SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934)
--------------------
CONCENTRA MANAGED CARE, INC.
(Name of Issuer)
CONCENTRA MANAGED CARE, INC.
(Name of Person(s) Filing Statement)
6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
(Title of class of Securities)
20589TAA1
674623AA1
20589TAB9
20589TAC7
(CUSIP Number of Class of Securities)
DANIEL J. THOMAS
CONCENTRA MANAGED CARE, INC.
312 UNION WHARF
BOSTON, MASSACHUSETTS 02109
(617) 367-2163
WITH COPIES TO:
OTHON A. PROUNIS, ESQ. RICHARD A. PARR II
REBOUL, MACMURRAY, HEWITT, CONCENTRA MANAGED CARE, INC.
MAYNARD & KRISTOL 5080 SPECTRUM DRIVE
45 ROCKEFELLER PLAZA SUITE 400, WEST TOWER
NEW YORK, NEW YORK 10111 ADDISON, TEXAS 75001
(212) 841-5700 (800) 232-3550
<PAGE>
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
July 20, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
Transaction Valuation* Amount Of Filing Fee
$328,281,875 $65,657
* For purposes of calculating amount of filing fee only. The purchase price
of the 6% Convertible Subordinated Notes Due 2001 (the "6% Notes'), as
described herein, is $1,002.50 per $1,000 principal amount of the 6% Notes.
As of July 19, 1999, there were $97,750,000 aggregate principal amount of
the 6% Notes outstanding, resulting in an aggregate purchase price,
assuming all 6% Notes are tendered, of $97,994,375. The purchase price of
the 4.5% Convertible Subordinated Notes Due 2003 (the "4.5% Notes"), as
described herein, is $1,001.25 per $1,000 principal amount of the 4.5%
Notes. As of July 19, 1999, there were $230,000,000 aggregate principal
amount of the 4.5% Notes outstanding, resulting in an aggregate purchase
price, assuming all 4.5% Notes are tendered, of $230,287,500.The amount of
the filing fee calculated in accordance with Rule 0-11 of the Securities
Exchange Act of 1934, as amended equals 1/50th of one percent of
$328,281,875 which is the total purchase price for the 6% Notes and the
4.5% notes..
|_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: NONE Filing party: NOT APPLICABLE
------- -----------------
Form or registration no.: NOT APPLICABLE Date filed: NOT APPLICABLE
----------------- -----------------
<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The issuer is Concentra Managed Care, Inc., a Delaware corporation
(the "Company"). The Company's principal executive offices are located at 312
Union Wharf, Boston, Mass. 02109.
(b) As of July 19, 1999, there was $97,750,000 aggregate principal
amount of the 6% Convertible Subordinated Notes Due 2001 of the Company (the "6%
Notes") outstanding and $230,000,000 aggregate principal amount of the 4.5%
Convertible Subordinated Notes Due 2003 of the Company (the "4.5% Notes" and,
together with the 6% Notes, the "Notes") outstanding. The Company is offering to
purchase (i) all of its outstanding 6% Notes for a cash purchase price of
$1,002.50 per $1,000 principal amount of 6% Notes, plus accrued and unpaid
interest to, but not including, the date of payment and (ii) all of its
outstanding 4.5% Notes for a cash purchase price of $1,001.25 per $1,000
principal amount of 4.5% Notes, plus accrued and unpaid interest up to, but not
including, the date of payment, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated July 20, 1999 (the "Offer to Purchase") and
in the related Letter of Transmittal (the "Letter of Transmittal"), copies of
which are filed herewith as Exhibits (a)(1) and (a)(2), respectively. The
Company is not aware that any of its directors, officers or affiliates will be
tendering Notes pursuant to the tender offer. The information set forth under
"Principal Terms of the Offers" of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth under "Price Range of the Notes" of the
Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth under "Purpose and Background of
the Offers" and "Source and Amount of Funds" of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
ISSUER OR AFFILIATE.
(a) - (j) The information set forth under "Purpose and Background of
the Offers", "Consolidated Pro Forma Financial Statements (Unaudited)" and
"Source and Amount of Funds" of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
During the past 40 business days, there have been no transactions in
the Notes effected by the Company or any subsidiary of the Company or, to the
knowledge of the Company, by any directors or executive officers of the Company
or any subsidiary of the Company.
<PAGE>
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The information set forth under "Purpose and Background of the Offers"
of the Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth under "Information Agent, Dealer Manager and
Depositary" of the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) The information set forth under "Selected Consolidated Financial
Data" of the Offer to Purchase is incorporated herein by reference. The
following documents, which have been filed by the Company (File No. 1-12139)
with the Securities and Exchange Commission are incorporated herein by
reference:
(1) Annual Report of the Company on Form 10-K/A for the fiscal year
ended December 31, 1998; and
(2) Quarterly Report of the Company on Form 10-Q/A for the fiscal
year ended March 31, 1998; and
(b) The information set forth under "Consolidated Pro Forma Financial
Statements (Unaudited)" of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) The information set forth under "Purpose and Background of the
Offers" is incorporated herein by reference.
(b) There are no applicable regulatory requirements which must be
complied with or approvals which must be obtained in connection with the tender
offer other than compliance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder including, without
limitation, Rule 13E-4 promulgated thereunder, and the requirements of state
securities or "blue sky" laws.
(c) Not applicable.
(d) None.
(e) The information set forth in the Offer to Purchase and the Letter
of Transmittal, copies of which are filed herewith as Exhibits (a)(1) and
(a)(2), respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
2
<PAGE>
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9
(a)(7) Form of Summary Advertisement dated July 20, 1999
(a)(8) Text of Press Release dated July 20, 1999
(a)(9) Proxy Statement of Concentra Managed Care, Inc. on Schedule
14A filed on July 16, 1999 (Incorporated by reference under
File No. 1-12139
(b)(1) Commitment Letter dated February 28, 1999 from Chase
Securities Inc., The Chase Manhattan Bank, DLJ Capital
Funding, Inc., Credit Suisse First Boston and Fleet National
Bank (incorporated by reference to Exhibit (a)(1) to the
Schedule 13E-3 filed by Concentra Managed Care, Inc. on June
7, 1999)
(b)(2) Letter dated February 24, 1999 from Chase Capital Partners
(incorporated by reference to Exhibit (a)(2) to the Schedule
13E-3 filed by Concentra Managed Care, Inc. on June 7, 1999)
(b)(3) Letter dated March 1, 1999 from WCAS Capital Partners III,
L.P. (incorporated by reference to Exhibit (a)(3) to the
Schedule 13E-3 filed by Concentra Managed Care, Inc. on June
7, 1999)
(c) Amended and Restated Agreement and Plan of Merger, dated as
of March 24, 1999, between Yankee Acquisition Corp. and
Concentra Managed Care, Inc. (incorporated by reference to
Exhibit 2.1 to the Form 8-K filed by Concentra Managed Care,
Inc. on March 29, 1999)
(d) None
(e) None
(f) None
3
<PAGE>
SIGNATURE
After due 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.
Dated: July 20, 1999
CONCENTRA MANAGED CARE, INC.
By /s/ Richard Parr
------------------------------
Name:Richard Parr
Title:Executive Vice President
and General Counsel
4
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9
(a)(7) Form of Summary Advertisement dated July 20, 1999
(a)(8) Text of Press Release dated July 20, 1999]
(a)(9) Proxy Statement of Concentra Managed Care, Inc. on Schedule
14A filed on July 16, 1999 (Incorporated by reference under
File No. 1-12139
(b)(1) Commitment Letter dated February 28, 1999 from Chase
Securities Inc., The Chase Manhattan Bank, DLJ Capital
Funding, Inc., Credit Suisse First Boston and Fleet National
Bank (incorporated by reference to Exhibit (a)(1) to the
Schedule 13E-3 filed by Concentra Managed Care, Inc. on June
7, 1999)
(b)(2) Letter dated February 24, 1999 from Chase Capital Partners
(incorporated by reference to Exhibit (a)(2) to the Schedule
13E-3 filed by Concentra Managed Care, Inc. on June 7, 1999)
(b)(3) Letter dated March 1, 1999 from WCAS Capital Partners III,
L.P. (incorporated by reference to Exhibit (a)(3) to the
Schedule 13E-3 filed by Concentra Managed Care, Inc. on June
7, 1999)
(c) Amended and Restated Agreement and Plan of Merger, dated as
of March 24, 1999, between Yankee Acquisition Corp. and
Concentra Managed Care, Inc. (incorporated by reference to
Exhibit 2.1 to the Form 8-K filed by Concentra Managed Care,
Inc. on March 29, 1999)
(d) None
(e) None
(f) None
5
OFFER TO PURCHASE
CONCENTRA MANAGED CARE, INC.
OFFER TO PURCHASE FOR CASH
ALL OF ITS OUTSTANDING 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
CUSIP #: 20589T-AA-1
674623-AA-1 (FORMERLY OCCUSYSTEMS, INC.)
AND
ALL OF ITS OUTSTANDING 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
CUSIP #: 20589T-AB-9
20589T-AC-7
- --------------------------------------------------------------------------------
Concentra Managed Care, Inc., a Delaware corporation (the "Company"), hereby
offers to purchase, upon the terms and subject to the conditions set forth in
this Offer to Purchase (the "Offer to Purchase") and in the accompanying Letter
of Transmittal (the "Letter of Transmittal"), (i) all of its outstanding 6%
Convertible Subordinated Notes due 2001 (the "6% Notes") for a cash purchase
price of $1,002.50 per $1,000 principal amount of 6% Notes, plus accrued and
unpaid interest up to, but not including, the date of payment and (ii) all of
its outstanding 4.5% Convertible Subordinated Notes due 2003 (the "4.5% Notes"
and, together with the 6% Notes, the "Notes") for a cash purchase price of
$1,001.25 per $1,000 principal amount of 4.5% Notes, plus accrued and unpaid
interest up to, but not including, the date of payment. The offer to purchase
each issue of Notes on the terms and subject to the conditions set forth herein
and in the Letter of Transmittal is referred to individually as an "Offer," and
such offers with respect to both issues of Notes are collectively referred to as
the "Offers." Notwithstanding any other provision of the Offers, the Company's
obligation to accept for purchase, and pay for, Notes validly tendered pursuant
to the relevant Offer is subject to certain conditions, including, among other
things, the consummation of the Merger (as defined below) (the "Merger
Condition"), and certain other conditions described in this Offer to Purchase.
See "Purpose and Background of the Offers--The Merger--Conditions" and
"Conditions of the Offers." The purchase of the Notes is not a condition to the
Merger. Each Offer is independent of the other.
As of July 19, 1999, each $1,000 principal amount of 6% Notes was convertible
into 33.67 shares (the "6% Conversion Rate") of the Company's common stock, par
value $.01 per share ("Company Common Stock"), equivalent to a conversion price
of approximately $29.70 per share. As of July 19, 1999, each $1,000 principal
amount of 4.5% Notes was convertible into 24.24 shares (the "4.5% Conversion
Rate") of Company Common Stock, equivalent to a conversion price of
approximately $41.25 per share. On July 19, 1999, the last reported sale price
of the Company Common Stock on the Nasdaq National Market was $15.625.
The Offers are being made in connection with the proposed merger (the "Merger")
of Yankee Acquisition Corp., a Delaware corporation ("Yankee") which was
organized and is currently owned by Welsh, Carson, Anderson & Stowe VIII, L.P.,
a Delaware limited partnership ("WCAS"), with and into the Company, pursuant to
the Amended and Restated Agreement and Plan of Merger, dated as of March 24,
1999 (the "Merger Agreement"), between Yankee and the Company. Upon consummation
of the Merger, each outstanding share of Company Common Stock will be converted
into the right to receive $16.50 in cash. Upon consummation of the Merger, the
Notes will no longer be convertible into shares of Company Common Stock. In
accordance with the terms of the respective Indentures (as defined below), upon
a Holder's election to convert any or all of such Holder's Notes following the
consummation of the Merger, such Holder shall only be entitled to receive the
same kind and amount of consideration received in the Merger by a holder of the
number of shares of Company Common Stock issuable upon conversion of such Note
or Notes immediately prior to the Merger. As a result, following the
consummation of the Merger, each $1,000 principal amount of 6% Notes would be
convertible into $555.55 (based on the 6% Conversion Rate and the right to
receive $16.50 in cash for each outstanding share of Company Common Stock in the
Merger) and each $1,000 principal amount of 4.5% Notes would be convertible into
$400.00 (based on the 4.5% Conversion Rate and the right to receive $16.50 in
cash for each outstanding share of Company Common Stock in the Merger).
The Company will purchase all Notes validly tendered and not withdrawn prior to
the applicable Expiration Time upon the terms and subject to the conditions of
the applicable Offer. Notes not purchased pursuant to the Offers will remain
outstanding.
In order to satisfy the change of control repurchase requirements of the
Indentures, the Company intends to commence an offer to repurchase any
outstanding Notes as soon as practicable after the Closing Date (as defined
below) at a repurchase price in cash equal to 100% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
repurchase.
SEE "CERTAIN CONSIDERATIONS" AND "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" FOR
A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING THE
OFFERS.
EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST
17, 1999 UNLESS EXTENDED OR TERMINATED (SUCH TIME AND DATE OR THE LATEST TIME
AND DATE TO WHICH THE RELEVANT OFFER MAY BE EXTENDED OR TERMINATED WITH
RESPECT TO EACH OF THE OFFERS, BEING REFERRED TO AS THE "EXPIRATION TIME").
HOLDERS OF NOTES MUST TENDER THEIR NOTES PRIOR TO THE APPLICABLE EXPIRATION
TIME TO RECEIVE THE APPLICABLE PURCHASE PRICE (AS DEFINED BELOW). TENDERS OF
NOTES MAY BE VALIDLY WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION TIME AND,
UNLESS THERETOFORE ACCEPTED FOR PAYMENT BY THE COMPANY PURSUANT TO THE
RELEVANT OFFER, MAY ALSO BE VALIDLY WITHDRAWN AT ANY TIME AFTER TUESDAY,
SEPTEMBER 14, 1999.
The Dealer Manager for the Offers is:
DONALDSON, LUFKIN & JENRETTE
July 20, 1999
<PAGE>
IMPORTANT
Any holder of Notes (each a "Holder" and, collectively, "Holders")
desiring to tender Notes should either (i) complete and sign the relevant Letter
of Transmittal (or a manually signed facsimile) in accordance with the
instructions set forth therein and mail or deliver such manually signed Letter
of Transmittal (or such manually signed facsimile), together with the
certificates for such Notes and any other documents required by that Letter of
Transmittal, to United States Trust Company of New York (the "Depositary"), (ii)
tender Notes to such Depositary's account with the Book-Entry Transfer Facility
(as defined below) pursuant to the procedures for book-entry transfer set forth
herein or (iii) request the Holder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such Holder. Only
registered holders of Notes are entitled to tender Notes. Beneficial owners
whose Notes are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if they desire to tender Notes. See
"Procedures for Tendering Notes."
A Holder who desires to tender Notes but who cannot do so on a timely
basis may tender such Notes by following the procedures for guaranteed delivery
set forth herein. See "Procedures for Tendering Notes -- Guaranteed Delivery."
THE OFFER TO PURCHASE AND ACCOMPANYING LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFERS.
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at the addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery or other documents may be directed to the Information Agent.
Beneficial owners may also contact their broker, dealer, commercial bank or
trust company for assistance concerning the Offers.
THE DELIVERY OF THIS OFFER TO PURCHASE SHALL NOT UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS OFFER TO PURCHASE IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR, IN THE CASE OF INFORMATION INCORPORATED HEREIN
BY REFERENCE, SUBSEQUENT TO THE DATE THEREOF, OR THAT THERE HAS BEEN NO CHANGE
IN THE INFORMATION SET FORTH OR INCORPORATED BY REFERENCE IN THIS OFFER TO
PURCHASE OR IN THE BUSINESS, CONDITION OR AFFAIRS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE AN OFFER TO BUY OR THE
SOLICITATION OF AN OFFER TO SELL THE NOTES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER HOLDERS SHOULD TENDER
NOTES PURSUANT TO THE OFFERS. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION, OR TO MAKE ANY REPRESENTATION IN CONNECTION THEREWITH, OTHER THAN
THOSE CONTAINED HEREIN OR IN THE ACCOMPANYING LETTER OF TRANSMITTAL. IF MADE OR
GIVEN, SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
ii
<PAGE>
AVAILABLE INFORMATION
The Company is currently subject to the information and reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other information with the
U.S. Securities and Exchange Commission (the "Commission"). The Company has also
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
under the Exchange Act, which includes certain of the information contained in
this Offer to Purchase and certain other information relating to the Offers.
Such reports and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: New York Regional Office, Seven World Trade Center,
13th Floor, New York, New York 10048; and Chicago Regional Office, Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such material may also be accessed electronically at the Commission's
site on the world wide web located at "http://www.sec.gov." Statements made in
this Offer to Purchase concerning the provisions of any contract, agreement,
indenture or other document referred to herein are not necessarily complete.
With respect to each such statement concerning a contract, agreement, indenture
or other document filed with the Commission, reference is made to such filing
for a more complete description of the matter involved, and each such statement
is qualified in its entirety by such reference. In addition, the Company Common
Stock is listed and traded on the Nasdaq National Market, and such reports and
other information may be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Additional information concerning the Merger is contained in the proxy
statement of the Company, dated July 16, 1999, filed in connection with the
Merger (the "Proxy Statement") and the Schedule 13E-3 of the Company related
thereto. The Proxy Statement has been distributed to the Company's stockholders
in connection with their consideration of the Merger at a special meeting of
stockholders scheduled to be held on August 17, 1999.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
For information about the Company, Holders are referred to the
following documents filed by the Company with the Commission, which are
incorporated by reference in this Offer to Purchase to the extent not modified
or superseded by documents subsequently filed (the "Incorporated Documents"):
<TABLE>
<CAPTION>
SEC Filings (File No. 1-12139) Period
- ----------------------------------------------------------------------------------------------------
<S> <C>
Annual Report on Form 10-K, as amended by Form 10-K/A Year ended December 31,
1998 Quarterly Report on Form 10-Q, as amended by Form 10-Q/A Quarter ended March 31, 1999
Current Reports on Form 8-K February 4, 1999, March 3, 1999
March 29, 1999, April 28, 1999
and July 19, 1999
Proxy Statement on Schedule 14A and Schedule 13E-3 Filed on July 16, 1999
</TABLE>
The Proxy Statement is being delivered to Holders together with this
Offer to Purchase.
Any statements contained in a document of the Company listed above and
incorporated by reference in this Offer to Purchase shall be deemed to be
modified or superseded for the purpose of this Offer to Purchase to the extent
that a statement contained in this Offer to Purchase modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Offer to
Purchase. All information appearing in this Offer to Purchase is qualified in
its entirety by the information and financial statements (including notes
thereto) appearing in the Incorporated Documents, except to the extent set forth
in the immediately preceding statement.
All documents and reports filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Offer to
Purchase and prior to the Expiration Time shall also be deemed to be
incorporated by reference in this Offer to Purchase and to be a part hereof from
the date of filing of such documents. Any statement contained in this Offer to
Purchase or incorporated herein by reference shall be deemed to be modified or
superseded to the extent that a statement contained in any documents filed by
the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Offer to Purchase modifies or supersedes such statement.
iii
<PAGE>
The Company will provide without charge to each person to whom this
Offer to Purchase is delivered, upon request, copies of (i) the Indenture, dated
as of December 24, 1996, between OccuSystems, Inc. ("OccuSystems") and United
States Trust Company of New York (the "6% Notes Indenture") pursuant to which
the 6% Notes were issued and the related Supplemental Indenture, dated as of
August 29, 1997, among OccuSystems, the Company, and United States Trust Company
of New York (the "6% Notes Supplemental Indenture") pursuant to which the 6%
Notes were assumed by the Company; (ii) the Indenture, dated as of March 16,
1998, between the Company and Chase Bank of Texas, N.A. (the "4.5% Notes
Indenture" and, together with the 6% Notes Indenture and the 6% Notes
Supplemental Indenture, the "Indentures") pursuant to which the 4.5% Notes were
issued; and (iii) any or all information and reports of the Company incorporated
by reference in this Offer to Purchase and not included herewith (other than
exhibits to such incorporated information that are not specifically incorporated
by reference into such information). Written or telephone requests for such
copies should be directed to the Information Agent at its address and telephone
number set forth on the back cover of this Offer to Purchase.
