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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
EMCARE HOLDINGS INC.
(Name of Subject Company)
EHI ACQUISITION CORP.
LAIDLAW INC.
(Bidders)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
290820 10 9
(Cusip Number of Class of Securities)
------------------------
IVAN R. CAIRNS
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
LAIDLAW INC.
3221 NORTH SERVICE ROAD
BURLINGTON, ONTARIO L7R 3Y8
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
------------------------
COPY TO:
STEPHEN J. DRAGICH
SCHIFF HARDIN & WAITE
7200 Sears Tower
Chicago, Illinois
(312) 258-5692
------------------------
CALCULATION OF FILING FEE
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Transaction Valuation*: $366,558,241.50 Amount of Filing Fee**: $73,311.65
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* For purposes of calculating the fee only. This amount assumes the purchase
of 9,583,222 shares of common stock, par value $.01 per share (the
"Shares"), of the subject company for $38.00 cash per Share, based on the
number of Shares represented by the subject company as outstanding as of
July 31, 1997, and the number of Shares issuable upon exercise of all
outstanding options under the subject company's stock option plans.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d)
under the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the aggregate of the cash offered by the bidders.
/ / 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.
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Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
</TABLE>
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14D-1
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<C> <S>
CUSIP No. 290820 10 9 Page 2
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
EHI ACQUISITION CORP.
2. Check the Appropriate Box if a Member of a Group
(a) /X/
(b) / /
3. SEC Use Only
4. Sources of Funds
WC, AF
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f)
/ /
6. Citizenship or Place of Organization
DELAWARE
7. Aggregate Amount Beneficially Owned by Each Reporting Person
0
8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares
/ /
9. Percent of Class Represented by Amount in Row 7
0%
10. Type of Reporting Person
CO
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2
<PAGE>
14D-1
<TABLE>
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CUSIP No. 290820 10 9 Page 3
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
LAIDLAW INC.
2. Check the Appropriate Box if a Member of a Group
(a) /X/
(b) / /
3. SEC Use Only
4. Sources of Funds
WC, OO
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f)
/X/
6. Citizenship or Place of Organization
CANADA
7. Aggregate Amount Beneficially Owned by Each Reporting Person
0
8. Check if the Aggregate Amount in Row 7 Excludes Certain Shares
/ /
9. Percent of Class Represented by Amount in Row 7
0%
10. Type of Reporting Person
CO
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3
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SCHEDULE 14D-1
This Tender Offer Statement on Schedule 14D-1 relates to the offer by EHI
Acquisition Corp. (the "Purchaser"), a Delaware corporation and an indirect
wholly-owned subsidiary of Laidlaw Inc., a Canadian corporation ("Laidlaw"), to
purchase all of the outstanding shares of common stock, par value $.01 per share
(the "Shares"), of EmCare Holdings Inc. at a purchase price of $38.00 per Share,
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated August 5, 1997 and in
the related Letter of Transmittal (which, together with any supplements or
amendments, collectively constitute the "Offer"), copies of which are attached
as Exhibits (a)(1) and (a)(2) hereto, respectively. The item numbers and
responses thereto below are in accordance with the requirements of Schedule
14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is EmCare Holdings Inc., a Delaware
corporation (the "Company"). The address of the Company's principal executive
offices is 1717 Main Street, Suite 5200, Dallas, Texas 75201. The address of the
Purchaser's principal executive office is 669 Airport Freeway, Suite 400, Hurst,
Texas 76053.
(b) The class of equity securities to which this Schedule 14D-1 relates is
common stock, par value $.01 per share, of the Company. The information set
forth in the Offer to Purchase under "Introduction" is incorporated herein by
reference.
(c) The information set forth in the Offer to Purchase under "Introduction"
and in Section 6 ("Price Range of Shares; Dividends") is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by the Purchaser and Laidlaw.
The information set forth in the Offer to Purchase under "Introduction," in
Section 8 ("Certain Information Concerning the Purchaser and Laidlaw") and in
Schedule I to the Offer to Purchase is incorporated herein by reference.
(e)-(f) During the last five years, neither the Purchaser, Laidlaw nor, to
the best of their knowledge, any of the persons listed in Schedule I to the
Offer to Purchase (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 further violations of or prohibiting activities subject to
federal or state securities laws or finding any violation with respect to such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Offer to Purchase under
"Introduction," in Section 10 ("Background of the Offer; Contacts with the
Company") and in Section 11 ("Purpose of the Offer; Merger Agreement; Plans for
the Company") is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in the Offer to Purchase in Section 9
("Source and Amount of Funds") is incorporated herein by reference.
(c) Not applicable.
4
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(c) The information set forth in the Offer to Purchase under
"Introduction," in Section 10 ("Background of the Offer; Contacts with the
Company") and in Section 11 ("Purpose of the Offer; Merger Agreement; Plans for
the Company") is incorporated herein by reference.
(d) The information set forth in the Offer to Purchase in Section 10
("Background of the Offer; Contacts with the Company") and in Section 11
("Purpose of the Offer; Merger Agreement; Plans for the Company") is
incorporated herein by reference.
(e)-(g) The information set forth in the Offer to Purchase in Section 11
("Purpose of the Offer; Merger Agreement; Plans for the Company") and in Section
13 ("Effect of the Offer on the Market for the Shares, Nasdaq National Market
Listing and Exchange Act Registration") is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Offer to Purchase under "Introduction,"
in Section 8 ("Certain Information Concerning the Purchaser and Laidlaw"), in
Section 10 ("Background of the Offer; Contacts with the Company") and in Section
11 ("Purpose of the Offer; Merger Agreement; Plans for the Company") is
incorporated herein by reference.
(b) The information set forth in the Offer to Purchase in Section 10
("Background of the Offer; Contacts with the Company") is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Offer to Purchase under "Introduction," in
Section 8 ("Certain Information Concerning the Purchaser and Laidlaw"), in
Section 9 ("Source and Amount of Funds"), in Section 10 ("Background of the
Offer; Contacts with the Company") and in Section 11 ("Purpose of the Offer;
Merger Agreement; Plans for the Company") is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "Introduction" and
in Section 16 ("Fees and Expenses") is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in the Offer to Purchase in Section 8 ("Certain
Information Concerning the Purchaser and Laidlaw") is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Purchase in Section 11
("Purpose of the Offer; Merger Agreement; Plans for the Company") is
incorporated herein by reference.
(b)-(e) The information set forth in the Offer to Purchase under
"Introduction," in Section 13 ("Effect of the Offer on the Market for the
Shares, Nasdaq National Market Listing and Exchange Act Registration") and in
Section 15 ("Certain Legal Matters and Regulatory Approvals") is incorporated
herein by reference.
(f) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are filed as Exhibits (a)(1) and (a)(2)
hereto, respectively, is incorporated herein by reference in its entirety.
5
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated August 5, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Information Agent to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(5) Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of summary advertisement, dated August 5, 1997.
(a)(8) Text of joint press release issued by Laidlaw and the Company on July
30, 1997.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of July 29, 1997, by and among
the Company, the Purchaser and Laidlaw.
(c)(2) Stock Purchase Agreement, dated as of July 29, 1997, by and among
Laidlaw, Leonard M. Riggs, Jr., M.D. and William F. Miller.
(c)(3) Agreement, dated as of July 29, 1997, by and between Purchaser,
Leonard M. Riggs, Jr., M.D. and William F. Miller.
(c)(4) Employment Agreement, dated as of July 29, 1997, by and between the
Company and Leonard M. Riggs, Jr., M.D.
(c)(5) Employment Agreement, dated as of July 29, 1997, by and between the
Company and William F. Miller.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
6
<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: August 5, 1997 EHI ACQUISITION CORP.
