SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 28,
____________
1996
____
Advanced NMR Systems, Inc.
_________________________________________________________________
(Exact name or registrant as specified in its charter)
Delaware 0-11914 22-2457487
________ _______ __________
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification
No.)
46 Jonspin Road, Wilmington, Massachusetts 01887
__________________________________________ _____
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(508) 657-8876
______________
N/A
____________________________________________________________
(Former name or former address, if changed since last
report.)
Page 1 of 50 Pages
Exhibit Index on Page 4
Item 5. Other Events.
_______ _____________
On February 21, 1996, Advanced NMR Systems, Inc.
("Advanced NMR") filed a Current Report on Form 8-K disclosing
that a securities class action complaint (the "Original
Complaint") was filed against it in the Court of Chancery of the
State of Delaware in connection with a merger (the "Merger")
between a wholly-owned subsidiary of Advanced NMR and Advanced
Mammography Systems, Inc., a Delaware corporation ("AMS").
On February 28, 1996, a related complaint (Civil Action
No. 14866) was filed in Delaware state court by Susan Kaufman
(the "Kaufman Complaint") seeking substantially similar relief to
that sought in the Original Complaint on substantially similar
grounds. The Kaufman Complaint names three additional defendants
not named in the Original Complaint: John A. Lynch, a director
of Advanced NMR, and Joseph DeRose and Bernard Weiner, each a
director of AMS.
According to both complaints, Advanced NMR and the
named directors breached their fiduciary duties to the public
stockholders of AMS in approving the Merger for inadequate
consideration to such stockholders. As with the Original
Complaint, Advanced NMR believes there is no basis for the claims
made by plaintiff, and the company intends to vigorously defend
the action.
The Kaufman Complaint is included as Exhibit 99 hereto.
Item 7. Financial Statements and Exhibits.
_______ __________________________________
(c) Exhibits:
3 Amended By-Laws
99 Class Action Complaint Titled Susan Kaufman v. Jack
_____________________
Nelson, Robert Spira, Sol Triebwasser, Gary A.
______________________________________________
Kittrell, George A. Silver, George Aaron, John A.
_________________________________________________
Lynch, Joseph DeRose, Bernard Weiner, Advanced
______________________________________________
Ammography Systems, Inc. and Advanced NMR Systems, Inc.
_______________________________________________________
filed on February 26, 1996 in the Court of Chancery in
the State of Delaware, New Castle County. (Civ. No.
14866)
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ADVANCED NMR SYSTEMS, INC.
Dated: March 15, 1996 By: /s/ Jack Nelson
___________________________
Name: Jack Nelson
Title: Chairman
EXHIBIT INDEX
Exhibit Description Page
_______ ___________ ____
3 Amended By-Laws
99 Class Action Complaint Titled Susan Kaufman v. Jack
_____________________
Nelson, Robert Spira, Sol Triebwasser, Gary A.
______________________________________________
Kittrell, George A. Silver, George Aaron, John A.
_________________________________________________
Lynch, Joseph DeRose, Bernard Weiner, Advanced
______________________________________________
Ammography Systems, Inc. and Advanced NMR Systems, Inc.
_______________________________________________________
filed on February 26, 1996 in the Court of Chancery in
the State of Delaware, New Castle County. (Civ. No.
14866)
Exhibit 3
AMENDED AND RESTATED
BY-LAWS OF
ADVANCED NMR SYSTEMS, INC.
(a Delaware Corporation)
_______________
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of the
______________
stockholders of ADVANCED NMR SYSTEMS, INC. (hereinafter called
the "Corporation") for the election of directors and for the
transaction of such other proper business as may come before the
meeting shall be held at such date, time and place, either within
or without the State of Delaware, as shall be designated by the
Board of Directors from time to time.
Section 2. Special Meetings. Special meetings of the
________________
stockholders for any purpose or purposes may be called at any
time by the Board of Directors or the Chairman of the Board, but
special meetings may not be called by any other person or
persons. The only business to be conducted at a special meeting
of stockholders shall be as specified in the notice of such
meeting.
Section 3. Notice of Meetings; Adjournments. Notice
________________________________
of the date, time and place of the holding of each annual and
special meeting of stockholders and, in the case of a special
meeting, the purpose or purposes thereof, shall be given
personally or by mail in a postage prepaid envelope to each
stockholder entitled to vote at such meeting, not less than ten
nor more than sixty days before the date of such meeting, and, if
mailed, it shall be directed to such stockholder at his address
as it appears on the records of the Corporation, unless he shall
have filed with the Secretary of the Corporation, a written
request that notices to him be mailed to some other address, in
which case it shall be directed to him at some other address. If
mailed such notice shall be deemed to be delivered when deposited
in the United States mail so addressed with postage thereon
prepaid. Any meeting of stockholders, annual or special, may be
adjourned from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned
meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken.
Section 4. Quorum. Except as otherwise provided by
______
law, the Certificate of Incorporation or these By-laws, at each
meeting of stockholders 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 be necessary and sufficient
to constitute a quorum. In the absence of a quorum the
stockholders so present may, by majority vote, adjourn the
meeting from time to time in the manner provided in Article I,
Section 3 of these By-laws until a quorum shall attend. Shares
of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly
or indirectly, by the Corporation, shall neither be entitled to
vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation to
vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.
Section 5. Organization. Meetings of stockholders
____________
shall be presided over by the Chairman of the Board, or in his
absence by the Vice Chairman of the Board, or in his absence by
the President, or in his absence by a Vice President, or in the
absence of the foregoing persons by a chairman designated by the
Board of Directors, or in the absence of such designation by a
chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the
meeting may appoint any person to act as secretary of the
meeting. The Chairman of the meeting shall announce at the
meeting of stockholders the date and time of the opening and
closing of the polls for each matter upon which the stockholders
will vote.
