CUSIP No. 150937100 Page 1 of 58 Pages
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )*
Centennial HealthCare Corporation
-----------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
-----------------------------------------------------------------
(Title of Class of Securities)
150937100
-----------------------------------------------------------------
(CUSIP Number)
--------
* 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 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 and
Exchange Act of 1934 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).
<PAGE>
CUSIP No. 150937100 Page 2 of 58 Pages
Lawrence B. Sorrel William J. Hewitt, Esq.
Welsh, Carson, Anderson Reboul, MacMurray, Hewitt,
& Stowe Maynard & Kristol
320 Park Avenue 45 Rockefeller Plaza
New York, NY 10022 New York, NY 10111
Tel. (212) 893-9500 Tel. (212) 841-5700
Daryl R. Griswold
Centennial HealthCare Corporation
400 Perimeter Center Terrace
Suite 650
Atlanta, GA 30346
Tel. (770) 698-9040
-----------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 22, 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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d- 1(e), 13d-1(f) or 13d-1(g), check the following
box: [ ].
<PAGE>
CUSIP No. 150937100 Page 3 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons Welsh, Carson,
I.R.S. Identification Anderson &
Nos. of Above Persons (ENTITIES ONLY) Stowe VIII, L.P.
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds Not Applicable
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of 7) Sole Voting -0-
Shares Beneficially Power
Owned by Each
Reporting Person ________________________________________
With: 8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- -0-
tive Power
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially -0-
Owned by Each Reporting Person
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by -0-
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 150937100 Page 4 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons WCAS VIII
I.R.S. Identification Associates LLC
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds Not Applicable
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of 7) Sole Voting -0-
Shares Beneficially Power
Owned by Each
Reporting Person ________________________________________
With: 8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- -0-
tive Power
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially -0-
Owned by Each Reporting Person
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by -0-
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person OO
<PAGE>
CUSIP No. 150937100 Page 5 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons WCAS Capital
I.R.S. Identification Partners III, L.P.
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds Not Applicable
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting -0-
Beneficially Power
Owned by Each
Reporting Person
With: ________________________________________
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- -0-
tive Power
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially -0-
Owned by Each Reporting Person
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by -0-
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 150937100 Page 6 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons WCAS CP III
I.R.S. Identification Associates L.L.C.
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds Not Applicable
- ----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting -0-
Beneficially Power
Owned by Each
Reporting Person
With: ________________________________________
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- -0-
tive Power
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially -0-
Owned by Each Reporting Person
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by -0-
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person OO
<PAGE>
CUSIP No. 150937100 Page 7 of 58 Pages
- -------------------------------------------------------------
1) Names of Reporting Persons Welsh, Carson,
I.R.S. Identification Anderson & Stowe
Nos. of Above Persons (ENTITIES ONLY) VI, L.P.
- ----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds WC
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of 7) Sole Voting 2,520,193 shares of
Shares Beneficially Power Common Stock, $.01
Owned by Each par value ("Common
Reporting Person Stock")
With:
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 2,520,193 shares of
tive Power Common Stock
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 2,520,193 shares of
Owned by Each Reporting Person Common Stock
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 21.1%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 150937100 Page 8 of 58 Pages
- --------------------------------------------------------------
1) Names of Reporting Persons WCAS VI Partners, L.P.
I.R.S. Identification
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds WC
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of 7) Sole Voting 2,520,193 shares of
Shares Beneficially Power Common Stock
Owned by Each
Reporting Person
With: ________________________________________
8) Shared Voting
Power -0-
---------------------------------------
9) Sole Disposi- 2,520,193 shares of
tive Power Common Stock
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 2,520,193 shares of
Owned by Each Reporting Person Common Stock
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 21.1%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
- -----------------------------------------------------------------
<PAGE>
CUSIP No. 150937100 Page 9 of 58 Pages
1) Names of Reporting Persons WCAS Capital
I.R.S. Identification Partners II, L.P.
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds WC
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 246,896 shares of
Beneficially Power Common Stock
Owned by Each
Reporting Person
With: ________________________________________
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 246,896 shares of
tive Power Common Stock
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 246,896 shares of
Owned by Each Reporting Person Common Stock
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 2.1%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 150937100 Page 10 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons WCAS CP II
Identification Partners
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds WC
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place New Jersey
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 246,896 shares of
Beneficially Power Common Stock
Owned by Each
Reporting Person
With: ________________________________________
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 246,896 shares of
tive Power Common Stock
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 246,896 shares of
Owned by Each Reporting Person Common Stock
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 2.1%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 150937100 Page 11 of 58 Pages
- ---------------------------------------------------------------
1) Names of Reporting Persons WCAS Healthcare
I.R.S. Identification Partners, L.P.
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds WC
- ----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 81,384 shares of
Beneficially Power Common Stock
Owned by Each
Reporting Person
With:
----------------------------------------
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 81,384 shares of
tive Power Common Stock
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 81,384 shares of
Owned by Each Reporting Person Common Stock
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 0.7%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 150937100 Page 12 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons WCAS HP Partners
I.R.S. Identification
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds WC
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 81,384 shares of
Beneficially Power Common Stock
Owned by Each
Reporting Person
With:
----------------------------------------
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 81,384 shares of
tive Power Common Stock
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 81,384 shares of
Owned by Each Reporting Person Common Stock
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 0.7%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person PN
- -----------------------------------------------------------------
<PAGE>
CUSIP No. 150937100 Page 13 of 58 Pages
1) Names of Reporting Persons J. Stephen Eaton
I.R.S. Identification
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds PF
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place U.S. Citizen
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 1,213,077 (including
Beneficially Power 1,115,371 shares and
Owned by Each 97,706 shares issuable
Reporting Person upon exercise of options
With: currently exercisable
within 60 days,
respectively)
----------------------------------------
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 1,213,077
tive Power (including 1,115,371
shares and 97,706 shares
issuable upon exercise of
options currently
exercisable within 60
days, respectively)
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 1,213,077 (including
Owned by Each Reporting Person 1,115,371 shares and
97,706 shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
<PAGE>
CUSIP No. 150937100 Page 14 of 58 Pages
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 10.1%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person IN
<PAGE>
CUSIP No. 150937100 Page 15 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons Kent C. Fosha, Sr.
I.R.S. Identification
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds PF
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place U.S. Citizen
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 53,949 (including
Beneficially Power 7,970 shares
Owned by Each and 45,979 shares
Reporting Person issuable upon exercise
With: of options currently
exercisable within 60
days, respectively)
----------------------------------------
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 53,949 (including
tive Power 7,970 shares and 45,979
shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 53,949 (including
Owned by Each Reporting Person 7,970 shares and 45,979
shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
<PAGE>
CUSIP No. 150937100 Page 16 of 58 Pages
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 0.5%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person IN
<PAGE>
CUSIP No. 150937100 Page 17 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons Alan C. Dahl
I.R.S. Identification
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds PF
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place U.S. Citizen
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 93,976 (including
Beneficially Power 59,492 shares and
Owned by Each 34,484 shares issuable
Reporting Person upon exercise of options
With: currently exercisable
within 60 days,
respectively)
----------------------------------------
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 93,976 (including
tive Power 59,492 shares and 34,484
shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 93,976 (including
Owned by Each Reporting Person 59,492 shares and 34,484
shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
<PAGE>
CUSIP No. 150937100 Page 18 of 58 Pages
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 0.8%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person IN
<PAGE>
CUSIP No. 150937100 Page 19 of 58 Pages
- -----------------------------------------------------------------
1) Names of Reporting Persons Lawrence W. Lepley
I.R.S. Identification
Nos. of Above Persons (ENTITIES ONLY)
- -----------------------------------------------------------------
2) Check the Appropriate Box (a) [ X ]
if a Member of a Group (b) [ ]
- -----------------------------------------------------------------
3) SEC Use Only
- -----------------------------------------------------------------
4) Source of Funds PF
- -----------------------------------------------------------------
5) Check Box if Disclosure of Not Applicable
Legal Proceedings is
Required Pursuant to
Item 2(d) or 2(e)
- -----------------------------------------------------------------
6) Citizenship or Place U.S. Citizen
of Organization
- -----------------------------------------------------------------
Number of Shares 7) Sole Voting 92,226 (including
Beneficially Power 83,225 shares and
Owned by Each 9,001 shares issuable
Reporting Person upon exercise of options
With: currently exercisable
within 60 days,
respectively)
----------------------------------------
8) Shared Voting
Power -0-
----------------------------------------
9) Sole Disposi- 92,226 (including
tive Power 83,225 shares and 9,001
shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
----------------------------------------
10) Shared Dis-
positive Power -0-
----------------------------------------
11) Aggregate Amount Beneficially 92,226 (including
Owned by Each Reporting Person 83,225 shares and 9,001
shares issuable upon
exercise of options
currently exercisable
within 60 days,
respectively)
<PAGE>
CUSIP No. 150937100 Page 20 of 58 Pages
- -----------------------------------------------------------------
12) Check Box if the Aggregate
Amount in Row (11) [ ]
Excludes Certain Shares
- -----------------------------------------------------------------
13) Percent of Class
Represented by 0.8%
Amount in Row (11)
- -----------------------------------------------------------------
14) Type of Reporting
Person IN
<PAGE>
CUSIP No. 150937100 Page 21 of 58 Pages
Schedule 13D
------------
The items of the statement on Schedule 13D dated July 17, 1997 and
filed by reporting person J. Stephen Eaton relating to the Common Stock, $.01
par value (the "Common Stock"), of Centennial HealthCare Corporation, a Georgia
corporation (the "Issuer") are hereby amended and restated as set forth below.
