UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-19854
APRIA HEALTHCARE GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0488566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3560 HYLAND AVENUE, COSTA MESA, CA 92626
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714)427-2000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
There were 50,789,756 shares of Common Stock, $.001 par value, outstanding
at May 3, 1996.
<PAGE>
APRIA HEALTHCARE GROUP INC.
FORM 10-Q
For the period ended March 31, 1996
PART I. FINANCIAL INFORMATION
- - ------------------------------
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
- - ---------------------------
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security
Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- - ----------
<PAGE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---------- ------------
(Dollars in thousands)
<S> <C> <C>
CURRENT ASSETS
Cash $ 24,052 $ 18,829
Accounts receivable, less allowance for
doubtful accounts of $90,341 and $86,567
at March 31, 1996 and December 31, 1995,
respectively 306,980 258,332
Inventories 54,140 45,198
Deferred income taxes 45,769 45,883
Refundable income taxes 24,079 27,710
Prepaid expenses and other current assets 10,035 7,770
--------- ---------
TOTAL CURRENT ASSETS 465,055 403,722
PATIENT SERVICE EQUIPMENT, less accumulated
depreciation of $168,815 and $161,953 at
March 31, 1996 and December 31, 1995,
respectively 178,726 167,090
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET 92,236 80,108
INVESTMENT IN OMNICARE plc 1,504 1,504
COVENANTS NOT TO COMPETE, NET 19,167 20,272
GOODWILL, NET 297,383 298,870
OTHER ASSETS 5,052 8,419
--------- ---------
$1,059,123 $ 979,985
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 73,563 $ 100,653
Accrued payroll and related taxes
and benefits 22,203 26,792
Accrued restructuring costs 13,767 19,085
Other accrued liabilities 52,035 48,910
Current portion of long-term debt 8,975 9,652
--------- ---------
TOTAL CURRENT LIABILITIES 170,543 205,092
LONG-TERM DEBT 567,190 490,655
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value:
10,000,000 shares authorized; none issued - -
Common Stock, $.001 par value:
150,000,000 shares authorized; 50,713,571
and 49,692,266 shares issued and
outstanding at March 31, 1996 and
December 31, 1995, respectively 51 50
Additional paid-in capital 311,347 294,522
Retained earnings (deficit) 9,992 (10,334)
--------- ---------
321,390 284,238
COMMITMENTS AND CONTINGENCIES - -
--------- ---------
$1,059,123 $ 979,985
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1996 1995
---- ----
(In thousands, except
per share data)
<S> <C> <C>
Net revenues $295,303 $284,609
Costs and expenses:
Cost of net revenues 94,091 85,536
Selling, distribution and administrative 140,944 145,903
Provision for doubtful accounts 13,298 13,214
Amortization of intangible assets 4,102 3,924
-------- --------
OPERATING INCOME 42,868 36,032
Interest expense 11,108 10,682
-------- --------
INCOME BEFORE TAXES 31,760 25,350
Income taxes 11,434 9,558
-------- --------
NET INCOME $ 20,326 $ 15,792
======== ========
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE $ 0.39 $ 0.34
======== ========
Weighted average number of common and common
equivalent shares outstanding 51,997 46,410
EARNINGS PER COMMON AND COMMON EQUIVALENT
SHARE ASSUMING FULL DILUTION $ 0.39 $ 0.32
======== ========
Weighted average number of common and common
equivalent shares outstanding assuming
full dilution 52,221 50,942
</TABLE>
See notes to consolidated financial statements.
<PAGE>
APRIA HEALTHCARE GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1996 1995
------ ------
(Dollars in thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 20,326 $ 15,792
Items included in net income not
requiring (providing) cash:
Provision for doubtful accounts 13,298 13,214
Depreciation 19,855 19,478
Amortization of intangible assets 4,102 3,924
Amortization of deferred debt costs 260 1,137
Loss on sale of property, equipment
and improvements 10 155
Changes in operating assets and liabilities,
net of effects of acquisitions:
Increase in accounts receivable (61,880) (38,920)
Increase in inventories (8,533) (4,255)
Decrease (increase) in prepaids and
other assets 9,157 (2,804)
Decrease in accounts payable (27,090) (3,205)
Decrease in accrued payroll
and other liabilities (1,359) (396)
Decrease in accrued restructuring costs (5,318) -
Net purchases of patient service equipment,
net of effects of acquisitions (25,186) (25,281)
-------- --------
NET CASH USED IN OPERATING ACTIVITIES (62,358) (21,161)
INVESTING ACTIVITIES
Purchases of property, equipment and
improvements, net of effects of
acquisitions (17,322) (10,383)
Proceeds from sale of property, equipment
and improvements 18 78
Acquisitions and payments of
contingent consideration (489) (32,349)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (17,793) (42,654)
FINANCING ACTIVITIES
Proceeds under revolving credit facility 125,100 91,713
Payments under revolving credit facility (46,900) (67,495)
Proceeds from senior and other long-term debt - 115,156
Payments of senior and other long-term debt (2,550) (75,022)
Capitalized debt costs, net (11) (546)
Issuances of Common Stock 9,735 4,549
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 85,374 68,355
-------- --------
NET INCREASE IN CASH 5,223 4,540
Cash at beginning of period 18,829 21,188
Net activity for Homedco - October 1, 1994 to
December 31, 1994 - 3,697
-------- --------
CASH AT END OF PERIOD $ 24,052 $ 29,425
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
APRIA HEALTHCARE GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - POOLING OF INTERESTS AND BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Apria Healthcare Group Inc. ("the Company") and its
subsidiaries. All significant intercompany transactions and
accounts have been eliminated. On June 28, 1995, Homedco Group,
Inc. ("Homedco") merged with and into Abbey Healthcare Group
Incorporated ("Abbey") to form Apria Healthcare Group Inc. ("the
merger"). The merger was accounted for as a pooling-of-interests
and, accordingly, the consolidated financial statements reflect
the combined financial position and operating results of Abbey
and Homedco and have been adjusted to conform the differing
accounting policies of the separate companies for all periods
presented.
