-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U5yopuq16u8xcIBXy5uKV3YoPGW/cd5Ff8klaxfIBLRq9FnA5PJJNEGn2zuBhmKQ x1+BavNbwxfOfrkgYYcZBg== 0001007507-98-000015.txt : 19980415 0001007507-98-000015.hdr.sgml : 19980415 ACCESSION NUMBER: 0001007507-98-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORRISON HEALTH CARE INC CENTRAL INDEX KEY: 0001007507 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 631155966 STATE OF INCORPORATION: GA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14194 FILM NUMBER: 98593400 BUSINESS ADDRESS: STREET 1: 1955 LAKE PARK DR SE STREET 2: STE 400 CITY: SMYRNA STATE: GA ZIP: 30080-8855 BUSINESS PHONE: 7704373300 MAIL ADDRESS: STREET 1: 1955 LAKE PARK DR SE STREET 2: STE 400 CITY: SMYRNA STATE: GA ZIP: 30080-8855 10-Q 1 MORRISON HEALTH CARE, INC. 3RD QUARTER 10Q FY 1998 13 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 1998 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 1-14194 MORRISON HEALTH CARE, INC. -------------------------- (Exact name of Registrant as specified in charter) GEORGIA 63-1155966 (State or other jurisdiction of (I.R.S. Employer identification No.) incorporation or organization) 1955 Lake Park Drive, Suite 400, Smyrna, GA 30080-8855 (Address of principal executive offices) (Zip-Code) Registrant's telephone number, including area code: (770) 437-3300 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___ 12,351,376 (Number of shares of $0.01 par value common stock outstanding as of March 31, 1998) INDEX ----- PART I Financial Information Page Number ------ Item 1. Financial Statements Condensed Consolidated Balance Sheets as of February 28, 1998 and May 31, 1997......... 3 Condensed Consolidated Statements of Income for the Quarter and Nine Months Ended February 28, 1998 and March 1, 1997........... 4 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended February 28, 1998 and March 1, 1997........... 5 Notes to Condensed Consolidated Financial Statements.................................... 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................... 8-10 Item 3. Quantitative and Qualitative Disclosures about Market Risk............................. N/A PART II Other Information Item 1. Legal Proceedings............................. 11 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............................. 11 Item 6. Exhibits and Reports on Form 8-K.............. 11 Signatures................................................... 12 Index to Exhibits, Financial Statement Schedules, and Reports on Form 8-K.......................................... 13 PART I - FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS Morrison Health Care, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share data) As of As of February 28, May 31, 1998 1997 ------------------------------------ (Unaudited) (Audited)
Assets Current assets: Cash and short-term investments............... $ 4,550 $ 6,347 Receivables - accounts and notes (net)........ 25,023 21,271 Inventories................................... 3,052 2,686 Prepaid expenses.............................. 1,094 1,006 Deferred income tax benefits.................. 2,136 1,929 ------------------------------------ Total current assets........................ 35,855 33,239 ------------------------------------ Property and equipment - at cost................ 20,419 16,343 Less accumulated depreciation................. 9,662 8,471 ------------------------------------ 10,757 7,872 Cost in excess of net assets acquired, net...... 11,092 4,582 Deferred charges................................ 4,368 2,830 Other assets.................................... 12,905 11,680 ------------------------------------ Total assets................................ $74,977 $60,203 ==================================== Liabilities and Stockholders' Equity Current liabilities: Accounts payable.............................. $10,384 $10,381 Book bank overdrafts.......................... 1,653 2,596 Other accrued liabilities..................... 11,528 11,360 Current portion of long-term debt............. 5,011 5,011 ------------------------------------ Total current liabilities................... 28,576 29,348 ------------------------------------ Notes payable................................... 26,387 15,022 Other deferred liabilities...................... 10,920 10,205 Stockholders' equity: Common stock, $0.01 par value (authorized 100,000 shares; issued: 12,326 and 12,165 shares, 1998 and 1997, respectively)................ 123 122 Capital in excess of par value................ 11,914 9,717 Unearned ESOP shares.......................... (3,283) (3,517) Retained earnings............................. 1,727 647 ------------------------------------ 10,481 6,969 Less cost of treasury stock................... 1,387 1,341 ------------------------------------ Total stockholders' equity.................. 9,094 5,628 ------------------------------------ Total liabilities and stockholders' equity.. $74,977 $60,203 ====================================
The accompanying notes are an integral part of the financial statements. Morrison Health Care, Inc. and Subsidiaries Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) For the Quarter Ended For the Nine Months Ended ----------------------------- ------------------------------ February 28, March 1, February 28, March 1, 1998 1997 1998 1997 ----------------------------- ------------------------------
Revenues.............................. $63,337 $57,483 $181,737 $164,496 Operating costs and expenses: Operating expenses.................. 52,796 48,067 150,481 135,155 Selling, general and administrative.................... 5,925 5,517 16,475 15,777 Interest expense, net of interest income, totaling $107 and $1,387, respectively, in 1998 and $152 and $566, respectively, in 1997............................. 324 204 780 602 ---------------------------- ------------------------------- 59,045 53,788 167,736 151,534 Income before provision for income taxes........................ 4,292 3,695 14,001 12,962 Provision for federal and state income taxes........................ 1,695 1,533 5,530 5,378 ---------------------------- ------------------------------- Net income............................ $ 2,597 $ 2,162 $ 8,471 $ 7,584 ============================ =============================== Earnings per share - Basic............ $ 0.22 $ 0.18 $ 0.71 $ 0.64 Earnings per share - Diluted.......... $ 0.21 $ 0.18 $ 0.70 $ 0.64 Weighted average common shares - Basic...................... 11,975 11,785 11,927 11,783 Net effect of dilutive stock options.. 283 58 222 54 ---------------------------- -------------------------------- Weighted average common and common equivalent shares - Diluted......... 12,258 11,843 12,149 11,837 ============================ ================================
The accompanying notes are an integral part of the financial statements. Morrison Health Care, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) For the Nine Months Ended --------------------------------- February 28, March 1, 1998 1997 ---------------------------------
Operating activities: Net income........................................ $ 8,471 $ 7,584 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................. 1,858 1,469 Amortization of intangibles................... 220 116 Other, net.................................... 734 811 Deferred income taxes......................... (454) (715) (Gain)/Loss on disposition of assets.......... (47) 21 Changes in operating assets and liabilities: (Increase)/Decrease in receivables.......... (3,974) 4,004 Increase in inventories..................... (362) (17) (Increase)/Decrease in prepaid and other assets............................. (301) 675 (Decrease)/Increase in accounts payable, accrued and other liabilities............ (986) 1,988 Increase in income taxes payable............ 506 1,113 --------------------------------- Net cash provided by operating activities......... 5,665 17,049 --------------------------------- Investing activities: Purchases of property and equipment............... (4,911) (2,933) Proceeds from disposal of asset................... 242 61 Acquisitions...................................... (6,303) 0 Deferred charges.................................. (2,253) (649) Other, net........................................ (598) (332) --------------------------------- Net cash used by investing activities............. (13,823) (3,853) --------------------------------- Financing activities: Principal payments on long-term debt.............. (3,761) (11) Net change in short-term borrowings............... 15,125 (6,761) Proceeds from exercise of stock options........... 2,139 375 Dividends paid.................................... (7,391) (7,289) (Increase) in treasury stock held by Deferred Comp Plan............................ (45) (237) ESOP shares released.............................. 294 0 --------------------------------- Net cash provided (used) by financing activities.. 6,361 (13,923) --------------------------------- Decrease in cash and short-term investments....... (1,797) (727) Cash and short-term investments at the beginning of the period......................... 6,347 6,088 --------------------------------- Cash and short-term investments at the end of the period............................... $ 4,550 $ 5,361 =================================