Reporting persons Welsh, Carson, Anderson & Stowe VI, L.P., a Delaware limited
partnership ("WCAS VI"), WCAS Healthcare Partners L.P., a Delaware limited
partnership ("WCAS HP"), and WCAS Capital Partners II, L.P., a Delaware limited
partnership ("WCAS CP II"), previously filed, as a group, a statement on
Schedule 13G dated February 10, 1998 relating to the Common Stock of the Issuer.
Item 1. Security and Issuer.
-------------------
This statement relates to the Common Stock of the Issuer. The
principal executive offices of the Issuer are located at 400 Perimeter Center
Terrace, Suite 650, Atlanta, Georgia 30346.
Item 2. Identity and Background.
-----------------------
(a) Pursuant to Regulation 13D-G of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Act"), the
undersigned hereby file this statement on Schedule 13D on behalf of Welsh,
Carson, Anderson & Stowe VIII, L.P., a Delaware limited partnership ("WCAS
VIII"), WCAS VIII Associates LLC, a Delaware limited liability company ("VIII
Associates"), WCAS Capital Partners III, L.P., a Delaware limited partnership
("WCAS CP III"), WCAS CP III Associates, L.L.C., a Delaware limited liability
company ("CP III Associates"), WCAS HP, WCAS HP Partners, a Delaware general
partnership ("HP Partners"), WCAS VI, WCAS VI Partners, L.P., a Delaware limited
partnership ("VI Partners"), WCAS CP II, WCAS CP II Partners, a New Jersey
general partnership, ("CP II Partners"), J. Stephen Eaton, Kent C. Fosha, Alan
C. Dahl and Lawrence W. Lepley (hereinafter collectively referred to as the
"Reporting Persons").
The Reporting Persons are making this single, joint filing because
they may be deemed to constitute a "group" within the meaning of Section
13(d)(3) of the Act. The Agreement among the Reporting Persons to file as a
group (the "Group Agreement") is attached hereto as Exhibit A. Each Reporting
Person disclaims beneficial ownership of all shares of Common Stock other than
those reported herein as being owned by it.
<PAGE>
CUSIP No. 150937100 Page 22 of 58 Pages
WCAS VIII and VIII Associates
-------------------------
(b)-(c) The principal business of WCAS VIII is that of a private
investment partnership. WCAS VIII's principal business and principal office
address is 320 Park Avenue, Suite 2500, New York, New York 10022. The sole
general partner of WCAS VIII is VIII Associates. The principal business of VIII
Associates is that of acting as the general partner of WCAS VIII. VIII
Associates' principal business and principal office address is 320 Park Avenue,
Suite 2500, New York, New York 10022. The general partners of VIII Associates
are citizens of the United States, and their respective principal business
addresses and principal occupations are set forth below.
WCAS CP III and CP III Associates
-----------------------------
(b)-(c) The principal business of WCAS CP III is that of a private
investment partnership. WCAS CP III's principal business and principal office
address is 320 Park Avenue, Suite 2500, New York, New York 10022. The sole
general partner of WCAS CP III is CP III Associates. The principal business of
CP III Associates is that of acting as the general partner of WCAS CP III. CP
III Associates' principal business and principal office address is 320 Park
Avenue, Suite 2500, New York, New York 10022. The general partners of CP III
Associates are citizens of the United States, and their respective principal
business addresses and principal occupations are set forth below.
WCAS HP and HP Partners
-----------------------
(b)-(c) WCAS HP is a Delaware limited partnership. The principal
business of WCAS HP is that of a private investment partnership. WCAS HP's
principal business and principal office address is 320 Park Avenue, Suite 2500,
New York, New York 10022. The sole general partner of WCAS HP is HP Partners.
The principal business of HP Partners is that of acting as the general partner
of WCAS HP. HP Partners' principal business and principal office address is 320
Park Avenue, Suite 2500, New York, New York 10022. The general partners of HP
Partners are citizens of the United States, and their respective principal
business addresses and principal occupations are set forth below.
WCAS VI and VI Partners
---------------------
(b)-(c) The principal business of WCAS VI is that of a
<PAGE>
CUSIP No. 150937100 Page 23 of 58 Pages
private investment partnership. WCAS VI's principal business and principal
office address is 320 Park Avenue, Suite 2500, New York, New York 10022. The
sole general partner of WCAS VI is VI Partners. The principal business of VI
Partners is that of acting as the general partner of WCAS VI. VI Partners'
principal business and principal office address is 320 Park Avenue, Suite 2500,
New York, New York 10022. The general partners of VI Partners are citizens of
the United States, and their respective principal business addresses and
principal occupations are set forth below.
WCAS CP II and CP II Partners
-----------------------------
(b)-(c) The principal business of WCAS CP II is that of a private
investment partnership. WCAS CP II's principal business and principal office
address is 320 Park Avenue, Suite 2500, New York, New York 10022. The sole
general partner of WCAS CP II is CP II Partners. The principal business of CP II
Partners is that of acting as the general partner of WCAS CP II. CP II Partners'
principal business and principal office address is 320 Park Avenue, Suite 2500,
New York, New York 10022. The general partners of CP II Partners are citizens of
the United States, and their respective principal business addresses and
principal occupations are set forth below.
General Partners and Managing Members of VIII Associates, CP
III Associates, HP Partners, VI Partners and CP II Partners
------------------------------------------------------------
General Partners/ Address Occupation
Managing Members
- ---------------- ------- ----------
Patrick J. Welsh Welsh, Carson, General Partner,
Anderson & Stowe VI Partners,
320 Park Avenue CP II Partners,
Suite 2500 and HP Partners;
New York, NY 10022 Managing Member,
VIII Associates and
CP III Associates
Russell L. Carson Welsh, Carson, General Partner,
Anderson & Stowe VI Partners,
320 Park Avenue CP II Partners,
Suite 2500 HP Partners;
New York, NY 10022 Managing Member,
VIII Associates and
CP III Associates
<PAGE>
CUSIP No. 150937100 Page 24 of 58 Pages
General Partners/ Address Occupation
Managing Members
- ---------------- ------- ----------
Bruce K. Anderson Welsh, Carson, General Partner,
Anderson & Stowe VI Partners and
320 Park Avenue CP II Partners;
Suite 2500 Managing Member,
New York, NY 10022 VIII Associates and
CP III Associates
Richard H. Stowe Welsh, Carson, General Partner,
Anderson & Stowe VI Partners and
320 Park Avenue CP II Partners;
Suite 2500 Managing Member,
New York, NY 10022 CP III Associates
James B. Hoover Dauphin Capital Private equity
Partners fund manager;
108 Forest Avenue General Partner,
Locust Valley, NY 11560 CP II Partners
Charles G. Moore, III The Woodman Building Private investor;
75 Pearl Street General Partner,
Suite 209 CP II Partners
Portland, ME 04101
Andrew M. Paul Welsh, Carson, General Partner,
Anderson & Stowe VI Partners and
320 Park Avenue CP II Partners;
Suite 2500 Managing Member,
New York, NY 10022 VIII Associates and
CP III Associates
Thomas E. McInerney Welsh, Carson, General Partner,
Anderson & Stowe VI Partners and
320 Park Avenue CP II Partners;
Suite 2500 Managing Member,
New York, NY 10022 VIII Associates and
CP III Associates
Laura VanBuren Welsh, Carson, General Partner,
Anderson & Stowe VI Partners and
320 Park Avenue CP II Partners;
Suite 2500 Managing Member,
New York, NY 10022 VIII Associates and
CP III Associates
<PAGE>
CUSIP No. 150937100 Page 25 of 58 Pages
General Partners/ Address Occupation
Managing Members
- ---------------- ------- ----------
Priscilla A. Newman Welsh, Carson, Managing Member,
Anderson & Stowe VIII Associates and
320 Park Avenue CP III Associates
Suite 2500
New York, NY 10022
Robert A. Minicucci Welsh, Carson, General Partner,
Anderson & Stowe VI Partners,
320 Park Avenue CP II Partners;
Suite 2500 Managing Member,
New York, NY 10022 VIII Associates and
CP III Associates
Anthony J. deNicola Welsh, Carson, General Partner,
Anderson & Stowe CP II Partners and
320 Park Avenue VI Partners;
Suite 2500 Managing Member,
New York, NY 10022 VIII Associates and
CP III Associates
Paul B. Queally Welsh, Carson, Managing Member,
Anderson & Stowe VIII Associates and
320 Park Avenue CP III Associates;
Suite 2500 General Partner,
New York, NY 10022 VI Partners
Lawrence B. Sorrel Welsh, Carson, Managing Member,
Anderson & Stowe VIII Associates and
320 Park Avenue CP III Associates
Suite 2500
New York, NY 10022
J. Stephen Eaton
(b)-(c) J. Stephen Eaton is President, Chairman of the Board and Chief
Executive Officer of the Issuer. His business address is 400 Perimeter Center
Terrace, Suite 650, Atlanta, Georgia 30346.
