall be necessary
for any adjournment of any meeting. The signing of a written waiver of notice of
any special meeting by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be equivalent to the receiving of
such notice. Attendance of a director at a meeting shall also constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express and announced purpose of objecting, at the beginning of the meeting,
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
SECTION 4.7. QUORUM. A majority of the number of directors
fixed by these Bylaws shall constitute a quorum for the transaction of business
and the act of not less than a majority of such quorum of the directors shall be
required in order to constitute the act of the Board of Directors, unless the
act of a greater number shall be required by law, by the Certificate of
Incorporation or by these Bylaws.
SECTION 4.8. PROCEDURE AT MEETINGS. The Board of Directors, at
each regular meeting held immediately following the annual meeting of
stockholders, shall appoint one of their member as Chairman of the Board of
Directors. The Chairman of the Board shall preside at meetings of the Board. In
his absence at any meeting, any officer authorized by these Bylaws or any member
of the Board selected by the members present shall preside. The secretary of the
Corporation shall act as secretary at all meetings of the Board. In his absence,
the presiding officer of the meeting may designate any person to act as
secretary. At meetings of the Board of Directors, the business shall be
transacted in such order as the Board may from time to time determine.
SECTION 4.9. PRESUMPTION OF ASSENT. Any director of the
Corporation who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
SECTION 4.10. ACTION WITHOUT A MEETING. Any action required by
statute or permitted to be taken at a meeting of the directors of the
Corporation, or of any committee thereof, may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all
directors or all committee members as the case may be, and such consent shall
have the same force and effect as a unanimous vote of the directors or the
committee. Such signed consent, or a signed copy thereof, shall be filed with
the minutes of the proceedings of the Board or committee.
SECTION 4.11. COMPENSATION. Directors as such shall not receive
any stated salary for their service, but by resolution of the Board of
Directors, a fixed sum and reimbursement for reasonable expenses of attendance,
if any, may be allowed for attendance at each regular or special
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meeting of the Board of Directors or at any meeting of the executive committee
of directors, if any, to which such director may be elected in accordance with
the following Section 4.12 or at any other committee meeting of directors, if
any, to which such director may be elected in accordance with Section 4.13; but,
nothing herein shall preclude any director from serving the Corporation in any
other capacity or receiving compensation therefor.
SECTION 4.12. EXECUTIVE COMMITTEE. The Board of Directors, by
resolution adopted by a majority of the number of directors fixed by these
Bylaws, may designate an executive committee, which committee shall consist of
two or more of the directors of the Corporation. Such executive committee may
exercise such authority of the Board of Directors in the business and affairs of
the Corporation as the Board of Directors may by resolution duly delegate to it
except as prohibited by law, provided that the executive committee may not take
the following actions: (i) issue stock; (ii) liquidate or vote to dissolve the
Corporation; (iii) terminate the Corporation's Employment Agreements with
Charles R. Miller or James G. VanDevender; (iv) declare a dividend or other
distribution of assets; (v) approve any transaction involving a merger,
acquisition, reorganization, sale of assets, or recapitalization in which the
Corporation is not the surviving entity or in which there is a change in control
of the Corporation or (vi) any other action reserved for approval by the
stockholders pursuant to law. The designation of such committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or him
by law. Any member of the executive committee may be removed by the Board of
Directors by the affirmative vote of the greater of (x) a majority of the number
of directors fixed by the Bylaws or (y) that number of directors which
collectively own beneficially two-thirds of the Common Stock of the Corporation,
whenever in the judgment of the Board the best interests of the Corporation will
be served thereby. The executive committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required. The
minutes of the proceedings of the executive committee shall be placed in the
minute book of the Corporation.
SECTION 4.13. OTHER COMMITTEES. The Board of Directors, by
resolution adopted by a majority of the full board of directors, may appoint one
or more committees of two or more directors each. Such committees may exercise
such authority of the Board of Directors in the business and affairs of the
Corporation as the Board of Directors may, by resolution duly adopted, delegate,
except as prohibited by law. The designation of any committee and the delegation
thereto of authority shall not operate to relieve the Board of Directors, or any
member thereof, of any responsibility imposed on it or him by law. Any member of
a committee may be removed at any time by the Board of Directors. Members of any
such committees shall receive such compensation as may be approved by the Board
of Directors and will be reimbursed for reasonable expenses actually incurred by
reason of membership on a committee.