The accompanying notes are an integral part of the financial statements. Morrison Health Care, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments for normal recurring accruals. These adjustments are necessary, in the opinion of management, for a fair presentation of the financial position, the results of operations and the cash flows for the interim periods presented. The results of operations for the interim periods reported herein are not necessarily indicative of results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended May 31, 1997. Certain prior reported amounts have been reclassified to be consistent with current reporting practices. NOTE B - ACQUISITION OF DRAKE MANAGEMENT SERVICES In January 1998, the Company acquired for approximately $6 million all of the outstanding common stock of Drake Management Services (DMS). The purchase price may increase contingent on the future earnings of DMS as defined in the purchase agreement. The acquisition was accounted for using the purchase method. The resulting goodwill is being amortized over twenty years using the straight-line method. The results of Drake Management Services have been included from the acquisition date. NOTE C - EARNINGS PER SHARE In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share." The provisions of SFAS No. 128 are applicable to reporting periods after December 15, 1997, and supercede Accounting Principles Board Opinion No. 15, "Earnings Per Share." Under SFAS No. 128 basic earnings per share ("EPS") are computed by dividing income available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS are computed based on the weighted average number of shares outstanding during the period plus the effect of outstanding stock options using the treasury stock method. As required, the Company adopted SFAS No. 128 during the quarter ended February 28, 1998 and restated its EPS for all prior periods presented. NOTE D - SUBSEQUENT EVENTS Declaration of Quarterly Dividend On March 26, 1998, the Company's Board of Directors declared a quarterly cash dividend of $0.205 per share of outstanding common stock payable on April 30, 1998 to shareholders of record at the close of business on April 10, 1998. Strategic Dividend Decision and Stock Repurchase Program Also on March 26, 1998, the Board of Directors adopted a new dividend policy which calls for the payment of annual dividends at a rate of $0.16 per share effective with the quarterly dividend payment in July 1998. Morrison Health Care, Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - continued (UNAUDITED) At the same Board of Directors meeting, the Board authorized a program to repurchase up to 1,000,000 shares of common stock from time to time in open market and other negotiated transactions. The timing and actual number of shares that will be purchased will depend on a variety of factors, including the Company's liquidity and financial resources, and the market price of the stock and other market conditions. The Company may, at its discretion, extend or terminate the stock repurchase program at any time. Acquisition - Spectra Services, Inc. In March 1998, the Company acquired Chicago-based Spectra Services, Inc. ("Spectra") in a cash transaction. The acquisition will be accounted for using the purchase method. The resulting goodwill will be amortized over twenty years using the straight-line method. The results of Spectra will be included from the acquisition date. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Morrison Health Care, Inc. ("MHCI" or the "Company"), a Georgia corporation, was spun off from Morrison Restaurants Inc. ("MRI") in March 1996. The discussion below relates to the results of operations of the Company for the quarter and nine months ended February 28, 1998 compared with the results for the comparable periods of the prior year. Results of Operations The Company's net income from continuing operations increased 20.1% to $2.6 million for the quarter and 11.7% to $8.5 million for the nine months ended February 28, 1998, compared with net income of $2.2 and $7.6 million reported for the corresponding periods of the prior fiscal year. Earnings before interest and taxes increased 18.4% or $0.7 million to $4.6 million for the quarter and increased 9.0% or $1.2 million to $14.8 million for the nine months ended February 28, 1998. Revenue Revenue from operations increased $5.9 million or 10.2% to $63.3 million for the quarter and increased $17.2 million or 10.5% to $181.7 million for the nine months ended February 28, 1998. The increase was primarily attributable to the conversion of client paid payroll to MHCI paid payroll in continuing accounts and the revenue from the accounts acquired from Drake Management Services. Managed volume (which is the amount of estimated total operating costs managed) from operations increased $11.4 million or 9.7% to $129.3 million for the quarter and increased $22.4 million or 6.5% to $367.7 million for the nine months ended February 28, 1998 from the prior year period due to the expansion of the vending and branded concepts programs in continuing accounts. Operating Costs Operating costs increased $4.7 million or 9.8% to $52.8 million for the quarter and increased $15.3 million or 11.3% for the nine months ended February 28, 1998. On a year to date basis, these costs have increased as a percentage of revenue from the prior year primarily as a result of the conversion of client paid payroll to MHCI paid payroll in continuing accounts. Selling, general and administrative expenses increased $0.4 million or 7.4% for the quarter and increased $0.7 million or 4.4% for the nine months ended February 28, 1998 as compared to the same periods of the prior year. Selling, general and administrative expenses as percentage of revenue were relatively flat when compared to the corresponding periods of the prior year. Interest Expense (net of Interest Income) Net interest expense increased from $0.2 million to $0.3 million for the quarter and increased to $0.8 million for the nine months ended February 28, 1998 from $0.6 million for the same period of the prior year. Interest on funds used to finance construction of significant additions to property and equipment is capitalized. The capitalized interest is recorded as part of the asset to which it relates and will be amortized over the asset's estimated useful life. The Company capitalized interest totaling $33,000 and $62,000 for the three and nine months ended February 28, 1998, respectively, related to the construction of the Advanced Culinary Centers and the development of a new computer information system. Income Taxes The effective income tax rate on continuing operations for the three months and nine months ended February 28, 1998 was 39.5% as compared to 41.5% for the same periods of the prior year. The Company has lowered its estimated effective income tax rate for the current year based upon anticipated tax credits and a review of the first full year of tax filings. Earnings per Share The Company has adopted Financial Accounting Standards Board Statement (SFAS) No. 128, "Earnings Per Share", and has restated earnings per share amounts reported in prior periods in accordance with SFAS No. 128. Basic earnings per share is based on the weighted average number of shares outstanding during each quarter. Diluted earnings per share is based on the weighted average number of shares outstanding during each quarter plus the effect of outstanding stock options using the treasury stock method. Liquidity and Capital Resources Total assets at February 28, 1998 were $75.0 million, a $14.8 million increase from $60.2 million as of the prior fiscal year end. This increase is attributable to the following: 1) an increase of $3.8 million in accounts and notes receivable due in part to the month of February having only 28 days; 2) an increase of $2.9 million in net fixed assets primarily due to the construction of the Advanced Culinary Centers and the development of a new computer information system, 3) an increase of $1.5 million in client investments, 4) $0.6 million increase in investments due to the increase in the cash surrender value of company owned life insurance policies and 5) an increase in net costs in excess of assets acquired primarily due to the January 1998 acquisition of Drake Management Services. Total liabilities at February 28, 1998 were $65.9 million, a $11.3 million increase from $54.6 million as of the end of the prior fiscal year. This increase was primarily due to an $11.3 million increase in debt. The Company expects that funds generated from operations and existing lines of credit will be sufficient to meet its normal operating requirements over the near term. Subsequent Events Declaration of Quarterly Dividend On March 26, 1998, the Company's Board of Directors declared a quarterly cash dividend of $0.205 per share of outstanding Common Stock payable on April 30, 1998 to shareholders of record at the close of business on April 10, 1998. Strategic Dividend Decision and Stock Repurchase Program In order to create a more flexible financial structure moving forward, the Board of Directors has determined that it is in the Company's best interests to reduce its dividend. In accordance with the new dividend policy adopted on March 26, 1998, the annual dividend rate will be reduced to $0.16 per share effective with the quarterly dividend payment in July 1998. This policy change will make the Company's dividend payment as a percent of earnings more comparable with other companies in its industry. Subsequent Events - continued At the same Board of Directors meeting, the Board authorized a program to repurchase up to 1,000,000 shares of common stock from time to time in open market and other negotiated transactions. The timing and actual number of shares that will be purchased will depend on a variety of factors, including the Company's liquidity and financial resources, and the market price of the stock and other market conditions. The Company believes that the reduction in the long-term capital gains tax makes it more efficient to return capital to its shareholders through a stock repurchase program instead of dividends. The Company may, at its discretion, extend or terminate the stock repurchase program at any time. Acquisition - Spectra Services, Inc. The Company has identified investment opportunities in the Senior Living Dining Services, a market the Company believes is under-penetrated and rapidly expanding. The Company's plans for future growth in the senior living market are to result from acquisitions and internal development. In March 1998, the Company acquired Chicago-based Spectra Services, Inc. in a cash transaction. Special Note Regarding Forward-Looking Information The foregoing sections contain "forward-looking" statements which represent the Company's expectations or beliefs concerning future events, including statements regarding liquidity and capital resources. The Company cautions that a number of important factors could, individually or in the aggregate, cause actual results to differ materially from such forward-looking statements including, without limitation, the following: health care spending trends; the growth of systems and group purchasing organizations; changes in health care regulations; increased competition in the health care food and nutrition market; customer acceptance of the Company's cost savings programs; and changes in laws and regulations affecting labor and employee benefit costs. ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable. PART II - OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS The Company is presently, and from time to time, subject to pending claims and suits arising in the ordinary course of its business. In the opinion of Management, the ultimate resolution of these pending legal proceedings will not have a material adverse effect on the Company's operations or consolidated financial position. 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 ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 3.2 Bylaws of Morrison Health Care, Inc., as amended Exhibit 27.1 Financial Data Schedule - For the Nine Months ended February 28, 1998 (for SEC use only) Exhibit 27.2 Financial Data Schedule - For the Six Months ended November 30, 1997 and November 30, 1996 (for SEC use only) Exhibit 27.3 Financial Data Schedule - For the Three Months ended August 31, 1997 and August 31, 1996 (for SEC use only) Exhibit 27.4 Financial Data Schedule - For the Nine Months ended March 1, 1997 (for SEC use only) Exhibit 27.5 Financial Data Schedule - For the Year ended May 31, 1997 (for SEC use only) (b) Reports on Form 8-K: None 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. MORRISON HEALTH CARE, INC. (Registrant) 04/13/98 By: /S/ K. WYATT ENGWALL DATE K. WYATT ENGWALL Senior Vice President, Finance (Senior Vice President and Principal Accounting Officer) MORRISON HEALTH CARE, INC. LIST OF EXHIBITS Exhibit Number Description - ------ -------------------------------------------------------- 3.2 Bylaws of Morrison Health Care, Inc., as amended 27.1 Financial Data Schedule - For the Nine Months ended February 28, 1998 (for SEC use only) 27.2 Financial Data Schedule - For the Six Months ended November 30, 1997 and November 30, 1996 (for SEC use only) 27.3 Financial Data Schedule - For the Three Months ended August 31, 1997 and August 31, 1996 (for SEC use only) 27.4 Financial Data Schedule - For the Nine Months ended March 1, 1997 (for SEC use only) 27.5 Financial Data Schedule - For the Year ended May 31, 1997 (for SEC use only) EX-3.2 2 MORRISON HEALTH CARE, INC. BYLAWS, AS AMENDED 14 BYLAWS, AS AMENDED OF MORRISON HEALTH CARE, INC. As adopted December 14, 1995 and amended January 7, 1998 INDEX Page ARTICLE I OFFICES......................................... 1 ARTICLE II STOCKHOLDERS' MEETINGS.......................... 1 2.1 PLACES OF MEETINGS.............................. 1 2.2 ANNUAL MEETINGS................................. 1 2.3 SPECIAL MEETINGS................................ 1 2.4 MEETINGS WITHOUT NOTICE......................... 1 2.5 VOTING.......................................... 2 2.6 QUORUM.......................................... 2 2.7 LIST OF STOCKHOLDERS............................ 2 2.8 ACTION WITHOUT MEETING.......................... 2 ARTICLE III BOARD OF DIRECTORS.............................. 2 3.1 POWERS.......................................... 2 3.2 NUMBER, QUALIFICATION AND TERM.................. 3 3.3 COMPENSATION.................................... 3 3.4 MEETINGS AND QUORUM............................. 4 3.5 EXECUTIVE COMMITTEE............................. 4 3.6 OTHER COMMITTEES................................ 5 3.7 CONFERENCE TELEPHONE MEETINGS................... 5 3.8 ACTION WITHOUT MEETING.......................... 5 ARTICLE IV OFFICERS........................................ 6 4.1 TITLES AND ELECTION............................. 6 4.2 DUTIES.......................................... 6 (A) PRESIDENT................................. 6 (B) VICE PRESIDENT............................ 7 (C) SECRETARY................................. 7 (D) TREASURER................................. 