-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, YqOOcOJSblP8haaL2HWfVjfOv52cGjFTUdbZSCWhChQPdHhXIvEbroKmP6l3lMSv fzFuEMlEUTD8Nbd4PZEpaQ== 0000909518-95-000027.txt : 19950515 0000909518-95-000027.hdr.sgml : 19950515 ACCESSION NUMBER: 0000909518-95-000027 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19950213 SROS: AMEX GROUP MEMBERS: ALAN L. HOLLIS GROUP MEMBERS: ANDREW GILMAN GROUP MEMBERS: CHARLES G. PHILLIPS GROUP MEMBERS: CHRISTINA HENSLEY BAIR GROUP MEMBERS: DIANE HENSLEY RAMPONI GROUP MEMBERS: DONALD R. MONACK GROUP MEMBERS: E. BYRON HENSLEY, JR. GROUP MEMBERS: ELIZABETH J. HOPPER GROUP MEMBERS: ERIC J. GLEACHER GROUP MEMBERS: FRANK N. LIGUORI GROUP MEMBERS: GERALD M. BEREIKA GROUP MEMBERS: GLEACHER 7 INVESTORS, L.P. GROUP MEMBERS: GREGORY T. TORRES GROUP MEMBERS: H. CONRAD MEYER GROUP MEMBERS: HARRIS & HARRIS GROUP GROUP MEMBERS: HENRY EMIL W JR GROUP MEMBERS: JAMES E. GLEACHER GROUP MEMBERS: JAMES GOODWIN GROUP MEMBERS: JANICE L. QUIRAM GROUP MEMBERS: JEFFREY H. TEPPER GROUP MEMBERS: JOHN G. GLEACHER GROUP MEMBERS: LANA HENSLEY HOFFMAN GROUP MEMBERS: LEONARD O. HENRY GROUP MEMBERS: LOIS SIMON GROUP MEMBERS: MARIE A. GENTILE GROUP MEMBERS: MARK MORIN GROUP MEMBERS: MARTHA FAYE KOYSH GROUP MEMBERS: OLSTEN SERVICE CORP GROUP MEMBERS: PETER P. POLLONI GROUP MEMBERS: PETER W. MAIR GROUP MEMBERS: RICHARD A. DERBES GROUP MEMBERS: ROBERT A. ENGEL GROUP MEMBERS: ROBERT W. KITTS GROUP MEMBERS: RUTH ANN ROBERTS GROUP MEMBERS: SARAH E. GLEACHER GROUP MEMBERS: SUSAN MACKENZIE GROUP MEMBERS: THOMAS P. RILEY GROUP MEMBERS: WAYNE J. STELK GROUP MEMBERS: WILLIAM F. MURDY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHARTER MEDICAL CORP CENTRAL INDEX KEY: 0000019411 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 581076937 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-05938 FILM NUMBER: 95509357 BUSINESS ADDRESS: STREET 1: 577 MULBERRY ST STREET 2: PO BOX 209 CITY: MACON STATE: GA ZIP: 31298 BUSINESS PHONE: 9127421161 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HENRY EMIL W JR CENTRAL INDEX KEY: 0000936940 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O GLEACHER & CO INC STREET 2: 660 MADISON AVENUE 19TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10021 BUSINESS PHONE: 2128333514 MAIL ADDRESS: STREET 1: C/O GLEACHER & CO INC STREET 2: 660 MADISON AVE 19TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10021 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. ____) Charter Medical Corporation - -------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.25 par value 161241708 - ----------------------------------- ----------------------------------- (Title of class of securities) (CUSIP number) David E. Zeltner, Esq. Weil, Gotshal & Manges 767 Fifth Ave., New York, NY 10153 (212) 310-8000 January 27, 1995 - ----------------------------------- ----------------------------------- (Name, address and telephone number (Date of event which requires of person authorized to receive filing of this statement) notices and communications) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Check the following box if a fee is being paid with the statement [x]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Harris & Harris Group, Inc. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF Delaware ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 158,736 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 158,736 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 158,736 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.6% 14 TYPE OF REPORTING PERSON:* CO * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Gregory T. Torres S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 43,140 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 43,140 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 43,140 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.2% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Gerald M. Bereika S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 10,969 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 10,969 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 10,969 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Peter P. Polloni S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, PF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 10,531 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 10,531 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 10,531 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Peter W. Mair S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 19,266 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 19,266 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 19,266 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Elizabeth J. Hopper S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 22,012 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 22,012 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 22,012 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Eric J. Gleacher S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 204,569** SHARES BENEFICIALLY 8 SHARED VOTING POWER: 11,029*** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 204,569** REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 11,029*** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 215,598**** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.8% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 23,991 shares held by Mr. Gleacher as custodian for three of his children. *** Includes 11,029 shares held by Gleacher 7 Investors, L.P. Mr. Gleacher is the controlling shareholder, sole director, Chairman, Chief Executive Officer and Secretary of Gleacher & Co., Inc., the sole general partner of Gleacher 7 Investors, L.P. **** The filing of this Statement on Schedule 13D shall not be construed as an admission by Mr. Gleacher that, other than with respect to the 180,578 shares held directly by Mr. Gleacher, Mr. Gleacher is the beneficial owner of the shares described above. CUSIP No. 161241708 1 NAME OF REPORTING PERSON: James Goodwin S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 75,571 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 75,571 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 75,571 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.3% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Charles G. Phillips S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 111,875 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 111,875 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 111,875 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.4% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: H. Conrad Meyer S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 27,640 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 27,640 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 27,640 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Richard A. Derbes S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 23,970 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 23,970 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 23,970 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Emil W. Henry, Jr. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 16,309 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 16,309 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 16,309 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.1% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Robert W. Kitts S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 11,995 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 11,995 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 11,995 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Jeffrey H. Tepper S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 5,577 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 5,577 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 5,577 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Robert A. Engel S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 4,808 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 4,808 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 4,808 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Andrew Gilman S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 3,199 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 3,199 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,199 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Marie A. Gentile S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 1,921 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 1,921 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 1,921 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Gleacher 7 Investors, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF Delaware ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 11,029 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 11,209 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 11,029 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* PN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Olsten Service Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF Delaware ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 127,534 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 127,534 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 127,534 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.4% 14 TYPE OF REPORTING PERSON:* CO * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: James E. Gleacher S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 7,997 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 7,997 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 7,997 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: John G. Gleacher S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 7,997 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 7,997 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 7,997 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Sarah E. Gleacher S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 7,997 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 7,997 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 7,997 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Diane Hensley Ramponi S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 0 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 1,857** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 0 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,857** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 1,857** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 1,857 shares held in a trust of which Ms. Ramponi is a joint trustee. The filing of this Statement on Schedule 13D shall not be construed as an admission by Ms. Ramponi that she is the beneficial owner of the shares held by such trust. CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Christina Hensley Bair S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 1,857 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 1,609** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 1,857 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,609** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,466** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 1,609 shares held in various trusts, of which Ms. Bair is a joint trustee. The filing of this Statement on Schedule 13D shall not be construed as an admission by Ms. Bair that she is the beneficial owner of the shares held by such trusts. CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Martha Faye Koysh S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 2,476 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 2,476 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,476 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Lana Hensley Hoffman S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 2,476 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 2,476 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,476 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Ruth Ann Roberts S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 2,476 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 2,476 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,476 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: E. Byron Hensley, Jr. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 385,253 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 385,253 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 385,253 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 1.4% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Susan MacKenzie S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 0 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 5,572** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 0 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 5,572** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 5,572** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 5,572 shares held by trusts, of which Ms. MacKenzie is a joint trustee. The filing of this Statement on Schedule 13D shall not be construed as an admission by Ms. MacKenzie that she is the beneficial owner of the shares held by such trusts. CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Mark Morin S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 0 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 5,572** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 0 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 5,572** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 5,572** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 5,572 shares held by trusts of which Mr. Morin is a joint trustee. The filing of this Statement on Schedule 13D shall not be construed as an admission by Mr. Morin that he is the beneficial owner of the shares held by such trusts. CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Thomas P. Riley S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, PF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 123,042 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 1,609** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 123,042 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,609** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 124,651** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.4% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 1,609 shares held in various trusts, of which Mr. Riley is a joint trustee. The filing of this Statement on Schedule 13D shall not be construed as an admission by Mr. Riley that he is the beneficial owner of the shares held by such trusts. CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Donald R. Monack S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 3,831 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 3,831 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,831 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Leonard O. Henry S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 4,598 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 4,598 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 4,598 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Janice L. Quiram S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 3,831 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 3,831 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,831 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Alan L. Hollis S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 3,831 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 3,831 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,831 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Lois Simon S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 3,065 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 3,065 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 3,065 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Wayne J. Stelk S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 766 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 766 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 766 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: William F. Murdy S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, PF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 2,648 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 2,648 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 2,648 PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.0% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP No. 161241708 1 NAME OF REPORTING PERSON: Frank N. Liguori S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_] (b) [x] 3 SEC USE ONLY 4 SOURCE OF FUNDS:* SC, OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] PURSUANT TO ITEM 2(d) OR 2(e): 6 CITIZENSHIP OR PLACE OF United States ORGANIZATION: NUMBER OF 7 SOLE VOTING POWER: 5,056 SHARES BENEFICIALLY 8 SHARED VOTING POWER: 127,534** OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 5,056 REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: 127,534** 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING 132,590** PERSON: 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [_] CERTAIN SHARES:* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.5% 14 TYPE OF REPORTING PERSON:* IN * SEE INSTRUCTIONS BEFORE FILLING OUT! ** Includes 127,534 shares owned by Olsten Service Corporation, a wholly- owned subsidiary of Olsten Corporation. Mr. Liguori is the Chairman of the Board of Olsten Corporation. The filing of this Statement on Schedule 13D shall not be construed as an admission by Mr. Liguori that he is the beneficial owner of the shares held by Olsten Service Corp. Item 1. Security and Issuer. ------------------- This Statement on Schedule 13D (the "Statement") relates to the common stock, par value $.25 per share (the "Shares"), of Charter Medical Corporation, a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 3414 Peachtree Road, N.E., Suite 1400, Atlanta, Georgia 30326. Item 2. Identity and Background. ----------------------- (a)-(c) This Statement is being filed by and on behalf of the persons listed on Schedule A hereto (each, a "Reporting Person" and, collectively, the "Reporting Persons"). Schedule A sets forth for each Reporting Person the following information, which is incorporated herein by reference: (i) the name of such Reporting Person; (ii) the business address of such Reporting Person; and (iii) the principal business, occupation or employment of such Reporting Person. Schedule B sets forth the information described in clauses (i) through (iii) above for each director, executive officer and other persons controlling Olsten Service Corp. and Olsten Corporation, the sole shareholder of Olsten Service Corp. Schedule C sets forth the information described in clauses (i) through (iii) above for Gleacher & Co. Inc., the general partner of Gleacher 7 Investors, L.P., and each director, executive officer and other persons controlling such general partner. Schedule D sets forth the information described NYFS12...:\99\48499\0005\2468\SCH2035P.08C in clauses (i) through (iii) above for each director, executive officer and other persons controlling Harris & Harris Group, Inc. The information set forth on Schedules B, C and D hereto is incorporated herein by reference. (d)-(e) During the last five years, none of the persons or entities identified on Schedules A, B, C or D hereto has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each natural person listed on Schedules A, B, C or D hereto is a United States Citizen. The Reporting Persons could be deemed to be a group for purposes of this Statement by virtue of the provisions of the Stockholders Agreement (described in Item 6 below) relating to the holding and/or disposition of Shares. The Reporting Persons disclaim that they have acted as a group for purposes of acquiring, holding, voting or disposing of Shares, and each Reporting Person disclaims beneficial ownership of Shares owned by the other Reporting Persons. Item 3. Source and Amount of Funds or Other Consideration. -------------------------------------------------- The Reporting Persons were formerly stockholders of Magellan Health Services, Inc., a Delaware corporation ("Magellan"). Pursuant to an Agreement of Merger dated as of December 19, 1994, among Magellan, the Company and Charter Acquisition Subsidiary, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (the "Merger Sub"), on January 27, 1995, Magellan merged with the Merger Sub (the "Merger"), and the shares of Magellan's capital stock, and options to purchase such capital stock, outstanding at the time of the Merger were automatically converted into the right to receive an aggregate of 1,398,968 Shares. In addition, Messrs. James Goodwin, H. Conrad Meyer and Emil W. Henry, Jr. each received 3,670 shares (as designees of Gleacher & Co. Inc.) in satisfaction of certain financial advisory fees owed by Magellan to Gleacher & Co. Inc., and Mr. Frank N. Liguori received 2,908 Shares as compensation for consulting services provided by him to Magellan prior to the Merger. Also, (i) Harris & Harris Group, Inc. purchased 50,000 additional Shares in the open market for $768,750 using its working capital, (ii) Thomas P. Riley purchased 5,000 additional Shares in the open market for $81,250 using his personal funds, (iii) Peter P. Polloni purchased 500 additional Shares in the open market for $7,875 using his personal funds and (iv) William F. Murdy purchased 500 additional Shares in the open market for $7,625 using his personal funds. Item 4. Purpose of the Transaction. -------------------------- The Reporting Persons have acquired the Shares of the Company pursuant to or in connection with the Merger, and such Shares are being held for investment purposes only. Any Reporting Person may determine to acquire additional Shares in the open market, or dispose of some or all of the Shares held by such Reporting Person, in privately negotiated transactions or otherwise, depending on circumstances existing from time to time. Messrs. E. Byron Hensley, Jr. and Thomas P. Riley have entered into Noncompete and Confidentiality Agreements, dated as of January 27, 1995, with the Company, pursuant to which the Company has agreed to issue additional Shares to Messrs. Hensley and Riley in July, 1995. Except as set forth above, the Reporting Persons have no present plans or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. ------------------------------------ (a) The responses of the Reporting Persons to Items 7, 8, 9, 10 and 11 of the Cover Sheets, which relate to the beneficial ownership of Shares of the Company, are incorporated herein by reference. In the aggregate, the Reporting Persons own 1,468,886 Shares, representing 5.2% of the Company's outstanding Shares. The percentage of Shares owned is based in each case upon 28,355,113 outstanding Shares, consisting of 26,942,227 Shares outstanding on January 23, 1995, as set forth in an opinion of counsel delivered by King & Spalding, counsel to the Company, in connection with the Merger, together with the 1,412,886 Shares issued pursuant to or in connection with the Merger. (b) Each of the Reporting Persons has the sole power to vote and to dispose or direct the disposition of the Shares listed on such person's respective Cover Sheet as being beneficially owned by such person, except as otherwise disclosed in the footnotes to such Cover Page. (c) On January 27, 1995, 1,412,886 Shares were issued to the Reporting Persons pursuant to or in connection with the Merger in the amounts set forth on the respective Cover Pages of the Reporting Persons. In addition, certain of the Reporting Persons have purchased additional Shares pursuant to transactions effected during the past sixty days, which are described on Schedule E attached hereto, which Schedule E is incorporated herein by reference. Except as set forth in this paragraph or Schedule E hereto, to the best knowledge and belief of the Reporting Persons, none of the Reporting Persons has effected any transaction in any equity security of the Company during the past sixty days. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Company. -------------------------------------------- The Reporting Persons and Magellan are parties to a Stockholders Agreement dated as of January 27, 1995 (the "Stockholders Agreement"), pursuant to which each Reporting Person has agreed not to transfer more than 50% of the Shares received pursuant to the Merger prior to the second anniversary of the Merger, in order to preserve the Merger as a tax-free reorganization under Section 368 of the Internal Revenue Code of 1986. In connection with the Merger, the Reporting Persons entered into (i) an Investment and Registration Rights Agreement, dated as of January 27, 1995, with the Company (the "Registration Rights Agreement"), and (ii) an Indemnification Agreement, dated as of January 27, 1995, with the Company, Gleacher & Co. Inc., as Representative, and E. Byron Hensley, Jr., as Representative (the "Indemnification Agreement"). The Registration Rights Agreement provides that the Company will prepare and file with the Securities and Exchange Commission a shelf registration statement with respect to resales of the Shares by Reporting Persons within 30 days after the Merger and use its best efforts (i) to cause such registration statement to be declared effective as soon as reasonably practicable thereafter and (ii) to keep such registration statement current and continuously effective for a period of two years following the Merger. The Indemnification Agreement provides that certain indemnification obligations of the Reporting Persons to the Company may be satisfied by the surrender of Shares, which, pursuant to a side letter of the Company, will be valued at $23.00 per share with respect to an aggregate of 139,898 shares, and at $17.39 with respect to additional Shares. In addition, the Indemnification Agreement provides that 10% of the Shares which each Reporting Person would be entitled to receive pursuant to the Merger will be held in escrow by First Union National Bank of North Carolina, as escrow agent (the "Escrow Agent"), pursuant to an Escrow Agreement dated as of January 27, 1995, among the Company, the Escrow Agent, E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative, until the earlier of (i) the date of the first audit of financial statements containing combined operations of Magellan and the Company and (ii) the first anniversary of the Merger. E. Byron Hensley, Jr. and Thomas P. Riley have each entered into a Noncompete and Confidentiality Agreement, dated as of January 27, 1995, with the Company (respectively, the "Hensley Noncompete Agreement" and the "Riley Noncompete Agreement"), pursuant to which the Company has agreed to issue additional Shares to Messrs. Hensley and Riley in July, 1995. The Reporting Persons have entered into an agreement, dated as of February 6, 1995 (the "Filing Agreement"), with respect to the filing of this Statement and any amendment hereto, and pursuant to the Filing Agreement certain Reporting Persons have granted a power-of- attorney to Gleacher & Co. Inc., or to each of E. Byron Hensley and Thomas P. Riley, to execute this Statement and any amendment hereto on behalf of such Reporting Persons. Item 7. Materials to be Filed as Exhibits. --------------------------------- The following Exhibits are filed herewith: 1. Stockholders Agreement, dated as of January 27, 1995, among Magellan and the Reporting Persons. 2. Investment and Registration Rights Agreement, dated as of January 27, 1995, among the Company and the Reporting Persons. 3. Indemnification Agreement, dated as of January 27, 1995, among the Company, the Reporting Persons, E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative. 4. Letter dated January 27, 1995, from the Company addressed to E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative. 5. Escrow Agreement, dated as of January 27, 1995, among the Company, First Union National Bank of North Carolina, as Escrow Agent, E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative. 6. Noncompete and Confidentiality Agreement, dated as of January 27, 1995, between the Company and E. Byron Hensley, Jr. 7. Noncompete and Confidentiality Agreement, dated as of January 27, 1995, between the Company and Thomas P. Riley. 8. Agreement, dated as of February 6, 1995, among the Reporting Persons. SIGNATURES ---------- After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information contained in this Statement is true, complete and correct. Dated: February 13, 1995 /s/ Gregory T. Torres ----------------------- Gregory T. Torres /s/ Gerald M. Bereika ----------------------- Gerald M. Bereika /s/ Peter P. Polloni ----------------------- Peter P. Polloni /s/ Peter W. Mair ----------------------- Peter W. Mair /s/ Elizabeth J. Hopper ----------------------- Elizabeth J. Hopper * ----------------------- Eric J. Gleacher * ----------------------- James Goodwin * ----------------------- Charles G. Phillips * ----------------------- H. Conrad Meyer * ----------------------- Richard A. Derbes * ----------------------- Emil W. Henry, Jr. * ----------------------- Robert W. Kitts * ----------------------- Jeffrey H. Tepper * ----------------------- Robert A. Engel * ----------------------- Andrew Gilman * ----------------------- Marie A. Gentile GLEACHER 7 INVESTORS L.P. By: Gleacher & Co. Inc., its General Partner By: * ----------------------------- Name: Title: OLSTEN SERVICE CORP. By: /s/ Laurin L. Laderoute, Jr. ----------------------------- Name: Laurin L. Laderoute, Jr. Title: Vice President * ----------------------- Eric J. Gleacher, as custodian for Jay S. Gleacher * ----------------------- Eric J. Gleacher, as custodian for Patricia G. Gleacher * ----------------------- Eric J. Gleacher, as custodian for William R. Gleacher * -------------------------- James E. Gleacher * -------------------------- John G. Gleacher * -------------------------- Sarah E. Gleacher /s/ Diane Hensley Ramponi -------------------------- Diane Hensley Ramponi, as Trustee of the Lauren Carroll Education Trust /s/ Thomas P. Riley -------------------------- Thomas P. Riley, as Trustee of the Lauren Carroll Education Trust /s/ Christina Hensley Bair -------------------------- Christina Hensley Bair /s/ Christina Hensley Bair -------------------------- Christina Hensley Bair, as Trustee of the Emily Cristina Bair Education Trust /s/ Thomas P. Riley -------------------------- Thomas P. Riley, as Trustee of the Emily Cristina Bair Education Trust /s/ Christina Hensley Bair -------------------------- Christina Hensley Bair, as Trustee of the Nicholas Hensley Bair Education Trust /s/ Thomas P. Riley -------------------------- Thomas P. Riley, as Trustee of the Nicholas Hensley Bair Education Trust /s/ Martha Faye Koysh -------------------------- Martha Faye Koysh /s/ Lana Hensley Hoffman -------------------------- Lana Hensley Hoffman /s/ Ruth Ann Roberts -------------------------- Ruth Ann Roberts /s/ E. Byron Hensley, Jr. -------------------------- E. Byron Hensley, Jr. /s/ Susan MacKenzie -------------------------- Susan MacKenzie, as Trustee of the Jameson Robert Riley Education Trust /s/ Mark Morin -------------------------- Mark Morin, as Trustee of the Jameson Robert Riley Education Trust /s/ Susan MacKenzie -------------------------- Susan MacKenzie, as Trustee of the Katlyn MacKenzie Riley Education Trust /s/ Mark Morin -------------------------- Mark Morin, as Trustee of the Katlyn MacKenzie Riley Education Trust /s/ Susan MacKenzie -------------------------- Susan MacKenzie, as Trustee of the Bethany Ann Riley Education Trust /s/ Mark Morin -------------------------- Mark Morin, as Trustee of the Bethany Ann Riley Education Trust /s/ Thomas P. Riley -------------------------- Thomas P. Riley /s/ Donald R. Monack -------------------------- Donald R. Monack /s/ Leonard O. Henry -------------------------- Leonard O. Henry /s/ Janice L. Quiram -------------------------- Janice L. Quiram /s/ Alan L. Hollis -------------------------- Alan L. Hollis /s/ Lois Simon -------------------------- Lois Simon /s/ Wayne J. Stelk -------------------------- Wayne J. Stelk /s/ William F. Murdy -------------------------- William F. Murdy /s/ Frank N. Liguori -------------------------- Frank N. Liguori HARRIS & HARRIS GROUP, INC. By: /s/ Robert B. Schulz ---------------------------- Name: Robert B. Schulz Title: President and CEO * By: GLEACHER AND CO. INC., as Attorney-in-fact By: /s/ Emil W. Henry, Jr. ------------------------- Name: Emil W. Henry, Jr. Title: Managing Director SCHEDULE A Identity and Background The following table sets forth for each Reporting Person (i) the name of such Reporting Person; (ii) the business address of such Reporting Person; and (iii) the principal business, occupation or employment of such Reporting Person: 1. (i) Gregory T. Torres (ii) Magellan Health Services, Inc. 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 2. (i) Gerald M. Bereika (ii) Lifetime Healthcare, U.K. 28 Crofton Avenue London W4 3EW United Kingdom (iii) Vice President, Lifetime Healthcare, U.K. 3. (i) Peter P. Polloni (ii) Magellan Health Services, Inc. 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 4. (i) Peter W. Mair (ii) Magellan Health Services, Inc. 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 5. (i) Elizabeth J. Hopper (ii) Magellan Health Services, Inc. 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 6. (i) Eric J. Gleacher (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Chairman and Chief Executive Officer, Gleacher & Co. Inc. 7. (i) James Goodwin (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Managing Director, Gleacher & Co. Inc. 8. (i) Charles G. Phillips (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Managing Director, Gleacher & Co. Inc. 9. (i) H. Conrad Meyer (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Managing Director, Gleacher & Co. Inc. 10. (i) Richard A. Derbes (ii) Morgan Stanley & Co. Incorporated 1221 Avenue of the Americas New York, New York 10020 (iii) Managing Director, Morgan Stanley & Co. Incorporated 11. (i) Emil W. Henry, Jr. (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Managing Director, Gleacher & Co. Inc. 12. (i) Robert W. Kitts (ii) Morgan Stanley & Co. Incorporated 1221 Avenue of the Americas New York, New York 10020 (iii) Principal, Morgan Stanley & Co. Incorporated 13. (i) Jeffrey H. Tepper (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Vice President, Gleacher & Co. Inc. 14. (i) Robert A. Engel (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Vice President, Gleacher & Co. Inc. 15. (i) Andrew Gilman (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Associate, Gleacher & Co. Inc. 16. (i) Marie A. Gentile (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Office Manager, Gleacher & Co. Inc. 17. (i) Gleacher 7 Investors, L.P. (ii) c/o Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Equity investments 18. (i) Olsten Service Corp. (ii) 11615 Angus Road Austin, Texas 78759 (iii) Holding company for non-operating assets 19. (i) James E. Gleacher (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Salesman 20. (i) John G. Gleacher (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Attorney 21. (i) Sarah E. Gleacher (ii) Gleacher & Co. Inc. 660 Madison Avenue New York, New York 10021 (iii) Student 22. (i) Diane Hensley Ramponi (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) None 23. (i) Thomas P. Riley (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) President and Chief Operating Officer, Magellan Health Services, Inc. 24. (i) Christina Hensley Bair (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) None 25. (i) Martha Faye Koysh (ii) 828 Beardsley Road Gallin, Ohio 44833 (iii) Administrator, United Church Directories 26. (i) Lana Hensley Hoffman (ii) 1011 Pavilon Tower Circle Columbia, South Carolina 29201 (iii) Personnel Assistant, City of Columbia, South Carolina 27. (i) Ruth Ann Roberts (ii) 2632 Scott Court Grove City, Ohio 43123 (iii) Nurse, St. Ann's Hospital 28. (i) E. Byron Hensley, Jr. (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Chairman and Chief Executive Officer, Magellan Health Services, Inc. 29. (i) Susan MacKenzie, (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) None 30. (i) Mark Morin (ii) 10907 Mill Creek Road Marshfield, Wisconsin 54449 (iii) Ophthalmologist 31. (i) Donald R. Monack (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 32. (i) Leonard O. Henry (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 33. (i) Janice L. Quiram (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 34. (i) Alan L. Hollis (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 35. (i) Lois Simon (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 36. (i) Wayne J. Stelk (ii) Magellan Health Services 45 Milk Street Boston, MA 02109 (iii) Vice President, Magellan Health Services, Inc. 37. (i) William F. Murdy (ii) General Investment and Development Company 600 Atlantic Avenue, Suite 2000 Boston, MA 02210 (iii) Chief Executive Officer, General Investment and Development Company 38. (i) Frank N. Liguori (ii) Olsten Corporation 175 Broad Hollow Road Melville, New York 11747 (iii) Chairman of the Board, Olsten Corporation 39. (i) Harris & Harris Group, Inc. (ii) One Rockefeller Plaza 14 West 49th Street New York, New York 10020 (iii) Closed-end investment fund. SCHEDULE B Identity and Background of Directors, Executive Officers and Control Persons of Olsten Corporation and Olsten Service Corp. 1. The following table sets forth the name and principal occupation or employment of the directors, executive officers and other persons controlling Olsten Corporation, a Delaware corporation, the sole shareholder of Olsten Service Corp. Olsten Corporation is a holding company, with subsidiaries engaged in the healthcare and temporary staffing businesses. The business address of each person listed below is Olsten Corporation, 175 Broad Hollow Road, Melville, New York 11747. Name Present Principal Occupation ---- or Employment ------------------------------ Frank N. Liguori Chairman of the Board, Olsten Corporation Stuart Olsten Vice Chairman, President and controlling shareholder, Olsten Corporation Allan Tod Gittleson Director of Olsten Corporation and President of Hofstra Health Dome Incorporated Andrew N. Heine Director of Olsten Corporation, Attorney John M. May Director of Olsten Corporation, Management Consultant Miriam Olsten Director and controlling shareholder of Olsten Corporation Raymond S. Troubh Director of Olsten Corporation, Financial Consultant Richard Sharoff Director of Olsten Corporation, President and Chief Executive Officer of Hai Foods, Inc. Robert A. Fusco Executive Vice President of Olsten Corporation, President of Olsten Kimberly QualityCare Gerald J. Kapalko Executive Vice President, Olsten Corporation Richard A. Piske, III Executive Vice President of Olsten Corporation, President of Olsten Staffing Services William P. Costantini Senior Vice President and General Counsel, Olsten Corporation Anthony J. Puglisi Senior Vice President-Finance and Treasurer, Olsten Corporation Laurin L. Laderoute, Jr. Vice President and Secretary, Olsten Corporation Cheryl Olsten Ashburn Controlling shareholder, Olsten Corporation 2. The following table sets forth the name and principal occupation or employment of the directors, executive officers and other persons controlling Olsten Service Corp., a Delaware corporation. Olsten Service Corp. is principally engaged in the business of holding certain non-operating assets. The business address of each person listed below is Olsten Service Corp., 11615 Angus Road, Austin, Texas 78759. Name Present Principal Occupation ---- or Employment ------------------------------ Daniel Thompson Director and President of Olsten Service Corp., Reimbursement Specialist of Olsten Kimberly QualityCare. Michael Bauman Director of Olsten Service Corp., Area Vice President of Olsten Staffing Services. William P. Constantini Senior Vice President and General Counsel of Olsten Service Corp. and Olsten Corporation. Laurin L. Laderoute, Jr. Vice President and Secretary of Olsten Service Corp. and Olsten Corporation. Olsten Corporation Sole shareholder. SCHEDULE C Identity and Background of Directors, Executive Officers and Control Persons of Gleacher & Co. Inc., the General Partner of Gleacher 7 Investors, L.P. The following table sets forth the name and principal occupation or employment of the directors, executive officers and other persons controlling, Gleacher & Co. Inc., a Delaware corporation and the General Partner of Gleacher 7 Investors, L.P., a Delaware limited partnership. Gleacher & Co. Inc. is principally engaged in the business of providing financial advisory services. The business address of each person listed below is Gleacher & Co. Inc., 660 Madison Avenue, New York, New York 10021. Name Present Principal Occupation ---- or Employment ------------------------------ Eric J. Gleacher Controlling Shareholder, Sole Director, Chairman, Chief Executive Officer and Secretary of Gleacher & Co. Inc. Martin C. Breslin Treasurer of Gleacher & Co. Inc. SCHEDULE D Identity and Background of Directors, Executive Officers and Control Persons of Harris & Harris Group, Inc. The following table sets forth the name and principal occupation or employment of the directors, executive officers and other persons controlling Harris & Harris Group, Inc., a Delaware corporation and a closed-end investment fund. The business address of each person listed below is Harris & Harris Group, One Rockefeller Plaza, 14 West 49th Street, New York, New York 10020. Name Present Principal Occupation or Employment ---- --------------------------------- Charles E. Harris Chairman, Chief Executive Officer and Director of Harris & Harris Group, Inc. Robert B. Schulz President, Chief Operating Officer and Chief Compliance Officer of Harris & Harris Group, Inc. C. Richard Childress Executive Vice President and Chief Financial Officer of Harris & Harris Group, Inc. David C. Johnson, Jr. Executive Vice President of Harris & Harris Group, Inc. Rachel M. Pernia Vice President, Controller and Treasurer of Harris & Harris Group, Inc. C. Wayne Bardin, M.D. Director of Harris & Harris Group, Inc., Vice-President of The Population Council, Professor of Medicine at Pennsylvania State University, Senior Investigator of the National Cancer Institute G. Morgan Browne Director of Harris & Harris Group, Inc., Administrative Director of Cold Spring Harbor Laboratory Harry E. Ekblom Director of Harris & Harris Group, Inc., Vice Chairman of A.T. Hudson & Co., Inc., President of Harry E. Ekblom & Co., Inc. Marin Jaffe Director of Harris & Harris Group, Inc., Managing Director and Chief Operating Officer of Wood, Struthers and Winthrop Management Corp. Jon J. Masters Director of Harris & Harris Group, Inc., Attorney with Christy & Viener Glenn E. Mayer Director of Harris & Harris Group, Inc., Senior Vice President of Reich & Co. William R. Polk Director of Harris & Harris Group, Inc., Author and Self-Employed Consultant Philip M. Skidmore Director of Harris & Harris Group, Inc., Director and Group Vice President of Advest, Inc. SCHEDULE E Transactions in Shares Within the Past 60 Days ----------------------- Date of Number of Shares Price Per Name Transaction Purchased (1) Share (2) ---- ----------- --------------- --------- Harris & Harris Group, Inc. 1/11/95 50,000 $15.375 Thomas P. Riley 1/23/95 5,000 $16.25 Peter P. Polloni 1/12/95 500 $15.75 William F. Murdy 1/23/95 500 $15.25 ----------------------------------------------------------------- (1) All purchases were effected in open market transactions, principally on the American Stock Exchange. (2) Represents the price paid excluding brokerage commissions. EXHIBIT INDEX ------------- EXHIBIT NO EXHIBIT ------ ------- 1 Stockholders Agreement, dated as of January 27, 1995, among Magellan and the Reporting Persons. 2 Investment and Registration Rights Agreement, dated as of January 27, 1995, among the Company and the Reporting Persons. 3 Indemnification Agreement, dated as of January 27, 1995, among the Company, the Reporting Persons, E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative. 4 Letter dated January 27, 1995, from the Company addressed to E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative. 5 Escrow Agreement, dated as of January 27, 1995, among the Company, First Union National Bank of North Carolina, as Escrow Agent, E. Byron Hensley, Jr., as Representative, and Gleacher & Co. Inc., as Representative. 6 Noncompete and Confidentiality Agreement, dated as of January 27, 1995, between the Company and E. Byron Hensley, Jr. 7 Noncompete and Confidentiality Agreement, dated as of January 27, 1995, between the Company and Thomas P. Riley. 8 Agreement, dated as of February 6, 1995, among the Reporting Persons. EX-1 2 STOCKHOLDERS AGREEMENT EXHIBIT 1 --------- STOCKHOLDERS AGREEMENT This STOCKHOLDERS AGREEMENT (the "Agreement") is made and entered into as of this 27th day of January, 1995 by and among each of the parties signatory hereto (each, a "Stockholder") and Magellan Health Services, Inc., a Delaware corporation ("Magellan"). W I T N E S S E T H - - - - - - - - - - WHEREAS, Charter Medical Corporation ("Charter"), Charter Acquisition Subsidiary, Inc. ("Charter Acquisition") and Magellan have entered into that certain Agreement of Merger, dated as of December 19, 1994 (the "Merger Agreement"), pursuant to which Charter Acquisition, a direct wholly-owned subsidiary of Charter, will merge with and into Magellan and Magellan will be the surviving entity (the "Merger"); and WHEREAS, pursuant to the Merger, the Stockholders will receive shares of common stock of Charter ("Charter Common Stock") in exchange for their shares of capital stock (or options exercisable for shares of capital stock) of Magellan; and WHEREAS, the parties intend that the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and wish to enter into certain agreements with a view to maintaining such qualification; and WHEREAS, it is a condition precedent to the consummation of the Merger that the Stockholders enter into an Indemnification Agreement in the form attached to the Merger Agreement as Exhibit E and the Stockholders desire to provide for just and equitable contribution among them with respect to any payments required thereunder; and WHEREAS, the parties wish to expressly consent to the Merger and set forth certain rights and obligations relating thereto. NOW THEREFORE, In consideration of the foregoing, and in order to ensure that the Merger qualifies as a reorganization within the meaning of Section 368(a) of the Code, the parties, intending to be legally bound, agree as follows: NYFS12...:\99\48499\0005\2550\AGRD0194.K7F 1. Definitions. For purposes of this Agreement, ----------- capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement. 2. Stockholders; Consent to Merger; Execution of --------------------------------------------- Agreements. Each Stockholder acknowledges and agrees that such ---------- Stockholder's equity interest in Magellan is accurately set forth on Schedule I hereto and that the Stockholders shall be entitled to receive allocations of the Aggregate Magellan Consideration in accordance with the exchange ratios set forth on Schedule I hereto. Each Stockholder hereby consents to the execution and delivery by Magellan of the Merger Agreement, the performance of its obligations thereunder and the consummation of the Merger. Each Stockholder hereby agrees to execute and deliver the Registration Rights Agreement and the Indemnification Agreement in substantially the forms attached to the Merger Agreement as Exhibits A and E, respectively, upon the consummation of the Merger. 3. Tax Representations and Warranties. Each Stockholder ---------------------------------- hereby agrees, represents and warrants that such Stockholder has no plan or intention, directly or indirectly, to Sell (as hereinafter defined) shares of Charter Common Stock which constitute, in the aggregate, 50% or more of the Charter Common Stock to be received by such Stockholder pursuant to the Merger. Such Stockholder acknowledges that he is giving this representation to ensure that the Merger constitutes a reorganization within the meaning of Section 368(a) of the Code and further recognizes that significant adverse tax consequences might result if such representation is not true. For purposes of this Agreement, the term "Sell" shall mean, with respect to any shares of Charter Common Stock, to sell, exchange or otherwise dispose of such shares, to reduce the risk of loss with respect to such shares by short sale or otherwise, or to enter into any agreement to effect any such sale, exchange, disposition or reduction. 4. Tax Covenants. Each Stockholder hereby agrees that, ------------- prior to the second anniversary of the date of the Merger, such Stockholder will not Sell shares of Charter Common Stock which constitute, in the aggregate, 50% or more of the number of shares of Charter Common Stock received by such Stockholder pursuant to the Merger. Notwithstanding the foregoing, (i) Eric J. Gleacher, in the case of any Stockholder listed on Schedule II hereto, or E. Byron Hensley, Jr., in the case of any Stockholder listed in Schedule III hereto, may agree to permit a Stockholder to sell more than the number of shares of Charter Common Stock permitted by the immediately preceding sentence prior to the second anniversary of the date of the Merger upon receipt of a written undertaking from one or more other Stockholders listed on the same Schedule not to Sell such number of shares (in addition to the number of shares then subject to the restriction contained in the immediately preceding sentence) prior to such second anniversary, (ii) the restriction contained in the immediately preceding sentence may be reduced or eliminated by a written agreement signed by Stockholders who were issued not less than 66 2/3% of the Charter Common Stock issued in the Merger and (iii) no Stockholder shall have any liability to any other Stockholder for any action taken in conformity with this sentence (whether or not such action affects the qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code). 