sec document
As filed with the Securities and Exchange Commission on August 22, 2003
Registration No. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
HEALTHCARE SERVICES GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania
(State or other jurisdiction of
incorporation or organization)
23-2018365
----------
(IRS Employer
Identification Number)
--------------------------
3220 Tillman Drive
Glenview Corporate Center, Suite 300
Bensalem, Pennsylvania 19020
(Address, Including Zip Code, and Telephone Number of
Registrant's Principal Executive Offices)
--------------------------
Daniel P. McCartney
Chairman and Chief Executive Officer
3220 Tillman Drive
Glenview Corporate Center, Suite 300
Bensalem, Pennsylvania 19020
(215) 639-4274
(Name, Address, Including Zip Code, and Telephone Number
of Agent for Service)
Copy to:
Victor M. Rosenzweig, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
--------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. /X/
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
====================================================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Each Class of to be Price Offering Registration
Securities to be Registered Registered(1) Per Share Price Fee
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Common Stock, $.01 par value 1,000,000 $16.41(2) $16,410,000 $1,327.57
====================================================================================================
(1) This Registration Statement shall also cover any additional
shares of common stock which become issuable under our dividend
reinvestment plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number
of our outstanding shares of common stock.
(2) Estimated in accordance with Rule 457(c) solely for the purpose
of calculating the registration fee based upon the average of the
high and the low prices of our common stock, $.01 par value, as
reported on the Nasdaq National Market on August 19, 2003.
--------------------------------
HEALTHCARE SERVICES GROUP, INC.
3220 TILLMAN DRIVE,
GLENVIEW CORPORATE CENTER, SUITE 300
BENSALEM, PENNSYLVANIA 19020
August 22, 2003
Dear Shareholder:
We are pleased to announce the adoption of our dividend reinvestment
plan, which provides shareholders with a convenient way of purchasing additional
shares of common stock by reinvesting their cash dividends in additional shares
of common stock. The dividend reinvestment plan has been adopted in conjunction
with our intention to implement quarterly dividends. Our Board of Directors
declared our first quarterly dividend of $.06 per share on August 13, 2003. The
record date for such dividend is September 15, 2003 and the payment date is
September 29, 2003.
Enclosed you will find the plan prospectus, written in a question
and answer format, along with an enrollment form and a return envelope which
will make it easy for you to elect to participate in the plan.
I hope you will read the plan prospectus thoroughly. By taking these
actions, the Board is making every effort not only to increase the value of your
shares, but also to increase the convenience of being a Healthcare Services
Group, Inc. shareholder.
Sincerely,
Daniel P. McCartney
Chairman and Chief Executive Officer
PROSPECTUS
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HEALTHCARE SERVICES GROUP, INC.
DIVIDEND REINVESTMENT PLAN
This prospectus relates to 1,000,000 shares of our common stock,
$.01 par value per share, registered for issuance and sale under our dividend
reinvestment plan. The plan provides participants with a convenient method of
purchasing shares of common stock by reinvesting their cash dividends in
additional shares of common stock. An enrollment form is enclosed with this
prospectus and may also be obtained from the agent for the plan or from us. Our
telephone number and address and the address and telephone number of the agent
are set forth in Question 29 below.
Participants in the plan may:
Automatically reinvest cash dividends on all or a
portion of the shares of common stock registered in
their names or held in their plan accounts.
Deposit share certificates with the plan's agent
for safekeeping.
Until further notice from us, shares of common stock will be
purchased directly from us by the agent for the plan (i.e., we will issue new
shares or treasury shares to satisfy the dividend reinvestment requirements).
However, we reserve the right, upon due notice to plan participants, to satisfy
the requirements of the plan by authorizing our agent to purchase shares in the
open market. The purchase price per share of newly issued shares of common stock
purchased directly from us through the plan on any investment date will be the
average of the high and low sales price of a share of our common stock on the
Nasdaq National Market as reported for that date by the Nasdaq National Market
or, if no sales price is reported for that date, the average of the bid
quotations for the common stock on that date as reported by the Nasdaq National
Market; provided, however, that if no such sales or quotations are reported by
the Nasdaq National Market for such investment date, the purchase price of a
share of common stock on such date shall be the average of the high and low
sales price or, if no sales price is reported, the average of the bid quotations
as reported by the Nasdaq National Market for the business day immediately after
that investment date on which such sales or quotations are reported. No shares
of common stock will be sold by us to the plan at less than the par value of
such shares.
The purchase price for shares of common stock purchased through the
plan in the open market, if any, shall be the weighted average purchase price of
all shares purchased for the plan in the open market on the relevant investment
date. See Question 11 below.
The price at which the agent shall be deemed to have acquired shares
for a participant's account shall be the average price of all shares purchased
by it as agent for all participants in the plan with the proceeds of a single
cash dividend from us.
The last sales price of the common stock on August 19, 2003, on the
Nasdaq National Market, symbol "HCSG," was $16.55 per share.
Our shareholders who do not choose to participate in the plan will
receive cash dividends, as declared and paid.
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Neither the Securities and Exchange Commission nor any State
securities commission has determined whether this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
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The date of this prospectus is August 22, 2003.
