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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
AMENDMENT NO. 1
TO
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
____________ TO ____________
COMMISSION FILE NUMBER 2-18244
-------------------
HELIAN HEALTH GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4070276
State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9600 BLUE LARKSPUR LANE, SUITE 201 93940
MONTEREY, CALIFORNIA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 646-9000
(Former name, former address and former fiscal year, if changed since las
report): NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the proceeding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No.
--- ---
The number of shares outstanding of the registrant's Common Stock, $.01 Par
Value, as of October 9, 1995 was 5,475,075 shares.
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<PAGE>
HELIAN HEALTH GROUP, INC.
FORM 10-Q QUARTERLY REPORT
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements....................................... 1
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 6
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings.......................................... 8
Item 2 - Changes in Securities...................................... 8
Item 3 - Defaults Upon Senior Securities............................ 8
Item 4 - Submission of Matters to a Vote of Security Holders........ 8
Item 5 - Other Information.......................................... 8
Item 6 - Exhibits and Reports on Form 8-K........................... 8
<PAGE>
HELIAN HEALTH GROUP, INC.
CONSOLIDATED BALANCE SHEETS
August 31, 1995 NOVEMBER 30, 1994
--------------- -----------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents .................. $ 2,796,792 $ 4,118,459
Short-term investments ..................... 2,631,867 1,617,491
Accounts receivable, net of allowance for
doubtful accounts of $1,077,781 in 1995 and
$1,146,964 in 1994 ......................... 6,480,755 6,854,010
Current portion of notes receivable ........ 173,952 186,671
Inventories ................................ 578,104 508,969
Income taxes receivable .................... 541,930 1,071,930
Deferred income taxes ...................... 1,160,917 1,040,958
Prepaid expenses and other current assets .. 495,340 683,265
----------- -----------
Total current assets .................. 14,859,657 16,081,753
Investment in affiliated companies ............. 394,763 401,012
Notes receivable ............................... 263,802 398,875
Property and equipment, net .................... 11,662,661 12,655,061
Intangible assets, net ......................... 1,492,061 1,140,472
Other assets, net .............................. 430,788 235,877
----------- -----------
TOTAL ASSETS ................................... $29,103,732 $30,913,050
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable ........................... $ 681,306 $ 879,260
Accrued compensation and related expenses .. 1,968,941 1,654,247
Other accrued liabilities .................. 421,295 442,215
Payable to Palo Alto Medical Foundation .... 26,675 306,156
Current portion of long-term debt .......... 1,135,309 1,135,178
----------- -----------
Total current liabilities ............. 4,233,526 4,417,056
Deferred income taxes .......................... 213,000 213,000
Payable to Palo Alto Medical Foundation ........ 150,000 150,000
Long-term debt ................................. 5,307,507 6,103,603
Minority Interest .............................. 1,600 57,439
----------- -----------
TOTAL LIABILILTIES ............................. 9,905,633 10,941,098
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 20,000,000 shares
authorized, 5,474,905 shares issued and
outstanding for 1995 (5,437,928 in 1994) ... 54,749 54,380
Additional paid-in capital ..................... 15,113,240 14,986,349
Retained earnings .............................. 4,121,030 5,022,143
Less: Treasury stock, at cost, 25,500 shares .. (90,920) (90,920)
----------- -----------
Total stockholders' equity ..................... 19,198,099 19,971,952
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ..... $29,103,732 $30,913,050
=========== ===========
1
<PAGE>
<TABLE>
HELIAN HEALTH GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended August 31, Nine Months Ended August 31,
---------------------------- ----------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Patient revenues .............................. $ 8,410,691 $ 9,090,301 $23,148,231 $26,080,035
Management fees and lease income .............. 1,092,831 833,012 3,227,578 2,738,554
Other ......................................... 71,653 -- 203,750 --
----------- ----------- ----------- -----------
Total revenues .................................. 9,575,175 9.923,313 26,579,559 28,818,589
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Salaries and wages ............................ 3,529,621 3,634,094 10,618,740 10,192,227
Employee benefits ............................. 645,280 582,728 2,115,760 1,730,391
Fees to individuals and organizations ......... 1,090,464 966,638 2,900,409 2,918,729
Supplies and other expenses ................... 703,640 896,250 2,017,173 2,689,732
Purchased services ............................ 630,486 542,501 1,878,572 1,489.996
Building and equipment rent ................... 466,082 398,880 1,453,060 1,221,451
Provision for doubtful accounts ............... 220,931 721,937 769,259 2,072,344
Other operating costs ......................... 917,392 820,186 2,936,896 2,531,662
