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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PARACELSUS HEALTHCARE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
CALIFORNIA 95-3565943
(State or Other Jurisdiction of Incorporation or (IRS Employer Identification
Organization) No.)
</TABLE>
515 WEST GREENS ROAD, SUITE 800
HOUSTON, TEXAS 77067
(Address, Including Zip Code, of Principal Executive Offices)
CHAMPION HEALTHCARE CORPORATION EMPLOYEE STOCK OPTION PLAN
CHAMPION HEALTHCARE CORPORATION EMPLOYEE STOCK OPTION PLAN NO. 2
CHAMPION HEALTHCARE CORPORATION EMPLOYEE STOCK OPTION PLAN NO. 3
CHAMPION HEALTHCARE CORPORATION SENIOR EXECUTIVE STOCK OPTION PLAN NO. 4
CHAMPION HEALTHCARE CORPORATION SELECTED EXECUTIVE STOCK OPTION PLAN NO. 5
CHAMPION HEALTHCARE CORPORATION DIRECTORS' STOCK OPTION PLAN
CHAMPION HEALTHCARE CORPORATION FOUNDERS' STOCK OPTION PLAN
CHAMPION HEALTHCARE CORPORATION PHYSICIANS' STOCK OPTION PLAN
AMERIHEALTH AMENDED AND RESTATED 1988 NON-QUALIFIED STOCK OPTION PLAN
AMERIHEALTH, INC. 1984 NON-QUALIFIED PLAN
AMERIHEALTH, INC. SPECIAL STOCK OPTIONS
CHAMPION/CARESERVICES CONVERTIBLE SECURITIES
(Full Title of the Plans)
ROBERT C. JOYNER
PARACELSUS HEALTHCARE CORPORATION
515 WEST GREENS ROAD, SUITE 800
HOUSTON, TEXAS 77067
(713) 873-6623
(Name, Address, Including Zip Code, and Telephone Number of Agent for Service)
------------------------
COPY TO:
THOMAS C. JANSON, JR.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
300 SOUTH GRAND AVENUE
SUITE 3400
LOS ANGELES, CALIFORNIA 90071
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE PRICE PER SHARE OFFERING PRICE REGISTRATION
REGISTERED REGISTERED (1) (1) FEE (1)
<S> <C> <C> <C> <C>
Common Stock, no stated par
value per share.............. 1,347,204(2) $8.25 $11,114,433 $3,833
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rules 457(c) and (h) under the Securities Act of 1933, as amended (the
"Securities Act").
(2) Plus such additional number of shares of common stock, no stated par value,
of Paracelsus Healthcare Corporation (the "Common Stock") as may be issuable
pursuant to the antidilution provisions of the Plans.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
have been or will be sent or given to employees as specified by Rule 428(b)(1)
under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the registrant, Paracelsus Healthcare Corporation, a
California corporation (the "Company"), pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act") are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended September 30, 1995;
(b) Quarterly Reports on Form 10-Q for the periods ended December 31, 1995,
March 31, 1996 and June 30, 1996;
(c) Current Reports on Form 8-K dated December 8, 1995, April 12, 1996 and
May 17, 1996; and
(d) Prospectus dated August 13, 1996 relating to the offering of 4,600,000
shares of Common Stock, including the description of the Common Stock
contained therein.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed document that is
or is deemed to be incorporated by reference herein modifies or supersedes such
previous statement. Any statement so modified or superseded shall not be deemed
to constitute a part of this registration statement, except as so modified or
superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California Corporations Code authorizes a court to award,
or a corporation's Board of Directors to grant, indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. Article IV of the Company's Articles
of Incorporation (Exhibit 4.1 hereto) and Article V of the Company's Bylaws
(Exhibit 4.2 hereto) provide for indemnification of the Company's directors,
officers, employees and other agents to the maximum extent permitted by the
California Corporations Code.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
2
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ITEM 8. EXHIBITS.
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<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -------------------------------------------------------------------------------------------
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Company.
4.2 Amended and Restated Bylaws of the Company.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom regarding the legality of the securities
being registered.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Coopers & Lybrand L.L.P., independent accountants.
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (included in their opinion filed as Exhibit
5.1).
24.1 Power of Attorney (included on the signature page of this registration statement).
</TABLE>
ITEM 9. 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. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 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.
(b) The undersigned registrant hereby undertakes 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is
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incorporated by reference in the 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.
(c) 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 foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act 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 or 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 the 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.
4
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints R. J.
Messenger, Charles R. Miller, James G. VanDevender and Robert C. Joyner, and
each of them, his true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution, 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 the registration statement on
Form S-8, Commission File No. 333-10299, filed with respect to the Paracelsus
Healthcare Corporation 1996 Stock Incentive Plan, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and to take such actions in, and file with
the appropriate authorities in, whatever states said attorneys-in-fact and
agents, and each of them, shall determine, such applications, statements,
consents and other documents as may be necessary to register securities of the
Company for sale, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof and the
registrant hereby confers like authority on its behalf.
SIGNATURES
Pursuant to the requirements of the Securities Exchange 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-8 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 this 19th day of
September, 1996.
PARACELSUS HEALTHCARE CORPORATION
By /s/ ROBERT C. JOYNER
-----------------------------------
Robert C. Joyner
SENIOR VICE PESIDENT, SECRETARY AND
GENERAL COUNSEL
5
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Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated, on September 19, 1996.
/s/ DR. MANFRED GEORGE KRUKEMEYER
- ---------------------------------------- Chairman of the Board
Dr. Manfred George Krukemeyer
/s/ R. J. MESSENGER
- ---------------------------------------- Vice Chairman of the Board and
R. J. Messenger Chief Executive Officer (principal
(Attorney-in-Fact) executive officer)
/s/ CHARLES R. MILLER
- ---------------------------------------- President, Chief Operating Officer
Charles R. Miller and Director (principal executive
(Attorney-in-Fact) officer)
/s/ JAMES G. VANDEVENDER
- ---------------------------------------- Executive Vice President, Chief
James G. VanDevender Financial Officer and Director
(Attorney-in-Fact) (principal financial officer)
/s/ ROBERT STARLING
- ---------------------------------------- Controller (principal accounting
Robert Starling officer)
/s/ MICHAEL D. HOFMANN
- ---------------------------------------- Director
Michael D. Hofmann
/s/ CHRISTIAN A. LANGE
- ---------------------------------------- Director
Christian A. Lange
/s/ JAMES A. CONROY
- ---------------------------------------- Director
James A. Conroy
/s/ ANGELO R. MOZILO
- ---------------------------------------- Director
Angelo R. Mozilo
/s/ DARYL J. WHITE
- ---------------------------------------- Director
Daryl J. White
6
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EXHIBIT INDEX
<TABLE>
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EXHIBIT NO. DESCRIPTION PAGE
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4.1 Amended and Restated Articles of Incorporation of the Company.
4.2 Amended and Restated Bylaws of the Company.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom regarding the legality of the securities
being registered.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Coopers & Lybrand L.L.P., independent accountants.
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom (included in their opinion filed as Exhibit
5.1).
24.1 Power of Attorney (included on the signature page of this registration statement).
</TABLE>
7
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EXHIBIT 4.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PARACELSUS HEALTHCARE CORPORATION
A CALIFORNIA CORPORATION
R.J. MESSENGER and ROBERT C. JOYNER certify that:
1. They are the duly elected and acting President and Assistant Secretary,
respectively, of the corporation named above.
2. The articles of incorporation of the corporation shall be amended and
restated to read in full as follows:
FIRST. The name of the corporation is PARACELSUS HEALTHCARE CORPORATION.
SECOND. The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California ("GCLC") other than the banking business, the trust company
business or the practice of a profession permitted to be incorporated by the
California Corporations Code.
THIRD. The total number of shares of all classes of stock which the
corporation shall have authority to issue is 175,000,000, of which 150,000,000
shares of no par value shall be designated as Common Stock and 25,000,000 shares
of the par value of $0.01 per share shall be designated as Preferred Stock.
Shares of Preferred Stock may be issued in series from time to time by the board
of directors, and the board of directors is expressly authorized to fix by
resolution or resolutions the designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions thereof, of the
shares of each series of Preferred Stock, including without limitation the
following:
(a) the distinctive serial designation of such series which shall
distinguish it from other series;
(b) the number of shares included in such series, which number may be
increased or decreased from time to time unless otherwise provided by the
board of directors in the resolution or resolutions providing for the issue
of such series;
(c) the dividend rate (or method of determining such rate, which may be
fixed or variable) payable to the holders of the shares of such series, any
conditions upon which such dividends shall be paid and the date or dates
upon which such dividends shall be payable;
(d) whether dividends on the shares of such series shall be cumulative
and, in the case of shares of any series having cumulative dividend rights,
the date or dates or method of determining the date or dates from which
dividends on the shares of such series shall be cumulative;
(e) the amount or amounts which shall be payable out of the assets of
the corporation to the holders of the shares of such series upon voluntary
or involuntary liquidation, dissolution or winding up the corporation;
(f) the price or prices at which, the period or periods within which and
the terms and conditions upon which the shares of such series may be
purchased or redeemed, in whole or in part, at the option of the corporation
or at the option of the holder or holders thereof or upon the happening of a
specified event or events;
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(g) the obligation, if any, of the corporation to purchase or redeem
shares of such series pursuant to a sinking fund or otherwise and the price
or prices at which, the period or periods within which and the terms and
conditions upon which the shares of such series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(h) whether or not the shares of such series shall be convertible or
exchangeable, at any time or times at the option of the holder or holders
thereof or at the option of the corporation or upon the happening of a
specified event or events, into shares of any other class or classes or any
other series of the same or any other class or classes of stock or debt
securities of the corporation or of any other entity, and the price or
prices or rate or rates of exchange or conversion and any adjustments
applicable thereto; and
(i) the voting rights, if any, of the holders of the shares of such
series.