By: /s/ IVAN R. CAIRNS
-------------------------------------------
Its: SENIOR VICE PRESIDENT, GENERAL COUNSEL AND
SECRETARY
-------------------------------------------
LAIDLAW INC.
By: /s/ IVAN R. CAIRNS
-------------------------------------------
Its: SENIOR VICE PRESIDENT AND GENERAL COUNSEL
-------------------------------------------
7
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- -------- --------------------------------------------------------------------
(a)(1) Offer to Purchase, dated August 5, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(5) Letter to clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of summary advertisement, dated August 5, 1997.
(a)(8) Text of joint press release issued by Laidlaw and the Company on
July 30, 1997.
(c)(1) Agreement and Plan of Merger, dated as of July 29, 1997, by and
among the Company, the Purchaser and Laidlaw.
(c)(2) Stock Purchase Agreement, dated as of July 29, 1997, by and among
Laidlaw, Leonard M. Riggs, Jr., M.D. and William F. Miller.
(c)(3) Agreement, dated as of July 29, 1997, by and among Laidlaw,
Purchaser, Leonard M. Riggs, Jr., M.D. and William F. Miller.
(c)(4) Employment Agreement, dated as of July 29, 1997, by and between the
Company and Leonard M. Riggs, Jr., M.D.
(c)(5) Employment Agreement, dated as of July 29, 1997, by and between the
Company and William F. Miller.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
AT
$38.00 NET PER SHARE
BY
EHI ACQUISITION CORP.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
LAIDLAW INC.
---------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON SEPTEMBER 3, 1997, UNLESS THE
OFFER IS EXTENDED.
-----------------
THE BOARD OF DIRECTORS OF EMCARE HOLDINGS INC. (THE "COMPANY") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE OFFER DESCRIBED
HEREIN IS IN THE BEST INTEREST OF THE COMPANY'S STOCKHOLDERS AND
RECOMMENDS THAT ALL STOCKHOLDERS TENDER THEIR SHARES.
-------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF SHARES
REPRESENTING AT LEAST FIFTY-ONE PERCENT OF THE OUTSTANDING SHARES OF THE
COMPANY, ASSUMING CERTAIN EXERCISES (THE "MINIMUM CONDITION"). THE OFFER
IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 14.
-------------------
THE OFFER IS NOT CONDITIONED UPON LAIDLAW OR THE PURCHASER OBTAINING FINANCING.
-------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES SHOULD EITHER (I) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL (OR A
FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF
TRANSMITTAL AND MAIL OR DELIVER THE LETTER OF TRANSMITTAL (OR SUCH FACSIMILE)
TOGETHER WITH THE CERTIFICATE(S) EVIDENCING THE TENDERED SHARES AND ANY OTHER
REQUIRED DOCUMENTS TO THE DEPOSITARY, OR TENDER SUCH SHARES PURSUANT TO THE
PROCEDURES FOR BOOK-ENTRY TRANSFER SET FORTH IN SECTION 3; OR (II) REQUEST SUCH
STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO
EFFECT THE TRANSACTION FOR SUCH STOCKHOLDER. A STOCKHOLDER WHOSE SHARES 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 SUCH STOCKHOLDER DESIRES TO TENDER SHARES SO REGISTERED.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATES EVIDENCING
SUCH SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY WITH THE
PROCEDURES FOR BOOK-ENTRY TRANSFER DESCRIBED IN THIS OFFER TO PURCHASE ON A
TIMELY BASIS, MAY TENDER SUCH SHARES BY FOLLOWING THE PROCEDURES FOR GUARANTEED
DELIVERY SET FORTH IN SECTION 3.
QUESTIONS AND REQUESTS FOR ASSISTANCE, OR FOR ADDITIONAL COPIES OF THIS
OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL OR OTHER OFFER MATERIALS, MAY BE
DIRECTED TO THE INFORMATION AGENT OR TO MORGAN STANLEY & CO. INCORPORATED (THE
"DEALER MANAGER") AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE NUMBERS SET FORTH
ON THE BACK COVER OF THIS OFFER TO PURCHASE. STOCKHOLDERS MAY ALSO CONTACT
BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES FOR ASSISTANCE CONCERNING
THE OFFER.
-------------------
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY DEAN WITTER
AUGUST 5, 1997
<PAGE>
TABLE OF CONTENTS
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PAGE
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INTRODUCTION............................................................................................... 1
THE OFFER.................................................................................................. 2
Section 1. Terms of the Offer; Expiration Data............................................................. 2
Section 2. Acceptance for Payment and Payment for Shares................................................... 4
Section 3. Procedure for Tendering Shares.................................................................. 6
Section 4. Withdrawal Rights............................................................................... 9
Section 5. Certain U.S. Federal Income Tax Matters......................................................... 9
Section 6. Price Range of Shares; Dividends................................................................ 10
Section 7. Certain Information Concerning the Company...................................................... 11
Section 8. Certain Information Concerning the Purchaser and Laidlaw........................................ 12
Section 9. Source and Amount of Funds...................................................................... 15
Section 10. Background of the Offer; Contacts with the Company............................................. 15
Section 11. Purpose of the Offer; Merger Agreement; Plans for the Company.................................. 17
Section 12. Dividends and Distributions.................................................................... 25
Section 13. Effect of the Offer on the Market for the Shares, Nasdaq National Market Listing and Exchange
Act Registration............................................................................... 26
Section 14. Certain Conditions of the Offer................................................................ 27
Section 15. Certain Legal Matters and Regulatory Approvals................................................. 28
Section 16. Fees and Expenses.............................................................................. 31
Section 17. Miscellaneous.................................................................................. 31
Schedule I-- Information Concerning the Directors and Executive Officers of Laidlaw and the Purchaser...... S-1
</TABLE>
<PAGE>
TO: THE HOLDERS OF COMMON STOCK OF
EMCARE HOLDINGS INC.:
INTRODUCTION
EHI Acquisition Corp. (the "Purchaser"), a Delaware corporation and an
indirect wholly-owned subsidiary of Laidlaw Inc., a Delaware corporation
("Laidlaw"), hereby offers to purchase all of the outstanding shares of common
stock, par value $.01 per share (the "Shares"), of EmCare Holdings Inc., a
Delaware corporation (the "Company"), at a purchase price of $38.00 per Share,
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer and sale of Shares pursuant to
the Offer. The Purchaser will pay all fees and expenses of ChaseMellon
Shareholder Services, as Depositary (the "Depositary"), Morrow & Co., Inc., as
Information Agent (the "Information Agent"), and Morgan Stanley & Co.
Incorporated, as Dealer Manager (the "Dealer Manager"), incurred in connection
with the Offer. See Section 16.
The Offer is conditioned upon, among other things, there having been validly
tendered and not properly withdrawn prior to the expiration of the Offer a
number of Shares which constitutes at least fifty-one percent (51%) of the
Company's outstanding voting power (assuming the exercise of all outstanding
options and rights to purchase shares of Common Stock) (the "Minimum
Condition"). The Company has informed the Purchaser that as of July 31, 1997,
there were 8,279,046 Shares issued and outstanding, 1,304,176 shares of Common
Stock reserved for issuance under the Company's stock option plans and 37,570
shares of Common Stock reserved for issuance in connection with purchase price
payments (including deferred purchase price payments) in conjunction with
acquisitions, and that, except as otherwise disclosed in the Merger Agreement,
no other stock of the Company is outstanding or committed to be issued. Based on
this information, and assuming all holders of outstanding options to purchase
shares of Common Stock will have entered into agreements to cancel such options
effective on the date Purchaser purchases the Shares pursuant to the Offer, and
that holders of the right to receive shares in connection with purchase price
payments have agreed to accept cash in lieu of shares, the Purchaser believes
that the Minimum Condition will be satisfied if the Purchaser acquires at least
4,222,314 Shares in the Offer. Laidlaw does not directly or indirectly hold any
Shares. Certain other conditions to the Offer are described in Section 14. The
Minimum Condition cannot be waived without the consent of the Company.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of July 29, 1997 (the "Merger Agreement"), by and among the Company, Laidlaw
and the Purchaser. The Merger Agreement provides, among other things, that as
soon as practicable after the consummation of the Offer and satisfaction or, to
the extent permitted under the Merger Agreement, waiver of all conditions to the
Merger, the Purchaser will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will continue as the surviving
corporation of the Merger and as an indirect wholly-owned subsidiary of Laidlaw.