Depreciation and amortization ................. 572,229 675,955 2,093,637 2,042,093
Employee severance costs ...................... -- -- 866,257 --
----------- ----------- ----------- -----------
Total costs and expenses ....................... 8,776,125 9,239,169 27,649,763 26,888,625
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) ......................... 799,050 684,144 (1,070,204) 1,929,964
Interest income ................................. 93,678 84,139 275,360 212,730
Interest expense ................................ (149,535) (97,035) (454,635) (547,149)
----------- ----------- ----------- -----------
Income (loss) before provision for (benefit from)
income taxes and minority interest ........... 743,193 671,248 (1,249,479) 1,595,545
Minority Interest ............................... 15,481 (108,283) (61,149) (454,466)
Provision for (benefit from) income taxes ....... 298,360 322,414 (287,217) 844,656
----------- ----------- ----------- -----------
NET INCOME (LOSS) ............................... $ 429,352 $ 457,117 $ (901,113) $ 1,205,355
=========== =========== =========== ===========
Net income (loss) per share ..................... $ 0.08 $ 0.08 $ (0.17) $ 0.22
=========== =========== =========== ===========
Shares used in calculation
of net income (loss) per share ............... 5,490,488 5,483,635 5,458,923 5,481,111
=========== =========== =========== ===========
</TABLE>
2
<PAGE>
HELIAN HEALTH GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED AUGUST 31,
-------------------------------
1995 1994
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ............................... $ (901,113) $1,205,355
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization ................ 2,093,521 2,042,093
Provision for doubtful accounts .............. 769,259 2,072,344
Deferred income taxes ........................ (389,959) --
Equity in loss of affiliate .................. 6,249 212,870
Minority interest in consolidated subsidiaries (61,149) (306,335)
Changes in operating assets and liabilities,
net of effects from acquisition of business:
Accounts receivable ........................ (396,004) (2,560,833)
Prepaid expenses and other assets .......... (72,635) (231,152)
Accounts payable and accrued liabilities ... 101,130 124,801
Income taxes receivable or payable ......... 800,000 (99,858)
---------- ----------
Net cash provided by operating activities ..... 1,949,299 2,459,285
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment ............. (737,279) (389,894)
Sales of property and equipment ................. 83,225 --
Purchases of short-term investments, net ........ (1,014,376) (1,216,354)
Repayment on notes receivable ................... 147,792 1,278,131
Acquisition of business ......................... (800,000) --
Decrease in intangibles, net .................... 10,248 6,431
---------- ----------
Net cash used in investing activities ...... (2,310,390) (321,686)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt ...................... (1,106,957) (2,593,541)
Issuance of common stock ........................ 127,260 17,704
Proceeds from borrowings of long-term debt ...... 19,121 2,214,000
---------- ----------
Net cash used in financing activities ...... (960,576) (361,837)
---------- ----------
Net increase (decrease) in cash and cash equivalents (1,321,667) 1,775,762
Cash and cash equivalents at beginning of period ... 4,118,459 1,074,653
---------- ----------
Cash and cash equivalents at end of period ......... $2,796,792 $2,850,415
========== ==========
3
<PAGE>
HELIAN HEALTH GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (all of which
were normal recurring accruals) necessary to present fairly Helian Health
Group's consolidated financial position as of August 31, 1995 and November
30, 1994, and the results of operations for the three and nine month
periods ended August 31, 1995 and August 31, 1994, which results are not
necessarily indicative of results on an annual basis.
2. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and regulations of the Securities Exchange Commission. These condensed
financial statements should be read in conjunction with the financial
statements and related notes contained in the Annual Report for the fiscal
year ended November 30, 1994 on Form 10-K.
3. The consolidated financial statements include the accounts of Helian and
its wholly-owned subsidiaries. The Company consolidates all
partially-owned subsidiaries where it possesses the ability to exercise
significant influence or control over operating and financial policies of
the subsidiary. The equity method of accounting is generally used when the
Company has a 20% to 50% interest in other entities. All material
intercompany transactions and balances have been eliminated in
consolidation.
4. The Company generates revenues principally from the following sources:
Patient revenues are recorded when the service is provided to the patient
and are recognized net of allowances and contractual adjustments related
to third-party payors. Provisions for doubtful accounts are recorded as
operating expenses.
Management fees and lease income are recorded monthly under agreements
with the Surgecenter of Palo Alto, which is managed by the Company. The
management fees are based on a percentage of gross revenue and adjusted
net income plus all direct costs of Surgecenter personnel. The Company
leases furniture, fixtures and equipment and subleases the facility to the
Surgecenter.