In the opinion of management, all adjustments, consisting of
normal recurring accruals, necessary for a fair presentation of
the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim
periods are not necessarily indicative of the results to be
expected for the entire year. For further information, refer to
the consolidated financial statements and footnotes thereto for
the year ended December 31, 1995, filed with the Company's Form
10-K.
NOTE B - RECLASSIFICATIONS
Certain amounts from prior periods have been reclassified to
conform to the current year presentation.
NOTE C - INCOME TAXES
Income taxes have been provided at the effective tax rate
expected for the year. The Company's effective tax rate differs
from the statutory rate as a result of state income taxes (net of
federal benefit) and the use of net operating loss carryforwards.
NOTE D - RESTRUCTURING COSTS
In connection with the merger, the Company adopted a plan to
restructure and consolidate its operating locations and
administrative functions within specific geographic areas. The
plan, which the Company anticipates will be substantially
completed by September 1996, resulted in a restructuring charge
in 1995 of approximately $68,304,000 consisting of accrued costs
and impairments. The following table summarizes amounts paid
through March 31, 1996 and the remaining accrual at March 31,
1996.
<PAGE>
Accruals
--------
(in thousands)
Accrual at December 31, 1995 $19,085
Severance amounts paid through March 31, 1996 (4,120)
Other amounts paid through March 31, 1996 (1,198)
-------
Accrual at March 31, 1996 $13,767
=======
NOTE E - EQUITY
The change in stockholders' equity, other than from net income,
resulted from the exercise of stock options, shares issued under
the employee stock purchase plan and the tax benefit associated
with disqualifying dispositions of incentive stock options and
exercises of nonqualified stock options. For the three months
ended March 31, 1996, proceeds from the exercise of stock options
amounted to $9,292,000, the related tax benefit amounted to
$7,091,000 and shares valued at $443,000 were issued under the
employee stock purchase plan.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Company is engaged in the defense of certain claims and
lawsuits arising out of the ordinary course and conduct of its
business, the outcome of which are not determinable at this time.
The Company has insurance policies covering such potential losses
where such coverage is cost effective. In the opinion of
management, any liability that might be incurred by the Company
upon the resolution of these claims and lawsuits will not, in the
aggregate, have a material adverse effect on the consolidated
financial condition of the Company.
NOTE G - LONG-TERM DEBT
The Company uses interest rate swap and cap agreements to
moderate its exposure to interest rate changes. The Company
entered into a new swap agreement for $280,000,000 of notional
principal in January 1996. The counterparty to the swap
agreement has an option to terminate the swap transaction in July
1996. If this option is not exercised, the swap agreement will
terminate in January 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- - ---------------------
Net revenues increased 3.8% to $295.3 million for the first
quarter of 1996 compared with $284.6 million for the same period
last year. Respiratory therapy and medical equipment/other grew
at rates of 6.2% and 4.1%, respectively, while infusion therapy
decreased by 1.8%. The growth in the respiratory therapy line is
due to volume increases in both the traditional and managed care
markets. Although the Company believes its long-term growth
opportunities are mainly in managed care markets, continued
development of business from traditional referral/payor sources
is equally important. The slight decrease in infusion therapy
can be attributed to price compression in managed care markets,
as volume actually increased. Also contributing slightly to the
quarter to quarter revenue increase was the impact of certain
small complementary businesses acquired in early 1995.
The gross margin was 68.1% for the first quarter in 1996
versus 69.9% for the first quarter of 1995. The decline is
primarily attributable to an increase in the Company's managed
care organization customer base. Participation in the managed
care system requires a broad offering of products and services,
including lower-margin services, medical equipment and supplies.
Also, the intense competition in these markets has caused some
price compression. To mitigate the effect of these factors, the
Company is implementing various initiatives to reduce its
operating costs and has placed sales force incentives on certain
higher-margin "focus" products.
Selling, distribution and administrative expenses as a
percent of net revenues decreased to 47.7% in the first quarter
of 1996 compared with 51.3% for the same period in the prior
year. Much of this improvement can be attributed to the
successful execution of the restructuring and consolidation plan
initiated in conjunction with the merger. Employee reductions
and branch consolidations are substantially complete and the
associated expense savings is gradually being realized. Further,
operating and clinical efficiency models are being implemented
which are expected to contribute to additional expense
improvement. Certain aspects of the models were rolled-out
during the first quarter, so the full impact of the expected
savings is not yet reflected in the operating results.
Interest expense increased to $11.1 million in the first
quarter of 1996 from $10.7 million for the same period last year.
The increase is primarily due to an increase in long-term debt
(see Liquidity and Capital Resources). In January 1996, the
Company entered into a new one-year swap agreement to fix the
interest rate on the notional principal amount of $280 million.