FORWARD-LOOKING STATEMENTS
This Offer to Purchase, including the documents that are incorporated
by reference as set forth in "Incorporation of Certain Documents by Reference,"
contains forward-looking statements. These statements are based on management's
beliefs and assumptions, based on information currently available to management
and are subject to risks and uncertainties. Forward-looking statements include
the information concerning possible or assumed future results of operations of
the Company set forth (1) under "Summary," "Certain Projections," and "The
Merger" in the Proxy Statement, (2) under "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
each Annual Report on Form 10-K, as amended, and Quarterly Report on Form 10-Q,
as amended, incorporated by reference into this document and (3) in this
document and the documents incorporated by reference herein preceded by,
followed by, or that include, the words "believes," "expects," "anticipates,"
"intends," "plans," "estimates" or similar expressions.
Forward-looking statements are not guarantees of performance. The
future results of the Company may differ materially from those expressed in
these forward-looking statements. Many of these factors that will determine
these results are beyond the ability of the Company to control or predict.
Holders of Notes are cautioned not to put undue reliance on any forward-looking
statements.
Holders of Notes should understand that the following important
factors, in addition to those discussed herein and elsewhere in the documents
which are incorporated by reference herein, could affect the future results of
the Company and could cause the results to differ materially from those
expressed in such forward-looking statements: (1) the effect of economic
conditions; (2) the impact of competitive services and pricing, including
through legislative reform; (3) changes in laws and regulations, including
changes in accounting standards and regulations affecting the workers'
compensation, insurance or health care industries in general; (4) customer
demand; (5) changes in costs; and (6) opportunities that may be presented or
pursued by the Company.
iv
<PAGE>
TABLE OF CONTENTS
PAGE
----
Principal Terms of the Offers ........................................... 1
Purpose and Background of the Offers .................................... 3
Price Range of the Notes ................................................ 5
Certain Considerations .................................................. 6
Selected Consolidated Financial Data .................................... 7
Consolidated Pro Forma Financial Statements (Unaudited) ................. 8
Conditions of the Offers ................................................ 15
Expiration Time; Extension; Amendment; Termination ...................... 16
Acceptance of Notes for Purchase; Payment for Notes ..................... 17
Procedures for Tendering Notes .......................................... 18
Withdrawal of Tenders; Absence of Appraisal Rights ...................... 21
Source and Amount of Funds .............................................. 21
Certain Federal Income Tax Considerations ............................... 21
Information Agent, Dealer Manager and Depositary ........................ 22
Miscellaneous ........................................................... 22
v
<PAGE>
TO THE HOLDERS OF CONCENTRA MANAGED CARE, INC.
6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
AND
4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
PRINCIPAL TERMS OF THE OFFERS
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFERS.
The Company .................. Concentra Managed Care, Inc., a Delaware
corporation, is the leading provider of health
care management and cost containment services
to the workers' compensation, disability and
auto insurance markets. The Company also
provides out-of-network medical claims review
to the group health marketplace and performs
non-injury services for over 80,000 local
employees. The Company's principal executive
offices are located at 312 Union Wharf, Boston,
Mass. 02109.
The Notes ...................... 6% Convertible Subordinated Notes due 2001 and
4.5% Convertible Subordinated Notes due 2003.
Principal Amounts Outstanding As of July 19, 1999, $97.75 million aggregate
principal amount of the 6% Notes and $230
million aggregate principal amount of the 4.5%
Notes were outstanding.
The Offers ..................... The Company is offering to purchase for cash,
upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the
accompanying Letter of Transmittal, all of the
outstanding Notes validly tendered and not
withdrawn prior to the applicable Expiration
Time, at the Purchase Prices (as defined below)
set forth below. Each Offer is independent of
the other.
The Expiration Time .......... Each of the Offers will expire at 5:00 p.m.,
New York City time, on Tuesday, August 17,
1999, unless extended or earlier terminated. It
is contemplated that the Expiration Time of the
Offers will be extended, if necessary, to
coincide with the closing date of the Merger
(the "Closing Date") which is currently
expected to occur on or about August 17, 1999.
If the Merger Agreement is terminated and the
Merger is not consummated, it is contemplated
that the Offers will be terminated.
Payment ........................ Payment of the applicable Purchase Price for
Notes purchased in each Offer will be made
promptly after the Expiration Time for that
Offer, provided that the conditions to that
Offer, including consummation of the Merger,
have been satisfied or waived. It is currently
expected that the acceptance of the Notes for
purchase by the Company will occur on the
Closing Date and that the date of payment for a
particular issue of Notes will be the third
business day after the applicable Expiration
Time. The Company also reserves the right to
accept one issue of Notes for purchase without
accepting for purchase Notes of the other
issue.
Purchase Prices ............... THE 6% NOTES. The Purchase Price for the 6%
Notes (the "6% Notes Purchase Price") will be
$1,002.50 per $1,000 principal amount of 6%
Notes, plus accrued and unpaid interest up to,
but not including, the date of payment.
THE 4.5% NOTES. The Purchase Price for the 4.5%
Notes (the "4.5% Notes Purchase Price" and,
together with the 6% Notes Purchase Price, the
"Purchase Prices") will be $1,001.25 per $1,000
principal amount of 4.5% Notes, plus accrued
and unpaid interest up to, but not including,
the date of payment.
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Conditions to Each of
the Offers ..................... The Company's obligation to accept for
purchase, and to pay for, Notes validly
tendered pursuant to each Offer is conditioned
upon, among other things, the Merger Condition
and the General Conditions (as defined below).
See "Conditions of the Offers."
The Company, in its reasonable discretion, may
waive any of the conditions of the Offers, in
whole or in part, with respect to either or
both of the Offers at any time and from time to
time.
Withdrawal Rights ............. Tenders of Notes of a particular issue may be
validly withdrawn at any time prior to the
relevant Expiration Time and, unless
theretofore accepted for payment by the Company
pursuant to the relevant Offer, may also be
validly withdrawn at any time after Tuesday,
September 14, 1999. See "Withdrawal of Tenders;
Absence of Appraisal Rights."
The Trustees .................. The Indenture trustee for the 6% Notes is
United States Trust Company of New York (the
"6% Notes Trustee"), and the Indenture trustee
for the 4.5% Notes is Chase Bank of Texas, N.A.
(the "4.5% Notes Trustee" and, together with
the 6% Notes Trustee, the "Trustees").
How to Tender Notes ............ See "Procedures for Tendering Notes." For
further information, please contact the
Information Agent or the Dealer Manager or
consult your broker, dealer, commercial bank or
trust company for assistance.
Additional Documentation;
Further Information .......... Requests for additional copies of this Offer to
Purchase, the Letter of Transmittal and the
Notice of Guaranteed Delivery, or for copies of
the Incorporated Documents and the Indentures,
may be directed to the Information Agent. Any
questions or requests for assistance may be
directed to the Information Agent or the Dealer
Manager at the addresses and telephone numbers
on the back cover of this Offer to Purchase.
Beneficial owners may also contact their
broker, dealer, commercial bank or trust
company for assistance concerning the Offers.
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<PAGE>
PURPOSE AND BACKGROUND OF THE OFFERS
The purpose of the Offers is to acquire all or a substantial amount of
the outstanding Notes in connection with the consummation of the Merger. Upon a
Change of Control (as defined in the Indentures), the Company is required to
make an offer to repurchase the Notes and purchase the Notes from Holders who
elect to have their Notes repurchased at a repurchase price in cash equal to
100% of the aggregate principal amount thereof plus accrued and unpaid interest,
if any, to the date of repurchase (the "Change of Control Put"). The Company
intends to commence such offer as soon as practicable after the Closing Date.
The Offers do not constitute the offers to repurchase required by the Change of
Control Put provisions of the Indentures. The Company will make a separate offer
to repurchase any Notes not acquired in the Offers pursuant to the Change of
Control Put provisions of the Indentures if the Merger is consummated. The
purchase of the Notes by the Company is not a condition to the Merger.
THE MERGER
GENERAL. On March 2, 1999, the Company and Yankee, which was organized
and is currently owned by WCAS which is a 14.97% stockholder of the Company,
entered into a merger agreement (the "Prior Merger Agreement") providing for the
merger of Yankee with and into the Company. On March 24, 1999, the Company and
Yankee entered into the Merger Agreement which amended and restated the Prior
Merger Agreement. The Merger Agreement provides that Yankee will be merged with
and into the Company, with the Company being the surviving corporation. As a
result of the Merger, the Company's existing stockholders will receive $16.50 in
cash for each share of Company Common Stock that they own, unless such
stockholders exercise and perfect their dissenter's rights. Any shares of
Company Common Stock owned by the Company, its subsidiaries, Yankee or its
affiliates will be canceled in the Merger. In connection with the Merger, the
Company intends to effect the Refinancing (as defined below).
The Merger will become effective when a certificate of merger is filed
with the Secretary of State of Delaware or at such other time as will be
specified in the certificate of merger (the "Effective Time"). The Company
expects the Effective Time to occur as soon as practicable after the last of the
conditions in the Merger Agreement has been satisfied or waived. Immediately
following the consummation of the Merger, the Company will transfer all of its
assets and its shares in its subsidiaries to Concentra Operating Corporation, a
Nevada corporation and a wholly owned subsidiary of the Company ("Concentra
Operating Corporation").
FINANCING. In order to fund the payments for the outstanding shares of
Company Common Stock, the refinancing of all of the Company's existing debt at
the time of the Merger, including the Notes (the "Refinancing"), and the related
fees and expenses, the Company, or its subsidiaries or affiliates, intends to:
(i) borrow approximately $375 million under new senior secured credit facilities
(the "New Credit Facilities"), (ii) issue approximately $190 million of senior
subordinated notes (the "Senior Subordinated Notes") in a private placement and
(iii) issue approximately $110 million of senior discount notes (the "Senior
Discount Notes") in a private placement (collectively, the "New Financing"). In
addition, immediately prior to the Merger, WCAS and some of its affiliates have
agreed to invest approximately $370 million (including 6,343,203 shares of
Company Common Stock and $34.5 million in principal amount of 4.5% Notes owned
by WCAS) in Yankee, affiliates of Ferrer Freeman Thompson & Co., LLC ("FFT") has
agreed to invest approximately $30.6 million in cash in Yankee and Chase Capital
Partners, certain affiliates of Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") and certain members of the Company's management have agreed
to invest approximately $23.0 million in Yankee (collectively, the "Capital
Contributions"). Also, the Company intends to utilize approximately $71.6
million from the Company's available cash reserves.
SENIOR SUBORDINATED NOTES. It is anticipated that Concentra Operating
Corporation will raise approximately $190.0 million of the funds necessary to
consummate the Merger and related transactions through the issuance of the
Senior Subordinated Notes in the private capital markets. DLJ and Chase
Securities Inc. have each provided WCAS with letters dated February 24, 1999
stating that they are highly confident, subject to the assumptions in those
letters, that Concentra Operating Corporation will be able to raise the
necessary funds from the issuance of such Senior Subordinated Notes. It is
anticipated that the Senior Subordinated Notes will (i) be subordinated to the
New Credit Facilities, (ii) have registration rights, (iii) be redeemable by
Concentra Operating Corporation after 2004, or up to 35% of the Senior
Subordinated Notes with the net proceeds from certain sales of equity, (iv) be
redeemable by Concentra Operating Corporation at the option of the holders upon
a change of control, and (v) subject Concentra Operating Corporation and its
subsidiaries to customary covenants for this type of financing, including,
without limitation, restrictions on indebtedness, dividends, liens, affiliate
transactions, stock repurchases, assets sales and mergers.
SENIOR DISCOUNT NOTES. It is anticipated that the Company will raise
approximately $110.0 million of the funds necessary to consummate the Merger and
related transactions through the issuance of the Senior Discount Notes in the
private capital markets. The Senior Discount Notes will be issued with warrants
to purchase Company Common Stock at a nominal exercise price. Chase Capital
Partners and WCAS have provided binding commitments in the form of commitment
letters dated February 24, 1999 and March 1, 1999, respectively, to purchase the
Senior Discount Notes from the Company. The Company will not be required to pay
any interest
3
<PAGE>
on the Senior Discount Notes until 2004. It is anticipated that the Senior
Discount Notes will (i) be structurally subordinated to the New Credit
Facilities and the Senior Subordinated Notes, (ii) have registration rights,
(iii) be redeemable by the Company after 2004 (iv) be redeemable, with regard to
up to 35% of the accreted value of the Senior Discount Notes, by the Company at
any time prior to July 2002 with the net proceeds from certain sales of equity,
(v) be redeemable by the Company at the option of the holders upon a change of
control, and (v) subject the Company and its subsidiaries to customary covenants
for this type of financing, including, without limitation, restrictions on
indebtedness, dividends, liens, affiliate transactions, stock repurchases,
assets sales and mergers.
NEW CREDIT FACILITIES. It is anticipated that Concentra Operating
Corporation will raise approximately $375.0 million of the funds necessary to
consummate the Merger and related transactions through borrowings under the New
Credit Facilities. Chase Securities Inc., The Chase Manhattan Bank, DLJ Capital
Funding, Inc., Credit Suisse First Boston and Fleet National Bank have provided
a binding commitment to provide the funds for the New Credit Facilities in the
form of a commitment letter dated February 26, 1999. It is expected that the New
Credit Facilities will have the following features: (i) $375 million of term
loan facilities, (ii) $100 million of revolving loan facility, (iii) terms of
six to eight years, (iv) guarantees by the Company and its subsidiaries, other
than its joint ventures, (v) loans may be prepaid and commitments may be reduced
in certain amounts, (vi) prepayment will be mandatory with the net proceeds from
certain sales of equity, incurrence of certain indebtedness and certain asset
sales and with 50% of excess cash flow, (vii) secured by a perfected interest in
substantially all of Concentra Operating Corporation's and its subsidiaries'
tangible and intangible assets, (viii) customary representations and warranties,
and (ix) subject the Company and its subsidiaries to customary covenants,
including, without limitation, delivery of financial statements, reports,
accountants' letters, projections, officers' certificates, payment of other
material obligations, continuation of business, compliance with laws,
maintenance of property and insurance, maintenance of books and records,
litigation, compliance with environmental laws, further assurances and
limitations on indebtedness, liens, guarantee obligations, mergers, sales of
assets, leases, dividends, capital expenditures, investments, optional payments,
transactions with affiliates, sale and leasebacks and changes in sale of
business.
Definitive agreements for the issuance and sale of the Senior
Subordinated Notes, the Senior Discount Notes and the New Credit Facilities have
not been negotiated or completed. Accordingly, the terms of such arrangements
described above may change as a result of the negotiation of definitive
agreements. In addition, each of the financings described above is subject to
the satisfaction of numerous customary conditions, including the condition that
no material adverse change to the Company has occurred and that the Merger has
been consummated.
CONDITIONS. The Merger will be completed only if certain conditions,
including the following, are satisfied (or, in certain cases, are waived):
o the continued accuracy of the Company's and Yankee's representations
and warranties and the fulfilment of each of their promises contained
in the Merger Agreement;
o the adoption of the Merger Agreement by the affirmative vote of the
holders of a majority of the outstanding shares of Company Common
Stock;
o the absence of any order or regulation of any court or governmental
entity preventing or prohibiting the Merger;
o Yankee's receipt of the New Financing to consummate the Merger;
o the receipt by the Board of Directors of the Company (the "Board") of
a solvency letter from a valuation firm addressed to the Board as to
the solvency of the Company after giving effect to the Merger and
Yankee's contemplated financing arrangements to effect the Merger.
Consummation of the Merger is a condition of the obligation of the
Company to accept for purchase and pay for the Notes pursuant to the Offers. See
"Conditions of the Offers."
The above discussion of the Merger is qualified by reference to the
Proxy Statement being delivered to Holders together with this Offer to Purchase,
including the full text of the Merger Agreement attached as Appendix A to the
Proxy Statement.
EFFECT OF THE MERGER ON THE NOTES
Upon the completion of the Merger, the New Financing and the
Refinancing, the Company will have substantially more debt than it did prior to
the Merger. On a pro forma basis, at March 31, 1999, the pro forma total
stockholders' equity (deficit) of the
4
<PAGE>
Company would have been $(118.5) million, compared with its historical total
stockholders' equity of $247.7 million at that date. On a pro forma basis, at
March 31, 1999, the pro forma total long-term debt of the Company would have
been $647.2 million compared with its historical total long-term debt of $327.8
million at that date. On a pro forma basis, before restructuring and impairment
charges, the Company would have had a pro forma ratio of earnings to fixed
charges of 0.8x for the twelve months ended December 31, 1998 and 0.8x for the
three months ended March 31, 1999. Earnings consist of pre-tax earnings from
continuing operations before fixed charges. Fixed charges consist of interest on
indebtedness, including amortization of debt issuance costs and one-fourth of
rent expenses, estimated by management of the Company to be the interest
component of such rentals. See "Consolidated Pro Forma Financial Statements
(Unaudited)."
Such high leverage may: (a) make it more difficult for the Company to
satisfy its debt obligations; (b) increase the Company's vulnerability to
general adverse economic and industry conditions; (c) require the Company to
dedicate a substantial portion of its cash flow from operations to payments on
its indebtedness and therefore limit the Company's ability to fund future
working capital, capital expenditures and other general corporate requirements;
(d) limit the Company's flexibility in planning for, or reacting to, changes in
its business and the healthcare industry; (e) place the Company at a competitive
disadvantage compared to companies with less debt; (f) limit, along with the
financial and other restrictive covenants in its indebtedness, the Company's
ability to borrow additional funds; and (g) limit the Company's ability to
engage in various transactions such as acquisitions and dispositions or to make
certain investments.
WHETHER OR NOT ALL OF THE NOTES ARE NOT REPURCHASED PURSUANT TO THIS
OFFER TO PURCHASE, THE COMPANY INTENDS TO BORROW ALL THE AMOUNTS INCLUDED IN THE
NEW FINANCING. THEREFORE, IF ANY NOTES ARE NOT REPURCHASED, THE LONG-TERM DEBT
OF THE COMPANY WILL INCREASE AND THE RATIO OF ITS EARNINGS TO FIXED CHARGES WILL
DECREASE.
STOCK QUOTATION; EXCHANGE ACT REGISTRATION
The Company Common Stock is currently registered under the Exchange Act
and is traded on the Nasdaq National Market under the symbol "CCMC." Following
the consummation of the Merger, the registration of the Company Common Stock
under the Exchange Act will be terminated and the shares of Company Common Stock
will no longer be quoted on the Nasdaq National Market. In addition, following
the Merger the Notes will no longer be convertible into shares of Company Common
Stock. See "Certain Considerations--Loss of Right to Convert into Company Common
Stock".
MANAGEMENT; BOARD OF DIRECTORS
WCAS does not currently contemplate any material change in the
composition of the Company's current management, although after the Merger, the
Board will consist of Messrs. John K. Carlyle, Carlos Ferrer, D. Scott Mackesy,
Steve E. Nelson, Andrew M. Paul, Paul B. Queally, Daniel J. Thomas and two other
individuals to be designated by WCAS.
