SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended DECEMBER 31, 1994
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-11618
HPSC, INC.
-----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2560004
-------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 720-3600
--------------
Securities registered pursuant to section 12 (b) of the Act:
NONE
Securities registered pursuant to section 12 (g) of the Act:
COMMON STOCK-PAR VALUE $.01 PER SHARE
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any other
amendment to this Form 10-K.
YES X NO
--- ---
The aggregate market value of the voting stock held by non-affiliates of the
registrant was $16,394,325 at February 28, 1995, representing 3,544,719 shares.
The number of shares of common stock, par value $.01 per share, outstanding as
February 28, 1995 was 5,574,712.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended
December 31, 1994 (the "1994 Annual Report") are incorporated by reference into
Parts I, II and IV of this annual report on Form 10-K. Portions of the Proxy
Statement of the Registrant to be filed on or about March 28, 1995 are
incorporated by reference in Part III of this report on Form 10-K.
The 1994 Annual Report and Proxy Statement, except for the parts therein
which have been specifically incorporated by reference, shall not be deemed
"filed" as part of this report on Form 10-K.
2
PART I
Item 1. BUSINESS
GENERAL
HPSC, Inc. (the "Company" or "HPSC") is a financial services company
dedicated to providing financing for healthcare professionals. HPSC formerly
provided financing exclusively to the dental profession, but in mid-1993 it
began to expand into other healthcare markets and through its wholly-owned
subsidiary, American Commercial Finance Corporation ("ACFC"), into asset based
lending which focuses primarily on accounts receivable and inventory financing.
The Company's new business volume in 1994 increased substantially compared
to 1993 - $32,609,000 versus $16,402,000. In 1993, Healthco International,
Inc. (Healthco), the dental equipment supplier which previously supplied the
Company with substantially all of its business, filed for bankruptcy. The
bankruptcy of Healthco initially posed several significant challenges to the
Company. Management has worked to replace its lost business while at the same
time pursuing its plan to diversify into other markets. Within the dental
industry the Company continues its efforts to expand its business by
capitalizing on its reputation for providing a high level of customer service
and innovative and competitive financing programs. Today the Company provides
financing for over 100 different dental distributors and healthcare providers.
While certain of these vendors provide a substantial amount of business for the
Company, the Company is no longer dependent on any single source for its
business. The Company is now also providing financing to the ophthalmic,
podiatry, veterinary and chiropractic professions.
The Company finances dental, medical and other healthcare equipment as well
as leasehold improvements, office furniture, supplies and certain other costs
involved in opening, maintaining or acquiring a healthcare facility or practice.
The Company finances transactions only after a customer's credit has been
approved and a financing agreement has been executed. The Company does not
maintain any inventory. Typically, the manufacturer or distributor delivers the
equipment directly to the customer, and the Company purchases the equipment from
the supplier, at its customary selling price to the customer, upon installation
and customer acceptance.
Substantially all of the Company's agreements with its customers are
non-cancelable and provide for a full payout at a fixed financing rate with a
fixed payment schedule. The majority of the agreements have a term of between
three and seven years. All leases are classified as direct financing leases.
The Company's principal sources of funding include fixed rate borrowings of
varying maturities and a revolving line of credit at variable rates (see Note B
of Notes to Consolidated Financial Statements and "Management's Discussion and
Analysis of Financial Condition - Liquidity and Capital Resources" in the 1994
Annual Report). The Company's income depends, to a significant extent, upon its
ability to maintain a satisfactory spread between its cost of borrowings and the
rates that it charges its customers. In a rising interest rate environment,
the Company's use of variable rate financing could adversely affect its ability
to maintain these margins. Competitive pressures and other market conditions
could hinder the Company's ability to raise the rates charged to is customers
as quickly as its variable rate financing costs were rising.