Income taxes were $11.4 million in the first quarter, up
from $9.6 million in the first quarter of 1995. The increase is
due primarily to higher pretax income and was mitigated by a
slight reduction in the effective tax rate. The rate reduction
reflects lower state income taxes resulting from the Company's
merged and reorganized operations and the use of net operating
loss carryforwards.
Liquidity and Capital Resources
- - -------------------------------
During the first quarter of 1996, the Company's operating
activities required the use of $62.4 million, compared to $21.2
million for the same period last year. The two major factors
contributing to the increase in cash used during the first
quarter of 1996 were increases in accounts receivable and
reductions in accounts payable.
In conjunction with the restructuring and consolidation
plan, the Company decided to convert all branch operating
locations to one standardized information system. The activities
associated with the system conversions generally cause
disruptions to normal operations, which create billing and
collection delays and has resulted in an increase in accounts
receivable. At the end of the first quarter, approximately two-
thirds of the planned conversions were completed, with the
remaining 160 conversions scheduled for completion by the end of
the third quarter. Cash collections are expected to show some
improvement by the end of the second quarter as normal processing
resumes. In addition, collections-based incentive programs have
been implemented at the local and regional levels to ensure
proper focus is given to billing and collection activities.
The Company also centralized its accounts payable function
in connection with the restructuring and consolidation plan. The
centralization process disrupted day-to-day activities causing a
processing backlog which was reflected in the accounts payable
balance at December 31, 1995. During the first quarter of 1996,
the backlog was substantially eliminated, resulting in
significant outlays of cash.
Other operating activities contributing to the use of cash
include purchases of resale inventory to support business growth
and payments made against the restructuring cost accrual,
comprised primarily of severance and trailing facility costs.
Such payments are expected to continue through 2000, according to
contractual terms.
Long-term debt, and specifically the amount borrowed under
the revolving credit facility, increased significantly during the
first quarter due to the operating activities discussed above.
Also contributing to the increase were expenditures to support
the information systems conversions/enhancements and branch
consolidations. These expenditures resulted in a corresponding
increase to property, plant and equipment.
At December 31, 1995, other assets was primarily comprised
of payments for businesses acquired late in the year. During the
first quarter, the payments were allocated to the various
underlying acquired assets.
The Company believes that cash provided by operations and
amounts available under its existing credit facility will be
sufficient to finance its current operations for at least the
next 12 months. At March 31, 1996, availability under the credit
facility was $134.5 million.
PART II. OTHER INFORMATION
- - --------------------------
Item 1-5. Not applicable
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Exhibit
Number Description and Reference
------- -------------------------
3.2 Restated Bylaws of Registrant
11.1 Statement of Computation of Earnings
per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
quarter for which this report is filed.
<PAGE>
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.
Apria Healthcare Group Inc.
------------------------------
Registrant
May 14, 1996 /s/ Lawrence H. Smallen
------------------------------
Lawrence H. Smallen
Chief Financial Officer,
Vice President, Finance,
Treasurer and Secretary
(Principal Financial Officer)
Exhibit 3.2
RESTATED BYLAWS OF
APRIA HEALTHCARE GROUP INC.,
a Delaware corporation
RESTATED
BYLAWS
OF
APRIA HEALTHCARE GROUP INC.,
a Delaware corporation
ARTICLE I
Offices
SECTION 1. REGISTERED OFFICE. The registered office of this
Corporation shall be in the City of Wilmington, County of New
Castle, Delaware and the name of the resident agent in charge
thereof is the agent named in the Certificate of Incorporation
until changed by the Board of Directors (the "Board").
SECTION 1.2 PRINCIPAL OFFICE. The principal office for the
transaction of the business of the Corporation shall be at such
place as may be established by the Board. The Board is granted
full power and authority to change said principal office from one
location to another.
SECTION 1.3 OTHER OFFICES. The Corporation may also have an
office or offices at such other places, either within or without
the State of Delaware, as the Board may from time to time
designate or the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
SECTION 2.1 TIME AND PLACE OF MEETINGS. Meetings of
stockholders shall 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 2.2 ANNUAL MEETINGS OF STOCKHOLDERS. The annual meeting
of stockholders shall be held on such date and at such time and
place as may be fixed by the Board of Directors and stated in the
notice of the meeting, for the purpose of electing directors and
for the transaction of such other business as is properly brought
before the meeting in accordance with these Bylaws. To be
properly brought before the annual meeting, business must be
either (i) specified in the notice of annual meeting (or any
supplement or amendment thereto) given by or at the direction of
the Board of Directors, (ii) otherwise brought before the annual
meeting by or at the direction of the Board of Directors, (iii)
brought before the meeting in accordance with Rule 14a-8 under
the Securities Exchange Act of 1934, or (iv) otherwise properly
brought before the annual meeting by a stockholder. In addition
to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely a stockholder's
notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than
sixty (60) days nor more than ninety (90) days prior to the
meeting; provided, however, that in the event that less than
forty (40) days' notice or prior public disclosure of the date of
the annual meeting is given or made to stockholders, notice by a
stockholder, to be timely, must be received no 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 or
such public disclosure was made, whichever first occurs. A
stockholder's notice to the Secretary shall set forth (a) as to
each matter the stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be
brought before the annual meeting, (ii) the name and record
address of the stockholder proposing such business, (iii) the
class, series and number of shares of the Corporation which are
beneficially owned by the stockholder, and (iv) any material
interest of the stockholder in such business. No business shall
be conducted at the annual meeting except in accordance with the
procedures set forth in this Article II, Section 2.2. The officer
of the Corporation presiding at an annual meeting shall, if the
facts warrant, determine and declare to the annual meeting that
business was not properly brought before the annual meeting in
accordance with the provisions of this Article II, Section 2.2,
and if he should so determine, he shall so declare to the annual
meeting and any such business not properly brought before the
meeting shall not be transacted.