2
TABLE OF CONTENTS
Where You Can Find More Information............................................5
Incorporation By Reference.....................................................5
About This Prospectus..........................................................5
Description of the Plan........................................................6
Purpose.................................................................6
Advantages..............................................................6
Administration..........................................................7
Participation...........................................................7
Purchases...............................................................9
Costs..................................................................10
Taxes..................................................................10
Reports to Participants................................................11
Dividends On Fractions of Shares.......................................11
Sale of Shares.........................................................12
Certificates For Shares................................................12
Termination of Participation...........................................13
Other Information......................................................14
The Company...................................................................16
Risk Factors..................................................................16
Use of Proceeds...............................................................18
Description of Capital Stock..................................................18
Dividends.....................................................................19
Plan of Distribution..........................................................19
Experts.......................................................................19
3
Legal Matters.................................................................19
Additional Information........................................................19
Disclosure of Commission's Position on
Indemnification for Securities Act Liabilities................................20
4
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document we file at the SEC's public reference room
located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You
may obtain further information on the operation of the public reference room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public over the Internet at the SEC's web site at http://www.sec.gov. You may
also request copies of such documents, upon payment of a duplicating fee, by
writing to the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus and information that we file later
with the SEC will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended:
(1) Our Annual Report on Form 10-K for the year ended December 31,
2002;
(2) Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2003 and June 30, 2003; and
(3) Our Application for Registration of our common stock on Form
8-A filed April 30, 1984.
You may request a copy of these filings, excluding the exhibits to
such filings which we have not specifically incorporated by reference in such
filings, at no cost, by writing or telephoning us at the following address:
Healthcare Services Group, Inc.
Richard W. Hudson, Secretary
3220 Tillman Drive
Glenview Corporate Center, Suite 300
Bensalem, Pennsylvania 19020
(215) 639-4274
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we filed with
the SEC. You should rely only on the information provided or incorporated by
reference in this prospectus or any related supplement. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this prospectus or any supplement is accurate as of any
other date than the date on the front of those documents.
5
DESCRIPTION OF THE PLAN
The following question and answer statement is the text of our
dividend reinvestment plan. The plan was adopted by our Board of Directors on
August 13, 2003. There are 1,000,000 shares of our common stock reserved for
issuance and sale under the plan. Upon the allocation or issuance of 1,000,000
shares of common stock under the plan, the plan will terminate, unless our Board
of Directors authorizes additional shares to be issued under the plan.
PURPOSE:
1. What is the purpose of the plan?
The purpose of the plan is to provide our shareholders of record
with a simple and convenient method of purchasing shares of common stock by
reinvesting cash dividends in additional shares of common stock. We have
announced our intention to declare quarterly dividends. Our Board of Directors
declared our first quarterly dividend of $.06 per share on August 13, 2003. The
record date for such dividend is September 15, 2003 and the payment date is
September 29, 2003. Purchases of newly issued common stock under the plan
provide us with additional equity capital.
ADVANTAGES:
2. What are the advantages of the plan to participants?
(a) As a participant in the plan, you may have cash dividends on
some or all of your shares automatically reinvested in additional shares of
common stock.
(b) When shares are issued by us, you do not pay any brokerage
commissions in connection with purchases under the plan. See Question 13 below.
(c) Your funds will be fully invested because the plan permits
fractions of shares to be credited to your account. Dividends on such fractions
will be reinvested in additional shares or fractions thereof and such shares
credited to your account.
(d) Since the agent that administers the plan holds and acts as
custodian of shares purchased under the plan, you may also elect to deposit
certificates for shares of common stock held in your name with the agent if you
wish dividends to be reinvested on those shares. This relieves you of the
responsibility for the safekeeping of certificates and protects you against
loss, theft or destruction of such certificates. Participants who wish to avail
themselves of the safekeeping feature of the plan should mail their certificates
to American Stock Transfer & Trust Company, P.O. Box 922, Wall Street Station,
New York, New York 10269-0560, Attention: Dividend Reinvestment Department -
Heathcare Services Group, Inc. Certificates should be sent by registered or
certified mail, return receipt requested, accompanied by a completed enrollment
form specifying that (i) the shares are furnished for safekeeping, and (ii)
dividends on all such shares are to be reinvested pursuant to the plan. The
participant's aggregate account balance under the plan reflected on quarterly
statements will include the shares deposited for safekeeping.
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(e) Regular statements of account will provide you with a record of
each transaction to simplify your recordkeeping.
ADMINISTRATION:
3. Who administers the plan for participants?
We designated American Stock Transfer & Trust Company to administer
the plan as agent for the participants, to purchase and hold shares of common
stock acquired through the plan, to keep records and send statements of account
to each participant and to perform other duties related to the plan. Shares
purchased for you under the plan will be held by or through the agent until
termination of your participation in the plan or until a written request is
received from you for withdrawal of all or part of your shares. Shares purchased
under the plan and held by the agent will be registered in its name or the name
of one of its nominees. We may replace the agent at any time. In the event that
the agent should cease to administer the plan, we will make such other
arrangements as we deem appropriate for the administration of the plan.
You may contact the agent by writing to:
Healthcare Services Group, Inc. Dividend Reinvestment Plan
c/o American Stock Transfer & Trust Company
Dividend Reinvestment Dept.
P.O. Box 922
Wall Street Station
New York, New York 10269-0560
or by telephoning the agent at (877) 390-3092 or (212) 936-5100 between 8:00
a.m. and 5:00 p.m. Eastern Time or visit American Stock Transfer & Trust
Company's website at www.investpower.com.
PARTICIPATION:
4. Who is eligible to participate?
All of our shareholders are eligible to participate in the plan. See
Question 28 for information concerning circumstances for which we may terminate
participation in the plan for a plan participant. If common stock is registered
in a street or nominee name and the beneficial holder wishes to participate in
the plan, the beneficial holder must either make appropriate arrangements with
his or her broker to participate in the plan on the beneficial holder's behalf
or have all or part of such shares transferred to the beneficial holder's name
prior to enrolling in the plan.