As of November 1, 1994, the Company entered into a Purchase and Sale
Agreement with certain secured creditors of Healthco ("Secured Creditors")
pursuant to which the Company and certain individual investors agreed to acquire
the 1,949,182 shares of the Company's stock owned by Healthco which it had
pledged to the Secured Creditors and to resolve all claims between the Company
and the Secured Creditors relating to the Healthco bankruptcy. The total
consideration to be paid under the Purchase and Sale Agreement was $9 million,
$4.5 million to be paid at closing and $4.5 million to be in the form of a 6
month promissory note, collateralized by the shares of HPSC Common Stock
purchased by the Company. On December 30, 1994, the Company and the Secured
Creditors closed the transaction provided for in the Purchase and Sale
Agreement. The Company acquired 1,225,182 shares of its stock, subject to the
pledge of those shares to the Secured Creditors. Individual investors acquired
the remaining 724,000 shares. Mutual releases of claims were exchanged at the
closing, provided that the release of the Secured Creditor claims against HPSC,
if any, is contingent upon the Company's repayment in full of the note.
3
Item 1. BUSINESS (continued)
SEGMENT
The Company is principally engaged in providing financing to healthcare
professionals.
MARKETING AND SOURCES OF SUPPLY
The Company obtains its customers principally from equipment vendor
referral programs and directly from end-users to whom the Company has mailed
literature, who have learned of the Company's services through advertising or
who are current customers. The vendor referral programs permit the Company to
utilize vendors' sales personnel operating from retail distribution centers
throughout the United States to generate business for the Company. The Company
also sends representatives to major trade conventions.
The Company advertises its services through industry publications, its own
marketing brochures which it distributes and also through direct mail
advertising. Existing customers and referrals from existing customers of the
Company are also important sources of business.
LEASES AND NOTES RECEIVABLE
At December 31, 1994 the Company's lease, note receivable and asset based
lending portfolio of $103,531,000 consisted of approximately 8,000 accounts and
6,000 customers with an average remaining term of 26 months. Lease and note
terms ranged from 12-60 months, with the majority having a 36- or 60-month term.
No single customer accounted for more than 1.0% of the Company's total
receivables at December 31, 1994.
FINANCING TERMS AND CONDITIONS
The Company generally finances equipment to customers through standard
non-cancelable full payout leases or conditional sales agreements or notes.
Following execution of an agreement, the equipment is delivered from either a
distributor or a manufacturer directly to the customer. Following installation
and customer acceptance of the equipment, the Company purchases the equipment
from the supplier. The Company is the owner of the leased equipment and holds a
security interest in equipment financed with conditional sales agreements or
notes.
The Company makes no warranties to customers as to any matter, including
the condition, performance or suitability of the equipment. In substantially all
cases, customers are obligated to remit to the Company all amounts due
regardless of the performance of the equipment, to maintain and service the
equipment and to insure the equipment against casualty loss.
The Company establishes residual values when the equipment is
purchased and leased. Substantially all the Company's direct financing leases
include a lease purchase option. Historically, because substantially all
lessees have exercised this option at the recorded value, the Company generally
does not incur gains/losses from the sale or releasing of equipment. The
Company recognized no excess of recorded residuals in 1994.
4
Item 1. BUSINESS (continued)
CREDIT REVIEW AND LOSS EXPERIENCE
The Company conducts a credit review of each prospective customer, using
both commercial credit bureaus and its own internal credit procedures. The
Company's seven-person collection department is responsible for monitoring slow
paying accounts and collection activities when the Company determines such
action to be appropriate. Slow paying accounts are subject to service charges.
An analysis of changes in the allowance for uncollectible accounts and other
pertinent information follows (in thousands):
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross Write Offs
Leases and (Net of Provision Delinquent Allowance
Notes Recoveries) for Losses Installments for Losses
Receivable
--------------------------------------------------------------------------------
December 31, 1994 $103,531 $3,056(1) $754 $3,496 4,595
--------------------------------------------------------------------------------
December 25, 1993 126,369 17,423 15,104 4,805 6,897
--------------------------------------------------------------------------------
December 26, 1992 184,928 6,128 4,307 9,917 9,216
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<FN>
(1) Approximately $1,166,000 of this 1994 amount relates to Credident, Inc.,
the Company's Canadian subsidiary. The Company sold substantially all of
the assets of Credident to a third party in June, 1994. (See Note A of the
"Notes to Consolidated Financial Statements" in the 1994 Annual Report.)