Upon this amendment and restatement becoming effective, each of the
outstanding shares of Common Stock shall be split up and converted into
66,159.426 shares of Common Stock.
FOURTH. The board of directors of the corporation is expressly authorized
to adopt, amend or repeal the by-laws of the corporation. This Article Fourth
and the by-laws of the corporation may not be amended, modified or repealed by
the holders of the capital stock of the corporation except by the affirmative
vote of the holders of not less than a majority of the Total Voting Power (as
hereinafter defined) of the corporation and the affirmative vote of the holders
of a majority of the voting power of all outstanding Public Shares (as
hereinafter defined), each considered for purposes hereof as a single class.
For the purposes of these Articles, the following terms shall have the
following meanings: The term "Public Shares" shall mean shares of capital stock
of the corporation not beneficially owned (as determined pursuant to Rule 13d-3
or Rule 13d-5 of the Securities Exchange Act of 1934, as amended, as in effect
on the date this Restated Certificate of Incorporation becomes effective (the
"Exchange Act")) by any individual, partnership, corporation, limited liability
company, trust or other entity (a "Controlling Person") that is a member of any
group (as defined under Rule 13d-5 of the Exchange Act) that beneficially owns
25 percent or more of the Total Voting Power of the corporation; PROVIDED that
the Independent Directors (as hereinafter defined) shall have the power and duty
to construe and apply the provisions of this definition and to make all
determinations necessary or desirable to implement such provisions. The term
"Independent Directors" shall mean the directors of the corporation who are not
employed by, affiliated with or nominees or representatives of any Controlling
Person or employed by or affiliated with the corporation or any of their
respective Subsidiaries (as hereinafter defined), excluding for the purpose of
the foregoing any affiliation by reason of being a member on the Board of
Directors (but not an officer) of the corporation or its Subsidiaries. The term
"Subsidiary" with respect to any person shall mean any corporation or other
organization, whether incorporated or unincorporated, of which at least a
majority of the voting power of all outstanding securities entitled by the terms
thereof to vote generally in the election of directors, or others performing
similar functions with respect to such corporation or other organization, is
directly or indirectly beneficially owned by such person. The term "Total Voting
Power" shall mean the non-diluted aggregate number of votes that may be cast by
the holders of outstanding Voting Securities. The term "Voting Securities" shall
mean securities entitled to vote in the ordinary course in the election of
directors or of persons serving in a similar governing capacity, including the
voting rights attached to such securities and rights or options to acquire such
securities.
FIFTH. The number of directors of the corporation shall be fixed from time
to time pursuant to the by-laws of the corporation.
The directors of the corporation shall be divided into three classes, as
nearly equal in number as possible, as determined by the board of directors,
with the initial term of office of Class I to expire at the first annual meeting
of shareholders thereafter, the initial term of office of Class II to expire at
the second annual meeting of shareholders thereafter and the initial term of
office of Class III to expire at the third annual meeting of shareholders
thereafter, with each class of directors to hold office until
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their successors have been duly elected and qualified. At each annual meeting of
shareholders following such initial classification and election, directors
elected to succeed the directors whose terms expire at such annual meeting shall
be elected to hold office for a term expiring at the annual meeting of
shareholders in the third year following the year of their election and until
their successors have been duly elected and qualified. If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain or attain a number of directors in each class as
nearly equal as possible, but no decrease in the number of directors may shorten
the term of any incumbent director. This provision shall become effective only
when the corporation becomes a listed corporation within the meaning of Section
301.5 of the GCLC.
Shareholders shall not be entitled to cumulate votes in the election of
directors. This provision shall become effective only when the corporation
becomes a listed corporation within the meaning of Section 301.5 of the GCLC.
No director may be removed except for cause as set forth in Sections 302 and
304 of the GCLC, except as otherwise provided by Section 303 of the GCLC.
In the event that the holders of any class or series of stock of the
corporation shall be entitled, voting separately as a class, to elect any
directors of the corporation, then the number of directors that may be elected
by such holders shall be in addition to the number fixed pursuant to the by-laws
and, except as otherwise expressly provided in the terms of such class or
series, the terms of the directors elected by such holders shall expire at the
annual meeting of shareholders next succeeding their election without regard to
the classification of the remaining directors.
This Article Fifth may not be amended, modified or repealed except by the
affirmative vote of the holders of not less than eighty percent (80%) of the
Total Voting Power and the affirmative vote of the holders of a majority of the
voting power of all outstanding Public Shares, each considered for purposes
hereof as a single class.
SIXTH. No action required or permitted to be taken by the holders of any
class or series of stock of the corporation, including but not limited to the
election of directors, may be taken by written consent or consents and must be
taken at a duly called annual meeting or at a special meeting of shareholders.
This Article Sixth may not be amended, modified or repealed except by the
affirmative vote of the holders of not less than seventy-five percent (75%) of
the Total Voting Power of the corporation and the affirmative vote of the
holders of a majority of the voting power of all outstanding Public Shares, each
considered for purposes hereof as a single class.
SEVENTH. (a) The Board of Directors may not alter, amend or repeal
Sections 2.3, 2.4, 2.7, 2.11, 2.12, 2.14, 2.16, 3.2, 3.3, 3.4, 3.5, 3.8, 3.9,
4.1, 4.4, Article VI or Article IX of the By-laws, except upon the affirmative
vote of not less than seventy-five percent (75%) of the entire Board of
Directors.
(b) In addition to any approval required by the GCLC or any other provisions
of these Articles, the approval of any contract or transaction between the
Corporation or any of its subsidiaries and one or more of its directors or
Controlling Persons (or any of their "affiliates" as such term is defined in
Rule 12b-2 of the Securities and Exchange Act of 1934, as amended), or between
the corporation or any of its subsidiaries and any other corporation,
partnership, association or other organization in which one or more of its
directors or Controlling Persons have a material financial interest, shall
require that (i) the material facts as to his or her relationship or interest
and as to the contract or transaction be fully and fairly disclosed in good
faith to the Board of Directors and (ii) the Board of Directors in good faith
(having determined that the contract is just and reasonable) authorize the
contract or transaction by the affirmative vote of a majority of the
disinterested directors present at the meeting of the Board of Directors at
which such contract or transaction is considered (or, if there is only one
disinterested director, such disinterested director), even though such
disinterested directors consititute less than a quorum. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors which authorizes the contract or transaction. A mere
common directorship does not constitute a material financial interest within the
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meaning of this Article Seventh. A director is not interested within the meaning
of this subdivision in a resolution fixing the compensation of another director
as a director, officer or employee of the corporation, notwithstanding the fact
that the first director is also receiving compensation from the corporation.
If the other provisions hereinabove are met, no such contract or other
transaction contemplated above, or vote of a director, whether one or more, or
the Board of Directors, shall be void or voidable solely because a director is
not a disinterested director with respect to a matter and is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction to which such director is not a
disinterested director or solely because his or her or their votes are counted
for such approval for any purpose other than as provided above.
(c) Dividends on the outstanding shares of the corporation, if any, shall
not be declared except upon the affirmative vote of not less than seventy-five
percent (75%) of the entire Board of Directors at any regular or special
meeting. Dividends may be paid by the corporation in cash, in property, or in
the corporation's own shares, but only as permitted under Chapter 5 of the GCLC.
Subject to limitations upon the authority of the Board of Directors imposed by
any law, the declaration of and provision for payment of dividends shall be at
the discretion of the Board of Directors.
(d) The Board of Directors may, by resolution passed by the affirmative vote
of at least seventy-five percent (75%) of the entire Board of Directors, appoint
from its membership, annually, an Executive Committee of two or more directors,
which shall include the Chief Executive Officer and the President of the
corporation. The appointment or removal of any member (or alternate members) of
the Executive Committee shall require the affirmative vote of not less than
seventy-five percent (75%) of the entire Board of Directors.
This Article Seventh may not be amended, modified or repealed by the holders
of the capital stock of the corporation except by the affirmative vote of the
holders of not less than a majority of the Total Voting Power of the corporation
and the affirmative vote of the holders of a majority of the voting power of all
outstanding Public Shares, each considered for purposes hereof as a single
class.
EIGHTH. The corporation shall not enter into or recommend any Acquisition
Proposal except upon the affirmative vote of not less than seventy-five percent
(75%) of the entire Board of Directors. For purposes of this Article Eighth, an
Acquisition Proposal shall mean any BONA FIDE offer or proposal for (i) a merger
or other business combination (other than a Surviving Company Merger (as
hereinafter defined)) involving the corporation, (ii) the acquisition of any
Voting Securities representing more than 50% of the Total Voting Power of the
corporation after giving effect to such Acquisition Proposal or (iii) the
acquisition of all or substantially all of the assets of the corporation. For
purposes of this Article Eighth, a "Surviving Company Merger" shall mean any
merger or other business combination or reorganization (i) where the transaction
has been approved by a unanimous vote of the entire Board of Directors or (ii)
where the holders of Voting Securities of the corporation prior to such
transaction will beneficially own (as determined pursuant to Rule 13d-3 or Rule
13d-5 of the Exchange Act) in the aggregate at least 60% of the surviving
corporation's Total Voting Power immediately after giving effect to such
transaction.
This Article Eighth may not be amended, modified or repealed except by the
affirmative vote of the holders of not less than a majority of the Total Voting
Power of the corporation and the affirmative vote of the holders of a majority
of the voting power of all outstanding Public Shares, each considered for
purposes hereof as a single class.
NINTH. The liability of directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law. No
amendment, modification or repeal of this Article Ninth shall adversely affect
any right or protection of a director that exists at the time of such amendment,
modification or repeal.
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This Article Ninth may not be amended, modified or repealed except by the
affirmative vote of the holders of not less than eighty percent (80%) of the
Total Voting Power of the corporation and the affirmative vote of the holders of
a majority of the voting power of all outstanding Public Shares, each considered
for purposes hereof as a single class.