EMPLOYMENT AGREEMENTS
Yankee and each of Daniel J. Thomas, James M. Greenwood, Richard A. Parr
II, W. Tom Fogarty, M.D. and Kenneth Loffredo have agreed that at or prior to
the Effective Time they will amend and restate the existing employment
agreements between such individuals and the Company. The Company will enter into
a new employment agreement with Thomas E. Kiraly on substantially the same terms
as detailed below. The principal terms of the amended and restated employment
agreements are as follows:
o each agreement would have a term of two years, subject to automatic
renewal for additional one-year terms, unless terminated in accordance
with the agreement's terms;
o each agreement would provide for compensation consisting of base
salary amounts, bonuses at the discretion of the Board and
participation in any employee benefit plan adopted by the Company for
its employees;
o each agreement would provide for a severance payment in the event of
termination by the Company without cause or resignation by the
employee for good reason consisting of two years' base salary for Mr.
Thomas and one year's base salary for Messrs. Greenwood, Kiraly, Parr,
Fogarty and Loffredo; provided, however, if termination by the Company
occurs within 12 months following the Merger, each agreement would
provide for a severance payment consisting of two and one half years'
salary for Mr. Thomas and two years' base for each of Messrs.
Greenwood, Kiraly, Parr, Fogarty and Loffredo.
PRICE RANGE OF THE NOTES
The Notes are currently traded on an over-the-counter basis between
dealers. Although there is no reporting system for the Notes, the Company
believes that trading in the Notes has been limited and sporadic. Because there
is no reporting system for trading involving
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<PAGE>
the Notes, the Company is unable to determine the trading history of the Notes.
Although the Company expects the Notes may continue to be traded in the same
manner after the consummation of the Offers, to the extent that the Notes are
traded the prices of Notes may fluctuate greatly depending on the trading volume
and the balance between buy and sell orders. The Company believes that the
trading market for the Notes that remain outstanding after the Tender Offer will
be more limited. See "Certain Considerations --Limited Trading Market."
Each of the Notes are currently registered pursuant to Section 12 under
the Exchange Act. Following the consummation of the Offers, the Company intends
to terminate the registration of the Notes under the Exchange Act if such
registration is no longer required. If the Notes are deregistered, the Company
will no longer be subject to the reporting requirements of the Exchange Act
other than pursuant to the terms of the Indentures.
CERTAIN CONSIDERATIONS
In deciding whether to participate in the Offers, each Holder should
carefully consider the information contained or incorporated by reference in
this Offer to Purchase:
LIMITED TRADING MARKET
There currently is only a limited trading market for the Notes which,
from time to time, trade in the over-the-counter market. After the closing of
the Offers, it is anticipated that the outstanding principal amount of the Notes
available for trading will be significantly reduced. A debt security with a
smaller outstanding principal amount available for trading (a smaller "float")
may command a lower price than would a comparable debt security with a greater
float. Because the purchase of Notes pursuant to the Offers will reduce the
float, the liquidity and market price of the Notes may be adversely affected.
The reduced float may also tend to make the trading prices more volatile.
Holders of unpurchased Notes may attempt to obtain quotations for the Notes from
their brokers; however, there can be no assurance that any trading market will
exist for Notes following closing of the Offers. The extent of the public market
for the Notes following closing of the Offers will depend upon, among other
things, the remaining principal amount of Notes outstanding after the Offers,
the number of Holders remaining at such time and the interest of securities
firms in making a market in the Notes.
LOSS OF RIGHT TO CONVERT INTO COMPANY COMMON STOCK
Upon consummation of the Merger, the Notes will no longer be convertible
into shares of Company Common Stock. In accordance with the terms of the
respective Indentures, upon a Holder's election to convert any or all of such
Holder's Notes following the consummation of the Merger, such Holder shall only
be entitled to receive the same kind and amount of consideration received in the
Merger by a holder of the number of shares of Company Common Stock issuable upon
conversion of such Note or Notes immediately prior to the Merger. As a result,
following the consummation of the Merger, each $1,000 principal amount of 6%
Notes would be convertible into $555.55 (based on the 6% Conversion Rate and the
right to receive $16.50 in cash for each outstanding share of Company Common
Stock in the Merger) and each $1,000 principal amount of 4.5% Notes would be
convertible into $400.00 (based on the 4.5% Conversion Rate and the right to
receive $16.50 in cash for each outstanding share of Company Common Stock in the
Merger).
EFFECT OF THE TRANSACTIONS
Although the Company is offering to repurchase all of the Notes, some or
all of the Notes may remain outstanding after consummation of the Merger. The
repurchase of the Notes is not a condition to the Merger and each Offer is
independent of the other. As a result of the Merger and related transactions,
the Company will be significantly more leveraged than prior to the Merger. See
"Purpose and Background of the Offers -- Effect of the Merger on the Notes."
CONTROL BY WCAS AND ITS AFFILIATES
Immediately following the Merger, WCAS and certain of its affiliates
will own approximately 87% of the Company. Accordingly, after the Merger, such
investors will control the Company and have the power to elect all of its
directors, appoint new management and approve or reject any action requiring the
approval of the holders of Company Common Stock, including adopting amendments
to the Company's Certificate of Incorporation and approving mergers or sales of
all or substantially all of the Company's assets. The directors elected by such
investors will have the authority to make decisions affecting the capital
structure of the Company, including the issuance of additional capital stock and
the declaration of dividends.
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SELECTED CONSOLIDATED FINANCIAL DATA
The table below presents selected consolidated historical financial
data that has been derived from the Company's audited consolidated financial
statements. The selected financial data should be read in conjunction with the
Company's separate historical consolidated financial statements, related notes
and other financial information incorporated by reference into this Offer to
Purchase.
<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
---------------------------------------------------------------------
1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations:
Revenues ........................... $223,499 $305,355 $372,683 $489,318 $611,056 $144,282 $155,411
Gross profit ....................... 37,093 62,435 82,755 116,679 141,759 34,384 31,674
Non-recurring charges .............. -- 898 964 38,625 33,114 12,600 --
Operating income ................... 15,928 29,446 45,194 32,315 55,200 9,124 14,216
Income before taxes ................ 10,088 24,246 41,476 21,062 41,794 5,414 10,553
Provision for income taxes (1) ..... 6,802 7,771 13,437 11,062 19,308 4,567 4,485
Net income before
extraordinary items (1) .......... 3,286 16,475 28,039 10,000 22,486 847 6,068
Basic earnings per share before
extraordinary items .............. $0.48 $0.69 $0.23 $0.48 $0.02 $0.13
Basic weighted average shares
outstanding ...................... 33,810 40,411 42,774 46,451 44,939 47,251
Diluted earnings per share
before extraordinary items ....... $0.46 $0.65 $0.22 $0.47 $0.02 $0.13
Diluted weighted average shares
outstanding ........................ 35,939 43,344 46,895 47,827 47,769 47,882
Balance Sheet:
Working capital .................... $19,117 $21,971 $116,439 $36,754 $201,870 $171,800 $202,456
Total assets ....................... 113,672 188,530 367,900 482,533 656,794 581,976 671,978
Total debt ......................... 83,785 34,639 142,229 206,600 327,925 297,922 327,900
Total stockholders' equity (deficit) (5,820) 109,383 178,146 206,441 239,875 205,068 247,652
Book value per share ............... $4.40 $5.02 $4.29 $5.17
Fixed charge coverage ratio (2) .... 1.1x 1.6x 1.0x 1.6x
</TABLE>
(1) Prior to its recapitalization in March of 1994, CRA Managed Care, Inc. had
elected to be taxed as an "S" corporation. In connection with its
recapitalization, CRA Managed Care, Inc. was required to change from an "S"
to a "C" corporation. This change resulted in CRA Managed Care, Inc.
recording an incremental tax provision of $3,772,000 in the first quarter of
1994. The Company's pro forma net income for 1994 would have been $3,446,000
higher had CRA Managed Care, Inc. been subject to federal and state income
taxes during the entire period based upon an effective tax rate indicative
of the statutory rate in effect during the period.
(2) The ratio of earnings to fixed charges is computed by dividing the sum of
net earnings before deducting provisions for income taxes and fixed charges,
and adjusted for the equity in earnings of unconsolidated subsidiaries and
related distributions, if any, by fixed charges. Fixed charges consist of
interest on debt, including amortization of debt issuance costs, and
one-fourth of rent expenses, estimated by management to be the interest
component of such rentals.
7
<PAGE>
CONCENTRA MANAGED CARE, INC.
CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
On March 2, 1999, the Company entered into a definitive agreement to
merge with Yankee, which was organized and is currently owned by WCAS which is a
14.97% stockholder of the Company. The Company's board of directors unanimously
approved the transaction based upon the recommendation of the special committee
of the board of directors, which was formed on October 1, 1998 to evaluate
strategic alternatives in response to several unsolicited expressions of
interest regarding the possible acquisition of some or all of the Company Common
Stock. On March 24, 1999, the Company entered into the Merger Agreement with
Yankee. Pursuant to the Merger Agreement, WCAS will acquire approximately 87%,
funds managed by FFT will acquire approximately 7% and Chase Capital Partners,
affiliates of DLJ and certain members of the Company's management will acquire
approximately 6% of the post-Merger shares of Company Common Stock for $16.50
per share. As a result of the Merger, each outstanding share of Company Common
Stock will be converted into the right to receive $16.50 in cash.
The transaction is valued at approximately $1,100,000,000, including
the refinancing of $327,750,000 of the Notes. The transaction is structured to
be accounted for as a recapitalization and is expected to be completed in August
of 1999. The transaction is conditioned upon certain conditions. See "Purpose
and Background of the Offers--The Merger--Conditions."
To finance the acquisition of the Company, WCAS will invest
approximately $369,432,000 in equity financing, including the value of shares
and the Notes already owned by WCAS, and up to $110,000,000 in subordinated
indebtedness. Additionally, FFT will invest approximately $30,600,000 in equity
and Chase Capital Partners, affiliates of DLJ, and certain members of the
Company's management, will invest approximately $23,000,000 in equity. WCAS has
also received commitments from various lenders to provide financing of
$190,000,000 in Senior Subordinated Notes, $375,000,000 under the new Credit
Facilties and a $100,000,000 revolving credit facility to replace the Company's
existing senior credit facility. Additionally, the Company would utilize excess
cash on hand at the time of the Merger to help finance the purchase of Company
Common Stock. Simultaneous with the right to receive cash for shares, Yankee
would merge with and into the Company with the Company being the surviving
corporation.
The following consolidated pro forma financial statements give effect
to the Merger using the recapitalization method of accounting, after giving
effect to the pro forma adjustments described in the accompanying notes. The
current stockholders of the Company, other than WCAS, its affiliates and certain
members of the Company's management, will have no continuing financial interest
in the Company after the transaction. These unaudited consolidated pro forma
financial statements have been prepared from, and should be read in conjunction
with, the Company's historical consolidated financial statements and notes
thereto filed on Form 10-K/A for the year ended December 31, 1998 which are
incorporated by reference in this Offer to Purchase.
The unaudited Consolidated Pro Forma Balance Sheet as of March 31, 1999
gives effect to the Merger as if it had occurred on March 31, 1999 and the
Consolidated Pro Forma Statements of Operations for the three months ended March
31, 1999 and the year ended December 31, 1998 give effect to the Merger as if it
had occurred on January 1, 1999 and January 1, 1998, respectively. The
Consolidated Pro Forma Financial Statements of the Company do not purport to
present the financial position or results of operations of the Company had the
Merger been consummated at the dates indicated, nor are they necessarily
indicative of future operating results or financial position of the merged
companies.
8
<PAGE>
As a result of the Merger, the Company will incur certain deal fees and
financing costs of approximately $44,000,000. These costs will consist
principally of banking and professional fees of approximately $17,500,000
associated with the issuance of new debt which will be capitalized as deferred
finance costs and other banking, professional and transaction fees of
$26,500,000 associated with the Merger, which will be expensed. the Company will
also incur approximately $4,788,000 in non-cash charges for deferred
compensation expense related to the accelerated vesting and issuance of 195,000
shares of restricted stock as a result of the Merger. In addition, the Company
expects to settle vested in-the-money options which will result in a non-cash
compensation charge of approximately $12,400,000. The expensed portion of these
fees and non-cash compensation expense, and the related tax benefit, have not
been reflected on the Consolidated Pro Forma Statements of Operations as they
are one-time and unusual in nature.
9
<PAGE>
CONCENTRA MANAGED CARE, INC.
Consolidated Pro Forma Balance Sheets
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Concentra Adjustments Pro Forma
---------------- ----------- -----------
Assets
------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents .......................... $ 92,753,000 $283,869,000 (1) $ 35,318,000
675,000,000 (2)
(293,250,000)(2)
(679,054,000)(3)
(44,000,000)(4)
Marketable securities ............................... 5,003,000 -- 5,003,000
Accounts receivable, net............................. 137,272,000 -- 137,272,000
Prepaid expenses, tax assets and other current assets 36,109,000 4,227,000 (5) 40,336,000
------------ ------------- ------------
Total current assets......................... 271,137,000 (53,208,000) 217,929,000
NET PROPERTY AND EQUIPMENT............................. 89,048,000 -- 89,048,000
GOODWILL AND OTHER INTANGIBLE..........................
ASSETS, NET.......................................... 285,971,000 -- 285,971,000
MARKETABLE SECURITIES.................................. 10,542,000 -- 10,542,000
OTHER ASSETS........................................... 15,280,000 (7,093,000)(2) 25,687,000
17,500,000 (2)
------------ ------------- ------------
$671,978,000 $(42,801,000) $629,177,000
============ ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
- ----------------------------------------------
CURRENT LIABILITIES:
Revolving Credit Facility ........................... $ -- $ -- $ --
Current portion of long-term debt.................... 55,000 4,000,000 (2) 4,055,000
Accounts payable and accrued expenses................ 68,626,000 -- 68,626,000
------------ ------------- ------------
Total current liabilities................... 68,681,000 4,000,000 72,681,000
LONG-TERM DEBT, NET OF CURRENT PORTION................ 327,845,000 (34,500,000)(1,2) 647,153,000
(293,250,000)(2)
651,058,000 (2)
DEFERRED INCOME TAXES AND OTHER LIABILITIES 27,800,000 -- 27,800,000
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock......................................... 473,000 256,000 (6) 256,000
(473,000)(7)
Paid-in capital...................................... 272,420,000 23,942,000 (2) --
4,788,000 (5)
422,776,000 (6)
(723,926,000)(7)
Treasury stock....................................... -- (679,054,000)(3) --
(104,663,000)(8)
783,717,000 (7)
Unrealized gain on investments....................... 1,000 -- 1,000
Retained deficit..................................... (25,242,000) (26,500,000)(4) (118,714,000)
(4,788,000)(5)
(7,093,000)(2)
4,227,000 (5)
(59,318,000)(7)
------------ ------------- ------------
Total stockholders' equity (deficit)........ 247,652,000 (366,109,000) (118,457,000)
------------ ------------- ------------
$671,978,000 $ (42,801,000) $629,177,000
============ ============= ============
See accompanying Notes to Consolidated Pro Forma Financial Statements.
</TABLE>
10
<PAGE>
CONCENTRA MANAGED CARE, INC.
Consolidated Pro Forma Statements of Operations
For the Three Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Concentra Adjustments Pro Forma
---------------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Health services .......................... $70,622,000 $ -- $70,622,000
Managed care services:
Specialized cost containment ........... 46,712,000 -- 46,712,000
Field case management .................. 38,077,000 -- 38,077,000
------------- ----------- -------------
Total managed care services ........ 84,789,000 -- 84,789,000
------------- ----------- -------------
Total revenues ............... 155,411,000 -- 155,411,000
Cost of Services:
Health services .......................... 57,800,000 -- 57,800,000
Managed care services .................... 65,937,000 -- 65,937,000
------------- ----------- -------------
Total cost of services ............. 123,737,000 -- 123,737,000
------------- ----------- -------------
Total gross profit ........... 31,674,000 -- 31,674,000
General and administrative expenses ........ 14,420,000 -- 14,420,000
Amortization of intangibles ................ 3,038,000 -- 3,038,000
------------- ----------- -------------
Operating income ................... 14,216,000 -- 14,216,000
Interest expense ........................... 4,677,000 12,744,000(2) 17,421,000
Interest income ............................ (1,112,000) 1,112,000(9) --
Other, net ................................. 98,000 -- 98,000
------------- ----------- -------------
Income (loss) before income taxes .. 10,553,000 (13,856,000) (3,303,000)
Provision (benefit) for income taxes ....... 4,485,000 (5,392,000)(10) (907,000)
------------- ----------- -------------
Net income (loss) from continuing operations $6,068,000 $(8,464,000) $(2,396,000)
============= =========== =============
Basic earnings (loss) per share ............ $0.13 $(0.09)
============= =========== =============
Weighted average common shares outstanding 47,251,000 (21,613,000)(11) 25,638,000
Diluted earnings (loss) per share .......... $0.13 $(0.09)
============= =========== =============
Weighted average common shares and
equivalents outstanding ................ 47,882,000 (22,244,000)(11) 25,638,000
</TABLE>
See accompanying Notes to Consolidated Pro Forma Financial Statements.
11
<PAGE>
CONCENTRA MANAGED CARE, INC.
Consolidated Pro Forma Statements of Operations
For the Year Ended December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Concentra Adjustments Pro Forma
------------ ------------ -----------
<S> <C> <C> <C>
Revenues:
Health services ........................... $259,481,000 $ -- $259,481,000
Managed care services:
Specialized cost containment ............ 183,734,000 -- 183,734,000
Field case management ................... 167,841,000 -- 167,841,000
------------- ------------- -------------
Total managed care services ......... 351,575,000 -- 351,575,000
------------- ------------- -------------
Total revenues .................. 611,056,000 -- 611,056,000
Cost of Services:
Health services ........................... 201,181,000 -- 201,181,000
Managed care services ..................... 268,116,000 -- 268,116,000
------------- ------------- -------------
Total cost of services .............. 469,297,000 -- 469,297,000
------------- ------------- -------------
Total gross profit .............. 141,759,000 -- 141,759,000
General and administrative expenses ......... 45,326,000 -- 45,326,000
Amortization of intangibles ................. 8,119,000 -- 8,119,000
Non-recurring charge ........................ 33,114,000 -- 33,114,000
------------- ------------- -------------
Operating income ................ 55,200,000 -- 55,200,000
Interest expense ............................ 18,021,000 51,188,000(2) 69,209,000
Interest income ............................. (4,659,000) 4,659,000(9) --
Other, net .................................. 44,000 -- 44,000
------------- ------------- -------------
Income (loss) before income taxes 41,794,000 (55,847,000) (14,053,000)
Provision (benefit) for income taxes ........ 19,308,000 (21,181,000)(10) (1,873,000)
------------- ------------- -------------
Net income (loss) from continuing operations $22,486,000 $(34,666,000) $(12,180,000)
============= ============= =============
Basic earnings (loss) per share ............. $0.48 $(0.48)
============= =============
Weighted Average Common Shares Outstanding 46,451,000 (20,813,000)(11) 25,638,000
Diluted earnings (loss) per share ........... $0.47 $(0.48)
============= ============= =============
Weighted average common shares and
equivalents outstanding ................. 47,827,000 (22,189,000)(11) 25,638,000
</TABLE>
See accompanying Notes to Consolidated Pro Forma Financial Statements.
12
<PAGE>
CONCENTRA MANAGED CARE, INC.
Notes To Consolidated Pro Forma Financial Statements (Unaudited)
(1) To record the equity contributions and the receipt of $230,269,000 of cash
and $34,500,000 of Notes by WCAS, $30,600,000 of cash by FFT and
$23,000,000 of cash by other investors.