For discussion of provision for losses and allowance for losses, see
"Management's Discussion and Analysis of Financial Condition - Results of
Operations,Fiscal 1994 Compared to 1993 and Fiscal 1993 Compared to 1992"
in the 1994 Annual Report.
FUNDING
At December 31, 1994 the Company had financing from a fixed rate
securitization and a variable rate revolving line of credit. See Note B of the
"Notes to Consolidated Financial Statements" and "Management's Discussion and
Analysis of Financial Condition - Liquidity and Capital Resources" in the 1994
Annual Report.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES AND CONCESSIONS
The Company does not have any material patents, trademarks, licenses,
franchises or concessions.
SEASONALITY
The Company's business is not seasonal; however, healthcare professionals
generally tend to purchase more equipment in the fourth quarter, which may
result in more business for the Company in that quarter.
WORKING CAPITAL
The Company does not carry inventory or provide rights of return to its
customers. Its working capital requirements relate directly to its volume of
financing transactions (see "Business - Funding" and "Management's Discussion
and Analysis of Financial Condition - Liquidity and Capital Resources" in the
1994 Annual Report).
5
Item 1. BUSINESS (continued)
MATERIAL CUSTOMERS
No customer or group of related customers accounted for 1.0% or more of
fiscal 1994 revenues.
RAW MATERIALS
The Company's business does not depend on raw materials.
BACKLOG
At December 31, 1994, the Company had a backlog of approximately
$25,000,000, consisting of customer applications which have been approved but
have not yet resulted in a completed transaction, compared to $6,400,000 at the
end of 1993. Not all approved applications will result in financing
transactions for the Company.
GOVERNMENT CONTRACTS OR SUB-CONTRACTS
The Company does not have a material amount of government contracts or
sub-contracts.
COMPETITION
The equipment financing business is highly competitive. Participants in the
industry compete through vendor/customer service, product innovation, and price.
Pricing is affected by each participant's ability to control origination and
funding costs, portfolio risk management and operating overhead costs. The
Company's ability to compete effectively in this market depends upon: (i) its
ability to procure financing on attractive terms; (ii) its knowledge of and
experience in its markets; (iii) its flexibility and adaptability in dealing
with the special needs of its client; (iv) its relationships with equipment
vendors; (v) its ability to continue to expand its business into areas other
than the dental profession and (vi) its ability to manage its portfolio
effectively.
The Company competes with finance divisions, affiliates and subsidiaries of
equipment manufacturers, other leasing and finance companies, certain banks
engaged in leasing and lease brokers. Many of these organizations are much
larger than the Company, have greater financial or other resources than the
Company and have access to funds at more favorable rates and terms than those
available to the Company.
RESEARCH AND DEVELOPMENT
The Company does not have research and development activities.
ENVIRONMENTAL PROTECTION
The Company's compliance with laws and regulations relating to the
protection of the environment will not have a material effect on its capital
expenditures, earnings or competitive position.
EMPLOYEES
At December 31, 1994, the Company and its subsidiaries had 44 full-time
employees, including 27 in general and administration and 17 in sales and
marketing.
6
Item 1. BUSINESS (continued)
FOREIGN OPERATIONS
The Company, through its Canadian subsidiary, Credident, Inc., engaged in
the financing of dental equipment in Canada. In 1994 the Company sold
substantially all of Credident's assets to Newcourt. Credident, Inc. was in
substantially the same business as the Company, (see Note A of Notes to
Consolidated Financial Statements). The Company has ceased to underwrite any
new business in Canada. See "Management's Discussion and Analysis of Financial
Condition - Results of Operations Fiscal 1994 Compared to 1993" in the 1994
Annual Report.
EXPORT SALES
The Company does not have any export sales.
Item 2. PROPERTIES
The Company leases approximately 8,320 square feet of office space at 60
State Street, Boston, Massachusetts from Trustees of 60 State Street Trust;
approximately 2,431 square feet at 433 South Main Street, West Hartford,
Connecticut are leased by its wholly-owned subsidiary, American Commercial
Finance Corporation, and 1,520 square feet at 15455 Conway Road, Chesterfield,
Missouri by its Midwest Division. The Company also rents space as required for
its sales locations on a short-term basis. (See Note C of the "Notes to
Consolidated Financial Statements" in the 1994 Annual Report.)