Section 6. Voting; Proxies. Except as otherwise
_______________
provided by the Certificate of Incorporation, each stockholder
entitled to vote at any meeting of stockholders shall be entitled
to one vote for each share of stock held by him which has voting
power upon the matter in question. Each stockholder entitled to
vote at a meeting of stockholders may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted
or acted upon after three years from its date, unless the proxy
provides for a longer period. A 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 stockholder may revoke any proxy which is
not irrevocable by attending the meeting and voting in person or
by filing an instrument in writing revoking the proxy or by
delivering a proxy in accordance with applicable law bearing a
later date to the Secretary of the Corporation. Voting at
meetings of stockholders other than the election of directors
need not be by written ballot and, unless otherwise required by
law, need not be conducted by inspectors of election unless so
determined by the Board of Directors, the chairman of the meeting
or by 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 thereon which are present in
person or by proxy at such meeting. At all meetings of
stockholders for the election of directors a plurality of the
votes cast of shares present in person or represented by proxy at
the meeting and entitled to vote for the election of directors
shall be sufficient to elect directors. All other elections and
questions shall, unless otherwise provided by law, the
Certificate of Incorporation or these By-laws, be decided by the
affirmative vote of the majority of shares of stock present in
person or represented by proxy at the meeting and entitled to
vote on the subject matter.
Section 7. Fixing Date for Determination of
________________________________
Stockholders of Record. In order that the Corporation may
______________________
determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or
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 a record date. The record date shall not precede the date
upon which the resolution fixing the record date is adopted by
the Board of Directors. The record date: (1) in the case of
determination of stockholders entitled to vote at any meeting of
stockholders or adjournment thereof, shall unless otherwise
required by law not be more than sixty nor less than ten days
before the date of such meeting; and (2) in the case of any other
action, shall not be more than sixty days prior to such other
action. If no record date is fixed: (1) the record date for
determining stockholders entitled to 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; and (2) the record date for
determining stockholders for any other purpose shall be at the
close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting.
Section 8. List of Stockholders Entitled To Vote. The
_____________________________________
Secretary shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours,
for a period of at least ten days prior to the meeting, either at
a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof and may be inspected by a
stockholder who is present. Upon the willful neglect or refusal
of the directors to produce such a list at any meeting for the
election of directors, they shall be ineligible for election to
any office at such meeting. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the
stock ledger, the list of stockholders or the books of the
Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 9. Conduct of Meetings. The Board of
___________________
Directors of the Corporation may adopt by resolution such rules
and regulations for the conduct of the meeting of stockholders as
it shall deem appropriate. Except to the extent inconsistent
with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have
the right and authority to prescribe such rules, regulations and
procedures and to do all such acts, in the judgment of such
chairman, as are appropriate for the proper conduct of the
meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the
meeting, may include, without limitation, the following: (i) the
establishment of an agenda or order of business for the meeting;
(ii) rules and procedures for maintaining order at the meeting
and the safety of those present; (iii) limitations on attendance
at or participation in the meeting to stockholders of record of
the Corporation, their duly authorized and constituted proxies or
such other persons as the chairman of the meeting shall
determine; (iv) restrictions on entry to the meeting after the
time fixed for the commencement thereof; and (v) limitations on
the time allotted to questions or comments by participants.
Unless and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not
be required to be held in accordance with the rules of
parliamentary procedure.
Section 10. Advance Notice of Stockholder Business.
______________________________________
At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting
business must be: (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by
or at the direction of the Board of Directors, or (c) otherwise
properly brought before the meeting by a stockholder. For
business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the Corporation,
not less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days'
notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business
on the 10th day following the day on which such notice of the
date of the annual meeting was mailed or such public disclosure
was made. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before
the annual meeting (a) a brief description of the business
desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name
and address, as they appear on the Corporation's books, of the
stockholder proposing such business, (c) the class and number of
shares of the Corporation which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder in
such business. Notwithstanding anything in the By-Laws to the
contrary, no business shall be conducted at any annual meeting
except in accordance with the procedures set forth in this
Section 10. The chairman of the annual meeting shall, if the
facts warrant, determine and declare to the meeting that business
was not properly brought before the meeting and in accordance
with the provisions of this Section 10, and if he should so
determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be
transacted.
ARTICLE II
BOARD OF DIRECTORS
__________________
Section 1. General Powers. The business and affairs
______________
of the Corporation shall be managed by or under the direction of
the Board. The Board may exercise all such authority and powers
of the Corporation and do all such lawful acts and things as are
not by statute or the Certificate of Incorporation or by these
By-Laws directed or required to be exercised or done by the
stockholders.
Section 2. Number, Qualification, Election and Term of
___________________________________________
Office. The number of directors of the Corporation shall be
______
fixed from time to time by the vote of a majority of the entire
Board then in office and set forth in a resolution of the board
of directors and the number thereof may thereafter by like vote
be increased or decreased to such greater or lesser number (not
less than three) as may be so provided, subject to the provisions
of Section 11 of this Article II. Except as otherwise provided
by statute, the Certificate of Incorporation or these By-Laws,
the directors shall be elected at the annual meeting of the
stockholders for the election of directors at which a quorum is
present, and the persons receiving a plurality of the votes cast
at such meeting shall be elected. Each director shall hold
office until the next annual meeting of the stockholders and
until his successor shall have been duly elected and qualified,
or until his death, or until he shall have resigned, or have been
removed, as hereinafter provided in these By-Laws, or as
otherwise provided by statute or the Certificate of
Incorporation.
Section 3. Place of Meetings. Meetings of the Board
_________________
may be held at such place, within or without the State of
Delaware, as the Board may from time to time determine or as
shall be specified in the notice of waiver of notice of such
meeting.
Section 4. Annual Meeting. The Board shall meet for
______________
the purpose of organization, the election of officers and the
transaction of other business, as soon as practicable after each
annual meeting of the stockholders, on the same day and at the
same place where such annual meeting shall be held. Notice of
such meeting need not be given. Such meeting may be held at any
other time or place (within or without the State of Delaware)
which shall be specified in a notice thereof given as hereinafter
provided in Section 7 of this Article II.
Section 5. Regular Meetings. Regular meetings of the
________________
Board shall be held at such time and place as the Board may from
time to time determine. If any day fixed for a regular meeting
shall be a legal holiday at the place where the meeting is to be
held, then the meeting which would otherwise be held on that day
shall be held at the same hour on the next succeeding business
day. Notice of regular meetings of the Board need not be given
except as otherwise required by statute or these By-Laws.
Section 6. Special Meetings. Special meetings of the
________________
Board may be held at any time or place within or without the
State of Delaware whenever called by the Chairman, the President,
or by four or more directors of the Corporation.