5. Property and equipment consisted of the following:
AUGUST 31, 1995 NOVEMBER 30, 1994
--------------- -----------------
Land and land improvements ................. $ 1,712,156 $ 1,712,156
Building ................................... 4,128,113 3,953,727
Furniture, fixtures and equipment .......... 10,687,315 10,098,507
Leasehold improvements ..................... 2,555,708 2,626,536
----------- -----------
19,083,292 18,390,926
Less accumulated depreciation and
amortization ............................... 7,420,631 5,735,865
----------- -----------
Net property and equipment ................. $11,662,661 $12,655,061
=========== ===========
4
<PAGE>
6. On August 30, 1995, the Company signed a definitive agreement to be
acquired by TheraTx, Incorporated. In exchange for each share of Helian
common stock, TheraTx has agreed to issue shares of its common stock at an
exchange rate ranging between 0.4063 and 0.4809 shares, based upon the
market value of TheraTx common stock prior to the closing of the
transaction. In the event the average of the daily last sales price for
TheraTx common stock during the ten consecutive trading days immediately
prior to the fifth trading day prior to Helian's special meeting of
stockholders to consider the proposed merger is less than $12.25, Helian
has the right to terminate the agreement and, in that event, TheraTx is
required to pay Helian $300,000. The transaction is intended as a tax-free
reorganization, will be accounted for as a pooling of interests and is
expected to be completed around the end of 1995. The transaction has been
approved by the boards of directors of both companies, but remains subject
to regulatory approvals, approval by the stockholders of Helian and other
customary closing conditions.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company had revenues of $9,575,000 and net income of $429,000 for the
quarter ended August 31, 1995, as compared to revenues and net income of
$9,923,000 and $457,000, respectively, for the same period of 1994. For the nine
months ended August 31, 1995, revenues were $26,580,000 with a net loss of
$901,000, as compared to revenues of $28,819,000 and net income of $1,205,000
for the similar period of 1994. Revenues for the nine months were lower
primarily as a result of a decrease in average revenue per patient visit,
partially offset by an increase in patient visits in most of the Company's
operations. During the third quarter of 1995, patient visits increased in most
of these same operations as compared to the same period of 1994; however, lower
revenue per patient visit more than offset this increase resulting in lower
revenues. Average revenue per patient visit decreased for the three and nine
months of 1995 as a result of increased patient discounts, which was primarily
due to the Company's continued transition into a managed care provider system.
Excluding the Surgecenter of Palo Alto, which derives its revenue and net income
from a management contract, total patient visits and average revenue per visit
were 85,400 and $98, respectively, for the third quarter of 1995 as compared to
79,800 and $114, respectively, for the 1994 quarter. For the nine months of
1995, total patient visits and average revenue per visit were 230,500 and $100,
respectively; and 219,900 and $119, respectively, for the 1994 period. The
Company expects that profit margins will likely be reduced as the Company, and
the health care industry in general, transitions from fee-for-service
reimbursement to discounted fee-for-service to a system of capitation or other
risk-based reimbursement arrangement.
Salaries and wages, as a percentage of revenues, remained constant at 37% for
the three months ending August 31, 1995 as compared to 1994, and increased from
35% to 40% for the nine month period of 1995 as compared to the same period in
1994. The increase resulted primarily from hiring additional staff at certain
facilities to service increased business, partially offset by converting full
time positions to "as needed" per diem positions in other facilities.
As a percentage of revenues, employee benefits increased from 5.9% to 6.7% for
the third quarter of 1995 compared to the same quarter of 1994. For the nine
months ended August 31, 1995, employee benefits increased from 6.0% to 8.0%% as
compared to the same nine months of 1994. The increases principally resulted
from higher health and life insurance costs in 1995 as compared to 1994.
Fees to individuals and organizations increased, as a percentage of revenues,
from 9.7% for the three months ended August 31, 1994 to 11.4% for the comparable
period of 1995. For the nine months ended August 31, 1994 and August 31, 1995,
the costs increased, as a percentage of revenues, from 10.1% to 10.9%,
respectively. The increases are a function of increased patient visits due to
the company using higher-priced consultants to service increased business.
Supplies and other expenses decreased, as a percentage of revenues, from 9.0% to
7.4% for the three months ended August 31, 1994 and 1995, respectively, and
decreased from 9.3% to 7.6% for the nine months ended August 31, 1994 and 1995,
respectively. Cost containment efforts by the facilities, including enhanced
inventory controls, resulted in lower purchases for 1995. The lower costs were
partially offset by costs related to increased patient visits.
Purchased services increased, as a percentage of revenues, from 5.5% to 6.6% for
the quarters ended August 31, 1994 and 1995, respectively, and increased from
5.2% to 7.1% for the nine months of 1994 and 1995, respectively.
Provision for doubtful accounts, as a percentage of revenues, decreased from
7.3% for the third quarter of 1994 to 2.3% for the comparable quarter of 1995,
and decreased from 7.2% to 2.9% for the nine months ending August 31,
6
<PAGE>
1994 and 1995, respectively. The deceases in the provisions resulted from
increases in allowances for doubtful accounts at some of the Company's
facilities during 1994.
Employee severance costs represents a lump sum payment of $800,000 and
associated costs related to the resignation of a former officer of the Company.
The provision for income taxes, as a percentage of income before income taxes,
remained constant at 41% for the third quarters of 1995 and 1994, and for the
nine months ending August 31, 1994. The (benefit from) income taxes, as a
percentage of (loss) before income taxes, was (24%) for the nine months ending
August 31, 1995. The Company's benefit rate of 24% is less than the statutory
rate due to the possibility not all net operating losses will provide future tax
deductions.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 1995, the Company had working capital of $10,626,000 and a
working capital ratio of 3.51 to 1, compared to working capital of $11,665,000
and a working capital ratio of 3.64 to 1 at November 30, 1994.
