<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
(Amendment No. 3)
FORUM RETIREMENT PARTNERS, L.P.
(Name of Issuer)
FORUM GROUP, INC.
FORUM RETIREMENT, INC.
(Name of Person Filing Statement)
<TABLE>
<S> <C>
Preferred Depositary Units Representing
Preferred Limited Partners' Interests 349 851 105
(Title of Class of Securities) (CUSIP Number of Class of Securities)
</TABLE>
Dennis L. Lehman
Senior Vice President and Chief Financial Officer
Forum Group, Inc.
11320 Random Hills Road
Fairfax, Virginia 22030
(703) 277-7000
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of the Persons Filing Statement)
Copies to:
Robert A. Profusek, Esq.
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
(212) 326-3800
October 2, 1995
(Date Tender Offer First Published, Sent or Given to Security Holders)
This statement is filed in connection with a tender offer.
<PAGE> 2
This Amendment No. 3 (this "Amendment") supplements and amends the
Rule 13E-3 Transaction Statement, as previously supplemented and amended (the
"Schedule 13E-3"), relating to a tender offer by Forum Group, Inc., an Indiana
corporation (the "Purchaser"), to purchase any and all of the outstanding
preferred depositary units (the "Units") representing preferred limited
partners' interests in Forum Retirement Partners, L.P. (the "Partnership"), at
$2.83 per Unit, net to the seller in cash, on the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase dated October 2, 1995
(the "Offer to Purchase"), the Supplement dated October 16, 1995 to the Offer
to Purchase, the Supplement dated November 1, 1995 (the "November 1
Supplement") to the Offer to Purchase, and the related Letter of Transmittal.
A copy of the November 1 Supplement is filed by the Purchaser as Exhibit
(a)(11) to Amendment No. 2 to Schedule 14D-1 Tender Offer Statement which was
filed by the Purchaser with the Securities and Exchange Commission (the
"Commission") contemporaneously with this Amendment.
The cross reference sheet below is being supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location in the Schedule 14D-1
Tender Offer Statement originally filed by the Purchaser with the Commission on
October 2, 1995 (as amended, the "Schedule 14D-1"), of the information required
to be included in response to the items of Schedule 13E-3. The information in
the Schedule 14D-1, including all exhibits thereto, is hereby expressly
incorporated herein by reference and the responses to each item in this
Amendment are qualified in their entirety by the information contained in the
Schedule 14D-1.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Where located in
Item in Schedule 13E-3 Schedule 14D-1
---------------------- ------------------
<S> <C>
Item 2 Item 2
Item 3 Item 3
Item 4(a) *
Item 8(a)-(b) *
Item 8(d)-(e) *
Item 9 *
Item 10 Item 6
Item 11 Item 7
Item 12 *
Item 17(b) *
Item 17(d) *
</TABLE>
----------------------
* The information requested by this Item is not required
to be included in the Schedule 14D-1.
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<PAGE> 3
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
(a)-(d) and (g) The Schedule 13E-3 is being filed by the Purchaser
and Forum Retirement, Inc. (the "General Partner"), a Delaware corporation, a
wholly owned subsidiary of the Purchaser, and the sole general partner of the
Partnership. The information set forth in "Additional Information Concerning
the General Partner" in, and Annex A to, the November 1 Supplement is
incorporated herein by reference. In addition, pursuant to General Instruction
D to Schedule 13E-3, the information set forth in Item 3 of the Partnership's
Schedule 14D-9 Solicitation/Recommendation Statement (the "Schedule 14D-9"), a
copy of which has been filed as Exhibit (d)(11) to the Schedule 13E-3, is
incorporated herein by reference.
(e)-(f) During the last five years, neither the General Partner nor,
to its knowledge, any of its executive officers or directors (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
Item 3 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
The answer to Item 3 of Amendment No. 2 to the Schedule 14D-1 is
incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
Item 4 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
(a) The information set forth in "Effect of the Offer on Certain
Litigation" and "Certain Conditions of the Offer" in the November 1 Supplement
is incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
Item 8 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
(a)-(b) and (d)-(e) The information set forth in "Additional
Information Concerning the Background of the Offer" and "Additional Information
Concerning Determinations by the Purchaser" in the November 1 Supplement is
incorporated herein by reference. In addition, pursuant to General Instruction
D to Schedule 13E-3, the information set forth in Item 4 of Amendment No. 2 to
the Schedule 14D-9, a copy of which is filed as Exhibit (d)(13) hereto, is
incorporated herein by reference.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
Item 9 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
(a)-(c) The information set forth in "Additional Information
Concerning the Background of the Offer" and "Additional Information Concerning
Certain Determinations by the Purchaser" in the November 1 Supplement is
incorporated herein by reference. In addition, pursuant to General Instruction
D to Schedule 13E-3, the information set forth in Item 4 of Amendment No. 2 to
the Schedule 14D-9 is incorporated herein by reference.