SECTION 2.3 SPECIAL MEETINGS. Special meetings of the
stockholders of the Corporation for any purpose or purposes may
be called at any time by the Board, or by a committee of the
Board that has been duly designated by the Board and whose powers
and authority, as provided in a resolution of the Board or in the
Bylaws of the Corporation, include the power to call such
meetings, and shall be called by the president or secretary at
the request in writing of a majority of the Board, 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 but such special meetings may
not be called by any other person or persons; provided, however,
that if and to the extent that any special meeting of
stockholders may be called by any other person or persons
specified in any provisions of the Certificate of Incorporation
or any amendment thereto, or any certificate filed under Section
151(g) of the Delaware General Corporation Law (or its successor
statute as in effect from time to time hereafter), then such
special meeting may also be called by the person or persons in
the manner, at the times and for the purposes so specified.
Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
SECTION 2.4 STOCKHOLDER LISTS. 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 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 at the place of the meeting, and the
list shall also be available at the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
SECTION 2.5 NOTICE OF MEETINGS. Notice of each meeting of
stockholders, whether annual or special, stating the place, date
and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which such meeting has been called,
shall be given to each stockholder of record entitled to vote at
such meeting not less than ten nor more than sixty days before
the date of the meeting. Except as otherwise expressly required
by law, notice of any adjourned meeting of the stockholders need
not be given if the time and place thereof are announced at the
meeting at which the adjournment is taken.
Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation
or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent
thereto. Notice of any meeting of stockholders shall be deemed
waived by any stockholder who shall attend such meeting in person
or by proxy, except a stockholder who shall attend such meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
SECTION 2.6 QUORUM AND ADJOURNMENT . 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 for holding all meetings of stockholders, except as
otherwise provided by applicable law or by the Certificate of
Incorporation; provided, however, that the stockholders 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 stockholders 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. If it shall appear that such quorum is not present or
represented at any meeting of stockholders, the Chairman of the
meeting 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 noticed. 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. The Chairman of the meeting may determine
that a quorum is present based upon any reasonable evidence of
the presence in person or by proxy of stockholders holding a
majority of the outstanding votes, including without limitation,
evidence from any record of stockholders who have signed a
register indicating their presence at the meeting.
SECTION 2.7 VOTING. In all matters, when a quorum is present at
any meeting, the vote of the holders of a majority of the capital
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
applicable law 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. Such vote
may be by voice or by written ballot; provided, however, that the
Board may, in its discretion, require a written ballot for any
vote, and further provided that all elections for directors must
be by written ballot upon demand made by a stockholder at any
election and before the voting begins.
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.
SECTION 2.8 PROXIES. Each stockholder entitled to vote at a
meeting of stockholders may authorize in writing another person
or persons to act for such holder by proxy, but no proxy shall be
voted or acted upon after three years from its date, unless the
person executing the proxy specifies therein the period of time
for which it is to continue in force.
SECTION 2.9 INSPECTORS OF ELECTION. The Corporation shall, in
advance of any meeting of stockholders, appoint one or more
inspectors to act at the meeting and make a written report
thereof. The Corporation or the Chairman of the meeting shall
appoint one or more alternate inspectors to replace any inspector
who fails to act. Each inspector, before undertaking his or her
duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the
best of his or her ability. The inspectors shall ascertain the
number of shares outstanding and the voting power of each,
determine the shares represented at the meeting and the validity
of the proxies and ballots, count all votes and ballots,
determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the
inspectors and certify their determination of the number of
shares represented at the meeting and their count of all votes
and ballots. Each inspector shall perform his or her duties and
shall make all determinations in accordance with the Delaware
General Corporation Law including, without limitation, Section
231 of the Delaware General Corporation Law.
The date and time of the opening and closing of the polls for
each matter upon which the stockholders will vote at a meeting
shall be announced at the meeting. No ballot, proxies or votes,
nor revocations thereof or changes thereto, shall be accepted by
the inspectors after the closing of the polls unless the Court of
Chancery upon application by a stockholder shall determine
otherwise.
The appointment of inspectors of election shall be in the
discretion of the Board except that so long as the Corporation
has a class of voting stock that is (i) listed on a national
securities exchange, (ii) authorized for quotation on an
interdealer quotation system of a registered national securities
association, or (iii) held of record by more than 2,000
stockholders, appointment of inspectors shall be obligatory.
ARTICLE III
Directors
SECTION 3.1 POWERS. The Board shall have the power to manage or
direct the management of the property, business and affairs of
the Corporation, and except as expressly limited by law, to
exercise all of its corporate powers. The Board may establish
procedures and rules, or may authorize the Chairman of any
meeting of stockholders to establish procedures and rules, for
the fair and orderly conduct of any meeting including, without
limitation, registration of the stockholders attending the
meeting, adoption of an agenda, establishing the order of
business at the meeting, recessing and adjourning the meeting for
the purposes of tabulating any votes and receiving the results
thereof, the timing of the opening and closing of the polls, and
the physical layout of the facilities for the meeting.