(2) The table below reflects the pro forma adjustments to record (i) the
repayment or equity contribution of certain existing debt and the issuance
of new debt associated with the Merger, (ii) the write-off of the
Company's existing deferred finance costs on debt to be repaid and to
record new deferred finance costs associated with the issuance of new
debt, and (iii) the related interest expense adjustment to reflect the pro
forma effect of (i) and (ii) above.
<TABLE>
<CAPTION>
INTEREST
INTEREST EXPENSE
AMOUNT RATE ADJUSTMENT
------- ---------- ----------
YEAR THREE MONTHS
ENDED ENDED
DECEMBER 31, 1998 MARCH 31, 1999
----------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Repayment or equity contribution of existing debt:
Commitment fees on existing Revolving
Credit Facility ................................ $ -- $ (250) $ (63)
4.5% Notes ....................................... (230,000) 4.50%(a) (8,165) (2,587)
6.0% Notes (97,750) 6.00% (5,865) (1,466)
Interest on other indebtedness paid off during the year -- (2,042) (62)
--------- --------- ----------
Total existing debt ..................... (327,750) (16,322) (4,178)
Equity contribution of Notes by WCAS .... (34,500)
---------
Total repayment of existing debt......... $(293,250)
=========
Issuance of new debt:
Term Facilities:
Commitment fee on new $100,000,000 Credit Facility $ -- 500 125
Tranche B at ABR plus applicable margin due 2006..... 250,000 8.25%(b) 20,625 5,157
Tranche C at ABR plus applicable margin due 2007..... 125,000 8.50%(b) 10,625 2,656
Senior Subordinated Notes at 10.75% due 2009........... 190,000 10.75% 20,425 5,106
Senior Discount Notes with warrants at
13.75% due 2010(c) 86,058 16.63%(c) 14,908 3,846
--------- ---------- ----------
651,058 67,083 16,890
Warrants to purchase Company Common Stock(c) 23,942
---------
$ 675,000
=========
Amortization of existing deferred finance
costs on debt being repaid:
December 31, 1998 ........................... $ (7,592) (1,699)
March 31, 1999 .............................. (7,093) (499)
Amortization of deferred finance costs on new debt .. 17,500(d) 2,126 532
---------- ----------
Total interest expense adjustment........... $ 51,188 $ 12,744
========== ==========
</TABLE>
(a) The 4.5% Notes were issued in March ($200,000,000) and April
($30,000,000) of 1998. As such, the interest expense does not
reflect a full year of interest expense.
(b) The Adjusted Borrowing Rate ("ABR") is assumed to be 5% for the
purposes of calculating interest expense. The annual effect of a
1/8% change in the interest rate on the $375,000,000 variable rate
debt is $469,000 for the year ended December 31, 1998 and $117,000
for the three months ended March 31, 1999.
(c) Reflects $110,000,000 Senior Discount Notes less debt discount of
$23,942,000 which is the value assigned to the detachable warrants
for the purchase of 1,451,000 shares of Company Common Stock at an
exercise price of $0.01 per share. The effective interest rate is
16.63%.
(d) The estimated deferred finance fees of $17,500,000 are being
amortized over the weighted average life of the new debt of 8.7
years.
13
<PAGE>
(3) To reflect the repurchase of 41,154,817 shares of Company Common Stock by
the Company at $16.50 per share. These shares are comprised of 47,303,020
shares outstanding at March 31, 1999 plus 195,000 shares of restricted
stock vested and issued at the time of Merger, less the 6,343,203 shares
owned by WCAS prior to the Merger (see note 6).
(4) To record the use of cash to fund approximately $44,000,000 of transaction
fees consisting of deferred finance costs of approximately $17,500,000 (see
note 2(d)) and banking, professional fees and other fees of $26,500,000
associated with the Merger, which will be expensed. The expensed portion of
the fees of $26,500,000 has not been reflected on the Consolidated Pro
Forma Statement of Operations, as they are one-time and unusual in nature.
(5) To record the tax benefit ($4,227,000) on the pro forma adjustments
associated with the write-off of the existing deferred finance costs (see
note 2) and the vesting and issuance of restricted stock as a result of the
merger. For the purposes of these consolidated pro forma financial
statements, the Company has assumed that none of the expensed portion of
the transaction fees of $26,500,000 will be deductible for tax purposes.
(6) To record the capital contribution of cash and Notes of $318,369,000 (see
note 1) and 6,343,203 shares of Company Common Stock owned by WCAS. WCAS,
FFT and other investors will own 22,389,824, (87.3%), 1,854,545 (7.2%) and
1,393,939 (5.5%) shares of Company Common Stock post-Merger, respectively.
(7) To retire the Company's outstanding common stock at the time of the Merger.
The value of the treasury stock of $783,717,000 exceeds the Company's
required stated capital and paid-in capital by $59,318,000 which has been
reflected as an increase to the Company's retained deficit.
(8) To reflect 6,343,203 shares of Company Common Stock owned by WCAS, which
will be contributed to capital and will be subsequently retired at the time
of the Merger. (9) To record the decrease in interest income due to the use
of available cash. (10) To record the tax benefit on the pro forma interest
adjustments at 37.9%, for the year ended December 31, 1998 and 38.9% for
the three months ended March 31, 1999.
(11) To retire the Company's outstanding common stock and reflect the
subsequent re-issuance of new Company Common Stock to WCAS, FFT and other
investors in connection with the Merger. The Merger Agreement provides
that the Company will use its best efforts to effect the cancellation or
amendment at the Effective Time of all outstanding options to acquire
Company Common Stock in exchange for a cash payment equal to $16.50 per
share to such holder less the exercise price per share of such option. The
Company has not yet developed a plan with regard to unvested options. If
all vested in-the-money (exercise price less than $16.50 per share)
options and warrants are exercised at the time of the Merger, the cash
proceeds from the exercise would be $9,649,000, the related tax benefit
would be $5,078,000, cash required to repurchase the outstanding shares
would be $23,934,000 and stockholders' deficit would increase to
($127,020,000). The settlement of the vested in-the-money options will
result in a non-cash compensation charge of approximately $12,400,000. As
the exercise of these options and warrants are not directly attributable
to the Merger, their exercise and resulting repurchase has not been
reflected as a pro forma adjustment in the consolidated pro forma
financial statements.
14
<PAGE>
CONDITIONS OF THE OFFERS
Notwithstanding any other provisions of this Offer to Purchase and the
accompanying Letter of Transmittal, with respect to each issue of Notes and the
Offer applicable to that issue, the Company will not be required to accept for
purchase, or to pay for, Notes tendered pursuant to such Offer and may
terminate, extend or amend such Offer and may, subject to Rule 14e-l under the
Exchange Act, postpone the acceptance for purchase of, and payment for, Notes of
that issue so tendered, if the Merger Condition or any of the General Conditions
have not been satisfied. See "Purpose and Background of the Offers--The
Merger--Conditions."
The "General Conditions" shall be deemed to have been satisfied with
respect to a particular Offer unless any of the following conditions shall occur
on or after the date of this Offer to Purchase and prior to the acceptance for
purchase of any Notes tendered pursuant to the applicable Offer:
(a) there shall have been threatened, instituted or pending
any action, proceeding, claim or counterclaim by any government or
governmental, regulatory or administrative agency or authority or
tribunal or any other person, domestic or foreign, or before any
court, authority, agency or tribunal that, in the reasonable
judgment of the Company, (i) challenges the acquisition of either or
both issues of the Notes pursuant to the Offers or may prohibit,
prevent, restrict, limit or delay closing of either or both of the
Offers or the Merger or otherwise in any manner relates to or
affects the Offers or the Merger or (ii) would materially and
adversely affect the business, condition (financial or other),
income, operations or prospects of the Company or any of its
subsidiaries, in each case taken as a whole, or would otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries, in each case
taken as a whole, or would materially impair the contemplated
benefits of any of the Offers to the Company, other than any of the
foregoing events that has occurred prior to the date of this Offer
to Purchase or, in the case of any of the foregoing events that has
occurred prior to the date of this Offer to Purchase, there shall
have occurred any development that, in the reasonable judgment of
the Company, would or could have any of the effects set forth above;
(b) there shall have been any action threatened, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offers, the Merger, the Company or any of its
subsidiaries, by any legislative body, court, authority, agency or
tribunal which, in the reasonable judgment of the Company, would or
might, directly or indirectly, (i) make the acceptance for purchase
of, or payment for, some or all of the Notes illegal or otherwise
restrict or prohibit closing of either or both of the Offers or the
Merger, (ii) delay or restrict the ability of the Company, or render
the Company unable, to accept for purchase or pay for some or all of
the Notes, (iii) otherwise materially impair the contemplated
benefits of the Offers to the Company or (iv) materially and
adversely affect the business, condition (financial or other),
income, operations or prospects of the Company or any of its
subsidiaries, in each case taken as a whole, or otherwise materially
impair in any way the contemplated future conduct of the business of
the Company or any of its subsidiaries, in each case taken as a
whole;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii) any
change (or any condition, event or development involving a
prospective change) in the general political, market, economic or
financial condition in the United States or abroad that, in the
reasonable judgment of the Company, could have a material adverse
effect on the business, condition (financial or other), income,
operations or prospects of the Company or any of its subsidiaries,
in each case taken as a whole, or the ability to obtain financing
generally or the trading in the Notes or could or might prohibit,
restrict or delay closing of, or have an adverse effect on the
contemplated benefits to the Company of the Offers or the Merger,
(iii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or abroad or any
limitation on, or any event which, in the reasonable judgment of the
Company, might affect, the extension of credit by lending
institutions or the public or private capital markets in the United
States or abroad, (iv) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly
involving the United States or (v) in the case of any of the
foregoing existing at the time of the commencement of the Offers, in
the reasonable judgment of the Company, a material acceleration or
worsening thereof;
(d) there shall have occurred any event or events that have
resulted, or may in the reasonable judgment of the Company result,
in an actual or threatened change in the business, condition
(financial or other), income, operations or prospects of the Company
or any of its subsidiaries, in each case taken as a whole;
15
<PAGE>
(e) the Trustee under either Indenture shall have objected in
any respect to or taken any action that could, in the reasonable
judgment of the Company, adversely affect the closing of the Offers
or shall have taken any action that challenges the validity or
effectiveness of the procedures used by the Company in the making of
the Offers or the acceptance for purchase of, or payment for, any of
the Notes; or
(f) there exists, in the reasonable judgment of the Company,
any other actual or threatened legal impediment (including a default
under an agreement, indenture, lease or other instrument or
obligation to or by which the Company or any of their respective
subsidiaries, including their respective subsidiaries upon
consummation of the Merger, is a party or is bound) to the
acceptance for purchase of, or payment for, any of the Notes or the
implementation or validity of the Offers.
The conditions to each of the Offers are for the sole benefit of
the Company and may be asserted with respect to either Offer by the Company
regardless of the circumstances (including any action or inaction by the Company
giving rise to any such condition), and any such condition may be waived by the
Company, in whole or in part, at any time and from time to time in its
reasonable discretion. The Company also reserves the right at any time to waive
any or all of such conditions as to one of the Offers but not the other. The
failure by the Company at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time. Any
determination by the Company concerning the events described above will be final
and binding on all parties.
The Company reserves the right to transfer or assign from time to time,
in whole or in part, to one or more persons, its right to purchase the Notes
tendered pursuant to either of the Offers, but any such transfer or assignment
will not relieve the Company of its obligations under the Offers or prejudice
the rights of tendering Holders to receive payment for Notes validly tendered
and accepted for purchase pursuant to the Offers.
EXPIRATION TIME; EXTENSION; AMENDMENT; TERMINATION
Each of the Offers will expire at 5:00 p.m., New York City time, on
Tuesday, August 17, 1999, unless extended by the Company in its sole discretion
or terminated earlier. The Company expressly reserves the right to extend either
or both of the Offers on a daily basis or for such period or periods as it may
determine in its sole discretion from time to time by giving written or oral
notice to the Depositary and by making an announcement by press release to the
Dow Jones News Service or other public announcement prior to 9:00 a.m., New York
City time, on the next business day following the relevant previously scheduled
Expiration Time for such extended Offer. During any extension of an Offer, all
Notes previously tendered and not withdrawn pursuant to that Offer and not
accepted for purchase will remain subject to that Offer and may, subject to the
terms and conditions of this Offer to Purchase and the accompanying Letter of
Transmittal, be accepted for purchase by the Company. It is contemplated that
the Expiration Time for the Offers will be extended, if necessary, to coincide
with the Closing Date.
With respect to each Offer, the Company expressly reserves the absolute
right, in its sole discretion, to (i) amend or modify any or all of the terms of
that Offer, (ii) modify the Purchase Price or (iii) if any of the conditions set
forth under "Conditions of the Offers" above are not satisfied or waived by the
Company, to terminate the applicable Offer and not accept for purchase the Notes
tendered pursuant thereto or to delay acceptance for purchase of, or payment
for, the Notes tendered pursuant thereto. In no event, however, will the
Purchase Price for an issue of Notes be modified once any of such Notes have
been accepted by the Company for purchase, regardless of whether the Offer for
such Notes is continuing. Any waiver or amendment to an Offer will apply to all
Notes tendered of the relevant issue, regardless of when or in what order such
Notes were tendered. The Company also reserves the right at any time to waive
any or all of such conditions as to one but not the other of the Offers, or to
modify the terms or Purchase Price of or to terminate one but not the other of
the Offers without so modifying or terminating the other. Any amendment or
termination of either Offer will be followed as promptly as practicable by
public announcement thereof. The Company will have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
If any material change occurs in the information published, sent or
given to the Holders or the Company makes a material change in the terms of the
Offers or waives a material condition of the Offers, the Company will promptly
disclose such change and, if necessary, will extend the Offers for a period
deemed by the Company to be adequate under the applicable facts and
circumstances. With respect to any change in the consideration offered by the
Company for the Notes or in the percentage of the Notes being sought, the Offers
will be extended for a minimum of ten business days after the date that notice
of such change is first published, sent or given to Holders.
16
<PAGE>
ACCEPTANCE OF NOTES FOR PURCHASE; PAYMENT FOR NOTES
Upon the terms and subject to the conditions of this Offer to Purchase
and the accompanying Letter of Transmittal, the Company will accept for
purchase, and promptly pay for, Notes validly tendered (and not validly
withdrawn) pursuant to an Offer (or defectively tendered, if any such defects
have been waived) after the later of (i) the Expiration Time of such Offer and
(ii) the satisfaction or waiver of the conditions to such Offer specified above
under "Conditions of the Offers." It is currently expected that the Expiration
Time will occur on the Closing Date and that the date of payment for a
particular issue of Notes will be the third business day after the applicable
Expiration Time. The Company reserves the right to accept one issue of Notes for
purchase without accepting for purchase Notes of the other issue.
The Company expressly reserves the right, in its sole discretion, to
delay acceptance for purchase of the Notes tendered under either Offer or the
payment for Notes accepted for purchase (subject to Rule 14e-l under the
Exchange Act, which requires that the Company pay the consideration offered or
return the securities deposited by or on behalf of the holders thereof promptly
after termination or withdrawal of a tender offer), or to terminate either Offer
and not accept for purchase any Notes not theretofore accepted for purchase, if
any of the conditions set forth above under "Conditions of the Offers" with
respect to that Offer shall not have been satisfied or waived by the Company or
in order to comply in whole or in part with any applicable law. The Company also
expressly reserves the right at any time to delay acceptance for purchase of the
Notes subject to or to terminate one of the Offers without delaying acceptance
for purchase the Notes subject to or terminating the other Offer.
In all cases, payment for Notes accepted for purchase pursuant to an
Offer will be made only after timely receipt by the Depositary of certificates
for the applicable Notes (or confirmation of book-entry transfer), a properly
completed and duly executed Letter of Transmittal related thereto (or a manually
signed facsimile) or, if applicable, an Agent's Message (as defined below) in
lieu of a Letter of Transmittal and any other documents required thereby.
For purposes of each Offer, the Company will be deemed to have accepted
for purchase Notes validly tendered (and not validly withdrawn) pursuant to that
Offer (or defectively tendered Notes with respect to which the Company has
waived any defects) if, as and when the Company gives oral notice (confirmed in
writing) or written notice thereof to the Depositary. Payment for Notes accepted
for purchase in the Offers will be made by the Company by promptly depositing
such payment with the Depositary, which will act as agent for the tendering
Holders for the purpose of receiving the relevant Purchase Price and
transmitting the relevant Purchase Price to such Holders. Upon the terms and
subject to the conditions of the Offers, delivery of the Purchase Price for
Notes accepted for purchase pursuant to the Offers will be made by the
Depositary promptly after its receipt of funds for the payment of such Notes.
Tenders of Notes pursuant to the Offers will be accepted only in
principal amounts equal to $1,000 or any integral multiple thereof.
If, for any reason, acceptance for purchase of or payment for validly
tendered Notes pursuant to either Offer is delayed or the Company is unable to
accept for purchase or to pay for validly tendered Notes pursuant to that Offer,
then the Depositary may, nevertheless, on behalf of the Company, retain tendered
Notes, without prejudice to the rights of the Company described under
"Expiration Time; Extension; Amendment; Termination" and "Conditions of the
Offers" above and "Withdrawal of Tenders; Absence of Appraisal Rights" below
(subject to Rule 14e-l under the Exchange Act).
If tendered Notes are not accepted for purchase for any reason pursuant
to the terms and conditions of this Offer to Purchase and the accompanying
Letter of Transmittal, or if certificates are submitted for more Notes than
those which are tendered, certificates for such Notes will be returned, without
expense, to the tendering Holder (or, in the case of Notes tendered by
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth under the caption "Procedures for
Tendering Notes -- Book-Entry Transfer" below, such Notes will be credited to
the account maintained at the Book-Entry Transfer Facility) promptly following
the applicable Expiration Time or the termination of the relevant Offer, unless
otherwise requested by such Holder under "Special Delivery Instructions" in the
Letter of Transmittal. Although it has no obligation to do so, subject to
applicable laws, the Company reserves the right in the future to seek to acquire
Notes not tendered in the Offers by means of open market purchases, privately
negotiated acquisitions, subsequent exchange or tender offers, redemptions or
otherwise, at prices or on terms that may be more or less favorable than those
in the Offers.
Holders whose Notes are tendered and accepted for purchase pursuant to
the Offers will be entitled to accrued and unpaid interest on their Notes up to,
but not including, the date of payment. UNDER NO CIRCUMSTANCES WILL ANY
ADDITIONAL INTEREST BE PAYABLE BECAUSE OF ANY DELAY IN THE TRANSMISSION OF FUNDS
TO THE HOLDERS OF PURCHASED NOTES OR OTHERWISE.
17
<PAGE>
Holders of Notes purchased in the Offers will not be obligated to pay
brokerage commissions, fees or transfer taxes with respect to the purchase of
their Notes except as described in the Instructions to the Letter of
Transmittal. The Company will pay all other charges and expenses in connection
with the Offers. See "Information Agent, Dealer Manager and Depositary."
PROCEDURES FOR TENDERING NOTES
PROPER TENDER OF NOTES
For a Holder to validly tender Notes pursuant to the Offers, (i) such
Notes together with a properly completed and validly executed Letter of
Transmittal (or a manually signed facsimile), together with any signature
guarantees and any other documents required by the instructions to the Letter of
Transmittal, must be received by the Depositary at its address set forth on the
back cover of this Offer to Purchase or (ii) such Notes must be tendered
pursuant to the procedures for book-entry transfer described below and a
confirmation of such book-entry transfer must be received by the Depositary, in
either case, prior to the applicable Expiration Time. A Holder who desires to
tender Notes and who cannot do so on a timely basis must comply with the
procedures for guaranteed delivery set forth below.
