UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 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): July 1, 2007
SunLink Health Systems, Inc.
(Exact
Name of Registrant as Specified in its Charter)
Commission File Number: 1-12607
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Ohio
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310621189
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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900 Circle 75 Parkway
Suite 1120
Atlanta, Georgia 30339
(Address of Principal Executive Offices, Including Zip Code)
770-933-7000
(Registrant’s Telephone Number, Including Area Code)
(Former name or former address, if changed since last report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17CFR240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))
Item 5.02
5.02(c) Mark J. Stockslager’s title changed from Interim CFO to CFO
On July 1, 2007, SunLink Health Systems,
Inc., (the “Company”) appointed Mark J. Stockslager the Chief Financial Officer (the “CFO”). Mr. Stockslager had served as the Company’s Interim CFO since the departure of the Company’s former CFO on
December 31, 2006. Mr. Stockslager is 47 and has been SunLink’s Principal Accounting Officer since March 11, 1998. He has been associated continuously with the Company’s accounting and finance operations since June 1988 and
has held various positions, including Manager of U.S. Accounting, from June 1993 until November 1996 and Corporate Controller from November 1996 until
June 2007. From June 1982 through May 1988, Mr. Stockslager was employed by Price
Waterhouse & Co.
5.02(d) Election of Christopher H. B. Mills as Director
On July 11, 2007, the Company elected Christopher H. B. Mills, in accordance with Section 4 of Article III of the Company’s Code of
Regulations, to fill the newly created vacancy on its board of Directors (the “Board”). Mr. Mills was elected to the class of directors whose term expires at the 2008 annual meeting. In connection with Mr. Mills election to the
Board, Mr. Mills has agreed to certain understandings that limit his ability, while serving as a director and 90 days thereafter, to effect a change of control or enter into transactions, outside his duties as a director, that have the effect
of changing control of the Company, influencing the Company’s policies or forcing the Company into announcing a change of control type transaction. Mr. Mills is a partner with North Atlantic Value, LLP, which holds approximately 17% of the
Company’s issued and outstanding common shares and is the Company’s largest shareholder.
Item 5.03
5.03(a) Amendment to the Company’s Code of Regulations
Effective July 10, 2007, the Company, in accordance with Section 2 of Article III of its Code of Regulations increased the number of directors from seven to eight, and divided the eight directors into two classes with each class
having four directors.
Item 9.01 Financial Statements and Exhibits
Exhibits
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Exhibit No.
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Description
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99.1
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Press Release, dated July 11, 2007, announcing the election of Christopher H.B. Mills to the Board of Directors.
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99.2
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Agreement of understanding between the Company and Christopher H.B. Mills, dated June 28, 2007.
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99.3
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Resolutions of the July 5, 2007 Special Meeting of the Board of Directors.
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Signature(s)
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.
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SunLink Health Systems, Inc.
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Date: July 16, 2007
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By:
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/s/ Robert M. Thornton, Jr.
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Robert M. Thornton, Jr.
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President and Chief Executive Officer
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Exhibit Index
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Exhibit No.
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Description
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99.1
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Press Release, dated July 11, 2007, announcing the election of Christopher H.B. Mills to the Board of Directors.
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99.2
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Agreement of understanding between the Company and Christopher H.B. Mills, dated June 28, 2007.
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99.3
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Resolutions of the July 5, 2007 Special Meeting of the Board of Directors.
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Exhibit 99.1
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FOR IMMEDIATE RELEASE
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NEWS RELEASE
Contact:
Robert M. Thornton, Jr.
Chief Executive Officer
(770) 933-7000
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SUNLINK HEALTH SYSTEMS
ELECTS CHRISTOPHER H. B. MILLS
TO ITS BOARD OF DIRECTORS
ATLANTA,
Georgia (July 11, 2007) – SunLink Health Systems, Inc. (AMEX: SSY) announced today that its Board of Directors has established an
eighth Board seat and elected Christopher H. B. Mills to its Board of Directors for a term expiring at its 2008 annual meeting. Mr. Mills serves as a partner of North Atlantic Value, LLP, SunLink’s largest shareholder with approximately
17% of its outstanding common shares, and is a Director and the Chief Investment Officer of J. O. Hambro Capital Management in London. Mr. Mills, 54, received an Honors Degree in Business Studies from Guildhall University and his undergraduate
degree from Eton College.