Section 7. Notice of Meeting. Notice of each special
_________________
meeting of the Board (and of each regular meeting for which
notice shall be required) shall be given by the Secretary or any
Assistant Secretary as hereinafter provided in this Section 7, in
which notice shall be stated the time and place (within or
without the State of Delaware) of the meeting. Notice of each
such meeting shall be delivered to each director either (A)
personally or by telephone or facsimile at least twenty-four
hours before the time at which such meeting is to be held or (B)
by first-class mail, postage prepaid or express delivery service
addressed to him at his residence, or usual place of business, at
least two days before the day on which such meeting is to be
held. If mailed or sent by express delivery, such notice shall
be deemed to be delivered when deposited in the United States
mail or given to the delivery service. Notice of any such
meeting need not be given to any director who shall, either
before or after the meeting, submit a signed waiver of notice or
who shall attend such meeting without protesting, prior to or at
its commencement, the lack of notice to him. Except as otherwise
specifically required by law or these By-Laws, a notice or waiver
of notice of any regular or special meeting need not state the
purposes of such meeting.
Section 8. Quorum and Manner of Acting; Telephonic
_______________________________________
Participation. A majority of the entire Board shall be present
_____________
in person at any meeting of the Board in order to constitute a
quorum for the transaction of business at such meeting. Except
as otherwise expressly required by law or the Certificate of
Incorporation, the act of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the
Board. Any one or more members of the Board or any committee
thereof may participate in a meeting of the Board or such
committee by means of a conference telephone or similar
communications equipment allowing all participants in the meeting
to hear each other at the same time and participation by such
means shall constitute presence at a meeting. In the absence of
a quorum at any meeting of the Board, a majority of the directors
present thereat, or if no director be present, the Secretary, may
adjourn such meeting to another time and place, or such meeting,
unless it be the annual meeting of the Board, need not be held.
At any adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at
the meeting as originally called.
Section 9. Organization. At each meeting of the
____________
Board, the Chairman of the Board (or, in his absence, the Vice
Chairman, or in his absence, the President, or, in his absence,
another director chosen by a majority of the directors present)
shall act as chairman of the meeting and preside thereat. The
Secretary (or, in his absence, any person appointed by the
Chairman) shall act as secretary of the meeting and keep the
minutes thereof.
Section 10. Resignations. Any director of the
____________
Corporation may resign at any time by giving written notice of
his resignation to the Board or Chairman of the Board or the
President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it
shall become effective shall not be specified therein,
immediately upon its receipt; and unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 11. Vacancies. Vacancies, including newly
_________
created directorships, may be filled by a majority of the
directors then in office, although such majority is less than a
quorum, or by a plurality of the votes cast at a meeting of
stockholders, and each director so elected shall hold office
until the expiration of the term of office of the director whom
he has replaced or until his successor is elected and qualified.
Section 12. Removal of Directors. Any director or the
____________________
entire board of directors may be removed, with or without cause,
by the holders of a majority of the shares then entitled to vote
at an election of directors of the Corporation.
Section 13. Compensation. The Board shall have
____________
authority to fix the compensation, including fees and
reimbursement of expenses, of directors for services to the
Corporation in any capacity, provided no such payment shall
preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 14. Action By the Board By Written Consent.
______________________________________
Unless otherwise restricted by the Certificate of Incorporation
or these By-Laws, any action required or permitted to be taken at
any meeting of the Board or of any committee thereof may be taken
without a meeting if all members of the Board or committee, as
the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board
or committee.
Section 15. Nominations For Directors. Only persons
_________________________
who are nominated in accordance with the procedures set forth in
this Section 15 shall be eligible for election as directors by
stockholders. Nominations of persons for election to the Board
of Directors of the Corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or
by any stockholder of the Corporation entitled to vote for the
election of directors at the meeting who complies with the notice
procedures set forth in this Section 15. Such nominations, other
than those made by or at the direction of the Board of Directors,
shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 60
days or more than 90 days prior to the meeting; provided,
however, that in the event that less than 70 days' notice or
prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must
be so received not later than the close of business on the 10th
day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made. Such
stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or re-election
as a director, (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares
of the Corporation which are beneficially owned by such person
and (v) any other information relating to such person that is
required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended (including without limitation such persons' written
consent to being named in the proxy statement as a nominee and to
serving as a director if elected); and (b) as to the stockholder
giving the notice (i) the name and address, as they appear on the
Corporation's books, of such stockholder and (ii) the class and
number of shares of the Corporation which are beneficially owned
by such stockholder. At the request of the Board of Directors
any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. No person shall be
eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth in this
Section 15. The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination
was not made in accordance with the procedures prescribed by the
By-Laws, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
ARTICLE III
BOARD COMMITTEES
________________
Section 1. Board Committees. The Board may, by
________________
resolution passed by a majority of the entire Board, designate
one or more committees, each committee to consist of two or more
of the directors of the Corporation. The Board may designate one
or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent permitted by law
and to the extent provided in the resolution of the Board of
Directors, shall have and may exercise the powers of the Board in
the management of the business and affairs of the Corporation,
and may authorize the seal of the Corporation to be affixed to
all papers which may require it; provided, however, that in the
absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the Board to act at the meeting in the place of any such absent
or disqualified member. Each committee shall keep minutes of its
proceedings and shall report such minutes to the Board when
required. All such proceedings shall be subject to revision or
alteration by the Board.
Section 2. General. A majority of the Board members
_______
of any committee may determine its action and fix the time and
place of its meetings, unless the Board shall otherwise provide.
Notice of such meetings shall be given to each member of the
committee in the manner provided for in Article II, Section 7.
The Board shall have the power at any time to fill vacancies in,
to change the membership of, or to dissolve any such committee.
ARTICLE IV
OFFICERS
________
Section 1. Number and Qualifications. The officers
_________________________
of the Corporation shall include the Chairman of the Board, a
Vice Chairman, the President, one or more Vice Presidents (one or
of whom may be designated Executive Vice President or Senior Vice
President), the Treasurer, Controller, and the Secretary. Any
two or more offices may be held by the same person. Such
officers shall be elected from time to time by the Board. Each
officer shall hold office until the meeting of the Board
following the next annual meeting of the stockholders, or until
his successor shall have been duly elected and shall have
qualified, or until his death, or until he shall have resigned,
or have been removed, as hereinafter provided in these By-Laws.