7 4.3 CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER......................................... 8 4.4 CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER......................................... 8 4.5 DELEGATION OF AUTHORITY......................... 8 4.6 COMPENSATION.................................... 8 ARTICLE V RESIGNATIONS, VACANCIES AND REMOVALS............ 8 5.1 RESIGNATIONS.................................... 8 5.2 VACANCIES....................................... 8 (A) DIRECTORS................................. 8 (B) OFFICERS.................................. 9 5.3 REMOVALS........................................ 9 (A) DIRECTORS................................. 9 (B) OFFICERS.................................. 9 ARTICLE VI CAPITAL STOCK................................... 9 6.1 CERTIFICATES OF STOCK........................... 9 6.2 TRANSFER OF STOCK............................... 9 6.3 STOCK TRANSFER RECORDS.......................... 10 6.4 RECORD DATES.................................... 10 6.5 LOST CERTIFICATES............................... 10 ARTICLE VII FISCAL YEAR, BANK DEPOSITS, CHECKS, ETC......... 10 7.1 FISCAL YEAR..................................... 10 7.2 BANK DEPOSITS, CHECKS, ETC...................... 10 ARTICLE VIII BOOKS AND RECORDS............................... 11 8.1 PLACE OF KEEPING BOOKS.......................... 11 8.2 EXAMINATION OF BOOKS............................ 11 ARTICLE IX NOTICES......................................... 11 9.1 REQUIREMENTS OF NOTICE.......................... 11 9.2 WAIVERS......................................... 11 ARTICLE X SEAL............................................ 11 ARTICLE XI POWERS OF ATTORNEY.............................. 12 ARTICLE XII INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHER PERSONS............................... 12 12.1 INDEMNIFIED ACTIONS............................. 12 12.2 INDEMNIFICATION AGAINST EXPENSES SUCCESSFUL PARTY........................................... 12 12.3 ADVANCES OF EXPENSES............................ 12 12.4 RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION; PROCEDURE UPON APPLICATION......... 13 12.5 OTHER RIGHTS AND REMEDIES....................... 13 12.6 INSURANCE OF AGENTS............................. 13 12.7 CERTAIN DEFINITIONS............................. 13 12.8 INDEMNIFICATION AND INSURANCE OF OTHER PERSONS.. 14 12.9 SURVIVAL OF INDEMNIFICATION..................... 14 12.10 SAVINGS CLAUSE.................................. 14 ARTICLE XIII AMENDMENTS...................................... 14 MORRISON HEALTH CARE, INC. BYLAWS, AS AMENDED ARTICLE I OFFICES The Corporation shall at all times maintain a registered office in the State of Georgia and a registered agent at that address but may have other offices located in or outside of the State of Georgia as the Board of Directors may from time to time determine. ARTICLE II STOCKHOLDERS' MEETINGS 2.1 Places of Meetings. All meetings of stockholders shall be held at such place or places in or outside of the State of Georgia as the Board of Directors may from time to time determine or as may be designated in the notice of meeting or waiver of notice thereof, subject to any provisions of the laws of the State of Georgia. 2.2 Annual Meetings. The annual meeting of stockholders shall be held on such date in the month of September each year and at such time as shall be determined by the Board of Directors from time to time or with respect to any particular annual meeting for the purpose of electing directors and transacting such other business as may come properly before the meeting. Written notice of the date, time and place of the annual meeting shall be given by mail to each stockholder entitled to vote at his address as it appears on the records of the Corporation not less than ten (10) nor more than sixty (60) days prior to the scheduled date thereof, unless such notice is waived as provided by Article IX of these Bylaws. 2.3 Special Meetings. A special meeting of stockholders may be called at any time by the Board of Directors, the Chairman of the Board of Directors or the President. Written notice of the time, place and specific purposes of such meeting shall be given by mail to each stockholder entitled to vote thereat at his address as it appears on the records of the Corporation not less than ten (10) nor more than sixty (60) days prior to the scheduled date thereof, unless such notice is waived as provided in Article IX of these Bylaws. 2.4 Meetings Without Notice. Meetings of the stockholders may be held at any time without notice when all the stockholders entitled to vote thereat are present in person or by proxy. 2.5 Voting. At all meetings of stockholders, each stockholder entitled to vote on the record date as determined under Article VI, Section 6.4 of these Bylaws, or if not so determined, as prescribed under the laws of the State of Georgia, shall be entitled to one vote for each share of common stock, or such other number of votes prescribed in the Articles of Incorporation for each share of stock other than common stock, standing of record in his name, subject to any restrictions or qualifications set forth in the Articles of Incorporation, and may vote either in person or by proxy. 2.6 Quorum. At any meeting of stockholders, a majority of the number of shares of stock outstanding and entitled to vote thereat, present in person or by proxy, shall constitute a quorum, but a smaller interest may adjourn any meeting from time to time, and the meeting may be held as adjourned without further notice, subject to such limitation as may be imposed under the laws of the State of Georgia. At any such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the originally scheduled meeting. When a quorum is present at any meeting, a majority of the number of shares of stock entitled to vote present thereat shall decide any question brought before such meeting, unless the question is one upon which a different vote is required by express provision of the laws of the State of Georgia, or the Articles of Incorporation or these Bylaws, in which case such express provision shall govern. 2.7 List of Stockholders. At least one (1) day before every meeting, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of and the number of shares registered in the name of each stockholder, shall be prepared by the Secretary or the transfer agent in charge of the stock ledger of the Corporation. Such list shall be open for examination by any stockholder at the time and place of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine such list or the books of the Corporation or to vote in person or by proxy at such meeting. 2.8 Action Without Meeting. Any action required by the laws of the State of Georgia or the Articles of Incorporation to be taken at any annual or special meeting of stockholders, 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 all the holders of outstanding shares of stock entitled to vote on such action. ARTICLE III BOARD OF DIRECTORS 3.1 Powers. The business and affairs of the Corporation shall be carried on by or under the direction of the Board of Directors, which shall have all the powers authorized by the laws of the State of Georgia, subject to such limitations as may be provided by the Articles of Incorporation or these Bylaws. 