The Company's debt to equity ratio decreased from .36 to 1 to .34 to 1 for the
periods ending November 30, 1994 and August 31, 1995, respectively.
Cash and cash equivalents decreased by $1,322,000 from $4,118,000 at November
30, 1994 to $2,797,000 at August 31, 1995. The decrease resulted primarily from
net investments of $1,014,000 in short-term securities during the period.
Operating activities increased cash by $1,949,000, which was offset by
$1,014,000 from investing activities (excluding short-term investments) and
$961,000 from financing activities. Cash provided from operations in the amount
of $1,949,000 included principally depreciation and amortization, income tax
refund and provision for doubtful accounts, partially offset by the net loss,
changes in operating assets and liabilities and deferred income taxes. Cash used
in investing activities in the amount of $2,310,000 consisted primarily of net
purchases of short-term investments, the acquisition of an occupational medicine
medical center and purchases of property and equipment, offset by repayment on
notes receivable and proceeds from sales of property and equipment. Cash used in
financing activities in the amount of $961,000 included primarily payments of
long-term debt.
The Company acquired, on April 3, 1995, a medical center in Fresno, California
which specializes in occupational medicine. The $800,000 purchase price was paid
in cash at the acquisition date.
On April 10, 1995, Thomas D. Wilson resigned as President, Chief Executive
Officer, Chairman of the Board and as a director of the Company. In connection
with the resignation, the Company recorded $866,000 of severance costs.
The Company believes its cash reserves, including cash generated from
operations, and the Company's borrowing capacity, are adequate to meet operating
cash requirements for at least the next twelve months.
7
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
On August 30, 1995, the Company signed a definitive agreement to be acquired
by TheraTx, Incorporated. In exchange for each share of Helian common stock,
TheraTx has agreed to issue shares of its common stock at an exchange rate
ranging between 0.4063 and 0.4809 shares, based upon the market value of
TheraTx common stock prior to the closing of the transaction. In the event
the average of the daily last sales price for TheraTx common stock during
the ten consecutive trading days immediately prior to the fifth trading day
prior to Helian's special meeting of stockholders to consider the proposed
merger is less than $12.25, Helian has the right to terminate the agreement
and, in that event, TheraTx is required to pay Helian $300,000. The
transaction is intended as a tax-free reorganization, will be accounted for
as a pooling of interests and is expected to be completed around the end of
1995. The transaction has been approved by the boards of directors of both
companies, but remains subject to regulatory approvals, approval by the
stockholders of Helian and other customary closing conditions.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
2.1(11) Agreement and Plan of Merger with TheraTx, Incorporated and
related Stock Options Agreement and Stockholders Agreement.
3.1(1) Restated Certificate of Incorporation of the Company.
3.2(5) Amendment to Certificate of Incorporation of the Company
3.3 By-laws of the Company.
8
<PAGE>
10.1(1) Asset Purchase Agreement between AMI Ambulatory Centers, Inc. and
Helian Health Group of Georgia, Inc., dated as of December 7,
1987.
10.2(1) 1989 Amended and Restated Stock Option Plan of Helian Health
Group, Inc.
10.3(1) Asset Purchase Agreement among AMI Ambulatory Centers, Inc.,
Howell Industrial Clinic, Inc. Helian Health Group, Inc., and
Helian Health Group of Atlanta, Inc. dated August 9, 1988.
10.4(1) Asset Purchase Agreement between Palo Alto Surgecenter Corporation
and Palo Alto Medical Foundation for Health Care, Research and
Education dated September 22, 1988.
10.5(1) Management Agreement between Palo Alto Surgecenter Corporation and
Palo Alto Medical Foundation for Health Care, Research and
Education dated September 22, 1988.
10.6(1) Equipment Lease between Palo Alto Surgecenter Corporation and Palo
Alto Medical Foundation for Health Care, Research and Education
dated September 22, 1988.
10.7(1) Sublease dated September 22, 1988, between Palo Alto Surgecenter
Corporation, as sublessor, and Palo Alto Medical Foundation for
Health Care, Research and Education, as sublessor, including
Consent to Sublease, covering premises at 400 Forest Avenue, Palo
Alto, California.
10.8(1) Repurchase Agreement between Palo Alto Surgecenter Corporation and
Palo Alto Medical Foundation for Health Care, Research and
Education dated September 22, 1988.
10.9(1) Letter Agreement dated October 1, 1987, between Helian Health
Group of Miami, Inc. and Kenneth Mikel, Ph.D. regarding
development of additional occupational medical facilities.
10.10(1) Recovery Inn(sm) of Los Gatos, a California Limited Partnership,
Agreement dated November 18, 1987.
10.11(1) First Amendment to the Limited Partnership Agreement of Recovery
Inn(sm) of Los Gatos dated January 15, 1988.
10.12(1) Assignment of General Partnership Interest - Recovery Inn(sm) of
Los Gatos to Helian Recovery Corporation, dated January 29, 1988.
10.13(1) Common Stock Purchase Agreement dated November 16, 1987, between
Harvey Knoernschild, M.D., Paul Schrupp, Recovery Inns(sm) of
America, Inc. and Helian Recovery Corporation.