The Board may from time to time elect, or delegate to the
Chairman of the Board or the President the power to appoint such
other officers (including one or more Assistant Vice Presidents,
Assistant Treasurers and Assistant Secretaries) and such agents
as may be necessary or desirable for the business of the
Corporation. Such other officers and agents shall have such
duties and shall hold their offices for such terms as may be
prescribed by the Board or by the appointing authority.
Section 2. Resignation. Any officer of the
___________
Corporation may resign at any time by giving written notice of
his resignation to the Board, the Chairman of the Board, the
President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it
shall become effective shall not be specified herein, immediately
upon its receipt; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
Section 3. Removal. Any officer or agent of the
_______
Corporation may be removed, either with or without cause, at any
time, by the vote of the majority of the entire Board at any
meeting of the Board called for such person. Any officer or
agent appointed by the Chairman of the Board or the President
pursuant to Article IV, Section 1 of these By-laws may be
removed, either with or without cause, by the Chairman of the
Board or President. Such removal shall be without prejudice to
the contractual rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office,
_________
whether arising from death, resignation, removal or any other
cause, may be filled for the unexpired portion of the term of the
office which shall be vacant, in the manner prescribed in these
By-Laws for the regular election or appointment to such office.
Section 5. (a) The Chairman of the Board. The
_________________________
Chairman of the Board, if one be elected, shall be the chief
executive officer of the Corporation and shall have the general
active management of the business of the Corporation and general
and active supervision and direction over the other officers,
agents and employees and shall see that their duties are properly
performed; subject, however, to the regulation of the Board of
Directors. He shall, if present, preside at each meeting of the
stockholders and of the Board and shall be an ex officio member
of all committees of the Board. He shall perform all duties
incident to the office of Chairman of the Board and chief
executive officer and such other duties as may from time to time
be assigned to him by the Board.
(b) The Vice Chairman of the Board. The Vice
______________________________
Chairman of the Board, if one be elected, shall have such powers
and perform all such duties as from time to time may be assigned
to him by the Board or the Chairman of the Board and, unless
otherwise provided by the Board, shall in the case of the absence
or inability to act of the Chairman of the Board, perform the
duties of the Chairman of the Board and when so acting shall have
all the powers of, and be subject to all the restrictions upon,
the Chairman of the Board.
Section 6. The President. The President shall be the
_____________
chief operating officer of the Corporation and shall have
general and active supervision and direction over the business
and affairs of the Corporation and over its several officers,
subject, however, to the direction of the Chairman of the Board
and the control of the Board. If no Chairman of the Board is
elected, or at the request of the Chairman of the Board, or in
the case of his absence or inability to act, unless there be a
Vice Chairman of the Board so designated to act, the President
shall perform the duties of the Chairman of the Board and when so
acting shall have all the powers of, and be subject to all the
restrictions upon, the Chairman of the Board. He 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
or the Chairman of the Board.
Section 7. Vice Presidents. Each Executive Vice
_______________
President, each Senior Vice President and each Vice President
shall have such powers and perform all such duties as from time
to time may be assigned to him by the Board, the Chairman of the
Board, or the President. They shall, in the order of their
seniority, have the power and may perform the duties of the
Chairman of the Board and the President.
Section 8. The Treasurer. The Treasurer shall be the
_____________
chief financial officer of the Corporation and shall exercise
general supervision over the receipt, custody and disbursement of
corporate funds. He shall have such further powers and duties as
may be conferred upon him from time to time by the President or
the Board of Directors. He shall perform the duties of
Controller if no one is elected to that office.
Section 9. The Controller. The Controller shall be
______________
the chief accounting officer of the Corporation and shall
maintain adequate records of all assets, liabilities and
transactions of the Corporation; he shall establish and maintain
internal accounting controls and, in cooperation with the
independent public accountants selected by the Board, shall
supervise internal auditing. He shall have such further powers
and duties as may be conferred upon him from time to time by the
President or the Board of Directors.
Section 10. The Secretary. The Secretary shall
_____________
(a) keep or cause to be kept in one or more books
provided for the purpose, the minutes of all meetings of the
Board, the committees of the Board and the stockholders;
(b) see that all notices are duly given in
accordance with the provisions of these By-Laws and as
required by law;
(c) be custodian of the records and the seal of
the Corporation and affix and attest the seal to all stock
certificates of the Corporation (unless the seal be a
facsimile, as hereinafter provided) and affix and attest the
seal to all other documents to be executed on behalf of the
Corporation under its seal;
(d) see that the books, reports, statements,
certificates and other documents and records required by law
to be kept and filed are properly kept and filed; and
(e) in general, perform all the duties incident
to the office of Secretary and such other duties as from
time to time may be assigned to him by the Board, the
Chairman of the Board, or the President.
Section 11. Compensation. The compensation of the
____________
officers of the Corporation for their services as such officer
shall be fixed from time to time by the Board; provided, however,
that the Board may delegate to the Chairman of the Board or the
President the power to fix the compensation of officers and
agents appointed by the Chairman of the Board or the President,
as the case may be. An officer of the Corporation shall not be
prevented from receiving compensation by reason of the fact that
he is also a director of the Corporation, but any such officer
who shall also be a director shall not have any vote in the
determination of the amount of compensation paid to him.
ARTICLE V
INDEMNIFICATION
_______________
Section 1. Right to Indemnification. The Corporation
________________________
shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that he is or
was a director of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust,
or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
Section 2. Prepayment of Expenses. The Corporation
______________________
may, in its discretion, pay the expenses (including attorneys'
fees) incurred in defending any proceeding in advance of its
final disposition, provided, however, that the payment of
expenses incurred by a director or officer in advance of the
final disposition of the proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all
amounts advanced if it should be ultimately determined that the
director or officer is not entitled to be indemnified under this
Article or otherwise. Such expenses (including attorneys' fees)
incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the Board of Directors deems
appropriate.
Section 3. Claims. If a claim for indemnification or
______
payment of expenses under this Article is not paid in full
within sixty days after a written claim therefor has been
received by the Corporation, the claimant may file suit to
recover the unpaid amount of such claim and, if successful in
whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall
have the burden of proving that the claimant was not entitled to
the requested indemnification or payment of expenses under
applicable law.