Thereupon, each outstanding Share (other than treasury Shares, Shares held by
Laidlaw, the Purchaser or any other subsidiary of Laidlaw, and Shares held by
stockholders, if any, who properly exercise appraisal rights) will be converted
into and represent the right to receive $38.00 in cash, or any higher price that
may be paid per Share in the Offer, without interest. See Section 11.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS" OR THE
"BOARD") HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND HAS DETERMINED
THAT THE TERMS OF THE OFFER AND THE MERGER (INCLUDING THE OFFER PRICE
1
<PAGE>
OF $38.00 PER SHARE IN CASH) IS IN THE BEST INTEREST OF THE COMPANY'S
STOCKHOLDERS, AND RECOMMENDS THAT ALL STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
The Company has advised Laidlaw that Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), financial advisor to the Company, has delivered to the
Board of Directors a written opinion dated July 28, 1997 to the effect that, as
of such date and based upon and subject to certain matters stated in such
opinion, the $38.00 per Share cash consideration to be received by the holders
of Shares (other than Laidlaw and its affiliates) pursuant to the Offer and the
Merger, taken together, was fair to such holders from a financial point of view.
A copy of the written opinion of DLJ dated July 28, 1997, which sets forth the
assumptions made, factors considered and limitations on the review undertaken,
is contained in the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders concurrently
herewith and should be carefully read in its entirety.
The Merger Agreement provides that, commencing upon the purchase of Shares
pursuant to the Offer, and from time to time thereafter, Purchaser shall be
entitled to designate on the Board of Directors up to such number of directors,
rounded up to the next whole number, as will give Laidlaw representation on the
Board equal to the product of (i) the total number of directors on the Board and
(ii) the percentage that the aggregate number of Shares directly or indirectly
owned by Purchaser and its affiliates bears to the total number of outstanding
Shares, provided that at all times there shall be at least two directors who are
not designees of the Purchaser and the number of directors shall not be more
than ten nor less than six. In the Merger Agreement, the Company, subject to
certain limitations (see Section 11), has agreed to take all action necessary to
cause Purchaser's designees to be elected or appointed as directors of the
Company, including increasing the size of the Board or securing the resignation
of incumbent directors or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including, if required by law, the approval and adoption of
the Merger Agreement by the requisite vote of the stockholders of the Company.
See Section 11 and Section 14. Under the Company's Certificate of Incorporation
and the General Corporation Law of the State of Delaware ("Delaware Law"), the
holders of Shares have one vote for each Share owned by them of record. Under
the Company's Certificate of Incorporation and Delaware Law, a majority vote of
the then outstanding Shares is required to approve and adopt the Merger
Agreement and the Merger. Consequently, if the Minimum Condition is satisfied,
the Purchaser will have sufficient voting power to approve and adopt the Merger
Agreement and the Merger without the vote of any other stockholders.
Under Delaware Law, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, the Purchaser will be
able to consummate the Merger, without a vote of the Company's stockholders. In
such event, Laidlaw and the Purchaser shall take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of the Company's stockholders. If, however, the
Purchaser does not acquire at least 90% of the then outstanding Shares pursuant
to the Offer or otherwise, and a vote of the Company's stockholders is required
under Delaware Law, a longer period of time will be required to effect the
Merger. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of such extension or amendment), the Purchaser will
accept for payment and pay for all Shares validly tendered on or prior to
2
<PAGE>
the Expiration Date and not properly withdrawn as permitted by Section 4 below.
For purposes of the Offer, the term "Expiration Date" means 12:00 midnight, New
York City time, on Wednesday, September 3, 1997, unless and until the Purchaser,
in its sole discretion (subject to the terms of the Merger Agreement), shall
have extended the period of time during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"). The Offer is also subject to
certain other conditions set forth in Section 14 below. If these or any of the
other conditions referred to in Section 14 are not satisfied or any events
specified in Section 14 have occurred or are determined by the Purchaser to have
occurred, prior to the Expiration Date, the Purchaser reserves the right (but is
not obligated), subject to the terms of the Merger Agreement and whether or not
any shares have theretofore been accepted for payment, (i) to decline to
purchase any of the Shares tendered in the Offer, terminate the Offer and return
all tendered Shares to the tendering stockholders, (ii) to waive or amend any or
all conditions to the Offer, to the extent permitted by applicable law and the
provisions of the Merger Agreement, and, subject to complying with applicable
rules and regulations of the Securities and Exchange Commission (the
"Commission"), purchase all Shares validly tendered, (iii) to extend the Offer
and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain the Shares which have been tendered during the period or
periods for which the Offer is extended or (iv) to delay acceptance for payment
or payment for Shares, subject to applicable law, until satisfaction or waiver
of the conditions to the Offer. In the event that the Purchaser waives any of
the conditions set forth in Section 14, the Commission may, if the waiver is
deemed to constitute a material change to the information previously provided to
the stockholders, require that the Offer remain open for an additional period of
time and/or that the Purchaser disseminate information concerning such waiver.
The Purchaser shall, subject to the conditions specified in Section 14,
accept for payment and pay for Shares which have been validly tendered and not
withdrawn pursuant to the Offer as soon as it is permitted to do so under
applicable law; provided that, if the number of Shares that have been validly
tendered and not withdrawn represent less than 90% of the Company's outstanding
voting power (calculated assuming the exercise of all outstanding options and
rights to purchase shares of Common Stock), the Purchaser may extend the Offer
up to the fifth business day following the date on which all conditions to the
Offer shall first have been satisfied or waived; provided that if the Purchaser
so extends the Offer, its obligation to purchase the Shares tendered pursuant to
the Offer shall be unconditional. If all of the conditions specified in Section
14 are not satisfied on the initial Expiration Date, the Purchaser shall extend
(and re-extend) the Offer through October 31, 1997, to provide time to satisfy
such conditions. During such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a tendering
stockholder to withdraw its Shares. See Section 4.
The Merger Agreement provides that the Purchaser may modify the terms of the
Offer except that, without the written approval of the Company, the Purchaser
will not decrease the price per Share paid in the Offer, change the form of
consideration payable in the Offer, reduce the maximum number of Shares to be
purchased in the Offer, impose conditions to the Offer other than those set
forth herein or amend or modify such conditions, or amend any other terms or
conditions of the Offer, or make any other change that is otherwise adverse to
the holders of Shares.