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<PAGE> 4
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
Item 10 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
The information set forth in "Additional Information Concerning the
General Partner" in the November 1 Supplement is incorporated herein by
reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
Item 11 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
The information set forth in "Additional Information Concerning the
General Partner" in the November 1 Supplement is incorporated herein by
reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD
TO THE TRANSACTION.
Item 12 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following:
(b) The information set forth in "Additional Special Factors" in the
October 16 Supplement and in "Additional Information Concerning Certain
Determinations by the Purchaser" in the November 1 Supplement is incorporated
by reference. In addition, pursuant to General Instruction D to Schedule
13E-3, the information set forth in Item 4 of the Schedule 14D-9 and Item 4 of
Amendment No. 2 to the Schedule 14D-9 is incorporated herein by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
Item 17 of the Schedule 13E-3 is hereby supplemented and amended by
adding the following exhibits:
99.(b)(3) Opinion of Robert A. Innamorati & Co., as reissued
99.(d)(12) Supplement dated November 1, 1995 to the Offer to Purchase
dated October 2, 1995
99.(d)(13) Amendment No. 2 to Schedule 14D-9
Solicitation/Recommendation Statement dated
November 1, 1995
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<PAGE> 5
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 1, 1995
FORUM GROUP, INC.
By Troy B. Lewis
-----------------------------------
Troy B. Lewis,
Attorney-in-Fact*
*Pursuant to a Power of Attorney previously
filed with the Securities and Exchange
Commission
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<PAGE> 6
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 1, 1995
FORUM RETIREMENT, INC.
By Richard A. Huber
-----------------------------------
Richard A. Huber,
Secretary
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<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibits
---------
<S> <C>
99.(b)(3) Opinion of Robert A. Innamorati & Co., as reissued . . . . . . . . . . . . . . . .
99.(d)(12) Supplement dated November 1, 1995 to the Offer to Purchase dated
October 2, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.(d)(13) Amendment No. 2 to Schedule 14D-9 Solicitation/Recommendation Statement dated
November 1, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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<PAGE> 1
October 13, 1995
Special Committee of the Board of Directors
Forum Retirement, Inc.
8900 Keystone Crossing
Suite 200
P.O. Box 40498
Indianapolis, IN 46240
Attn : Mr. John Sexton
Mr. James Leslie
Gentlemen:
Forum Group, Inc. (the "Purchaser") has offered to purchase any and all of the
outstanding preferred depositary units (the "Units") representing preferred
limited partners' interests in Forum Retirement Partners, L.P. (the
"Partnership"), at a price of $2.83 per Unit net to the seller in cash (the
"Offer"). The Offer commenced on October 2, 1995 and is expected to be amended
no later than October 16, 1995 to reflect the foregoing price per Unit.
You have asked us whether, in our opinion, the proposed cash consideration to
be received by the holders of Units, other than the Purchaser and its
affiliates, (the "Unaffiliated Limited Partners") is fair to such
Unaffiliated Limited Partners, from a financial point of view.
In arriving at our opinion, we have reviewed the Offer to Purchase and
financial and other information that was publicly available or furnished to us
by Forum Retirement, Inc. (the "General Partner"), or its affiliates and
representatives, including certain financial projections for the Partnership
and information provided by the General Partner or its affiliates in
discussions therewith concerning the Partnership's business, operations and
future prospects. In addition, we have compared certain financial and
securities data of the Partnership with various other entities in similar
businesses whose securities are traded in public markets, reviewed other cash
tender offer transactions and conducted such other financial studies, analyses
and investigations as we deemed appropriate for purposes of this opinion.
In rendering the opinion set forth below, we have assumed and relied upon,
without independent verification: the accuracy and completeness of the
financial and other information obtained by us from public sources and that was
provided to us by the General Partner or its affiliates and representatives.
With respect to the financial projections supplied to us, we have assumed they
<PAGE> 2
Forum Retirement, Inc.
October 13, 1995
Page 2
have been reasonably prepared on the basis of the best currently available
estimates and judgments of the General Partner or its affiliates, and with
reasonable assumptions as to the future operating and financial performance of
the Partnership. We have neither made nor obtained any independent appraisal
of the assets or liabilities of the Partnership nor have we conducted any
physical inspection of the properties and facilities of the Partnership.
Our opinion is necessarily based on the status and condition of the Partnership
and economic, market, financial and other conditions as they exist on, and on
the information made available to us as of, the date of this letter. It should
be understood that, although subsequent developments may affect this opinion,
we do not have any obligation to update or revise this opinion. This opinion
is being delivered pursuant to the terms and conditions agreed to in the
engagement agreement between the General Partner and ROBERT A. INNAMORATI &
CO., INC.