SECTION 4.14 RELATED PARTY TRANSACTIONS. All transactions
between the Corporation or any subsidiary, on the one hand, and its
stockholders, officers or directors (or relatives thereof, or corporations or
other business organizations owned or controlled by, any such stockholder,
officer or director), on the other hand, other than transactions in their
capacity as stockholders, officers, directors or employees of the Corporation,
shall require approval of five-sevenths (5/7) of the Board
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of Directors and shall be on terms no less favorable than those available at the
same time from non-affiliated third parties.
SECTION 4.15 ISSUANCE OF COMMON STOCK. Without the prior
approval in each instance of at least five-sevenths (5/7) of the Board of
Directors, the Corporation shall not, and shall not cause or permit any
subsidiary to, issue, sell or redeem any of its Common Stock or other equity
securities (including any securities directly or indirectly convertible into or
exchangeable with the Common Stock), and if such Common Stock or other
securities are to be issued for consideration other than cash, the consideration
paid must be pursuant to valuation tests reasonably satisfactory to at least
five-sevenths (5/7) of the Board of Directors, except as otherwise permitted by
the Certificate of Incorporation.
SECTION 4.16 CHANGE IN CORPORATE STRUCTURE; SALE OF ASSETS.
Without the prior approval in each instance of at least five-sevenths (5/7) of
the Board of Directors, the Corporation will not (and will not cause or permit
any subsidiary to) (i) permit its Certificate of Incorporation or Bylaws to be
amended; (ii) consolidate or merge with any other corporation (except that any
subsidiary may merge into or consolidate with the Corporation or another
subsidiary of the Corporation); or (iii) sell, lease or otherwise dispose of all
or substantially all of its properties and assets, other than in the ordinary
course of business consistent with past practice.
SECTION 4.17 INDEBTEDNESS. Without the prior approval in each
instance of at least five-sevenths (5/7ths) of the members of the Board of
Directors of the Corporation, the Corporation shall not (and shall not cause or
permit any Subsidiary to) directly or indirectly create, incur, assume,
guarantee or be or remain liable with respect to any indebtedness or
liabilities, except for:
(I) indebtedness for borrowed money from the
Corporation's senior lenders;
(II) accounts payable and similar liabilities,
deferred taxes, and leases of real or personal
property, in each case incurred in the ordinary course
of business of the Corporation and subsidiaries;
(III) purchase money indebtedness incurred in
connection with the capital expenditures permitted in
connection with the following: (i) any single capital
expenditure not in excess of $500,000, or capital
expenditures which for the Corporation and all
subsidiaries does not exceed $1,000,000 in the
aggregate during any fiscal year; or (ii) any interest
in real estate or contract for the construction or
renovation of any capital improvements to real estate,
in the case of any single project having an aggregate
cost not exceeding $1,500,000. For purposes hereof,
capital expenditures shall include acquisitions
pursuant to capitalized leases.
SECTION 4.18 ACQUISITIONS. All acquisitions following the
closing by the Corporation or any subsidiary of any hospital, medical building
or complex or any similar medical facility will require the approval of
five-sevenths (5/7ths) of the members of the Board of Directors of the
Corporation.
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ARTICLE V
OFFICERS
SECTION 5.1. NUMBER. The officers of the Corporation shall
consist of a president, one or more vice presidents, a secretary and a
treasurer; and, in addition, such other officers and assistant officers and
agents as may be deemed necessary or desirable. Officers shall be elected or
appointed by the Board of Directors. Any two or more offices may be held by the
same person. In its discretion, the Board of Directors may leave unfilled any
office except those of president, treasurer and secretary.