Subject to the applicable regulations of the Commission, the Purchaser also
reserves the right, in its sole discretion, at any time and from time to time,
(i) to delay acceptance for payment of or, regardless of whether such Shares
were theretofore accepted for payment, payment for any Shares pending receipt of
any regulatory approval specified in Section 15 below or in order to comply in
whole or in part with any other applicable law, (ii) to terminate the Offer
(whether or not any Shares have theretofore been accepted for payment) if any of
the conditions referred to in Section 14 has not been satisfied or upon the
3
<PAGE>
occurrence of any of the events specified in Section 14 and (iii) to waive any
condition (other than the Minimum Condition, the expiration or termination of
any waiting period under the HSR Act and the absence of termination of the
Merger Agreement, which may not be waived without the prior written consent of
the Company) or otherwise amend the Offer in any respect in any manner that is
not prohibited as described above, in each case by giving oral or written notice
of such delay, termination, waiver or amendment to the Depositary and by making
a public announcement thereof. The Purchaser acknowledges that (i) Rule 14e-1(c)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires the Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer and (ii) the
Purchaser may not delay acceptance for payment of, or payment for (except as
provided in clause (i) of the preceding sentence), any Shares upon the
occurrence of any of the conditions specified in Section 14 without extending
the period of time during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Except as provided by applicable law (including Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act, which require that material changes
be promptly disseminated to stockholders in a manner reasonably designed to
inform them of such changes) and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will extend the Offer to
the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange
Act. The minimum period during which an offer must remain open following
material changes in the terms of the offer, other than a change in price or a
change in the percentage of securities sought, will depend upon the facts and
circumstances, including the materiality, of the changes. With respect to a
change in price or, subject to certain limitations, a change in the percentage
of securities sought, a minimum ten business day period from the day of such
change is generally required to allow for adequate dissemination to
stockholders. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday and consists of the time period
from 12:01 a.m. through 12:00 Midnight, New York City time.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares whose names
appear on the Company's stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms
and subject to the conditions of the Offer (including, if the Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment and will pay for all Shares validly tendered
and not properly withdrawn on or prior to the Expiration Date promptly after the
Expiration Date provided that the conditions of the Offer set forth in Section
14, including, without limitation, the expiration or termination of the waiting
period applicable to the acquisition of Shares pursuant to the Offer under the
HSR Act, have been satisified or waived prior to the Expiration Date. In
addition, subject to applicable rules of the Commission, the Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares
pending receipt of any other regulatory approvals specified in Section 15.
4
<PAGE>
Laidlaw intends to file as soon as practicable after the date hereof with
the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") a Pre-merger Notification and
Report Form under the HSR Act with respect to the Offer. The waiting period
under the HSR Act applicable to the Offer would expire at 11:59 p.m., New York
City time, 15 days after the filing thereof, unless prior to the expiration or
termination of the waiting period the FTC or the Antitrust Division extends the
waiting period by requesting additional information or documentary material from
Laidlaw. If such a request is made, the waiting period applicable to the Offer
will expire on the tenth calendar day after the date of substantial compliance
by Laidlaw with such request. Thereafter, the waiting period may be extended by
court order or with the consent of Laidlaw. The waiting period under the HSR Act
may be terminated by the FTC and the Antitrust Division prior to its expiration.
See Section 15.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Share Certificates"), or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares, if such procedure is available, into the Depositary's account at The
Depository Trust Company or the Philadelphia Depository Trust Company (each a
"Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3, (ii) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed
with any required signature guarantees, or an Agent's Message (as defined below)
in connection with a book-entry transfer, and (iii) any other documents required
by the Letter of Transmittal.
The term "Agent's Message" means a message from a Book-Entry Transfer
Facility transmitted to, and received by, the Depositary forming a part of a
Book-Entry Confirmation, which states that (i) the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of the Book-Entry
Confirmation, (ii) the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and (iii) the Purchaser may enforce such
agreement against the participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Shares for payment pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the Purchaser
and transmitting those payments to stockholders whose Shares have been accepted
for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
SUCH PAYMENT. If for any reason whatsoever acceptance for payment of or payment
for any Shares tendered pursuant to the Offer is delayed or the Purchaser is
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
then, without prejudice to the Purchaser's rights set forth herein, the
Depositary may nevertheless, on behalf of the Purchaser, retain tendered Shares,
and those Shares may not be withdrawn except to the extent that the tendering
stockholder is entitled to exercise and duly exercises withdrawal rights as
described in Section 4, subject, however, to the Purchaser's obligation under
Rule 14e-1(c) under the Exchange Act to pay for Shares tendered or return those
Shares promptly after termination or withdrawal of the Offer.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), without expense to the tendering stockholder, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
5
<PAGE>
If, prior to the Expiration Date, the Purchaser increases the consideration
offered to stockholders pursuant to the Offer, such increased consideration will
be paid to all stockholders whose Shares are purchased pursuant to the Offer,
regardless of whether those Shares were tendered prior to the increase in
consideration.
The Purchaser reserves the right to transfer or assign, in whole at any time
or in part from time to time, to one or more of the Purchaser's affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
SECTION 3. PROCEDURE FOR TENDERING SHARES.
VALID TENDER. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, (i) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date, and (ii) either
(a) Share Certificates evidencing tendered Shares must be received by the
Depositary at such address, or the Shares must be tendered pursuant to the
procedure for book-entry transfer described below and a Book-Entry Confirmation
must be received by the Depositary, in each case on or prior to the Expiration
Date, or (b) the tendering stockholder must comply with the guaranteed delivery
procedures described below.
If Share Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof) must
accompany each delivery.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facilities for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's transfer procedures. However, although delivery of Shares may be
effected through book-entry transfer at a Book-Entry Transfer Facility, a Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed
with any required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and any other documents required by the Letter of
Transmittal, 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 on or prior to
the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedures described below.
Delivery of documents to a Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary.
SIGNATURE GUARANTEES. Signatures on Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of a recognized
Medallion Signature Guarantee Program or by any other "eligible guarantor
institution," as defined in Rule 17A(b)-15 under the Exchange Act (each of the
foregoing, an "Eligible Institution"), unless the Shares tendered thereby are
tendered (i) by a registered holder of Shares who has not completed either the
box labeled "Special Payment Instructions" or the box labeled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
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<PAGE>
If a Share Certificate is registered in the name of a person other than the
person who signs the Letter of Transmittal, or if payment is to be made, or a
Share Certificate not accepted for payment or not tendered is to be returned, to
a person other than the registered holder(s), the Share Certificate must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appears on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed as provided above. See Instructions 1 and 5 of the Letter of
Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available, time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date, or a stockholder cannot complete the
procedure for delivery by book-entry transfer on a timely basis, then such
stockholder's Shares may nevertheless be tendered, provided that all of the
following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates evidencing all tendered Shares, in proper
form for transfer, or a Book-Entry Confirmation, together with the Letter of
Transmittal (or a facsimile thereof) properly completed and duly executed
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the Letter
of Transmittal, are received by the Depositary within three Nasdaq National
Market trading days after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution and a representation that the stockholder
owns the Shares tendered within the meaning of, and that the tender of the
Shares effected thereby complies with, Rule 14e-4 under the Exchange Act, each
in the form set forth in the Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares (if available), (ii) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) or, in the case of a book-entry transfer, an Agent's Message, and (ii)
any other documents required by the Letter of Transmittal. Accordingly, payment
may not be made to all tendering stockholders at the same time and will depend
upon when Share Certificates are received by the Depositary or Book-Entry
Confirmations of tendered Shares are received in the Depositary's account at a
Book-Entry Transfer Facility.
The method of delivery of Share Certificates and all other required
documents, including through any Book-Entry Transfer Facility, is at the option
and risk of the tendering stockholder and the delivery will be deemed made only
when actually received by the Depositary. If delivery is by mail, registered
mail with return receipt requested, properly insured, is recommended. In all
cases, sufficient time should be allowed to ensure timely delivery.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares pursuant to any of the procedures described above will be determined
by the Purchaser, in its sole discretion, which determination shall be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
and all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of its counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any defect or irregularity in any
tender of Shares of any particular stockholder, whether or not similar defects
or irregularities are waived in the case of other
7
<PAGE>
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived.