Item 3. LEGAL PROCEEDINGS
The Company was not subject to any material legal proceedings at December
31, 1994.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1994.
7
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The common stock of HPSC is traded on the NASDAQ National Market System.
The high and low sales prices for the common stock as reported by NASDAQ for
each quarter in the last two fiscal years, as well as the approximate number of
record holders and information with respect to dividend restrictions, are
incorporated by reference from page 17 of the 1994 Annual Report.
Item 6. SELECTED FINANCIAL DATA
Selected financial data for the five years ended December 31, 1994 is
incorporated by reference from page 16 of the 1994 Annual Report.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Financial Condition of the Company
is incorporated by reference from pages 17 through 19 of the 1994 Annual Report.
The information required by this item together with the Report of
Independent Accountants is incorporated by reference from pages 4 through 14 and
page 16 of the 1994 Annual Report. (See also the "Financial Statement Schedule"
filed under Item 14 of this Form 10-K.)
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
8
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information concerning the directors and executive officers of the
Company is incorporated by reference from the sections entitled "Nominees for
Directorship" and "Executive Officers" in the Proxy Statement of the Company to
be filed on or about March 28, 1995 (the "1995 Proxy Statement").
Item 11. EXECUTIVE COMPENSATION
Information regarding executive compensation is incorporated by reference
from the sections entitled "Executive Compensation - Summary Compensation
Table", "Executive Compensation - Option Grant Table", "Executive Compensation -
Aggregated Option Exercises and Year-End Option Value Table" and "Executive
Compensation - Employment Agreements" in the 1995 Proxy Statement.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The stock ownership of each person known to HPSC to be the beneficial owner
of more than 5% of its common stock and the stock ownership of directors and
executive officers and of all directors and executive officers as a group are
incorporated by reference from the section entitled "Voting Securities" in the
1995 Proxy Statement. See "Business-General" for information with respect to
HPSC stock formerly held by Healthco.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions is
incorporated by reference from the sections entitled "Executive Compensation -
Stock Loan Program" and "Certain Relationships and Related Transactions" in the
1995 Proxy Statement.
9
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Page Number In
(a) 1. FINANCIAL STATEMENTS ANNUAL REPORT
Incorporated by reference from the Company's
Annual Report to Stockholders for the fiscal
year ended December 31, 1994:
Report of Independent Accountants
Consolidated Balance Sheets at December 31,
1994 and December 25, 1993 4
Consolidated Statements of Income for each
of the three years in the period ended
December 31, 1994 5
Consolidated Statements of Changes in Stock-
holders' Equity for each of the three years in
the period ended December 31, 1994 6
Consolidated Statements of Cash Flows for
each of the three years in the period ended
December 31, 1994 7
Notes to Consolidated Financial Statements 8-13
Page Number in
(a) 2. FINANCIAL STATEMENT SCHEDULES FORM 10-K
Included in Part IV of this report:
Schedule VIII - Valuation and Qualifying
Accounts for each of the three years in
the period ended December 31, 1994 21
10
(a) 3. Exhibits Location of Documents Pertaining to Executive Compensation
Plans and Arrangements
Item in
Name of Document this Report Cross Reference
---------------- ----------- ---------------
1. HPSC, Inc. Stock Option 10.2 Incorporated by
Plan dated March 5, 1986 reference to Exhibit
10.6 to HPSC's Annual
Report on Form 10-K
for the fiscal year
ended December 30,
1989
2. Amended and Restated 10.3 Incorporated by
Employee Purchase Plan reference to Exhibit
effective January 5, 1987 4.3 to HPSC's
restated May 18, 1993 Quarterly Report on
Form 10-Q for the
quarter ended
September 25, 1993
3. Employment Agreement 10.4 Incorporated by
between the Company and reference to Exhibit
John W. Everets, dated 10.1 to HPSC's
July 19, 1993 Quarterly Report on
Form 10-Q for the
quarter ended
September 25, 1993
4. Employment Agreement 10.5 Incorporated by
between the Company and reference to Exhibit
Raymond R. Doherty dated 10.2 to HPSC's
as of August 2, 1993 Quarterly Report on
Form 10-Q for the
quarter ended
September 25, 1993
5. HPSC, Inc. Employee Stock 10.9 Incorporated by
Ownership Plan Agreement reference to HPSC's
dated December 22, 1993 Annual Report on Form
between HPSC, Inc. and John 10-K for the fiscal
Everets and Raymond year ended
Doherty, as trustees December 25, 1993
6. HPSC, Inc. 401 (k) Plan 10.15 Incorporated by
dated February, 1993 reference to HPSC's
between HPSC, Inc. and Annual Report on Form
Metropolitan Life Insurance 10-K for the fiscal
Company year ended
December 25, 1993
7. First Amendment effective 10.10 Incorporated by
January 1, 1993 to HPSC, reference to Exhibit
Inc. Employee Stock 10.2 to HPSC's
Ownership Plan Quarterly Report on
Form 10-Q
8. Second Amendment effective 10.11 Filed herewith.
January 1, 1994 to HPSC,
Inc., Employee Stock
Ownership Plan
9. Third Amendment effective 10.12 Filed herewith
January 1, 1993 to HPSC,
Inc. Employee Stock
Ownership Plan
10. HPSC, Inc. Supplemental 10.13 Incorporated by
Employee Stock Ownership reference to Exhibit
Plan and Trust dated 10.3 to HPSC's
July 25, 1994 Quarterly Report on
Form 10-Q for the
quarter ended June 25,
1994
11
(a) 3. Exhibits Location of Documents Pertaining to Executive Compensation
Plans and Arrangements (cont'd)
Item in
Name of Document this Report Cross Reference
---------------- ----------- ---------------
11. HPSC, Inc. 1994 Stock Plan 10.14 Incorporated by
dated as of March 23, 1994 reference to Exhibit
and related forms of 10.4 to HPSC's
Nonqualified Option Grant Quarterly Report on
and Option Exercise Form Form 10-Q for the
quarter ended June 25,
1994
12. Employment Agreement 10.8 Incorporated by
between HPSC, Inc. and Rene reference to Exhibit
Lefebvre dated April 6, 10.5 to HPSC's
1994 Quarterly Report on
Form 10-Q for the
quarter ended June 25,
1994
13. Amendment dated as of May 10.6 Incorporated by
25, 1994 to Employment reference to Exhibit
Agreement between HPSC, 10.6 to HPSC's
Inc. and John W. Everets Quarterly Report on
Form 10-Q for the
quarter ended June 25,
1994
14. Amendment dated as of May 10.7 Incorporated by
25, 1994 to Employment reference to Exhibit
Agreement between HPSC, 10.7 to HPSC's
Inc. and Raymond R. Doherty Quarterly Report on
Form 10-Q for the
quarter ended June 25,
1994
12
EXHIBITS
Exhibit Title Method of Filing
------- ----- ----------------
No.
--
3.1 Form of Restated Certificate Incorporated by reference
of Incorporation of HPSC, Inc. to Exhibit 3.1 to HPSC's
Registration Statement on
Form S-1 filed April 27,
1983 (File No. 2-83334)
3.2 Certificate of Designation of Incorporated by reference
HPSC, Inc.'s Series A to Exhibit 3.3 to HPSC's
Preferred Stock Annual Report on Form 10-K
for the fiscal year ended
December 25, 1993
3.3 Amended and Restated By-Laws Incorporated by reference
to Exhibit 3.1 to HPSC's
Quarterly Report on Form
10-Q for the quarter ended
June 25, 1994
4.1 Rights Agreement dated as of Incorporated by reference
August 3, 1993 between the to Exhibit 4 to HPSC's
Company and The First National Amendment No. 1 to its
Bank of Boston, N.A., Current Report on Form 8-K
including as Exhibit B thereto filed August 11, 1993.