SECTION 5.2. ELECTION; TERM; QUALIFICATION. Officers shall be
chosen by the Board of Directors annually at the meeting of the Board of
Directors following the annual stockholders' meeting. Each officer shall hold
office until his successor has been chosen and qualified, or until his death,
resignation, or removal.
SECTION 5.3. REMOVAL. Any officer or agent elected or appointed
by the Board of Directors may be removed by the Board of Directors whenever in
its judgment the best interests of the Corporation will be served thereby; but,
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not of
itself create any contract rights.
SECTION 5.4. VACANCIES. Any vacancy in any office for any cause
may be filled by the Board of Directors at any meeting.
SECTION 5.5. DUTIES. The officers of the Corporation shall have
such powers and duties, except as modified by the Board of Directors, as
generally pertain to their offices, respectively, as well as such powers and
duties as from time to time shall be conferred by the Board of Directors and by
these Bylaws.
SECTION 5.6. THE PRESIDENT. The president shall have general
direction of the affairs of the Corporation and general supervision over its
several officers, subject however, to the control of the Board of Directors. He
shall at each annual meeting, and from time to time, report to the stockholders
and to the Board of Directors all matters within his knowledge which, in his
opinion, the interest of the Corporation may require to be brought to the notice
of such persons. He may sign, with the secretary or an assistant secretary, any
or all certificates of stock of the Corporation. He shall preside at all
meetings of the stockholders, shall sign and execute in the name of the
Corporation (i) all contracts or other instruments authorized by the Board of
Directors, and (ii) all contracts or instruments in the usual and regular course
of business, pursuant to Section 6.2 hereof, except in cases when the signing
and execution thereof shall be expressly delegated or permitted by the Board or
by these Bylaws to some other officer or agent of the Corporation; and, in
general, shall perform all duties incident to the office of president, and such
other duties as from time to time may be assigned to him by the Board of
Directors or as are prescribed by these Bylaws.
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SECTION 5.7. THE VICE PRESIDENTS. At the request of the
president, or in his absence or disability, the vice presidents, in the order of
their election, shall perform the duties of the president, and, when so acting,
shall have all the powers of, and be subject to all restrictions upon, the
president. Any action taken by a vice president in the performance of the duties
of the president shall be conclusive evidence of the absence or inability to act
of the president at the time such action was taken. The vice presidents shall
perform such other duties as may, from time to time, be assigned to them by the
Board of Directors or the president. A vice president may sign, with the
secretary or an assistant secretary, certificates of stock of the Corporation.
SECTION 5.8. SECRETARY. The secretary shall keep the minutes of
all meetings of the stockholders and of the Board of Directors, in one or more
books provided for such purpose and shall see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law. He shall
be custodian of the corporate records and of the seal (if any) of the
Corporation and see, if the Corporation has a seal, that the seal of the
Corporation is affixed to all documents the execution of which on behalf of the
Corporation under its seal is duly authorized; shall have general charge of the
stock certificate books, transfer books and stock ledgers, and such other books
and papers of the Corporation as the Board of Directors may direct, all of which
shall, at all reasonable times, be open to the examination of any director, upon
application at the office of the Corporation during business hours; and in
general shall perform all duties and exercise all powers incident to the office
of the secretary and such other duties and powers as the Board of Directors or
the president from time to time may assign to or confer on him.
SECTION 5.9. TREASURER. The treasurer shall keep complete and
accurate records of account, showing at all times the financial condition of the
Corporation. He shall be the legal custodian of all money, notes, securities and
other valuables which may from time to time come into the possession of the
Corporation. He shall furnish at meetings of the Board of Directors, or whenever
requested, a statement of the financial condition of the Corporation, and shall
perform such other duties as these Bylaws may require or the Board of Directors
may prescribe.
SECTION 5.10. ASSISTANT OFFICERS. Any assistant secretary or
assistant treasurer appointed by the Board of Directors shall have power to
perform, and shall perform, all duties incumbent upon the secretary or treasurer
of the Corporation, respectively, subject to the general direction of such
respective officers, and shall perform such other duties as these Bylaws may
require or the Board of Directors may prescribe.