None of the Purchaser, Laidlaw, any of their affiliates or assigns, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints the Purchaser, its officers
and its designees, and each of them, as the stockholder's attorneys-in-fact and
proxies, with full power of substitution, in the manner set forth in the Letter
of Transmittal, to the full extent of such stockholder's rights with respect to
the Shares tendered by such stockholder and accepted for payment by the
Purchaser (and with respect to any and all other Shares or other securities
issued or issuable in respect of the Shares on or after July 29, 1997). All such
powers of attorney and proxies shall be considered irrevocable and coupled with
an interest in the tendered Shares. Such appointment will be effective if, when
and only to the extent that, the Purchaser accepts such Shares for payment. Upon
such acceptance for payment, all prior powers of attorney and proxies given by
the stockholder with respect to the Shares (and such other Shares and
securities) will, without further action, be revoked, and no subsequent powers
of attorney, proxies or written consents may be given or executed (and if given
or executed will not be deemed effective with respect thereto by the
stockholder). The Purchaser, its officers and its designees will, with respect
to the Shares (and such other Shares and securities) for which such appointment
is effective, be empowered to exercise all voting and other rights of the
stockholder as they in their sole discretion may deem proper at any annual or
special meeting of the Company's stockholders or any adjournment or postponement
thereof, by written consent in lieu of any such meeting or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's payment for such Shares, the
Purchaser must be able to exercise full voting rights with respect to such
Shares and other securities, including voting at any meeting of stockholders.
BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer to the extent not previously provided must provide the payor
of such cash with the stockholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that the stockholder is not subject to backup
withholding. Certain stockholders (including, among others, all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
If a stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on the stockholder and payment of cash to the stockholder pursuant to
the Offer may be subject to backup withholding. All stockholders surrendering
Shares pursuant to the Offer should complete and sign the Substitute Form W-9
included in the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Depositary).
Non-corporate foreign stockholders should complete and sign a Form W-8,
Certificate of Foreign Status (a copy of which may be obtained from the
Depositary), in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
OTHER REQUIREMENTS. The Purchaser's acceptance for payment of Shares
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering stockholder and the Purchaser upon the
terms and subject to the conditions of the Offer, including the tendering
stockholder's representation and warranty that such stockholder is the owner of
the Shares within the meaning of, and that the tender of the Shares complies
with, Rule 14e-4 under the Exchange Act.
8
<PAGE>
SECTION 4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer
are irrevocable, except that Shares tendered pursuant to the Offer may be
withdrawn at any time on or prior to the Expiration Date and unless already
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after October 3, 1997. If the Purchaser is delayed in its
acceptance for payment of Shares or is unable to purchase Shares validly
tendered pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, tendered Shares may be retained by the
Depositary on behalf of the Purchaser, and may not be withdrawn except to the
extent that tendering stockholders are entitled to withdrawal rights as set
forth in this Section 4; subject, however, to the Purchaser's obligation,
pursuant to Rule 14e-1(c) under the Exchange Act, to pay for the tendered Shares
or return those Shares promptly after termination or withdrawal of the Offer.
Any such delay will be accompanied by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers shown on such Share
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in Section 3, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Laidlaw, any of their affiliates or assigns, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
SECTION 5. CERTAIN U.S. FEDERAL INCOME TAX MATTERS. The summary of tax
consequences set forth below is for general information only and is based on the
law as currently in effect, including modifications made by the Taxpayer Relief
Act of 1997 which was recently passed by both houses of Congress and is awaiting
the President's signature. The tax treatment of each stockholder will depend in
part upon such stockholder's particular situation. Special tax consequences not
described herein may be applicable to particular classes of taxpayers, such as
financial institutions, broker-dealers, persons who are not citizens or
residents of the United States, stockholders who acquired their Shares through
the exercise of an employee stock option or otherwise as compensation and
persons who received payments in respect of options to acquire Shares. ALL
STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX
CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY
AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME
AND OTHER TAX LAWS AND CHANGES IN SUCH TAX LAWS.
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<PAGE>
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local, foreign income or other tax laws. Generally, a tendering stockholder will
recognize gain or loss in an amount equal to the difference between the cash
received by the stockholder pursuant to the Offer or the Merger and the
stockholder's adjusted tax basis in the Shares tendered and purchased pursuant
to the Offer or the Merger. Gain or loss is computed separately for each block
of Shares (Shares which were purchased at the same time and price) sold. For
federal income tax purposes, such gain or loss will be a capital gain or loss if
the Shares are a capital asset in the hands of the stockholder, and a long-term
capital gain or loss if the stockholder meets one of the holding periods set
forth below as of the date the Purchaser accepts such Shares for payment
pursuant to the Offer or the effective date of the Merger, as the case may be.
There are significant limitations on the deductibility of capital losses by
individuals or corporations. Capital losses can offset capital gains on a
dollar-for-dollar basis and, in the case of an individual stockholder, capital
losses in excess of capital gains can be deducted to the extent of $3,000
annually. An individual can carry forward unused capital losses indefinitely. A
corporation can utilize capital losses only to offset capital gain income; a
corporation's unused capital losses can be carried back three years and forward
five years.
Assuming the President signs the Tax Relief Act of 1997, long-term capital
gains recognized after July 28, 1997, on marketable securities such as the
Shares, will be taxable at a maximum rate of 20% for individuals if the
individual's holding period is more than 18 months and 28% if the holding period
is more than one year but not more than 18 months, and 35% for corporations.
Ordinary income is taxable at a maximum rate of 39.6% for individuals and 35%
for corporations.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded in the
Nasdaq National Market under the symbol "EMCR." At July 30, 1997 there were 95
holders of record. The Company completed its initial public offering of Shares
in December 1994 at an initial public offering price of $11.00 per share. Based
on information provided by the Company, the following table sets forth, for the
periods indicated, the high and low sales price per Share subsequent to December
8, 1994, the day trading commenced. The sale prices per Share set forth below
are as reported in published financial sources and do not include commissions.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Fiscal Year Ended December 31, 1994:
Fourth Quarter (from December 8 to December 31)................................................ $ 14 3/4 $ 11
Fiscal Year Ended December 31, 1995:
First Quarter.................................................................................. 20 5/8 13 1/8
Second Quarter................................................................................. 20 1/2 18 1/8
Third Quarter.................................................................................. 23 3/4 17 7/8
Fourth Quarter................................................................................. 26 7/8 19 3/8
Fiscal Year Ended December 31, 1996:
First Quarter.................................................................................. 30 1/2 21 1/4
Second Quarter................................................................................. 37 25 1/2
Third Quarter.................................................................................. 29 3/4 20 1/2
Fourth Quarter................................................................................. 30 3/4 17 1/4
Fiscal Year Ending December 31, 1997:
First Quarter.................................................................................. 29 7/8 22 1/4
Second Quarter................................................................................. 37 5/8 26 1/8
Third Quarter (through July 30)................................................................ 39 5/8 36 1/8
</TABLE>
The Company has not paid any cash dividends since its formation.
On July 29, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the reported closing sale
price per Share as reported on the Nasdaq National Market
10
<PAGE>
was $38 1/4. On August 1, 1997, two trading days prior to commencement of the
Offer, the reported closing sale price per share as reported on the Nasdaq was
$37 33/64. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL. The Company is a Delaware corporation with its headquarters
located at 1717 Main Street, Suite 5200, Dallas, Texas 75201. The Company is a
leading provider of physician services management in hospital emergency
departments and other practice settings.
FINANCIAL INFORMATION. Set forth below is certain selected financial
information with respect to the Company and its subsidiaries.
