CONFORMED COPY
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Atria Communities, Inc.
(Name of Company)
Common Stock, Par Value $0.10 per share
(Title of Class of Securities)
049905102
(CUSIP Number)
Murry N. Gunty
Lazard Freres Real Estate Investors L.L.C.
30 Rockefeller Plaza, 63rd Floor
New York, NY 10020
(212) 632-6000
with a copy to:
Kevin J. Grehan, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
(212) 474-1490
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 19, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ]
Note: six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
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Item 1. Security and Company
This Amendment No. 2 ("Amendment No. 2") to the
statement on Schedule 13D (the "Initial Statement" and,
together with Amendment No. 1 to the Initial Statement and
this Amendment No. 2, the "Statement") of KA Acquisition
Corp. ("Sub"), Kapson Senior Quarters Corp. ("Kapson"),
Prometheus Senior Quarters, LLC ("Prometheus"), LF Strategic
Realty Investors II L.P. (the "Fund") and Lazard Freres Real
Estate Investors L.L.C. ("LFREI" and, together with Sub,
Kapson, the Fund and Prometheus, the "Reporting Persons"),
relates to the common stock, par value $0.10 per share (the
"Common Stock"), of Atria Communities, Inc., a Delaware
corporation (the "Company"). The principal executive offices
of the Company are located at 501 South Fourth Avenue, Suite
140, Louisville, Kentucky 40202. This Amendment No. 2
supplementally amends the Initial Statement. Capitalized
terms used herein but not defined herein have the meanings
ascribed to them in the Initial Statement.
Item 2. Identity and Background
No change.
Item 3. Source and Amount of Funds or Other Consideration
No change.
Item 4. Purpose of Transaction
This Amendment No. 2 is being filed in connection
with the execution of the First Amendment, dated as of May
19, 1998 (the "First Amendment"), to the Agreement and Plan
of Merger dated as of April 19, 1998, among the Company, Sub
and Kapson. Pursuant to the First Amendment, the number of
shares of Common Stock to be received by Kapson in the Merger
was reduced from 11,111,111 to 9,135,802, subject to Kapson's
right to increase such number of shares up to 11,111,111 by
giving written notice to the Company and Vencor at least 10
days prior to the meeting of the Company's stockholders to
approve the Merger; provided, however, that immediately prior
to the consummation of the Merger, Kapson shall make an
equity contribution to Sub in an amount equal to $20.25 for
each share of Common Stock to be received by Kapson in the
Merger. If Kapson were to receive 9,135,802 shares of Common
Stock in the Merger, following the Merger, Kapson would own
88.1% of the outstanding shares of Common Stock and Vencor
would own 11.9% of the outstanding shares of Common Stock. If
Kapson
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were to receive 11,111,111 shares of Common Stock in the
Merger, following the Merger, Kapson would own 90.0% of the
outstanding shares of Common Stock and Vencor would own 10.0%
of the outstanding shares of Common Stock. The First
Amendment also amended certain other provisions of the Merger
Agreement, including provisions relating to (i) the treatment
of stock options of the Company to be held by certain members
of management following the Merger and (ii) assignments of
the Merger Agreement by Parent to a wholly owned subsidiary
of Parent or an affiliate of Parent. The foregoing summary of
the First Amendment is qualified in its entirety by reference
to the complete text of the First Amendment, which is filed
as an Exhibit to this Amendment No. 2.
Item 5. Interest in Securities of the Company
No change.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Company
On May 19, 1998, the Company, Kapson and Sub
executed the First Amendment to the Merger Agreement. See
Item 4.
Item 7. Material to be Filed as Exhibits
The following exhibits were filed as part of the
Initial Statement.
Exhibit 1: Agreement and Plan of Merger dated as of
April 19, 1998 among the Company, Sub
and Kapson
Exhibit 2: Support Agreement dated as of April 19,
1998 among Kapson, Sub, Vencor, and VALH
Exhibit 3: Support Agreement dated as of April 19,
1998 among Kapson, Sub, and the
Stockholders party thereto
The following exhibit is being filed herewith.