SECTION 5.11. SALARIES. The salaries or other compensation of
the officers shall be fixed from time to time by the Board of Directors. No
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he is also a director of the Corporation.
SECTION 5.12. BONDS OF OFFICERS. The Board of Directors may
secure the fidelity of any officer of the Corporation by bond or otherwise, on
such terms and with such surety or sureties, conditions, penalties or securities
as shall be deemed proper by the Board of Directors.
SECTION 5.13. DELEGATION. The Board of Directors may delegate
temporarily the powers and duties of any officer of the Corporation, in case of
his absence or for any other reason,
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to any other officer, and may authorize the delegation by any officer of the
Corporation of any of his powers and duties to any agent or employee, subject to
the general supervision of such officer.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. DIVIDENDS. Dividends on the outstanding shares 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 by the Corporation in cash, in
property, or in the Corporation's own shares, but only out of the surplus of the
Corporation, except as otherwise allowed by law.
Subject to limitations upon the authority of the Board of Directors
imposed by law or by the Certificate of Incorporation, the declaration of and
provision for payment of dividends shall be at the discretion of the Board of
Directors.
SECTION 6.2. CONTRACTS. The president shall have the power and
authority to execute, on behalf of the Corporation, contracts or instruments in
the usual and regular course of business, and in addition the Board of Directors
or the President may authorize any officer or officers, agent or agents, of the
Corporation to enter into any contract or execute and deliver any instruments in
the name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances. Unless so authorized by the Board of
Directors or by these Bylaws, no officer, agent or employee shall have any power
or authority to bind the Corporation by any contract or engagement, or to pledge
its credit or to render it pecuniarily liable for any purpose or in any amount.
SECTION 6.3. CHECKS, DRAFTS, ETC. All checks, drafts, or other
orders for the payment of money, notes, or other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officers or
employees of the Corporation as shall from time to time be authorized pursuant
to these Bylaws or by resolution of the Board of Directors.
SECTION 6.4. DEPOSITORIES. All funds of the Corporation shall
be deposited from time to time to the credit of the Corporation in such banks or
other depositories as the Board of Directors may from time to time designate,
and upon such terms and conditions as shall be fixed by the Board of Directors.
The Board of Directors may from time to time authorize the opening and
maintaining within any such depository as it may designate, of general and
special accounts, and may make such special rules and regulations with respect
thereto as it may deem expedient.
SECTION 6.5. ENDORSEMENT OF STOCK CERTIFICATES. Subject to the
specific directions of the Board of Directors, any share or shares of stock
issued by any corporation and owned by the Corporation, including reacquired
shares of the Corporation's own stock, may, for sale or transfer, be endorsed in
the name of the Corporation by the president or any vice president; and such
endorsement may be attested or witnessed by the secretary or any assistant
secretary either with or without the affixing thereto of the corporate seal.
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SECTION 6.6. CORPORATE SEAL. The corporate seal, if any, shall
be in such form as the Board of Directors shall approve, and such seal, or a
facsimile thereof, may be impressed on, affixed to, or in any manner reproduced
upon, instruments of any nature required to be executed by officers of the
Corporation.
SECTION 6.7. FISCAL YEAR. The fiscal year of the Corporation
shall begin and end on such dates as the Board of Directors at any time shall
determine.
SECTION 6.8. BOOKS AND RECORDS. The Corporation shall keep
correct and complete books and records of account and shall keep minutes of the
proceedings of its stockholders and Board of Directors, and shall keep at its
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its stockholders, giving the names and
addresses of all stockholders and the number and class of the shares held by
each.
SECTION 6.9. RESIGNATIONS. Any director or officer may resign
at any time. Such resignations shall be made in writing and shall take effect at
the time specified therein, or, if no time is specified, at the time of its
receipt by the president or secretary. The acceptance of a resignation shall not
be necessary to make it effective, unless expressly so provided in the
resignation.
SECTION 6.10. MEETINGS BY TELEPHONE. Subject to the provisions
required or permitted by these Bylaws or the laws of the State of Delaware for
notice of meetings, members of the Board of Directors, or members of any
committee designated by the Board of Directors, may participate in and hold any
meeting required or permitted under these Bylaws by telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this Section
shall constitute presence in person at such a meeting, except where a person
participates in the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened.