5. How does an eligible applicant participate in the plan?
Eligible shareholders may join the plan by completing and signing an
enrollment form and returning it to the agent. A return envelope is provided
with the enrollment form for this purpose. Where the common stock is registered
in more than one name (i.e., joint tenants, trustees, etc.), all registered
holders must sign the enrollment form.
7
6. Is partial participation possible under the plan?
Yes. If you are a participant in the plan and you want to reinvest
the dividends on only some of your shares, you must sign the enrollment form and
indicate the number of such shares under the "Partial Dividend Reinvestment"
option. See Question 8 below.
7. When may an eligible applicant join the plan?
A shareholder of record may join the plan at any time by completing
and signing an enrollment form and returning it to the agent. An enrollment form
may be obtained by telephone or written request to the agent or us.
If the signed enrollment form is received by the agent prior to the
record date for the next dividend payment, reinvestment of your dividends will
begin with the next dividend. If the enrollment form arrives after this
deadline, it will be necessary to delay reinvestment until the next dividend
payment. It is currently our intention to pay dividends in March, June,
September and December. The dividend record date will generally be ten days to
two weeks prior to the dividend payment date. The dividend payment date is also
the date that dividends will be invested in common stock and is referred to as
the investment date.
8. What options are included in the enrollment form?
The enrollment form provides for the following options:
(A) "FULL DIVIDEND REINVESTMENT" -- the participant directs us to
pay to the agent for reinvestment in accordance with the plan all cash dividends
on all of the shares of common stock then or subsequently registered in the
participant's name.
(B) "PARTIAL DIVIDEND REINVESTMENT" -- the participant directs us
to pay to the agent for reinvestment in accordance with the plan all cash
dividends on that portion of shares of common stock registered in the
participant's name and designated in the appropriate space on the enrollment
form.
(C) "SAFEKEEPING" -- the participant may elect to deposit
certificates with the agent for safekeeping and must elect to reinvest dividends
on all of such shares (i.e., all shares held for safekeeping must participate in
dividend reinvestment. In order to elect partial dividend reinvestment, shares
of common stock must be registered in the participant's name and not credited to
the participant's account under the plan as shares held for safekeeping).
Once you elect reinvestment, cash dividends paid on shares of common
stock registered in your name or held in your account will be reinvested in
additional shares of common stock. If you have specified partial reinvestment
for shares registered in your name, that portion of such dividend payment not
being reinvested will be sent to you by check in the usual manner.
9. How may a participant change reinvestment amounts under the plan?
As a participant, you may change your reinvestment levels at any
time by requesting a new enrollment form and returning it to the agent at the
address set forth in Question 3.
8
A change in reinvestment amount will be effective as of the
investment date, provided that the participant's request is received on or
before the applicable dividend record date.
PURCHASES:
10. How does the agent acquire the shares of common stock for the plan?
Until further notice from us, we will issue new shares of common
stock (which may include previously issued shares held in treasury) to the agent
in order to satisfy the requirements of the plan.
However, we reserve the right to authorize the agent to satisfy the
requirements of the plan through open market purchases effected through
brokerage transactions in the over-the-counter market or in negotiated
transactions which may include situations where the broker is selling as a
principal (which may include a mark-up) or an agent. In making purchases in the
open market, the agent may commingle your funds with the funds of other
participants in the plan.
11. What will be the price of shares purchased under the plan?
The purchase price per share of newly issued shares of common stock
(which may be treasury shares) purchased to satisfy the requirements of the plan
directly from us on any investment date will be the average of the high and low
sales price of a share of common stock on the Nasdaq National Market as reported
for that date by the Nasdaq National Market or, if no sales price is reported
for that date, the average of the bid quotations for the common stock on that
date as reported by the Nasdaq National Market; provided, however, that if no
such sales or quotations are reported by the Nasdaq National Market for such
investment date, the purchase price of a share of common stock on such date
shall be the average of the high and low sales price or, if no sales price is
reported, the average of the bid quotations as reported by the Nasdaq National
Market for the business day immediately after that investment date on which such
sales or quotations are reported. We will not sell any shares of common stock to
the plan at less than the par value of such shares.
The purchase price for shares of common stock purchased through the
plan in the open market, if any, shall be the weighted average purchase price of
all shares purchased for the plan in the open market on the relevant investment
date.
The price at which the agent shall be deemed to have acquired shares
for a participant's account shall be the average price of all shares purchased
by it as agent for all participants in the plan with the proceeds of a single
cash dividend from us.
The agent will make every effort to invest funds in common stock as
soon as practicable on or after each investment date. Shares that we sell to
participants' accounts shall be sold as of the close of business on the relevant
investment date. Dividend and voting rights will commence upon settlement, which
is normally the date of purchase.
9
12. How many shares will be purchased for participants?
The number of shares purchased for you depends on the amount of your
reinvested dividends and the price per share on the investment date, as
described by Question 11 above. Your account will be credited with that number
of shares, including fractions computed to three decimal places, equal to the
total amount of your reinvested dividends divided by the applicable purchase
price per share.
COSTS:
13. Are there any out-of-pocket costs to participants in connection with
purchases (with your reinvested cash dividends) under the plan?
We pay all costs of administration of the plan. However with respect
to each purchase transaction under the plan, there will be an investment fee
equal to 2% of the investment up to a maximum of $2.50 for each purchase
transaction. If a shareholder deposits certificates with American Stock Transfer
& Trust Company for safekeeping, there will also be a safekeeping fee of $7.50
per each deposit.