LETTERS OF TRANSMITTAL AND NOTES SHOULD BE SENT ONLY TO THE DEPOSITARY,
AND NOT TO THE COMPANY, THE INFORMATION AGENT, THE DEALER MANAGER OR THE
BOOK-ENTRY TRANSFER FACILITY.
DELIVERY OF LETTER OF TRANSMITTAL
If certificates for Notes are registered in the name of a person other
than the signer of a Letter of Transmittal, then, in order to tender such Notes
pursuant to the Offers, the certificates for such Notes must be endorsed or
accompanied by appropriate bond powers, signed exactly as the name or names of
such Holder or Holders appear on the certificates, with the signatures on the
certificates or bond powers guaranteed as provided below.
A LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE) MUST BE USED TO
TENDER NOTES AS DESCRIBED IN THIS SECTION. HOLDERS WHO WISH TO TENDER NOTES OF
MORE THAN ONE ISSUE MUST COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH
ISSUE TENDERED.
Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee or held through the
Book-Entry Transfer Facility and who wishes to tender Notes should contact such
registered Holder promptly and instruct such registered Holder to tender Notes
on such beneficial owner's behalf according to one of the procedures described
herein, A Letter of Instruction is contained in the solicitation materials
provided along with this Offer to Purchase which may be used by a beneficial
owner to instruct the record holder to tender Notes.
SIGNATURE GUARANTEES
Signatures on the Letter of Transmittal must be guaranteed by a firm
that is a participant in the Security Transfer Agents Medallion Program or the
Stock Exchange Medallion Program (an "Eligible Institution"), unless (a) the
Letter of Transmittal is signed by the registered Holder(s) of the Notes
tendered therewith (or by a participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of such Notes)
and payment of the Purchase Price is to be made, or if any Notes for principal
amounts not tendered or not accepted for purchase are to be issued, directly to
such Holder(s) (or, if tendered by a participant in the Book-Entry Transfer
Facility, any Notes for principal amounts not tendered or not accepted for
purchase are to be credited to such participant's account at the Book-Entry
Transfer Facility), and neither the "Special Payment Instructions" box nor the
"Special Delivery Instructions" box on the Letter of Transmittal has been
completed, or (b) such Notes are tendered for the account of an Eligible
Institution.
18
<PAGE>
BOOK-ENTRY TRANSFER
Promptly after the commencement of the Offers, the Depositary will
establish an account or use an existing account with respect to the Notes at the
Depository Trust Company (the "Book-Entry Transfer Facility"), and any financial
institution that is a participant in the Book-Entry Transfer Facility system and
whose name appears on a security position listing as the owner of Notes may make
book-entry delivery of Notes by causing the Book-Entry Transfer Facility to
transfer such Notes into the Depositary's account in accordance with the
Book-Entry Transfer Facility's procedures for such transfer. However, although
delivery of Notes may be effected through book-entry transfer into the
Depositary's account as a book-entry transfer, the Letter of Transmittal (or a
manually signed facsimile), properly completed and validly executed, with any
required signature guarantees or an Agent's Message (as defined below) in lieu
of the Letter of Transmittal, and any other required documents, must, in any
case, be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase prior to the applicable Expiration Time or
the guaranteed delivery procedures described below must be complied with. The
confirmation of a book-entry transfer of Notes into the Depositary's account at
the Book-Entry Transfer Facility is referred to herein as a "Book-Entry
Confirmation."
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Notes that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.
GUARANTEED DELIVERY
If a Holder desires to tender Notes pursuant to the Offers and (a)
certificates for such Notes are not lost but are not immediately available, (b)
time will not permit such Holder's Letter of Transmittal, certificates for such
Notes and all other required documents to reach the Depositary prior to the
Expiration Time or (c) the procedures for book-entry transfer cannot be
completed prior to the applicable Expiration Time, a tender may be effected if
all of the following are complied with:
(a) such tender is made by or through an Eligible Institution;
(b) on or prior to the applicable Expiration Time, the
Depositary has received from such Eligible Institution, at one of
the addresses of the Depositary set forth on the back cover of this
Offer to Purchase, a properly completed and duly executed Notice of
Guaranteed Delivery (by manually signed facsimile transmission, mail
or hand delivery) in substantially the form provided with this Offer
to Purchase, setting forth the name(s) and address(es) of the
registered Holder(s) and the principal amount of Notes being
tendered, and stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange ("NYSE")
trading days after the date of the Notice of Guaranteed Delivery,
the applicable Letter of Transmittal properly completed and duly
executed (or a manually signed facsimile), together with
certificates for such Notes (or confirmation of book-entry transfer
of such Notes into the Depositary's account with the Book-Entry
Transfer Facility and, if applicable, an Agent's Message in lieu of
the Letter of Transmittal), and any other documents required by the
applicable Letter of Transmittal and the instruction thereto, will
be deposited by such Eligible Institution with the Depositary; and
(c) such Letter of Transmittal (or a manually signed
facsimile), properly completed and duly executed with any required
signature guarantees, together with certificates for all physically
delivered Notes in proper form for transfer (or confirmation of
book-entry transfer of such Notes into the Depositary's account with
the Book-Entry Transfer Facility and, if applicable, an Agent's
Message in lieu of the Letter of Transmittal), and any other
required documents are received by the Depositary within three NYSE
trading days after the date of such Notice of Guaranteed Delivery.
THE NOTICE OF GUARANTEED DELIVERY MUST BE USED WITH RESPECT TO NOTES TO
BE DELIVERED BY GUARANTEED DELIVERY, AND HOLDERS WHO WISH TO TENDER MORE THAN
ONE ISSUE OF NOTES PURSUANT TO THE PROCEDURES FOR GUARANTEED DELIVERY DESCRIBED
ABOVE MUST COMPLETE A SEPARATE NOTICE OF GUARANTEED DELIVERY IN RESPECT OF EACH
ISSUE OF NOTES TENDERED.
19
<PAGE>
LOST OR MISSING CERTIFICATES
If a Holder desires to tender Notes pursuant to the Offers, but the
certificates for such Notes have been mutilated, lost, stolen or destroyed, such
Holder should write to or telephone the relevant Trustee at the address or
telephone number listed below to obtain replacement certificates for such Notes
or to arrange for any other matters that require handling by the relevant
Trustee:
FOR THE 6% NOTES: FOR THE 4.5% NOTES:
United States Trust Company of New York Chase Bank of Texas, N.A
114 West 47th Street 2200 Ross Avenue, 5th Floor
New York, New York 10036-1532 Dallas, Texas 75201
Attention: Corporate Trust Division Attention: Global Trust Services
Telephone: (800) 548-6565 Telephone: (800) 275-2048
OTHER MATTERS
THE METHOD OF DELIVERY TO THE DEPOSITARY OF NOTES AND LETTERS OF
TRANSMITTAL (OR MANUALLY SIGNED FACSIMILES) AND ALL OTHER REQUIRED DOCUMENTS
(INCLUDING THROUGH THE BOOK-ENTRY TRANSFER FACILITY) IS AT THE ELECTION AND RISK
OF THE HOLDER TENDERING NOTES. DELIVERY OF SUCH DOCUMENTS WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH DELIVERY IS BY MAIL, IT
IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE
APPLICABLE EXPIRATION TIME TO PERMIT DELIVERY TO THE DEPOSITARY PRIOR TO SUCH
RESPECTIVE DATE. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF NOTES WILL
BE ACCEPTED.
Notwithstanding any other provision of this Offer to Purchase or the
Letter of Transmittal, payment for Notes accepted for purchase pursuant to the
Offers will in all cases be made only after timely receipt by the Depositary of
(a) certificates for (or a timely Book-Entry Confirmation with respect to) such
Notes, (b) a Letter of Transmittal (or a manually signed facsimile), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal and (c) any other documents required by the Letter of Transmittal.
Accordingly, tendering Holders may be paid at different times, depending upon
when certificates for Notes or Book-Entry Confirmation with respect to Notes and
other documents required by the Letter of Transmittal are actually received by
the Depositary. Under no circumstances will additional interest be paid on the
Purchase Price from the date of acceptance for payment, regardless of any delay
in making such payment.
Tenders of Notes pursuant to any of the procedures described above, and
acceptance by the Company of Notes for purchase and payment, will constitute a
binding agreement between the Company and the tendering Holder of such Notes,
upon the terms and subject to the conditions of this Offer to Purchase and the
accompanying Letter of Transmittal as are in effect at the applicable Expiration
Time.
All questions as to the form of all documents and the validity
(including time of receipt) and acceptance of all tenders and withdrawals of
Notes will be determined by the Company, in its sole discretion, the
determination of which shall be final and binding. Alternative, conditional or
contingent tenders of Notes will not be considered valid. The Company reserves
the absolute right to reject any or all tenders of Notes that are not in proper
form or the acceptance of which in the Company's opinion, would be unlawful. The
Company also reserves the right to waive any defects or irregularities as to
particular Notes.
The Company's interpretation of the terms and conditions of this Offer
to Purchase and the accompanying Letter of Transmittal, as such documents may be
amended or supplemented, will be final and binding.
Any defect or irregularity in connection with tenders of Notes must be
cured within such time as the Company determines, unless waived by the Company.
Tenders of Notes shall not be deemed to have been made until all defects and
irregularities have been waived by the Company or cured. None of the Company,
the Depositary, the Trustees, the Information Agent, the Dealer Manager or any
other person will be under any duty to give notice of any defects or
irregularities in tenders of Notes, or will incur any liability to Holders for
failure to give any such notice.
BACKUP WITHHOLDING
For a discussion of U.S. federal income tax considerations related to
back-up withholding, see "Certain Federal Income Tax Considerations -- Backup
Withholding" below.
20
<PAGE>
WITHDRAWAL OF TENDERS;
ABSENCE OF APPRAISAL RIGHTS
WITHDRAWAL OF TENDERS
Tenders of Notes of either issue may be validly withdrawn at any time
prior to the relevant Expiration Time and, unless theretofore accepted for
payment by the Company pursuant to the relevant Offer, may also be validly
withdrawn at any time after Tuesday, September 14, 1999. Holders who have
withdrawn tenders of Notes may re-tender Notes by following one of the
procedures described in "Procedures for Tendering Notes."
Holders who wish to exercise their right of withdrawal with respect to
an Offer must give written notice of withdrawal delivered by mail, hand delivery
or manually signed facsimile transmission, which notice must be timely received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase. In order to be valid, a notice of withdrawal must (i) specify
the name of the person who deposited the Notes to be withdrawn (the
"Depositor"), the name in which the Notes are registered (or, if tendered by
book-entry transfer, the name of the participant in the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of such
Notes), if different from that of the Depositor, (ii) specify the principal
amount of Notes to be withdrawn, (iii) be signed by the Depositor in the same
manner as the original signature on the Letter of Transmittal (including, in any
case, any required signature guarantee(s)) or be accompanied by evidence
satisfactory to the Company and the Depositary that the person withdrawing the
tender has succeeded to the beneficial ownership of such Notes and (iv) be
timely received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase. If certificates have been delivered or
otherwise identified (through confirmation of book-entry transfer of such Notes)
to the Depositary, the name of the Holder and the certificate number or numbers
relating to such withdrawn Notes must also be furnished to the Depositary as
aforesaid prior to the physical release of the certificates for the withdrawn
Notes (or, in the case of Notes transferred by book-entry transfer, the name and
number of the account at the Book-Entry Transfer Facility to be credited with
withdrawn Notes).
APPRAISAL RIGHTS
The Notes are debt obligations of the Company and are governed by the
Indentures. There are no appraisal or other similar statutory rights available
to Holders in connection with the Offers.
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Company to purchase all of the
Notes pursuant to the Offers and pay all related costs and expenses is estimated
to be approximately $333,854,000. The Company intends to cancel the Notes
acquired pursuant to the Offers in accordance with the terms of the relevant
Indenture.
The Company expects to finance the aggregate Purchase Price of the Notes
with cash available from the Company's cash reserves, the Capital Contributions
and the New Financing immediately following the Merger (see "Purpose and
Background of the Offers -- The Merger"). There are no current plans to
refinance any borrowings included in the New Financing.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is for general information only and is based on
the U.S. federal income tax law now in effect, which is subject to change,
possibly retroactively. This summary does not discuss all aspects of U.S.
federal income taxation that may be important to a particular Holder in light of
the Holder's individual investment circumstances or to certain types of Holders
subject to special tax rules (e.g., financial institutions, broker-dealers,
insurance companies, tax-exempt organizations and foreign taxpayers), nor does
it address specific state, local or foreign tax consequences. This summary
assumes that Holders hold their Notes as "capital assets" (generally, property
held for investment) under the Internal Revenue Code of 1986, as amended. Each
Holder is urged to consult its tax advisor regarding the specific federal,
state, local and foreign income and other tax consequences of the Offers.
TENDER OF NOTES PURSUANT TO THE OFFER
The receipt of the Purchase Price for Notes pursuant to the Offers will
be a taxable transaction for federal income tax purposes. Accordingly, a Holder
will recognize gain or loss for U.S. federal income tax purposes equal to the
difference between the amount of the Purchase Price received in exchange for its
Notes (reduced by amounts attributable to accrued and unpaid interest not
previously included in income, which will be treated as ordinary income for tax
purposes) and such Holder's adjusted tax basis in such Notes.
21
<PAGE>
Subject to the market discount rules and the bond premium rules, a Holder's
adjusted tax basis in its Notes will generally be equal to its initial tax basis
at the time the Notes were acquired by the Holder (i.e., its cost). Except to
the extent of accrued market discount (discussed below), if any, not previously
included in income, any gain recognized with respect to a disposition of the
Notes will be capital gain. Any loss will be a capital loss under such
circumstances.
An exception to the capital gain treatment described above may apply to
a Holder who purchased a Note at a "market discount." The market discount on a
Note is the excess of the stated redemption price at maturity of such Note over
the Holder's tax basis in such Note immediately after its acquisition by such
Holder, subject to a de minimis exception under which market discount is
considered to be zero if it is less than one quarter of one percent of the
stated redemption price at maturity multiplied by the number of complete years
to maturity from the date of acquisition. In general, for a Holder that has not
elected to include market discount in income currently as it accrues, any gain
realized on the sale of a Note having market discount will be treated as
ordinary income to the extent of the market discount that has accrued (on a
straight line basis or, at the election of the Holder, on a constant yield
basis) while such Note was held by the Holder.
CONSEQUENCES TO NON-TENDERING HOLDERS
Holders who do not tender their Notes in the Offers will not recognize
any gain or loss for federal income tax purposes with respect to the Notes as a
result of the Offers.
BACKUP WITHHOLDING
Under federal income tax law, certain Holders whose Notes are accepted
for purchase are required to comply with applicable certification requirements
to avoid imposition of backup withholding at a rate of 31%. See "Important Tax
Information" in the Letter of Transmittal.
INFORMATION AGENT, DEALER MANAGER AND DEPOSITARY
The Company has retained MacKenzie Partners, Inc. to act as Information
Agent, Donaldson, Lufkin & Jenrette Securities Corporation to act as Dealer
Manager and United States Trust Company of New York to act as Depositary in
connection with the Offers. The Company has agreed to pay the Information Agent
and the Depositary customary fees for their services in connection with the
Offers. The Company has also agreed to reimburse the Information Agent, the
Dealer Manager and the Depositary for their out-of-pocket expenses (including
the fees and disbursements of counsel) and to indemnify them against certain
liabilities, including liabilities under the federal securities laws. The
Company will not pay any fees or commissions to any broker, dealer or other
person (other than the Information Agent and the Depositary) in connection with
the solicitation of tenders of Notes pursuant to the Offers.
None of the Information Agent, the Dealer Manager or the Depositary
assumes any responsibility for the accuracy or completeness of the information
concerning the Company contained or incorporated by reference in this Offer to
Purchase or for any failure by the Company to disclose events that may affect
the significance or accuracy of such information.
Directors, officers and regular employees of the Company and its
affiliates (who will not be specifically compensated for such services), the
Information Agent and the Dealer Manager may contact Holders personally or by
mail, telephone or otherwise regarding the Offers and may request brokers,
dealers and other nominees to forward this Offer to Purchase and related
material to beneficial owners of Notes.
MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the
Offers is not in compliance with the laws of such jurisdiction. If the Company
becomes aware of any jurisdiction where the making of the Offers would not be in
compliance with such laws, the Company will make a good faith effort to comply
with any such laws or seek to have such laws declared inapplicable to the
Offers. If, after such good faith effort, the Company cannot comply with any
such applicable laws, the Offers will not be made to (nor will tenders be
accepted from or on behalf of) any Holders residing in such jurisdiction.
22
<PAGE>
THE DEPOSITARY FOR THE OFFERS IS:
UNITED STATES TRUST COMPANY OF NEW YORK
--------------------------------
BY OVERNIGHT COURIER &
BY HAND AFTER 4:30 P.M.
ON THE DATE OF THE EXPIRATION TIME ONLY:
United States Trust Company
of New York
770 Broadway, 13th Floor
New York, NY 10003
Attn: Corporate Trust Services
BY HAND UP TO 4:30 P.M.:
United States Trust Company
of New York
111 Broadway
Lower Level
Attn: Corporate Trust Services
NewYork, NY 10006
BY: FACSIMILE NUMBER:
212-420-6211
CONFIRM BY TELEPHONE NUMBER:
800-548-6565
BY REGISTERED OR CERTIFIED MAIL:
United States Trust Company
of New York
P.O. Box 844
Attn: Corporate Trust Services
Cooper Station
New York, NY 10276-0844
Any questions or requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below. Requests for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent. Requests for copies of the Incorporated
Documents and the Indentures may also be directed to the Information Agent.
Beneficial owners may also contact their broker, dealer, commercial bank or
trust company for assistance concerning the Offers.
THE INFORMATION AGENT FOR THE OFFERS IS:
[MacKenzie Partners Logo]
156 Fifth Avenue
New York, New York 10010
212-929-5500 (Call Collect)
or
(800) 322-2885 (Call Toll Free)
THE DEALER MANAGER FOR THE OFFERS IS:
DONALDSON, LUFKIN & JENRETTE
277 Park Avenue
New York, New York 10172
(800) 255-9260, ext. 4131 (Call Toll Free)
LETTER OF TRANSMITTAL
TO TENDER (CHECK ONLY ONE*):
[] 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
CUSIP #: 20589T-AA-1
674623-AA-1 (FORMERLY OCCUSYSTEMS, INC.)
[] 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
CUSIP #: 20589T-AB-9
20589T-AC-7
OF
CONCENTRA MANAGED CARE, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED JULY 20, 1999
EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, AUGUST 17, 1999 UNLESS EXTENDED OR TERMINATED (SUCH TIME AND
DATE OR THE LATEST TIME AND DATE TO WHICH THE RELEVANT OFFER MAY BE
EXTENDED OR TERMINATED WITH RESPECT TO EACH OF THE OFFERS, BEING
REFERRED TO HEREIN AS THE "EXPIRATION TIME"). HOLDERS OF NOTES MUST
TENDER THEIR NOTES PRIOR TO THE APPLICABLE EXPIRATION TIME TO RECEIVE
THE APPLICABLE PURCHASE PRICE (AS DEFINED BELOW). TENDERS OF NOTES
MAY BE VALIDLY WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION TIME
AND, UNLESS THERETOFORE ACCEPTED FOR PAYMENT BY THE COMPANY PURSUANT
TO THE RELEVANT OFFER, MAY ALSO BE VALIDLY WITHDRAWN AT ANY TIME
AFTER TUESDAY, SEPTEMBER 14, 1999.