the form of Rights Certificate
10.1 Lease dated as of March 8, Filed herewith.
1994 between the Trustees of
60 State Street Trust
September 10, 1970 and
HPSC, Inc. relating to the
principal executive offices of
HPSC, Inc. at 60 State Street,
Boston, Massachusetts
10.2 HPSC, Inc. Stock Option Plan, Incorporated by reference
dated March 5, 1986 to Exhibit 10.6 to HPSC's
Annual Report on Form 10-K
for the fiscal year ended
December 30, 1989
10.3 Amended and Restated Employee Incorporated by reference
Stock Purchase Plan effective to Exhibit 4.3 to HPSC's
January 5, 1987 restated May Quarterly Report on Form
18, 1993 10-Q for the quarter ended
September 25, 1993
13
EXHIBITS (CONTINUED)
Exhibit Title Method of Filing
------- ----- ----------------
No.
--
10.4 Employment Agreement between Incorporated by reference
the Company and to Exhibit 10.1 to HPSC's
John W. Everets, dated Quarterly Report on Form
July 19, 1993 10-Q for the quarter ended
September 25, 1993
10.5 Employment Agreement between Incorporated by reference
the Company and Raymond R. to Exhibit 10.2 to HPSC's
Doherty dated Quarterly Report on Form
as of August 2, 1993 10-Q for the quarter ended
September 25, 1993
10.6 Amendment dated as of May 25, Incorporated by reference
1994 to Employment Agreement to Exhibit 10.6 to HPSC's
between HPSC, Inc. and Quarterly Report on Form
John W. Everets 10-Q for the quarter ended
June 25, 1994
10.7 Amendment dated as of May 25, Incorporated by reference
1994 to Employment Agreement to Exhibit 10.7 to HPSC's
between HPSC, Inc. and Raymond Quarterly Report on Form
R. Doherty 10-Q for the quarter ended
June 25, 1994
10.8 Employment Agreement between Incorporated by reference
HPSC, Inc. and Rene Lefebvre to Exhibit 10.5 to HPSC's
dated April 6, 1994 Quarterly Report on Form
10-Q for the quarter ended
June 25, 1994
10.9 HPSC, Inc. Employee Stock Incorporated by reference
Ownership Plan Agreement dated to HPSC's Annual Report on
December 22, 1993 between Form 10-K for the fiscal
HPSC, Inc. and John W. Everets year ended December 25,
and Raymond R. Doherty, as 1993
trustees
10.10 First Amendment effective Incorporated by reference
January 1, 1993 to HPSC, Inc. to Exhibit 10.2 to HPSC's
Employee Stock Ownership Plan Quarterly Report on Form
10-Q for the quarter ended
June 25, 1994
10.11 Second Amendment effective Filed herewith
January 1, 1994 to HPSC, Inc.
Employee Stock Ownership Plan
10.12 Third Amendment effective Filed herewith
January 1, 1993 to HPSC, Inc.
Employee Stock Ownership Plan
14
EXHIBITS (CONTINUED)
Exhibit Title Method of Filing
------- ----- ----------------
No.
--
10.13 HPSC, Inc. Supplemental Incorporated by reference
Employee Stock Ownership Plan to Exhibit 10.3 to HPSC's
and Trust dated July 25, 1994 Quarterly Report on Form
10-Q for the quarter ended
June 25, 1994
10.14 HPSC, Inc. 1994 Stock Plan Incorporated by reference
dated as of March 23, 1994 and to Exhibit 10.4 to HPSC's
related forms of Nonqualified Quarterly Report on Form
Option Grant and Option 10-Q for the quarter ended
Exercise Form June 25, 1994
10.15 HPSC, Inc. 401(k) Plan dated Incorporated by reference
February, 1993 between HPSC, to HPSC's Annual Report on
Inc. and Metropolitan Life Form 10-K for the fiscal
Insurance Company year ended December 25,
1993
10.16 Indenture and Service Incorporated by reference
Agreement dated as of December to HPSC's Annual Report on
23, 1993 by and among HPSC Form 10-K for the fiscal
Funding Corp. I, HPSC, Inc. year ended December 25,
and State Street Bank and 1993
Trust company of Connecticut,
N.A.