SECTION 3.2 NUMBER, ELECTION AND TENURE. The Board shall
initially consist of eight members. Thereafter, the number of
directors shall be fixed or altered exclusively by resolutions
adopted by the Board. The directors shall be divided into three
classes as nearly equal in number as possible, designated Class
I, Class II and Class III. The initial term of office of Class I
directors shall expire at the 1996 annual meeting of
stockholders; of Class II directors at the 1997 annual meeting of
stockholders; and of Class III directors at the 1998 annual
meeting stockholders. At each annual meeting of stockholders,
successors to the class of directors whose terms of office expire
in that year shall be elected to hold office for a term of three
(3) years. Each director shall hold office until his successor is
elected and qualified or until his earlier resignation. No
decrease in the number of directors shall shorten the term of any
incumbent director.
SECTION 3.3 VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Subject
to Section 3.13 for as long as such Section remains in effect,
any vacancy on the Board, including any newly created
directorship resulting from an increase in the number of
directors, may be filled by a majority of the Board then in
office, provided that a quorum is present.
SECTION 3.4 MEETINGS. The Board may hold meetings, both regular
and special, either within or outside the State of Delaware.
SECTION 3.5 ANNUAL MEETING. The Board shall meet as soon as
practicable after each annual election of directors.
SECTION 3.6 REGULAR MEETINGS. Regular meetings of the Board
shall be held without call or notice at such time and place as
shall from time to time be determined by resolution of the Board.
SECTION 3.7 SPECIAL MEETINGS. Special meetings of the Board may
be called at any time, and for any purpose permitted by law, by
the Chairman of the Board, or by the Secretary on the written
request of any two members of the Board unless the Board consists
of only one director in which case the special meeting shall be
called on the written request of the sole director, which
meetings shall be held at the time and place designated by the
person or persons calling the meeting. Notice of the time, place
and purpose of any such meeting shall be given to the directors
by the Secretary, or in case of the Secretary's absence, refusal
or inability to act, by any other officer. Any such notice may be
given by mail, by telegraph, by telephone, by personal service,
or by any combination thereof as to different directors. If the
notice is by mail, then it shall be deposited in a United States
Post Office at least seventy-two hours before the time of the
meeting; if by telegraph, by deposit of the message with the
telegraph company at least twenty-four hours before the time of
the meeting; if by telephone or by personal service, communicated
or delivered at least twenty-four hours before the time of the
meeting.
SECTION 3.8 QUORUM. At all meetings of the Board, a majority of
the whole Board shall be necessary and sufficient to constitute a
quorum for the transaction of business, and the affirmative vote
of a majority of the whole Board shall be necessary to constitute
the act of the Board, regardless of the number of directors
present at the meeting at which such matter is voted upon. For
all purposes herein, the phrase "whole Board" and the phrase
"total number of directors" shall mean the total number of
directors that the Corporation would have if there were no
vacancies. Any meeting of the Board may be adjourned to meet
again at a stated day and hour. Even though a quorum is not
present, as required in this Section, a majority of the directors
present at any meeting of the Board, either regular or special,
may adjourn from time to time until a quorum is present. Notice
of any adjourned meeting need not be given.
SECTION 3.9 FEES AND COMPENSATION. Each director and each
member of a committee of the Board shall receive such fees and
reimbursement of expenses incurred on behalf of the Corporation
or in attending meetings as the Board may from time to time
determine. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving
compensation therefor.
SECTION 3.10 MEETINGS BY TELEPHONIC COMMUNICATION. Members of
the Board or any committee thereof may participate in a regular
or special meeting of such Board or committee by means of
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other. Participation in a meeting pursuant to this Section shall
constitute presence in person at such meeting.
SECTION 3.11 COMMITTEES. The Board may designate committees,
each committee to consist of one or more of the directors of the
Corporation. Any such committee, to the extent provided in the
resolution of the Board, shall have and may exercise all the
powers and authority of the Board in the management of the
business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers that may
require it. Any executive committee of the Board may act only
with the unanimous consent or approval of all of its members, and
any other committees of the Board may act only by the affirmative
vote of a majority of the authorized number of members of such
committee, regardless of the number of members present at the
meeting at which such matter is voted upon and irrespective of
whether vacancies exist on such committee at the time of such
vote. Notwithstanding the foregoing, no committee of the Board
shall have the power or authority in reference to: (a) 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 as
provided in Section 151(a) of the Delaware General Corporation
Law 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 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 or fix the number of shares
of any series of stock or authorize the increase or decrease of
the shares of any series); (b) adopting an agreement of merger or
consolidation under Section 251 or 252 of the Delaware General
Corporation Law; (c) recommending to the stockholders the sale,
lease or exchange of all or substantially all of the
Corporation's property and assets; (d) recommending to the
stockholders a dissolution of the corporation or a revocation of
a dissolution; or (e) amending the Bylaws of the Corporation.
Unless the resolution appointing such committee or the
Certificate of Incorporation expressly so provides, 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 pursuant to Section 253 of the Delaware
General Corporation Law. Each committee shall have such name as
may be determined from time to time by resolution adopted by the
Board. Each committee shall keep minutes of its meetings and
report to the Board when required.