Kent C. Fosha, Sr.
(b)-(c) Kent C. Fosha, Sr. is Executive Vice President of Operations
of the Issuer. His business address is 400 Perimeter Center Terrace, Suite 650,
Atlanta, Georgia 30346.
<PAGE>
CUSIP No. 150937100 Page 26 of 58 Pages
Alan C. Dahl
(b)-(c) Alan C. Dahl is Executive Vice President, Chief Financial
Officer and Treasurer of the Issuer. His business address is 400 Perimeter
Center Terrace, Suite 650, Atlanta, Georgia 30346.
Lawrence W. Lepley
(b)-(c) Lawrence W. Lepley is President of Paragon Rehabilitation,
Inc., an indirect wholly-owned subsidiary of the Issuer. His business address is
3100 West End Avenue, Suite 470, Nashville, TN 37203.
(d) None of the entities or persons identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds and Other Consideration.
--------------------------------------------------
As previously reported in filings with the Securities and Exchange
Commission by WCAS VI, WCAS CP II and WCAS HP, and as further described in Item
5 below, WCAS VI, WCAS CP II and WCAS HP currently beneficially own 2,520,193
(21.1%), 246,896 (2.1%) and 81,384 (0.7%) shares of Common Stock, respectively.
A majority of the shares of Common Stock held by WCAS VI, WCAS CP II and WCAS HP
were acquired from the Issuer upon conversion of securities of the Issuer which
were issued to such entities in connection with the December 31, 1995 merger
between a subsidiary of the Issuer and Transitional Health Services ("THS") in
respect of securities of THS which had been purchased with the working capital
of such entities. A portion of the shares of Common Stock held by WCAS VI, WCAS
CP II and WCAS HP were acquired from the Issuer upon conversion of securities of
the Issuer which had been purchased directly from the Issuer with the working
capital of such entities. The remainder of the shares of Common Stock held by
WCAS VI, WCAS CP II and WCAS HP were acquired on January 31, 1997 from Mr. Eaton
for $12.18 per share with the working capital of such entities. No additional
shares of Common Stock have been acquired by any of such Reporting Persons in
connection with the Merger Agreement, as defined and further described in Item 6
below.
<PAGE>
CUSIP No. 150937100 Page 27 of 58 Pages
J. Stephen Eaton currently owns 1,115,371 shares of Common Stock (not
including 97,706 shares purchasable upon exercise of stock options that are
currently exercisable or will become exercisable within 60 days), which were
acquired as follows: Mr. Eaton was founder of the Issuer and acquired the
majority of his shares upon its initial capitalization. He purchased
7,066 shares in private sales for $8.49 per share in 1994, acquired 76,632
shares upon exercise of options granted under the 1992 Stock Option Plan at
$.2944 per share, acquired an additional 5,000 shares for $16.00 per share in
conjunction with the Issuer's initial public offering and received shares as a
result of a stock dividend in connection with the merger between a subsidiary
of the Issuer and THS on December 31, 1995. No additional shares of Common
Stock have been acquired by such Reporting Person in connection with
the Merger Agreement, as defined and further described in Item 6 below.
Kent C. Fosha, Sr. currently owns 7,970 shares of Common Stock (not
including 45,979 shares purchasable upon exercise of stock options that are
currently exercisable or will become exercisable within 60 days), which were
acquired as follows: All shares were acquired upon the exercise of options
granted under the Issuer's 1992 Stock Option Plan at an exercise price of $.2944
per share. No additional shares of Common Stock have been acquired by such
Reporting Person in connection with the Merger Agreement, as defined and further
described in Item 6 below.
Alan C. Dahl currently owns 59,492 shares of Common Stock (not
including 34,484 shares purchasable upon exercise of stock options that are
currently exercisable or will become exercisable within 60 days), which were
acquired as follows: 2,000 shares were acquired in the initial public offering
for $16.00 per share; 2,000 shares were acquired in the open market for $20.125
per share; 11,495 shares were acquired upon the exercise of options granted
under the 1994 Stock Option Plan at an exercise price of $7.83 per share; 38,316
shares were acquired upon the exercise of options granted under the 1992 Stock
Option Plan at an exercise price of $.2944 per share, 4,056 shares were
received as the result of a stock dividend in connection with the merger
between a subsidiary of the Issuer and THS on December 31, 1995 and 1,625
shares were purchased in a private sale for $8.49 per share in 1994. No
additional shares of Common Stock have been acquired by such Reporting Person
in connection with the Merger Agreement, as defined and further described in
Item 6 below.
Lawrence W. Lepley currently owns 83,225 shares of Common Stock (not
including 9,001 shares purchasable upon exercise of stock options that are
currently exercisable or will become exercisable within 60 days), which were
acquired as follows: All 83,225 shares were acquired from the Issuer upon
conversion of securities in connection with the merger between a subsidiary of
the Issuer and THS on December 31, 1995. No additional shares of Common Stock
have been acquired by such Reporting Person in connection with the Merger
Agreement, as defined and further described in Item 6 below.
<PAGE>
CUSIP No. 150937100 Page 28 of 58 Pages
Item 4. Purpose of Transaction.
----------------------
The Reporting Persons have, through entities organized specifically
for such purpose, entered into the transactions described herein for the purpose
of accomplishing the Merger, as defined and further described in Item 6 below.
The purpose of the Merger is to permit Parent to acquire the entire
equity ownership of the Issuer. The Merger Agreement, Commitment Letter and
Shareholders Agreement, all as defined and described in Item 6, have been
entered into in furtherance of such purpose.
Item 5. Interest in Securities of the Issuer.
------------------------------------
The following information is based on a total of 11,923,618 shares of
Common Stock outstanding as of August 5, 1998, as reported in the Issuer's
Quarterly Report on Form 10-Q for the period ended June 30, 1998:
(a)
WCAS VIII and VIII Associates
-------------------------
WCAS VIII and VIII Associates own no shares of Common Stock.
WCAS CP III and CP III Associates
-------------------------
WCAS CP III and CP III Associates own no shares of Common Stock.
WCAS HP and HP Partners
-----------------------
WCAS HP owns 81,384 shares of Common Stock, or approximately 0.7% of
the Common Stock outstanding. HP Partners, as the sole general partner of
WCAS HP, may be deemed to beneficially own the securities owned by WCAS HP.
WCAS VI and VI Partners
---------------------
WCAS VI owns 2,520,193 shares of Common Stock, or
<PAGE>
CUSIP No. 150937100 Page 29 of 58 Pages
approximately 21.4% of the Common Stock outstanding. VI Partners, as the
sole general partner of WCAS VI, may be deemed to beneficially own the
securities owned by WCAS VI.
WCAS CP II and CP II Partners
-----------------------------
WCAS CP II owns 246,896 shares of Common Stock, or approximately 2.1%
of the Common Stock outstanding. CP II Partners, as the sole general
partner of WCAS CP II, may be deemed to beneficially own the securities
owned by WCAS CP II.
Managing Members and General Partners of VIII Associates, CP III
Associates, VI Partners, HP Partners and CP II Partners
-------------------------------------------------
(i) Patrick J. Welsh owns 49,977 shares of Common Stock, or
approximately 0.4% of the Common Stock outstanding.
(ii) Russell L. Carson owns 49,977 shares of Common Stock, or
approximately 0.4% of the Common Stock outstanding.