Exhibit 4: First Amendment, dated as of May 19,
1998, to the Agreement and Plan of
Merger dated as of April 19, 1998 among
the Company, Sub and Kapson
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After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
KA ACQUISITION CORP.,
by /s/ Robert P. Freeman
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Name: Robert P. Freeman
Title: Treasurer
KAPSON SENIOR QUARTERS CORP.,
by /s/ Glenn Kaplan
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Name: Glenn Kaplan
Title: Chief Executive Officer
PROMETHEUS SENIOR QUARTERS, LLC,
by LF STRATEGIC REALTY INVESTORS II, L.P.,
as sole member,
by LAZARD FRERES REAL ESTATE INVESTORS
L.L.C., its general partner,
by /s/ Robert P. Freeman
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Name: Robert P. Freeman
Title: President
LF STRATEGIC REALTY INVESTORS II, L.P.,
by LAZARD FRERES REAL ESTATE INVESTORS
L.L.C., its general partner,
by /s/ Robert P. Freeman
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Name: Robert P. Freeman
Title: President
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LAZARD FRERES REAL ESTATE INVESTORS L.L.C.,
by /s/ Robert P. Freeman
---------------------------
Name: Robert P. Freeman
Title: President
Page 5 of 5
Exhibit 4
CONFORMED COPY
FIRST AMENDMENT, dated as of May 19, 1998 (the "First
Amendment"), to the Agreement and Plan of Merger dated as of
April 19, 1998 (the "Merger Agreement") among KAPSON SENIOR
QUARTERS CORP., a Delaware corporation ("Parent"), KA
ACQUISITION CORP., a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and ATRIA COMMUNITIES, INC., a
Delaware corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company, have previously approved the merger of the Sub (the "Merger") with
and into the Company, upon the terms and subject to the conditions set
forth in the Merger Agreement; and
WHEREAS Parent, Sub and the Company desire to amend the Merger
Agreement as set forth herein and the respective Boards of Directors of
Parent, Sub and the Company have approved the Merger upon the terms and
subject to the conditions set forth in the Merger Agreement as amended
hereby;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Amendment to Section 3.01 of the Merger Agreement.
Section 3.01(a) of the Merger Agreement is hereby amended and restated to
read in its entirety as follows:
"(a) Capital Stock of Sub. Each issued and outstanding share of
the common stock of Sub shall be converted into and become 9,135.802
fully paid and nonassessable shares of Common Stock, par value $0.01
per share, of the Surviving Corporation; provided, however, that at
any time prior to ten calendar days prior the Stockholders Meeting,
Parent and Sub may elect, by written notice to the Company and Vencor,
to change the number of shares of Common Stock of the Surviving
Corporation into which each share of capital stock of Sub shall be
converted at the Effective Time of the Merger to any number of shares
not less than 9,135.802 and not greater than 11,111.111; provided
further, however, that, at or immediately prior to the Effective Time
of the Merger, Parent shall make an equity contribution to Sub in an
aggregate amount equal to the product of (x) $20.25 and (y) the
aggregate number of shares of Common Stock of the Surviving
Corporation into which the outstanding shares of common stock of Sub
shall be converted at the Effective Time of the Merger."
SECTION 2. Amendment to Section 4.02(h). Section 4.02(h) of the
Merger Agreement is hereby amended by adding the following sentence to the
end of such Section: "Parent and Sub hereby represent and warrant to the
Company that the outstanding capital stock of Sub immediately prior to the
Effective Time of the Merger will consist solely of 1,000 shares of common
stock, par value $0.01 per share, owned of record and beneficially by
Parent or an affiliate of Parent."
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SECTION 3. Amendment to Certain Provisions Relating to Rollover
Options. (a) Subparagraph (ii) of Section 4.01(l) of the Merger Agreement
is hereby amended by replacing the reference to "Rollover Options" to a
reference to "Nonaccelerating Rollover Options".
(b) The first sentence of Section 6.05(d) is hereby amended by
replacing the reference to "Schedule 6.05(d)" to "Schedule 6.05(d)(i)".