10.14(1) Assignment Agreement to Stock Purchase Agreement dated June 2,
1989 among Helian Health Group, Inc., Margo Mynderse-Isola and
Donald C. Blanding.
10.15(1) Assignment Agreement to Stock Purchase Agreement dated July 14,
1989, among Helian Health Group, Inc., Lori Iaconis and (i)
William Hines, (ii) Rose L. Parkes, (iii) Tony M. Schierbeck, and
(iv) Kim Richmond.
10.16(1)* Key Managers Incentive Compensation Plan.
10.17(1)* Executive Directors Incentive Compensation Plan.
10.18(1) Stock Purchase Agreement between Helian Health Group, Inc. and
Andrew Miller, dated February 1, 1987.
9
<PAGE>
10.19(1)* Employment Agreement dated October 8, 1986, as amended, between
Helian Health Group, Inc. and Thomas D. Wilson.
10.20(1)* Employment Agreement dated January 1, 1993, between Helian Health
Group, Inc. and Andrew Miller.
10.21(1) Stock Option Agreement dated August 1, 1987, between Donald
Blanding and Helian Health Group, Inc.
10.22(1) Amendment to Loan Agreement between Helian Health Group, Inc. and
Society National Bank.
10.23(1) Term Loan Agreement between Helian Health Group, Inc. and Society
National Bank dated October 8, 1986.
10.24(1) Term Loan Agreement between Helian Health Group, Inc. and Society
National Bank dated January 19, 1988.
10.25(1) Term Loan Agreement between Helian Health Group, Inc. and Society
National Bank dated August 11, 1988.
10.26(1) Security Agreement between Helian Health Group, Inc. and Society
National Bank dated October 8, 1986.
10.27(1) Security Agreement between Helian Health Group, Inc. and Society
National Bank dated January 19, 1988.
10.28(1) Security Agreement between Helian Health Group, Inc. and Society
National Bank dated August 11, 1988.
10.29(1) Pledge Agreement between Helian Health Group, Inc. and Society
National Bank dated October 8, 1986.
10.30(1) Amended Pledge Agreement between Helian Health Group, Inc. and
Society National Bank dated January 19, 1988.
10.31(1) Amended Pledge Agreement between Helian Health Group, Inc. and
Society National Bank dated August 19, 1988.
10.32(1) Waiver Letter dated September 22, 1988, from Society National Bank
regarding conditions of Term Loan Agreements.
10.33(1) Lease dated December 20, 1988, between Helian Health Group, Inc.,
as tenant, and Roger Winslow, as landlord, covering premises at
1000 8th Street, Monterey, California.
10.34(1) Lease dated April 9, 1987, between Austin Occupational Health
Center, Inc., as tenant, and Crow- Gottesman-Hill #27, as
landlord, covering premises at 2112 Rutland Drive, Suite 180,
Austin, Texas.
10.35(1) Lease dated August 15, 1985, including Assignment, between Austin
Occupational Health Center, Inc., as tenant, and Dry Doc Building
Corporation, as landlord, covering premises at 1213 North IH35,
Austin, Texas.
10.36(1) Lease dated September 6, 1984, including Assignments and
Assignment, between Helian Health Group of Atlanta, Inc., as
tenant, and as successor-in-interest to AMI Ambulatory Centers,
Inc. and Howell Industrial Clinic, Inc., and First Union
Management, Inc., as landlord, covering premises at 730 Peachtree
Building, Atlanta, Georgia.
10.37(1) Lease dated July 12, 1974, including Amendments and Assignments,
between Helian Health Group, Inc., as tenant, and as
successor-in-interest to Industrial Clinic Professional
Corporation and AMI Ambulatory Centers, Inc., and Chestnut
Associates, as landlord, covering premises at 3580 Atlanta Avenue,
Hapeville, Georgia.
10
<PAGE>
10.38(1) Lease dated December 24, 1985, including Assignment, between
Helian Health Group of Georgia, Inc., as tenant, and as
successor-in-interest to AMI Ambulatory Centers, Inc., and Homart
Development Co., as landlord, covering premises at 3490 Piedmont
Road, N.E., Atlanta, Georgia.
10.39(1) Lease dated February 26, 1987, between Helian Health Group of
Georgia, Inc., as tenant, and Peterson Properties as landlord,
covering premises at 6475 Jimmy Carter Blvd., Norcross, Georgia.
10.40(1) Lease dated September 10, 1987, between Tucson Occupational Health
Center, as tenant, and The Atrium Associates, as landlord,
covering premises at 5099 East Grant Road, Tucson, Arizona.
10.41(1) Lease dated May 2, 1980, including Assignment, between Tucson
Occupational Health Center as tenant, and as successor-in-interest
to Robert Levitin, M.D. and Marcia Levitin, d/b/a Occupational
Medicine Clinic of Tucson, and Lot One, T.B.P., as landlord,
covering premises at Lot 1, Tucson Business Yard, Tucson, Arizona.