(iii) Bruce K. Anderson owns 29,977 shares of Common Stock, or
approximately 0.3% of the Common Stock outstanding.
(iv) Richard H. Stowe owns no shares of Common Stock.
(v) Charles G. Moore, III owns no shares of Common Stock.
(vi) Andrew M. Paul owns 12,707 shares of Common Stock, or
approximately 0.1% of the Common Stock outstanding.
(vii) Thomas E. McInerney owns 10,000 shares of Common Stock, or less
than 0.1% of the Common Stock outstanding.
(viii) Laura VanBuren owns no shares of Common Stock.
(ix) Priscilla A. Newman owns no shares of Common Stock.
(x) Robert A. Minicucci owns 10,772 shares of Common Stock, or less
than 0.1% of the Common Stock outstanding.
(xi) Anthony J. deNicola owns 5,000 shares of Common Stock, or less
than 0.1% of the Common Stock outstanding.
(xii) Paul B. Queally owns no shares of Common Stock.
(xiii) Lawrence B. Sorrel owns no shares of Common Stock.
<PAGE>
CUSIP No. 150937100 Page 30 of 58 Pages
(xiv) James B. Hoover beneficially owns 13,464 shares of Common Stock,
or approximately 0.1% of the Common Stock outstanding.
J. Stephen Eaton
J. Stephen Eaton owns 1,213,077 shares of Common Stock (including
97,706 shares issuable upon the exercise of stock options exercisable
currently or within 60 days), or approximately 10.1% of the Common Stock
outstanding.
Kent C. Fosha, Sr.
Kent C. Fosha, Sr. owns 53,949 shares of Common Stock (including
45,979 shares issuable upon the exercise of stock options exercisable
currently or within 60 days), or approximately 0.5% of the Common Stock
outstanding.
Alan C. Dahl
Alan C. Dahl owns 93,976 shares of Common Stock (including 34,484
shares issuable upon the exercise of stock options exercisable currently or
within 60 days), or approximately 0.8% of the Common Stock outstanding.
Lawrence C. Lepley
Lawrence C. Lepley owns 92,226 shares of Common Stock (including
9,001 shares issuable upon the exercise of stock options exercisable
currently or within 60 days), or approximately 0.8% of the Common Stock
outstanding.
(b) Each of the persons named in paragraph (a), by virtue of his or
her position as a general partner or managing member of VIII Associates, CP III
Associates, HP Partners, VI Partners and/or CP II Partners, may be deemed to
share the powers to vote or direct the voting of and to dispose or direct the
disposition of the shares owned by the limited partnerships of which such
entities are the general partners. Each such person disclaims beneficial
ownership of all shares other than the shares he or she owns directly or by
virtue of his or her indirect pro rata interest, as a managing member or general
partner of such entities.
(c) Except as described in this statement, none of the entities or
persons named in Item 2 has effected any transaction in the Issuer's securities
in the past 60 days.
(d) Except as described in this statement, no person has the power to
direct the receipt of dividends on or the proceeds of
<PAGE>
CUSIP No. 150937100 Page 31 of 58 Pages
sales of the shares of Common Stock owned by WCAS VI, WCAS CP II or WCAS HP.
(e) Not Applicable.
As a result of the Merger, WCAS VIII, WCAS CP III and Messrs.
Eaton, Fosha, Dahl and Lepley will indirectly own all of the issued and
outstanding securities of the Issuer.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities
of the Issuer.
------------------------------------------
The Issuer has entered into an Agreement and Plan of Merger, dated as
of October 22, 1998, by and among the Issuer, Cougar Holdings Corporation, a
Delaware corporation (the "Parent"), and Cougar Acquisition Corp., a Georgia
corporation (the "Acquisition Sub") (the "Merger Agreement"). The Merger
Agreement is incorporated by reference herein as Exhibit B, and any description
thereof is qualified in its entirety by reference thereto. The Parent is the
sole shareholder of the Acquisition Sub. WCAS VIII formed the Parent and the
Acquisition Sub in order to facilitate the Merger. The Merger Agreement provides
for, among other things, the merger of the Acquisition Sub with and into the
Issuer (the "Merger"). Pursuant to the terms of the Merger Agreement, each
issued and outstanding share of the Issuer's Common Stock will be canceled,
extinguished and converted automatically into the right to receive $16.00 in
cash, payable by the Parent or the Acquisition Sub to the holder thereof and
each outstanding share of the Acquisition Sub's capital stock will be converted
into one share of Common Stock. Upon the effectiveness of the Merger, the
separate corporate existence of the Acquisition Sub will cease, and the Issuer
is to be its successor and the surviving corporation. The Merger Agreement
contains customary representations, warranties and covenants. The
representations, warranties and covenants generally will not survive the closing
date of the Merger.
Pursuant to a letter agreement, dated October 22, 1998, from WCAS VIII
and WCAS CP III to the Parent (the "Commitment Letter"), WCAS VIII and WCAS CP
III have committed to provide the Parent with up to an aggregate of $210 million
of financing to ensure, subject to the terms and conditions of the Merger
Agreement, the performance of the Parent's and the Acquisition Sub's obligations
under the Merger Agreement. The Commitment Letter is attached hereto as Exhibit
C, and any description thereof is qualified in its entirety by reference
thereto.
Pursuant to a Shareholders Agreement dated as of October 22, 1998 (the
"Shareholders Agreement") among the Parent, the Acquisition
<PAGE>
CUSIP No. 150937100 Page 32 of 58 Pages
Sub and Messrs. Eaton, Fosha, Dahl and Lepley (collectively, the "Management
Parties"), the Management Parties have agreed to contribute to the Parent not
less than 505,000 shares of Common Stock in exchange for shares of the Parent's
common stock. For purposes of such contribution and exchange, the Common Stock
contributed will be valued at $16.00 per share and the common stock of the
Parent received in exchange will be valued at $2.00 per share. By agreement of
WCAS VIII and Mr. Eaton, additional members of the Issuer's management may be
permitted to acquire Common Stock in exchange for shares of the Parent common
stock. Pursuant to the Shareholders Agreement, (i) WCAS VIII and certain
affiliated individuals have agreed to purchase, for an aggregate $100 million in
cash, 50 million shares of the Parent's common stock and (ii) WCAS CP III has
agreed to purchase, for an aggregate of $100 million in cash, the Parent's
subordinated notes in the face amount of $100 million and 7,142,857 shares of
the Parent's common stock.
Pursuant to the Shareholders Agreement, WCAS VI and each of the
Management Parties has agreed to vote their shares of the Issuer (i) in favor of
adoption and approval of the Merger Agreement and the Merger and the approval of
the terms thereof and each of the other actions contemplated by the Merger
Agreement and the Shareholders Agreement and (ii) except as otherwise agreed to
in writing in advance by the Parent, against the following actions (other than
the Merger and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Issuer or its subsidiaries; (B) a sale, lease
or transfer of a material amount of assets of the Issuer or its subsidiaries, or
a reorganization, recapitalization, dissolution or liquidation of the Issuer or
its subsidiaries; (C) (1) any change in a majority of the persons who constitute
the Board of Directors of the Issuer; (2) any material amendment of the Issuer's
Articles of Incorporation or By-laws; or (3) any other action involving the
Issuer or its subsidiaries which has the effect of impeding, interfering with,
delaying, postponing, or impairing (A) the ability of the Issuer to consummate
the Merger or (B) the transaction contemplated by the Shareholders Agreement and
the Merger Agreement. Pursuant to the Shareholders Agreement, WCAS VI and each
of the Management Parties has agreed not to enter into any agreement or
understanding with any person or entity prior to the termination of the
Shareholders Agreement to vote in any manner inconsistent therewith.
Pursuant to the Shareholders Agreement, each of the Management Parties
further agreed that while the Merger Agreement is in effect, and except as
contemplated by the Shareholders Agreement, not to (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, enforce or permit the execution of the
provisions of any redemption agreement with the Issuer or enter into any
<PAGE>
CUSIP No. 150937100 Page 33 of 58 Pages
contract, option or other arrangement or understanding with respect to or
consent to the offer for sale, sale, transfer, pledge, encumbrance, assignment
or other disposition of, any of its shares of the Issuer, or any shares of the
Issuer acquired after the date hereof, or any interest in any of the foregoing,
except to the Parent; (ii) grant any proxies or powers of attorney, deposit any
Shares of the Issuer into a voting truest or enter into a voting agreement with
respect to any such Shares, or any interest in any of the foregoing, except to
the Parent or the Acquisition Sub; or (iii) take any action that would make any
representation or warranty of such Management Parties contained herein untrue or
incorrect or have the effect of preventing or disabling the Management Parties
from performing such Management Parties' obligations under the Shareholders
Agreement. The Shareholders' Agreement shall terminate, and no party shall have
any rights or obligations thereunder and the Merger Agreement shall become null
and void and have no further effect upon the earliest of (a) the effective time
of the Merger and (b) termination of the Merger Agreement. The Shareholders
Agreement is attached hereto as Exhibit D, and any description thereof is
qualified in its entirety by reference thereto.