THE DEPOSITARY FOR THE OFFERS IS:
UNITED STATES TRUST COMPANY OF NEW YORK
--------------------------------
<TABLE>
<S> <C> <C>
BY OVERNIGHT COURIER & BY HAND UP TO 4:30 P.M. BY REGISTERED OR CERTIFIED MAIL:
BY HAND AFTER 4:30 P.M.
ON THE DATE OF THE EXPIRATION TIME ONLY:
United States Trust Company United States Trust Company United States Trust Company
of New York of New York of New York
770 Broadway, 13th Floor 111 Broadway P.O. Box 844
New York, NY 10003 Lower Level Attn: Corporate Trust Services
Attn: Corporate Trust Services Attn: Corporate Trust Services Cooper Station
New York, NY 10006 New York, NY 10276-0844
By: Facsimile Number:
212-420-6211
Confirm by Telephone Number:
800-548-6565
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
The instructions contained herein should be read carefully before
this Letter of Transmittal is completed.
This Letter of Transmittal and instructions hereto (the "Letter of
Transmittal") and the Offer to Purchase, dated July 20, 1999 (as amended or
supplemented from time to time, the "Offer to Purchase"), of Concentra
- -------------------------------------------------------------------------------
* If Notes of more than one issue are being tendered, it is necessary toreturn
a separate form for eachissue of Notes. Please check the appropriate box at
the top of this page to indicate the issue of Notes to which this Letter of
Transmittal applies.
<PAGE>
Managed Care, Inc., a Delaware corporation (the "Company"), together constitute
the Company's offer to purchase for cash (i) all of its outstanding 6%
Convertible Subordinated Notes due 2001 (the "6% Notes") for a cash purchase
price of $1,002.50 per $1000 principal amount of 6.0% Notes, plus accrued and
unpaid interest up to, but not including, the date of payment and (ii) all
outstanding 4.5% Convertible Subordinated Notes due 2003 (the "4.5% Notes" and,
together with the 6% Notes, the "Notes") for a cash purchase price of $1,001.25
per $1000 principal amount of 4.5% Notes, plus accrued and unpaid interest up
to, but not including, the date of payment (the "4.5% Note Purchase Price" and,
together with the 6% Purchase Price, the "Purchase Prices"). The offer to
purchase each issue of Notes on the terms and subject to the conditions set
forth in the Offer to Purchase and in this Letter of Transmittal is referred to
individually as an "Offer," and such offers with respect to both issues of Notes
are collectively referred to as the "Offers."
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE THE APPLICABLE PURCHASE PRICE
PURSUANT TO AN OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR NOTES TO THE
DEPOSITARY PRIOR TO THE EXPIRATION TIME.
This Letter of Transmittal is to be used by Holders if: (i) certificates
for Notes are to be physically delivered to the Depositary herewith by such
Holders; (ii) the tender of Notes is to be made by book-entry transfer to the
Depositary's account at the Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in the Offer to Purchase under
the caption "Procedures for Tendering Notes -- Book-Entry Transfer" by any
financial institution that is a participant in the Book-Entry Transfer Facility
and whose name appears on a security position listing as the owner of the Notes
(such participants, acting on behalf of Holders, are referred to herein as
"Acting Holders") and an Agent's Message (as defined herein) is not delivered or
(iii) the tender of Notes is to be made according to the guaranteed delivery
procedures set forth in the Offer to Purchase under the caption "Procedures for
Tendering Notes -- Guaranteed Delivery." Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Depositary.
In the event that an Offer is terminated or otherwise not completed, the
applicable Purchase Price will not be paid or become payable to Holders of the
Notes who have validly tendered their Notes pursuant to the applicable Offer.
The Offers are made upon the terms and subject to the conditions set
forth in the Offer to Purchase and this Letter of Transmittal. Holders should
carefully review the information in the Offer to Purchase and this Letter of
Transmittal. All capitalized terms used and not defined herein have the meanings
ascribed to them in the Offer to Purchase.
A Holder's bank or broker can assist in completing this form. The
instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Manager, whose addresses and telephone numbers appear on the back
cover of the Offer to Purchase. See Instruction 10 below. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or the
Notice of Guaranteed Delivery or other documents related to the Offers may be
directed to the Information Agent.
[ ] CHECK HERE IF CERTIFICATES FOR TENDERED NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSlTARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_____________________________________________
If Notes will be tendered by book-entry transfer at the
Depository Trust Company, please provide the following information:
Account Number:____________________________________________________________
Transaction Code Number:___________________________________________________
2
<PAGE>
If Holders desire to tender Notes pursuant to an Offer and (i)
certificates for such Notes are not lost but are not immediately available, (ii)
time will not permit this Letter of Transmittal, certificates for such Notes or
other required documents to reach the Depositary prior to the Expiration Time or
(iii) the procedures for book-entry transfer cannot be completed prior to the
Expiration Time, such Holders may effect a tender of such Notes in accordance
with the guaranteed delivery procedures set forth in the Offer to Purchase under
the caption "Procedures for Tendering Notes--Guaranteed Delivery. " See
Instruction 1 below.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s):___________________________________________
Window Ticket No. (if any):________________________________________________
Date of Execution of Notice of Guaranteed Delivery:________________________
Name of Eligible Institution that Guaranteed Delivery:_____________________
If Notes will be tendered by book-entry transfer at the Depository
Trust Company, please provide the following information:
Account Number:____________________________________________________________
Transaction Code Number:___________________________________________________
<PAGE>
List below the Notes to which this Letter of Transmittal
relates. If the space provided below is inadequate, list the
certificate numbers and principal amounts on a separately executed
schedule and attach the schedule to this Letter of Transmittal. Tenders
of Notes will be accepted only in principal amounts equal to $1,000 or
any integral multiple thereof.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Aggregate Principal
Names(s) and Address(es) Issue Principal Amount
of Holder(s) of Certificate Amount Tendered (if
(Please fill in, if blank) Notes* Number(s)** Represented less than all)
(1) (2) (3) (4) (5)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total
Principal
Amounts
of Notes
- ---------------------------------------------------------------------------------------------------------------------------
* Indicate applicable issue of Notes of the Company: 6% Notes or 4.5% Notes.
** Need not be completed by Holders tendering by book-entry transfer (see below).
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Offers, the
undersigned hereby tenders to the Company the principal amount of Notes
indicated above. By signing below, the undersigned acknowledges receipt of the
Offer to Purchase which, together with this Letter of Transmittal, set forth
such terms and conditions and constitute the Offers.
Subject to, and effective upon, the acceptance for purchase of, and
payment for, the principal amount of Notes tendered with this Letter of
Transmittal, the undersigned hereby sells, assigns and transfers to, or upon the
order of the Company all right, title and interest in and to the Notes that are
being tendered hereby, waives any and all other rights with respect to the Notes
(including, without limitation, any existing or past defaults and their
consequences in respect of the Notes and the Indenture under which the Notes
were issued) and releases and discharges the Company from any and all claims
such Holder may have now, or may have in the future, arising out of, or related
to, the Notes, including without limitation any claims that such Holder is
entitled to receive additional principal or interest payments with respect to
the Notes or to participate in any redemption or defeasance of the Notes. The
undersigned hereby irrevocably constitutes and appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned (with full knowledge
that the Depositary also acts as the agent of the Company) with respect to such
Notes, with full power of substitution (such power-of-attorney being deemed to
be an irrevocable power coupled with an interest), to (i) present such Notes and
all evidences of transfer and authenticity to, or transfer of ownership of, such
Notes on the account books maintained by the Book-Entry Transfer Facility to or
upon the order of the Company, (ii) present such Notes for transfer of ownership
on the books of the relevant security register and (iii) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Notes, all in
accordance with the terms of and conditions to the Offers as described in the
Offer to Purchase and herein.
The undersigned understands and acknowledges that the Offers will expire
at 5:00 p.m., New York City time, on August 17, 1999, unless extended by the
Company in its sole discretion or terminated earlier.
The undersigned understands that tenders of Notes may be withdrawn by
written notice of withdrawal received by the Depositary at any time prior to the
Expiration Time and, unless theretofore accepted for payment by the Company
pursuant to the relevant Offer, may also be validly withdrawn at any time after
Tuesday, September 14, 1999.
The undersigned understands that tenders of Notes pursuant to any of the
procedures described in the Offer to Purchase and in the instructions hereto and
acceptance thereof by the Company will constitute a binding agreement between
the undersigned and the Company upon the terms and subject to the conditions of
the Offers.
The undersigned hereby represents and warrants that: (a) the undersigned
has full power and authority to tender, sell, assign and transfer the Notes
tendered hereby, and (b) that when such Notes are accepted for purchase and
payment by the Company, the Company will acquire good title thereto, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim or right. The undersigned will, upon request by the Company,
the Depositary or the Trustee, execute and deliver any additional documents
deemed by the Company, the Depositary or the Trustee to be necessary or
desirable to complete the sale, assignment and transfer of the Notes tendered
hereby.
For purposes of the Offers, the undersigned understands that the Company
will be deemed to have accepted for purchase validly tendered Notes (or
defectively tendered Notes with respect to which the Company has waived such
defect), if, as and when the Company gives oral notice (confirmed in writing) or
written notice thereof to the Depositary.
5
<PAGE>
The undersigned understands that, under certain circumstances and
subject to certain conditions of the Offers set forth in the Offer to Purchase
(each of which the Company may waive), the Company will not be required to
accept for purchase any of the Notes tendered (including any Notes tendered
after the Expiration Time). Any Notes not accepted for purchase will be returned
promptly to the undersigned at the address set forth above, unless otherwise
indicated herein under "Special Delivery Instructions" below.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and every
obligation of the undersigned under this Letter of Transmittal shall be binding
upon the undersigned's heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives.
The undersigned understands that the delivery and surrender of the Notes
is not effective, and the risk of loss of the Notes does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal, or a
facsimile, properly completed and duly executed (or, in the case of a book-entry
transfer, an Agent's Message, if applicable, in lieu of the Letter of
Transmittal), together with all accompanying evidences of authority and any
other required documents in form satisfactory to the Company. All questions as
to form of all documents and the validity (including time of receipt) and
acceptance of tenders and withdrawals of Notes will be determined by the
Company, in its sole discretion, which determination shall be final and binding.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF NOTES
REGARDLESS OF WHETHER NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by each registered Holder of
Notes exactly as its name appears on the certificate(s) for the Notes or,
if tendered by a participant in the Book-Entry Transfer Facility, exactly
as such participant's name appears on a security position listing as the
owner of the Notes, or by a person authorized to become a registered Holder
by endorsements on certificates for the Notes or by bond powers transmitted
with this Letter of Transmittal. Endorsements on the Notes and signatures
on bond powers by registered Holders not executing this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction
3 below. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below under "Capacity" and submit evidence satisfactory to the Company of
such person's authority to so act. See Instruction 3 below.
X___________________________________________________________________________
(Signature(s) of Registered Holder(s) or Authorized Signature)
Dated: _____________________, 1999
Name(s): ___________________________________________________________________
___________________________________________________________________
(Please Print)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
___________________________________________________________________
(Including Zip Code)
Area Code and Telephone No: ________________________________________________
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (See Instruction 3 below)
(Certain Signatures Must Be Guaranteed by an Eligible Institution)
----------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signature)
----------------------------------------------------------------------------
(Address (including Zip Code) and Telephone Number
(including Area Code) of Firm)
----------------------------------------------------------------------------
(Authorized Signature)
----------------------------------------------------------------------------
(Printed Name)
----------------------------------------------------------------------------
(Title)
Dated: _______________________, 1999
7
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 2, 3, 4 and 6)
To be completed ONLY if the applicable Purchase Price is to be paid to someone
other than the registered Holder or Acting Holder. Unless one or more persons
is designated under "Special Delivery Instructions," Notes not accepted in the
Offers, or certificates for principal amounts not being tendered, will also be
delivered to the person(s) designated herein.
Pay the applicable Purchase Price to:
Name(s): _______________________________
(Please Print)
Address: _______________________________
________________________________________
________________________________________
(Including Zip Code)
________________________________________
Taxpayer Identification Number (i.e., Social
Security Number or Employer Identification
Number) (also complete Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 2, 3, 4 and 6)
To be completed ONLY if Notes not accepted in the Offers, or certificates for
principal amounts not being tendered, are to be delivered in the name of
someone other than the registered Holder or Acting Holder or to the person(s)
designated above under "Special Payment Instructions."
Deliver the Notes to:
Name(s): _______________________________
(Please Print)
Address: _______________________________
________________________________________
________________________________________
(Including Zip Code)
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFERS
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR THE NOTES
OR BOOK-ENTRY CONFIRMATIONS; GUARANTEED DELIVERY PROCEDURES; WITHDRAWAL OF
TENDERS. To tender Notes, physical delivery of certificates for such Notes or a
confirmation of any book-entry transfer into the Depositary's account with the
Book-Entry Transfer Facility of Notes tendered electronically, as well as a
properly completed and duly executed copy or facsimile of this Letter of
Transmittal, or an Agent's Message (as defined), if applicable, in lieu of the
Letter of Transmittal, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Time. Tenders of Notes in the Offers will
be accepted in accordance with the procedures described in the preceding
sentence and otherwise in compliance with this Letter of Transmittal. The term
"Agent's Message" means a message transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation, which states that the Book-Entry Transfer Facility has received an
express acknowledgment from the participant in the Book-Entry Transfer Facility
tendering Notes that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Company may enforce such
agreement against the participant. The method of delivery of this Letter of
Transmittal, the Notes and all other required documents to the Depositary is at
the election and risk of Holders. If such delivery is by mail, it is suggested
that Holders use properly insured, registered mail, return receipt requested,
and that the mailing be made sufficiently in advance of the applicable
Expiration Time to permit delivery to the Depositary prior to such date. Except
as otherwise provided below, the delivery will be deemed made when actually
received or confirmed by the Depositary. THIS LETTER OF TRANSMITTAL AND THE
NOTES SHOULD BE SENT ONLY TO THE DEPOSITARY, AND NOT TO THE COMPANY, THE
TRUSTEES, THE DEALER MANAGER OR THE BOOK-ENTRY TRANSFER FACILITY.
If Holders desire to tender Notes pursuant to the Offers and (i)
certificates for such Notes are not lost but are not immediately available, (ii)
time will not permit this Letter of Transmittal, certificates for such Notes or
other required documents to reach the Depositary prior to the Expiration Time or
(iii) the procedures for book-entry transfer cannot be completed prior to the
Expiration Time, such Holders may effect a tender of the Notes in accordance
with the guaranteed delivery procedures set forth in the Offer to Purchase under
the caption "Procedures for Tendering Notes--Guaranteed Delivery."
Pursuant to the guaranteed delivery procedures:
(a) such tender and delivery must be made by or through an
"Eligible Institution" that is a participant in the Security Transfer
Agents Medallion Program or the Stock Exchange Medallion Program;
(b) on or prior to the Expiration Time, the Depositary must have
received from such Eligible Institution, at one of the addresses of the
Depositary set forth herein, a properly completed and duly executed
Notice of Guaranteed Delivery (by manually signed facsimile
transmission, mail or hand delivery) in substantially the form provided
by the Company, setting forth the name(s) and address(es) of the
registered Holder(s), and the principal amount of the Notes being
tendered, and stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange ("NYSE")
trading days after the date of the Notice of Guaranteed Delivery, a
properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile), together with certificates for such Notes
(or confirmation of book-entry transfer of such Notes into the
Depositary's account with the Book-Entry Transfer Facility and, if
applicable, an Agent's Message in lieu of the Letter of Transmittal),
and any other documents required by this Letter of Transmittal and the
instructions hereto, will be deposited by such Eligible Institution
with the Depositary; and
(c) this Letter of Transmittal (or a manually signed facsimile),
properly completed and duly executed with any required signature
guarantees, together with certificates for all physically delivered
Notes in proper form for transfer (or confirmation of book-entry
transfer of such Notes into the Depositary's account with the
Book-Entry Transfer Facility and, if applicable, an Agent's Message in
lieu of the Letter of Transmittal), and any other required documents
must be received by the Depositary within three NYSE trading days after
the date of the Notice of Guaranteed Delivery.
9
<PAGE>
Tenders of Notes may be withdrawn at any time prior to the relevant
Expiration Time and, unless theretofore accepted for payment by the Company
pursuant to the relevant Offer, may also be validly withdrawn at any time after
Tuesday, September 14, 1999, by written notice of withdrawal received by the
Depositary delivered by mail, hand delivery or facsimile transmission. To be
valid, notice of withdrawal of tendered Notes must (i) be timely received by the
Depositary at one of its addresses set forth herein, (ii) specify the name of
the person who deposited the Notes to be withdrawn (the "Depositor"), and the
name in which the Notes are registered (or, if tendered by book-entry transfer,
the name of the participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of such Notes), if different
from that of the Depositor, (iii) specify the principal amount of the Notes to
be withdrawn and (iv) be signed by the Depositor in the same manner as the
original signature on this Letter of Transmittal (including any required
signature guarantees) or be accompanied by evidence satisfactory to the Company
and the Depositary that the person withdrawing the tender has succeeded to
beneficial ownership of the Notes. If certificates have been delivered or
otherwise identified (through confirmation of book-entry transfer of such Notes)
to the Depositary, the name of the registered Holder and the certificate number
or numbers relating to such withdrawn Notes must also be furnished to the
Depositary as aforesaid prior to the physical release of the certificates for
the withdrawn Notes (or, in the case of Notes transferred by book-entry
transfer, the name and number of the account at the Book-Entry Transfer Facility
to be credited with withdrawn Notes).
2. PARTIAL TENDERS. Tenders of Notes pursuant to the Offers will be
accepted only in respect of principal amounts equal to $1,000 or integral
multiples thereof. If less than the entire principal amount of any Note
evidenced by a submitted certificate is tendered, the tendering Holder must fill
in the principal amount tendered in the last column of the box entitled
"Description of Notes Tendered" herein. Unless otherwise indicated in that
column, the entire principal amount represented by the certificates for all
Notes delivered to the Depositary will be deemed to have been tendered. If the
entire principal amount of all Notes is not tendered or not accepted for
purchase, the Notes for such untendered amount will be sent (or, if tendered by
book-entry transfer, returned by credit to the account at the Book-Entry
Transfer Facility) to the registered Holder or Acting Holders, unless otherwise
provided in the appropriate box on this Letter of Transmittal (see Instruction
4), promptly after the Notes are accepted for purchase.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND
ENDORSEMENT; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by
the registered Holder(s) of the Notes tendered hereby, the signature(s) must
correspond with the name(s) as written on the face of the certificate(s),
without alteration, enlargement or any change whatsoever. If this Letter of
Transmittal is signed by a participant in the Book-Entry Transfer Facility whose
name is shown as the owner of the Notes tendered hereby, the signature must
correspond with the name shown on the security position listing as the owner of
the Notes.
If any of the Notes tendered hereby are registered in the name of two or
more Holders, all such Holders must sign this Letter of Transmittal. If any
tendered Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many separate copies of this
Letter of Transmittal and any necessary accompanying documents as there are
different names in which certificates are held.
If this Letter of Transmittal is signed by the registered Holder or
Acting Holder, and the certificates for any principal amount of Notes not
tendered or not accepted for purchase are to be issued (or if any principal
amount of Notes that is not tendered or not accepted for purchase is to be
reissued or returned) to or, if tendered by book-entry transfer, credited to the
account at the Book-Entry Transfer Facility of the registered Holder or Acting
Holder, and checks for payments of the applicable Purchase Price to be made in
connection with the Offers are to be issued to the order of the registered
Holder or Acting Holder, then the registered Holder or Acting Holder need not
endorse any certificates for tendered Notes nor provide a separate bond power.