5. Termination of Existing Share Purchase Agreement and ---------------------------------------------------- Shareholders' Agreement. Magellan and the Stockholders party thereto ----------------------- hereby agree that, effective upon the consummation of the Merger, the Share Purchase Agreement and the Shareholders' Agreement, each dated as of December 17, 1993, among Magellan and such Stockholders, shall automatically terminate and be of no further force or effect and any claims outstanding thereunder shall automatically be released. 6. Contribution. In order to provide for just and ------------ equitable contribution among the Stockholders with respect to their obligations under the Indemnification Agreement, other than with respect to representations and warranties made by each Stockholder pursuant to Section 7(b) of the Indemnification Agreement or Sections 3 or 4 of the Registration Rights Agreement (the "Excluded Claims"), each Stockholder hereby agrees that, if one or more Stockholders satisfy or exceed their pro rata shares of a claim by an Indemnified Party pursuant to the Indemnification Agreement (other than an Excluded Claim) or any claim by the Escrow Agent for indemnification under the Escrow Agreement, such Stockholders (collectively, the "Indemnifying Stockholders") shall be entitled to recover from each Stockholder that does not satisfy or exceed its pro rata share of such claim (each a "Contributing Stockholder") an amount (the "Contribution Amount") equal to (i) the fraction obtained by dividing the number of shares of Charter Common Stock issued to such Contributing Stockholder in the Merger by the total number of shares of Charter Common Stock issued to all Stockholders in the Merger, multiplied by (ii) the ------------- amount of the claim satisfied by such Indemnifying Stockholders. Within 5 business days of a Contributing Stockholder's receipt of notice from any of the Indemnifying Stockholders of a claim for contribution hereunder, such Contributing Stockholder shall deliver to each of the Indemnifying Stockholders its "proportionate share" of the Contribution Amount in cash (or wire transfer of immediately available funds), or by the delivery of shares of Charter Common Stock (duly endorsed or accompanied by duly executed instruments of transfer reasonably satisfactory to such Indemnifying Stockholder) having a fair market value, as of the closing under the Merger Agreement, equal to such Indemnifying Stockholder's proportionate share of the Contribution Amount. An Indemnifying Stockholder's "proportionate share" of any Contribution Amount shall be equal to such Contribution Amount multiplied by the fraction obtained by dividing the number of shares of Charter Common Stock issued to such Indemnifying Stockholder in the Merger by the total number of Shares of Charter Common Stock issued to all Indemnifying Stockholders in the Merger. 7. Survival. The representations, warranties and -------- covenants contained herein shall survive the consummation of the Merger. 8. Miscellaneous. ------------- a. Entire Agreement. This Agreement constitutes the ---------------- entire agreement between the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. b. Certain Events. Each Stockholder agrees that this -------------- Agreement and the obligations hereunder shall be binding upon such Stockholder's heirs, guardians, administrators or successors. c. Assignment. This Agreement shall not be assigned ---------- by operation of law or otherwise without the prior written consent of the other parties. d. Amendments, Waivers, Etc. This Agreement may not ------------------------ be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by Stockholders who were issued not less than 91% of the number of shares of Charter Common Stock issued in the Merger. e. Notices. All notices, requests, claims, demands ------- and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly received if so given) by hand delivery, telegram, telex or telecopy, or by mail (registered or certified mail, postage prepaid, return receipt requested) or by any courier service, such as Federal Express, providing proof of delivery. All communications hereunder shall be delivered to the respective parties (i) in the case of any Stockholder listed on Schedule II hereto, c/o Gleacher & Co. Inc., 660 Madison Avenue, 19th Floor, New York, New York 10021 (telecopier: (212) 752-2711), (ii) in the case of Magellan or any Stockholder listed on Schedule III hereto, c/o Magellan Health Services, Inc., 45 Milk Street, Boston, Massachusetts 02109 (telecopier: (617) 654-0527), (iii) in the case of Frank N. Liguori or Olsten Holding Co., 175 Broad Hollow Road, Melville, New York 11747, Attention: Frank N. Liguori (telecopier: (516) 844-7266), or (iv) to such other address as the person to whom notice is to be given may have previously furnished to the others in writing in the manner set forth above. f. Severability. Whenever possible, each provision ------------ or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein. g. Remedies Cumulative. All rights, powers and ------------------- remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning or the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. h. No Waiver. The failure of any party hereto to --------- exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. i. No Third Party Beneficiaries. This Agreement is ---------------------------- not intended to be for the benefit of, and shall not be enforceable by, any person or entity who or which is not a party hereto. j. Governing Law. This Agreement shall be governed ------------- and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of law principles thereof. k. Descriptive Headings. The descriptive headings -------------------- used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. l. Counterparts. This Agreement may be executed in ------------ one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same original instrument. IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day and year first above written. MAGELLAN HEALTH SERVICES, INC. By: /s/ Thomas P. Riley ------------------------------- Name: Thomas P. Riley Title: President and Chief Operating Officer /s/ Gregory T. Tornes ---------------------------------- Gregory T. Torres /s/ Gerald M. Bereika ---------------------------------- Gerald M. Bereika /s/ Peter P. Polloni ---------------------------------- Peter P. Polloni /s/ Peter W. Mair ---------------------------------- Peter W. Mair /s/ Elizabeth J. Hopper ---------------------------------- Elizabeth J. Hopper /s/ Eric J. Gleacher ---------------------------------- Eric J. Gleacher /s/ James Goodwin ---------------------------------- James Goodwin /s/ Charles G. Phillips ---------------------------------- Charles G. Phillips /s/ H. Conrad Meyer ---------------------------------- H. Conrad Meyer /s/ Richard A. Derbes ---------------------------------- Richard A. Derbes /s/ Emil W. Henry, Jr. ---------------------------------- Emil W. Henry, Jr. /s/ Robert W. Kitts ---------------------------------- Robert W. Kitts /s/ Jeffrey H. Tepper ---------------------------------- Jeffrey H. Tepper /s/ Robert A. Engel ---------------------------------- Robert A. Engel /s/ Andrew Gilman ---------------------------------- Andrew Gilman /s/ Marie A. Gentile ---------------------------------- Marie A. Gentile GLEACHER 7 INVESTORS L.P. By: Gleacher & Co. Inc., its General Partner By: /s/ Emil W. Henry, Jr --------------------------------- Name: Emil W. Henry, Jr. Title: Vice President OLSTEN HOLDING CO. By: /s/ William Costantini --------------------------------- Name: William Costantini Title: Sr. Vice President and General Counsel /s/ Eric J. Gleacher ---------------------------------- Eric J. Gleacher, as custodian for Jay S. Gleacher /s/ Eric J. Gleacher ---------------------------------- Eric J. Gleacher as custodian for Patricia G. Gleacher /s/ Eric J. Gleacher ---------------------------------- Eric J. Gleacher, as custodian for William R. Gleacher /s/ James E. Gleacher ---------------------------------- James E. Gleacher /s/ John G. Gleacher ---------------------------------- John G. Gleacher /s/ Sarah E. Gleacher ---------------------------------- Sarah E. Gleacher /s/ Diane Hensley Ramponi ---------------------------------- Diane Hensley Ramponi, as Trustee of the Lauren Carroll Education Trust /s/ Thomas P. Riley ---------------------------------- Thomas P. Riley, as Trustee of the Lauren Carroll Education Trust /s/ Christina Hensley Bair ---------------------------------- Christina Hensley Bair /s/ Christina Hensley Bair ---------------------------------- Christina Hensley Bair, as Trustee of the Emily Cristina Bair Education Trust /s/ Thomas P. Riley ---------------------------------- Thomas P. Riley, as Trustee of the Emily Cristina Bair Education Trust /s/ Christina Hensley Bair ---------------------------------- Christina Hensley Bair as Trustee of the Nicholas Hensley Bair Education Trust /s/ Thomas P. Riley ---------------------------------- Thomas P. Riley, as Trustee of the Nicholas Hensley Bair Education Trust /s/ Martha Faye Koysh ---------------------------------- Martha Faye Koysh /s/ Lana Hensley Hoffman ---------------------------------- Lana Hensley Hoffman /s/ Ruth Ann Roberts ---------------------------------- Ruth Ann Roberts /s/ E. Byron Hensley, Jr. ---------------------------------- E. Byron Hensley, Jr. /s/ Susan MacKenzie ---------------------------------- Susan MacKenzie, as Trustee of the Jameson Robert Riley Education Trust /s/ Mark Morin ---------------------------------- Mark Morin, as Trustee of the Jameson Robert Riley Education Trust /s/ Susan MacKenzie ---------------------------------- Susan MacKenzie, as Trustee of the Katlyn MacKenzie Riley Education Trust /s/ Mark Morin ---------------------------------- Mark Morin, as Trustee of the Katlyn MacKenzie Riley Education Trust /s/ Susan MacKenzie ---------------------------------- Susan MacKenzie, as Trustee of the Bethany Ann Riley Education Trust /s/ Mark Morin ---------------------------------- Mark Morin, as Trustee of the Bethany Ann Riley Education Trust /s/ Thomas P. Riley ---------------------------------- Thomas P. Riley HARRIS & HARRIS GROUP, INC. By: /s/ Robert B. Schulz ------------------------------- Name: Robert B. Schulz Title: President and Chief Operating Officer /s/ Donald R. Monack ---------------------------------- Donald R. Monack /s/ Leonard O. Henry ---------------------------------- Leonard O. Henry /s/ Janice L. Quiram ---------------------------------- Janice L. Quiram /s/ Alan L. Hollis ---------------------------------- Alan L. Hollis /s/ Lois Simon ---------------------------------- Lois Simon /s/ Wayne J. Stelk ---------------------------------- Wayne J. Stelk /s/ William F. Murdy ---------------------------------- William F. Murdy /s/ Frank N. Liguori ---------------------------------- Frank N. Liguori EX-2 3 INVESTMENT AND REGISTRATION RIGHTS AGREEMENT EXHIBIT 2 --------- INVESTMENT AND REGISTRATION RIGHTS AGREEMENT THIS INVESTMENT AND REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into this 27th day of January, 1995, among: CHARTER MEDICAL CORPORATION, a Delaware corporation (hereinafter called the "Company"), and the former stockholders of MAGELLAN HEALTH SERVICES, INC., a Delaware corporation ("Magellan"), listed on Exhibit "A" hereto (hereinafter referred to collectively as "Holders" and individually as a "Holder"). RECITALS ======== A. Concurrently with the execution of this Agreement, the Company has issued to the Holders 1,398,989 shares of the $.25 par value per share common stock of the Company (hereinafter the "Shares") pursuant to that certain Agreement of Merger, dated as of December 19, 1994 (the "Merger Agreement"), among the Company, Magellan and Charter Acquisition Subsidiary, Inc. B. The Shares have been issued to the Holders without registration under the Securities Act of 1933, as amended (the "Securities Act"), and the Company and the Holders desire to provide for compliance with the Securities Act and for the registration of the Shares upon the terms and conditions set forth below. NOW, THEREFORE, the parties agree as follows: 1. Certain Other Definitions. Capitalized terms used but ========================== not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Merger Agreement. The capitalized terms set forth below (in their singular and plural forms as applicable) shall have the following meanings: 1.1. "Commission" shall mean the United States ========== Securities and Exchange Commission and any successor federal agency having similar powers. 1.2. "Common Stock" shall mean the $.25 par value per ============ share common stock of the Company. 1.3. The terms "register", "registered" and ======== ========== "registration" refer to a registration effected by preparing and ============ filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. 1.4. "Registrable Securities" shall mean the Securities ====================== that have not been sold to the public. 1.5. "Registration Expenses" shall mean all expenses ===================== incurred by the Company in complying with Section 5, including, with- out limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, and accountants' expenses, including, without limitation, any special audits or "comfort" letters incident to or required by any such registration, transfer taxes, fees of transfer agents and registrars, costs of insurance, and any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding underwriting discounts and commissions. 1.6. "Securities" shall mean the Shares, together with ========== any other securities which are hereafter issued with respect thereto by way of exchange, reclassification, dividend or distribution, whether or not such Shares and securities have been sold to the public. 2. Representations and Warranties of Company. The ========================================= representations and warranties of the Company contained in Section 5 of the Merger Agreement are incorporated by reference into this Agreement. The Holders are entitled to rely on such representations and warranties as if they were set forth in this Agreement. The Holders agree that they shall not bring any action based on a breach of any such representation and warranty against Charter, any Subsidiary, any affiliate or any officer, director, employee or agent of any of them with respect to a claim made after the first anniversary of the date of this Agreement. 3. Representations and Warranties of Holders. Each Holder, ========================================= severally and not jointly, hereby represents, acknowledges, covenants and agrees as follows: (i) the Shares are being acquired for his own account for investment and not with a view to any distribution or public offering within the meaning of the Securities Act or any state securities law; (ii) the Shares have not been registered under the Securities Act or any state securities law; (iii) he is an "accredited investor" within the meaning of Rule 501 promulgated by the Commission pursuant to the Securities Act, or if not, he, either alone or with his purchaser representative, has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment in the Shares; and (iv) he will not sell or otherwise transfer any of the Shares except upon the terms and conditions specified herein and he will cause any subsequent Holder of his Shares to agree to take and hold the Shares subject to the terms and conditions of this Agreement, provided that ======== any Holder may sell the Shares in one or more private transactions not requiring registration under the Securities Act or any state securities law. 4. Restrictions on Transfer. ======================== 4.1. Legend. Except as provided in Section 4.3, each ====== certificate representing the Shares issued to the Holders or to a subsequent Holder pursuant to Section 4.2 shall include a legend in substantially the following form, provided that such ======== legend shall not be required if such transfer is being made in connection with a sale that is exempt from registration pursuant to Rule 144 under the Securities Act or if the opinion of counsel referred to in Section 4.2 is to the further effect that neither such legend nor the restrictions on transfer in this Section 4 are required in order to ensure compliance with the Securities Act: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURI- TIES ACT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. SUCH SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE INVESTMENT AND REGISTRATION RIGHTS AGREEMENT DATED AS OF JANUARY 27, 1995, BETWEEN THE ISSUER AND THE OTHER ENTITIES AND INDIVIDUALS NAMED THEREIN, A COMPLETE AND CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE. 4.2. Additional Restrictions. Each Holder further ======================= represents, acknowledges, covenants and agrees with the Company that he will not sell, transfer or otherwise dispose of any Securities received in the Merger or any other shares of Common Stock until after such time as results covering at least 30 days of combined operations of Magellan Health Services, Inc. and the Company have been published by the Company, in the form of a quarterly earnings report, an effective registration statement filed with the Commission, a report to the Commission on Form 10-K, Form 10-Q or Form 8-K, or any other public filing or announcement which includes such combined results of operations. Notwithstanding the foregoing, each Holder understands that he will not be prohibited from selling up to 10% of the securities received by such Holder in the Merger during the aforementioned period. In addition, each Holder further represents, acknowledges, covenants and agrees that he has not, and from the date of this Agreement, shall not take any action, or fail to take any action, with the intention of jeopardizing the treatment of the Merger as a "pooling of interest" for accounting purposes. 4.3. Notice of Transfer. Prior to any proposed ================== assignment, transfer or sale of any Shares, the Holder of such Shares shall give written notice to the Company of Holder's intention to effect such assignment, transfer or sale, which notice shall set forth the date of such proposed assignment, transfer or sale. Holder shall also furnish to the Company an agreement by the transferee that it is taking and holding the same subject to the terms and conditions specified in this Agreement and a written opinion of Holder's counsel, in form reasonably satisfactory to the Company, to the effect that the proposed transfer may be effected without registration under the Securities Act. 4.4. Termination of Restrictions. The restrictions set =========================== forth in this Section 4 shall terminate and cease to be effective with respect to any of the Shares (i) upon the sale of any such Shares which has been registered under the Securities Act, (ii) upon receipt by the Company of an opinion of counsel, in form reasonably satisfactory to the Company, to the effect that compliance with such restrictions is not necessary in order to comply with the Securities Act with respect to the sale of the Shares or (iii) upon the expiration of the three-year period referred to in Rule 144(k) promulgated pursuant to the Securities Act. Whenever such restric- tions shall so terminate, the Holder of such Shares shall be entitled to receive from the Company, without expense (other than transfer taxes, if any), certificates for such Shares not bearing the legend set forth in Section 4.1 at which time the Company shall rescind any transfer restrictions relating thereto. 5. Registration under Securities Act, etc. ======================================= 5.1. Shelf-Registration. (a) General. The Company shall ================== ======= prepare and file with the Commission on or prior to 30 days after the date hereof, a registration statement on an appropriate form under the Act relating to the offer and sale of the Shares by the Holders in accordance with the methods of distribution set forth in such registration statement and Rule 415 under the Act (hereafter, a "Shelf Registration Statement") and shall use its best efforts to cause the Shelf Registration Statement to be declared effective as soon as reasonably practicable thereafter. (b) Effective Period. The Company agrees to use its best ================ efforts to keep the Shelf Registration Statement current and continuously effective in order to permit the prospectus included in the Shelf Registration Statement to be usable by the holders of the Shares for a period of two years from the Closing Date or such shorter period that shall terminate when all the Shares covered by the Shelf Registration Statement have been sold; provided that the Company shall ======== be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in holders of the Shares covered by the Shelf Registration Statement not being able to offer and sell such Shares during that period, unless such action is required by applicable law, and provided, further, that the foregoing ======== ======= shall not apply to actions taken by the Company in good faith and for valid business reasons (not including avoidance of the Company's obligations pursuant to this Agreement), including, without limitation, the acquisition or divestiture of a material portion of its assets, the offering of shares of Common Stock pursuant to the registration rights referred to in Section 10 or the offering of shares of Common Stock by the Company for its own account, so long as the Company promptly complies with the requirements of Section 5.3(f), if applicable. Any such period during which the Company fails to keep the Shelf Registration Statement effective and usable for offers and sales of Shares is hereafter referred to as a "Suspension Period." A Suspension Period shall commence on and include the date on which the Company provides notice that the Shelf Registration Statement is no longer effective, that the prospectus included in the Shelf Registration Statement is no longer usable for offers and sales of Shares or that the Company is required to suspend the sale of Shares because of the occurrence of an underwritten offering in connection with the demand registrations or primary registrations referred to above and shall end on the date when each seller of Shares covered by the Shelf Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 5.3(f) or is advised in writing by the Company that use of the prospectus may be resumed. If one or more Suspension Periods occur, the time period referenced above shall be extended by a period which is not less than the aggregate number of days included in all Suspension Periods. (c) Block-out Period. Each Holder of Registrable Securities ================ agrees by acquisition of such Registrable Securities, if so requested by the Company, not to effect any sale of Shares pursuant to the Shelf Registration Statement for any period reasonably deemed necessary by the Company in connection with the offering of shares of Common Stock pursuant to an underwritten offering pursuant to demand registration rights granted to another entity pursuant to Section 10 or the offering of shares of Common Stock by the Company for its own account. The Company agrees that the time period during which the Company shall keep the Shelf Registration Statement current and continuously effective as referred to in Section 5.1(a) shall be extended by a period which is not less than the aggregate number of days included in the periods during which Holders suspended sales of Shares pursuant to the Shelf Registration Statement at the Company's request, without duplication of the extension of such period referred to in Section 5.1(b). 