The Shareholders Agreement also provides for (i) the amendment of the
Management Parties' employment agreements with the Issuer to, among other
things, appoint the Management Shareholders officers of the Parent and (ii) the
grant of options to purchase additional shares of the Parent's common stock to
the Management Parties.
Item 7. Material to Be Filed as Exhibits.
--------------------------------
Exhibit A - Joint Filing Agreement (appears at page 36)
Exhibit B - Power of Attorney of Kent C. Fosha, Sr., Alan C. Dahl
and Lawrence W. Lepley in favor of J. Stephen Eaton
(appears at page 38);
Exhibit C - Merger Agreement (incorporated herein by reference to
Exhibit 2.1 to the Issuer's Current Report on Form 8-K,
dated October 28, 1998)
Exhibit D - Commitment Letter (appears at page 39)
Exhibit E - Shareholders Agreement (appears at page 41)
Exhibit F - Press Release (incorporated herein by reference to
Exhibit 99.1 to the Issuer's Current Report on Form
8-K, dated October 28, 1998).
<PAGE>
CUSIP No. 150937100 Page 34 of 58 Pages
Signature:
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.
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By: WCAS VIII Associates LLC, General
Partner
By /s/ Laura VanBuren
Managing Member
WCAS VIII ASSOCIATES LLC
By /s/ Laura VanBuren
Managing Member
WCAS CAPITAL PARTNERS III, L.P.
By: WCAS CP III Associates L.L.C., General
Partner
By /s/ Laura VanBuren
Managing Member
WCAS CP III ASSOCIATES L.L.C.
By /s/ Laura VanBuren
Managing Member
WCAS HEALTHCARE PARTNERS, L.P.
By: WCAS HP Partners, General Partner
By /s/ Laura VanBuren
Attorney-in-Fact
WCAS HP PARTNERS
By /s/ Laura VanBuren
Attorney-in-Fact
WCAS CAPITAL PARTNERS II, L.P.
By: WCAS CP II Partners, General Partner
By /s/ Laura VanBuren
General Partner
WCAS CP II PARTNERS
By /s/ Laura VanBuren
General Partner
WELSH, CARSON, ANDERSON & STOWE VI, L.P.
By: WCAS VI Partners, L.P., General Partner
By /s/ Laura VanBuren
General Partner
WCAS VI PARTNERS, L.P.
By /s/ Laura VanBuren
General Partner
<PAGE>
CUSIP No. 150937100 Page 35 of 58 Pages
/s/ Stephen J. Eaton
J. Stephen Eaton
*
Kent C. Fosha, Sr.
*
Alan C. Dahl
*
Lawrence W. Lepley
*By: /s/ Stephen J. Eaton
J. Stephen Eaton, Attorney-in-Fact
Dated: November 2, 1998
<PAGE>
CUSIP No. 150937100 Page 36 of 58 Pages
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D to
which this Agreement is annexed as Exhibit A is filed on behalf of each of them
in accordance with the provisions of Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended.
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By: WCAS VIII Associates LLC, General
Partner
By /s/ Laura VanBuren
Managing Member
WCAS VIII ASSOCIATES LLC
By /s/ Laura VanBuren
Managing Member
WCAS CAPITAL PARTNERS III, L.P.
By: WCAS CP III Associates L.L.C., General
Partner
By /s/ Laura VanBuren
Managing Member
WCAS CP III ASSOCIATES L.L.C.
By /s/ Laura VanBuren
Managing Member
WCAS HEALTHCARE PARTNERS, L.P.
By: WCAS HP Partners, General Partner
By /s/ Laura VanBuren
Attorney-in-Fact
WCAS HP PARTNERS
By /s/ Laura VanBuren
Attorney-in-Fact
WCAS CAPITAL PARTNERS
By: WCAS CP II Partners, General Partner
By /s/ Laura VanBuren
General Partner
WCAS CP II PARTNERS
By /s/ Laura VanBuren
General Partner
WELSH, CARSON, ANDERSON & STOWE VI, L.P.
By: WCAS VI Partners, L.P., General Partner
By /s/ Laura VanBuren
General Partner
WCAS VI PARTNERS, L.P.
By /s/ Laura VanBuren
General Partner
<PAGE>
CUSIP No. 150937100 Page 37 of 58 Pages
/s/ J. Stephen Eaton
J. Stephen Eaton
*
Kent C. Fosha, Sr.
*
Alan C. Dahl
*
Lawrence W. Lepley
*By: /s/ J. Stephen Eaton
J. Stephen Eaton, Attorney-in-Fact
Dated: November 2, 1998
<PAGE>
CUSIP No. 150937100 Page 38 of 58 Pages
EXHIBIT B
POWER OF ATTORNEY
THE UNDERSIGNED hereby makes, constitutes and appoints J. Stephen
Eaton (the "Attorney"), with full power of substitution, the true and lawful
attorney in fact for the undersigned, in the undersigned's name, place and stead
and on the under signed's behalf, to complete, execute and file with the United
States Securities and Exchange Commission (the "Commission"), a statement on
Schedule 13D and any and all amendments thereto pursuant to Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations thereunder, and
any other forms, certificates, documents or instruments that the Attorney deems
necessary or appropriate in order to enable the undersigned to comply with the
requirements of said Section 13(d) and said rules and regulations.
This Power of Attorney shall remain in effect for a period of two
years from the date hereof or until such earlier date as a written revocation
thereof is filed with the Commission.
Dated: November 2, 1998
Kent C. Fosha, Sr.
Alan C. Dahl
Lawrence W. Lepley
<PAGE>
CUSIP No. 150937100 Page 39 of 58 Pages
EXHIBIT D
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
WCAS CAPITAL PARTNERS III, L.P.
October 22, 1998
Cougar Holdings Corporation
320 Park Avenue, Suite 2500
New York, N.Y. 10022
Centennial HealthCare Corporation
Dear Sirs:
We refer to the Agreement and Plan of Merger dated as of the date
hereof (the "Merger Agreement") among Cougar Holdings Corporation, a Delaware
corporation ("Holdings"), Cougar Acquisition Corp., a Georgia corporation
("Acquisition"), and Centennial HealthCare Corporation, a Georgia corporation
(the "Company"), providing for the merger of Acquisition with and into the
Company. Terms used herein which are defined in the Merger Agreement and not
otherwise defined herein shall have the respective meanings assigned to them
therein. The undersigned, Welsh, Carson, Anderson & Stowe VIII, L.P., a Delaware
limited partner ship ("WCAS VIII"), is the sole stockholder of Holdings, and
Acquisition is a wholly-owned subsidiary of Holdings. The undersigned WCAS
Capital Partners III, L.P., a Delaware limited partnership ("WCAS CP III" and,
collectively with WCAS VIII, the "Partnerships") is under common control with
WCAS VIII.
This will confirm our agreement that, subject only to satisfaction or
waiver of the conditions set forth in Sections 7.01 and 7.02 of the Merger
Agreement, the Partnerships will provide (or cause to be provided) cash
financing to Holdings in an amount sufficient to permit it to convert the Shares
(other than Shares then held by Holdings or Acquisition) to cash in the Merger
and to pay all related fees and expenses to be paid by Holdings or Acquisition,
in each case up to the maximum amount of financing for each Partnership
hereinbelow provided.
The form of the securities to be acquired by the Partnerships in
connection with such financing shall be determined by the Partnerships and
<PAGE>
CUSIP No. 150937100 Page 40 of 58 Pages
Holdings in their discretion, subject to compliance with applicable laws, but
the amount of financing so provided (or caused to be provided) by WCAS VIII
shall not exceed $105 million, and the amount so provided (or caused to be
provided) by WCAS CP III shall not exceed $105 million. The obligation of the
Partnerships to provide (or cause to be provided) such financing shall be
several and not joint. In the event that WCAS VIII or WCAS CP III shall arrange
for other parties to provide a portion of the financing committed for by it
hereunder, any such arrangement shall not relieve such Partnership from its
obligations hereunder, subject only to the conditions hereinbefore stated, to
provide (or cause to be provided) such financing.
This letter is intended to be for the benefit of the Company, and may
be enforced by the Company as a third-party beneficiary. Except for Holdings and
the Company as aforesaid, this letter shall not inure to the benefit of, or be
enforceable by, any other party. This letter shall be governed by and construed
in accordance with the laws of the State of New York.