Based on the foregoing and such other factors as we deem relevant, we are of
the opinion that the proposed cash consideration to be received by the
Unaffiliated Limited Partners pursuant to the Offer is fair to such
Unaffiliated Limited Partners, from a financial point of view.
Very truly yours,
ROBERT A. INNAMORATI & CO., INC.
By: /s/ Robert A. Innamorati
____________________________________
Robert A. Innamorati
President
<PAGE> 1
Supplement to
Offer to Purchase for Cash
Any and All Outstanding Preferred Depositary Units
Representing Preferred Limited Partners' Interests
in
FORUM RETIREMENT PARTNERS, L.P.
at
$2.83 Net Per Preferred Depositary Unit
by
FORUM GROUP, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 10, 1995, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF THE GENERAL PARTNER OF FORUM RETIREMENT
PARTNERS, L.P. (WITH THE DIRECTOR AFFILIATED WITH THE PURCHASER ABSTAINING),
BASED UPON THE UNANIMOUS RECOMMENDATION OF A SPECIAL COMMITTEE COMPRISED OF THE
INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS, HAS DETERMINED THAT THE OFFER IS
FAIR TO UNITHOLDERS (OTHER THAN FORUM GROUP, INC. AND ITS AFFILIATES) AND
RECOMMENDS THAT SUCH UNITHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR UNITS
PURSUANT TO THE OFFER. SEE ITEM 4 OF THE SCHEDULE 14D-9.
The Offer is not conditioned on any minimum number of Units being
tendered. The Offer is conditioned on, among other things, (i) the absence of
certain litigation, orders, or other legal matters and (ii) the absence of a
material adverse change (or any development involving a prospective material
adverse change) in the business, financial condition, results of operations, or
prospects of the Partnership. See "The Offer -- Certain Conditions of the
Offer" in the Offer to Purchase. The purchase of Units pursuant to the Offer
may result in the delisting of the Units from trading on the American Stock
Exchange and the Partnership no longer filing reports and other information
under the Securities Exchange Act of 1934, as amended, and would reduce the
number of Units that might otherwise trade publicly as well as the number of
Unitholders. Any of these effects could adversely affect the liquidity or
prices realizable in sales of the Units following the completion of the Offer.
See "Special Factors -- Certain Effects of the Offer" in the Offer to Purchase.
Procedures for tendering Units are set forth in "The Offer --
Procedures for Tendering Units" in the Offer to Purchase. Tendering
Unitholders should continue to use the Letter of Transmittal and the Notice of
Guaranteed Delivery previously delivered with the Offer to Purchase.
Unitholders who have already tendered Units using the Letter of Transmittal
need not complete another Letter of Transmittal or take any additional action
for their Units to be tendered pursuant to the Offer. Upon the acceptance for
payment of Units tendered pursuant to the Offer, each tendering Unitholder will
be deemed to have released the Purchaser, the General Partner, and certain
other persons from any claim based upon the allegations being made against the
Purchaser and the General Partner in certain pending litigation. Accordingly,
tendering Unitholders may be waiving significant rights. See "Effect of the
Offer on Certain Litigation".
Any questions or requests for assistance or additional copies of this
Supplement to Offer to Purchase, the Offer to Purchase, the previous Supplement
to Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery, and other related materials may be directed to the Information Agent
at its address and telephone numbers set forth on the back cover of this
Supplement to Offer to Purchase.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
November 1, 1995
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
<PAGE> 2
To the Holders of Preferred Depositary Units
of Forum Retirement Partners, L.P.:
INTRODUCTION
The following is certain additional information that supplements the
Offer to Purchase dated October 2, 1995 (the "Offer to Purchase"), as
previously supplemented by a supplement dated October 16, 1995 (the "October 16
Supplement"), of Forum Group, Inc. (the "Purchaser") pursuant to which the
Purchaser is offering to purchase any and all of the outstanding preferred
depositary units (the "Units") representing preferred limited partners'
interests in Forum Retirement Partners, L.P., a Delaware limited partnership
(the "Partnership"), not now beneficially owned by the Purchaser, at $2.83 per
Unit, without interest, net to the seller in cash, on the terms and subject to
the conditions set forth in the Offer to Purchase, the October 16 Supplement,
this Supplement, and the related Letter of Transmittal (which together
constitute the "Offer"). Amendment No. 2 (the "Schedule 14D-9 Amendment") to
the Partnership's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which contains additional information concerning the Offer,
is being mailed to Unitholders together with this Supplement.
Except as set forth in this Supplement, the terms and conditions set
forth in the Offer to Purchase, as previously supplemented by the October 16
Supplement, and related Letter of Transmittal remain applicable in all respects
to the Offer, and this Supplement should be read in conjunction with the Offer
to Purchase, the October 16 Supplement, and the related Letter of Transmittal.