10.17 Sale and Contribution Incorporated by reference
Agreement dated as of December to HPSC's Annual Report on
23, 1993 between HPSC Funding Form 10-K for the fiscal
Corp I and HPSC, Inc. year ended December 25,
1993
10.18 Note Purchase Agreement dated Incorporated by reference
as of December 23, 1993 among to HPSC's Annual Report on
HPSC Funding Corp. I, HPSC, Form 10-K for the fiscal
Inc. and the Prudential Life year ended December 25,
Insurance Company of America 1993
10.19 Insurance Agreement dated as Incorporated by reference
of December 23, 1993 among to HPSC's Annual Report on
Municipal Bond Investors Form 10-K for the fiscal
Assurance Corporation, HPSC year ended December 25,
Funding Corp. I, HPSC, Inc. 1993
and State Street Bank and
Trust Company of Connecticut,
N.A.
10.20 Undertaking with respect to Incorporated by reference
Exhibits to certain Agreements to HPSC's Annual Report on
Form 10-K for the fiscal
year ended December 25,
1993
15
EXHIBITS (CONTINUED)
Exhibit Title Method of Filing
------- ----- ----------------
No.
--
10.21 Revolving Credit Agreement Incorporated by reference
dated as of June 23, 1994 to Exhibit 10.1 to HPSC's
among HPSC, Inc., The First Quarterly Report on Form
National Bank of Boston, 10-Q for the quarter ended
individually and as agent, and June 25, 1994
Continental Bank, N.A.,
individually and as Co-agent
10.22 First Amendment, dated as of Incorporated by reference
September 2, 1994, to to Exhibit 10.1 to HPSC's
Revolving Credit Agreement Quarterly Report on Form
dated as of June 23, 1994, 10-Q for the quarter ended
among HPSC, Inc., The First September 24, 1994
National Bank of Boston,
individually and as Agent, and
Continental Bank, N.A.,
individually and as Co-Agent
10.23 Amendment and Restatement, Incorporated by reference
dated November 4, 1994, of to Exhibit 10.2 to HPSC's
First Amendment, dated as of Quarterly Report on Form
September 2, 1994, to 10-Q for the quarter ended
Revolving Credit Agreement, September 24, 1994
dated as of June 23, 1993,
among HPSC, Inc., The First
National Bank of Boston,
individually and as Agent, and
Bank of America, Illinois,
individually and as Co-Agent
10.24 Second Amendment, dated as of Filed herewith
November 8, 1994, to Revolving
Credit Agreement dated as of
June 23, 1994, among HPSC,
Inc., The First National Bank
of Boston, individually and as
Agent, and Bank of America
Illinois, individually and a
Co-Agent
10.25 Third Amendment, dated as of Filed herewith
November 22, 1994, to
Revolving Credit Agreement
dated as of June 23, 1994,
among HPSC, Inc., The First
National Bank of Boston,
individually and as Agent, and
Bank of America Illinois,
individually and as Co-Agent
16
EXHIBITS (CONTINUED)
Exhibit Title Method of Filing
------- ----- ----------------
No.
--
10.26 Fourth Amendment, dated as of Filed herewith
December 22, 1994, to
Revolving Credit Agreement
dated as of June 23, 1994,
among HPSC, Inc., The First
National Bank of Boston,
individually and as Agent, and
Bank of America Illinois,
individually and as Co-Agent
10.27 Fifth Amendment, dated as of Filed herewith
January 6, 1995, to Revolving
Credit Agreement dated as of
June 23, 1994, among HPSC,
Inc., The First National Bank
of Boston, individually and as
Agent, and Bank of America
Illinois, individually and as
Co-Agent
10.28 Sixth Amendment, dated as of Filed herewith
February 3, 1995, to Revolving
Credit Agreement dated as of
June 23, 1994, among HPSC,
Inc., The First National Bank
of Boston, individually and as
Agent, and Bank of America
Illinois, individually and as
Co-Agent
10.29 Seventh Amendment, dated as of Filed herewith
February 6, 1995, to Revolving
Credit Agreement dated as of
June 23, 1994, among HPSC,
Inc., The First National Bank
of Boston, individually and as
Agent, and Bank of America
Illinois, individually and as
Agent.
