Attached files
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| EX-3.1 - SECOND AMENDMENT - BPO Management Services, Inc. | bpo_8k-ex0301.htm |
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of report (Date of earliest
event reported): January 28, 2010
BPO
Management Services, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Pennsylvania
(State or
Other Jurisdiction of Incorporation)
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0-13591
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23-2214195
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1290
N. Hancock, Suite 200, Anaheim, CA
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92807
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(714) 974-2670
(Registrant’s
Telephone Number, Including Area Code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions ( see
General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On
January 29, 2010, BPO Management Services, Inc. (the “Company”), Healthaxis.com,
Inc., a Pennsylvania corporation and wholly owned subsidiary of the Company,
Healthaxis Managing Partner, LLC, a Delaware limited liability company and
wholly owned subsidiary of the Company, Healthaxis Limited Partner,
LLC, a Delaware limited liability company and wholly owned subsidiary of the
Company (“Limited Partner”) and Healthaxis, Ltd., a Texas limited partnership
and wholly owned subsidiary of the Company (“Healthaxis”), entered
into a Agreement and Plan of Merger (the “Merger Agreement”) with
unaffiliated and privately owned Healthaxis Holdings, LLC, a Delaware limited
liability company (“Purchaser”), and Healthaxis, LLC, a Delaware
limited liability company and wholly owned subsidiary of the Purchaser (“Merger
Sub”). Under the terms of the Merger Agreement, Healthaxis will be
merged with and into Merger Sub. Healthaxis is the operating
subsidiary in which all of the Company’s Healthcare division operations are
conducted, and includes Healthaxis, Ltd., and its subsidiaries, Healthaxis
Imaging Services, LLC, Healthaxis Production Processing, Inc. and Satellite
Image Systems (Jamaica) Limited (the “Healthcare Subsidiaries”).
The total
merger consideration payable to the Company from the Purchaser is
$2,600,000. $2,400,000 of the consideration is payable at closing,
and the remaining $200,000 is subject to a holdback and adjustment
(up or down) based on certain working capital and cash tests related to the
final balance sheet of the businesses sold in the merger as of January 31,
2010. The holdback amount, as adjusted, will be released to the
Company in March 2010.
The
Agreement contains customary representations and warranties which survive the
closing for various periods, and the Company and its remaining subsidiaries that
are parties to the Merger Agreement (collectively, the “Sellers”) have agreed to
indemnify the Purchaser subject to certain limitations in the event of adverse
consequences suffered by the Purchaser or Merger Sub if any of the
representations, warranties or covenants in the Merger Agreement are
breached. The Agreement also contains various conditions that must be
satisfied by both parties prior to closing, including (i) a condition that the
transaction be approved by holders of a majority of the Company’s Series B
Preferred Stock, and (ii) a condition that the Company’s Chief Operating
Officer, John M. Carradine, enter into an employment agreement with the
surviving company to serve as its chief executive officer.
Under the
terms of the Merger Agreement, Sellers are also required to enter into a
confidentiality, non-competition and non-solicitation agreement pursuant to
which Sellers agree that for a period of five (5) years from the closing date,
Sellers will not to engage directly or indirectly in any business competitive to
the business being sold. In addition, for a period of five (5) years
from the closing date, the Sellers agree not to (i) induce or attempt to induce
or encourage others to induce or attempt to induce, any person who is or during
such period becomes an employee of, consultant to or agent of the surviving
company in the merger, to terminate such person’s employment with the surviving
company (in the case of an employee) or cease providing its services
to the surviving company, or (ii) induce or attempt to induce or encourage
others to induce or attempt to induce any person who is or during such period
becomes a customer, supplier, referral source, or key business relationship of
the surviving company to cease doing business with the surviving company or
otherwise alter their relationship with the surviving company; or, in the case
of referral sources, to refer their business to any person engaged in a
competing business with the surviving company; or, in the case of customers, to
place their business with any person engaged in the business of the companies
being sold in the merger.
ITEM
2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
The
transaction described in Item 1.01 (the description of which is incorporated by
reference) was closed on January 29, 2010 and the merger became effective at
12:01am on January 30, 2010.
ITEM 5.02: DEPARTURE OF DIRECTORS OR
CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
In
connection with, and as a condition to, the closing of the transaction described
in Items 1.01 and 2.01, on January 29, 2010, the Company and BPOMS, Inc., a
wholly-owned subsidiary of the Company (“Former BPOMS”), and the Healthcare
Subsidiaries entered into a Release and Termination Agreement with John M.
Carradine, the Company’s Chief Operating Officer. Under the terms of the
agreement, the Company, Former BPOMS, the Healthcare Subsidiaries and Mr.
Carradine agreed that his existing employment agreement would be terminated
immediately and that his employment with the Company, Former BPOMS and the
Healthcare Subsidiaries would terminate effective as of the close of business on
January 29, 2010 (the “Termination Date”). In addition to payment of his normal
base salary and other amounts due pursuant to Company policies through the
Termination Date, under the terms of the agreement the Company paid Mr.
Carradine $75,000, with such amount being in full settlement of all claims
arising out of his past employment with the Company, Former BPOMS and the
Healthcare Subsidiaries, including a full release of (i) any claims to
post-termination compensation, benefits, or severance rights under the
employment agreement with Former BPOMS arising or resulting from the termination
thereof, including any such compensation, benefits or severance rights that may
have otherwise been applicable thereunder to the extent the termination may be
deemed a termination based on a change in control, (ii) all accrued but unpaid
vacation, and (iii) any claims to the unpaid transition bonus described in the
employment agreement. Under the terms of the Release and Termination
Agreement and consistent with the terms of his employment agreement, all of Mr.
Carradine’s unvested restricted stock awards became fully vested on the
Termination Date, and the terms of Mr. Carradine’s outstanding options to
purchase Company common stock have been extended and shall be exercisable for a
period of thirty-six (36) months after the Termination Date, subject to the
terms of the applicable option plan. At this time, the Company has no
plans to appoint a new principal operating officer.
ITEM
5.03: AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR
On
January 28, 2010, the Board of Directors of the Company approved an amendment to
the Company’s Second Amended and Restated Bylaws to replace Section 105 of the
Company’s Bylaws in its entirety to permit any action required or permitted to
be taken at a meeting of the shareholders or of a class of shareholders to be
taken without a meeting upon the consent of shareholders who would have been
entitled to cast the minimum number of votes that would be necessary to
authorize the action at a meeting at which all shareholders entitled to vote
thereon were present and voting. The amendment to the Company’s Second Amended
and Restated Bylaws described above was effective on January 28,
2010.
The above
described amendment to the Second Amended and Restated Bylaws is filed as
Exhibit 3.1 and is incorporated herein by reference. The foregoing description
of such amendment is qualified in its entirety by reference to the full text of
such amendment attached hereto.
ITEM 9.01 EXHIBITS
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Exhibit
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Description
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3.1
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Second
Amendment to the Company’s Second Amended and Restated Bylaws, effective
as of January 28, 2010.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date:
February 3, 2010
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BPO
MANAGEMENT SERVICES, INC.
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By:
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/s/
David Frear
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David
Frear
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Chief
Accounting Officer
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EXHIBIT
INDEX
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Exhibit
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Description
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3.1
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Second
Amendment to the Company’s Second Amended and Restated Bylaws, effective
as of January 28, 2010.
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