TENTH. The corporation is authorized to indemnify the directors, officers,
employees or other agents of the corporation to the fullest extent permissible
under California law.
ELEVENTH. The Board of Directors is expressly authorized to adopt, amend or
repeal a shareholder protection rights plan, which plan (or the securities
issued pursuant to the terms of such plan) may distinguish between shares of
Common Stock or other securities of the same class or series and may distinguish
between shareholders of Common Stock or other securities of the same class or
series.
This Article Eleventh may not be amended, modified or repealed except by the
affirmative vote of the holders of not less than eighty percent (80%) of the
Total Voting Power and the affirmative vote of the holders of a majority of the
voting power of all outstanding Public Shares, each considered for purposes
hereof as a single class.
3. The foregoing amendment and this certificate have been approved by the
Board of Directors of the corporation.
4. The foregoing amendment was approved by the required vote of the
shareholder of the corporation in accordance with Section 902 of the GCLC; the
corporation has only one class of shares and the total number of outstanding
shares of such class entitled to vote with respect to the foregoing amendment
was 450 shares; and the total number of shares of such class voting in favor of
the foregoing amendment equaled or exceeded the vote required, such required
vote being a majority of the outstanding shares of such class.
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Each of the undersigned declares under penalty of perjury under the laws of
the State of California that he has read the foregoing certificate and knows the
contents thereof and that the same is true of his own knowledge.
Dated:
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EXHIBIT 4.2
AMENDED AND RESTATED BYLAWS
OF
PARACELSUS HEALTHCARE CORPORATION
ARTICLE I
CORPORATE OFFICES
1.1 PRINCIPAL OFFICE
The Board of Directors shall fix the location of the principal executive
office of the corporation at any place within or outside the State of
California. If the principal executive office is located outside California and
the corporation has one or more business offices in California, then the Board
of Directors shall fix and designate a principal business office in California.
Unless and until redesignated by the Board of Directors, the principal executive
office of the corporation is 500 Greens Road, Suite 800, Houston, Texas 77067.
1.2 OTHER OFFICES
The Board of Directors may at any time establish branch or subordinate
offices at any place or places.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1 PLACE OF MEETINGS
Except as otherwise provided in these Bylaws, meetings of shareholders shall
be held at any place within or outside the State of California designated by the
Board of Directors. In the absence of any such designation, shareholders'
meetings shall be held at the principal executive office of the corporation or
at any place consented to in writing by all persons entitled to vote at such
meeting, given before or after the meeting and filed with the Secretary of the
corporation.
2.2 ANNUAL MEETING
The annual meeting of shareholders shall be held each year on a date and at
a time designated by the Board of Directors. At each annual meeting, directors
shall be elected and any other proper business may be transacted.
2.3 SPECIAL MEETINGS
Special meetings of the shareholders may be called at any time, subject to
the provisions of Sections 2.4 and 2.5 of these Bylaws, by the Board of
Directors, the Chairman of the Board, the President or the holders of shares
entitled to cast not less than ten percent (10%) of the votes at that meeting;
PROVIDED, that no special meeting shall be held during the period of sixty (60)
days preceding or forty-five (45) days succeeding the date fixed for the annual
meeting of shareholders.
If a special meeting is called by anyone other than the Board of Directors
or the President or the Chairman of the Board, then the request shall be in
writing, specifying the time of such meeting and the general nature of the
business proposed to be transacted, and shall be delivered personally or sent by
registered mail or by other written communication to the Chairman of the Board,
the President, any Vice President or the Secretary of the corporation. The
officer receiving the request forthwith shall cause notice to be given to the
shareholders entitled to vote, in accordance with the provisions of Sections 2.4
and 2.5 of these Bylaws, that a meeting will be held at the time requested by
the person or persons calling the meeting, so long as that time is not less than
thirty-five (35) nor more than sixty (60) days after the receipt of the request.
If the notice is not given within twenty (20) days after receipt
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of the request, then the person or persons requesting the meeting may give the
notice. Nothing contained in this paragraph of this Section 2.3 shall be
construed as limiting, fixing or affecting the time when a meeting of
shareholders called by action of the Board of Directors may be held.
2.4 NOTICE OF SHAREHOLDERS' MEETINGS
All notices of meetings of shareholders shall be written and sent or
otherwise given in accordance with Section 2.5 of these Bylaws not less than ten
(10) (or, if sent by third-class mail pursuant to Section 2.5 of these Bylaws,
not less than thirty (30)) nor more than sixty (60) days before the date of the
meeting to each shareholder entitled to vote thereat. Such notice shall state
the place, date, and hour of the meeting and (i) in the case of a special
meeting, the general nature of the business to be transacted, and no business
other than that specified in the notice may be transacted, or (ii) in the case
of the annual meeting, those matters which the Board of Directors, at the time
of the mailing of the notice, intends to present for action by the shareholders,
but, subject to the provisions of the next paragraph of this Section 2.4, any
proper matter may be presented at the meeting for such action. The notice of any
meeting at which Directors are to be elected shall include the names of nominees
intended at the time of the notice to be presented by the Board for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a director has a direct or indirect financial
interest, pursuant to Section 310 of the California Corporations Code (the
"Code"), (ii) an amendment of the Restated Articles of Incorporation, pursuant
to Section 902 of the Code, (iii) a reorganization of the corporation, pursuant
to Section 1201 of the Code, (iv) a voluntary dissolution of the corporation,
pursuant to Section 1900 of the Code, or (v) a distribution in dissolution other
than in accordance with the rights of any outstanding preferred shares, pursuant
to Section 2007 of the Code, then the notice shall also state the general nature
of that proposal.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of a shareholders' meeting shall be given either personally or by
first-class mail, or, if the corporation has outstanding shares held of record
by five hundred (500) or more persons (determined as provided in Section 605 of
the Code) on the record date for the shareholders' meeting, notice may be sent
by third-class mail, or other means of written communication, addressed to the
shareholder at the address of the shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for the purpose of
notice; or if no such address appears or is given, at the place where the
principal executive office of the corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located. The notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
other means of written communication.
If any notice (or any report referenced in Article VII of these Bylaws)
addressed to a shareholder at the address of such shareholder appearing on the
books of the corporation is returned to the corporation by the United States
Postal Service marked to indicate that the United States Postal Service is
unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if the same shall be available to the shareholder upon written demand of
the shareholder at the principal executive office of the corporation for a
period of one (1) year from the date of the giving of the notice or report to
all other shareholders.
An affidavit of mailing or other means of giving any notice or report in
accordance with the provisions of this Section 2.5, executed by the Secretary,
Assistant Secretary or any transfer agent, shall be prima facie evidence of the
giving of the notice or report.
Except as otherwise prescribed by the Board of Directors in particular
instances and except as otherwise provided by subdivision (c) of Section 601 of
the Code, the Secretary shall prepare and give, or cause to be prepared and
given, the notice of meetings of shareholders.
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2.6 ORGANIZATION OF MEETINGS
The Chairman of the Board of Directors, if any, shall preside at each
meeting of shareholders, or in the absence of the Chairman of the Board of
Directors the Vice-Chairman of the Board of Directors, if any, or in the absence
of the Vice-Chairman the President, or in the absence of the President the Chief
Financial Officer of the Company, or in the absence of the Chief Financial
Officer, by a chairman designated by the Board of Directors, in the absence of
such designation, by a chairman chosen at the meeting. The Secretary shall act
as secretary of all meetings of shareholders and keep the records of such
meetings, and in the absence of the Secretary, his or her duties shall be
performed by any other officer authorized by the Board of Directors or in the
absence of such authorization any officer authorized by these Bylaws or if no
such officer is available or willing to so act, by any person appointed by
resolution duly adopted at the meeting.
The order of business at each such meeting shall be as determined by the
chairman of the meeting. The chairman of the meeting shall have the right and
authority, subject to applicable law and the provisions of the Restated Articles
of Incorporation and these Bylaws, to prescribe such rules, regulations and
procedures and to do all such acts and things as are necessary or desirable for
the proper conduct of the meeting, including without limitation, the
establishment of procedures for the maintenance of order and safety, limitation
on the time allotted to questions or comments on the affairs of the corporation,
restrictions on entry to such meetings after the time prescribed for the
commencement thereof and the opening and closing of the voting polls.
2.7 QUORUM
Unless otherwise provided in the Restated Articles of Incorporation, a
majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of the shareholders. The shareholders
present at a duly called or held meeting at which a quorum is present may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum, if any action taken (other
than adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
In the absence of a quorum, any meeting of shareholders may be adjourned
from time to time by the vote of a majority of the shares represented either in
person or by proxy, but no other business may be transacted, except as provided
in the last sentence of the preceding paragraph.
2.8 ADJOURNED MEETING; NOTICE
Any shareholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the vote of the majority of the
shares represented at that meeting, either in person or by proxy.
When any meeting of shareholders, either annual or special, is adjourned to
another time or place, notice need not be given of the adjourned meeting if its
time and place are announced at the meeting at which the adjournment is taken.
However, if the adjournment is for more than forty-five (45) days from the date
set for the original meeting or if a new record date for the adjourned meeting
is fixed, a notice of the adjourned meeting shall be given to each shareholder
of record entitled to vote at the adjourned meeting in accordance with the
provisions of Sections 2.4 and 2.5 of these Bylaws. At any adjourned meeting,
the corporation may transact any business which might have been transacted at
the original meeting.
2.9 VOTING
The shareholders entitled to vote at any meeting of shareholders shall be
determined in accordance with the provisions of Section 2.12 of these Bylaws,
subject to the provisions of Chapter 7 of the Code.
Elections for directors and voting on any other matter at a shareholders'
meeting need not be by ballot unless a shareholder demands election by ballot at
the meeting and before the voting begins.