EMCARE HOLDINGS INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
THREE MONTHS ENDED ------------- ---------- ----------
MARCH 31, 1997
-------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenue.......................................... $ 59,510 $ 196,257 $ 156,826 $ 118,250
Income before income taxes and extraordinary
charge.............................................. 4,861 8,263(1) 13,909 7,137
Income before extraordinary charge................... 3,014 5,425(1) 8,693 4,569
Net income........................................... 3,014 5,425(1) 8,693 3,732
PER SHARE DATA:
Primary earnings per common share before
extraordinary charge................................ 0.35 0.64(1) 1.05 0.89
Primary earnings per common share.................... 0.35 0.64(1) 1.05 0.73
Primary weighted average common and common equivalent
shares outstanding.................................. 8,537 8,531 8,251 5,138
BALANCE SHEET DATA:
Working capital...................................... 22,766 19,918 18,948 28,041
Total assets......................................... 150,951 138,063 80,743 55,214
Total indebtedness................................... 47,877 40,468 5,456 4,423
Stockholders' equity................................. 65,201 61,728 52,730 34,499
</TABLE>
- ------------------------------
(1) The Company has settled the claims alleged against it in the civil lawsuit
styled UNITED STATES EX REL. THERESA SEMTNER V. EMERGENCY PHYSICIAN BILLING
SERVICES, INC., ET AL. (Cause No. 94-617(C)), in the United States District
Court for the Western District of Oklahoma (the "DOJ Lawsuit"). Emergency
Physician Billing Services, Inc. is an outside vendor that provided billing
services on a contract basis for the Company and others. The suit alleged
improper coding of charges for emergency department services reimbursed
under the Medicare, Medicaid, CHAMPUS, and Federal Employees Health Benefits
programs.
Under the settlement, the Company has agreed to pay $7,750,000 to the United
States and the various states for settlement of the lawsuit and has already
paid $5,000,000 of that amount with the balance due on or before January 5,
1998. The settlement provides for the DOJ Lawsuit to be dismissed with
prejudice as to the Company. An additional $250,000 in attorneys' fees and
another $450,000 in other expenses is also expected to be incurred by the
Company. In the settlement, the Company did not admit any of the allegations
of the DOJ Lawsuit or any related liability, and the settlement specifically
provided for the Company to participate fully in the future in Medicare,
Medicaid, CHAMPUS, and Federal Employees Health Benefits programs. These
related settlement expenses have been accrued for in the fourth quarter of
the 1996 financial data.
AVAILABLE INFORMATION. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the information and reporting
requirements of the Exchange Act and in accordance
11
<PAGE>
therewith is obligated to file periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. Information as of particular dates concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities and any material interest of such
persons in transactions with the Company is required to be disclosed in such
proxy statements and distributed to the Company's stockholders and filed with
the Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection and copying at prescribed rates at the
regional offices of the Commission located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite
1300, New York, New York 10048. Copies of this material may also be obtained by
mail, upon payment of the Commission's customary fees, from the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
such material should also be available for inspection at EmCare Holdings Inc.,
1717 Main Street, Suite 5200, Dallas, Texas 75201.
SECTION 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND LAIDLAW. The
Purchaser, a newly incorporated Delaware corporation and an indirect
wholly-owned subsidiary of Laidlaw, was organized in connection with the Offer
and has not carried on any activities to date other than in connection with the
Offer and the Merger Agreement. The principal executive office of the Purchaser
is located at 669 Airport Freeway, Suite 400, Hurst, Texas 76053, and the
telephone number at such office is (817) 282-7580. The principal executive
office of Laidlaw is located at 3221 North Service Road, Burlington, Ontario L7R
3Y8, and the telephone number at such office is (905) 336-1800.
Laidlaw is the largest emergency healthcare transportation, school busing
and municipal transit service company in North America.
PASSENGER SERVICES. Laidlaw provides passenger services, primarily under
the names Laidlaw Transit, Mayflower Contract Services and National School Bus
Services in the United States and Laidlaw Transit, Charterways and Grey Goose
Bus Lines in Canada, operating school buses and special education vehicles and
public transit buses. In August 1996, Laidlaw significantly expanded its
passenger service operations through the acquisition of Scott's Hospitality Inc.
Laidlaw is the largest school bus operator in North America, providing
transportation for in excess of 2.5 million students per day. Laidlaw also
presently provides services to 245 municipal transit systems and in excess of 1
million transit passengers in the United States and Canada. Laidlaw is the
largest operator of paratransit services in the United States providing access
to transportation for elderly and physically and mentally challenged passengers.
Laidlaw also operates fixed-rate transit, scheduled daily passenger bus and
parcel express services. In addition, Laidlaw provides scheduled services under
private contract and package tours to major tourist regions in the United States
and Canada.
HEALTHCARE TRANSPORTATION. Laidlaw entered the healthcare transportation
business in 1993. During fiscal 1996, it significantly expanded its operations
through the acquisition of CareLine, Inc. and again in February 1997 through the
acquisition of American Medical Response, Inc., creating the premier healthcare
transportation company in North America. Laidlaw is the largest provider of
healthcare transportation services in the United States, operating from 134
locations and 37 states. These services consist of critical care transportation
services, non-emergency ambulance and transfer services, emergency response
services and emergency department staffing. Laidlaw enters into agreements with
municipal or county public safety agencies to provide performance-based
contracts for 9-1-1 response, joint training, shared staffing and stationing
arrangements and contracted dispatching. Laidlaw enters into contracts with
integrated healthcare delivery networks to provide turnkey managed healthcare
transportation systems. The Company also provides comprehensive on site medical
care and transport service for all types of special events.
12
<PAGE>
HAZARDOUS WASTE SERVICES. Laidlaw provides hazardous waste services from
100 service locations, including 9 incinerators, 32 transfer service centers, 6
waste water treatment plants and 13 landfills in 26 states and seven Canadian
provinces. These services are conducted primarily under the name Laidlaw
Environmental Services, Inc. Laidlaw owns sixty-six percent (66%) of the equity
of Laidlaw Environmental Services, Inc.
CHANGES IN CONTROL OF LAIDLAW. Canadian Pacific Limited had owned
47,632,092 Class A Shares of Laidlaw representing approximately 47.2% of the
issued voting equity shares of Laidlaw and 29,711,034 Class B Non-Voting Shares
representing approximately 10.9% of the issued shares of that class. Pursuant to
a capital reorganization effected by certificate and articles of amalgamation
dated July 28, 1997 (see OTHER RECENT EVENTS below), the Class A Shares and
Class B Non-Voting Shares owned by Canadian Pacific Limited became 55,586,034
Common Shares of Laidlaw, representing approximately 17% of the outstanding
Common Shares of Laidlaw after giving effect to the reorganization.
On July 2, 1997, Canadian Pacific Limited conditionally sold to a group of
underwriters share purchase rights to acquire the 55,586,034 Common Shares of
Laidlaw, payable in two installments. The condition to the sale of the share
purchase rights was satisfied upon the capital reorganization becoming effective
on July 28, 1997. See OTHER RECENT EVENTS below.
OTHER RECENT EVENTS. At a special meeting of the shareholders of Laidlaw
held on July 23, 1997, the shareholders approved a special resolution approving
a capital reorganization pursuant to which the Class A Shares and Class B
Non-Voting Shares beneficially owned by Canadian Pacific Limited (see CHANGES IN
CONTROL OF LAIDLAW above) would become 55,586,034 Common Shares of Laidlaw and
each other issued Class A Share of Laidlaw would be converted into issued common
shares on the basis of 1.15 Common Shares for every one Class A Share of
Laidlaw, and each issued Class B Non-Voting Share in the capital of Laidlaw
would be converted into issued common shares on the basis of one Common Share
for each one Class B Non-Voting Share of Laidlaw. The reorganization became
effective upon the issuance of a certificate and articles of amalgamation dated
July 28, 1997.