10.30 Stock Purchase Agreement, Incorporated by reference
dated as of November 1, 1994, to Exhibit 10.3 to HPSC's
by and among HPSC, Inc. and Quarterly Report on Form
each of Chemical Bank; The CIT 10-Q for the quarter ended
Group/Business Credit, Inc.; September 24, 1994
Van Kampen Merritt Prime Rate
Income Trust; the Nippon
Credit Bank, Ltd.; Union Bank
of Finland, Grand Cayman
Branch; SPBC, Inc.; The Bank
of Tokyo Trust Company; and
Morgens, Waterfall, Vintiadis
& Co. Inc., and related
Schedules
17
EXHIBITS (CONTINUED)
Exhibit Title Method of Filing
------- ----- ----------------
No.
--
10.31 Purchase and Contribution Filed herewith
Agreement dated as of January
31, 1995 between HPSC, Inc.
and HPSC Bravo Funding Corp.
10.32 Credit Agreement dated as of Filed herewith
January 31, 1995 among HPSC
Bravo Funding Corp., Triple-A
One Funding Corporation, as
lender, and CapMAC, as
Administrative Agent and as
Collateral Agent
10.33 Agreement to Furnish Copies Filed herewith
of Omitted Exhibits to
Certain Agreements with HPSC
Bravo Funding Corp.
13 Annual Report to Stockholders Filed herewith
for the fiscal year ended
December 31, 1994
21 Subsidiaries of HPSC, Inc. Filed herewith
23 Report of Coopers & Lybrand, Filed herewith
L.L.P.
27 HPSC, Inc. Financial Data Filed herewith
Schedule
Copies of Exhibits may be obtained for a nominal charge by writing to:
Investor Relations
HPSC, Inc.
60 State Street
Boston, Massachusetts 02019
(b) Reports on Form 8-K
None
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, HPSC, Inc. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
HPSC, Inc.
By: John W. Everets
-------------------
Dated: March 23, 1995 John W. Everets
Chairman, Chief Executive
Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
HPSC, Inc. and in the capacities and on the dates indicated.
NAME TITLE DATED
By: Rene Lefebvre Vice President, Chief March 23, 1995
----------------------- Financial Officer and
Rene Lefebvre Treasurer (Principal
Financial Officer)
By: Raymond R. Doherty President and Director March 23, 1995
-----------------------
Raymond R. Doherty
By: Dennis J. McMahon Vice President March 23, 1995
----------------------- Administration
Dennis J. McMahon (Principal Accounting
Officer)
By: Louis J.P. Calisti Director March 23, 1995
-----------------------
Louis J.P. Calisti
By: Dollie A. Cole Director March 23, 1995
-----------------------
Dollie A. Cole
By: Thomas M. McDougal Director March 23, 1995
-----------------------
Thomas M. McDougal
By: Samuel P. Cooley Director March 23, 1995
-----------------------
Samuel P. Cooley
By: Joseph A. Biernat Director March 23, 1995
-----------------------
Joseph A. Biernat
By: J. Kermit Birchfield Director March 23, 1995
-----------------------
J. Kermit Birchfield
19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of HPSC, Inc.:
Our report on the consolidated financial statements of HPSC, Inc. has been
incorporated by reference in this Form 10-K from page 14 of the 1994 Annual
Report to Stockholders of HPSC, Inc. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule listed in Item 14(a)2 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand, L.L.P.
COOPERS & LYBRAND, L.L.P.
Boston, Massachusetts
March 15, 1995
SCHEDULE VIII
HPSC, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1994
(IN THOUSANDS)
-------------------------------------------------------------------------
Balance at Charged to Balance
Beginning Costs and Deductions at end of
Description of Year Expenses (1) year
-------------------------------------------------------------------------
Allowance for losses 1994 $6,897 $754 $3,056 $4,595
-------------------------------------------------------------------------
Allowance for losses 1993 9,216 15,104 17,423 6,897
-------------------------------------------------------------------------
Allowance for losses 1992 11,033 4,307 6,124 9,216
-------------------------------------------------------------------------
<FN>
(1) Deductions are write-offs net of recoveries.