SECTION 3.12 ACTION WITHOUT MEETINGS. Unless otherwise
restricted by applicable law or by the Certificate of
Incorporation or by these Bylaws, any action required or
permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting if all members
of the Board or of such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of the Board or committee.
SECTION 3.13 FILLING OF CERTAIN VACANCIES. For a period of
three years commencing at the effective time of the merger of
Apria Healthcare Group Inc. ("Abbey") and Homedco Group, Inc.
("Homedco") and continuing through the 1998 Annual Meeting of
Stockholders of this Corporation, any vacancy on the Board
arising among Jeremy M. Jones, David L. Goldsmith, Terry
Hartshorn and Charles D. Martin (or any other individual or
individuals selected (i) as a replacement director for the
foregoing individuals or (ii) by the foregoing individuals or
their successors) and any nominee selected to fill a director
position occupied by any of the foregoing individuals (the
"Homedco Directors") will be filled or selected by a majority
vote of the remaining Homedco Directors, and any vacancy arising
among Timothy M. Aitken, Frederick S. Moseley, IV, Leonard Green
and Vincent M. Prager (or any other individual or individuals
selected (i) as a replacement director for the foregoing
individuals or (ii) by the foregoing individuals or their
successors) and any nominee selected to fill a director position
occupied by any of the foregoing individuals (the "Abbey
Directors") will be filled or selected by a majority vote of the
remaining Abbey Directors.
ARTICLE IV
Officers
SECTION 4.1 APPOINTMENT AND SALARIES. The senior officers of
the Corporation shall be appointed by the Board and shall be a
Chairman of the Board and Chief Executive Officer
("Chairman/CEO"), a President ("President"), a Chief Operating
Officer, a Treasurer and a Chief Financial Officer. The Board may
also appoint such other officers as it deems necessary or
appropriate. The Chairman/CEO may appoint one or more Vice
Presidents, a Secretary and such other officers (including
assistant secretaries and financial officers) as the Board or the
Chairman/CEO may deem necessary or desirable. The President and
the Chief Operating Officer may each appoint officers in their
respective areas of responsibility, subject to approval by the
Board or by the Chairman/CEO. The senior officers 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. Each other officer appointed by the Chairman/CEO, the
President or the Chief Operating Officer shall hold office for
such term and shall exercise such powers and perform such duties
as shall be determined from time to time by the Board, by the
Chairman/CEO or by the officer making such appointment. The Board
shall fix the salaries of all officers appointed by it. Unless
prohibited by applicable law or by the Certificate of
Incorporation or by these Bylaws, one person may be elected or
appointed to serve in more than one official capacity. Any
vacancy occurring in any senior office of the Corporation may be
filled only by the Board.
SECTION 4.2 REMOVAL AND RESIGNATION. Any officer may be
removed, either with or without cause, by the Board or, in the
case of an officer other than a senior officer, by the Board or
the Chairman/CEO. Any officer may resign at any time by giving
notice to the Board, the Chairman/CEO or Secretary. Any such
resignation shall take effect at the date of receipt of such
notice or at any later time specified therein and, unless
otherwise specified in such notice, the acceptance of the
resignation shall not be necessary to make it effective.
SECTION 4.3 CHAIRMAN/CEO. The Chairman/CEO shall (i) if
present, preside at all meetings of the stockholders and of the
Board; (ii) be the chief executive officer of the Corporation
with the powers of general manager; (iii) have supervising
authority over and may exercise general executive powers
concerning all of the operations and business of the Corporation,
with the authority from time to time to delegate to other
officers such executive and other powers and duties as he or she
may deem advisable; and (iv) have such other powers and duties as
may from time to time be assigned to him or her by the Board.
SECTION 4.4 PRESIDENT. In the absence of the Chairman/CEO, the
President of the Corporation shall, if present, preside at all
meetings of the stockholders. Subject to the powers of the
Chairman/CEO, the President shall be the principal officer of the
Corporation and shall have authority over such areas of
responsibility as the Board may from time to time prescribe.
SECTION 4.5 CHIEF OPERATING OFFICER. Subject to the powers of
the Chairman/CEO, the Chief Operating Officer shall be the
principal officer in charge of the operations of the Corporation
other than those areas of responsibility as the Board may from
time to time assign to the President.
SECTION 4.6 VICE PRESIDENT. In the absence of the President, or
in the event of the President's inability or refusal to act, the
Vice President, if any, (or if there be more than one Vice
President, the Vice Presidents in the order of their rank or, if
of equal rank, then in the order designated by the Board or, in
the absence of any designation, then in the order of their
appointment) 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 rank of Vice Presidents in
descending order shall be Executive Vice President, Senior Vice
President and Vice President. The Vice Presidents shall perform
such other duties and have such other powers as the Board or the
officer appointing any such Vice President may from time to time
prescribe.
SECTION 4.7 SECRETARY AND ASSISTANT SECRETARY. The Secretary
shall attend all meetings of the Board (unless the Board shall
otherwise determine) and all meetings of the stockholders and
record all the proceedings of the meetings of the Corporation and
of the Board in a book to be kept for that purpose and shall
perform like duties for the committees when required. The
Secretary shall give, or cause to be given, notice of all
meetings of stockholders and special meetings of the Board. The
Secretary shall have custody of the corporate seal of the
Corporation and shall (as well as any Assistant Secretary) have
authority to affix the same to any instrument requiring it and to
attest it. The Secretary shall perform such other duties and have
such other powers as the Board or the Chairman/CEO may from time
to time prescribe.