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Except as provided in the last paragraph of this Section 2.9, or as may be
otherwise provided in the Restated Articles of Incorporation, each outstanding
share, regardless of class, shall be entitled to one vote on each matter
submitted to a vote of the shareholders. Any holder of shares entitled to vote
on any matter may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or may vote them against the proposal other
than elections to office, but, if the shareholder fails to specify the number of
shares such shareholder is voting affirmatively, it will be conclusively
presumed that the shareholder's approving vote is with respect to all shares
which the shareholder is entitled to vote.
The affirmative vote of the majority of the shares represented and voting at
a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders, unless the vote of a greater number or
percentage of voting shares is required by the Code or by the Restated Articles
of Incorporation.
Except as otherwise provided by law, no shareholder shall be entitled to
cumulate votes for any candidate or candidates. Directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote on the election of directors.
2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT
The transactions of any meeting of shareholders, either annual or special,
however called and noticed, and wherever held, are as valid as though they had
been taken at a meeting duly held after regular call and notice, if a quorum be
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. Neither the business to be
transacted at nor the purpose of any annual or special meeting of shareholders
need be specified in any written waiver of notice or consent to the holding of
the meeting or approval of the minutes thereof, unless otherwise provided in the
Restated Articles of Incorporation or these Bylaws, and except that if action is
taken or proposed to be taken for approval of any of those matters specified in
the second paragraph of Section 2.4 of these Bylaws, the waiver of notice or
consent or approval shall state the general nature of the proposal. All such
waivers, consents, and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
Attendance of a person at a meeting shall constitute a waiver of notice of
and presence at that meeting, except when the person objects, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters required by the
Code to be included in the notice of such meeting but not so included, if such
objection is expressly made at the meeting.
2.11 ACTION BY WRITTEN CONSENT
Except as otherwise provided in the Restated Articles of Incorporation, any
action which may be taken at any annual or special meeting of shareholders may
be taken without a meeting and without prior notice, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
shares 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.
All such consents shall be filed with the Secretary of the corporation and
shall be maintained in the corporate records. Any shareholder giving a written
consent, or the shareholder's proxyholders, or a transferee of the shares, or a
personal representative of the shareholder, or their respective proxyholders,
may revoke the consent by a writing received by the Secretary of the corporation
before written consents of the number of shares required to authorize the
proposed action have been filed with the Secretary, but may not do so
thereafter.
If the consents of all shareholders entitled to vote have not been solicited
in writing, the Secretary shall give prompt notice to those shareholders
entitled to vote who have not consented in writing of
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the taking of any corporate action approved by shareholders without a meeting by
less than unanimous written consent. Such notice shall be given in accordance
with Section 2.5. In the case of approval of (i) contracts or transaction in
which a director has a direct or indirect material financial interest, pursuant
to Section 310 of the Code, (ii) indemnification of agents of the corporation,
pursuant to Section 317 of the Code, (iii) a reorganization of the corporation,
pursuant to Section 1201 of the Code or (iv) a distribution in dissolution other
than in accordance with the rights of outstanding preferred shares, pursuant to
Section 2007 of the Code, such notice shall be given at least ten (10) days
before the consummation of the action authorized by such approval, unless the
consents of all shareholders entitled to vote have been solicited in writing.
2.12 RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS
Except as otherwise provided in the Restated Articles of Incorporation in
order that the corporation may determine the shareholders entitled to notice of
any meeting or to vote, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
prior to the date of such meeting nor more than sixty (60) days before any other
action. Shareholders at the close of business on the record date are entitled to
notice and to vote, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date, except as
otherwise provided in the Restated Articles of Incorporation or the Code.
A determination of shareholders of record entitled to notice of or to vote
at a meeting of shareholders shall apply to any adjournment of the meeting
unless the Board of Directors fixes a new record date for the adjourned meeting,
but the Board of Directors shall fix a new record date if the meeting is
adjourned for more than forty-five (45) days from the date set for the original
meeting.
If the Board of Directors does not so fix a record date: (i) the record date
for determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held; and (ii) the record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, when no prior action
by the Board has been taken, shall be the day on which the first written consent
is given.
The record date for any other purpose shall be as provided in Section 8.1 of
these Bylaws.
2.13 PROXIES
Every person entitled to vote for directors, or on any other matter, shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the Secretary of the
corporation. A proxy shall be deemed signed if the shareholder's name or other
authorization is placed on the proxy (whether by manual signature, typewriting,
telegraphic or electronic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i) the
person who executed the proxy revokes it prior to the time of voting by
delivering a writing to the corporation stating that the proxy is revoked or by
executing a subsequent proxy and presenting it to the meeting or by attendance
at such meeting and voting in person, or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; PROVIDED, HOWEVER, that no proxy shall
be valid after the expiration of eleven (11) months from the date thereof,
unless otherwise provided in the proxy. The dates contained on the forms of
proxy presumptively determine the order of execution, regardless of the postmark
dates on the envelopes in which they are mailed. The revocability of a proxy
that states on its face that it is irrevocable shall be governed by the
provisions of Sections 705(e) and 705(f) of the Code.
2.14 ADVANCE NOTICE
(a) Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the corporation,
except as may be otherwise provided in the
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Restated Articles of Incorporation of the corporation with respect to the right
of holders of certain classes of stock of the corporation to nominate and elect
a specified number of directors in certain circumstances. Nominations of persons
for election to the Board of Directors may be made at any annual meeting of
shareholders, or at any special meeting of shareholders called for the purpose
of electing directors, (i) by or at the direction of the Board of Directors (or
any duly authorized committee thereof) or (ii) by the shareholder of the
corporation (x) who is a shareholder of record on the date of the giving of the
notice provided for in this Section 2.14 and on the record date for the
determination of shareholders entitled to vote at such meeting and (y) who
complies with the notice procedures set forth in this Section 2.14.
In addition to any other applicable requirements, for a nomination to be
made by a shareholder, such shareholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.
To be timely, a shareholders's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of the
shareholders; PROVIDED, HOWEVER, that (i) in the event that the annual meeting
is called for a date that is not within thirty (30) days before or after such
anniversary date notice by the shareholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed for
such public disclosure of the date of the annual meeting was made, whichever
first occurs; and (ii) in the case of a special meeting of shareholders called
for the purpose of electing directors, not later than the close of business on
the tenth (10th) day following the day on which notice of the date of the
special meeting was mailed or public disclosure of the date of the special
meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary must
set forth (x) as to each person whom the shareholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the corporation
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (y) as to the shareholder giving the
notice (i) the name and record address of such shareholder, (ii) the class or
series and number of shares of capital stock of the corporation which are owned
beneficially (as determined pursuant to Rule 13d-3 of the Exchange Act) or of
record by such shareholder, (iii) a description of all arrangements or
understandings between such shareholder and each proposed nominee and any other
person or persons (including their names) pursuant to which the nomination(s)
are to be made by such shareholder, (iv) a representation that such shareholder
intends to appear in person or by proxy at the meeting to nominate the persons
named in its notice and (v) any other information relating to such shareholder
that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied by a written
consent of each proposed nominee to being named as a nominee and to serve as a
director if elected.
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
2.14. If the Chairman of the meeting determines that a nomination was not made
in accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective and such defective nomination shall be
disregarded.
(b) No business may be transacted at an annual meeting of shareholders,
other than business that is either (a) specified in the notice of meeting (or
any supplement thereto) given by or at the
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direction of the Board of Directors (or any duly authorized committee thereof),
(b) otherwise properly brought before the annual meeting by or at the direction
of the Board of Directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the annual meeting by any shareholder of the
corporation (i) who is a shareholder of record on the date of the giving of the
notice provided for in this Section 2.14 and on the record date for the
determination of shareholders entitled to vote at such annual meeting and (ii)
who complied with the notice procedures set forth in this Section 2.14.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a shareholder, such shareholder
must have given timely notice thereof in proper written form to the Secretary of
the corporation.
To be timely, a shareholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of shareholders;
PROVIDED, HOWEVER, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the shareholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed for such public
disclosure of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary must
set forth as to each matter such shareholder proposes to bring before the annual
meeting (i) 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, (ii) the name and record address of such shareholder, (iii) the class
or series and number of shares of capital stock of the corporation which are
owned beneficially (as determined pursuant to Rule 13d-3 of the Exchange Act) or
of record by such shareholders, (iv) a description of all arrangements or
understandings between such shareholder and any other person or persons
(including their names) in connection with the proposal of such business by such
shareholder and any material interest of such shareholder in such business and
(v) a representation that such shareholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of shareholders except
business brought before the annual meeting in accordance with the procedures set
forth in this Section 2.14, PROVIDED, HOWEVER, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 2.14 shall be deemed to preclude discussion by any
shareholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
(c) For so long as the Shareholder Agreement, dated , 1996, between
the corporation and (the "Shareholder Agreement") shall be in effect,
nothing in Sections 2.14(a) or 2.15(b) shall be deemed to limit the rights and
other provisions under the Shareholder Agreement, including without limitation
Sections 6, 7 and 9 thereof.
2.15 INSPECTORS OF ELECTION
In advance of any meeting of shareholders, the Board of Directors may
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed or designated or if any
persons so appointed fail to appear or refuse to act, then the Chairman of the
meeting may, and on the request of any shareholder or a shareholder's proxy
shall, appoint inspectors of election (or persons to replace those who so fail
to appear) at the meeting. The
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number of inspectors shall be either one (1) or three (3). If appointed at a
meeting on the request of one (1) or more shareholders or proxies, the majority
of shares represented in person or by proxy shall determine whether one (1) or
three (3) inspectors are to be appointed.