3.2 Number, Qualification and Term. The initial number of directors shall be such as may be determined by the incorporator(s) and thereafter the number of directors shall be not less than three (3) and not more than twelve (12), the exact number within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the Board of Directors or by the affirmative vote of the holders of at least 80% of all outstanding shares of capital stock entitled to vote in the election of directors, voting together as a single class, as provided in the Articles of Incorporation. Directors shall be of full age, and no person shall be nominated for the Board of Directors who shall have attained the age of seventy (70) on or before the annual meeting of stockholders at which directors are elected, provided, however, under special conditions in the best interests of the Corporation, as determined by the Board of Directors or the shareholders, a person may be nominated for the Board of Directors who has attained the age of seventy (70) before such meeting. Directors need not be residents of the State of Georgia, however, directors must be stockholders of the Corporation. The initial Board of Directors shall be elected by the incorporator(s). Thereafter, Directors shall be elected at the annual meeting of stockholders by a plurality of the votes cast at such election. Each director shall serve until the election and qualification of his successor or until his earlier death, resignation or removal as provided in the Articles of Incorporation and these Bylaws. In case of an increase in the number of directors between elections by the stockholders, the additional directorships shall be considered vacancies and shall be filled in the manner prescribed in Article V of these Bylaws. The Board of Directors may, by majority vote, elect a Chairman of the Board of Directors and a Vice Chairman of the Board of Directors. The Chairman shall be a member of the Board and shall preside at all meetings of the stockholders and of the Board of Directors and shall have such other powers and perform such other duties as the Board of Directors may prescribe from time to time. The Vice Chairman shall be a member of the Board and, in the absence of the Chairman of the Board, shall preside at all meetings of the stockholders and of the Board of Directors and shall have such other powers and perform such other duties as the Board of Directors may prescribe from time to time. 3.3 Compensation. The Board of Directors, or a committee thereof, may from time to time by resolution authorize the payment of fees or other compensation to the directors for services as such to the Corporation, including, but not limited to, fees for attendance at all meetings of the Board of Directors or any committee thereof, and determine the amount of such fees and compensation. Directors shall in any event be paid their traveling expenses for attendance at all meetings of the Board of Directors or any committee thereof. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor in amounts authorized or otherwise approved from time to time by the Board of Directors or a committee thereof. 3.4 Meetings and Quorum. Meetings of the Board of Directors may be held either in or outside of the State of Georgia. A quorum shall be one-third (1/3) of the number of directors then fixed in the manner provided in Section 3.2 of this Article but not less than two (2) directors. The act of a majority of the directors present at a meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum is not present at any meeting, the Directors who are present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is obtained, subject to such limitation as may be imposed under the laws of the State of Georgia. The Board of Directors shall, at the close of each annual meeting of stockholders and without further notice other than these Bylaws, if a quorum of directors is then present or as soon thereafter as may be convenient, hold a regular meeting for the election of officers and the transaction of any other business. The Board of Directors may from time to time provide for the holding of regular meetings with or without notice and may fix the times and places at which such meetings are to be held. Meetings other than regular meetings may be called at any time by the Chairman of the Board of Directors or the President and must be called by the Chairman of the Board, the President, the Secretary or an Assistant Secretary upon the request of at least three (3) directors. Notice of each meeting, other than a regular meeting (unless required by the Board of Directors), shall be given to each director by mailing the same to each director at his residence or business address at least two (2) days before the meeting or by delivering the same to him personally or by telephone, facsimile transmission or telegraph at least one (1) day before the meeting unless, in case of exigency, the Chairman of the Board of Directors, the President, the Secretary or an Assistant Secretary, as the case may be, shall prescribe a shorter notice to be given personally or by telephone, telegraph, cable or facsimile transmission to all or any one or more of the directors at their respective residences or places of business. Notice will be deemed to have been given at the time it is mailed, postage-prepaid, or sent by telegraph, cable or facsimile transmission, or given by telephone, as the case may be. Notice of any meeting shall state the time and place of such meeting, but need not state the purposes thereof unless otherwise required by the laws of the State of Georgia, the Articles of Incorporation or the Board of Directors. 3.5 Executive Committee. The Board of Directors, by resolution adopted by a majority of the number of directors then fixed in the manner provided in Section 3.2 of this Article, may provide for an Executive Committee of three (3) or more directors and shall elect the members thereof to serve during the pleasure of the Board of Directors. The Executive Committee shall elect its own chairman, unless a chairman has been designated by the Board of Directors. Special meetings of the Executive Committee may be called by the chairman of the committee or by the Board of Directors, and notice of meetings of the Executive Committee shall be given by the chairman of the committee or by the Secretary, in the manner provided in Article IX of these Bylaws. The Board of Directors may at any time change the membership of the Executive Committee, fill vacancies in it, designate alternate members to replace any absent or disqualified members at any meeting of the Executive Committee, or dissolve it. During the intervals between the meetings of the Board of Directors, the Executive Committee shall possess and may exercise any or all of the powers of the Board of Directors in the management or direction of the business and affairs of the Corporation to the extent authorized by resolution adopted by a majority of the number of directors then fixed in the manner provided in Section 3.2 of this Article, subject to such limitations as may be imposed by the laws of the State of Georgia. Except as inconsistent with these Bylaws or the resolution of the Board of Directors from time to time, the Executive Committee may determine its rules of procedure and the notice to be given of its meeting, and it may appoint such committees as it shall from time to time deem necessary. A majority of the members of the Executive Committee shall constitute a quorum. The Executive Committee shall keep minutes of its meetings and shall report the same to the Board of Directors. 3.6 Other Committees. The Board of Directors may by resolution provide for such other committees as it deems desirable and may discontinue the same at its pleasure. Each such committee shall have the powers and perform such duties, not inconsistent with law, as may be assigned to it by the Board of Directors. Each such committee shall elect its own chairman, unless a chairman has been designated by the Board of Directors. Except as inconsistent with these Bylaws or the resolution of the Board of Directors from time to time, each such committee may determine its rules of procedure and the notice to be given of its meeting, and it may appoint such committees as it shall from time to time deem necessary. Special meetings of any such committee may be called by the chairman of that committee or by the Board of Directors, and notice of any meeting of any such committee shall be given by the chairman of that committee or by the Secretary in the manner provided in Article IX of these Bylaws. A majority of the members of any such committee then in office shall constitute a quorum. Each such committee shall keep minutes of its meetings and report the same to the Board of Directors. 3.7 Conference Telephone Meetings. Any one or more members of the Board of Directors or any committee thereof may participate in a meeting by means of a conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. 