SunLink Health Systems, Inc. currently operates seven community hospitals and related businesses in the
Southeast and Midwest. Each SunLink facility is the only hospital in its community. SunLink’s operating strategy is to link patients’ needs with dedicated physicians and health professionals to deliver quality, efficient medical care in
each community it serves. For additional information on SunLink Health Systems, Inc., please visit the company’s website at www.sunlinkhealth.com.
Exhibit 99.2
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S
UN
L
INK
Health Systems, Inc.
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900 Circle 75 Parkway, Suite 1120
Atlanta, Georgia 30399
770-933-7000
770-933-7010 Fax
www. sunlinkhealth.com
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June 28, 2007
Mr. Christopher H.B.Mills
Partner
North Atlantic
Valte LLP
14 Ryder Street
Engted
Dear Christopher:
I am pleased to advise you that the Board
of Directors of SunLink Health Systems, Inc. is agreeable to electing you to serve as an eighth director commencing July 9, 2007 upon the following understandings:
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(1)
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you will be responsible for your travel expenses associated with attending meetings of the Board;
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(2)
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you will otherwise be compensated for Board service in the same manner as other directors,
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(3)
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should you be unable to attend meetings in person, you may arrange to attend by telephone conference call;
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(4)
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you will be subject to and agree to abide by the same policies, including the corporate code of conduct and limitations on trading, applicable to SunLink directors;
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(5)
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you agree that during your period of service as a director and for a period of 90 days thereafter, unless specifically requested to do so by a majority of the Board of Directors,
neither you noc any of your affiliates (as such term is defined under the Securities Exchange Act of 1934, as amended (the “1934 Act”)) will in any manner, directly or indirectly, (a) propose publicly to effect, or cause, participate with,
or in any way assist, any other person to propose publicly to effect, (i) any acquisition of the securities or assets of Sunlink or any of its subsidiaries as would result in a change in control of Sunlink; (ii) any tender or exchange offer, merger
or other business combination involving SunLink or any of its subsidiaries; (iii) any liquidation, dissolution or other extraordinary transaction with respect to SunLink or any of its subsidiaries; or (iv) any “solicitation of
“proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of SunLink; (b)
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Mr. Christopher H.B. Mills
June 28, 2007
Page 2
alone or in
concert with others, seek to control or, except in the ordinary course of business in your status as a director and/or shareholder of SunLink, influence the management, Board of Directors or policies of SunLink; or (c) take any action which would
reasonably be expected to force SunLink to make a public announcement regarding any of the types of matters set forth in (a) above; provided, however, the provisions of subclauses (i) and (ii) of clause (a), and the provisions of clauses (b) and (c)
(insofar as applicable to such subclauses (i) and (ii) of clause (a)), of this sentence shall immediately terminate upon the public announcement of any proposed transaction of the type referred to in such subclauses (i) or (ii), proposed by SunLink
or any third party not affiliated with you. You also agree during such period not to request SunLink (or its directors, officers, employees or agents), directly or indirectly, to amend or waive any provision of this paragraph (including this
sentence).
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(6)
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You agree to resign your position as a director if the holdings of your “group” (as defined in the 1934 Act) at any time fall below 5% of the fully diluted common shares
of the capital stock of Sunlink.
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Please indicate your agreement with the foregoing by signing and returning a copy of this
letter to me at your earliest convenience.
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Very truly yours,
SUNLINK HEALTH SYSTEMS, INC.
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By:
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/s/ Robert M. Thornton, Jr.
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Robert M. Thornton, Jr.
Chief Executive
Officer
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/s/ Christopher H.B. Mills
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Christopher H.B. Mills
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Exhibit 99.3
RESOLUTIONS OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS
-of-
SUNLINK HEALTH SYSTEMS, INC.
July 5, 2007
The following resolutions were unanimously adopted:
RESOLVED, that, effective July 10, 2007, pursuant to the provisions of Section 2 of Article III of the Code of Regulations of the Corporation,
the number of directors of the Corporation be, and it is hereby, increased from seven to eight and said directors be, and they are hereby, divided into two classes, each of which shall have four directors; and
FURTHER RESOLVED, that, pursuant to the provisions of Section 4 of Article III of the Code of Regulations of the Corporation, Mr. Christopher
H.B. Mills be, and he is hereby, elected to fill the vacancy created in the Board of Directors by the foregoing resolution in the class of directors whose term expires at the annual meeting of shareholders to be held in 2008 to serve in accordance
with the terms of the letter agreement dated June 28, 2007 between Mr. Mills and the Corporation.