10.42(1) Lease dated May 7, 1976, including Assignment, between Palo Alto
Surgecenter Corporation, as tenant, and Gorman Whitney Development
Co., as landlord, covering premises at 400 Forest Avenue, Palo
Alto, California.
10.44(1) Deed dated November 18, 1987, for land purchased by Recovery Inn
of Los Gatos located in Campbell, California.
10.45(1) Agreement Dated May 22, 1988, between Recovery Inns(sm) of
America, Inc. and San Jose Medical Center.
10.46(1)* Employment Agreement dated January 1, 1993, between Helian Health
Group, Inc. and Donald C. Blanding.
10.47(5) Amended and Restated 1989 Stock Option Plan of the Company
10.48(1)* Stock Option Agreement dated as of April 1, 1987, between the
Company and William A. Hines.
10.49(1) Loan Agreement dated June 27, 1990, between the Company and First
Interstate Bank of California.
10.50(1) Security Agreement dated June 27, 1990, between the Company and
First Interstate Bank of California.
10.51(1) Installment Note dated June 14, 1990, payable to First Interstate
Bank of California.
10.52(1) Revolving Credit Note dated June 14, 1990, payable to First
Interstate Bank of California.
10.531 Purchase Agreement dated June 11, 1990, among Well America, a
general Partnership, J. Michael Hitt, M.D. and Tucson Occupational
Health Center, Inc., a wholly-owned subsidiary of the Company.
10.54(1) Real Estate Purchase Contract and Receipt for Deposit, dated June
1989, between the Company and the Menlo Park Willows, a California
Limited Partnership.
10.55(1) Letter Agreement, dated May 29, 1990, between Recovery Inn(sm) of
Los Gatos, a California Limited Partnership, and Sanwa Bank
California, a California corporation, as Corporate Co-Trustee for
Carpenters Pension Trust Fund for Northern California.
10.56(1) Letter Agreement, dated June 6, 1990, between Recovery Inn(sm) of
Los Gatos, a California Limited Partnership, and Tokai Bank of
California.
11
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10.57* Amendment of Employment Agreement For Thomas D. Wilson, dated
December 21, 1990, between the Company and Thomas D. Wilson.
10.58(2) Asset Purchase Agreement between Steven C. Schumann, M.D., Inc.,
Steven C. Schumann, M.D., Helian Health Group of Fresno, Inc., and
Helian Health Group, Inc., dated April 1, 1991.
10.59(2) Management Service Agreement by and among Helian Health Group of
Fresno, Inc., and Steven C. Schumann, M.D., Inc.
10.60(2) Covenant Not to Compete Agreement dated April 1, 1991, between
Helian Health Group of Fresno, Inc., and Steven C. Schumann, M.D.
10.61(2) Consulting Agreement dated April 1, 1991, by and between Helian
Health Group, Inc. and Steven C. Schumann, M.D.
10.62(3) Asset Purchase Agreement among Southern Back & Orthopaedic Center,
P.C., William D. Cabot and Helian Health Group, Inc. dated June
17, 1991.
10.63(3) Employment Agreement between Rehabilitative Back Center of
Atlanta, Inc. and William D. Cabot dated June 17, 1991.
10.64(3) Consulting Agreement between Rehabilitative Back Center of
Atlanta, Inc. and William D. Cabot dated June 17, 1991.
10.65(3) Medical Supervisor Agreement between Rehabilitative Back Center of
Atlanta, Inc. and William D. Cabot dated June 17, 1991.
10.66* Employment Agreement, dated April 1, 1992, between the Company and
J. Spencer Davis.
10.67* Employment Agreement, dated August 1, 1992, between the Company
and Michael K. McMillan.
10.68(4) Agreement to Provide Guaranty, dated April 16, 1992, as amended by
the First Amendment, between the Company and Jacob Noghreian,
Jeremy Cole, Jeffrey Aaronson, John Sherman and John Alexander.
10.69(4) Ground Lease, dated April 17, 1992, between the Company and
Recovery Inn of Menlo Park, a California limited partnership.
10.70(4) Master Lease, dated October 25, 1991, between Diagnostic Imaging
of Atlanta, L.P., and Norwest Financial Leasing, Inc.
10.71(4) Unconditional Guaranty Agreement, dated November 30, 1992, by the
Company to Norwest Financial Leasing, Inc.
10.72(4) Guaranty, dated January 22, 1993, by the Company to MetLife
Capital Corporation.
10.73(6) Management Agreement between Salinas Surgery Center and Helian ASC
of Salinas, Inc., dated, July 15, 1993.
10.74(6) Partnership Agreement between Helian ASC of Salinas and
Concentrated Care, Inc., dated, July 15, 1993
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10.75(6) Term Loan Agreement between Palo Alto Surgecenter Corporation and
MetLife Capital Corporation dated, August 5, 1993.
10.76(6) Term Loan Agreement between Recovery Inn(sm) of Los Gatos, Ltd.
and MetLife Capital Corporation dated, August 5, 1993.