3.8 Action Without Meeting. To the extent authorized by Georgia law, any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or 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 of Director or committee. ARTICLE IV OFFICERS 4.1 Titles and Election. The officers of the Corporation shall be the President, one or more Vice Presidents, the Secretary and the Treasurer, who shall have such authority and perform such duties as may be prescribed by the Board of Directors or as otherwise provided in these Bylaws. The Board of Directors, in its discretion, may also at any time elect or appoint such other officers as it may deem advisable, each of whom shall have such authority and shall perform such duties as may be prescribed or determined from time to time by the Board of Directors or, if not prescribed or determined by the Board of Directors, as the President or the then senior executive officer may prescribe or determine. The Board of Directors may assign such additional titles and duties to one or more of the officers as it shall deem appropriate. Any person may hold more than one office if the duties can be consistently performed by the same person. The officers of the Corporation shall initially be elected as soon as convenient by the Board of Directors and thereafter, in the absence of earlier deaths, resignations or removals, shall be elected at the first meeting of the Board of Directors following each annual meeting of stockholders. Each officer shall hold office at the pleasure of the Board of Directors except as may otherwise be approved by the Board of Directors, or until his earlier resignation, removal or other termination of his employment. The Board of Directors may require any officer or other employee or agent to give bond for the faithful performance of his duties in such form and with such sureties as the Board may require. 4.2 Duties. Subject to such extension, limitations, and other provisions as the Board of Directors may from time to time prescribe or determine, the following officers shall have the following powers and duties: (a) President. The President shall exercise the powers and authority and perform all of the duties commonly incident to his office and shall perform such other duties as the Board of Directors shall specify from time to time. In the absence or disability of the Chairman of the Board, the President shall perform those duties of the Chairman of the Board not assigned to the Vice Chairman of the Board, unless otherwise provided by the Board of Directors. (b) Vice President. The Vice President or Vice Presidents shall perform such duties and have such powers as may be assigned to them from time to time by the Board of Directors or the President. Any Vice President may have the title of Executive Vice President, Senior Vice President, Assistant Vice President or such other title deemed appropriate by the Board of Directors from time to time. In the absence or disability of the President, the Vice Presidents in order of seniority may, unless otherwise determined by the Board of Directors, exercise the powers and perform the duties pertaining to the office of the President. (c) Secretary. The Secretary, or in his absence an Assistant Secretary, shall keep the minutes of all meetings of stockholders and of the Board of Directors and any committee thereof, cause all notices to be duly given to and served on the stockholders and directors, attend to such correspondence as may be assigned to him, keep or cause to be kept in safe custody the seal and corporate records of the Corporation and affix such seal to all such instruments properly executed as may require it, have general charge of the stock transfer books of the Corporation and shall in general perform all duties incident to his office, and shall have such other duties and powers as may be prescribed or determined from time to time by the Board of Directors or the President. In the absence or disability of the Secretary, the Assistant Secretary, or if there he more than one, the Assistant Secretaries in the order determined by the Board of Directors, or if no such determination has been made, in the order of their election, shall perform the duties and exercise the powers of the Secretary. Each Assistant Secretary also shall perform such other duties and have such other powers as may be assigned to him from time to time by the Board of Directors or the President. (d) Treasurer. The Treasurer shall have the care and custody of and be responsible for the monies, funds, securities, financial records and other valuable papers of the Corporation (other than his own bond, if any, which shall be in the custody of the President); shall keep full and accurate accounts of receipts and disbursements and shall render account thereof whenever required by the Board of Directors or the President; shall have and perform, under the supervision of the Board of Directors and the President all the powers and duties commonly incident to his office: shall deposit or cause to be deposited all funds of the Corporation in such bank or banks, trust company or trust companies, or with such firm or firms doing a banking business as may be designated by the Board of Directors or the President; may endorse for deposit or collection all checks, notes, and similar instruments payable to the Corporation or to its order; and shall have such other duties as may be prescribed or determined from time to time by the Board of Directors or the President. In the absence or disability of the Treasurer, the Assistant Treasurer, or if there be more than one, the Assistant Treasurers in the order determined by the Board of Directors, or if no such determination has been made, in the order of their election, shall perform the duties and exercise the powers of the Treasurer and such other duties as may be assigned to them from time to time by the Board of Directors or the President. 4.3 Chief Executive Officer and Chief Operating Officer. In its discretion, the Board of Directors may designate the President or the Chairman of the Board, if any, to serve as the Chief Executive Officer or the Chief Operating Officer, or both, of the Corporation. The Chief Executive Officer shall, subject to the direction and control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation and have the powers and duties otherwise customary to the office. The Chief Operating Officer shall, subject to the direction and control of the Board of Directors, have general supervision, management and control of the operations and personnel of the Corporation and the powers and duties otherwise customary to the office. 4.4 Chief Financial Officer and Chief Accounting Officer. In its discretion, the Board of Directors may at any time designate any officer as the Chief Financial Officer, the Chief Accounting Officer, or both, of the Corporation. 4.5 Delegation of Authority. The Board of Directors may at any time delegate the powers and duties of any officer for the time being to any other officer, director or employee. 4.6 Compensation. The compensation of the officers shall be fixed by the Board of Directors or a committee thereof and the fact that any officer is a director shall not preclude him from receiving compensation or from voting upon the resolution providing the same. ARTICLE V RESIGNATIONS, VACANCIES AND REMOVALS 5.1 Resignations. Any director or officer may resign at any time by giving written notice thereof to the Board of Directors, the Chairman of the Board, the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and unless otherwise specified therein, the acceptance of any resignation shall not be necessary to make it effective. 5.2 Vacancies. (a) Directors. Any vacancy in the Board of Directors caused by reason of death, incapacity, resignation, removal, increase in the authorized number of directors or otherwise may be filled by a majority vote of the remaining directors though less than a quorum, or by the sole remaining director. Any director so elected by the Board of Directors shall serve until the next annual meeting of stockholders at which directors of the class in which such director serves are to be elected and until the election and qualification of his successor or until his earlier death, resignation or removal as provided in the Articles of Incorporation or these Bylaws. The Board of Directors also may reduce their authorized number by the number of vacancies in the Board, provided such reduction does not reduce the Board to less than the minimum authorized by the laws of the State of Georgia or to less than the number of directors then in office. (b) Officers. The Board of Directors may at any time or from time to time fill any vacancy among the officers of the Corporation. 