Capitalized terms used herein without definition have the meanings ascribed to
such terms in the Offer to Purchase.
ADDITIONAL INFORMATION CONCERNING THE BACKGROUND OF THE OFFER
As discussed in the Offer to Purchase (see "Special Factors -- Certain
Determinations by the Purchaser"), no person was retained to act as an
unaffiliated representative on behalf of unaffiliated Unitholders for purposes
of negotiating the terms of the Offer and the Purchaser did not obtain any
report, opinion, or appraisal from any outside party relating to the fairness
of the Offer. However, following the public announcement of the Offer, the
Board of Directors of the General Partner (the "FRI Board") established a
Special Committee comprised of persons not affiliated with the Purchaser and
the Special Committee thereafter retained financial and legal advisors who were
also not affiliated with the Purchaser. The Special Committee, with the
assistance of its financial and legal advisors, negotiated an increase in the
offer price from $2.50 per Unit as proposed on October 2, 1995 to $2.83 per
Unit as set forth in the October 16 Supplement. For additional information
with respect to the foregoing, see "Additional Information Concerning the
Background of the Offer" in the October 16 Supplement and Item 4 of the
Schedule 14D-9, which have previously been furnished to Unitholders and filed
with the Commission.
ADDITIONAL INFORMATION CONCERNING THE GENERAL PARTNER
Annex A hereto sets forth the following information with respect to
each of the directors and officers of the General Partner: (i) name; (ii)
business address; (iii) present principal occupation or employment and the
name, principal place of business, and address of any corporation or other
organization in which such employment or occupation is conducted; (iv) material
occupations, positions, offices, or employments during the last five years,
giving the starting and ending dates of each and the name, principal business,
and address of any business corporation or other organization in which such
occupation, position, office, or employment was carried on; and (v)
citizenship. Except as disclosed in the Offer to Purchase, the October 16
Supplement, or this Supplement, neither the General Partner, nor, to the
knowledge of the Purchaser, any of the persons listed in Annex A hereto, or any
majority owned subsidiary or associate of the General Partner or the persons so
listed, beneficially owns or has a right to acquire any equity securities of
the Partnership, nor has the General Partner, or, to the knowledge of the
Purchaser, any of the persons listed in Annex A, effected any transactions in
the equity securities of the Partnership which are required to be disclosed
pursuant to the rules and regulations of the Commission. Except as disclosed
in the Offer to Purchase, the October 16 Supplement, or this Supplement,
neither the General Partner, nor, to the knowledge of the Purchaser, any of the
persons listed in Annex A hereto, has any present or proposed contract,
arrangement, understanding, or relationship with any other person with respect
to any securities of the
<PAGE> 3
Partnership, including, but not limited to, any contract, arrangement,
understanding, or relationship concerning the transfer or the voting of any
securities of the Partnership, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies.
ADDITIONAL INFORMATION CONCERNING CERTAIN DETERMINATIONS BY THE PURCHASER
For a discussion of the Purchaser's consideration of the fairness of
the Offer, see "Special Factors -- Certain Determinations by the Purchaser" in
the Offer to Purchase. For a discussion of the Special Committee's
consideration of these matters, see Item 4 of the Schedule 14D-9. Additional
information concerning the Special Committee's determination regarding the
fairness of the Offer is set forth in Item 4 of the Schedule 14D-9 Amendment
and is incorporated herein by reference.
As disclosed in "Certain Information Concerning the Purchaser" in the
Offer to Purchase, during 1994, the Purchaser acquired in privately negotiated
transactions 1,831,644 Units at a purchase price of $3.00 per Unit, or $0.17
per Unit more than the offer price. The Purchaser did not consider such
purchases to be material to its consideration of the fairness of the Offer
because, among other things, the Purchaser's assumptions relating to the value
of an investment in the Units have changed since the time such purchases were
effected, primarily as a result of the lowering of the Purchaser's assumptions
as to the number of living units that can be added pursuant to the
Partnership's expansion program and the anticipated results of operations of
certain of the Properties.
As disclosed in "Special Factors -- Certain Determinations by the
Purchaser" in the Offer to Purchase, since the recapitalization of the
Purchaser in 1993, the Purchaser has performed a number of analyses in addition
to that set forth in the Offer to Purchase with respect to the value of an
investment in the Units. Such analyses were performed for internal use only
and not with a view to dissemination to Unitholders. (For a discussion of the
valuation analyses performed by the financial advisor to the Special Committee,
see Item 4 of the Schedule 14D-9.) In addition, based upon the assumptions as
to the future prospects of the Partnership which the Purchaser believes to be
appropriate (as described in "Special Factors -- Certain Determinations by the
Purchaser" in the Offer to Purchase), none of such analyses resulted in
valuations in excess of those resulting from the valuation analyses set forth
in "Special Factors -- Certain Determinations by the Purchaser" in the Offer to
Purchase or in Item 4 of the Schedule 14D-9.