If we satisfy the requirements of the plan by issuing new shares of
common stock (which may include previously issued shares held in treasury),
there will be no brokerage fees or commissions charged to participants in
connection with reinvestment of their cash dividends. However, if shares are
purchased on the open market to satisfy the requirements of the plan (which will
only occur after due notice to plan participants), there will be brokerage fees
or commissions charged at a rate of $.10 per share to participants in connection
with the reinvestment of their cash dividends, which in the instance where the
broker acts as a principal may include mark-ups.
For sales of common stock and termination of a participant's account
under the plan, there will be a $15 transaction fee plus a $.10 per share
brokerage commission.
TAXES:
14. What are the income tax consequences of participation in the plan?
Under federal tax law, reinvested cash dividends will be taxed as
ordinary (dividend) income to the extent that a cash distribution would have
been ordinary (dividend) income to such shareholder. Reinvestment of dividends
does not relieve a participant of any income tax which may be payable on such
dividends. Under current federal tax law, dividends are generally taxed at a
rate of 15%.
Shareholders who elect to participate in the plan will have a basis
in the shares acquired under the plan equal to the price of the shares purchased
for their account. Upon a sale of such stock, the difference between the sales
proceeds and the shareholder's basis will generally be taxable as short-term or
long-term capital gain (or loss) depending on the shareholder's holding period
for the shares. The holding period for shares acquired pursuant to the plan will
begin on the day following the purchase of such shares.
10
A participant may also realize a gain or loss upon withdrawal from
the plan and receipt of a cash payment for a fraction of a share. The amount of
such gain or loss will be the difference between the amount received for the
fraction of a share and the tax basis thereof.
In the case of U.S and non-U.S. participants who elect to have their
dividends reinvested and whose dividends are subject to United States
withholding tax or backup withholding (both currently at a rate of 30%), an
amount equal to the dividends payable to such participants, less the amount of
tax required to be withheld, will be applied to the purchase of shares of common
stock under the plan. The filing of any documentation required to obtain a
reduction in United States withholding tax will be the responsibility of the
participant.
We believe the foregoing is an accurate summary of the federal
income tax consequences of participation in the plan as of the date of this
prospectus. This summary may not reflect every possible situation that could
result from participation in the plan. Therefore, each participant is urged to
consult his or her own tax advisor to determine the particular federal, state
and local tax consequences resulting from participation in the plan and the
subsequent disposal of shares purchased pursuant to the plan. If a participant
does not reside in the United States, his or her income tax consequences will
vary from jurisdiction to jurisdiction. In addition, the foregoing rules may not
be applicable to certain participants in the plan, such as tax exempt entities
(e.g., pension funds and IRAs).
REPORTS TO PARTICIPANTS:
15. What kind of reports will be sent to participants in the plan?
Each participant will receive a quarterly statement showing the
amount invested, the purchase price, the number of shares purchased, deposited,
sold, transferred, or withdrawn, the total shares accumulated, and other
information for each quarter. The quarterly statement will consolidate all
shares held by the agent for the participant and other shares registered in the
participant's name. Each participant should retain these statements in order to
establish the cost basis of shares purchased under the plan for income tax and
other purposes. Duplicate statements will be available from the agent.
In addition, on or before January 31 of each year, the agent will
deliver to participants a Form 1099 reporting dividend income for Federal income
tax purposes. Participants will also receive copies of the same communications
sent to all other holders of the common stock, including our annual report, the
notice of annual meeting and the proxy statement for the annual meeting.
DIVIDENDS ON FRACTIONS OF SHARES:
16. Will participants be credited with dividends on fractions of shares?
Dividends on fractions, as well as on whole shares, will be credited
to your account and will be reinvested in additional shares of common stock.
11
SALE OF SHARES.
17. May a participant sell shares in his or her plan account?
Participants may request the agent to sell any number of whole
shares held in their plan accounts by giving written instructions to the agent.
The agent will make the sale as promptly as practicable and, in no event later
than ten business days following receipt of the request. The participant will
receive the proceeds, less applicable brokerage fees or commissions and transfer
tax, if any. Proceeds of shares sold through the plan will be paid to the
participant by check. No check will be mailed prior to settlement, which
typically occurs three business days after the sale of shares.
No participant shall have the authority or power to direct the date
or price at which common stock may be sold. Requests must indicate the number of
shares to be sold and not the dollar amount to be attained. Any request that
does not clearly indicate the number of shares to be sold will be returned to
the participant with no action taken. A request to sell all shares held in a
participant's account will be treated as a withdrawal from the plan (see
"Termination of Participation" below).
CERTIFICATES FOR SHARES:
18. Will certificates be issued for shares purchased?
Certificates will not be issued to you for shares credited to your
account unless you request the agent in writing to do so or unless your account
is terminated. The number of shares (including fractional shares) credited to
your account under the plan will be shown on each statement of your account.
This service eliminates the need for safekeeping by you to protect against loss,
theft or destruction of stock certificates.
You may request that the agent send you a certificate for all or
part of the whole shares credited to your account. You may utilize the
transaction stub attached to your quarterly statement for this purpose. This
request should be mailed to:
American Stock Transfer & Trust Company
Dividend Reinvestment Dept.
P.O. Box 922 Wall Street Station
New York, New York 10269-0560
You may also request certificates by visiting American Stock
Transfer & Trust Company's website at www.investpower.com or by calling (877)
390-3092.
Any remaining whole shares and fractions of a share will continue to
be credited to your account. Withdrawal of shares in certificate form in no way
affects dividend reinvestment.
Shares credited to your account under the plan may not be pledged or
assigned. If you want to pledge or assign such shares, you must request that a
certificate for such shares be issued in your name.
12
Certificates for fractional shares will not be issued under any
circumstances.