5.3 Removals. (a) Directors. The entire Board of Directors, or any individual member thereof, may be removed only as provided in the Articles of Incorporation. (b) Officers. Subject to the provisions of any validly existing agreement, the Board of Directors may at any meeting remove from office any officer, with or without cause, and may elect or appoint a successor. ARTICLE VI CAPITAL STOCK 6.1 Certificates of Stock. Every stockholder shall be entitled to a certificate or certificates for shares of the capital stock of the Corporation in such form as may be prescribed or authorized by the Board of Directors, duly numbered and setting forth the number and kind of shares represented thereby. Such certificates shall be signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary. If and to the extent permitted by Georgia law, any or all of such signatures may be in facsimile if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or an employee of the Corporation. The transfer agent or registrar may sign either manually or by facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on a certificate has ceased to be such officer, transfer agent or registrar before the certificate has been issued, such certificate may nevertheless be issued and delivered by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. 6.2 Transfer of Stock. Shares of the capital stock of the Corporation shall be transferable only upon the books of the Corporation upon the surrender of the certificate or certificates properly assigned and endorsed for transfer. The Board of Directors may appoint a transfer agent and one or more co-transfer agents and a registrar and one or more co- registrars and may make or authorize such agents to make all such rules and regulations deemed expedient concerning the issue, transfer and registration of shares of stock. If the Corporation has a transfer agent or registrar acting on its behalf, the signature of any officer or representative thereof may be in facsimile. 6.3 Stock Transfer Records. Unless the Corporation has a stock transfer agent to keep such records, the Secretary shall keep a stock book or books containing the names, alphabetically arranged, with the address of every stockholder showing the number of shares of each kind, class or series of stock held of record. The person in whose name shares of stock stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes. 6.4 Record Dates. 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 shall fix in advance a record date which, in the case of a meeting, shall not be less than ten (10) nor more than sixty (60) days prior to the scheduled date of such meeting and which, in the case of any other action, shall be not more than sixty (60) days prior to any such action permitted by the laws of the State of Georgia. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 6.5 Lost Certificates. In case of loss, mutilation or destruction of a stock certificate, a duplicate certificate may be issued upon such terms as may be determined or authorized by the Board of Directors, the Chairman of the Board or the President. ARTICLE VII FISCAL YEAR, BANK DEPOSITS, CHECKS, ETC. 7.1 Fiscal Year. The fiscal year of the Corporation shall begin on the 1st day of June of each year and end on the following May 31st. 7.2 Bank Deposits, Checks, Etc. The funds of the Corporation shall be deposited in the name of the Corporation or of any division thereof in such banks or trust companies in the United States or elsewhere as may be designated from time to time by the Board of Directors, or by such officer or officers as the Board of Directors may authorize to make such designations. All checks, drafts or other orders for the withdrawal of funds from any bank account shall be signed by such person or persons as may be designated from time to time by the Board of Directors. The signatures on checks, drafts or other orders for the withdrawal of funds may be in facsimile if authorized in the designation. ARTICLE VIII BOOKS AND RECORDS 8.1 Place of Keeping Books. The books and records of the Corporation may be kept in or outside of the State of Georgia, as the Board of Directors may from time to time determine. 8.2 Examination of Books. Except as may otherwise be provided by the laws of the State of Georgia, the Articles of Incorporation or these Bylaws, the Board of Directors shall have power to determine from time to time whether and to what extent and at what times and places and under what conditions any of the accounts, records and books of the Corporation are to be open to the inspection of any stockholder. No stockholder shall have any right to inspect any account or book or document of the Corporation except as prescribed by law or authorized by express resolution of the stockholders or of the Board of Directors. ARTICLE IX NOTICES 9.1 Requirements of Notice. Whenever notice is required to be given by statute, the Articles of Incorporation or these Bylaws, it shall not mean personal notice unless so specified, but such notice may be given in writing by depositing the same in a post office, letter box, or mail chute postage prepaid and addressed to the person to whom such notice is directed at the address of such person on the records of the Corporation, and such notice shall be deemed given at the time when the same shall be thus mailed. 9.2 Waivers. Any stockholder, director or officer may, in writing or by telegram or cable, at any time waive any notice or other formality required by statute, the Articles of Incorporation or these Bylaws. Such waiver of notice, whether given before or after any meeting or action, shall be deemed equivalent to notice. Presence of a stockholder either in person or by proxy at any meeting of stockholders and presence of any director at any meeting of the Board of Directors shall constitute a waiver of such notice as may be required by any statute, the Articles of Incorporation or these Bylaws. ARTICLE X SEAL The corporate seal of the Corporation shall be in such form as the Board of Directors shall determine from time to time and may consist of a facsimile thereof or the words "Corporate Seal" or "Seal" enclosed in parentheses. In the absence of the Secretary, any other officer of the Corporation may affix and attest the seal of the Corporation to any instrument requiring it, unless otherwise provided by resolution of the Board of Directors. ARTICLE XI POWERS OF ATTORNEY The Board of Directors may authorize one or more of the officers of the Corporation to execute powers of attorney delegating to named representatives or agents power to represent or act on behalf of the Corporation, with or without power of substitution. In the absence of any action by the Board of Directors, any officer of the Corporation may execute for and on behalf of the Corporation waivers of notice of meetings of stockholders and proxies for such meetings of any company in which the Corporation may hold voting securities. ARTICLE XII INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHER PERSONS 12.1 Indemnified Actions. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, and whether external or internal to the Corporation (including a judicial action or suit brought by or in the right of the Corporation), by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to hereafter as an "Agent"), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged liable to the Corporation or subjected to injunctive relief in favor of the Corporation: (a) for any appropriation, in violation of his duties, of any business opportunity of the Corporation; (b) for acts or omissions which involve intentional misconduct or a knowing violation of law; (c) for unlawful distributions pursuant to Section 14-2-832 of the Georgia Business Corporation Code; or (d) for any transaction from which he received an improper personal benefit. 