As discussed in "Interests of Certain Persons in the Offer" in the
Offer to Purchase, deferred management fees are payable to the Purchaser out of
net proceeds from sales and refinancings of the Partnership's RCs ("Capital
Transaction Proceeds") after making distributions of such Capital Transaction
Proceeds in an amount sufficient (i) to meet Limited Partners' income tax
liabilities, (ii) together with all prior distributions of Capital Transaction
Proceeds, to repay Limited Partners' capital contributions, and (iii) together
with all prior distributions of Capital Transaction Proceeds and net cash flow,
to pay a 12% cumulative, simple annual return on the Limited Partners'
respective unrecovered capital contributions. Assuming that all of the
Partnership's Properties were sold as of June 30, 1995 and that the payment of
the deferred management fees continued to be subordinated to distributions of
the resulting proceeds, a Unitholder who purchased his, her, or its Units at
$12.75 in the initial public offering of the Units would be entitled to receive
approximately $21.15 per Unit (plus amounts required to be distributed in
respect of income tax liabilities) before any proceeds from such sale would be
payable to the Purchaser in respect of deferred management fees. The foregoing
does not purport to reflect an estimate of the amount that would actually be
realized by Unitholders in the event of an actual sale of the Properties. The
Purchaser does not believe that the net proceeds from such a sale would be
sufficient to result in a distribution per Unit in an amount in excess of the
per Unit value range set forth in "Special Factors -- Certain Determinations by
the Purchaser" in the Offer to Purchase. Accordingly, the Purchaser did not
consider the right of Unitholders to receive proceeds from sales of the
Properties prior to the payment of the deferred management fees to be material
to its consideration of the fairness of the Offer.
EFFECT OF THE OFFER ON CERTAIN LITIGATION
As disclosed in "Special Factors -- Certain Litigation against the
Purchaser and the General Partner" in the Offer to Purchase, the Purchaser and
the General Partner are parties to certain litigation (the "Pending
Litigation") in which Plaintiff has alleged, among other things, breach of the
Partnership Agreement, breach of
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<PAGE> 4
fiduciary duty, insider trading and oppression of minority Unitholders, and
civil conspiracy. More specifically, Plaintiff has alleged, among other
things, that (i) the FRI Board is not comprised of a majority of Independent
Directors as required by the Partnership Agreement, (ii) the allegedly improper
composition of the FRI Board is a consequence of actions by the Purchaser,
(iii) the FRI Board has approved and/or acquiesced in 8% management fees being
charged by the Purchaser under the Management Agreement, whereas Plaintiff
alleges that the "industry standard" for such fees is 4%, thereby resulting in
an "overcharge" to the Partnership estimated by Plaintiff at $1.8 million per
annum, beginning in 1994, and (iv) as a consequence of the allegedly improper
composition of the FRI Board, the Purchaser and the General Partner breached
the Partnership Agreement and failed to discharge fiduciary duties. Upon the
acceptance for payment by the Purchaser of the Units tendered pursuant to the
Offer, each tendering Unitholder will transfer to the Purchaser all of its
right, title, and interest in and to the tendered Units. Accordingly,
tendering Unitholders will not participate in any future benefit that might
accrue to the holder of the tendered Units as a result of any recovery by the
Partnership in connection with any derivative action brought by Plaintiff or
any other Unitholder on behalf of the Partnership, whether in connection with
the Pending Litigation or otherwise. In addition, upon the acceptance for
payment by the Purchaser of Units tendered pursuant to the Offer, each
tendering Unitholder will be deemed to have released the Purchaser, the General
Partner, and their respective stockholders, affiliates, directors, officers,
employees, agents, and representatives from any claim, cause of action, or
liability based upon the allegations made in the Pending Litigation, as
described above, or the facts underlying such allegations. The release set
forth in the Letter of Transmittal previously delivered with the Offer to
Purchase is hereby deemed to be modified so as to be limited to the subject
matter of the Pending Litigation as set forth in the immediately preceding
sentence. See "The Offer -- Release of Claims" in the Offer to Purchase. The
foregoing release does not include a release of any claims that tendering
Unitholders might have under federal securities laws. The Purchaser, based on
the advice and opinion of its counsel, believes that the release deemed to be
given by tendering Unitholders upon acceptance for payment by the Purchaser of
Units tendered pursuant to the Offer will be enforceable.
CERTAIN CONDITIONS TO THE OFFER
In "The Offer -- Certain Conditions to the Offer" in the Offer to
Purchase, the Purchaser reserved the right, among other things, to terminate
the Offer if in the "sole discretion" of the Purchaser certain events occurred.
The Purchaser hereby amends the Offer to modify that standard to the
Purchaser's "reasonable discretion."