In any other case (including if this Letter of Transmittal is not signed by the
registered Holder or Acting Holder), the registered Holder or Acting Holder must
either properly endorse the certificates for the tendered Notes or transmit a
separate properly completed bond power with this Letter of Transmittal (in
either case, executed exactly as the name of each registered Holder appears on
such Notes, and, with respect to a participant in the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of the
Notes, exactly as the name of each participant appears on such security position
listing), with the signature on the endorsement or bond power guaranteed by an
Eligible Institution, unless such certificates or bond powers are executed by an
Eligible Institution.
10
<PAGE>
If this Letter of Transmittal or any certificates for Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence satisfactory to the Company of their authority so to act must be
submitted with this Letter of Transmittal.
Endorsements on certificates for Notes and signatures on bond powers
provided in accordance with this Instruction 3 by registered Holders not
executing this Letter of Transmittal must be guaranteed by an Eligible
Institution.
No signature guarantee is required if (i) this Letter of Transmittal is
signed by the registered Holder(s) of the Notes tendered herewith (or by a
participant in the Book-Entry Transfer Facility whose name appears on a security
position listing it as the owner of Notes) and payment of the applicable
Purchase Price is to be made, or any Notes for principal amounts not tendered or
not accepted for purchase are to be issued, directly to such Holder(s) (or, if
tendered by a participant in the Book-Entry Transfer Facility, any Notes for
principal amounts not tendered or not accepted for purchase are to be credited
to such participant's account at the Book-Entry Transfer Facility) and neither
the "Special Payment Instructions" box nor the "Special Delivery Instructions"
box of this Letter of Transmittal has been completed, or (ii) such Notes are
tendered for the account of an Eligible Institution. In all other cases, all
signatures on Letters of Transmittal and endorsements on certificates,
signatures on bond powers (if any) accompanying the Notes must be guaranteed by
an Eligible Institution.
4. SPECIAL PAYMENT AND SPECIAL DELIVERY INSTRUCTIONS. If the applicable
Purchase Price is to be paid in the name of someone other than the tendering
Holder, the tendering Holder must fill in the information in the box entitled
"Special Payment Instructions." If the Notes not accepted in the Offers, or
certificates for principal amounts not being tendered, are to be delivered in
the name of someone other than the tendering Holder, the tendering Holder must
fill in the information in the box entitled "Special Delivery Instructions."
Unless one or more different persons is indicated in the box entitled "Special
Delivery Instructions," Notes not accepted in the Offers, or certificates for
principal amounts not being tendered, will be delivered in the name of the
person(s) designated in the box entitled "Special Payment Instructions."
5. TAXPAYER IDENTIFICATION NUMBER. Each tendering Holder is required to
provide the Depositary with the Holder's correct taxpayer identification number
("TIN"), generally the Holder's social security or employer identification
number, on Substitute Form W-9, which is provided under "Important Tax
Information" below, or, alternatively, to establish another basis for exemption
from backup withholding. A Holder must cross out item (2) in the Certification
box on Substitute Form W-9 if such Holder is subject to backup withholding.
Failure to provide the information on the form may subject the tendering Holder
to federal income tax backup withholding at the rate of 31% on the payments made
to the Holder or other payee with respect to Notes purchased pursuant to the
Offers. The box in Part 3 of the form should be checked if the tendering Holder
has not been issued a TIN and has applied for a TIN or intends to apply for a
TIN in the near future. If the box in Part 3 is checked and the Depositary is
not provided with a TIN by the date of payment, the Depositary will withhold 31%
of all payments of the applicable Purchase Price.
6. TRANSFER TAXES. Except as set forth in this Instruction 6, the
Company will pay all transfer taxes applicable to the purchase and transfer of
Notes pursuant to the Offers. However, if payment for Notes is to be made to, or
deliveries of certificates for Notes for principal amounts not tendered or not
accepted for payment are to be made to, any person other than the registered
Holder or Acting Holder of Notes tendered thereby, or if a transfer tax is
imposed for any reason other than the purchase and transfer of Notes pursuant to
the Offers, the amount of any such transfer taxes (whether imposed on the
registered Holder or Acting Holder, such other person or otherwise) will be
deducted from the payment unless transfer tax stamps are affixed to the
certificates listed in this Letter of Transmittal or other satisfactory evidence
of the payment of such taxes, or exemption therefrom, is submitted.
11
<PAGE>
Except as provided in this Instruction 6, it will not be necessary for transfer
tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. IRREGULARITIES. All questions as to the form of all documents and the
validity (including time of receipt) and acceptance of all tenders and
withdrawals of Notes will be determined by the Company, in its sole discretion,
which determination shall be final and binding. Alternative, conditional or
contingent tenders of Notes will not be considered valid. The Company reserves
the absolute right to reject any or all tenders of Notes in respect of Notes
that are not in proper form or the acceptance of which would, in the Company's
opinion, be unlawful. The Company also reserves the right to waive any defects
or irregularities as to particular Notes. The Company's interpretations of the
terms and conditions of the Offers (including the instructions in this Letter of
Transmittal) will be final and binding. Any defect or irregularity in connection
with tenders of Notes must be cured within such time as the Company determines,
unless waived by the Company. Tenders of Notes shall not be deemed to have been
made until all defects and irregularities have been waived by the Company or
cured. By execution of this Letter of Transmittal or a facsimile hereof, all
tendering Holders waive any right to receive notice of the acceptance of their
Notes for purchase. None of the Company, the Depositary, the Dealer Manager, the
Trustees or any other person will be under any duty to give notice of any
defects or irregularities in tenders of Notes, or will incur any liability to
Holders for failure to give any such notice.
8. WAIVER OF CONDITIONS. The Company expressly reserves the right, in
its reasonable discretion, to amend or waive any of the conditions to the Offers
in the case of any Notes tendered in whole or in part, at any time and from time
to time.
9. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR NOTES. Any
Holder whose certificates for Notes have been mutilated, lost, stolen or
destroyed should write to or telephone the relevant Trustee at the address or
telephone number set forth in the Offer to Purchase under the caption
"Procedures for Tendering Notes -- Lost or Missing Certificates."
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to
the procedure for tendering Notes and requests for assistance may be directed to
the Information Agent or the Dealer Manager, whose addresses and telephone
numbers appear on the last page of the Offer to Purchase. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery or other documents related to the Offers may be
directed to the Information Agent.
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a Holder whose tendered Notes are
accepted for payment is required to provide the Depositary (as payer) with such
Holder's correct TIN on Substitute Form W-9 below or otherwise establish a basis
for exemption from backup withholding. If such Holder is an individual, the TIN
is his or her social security number. If the Depositary is not provided with the
correct TIN, a $50 penalty may be imposed by the Internal Revenue Service, and
payments made to such Holder with respect to Notes purchased pursuant to the
Offers may be subject to 31% backup withholding.
Certain Holders (including all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. Where a payment is potentially subject to backup withholding, in
order for a foreign individual to qualify as an exempt recipient, such
individual must generally submit an Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to such individual's exempt status. A Form
W-8 is available from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold
31% of any payments made to the Holder or other payee. Backup withholding is not
an additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
12
<PAGE>
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Notes
purchased pursuant to the Offers, the Holder is required to provide the
Depositary with (i) the Holder's correct TIN by completing the form below,
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
Holder is awaiting a TIN) and that (A) such Holder is exempt from backup
withholding, (B) the Holder has not been notified by the Internal Revenue
Service that the Holder is subject to backup withholding as a result of failure
to report all interest or dividends or (C) the Internal Revenue Service has
notified the Holder that the Holder is no longer subject to backup withholding,
and (ii) if applicable, an adequate basis for exemption.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Holder is required to give the Depositary the TIN of the Holder. If
the Notes are held in more than one name or are held not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
13
<PAGE>
PAYER'S NAME: UNITED STATES TRUST COMPANY OF NEW YORK
SUBSTITUTE
FORM W-9
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER ("TIN")
Part 1 - PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND
DATING BELOW.
----------------------
Social Security Number
or
----------------------
Employer Identification
Number
Part 2 - CERTIFICATION - Under penalties of perjury, I certify that:
(1)The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me), and
(2)I am not subject to backup withholding either because:(a) I am exempt from
backup withholding, (b) I have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or (c) the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS - You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if after being notified by the IRS that you were subject to backup
withholding, you received another notification from the IRS that you are no
longer subject to backup withholding, do not cross out such item (2).
SIGNATURE _____________________ DATE ______
NAME (Please Print) ______________________________
ADDRESS (Please Print) ___________________________
Part 3 -
Awaiting TIN
[ ]
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITH-
HOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
14
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be withheld.
Signature ________________________________________________ Date ___________
Name (Please Print): ______________________________________________________
Address (Please Print): ___________________________________________________
15
<PAGE>
THE INFORMATION AGENT FOR THE OFFERS IS:
156 Fifth Avenue
New York, New York 10010
212-929-5500 (Call Collect)
or
(800) 322-2885 (Call Toll Free)
The Dealer Manager for the Offers is:
Donaldson, Lufkin & Jenrette
277 Park Avenue
New York, New York 10172
(800) 255-9260, ext. 4131 (Call Toll Free)
THIS NOTICE OF GUARANTEED DELIVERY IS BEING USED WITH RESPECT TO THE FOLLOWING
ISSUE OF NOTES OF CONCENTRA MANAGED CARE, INC. (CHECK ONLY ONE*):
[ ] 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
CUSIP #: 20589T-AA-1
674623-AA-1 (FORMERLY OCCUSYSTEMS, INC.)
[ ] 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
CUSIP #: 20589T-AB-9
20589T-AC-7
NOTICE OF GUARANTEED DELIVERY
PURSUANT TO THE OFFER TO PURCHASE OF
CONCENTRA MANAGED CARE, INC.
DATED JULY 20, 1999
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to tender the 6% Convertible Subordinated Notes due 2001
(the "6% Notes") or the 4.5% Convertible Subordinated Notes due 2003 (the "4.5%
Notes" and, together with the 6% Notes, the "Notes") of Concentra Managed Care,
Inc. (the "Company") pursuant to the Offer to Purchase (as defined below) if (i)
certificates for such Notes are not lost but are not immediately available, (ii)
time will not permit the Letter of Transmittal with respect to the Notes (the
"Letter of Transmittal"), certificates for Notes or other required documents to
reach United States Trust Company of New York (the "Depositary") prior to the
Expiration Time (as defined below) or (iii) the procedures for book-entry
transfer cannot be completed prior to the Expiration Time. This Notice of
Guaranteed Delivery may be delivered by hand or mail or transmitted by facsimile
transmission to the Depositary.
EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST
17, 1999 UNLESS EXTENDED OR TERMINATED (SUCH TIME AND DATE OR THE LATEST TIME
AND DATE TO WHICH THE RELEVANT OFFER (AS DEFINED IN THE OFFER TO PURCHASE)
MAY BE EXTENDED OR TERMINATED WITH RESPECT TO EACH OF THE OFFERS, BEING
REFERRED TO HEREIN AS THE "EXPIRATION TIME"). HOLDERS OF NOTES MUST TENDER
THEIR NOTES PRIOR TO THE APPLICABLE EXPIRATION TIME TO RECEIVE THE APPLICABLE
PURCHASE PRICE (ASDEFINEDINTHEOFFERTOPURCHASE). TENDERS OF NOTES MAY BE
VALIDLY WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION TIME AND, UNLESS
THERETOFORE ACCEPTED FOR PAYMENT BY THE COMPANY PURSUANT TO THE RELEVANT
OFFER, MAY BE VALIDLY WITHDRAWN AT ANY TIME AFTER TUESDAY, SEPTEMBER 14,
1999.
<TABLE>
THE DEPOSITARY FOR THE OFFERS IS:
UNITED STATES TRUST COMPANY OF NEW YORK
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BY OVERNIGHT COURIER & BY HAND UP TO 4:30 P.M. BY REGISTERED OR CERTIFIED MAIL:
BY HAND AFTER 4:30 P.M.
ON THE DATE OF THE EXPIRATION TIME ONLY:
United States Trust of New York Company United States Trust of New York Company United States Trust of New York Company
770 Broadway, 13th Floor 111 Broadway P.O. Box 844
New York, NY 10003 Lower Level Attn:Corporate Trust Services
Attn: Corporate Trust Services Attn: Corporate Trust Services Cooper Station
New York, NY 10006 New
York, NY 10276-0844
By:Facsimile Number:
212-420-6211
Confirm by Telephone Number:
800-548-6565
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
- --------------------------------------------------------------------------------
* If Notes of more than one issue are being tendered, it is necessary to return
a separate form for each issue of Notes. Please check the appropriate box at the
top of this page to indicate the issue of Notes to which this Notice of
Guaranteed Delivery relates.
<PAGE>
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
LADIES AND GENTLEMEN:
By execution hereof, the undersigned acknowledges receipt of the Offer
to Purchase, dated July 20, 1999 (as the same may be amended or supplemented
from time to time, the "Offer to Purchase"), of the Company, and the
accompanying Letter of Transmittal and instructions thereto, which together
constitute the Company's offer to purchase for cash all of its outstanding 6%
Notes and 4.5% Notes, upon the terms and subject to the conditions set forth in
the Offer to Purchase and the Letter of Transmittal.
Upon the terms and subject to the conditions of the Offer to Purchase
and the Letter of Transmittal, the undersigned hereby tenders to the Company the
principal amount of 6% Notes or 4.5% Notes as indicated below, pursuant to the
guaranteed delivery procedures described in the Offer to Purchase under the
caption "Procedures for Tendering Notes--Guaranteed Delivery."
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned,
and every obligation of the undersigned under the Letter of Transmittal shall be
binding upon the undersigned's heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives.
2
<PAGE>
<TABLE>
<CAPTION>
Issue of Notes Certificate Number Principal Amount
Tendered (if available) Tendered
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PLEASE SIGN AND COMPLETE
Signature(s) of Registered Holder(s) Dated: _______________________________________________, 1999
or Authorized Signatory:_______________________________________ Address(es): _______________________________________________
_______________________________________________________________ ____________________________________________________________
Name(s) of Registered Holder(s):_______________________________ Area Code and Telephone No.: _______________________________
_______________________________________________________________ If Notes will be delivered by book-entry transfer to
_______________________________________________________________ the Depository Trust Company ("DTC"), check the box: M
_______________________________________________________________ DTC Account No.: ___________________________________________
</TABLE>
This Notice of Guaranteed Delivery must be signed by each registered holder
exactly as its name appears on certificate(s) for Notes or, if tendered by a
participant in DTC, exactly as such participant's name appears on a security
position listing as the owner of Notes, or by person(s) authorized to become
Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation, agent or other person
acting in a fiduciary or representative capacity, such person must provide the
following information:
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):_____________________________________________________________________
_____________________________________________________________________________
Capacity:____________________________________________________________________
Address(es):_________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Zip Code)
DO NOT SEND NOTES WITH THIS FORM. NOTES SHOULD BE SENT TO THE DEPOSITARY,
TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL
AND ANY OTHER REQUIRED DOCUMENTS.
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings
association or other entity that is a member of the Security Transfer Agents
Medallion Program or the Stock Exchange Medallion Program (an "Eligible
Institution") hereby (i) represents that each holder of the Notes on whose
behalf this tender is being made "owns" the Notes tendered hereby within the
meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended,
(ii) represents that such tender of such Notes complies with such Rule 14e-4
and (iii) guarantees that the Notes tendered hereby in proper form for
transfer together with a properly completed and duly executed Letter of
Transmittal, or a manually signed facsimile, with any required signature
guarantees, and any other documents required by the Letter of Transmittal or
a properly transmitted Agent's Message (as defined in the Offer to Purchase)
will be received by the Depositary at one of its addresses set forth above
within three New York Stock Exchange trading days after the date hereof.
The Eligible Institution that completes this form must communicate
the guarantee to the Depositary and must deliver the Letter of Transmittal
and certificates for the Notes to the Depositary within the time period shown
herein. Failure to do so could result in financial loss to such Eligible
Institution.
<TABLE>
<S> <C>
______________________________________________________________________________________________________________________________
Name of Firm:__________________________________________________ ____________________________________________________________
(Authorized Signature)
Address:_______________________________________________________
Name: ______________________________________________________
_______________________________________________________________
(including Zip Code) Title: _____________________________________________________
Area Code and Tel. No.:________________________________________ Date: ______________________________________________________
</TABLE>
NOTE: DO NOT SEND NOTES WITH THIS NOTICE. NOTES SHOULD BE SENT TO THE DEPOSITARY
TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND
ANY OTHER REQUIRED DOCUMENTS.
4
CONCENTRA MANAGED CARE, INC.
OFFER TO PURCHASE FOR CASH
ALL OF ITS OUTSTANDING 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
CUSIP #: 20589T-AA-1
674623-AA-1 (FORMERLY OCCUSYSTEMS, INC.)
AND
ALL OF ITS OUTSTANDING 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
CUSIP #: 20589T-AB-9
EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 17,
1999 UNLESS EXTENDED OR TERMINATED (SUCH TIME AND DATE OR THE LATEST TIME AND
DATE TO WHICH THE RELEVANT OFFER MAY BE EXTENDED OR TERMINATED WITH RESPECT TO
EACH OF THE OFFERS, BEING REFERRED TO HEREIN AS THE "EXPIRATION TIME"). HOLDERS
OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES PRIOR TO THE APPLICABLE
EXPIRATION TIME TO RECEIVE THE APPLICABLE PURCHASE PRICE (AS DEFINED BELOW).
TENDERS OF NOTES MAY BE VALIDLY WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION
TIME AND, UNLESS THERETOFORE ACCEPTED FOR PAYMENT BY THE COMPANY PURSUANT TO THE
RELEVANT OFFER, MAY ALSO BE VALIDLY WITHDRAWN AT ANY TIME AFTER TUESDAY,
SEPTEMBER 14, 1999.
July 20, 1999
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
We are enclosing herewith the materials listed below relating to the
offer by Concentra Managed Care, Inc. (the "Company") to purchase (i) all of its
outstanding 6% Convertible Subordinated Notes due 2001 (the "6% Notes") for a
cash purchase price of $1,002.50 per $1000 principal amount of 6% Notes, plus
accrued and unpaid interest up to, but not including, the date of payment (the
"6% Notes Purchase Price") and (ii) all of its outstanding 4.5% Notes due 2003
(the "4.5% Notes" and, together with the 6% Notes, the "Notes") for a cash
purchase price of $1,001.25 per $1000 principal amount of 4.5% Notes, plus
accrued and unpaid interest up to, but not including, the date of payment (the
"4.5% Notes Purchase Price" and, together with the 6% Notes Purchase Price, the
"Purchase Prices"). The offer to purchase each issue of Notes on the terms and
subject to the conditions set forth in the Offer to Purchase, dated July 20,
1999 (as the same may be amended or supplemented from time to time, the "Offer
to Purchase") and in the Letter of Transmittal (the "Letter of Transmittal") is
referred to individually as an "Offer," and such offers with respect to both
issues of Notes are collectively referred to as the "Offers." Consummation of
the Offers is subject to, among other things, satisfaction of the conditions set
forth in the Offer to Purchase under the heading "Conditions of the Offers."
We are asking you to contact your clients for whom you hold Notes
registered in your name or in the name of your nominee. In addition, we are
asking you to contact your clients who, to your knowledge, hold Notes registered
in their own name.