SECTION 4.8 CHIEF FINANCIAL OFFICER. Subject to the powers of
the Chairman/CEO, the Chief Financial Officer shall be the
principal officer in charge of the financial affairs of the
Corporation and shall perform such other duties and have such
other powers as the Board or the Chairman/CEO may from time to
time prescribe.
SECTION 4.9 TREASURER. Subject to the powers of the Chief
Financial Officer, the Treasurer shall have 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 monies and other valuable
effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board. Subject to the
powers of the Chief Financial Officer, the Treasurer may disburse
the funds of the Corporation as may be ordered by the Board,
taking proper vouchers for such disbursements, and shall render
to the Board at its regular meetings, or when the Board so
requires, an account of transactions and of the financial
condition of the Corporation. The Treasurer shall perform such
other duties and have such other powers as the Board or the
Chairman/CEO may from time to time prescribe.
If required by the Board and at the expense of the Corporation,
the Chief Financial Officer, the Treasurer, and the Assistant
Treasurer, if any, shall give the Corporation a bond (which shall
be renewed at such times as specified by the Board) in such sum
and with such surety or sureties as shall be satisfactory to the
Board for the faithful performance of the duties of such person's
office and for the restoration to the Corporation, in case of
such person's death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property
of whatever kind in such person's possession or under such
person's control belonging to the Corporation.
SECTION 4.10 ASSISTANT OFFICERS. An assistant officer shall, in
the absence of the officer to whom such person is an assistant or
in the event of such officer's inability or refusal to act (or,
if there be more than one such assistant officer, the assistant
officers in the order designated by the Board, in the absence of
any designation, then in the order of their appointment), perform
the duties and exercise the powers of such officer. An assistant
officer shall perform such other duties and have such other
powers as the Board or the officer appointing any such assistant
officer may from time to time prescribe.
ARTICLE V
Seal
It shall not be necessary to the validity of any instrument
executed by any authorized officer or officers of the Corporation
that the execution of such instrument be evidenced by the
corporate seal, and all documents, instruments, contracts and
writings of all kinds signed on behalf of the Corporation by any
authorized officer or officers shall be as effectual and binding
on the Corporation without the corporate seal, as if the
execution of the same had been evidenced by affixing the
corporate seal thereto. The Board may give general authority to
any officer to affix the seal of the Corporation and to attest
the affixing by signature.
ARTICLE VI
Form of Stock Certificate
Every holder of stock in the Corporation shall be entitled to
have a certificate signed by, or in the name of, the Corporation
by the Chairman or Vice-Chairman of the Board of Directors, if
any, or by the President or a Vice-President, and by the
Treasurer or a Financial Officer, or the Secretary or an
Assistant Secretary certifying the number of shares owned the
Corporation. Any or all of the signatures on the certificate may
be a facsimile signature. If any officer, transfer agent or
registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have 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 such
person were such officer, transfer agent or registrar at the date
of the issuance.
If the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof
and the qualification, limitations or restrictions of such
preferences or rights shall be set forth in full or summarized on
the face or back of the certificate that the Corporation shall
issue to represent such class or series of stock. Except as
otherwise provided in Section 202 of the General Corporation Law
of Delaware, in lieu of the foregoing requirements, there may be
set forth on the face or back of the certificate a statement that
the Corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each
class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences or rights.
ARTICLE VII
Representation of Shares of Other Corporations
Any and all shares of any other corporation or corporations
standing in the name of the Corporation shall be voted, and all
rights incident thereto shall be represented and exercised on
behalf of the Corporation, as follows: (i) as the Board of the
Corporation may determine from time to time, or (ii) in the
absence of such determination, by the Chairman of the Board, or
(iii) if the Chairman of the Board shall not vote or otherwise
act with respect to the shares, by the President. The foregoing
authority may be exercised either by any such officer in person
or by any other person authorized so to do by proxy or power of
attorney duly executed by said officer.
ARTICLE VIII
Transfers of Stock
Upon surrender of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment 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.
ARTICLE IX
Lost, Stolen or Destroyed Certificates
The Board may direct a new certificate or certificates be
issued in place of any certificate theretofore issued alleged to
have been lost, stolen or destroyed, upon the making of an
affidavit of the fact by the person claiming the certificate to
be lost, stolen or destroyed. When authorizing such issue of a
new certificate, the Board may, in its discretion and as a
condition precedent to the issuance, require the owner of such
certificate or certificates, or such person's legal
representative, 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 lost, stolen or
destroyed certificate.
ARTICLE X
Record Date
The Board may fix in advance a date, which shall not be more
than sixty days nor less than ten days preceding the date of any
meeting of stockholders, nor more than 60 days prior to any other
action, as a record date for the determination of stockholders
entitled to notice of or to vote at any such meeting and 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 the rights in respect of any change,
conversion or exchange of stock, and in such case such
stockholders, and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice
of, and to vote at, such meeting and any adjournment thereof, or
to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, or to give such consent,
as the case may be, notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as
aforesaid.