An institution that is participating in the plan and is required by
law to maintain physical possession of certificates may request a special
arrangement regarding the issuance of certificates for shares purchased under
the plan. This request should be mailed to the agent at the above address.
19. In whose name will certificates be registered when issued to
participants?
Accounts under the plan are maintained in the name in which your
shares are registered at the time you enter the plan. Consequently, certificates
for whole shares purchased under the plan will be similarly registered when
issued to you upon your request.
TERMINATION OF PARTICIPATION:
20. How does a participant terminate participation in the plan?
In order to terminate participation in the plan, a participant must
notify the agent in writing that he or she wishes to do so. A form of such
notice is provided on a tear-off stub at the bottom of the account statement and
should be mailed to:
American Stock Transfer & Trust Company
Dividend Reinvestment Dept.
P.O. Box 922 Wall Street Station
New York, New York 10269-0560
Upon termination of participation in the plan, a certificate for
whole shares credited to a participant's account under the plan will be issued
and a check will be issued for any fraction of a share. Cash payments for
fractional shares will be based upon the market price of the common stock at the
time such fraction is sold. However, you may not receive payment for a
fractional share in the event that the transaction fees discussed in Question 13
exceed the amount due on said fractional share. Notwithstanding the foregoing,
American Stock Transfer & Trust Company will not bill you for the difference
between the amount due on said fractional share and the transaction fees due to
American Stock Transfer & Trust Company.
On termination, a participant may request that all the whole shares
credited to his or her account in the plan be sold and the sale will be made by
the agent within ten business days of the agent's receipt of the participant's
request. A participant will receive the proceeds from such sale, less any
brokerage fees or commissions and any applicable transfer tax.
21. When may a participant terminate participation in the plan?
Termination may occur at any time. If the request to terminate is
received two days prior to a dividend payment date, the withdrawal will be
effective for the applicable dividend payment date. If the request to terminate
is received less than two days prior to a dividend payment date, any cash
dividend paid on that dividend payment date will be reinvested in a
participant's account. The participant will have to re-terminate his account at
his convenience.
13
All subsequent dividends will be paid to you by check unless you
re-enroll in the plan, which you may do at any time.
OTHER INFORMATION:
22. What happens when a participant sells or transfers some or all of
the shares registered in his or her name?
If a participant disposes of some or all of the shares registered in
his or her name, that transfer will not affect participation in the plan. The
agent will continue to reinvest the dividends on shares credited to a
participant's account under the plan, subject to the right to withdraw from the
plan at any time.
23. If we have a rights offering, how will the rights on the plan shares
be handled?
In the event of a rights offering, the agent will distribute rights
to purchase additional shares of our common stock or other securities that are
received by the agent with respect to shares held in the participant's account,
including shares held for safekeeping, as soon as practicable. Rights on shares
of stock registered in the name of a participant will be mailed directly to the
participant in the same manner as to shareholders who are not participating in
the plan. Rights based on a fraction of a share held in a participant's account
will be sold and the net proceeds will be invested in the same manner as
dividends as of the next investment date.
Transaction processing may be curtailed or suspended until the
rights offering has been completed.
24. What happens if we issue a dividend payable in stock or declare a
stock split?
Any dividend payable in common stock or split shares distributed by
us on shares credited to a participant's account under the plan, including
shares held for safekeeping, will be added to that account.
Stock dividends or split shares distributed on shares registered in
the participant's name will be mailed directly to the participant in the same
manner as to shareholders who are not participating in the plan.
Transaction processing may be curtailed or suspended until such
corporate action has been completed.
25. How will a participant's shares held by the agent be voted at
shareholders' meetings?
Proxy materials will be sent to participants in connection with any
annual or special meeting of shareholders. Whole and fractional shares held for
you by the agent under the plan will be voted as you direct.
14
26. What are our and the agent's responsibilities under the plan?
Neither we nor the agent (nor any of their respective agents,
representatives, employees, officers, directors or subcontractors) will be
liable in administering the plan for any act done in good faith or for any good
faith omission to act, including, without limitation, any claim of liability
arising out of failure to terminate a participant's account upon death or with
respect to the prices at which shares are purchased or sold for a participant's
account, the times when purchases are made or with respect to any fluctuation in
market value of the common stock.
Participants should recognize that we cannot assure a profit or
protect against a loss on the shares purchased under the plan.
27. May the plan be changed or discontinued?
Notwithstanding any other provision of the plan, our Board of
Directors may amend, supersede or terminate the plan at any time, including the
period between a dividend record date and a dividend payment date. Our Board of
Directors may increase the number of shares that we may issue under the plan,
but may not increase the number of authorized shares of the common stock without
shareholder approval. As previously discussed, until further notice from us,
shares of common stock will be purchased directly from us by the agent for the
plan. However, we reserve the right to satisfy the requirements of the plan,
upon due notice to the participants, by authorizing our agent to purchase shares
in the open market. Notice of any material amendment, or any suspension or
termination of the plan, or statement that we are authorizing the agent to
satisfy the requirements of the plan by purchasing shares in the open market,
will be mailed to all participants. No such event will affect any shares then
credited to a participant's account. Upon any whole or partial termination of
the plan, certificates for whole shares credited to a participant's account
under the plan will be issued to the participant and a cash payment will be made
for any fraction of a share.
28. May we terminate participation by a plan participant?
If a participant does not own at least one whole share registered in
the participant's name or held through the plan, the participant's participation
in the plan may be terminated. We may also terminate any participant's
participation in the plan after written notice in advance mailed to such
participant at the address appearing on the agent's records. Participants whose
participation in the plan has been terminated will receive certificates for
whole shares held in their accounts and a check for the cash value of any
fractional shares held in their plan accounts. The value of fractional shares
will be based upon the market price of the common stock at the time payment is
made.