Very truly yours,
WELSH, CARSON, ANDERSON & STOWE
VIII, L.P.
By WCAS VIII ASSOCIATES LLC,
General Partner
By /s/ Lawrence B. Sorrel
Managing Member
WCAS CAPITAL PARTNERS III, L.P.
By WCAS CP III ASSOCIATES L.L.C.,
General Partner
By /s/ Lawrence B. Sorrel
Managing Member
<PAGE>
CUSIP No. 150937100 Page 41 of 58 Pages
EXHIBIT E
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT, dated as of October 22, 1998 (this
"Agreement"), among Cougar Holdings Corporation, a Delaware corporation
("Parent"), Cougar Acquisition Corp., a Georgia corporation and a wholly owned
subsidiary of Parent ("Sub"), and the several shareholders of Centennial
HealthCare Corporation, a Georgia corporation ("Centennial"), who are parties
hereto (each, a "Shareholder" and, collectively, the "Shareholders"). The
Shareholders who are employed by Centennial or one of its subsidiaries are
herein called "Management Shareholders."
RECITALS
Parent, Sub and Centennial propose to enter into an Agreement and Plan
of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement"; capitalized terms used but not defined
herein shall have the meanings set forth in the Merger Agreement as entered into
on the date hereof) providing for the merger of Sub with and into Centennial
(the "Merger"), upon the terms and subject to the conditions set forth in the
Merger Agreement.
As of the date hereof, each Shareholder is the record and beneficial
owner of the number of shares of common stock, per value $.01, of Centennial
("Centennial Common Stock") set forth on the signature page hereof beneath such
Shareholder's name (with respect to each Shareholder, such Shareholder's
"Existing Shares" and, together with any shares of Centennial Common Stock
acquired after the date hereof, whether upon the exercise of warrants, options,
conversion of convertible securities or otherwise, such Shareholder's "Shares").
As an inducement and a condition to entering into the Merger
Agreement, Parent and Sub have required that the Shareholders agree, and the
Shareholders have agreed, to enter into this Agreement.
The Shareholders, Parent and Sub desire to set forth their agreement
with respect to the voting of the Shares in connection with the Merger, the
acquisition by the Shareholders of an equity interest in Parent, and the terms
of employment of the Management Shareholders by Parent and Centennial following
the Merger.
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CUSIP No. 150937100 Page 42 of 58 Pages
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
Section 1. Agreement to Vote. Each Shareholder, severally and not
jointly, hereby agrees that, from and after the date hereof and until this
Agreement shall have been terminated in accordance with Section 8, at any
meeting of the holders of Centennial Common Stock, however called, or in
connection with any written consent of the holders of Centennial Common Stock,
such Shareholder shall vote (or cause to be voted) such Shareholder's Shares (i)
in favor of adoption and approval of the Merger Agreement and the Merger and the
approval of the terms thereof and each of the other actions contemplated by the
Merger Agreement and this Agreement and (ii) except as otherwise agreed to in
writing in advance by Parent, against the following actions (other than the
Merger and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving Centennial or its subsidiaries; (B) a sale, lease
or transfer of a material amount of assets of Centennial or its subsidiaries, or
a reorganization, recapitalization, dissolution or liquidation of Centennial or
its subsidiaries; (C) (1) any change in a majority of the persons who constitute
the Board of Directors of Centennial; (2) any material amendment of Centennial's
Articles of Incorporation or By-laws; or (3) any other action involving
Centennial or its subsidiaries which has the effect of impeding, interfering
with, delaying, postponing, or impairing (A) the ability of Centennial to
consummate the Merger or (B) the transactions contemplated by this Agreement and
the Merger Agreement. Such Shareholder shall not enter into any agreement or
understanding with any person or entity prior to the termination of this
Agreement to vote in any manner inconsistent herewith.
Section 2. Equity Participation of Management Shareholders in Parent;
Fee to WCAS Management. (a) Parent proposes to enter into a Contribution
Agreement (the "Contribution Agreement") with Welsh, Carson, Anderson & Stowe
VIII, a Delaware limited partnership and certain affiliated partnerships and
individuals (collectively, "WCAS"), the Management Shareholders and certain
other executives of Centennial (such other executives and the Management
Shareholders being collectively called the "Management Contributors"). Pursuant
to the Contribution Agreement, WCAS will contribute cash in exchange for common
stock, par value $.01 per share of Parent ("Parent Common") at an exchange price
of $2.00 per share of
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CUSIP No. 150937100 Page 43 of 58 Pages
Parent Common, and Subordinated Notes of Parent ("Notes"), at an exchange price
equal to 85.71% of the aggregate principal amount of the Notes, all as set forth
in the Summary of Terms of Management Participation annexed hereto as Annex A.**
The Management Contributors will contribute not less than an aggregate of
505,000 shares of Centennial Common Stock in exchange for Parent Common. In such
exchange, Centennial Common Stock will be valued at the Merger Consideration,
and Parent Common will be valued at $2.00 per share. The identity of the
Management Contributors other than the Management Shareholders, and the
respective amounts of Centennial Common Stock to be contributed by them pursuant
to the Contribution Agreement, will be determined by agreement of WCAS VIII and
Mr. Eaton. Absent such agreement, the Shareholders will contribute not less than
an aggregate of 505,000 shares of Centennial Common Stock pursuant to the
Contribution Agreement, in such proportions as they may agree among themselves.
The contribution of cash and Centennial Common Stock to Parent pursuant to the
Contribution Agreement will be designed to constitute a transaction under
Section 351 of the Code in which WCAS and the Management Contributors transfer
property to Parent in exchange for stock of Parent and immediately after the
exchange WCAS and the Management Contributors are in control (as defined in
Section 368(c) of the Code) of Parent. However, no party to the Contribution
Agreement will make any representation or warranty to any other party as to
whether or not such transactions will constitute a transaction in which the
Management Contributors will not recognize gain or loss under Section 351 of the
Code or any similar provision of state or local law.
(b) Upon closing of the Merger, Parent will pay to WCAS Management
Corporation, the investment advisor to WCAS, a consummation fee of $3,000,000.
Section 3. Option Grants to Management Shareholders; Employment
Agreements of Certain Management Shareholders. At or promptly following the
Effective Time under the Merger, Parent will grant options to purchase common
stock of Parent to each Management Shareholder as provided in Annex A hereto. At
or promptly following such Effective Time, the employment agreements between
Centennial and each of Messrs. Eaton, Fosha and Dahl will -------- **This amount
of equity to be issued in conjunction with the subordinated debt depends upon
the ratio (in dollars) of the subordinated debt investment to the total equity
investment. For purposes of illustration, the figures used herein assume $100
million each. It is contemplated that the actual ratio would be close to 1 to 1.
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CUSIP No. 150937100 Page 44 of 58 Pages
be amended to add Parent as a party to such agreements, and to provide that each
of such individuals will have titles, duties and responsibilities in Parent
equivalent to their present titles, duties and responsibilities in Centennial.
Each of Messrs. Eaton, Fosha, Dahl and Lepley agree that, subject to compliance
with this Section 3 by Parent, the transactions contemplated by the Merger
Agreement and by this Agreement will not constitute Good Reason for resignation
under their respective employment agreements with Centennial or Paragon
Rehabilitation, Inc., as the case may be.
Section 4. Representations and Warranties of Each Shareholder. Each
Shareholder, severally and not jointly, hereby represents and warrants to Parent
and Sub as of the date hereof in respect of itself as follows:
(a) Authorization; Validity of Agreement; Necessary Action. Such
Shareholder has full power and authority to execute and deliver this
Agreement, to perform such Shareholder's obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by such Shareholder, and, assuming this
Agreement constitutes a valid and binding obligation of Parent and Sub,
constitutes a valid and binding obligation of such Shareholder, enforceable
against it in accordance with its terms, except that (i) such enforcement
may be subject to applicable bankruptcy, insolvency or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(b) Consents and Approvals; No Violations. Neither the execution,
delivery or performance of this Agreement by such Shareholder nor the
consummation by it of the transactions contemplated hereby nor compliance
by it with any of the provisions hereof will (i) require any filing with,
or permit, authorization, consent or approval of, any Governmental Entity
(except where the failure to obtain such permits, authorizations, consents
or approvals or to make such filings would not materially impair the
ability of such Shareholder to consummate the transactions contemplated
hereby), (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage,
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CUSIP No. 150937100 Page 45 of 58 Pages
indenture, guarantee, other evidence of indebtedness, lease, license,
contract, agreement or other instrument or obligation to which such
Shareholder is a party or by which it or any of its properties or assets
may be bound or (iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to it or any of its properties or assets,
except in the case of clauses (ii) and (iii) for violations, breaches or
defaults, or rights of termination, amendment, cancellation or
acceleration, which would not materially impair the ability of such
Shareholder to consummate the transactions contemplated hereby.