CERTAIN OTHER MATTERS RELEVANT TO THE OFFER
The Purchaser has filed with the Commission a Tender Offer Statement
on Schedule 14D-1 and has filed with the Commission a Transaction Statement on
Schedule 13E-3, together with exhibits in each case, pursuant to Rules 14d-3
and 13e-3, respectively, under the Exchange Act, furnishing certain additional
information with respect to the Offer. Such Statements and amendments thereto,
including exhibits, may be examined and copies may be obtained at the places
and in a manner set forth under "Certain Information Concerning the
Partnership" in the Offer to Purchase (except they will not be available in the
regional offices of the Commission).
FORUM GROUP, INC.
November 1, 1995
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<PAGE> 5
ANNEX A
CERTAIN INFORMATION WITH RESPECT TO THE
DIRECTORS AND OFFICERS OF THE GENERAL PARTNER
Certain information with respect to the directors and officers of the
General Partner is set forth below. Each of the directors and officers of the
General Partner is a United States citizen.
DIRECTORS
James C. Leslie has been Executive Vice President -- Financial
Services of The Staubach Company, a commercial real estate services company,
since 1992. Theretofore, Mr. Leslie served in other capacities with The
Staubach Company. The business address of The Staubach Company, which is also
Mr. Leslie's business address, is 6750 LBJ Freeway, Suite 1100, Dallas, Texas
75240.
Donald J. McNamara has been the Chairman and Co-Chief Executive
Officer of The Hampstead Group, L.L.C. ("Hampstead"), a privately held
investment company, since 1992. Theretofore, Mr. McNamara served as President,
Chairman, and Chief Executive Officer of Hampstead. The principal business
address of Hampstead, which is also Mr. McNamara's business address, is 4200
Texas Commerce Tower West, 2001 Ross Avenue, Dallas, Texas 75201. See also
Annex D to the Offer to Purchase.
Mr. McNamara has been the President and Chairman of the Board of the
General Partner since 1993.
John F. Sexton has been Chairman of Evans - McKinsey & Company, a
financial consulting company, since 1993. Theretofore, Mr. Sexton was Senior
Vice President of Finance of Lomas Financial Corporation, a financial services
company. The business address of Evans-McKinsey & Company, which is also Mr.
Sexton's business address, is 8214 Westchester, Suite 500, Dallas, Texas
75225.
OFFICERS
Richard A. Huber is the Secretary of the General Partner and is the
only officer of the General Partner other than Mr. McNamara. Mr. Huber has
been Vice President - Operations Finance of the Purchaser since 1993.
Theretofore, Mr. Huber was Director-Operations Accounting and Analysis, Senior
Living Services Division of Marriott Corporation, a company which owns and
operates senior living facilities. The business address of the Purchaser,
which is also Mr. Huber's business address, is 11320 Random Hills Road, Suite
400, Fairfax, Virginia 22030. See also Annex C to the Offer to Purchase.
A-1
<PAGE> 6
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and Depositary Receipts for Units and any other required documents
should be sent by each Unitholder or his broker, dealer, commercial bank, trust
company, or nominee to the Depositary at the address set forth below:
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail, Hand or Overnight
Courier:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
By Facsimile Transmission:
(718) 234-5001
For Information or Confirmation by Telephone:
(718) 921-8200
Any questions or requests for assistance or additional copies of this
Supplement to Offer to Purchase, the Offer to Purchase, the previous Supplement
to Offer to Purchase, the Letter of Transmittal, and the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
location listed below. You may also contact your broker, dealer, commercial
bank, or trust company for assistance concerning this Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll Free (800) 322-2885
<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
AMENDMENT NO.2 TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d) of the Securities Exchange Act of 1934
-----------------
FORUM RETIREMENT PARTNERS, L.P.
(Name of Subject Company)
FORUM RETIREMENT, INC.
FORUM RETIREMENT PARTNERS, L.P.
(Name of Persons Filing Statement)
PREFERRED DEPOSITARY UNITS REPRESENTING
PREFERRED LIMITED PARTNERS' INTERESTS
(Title of Class of Securities)
349 851 105
(CUSIP Number of Class of Securities)
RICHARD A. HUBER
SECRETARY
FORUM RETIREMENT, INC.
11320 RANDOM HILLS ROAD
SUITE 400
FAIRFAX, VIRGINIA 22030
(703) 277-7000
(Name, address and telephone number of person authorized to receive notice
and communications on behalf of person filing statement)
With a copy to:
Jeffery B. Floyd, Esq.