SECTION 6.11. CONFLICT WITH CERTIFICATE OF INCORPORATION. Any
provision in these Bylaws to the contrary notwithstanding, should any Bylaw
conflict with any provision in the Certificate of Incorporation of the
Corporation, as amended, including without limitation any such provision
governing a change of control of the Corporation's Board of Directors upon the
occurrence of certain events specified therein, then such provision of said
Certificate of Incorporation, as amended, shall be controlling, and the
remainder of these Bylaws shall be construed so as to comply with said
Certificate of Incorporation.
ARTICLE VII
INDEMNITIES
SECTION 7.1. DEFINITIONS. In this Article:
(a) "Indemnitee" means (i) any present or former Director, advisory
director or officer of the Corporation, (ii) any person who while serving in any
of the capacities referred to in clause (i) hereof
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served at the Corporation's request as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, and (iii) any person nominated or designated by (or
pursuant to authority granted by) the Board of Directors or any committee
thereof to serve in any of the capacities referred to in clauses (i) or (ii)
hereof.
(b) "Official Capacity" means (i) when used with respect to a
Director, the office of Director of the Corporation, and (ii) when used with
respect to a person other than a Director, the elective or appointive office of
the Corporation held by such person or the employment or agency relationship
undertaken by such person on behalf of the Corporation, but in each case does
not include service for any other foreign or domestic corporation or any
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise.
(c) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and any inquiry
or investigation that could lead to such an action, suit or proceeding.
SECTION 7.2. INDEMNIFICATION. The Corporation shall indemnify
every Indemnitee against all judgments, penalties (including excise and similar
taxes), fines, amounts paid in settlement and reasonable expenses actually
incurred by the Indemnitee in connection with any Proceeding to which he was, is
or is threatened to be named defendant or respondent, or in which he was or is a
witness without being named a defendant or respondent, by reason, in whole or in
part, of his serving or having served, or having been nominated or designated to
serve, in any of the capacities referred to in Section 7.1(a), if it is
determined in accordance with Section 7.4 that the Indemnitee (a) conducted
himself in good faith, (b) reasonably believed, in the case of conduct in his
Official Capacity, that his conduct was in the Corporation's best interests and,
in all other cases, that his conduct was at least not opposed to the
Corporation's best interests, and (c) in the case of any criminal proceeding,
had no reasonable cause to believe that his conduct was unlawful; provided,
however, that in the event a determination is made that a person is entitled to
indemnification pursuant to this Section 7.2 in connection with a Proceeding
brought by or on behalf of the Corporation, such indemnification shall be
limited to the reasonable expenses (including court costs and attorneys' fees)
actually incurred by the Indemnitee in connection with the Proceeding. No
indemnification shall be made under this Section 7.2 in respect of any judgment,
penalty, fine or amount paid in settlement in connection with any Proceeding in
which such Indemnitee shall have been found liable to the Corporation. If a
director is found liable on the basis that personal benefit was improperly
received by him, whether or not the benefit resulted from an action taken in the
Indemnitee's Official Capacity, then indemnification can be made only if the
indemnification (x) is limited to reasonable expenses and (y) shall not be made
if the director is found liable for willful or intentional misconduct in
performing his duties to the Corporation. The termination of any Proceeding by
judgment, order, settlement or conviction, or on a plea of nolo contendere or
its equivalent, is not of itself determinative that the Indemnitee did not meet
the requirements set forth in clauses (a), (b) or (c) in the first sentence of
this Section 7.2.
SECTION 7.3. SUCCESSFUL DEFENSE. Without limitation of Section
7.2 and in addition to the indemnification provided for in Section 7.2, the
Corporation shall indemnify every Indemnitee
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against reasonable expenses incurred by such person in connection with any
Proceeding in which he is a witness or a named defendant or respondent because
he served in any of the capacities referred to in Section 7.1(a), if such person
has been wholly successful, on the merits or otherwise, in defense of the
Proceeding.