29. How may shareholders obtain answers to other questions regarding the
plan?
Any additional questions should be addressed to:
Heathcare Services Group, Inc. Dividend Reinvestment Plan
c/o American Stock Transfer & Trust Company
Dividend Reinvestment Dept.
P.O. Box 922 Wall Street Station
New York, New York 10269-0560
Telephone No.: (877) 390-3092 or (212) 936-5100
15
or
Richard Hudson, Secretary
Healthcare Services Group, Inc.
3220 Tillman Drive
Glenview Corporate Center, Suite 300
Bensalem, Pennsylvania 19020
THE COMPANY
Healthcare Services Group, Inc. (the "Company") is a Pennsylvania
corporation. The Company's principal executive offices are located at 3220
Tillman Drive, Glenview Corporate Center, Suite 300, Bensalem, Pennsylvania
19020. The Company's telephone number is (215) 639-4274.
RISK FACTORS
GENERAL - CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS.
The purchase of our common stock involves a high degree of risk. You
should carefully consider the following risk factors and the other information
in this Prospectus and in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2002 (the "10-K") particularly, "Government Regulation of
Clients", "Service Agreements/Collection" and "Competition" and in our Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003
(the "10-Qs") before deciding to invest in our common stock. Certain matters
discussed in this Prospectus and in the 10-K or 10-Qs may include
forward-looking statements that are subject to risks and uncertainties that
could cause actual results or objectives to differ materially from those
projected. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Such risks and uncertainties include, but are not limited
to, continued availability of funds to pay future dividends, risks arising from
our providing services exclusively to the health care industry, primarily
providers of long-term care; credit and collection risks associated with this
industry; one client accounting for approximately 23% of revenue for the six
months ended June 30, 2003; our claims experience related to workers'
compensation and general liability insurance; the effects of changes in
regulations governing the industry; and the risks specified below. Additionally,
our operating results would be adversely affected if unexpected increases in the
costs of labor, materials, supplies and equipment used in performing our
services could not be passed on to clients. In addition, we believe that to
improve our future financial performance we must continue to obtain service
agreements with new clients, provide additional services to existing clients,
achieve modest price increases on current service agreements with existing
clients and maintain internal cost reduction strategies at various operational
levels. Furthermore, we believe that our ability to sustain the internal
development of managerial personnel is an important factor impacting future
operating results and successfully executing projected growth strategies.
16
THE PHASING IN OF A MEDICARE PROSPECTIVE PAYMENT SYSTEM HAS ADVERSELY AFFECTED
OUR CLIENTS AND MAY CONTINUE TO DO SO IN THE FUTURE.
Our clients are subject to various governmental regulations
including, but not limited to, the Balanced Budget Act of 1997 (the "BBA"). This
legislation changed Medicare policy in a number of ways, most notably the
phasing in, effective July 1, 1998, of a Medicare Prospective Payment System
("PPS") for skilled nursing facilities which significantly changed the
reimbursement procedures and the amounts of reimbursement they receive. Many of
our clients' revenues are highly contingent on Medicare and Medicaid
reimbursement funding rates. Therefore, they have been and continue to be
adversely affected by changes in applicable laws and regulations, as well as
other trends in the long-term care industry. This has resulted in certain of our
clients filing for bankruptcy protection. Others may follow. Since the passage
of the BBA, Congress has passed additional legislation, principally the Balanced
Budget Refinement Act of 1999 ("BBRA") and the Benefit Improvement and
Protection Act of 2000 ("BIPA"). These enactments were intended primarily to
mitigate, temporarily, the reduction in reimbursement for skilled nursing
facilities under the Medicare PPS. In total, four add-on payments were
established by the enactments to offset the impact of PPS. On April 23, 2002,
the Center for Medicare and Medicaid Services ("CMS") announced that it would
delay implementation of any refinements to the scope of two of the add-on
payments enacted pursuant to the BBRA and BIPA, thereby extending the related
add-ons to at least September 30, 2003. The other two add-on payment provisions
expired on September 30, 2002. The Senate introduced legislation in October 2002
which included a partial reinstatement of the add-on payment provision limited
to the nursing component of the Medicare rate. This legislative proposal would
provide for certain annual increases beginning in 2003 and continuing through
2005. There can be no assurance as to whether this proposal will be adopted. Any
decisions by the government to discontinue or adversely modify legislation
relating to reimbursement funding rates will have a material adverse effect on
our clients' revenues. These factors, in addition to delays in payments from
clients, have resulted in and could continue to result in significant additional
bad debts in the future.
MAJOR CLIENT
We have one client, a nursing home chain, which for the six month
period ended June 30, 2003 and annual periods of 2002 and 2001 accounted for
approximately 23%, 17% and 14%, respectively, of our consolidated revenues. With
respect to such client, we derived revenues from both operating segments.
Although we expect to continue our relationship with this client, the loss of
such client would adversely affect the operations of our two operating segments.
OTHER BUSINESS RELATED RISKS
Our clients generally enter into service agreements which are
cancelable on short notice, and we have encountered difficulty in collecting
amounts due from certain clients who have terminated service agreements as well
as clients who are in bankruptcy or slow payers experiencing financial
difficulties.
Substantially all of our agreements are full service agreements.
These agreements typically provide for a one year term, but are cancelable by
either party upon 30 days' notice after the initial 90-day period. As of June
30, 2003, we provided services to approximately 1,400 client facilities.