10.77(6) Lease dated, March 1, 1993 between Helian Health Group, Inc. and
Lightner Place Associates covering premises at 955 Blanco Circle,
Suite A, Salinas, California.
10.78(7) Term Loan Agreement between Helian Health Group, Inc., and MetLife
Capital Corporation dated, September 14, 1993.
10.79(7) Term Loan Agreement between Salinas Surgery Center and MetLife
Capital Corporation dated, November 24, 1993.
10.80(8)* Employment Agreement dated March 26, 1994 between Helian Health
Group, Inc. and William A. Hines.
10.81* Employment Agreement dated February 1,1994 between Helian Health
Group, Inc. and Leslie J. Arliskas.
10.82(9) Loan Agreement dated May 4 , 1994 between Helian Health Group,
Inc. and Sumitomo Bank of California.
10.83(9) Management Agreement dated February 26, 1994 between Helian Health
Group, Inc. and Marin General Hospital.
10.84(10) Asset Purchase Agreement by and among Industrial Medical Group,
Theodore R. Johstone, M.D., Kathryn Johnstone, R.N., Primary Care
Medical Group, Inc., Paul Cohen, M.D., Paul Cohen Family Trust and
Helian Health Group of Fresno, Inc. dated March 31, 1995.
10.85* Thomas D. Wilson Resignation Term sheet dated April 9, 1995.
- -------------------
* Employment Agreement or Compensatory Plan or Arrangement.
1 Incorporated by reference to Registrant's Registration Statement Number
33-31520 on Form S-1, filed October 11, 1989, Amendment Number 2 thereto
filed November 21, 1989, and Post-Effective Amendments Number 1 and Number
2 thereto filed November 22, 1990 and January 16, 1991, respectively.
2 Incorporated by reference to corresponding exhibit number in the Company's
Form 8-K filed on April 11, 1991.
3 Incorporated by reference to corresponding exhibit number in the Company's
Form 8-K filed on June 24, 1991.
4 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-K filed on March 1, 1993.
5 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-Q filed on July 14, 1993.
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6 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-Q filed on October 14, 1993.
7 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-K filed on February 26, 1994.
8 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-Q filed on April 13, 1994.
9 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-Q filed on July 14, 1994.
10 Incorporated by reference to corresponding exhibit number in the Company's
Form 10-Q filed on July 14, 1995.
11 Incorporated by reference to corresponding exhibit number in the Company's
Form 8-K filed on September 1, 1995.
(b) Reports on Form 8-K
A Form 8-K was filed on September 1, 1995, describing the August 29, 1995
Agreement and Plan of Merger with TheraTx, Incorporated and related Stock
Option Agreement and Stockholders Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HELIAN HEALTH GROUP, INC.
OCTOBER 13, 1995
/S/ HERBERT W. FOSTER
------------------------------------------------------
HERBERT W. FOSTER, ACTING CHIEF FINANCIAL OFFICER
OCTOBER 13, 1995
/S/ DONALD C. BLANDING
--------------------------------------------------------
DONALD C. BLANDING, TREASURER
15
EXHIBIT 3.3
CERTIFICATE OF SECRETARY
I hereby certify:
That I am the duly elected and acting Secretary of Helian Health Group,
Inc., a Delaware corporation (the "Corporation); and
That at a meeting of the Board of Directors duly held on April 25, 1995
the following resolutions were adopted:
Amendment of By-laws.
- ---------------------
WHEREAS, it is in the best interest of the Corporation to amend its By-laws to
provide for the office of Chief Executive Officer.
RESOLVED, that Article V of the By-laws of the Corporation is hereby amended and
restated in its entirety in the form attached hereto as Exhibit A.
---------
RESOLVED FURTHER, that the Secretary of the Corporation be, and he hereby is,
authorized to certify such amendment as having been adopted at this meeting and
that the Secretary be, and he hereby is, directed to execute and insert a
Certificate of Secretary in the minute book immediately following the By-laws of
the Corporation.
IN WITNESS WHEREOF, I have hereunder subscribed my name this 1st day of October,
1995.
/s/ Michael K. McMillan
------------------------------------
Michael K. McMillan
Secretary
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EXHIBIT A
---------
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a chief executive officer, a president, a
vice-president, a secretary and a treasurer. The board of directors may also
choose a chairman of the board, additional vice-presidents, and one or more
assistant secretaries and assistant treasurers. Any number of offices may be
held by the same person, unless the certificate of incorporation or these
by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a chief executive officer, a
president, one or more vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shalldeem necessary who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 6. The chairman of the board, if there shall be such an
officer, shall, if present, preside at all meetings of the board of directors,
and shall exercise and perform such other powers and duties as may be from time
to time assigned to him by the board of directors.
CHIEF EXECUTIVE OFFICER
Section 7. The chief executive officer shall be the general manager of
the corporation and shall, subject to the control of the board of directors,
have general supervision, direction and control of the business and officers of
the corporation. He shall preside at all meetings of the stockholders and, in
the absence of the chairman of the board, or if there be none, at all meetings
of the board of directors. He shall be ex-officio a member of all the standing
committees, including the executive committee, if any. He shall have such other
powers and duties as may be prescribed by the board of directors.