Section 4. Non-Exclusivity of Rights. The rights
_________________________
conferred on any person by this Article V shall not be exclusive
of any other rights which such person may have or hereafter
acquire under any statute, provision of the Certificate of
Incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Other Indemnification; Insurance. The
________________________________
Corporation's obligation, if any, to indemnify any person who
was or is serving at its request as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust, or other enterprise shall be reduced by any amount such
person may collect as indemnification from such other
corporation, partnership, joint venture, trust, or other
enterprise. The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust,
or other enterprise against any liability asserted against him in
any such capacity, or arising out of his status as such, whether
or not the Corporation would have the power to indemnify him
against such liability under the provisions of law or this
section.
Section 6. Amendment or Repeal. Any repeal or
___________________
modification of the foregoing provisions of this Article V shall
not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE VI
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
______________________________________________
Section 1. Execution of Contracts. Except as
______________________
otherwise required by statute, the Certificate of Incorporation
or these By-Laws, any contracts or other instruments may be
executed and delivered in the name and on behalf of the
Corporation by such officer or officers (including any assistant
officer) of the Corporation as the Board may from time to time
direct. Such authority may be general or confined to specific
instances as the Board may determine. Unless authorized by the
Board or expressly permitted by these By-Laws, an officer or
agent or employee shall not 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 to
any amount.
Section 2. Loans. Unless the Board shall otherwise
_____
determine, either (a) the Chairman of the Board, the Vice
Chairman of the Board or the President, singly, or (b) a Vice
President, together with the Treasurer, may effect loans and
advances at any time for the Corporation or guarantee any loans
and advances to any subsidiary of the Corporation, from any bank,
trust company or other institution, or from any firm, corporation
or individual, and for such loans and advances may make, execute
and deliver promissory notes, bonds or other certificates or
evidences or indebtedness of the Corporation, or guarantee of
indebtedness of subsidiaries of the Corporation, but no officer
or officers shall mortgage, pledge, hypothecate or transfer any
securities or other property of the Corporation, except when
authorized by the Board.
Section 3. Check, Drafts, Etc. All checks, drafts,
__________________
bills of exchange or other orders for the payment of money out
of the funds of the Corporation, and all notes or other evidences
of indebtedness of the Corporation, shall be signed in the name
and on behalf of the Corporation by such persons and in such
manner as shall from time to time be authorized by the Board.
Section 4. Deposits. All funds of the Corporation not
________
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or other
depositories as the Board may from time to time designate or as
may be designated by any officer or officers of the Corporation
to whom such power of designation may from time to time be
delegated by the Board. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, checks,
drafts and other orders for the payment of money which are
payable to the order of the Corporation may be endorsed, assigned
and delivered by any officer or agent of the Corporation, or in
such manner as the Board may determine by resolution.
Section 5. General and Special Bank Accounts. The
_________________________________
Board may from time to time authorize the opening and keeping of
general and special bank accounts with such banks, trust
companies or other depositories as the Board may designate or as
may be designated by any officer or officers of the Corporation
to whom such power of designation may from time to time be
delegated by the Board. The Board may make such special rules
and regulations with respect to such bank accounts, not
inconsistent with the provisions of these By-laws, as it may deem
expedient.
Section 6. Proxies in Respect of Securities of Other
_________________________________________
Corporations. Unless otherwise provided by resolution adopted
____________
by the Board of Directors, the Chairman of the Board, the
President, or a Vice President may from time to time appoint an
attorney or attorneys or agent or agents, of the Corporation, in
the name and on behalf of the Corporation to cast the votes which
the Corporation may be entitled to cast as the holder of stock or
other securities in any other corporation, any of whose stock or
other securities may be held by the Corporation, at meetings of
the holders of the stock or other securities of such other
corporation, or to consent in writing, in the name of the
Corporation as such holder, to any action by such other
corporation, and may instruct the person or persons so appointed
as to the manner of casting such votes or giving such consent,
and may execute or cause to be executed in the name and on behalf
of the Corporation and under its corporate seal, or otherwise,
all such written proxies or other instruments as he may deem
necessary or proper.
ARTICLE VII
SHARES, ETC.
____________
Section 1. Stock Certificates. Each holder of shares
__________________
of stock of the Corporation shall be entitled to have a
certificate, in such form as shall be approved by the Board,
certifying the number of shares of the Corporation owned by him.
The certificates representing shares of stock shall be signed in
the name of the Corporation by the Chairman of the Board or the
President or a Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer
and sealed with the seal of the Corporation (which seal may be a
facsimile, engraved or printed); provided, however, that where
any such certificate is countersigned by a transfer agent other
than the Corporation or its employee, or is registered by a
registrar other than the Corporation or one of its employees, the
signature of the officers of the Corporation upon such
certificates may be facsimiles, engraved or printed. In case any
officer who shall have signed or whose facsimile signature has
been placed upon such certificates shall have ceased to be such
officer before such certificates shall be issued, they may
nevertheless be issued by the Corporation with the same effect as
if such officer were still in office at the date of their issue.
Section 2. Record of Stockholders. The stock record
______________________
books and the blank stock certificate books shall be kept by the
Secretary or by any other officer or agent designated by the
Board of Directors.
Section 3. Transfer of Shares. Transfers of shares of
__________________
stock of the Corporation shall be made on the stock records of
the Corporation only upon authorization by the registered holder
thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary or with a
transfer agent, and on surrender of the certificate or
certificates for such shares properly endorsed or accompanied by
a duly executed stock transfer power and the payment of all taxes
thereon. Except as otherwise provided by law, the Corporation
shall be entitled to recognize the exclusive right of a person in
whose name any share or shares stand on the record of
stockholders as the owner of such share or shares for all
purposes, including, without limitation, the rights to receive
dividends or other distributions, and to vote as such owner.
Section 4. Lost, Destroyed or Mutilated Certificates.