17
Although the service agreements are cancelable on short notice, we
have historically had a favorable client retention rate and expect to be able to
continue to maintain satisfactory relationships with our clients (although there
can be no assurance thereof). The risks associated with short-term agreements
have not materially affected either our linen and laundry service, which
sometimes require a capital investment, or laundry installation sales, which
require us to finance the sales price. These transactions have not been material
in recent years. Such risks are often mitigated by certain provisions set forth
in the agreements in which we enter.
From time to time, however, we encounter difficulty in collecting
amounts due from certain of our clients. Therefore, the Company has sometimes
been required to extend the period of payment for certain clients beyond
contractual terms. These clients include those in bankruptcy, those who have
terminated service agreements and those who are slow payers and experiencing
financial difficulties. In order to provide for these collection problems and
the general risk associated with the granting of credit terms, we have recorded
bad debt provisions (i.e., an Allowance for Doubtful Accounts) of $2,950,000,
$6,050,000 and $5,445,000 in the six months ended June 30, 2003 and the fiscal
years ended December 31, 2002 and 2001, respectively. In addition to analyzing
and anticipating, where possible, the specific cases described above, our
management considers the general collection risks associated with trends in the
long-term care industry in making its evaluations.
THERE IS STRONG COMPETITION TO PROVIDE SERVICE TO HEALTH CARE FACILITIES.
We compete primarily with the in-house support service departments
of our potential clients. Most health care facilities perform their own support
service functions without relying on outside management firms like us. In
addition, a number of local firms compete with us in the regional markets in
which we conduct business. Additionally, several national service firms are
larger and have greater financial and marketing resources than us, although
historically, such firms have concentrated their marketing efforts on hospitals
rather than the long-term care facilities which we typically service. Although
the competition to provide service to health care facilities is strong, we
believe that we compete effectively for new agreements, as well as renewals of
the existing agreements, based upon the quality and dependability, as well as
cost savings, from our services.
USE OF PROCEEDS
The Company does not know the number of shares that will ultimately
be purchased directly from the Company under the plan. To the extent that the
Company issues shares in lieu of paying a cash dividend, the proceeds which the
Company otherwise would use to pay for the cash dividend will be used for
general corporate purposes.
DESCRIPTION OF CAPITAL STOCK
The Company has 30,000,000 shares of authorized common stock, $.01
par value per share (the "Common Stock"), 11,323,921 of which shares were
outstanding as of the date of this prospectus.
18
The following statements are brief summaries of certain information
relating to the Common Stock. These summaries do not purport to be complete and
are subject in all respects to the applicable provisions of the Company's
Articles of Incorporation, as amended, with respect to certain rights of the
holders of Common Stock.
Each share of Common Stock is entitled to dividends when and as
declared by the Board of Directors out of sources legally available therefor.
Each share of Common Stock is entitled to one vote on all matters. On
liquidation, the holders of Common Stock are entitled to share pro rata in the
net assets of the Company remaining after the payment of creditors. The Board of
Directors is authorized to issue all unissued shares of Common Stock from time
to time, as well as previously issued shares held in treasury, without any
further action or authorization by shareholders. The holders of Common Stock
have no preemptive or conversion rights. The shares of Common Stock presently
outstanding are, and the shares reserved for issuance under the plan will be
upon issue, fully paid and nonassessable.
DIVIDENDS
The Company currently intends to pay dividends quarterly in March,
June, September and December. The payment of dividends is within the sole
discretion of the Board of Directors.
PLAN OF DISTRIBUTION
The shares of Common Stock sold under the plan are being distributed
directly by us rather than through an underwriter, broker or dealer. Unless we
authorize our agent to purchase shares in the open market, there will be no
brokerage commissions charged to participants in connection with the purchase of
shares under the plan. Upon withdrawal by a participant from the plan or upon
the sale of Common Stock held under the plan, the participant will receive
proceeds of such sale less a nominal fee per transaction paid to the agent (if
such sale is made by the agent at the request of a participant), any related
brokerage commissions and any applicable transfer taxes.
EXPERTS
The financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of Healthcare Services Group, Inc.
for the year ended December 31, 2002 have been so incorporated in reliance on
the report of Grant Thornton LLP, independent accountants, given on the
authority of said firm as an expert in auditing and accounting.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Common
Stock offered hereby have been passed upon for the Company by Olshan Grundman
Frome Rosenzweig & Wolosky LLP, 505 Park Avenue, New York, New York 10022.
Robert L. Frome, a member of Olshan Grundman Frome Rosenzweig & Wolosky LLP, is
a director of the registrant and beneficially owns 225 shares and holds options
to purchase 32,435 shares of Common Stock.
19
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-3d under the Securities Act with respect to the
shares offered hereby. For further information with respect to the Company and
the securities offered hereby, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, such statement being qualified in all respects by such
reference.
DISCLOSURE OF COMMISSION'S POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act") may be permitted to
directors, officers or persons controlling the Company, the Company has been
advised that it is the Securities Exchange Commission's opinion that such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Filing Fee..............$1,327.57
Administrative and transfer agent's fees....................6,100(i)
Costs of printing and engraving.............................2,140
Legal fees and expenses....................................17,500
Accounting fees and expenses................................5,000
Miscellaneous expenses......................................5,000
Total.....................................................$37,067.57
(i) Based on an initial fee of $2,500 and first annual fee of $3,600.
All of the above amounts are estimated except for the Securities and
Exchange Commission filing fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS BY THE REGISTRANT.
Sections 1741 through 1750 of Subchapter C of Chapter 17 of the
Pennsylvania Business Corporation Law (the "BCL") contain, among other things,
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers and other personnel.