SECTION 7.4. DETERMINATIONS. Any indemnification under Section
7.2 (unless ordered by a court of competent jurisdiction) shall be made by the
Corporation only upon a determination that indemnification of the Indemnitee is
proper in the circumstances because he has met the applicable standard of
conduct. Such determination shall be made (a) by the Board of Directors by a
majority vote of the directors who are not parties or respondents in the
Proceeding, even though less than a quorum; (b) by special legal counsel
selected by the Board of Directors by vote as set forth in clause (a) of this
Section 7.4 or, if all of the Directors are named defendants or respondents in
the Proceeding by a majority vote of all of the Directors; or (c) by the
stockholders in a vote that excludes the shares held by Directors that are named
defendants or respondents in the Proceeding. Determination as to reasonableness
of expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination that
indemnification is permissible is made by special legal counsel, determination
as to reasonableness of expenses must be made in the manner specified in clause
(b) of the preceding sentence for the selection of special legal counsel. In the
event a determination is made under this Section 7.4 that the Director or
officer has met the applicable standard of conduct as to some matters but not as
to others, amounts to be indemnified may be reasonably prorated.
SECTION 7.5. ADVANCEMENT OF EXPENSES. Reasonable expenses
(including court costs and attorneys' fees) incurred by an Indemnitee who was or
is a witness or was, is or is threatened to be made a named defendant or
respondent in a Proceeding shall be paid by the Corporation at reasonable
intervals in advance of the final disposition of such Proceeding upon receipt by
the Corporation of (a) a written affirmation by such Indemnitee of his good
faith belief that he has met the standard of conduct necessary for
indemnification by the Corporation under this Article and (b) a written
undertaking by or on behalf of such Indemnitee to repay the amount paid or
reimbursed by the Corporation if it shall ultimately be determined that he is
not entitled to be indemnified by the Corporation as authorized in this Article.
Such written undertaking shall be an unlimited obligation of the Indemnitee but
need not be secured and it may be accepted without reference to financial
ability to make repayment. Notwithstanding any other provision of this Article,
the Corporation may pay or reimburse expenses incurred by an Indemnitee in
connection with his appearance as a witness or other participation in a
Proceeding at a time when he is not named a defendant or respondent in the
Proceeding.
SECTION 7.6. EMPLOYEE BENEFIT PLANS. For purposes of this
Article, the Corporation shall be deemed to have requested an Indemnitee to
serve an employee benefit plan whenever the performance by him of his duties to
the Corporation also imposes duties on or otherwise involves services by him to
the plan or participants or beneficiaries of the plan. Excise taxes assessed on
an Indemnitee with respect to an employee benefit plan pursuant to applicable
law shall be deemed fines. Action taken or omitted by an Indemnitee with respect
to an employee benefit plan in the performance of his duties for a purpose
reasonably believed by him to be in the interest of the participants and
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beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Corporation.
SECTION 7.7. OTHER INDEMNIFICATION AND INSURANCE. The
indemnification provided by this Article shall (a) not be deemed exclusive of,
or to preclude, any other rights to which those seeking indemnification may at
any time be entitled under the Corporation's Certificate of Incorporation, any
law, agreement or vote of stockholders or disinterested Directors, or otherwise,
or under any policy or policies of insurance purchased and maintained by the
Corporation on behalf of any Indemnitee or under any self-insurance arrangement
allowed by law, both as to action in his Official Capacity and as to action in
any other capacity, (b) continue as to a person who has ceased to be in the
capacity by reason of which he was an Indemnitee with respect to matters arising
during the period he was in such capacity, and (c) inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 7.8. NOTICE. Any indemnification of or advance of
expenses to a present or former Director of the Corporation in accordance with
this Article shall be reported in writing to the stockholders of the Corporation
with or before the notice or waiver of notice of the next stockholders' meeting
or with or before the next submission to stockholders of a consent to action
without a meeting and, in any case, within the twelve-month period immediately
following the date of the indemnification or advance.