The inspectors of election shall determine the number of shares outstanding
and the voting power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity, and effect of proxies,
receive votes, ballots or consents, hear and determine all challenges and
questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, (if permitted by the Restated Articles of
Incorporation), determine when the polls shall close, determine the result and
do any other acts that may be proper to conduct the election or vote with
fairness to all shareholders. If there are three (3) inspectors or election the
decision, act or certificate of a majority is effective in all respects as to
the decision, act or certificate or all. Any report or certificate made by the
inspectors of election is prima facie evidence of the facts stated therein.
2.16 COUNTING CONSENTS.
In the event of an amendment to the Restated Articles of Incorporation or
these Bylaws to permit shareholders action by written consent and except as
otherwise provided by the Restated Articles of Incorporation or by these Bylaws,
within three business days of the receipt of the first dated consent delivered
to the corporation in the manner provided by law and these Bylaws, the Secretary
shall engage nationally recognized independent inspectors of elections for the
purpose of performing a ministerial review of the validity of the consents and
revocations. The cost of retaining inspectors of elections shall be borne by the
corporation.
Consents and revocations shall be delivered to the inspectors upon receipt
by the corporation, the shareholder or shareholders soliciting consents or
soliciting revocations in opposition to action by consent proposed by the
corporation (the "Soliciting Shareholders") or their proxy solicitors or other
designated agents. As soon as consent and revocations are received, the
inspectors shall review the consents and revocations and shall maintain a count
of the number of valid and unrevoked consents. The inspectors shall keep such
count confidential and shall not reveal the count to the corporation, the
Soliciting Shareholders or their representatives or any other person. As soon as
practicable after the earlier of (i) sixty days after the date of the earliest
dated consent delivered to the corporation in the manner provided by law and
these Bylaws or (ii) a written request therefor by the corporation or the
Soliciting Shareholders, whichever is soliciting consents (which request may be
made no earlier than the commencement of the applicable solicitation or consents
and notice of which request shall be given to the party opposing the
solicitation of consents, if any), which request shall state that the
corporation or the Soliciting Shareholders, as the case may be, have a good
faith belief that the requisite number of valid and unrevoked consents to
authorize or take the action specified in the consents has been received in
accordance with these Bylaws, the inspectors shall issue a preliminary report to
the corporation and the Soliciting Shareholders stating: (i) the number of valid
consents; (ii) the number of valid revocations; (iii) the number of valid and
unrevoked consents; (iv) the number of invalid consents; (v) the number of
invalid revocations; and (vi) whether, based on their preliminary count, the
requisite number of valid and unrevoked consents has been obtained to authorize
or take the action specified in the consents. For purposes of this Bylaw, to the
extent that a proxy statement or an information statement is required by law to
be furnished to the corporation's shareholders, a consent solicitation shall be
deemed to have commenced when a proxy statement or information statement
containing the information required by law is first furnished to the
corporation's shareholders.
Unless the corporation and the Soliciting Shareholders agree to a shorter or
longer period, the corporation and Soliciting Shareholders shall have
forty-eight hours to review the consents and revocations and to advise the
inspectors and the opposing party in writing as to whether they intend to
challenge the preliminary report of the inspectors. If no written notice of an
intention to challenge the preliminary report is received within forty-eight
hours after the inspectors' issuance of the preliminary report, the inspectors
shall issue to the corporation and the Soliciting Shareholders their final
report containing the information from the inspectors' determination with
respect to whether the
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requisite number of valid and unrevoked consents was obtained to authorize and
take the action specified in the consents. If the corporation or the Soliciting
Shareholders issue written notice of an intention to challenge the inspectors'
preliminary report, within forty-eight hours after the issuance of that report,
a challenge session shall be scheduled by the inspectors as promptly as
practicable. A transcript of the challenge session shall be recorded by a
certified court reporter. Following completion of the challenge session, the
inspectors shall as promptly as practicable issue their final report to the
Soliciting Shareholders and the corporation, which report shall contain the
information included in the preliminary report, plus all changes in the totals
as a result of the challenge and a certification of whether the requisite number
of valid and unrevoked consents was obtained to authorize or take the action
specified in the consents. A copy of the final report of the inspectors shall be
included in the book in which the proceedings of meetings of shareholders are
recorded.
The corporation shall give prompt notice to the shareholders of the results
of any consent solicitation or the taking of corporate action without a meeting.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the Code and any limitations in the Restated
Articles of Incorporation and these Bylaws relating to action required to be
approved by the shareholders or by the outstanding shares, the business and
affairs of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board of Directors. The Board may
delegate the management of the day-to-day operation of the business of the
corporation to a management company or other person provided that the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised under the ultimate direction of the Board.
3.2 NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall be not less than
nine (9) nor more than twelve (12), and the exact number of directors shall be
nine (9) until changed, within the limits specified above, by a resolution
amending such exact number, duly adopted by at least seventy-five percent (75%)
of the entire Board of Directors or by the shareholders, in accordance with the
provisions set forth in the Restated Articles of Incorporation, these Bylaws and
applicable laws. In accordance with the provisions set forth in the Restated
Articles of Incorporation and subject to the limitations contained therein, the
minimum and maximum number of directors may be changed, or a definite number may
be fixed without provision for an indefinite number, by a duly adopted amendment
to the Restated Articles of Incorporation or by an amendment to this Bylaw duly
adopted by the vote or written consent, if permitted by the Restated Articles of
Incorporation, of shareholders entitled to vote in such manner as set forth in
the Restated Articles of Incorporation; PROVIDED, HOWEVER, that an amendment
reducing the fixed number or the minimum number of directors to a number less
than five (5) cannot be adopted if the votes cast against its adoption at a
meeting, or the shares not consenting in the case of an action by written
consent, are equal to more than sixteen and two-thirds percent (16 2/3%) of the
outstanding shares entitled to vote thereon.
No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS AND REMOVAL
At each annual meeting of shareholders, directors shall be elected to hold
office until the next election of the class for which such directors were
designated and until their successors have been elected and qualified, in
accordance with the provisions set forth in the Restated Articles of
Incorporation and in these Bylaws. Each director, including a director elected
to fill a vacancy, shall hold office,
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in accordance with the provisions set forth in the Restated Articles of
Incorporation and on these Bylaws, until the expiration of the term for which
elected and until a successor has been elected and qualified, except in the case
of the death, resignation, or removal of such a director.
No director may be removed from office, except as provided by the Restated
Articles of Incorporation or by law.
3.4 CLASS OR SERIES DIRECTORS
Whenever the holders of any class or series of stock are entitled to elect
one or more directors by the articles of incorporation, the provisions of the
last sentence of Section 3.3 shall apply, with respect to the removal without
cause of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Unless otherwise provided in the articles of
incorporation or these Bylaws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors elected by all
of the stockholders having the right to vote as a single class or from any other
cause may be filled by a majority of the directors then in office, although less
than a quorum, or by the sole remaining director. Whenever the holders of any
class or classes of stock or series thereof are entitled to elect one or more
directors by the articles of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority of
the directors elected by such class or classes or series thereof then in office,
or by the sole remaining director so elected. Any director elected or appointed
to fill a vacancy shall hold office until the next election of the class of
directors of the director which such director replaced, and until and his or her
successor is elected and qualified or until his or her earlier resignation or
removal.
3.5 RESIGNATION AND VACANCIES
(a) Any director may resign effective upon giving oral or written notice to
the Chairman of the Board, the President, the Secretary or the Board of
Directors, unless the notice specifies a later time for the effectiveness of
such resignation. If the resignation of a director is effective at a future
time, the Board of Directors may elect a successor to take office when the
resignation becomes effective.
(b) Unless otherwise provided in the Restated Articles of Incorporation of
these Bylaws, vacancies on the Board of Directors may be filled by a majority of
the remaining directors, although less than a quorum, or a sole remaining
director.
(c) The shareholders may elect a director to fill any vacancy not filled by
the directors in accordance with law and with the provisions of the Restated
Articles of Incorporation and these Bylaws.
(d) A vacancy or vacancies in the Board of Directors shall be deemed to
exist (i) in the event of the death, resignation or removal of any director,
(ii) if the Board of Directors by resolution declares vacant the office of a
director who has been declared of unsound mind by an order of court or convicted
of a felony, (iii) if the authorized number of directors is increased as
provided in the Restated Articles of Incorporation, or (iv) if the shareholders
fail, at any meeting of shareholders at which any director or directors are
elected, to elect the full authorized number of directors to be elected at that
meeting, as provided in the Restated Articles of Incorporation.
(e) Notwithstanding anything to the contrary in this Section 3.5, for so
long as the Shareholder Agreement shall be in effect:
(i) In the event that the size of the Board of Directors is increased in
accordance with the provisions of the Shareholder Agreement, the nominees to
the vacancies created by such increase shall be Independent Directors (as
defined in the Shareholder Agreement) in accordance with the terms of the
Shareholder Agreement); and
(ii) Vacancies among the Shareholder Directors and the Transferee
Directors (each as defined in the Shareholder Agreement) and among the
Independent Directors shall be filled in accordance with the terms of the
Shareholder Agreement.
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3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the Board of Directors may be held at any place within
or outside the State of California that has been designated from time to time by
resolution of the Board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the Board may be held at any place within or outside the State of
California that has been designated in the notice of the meeting or, if not
stated in the notice or if there is no notice, at the principal executive office
of the corporation.
Members of the Board may participate in a meeting through the use of
conference telephone or similar communications equipment, so long as all
directors participating in such meeting can hear one another. Participation in a
meeting pursuant to this paragraph constitutes presence in person at such
meeting.
3.7 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice if the
time and place of such meetings are fixed by the Board of Directors or by these
Bylaws.
3.8 SPECIAL MEETINGS; NOTICE
Subject to the provisions of the following paragraph, special meetings of
the Board of Directors for any purpose or purposes may be called at any time by
the Chairman of the Board, the President, any Vice President, the Secretary or
any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telegram, charges prepaid, or by telecopier, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone or by telecopier or telegram, it shall be
delivered personally or by telephone or by telecopier or to the telegraph
company at least forty-eight (48) hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated
either to the director or to a person at the office of the director who the
person giving the notice has reason to believe will promptly communicate it to
the director. The notice need not specify the purpose of the meeting.