ARTICLE XI
Registered Stockholders
The Corporation shall be entitled to treat the holder of record
of any share or shares of stock of the Corporation as the holder
in fact thereof and shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any
other person, whether or not it shall have express or other
notice thereof, except as expressly provided by applicable law.
ARTICLE XII
Fiscal Year
The fiscal year of the Corporation shall be fixed by resolution
of the Board.
ARTICLE XIII
Amendments
Subject to any contrary or limiting provisions contained in the
Certificate of Incorporation, these Bylaws may be amended or
repealed, or new Bylaws may be adopted (a) by the affirmative
vote of the holders of at least a majority of the Common Stock of
the Corporation, or (b) by the affirmative vote of the majority
of the whole Board at any regular or special meeting. Any Bylaws
adopted or amended by the stockholders may be amended or repealed
by the Board or the stockholders.
ARTICLE XIV
Dividends
SECTION 14.1 DECLARATION. Dividends on the capital stock of the
Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board at any
regular or special meeting, pursuant to law, and may be paid in
cash, in property or in shares of capital stock.
SECTION 14.2 SET ASIDE FUNDS. Before payment of any dividend,
there may be set aside out of any funds of the Corporation
available for dividends such 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 determine to be in
the best interest of the Corporation, and the directors may
modify or abolish any such reserve in the manner in which it was
created.
ARTICLE XV
Indemnification and Insurance
SECTION 15.1 RIGHT TO INDEMNIFICATIONS. Each person who was
or is a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee
or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such
proceeding is alleged action or inaction in an official capacity
or in any other capacity while serving as a director, officer,
employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent permitted by the laws of the
State of Delaware, as the same exist or may hereafter be amended,
against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and
administrators; PROVIDED, HOWEVER, that the Corporation shall
indemnify any such person seeking indemnification in connection
with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board.
The right to indemnification conferred in this Article shall be a
contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; PROVIDED,
HOWEVER, that, if the Delaware General Corporation Law requires,
the payment of such expenses incurred by a director or officer in
his or her capacity as a director of officer (and not in any
other capacity in which service was or is rendered by such person
while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not
entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of the Board, provide indemnification
to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and
officers.
SECTION 15.2 RIGHT OF CLAIMANT TO BRING SUIT. If a claim under
Section 15.1 of this Article is not paid in full by the
Corporation within thirty days after a written claim has been
received by the Corporation, 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 be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation ) that the
claimant has failed to meet a standard of conduct which makes it
permissible under Delaware law for the Corporation to indemnify
the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board, independent legal counsel, or
its stockholders) 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
such standard of conduct, nor an actual determination by the
Corporation (including its Board, independent legal counsel, or
its stockholders) that the claimant has not met such standard of
conduct, shall be a defense to the action or create a presumption
that the claimant has failed to meet such standard of conduct.
SECTION 15.3 NON-EXCLUSIVITY OF RIGHTS. The right to
indemnification and the payment of expenses incurred in defending
a proceeding in advance of its final disposition conferred in
this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision
of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
SECTION 15.4 INSURANCE. The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such
expense, liability or loss under Delaware law.
SECTION 15.5 EXPENSES AS A WITNESS. To the extent that any
director, officer, employee or agent of the Corporation, is by
reason of such position, or a position with another entity at the
request of the Corporation, a witness in any action, suit or
proceeding, he or she shall be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his
or her behalf in connection therewith.
SECTION 15.6 INDEMNITY AGREEMENTS. The Corporation may enter
into agreements with any director, officer, employee or agent of
the Corporation providing for indemnification to the full extent
permitted by Delaware law.
EXHIBIT 11.1
APRIA HEALTHCARE GROUP INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1996 1995
---- ----
(In thousands, except
per share data)
<S> <C> <C>
Net income for primary earnings per share $20,326 $15,792
======= =======
Interest on convertible debentures,
net of tax effect - 350
Amortization of registration costs incurred
in the issuance of convertible debentures,
net of tax effect - 54
------- -------
Adjusted net income for fully diluted
earnings per share $20,326 $16,196
======= =======
Weighted average shares outstanding 50,168 43,574
Incremental shares - reserved for acquisitions - 691
Incremental shares - stock options 1,829 2,145
------- -------
Primary shares 51,997 46,410
Incremental shares - stock options 224 389
Assumed conversion of convertible debentures - 4,143
------- -------
Fully diluted shares 52,221 50,942
======= =======
Primary earnings per share:
Net income $ 0.39 $ 0.34
======= =======
Fully diluted earnings per share:
Net income $ 0.39 $ 0.32
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 1996 (UNAUDITED) AND CONSOLIDATED
INCOME STATEMENT FOR THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED) AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 24,052
<SECURITIES> 0
<RECEIVABLES> 397,321
<ALLOWANCES> 90,341
<INVENTORY> 54,140
<CURRENT-ASSETS> 465,055
<PP&E> 511,486
<DEPRECIATION> 240,524
<TOTAL-ASSETS> 1,059,123
<CURRENT-LIABILITIES> 170,543
<BONDS> 567,190
0
0
<COMMON> 51
<OTHER-SE> 321,339
<TOTAL-LIABILITY-AND-EQUITY> 1,059,123
<SALES> 295,303
<TOTAL-REVENUES> 295,303
<CGS> 94,091
<TOTAL-COSTS> 94,091
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 13,298
<INTEREST-EXPENSE> 11,108
<INCOME-PRETAX> 31,760
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