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, Texas 77002
(713) 758-2222
================================================================================
<PAGE> 2
AMENDMENT NO. 2 TO SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9
This Amendment No. 2 to Solicitation/Recommendation Statement on
Schedule 14D-9 (this "Amendment") is an amendment of the
Solicitation/Recommendation Statement on Schedule 14D-9 filed October 16, 1995,
as previously amended by Amendment No.1 filed October 17, 1995 (as amended by
Amendment No.1, the "Schedule 14D-9"), by Forum Retirement Partners, L.P., a
Delaware limited partnership (the "Partnership"), and Forum Retirement, Inc.,
the sole general partner of the Partnership and a Delaware corporation (the
"General Partner"), relating to the tender offer made by Forum Group, Inc.,
an Indiana corporation ("Forum Group"), to purchase any and all of the issued
and outstanding Units not beneficially owned by it. All capitalized terms used
in this Amendment and not defined herein have the meanings set forth in the
Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4(b) of the Schedule 14D-9 is hereby amended and supplemented by
adding the following information with respect to the reasons for the
recommendation:
In addition to the other matters described in the Schedule 14D-9, in
evaluating the Offer, the Special Committee considered the fact that the Offer
of $2.83 exceeds the net book value per Unit of the Partnership of
approximately $2.54 as of June 30, 1995. The Special Committee also
considered the fact that the Offer was not conditioned on acceptance of the
Offer by a majority of the Unitholders to whom it was directed and determined
that the lack of such condition permitted each Unitholder to make its own
decision regarding whether to tender Units pursuant to the Offer. The Special
Committee did not consider liquidation value to be material to its
determination because, among other factors, the prior decision by the General
Partner's Board to expand certain of the Partnership's Properties and to apply
the Partnership's available cash flow to such expansion, Forum Group's stated
intention to make capital available to the Partnership to accelerate the
expansion program if it significantly increases its equity ownership in the
Partnership through the Offer, Forum Group's contractual right of first refusal
on the Partnership's Properties, the fact that in a liquidation the deferred
management fees of $15,780,000 would become due and payable, and the fact that
the Partnership could not be liquidated without the approval of Forum Group
pursuant to the terms of the Partnership Agreement.
The Special Committee approved the conclusion and analyses of RAI&Co.;
however, the Special Committee did not adopt the opinion of RAI&Co as the
exclusive basis for its determination as to the fairness of the Offer. Rather,
the Special Committee included RAI&Co's opinion in the total mix of information
regarding the Offer that was available to, and evaluated by, it. The Special
Committee believes that RAI&Co's analyses support the Special Committee's
determination that the Offer is fair to the Unitholders (other than Forum Group
and its affiliates), because, among other things, the $2.83 per Unit cash price
is in the upper half of the range of the various per Unit ranges resulting from
the analyses by RAI&Co. See "Item 4. The Solicitation or Recommendation --
Opinion of Financial Advisor" in the Schedule 14D-9.
A decision as to the fairness of a transaction takes into account
numerous factors, including quantifiable per Unit values resulting from various
financial analyses. The various financial analyses performed by RAI&Co in
connection with its presentation and the rendering of its fairness opinion to
the Special Committee resulted in a range of possible per Unit valuations. As
set forth under the caption "Item 4. The Solicitation or Recommendation --
Reasons for the Recommendation" in the Schedule 14D-9, the Special Committee
considered, among other things, such valuation ranges before determining to
recommend the Offer at $2.83 per Unit. Such price per Unit valuation is above
the mid-point of each of such ranges. The Special Committee believes that the
Offer is fair, notwithstanding the fact that the highest end of the various
valuation ranges considered by it exceeds the $2.83 per Unit price in the
Offer.
In making its determination and recommendation regarding the fairness
of the Offer, the members of the Special Committee considered various factors,
including their knowledge of the business, results of operations, properties,
financial condition and prospects of the Partnership, including, without
limitation, the economic limitations likely to be imposed on the Partnership as
a result of a possible change in tax status beginning in 1998. The Special
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<PAGE> 3
Committee member's knowledge of the business, results of operations, properties
and financial condition included that gained from the meeting of the Special
Committee with the representatives of the management of Forum Group on October
5, 1995, and their own experience from serving on the Board of Directors of the
General Partner during the preceding two years and in that role overseeing the
management of the affairs of the Partnership. With regard to the prospects of
the Partnership, the members of the Special Committee reviewed and evaluated
the ten year financial projections summarized under the caption "Item 8.
Additional Information -- Certain Financial Projections" in the Schedule
14D-9. The Special Committee also took their knowledge into account in
considering and analyzing the other factors set forth under the caption "Item
4. The Solicitation or Recommendation -- Reasons for the Recommendation" in the
Schedule 14D-9.
RAI&Co has reissued its opinion dated October 13, 1995, to replace the
paragraph of the opinion that stated, "This opinion is for the General
Partner's Special Committee and its Board of Directors and is not to be quoted
or referred to in whole or in part in any written document, nor shall this
letter be delivered to or relied upon by any other person or used for any other
purpose, except as provided and upon the terms and conditions agreed to in the
engagement agreement between the General Partner and ROBERT A. INNAMORATI &
CO., INC." with the following sentence:
"This opinion is being delivered pursuant to the terms and conditions
agreed to in the engagement agreement between the General Partner and
ROBERT A. INNAMORATI & CO., INC."