THE PRESIDENT
Section 8. Subject to the supervision of the chief executive officer,
the president shall have general and active management of the business of the
corporation. In the absence or disability of the chief executive officer, if
such office is held by another person, the president shall perform all duties of
the chief executive officer, and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the president. He shall have such
other powers and duties as may be prescribed by the board of directors.
Section 9. Both the chief executive officer and the president shall
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation, except where required or permitted by law
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to be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the board of directors to some other
officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 10. In the absence of the chief executive officer and, if such
office is held by another person, president or in the event of such officers'
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the chief executive officer and the
president, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the chief executive officer and the president. The
vice-presidents shall perform such other duties and have such other powers as
the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 11. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
chief executive officer, under whose supervision he shall be. He shall have
custody of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The board of directors may give general authority to
any other officer to affix the seal of the corporation and to attest the
affixing by his signature.
Section 12. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 13. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 14. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and board of directors, at its
regular meetings, or when the board of directors so requires, an account of all
his transactions as treasurer and of the financial condition of the corporation.
Section 15. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
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Section 16. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(of if there be no such determination, then in the order of their election)
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
4
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HELIAN HEALTH GROUP, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the City of Los Angeles, State of California, at such
place as may be fixed from time to time by the board of directors, or at such
other place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting. Meetings of stockholders for any other purpose may be held at
such time and place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year
1987, shall be held on the fifteenth day of May if not a legal holiday, and if a
legal holiday, then on the next secular day following, at 10:00 A.M., or at such
other date and time as shall be designated from time to time by the board of
directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a board of directors, and transact such other business as may
properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called
5
<PAGE>
by the president or secretary at the request in writing of a majority of the
board of directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be given not less than ten nor more than sixty days before the
date of the meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
6
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ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be not less than three nor more than thirteen. The first board shall
consist of three directors. Thereafter, within the limits above specified, the
number of directors shall be determined by resolution of the board of directors
or by the stockholders at the annual meeting. The directors shall be elected at
the annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of the shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.
Section 3. The business of the corporation shall be managed by or under
the direction of its board of directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation or by these by-laws directed or required to
be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board may be called by the president
on one day's notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two directors unless the
board consists of only one director; in which case special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of the sole director.
Section 8. At all meetings of the board a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors
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the directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, (except
that a 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
as provided in Section 151(a) fix any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation) adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock or to adopt a certificate of ownership and
merger. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board of directors.
Section 12. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their
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expenses, if any, of attendance at each meeting of the board of directors and
may be paid a fixed sum for attendance at each meeting of the board of directors
or a stated salary as director. No such payment shall preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
incorporation or by law, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
9
<PAGE>
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
10
<PAGE>
Section 13. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by a
certificate or shall be uncertificated. Certificates shall be signed by, or in
the name of the corporation by, the chairman or vice-chairman of the board of
directors, or the president or a vice-president and the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of the
corporation.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to Sections 151, 156, 202(a) or 218(a) or a statement
that the corporation will furnish without issue of a new certificate or
certificates or uncertificated shares, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 2. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Upon receipt of proper transfer instructions from the registered owner of
uncertificated shares such uncertificated shares shall be cancelled and issuance
of new equivalent uncertificated shares or certificated shares shall be made to
the person entitled thereto and the transaction shall be recorded upon the books
of the corporation.
FIXING RECORD DATE
Section 3. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, no more than sixty days prior to any other action. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
11
<PAGE>
stockholders shall apply to any adjournment of the meeting: provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 4. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, an shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
12
<PAGE>
INDEMNIFICATION
Section 7. The duly elected directors of the Corporation shall not be
held personally liable to the Corporation or its Stockholders for monetary
damages for breach of a fiduciary duty as a director, but such liability may be
imposed (i) for any breach of the director's duty of loyalty to the Corporation
or its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of Title 8 of the Delaware Code; or (iv) for any transaction from
which the director derived an improper personal benefit.
Section 8. (A) The Corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in and not opposed to
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
---- ----------
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best interest
of the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(B) The Corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the court of equity or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court of equity or such other
court shall deem proper.
(C) To the extent that a director, officer, employee or agent
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (A) and (B) of this
Section Eight or in the defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(D) Any indemnification under subsections (A) and (B) of this
Section Eight (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (A) and
(B). Such determination shall be made (l) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of the disinterested directors so directs, by independent
legal counsel in a written opinion or (3) by the stockholders.
13
<PAGE>
(E) Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount if
it shall ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Section Eight.
(F) The indemnification and advancement of expenses provided
by or granted pursuant to this Section Eight shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any statute, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(G) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section Eight shall, unless otherwise provided
when authorized or ratified, 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 such person.
(H) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Section Eight.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate of
incorporation at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new
by-laws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal by-laws is conferred upon the board of directors by the
certificate of incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal by-laws.
14
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