Laidlaw is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file certain
information with the Commission relating to its business, financial condition
and other matters. Information as of particular dates concerning Laidlaw's
directors and officers, their remuneration, stock options granted to them, the
principal holders of Laidlaw's securities and any material interests of such
persons in transactions with Laidlaw is contained in that information. This
information may be inspected and copies may be obtained from the offices of the
Commission in the same manner as set forth with respect to information about the
Company in Section 7. Such information concerning the Company can be inspected
at the offices of The New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
Set forth below is certain selected consolidated financial information
relating to Laidlaw and its subsidiaries for Laidlaw's last three fiscal years,
which has been derived from the financial statements contained in Laidlaw's
Annual Report on Form 10-K for the fiscal year ended August 31, 1996, filed by
Laidlaw with the Commission. More comprehensive financial information (including
management's discussion and analysis of financial condition and results of
operations) is included in the reports and other documents filed by Laidlaw with
the Commission. The following financial information is qualified in its entirety
by reference to such reports and other documents, including the financial
statements and related notes contained therein.
13
<PAGE>
LAIDLAW INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN U.S. $MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Revenue..................................................................... $ 2,296.0 $ 1,722.4 $ 1,378.1
Income from operations...................................................... 233.0 174.9 140.0
Income from continuing operations before income taxes....................... 147.4 95.9 66.8
Income from continuing operations........................................... 117.2 74.9 48.8
Income from discontinued operations......................................... 44.6 57.9 42.0
Net income.................................................................. 161.8 132.8 90.8
Earnings per share
Continuing operations..................................................... 0.40 0.27 0.18
Discontinued operations................................................... 0.15 0.21 0.15
Net income per share........................................................ 0.55 0.48 0.33
</TABLE>
<TABLE>
<CAPTION>
AT AUGUST 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash & Short-Term........................................................... $ 225.8 $ 146.5 $ 199.6
Current Assets.............................................................. 773.5 579.3 468.6
Assets of discontinued operations........................................... 828.0 744.8 733.8
Long-term investments....................................................... 168.5 587.5 742.6
Fixed asset................................................................. 1,949.8 1,650.4 1,219.2
Other assets................................................................ 1,212.5 572.8 339.8
Total Assets................................................................ 4,932.3 4,134.8 3,504.0
Current liabilities......................................................... 480.0 409.2 256.2
Deferred items.............................................................. 386.2 362.3 264.1
Long-term debt.............................................................. 1,929.3 1,665.9 1,397.8
Stockholders' Equity........................................................ 2,136.8 1,697.4 1,585.9
</TABLE>
The name, citizenship, business address, principal occupation or employment
and five year employment history of each of the directors and executive officers
of the Purchaser and Laidlaw are set forth in Schedule I to this Offer to
Purchase.
None of the Purchaser, Laidlaw nor, to the best knowledge of the Purchaser
and Laidlaw, any of the persons listed on Schedule I or any associate or
wholly-owned or majority-owned subsidiary of the Purchaser, Laidlaw or any of
the persons so listed, beneficially owns or has a right to acquire directly or
indirectly any Shares. None of the Purchaser, Laidlaw nor, to the best knowledge
of the Purchaser and Laidlaw, any of the persons or entities referred to above,
or any of the respective executive officers, directors or subsidiaries of any of
the foregoing, has effected any transactions in the Shares during the past sixty
(60) days.
Except as described in this Offer to Purchase, none of the Purchaser,
Laidlaw or, to the best knowledge of the Purchaser and Laidlaw, any of the
persons listed on Schedule I, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including but not limited to contracts, arrangements, understandings or
relationships concerning the transfer or voting of such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, since January 1, 1994, none of the Purchaser,
Laidlaw or, to the best knowledge of
14
<PAGE>
the Purchaser and Laidlaw, any of the persons listed on Schedule I, has had any
business relationships or transactions with the Company or any of its executive
officers, directors or affiliates that are required to be reported under the
rules and regulations of the Commission applicable to the Offer. Except as set
forth in this Offer to Purchase, since January 1, 1994 there have been no
contacts, negotiations or transactions between any of Laidlaw, the Purchaser or,
to the best knowledge of the Purchaser and Laidlaw, any of the persons listed on
Schedule I, on the one hand, and the Company or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors, or a sale or other transfer
of a material amount of assets.
SECTION 9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required
by the Purchaser and Laidlaw to consummate the Offer and the Merger (including
the cash out of stock options as described in Section 11) and to pay related
fees and expenses (approximately $2 million) is estimated to be approximately
$342 million. The Company also has a revolving credit facility which provides
for a default upon a merger or consolidation. In the event any such debt is
accelerated, the Purchaser and Laidlaw will require additional funds to repay
that debt.
The Purchaser will obtain all necessary funds through capital contributions
or advances to be made by Laidlaw. Laidlaw has sufficient funds available to it,
from cash on hand and from undrawn or available credit under its existing
revolving credit facilities and other sources, to fund fully all of its
requirements and the Purchaser's requirements in connection with the Offer and
the Merger. Laidlaw's existing credit facilities ("Facility") are each by and
among Laidlaw, as borrower, and a syndicate of financial institutions for which
Canadian Imperial Bank of Commerce acts as administrative agent. Laidlaw may
borrow up to an aggregate amount of $1.4 billion under the Facility for general
corporate purposes, including transactions contemplated by the Offer.
Laidlaw's ability to borrow under the Facility is conditioned on compliance
with certain covenants and satisfaction of certain other requirements. Laidlaw
is currently in compliance with these covenants and requirements and believes
that funds will be available prior to the time that funds are required to pay
for Shares tendered in the Offer.
Laidlaw anticipates that any indebtedness incurred through borrowings under
the Facility will be repaid from a variety of sources, which may include, but
may not be limited to, funds generated internally by Laidlaw and its affiliates
(including, following the Merger, funds generated by the Purchaser). No decision
has been made concerning the method Laidlaw will employ to repay such
indebtedness. Such decision will be made based on Laidlaw's review from time to
time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions and such other
factors as Laidlaw may deem appropriate.
THE OFFER IS NOT CONDITIONED UPON THE PURCHASER OBTAINING FINANCING.
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. On February
5, 1997, James R. Bullock, the President and Chief Executive Officer of Laidlaw,
Paul T. Shirley, the President and Chief Executive Officer of American Medical
Response, Inc., which was acquired by Laidlaw in February 1997 ("AMR"), Leonard
M. Riggs, Jr., M.D., the Chairman and Chief Executive Officer of the Company and
William F. Miller, III, the President and Chief Operating Officer of the
Company, met in Dallas, Texas. The purpose of the meeting was to discuss the
Company's software plans for improved operations of emergency departments in
hospitals and to discuss generally the possibility of a business alliance or
other undefined transaction between AMR's emergency ambulance services and the
Company's hospital emergency department services. There was no discussion about
any specific transaction between the parties at that time.
Prior to Laidlaw's acquisition of AMR in February 1997 representatives of
AMR met with the Company's management in December 1996 in Denver to acquaint its
management with a history of the
15
<PAGE>
Company and for AMR to discuss its concepts of pathways in emergency medicine.
Subsequently, AMR engaged Dean Witter Reynolds Inc. ("Dean Witter") (which,
subsequent to the merger of Dean Witter, Discover & Co. with the Morgan Stanley
Group Inc., the execution of the engagement was assumed by Morgan Stanley) to
provide financial advice to it on a prospective transaction with the Company.
Subsequent to the meeting in Dallas, Mr. Bullock, Mr. Shirley and Dr. Riggs
participated in a few telephone conversations to determine whether the parties
should meet and have more specific discussions about a potential business
alliance. Mr. Bullock and Dr. Riggs agreed to meet in Utah on February 27, 1997.
At that meeting in Utah, which also included Mr. Shirley and David C. Colby,
Executive Vice President, Chief Financial Officer and Treasurer of AMR, Dr.
Riggs indicated that he and the Company's Board thought it would be in the best
interests of the Company to complete the negotiations for settlement of a
billing challenge that was underway before considering any specific plans with
respect to the future of the Company. Dr. Riggs indicated that he thought those
negotiations would take 30 to 60 days, after which he would call Mr. Bullock if
the Company desired to proceed with further discussions with Laidlaw.