5.2. Incidental Registration. Right to Include Registrable ======================= ============================ Securities. If at any time prior to the date on which the Shelf ========== Registration Statement is declared effective, the Company proposes to register any of its equity securities under the Securities Act for sale for its own account on a form and in a manner which would permit registration of Registrable Securities for sale to the public under the Securities Act, it will each such time give notice at least 20 days prior to the proposed filing date to all Holders of Registrable Securities of its intention to do so, describing such securities and specifying the form and manner and the other relevant facts involved in such proposed registration, and upon the written request of any such Holder delivered to the Company within 10 business days after the giving of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such Holder and the intended method or methods of disposition thereof), the Company shall prepare and file with the Commission, and shall use its best efforts to cause to be declared effective, a registration statement on an appropriate form covering all Registrable Securities that the Company has been so requested to register by the Holders of Registrable Securities (hereinafter "Requesting Holder"), to the extent requisite to permit the disposition (in accordance with the intended methods of disposition) of the Registrable Securities so to be registered, provided that: ======== (i) if, at any time after giving such written notice of its intention to register any of its securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Holder of Registrable Securities and upon giving such notice shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection with the Registration as provided in Section 5.7); (ii) if (A) the registration so proposed by the Company = involves an underwritten offering of the securities so being registered to be distributed by or through one or more underwriters of recognized standing under underwriting terms ap- propriate for such a transaction, (B) the Company proposes that = the securities to be registered in such underwritten offering will not include all of the Registrable Securities requested to be so included, and (C) the managing underwriter of such = underwritten offering shall advise the Company in writing that, in its opinion, the distribution of all or a specified portion of such Registrable Securities concurrently with the securities being distributed by such underwriters will materially and adversely affect the distribution of such securities by such underwriters (such opinion to state the reasons for such advice), then the Company will promptly furnish each such Holder of Registrable Securities with a copy of such opinion and may require, by written notice to each such Holder accompanying such opinion, that the distribution of all or a specified portion of such Registrable Securities be excluded from such distribution (in case of an exclusion of a portion of such Registrable Securities, such portion to be allocated among such Holders in proportion to the respective numbers of shares of Registrable Securities so requested to be registered by such Holders); and (iii) the Company shall not be obligated to effect any registration of Registrable Securities under this Section 5.2 incidental to the registration of any of its securities in connection with mergers, acquisitions, exchange offers, dividend reinvestment plans or stock option or other employee benefit plans or incidental to the registration of any non-equity securities not convertible into equity securities. 5.3. Registration Procedures. The Company shall: ======================= (a) cause any registration statement filed pursuant to Section 5.1 or 5.2 and the related prospectus and any amendment or supplement, as of the effective date of such registration statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission promulgated under the Securities Act and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities and other securities covered by such registration statement until the earlier of such time as all such Registrable Securities and securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement or, in the case of the Shelf Registration Statement, for a period of two years from the Closing Date and, in the case of a registration of Registrable Securities pursuant to Section 5.2, 90 days, after such registra- tion statement becomes effective; and will furnish, upon request, to each such seller and each Requesting Holder a copy of any amendment or supplement to such registration statement or prospectus prior to filing it and shall not file any such amendment or supplement to which any such seller or Requesting Holder shall have reasonably objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or of the rules or regulations thereunder; (c) furnish to each seller of such Registrable Securities and each Requesting Holder such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents, if any, incorporated by reference in such registration statement or prospectus, and such other documents, as such seller or Requesting Holder may reasonably request; (d) use its best efforts to register or qualify all Registrable Securities and other securities covered by such reg- istration statement under such other securities or blue sky laws of the states of the United States as each seller or Requesting Holder shall reasonably request, to keep such registration or qualification in effect for so long as such registration statement remains in effect, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of its Reg- istrable Securities covered by such registration statement, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction in which it is not and would not, but for the requirements of this Section 5.3(d), be obligated to be so qualified, or to subject itself to taxation in any such jurisdiction, or to consent to general service of process in any such jurisdiction; (e) upon request, furnish to each seller of Registrable Securities and each Requesting Holder a signed counterpart, addressed to such seller and such Requesting Holder, of (i) an = opinion of counsel for the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), and (ii) a "comfort" letter, == signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), covering substantially the same matters with respect to such registration statement (and the prospectus included in such registration statement) and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities and, in the case of the accountants' letter, such other financial matters, as the principal underwriter for such sellers, or any of such Requesting Holders, may reasonably request; (f) immediately notify each seller of Registrable Securities covered by such registration statement and each Requesting Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, which untrue statement or omission requires amendment of the registration statement or supplementation of the prospectus, and at the request of any such seller or Requesting Holder, prepare and furnish to such seller and each Requesting Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that each Holder of Registrable Securities registered pursuant to such registra- tion statement agrees that he will not sell any Registrable Securities pursuant to such registration statement during the time that the Company is preparing and filing with the Commission a supplement to or an amendment of such prospectus or registration statement; (g) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its securities holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month of the first fiscal quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; and (h) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration statement. Each seller of Registrable Securities as to which any registration is being effected shall furnish to the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing and as shall be required by law or by the Commission in connection therewith. 5.4. Underwritten Offerings. (a) Incidental ====================== ========== Underwritten Offerings. If the Company at any time proposes to ====================== register any of its securities under the Securities Act as contemplated by Section 5.2 and such securities are to be distributed by or through one or more underwriters, the Company will use its best efforts, if requested by any Holder of Registrable Securities who requests incidental registration of Registrable Securities in connection therewith pursuant to Section 5.2, to arrange for such underwriters to include, on the same terms as the other shares being distributed, the Registrable Securities to be offered and sold by such Holder among the securities to be distributed by or through such underwriters, provided that, for purposes of this sentence, best efforts shall not ======== require the Company to reduce the amount or sale price of such securities proposed to be distributed on behalf of the Company by or through such underwriters. The Holders of Registrable Securities to be distributed by such underwriters shall be parties to the underwrit- ing agreement between the Company and such underwriters and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters, shall also be made to and for the benefit of such Holders of Registrable Securities, and the Company will cooperate with such Holders of Registrable Securities to the end that the conditions precedent to the obligations of such Holders of Registrable Securities under such underwriting agreement shall not include conditions that are not customary in underwriting agreements with respect to combined primary and secondary distributions and shall be otherwise satisfactory to such Holders. Such Holders of Registrable Securities shall not be required by the Company to make any representations or warranties to or agreements (including indemnity agreements customary in secondary offerings) with the Company or the underwriters other than reasonable representations, warranties or agreements regarding such Holder, such Holder's Registrable Securities and such Holder's intended method or methods of distribution and any other repre- sentation required by law. (b) Holdback Agreements. =================== (i) If any registration pursuant to Section 5.2 shall be in connection with an underwritten public offering, each Holder of Registrable Securities agrees by acquisition of such Registrable Securities, if so required by the managing underwriter, not to effect any public sale or distribution of Registrable Securities (other than as part of such underwritten public offering) within seven days prior to the effective date of such registration statement or 120 days after the effective date of such registration statement. (ii) The Company agrees (A) not to effect any public = sale or distribution of any of its equity securities or securi- ties convertible into or exchangeable or exercisable for any of such securities during the seven days prior to and the earlier of 120 days after any underwritten registration pursuant to Section 5.2 has become effective and the date on which all securities under such registration statement are sold, except as part of such underwritten registration and except pursuant to regis- trations on Form S-4 or S-8 or any successor thereto, and (B) to = use its best efforts to cause each holder of its equity secu- rities or any securities convertible into or exchangeable or ex- ercisable for any of such securities, in each case purchased from the Company at any time after the date of this Agreement (other than in a public offering) to agree not to effect any such public sale or distribution of such securities during such period. 5.5. Preparation; Reasonable Investigation. In ===================================== connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act, the Company will give the Holders of Registrable Securities on whose behalf such Registrable Securities are to be so registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included in such registration statement or filed with the Commission and each amendment or supplement, and will give each of them such reasonable access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary in the opinion of such Holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. To minimize disruption and expense to the Company during the course of the registration process, sellers of Registrable Securities to be covered by any such registration statement shall coordinate their investigation and due diligence efforts and, to the extent practicable, will act through a single set of counsel and a single set of accountants and will enter into appropriate confidentiality agreements with the Company in a form satisfactory to the Company. 5.6. Indemnification. (a) Indemnification by the =============== ====================== Company. The Company shall indemnify and hold harmless the ======= seller of any Registrable Securities covered by any registration statement filed pursuant to Section 5.1 or 5.2, its directors, trustees and officers, each other person who participates as an underwriter in the offering or sale of such securities and each other person, if any, who controls such seller or any such underwriter within the meaning of the Securities Act against any losses, claims, damages, liabilities or expenses, joint or several, to which such seller or Requesting Holder or any such director or officer or participating or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or related actions or proceedings) arise out of or are based upon (x) any = untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in such registration statement, or any amendment or supplement to such registration statement, or any document incorporated by reference in such registration statement, or (y) = any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse such seller, Requesting Holder and each such director, trustee, officer, participating person and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, provided ======== that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense (or action or proceeding in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller or such Requesting Holder or any such director, trustee, officer, participating person or controlling person specifically stating that it is for use in the preparation of such registration statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or such Requesting Holder or any such director, officer, participating person or controlling person and shall survive the transfer of such securities by such seller. The Company shall agree to make provision for contribution relating to such indemnity as shall be reasonably requested by any seller of Registrable Securities or the underwriters. (b) Indemnification by the Sellers. The Company may ============================== require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Sections 5.1 or 5.2, that the Company shall have received an undertaking satisfactory to it from each prospective seller of such securities, severally and not jointly, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 5.6(a)) the Company, each director of the Company, each officer of the Company who shall sign such registration statement and each other person, if any, who controls the Company within the meaning of the Securities Act, with respect to any untrue statement in or omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus included in such registration statement, or any amendment or supplement to such registration statement, of a material fact if such statement or omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such seller. (c) Notice of Claims, etc. Promptly after receipt by ====================== an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Sections 5.6(a) and (b), such indemnified party will, if a claim is to be made against an indemnifying party, give written notice to the latter of the commencement of such action, provided that the failure of ======== any indemnified party to give notice shall not relieve the indemnifying party of its obligations under Sections 5.6(a) or (b), except to the extent that the indemnifying party is actually and materially prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party's reasonable judgment (i) a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, or (ii) the indemnified party has available to it reasonable defenses which are different from or additional to those available to the indemnifying party, the indemnifying party shall be entitled to participate in and to assume the defense of such action, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense of such action other than reasonable costs of investigation. Notwithstanding the foregoing, in any such action, any indemnified party shall have the right to retain its own counsel but the fees and disbursements of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party shall have failed to retain counsel for the indemnified party, or (ii) the indemnifying party and such indemnified party shall have mutually agreed to the retention of such counsel. It is understood that the indemnifying party shall not, in connection with any action or related actions in the same jurisdiction, be liable for the fees and disbursements of more than one separate firm qualified in such jurisdiction to act as counsel for the indemnified parties, unless in any indemnified party's reasonable judgment (i) a conflict of interest between such indemnified party and any other indemnified party may exist in respect of such claims, or (ii) the indemnified party has available to it reasonable defenses which are different from or additional to those available to another indemnified party. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. (d) Other Indemnification. Indemnification similar to ===================== that specified in the Sections 5.6(a) and 5.6(b) (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of such Registrable Securities under any federal or state law or regulation of governmental authority other than the Securities Act. (e) Contribution. If the indemnification provided for ============ in this Section 5.6 is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses described as indemnifiable pursuant to Sections 5.6(a) or 5.6(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party, as a result of such losses, claims, damages, liabilities or expenses in such proportion as appropriate to reflect the relative fault of the Company, on the one hand, or such seller of Registrable Securities, on the other hand, and to the parties' relative intent, knowledge, access to information and opportunity to correct or prevent any untrue statement or omission giving rise to such indemnification obligation. The Company and the Holders of Registrable Securities agree that it would not be just and equitable if contributions pursuant to this Section 5.6(e) were determined by pro rata allocation (even if the Holders of Registrable Securities were treated as one entity for such purpose) or by any other method of allocation which did not take account of the equitable considerations referred to above in this Section 5.6(e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. (f) Indemnification Payments. Periodic payments of ======================== amounts required to be paid pursuant to this Section 5.6 shall be made during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. (g) Limitation on Seller's Payments. Notwithstanding =============================== any provision of this Agreement to the contrary, the liability of any seller of Registrable Securities under this Section 5.6 shall in no event exceed the proceeds received by such seller from the sale of Registrable Securities covered by the registration statement giving rise to such liability. 5.7. Registration Expenses. The Company shall bear all ===================== expenses incurred in connection with the performance of its obligations under Sections 5.1 and 5.2 of this Agreement and, in the event of a Shelf Registration Statement, shall bear or reimburse the holders of the Registerable Securities for the reasonable fees and disbursements of one firm of counsel designated by the holders of a majority in principal amount of the Registerable Securities to act as counsel for all holders of Registerable Securities in connection therewith. 6. Rule 144. The Company shall comply with the ======== requirements of Rule 144 under the Securities Act, as such Rule may be amended from time to time (or any similar rule or regulation hereafter adopted by the Commission), regarding the availability of current public information to the extent required to enable any Holder of Registrable Securities to sell shares of Registrable Securities without registration under the Securities Act pursuant to Rule 144 (or any similar rule or regulation). Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. 7. Amendments and Waivers. This Agreement may be ====================== amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of the Holder or Holders of 51% or more of the shares of Registrable Securities (and, in the case of any amendment, action or omission to act which adversely affects any specific Holder of Registrable Securities or a specific group of Holders of Registrable Securities, the written consent of each such Holder or Holders of 51% or more of the Registrable Securities held by such group). Each Holder of any Registrable Securities at the time shall be bound by any consent authorized by this Section 7, whether or not such Registrable Securities shall have been marked to indicate such consent. 8. Nominees for Beneficial Owners. In the event that ============================== any Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election, be treated as the Holder of such Registrable Securities for purposes of any request or other action by any Holder or Holders of Registrable Securities pursuant to this Agreement or any determination of any number or percentage of shares of Registrable Securities held by any Holder or Holders of Registrable Securities contemplated by this Agreement. If the beneficial owner of any Registrable Securities so elects, the Company may require assurances reasonably satisfactory to it of such owner's beneficial ownership of such Registrable Securities. 9. Notices. All notices, communications and deliveries ======= required or permitted by this Agreement shall be made in writing signed by the Party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (i) on the date delivered if delivered by telecopy or in person, (ii) on the third (3rd) business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid) or (iii) on the day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows: (a) if to any Holder of Registrable Securities, at the address shown on the stock transfer books of the Company unless such Holder has advised the Company in writing of a different address as to which notices shall be sent under this Agreement, and (b) if to the Company, at 3414 Peachtree Road, N.E., Suite 1400, Atlanta, Georgia 31326, Attn: Steve J. Davis, Telecopy No.: (404) 814-5795, with a copy to King & Spalding, 191 Peachtree Street, Atlanta, Georgia 30303-1763, Attention: Mr. Robert W. Miller, Telecopy No: (404) 572-5144, or to such other representative or at such other address of a Party as such Party hereto may furnish to the other Parties in writing. If notice is given pursuant to this Section 9 of any assignment to a permitted successor or assign of a Party hereto, the notice shall be given as set forth above to such successor or assign of such Party. 10. Miscellaneous. The Company shall not after the date of ============= this Agreement enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to Holders of Registrable Securities in this Agreement; provided, however, that the Company shall be permitted to enter into registration rights agreements with respect to Common Stock issued in connection with acquisitions consummated after the date of this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties to this Agreement, whether so expressed or not, and, in particular, shall inure to the benefit of and be enforceable by any Holder or Holders of Registrable Securities. This Agreement and the Merger Agreement embody the entire agreement and understanding between the Company and the other parties to this Agreement and supersede all prior agreements and understandings relating to the subject matter of this Agreement. This Agreement shall be construed and enforced in accordance with and governed by the law of the State of Delaware. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective duly authorized officers as of the date first above written. CHARTER MEDICAL CORPORATION =========================== By: /s/ Michael Catalano ------------------------------------ Name: Michael Catalano Title: Vice President Planning and Development STOCKHOLDERS ============ /s/ Gregory T. Torres --------------------------------- Gregory T. Torres /s/ Gerald M. Bereika --------------------------------- Gerald M. Bereika /s/ Peter P. Polloni --------------------------------- Peter P. Polloni /s/ Peter W. Mair --------------------------------- Peter W. Mair /s/ Elizabeth J. Hopper --------------------------------- Elizabeth J. Hopper /s/ James Goodwin --------------------------------- James Goodwin /s/ Charles G. Phillips --------------------------------- Charles G. Phillips /s/ H. Conrad Meyer --------------------------------- H. Conrad Meyer /s/ Richard A. Derbes --------------------------------- Richard A. Derbes /s/ Emil W, Henry, Jr. --------------------------------- Emil W. Henry, Jr. /s/ Robert W. Kitts --------------------------------- Robert W. Kitts /s/ Jeffrey H. Tepper --------------------------------- Jeffrey H. Tepper /s/ Robert A. Engel --------------------------------- Robert A. Engel /s/ Andrew A. Gilman --------------------------------- Andrew Gilman /s/ Maria A. Gentile --------------------------------- Marie A. Gentile GLEACHER 7 INVESTORS L.P. ========================= By: /s/ Emil W. Henry, Jr. ----------------------------------- Name: Emil W. Henry, Jr. Title: Managing Director OLSTEN HOLDING CO. ================= By: /s/ Laurin L. Laderoute, Jr. ----------------------------------- Name: Laurin L. Laderoute, Jr. Title: Vice President /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher, as Custodian for Jay S. Gleacher /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher, as Custodian for Patricia G. Gleacher /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher, as Custodian for William R. Gleacher /s/ James E. Gleacher --------------------------------- James E. Gleacher /s/ John G. Gleacher --------------------------------- John G. Gleacher /s/ Sarah E. Gleacher --------------------------------- Sarah E. Gleacher /s/ Thomas P. Riley --------------------------------- Thomas P. Riley /s/ Dianne Hensley Ramponi --------------------------------- Dianne Hensley Ramponi, Trustee /s/ Thomas P. Riley --------------------------------- Thomas P. Riley, Trustee /s/ Christina Hensley Blair --------------------------------- Christina Hensley Blair /s/ Christina Hensley Blair --------------------------------- Christina Hensley Blair, Trustee /s/ Thomas P. Riley --------------------------------- Thomas P. Riley, Trustee /s/ Martha Faye Koysh --------------------------------- Martha Faye Koysh /s/ Lana Hensley Hoffman --------------------------------- Lana Hensley Hoffman /s/ Ruth Ann Roberts --------------------------------- Ruth Ann Roberts /s/ E. Byron Hensley, Jr. --------------------------------- E. Byron Hensley, Jr. /s/ Susan Mackenzie --------------------------------- Susan MacKenzie, Trustee /s/ Mark Morin --------------------------------- Mark Morin, Trustee HARRIS & HARRIS GROUP INC. ========================= By: /s/ Robert B. Schulz ----------------------------------- Name: Robert B. Schulz Title: President and CEO EX-3 4 IMDEMNIFICATION AGREEMENT EXHIBIT 3 --------- INDEMNIFICATION AGREEMENT ========================= THIS INDEMNIFICATION AGREEMENT ("Agreement") is made and entered into as of the 27th day of January, 1995, among all of the stockholders of MAGELLAN HEALTH SERVICES, INC., a Delaware corporation ("Magellan") and holders of options to purchase shares of Magellan's Capital Stock, which stockholders and holders of options are listed on Exhibit A hereto (collectively, the "Stockholders"), GLEACHER & CO. and E. BYRON HENSLEY, JR., acting jointly as representatives of the Stockholders (collectively, the "Representative"), and CHARTER MEDICAL CORPORATION, a Delaware corporation ("Charter"). RECITALS: ======== 1. Charter, Magellan and Charter Acquisition Subsidiary, Inc. ("Merger Sub") have entered into an Agreement of Merger, dated as of December 19, 1994 (the "Merger Agreement"), pursuant to which Merger Sub will be merged with and into Magellan; 2. Pursuant to the terms of the Merger Agreement, and as a condition to Charter's obligations under the Merger Agreement, the Stockholders have agreed to provide certain indemnification rights to Charter; and 3. In consideration of the foregoing, and the representations, warranties, covenants and agreements set forth in this Agreement, the parties agree as follows: 1. Definitions. Capitalized terms used but not otherwise =========== defined in this Agreement shall have the meanings ascribed to such terms in the Merger Agreement. 2. Indemnification by Stockholders. =============================== (a) Subject to the other provisions of this Agreement, from and after the Closing, the Stockholders shall indemnify and hold harmless, severally and not jointly, in accordance with their proportionate interests as reflected on Exhibit A, Charter and its subsidiaries and affiliates, each of their respective officers, directors, employees, agents and representatives, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the "Indemnified Parties"), against any losses, claims, damages, liabilities or expenses whenever arising or incurred (including, without limitation, amounts paid in settlement, reasonable costs of investigation and reasonable attorneys' fees and expenses) (hereinafter "Losses") arising out of or relating to (i) any breach of any representation or warranty made by (x) Magellan in the Merger Agreement, including the Magellan Disclosure Schedule, or (y) the Stockholders in Sections 3 and 4 of the Registration Rights Agreement and Section 7(b) of this Agreement (the "Documents") and (ii) the Shareholder's Agreement, dated as of December 17, 1993, among Magellan (formerly known as National Mentor Holding Corp.), Olsten Holding Company, the Management Shareholders (as such term is defined in the Shareholder's Agreement) and the Gleacher Shareholders (as such term is defined in the Shareholder's Agreement); provided, ========= however, that, with respect to any breach of any representation or ======= warranty made by a Stockholder pursuant to Sections 3 and 4 of the Registration Rights Agreement or Section 7(b) of this Agreement, no Stockholder (other than the Stockholder who commits such breach) shall have liability for such breach. In addition to the foregoing, if Magellan asserts a claim for indemnity against The Olsten Corporation, a Delaware corporation or its successors or assigns ("Olsten"), pursuant to Section 7.1(a) of that certain Stock Purchase Agreement, dated October 1, 1993, between Mentor Acquisition Corp. (now known as National Mentor, Inc.), and Olsten for any breach of Olsten's representation and warranty set forth in Section 1.6 of such agreement (a "Tax Claim"), or would have asserted a claim except for the $1,000,000 threshold set forth in Section 7.1(a), any amount of such claim, not in excess of $1,000,000, awarded to Magellan or which would have been awarded to Magellan except for the $1,000,000 threshold (as a result of proceedings against Olsten, resolution of the claim pursuant to the procedure set forth in Section 2(c)(iii) of this Agreement or otherwise) and not paid by Olsten shall be paid to Magellan by the Stockholders, severally and not jointly, in accordance with their proportionate interests as reflected on Exhibit A. (b) No Indemnified Party shall be entitled to make any claim for indemnification pursuant to this Agreement after the Claims Period (as defined below). (c) Indemnification Procedure. (i) Promptly after receipt by an Indemnified Party of notice of the commencement of any action or proceeding involving a claim to which indemnification is being sought, such Indemnified Party will, if a claim is to be made against the Stockholders, give written notice to the Representative of the commencement of such action or proceeding; provided, however, that failure so to notify the ======== ======= Representative shall not relieve the Stockholders from any liability which the Stockholders may have with respect to such claim, except to the extent that the Stockholders are actually materially prejudiced by such failure to give notice. (ii) In case any such action is brought against an Indemnified Party, unless in such Indemnified Party's reasonable judgment (i) a conflict of interest between the Indemnified Party and the Stockholders may exist in respect of such claim, or (ii) the Indemnified Party has available to it reasonable defenses which are different from or additional to those available to the Stockholders, the Representative shall be entitled to assume and control the defense of such action to the extent that it may wish, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Representative to such Indemnified Party of its election so to assume and control the defense of such action, the Stockholders shall not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by the latter in connection with the defense of such action other than reasonable costs of investigation. Notwithstanding the foregoing, in any such action, any Indemnified Party shall have the right to retain its own counsel, but the fees and disbursements of such counsel shall be at the expense of such Indemnified Party unless (i) the Representative shall have failed to retain counsel for the Indemnified Party, or (ii) the Representative and such Indemnified Party shall have mutually agreed to the retention of such counsel. It is understood that the Stockholders shall not, in connection with any action or related actions in the same jurisdiction, be liable for the fees and disbursements of more than one separate firm qualified in such jurisdiction to act as counsel for all Indemnified Parties, unless in any such Indemnified Party's reasonable judgment (i) a conflict of interest between such Indemnified Party and any other Indemnified Party may exist in respect of such claim or (ii) such Indemnified Party has available to it reasonable defenses which are different from or additional to those available to other Indemnified Parties. The Stockholders shall not be liable for any settlement of any proceeding effected without the written consent of the Representative but if settled with such consent or if there be a final judgment for the plaintiff, the Stockholders agree to indemnify the Indemnified Party, severally and not jointly, in accordance with their proportionate interests as reflected on Exhibit A, from and against any loss or liability by reason of such settlement or judgment. Other than with respect to claims relating to Taxes, the Stockholders shall not, without the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Within five business days of the final determination of any such settlement or judgment, each Stockholder, severally, but not jointly, in accordance with its proportionate interest as set forth on Exhibit A, shall deliver to the Indemnified Party an amount of cash in immediately available funds, or shares of Charter Common Stock issued to such Stockholder in the Merger (including, without limitation, the Escrowed Shares) in an amount or having a value, in the case of shares of Charter Common Stock, sufficient to satisfy its pro rata share of such claim. (iii) In the event that an Indemnified Party shall claim a right to payment pursuant to this Agreement with respect to which there has been no action or proceeding involving such claim pursuant to Section 2(c)(i) above, such Indemnified Party shall send written notice of such claim to the Representative. Such notice shall specify the basis for such claim. As promptly as possible after the Indemnified Party has given such notice, such Indemnified Party and the Representative shall establish the merits and amount of such claim (by mutual agreement, litigation, arbitration or otherwise) and, within five business days of the final determination of the merits and amount of such claim, each Stockholder, severally, but not jointly, in accordance with its proportionate interest as set forth on Exhibit A, shall deliver to the Indemnified Party an amount of cash in immediately available funds, or shares of Charter Common Stock issued to such Stockholder in the Merger (including, without limitation, the Escrowed Shares) in an amount or having a value, in the case of shares of Charter Common Stock, sufficient to satisfy its pro rata share of such claim. For purposes of Paragraphs 2(c)(ii) and 2(c)(iii), shares of Charter Common Stock issued in the Merger that are delivered in satisfaction of a Stockholder's pro rata portion of a claim made hereunder shall be valued at $23.00 per share. 3. Liability Limits. ================ (a) The Stockholders shall be liable for Losses solely to the extent that any such Losses exceed, in the aggregate, $500,000. (b) Solely for purposes of this Agreement, a Loss or series of related Losses shall be deemed to have a Magellan Material Adverse Effect if such Loss or series of related Losses exceed $25,000. (c) Notwithstanding the preceding, the Stockholders' liability for Losses shall not exceed the Aggregate Magellan Consideration. 4. Claim Periods. Except as provided in this Paragraph 4, no ============= claim for indemnification under this Agreement may be asserted by an Indemnified Party after the end of the claims period (the "Claims Period") which shall commence on the date of this Agreement and end on the first to occur of the following: (i) the first anniversary of the date of this Agreement and (ii) the date of the first audit of financial statements containing combined operations of the Company and Magellan. In addition, no claim for indemnification may be asserted by an Indemnified Party for any Loss arising from or relating to any breach by Magellan of the representations and warranties set forth in Section 4.17(d) of the Merger Agreement (relating to the federal employment tax treatment of mentors) to the extent such Loss is attributable to Taxes assessed with respect to any payment to a mentor that is made after the Closing Date. 5. Escrow of Shares. The Stockholders hereby agree that a ================ number of shares of Charter Common Stock equal to ten percent (10%) of the total number of shares delivered to each of them (the "Escrow Shares") shall be delivered by the Exchange Agent to First Union National Bank, as escrow agent (the "Escrow Agent"), pursuant to the terms of an Escrow Agreement (the "Escrow Agreement") in the form attached as Exhibit B. The Escrow Shares shall secure the obligations of the Stockholders to Charter pursuant to Paragraph 2 of this Agreement in accordance with the terms of the Escrow Agreement. Each Stockholder shall be entitled to direct the Escrow Agent to deliver all or any portion of the Escrow Shares owned by such Stockholder to any Indemnified Party as provided in Paragraphs 2(c)(ii) and 2(c)(iii) hereof. 6. Jurisdiction and Forum. ====================== (a) By the execution and delivery of this Agreement, each of the Stockholders (i) irrevocably designates and appoints The Corporation Trust Company ("CTCD") at The Corporation Trust Center, ==== 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware 19801 as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Agreement that may be instituted in any state or federal court in the State of Delaware and (ii) submits to the personal jurisdiction of any such court in any such suit or proceeding, and agrees that service of process upon CTCD shall be deemed in every respect effective service of process upon each Stockholder in any such suit or proceeding. Each Stockholder further agrees to take any and all action reasonably requested by an Indemnified Party, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of CTCD in full force and effect so long as this Agreement shall be in effect. The foregoing shall not limit the rights of any party to serve process in any other manner permitted by law. (b) To the extent that any Stockholder has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each Stockholder hereby irrevocably waives such immunity in respect of its obligations with respect to this Agreement. (c) The parties agree that an appropriate forum and venue for any disputes between any of the parties arising out of this Agreement shall be any state or federal court in the State of Delaware. The foregoing shall not limit the rights of any party to obtain execution of judgment in any other jurisdiction. The parties further agree, to the extent permitted by law, that a final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and amount of such judgment. 7. Representations and Warranties of the Representative and the ============================================================ Stockholders. ============ (a) The Representative hereby represents and warrants to each other party hereto that: (i) this Agreement has been duly authorized, executed and delivered by it and constitutes the legal, valid and binding agreement of it, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other laws affecting creditors' rights and remedies generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and (ii) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not violate or conflict with, constitute a breach of or default under, result in the loss of any material benefit under, or permit the acceleration of or entitle any party to accelerate any obligation under or pursuant to any material mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment or decree to which it is a party or by which it or any of its assets are bound. (b) Each Stockholder hereby represents and warrants to each other party hereto that: (i) this Agreement has been duly authorized, executed and delivered by such Stockholder and constitutes the legal, valid and binding agreement of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other laws affecting creditors' rights and remedies generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and (ii) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not violate or conflict with, constitute a breach of or default under, result in the loss of any material benefit under, or permit the acceleration of or entitle any party to accelerate any obligation under or pursuant to any material mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment or decree to which such Stockholder is a party or by which it or any of its assets are bound. 8. Representative. Each of the Stockholders hereby constitutes ============== and appoints the Representative to act as the Representative under this Agreement. Each of the Stockholders agrees to indemnify and hold harmless the Representative by reason of its acting or failing to act in connection with any of the transactions contemplated hereby or by the Merger Agreement and against any loss, liability or expense the Representative may sustain or incur as a result of serving as Representative hereunder and, except such losses, liabilities and expenses which are determined in a final judgment of a court to have resulted primarily from the gross negligence or willful misconduct of the Representative. Each of the Stockholders agrees that the Representative shall have no liability whatsoever to any Indemnified Party, any Stockholder or such Indemnified Party's or Stockholder's beneficiaries, heirs or personal representatives for any matters arising out of this Agreement, the Merger Agreement, the Registration Rights Agreement or the Escrow Agreement except, in the case of the Stockholders, for liability for such matters which are determined in a final judgment of a court to have resulted primarily from the gross negligence or willful misconduct of the Representative. Each of the Stockholders hereby agrees to reimburse the Representative upon the request of the Representative for all reasonable expenses, disbursements and advances incurred or made by the Representative in the performance of its duties under this Agreement. The Representative shall have the authority to act on behalf of and to bind the Stockholders, in accordance with their proportionate interests as set forth on Exhibit A, for purposes of the provisions of this Agreement to the extent set forth in this Agreement. In no event shall the Representative be liable to any Indemnified Party for any Stockholder's obligations under this Agreement or the collection of any claim against any Stockholder. 9. Notices. All notices, communications and deliveries ======= required or permitted by this Agreement shall be made in writing signed by the Party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made, and shall be deemed given or made (i) on the date delivered if delivered by telecopy or in person, (ii) on the third business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid), or (iii) on the day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows: To Charter: Charter Medical Corporation 3414 Peachtree Road NE Suite 1400 Atlanta, Georgia 31326 Attn: Steve J. Davis Telecopy No.: (404) 814-5795 with a copy to: King & Spalding 191 Peachtree Street Atlanta, Georgia 30309 Attn: Mr. Robert W. Miller Telecopy No.: (404) 572-5144 To Stockholders and Representative: Gleacher & Co. 667 Madison Avenue 4th Floor New York, New York 10021 Attn: Mr. Emil Henry Telecopy No.: (212) 752-2711 and Mr. E. Byron Hensley, Jr. 1 Mason Road Brookline, MA 02146 with a copy to: Weil Gotshal & Manges 767 Fifth Avenue New York, New York 10153 Attn: Mr. David E. Zeltner Telecopy No.: (212) 310-8007 and Sullivan & Worcester One Post Office Square Boston, MA 02109 Attn: Mr. Richard E. Teller Telecopy No.: (617) 338-2880 or to such other representative or at such other address of a Party as such Party hereto may furnish to the other Parties in writing. If notice is given pursuant to this Paragraph 9 of any assignment to a permitted successor or assign of a Party hereto, the notice shall be given as set forth above to such successor or assign of such Party. 10. Time of the Essence; Computation of Time. Time is of the ======================================== essence for each and every provision of this Agreement. Whenever the last day for the exercise of any privilege or the discharge of any duty under this Agreement shall fall upon a Saturday, Sunday or any date on which banks in Atlanta, Georgia, Boston, Massachusetts or New York, New York are closed, the Party having such privilege or duty may exercise such privilege or discharge such duty on the next succeeding day which is a regular business day. 11. Successors in Interest. This Agreement shall be binding ====================== upon and shall inure to the benefit of the Parties and their permitted successors and assigns, and any reference to a Party shall also be a reference to a permitted successor or assign. 12. Number; Gender. Whenever the context so requires, the ============== singular number shall include the plural and the plural shall include the singular, and the gender of any pronoun shall include the other genders. 13. Captions. The titles and captions contained in this ======== Agreement are inserted in this Agreement only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision of this Agreement. Unless otherwise specified to the contrary, all references to Sections are references to Sections of this Agreement. 14. Amendments. To the extent permitted by law, this Agreement ========== may be amended by a subsequent writing signed by all of the Parties (other than the Stockholders) and Stockholders having an aggregate proportionate interest, as reflected on Exhibit A, at least equal to 91%. 15. Controlling Law; Integration; Waiver. This Agreement shall ==================================== be governed by and construed and enforced in accordance with the laws of the State of Delaware, including but not limited to the Delaware Law. This Agreement supersedes all negotiations, agreements and understandings among the Parties with respect to the subject matter of this Agreement and constitutes the entire agreement among the Parties to this Agreement. No prior drafts of this Agreement shall constitute evidence of the purposes or intentions of the parties with respect to any provisions of this Agreement. The failure of any Party at any time or times to require performance of any provisions of this Agreement shall in no manner affect the right to enforce the same. No waiver by any Party of any conditions, or of the breach of any term, provision, warranty, representation, agreement or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed or construed as a further or continuing waiver of any such condition or breach of any other term, provision, warranty, representation, agreement or covenant contained in this Agreement. 16. No Limitation. The Parties agree that the rights and ============= remedies of any Party under this Agreement shall not operate to limit any other rights and remedies otherwise available to any Party under the Merger Agreement. 17. Severability. Any provision of this Agreement which is ============ prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by law, the Parties waive any provision of law which renders any such provision prohibited or unenforceable in any respect. 18. Pooling of Interest. If any provision of this Agreement or =================== the application of any such provision to any person or circumstance shall preclude the use of "pooling of interest" accounting treatment in connection with the Merger, then such provision shall be of no force and effect to the extent, and solely to the extent, necessary to preserve such accounting treatment for the Merger, and in that event, the remainder of this Agreement shall not be affected, and in lieu of such provision there shall be added as part of this Agreement a provision as similar in terms as may be possible for the Merger to be treated as a "pooling of interests" for accounting purposes. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. CHARTER MEDICAL CORPORATION =========================== By: /s/ Michael Catalano ----------------------------------- Name: Michael Catalano Title: Vice President Planning and Development GLEACHER & CO., as Representative By: /s/ Emil W. Henry, Jr. ----------------------------------- Name: Emil W. Henry, Jr. Title: Managing Director /s/ E. Byron Hensley, Jr. --------------------------------------- E. Byron Hensley, Jr. as Representative STOCKHOLDERS ============ /s/ Gregory T. Torres --------------------------------- Gregory T. Torres /s/ Gerald M. Bereika --------------------------------- Gerald M. Bereika /s/ Peter P. Polloni --------------------------------- Peter P. Polloni /s/ Peter W. Mair --------------------------------- Peter W. Mair /s/ Elizabeth J. Hopper --------------------------------- Elizabeth J. Hopper /s/ James Goodwin --------------------------------- James Goodwin /s/ Charles G. Phillips --------------------------------- Charles G. Phillips /s/ H. Conrad Meyer --------------------------------- H. Conrad Meyer /s/ Richard A. Derbes --------------------------------- Richard A. Derbes /s/ Emil W, Henry, Jr. --------------------------------- Emil W. Henry, Jr. /s/ Robert W. Kitts --------------------------------- Robert W. Kitts /s/ Jeffrey H. Tepper --------------------------------- Jeffrey H. Tepper /s/ Robert A. Engel --------------------------------- Robert A. Engel /s/ Andrew A. Gilman --------------------------------- Andrew Gilman /s/ Maria A. Gentile --------------------------------- Marie A. Gentile GLEACHER 7 INVESTORS L.P. ======================== By: /s/ Emil W. Henry, Jr. ----------------------------------- Name: Emil W. Henry, Jr. Title: Managing Director OLSTEN HOLDING CO. ================= By: /s/ Laurin L. Laderoute, Jr. ----------------------------------- Name: Laurin L. Laderoute, Jr. Title: Vice President /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher, as Custodian for Jay S. Gleacher /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher, as Custodian for Patricia G. Gleacher /s/ Eric J. Gleacher --------------------------------- Eric J. Gleacher, as Custodian for William R. Gleacher /s/ James E. Gleacher --------------------------------- James E. Gleacher /s/ John G. Gleacher --------------------------------- John G. Gleacher /s/ Sarah E. Gleacher --------------------------------- Sarah E. Gleacher /s/ Thomas P. Riley --------------------------------- Thomas P. Riley /s/ Dianne Hensley Ramponi --------------------------------- Dianne Hensley Ramponi, Trustee /s/ Thomas P. Riley --------------------------------- Thomas P. Riley, Trustee /s/ Christina Hensley Blair --------------------------------- Christina Hensley Blair /s/ Christina Hensley Blair --------------------------------- Christina Hensley Blair, Trustee /s/ Thomas P. Riley --------------------------------- Thomas P. Riley, Trustee /s/ Martha Faye Koysh --------------------------------- Martha Faye Koysh /s/ Lana Hensley Hoffman --------------------------------- Lana Hensley Hoffman /s/ Ruth Ann Roberts --------------------------------- Ruth Ann Roberts /s/ E. Byron Hensley, Jr. --------------------------------- E. Byron Hensley, Jr. /s/ Susan Mackenzie --------------------------------- Susan MacKenzie, Trustee /s/ Mark Morin --------------------------------- Mark Morin, Trustee HARRIS & HARRIS GROUP INC. ========================= By: /s/ Robert B. Schulz ----------------------------------- Name: Robert B. Schulz Title: Robert B. Schulz EX-4 5 TRANSMITTAL LETTER RE: IMDEMNIFICATION AGREEMENT EXHIBIT 4 --------- January 27, 1995 Gleacher & Co. 667 Madison Avenue 4th Floor New York, New York 10021 Mr. E. Byron Hensley, Jr. 1 Mason Road Brookline, Massachusetts 02146 Re: Indemnification Agreement, dated the date hereof, among Charter Medical Corporation, Gleacher & Co. and E. Byron Hensley, Jr., as representatives ------------------------------------------------- Dear Sirs: As a material inducement to your entering into the above- referenced Indemnification Agreement, Charter Medical Corporation, intending to be legally bound, hereby agrees, for the avoidance of doubt and at your request, as follows: (A) notwithstanding the reference to Aggregate Magellan Consideration in Section 3(c) of the Indemnification Agreement, the Stockholder's liability for Losses shall not exceed the sum of (i) $3,217,674 plus (ii) the product of (a) 1,259,090 and (b) the fair market value of a share of Charter Common Stock as of the closing date and (B) shares of Charter Common Stock surrendered in satisfaction of an indemnity claim shall be valued (i) at $33.00 per share to the extent that the number of shares surrendered does not exceed 139,896 and (ii) at the fair market value of a share of Charter Common Stock as of the closing date to the extent the number of shares surrendered exceeds 139,898. Please indicate your receipt of this letter by signing a copy of this letter in the place indicated below. Sincerely, Charter Medical Corporation By: /s/ Michael Catalano ------------------------- Michael Catalano Vice President Planning & Development Gleacher & Co. Mr. E. Byron Hensley, Jr. January 27, 1995 Page Acknowledged: Gleacher & Co., as Representative By: /s/ Emil W. Henry, Jr. ------------------------- Name: Emil W. Henry, Jr. Title: Managing Director /s/ E. Byron Hensley ---------------------------- E. Byron Hensley, as Representative NYFS12...:\99\48499\0004\2468\LTR2065K.340 EX-5 6 ESCROW AGREEMENT EXHIBIT 5 --------- ESCROW AGREEMENT ================ THIS ESCROW AGREEMENT, ("Agreement") is made and entered into as of the 27th day of January, 1995, among CHARTER MEDICAL CORPORATION, a Delaware corporation ("Charter"), GLEACHER & CO. INC. and E. BYRON HENSLEY, JR., acting jointly as representatives (collectively, the "Representative") of all of the stockholders of MAGELLAN HEALTH SERVICES, INC., a Delaware corporation ("Magellan"), (collectively, the "Stockholders"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association, as escrow agent (the "Escrow Agent"). RECITALS: ======== A. Charter, Magellan and Charter Acquisition Subsidiary, Inc. ("Merger Sub") have entered into an Agreement of Merger, dated as of December 19, 1994 (the "Merger Agreement"), pursuant to which Merger Sub will be merged with and into Magellan; B. Pursuant to the terms of the Merger Agreement, and as a condition to Charter's obligations under the Merger Agreement, the Stockholders have agreed to provide certain indemnification rights to Charter; and C. In order to provide such indemnification rights, Charter, the Stockholders and the Representatives have entered into an Indemnification Agreement dated the date hereof the "Indemnification Agreement"); and D. Pursuant to Section 5 of the Indemnification Agreement the parties have agreed to enter into this Agreement; and E. Escrow Agent is willing to act as escrow agent under this Agreement; and F. In consideration of the foregoing, and the representations, warranties, covenants and agreements set forth in this Agreement, the parties agree as follows: 1. Definitions. Charter, the Representative, the =========== Stockholders and the Escrow Agent are each referred to herein as a "Party" and collectively as the "Parties." Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Indemnification Agreement and the Merger Agreement. 2. Establishment of Escrow Fund. Simultaneously with the ============================ execution of this Agreement, the Exchange Agent has delivered to Escrow Agent 139,898 shares of Charter Common Stock (the "Escrow Shares"). Exhibit A attached to this Agreement lists the name of each Stockholder depositing shares of Charter Common Stock with the Escrow Agent and the number of shares deposited by each. The Exchange Agent will provide stock powers duly executed in blank by the respective Stockholders to the Escrow Agent. The Escrow Shares shall be held by Escrow Agent in trust subject to the terms and conditions hereinafter set forth. If the Escrow Agent should receive any cash or other property with respect to the Escrow Shares, the Escrow Agent shall invest and reinvest the such cash and the income therefrom in any money market fund substantially all of which is invested in direct obligations of the United States of America or obligations the principal of and the interest on which are unconditionally guaranteed by the United States of America, including any such money market fund managed by Escrow Agent or any of its affiliates and shall hold such other property in trust subject to the terms and conditions hereinafter set forth. 3. Claims Against the Escrow Fund. The Escrow Shares ============================== shall secure the obligations of the Stockholders to the Indemnified Parties pursuant to Paragraph 2 of the Indemnification Agreement and in accordance with the terms of this Agreement. In the event that a claim for indemnity results from the final determination of a settlement or judgment, as contemplated by paragraph 2(c)(ii) of the Indemnification Agreement, Charter and the Representative shall send the Escrow Agent notice of such fact in a writing signed by both Charter and the Representative. Such notice shall state the name of the Indemnified Party, the amount of the indemnity to which the Indemnified Party is entitled, the names of the Stockholders from whom indemnity is sought and the number of shares of Charter Common Stock that each such Stockholder would be required to transfer to the Indemnified Party to satisfy its proportionate share of such claim for indemnity. Pursuant to the Indemnification Agreement, each such Stockholder shall have five business days from the date of such notice to deliver to the Indemnified Party an amount of cash in immediately available funds, or shares of Charter Common Stock (including, without limitation, the Escrow Shares) in an amount or having a value, in the case of shares of Charter Common Stock, sufficient to satisfy its pro rata share of such claim. If after such fifth business day Charter advises the Escrow Agent that any such Stockholder has not satisfied its pro rata share of such indemnity claim, the Escrow Agent shall promptly deliver to Charter such number of Escrow Shares sufficient to satisfy such Stockholder's pro rata share of such claim for indemnity, together with the stock powers executed by such Stockholder. In the event that Charter shall claim a right to payment pursuant to Section 2(c)(iii) of the Indemnification Agreement, Charter shall send written notice of such claim to the Escrow Agent and the Representative. As promptly as possible after Charter has given such notice, Charter and the Representative shall establish the merit and accuracy of such claim in accordance with the terms of the Indemnification Agreement and, upon final determination of the merits of such claim, shall notify the Escrow Agent and the Stockholders from whom indemnity is sought (either by means of a certified copy of the judgment, a certified copy of the arbitration decision, or a written instrument executed by Charter and the Representative) of the terms of such determination (such notice is hereinafter referred to as a "Claims Notice"). After such Claims Notice has been delivered to the Escrow Agent, pursuant to the Indemnification Agreement, each such Stockholder shall, within five business days after receipt of a Claims Notice, deliver to the Indemnified Party an amount of cash in immediately available funds, or shares of Charter Common Stock having a value sufficient to satisfy its pro rata share of such claim. If after such fifth business day, Charter advises the Escrow Agent that any such Stockholder has not satisfied its pro rata share of such indemnity claim, the Escrow Agent shall promptly deliver to Charter such number of the Escrow Shares sufficient to satisfy such Stockholder's pro rata share of such claim for indemnity, together with the stock powers executed by such Stockholder. For purposes of this paragraph, each Escrow Share shall be valued at $23.00. 4. Termination of Escrow Fund. The escrow provided for ========================== hereunder shall terminate completely upon the later of the following dates: the earlier of (i) January 27, 1996 and (ii) the date of the first audit of financial statements containing combined operations of Charter and Magellan. 5. Payment Upon Termination. Upon termination of the ======================== escrow, the Escrow Agent shall pay over to the Representative the balance, if any, of the Escrow Shares and any cash or other property then held by the Escrow Agent, for disbursement by the Representative to the Stockholders in accordance with their respective interests as set forth on Exhibit A to this Indemnification Agreement. 6. Escrow Agent. ============ a. Duties. Escrow Agent shall have no liability or ====== obligation with respect to the Escrow Fund except for Escrow Agent's willful misconduct or gross negligence. Escrow Agent's sole responsibility shall be for the safekeeping, investment, and disbursement of the Escrow Fund in accordance with the terms of this Escrow Agreement. Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein. Escrow Agent may rely upon any instrument, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein, which Escrow Agent shall in good faith believe to be genuine, to have been signed or presented by the person or parties purporting to sign the same and to conform to the provisions of this Escrow Agreement. In no event shall Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages. Escrow Agent shall not be obligated to take any legal action or commence any proceeding in connection with the Escrow Fund, any account in which the Escrow Fund is deposited, this Escrow Agreement or the Indemnification Agreement, or to appear in, prosecute or defend any such legal action or proceedings. Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, and shall incur no liability and shall be fully protected from any liability whatsoever in acting in accordance with the opinion or instruction of such counsel. Charter and the Stockholders, jointly and severally, shall promptly pay, upon demand, the reasonable fees and expenses of any such counsel. b. Indemnification. From and at all times after the date =============== of this Escrow Agreement, Charter and the Stockholders, jointly and severally, shall, to the fullest extent permitted by law and to the extent provided herein, indemnify and hold harmless Escrow Agent and each director, officer, employee, attorney, agent and affiliate of Escrow Agent (collectively, the "Indemnified Parties") against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys' fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, whether direct, indirect or consequential, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Escrow Agreement or any transactions contemplated herein, whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Indemnified Party shall have ======== ======= the right to be indemnified hereunder for any liability finally determined by a court of competent jurisdiction, subject to no further appeal, to have resulted solely from the gross negligence or willful misconduct of such Indemnified Party. If any such action or claim shall be brought or asserted against any Indemnified Party, such Indemnified Party shall promptly notify Charter and the Stockholders in writing, and Charter and the Stockholders shall assume the defense thereof, including the employment of counsel and the payment of all expenses. Such Indemnified Party shall, in its sole discretion, have the right to employ separate counsel in any such action and to participate in the defense thereof, and the fees and expenses of such counsel shall be paid by such Indemnified Party unless (a) Charter and the Stockholders agree to pay such fees and expenses, or (b) Charter or the Stockholders shall fail to assume the defense of such action or proceeding or shall fail, in the reasonable discretion of such Indemnified Party, to employ counsel satisfactory to the Indemnified Party in any such action or proceeding, or (c) the named parties to any such action or proceeding (including any impleaded parties) include both Indemnified Party and Charter or the Stockholder, and Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to Charter or the Stockholders. All such fees and expenses payable by Charter or the Stockholder pursuant to the foregoing sentence shall be paid from time to time as incurred, both in advance of and after the final disposition of such action or claim. All of the foregoing losses, damages, costs and expenses of the Indemnified Parties shall be payable by Charter and the Stockholders, jointly and severally, upon demand by such Indemnified Party. The obligations of Charter and the Stockholders under this Paragraph b. shall survive any termination of this Escrow Agreement and the resignation or removal of Escrow Agent. The parties agree that neither the payment by Charter or the Stockholders of any claim by Escrow Agent for indemnification hereunder nor the disbursement of any amounts to Escrow Agent from the Escrow Fund in respect of a claim by Escrow Agent for indemnification shall impair, limit, modify, or affect, as between Charter and the Stockholders, the respective rights and obligations of the Stockholders, on the one hand, and Charter, on the other hand, under the Indemnification Agreement. c. Disputes. If, at any time, there shall exist any ======== dispute between Charter, the Stockholders or the Representative with respect to the holding or disposition of any portion of the Escrow Fund or any other obligations of Escrow Agent hereunder, or if at any time Escrow Agent is unable to determine, to Escrow Agent's sole satisfaction, the proper disposition of any portion of the Escrow Fund or Escrow Agent's proper actions with respect to its obligations hereunder, or if the Representative has not within 30 days of the furnishing by Escrow Agent of a notice of resignation pursuant to Paragraph d hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole discretion, take either or both or the following actions: (i) suspend the performance of any of its obligations under this Escrow Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have been appointed (as the case may be); provided, however, that ======== ======= Escrow Agent shall continue to invest the Escrow Funds in accordance with Section 2 hereof; and/or ========= (ii) petition (by means of an interpleader action or any other appropriate method) any court of competent jurisdiction in Charlotte, North Carolina, for instructions with respect to such dispute or uncertainty, and pay into or deposit with such court all funds and Escrow Shares held by it in the Escrow Fund for holding and disposition in accordance with the instructions of such court. Escrow Agent shall have no liability to Charter, the Stockholders or the Representative or any other person with respect to any such suspension of performance or disbursement into court, specifically including any liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of funds held in the Escrow Fund or any delay in or with respect to any other action required or requested of Escrow Agent. d. Resignation of Escrow Agent. Escrow Agent may resign =========================== from the performance of its duties hereunder at any time by giving ten (10) days' prior written notice to Charter and the Representative or may be removed, with or without cause, by Charter and the Representative, acting jointly, at any time by the giving of ten (10) days' prior written notice to Escrow Agent. Such resignation or removal shall take effect upon the appointment of a successor Escrow Agent as provided herein. Upon any such notice of resignation or removal, Charter and the Representative jointly shall appoint a successor Escrow Agent hereunder, which shall be a commercial bank, trust company or other financial institution with a combined capital and surplus in excess of $100,000,000. Upon the acceptance in writing of any appointment as Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Escrow Agent, and the retiring Escrow Agent shall be discharged from its duties and obligations under this Escrow Agreement, but shall not be discharged from any liability for actions taken as Escrow Agent hereunder prior to such succession. After any retiring Escrow Agent's resignation or removal, the provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Escrow Agreement. e. Receipt. By its execution and delivery of this ======= Agreement, Escrow Agent acknowledges receipt of the Escrow Shares. f. Fees. Charter shall compensate Escrow Agent for its ==== services hereunder in accordance with Schedule I attached hereto and, in addition, shall reimburse Escrow Agent for all of its reasonable out-of-pocket expenses, including attorneys' fees, travel expenses, telephone and facsimile transmission costs, postage (including express mail and overnight delivery charges), copying charges and the like. All of the compensation and reimbursement obligations set forth in this paragraph f. shall be payable upon demand by Escrow Agent. The obligations of Charter under this paragraph f. shall survive any termination of this Escrow Agreement and the resignation or removal of Escrow Agent. If Charter has not paid the amount of any compensation or reimbursement for out-of-pocket expenses demanded by Escrow Agent within a reasonable time following such demand, Escrow Agent is authorized to, and may, disburse to itself from any cash contained in the Escrow Fund, from time to time, the amount of any compensation and reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which Escrow Agent or any Indemnified Party is entitled to seek indemnification pursuant to paragraph b hereof). Escrow Agent shall notify Charter and the Representative of any disbursement from the Escrow Fund to itself or any Indemnified Party in respect of any compensation or reimbursement hereunder. Charter, the Stockholders and the Representative hereby grant to Escrow Agent and the Indemnified Parties a security interest in and lien upon the Escrow Fund and all funds or other property therein to secure all obligations hereunder to Escrow Agent and the Indemnified Parties, and Escrow Agent and Indemnified Parties shall have the right to offset the amount of any compensation or reimbursement due any of them hereunder (including any claim for indemnification pursuant to paragraph b hereof) against the cash on deposit in the Escrow Fund, if Charter shall not have paid the amount of such compensation or reimbursement within a reasonable time following Escrow Agent's demand therefor. If for any reason funds in the Escrow Fund are insufficient to cover such compensation and reimbursement, Charter shall promptly pay such amounts to Escrow Agent or any Indemnified Party upon receipt of an itemized invoice. 7. Notices. All notices, communications and deliveries ======= required or permitted by this Agreement shall be made in writing signed by the Party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made, and shall be deemed given or made (i) on the date delivered if delivered by telecopy or in person, (ii) on the third business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid), or (iii) on the day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows: To Charter: Charter Medical Corporation 3414 Peachtree Road NE Suite 1400 Atlanta, Georgia 31326 Attn: Steve J. Davis, General Counsel Telecopy No.: (404) 814-5795 with a copy to: King & Spalding 191 Peachtree Street Atlanta, Georgia 30309 Attn: Mr. Robert W. Miller Telecopy No.: (404) 572-5144 To Stockholders and Representative: Gleacher & Co. 667 Madison Avenue 4th Floor New York, New York 10021 Attn: Mr. Emil Henry Telecopy No.: (212) 752-2711 Mr. E. Byron Hensley, Jr. 1 Mason Road Brookline, MA 02146 with a copy to: Weil Gotshal & Manges 767 Fifth Avenue New York, New York 10153 Attn: Mr. David E. Zeltner Telecopy No. (212) 310-8007 and Sullivan & Worcester One Post Office Square Boston, MA 02109 Attn: Mr. Richard E. Teller Telecopy No. (617) 338-2880 To Escrow Agent: First Union National Bank of North Carolina, as Escrow Agent Corporate Trust Department 230 South Tryon Street, 8th Floor Charlotte, North Carolina 28288-1179 Attn.: Karen Atkinson Telecopy No.: (704) 383-7316 or to such other representative or at such other address of a Party as such Party hereto may furnish to the other Parties in writing. If notice is given pursuant to this Section 7 of any assignment to a permitted successor or assign of a Party hereto, the notice shall be given as set forth above to such successor or assign of such Party. 