<PAGE>
Enclosed for your information and use are copies of the following
documents:
1. The Offer to Purchase dated July 20, 1999;
2. A Letter of Transmittal for the Notes for your use and
for the information of your clients, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9
providing information relating to U.S. federal income tax backup
withholding;
3. A form of letter that may be sent to your clients for
whose accounts you hold Notes registered in your name or the name of
your nominee, with space provided for obtaining the clients'
instructions with regard to the Offers;
4. A Notice of Guaranteed Delivery for the Notes; and
5. The Proxy Statement of the Company dated July 16, 1999.
FOR YOUR CLIENTS WHO WISH TO TENDER NOTES OF MORE THAN ONE SERIES, A
SEPARATE LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY IS REQUIRED
FOR EACH SERIES OF NOTES TENDERED.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE
NOTE THAT EACH OF THE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, AUGUST 17, 1999 UNLESS EXTENDED OR TERMINATED. HOLDERS OF NOTES MUST
TENDER THEIR NOTES PRIOR TO THE APPLICABLE EXPIRATION TIME TO RECEIVE THE
APPLICABLE PURCHASE PRICE.
In all cases, the applicable Purchase Price will be paid for Notes
accepted for purchase pursuant to the Offers only after timely receipt by United
States Trust Company of New York (the "Depositary") of such Notes (or
confirmation of book-entry transfer of such Notes into the Depositary's account
at the Book-Entry Transfer Facility (as defined in the Offer to Purchase)), a
Letter of Transmittal (or facsimile), properly completed and validly executed,
or, if applicable, an Agent's Message (as defined in the Offer to Purchase) in
lieu of a Letter of Transmittal and any other required documents.
If holders of Notes wish to tender, but it is impracticable for them to
forward their Notes or other required documents prior to the applicable
Expiration Time, a tender may be effected by following the guaranteed delivery
procedures described in the Offer to Purchase under the heading "Procedures for
Tendering Notes--Guaranteed Delivery."
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE IN ORDER TO
OBTAIN THEIR INSTRUCTIONS.
<PAGE>
The Company will not pay any fees or commissions to any broker, dealer
or other person (other than the Information Agent, and the Depositary) in
connection with the Offers. However, the Company will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Company will pay or cause to be paid any
transfer taxes payable with respect to the transfer of Notes to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offers should be
addressed to MacKenzie Partners, Inc., the Information Agent, or Donaldson,
Lufkin & Jenrette Securities Corporation, the Dealer Manager, at their addresses
and telephone numbers set forth on the back cover of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the Information
Agent.
Very truly yours,
Donaldson, Lufkin & Jenrette
Securities Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE INFORMATION AGENT, THE
DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFERS OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
CONCENTRA MANAGED CARE, INC.
OFFER TO PURCHASE FOR CASH
ALL OF ITS OUTSTANDING 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
CUSIP #: 20589T-AA-1
674623-AA-1 (FORMERLY OCCUSYSTEMS, INC.)
AND
ALL OF ITS OUTSTANDING 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
CUSIP #: 20589T-AB-9
20589T-AC-7
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated July 20,
1999 (as the same may be amended or supplemented from time to time, the "Offer
to Purchase"), and the Letter of Transmittal (the "Letter of Transmittal")
relating to the offer by Concentra Managed Care, Inc. (the "Company") to
purchase (i) all of its outstanding 6% Convertible Subordinated Notes due 2001
(the "6% Notes") for a cash purchase price of $1,002.50 per $1000 principal
amount of 6% Notes, plus accrued and unpaid interest up to, but not including,
the date of payment (the "6% Notes Purchase Price") and (ii) all of its
outstanding 4.5% Convertible Subordinated Notes due 2003 (the "4.5% Notes" and,
together with the 6% Notes, the "Notes") for a cash purchase price of $1,001.25
per $1000 principal amount of 4.5% Notes, plus accrued and unpaid interest up
to, but not including, the date of payment (the "4.5% Notes Purchase Price" and,
together with the 6% Notes Purchase Price, the "Purchase Prices"). The offer to
purchase each issue of Notes on the terms and subject to the conditions set
forth in the Offer to Purchase and in the Letter of Transmittal is referred to
individually as an "Offer," and such offers with respect to both issues of Notes
are collectively referred to as the "Offers."
WE ARE THE HOLDER OF RECORD OF NOTES HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH NOTES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT
TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER NOTES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to have us tender on
your behalf any or all of the Notes held by us for your account, upon the terms
and subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal.
1
<PAGE>
Your attention is directed to the following:
1. EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY,
AUGUST 17, 1999 UNLESS EXTENDED OR TERMINATED (SUCH TIME AND DATE OR THE LATEST
TIME AND DATE TO WHICH THE RELEVANT OFFER MAY BE EXTENDED OR TERMINATED WITH
RESPECT TO EACH OF THE OFFERS, BEING REFERRED TO HEREIN AS THE "EXPIRATION
TIME"). HOLDERS OF NOTES MUST TENDER THEIR NOTES PRIOR TO THE APPLICABLE
EXPIRATION TIME TO RECEIVE THE APPLICABLE PURCHASE PRICE. TENDERS OF NOTES MAY
BE VALIDLY WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION TIME AND, UNLESS
THERETOFORE ACCEPTED FOR PAYMENT BY THE COMPANY PURSUANT TO THE RELEVANT OFFER,
MAY ALSO BE VALIDLY WITHDRAWN AT ANY TIME AFTER TUESDAY, SEPTEMBER 14, 1999.
2. The Company's obligation to accept for purchase Notes validly
tendered and not withdrawn pursuant to the relevant Offer is conditioned upon
the consummation of the Merger and certain other conditions described in the
Offer to Purchase under the headings "Principal Terms of the Offers" and
"Conditions of the Offers". IN THE EVENT THAT AN OFFER IS TERMINATED OR
OTHERWISE NOT COMPLETED, NO PURCHASE PRICE WILL BE PAID OR BECOME PAYABLE TO
HOLDERS OF NOTES WHO HAVE TENDERED THEIR NOTES IN CONNECTION WITH SUCH OFFER.
3. Consummation of the Offers may have adverse consequences to
non-tendering Holders, including that the reduced amount of outstanding Notes as
a result of the Offers may adversely affect the trading market, liquidity and
market price of the Notes.
If you wish to have us tender any or all of your Notes please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. If you authorize the tender of your Notes, all such
Notes will be tendered unless otherwise specified in your instructions. YOUR
INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION TIME.
The Offers are made solely by the Offer to Purchase and accompanying
Letter of Transmittal and do not constitute an offer to buy or the solicitation
of an offer to sell the Notes in any circumstances in which such Offer is
unlawful.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
CONCENTRA MANAGED CARE, INC.
OFFER TO PURCHASE FOR CASH
ALL OF ITS OUTSTANDING 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
AND
ALL OF ITS OUTSTANDING 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated July 20, 1999 (as the same may be amended or
supplemented from time to time, the "Offer to Purchase"), and the accompanying
Letter of Transmittal (the "Letter of Transmittal"), in connection with the
offer by Concentra Managed Care, Inc. to purchase for cash all of its
outstanding 6% Convertible Subordinated Notes due 2001 (the "6% Notes") and all
of its outstanding 4.5% Convertible Subordinated Notes due 2003 (the "4.5%
Notes" and, together with the 6% Notes, the "Notes") upon the terms and
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
This will instruct you to tender the aggregate principal amount of
Notes indicated below held by you for the account or benefit of the undersigned
(or, if no amount is indicated below, for all of the aggregate principal amount
of Notes held by you for the account of the undersigned) upon the terms and
subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal.
3
<PAGE>
SIGN HERE
Aggregate Principal Amount of
6% Notes to be Tendered
- --------------------------------- -------------------------------------
Signature(s)
-------------------------------------
Aggregate Principal Amount of _____________________________________
4.5% Notes to be Tendered Please Type or Print Name(s)
_________________________________ Dated:___________________________, 1999
-------------------------------------
-------------------------------------
Please Type or Print Address and Zip Code
-------------------------------------
Area Code and Telephone Number
-------------------------------------
Taxpayer Identification Number (i.e.,
Social Security Number or Employer
Identification Number)
4
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER NAME AND IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- The taxpayer identification number for an individual is the
individual's social security number. Social security numbers have nine digits
separated by two hyphens: i.e., 000-00-0000. The taxpayer identification number
for an entity is the entity's employer identification number. Employer
identification numbers have nine digits separated by only one hyphen: i.e.,
00-0000000. The table below will help determine the number to give the payer.
- --------------------------------------------------------------------------------
GIVE THE NAME AND TAXPAYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF
- --------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined funds,
any one of the individuals(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint funds,
either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
The adult or, if the minor is
5. Adult and minor (joint the only contributor, the
account) minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State law
8. Sole proprietorship account The owner(4)
9. A valid trust, estate or The legal entity (Do not
pension trust furnish the identifying number
of the personal representative
or trustee unless the legal
entity itself is not
designated in the account
title.)(5)
10. Corporate account The corporation
11. Association, club, religious, The organization
charitable, educational or
other tax- exempt organization
account
12. Partnership account The partnership
13. A broker or registered nominee The broker or nominee
14. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Card, or Form SS-4,
Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL broker
transactions and interest and dividend payments include the following:
|X| A corporation.
|X| A financial institution.
|X| An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual retirement
plan.
|X| The United States or any agency or instrumentality thereof.
|X| A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
|X| A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
|X| An international organization or any agency or instrumentality thereof.
|X| A dealer in securities or commodities required to register in the U.S. or
a possession of the U.S.
|X| A real estate investment trust.
|X| A common trust fund operated by a bank under section 584(a) of the Code.
|X| An entity registered at all times under the Investment Company Act of
1940.
|X| A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject
to backup withholding including the following:
|X| Payments to nonresident aliens subject to withholding under section 1441.
|X| Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one non-resident alien partner.
|X| Payments of patronage dividends not paid in money.
|X| Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding
include the following:
|X| Payments of interest on obligations issued by individuals.
|X| Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code).
|X| Payments described in Code section 6049(b) (5) to non-resident aliens.
|X| Payments on tax-free covenant bonds under section 1451 of the Code.
|X| Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. ENTER YOUR TAXPAYER IDENTIFICATION
NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF
AN OFFER TO SELL ANY OF THE NOTES (AS DEFINED BELOW). THE OFFERS (AS
DEFINED BELOW) ARE MADE SOLELY BY THE OFFER TO PURCHASE, DATED JULY 20,
1999, AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND IS NOT BEING MADE
TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF NOTES
IN ANY JURISDICTION IN WHICH THE MAKING OF AN OFFER OR THE ACCEPTANCE
THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
IN ANY JURISDICTION THE SECURITIES, BLUE SKY OR OTHER LAWS OF WHICH
REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER
SHALL BE DEEMED MADE ON BEHALF OF THE COMPANY BY THE DEALER MANAGER OR
ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF
SUCH JURISDICTION.
CONCENTRA MANAGED CARE, INC.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OF ITS OUTSTANDING 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
AND
ALL OF ITS OUTSTANDING 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
Concentra Managed Care, Inc., a Delaware corporation (the "Company"),
is offering to purchase, upon the terms and subject to the conditions set forth
in the Offer to Purchase (as amended or supplemented from time to time, the
"Offer to Purchase ") and in the accompanying Letter of Transmittal (the "Letter
of Transmittal"), (i) all of its outstanding 6% Convertible Subordinated Notes
due 2001 (the "6% Notes") for a cash purchase price of $1,002.50 per $1,000
principal amount of 6% Notes, plus accrued and unpaid interest up to, but not
including, the date of payment and (ii) all of its outstanding 4.5% Convertible
Subordinated Notes due 2003 (the "4.5% Notes" and, together with the 6% Notes,
the "Notes") for a cash purchase price of $1,001.25 per $1,000 principal amount
of 4.5% Notes, plus accrued and unpaid interest up to, but not including, the
date of payment. The offer to purchase each issue of Notes on the terms and
subject to the conditions set forth herein and in the Letter of Transmittal is
referred to individually as an "Offer," and such offers with respect to both
issues of Notes are collectively referred to as the "Offers."
Each Offer is subject to certain conditions, including, among other
things, the consummation of the Merger (as defined below), and certain other
conditions described in the Offer to Purchase . The purchase of the Notes is not
a condition to the Merger. Each Offer is independent of the other.
The Offers are being made in connection with the proposed merger (the
"Merger") of Yankee Acquisition Corp., a Delaware corporation ("Yankee") and a
wholly owned subsidiary of Welsh, Carson, Anderson & Stowe VIII, L.P., a
Delaware limited partnership with and into the Company, pursuant to the Amended
and Restated Agreement and Plan of Merger, dated as of March 24, 1999, between
Yankee and the Company.
<PAGE>
EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, AUGUST 17,
1999 UNLESS EXTENDED OR TERMINATED (SUCH TIME AND DATE OR THE LATEST TIME AND
DATE TO WHICH THE RELEVANT OFFER MAY BE EXTENDED OR TERMINATED WITH RESPECT TO
EACH OF THE OFFERS , BEING REFERRED TO AS THE "EXPIRATION TIME"). HOLDERS OF
NOTES MUST TENDER THEIR NOTES PRIOR TO THE APPLICABLE EXPIRATION TIME TO RECEIVE
THE APPLICABLE PURCHASE PRICE. TENDERS OF NOTES MAY BE VALIDLY WITHDRAWN AT ANY
TIME PRIOR TO THE EXPIRATION TIME AND, UNLESS THERETOFORE ACCEPTED FOR PAYMENT
BY THE COMPANY PURSUANT TO THE RELEVANT OFFER, MAY ALSO BE VALIDLY WITHDRAWN AT
ANY TIME AFTER TUESDAY, SEPTEMBER 14, 1999.
For purposes of each Offer, the Company will be deemed to have accepted
for purchase Notes validly tendered (and not validly withdrawn) pursuant to that
Offer (or defectively tendered Notes with respect to which the Company has
waived any defects) if, as and when the Company gives oral notice (confirmed in
writing) or written notice thereof to the United States Trust Company of New
York (the "Depositary"). Payment for Notes accepted for purchase in the Offers
will be made by the Company by promptly depositing such payment with the
Depositary, which will act as agent for the tendering holders of Notes for the
purpose of receiving the relevant purchase price and transmitting the relevant
purchase price to such holders of Notes. In all cases, payment for Notes
accepted for purchase pursuant to an Offer will be made only after timely
receipt by the Depositary of certificates for the applicable Notes (or
confirmation of book-entry transfer), a properly completed and duly executed
Letter of Transmittal related thereto (or a manually signed facsimile) or, if
applicable, an Agent's Message (as defined in the Offer to Purchase ) in lieu of
a Letter of Transmittal and any other documents required thereby. Upon the terms
and subject to the conditions of the Offers , delivery of the purchase price for
Notes accepted for purchase pursuant to the Offers will be made by the
Depositary promptly after its receipt of funds for the payment of such Notes.
Each of the Offers will expire at 5:00 p.m., New York City time, on
Tuesday, August 17, 1999, unless extended by the Company in its sole discretion
or terminated earlier. The Company expressly reserves the right to extend either
or both of the Offers on a daily basis or for such period or periods as it may
determine in its sole discretion from time to time by giving written or oral
notice to the Depositary and by making an announcement by press release to the
Dow Jones News Service or other public announcement prior to 9:00 a.m., New York
City time, on the next business day following the relevant previously scheduled
Expiration Time for such extended Offer. During any extension of an Offer, all
Notes previously tendered and not withdrawn pursuant to that Offer and not
accepted for purchase will remain subject to that Offer and may, subject to the
terms and conditions of the Offer to Purchase and the accompanying Letter of
Transmittal, be accepted for purchase by the Company.
Holders of Notes who wish to exercise their right of withdrawal with
respect to an Offer must give written notice of withdrawal delivered by mail,
hand delivery or manually signed facsimile transmission, which notice must be
timely received by the Depositary at one of its addresses set forth in the Offer
to Purchase . In order to be valid, a notice of withdrawal must (i) specify the
name of the person who deposited the Notes to be withdrawn (the "Depositor"),
the name in which the Notes are registered (or, if tendered by book-entry
transfer, the name of the participant in the Book-Entry Transfer Facility (as
defined in the Offer to Purchase ) whose name appears on a security position
listing as the owner of such Notes), if different from that of the Depositor,
(ii) specify the principal amount of Notes to be withdrawn, (iii) be signed by
the Depositor in the same manner as the original signature on the Letter of
Transmittal (including, in any case, any required signature guarantee(s)) or be
accompanied by evidence satisfactory to the Company and the Depositary that the
person withdrawing the tender has succeeded to the beneficial ownership of such
Notes and (iv) be timely received by the Depositary at one of its addresses set
forth in the Offer to Purchase . If certificates have been delivered or
otherwise identified (through confirmation of book-entry transfer of such Notes)
to the Depositary, the name of the holder of Notes and the certificate number or
numbers relating to such withdrawn Notes must also be furnished to the
Depositary as
2
<PAGE>
aforesaid prior to the physical release of the certificates for
the withdrawn Notes (or, in the case of Notes transferred by book-entry
transfer, the name and number of the account at the Book-Entry Transfer Facility
to be credited with withdrawn Notes).
The Offer to Purchase and the accompanying Letter of Transmittal will
be mailed to registered holders of Notes and furnished to brokers, dealers,
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the Company's stockholder lists, or, if applicable, who are
listed as participants in a clearing agency's security position listings for
subsequent transmittal to beneficial owners of Notes.
The information required to be disclosed by Rule 13(e)-4(d)(1) under
the Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The Offer to Purchase contains important information which should be
read before any decision is made with respect to the Offers.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and all other tender offer materials may be directed to the Information Agent as
set forth below, and copies will be furnished at the Company's expense. No fees
or commissions will be payable to brokers, dealers or other persons (other than
the Dealer Manager and the Information Agent) for soliciting tenders of Notes
pursuant to the Offers.
The Information Agent for the Offers is:
[MacKenzie Partners Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Collect)
or
CALL TOLL-FREE (800) 322-2855
The Dealer Manager for the Offers is:
Donaldson, Lufkin & Jenrette
277 Park Avenue
New York, New York 10172
CALL TOLL-FREE (800) 255-9260, EXT. 4131
July 20, 1999
3
Contact: Thomas E. Kiraly
Executive Vice President and
Chief Financial Officer
(617) 367-2163, Ext. 5101
CONCENTRA MANAGED CARE COMMENCES TENDER OFFERS
FOR ITS 6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
AND ITS 4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2003
BOSTON, Mass. (July 20, 1999) - Concentra Managed Care, Inc.
(Nasdaq/NM: CCMC) ("Concentra" or the "Company") today announced that it has
commenced tender offers to purchase all of its outstanding 6% Convertible
Subordinated Notes due 2001 for a cash purchase price of $1,002.50 per $1,000
principal amount of such notes, plus accrued and unpaid interest up to, but not
including, the date of payment and all of its outstanding 4.5% Convertible
Subordinated Notes due 2003 for a cash purchase price of $1,001.25 per $1,000
principal amount of such notes, plus accrued and unpaid interest up to, but not
including, the date of payment.
The tender offers will expire at 5:00 p.m., New York City time, on
Tuesday, August 17, 1999, unless extended.
Donaldson Lufkin & Jenrette is the Dealer Manager and MacKenzie
Partners is the Information Agent for the tender offers.
Concentra Managed Care is the leading provider and comprehensive
outsource solution for cost containment and fully integrated care management in
the occupational, auto, and group healthcare markets. Concentra offers
prospective and retrospective services to employers and insurers of all sizes,
providing pre-employment testing, loss prevention services, first report of
injury, injury care, specialist networks and specialized cost containment to the
disability and automobile injury markets. Currently, the Company operates the
nation's largest network of occupational healthcare centers, managing the
practices of approximately 334 physicians located in 188 centers in 55 markets
in 29 states. The Company has approximately 1,100 field case managers who
provide medical management and return to work services in 49 states, the
District of Columbia, and Canada. The Company also has 84 service locations that
provide specialized cost containment services including utilization management,
telephonic case management, first notice of loss reporting, and retrospective
bill review.
This news release is neither an offer to purchase nor a solicitation of
an offer to sell securities.
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