_________________________________________
The holder of any certificate representing shares of stock of
the Corporation shall immediately notify the Corporation of any
loss, destruction or mutilation of such certificate, and the
Corporation may issue a new certificate of stock in the place of
any certificate theretofore issued by it which the owner thereof
shall allege to have been lost, stolen, or destroyed or which
shall have been mutilated. The Board may, in its discretion,
require such owner or his legal representative to give the
Corporation a bond in such sum, limited or unlimited, and in such
form and with such surety or sureties as the Board in its
absolute discretion shall determine, to indemnify the Corporation
against any claim that may be made against it on account of the
alleged lost, theft, or destruction of any such certificate, or
the issuance of a new certificate.
ARTICLE VIII
OFFICES
_______
Section 1. Principal or Registered Office. The
______________________________
principal registered office of the Corporation shall be at such
place as may be specified in the Certificate of Incorporation of
the Corporation or other certificate filed pursuant to law, or if
none be so specified, at such place as may from time to time be
fixed by the Board.
Section 2. Other Offices. The Corporation also may
_____________
have an office or offices other than said principal or
registered office, at such place or places either within or
without the state of incorporation.
ARTICLE IX
FISCAL YEAR
___________
The fiscal year of the Corporation shall be determined
by the Board.
ARTICLE X
SEAL
____
The Board shall provide a corporate seal which shall
contain the name of the Corporation, the words "Corporate Seal"
and the year and state of incorporation.
ARTICLE XI
AMENDMENTS
__________
Section 1. Shareholders. These By-laws may be amended
____________
or repealed, or new By-laws may be adopted, at any annual or
special meeting of the stockholders, by a majority of the total
votes of the stockholders or when stockholders are required to
vote by class by a majority of the appropriate class, in person
or represented by proxy and entitled to vote on such action;
provided, however, that the notice of such meeting shall have
been given as provided in these By-laws, which notice shall
mention that amendment or repeal of these By-laws, or the
adoption of new By-laws, as one of the purposes of such meeting.
Section 2. Board of Directors. These By-laws may also
__________________
be amended or repealed or new By-laws may be adopted, by the
Board at any meeting thereof; provided, however, that notice of
such meeting shall have been given as provided in these By-laws,
which notice shall mention that amendment or repeal of the By-
laws, or the adoption of new By-laws, is one of the purposes of
such meetings. By-laws adopted by the Board may be amended or
repealed by the stockholders as provided in Section 1 of this
Article XI.
Exhibit 99
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
----------------------------------------x
SUSAN KAUFMAN, on behalf of herself: :
and all others similarly situated, :
:
Plaintiff, :
:
v. :
:
JACK NELSON, ROBERT SPIRA, : C.A. No. 14866
SOL TRIEBWASSER, GARY A. KITTRELL, :
GEORGE A. SILVER, GEORGE AARON, :
JOHN A. LYNCH, JOSEPH DEROSE, :
BERNARD WEINER, ADVANCED MAMMOGRAPHY :
SYSTEMS, INC. and ADVANCED NMR :
SYSTEMS, INC., :
:
Defendants. :
----------------------------------------x
CLASS ACTION COMPLAINT
______________________
Plaintiff, by and through her attorneys, alleges upon
information and belief, except as to paragraph 2, which she
alleges upon personal knowledge, as follows:
NATURE OF THE ACTION
____________________
1. This is a stockholders' class action on behalf of the
public stockholders of Advanced Mammography Systems, Inc. ("AMS"
or the "Company"), against certain officers and directors and the
controlling shareholder of AMS to enjoin certain actions of the
defendants related to the acquisition of the outstanding shares
of AMS common stock by its majority controlling shareholder,
defendant Advanced NMR Systems, Inc. ("NMR").
THE PARTIES
___________
2. Plaintiff Susan Kaufman has been at all times relevant
to the action, and continues to be, an owner of 500 shares of
AMS common stock.
3. Defendant AMS is a corporation duly organized and
existing under the laws of the State of Delaware, with its
principal executive offices located at 46 Jonspin Road,
Wilmington, Massachusetts. AMS is a development-stage company
which was organized to acquire and develop proprietary technology
from NMR in order to design, manufacture, and commercialize a
dedicated magnetic resonance imaging ("MRI") system for breast
imaging which can be used in the detection of breast tissue
abnormalities and aid in the diagnosis of breast cancer.
4. Defendant NMR is also a Delaware corporation with its
principal executive offices located at 46 Jonspin Road,
Wilmington, Massachusetts. NMR develops and manufactures
ultrafast MRI technology for clinical applications and advanced
research. NMR owns 61% of the outstanding shares of AMS and, as
controlling shareholder of AMS, owes fiduciary obligations of
good faith, candor, loyalty and fair dealing to the public
minority shareholders of AMS.
5. Defendant Jack Nelson ("Nelson") is and has been at all
relevant times the Chairman of AMS. In addition, Nelson serves
as the Chairman and Treasurer of NMR.
6. Defendant Robert Spira ("Spira") is and has been at all
relevant times the Vice Chairman of AMS. In addition, Spira is
and has been at all relevant times the Vice Chairman and a
director of NMR.
7. Defendants George Aaron, George A. Silver, Sol
Triebwasser and John A. Lynch are and have been at all relevant
times directors of AMS and NMR. Defendants Gary A. Kittrell,
Joseph DeRose and Bernard Weiner are and have been at all
relevant times directors of AMS (collectively, with defendants
Nelson and Spira, the "Individual Defendants").
8. By virtue of their positions as directors and/or
officers of AMS and/or their exercise of control and dominant
ownership over the business and corporate affairs of AMS, each
and every of the Individual Defendants and NMR have, and at all
relevant times had, the power to control and influence, and did
control and influence AMS and cause it to engage in the practices
complained of herein. Each Individual Defendant and NMR owed and
owes AMS and its stockholders fiduciary obligations and were and
are required to: use their ability to control and manage AMS in
a fair, just and equitable manner; act in furtherance of the best
interests of AMS and its stockholders; refrain from abusing their
positions of control; and refrain from favoring their own
interests at the expense of AMS and its stockholders.
9. As discussed in detail below, NMR and the Individual
Defendants, who control the actions of AMS, have breached their
fiduciary duties to AMS's public stockholders by attempting to
acquire the publicly-held minority shares of AMS for unfair and
inadequate consideration.
10. Each defendant herein is sued individually as a
conspirator and aider and abettor, and in the case of the
Individual Defendants, in their capacity as directors and/or
officers of AMS. The liability of each arises from the fact that
they have engaged in all or part of the unlawful acts, plans,
schemes, or transactions complained of herein.