8. Time of the Essence; Computation of Time. Time is of ======================================== the essence for each and every provision of this Agreement. Whenever the last day for the exercise of any privilege or the discharge of any duty under this Agreement shall fall upon a Saturday, Sunday or any date on which banks in Atlanta, Georgia, Boston, Massachusetts, Charlotte, North Carolina or New York, New York are closed, the Party having such privilege or duty may exercise such privilege or discharge such duty on the next succeeding day which is a regular business day. 9. Successors in Interest. This Agreement shall be ====================== binding upon and shall inure to the benefit of the Parties and their permitted successors and assigns, and any reference to a Party shall also be a reference to a permitted successor or assign. 10. Number; Gender. Whenever the context so requires, the ============== singular number shall include the plural and the plural shall include the singular, and the gender of any pronoun shall include the other genders. 11. Captions. The titles and captions contained in this ======== Agreement are inserted in this Agreement only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision of this Agreement. Unless otherwise specified to the contrary, all references to Sections are references to Sections of this Agreement. 12. Amendments. To the extent permitted by law, this ========== Agreement may be amended by a subsequent writing signed by all of the Parties. 13. Controlling Law; Integration; Waiver. This Agreement ==================================== shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina, without giving effect to the conflicts of law principles thereof. This Agreement supersedes all negotiations, agreements and understandings among the Parties with respect to the subject matter of this Agreement and constitutes the entire agreement among the Parties to this Agreement. The failure of any Party at any time or times to require performance of any provisions of this Agreement shall in no manner affect the right to enforce the same. No waiver by any Party of any conditions, or of the breach of any term, provision, warranty, representation, agreement or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed or construed as a further or continuing waiver of any such condition or breach of any other term, provision, warranty, representation, agreement or covenant contained in this Agreement, the Indemnification Agreement or the Merger Agreement. 14. No Limitation. The Parties agree that the rights and ============= remedies of any Party under this Agreement shall not operate to limit any other rights and remedies otherwise available to any Party under the Indemnification Agreement or the Merger Agreement. 15. Additional Actions and Documents. Each of the Parties ================================ agrees to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments, and to obtain such consents as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement. 16. Severability. Any provision of this Agreement which is ============ prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by law, the Parties waive any provision of law which renders any such provision prohibited or unenforceable in any respect. 17. Pooling of Interest. If any provision of this =================== Agreement or the application of any such provision to any person or circumstance shall preclude the use of "pooling of interest" accounting treatment in connection with the Merger, then such provision shall be of no force and effect to the extent, and solely to the extent, necessary to preserve such accounting treatment for the Merger, and in that event, the remainder of this Agreement shall not be affected, and in lieu of such provision there shall be added as part of this Agreement a provision as similar in terms as may be possible for the Merger to be treated as a "pooling of interests" for accounting purposes. 18. Jurisdiction and Venue. In the event that any party ====================== hereto commences a lawsuit or other proceeding relating to or arising from this Agreement, the parties hereto agree that the United States District Court of the Western District of North Carolina shall have the sole and exclusive jurisdiction over any such proceeding. If such court lacks federal subject matter jurisdiction, the parties agree that the Superior Court Division of the General Court of Justice of Mecklenburg County, North Carolina shall have sole and exclusive jurisdiction. Any of these courts shall be proper venue for any such lawsuit or judicial proceeding and the parties hereto waive any objection to such venue. The parties hereto consent to and agree to submit to the jurisdiction of any of the courts specified herein and agree to accept service or process to vest personal jurisdiction over them in any of these courts. 19. Purchase of Securities. The Escrow Agent and any ====================== stockholder, director, officer or employee of the Escrow Agent may buy, sell, and deal in any of the securities of Charter and become pecuniarily interested in any transaction in which Charter may be interested, and contract and lend money to Charter and otherwise act as fully and freely as though it were not Escrow Agent under this Agreement. Nothing herein shall preclude the Escrow Agent from acting in any other capacity for Charter or for any other entity. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first above written. GLEACHER & CO. INC. as Representative By: /s/ Emil W. Henry, Jr. ------------------------------------ Name: Emil W. Henry, Jr. Title: Managing Director /s/ E. Byron Hensley, Jr. ------------------------------ E. Byron Hensley, Jr., as Representative CHARTER MEDICAL CORPORATION By: /s/ Michael Catalano ---------------------------------- Name: Michael Catalano Title: Vice President Planning and Development FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Escrow Agent By: /s/ Karen E. Atkinson ----------------------------------- Name: Karen E. Atkinson Title: Asssistant Vice President EX-6 7 NONCOMPETE - E. BYRON HENSLEY, JR. EXHIBIT 6 --------- NONCOMPETE AND CONFIDENTIALITY AGREEMENT ======================================== THIS AGREEMENT (the "Agreement") is made and entered into as of this 27th day of January, 1995, by and between CHARTER MEDICAL CORPORATION, a Delaware corporation with its corporate headquarters in Atlanta, Georgia (the "Company"), and E. BYRON HENSLEY, JR. ("Mr. Hensley"). R E C I T A L S : --------------- 1. National Mentor, Inc. ("Mentor") is a private provider of behavioral healthcare services in the homes of trained paraprofessionals and operates an outpatient clinic located in the Boston, Massachusetts, metropolitan area (the "Business"). Mentor is a wholly-owned subsidiary of Magellan Health Services, Inc., a Delaware corporation ("Magellan"). 2. Magellan merged with Charter Acquisition Subsidiary, Inc., a wholly-owned subsidiary of the Company, on January 27, 1995, pursuant to the Agreement of Merger, dated as of December 19, 1994, among the Company, Charter Acquisition Subsidiary, Inc. and Magellan (the "Merger Agreement"). 3. Mr. Hensley is a former stockholder of Magellan and an executive officer of Mentor. 4. In connection with the Merger Agreement, the Company acquired the "Confidential Information" and "Trade Secrets" (both as defined below) of Mentor and, to protect the Company's substantial investment in the Confidential Information and Trade Secrets, and to protect the goodwill associated with the Company's customer relationships, Mr. Hensley and the Company (together, the "Parties") have agreed to abide by the terms and conditions of this Agreement. In consideration of the foregoing, and the representations, warranties, covenants and agreements set forth in this Agreement and in the Merger Agreement, the Parties hereby agree as follows: 1. Definitions. The following terms shall have the =========== following meanings when used in this Agreement: (a) "Competitor" shall mean any person or Entity engaged, ========== wholly or partly, in the Business. (b) "Competitive Position" shall mean: (i) the direct or ==================== indirect equity ownership (excluding equity ownership of a publicly held company through the ownership of less than five percent (5%) of its outstanding shares) of all or any portion of a Competitor; or (ii) any employment, consulting or independent contractor arrangement with any Competitor for the Services described in this Agreement; provided that the ============= foregoing shall not apply to any employment, consulting or independent contractor arrangement with the parent company, a division or a subsidiary of a Competitor which parent company, division or subsidiary is not a Competitor. (c) "Confidential Information" shall mean the proprietary ======================== and confidential data or information of the Company or Mentor, other than "Trade Secrets" (as defined below), which is of tangible or intangible value to the Company and is not public information or is not generally known or available to the Company's competitors but is known only to the Company and those of its employees, independent contractors, consultants, customers or agents to whom it must be confided in order to apply it to the uses intended, including, without limitation, informal information regarding the Company's customers or prospective customers (such as lists containing the names, addresses and telephone numbers and/or account information of customers and prospective customers, but not including information that is available to the public), marketing methods and business plans gained by Mr. Hensley as a result of his relationship with the Company or Mentor. (d) "Entity" shall mean any partnership, joint venture, ====== agency, governmental subdivision, association, firm, corporation or entity. (e) "Restricted Territory" shall mean the continental ==================== United States, except with respect to the operation of an outpatient clinic, the Restricted Territory shall be the Boston, Massachusetts, metropolitan area. The Parties agree to amend this definition of "Restricted Territory" to reflect any significant contraction of the areas where the Company conducts the Business. (f) "Services" shall mean Mr. Hensley's performance of ======== executive services to Mentor in his capacity as its Chairman and Chief Executive Officer. (g) "Trade Secrets" shall mean information of the Company ============= or Mentor, including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, products plans, or lists of actual or potential customers or suppliers, which: (x) derives economic value, actual or potential from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use; and (y) is the subject of efforts that are reasonable under the circumstances to maintain their secrecy; including, without limitation, formalized business, pricing, marketing, and customer or prospective customer information. (h) "Work Product" shall mean work product, property, data, ============ documentation or information of any kind, prepared, conceived, discovered, developed or created by Mr. Hensley for the Company or Mentor or any of the Company's clients or customers while Mr. Hensley is employed by Mentor. 2. Consideration. The Company shall pay to Mr. Hensley the sum ============= of $230,839.00 in consideration of his undertakings set forth herein. Such sum shall be paid to Mr. Hensley on July 17, 1995, at Charter's option, either in cash or by the issuance to him of such number of freely transferrable whole shares of Charter Common Stock, valued at the closing sale price on July 14, 1995, as reported by AMEX, together with an amount of cash equal to any fractional shares, having a value of $230,839.00. Mr. Hensley acknowledges and agrees that such payment constitutes sufficient and adequate consideration for the covenants and agreements contained in this Agreement. 3. Nondisclosure; Ownership of Proprietary Property. ================================================ (a) Mr. Hensley hereby acknowledges that by virtue of Mr. Hensley's relationship with Mentor, Mr. Hensley has been exposed to and will continue to be exposed to the Trade Secrets and Confidential Information. Mr. Hensley further acknowledges that it is in the best business interest of the Company to maintain the strict confidentiality of such Trade Secrets and Confidential Information. (b) In recognition of the need of the Company to protect its legitimate business interests, Mr. Hensley hereby covenants and agrees that (i) with regard to each item constituting a Trade Secret, at all times during his affiliation with the Company and all times thereafter during which such item continues to constitute a Trade Secret under applicable law; and (ii) with regard to any Confidential Information, for five (5) years after the date of this Agreement, he shall regard and treat each item constituting a Trade Secret or Confidential Information as strictly confidential and wholly owned by Company and will not, for any reason in any fashion, either directly or indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, reproduce, copy, appropriate or otherwise communicate any such item or information to any Entity for any person or purpose other than strictly in accordance with the express terms of this Agreement. (c) To the greatest extent possible, any Work Product shall be deemed to be "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. 101 et. seq., as amended) and owned == === exclusively by the Company. Mr. Hensley hereby unconditionally and irrevocably transfers and assigns to the Company all rights, title and interest he may currently have or in the future may have by operation of law or otherwise in or to any Work Product, including, without limitation, all patents, copyrights, trademarks, service marks and other intellectual property rights. Mr. Hensley agrees to execute and deliver to the Company any transfers, assignments, documents or other instruments which the Company may deem necessary or appropriate to vest complete title and ownership of any Work Product, and all rights therein, exclusively in the Company. (d) Mr. Hensley shall notify the Company as soon as practicable of any unauthorized disclosure or use of any Trade Secrets or Confidential Information by him or any other person of which he becomes aware. Mr. Hensley shall use reasonable efforts to assist Company in the procurement or any protection of Company's rights to or in any of the Trade Secrets or Confidential Information; provided, however, that the foregoing shall not require Mr. Hensley to institute litigation to procure or protect such rights. (e) Immediately upon termination of his affiliation with the Company, or at any point upon the specific request of the Company, Mr. Hensley shall return to the Company all written or descriptive materials of any kind in his possession that constitute or contain any Confidential Information or Trade Secrets, and the confidentiality obligations of this Agreement shall continue until their expiration under the terms of this Agreement. 4. Non-Competition. Mr. Hensley agrees that for five (5) years =============== after the date of this Agreement, he will not accept or enter into a Competitive Position with a Competitor located in the Restricted Territory. So long as he is affiliated with the Company, Mr. Hensley shall not accept or enter into a Competitive Position with a Competitor, no matter where located. 5. Nonsolicitation of Employees and Customers. Mr. Hensley ========================================== covenants and agrees that for five (5) years after the date of this Agreement, he will not, either directly or indirectly, alone or in conjunction with any other person or Entity: (a) solicit any employee, consultant, contractor or other personnel of the Company, Magellan or Mentor, to terminate, alter or lessen his affiliation with the Company, Magellan or Mentor; or (b) solicit, divert or appropriate any customer or actively sought prospective customer of the Company, Magellan or Mentor for or on behalf of any Competitor (provided, however, that after termination of his affiliation with the Company, this restriction shall only apply to his solicitation of customers or actively sought prospective customers with whom he had material contact in connection with his performing the Services for or on behalf of the Company). 6. Acknowledgment. Mr. Hensley and the Company acknowledge and ============== agree that the covenants set forth in Sections 3, 4, and 5 are reasonable as to time, scope and territory given the Company's need to protect its Trade Secrets, Confidential Information and its substantial investment in its customer base, particularly given (a) the complexity and competitive nature of the Company's business, and (b) that he has sufficient skills to find alternative, commensurate employment or consulting work in his field of expertise that would not violate Section 3, 4, or 5. 7. Remedies: Damages, Injunctions and Specific Performance. ======================================================= The Parties expressly understand and agree that the covenants and agreements to be rendered and performed by Mr. Hensley pursuant to Section 3, 4 or 5 are special, unique, and of extraordinary character, and in the event of any default, breach or threatened breach by him of Section 3, 4 or 5 (collectively, the "Material Paragraphs"), the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, and shall be entitled to such legal and equitable relief, including, without limitation, any proceedings to: (i) obtain damages for any breach of this Agreement by him; (ii) order the specific performance thereof by him; or (iii) enjoin him from breaching such provisions. If the Company shall seek to enjoin Mr. Hensley from defaulting in the performance of or breaching any provision or Section of this Agreement, he shall waive and hereby waives the defense that the Company has or will have an adequate remedy at law. 8. Miscellaneous Provisions. ======================== (a) Interpretation. Should any provision of this Agreement ============== require judicial interpretation, the Parties agree that the judicial body interpreting or construing such provision shall not apply the assumption that the terms of this Agreement shall be more strictly construed against either one or the other party because of the rule of construction that an instrument is to be construed more strictly against the drafting party, it being agreed that all of the Parties and/or their agents have participated in the preparation of this Agreement. (b) Assignment; Successors in Interest. Neither this Agreement ================================== nor any rights or obligations of Mr. Hensley hereunder shall be transferable or assignable by him without the prior written consent of the Company, and any attempted transfer or assignment of this Agreement by him not in accordance with this subsection shall be null and void. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their permitted successors and assigns, and any reference to a Party shall also be a reference to a permitted successor or assign. (c) Severability. All paragraphs and subparagraphs of this ============ Agreement are severable, and the unenforceability or invalidity of any of the paragraphs or subparagraphs of this Agreement shall not affect the validity or enforceability of the remaining paragraphs or subparagraphs of this Agreement, but such remaining paragraphs or subparagraphs shall be interpreted and construed in such a manner as to carry out fully the intention of the Parties, provided, however, -------- -------- that should any judicial body interpreting this Agreement deem any provision of this Agreement to be unreasonably broad in time, territory, scope or otherwise, it is the intent and desire of the Parties that such judicial body, to the greatest extent possible, reduce the breadth of such provision to the maximum legally allowable parameters rather than deeming such provision totally unenforceable or invalid. Mr. Hensley acknowledges and agrees that the covenants and agreements contained in this Agreement, including, without limitation, the covenants and agreements contained in the Material Paragraphs, shall be construed as covenants and agreements independent of each other and of any other provision of this Agreement or any other contract between the Parties and that the existence of any claim or cause of action by him against the Company, whether predicated upon this Agreement or any other contract, shall not constitute a defense to the enforcement by the Company of such covenants, agreements and the Material Paragraphs. (d) Notices. All notices, communications and deliveries by this ======= Agreement shall be made in writing signed by the Party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made, and shall be deemed given or made on the date delivered if delivered by telecopy or in person or on the third (3rd) business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid) as follows: To Charter: Charter Medical Corporation 3414 Peachtree Road, N.E. Suite 1400 Atlanta, Georgia 31326 Attn: Steve J. Davis Telecopy No.: (404) 814-5795 with a copy to: King & Spalding 191 Peachtree Street Atlanta, Georgia 30303-1763 Attn: Mr. Robert W. Miller Telecopy No.: (404) 572-5144 To Mr. Hensley: 1 Mason Road Brookline, MA 02146 with a copy to: Sullivan & Worcester One Post Office Square Boston, MA 02109 Attn: Richard E. Teller Telecopy No.: 617/338-2880 or to such other representative or at such other address of a Party as such Party hereto may furnish to the other Parties in writing. If notice is given pursuant to this subsection of any assignment to a permitted successor or assign of a Party hereto in accordance with this subsection, the notice shall be given as set forth above to such successor or assign of such Party. (e) Amendments. To the extent permitted by law, this ========== Agreement may be amended by a subsequent writing signed by all of the Parties. (f) Controlling Law; Integration; Waiver. This Agreement ==================================== shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. This Agreement supersedes all negotiations, agreements and understandings among the Parties with respect to the subject matter of this Agreement and constitutes the entire agreement among the Parties to this Agreement. The failure of any Party at any time or times to require performance of any provisions of this Agreement shall in no manner affect the right to enforce the same. No waiver by any Party of any conditions, or of the breach of any term, provision, warranty, representation, agreement or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed or construed as a further or continuing waiver of any such condition or breach of any other term, provision, warranty, representation, agreement or covenant contained in this Agreement. (g) Time of the Essence; Computation of Time. Time is of ======================================== the essence for each and every provision of this Agreement. Whenever the last day for the exercise of any privilege or the discharge of any duty under this Agreement shall fall upon a Saturday, Sunday or any date on which banks in Atlanta, Georgia are closed, the Party having such privilege or duty may exercise such privilege or discharge such duty on the next succeeding day which is a regular business day. (h) Captions. The titles, captions and table of contents ======== contained in this Agreement are inserted in this Agreement only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision of this Agreement. Unless otherwise specified to the contrary, all references to Sections are references to Sections of this Agreement. (i) Counterparts. This Agreement may be executed in two or ============ more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one of such counterparts. IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed, as of the date first above written. CHARTER MEDICAL CORPORATION: =========================== (Corporate Seal) Attest: By: /s/ Michael Catalano -------------------------- Name: Michael Catalano Title: Vice President Planning and Development By: /s/ Kirk D. McConnell -------------------------- Name: Kirk D. McConnell Title: Assistant Secretary /s/ E. Byron Hensley, Jr. ----------------------------- E. BYRON HENSLEY, JR. Witness: /s/ Richard E. Teller --------------------------- EX-7 8 NONCOMPETE - THOMAS P. RILEY EXHIBIT 7 --------- NONCOMPETE AND CONFIDENTIALITY AGREEMENT ======================================== THIS AGREEMENT (the "Agreement") is made and entered into as of this 27th day of January, 1995, by and between CHARTER MEDICAL CORPORATION, a Delaware corporation with its corporate headquarters in Atlanta, Georgia (the "Company"), and THOMAS P. RILEY ("Mr. Riley"). R E C I T A L S : --------------- 1. National Mentor, Inc. ("Mentor") is a private provider of behavioral healthcare services in the homes of trained paraprofessionals and operates an outpatient clinic located in the Boston, Massachusetts, metropolitan area (the "Business"). Mentor is a wholly-owned subsidiary of Magellan Health Services, Inc., a Delaware corporation ("Magellan"). 