12.2 Indemnification Against Expenses of Successful Party. Notwithstanding the other provisions of this Article XII, to the extent that an Agent has been successful on the merits or otherwise in defense of any proceeding or in defense of any claim, issue or matter therein, such Agent shall be indemnified against all expenses incurred in connection therewith. 12.3 Advances of Expenses. Expenses incurred in defending or investigating any action, suit, proceeding or investigation shall be paid by the Corporation in advance of the final disposition of such matter, if the Agent shall provide the Corporation with (i) a written affirmation of his good faith belief that his conduct does not constitute behavior of the kind described in any of the clauses (a) through (d) of Section 12.1, and (ii) a written undertaking, executed personally or on his behalf, to repay any advances if it is ultimately determined that he is not entitled to indemnification under Section 12.1. 12.4 Right of Agent to Indemnification Upon Application; Procedure Upon Application. Any indemnification under Sections 12.1 and 12.2 hereof or advance under Section 12.3 hereof shall be made promptly and in any event within forty-five (45) days after receipt of the written request of the Agent, unless the Agent is not entitled to such indemnification or advance pursuant to the terms of such sections. The right to indemnification or advances as granted by this Article XIl shall be enforceable by the Agent in any court of competent jurisdiction if the Corporation denies the claim, in whole or in part, or if no disposition of such claim is made within forty- five (45) days of the Agent's request. The Agent's expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation. 12.5 Other Rights and Remedies. The indemnification provided by this Article XII shall not be deemed exclusive of any other rights to which an Agent seeking indemnification may be entitled under any agreement, vote of stockholders or disinterested directors, court order or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. It is the policy of the Corporation that indemnification of Agents shall be made to the fullest extent permitted by law. All rights to indemnification under this Article XII shall be deemed to be provided by a contract between the Corporation and the Agent who serves in such capacity at any time while these Bylaws and other relevant provisions of the Georgia Business Corporation Code and other applicable law, if any, are in effect. Any repeal or modification thereof shall not affect any rights or obligations then existing. 12.6 Insurance of Agents. To the extent permitted by Georgia law, the Corporation may purchase and maintain insurance on behalf of any person who is or was an Agent 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 Article XII. 12.7 Certain Definitions. For purposes of this Article XII, references to the "Corporation" shall include, in addition to the resulting or surviving corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article XII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued; references to "other enterprise" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director or officer of the Corporation which imposes duties on, or involves services by, such director or officer with respect to any employee benefit plan, its participants, or beneficiaries. 12.8 Indemnification and Insurance of Other Persons. The provisions of this Article XII shall not be deemed to preclude the Corporation from either indemnifying or purchasing and maintaining insurance on behalf of, or both, any person who is not an Agent but whom the Corporation has the power or obligation to indemnify or insure under the provisions of the Georgia Business Corporation Code or otherwise. The Corporation may, in its sole discretion, indemnify or insure, or both, an employee, trustee or other agent as permitted by the Georgia Business Corporation Code. The Corporation shall indemnify or insure any employee, trustee or other agent where required by law. 12.9 Survival of Indemnification. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article XII shall continue as to a person who has ceased to be an Agent and shall inure to the benefit of the heirs, executors and administrators of such Agent. 12.10 Savings Clause. If this Article XII or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Agent against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether internal or external, including a grand jury proceeding and an action or suit brought by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article XII that shall not have been invalidated or by any other applicable law. ARTICLE XIII AMENDMENTS Unless otherwise provided by law, the Articles of Incorporation or another provision of these Bylaws, these Bylaws may be amended or repealed either: (a) at any meeting of stockholders at which a quorum is present by vote of the holders of a majority of the number of shares of stock entitled to vote present in person or by proxy at such meeting as provided in Article II, Sections 2.4 and 2.5 of these Bylaws, or (b) at any meeting of the Board of Directors by a majority vote of the directors then in office; provided the notice of such meeting of stockholders or directors or waiver of notice thereof contains a statement of the substance of the proposed amendment or repeal. EX-27.1 3 FINANCIAL DATA SCHEDULE 3RD QTR FY 1998
5 This schedule contains summary financial information extracted from the consolidated balance sheets and consolidated statements of income in the Company's Quarterly Report to Shareholders for the quarter ended February 28, 1998 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS MAY-31-1998 FEB-28-1998 4,550 0 20,168 784 3,052 35,855 20,419 9,662 74,977 28,576 26,387 0 0 123 8,971 74,977 181,737 181,737 150,481 150,481 0 0 2,166 14,001 5,530 8,471 0 0 0 8,471 0.71 0.70
EX-27.2 4 RESTATED FDS FOR 2ND QTR FY 1998 & FY 1997
5 This schedule contains summary financial information extracted from the financial statements of Morrison Health Care, Inc. for the six months ended November 30, 1997 and November 30, 1996 and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS 6-MOS MAY-31-1998 MAY-31-1997 NOV-30-1997 NOV-30-1996 5,842 5,991 0 0 21,627 18,443 744 1,114 2,716 2,713 36,881 33,065 18,031 14,549 9,113 8,082 68,202 59,744 31,772 26,349 16,511 17,522 0 0 0 0 123 119 8,457 5,273 68,202 59,744 118,400 107,013 118,400 107,013 97,685 87,088 97,685 87,088 0 0 0 0 1,736 812 9,709 9,267 3,835 3,845 5,874 5,422 0 0 0 0 0 0 5,874 5,422 0.49 0.46 0.49 0.46
EX-27.3 5 RESTATED FDS FOR 1ST QTR FY 1998 & FY 1997
5 This schedule contains summary financial information extracted from the financial statements of Morrison Health Care, Inc. for the three months ended August 31, 1997 and August 31, 1996 and is qualified in its entirety by reference to such financial statements. 1000 3-MOS 3-MOS MAY-31-1998 MAY-31-1997 AUG-31-1997 AUG-31-1996 1,668 8,208 0 0 19,240 15,946 744 1,114 2,641 2,636 31,216 36,550 16,792 15,520 8,674 9,422 60,293 60,497 29,744 26,045 13,761 18,772 0 0 0 0 122 118 6,293 4,939 60,293 60,497 57,754 52,658 57,754 52,658 47,727 43,024 47,727 43,024 0 0 0 0 404 396 4,674 4,619 1,846 1,923 2,828 2,696 0 0 0 0 0 0 2,828 2,696 0.24 0.23 0.24 0.23
EX-27.4 6 RESTATED FDS FOR 3RD QTR FY 1997
5 This schedule contains summary financial information extracted from the financial statements of Morrison Health Care, Inc. for the nine months ended March 1, 1997 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS MAY-31-1997 MAR-01-1997 5,361 0 17,721 877 2,679 30,967 15,337 8,279 57,863 26,034 16,272 0 0 119 5,030 57,863 164,496 164,496 135,155 135,155 0 0 1,168 12,962 5,378 7,584 0 0 0 7,584 0.64 0.64
EX-27.5 7 RESTATED FDS FOR THE YEAR ENDED MAY 31, 1997
5 This schedule contains summary financial information extracted from the financial statements of Morrison Health Care, Inc. for the year ended May 31, 1997 and is qualified in its entirety by reference to such financial statements. 1,000 12-MOS MAY-31-1997 MAY-31-1997 6,347 0 17,131 744 2,686 33,239 16,343 8,471 60,203 29,348 15,022 0 0 122 5,506 60,203 221,011 221,011 181,233 181,233 0 0 1,494 17,576 7,290 10,286 0 0 0 10,286 0.87 0.87
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