In reissuing its opinion, RAI&Co did not supplement or update its work or
analyses performed and summarized under "Item 4. The Solicitation or
Recommendation -- Opinion of Financial Advisor" in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
1. - Offer to Purchase (incorporated by reference to Exhibit
(a)(1) to Forum Group's Schedule 14D-1 dated October 2,
1995).
2. - Supplement to Offer to Purchase dated October 16, 1995
(incorporated by reference to Exhibit (a)(9) to Forum
Group's Amendment No. 1 to Schedule 14D-1 dated October 16,
1995).
3. - Letter of Transmittal (incorporated by reference to Exhibit
(a)(2) to Forum Group's Schedule 14D-1 dated October 2,
1995).
4. - Letter to Unitholders dated October 16, 1995.
5. - Press release dated October 16, 1995 (incorporated by
reference to Exhibit (a)(10) to Forum Group's Amendment No.
1 to Schedule 14D-1 dated October 16, 1995).
6. - Fairness opinion of Robert A. Innamorati & Co. dated
October 13, 1995 (attached as Annex A hereto).
7. - Form of Indemnification Agreement between Forum Group and
the directors and officers of the General Partner.
8. - Form of Indemnification Agreement between Forum Retirement,
Inc .and its directors.
9. - Amended and Restated Agreement of Limited Partnership,
dated as of December 29, 1986, of the Partnership, as
amended (incorporated by reference to Exhibit 4(1) to the
Partnership's Registration Statement on Form S-2
(Registration No. 33-71498), dated November 10, 1993 (the
"Form S-2")).
10. - Depositary Agreement, dated as of December 29, 1986, by and
among the Partnership, Forum Retirement, Inc., the general
partner of the Partnership, as general partner and
attorney-in-fact of
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<PAGE> 4
the limited partners, Manufacturers Hanover Trust Company
(which subsequently assigned its interests thereunder to
American Stock Transfer & Trust Company) and all holders
from time to time of depositary receipts (incorporated by
reference to Exhibit 10(6) to the Form S-2).
11. - Recapitalization Agreement, dated as of October 6, 1994, by
and between Forum Group and the Partnership (incorporated
by reference to Exhibit 10(1) to the Partnership's Current
Report on Form 8-K dated October 12, 1993).
12. - Letter Agreement, dated December 14, 1993, by and among
Forum Group, Forum A/H, Inc. and the Partnership
(incorporated by reference to Exhibit 2(3) of Amendment No.
1 to the Form S-2, dated December 21, 1993).
13. - Management Agreement, dated as of December 29, 1986 (the
"Management Agreement"), by and among the Partnership,
Forum Retirement Operations, L.P. ("Operations"), Forum
Health Partners 1-A, L.P., Foulk Manor Partners, L.P., and
Forum Group (incorporated by reference to Exhibit 10(1) to
the Form S-2).
14. - First Amendment to the Management Agreement, dated as of
September 20, 1986 (incorporated by reference to Exhibit
10(2) to the Form S-2).
15. - Second Amendment to the Management Agreement, dated as of
September 20, 1989 (incorporated by reference to Exhibit
10(3) to the Form S-2).
16. - Third Amendment to the Management Agreement, dated as of
May 27, 1992 (incorporated by reference to Exhibit 10(4) to
the Form S-2).
17. - Fourth Amendment to the Management Agreement, dated as of
November 9, 1993 (incorporated by reference to Exhibit
10(5) to the Form S-2).
18. - Option Agreement, dated as of December 29, 1986, by and
among Forum Group, Inc., the Partnership, and Operations
(incorporated by reference to Exhibit 2(1) to the Form
S-2).
19. - Presentation to the Special Committee of the Board of
Directors of the General Partner of the Partnership
delivered by Robert A. Innamorati & Co. on October 13,
1995.
* 20. - Fairness opinion of Robert A. Innamorati & Co. dated
October 13, 1995, reissued.
21. - Supplement to Offer to Purchase dated November 1, 1995
(incorporated by reference to Exhibit (d)(12) to Forum
Group's Amendment NO. 2 to Schedule 14D-9 dated November 1,
1995).
- ------------------
* Filed herewith
-4-
<PAGE> 5
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 1, 1995
FORUM RETIREMENT PARTNERS, L.P.
By: Forum Retirement, Inc.
its General Partner
By: /S/ RICHARD A. HUBER
----------------------
Richard A. Huber
Secretary
FORUM RETIREMENT, INC.
By: /S/ RICHARD A. HUBER
----------------------
Richard A. Huber
Secretary
-5-