3.9 QUORUM
(a) Except as set forth below, a majority of the authorized number of
directors shall constitute a quorum for the transaction of business. Except as
otherwise provided for in the Restated Articles of Incorporation or these
Bylaws, every act or decision done or made by a majority of the directors
present at a meeting duly held at which a quorum is present is the act of the
Board of Directors, subject to the provisions of Section 310 of the Code (as to
approval of contracts or transactions in which a director has a direct or
indirect material financial interest), Section 311 of the Code (as to
appointment of committees), Section 317(e) of the Code (as to indemnification of
directors), the Restated Articles of Incorporation, and other applicable law,
and subject to any provisions in the Restated Articles of Incorporation or these
Bylaws requiring a vote by more than a simple majority of directors.
(b) A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
(c) For so long as the Shareholder Agreement shall be in effect, the quorum
required for the transaction of business by the Board of Directors shall include
at least one director who is a Shareholder Director or a Transferee Director and
also one director who is an Independent Director, or their respective designees,
attending in person or, if necessary, via teleconference call or other permitted
means.
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3.10 WAIVER OF NOTICE
Notice of a meeting need not be given to any director who signs a waiver of
notice or a consent to holding the meeting or an approval of the minutes
thereof, whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to such
director. All such waivers, consents, and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting. A waiver of
notice need not specify the purpose of any regular or special meeting of the
Board of Directors.
3.11 ADJOURNMENT
A majority of the directors present, whether or not a quorum is present, may
adjourn any meeting to another time and place.
3.12 NOTICE OF ADJOURNMENT
If the meeting is adjourned for more than twenty-four (24) hours, notice of
any adjournment to another time and place shall be given prior to the time of
the adjourned meeting to the directors who were not present at the time of the
adjournment.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the Board of Directors under
the provisions of the Restated Articles of Incorporation and these Bylaws or
otherwise may be taken without a meeting, if all members of the Board
individually or collectively consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the proceedings of the
Board. Such action by written consent shall have the same force and effect as a
unanimous vote of the Board of Directors.
3.14 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the Board of Directors. This Section 3.14 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
ARTICLE IV
COMMITTEES
4.1 EXECUTIVE COMMITTEE
EXECUTIVE COMMITTEE. In accordance with the provisions set forth in these
Bylaws and the Restated Articles of Incorporation, the Board of Directors may,
by resolution passed by the affirmative vote of at least seventy-five percent
(75%) of the whole Board of Directors, appoint from its membership, annually, an
Executive Committee of two or more directors, which shall include the Chief
Executive Officer and the President of the Corporation. The Board of Directors
may designate in such resolution one or more directors as alternate members of
the Executive Committee, who may replace any absent or disqualified member at
any meeting of the Committee. The Executive Committee, during the intervals
between meetings of the Board of Directors, shall have and there is hereby
granted to it all of the authority and power of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation be affixed to papers which may require it, except that
the Executive Committee shall have authority to act in the manner and to the
extent provided in the resolution of the Board and may have all the authority of
the Board, except with respect to:
(a) The approval of any action which, under the Code, also requires
shareholders' approval or approval of the outstanding shares.
(b) The filling of vacancies on the Board of Directors or in any
committee.
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(c) The fixing of compensation of the directors for serving on the Board
or on any committee.
(d) The amendment or repeal of these Bylaws or the adoption of new
Bylaws.
(e) The amendment or repeal of any resolution of the Board of Directors
which by its express terms is not so amendable or repealable.
(f) A distribution to the shareholders of the corporation, except at a
rate, in a periodic amount or within a price range set forth in the Restated
Articles of Incorporation or determined by the Board of Directors.
(g) The appointment of any other committees of the Board of Directors or
the members thereof.
The Executive Committee shall have no power or authority in reference to (i)
amending the Restated Articles of Incorporation (except that the Executive
Committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors,
fix the designations and any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the Corporation or the convention into, or the exchange of such shares for,
shares of any other class or classes of stock of the Corporation or fix the
number of shares of any series of stock or authorizing the increase or decrease
of the shares of any series), (ii) adopting a certificate of ownership or an
agreement of merger or consolidation, (iii) recommending to the shareholders the
sale, loans or exchange of all or substantially all of the Corporation's
property and assets, (iv) recommending to the shareholders a dissolution of the
Corporation or a revocation of a dissolution or (v) removing or indemnifying
directors.
The Executive Committee shall keep regular minutes of all business
transacted at its meetings, and all action of the Executive Committee shall be
reported to the Board of Directors at its next meeting. The minutes of the
Executive Committee shall be placed in the minute book of the Corporation.
Members of the Executive Committee shall receive such compensation as may be set
forth in the resolution appointing such member and shall be reimbursed for
reasonable expenses actually incurred by reason of membership on the Executive
Committee.
4.2 OTHER COMMITTEES OF DIRECTORS
(a) The Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more other committees, each
consisting of two (2) or more directors, to serve at the pleasure of the Board
of Directors. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent member at any meeting of the
committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any such
committee shall have authority to act, in the manner and to the extent provided
in the resolution of the Board of Directors and may have all the authority of
the Board, except with respect to the limitations as set forth in Section 4.1.
(b) The Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, appoint from its membership an Audit Committee,
a Compensation and Stock Option Committee and a Finance and Strategic Planning
Committee.
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4.3 MEETINGS AND ACTIONS OF COMMITTEES
Meetings and actions of committees permitted by the provisions of the
Restated Articles of Incorporation shall be governed by, and held and taken in
accordance with each of the provisions of Article III of these Bylaws, with such
changes in the context of those Bylaws as are necessary to substitute the
committee and its members for the Board of Directors and its members; provided,
however, that the time of regular meetings of committees may be determined
either by resolution of the Board of Directors or by resolution of the
committee, that special meetings of committees may also be called by resolution
of the Board of Directors, and that notice of special meetings of committees
shall also be given to all alternate members, who shall have the right to attend
all meetings of the committee. The Board of Directors may adopt rules for the
government of any committee not inconsistent with the provisions of these Bylaws
and the Restated Articles of Incorporation.
4.4 COMPOSITION OF COMMITTEES
For so long as the Shareholder Agreement shall remain in effect, each
committee of the Board of Directors, other than the Audit Committee and the
Compensation and Stock Option Committee, shall contain such numbers of
Shareholder Directors or Transferee Directors so that the number of Shareholder
Directors or Transferee Directors on each such committee shall be as nearly as
possible proportional to the total number of Shareholder Directors on the Board
of Directors and the Audit Committee shall be comprised solely of Independent
Directors. For so long as the Shareholder is entitled to nominate Shareholder
Directors under the Shareholder Agreement, the Compensation and Stock Option
Committee shall be comprised solely of one non-employee Shareholder Director,
one Independent Director and an additional non-employee director.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporation shall be a Chief Executive Officer, a
President, a Secretary, and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board of Directors, a Chairman of the Board, a
Vice Chairman of the Board, one or more Vice Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers as may be
appointed in accordance with the provisions of Section 5.3 of these Bylaws. Any
number of offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
The officers of the corporation, except such officers as may be appointed in
accordance with the provisions of Section 5.3 or Section 5.5 of these Bylaws,
shall be chosen by the Board and serve at the pleasure of the Board of
Directors, subject to the rights, if any, of an officer under any contract of
employment.
5.3 SUBORDINATE OFFICERS
The Board of Directors may appoint, or may empower the Chairman of the Board
or the President to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these Bylaws or as
the Board of Directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, all officers serve at the pleasure of the Board of Directors and any
officer may be removed, either with or without cause, by the Board of Directors
at any regular or special meeting of the Board or, except in case of an officer
chosen by the Board of Directors, by any officer upon whom such power of removal
may be conferred by the Board of Directors.
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Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
The Chairman of the Board, if such an officer be elected, shall, if present,
preside at meetings of the Board of Directors and exercise and perform such
other powers and duties as may from time to time be assigned by the Board of
Directors or as may be prescribed by these Bylaws or by law.
5.7 CHIEF EXECUTIVE OFFICER
Subject to such supervisory powers, if any, as may be given by the Board of
Directors to the Chairman of the Board, if there be such an officer, the Chief
Executive Officer shall have general supervision, direction, and control of the
business and the officers of the corporation. The Chief Executive Officer shall
preside at all meetings of the shareholders and, in the absence or nonexistence
of a Chairman of the Board, at all meetings of the Board of Directors. The Chief
Executive Officer shall have the general powers and duties of management usually
vested in the office of Chief Executive Officer of a corporation, and shall have
such other powers and duties as may be prescribed by the Board of Directors or
these Bylaws.
5.8 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the Board of
Directors to the Chief Executive Officer, if there be such an officer, the
President shall have general supervision, direction, and control of the business
and the officers of the corporation. The President shall preside at all meetings
of the shareholders and, in the absence or nonexistence of a Chief Executive
Officer, at all meetings of the Board of Directors. The President shall have the
general powers and duties of management usually vested in the office of
President of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or these Bylaws.
5.9 VICE PRESIDENTS
In the absence or disability of the President, the Vice Presidents, if any,
in order of their rank as fixed by the Board of Directors or, if not ranked, a
Vice President designated by the Board of Directors, shall perform all the
duties of the President and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the President. The Vice Presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors, these Bylaws, the
President or the Chairman of the Board.