2. Magellan merged with Charter Acquisition Subsidiary, Inc., a wholly-owned subsidiary of the Company, on January 27, 1995, pursuant to the Agreement of Merger, dated as of December 19, 1994, among the Company, Charter Acquisition Subsidiary, Inc. and Magellan (the "Merger Agreement"). 3. Mr. Riley is a former stockholder of Magellan and an executive officer of Mentor. 4. In connection with the Merger Agreement, the Company acquired the "Confidential Information" and "Trade Secrets" (both as defined below) of Mentor and, to protect the Company's substantial investment in the Confidential Information and Trade Secrets, and to protect the goodwill associated with the Company's customer relationships, Mr. Riley and the Company (together, the "Parties") have agreed to abide by the terms and conditions of this Agreement. In consideration of the foregoing, and the representations, warranties, covenants and agreements set forth in this Agreement and in the Merger Agreement, the Parties hereby agree as follows: 1. Definitions. The following terms shall have the =========== following meanings when used in this Agreement: (a) "Competitor" shall mean any person or Entity engaged, ========== wholly or partly, in the Business. (b) "Competitive Position" shall mean: (i) the direct or ==================== indirect equity ownership (excluding equity ownership of a publicly held company through the ownership of less than five percent (5%) of its outstanding shares) of all or any portion of a Competitor; or (ii) any employment, consulting or independent contractor arrangement with any Competitor for the Services described in this Agreement; provided that the foregoing shall ============= not apply to any employment, consulting or independent contractor arrangement with the parent company, a division or a subsidiary of a Competitor which parent company, division or subsidiary is not a Competitor. (c) "Confidential Information" shall mean the proprietary ======================== and confidential data or information of the Company or Mentor, other than "Trade Secrets" (as defined below), which is of tangible or intangible value to the Company and is not public information or is not generally known or available to the Company's competitors but is known only to the Company and those of its employees, independent contractors, consultants, customers or agents to whom it must be confided in order to apply it to the uses intended, including, without limitation, informal information regarding the Company's customers or prospective customers (such as lists containing the names, addresses and telephone numbers and/or account information of customers and prospective customers, but not including information that is available to the public), marketing methods and business plans gained by Mr. Riley as a result of his relationship with the Company or Mentor. (d) "Entity" shall mean any partnership, joint venture, ====== agency, governmental subdivision, association, firm, corporation or entity. (e) "Restricted Territory" shall mean the continental ==================== United States, except with respect to the operation of an outpatient clinic, the Restricted Territory shall be the Boston, Massachusetts, metropolitan area. The Parties agree to amend this definition of "Restricted Territory" to reflect any significant contraction of the areas where the Company conducts the Business. (f) "Services" shall mean Mr. Riley's performance of ======== executive services to Mentor in his capacity as its President and Chief Operating Officer. (g) "Trade Secrets" shall mean information of the Company ============= or Mentor, including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, products plans, or lists of actual or potential customers or suppliers, which: (x) derives economic value, actual or potential from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use; and (y) is the subject of efforts that are reasonable under the circumstances to maintain their secrecy; including, without limitation, formalized business, pricing, marketing, and customer or prospective customer information. (h) "Work Product" shall mean work product, property, data, ============ documentation or information of any kind, prepared, conceived, discovered, developed or created by Mr. Riley for the Company or Mentor or any of the Company's clients or customers while Mr. Riley is employed by Mentor. 2. Consideration. The Company shall pay to Mr. Riley the sum ============= of $350,339.00 in consideration of his undertakings set forth herein. Such sum shall be paid to Mr. Riley on July 17, 1995, at Charter's option, either in cash or by the issuance to him of such number of freely transferrable whole shares of Charter Common Stock, valued at the closing sale price on July 14, 1995, as reported by AMEX, together with an amount of cash equal to any fractional shares, having a value of $350,339.00. Mr. Riley acknowledges and agrees that such payment constitutes sufficient and adequate consideration for the covenants and agreements contained in this Agreement. In addition to the foregoing, so long as Mr. Riley complies with the terms of this Agreement in all material respects, the Company, for one (1) year after the date his employment with the Company is terminated, shall pay him an amount equal to his base salary and shall continue to pay the premiums for his health insurance coverage, all to the extent or as in effect, as the case may be, immediately prior to the termination of his employment with the Company; provided, however, that, after the date that is six months following the termination of Mr. Riley's employment with the Company, the Company shall be entitled to reduce the amount paid to him with respect to his base salary by any amount earned by Mr. Riley from other employment taken by him (other than a Competitive Position.) Such amount shall be paid to Mr. Riley in accordance with the Company's normal payroll practices and shall be subject to all applicable state and federal withholdings. 3. Nondisclosure; Ownership of Proprietary Property. ================================================ (a) Mr. Riley hereby acknowledges that by virtue of Mr. Riley's relationship with Mentor, Mr. Riley has been exposed to and will continue to be exposed to the Trade Secrets and Confidential Information. Mr. Riley further acknowledges that it is in the best business interest of the Company to maintain the strict confidentiality of such Trade Secrets and Confidential Information. (b) In recognition of the need of the Company to protect its legitimate business interests, Mr. Riley hereby covenants and agrees that (i) with regard to each item constituting a Trade Secret, at all times during his affiliation with the Company and all times thereafter during which such item continues to constitute a Trade Secret under applicable law; and (ii) with regard to any Confidential Information, for two (2) years after the date of the termination of his employment with the Company, he shall regard and treat each item constituting a Trade Secret or Confidential Information as strictly confidential and wholly owned by Company and will not, for any reason in any fashion, either directly or indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, reproduce, copy, appropriate or otherwise communicate any such item or information to any Entity for any person or purpose other than strictly in accordance with the express terms of this Agreement. (c) To the greatest extent possible, any Work Product shall be deemed to be "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. 101 et. seq., as amended) and owned == === exclusively by the Company. Mr. Riley hereby unconditionally and irrevocably transfers and assigns to the Company all rights, title and interest he may currently have or in the future may have by operation of law or otherwise in or to any Work Product, including, without limitation, all patents, copyrights, trademarks, service marks and other intellectual property rights. Mr. Riley agrees to execute and deliver to the Company any transfers, assignments, documents or other instruments which the Company may deem necessary or appropriate to vest complete title and ownership of any Work Product, and all rights therein, exclusively in the Company. (d) Mr. Riley shall notify the Company as soon as practicable of any unauthorized disclosure or use of any Trade Secrets or Confidential Information by him or any other person of which he becomes aware. Mr. Riley shall use reasonable efforts to assist Company in the procurement or any protection of Company's rights to or in any of the Trade Secrets or Confidential Information; provided, however, that the foregoing shall not require Mr. Riley to institute litigation to procure or protect such rights. (e) Immediately upon termination of his affiliation with the Company, or at any point upon the specific request of the Company, Mr. Riley shall return to the Company all written or descriptive materials of any kind in his possession that constitute or contain any Confidential Information or Trade Secrets, and the confidentiality obligations of this Agreement shall continue until their expiration under the terms of this Agreement. 4. Non-Competition. Mr. Riley agrees that for one (1) year =============== after the date his employment with the Company terminates, he will not accept or enter into a Competitive Position with a Competitor located in the Restricted Territory. So long as he is employed by the Company, Mr. Riley shall not accept or enter into a Competitive Position with a Competitor, no matter where located. 5. Nonsolicitation of Employees and Customers. Mr. Riley ========================================== covenants and agrees that for one (1) year after his employment with the Company terminates, he will not, either directly or indirectly, alone or in conjunction with any other person or Entity: (a) solicit any employee, consultant, contractor or other personnel of the Company, Magellan or Mentor, to terminate, alter or lessen his affiliation with the Company, Magellan or Mentor; or (b) solicit, divert or appropriate any customer or actively sought prospective customer of the Company, Magellan or Mentor for or on behalf of any Competitor (provided, however, that after termination of his employment with the Company, this restriction shall only apply to his solicitation of customers or actively sought prospective customers with whom he had material contact in connection with his performing the Services for or on behalf of the Company). 6. Acknowledgment. Mr. Riley and the Company acknowledge and ============== agree that the covenants set forth in Sections 3, 4, and 5 are reasonable as to time, scope and territory given the Company's need to protect its Trade Secrets, Confidential Information and its substantial investment in its customer base, particularly given (a) the complexity and competitive nature of the Company's business, and (b) that he has sufficient skills to find alternative, commensurate employment or consulting work in his field of expertise that would not violate Section 3, 4, or 5. 7. Remedies: Damages, Injunctions and Specific Performance. ======================================================= The Parties expressly understand and agree that the covenants and agreements to be rendered and performed by Mr. Riley pursuant to Section 3, 4 or 5 are special, unique, and of extraordinary character, and in the event of any default, breach or threatened breach by him of Section 3, 4 or 5 (collectively, the "Material Paragraphs"), the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law or in equity, and shall be entitled to such legal and equitable relief, including, without limitation, any proceedings to: (i) obtain damages for any breach of this Agreement by him; (ii) order the specific performance thereof by him; or (iii) enjoin him from breaching such provisions. If the Company shall seek to enjoin Mr. Riley from defaulting in the performance of or breaching any provision or Section of this Agreement, he shall waive and hereby waives the defense that the Company has or will have an adequate remedy at law. 8. Miscellaneous Provisions. ======================== (a) Interpretation. Should any provision of this Agreement ============== require judicial interpretation, the Parties agree that the judicial body interpreting or construing such provision shall not apply the assumption that the terms of this Agreement shall be more strictly construed against either one or the other party because of the rule of construction that an instrument is to be construed more strictly against the drafting party, it being agreed that all of the Parties and/or their agents have participated in the preparation of this Agreement. (b) Assignment; Successors in Interest. Neither this Agreement ================================== nor any rights or obligations of Mr. Riley hereunder shall be transferable or assignable by him without the prior written consent of the Company, and any attempted transfer or assignment of this Agreement by him not in accordance with this subsection shall be null and void. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their permitted successors and assigns, and any reference to a Party shall also be a reference to a permitted successor or assign. (c) Severability. All paragraphs and subparagraphs of this ============ Agreement are severable, and the unenforceability or invalidity of any of the paragraphs or subparagraphs of this Agreement shall not affect the validity or enforceability of the remaining paragraphs or subparagraphs of this Agreement, but such remaining paragraphs or subparagraphs shall be interpreted and construed in such a manner as to carry out fully the intention of the Parties, provided, however, -------- -------- that should any judicial body interpreting this Agreement deem any provision of this Agreement to be unreasonably broad in time, territory, scope or otherwise, it is the intent and desire of the Parties that such judicial body, to the greatest extent possible, reduce the breadth of such provision to the maximum legally allowable parameters rather than deeming such provision totally unenforceable or invalid. Mr. Riley acknowledges and agrees that the covenants and agreements contained in this Agreement, including, without limitation, the covenants and agreements contained in the Material Paragraphs, shall be construed as covenants and agreements independent of each other and of any other provision of this Agreement or any other contract between the Parties and that the existence of any claim or cause of action by him against the Company, whether predicated upon this Agreement or any other contract, shall not constitute a defense to the enforcement by the Company of such covenants, agreements and the Material Paragraphs. (d) Notices. All notices, communications and deliveries ======= required or permitted by this Agreement shall be made in writing signed by the Party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made, and shall be deemed given or made on the date delivered if delivered by telecopy or in person or on the third (3rd) business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid) as follows: To Charter: Charter Medical Corporation 3414 Peachtree Road, N.E. Suite 1400 Atlanta, Georgia 31326 Attn: Steve J. Davis Telecopy No.: (404) 814-5795 with a copy to: King & Spalding 191 Peachtree Street Atlanta, Georgia 30303-1763 Attn: Mr. Robert W. Miller Telecopy No.: (404) 572-5144 To Mr. Riley: 3 Longridge Lane Ipswich, MA 01938 with a copy to: Sullivan & Worcester One Post Office Square Boston, MA 02109 Attn: Richard E. Teller Telecopy No.: 617/338-2880 or to such other representative or at such other address of a Party as such Party hereto may furnish to the other Parties in writing. If notice is given pursuant to this subsection of any assignment to a permitted successor or assign of a Party hereto in accordance with this subsection, the notice shall be given as set forth above to such successor or assign of such Party. (e) Amendments. To the extent permitted by law, this ========== Agreement may be amended by a subsequent writing signed by all of the Parties. (f) Controlling Law; Integration; Waiver. This Agreement ==================================== shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. This Agreement supersedes all negotiations, agreements and understandings among the Parties with respect to the subject matter of this Agreement and constitutes the entire agreement among the Parties to this Agreement. The failure of any Party at any time or times to require performance of any provisions of this Agreement shall in no manner affect the right to enforce the same. No waiver by any Party of any conditions, or of the breach of any term, provision, warranty, representation, agreement or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed or construed as a further or continuing waiver of any such condition or breach of any other term, provision, warranty, representation, agreement or covenant contained in this Agreement. (g) Time of the Essence; Computation of Time. Time is of ======================================== the essence for each and every provision of this Agreement. Whenever the last day for the exercise of any privilege or the discharge of any duty under this Agreement shall fall upon a Saturday, Sunday or any date on which banks in Atlanta, Georgia are closed, the Party having such privilege or duty may exercise such privilege or discharge such duty on the next succeeding day which is a regular business day. (h) Captions. The titles, captions and table of contents ======== contained in this Agreement are inserted in this Agreement only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision of this Agreement. Unless otherwise specified to the contrary, all references to Sections are references to Sections of this Agreement. (i) Counterparts. This Agreement may be executed in two or ============ more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one of such counterparts. IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed, as of the date first above written. CHARTER MEDICAL CORPORATION: =========================== (Corporate Seal) Attest: By: /s/ Michael Catalano -------------------------- Name: Michael Catalano Title: Vice President Planning and Development By: Kirk D. McConnell -------------------------- Name: Kirk D. McConnell Title: Assistant Secretary /s/ Thomas P. Riley ---------------------------- THOMAS P. RILEY Witness: /s/ Richard E. Teller ----------------------------- EX-8 9 AGREEMENT EXHIBIT 8 --------- AGREEMENT --------- This will confirm the agreement by and among all the undersigned that the statement on schedule 13D filed on or about this date (the "Schedule 13D") with respect to the beneficial ownership by the undersigned of shares of common stock, $.25 par value, of Charter Medical Corporation, a Delaware corporation, is being filed on behalf of each of the signatories named below (each, an "Investor" and together, the "Investors"). This will also confirm the agreement by and among all the Investors that any amendment to such Schedule 13D which may be required to be filed shall be filed on behalf of each of the Investors. Each Investor listed on Schedule I hereto, by his, her or its execution hereof, hereby irrevocably makes, constitutes and appoints Gleacher & Co. Inc. as his, her or its true and lawful agent and attorney-in-fact, with full power of substitution and full power and authority in his, her or its name, place and stead, to make, execute, sign, acknowledge, swear to, record and file (i) the Schedule 13D and all amendments thereto and (ii) all certificates and other instruments deemed advisable by Gleacher & Co. Inc. to comply with the provisions of the Securities Exchange Act of 1934, as amended. Each Investor listed on Schedule II hereto, by his, her or its execution hereof, hereby irrevocably makes, constitutes and appoints each of E. Byron Hensley, Jr. and Thomas P. Riley as his, her or its true and lawful agent and attorney-in-fact, with full power of substitution and full power and authority in his, her or its name, place and stead, to make, execute, sign, acknowledge, swear to, record and file (i) the Schedule 13D and all amendments thereto and (ii) all certificates and other instruments deemed advisable by E. Byron Hensley, Jr. or Thomas P. Riley to comply with the provisions of the Securities Exchange Act of 1934, as amended. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Dated: February 13, 1995 /s/ Gregory T. Torres --------------------- Gregory T. Torres NYFS12...:\99\48499\0005\2468\EXH2065P.350 /s/ Gerald M. Bereika ----------------------------- Gerald M. Bereika /s/ Peter P. Polloni ----------------------------- Peter P. Polloni /s/ Peter W. Mair ----------------------------- Peter W. Mair /s/ Elizabeth J. Hopper ----------------------------- Elizabeth J. Hopper /s/ Eric J. Gleacher ----------------------------- Eric J. Gleacher /s/ James Goodwin ----------------------------- James Goodwin /s/ Charles G. Phillips ----------------------------- Charles G. Phillips /s/ H. Conrad Meyer ----------------------------- H. Conrad Meyer /s/ Richard A. Derbes ----------------------------- Richard A. Derbes /s/ Emil W. Henry, Jr. ----------------------------- Emil W. Henry, Jr. /s/ Robert W. Kitts ----------------------------- Robert W. Kitts /s/ Jeffrey H. Tepper ----------------------------- Jeffrey H. Tepper /s/ Robert A. Engel ----------------------------- Robert A. Engel /s/ Andrew Gilman ----------------------------- Andrew Gilman /s/ Marie A. Gentile ----------------------------- Marie A. Gentile GLEACHER 7 INVESTORS L.P. By: Gleacher & Co. Inc., its General Partner By: /s/ Emil W. Henry, Jr. ------------------------------ Name: Emil W. Henry, Jr. Title: Managing Director OLSTEN SERVICE CORP. By: /s/ Laurin L. Laderoute, Jr. ------------------------------ Name: Laurin L. Laderoute, Jr. Title: Vice President /s/ Eric J. Gleacher ----------------------------- Eric J. Gleacher, as custodian for Jay S. Gleacher /s/ Eric J. Gleacher ----------------------------- Eric J. Gleacher, as custodian for Patricia G. Gleacher /s/ Eric J. Gleacher ----------------------------- Eric J. Gleacher, as custodian for William R. Gleacher /s/ James E. Gleacher ----------------------------- James E. Gleacher /s/ John G. Gleacher ----------------------------- John G. Gleacher /s/ Sarah E. Gleacher ----------------------------- Sarah E. Gleacher /s/ Diane Hensley Ramponi ----------------------------- Diane Hensley Ramponi, as Trustee of the Lauren Carroll Education Trust /s/ Thomas P. Riley ----------------------------- Thomas P. Riley, as Trustee of the Lauren Carroll Education Trust /s/ Christina Hensley Bair ----------------------------- Christina Hensley Bair /s/ Christina Hensley Bair ----------------------------- Christina Hensley Bair, as Trustee of the Emily Cristina Bair Education Trust /s/ Thomas P. Riley ----------------------------- Thomas P. Riley, as Trustee of the Emily Cristina Bair Education Trust /s/ Christina Hensley Bair ----------------------------- Christina Hensley Bair, as Trustee of the Nicholas Hensley Bair Education Trust /s/ Thomas P. Riley ----------------------------- Thomas P. Riley, as Trustee of the Nicholas Hensley Bair Education Trust /s/ Martha Faye Koysh ----------------------------- Martha Faye Koysh /s/ Lana Hensley Hoffman ----------------------------- Lana Hensley Hoffman /s/ Ruth Ann Roberts ----------------------------- Ruth Ann Roberts /s/ E. Byron Hensley, Jr. ----------------------------- E. Byron Hensley, Jr. /s/ Susan MacKenzie ----------------------------- Susan MacKenzie, as Trustee of the Jameson Robert Riley Education Trust /s/ Mark Morin ----------------------------- Mark Morin, as Trustee of the Jameson Robert Riley Education Trust /s/ Susan MacKenzie ----------------------------- Susan MacKenzie, as Trustee of the Katlyn MacKenzie Riley Education Trust /s/ Mark Morin ----------------------------- Mark Morin, as Trustee of the Katlyn MacKenzie Riley Education Trust /s/ Susan MacKenzie ------------------------------ Susan MacKenzie, as Trustee of the Bethany Ann Riley Education Trust /s/ Mark Morin ------------------------------ Mark Morin, as Trustee of the Bethany Ann Riley Education Trust /s/ Thomas P. Riley ------------------------------ Thomas P. Riley /s/ Donald R. Monack ------------------------------ Donald R. Monack /s/ Leonard O. Henry ------------------------------ Leonard O. Henry /s/ Janice L. Quiram ------------------------------ Janice L. Quiram /s/ Alan L. Hollis ------------------------------ Alan L. Hollis /s/ Lois Simon ------------------------------ Lois Simon /s/ Wayne J. Stelk ------------------------------ Wayne J. Stelk /s/ William F. Murdy ------------------------------ William F. Murdy /s/ Frank N. Liguori ------------------------------ Frank N. Liguori HARRIS & HARRIS GROUP, INC. By: /s/ Robert B. Schulz ------------------------------ Name: Robert B. Schulz Title: President and CEO -----END PRIVACY-ENHANCED MESSAGE-----