(c) Shares. Such Shareholder's Existing Shares are, and its Shares at
the Effective Time will be, owned beneficially and of record by such
Shareholder. Such Shareholder's Existing Shares constitute all of the
shares of Centennial Common Stock owned of record or beneficially by such
Shareholder. All of such Shareholder's Existing Shares are issued and
outstanding. Such Shareholder has sole voting power, sole power of
disposition, sole power to issue instructions with respect to the matters
set forth in Section 1 hereof, sole power of conversion, sole power to
demand appraisal rights and sole power to agree to all of the matters set
forth in this Agreement, in each case with respect to all of such
Shareholder's Existing Shares and will have sole voting power, sole power
of disposition, sole power to issue instructions with respect to the
matters set forth in Section 1, sole power of conversion, sole power to
demand appraisal rights and sole power to agree to all of the matters set
forth in this Agreement, with respect to all of such Shareholder's Shares
on the Closing, with no limitations, qualifications or restrictions on such
rights, subject to applicable federal securities laws and the terms of this
Agreement. Such Shareholder has good and valid title to its Existing Shares
and at all times during the term hereof and on the Closing Date will have
good and valid title to its Shares, free and clear of all liens, claims,
security interests or other charges or encumbrances.
(d) No Finder's Fees. Except as disclosed in the Merger Agreement and
as provided in this Agreement, no broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of such Shareholder.
Section 5. Representations and Warranties of Parent. Parent and Sub
hereby represent and warrant to each Shareholder
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CUSIP No. 150937100 Page 46 of 58 Pages
as of the date hereof as follows:
(a) Organization. Each of Parent and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Corporate Authorization; Validity of Agreement; Necessary Action.
Each of Parent and Sub has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by Parent and Sub of this
Agreement and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly and validly authorized by their
respective boards of directors, and no other corporate action or
proceedings on the part of Parent or Sub are necessary to authorize the
execution and delivery by Parent or Sub of this Agreement, and the
consummation by Parent or Sub of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Parent and Sub, and,
assuming this Agreement constitutes a valid and binding obligation of the
Shareholders, constitutes valid and binding obligations of Parent and Sub,
enforceable against them in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
(c) Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under,
and other applicable requirements of, the HSR Act, any applicable state
takeover laws and applicable state insurance laws and regulations, neither
the execution, delivery or performance of this Agreement by Parent or Sub
nor the consummation by Parent or Sub of the transactions contemplated
hereby nor compliance by Parent or Sub with any of the provisions hereof
will (i) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws of Parent or any of its
Subsidiaries, (ii) require any filing with, or permit, authorization,
consent or approval of, any governmental entity, (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the
<PAGE>
CUSIP No. 150937100 Page 47 of 58 Pages
terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract,
agreement or other instrument or obligation to which Parent or Sub is a
party or by which it or any of its properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent, any of its Subsidiaries or any of their
properties or assets.
Section 6. Further Agreements of Shareholders. (a) Each Shareholder,
severally and not jointly, hereby agrees, while this Agreement is in effect, and
except as contemplated hereby, not to (i) sell, transfer, pledge, encumber,
assign or otherwise dispose of, enforce or permit the execution of the
provisions of any redemption agreement with Centennial or enter into any
contract, option or other arrangement or understanding with respect to or
consent to the offer for sale, sale, transfer, pledge, encumbrance, assignment
or other disposition of, any of its Existing Shares, or any Shares acquired
after the date hereof, or any interest in any of the foregoing, except to
Parent; (ii) grant any proxies or powers of attorney, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares, or any
interest in any of the foregoing, except to Parent or Sub; or (iii) take any
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling the Shareholder from performing such Shareholder's obligations under
this Agreement.
(b) Each Shareholder hereby irrevocably waives any rights of appraisal
or rights to dissent from the Merger that the Shareholder may have.
(c) Each Shareholder agrees with, and covenants to, Parent that the
Shareholder shall not request that Centennial register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
such Shareholder's Shares, unless such transfer is made in compliance with this
Agreement. In the event of a stock dividend or distribution, or any change in
Centennial Common Stock by reason of any stock dividend or distribution, or any
change in Centennial Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term "Shares"
shall be deemed to refer to and include the Shares as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Shares may be changed or exchanged. Each Shareholder shall be entitled to
receive any cash dividend paid by Centennial during the term of this Agreement
until the Shares are cancelled in the Merger.
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CUSIP No. 150937100 Page 48 of 58 Pages
(d) Each Shareholder, severally and not jointly, shall not, nor shall
it authorize or permit any investment banker, attorney or other advisor or
representative of, such Shareholder to, directly or indirectly, except as
expressly permitted pursuant to the Merger Agreement (a) take any action to
solicit, initiate or, knowingly encourage any Acquisition Proposal, or (b)
participate in any discussions or negotiations with or encourage any effort or
attempt by any other person or entity or take any other action to facilitate an
Acquisition Proposal. Notwithstanding anything in this Agreement to the
contrary, from and after the date hereof, each Shareholder, severally and
jointly, shall promptly and within not more than 12 hours advise Parent orally
and in writing of the receipt by it (or any of the other entities or person
referred to above) of any Acquisition Proposal, or any inquiry which is likely
to lead to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or inquiry, and the identity of the person making any such
Acquisition Proposal or inquiry. Each Shareholder will keep Parent fully
informed of the status and details of any such Acquisition Proposal or inquiry.
Section 7. Further Assurances. From time to time prior to the Closing,
at any other party's request and without further consideration, each party
hereto shall execute and deliver such additional documents and take all such
further lawful action as may be necessary or desirable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
Section 8. Termination. This Agreement shall terminate, and no party
shall have any rights or obligations hereunder and this Agreement shall become
null and void and have no further effect upon the earliest of (a) the Effective
Time and (b) termination of the Merger Agreement pursuant to Article VIII
thereof. Nothing in this Section 8 shall relieve any party of liability for
breach of this Agreement.
Section 9. Costs and Expenses. All costs and expenses incurred in
connection with this Agreement and the consummation of the transactions
contemplated hereby shall be paid by the party incurring such expenses.
Section 10. Amendment and Modification. This Agreement may be amended,
modified and supplemented in any and all respects only by written agreement of
the parties hereto.
Section 11. Several Obligations. The representations, warranties,
covenants, agreements and conditions of this
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CUSIP No. 150937100 Page 49 of 58 Pages
Agreement applicable to the Shareholders are several and not joint.
Section 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Parent, Sub or Welsh, Carson, Anderson & Stowe VI, L.P.:
c/o Welsh, Carson, Anderson & Stowe
320 Park Avenue
Suite 2500
New York, New York 10022-6815
Attention: Lawrence B. Sorrel
Facsimile No.: (212) 893-9575
with a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, N.Y. 10111
Attention: William J. Hewitt
Facsimile No.: (212) 841-5725
(b) if to any Management Shareholder, to such Management Shareholder:
c/o Centennial HealthCare Corporation
400 Perimeter Center Terrace
Suite 650
Atlanta, Georgia 30346
Attention: Daryl R. Griswold, Esq.
Fax: 770-730-1350
Section 13. Interpretation. When a reference is made in this Agreement
to sections, such reference shall be to a section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation".
Section 14. Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the
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CUSIP No. 150937100 Page 50 of 58 Pages
parties and delivered to the other parties, it being understood that all parties
need not sign the same counterpart.
Section 15. Entire Agreement; Third Party Beneficiary; Effectiveness.
This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof. The agreements in Section 1 hereof are
intended to be for the benefit of Centennial and shall be enforceable by it.
This Agreement shall be binding upon all Shareholders who have executed it
notwithstanding the failure of any other Shareholder to execute it.
Section 16. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby may be consummated as
originally contemplated to the fullest extent possible.
Section 17. Specific Performance; Remedies Cumulative. (a) The parties
hereto agree that irreparable damage would occur in the event any provision of
this Agreement was not performed in accordance with the terms hereof and that
the parties shall be entitled to the remedy of specific performance of the terms
hereof, in addition to any other remedy at law or equity. (b) All rights, powers
and remedies provided under this Agreement or otherwise available in respect
hereof at law or in equity shall be cumulative and not alternative, and the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
Section 18. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Georgia without giving
effect to the principles of conflicts of law thereof.