5.10 SECRETARY
The Secretary shall keep or cause to be kept, at the principal executive
office of the corporation or such other place as the Board of Directors may
direct, a book of minutes of all meetings and actions of Directors, committees
of directors and shareholders. The minutes shall show the time and place of each
meeting, whether regular or special (and, if special, how authorized and the
notice given), the names of those present at directors' meetings or committee
meetings, the number of shares present or represented at shareholders' meetings,
and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive
office of the corporation or at the office of the corporation's transfer agent
or registrar, as determined by resolution of the Board of Directors, a share
register, or a duplicate share register, showing the names of all shareholders
and
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their addresses, the number and classes of shares held by each, the number and
date of certificates evidencing such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the Board of Directors required to be given by law or by
these Bylaws. The Secretary shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the Board of Directors or by these Bylaws.
5.11 CHIEF FINANCIAL OFFICER
The Chief Financial Officer shall keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of the properties
and business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and shares. The books of account shall at all reasonable times be open to
inspection by any director.
The Chief Financial Officer shall deposit all money and other valuables in
the name and to the credit of the corporation with such depositaries as may be
designated by the Board of Directors. The Chief Financial Officer shall disburse
the funds of the corporation as may be ordered by the Board of Directors, shall
render to the President and directors, whenever they request it, an account of
all of his or her transactions as Chief Financial Officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or these Bylaws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES,
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS
The corporation shall, to the maximum extent and in the manner permitted by
the Code, indemnify each of its directors against expenses (as defined in
Section 317(a) of the Code), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with any proceeding (as defined
in Section 317(a) of the Code), arising by reason of the fact that such person
is or was a director of the corporation. For purposes of this Article VI, a
"director" of the corporation includes any person (i) who is or was a director
of the corporation, (ii) who is or was serving at the request of the corporation
as a director of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was a director of a corporation
which was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the extent and in the manner
permitted by the Code, to indemnify each of its employees, officers, and agents
(other than directors) against expenses (as defined in Section 317(a) of the
Code), judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding (as defined in Section 317(a) of the
Code), arising by reason of the fact that such person is or was an employee,
officer, or agent of the corporation. For purposes of this Article VI, an
"employee" or "officer" or "agent" of the corporation (other than a director)
includes any person (i) who is or was an employee, officer, or agent of the
corporation, (ii) who is or was serving at the request of the corporation as an
employee, officer, or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was an
employee, officer, or agent of a corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of such predecessor
corporation.
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6.3 PAYMENT OF EXPENSES IN ADVANCE
Expenses and attorneys' fees incurred in defending any civil or criminal
action or proceeding for which indemnification is required pursuant to Section
6.1, or if otherwise authorized by the Board of Directors, shall be paid by the
corporation in advance of the final disposition of such action or proceeding
upon receipt of an undertaking by or on behalf of the indemnified party to repay
such amount if it shall ultimately be determined that the indemnified party is
not entitled to be indemnified as authorized in this Article VI.
6.4 INDEMNITY NOT EXCLUSIVE
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any By-law, agreement, vote of shareholders or directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office. The rights to indemnity hereunder shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of the person.
6.5 INSURANCE INDEMNIFICATION
The corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation against any liability asserted against or incurred by such person in
such capacity or arising out of that person's status as such, whether or not the
corporation would have the power to indemnify that person against such liability
under the provisions of this Article VI.
6.6 CONFLICTS
No indemnification or advance shall be made under this Article VI, except
where such indemnification or advance is mandated by law or the order, judgment
or decree of any court of competent jurisdiction, in any circumstance where it
appears:
(1) That it would be inconsistent with a provision of the Restated
Articles of Incorporation, these Bylaws, a resolution of the shareholders or
an agreement in effect at the time of the accrual of the alleged cause of
the action asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits
indemnification; or
(2) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
6.7 RIGHT TO BRING SUIT
If a claim under this Article VI is not paid in full by the corporation
within 90 days after a written claim has been received by the corporation
(either because the claim is denied or because no determination is made), the
claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall also be entitled to be paid the expenses of prosecuting such
claim. The corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standards of conduct that make it
permissible under the Code for the corporation to indemnify the claimant for the
claim. Neither the failure of the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
permissible in the circumstances because he or she has met the applicable
standard of conduct, if any, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel, or its
shareholders) that the claimant has not met the applicable standard of conduct,
shall be a defense to such action or create a presumption for the purposes of
such action that the claimant has not met the applicable standard of conduct.
6.8 INDEMNITY AGREEMENTS
The Board of Directors is authorized to enter into a contract with any
director, officer, employee or agent of the corporation, or any person who is or
was serving at the request of the corporation as a
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director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including employee benefit plans, or any
person who was a director, officer, employee or agent of a corporation which was
a predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation, providing for indemnification rights
equivalent to or, if the Board of Directors so determines and to the extent
permitted by applicable law, greater than, those provided for in this Article
VI.
6.9 AMENDMENT, REPEAL OR MODIFICATION
Any amendment, repeal or modification of any provision of this Article VI
shall not adversely affect any right or protection of a director or agent of the
corporation existing at the time of such amendment, repeal or modification.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF SHARE REGISTER
The corporation shall keep either at its principal executive office or at
the office of its transfer agent or registrar (if either be appointed), as
determined by resolution of the Board of Directors, a record of its shareholders
listing the names and addresses of all shareholders and the number and class of
shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation or who hold at least one percent (1%) of such voting shares and have
filed a Schedule 14B with the United States Securities and Exchange Commission
relating to the election of directors, shall have an absolute right to do either
or both of the following (i) inspect and copy the record of shareholders' names,
addresses, and shareholdings during usual business hours upon five (5) days'
prior written demand upon the corporation, or (ii) obtain from the transfer
agent for the corporation, upon written demand and upon the tender of such
transfer agent's usual charges for such list (the amount of which charges shall
be stated to the shareholder by the transfer agent upon request), a list of the
shareholders' names and addresses who are entitled to vote for the election of
directors, and their shareholdings, as of the most recent record date for which
it has been compiled or as of a date specified by the shareholder subsequent to
the date of demand. The list shall be made available on or before the later of
five (5) business days after the demand is received or the date specified
therein as the date as of which the list is to be compiled.
The record of shareholders shall also be open to inspection and copying by
any shareholder or holder of a voting trust certificate at any time during usual
business hours upon written demand on the corporation, for a purpose reasonably
related to the holder's interests as a shareholder or holder of a voting trust
certificate.
Any inspection and copying under this Section 7.1 may be made in person or
by an agent or attorney of the shareholder or holder of a voting trust
certificate making the demand.
7.2 MAINTENANCE AND INSPECTION OF BYLAWS
The corporation shall keep at its principal executive office or, if its
principal executive office is not in the State of California, at its principal
business office in California, the original or a copy of these Bylaws as amended
to date, which shall be open to inspection by the shareholders at all reasonable
times during office hours. If the principal executive office of the corporation
is outside the State of California and the corporation has no principal business
office in such state, then it shall, upon the written request of any
shareholder, furnish to such shareholder a copy of these Bylaws as amended to
date.
7.3 MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS
The accounting books and records and the minutes of proceedings of the
shareholders and the Board of Directors, and committees of the Board of
Directors shall be kept at such place or places as
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are designated by the Board of Directors or, in absence of such designation, at
the principal executive office of the corporation. The minutes shall be kept in
written form, and the accounting books and records shall be kept either in
written form or in any other form capable of being converted into written form.
The minutes and accounting books and records shall be open to inspection
upon the written demand on the corporation of any shareholder or holder of a
voting trust certificate at any reasonable time during usual business hours, for
a purpose reasonably related to such holder's interests as a shareholder or as
the holder of a voting trust certificate. Such inspection by a shareholder or
holder of a voting trust certificate may be made in person or by an agent or
attorney and the right of inspection includes the right to copy and make
extracts. Such rights of inspection shall extend to the records of each
subsidiary corporation of the corporation.
7.4 INSPECTION BY DIRECTORS
Every director shall have the absolute right at any reasonable time to
inspect and copy all books, records, and documents of every kind and to inspect
the physical properties of the corporation and each of its subsidiary
corporations, domestic or foreign. Such inspection by a director may be made in
person or by an agent or attorney and the right of inspection includes the right
to copy and make extracts.
7.5 ANNUAL REPORT TO SHAREHOLDERS; WAIVER
The Board of Directors shall cause an annual report to be sent to the
shareholders not later than one hundred twenty (120) days after the close of the
fiscal year adopted by the corporation. Such report shall be sent to the
shareholders at least fifteen (15) (or, if sent by third-class mail, thirty-five
(35)) days prior to the annual meeting of shareholders to be held during the
next fiscal year and in the manner specified in Section 2.5 of these Bylaws for
giving notice to shareholders of the corporation.
The annual report shall contain a balance sheet as of the end of the fiscal
year and an income statement and statement of changes in financial position for
the fiscal year, accompanied by any report thereon of independent accountants
or, if there is no such report, the certificate of an authorized officer of the
corporation that the statements were prepared without audit from the books and
records of the corporation.
The foregoing requirement of an annual report shall be waived so long as the
shares of the corporation are held by fewer than one hundred (100) holders of
record.
7.6 FINANCIAL STATEMENTS
If no annual report for the fiscal year has been sent to shareholders, then
the corporation shall, upon the written request of any shareholder made more
than one hundred twenty (120) days after the close of such fiscal year, deliver
or mail to the person making the request, within thirty (30) days thereafter, a
copy of a balance sheet as of the end of such fiscal year and an income
statement and statement of changes in financial position for such fiscal year.
A shareholder or shareholders holding at least five percent (5%) of the
outstanding shares of any class of the corporation may make a written request to
the corporation for an income statement of the corporation for the three-month,
six-month or nine-month period of the current fiscal year ended more than thirty
(30) days prior to the date of the request and a balance sheet of the
corporation as of the end of that period. The statements shall be delivered or
mailed to the person making the request within thirty (30) days thereafter. A
copy of the statements shall be kept on file in the principal office of the
corporation for twelve (12) months and it shall be exhibited at all reasonable
times to any shareholder demanding an examination of the statements or a copy
shall be mailed to the shareholder. If the corporation has not sent to the
shareholders its annual report for the last fiscal year, the statements referred
to in the first paragraph of this Section 7.6 shall likewise be delivered or
mailed to the shareholder or shareholders within thirty (30) days after the
request.