SECTION 7.9. CONSTRUCTION. The indemnification provided by this
Article shall be subject to all valid and applicable laws, including, without
limitation, Section 145 of the Delaware General Corporation Law, and, in the
event this Article or any of the provisions hereof or the indemnification
contemplated hereby are found to be inconsistent with or contrary to any such
valid laws, the latter shall be deemed to control and to provide the fullest
possible rights and privileges accorded thereby, and this Article shall be
regarded as modified accordingly, and, as so modified, to continue in full force
and effect.
SECTION 7.10. CONTINUING OFFER, RELIANCE, ETC. The provisions
of this Article (i) are for the benefit of, and may be enforced by, each
Director and officer of the Corporation, the same as if set forth in their
entirety in a written instrument duly executed and delivered by the Corporation
and such Director or officer and (ii) constitute a continuing offer to all
present and future Directors and officers of the Corporation. The Corporation,
by its adoption of these Bylaws, (i) acknowledges and agrees that each present
and future Director and officer of the Corporation has relied upon and will
continue to rely upon the provisions of this Article in accepting and serving in
any of the capacities referred to in Section 7.1(a) of this Article, (ii) waives
reliance upon, and all notices of acceptance of, such provisions by such
Directors and officers and (iii) acknowledges and agrees that no present or
future Director or officer of the Corporation shall be prejudiced in his right
to enforce the provisions of this Article in accordance with their terms by any
act or failure to act on the part of the Corporation.
SECTION 7.11. EFFECT OF AMENDMENT. No amendment, modification
or repeal of this Article or any provision hereof shall in any manner terminate,
reduce or impair the right of any past, present or future Director or officer of
the Corporation to be indemnified by the Corporation, nor the
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obligation of the Corporation to indemnify any such Director or officer, under
and in accordance with the provisions of the Article as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
ARTICLE VIII
AMENDMENTS
SECTION 8.1. AMENDMENTS. These Bylaws, subject to Article 4,
may be altered, amended or repealed, or new bylaws may be adopted, by the
Directors at any duly held meeting or by the holders of a majority of the shares
represented at any duly held meeting of stockholders; provided that notice of
such proposed action shall have been contained in the notice of any such
meeting.
[Including all amendments through and including May 25, 1995.]
---------------------------------------
James G. VanDevender, Secretary
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Champion Healthcare Corporation, on Form S-3 (File No. 33-________) of our
report dated March 30, 1995, on our audits of the consolidated financial
statements of Champion Healthcare Corporation. We also consent to the reference
to our firm under the caption "Experts."
Coopers & Lybrand, L.L.P.
Houston, Texas
August 14, 1995
<PAGE> 1
CONSENT OF INDEPDENDENT AUDITORS
We consent to the references to our firm under the Caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Champion Healthcare
Corporation for the registration of 422,538 shares of its common stock and to
the incorporation by reference therein of our reports dated February 25, 1994
with respect to the consolidated statement of financial position of
AmeriHealth, Inc. and subsidiaries as of December 31, 1993 and 1992, and the
related statements of operations, shareholders' equity and cash flows for the
years then ended (incorporated by reference in the Champion Healthcare
Corporation Form S-3) and included in the AmeriHealth, Inc. Annual Report (Form
10-K) for the year ended December 31, 1993 filed with the Securities and
Exchange Commission; and dated March 22, 1994 with respect to the consolidated
statement of operations of Psychiatric Healthcare Corporation (formerly
Pinnacle Healthcare Corporation) and subsidiaries for the year ended December
31, 1993 and the related statement of cash flows for the year then ended
(incorporated by reference in the Champion Healthcare Corporation Form S-3)
and included in the AmeriHealth, Inc. Proxy Statement dated November 11, 1994,
as amended, as filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
August 8, 1995
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Champion Healthcare Corporation, on Form S-3 (File No. 33-________) of our
report dated June 11, 1995, on our audits of the consolidated financial
statements of Salt Lake Regional Medical Center. We also consent to the
reference to our firm under the caption "Experts."
Coopers & Lybrand, L.L.P.
Houston, Texas
August 14, 1995