Section 19. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other
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CUSIP No. 150937100 Page 51 of 58 Pages
parties, except that Parent may assign, in its sole discretion, any or all of
its rights, interests and obligations hereunder to any direct or indirect wholly
owned subsidiary of Parent; provided, however, that no such assignment shall
relieve Parent from any of its obligations hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
Section 20. Jurisdiction. Each of the parties hereto irrevocably
consents and submits to the jurisdiction in any action brought in connection
with this Agreement in the United States District Court for the Southern
District of New York or for the Northern District of Georgia.
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CUSIP No. 150937100 Page 52 of 58 Pages
IN WITNESS WHEREOF, Parent, Sub and each of the Shareholders have
caused this Agreement to be signed by their respective officers or other
authorized person thereunto duly authorized as of the date first written above.
COUGAR ACQUISITION CORP.
By: /s/ Lawrence B. Sorrel
Name: Lawrence B. Sorrel
Title: President
COUGAR HOLDINGS CORPORATION
By: /s/ Lawrence B. Sorrel
Name: Lawrence B. Sorrel
Title: President
Shareholders:
WELSH, CARSON, ANDERSON &
STOWE VI, L.P.
By: WCAS VI Partners, L.P.,
General Partner
By: /s/ Russell L. Carson
General Partner
Number of Existing Shares:
2,520,193
/s/ J. Stephen Eaton
J. Stephen Eaton
Number of Existing Shares:
1,115,371
/s/ Kent C. Fosha
Kent C. Fosha
Number of Existing Shares:
7,970
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CUSIP No. 150937100 Page 53 of 58 Pages
/s/ Alan C. Dahl
Alan C. Dahl
Number of Existing Shares:
59,492
/s/ Lawrence W. Lepley
Lawrence W. Lepley
Number of Existing Shares:
83,225
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CUSIP No. 150937100 Page 54 of 58 Pages
Annex A
SUMMARY OF TERMS OF MANAGEMENT PARTICIPATION
The following is a summary of (i) the proposed terms and conditions
under which management will be permitted to invest in the holding company (the
"Company") that acquires Centennial, and (ii) certain agreements relating to the
employment of certain senior executives.
A. Equity and Subordinated Debt Financing from WCAS.
WCAS VIII and certain affiliated individuals will purchase 50,000,000 shares of
Common Stock of the Company at $2.00 per share or an aggregate of $100,000,000.
WCAS Capital Partners III will purchase $100,000,000 aggregate principal amount
of the Company's subordinated notes at a purchase price of 85.71% of principal
amount, and 7,142,857 shares of Common Stock of the Company at $2.00 per share
or an aggregate of $14,285,714.
B. Initial Management Ownership; Grant of Options.
Certain members of senior management (each, a "Management Purchaser") will
participate in the Company through (i) the rollover of a minimum of 505,000
shares of Centennial common owned by them into shares of Company Common Stock,
(ii) the grant of options ("Options") to purchase shares Common Stock of the
Company, and (iii) the opportunity to invest an amount up to the option spread
of Centennial options held by them in Common Stock of the Company. The identity
of the Management Purchasers and their respective participations will be
determined by WCAS VIII in consultation with Mr. Eaton. The purchase and Option
price will be $2.00 per share. Centennial common will be valued at the merger
price for purposes of the rollover. The initial equity capitalization of the
Company is shown on Exhibit I hereto. 15% of the fully diluted Common Stock of
the Company will be reserved for Options to be granted to Management Purchasers
and other members of management.
C. Employment Agreements.
The existing employment agreements between Centennial and each of Messrs. Eaton,
Fosha and Dahl will be amended to add the Company as a party, to provide that
each of these individuals will have titles, duties and responsibilities with the
Company equal to those with Centennial and to provide for two-year rolling
severance and noncompete periods for each executive. Such agreements will
otherwise remain in effect without change. The
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CUSIP No. 150937100 Page 55 of 58 Pages
employment agreement with Mr. Lepley will be amended to provide for two-year
rolling severance and noncompete. The Company will, in addition, pay the
Management Purchasers an aggregate of $2,000,000 in additional fees and bonuses
within two months of the closing of the Merger, such amounts to be allocated by
agreement between WCAS VIII and Mr. Eaton.
Mr. Eaton's employment agreement will be amended to provide that if following a
Change of Control (as defined in his agreement) he is not offered the
opportunity to continue as chief executive officer of the Company, then provided
that the Company's board of directors determines that the value of the Company
has reached a target to be agreed, the Company will, at Mr. Eaton's request but
subject to the Company's obtaining all consents required under its loan
agreements, repurchase up to 50% of the shares of Company Common Stock acquired
by him on roll over in the Merger, at fair market value as determined by
agreement of the Board of Directors and Mr. Eaton or, in default of such
agreement, by a third party or parties as specified in the amended employment
agreement.
D. Stock Options.
Vesting under all outstanding options of Centennial will be
accelerated to the Effective Date of the Merger. Options for 15% of the fully
diluted shares of Company Common will be available to be granted as either Time
Options or Performance Accelerated Options with exercisability as described
below.
Exercisability
of Options: Time Vesting Options will be granted at
closing for 9% of fully diluted Company
Common, of which 3% will be immediately
exercisable and 6% will vest in installments
of 1.5% each of the first through fourth
anniversaries of Closing.
Performance Vesting Options will be granted
at Closing for 6% of the fully diluted
Company Common. Performance options will be
exercisable at any time after the eighth
anniversary of grant. Vesting of Performance
Options will accelerate upon a Liquidity
Event (as hereinafter defined) in the event
that WCAS VIII achieves specified multiples
of its investment (in the event of a
Liquidity Event prior to the fourth
anniversary of the Merger), or in the event
it achieves specified Internal Rate of
Return targets (in the event of a Liquidity Event on
or after the fourth anniversary of the Merger),
as follows:
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CUSIP No. 150937100 Page 56 of 58 Pages
Percentage of Performance
Options Exercisable IRR Multiple
33-1/3% 25% 2.0
66-2/3% 30% 2.5
100% 35% 3.0
The percentage exercisable will be
interpolated for multiples or IRR's between
these values. A Liquidity Event will be
defined to mean (i) a sale of all or
substantially all of the assets of the
Company or a consolidation or merger of the
Company as a result of which a majority of
the voting stock the purchaser or the
surviving corporation, of such merger or
consolidation, as the case may be, is not
owned by the same persons who owned such
voting stock immediately prior to such
transaction, in substantially the same
proportions, or (ii) the Company's
completing a firm commitment underwritten
initial public offering resulting in gross
proceeds of at least $50 million and not
less than 20 percent of the Company's
outstanding Common Stock being publicly
tradeable. WCAS VIII's multiple of return or
IRR, as the case may be, will be based on
its entire equity investment in the Company
(including equity investments subsequent to
the merger) treating the entire WCAS VIII
equity investment as cashed out of the time
of a Liquidity Event at the price of Company
Common Stock reflected in such event (or, in
the case of (iii) above, the 30 trading days
ending on such event).
In the event that the Company completes a
public offering prior to the fourth
anniversary of the Merger which meets the
foregoing IRR targets but does not meet the
multiple of return targets, at the time of
the offering the management will be provided
an opportunity to earn an economic value
equivalent to that of the unvested
347787.1
<PAGE>
CUSIP No. 150937100 Page 57 of 58 Pages
performance options through a grant of new
options structured on a more customary basis
for a public company.
No Options shall become exercisable for any
additional shares after employment ceases.
In such events, any unexercisable Options
terminate.
Expiration of Options: All Options expire upon the earliest of
(a) the tenth anniversary of the grant
date, (b) the first anniversary of
death, permanent disability or
retirement, (c) immediately upon
termination for cause, (d) after other
terminations of employment, 90 days and
(e) at the discretion of the Company, in
the event of certain business
combinations upon payment of the option
spread with respect to all Options which
were exercisable at the date of the
business combination. Unexercisable
Options terminate upon any termination
of employment.
<PAGE>
CUSIP No. 150937100 Page 58 of 58 Pages
EXHIBIT I
<TABLE>
<CAPTION>
Purchase Principal Total
Purchase Price- Price - Amount Purchase
Shares No. of Shares Percentage Note of Notes Price
<S> <C> <C> <C> <C>
WCAS VII 100,000,000 50,000,000 69.46% 100,000,000
WCAS Cap
Partners III 14,285,714 7,142,857 9.92% 85,714,286 100,000,000 100,000,000
Senior Management
Roll Over 8,080,000 4,040,000 5.61% 8,080,000
Options Vested 2,159,395 3.00%
Options Time
Vesting 4,318,790 6.00%
Options -
Performance
Vesting 4,318,790 6.00%
Total 22,365,714 71,979,832 100.00% 208,080,000
Holdings share 2.00
Merger Price 16.00
Management
Rollover shares 505,000
</TABLE>