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The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that the financial statements were prepared without
audit from the books and records of the corporation.
7.7 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The Chairman of the Board, the Vice Chairman of the Board, the President,
any Vice President, the Chief Financial Officer, the Secretary or Assistant
Secretary of this corporation, or any other person authorized by the Board of
Directors or the President or a Vice President, is authorized to vote,
represent, and exercise on behalf of this corporation all rights incident to any
and all shares of any other corporation or corporations standing in the name of
this corporation. The authority herein granted may be exercised either by such
person directly or by any other person authorized to do so by proxy or power of
attorney duly executed by such person having the authority.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the shareholders 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 other lawful action, other than with
respect to notice or voting at a shareholders meeting, the Board of Directors
may fix, in advance, a record date, which shall not be more than sixty (60) days
prior to any such action. Only shareholders of record at the close of business
on the record date are entitled to receive the dividend, distribution or
allotment of rights, or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date, except as otherwise provided in the Restated Articles of
Incorporation or the Code.
If the Board of Directors does not so fix a record date, then the record
date for determining shareholders for any such purpose shall be at the close of
business on the day on which the Board adopts the resolution relating thereto or
the sixtieth (60th) day prior to the date of that action, whichever is later.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the Board of Directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The Board of Directors, except as otherwise provided in these Bylaws, may
authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the Board of Directors or within the agency
power of an officer, 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 liable for any purpose or for any amount.
8.4 CERTIFICATES FOR SHARES
A certificate or certificates for shares of the corporation shall be issued
to each shareholder when any of such shares are fully paid. The Board of
Directors may authorize the issuance of certificates for shares partly paid
provided that these certificates shall state the total amount of the
consideration to be paid for them and the amount actually paid. All certificates
shall be signed in the name of the corporation by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice
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President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be by facsimile.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on a certificate has ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.
8.5 LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares shall
be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation or its transfer agent or registrar and cancelled
at the same time. The Board of Directors may, in case any share certificate or
certificate for any other security is lost, stolen or destroyed (as evidenced by
a written affidavit or affirmation of such fact), authorize the issuance of
replacement certificates on such terms and conditions as the Board may require;
the Board may require indemnification of the corporation secured by a bond or
other adequate security sufficient to protect the corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
8.6 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Code shall govern the construction of these
Bylaws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.
ARTICLE IX
AMENDMENTS
9.1 AMENDMENT BY SHAREHOLDERS
Except as otherwise provided in the Restated Articles of Incorporation or in
these Bylaws new Bylaws may be adopted or these Bylaws may be amended or
repealed by the vote or written consent of holders of a majority of the
outstanding shares entitled to vote; provided, however, that if the Restated
Articles of Incorporation of the corporation set forth the number of authorized
Directors of the corporation, then the authorized number of Directors may be
changed only by an amendment of the Restated Articles of Incorporation.
9.2 AMENDMENT BY DIRECTORS
Except as otherwise provided in the Restated Articles of Incorporation or in
these Bylaws, these Bylaws including amendments adopted by the shareholders may
be altered, amended or repealed by a majority vote of the whole Board of
Directors at any regular or special meeting of the Board of Directors provided
that the shareholders may from time to time specify particular provisions of the
Bylaws which shall not be amended by the Board of Directors. Notwithstanding the
foregoing, any alteration, amendment or repeal of Sections 2.3, 2.4, 2.11, 2.12,
2.14, 2.16, 3.2, 3.3, 3.4, 3.5, 3.8, 3.9, 4.1, 4.4 Article VI or Article IX
shall require the affirmative vote of not less than seventy-five percent (75%)
of the whole Board of Directors.
9.3 RECORD OF AMENDMENTS
Whenever an amendment or new Bylaw is adopted, it shall be copied in the
book of minutes with the original Bylaws. If any Bylaw is repealed, the fact of
repeal, with the date of the meeting at which the repeal was enacted or written
consent was filed, shall be stated in said book.
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ARTICLE X
INTERPRETATION
Reference in these Bylaws to any provision of the California Corporations
Code shall be deemed to include all amendments thereof.
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EXHIBIT 5.1
September 19, 1996
Paracelsus Healthcare Corporation
515 West Greens Road, Suite 800
Houston, Texas 77067
Re: Paracelsus Healthcare Corporation
Registration Statement on Form S-8
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Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") that you intend to file with the Securities and
Exchange Commission (the "Commission") in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of 1,347,204
shares (the "Shares") of common stock, no stated value per share (the "Common
Stock"), of Paracelsus Healthcare Corporation, a California corporation (the
"Company"), issuable by the Company under the Champion Healthcare Corporation
Employee Stock Option Plan, Champion Healthcare Corporation Employee Stock
Option Plan No. 2, Champion Healthcare Corporation Employee Stock Option Plan
No. 3, Champion Healthcare Corporation Senior Executive Stock Option Plan No. 4,
Champion Healthcare Corporation Selected Executive Stock Option Plan No. 5,
Champion Healthcare Corporation Directors' Stock Option Plan, Champion
Healthcare Corporation Founders' Stock Option Plan, Champion Healthcare
Corporation Physicians' Stock Option Plan, AmeriHealth Amended and Restated 1988
Non-Qualified Stock Option Plan, AmeriHealth, Inc. 1984 Non-Qualified Plan,
AmeriHealth, Inc. Special Stock Options, and the Employment Agreement between
Care Services of America, Inc. and Robert L. Hancock (the "Plans").
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Plans, (ii) the Amended and Restated Articles of Incorporation of the
Company as in effect on the date hereof, (iii) the Amended and Restated Bylaws
of the Company, as in effect on the date hereof, (iv) certain resolutions of the
Board of Directors of the Company relating to, among other things, the Shares,
the Plans and the Registration Statement, (v) a specimen of the certificate
representing the Common Stock and (vi) such other documents, certificates and
records as we have considered necessary or appropriate for purposes of this
opinion. In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed by parties other than the
Company, we have assumed that such parties had or will have the power, corporate
or other, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or other, and
execution and delivery by such parties of such documents and the validity and
binding effect thereof. As to any facts material to the opinion expressed
herein, we have relied upon oral or written statements and representations of
officers and other representatives of the Company and others.
Members of our firm are admitted to the Bar in the State of California and
we do not express any opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, and assuming (i) the valid issuance
of options and other awards pursuant to the Plans and (ii) the conformity of the
certificates representing the Shares to the form thereof examined by us and the
due execution and countersignature of such certificates, we are of the opinion
that the Shares, when issued upon exercise of options or in connection with
other awards in accordance with the terms of the Plans, will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. In giving this consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission.
Very truly yours,
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the Champion Healthcare Corporation Employee Stock
Option Plan, Champion Healthcare Corporation Employee Stock Option Plan No. 2,
Champion Healthcare Corporation Employee Stock Option Plan No. 3, Champion
Healthcare Corporation Senior Executive Stock Option Plan No. 4, Champion
Healthcare Corporation Selected Executive Stock Option Plan No. 5, Champion
Healthcare Corporation Directors' Stock Option Plan, Champion Healthcare
Corporation Founders' Stock Option Plan, Champion Healthcare Corporation
Physicians' Stock Option Plan, AmeriHealth Amended and Restated 1988
Non-Qualified Stock Option Plan, AmeriHealth, Inc. 1984 Non-Qualified Plan,
AmeriHealth, Inc. Special Stock Options, and the Employment Agreement between
Care Services of America, Inc. and Robert L. Hancock of our report dated
December 14, 1995, with respect to the consolidated financial statements and
schedule of Paracelsus Healthcare Corporation included in its Annual Report
(Form 10-K) for the year ended September 30, 1995, and in its Prospectus dated
August 13, 1996, that is made a part of the Registration Statement (Form S-1),
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Los Angeles, California
September 19, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Paracelsus Healthcare Corporation on Form S-8 (File No. 333- )
related to the registration of 1,337,204 shares of Common Stock, no stated par
value per share, for the Champion Healthcare Corporation Employee Stock Option
Plan, Champion Healthcare Corporation Employee Stock Option Plan No. 2, Champion
Healthcare Corporation Employee Stock Option Plan No. 3, Champion Healthcare
Corporation Senior Executive Stock Plan No. 5, Champion Healthcare Corporation
Directors' Stock Option Plan, Champion Healthcare Corporation Founders' Stock
Option Plan, Champion Healthcare Corporation Physicians' Stock Option Plan,
AmeriHealth Amended and Restated 1988 Non-Qualified Stock Option Plan,
AmeriHealth, Inc. 1984 Non-Qualified Plan, AmeriHealth, Inc. Special Stock
Options, and the Employment Agreement between Care Services of America, Inc. and
Robert L. Hancock of (i) our report dated February 27, 1996, with respect to the
consolidated financial statements of Champion Healthcare Corporation as of
December 31, 1994 and 1995 and for each of the three years in the period ended
December 31, 1995, (ii) our report dated February 16, 1996, with respect to the
financial statements of Dakota Heartland Health System as of December 31, 1994
and 1995 and for the year ended December 31, 1995, (iii) our report dated
December 28, 1995, with respect to the financial statements of Jordan Valley
Hospital as of September 30, 1995 and for the period from January 1, 1995
through September 30, 1995, (iv) our report dated June 11, 1995, with respect to
the financial statements of Salt Lake Regional Medical Center as of May 31, 1994
and April 13, 1995 and for each of the two years in the period ended May 31,
1994 and the period from June 1, 1994 through April 13, 1995, which reports are
included in the Proxy Statement dated August 13, 1996.
COOPERS & LYBRAND L.L.P.
Houston, Texas
September 19, 1996