CLASS ACTION ALLEGATIONS
________________________
11. Plaintiff brings this action on behalf of herself and
as a class action, pursuant to Rule 23 of the Rules of the Court
of Chancery, on behalf of all other public stockholders of AMS
(excluding defendants herein and any person, firm, trust,
corporation, or other entity related to or affiliated with any of
them and their successors in interest), who are or will be
threatened with injury arising from defendants' actions as more
fully described herein (the "Class").
12. This action is properly maintainable as a class action
for the following reasons:
(a) The Class of stockholders for whose benefit this
action is brought is so numerous that joinder of all members is
impracticable. As of March 15, 1995, AMS had approximately 6.5
million shares of common stock outstanding, collectively held by
approximately 77 stockholders of record and many beneficial
owners. Members of the Class are scattered throughout the United
States.
(b) There are questions of law and fact which are
common to the Class and which predominate over questions
affecting any individual Class member, including whether the
defendants have breached the fiduciary duties owed by them to
plaintiff and other members of the Class by reason of the acts
described herein.
(c) Plaintiff's claims are typical of the claims of
the Class in that all members of the Class will be damaged by the
defendants' actions.
(d) Plaintiff is committed to the vigorous prosecution
of this action and has retained competent counsel experienced in
litigation of this nature. Plaintiff is an adequate
representative of the Class and anticipates that there will not
be any difficulty in the management of this litigation as a class
action.
(e) The prosecution of separate actions by individual
members of the Class would create a risk of inconsistent or
varying adjudications with respect to individual members of the
Class which would establish incompatible standards of conduct for
the party opposing the Class.
(f) Defendants have acted and will continue to act on
grounds generally applicable to the Class, thereby making
appropriate, inter alia, final injunctive or corresponding
_____ ____
declaratory relief with respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
_______________________
13. Except for skin cancer, which has a low mortality rate,
breast cancer strikes women more frequently than any other form
of cancer. Breast cancer is second to lung cancer in the number
of cancer deaths among women.
14. In the United States, National Cancer Institute
guidelines recommend that women over 50 undergo an annual
screening for breast cancer. Screening exams which result in
early detection of the disease lead to increased survival rates
among breast cancer patients. Approximately 25 million screening
procedures were performed in 1995, generally utilizing
conventional x-ray and ultrasound equipment.
15. However, screening x-ray mammography results in
ambiguous or indeterminate findings in 15-20% of the patients
tested.
16. MRI imaging, a well-established technique, provides
medical images for the diagnosis and detection of disease. The
systems use magnets, digital computers and controlled radio waves
to derive cross-sectional (two-dimensional) and volume (three-
dimensional) pictures of human anatomy, which can be displayed
either on film or a video monitor. MRI imaging provides
information about the concentration and the physical and
chemical environment of atomic nuclei within the body, without
the need for invasive surgery. Furthermore, MRI does not use
ionizing radiation, thus, it is relatively risk-free.
17. Current commercially available MRI systems are whole
body scanners, which are very large and expensive for discrete
uses such as breast imaging. Accordingly, AMS was organized in
July 1992 to design, manufacture, and commercialize a dedicated
(or partial body) MRI system for breast imaging which can be used
to detect and characterize breast tissue abnormalities.
18. In January 1993, AMS completed a public offering of
1,483,500 shares of common stock at $6.00 per share. The
offering proceeds were used for the repayment of debt, for
research and development and for working capital.
19. On April 15, 1994, defendant Nelson stated
affirmatively: "we believe that the market for MR mammography is
already forming, and that Advanced Mammography Systems will be a
premier provider of such systems."
20. On June 24, 1994, AMS announced at its annual meeting
of shareholders that it had successfully obtained images with
components used on its dedicated MRI mammography system. William
H. Voorheis, President and Chief Operating Officer, stated:
This is an epic milestone for the Company. The
successful imaging of our dedicated MR mammography
system is the first step to delivering MR technology
for breast imaging at greatly reduced cost while
improving breast cancer detection.
21. In February 1995, AMS filed a 501(k) application with
the U.S. Food and Drug Administration (the "FDA") seeking
clearance for commercial sale and use of its Aurora dedicated MR
Breast Imaging System.
22. On September 28, 1995, AMS announced that it had
entered an agreement with the University of Texas Medical Branch
at Galveston ("UTMB") for its first Aurora system installation -
for clinical evaluation at UTMB's Breast Imaging Center.
23. In connection with the UTMB announcement, Peter B.
Roemer, Ph.D., executive vice president of research and
technology for AMS stated:
The Aurora system was designed for patient comfort and
user-friendly operation, as well as maximum image
resolution. We are confident it will ultimately become
an important tool in more accurately diagnosing breast
disease for high risk women for whom conventional x-ray
mammography is insufficient.
According to NMR's most recent 10-K, "the unit will be shipped to
the University's Breast Imaging Clinic in February 1996."
24. NMR's 1995 10-K also stated that: "AMS is negotiating
with several other breast imaging centers to establish additional
beta test sites for this product and is engaged in pre-market
activities to educate potential customers about the products
capabilities."
25. AMS is thus poised for substantial future growth and
profitability. Reflecting its promising prospects, its stock
traded as high as $15 per share as recently as June 1995.
26. In contrast, NMR, according to its most recent 10-K,
realized a net loss of $1,677,758 or $.07 per share for the nine
months ended September 30, 1995.
27. On February 5, 1996, AMS and NMR announced that they
had entered into a definitive merger agreement (the "Agreement").
Pursuant to the Agreement, the two companies would merge in a
stock swap transaction and AMS shareholders would receive $2.625
in NMR common stock for each AMS share, subject to certain
conditions.
28. AMS and NMR further announced that the actual number of
NMR shares to be issued for each AMS share will be determined by
dividing $2.625 by the average closing price of NMR common stock
over a 30 day trading period ending five days prior to the
closing of the transaction, up to a limit of 1.297059 NMR shares
for each share of AMS common stock. Therefore, the number (and
value) of NMR shares to be received is capped.