(c) The fourth sentence of Section 6.05(d) of the Merger
Agreement is hereby amended and restated in its entirety as follows:
"The Rollover Options shall be subject after the Effective Time
of the Merger to the same terms and conditions that applied
before the Effective Time of the Merger (including terms and
conditions that will cause the accelerated vesting of the
Rollover Options as a result of the transactions contemplated by
this Agreement) with the following exceptions: (i) with respect
to the Company Stock Options identified on Schedule 6.05(d)(ii)
(the "Nonaccelerating Rollover Options"), any provision or
agreement providing for (x) the accelerated vesting of such
Nonaccelerating Rollover Options as a result of the transactions
contemplated by this Agreement or (y) the expiration or
cancelation of such Nonaccelerating Rollover Options upon
termination of employment for any reason ("Termination") of the
holder of Nonaccelerating Rollover Options shall not be given
effect provided, that, (1) the original vesting schedule shall
continue to apply to such Nonaccelerating Rollover Options and
(2) upon the vesting of any Nonaccelerating Rollover Options that
have not vested as of the date of Termination, the holder thereof
shall receive an amount of cash therefor equal to the aggregate
spread with respect to each Nonaccelerating Rollover Option; (ii)
upon Termination of the holder of any Rollover Options, such
holder shall receive an amount of cash equal to the aggregate
spread with respect to each Rollover Option, except for
Nonaccelerating Rollover Options that are unvested as of such
Termination (which are governed by clause (i) above); and (iii)
the shares of the Surviving Corporation delivered upon exercise
of the Rollover Options shall be subject to the shareholder
provisions set forth in the Shareholders Agreement. For purposes
of the immediately preceding sentence, the aggregate "spread"
with respect to each Rollover Option shall be equal to the
product of (x) the number of shares covered by such Rollover
Option and (y) the excess of (A) the fair market value of one
share of Common Stock of the Surviving Corporation at the date of
determination (either the date of Termination or vesting, as
applicable), over (B) the exercise price of such Rollover
Option."
(d) Schedule 6.05(d) to the Merger Agreement is hereby amended
and restated in its entirety to read as set forth on Exhibit A attached
hereto.
(e) Schedule 4.01(1) to the Merger Agreement is hereby amended
and restated in its entirety to read as set forth on Exhibit B hereto.
<PAGE>
SECTION 4. Amendment to Section 6.08(b). The first sentence of
Section 6.08(b) is hereby amended and restated in its entirety as follows:
The Company shall pay to Parent upon demand a fee of $18,209,496,
payable in same day funds, plus all Expenses (as defined below) of Parent,
if (i) the Company terminates this Agreement pursuant to Section 8.01(f);
(ii) Parent terminates this Agreement pursuant to Section 8.01(c), provided
that the breach or failure to perform by the Company giving rise to such
right to terminate under Section 8.01(c) must be a deliberate breach or
failure to perform with the intent of frustrating the Closing; (iii) Parent
terminates this Agreement pursuant to Section 8.01(d); (iv) any person
makes a takeover proposal that was not withdrawn more than ten days prior
to the date of the Stockholders Meeting and thereafter this Agreement is
terminated pursuant to Section 8.01(b)(i); or (v) any person makes a
takeover proposal that was not withdrawn on the date 60 days prior to the
Outside Date (as defined in Section 8.01(b)(ii)) and the Company
Stockholder Approval is not obtained prior to termination of this
Agreement.
SECTION 5. Amendment to Section 9.08 of the Merger Agreement.
Section 9.08 is hereby amended by inserting the following sentence
immediately after the second sentence of such Section:
"Notwithstanding anything to the contrary in Section 2.01 or this
Section 9.08, no person shall be substituted as a constituent
corporation in the Merger unless (i) such person is a wholly
owned subsidiary of Parent or a wholly owned subsidiary of an
affiliate of Parent and (ii) the representations and warranties
of Sub set forth in Sections 4.02(a), (b), (c) and (h) shall be
true and correct with respect to such person."
SECTION 6. Governing Law. This First Amendment shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 7. Counterparts. This First Amendment may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 8. Full Force and Effect. Except as expressly modified
and amended by this First Amendment, the Merger Agreement shall continue in
full force and effect and is hereby ratified and confirmed in all respects.
<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
First Amendment to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
KAPSON SENIOR QUARTERS CORP.,
by /s/ Evan A. Kaplan
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Name: Evan A. Kaplan
Title: President
KA ACQUISITION CORP.,
by /s/ Evan A. Kaplan
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Name: Evan A. Kaplan
Title: President
ATRIA COMMUNITIES, INC.,
by /s/ J. Timothy Wesley
--------------------------
Name: J. Timothy Wesley
Title: Chief Financial Officer, Vice
President of Development and
Secretary
Pursuant to Section 8.03 of the Merger Agreement, VENCOR, INC.
and VENCOR HOLDINGS, L.L.C. hereby approve the amendment of the Merger
Agreement as set forth above.
VENCOR, INC.,
by /s/ James. H. Gillenwater, Jr.
--------------------------------
Name: James H. Gillenwater, Jr.
Title: Senior Vice President, Planning
and Development
VENCOR HOLDINGS, L.L.C.,
by /s/ James H. Gillenwater, Jr.
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Name: James H. Gillenwater, Jr.
Title: Senior Vice President, Planning
and Development