Under Section 1741, unless otherwise limited by its by-laws, a
corporation has the power to indemnify directors and officers under certain
prescribed circumstances against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with a threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative, to which any of them
is a party or threatened to be made a party by reason of his being a
representative, director or officer of the corporation or serving at the request
of the corporation as a representative of another corporation, partnership,
joint venture, trust or other enterprise, if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action or
proceeding by judgment, order, settlement or conviction or upon a plea of nolo
contendere or its equivalent does not of itself create a presumption that the
person did not act in good faith and in a manner that he reasonably believed to
be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 1742 provides for indemnification with respect to derivative
actions similar to that provided by Section 1741. However, indemnification is
not provided under Section 1742 with respect to any claim, issue or matter as to
which a director or officer has been adjudged to be liable to the corporation
unless and only to the extent that the proper court determines upon application
that, despite the adjudication of liability but in view of all of the
circumstances of the case, a director or officer is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
II-1
Section 1743 provides that indemnification against expenses is
mandatory to the extent that the director or officer has been successful on the
merits or otherwise in defense of any such action or proceeding referred to in
Section 1741 or 1742.
Section 1744 provides that unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation as
authorized in the specific case upon a determination that indemnification of
directors and officers is proper because the director or officer met the
applicable standard of conduct, and such determination will be made by the Board
of Directors by a majority vote of a quorum of directors not parties to the
action or proceeding; if a quorum is not obtainable or if obtainable and a
majority of disinterested directors so directs, by independent legal counsel; or
by the shareholders.
Section 1745 provides that expenses incurred by a director or
officer in defending any action or proceeding referred to in the Subchapter may
be paid by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation.
Section 1746 provides generally that except in any case where the
act or failure to act giving rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by the Subchapter shall not
be deemed exclusive of any other rights to which a director or officer seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding that office.
Section 1747 also grants a corporation the power to purchase and
maintain insurance on behalf of any director or officer against any liability
incurred by him in his capacity as officer or director, whether or not the
corporation would have the power to indemnify him against the liability under
this Subchapter of the BCL.
Sections 1748 and 1749 apply the indemnification and advancement of
expenses provisions contained in the Subchapter to successor corporations
resulting from consolidation, merger or division and to service as a
representative of a corporation or an employee benefit plan.
The foregoing provisions substantially overlap the provisions of the
Pennsylvania Directors' Liability Act, 42 Pa. C.S. ss. 8365, which are also
applicable to the Company.
Article XI of the Company's By-laws provides, in part, that the
Company shall indemnify its directors, officers, employees and agents to the
fullest extent permitted by the BCL.
Article XII of the Company's By-laws provides, in part, that:
II-2
"A Director shall not be liable for monetary damages as
such for any action taken, or any failure to take action, unless
(1): the director has breached or failed to perform the duties of
his office under Section 8363 of the Pennsylvania Consolidated
Statutes and the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness; provided, however,
that the foregoing provision shall not relieve a director of
responsibility or liability of a director pursuant to any criminal
statute or for the payment of taxes pursuant to local, state or
Federal law."
The Company has purchased director and officer liability insurance
for its directors and officers.
ITEM 16. LIST OF EXHIBITS
5. Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.
23. Consent of Grant Thornton LLP.
24. Power of Attorney (contained in the signature page).
99. Form of Dividend Reinvestment Plan enrollment card.
ITEM 17. UNDERTAKINGS
A The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
provided, however, that paragraphs (i) and (ii) above do
not apply if the information required to be included in
a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
that are incorporated by reference in the Registration
Statement;
II-3
(2) That, for the purposes of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that
remain unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, a copy of the
registrant's latest annual report to stockholders that is
incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Exchange Act; and, where interim financial
information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus
is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to
provide such interim financial information.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3d and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Bensalem, State of Pennsylvania, on this 21st day of August, 2003.
HEALTHCARE SERVICES GROUP, INC.
(Registrant)
/s/ Daniel P. McCartney
-------------------------------------------------------
Daniel P. McCartney, Chief Executive Officer and Chairman
POWERS OF ATTORNEY AND SIGNATORIES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the undersigned officers and
directors of Healthcare Services Group, Inc. hereby constitutes and appoints
Daniel P. McCartney and Thomas A. Cook and each of them singly, as true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him in his name in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission and to
prepare any and all exhibits thereto, and other documents in connection
therewith, and to make any applicable state securities law or blue sky filings,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite or necessary to be done to
enable Healthcare Services Group, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/ Daniel P. McCartney
---------------------------
Daniel P. McCartney Chief Executive Officer and Chairman August 22, 2003
/s/ Thomas A. Cook Director, President and Chief Operating
---------------------------- Officer August 22, 2003
Thomas A. Cook
II-5
Signature Title Date
--------- ----- ----
/s/Barton D. Weisman
--------------------------
Barton D. Weisman Director August 22, 2003
/s/ Robert L. Frome
--------------------------
Robert L. Frome Director August 22, 2003
/s/ John M. Briggs
--------------------------
John M. Briggs Director August 22, 2003
/s/ Robert J. Moss
--------------------------
Robert J. Moss Director August 22, 2003
/s/ Joseph F. McCartney
--------------------------
Joseph F. McCartney Director and Divisional Vice President August 22, 2003
/s/ James L. DiStefano
--------------------------
James L. DiStefano Chief Financial Officer and Treasurer August 22, 2003
/s/ Richard W. Hudson Vice President - Finance August 22, 2003
-------------------------- and Secretary (Principal
Richard W. Hudson Accounting Officer)
II-6