29. The Agreement is timed to take advantage of the
Company's severely depressed share price, which is currently
well below its 52-week high of $15 1/4. Moreover, the Company
will soon realize the substantial benefits of its much-touted
Aurora system, which has not yet been fully reflected in the
price of AMS's stock. NMR has breached its fiduciary duties by
failing to offer consideration to the Company's minority
shareholders which takes into account the future financial
prospects of the Company's products as well as its important
new-product developments.
30. Furthermore, in 1992, AMS was granted by NMR a
perpetual, worldwide exclusive, royalty-free license for all of
NMR's proprietary technology if useful in connection with
developing a dedicated MRI system for mammography (the "Field of
Use"). Additionally, AMS has been granted a 50% interest in any
entity which may be organized by NMR to develop dedicated use MRI
scanners outside the Field of Use and a 50% interest in any net
profits derived by NMR from the sale or license of dedicated use
MRI systems based on information outside the Field of Use. By
virtue of the Agreement, NMR seeks effectively to rescind its
licensing agreement and appropriate to its exclusive use AMS's
lucrative corporate opportunity.
31. By reason of its position as a majority stockholder of
AMS, NMR is in possession of non-public information concerning
AMS, which it and the Individual Defendants have not disclosed to
AMS's public stockholders.
32. The proposed merger offer to AMS's public stockholders
does not represent the true value of the Company and is
unconscionable, unfair and grossly inadequate and constitutes
unfair dealing.
33. The proposed transaction will deny class members their
right to share proportionately in the true value of AMS's
valuable and profitable business, and future growth in profits
and earnings, at a time when the Company is poised to
dramatically increase its profitability.
34. Defendants' fiduciary obligations require them to:
(a) act independently so that the interests of AMS's
public stockholders will be protected;
(b) adequately ensure that no conflicts of interest
exist between defendants' own interests and their fiduciary
obligation of entire fairness or, if such conflicts exist, to
ensure that all the conflicts are resolved in the best interests
of AMS's public stockholders; and
(c) provide AMS stockholders with independent
representation in the negotiations with NMR.
35. Because NMR controls over 60% of AMS, no auction or
market check can be effected to establish AMS's worth through
arms-length bargaining. Thus, NMR has the power and is
exercising its power to acquire AMS's minority shares and dictate
terms which are in NMR's best interest, without competing bids
and regardless of the wishes or best interests of the Class
members.
36. Defendants' purported review of the transaction by a
special committee of AMS's "independent directors" which,
according to defendants, has reviewed the agreement and found it
to be fair to the Company's shareholders from a financial point
of view, is insufficient. As stated above, each of AMS's
directors, with the exception of defendants Kittrell, DeRose and
Weiner, is also a director and/or officer of NMR. Defendants
Kittrell, DeRose and Weiner are dependent upon the remaining
directors and NMR for their positions as directors and the
substantial benefits that result from that position. In
addition, all of the AMS directors have intermingled personal and
business relationships. Thus, each of the Individual Defendants
suffers from disabling conflicts of interest in that their desire
to remain entrenched in their positions at AMS and advance the
interests of NMR are in conflict with their obligation to
maximize shareholder value and secure fair value for AMS's
minority shareholders.
37. The AMS Board, dominated and controlled by individuals
and entities whose ownership interests predated the public
offering, have agreed to the proposed transaction because their
desire is to convert their AMS investment at this time, at a
substantial premium over their cost, notwithstanding that class
_____
members will be receiving substantially less than they paid in
the public offering and in the open market. Moreover, the public
minority was induced to purchase AMS stock based upon the
long-term value of their investment as touted in the Prospectus.
38. By reason of the foregoing, defendants have violated
the fiduciary duties which each of them owes to plaintiff and the
other members of the Class.
39. Each of the defendants has rendered substantial
assistance in the accomplishment of the wrongdoing complained of
herein. In taking the actions, as particularized herein, to aid
and abet and substantially assist the wrongs complained of, all
defendants acted with an awareness of the primary wrongdoing and
realized that their conduct would substantially assist the
accomplishment of that wrongdoing and were aware of their overall
contribution to the conspiracy, common scheme and course of
wrongful conduct.
40. By reason of the foregoing, defendants have wrongfully
participated in unfair dealing toward the members of the Class
and have engaged in and have substantially assisted and aided and
abetted each other in breaching fiduciary duties owed to
plaintiff and other members of the Class.
41. By virtue of the acts and conduct alleged herein, NMR
and the Individual Defendants are not complying with their
fiduciary duties and are carrying out a preconceived plan and
scheme to advance NMR's interests at the expense of AMS's public
shareholders.
42. Unless enjoined by this Court, defendants will continue
to breach their fiduciary duties owed to plaintiff and the other
members of the Class, and may consummate the proposed
transaction, which will exclude the Class from its fair
proportionate share of AMS's valuable products and businesses,
all to the irreparable harm of the Class, as aforesaid.
43. Plaintiff and the other Class members are immediately
threatened by the acts and transactions complained of herein,
which have caused and will cause them irreparable injury.
44. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment and preliminary and
permanent relief, including injunctive relief, in her favor and
in favor of the Class and against defendants as follows:
A. Declaring that this action is properly
maintainable as a class action, and certifying plaintiff as a
class representative;
B. Declaring that the defendants and each of them
have committed or participated in a gross abuse of trust and have
breached their fiduciary duties to plaintiff and other members of
the Class or aided and abetted such breaches;
C. Enjoining the proposed transaction and, if the
transaction is consummated, rescinding the transaction;
D. Awarding plaintiff and the Class compensatory
damages and/or rescissory damages;
E. Awarding plaintiff the costs and disbursements of
this action, including allowance for reasonable plaintiff's
attorneys' and experts' fees; and
F. Granting such other, and further relief as this
Court may deem to be just and proper.
Dated: February 26, 1996
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:________________________________________
First Federal Plaza, Suite 214
P.O.Box 1070
Wilmington, DE 19899-1070
(302)656-4433
Attorneys for Plaintiff
OF COUNSEL:
David J. Bershad
Steven G. Schulman
U. Seth Ottensoser
MILBERG WEISS BERSHAD
HYNES & LERACH LLP
One Pennsylvania Plaza
New York, NY 10119
(212) 594-5300
PETER FISCHBEIN, ESQ.
777 Terrace Avenue
Hasbrouck Heights, N.J. 07604
(201) 288-8220