During March and April of 1997, Mr. Bullock and Mr. Shirley each spoke with
Dr. Riggs on one or two occasions to ascertain the progress of the settlement
negotiations and to continue to express their interest in exploring alternative
business alliances, but no specific proposals were discussed. On May 21, 1997,
AMR and the Company entered into a confidentiality agreement pursuant to which,
among other things, Laidlaw agreed to treat as confidential certain information
provided by or on behalf of the Company. Pursuant to that confidentiality
agreement, Laidlaw and its advisors were provided access to various due
diligence materials and Laidlaw performed due diligence to confirm its prior
analysis of the Company.
On June 13, 1997, at the request of DLJ, Laidlaw submitted a letter advising
the Company that Laidlaw's analysis suggested that a fair price for the Company
would be $34.00 per share. Shortly thereafter, the Company, through DLJ,
informed Laidlaw that its price was too low and would need to be increased if
discussions between the Company and Laidlaw were to continue. Laidlaw continued
to analyze the information on the Company provided by DLJ and Laidlaw and its
advisors participated in further due diligence meetings in Dallas during the
later part of June.
On June 19, 1997, Mr. Bullock and Mr. Shirley met with Dr. Riggs, Mr. Miller
and representatives of DLJ in Dallas, Texas. At that meeting, Mr. Bullock
indicated that Laidlaw was prepared to place a value on the Company between
$37.00 and $37.50 per share. On June 19, 1997, the Company informed Laidlaw that
its Board had met with representatives of DLJ and was considering its
alternatives, but that the Company wanted Laidlaw to go forward and complete its
due diligence, present the form of documentation that might be used in a
possible transaction and finalize its thinking on the value of the Company.
Representatives of the Company indicated that the Board thought the purchase
price would need to be higher, but it seemed that the Company and Laidlaw were
close enough on price to continue discussions with Laidlaw.
During the last week in June, Mr. Bullock informed the Company that Laidlaw
was in the midst of a reorganization of its shares, and that while Laidlaw was
quite interested in acquiring the Company, Laidlaw wanted to wait until the
reorganization was completed at its July 23, 1997 shareholders meeting before
completing its analysis of a potential transaction with the Company. During the
first week of July 1997 representatives of Laidlaw and AMR met with
representatives of the Company for further detailed discussions of due diligence
matters.
On Friday, July 25, 1997, Mr. Bullock, Ivan R. Cairns, Senior Vice President
and General Counsel of Laidlaw, Dr. Riggs and Mr. Miller met in Burlington,
Ontario. At that meeting, the parties had detailed discussions on the form of
the transaction that would include a cash price of $38.00 per share, as well as
a commitment on the part of Dr. Riggs and Mr. Miller to have a significant
investment in Laidlaw common stock in order to align their interests with
Laidlaw shareholders going forward. Dr. Riggs and Mr. Miller indicated that they
wanted to consider Laidlaw's proposal over the weekend and analyze the Company's
other alternatives. Mr. Bullock and Mr. Cairns were advised that the Company's
Board was scheduled to
16
<PAGE>
meet on Monday, July 28, 1997. During the morning of July 28, 1997, Mr. Bullock,
Dr. Riggs and Mr. Miller participated in a conference call during which they
continued to negotiate the terms of the proposed Merger Agreement and arrived at
a verbal understanding of the structure of the transaction the Company and
Laidlaw would try to consummate if the Company's Board decided to proceed.
At the July 28, 1997 Company Board meeting, DLJ presented its analysis of
the proposed consideration to be received by the Company's stockholders and
delivered its oral opinion to the Board (which was subsequently confirmed by
delivery of a written opinion dated July 28, 1997), to the effect that, as of
such date and based upon and subject to certain matters stated in such opinion,
the cash consideration of $38.00 per share to be received by holders of Shares
(other than Laidlaw and its affiliates) in the Offer and the Merger, taken
together, was fair, from a financial point of view, to such holders. Following a
number of questions from, and discussions among, the directors, the Company's
Board of Directors unanimously (i) approved the Merger Agreement and the
transactions contemplated thereby and authorized the execution and delivery
thereof, (ii) determined that the Offer and the Merger, taken together, were in
the best interests of the stockholders of the Company, and (iii) recommended
that the Company's stockholders accept the Offer and tender their shares to the
Purchaser.
At the close of business on July 28, 1997, Dr. Riggs and Mr. Miller informed
Mr. Bullock that the Company's Board had authorized them to try and proceed to
complete the proposed Merger Agreement and the terms of the Offer with Laidlaw.
On July 29, 1997, representatives of the Company and Laidlaw completed their
negotiations of all substantive terms of the Merger Agreement, which had been
under discussion during the month of July. On July 29, 1997, the Board of
Directors of Laidlaw and Purchaser took the steps required under the corporate
and securities laws to approve the Offer, the Merger and the Merger Agreement.
Laidlaw, the Purchaser and the Company executed the Merger Agreement late in the
evening on July 29, 1997. On July 30, 1997, before the opening of trading,
Laidlaw and the Company jointly announced the transaction. On August 5, 1997,
Purchaser commenced the Offer.
To the extent any of the foregoing background describes events to which
Laidlaw was not a party, it is based upon information provided by the Company.
SECTION 11. PURPOSE OF THE OFFER; MERGER AGREEMENT; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER. The purpose of the Offer, the Merger and the Merger
Agreement is to enable Laidlaw to acquire control of the entire equity interest
of the Company. Upon consummation of the Merger, the Company will become an
indirect wholly-owned subsidiary of Laidlaw. The Offer is being made pursuant to
the Merger Agreement.
MERGER AGREEMENT. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to the
Merger Agreement, which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to Laidlaw's Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1"). In particular, when the term
material adverse effect is used herein it has the meaning as defined in the
Merger Agreement. The Merger Agreement may be examined and copies may be
obtained at the place and in the manner set forth in Section 7 of this Offer to
Purchase.
THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered pursuant to the Offer. The Merger Agreement provides that the
Purchaser may in its sole discretion waive, in whole or in part, at any time or
from time to time, any condition (other than the Minimum Condition, the
expiration or termination of the waiting period under the HSR Act and the
absence of termination of the Merger Agreement, which may not be waived without
the prior written consent of the Company), increase the price per Share payable
in the Offer or make any
17
<PAGE>
other changes in the terms and conditions of the Offer; provided that, unless
previously approved by the Company in writing, no change may be made that
decreases the price per Share payable in the Offer, changes the form of
consideration payable in the Offer, reduces the maximum number of Shares to be
purchased in the Offer, imposes conditions to the Offer other than those set
forth herein, or amends or modifies such conditions, amends any other terms or
conditions of the Offer, or that is otherwise adverse to the holders of Shares.
The Company has informed the Purchaser that as of July 31, 1997, there were
8,279,046 Shares issued and outstanding, 1,304,176 shares of Common Stock
reserved for future issuance pursuant to outstanding stock options, and 37,570
shares of Common Stock reserved for future issuance in connection with purchase
price payments (including deferred purchase price payments) in conjunction with
acquisitions, and that, except as otherwise disclosed in the Merger Agreement,
no other stock of the Company is outstanding or committed to be issued. Based on
this information and assuming all holders of outstanding options to purchase
shares of Common Stock will have entered into agreements to cancel such options
on or prior to the date Purchaser purchases the Shares pursuant to the Offer and
that holders of the right to receive shares in connection with purchase price
payments have agreed to accept cash in lieu of shares, the Purchaser believes
that the Minimum Condition will be satisfied if the Purchaser acquires at least
4,222,314 Shares in the Offer. Laidlaw does not directly or indirectly hold any
Shares. Certain other conditions to the Offer are described in Section 14. The
Minimum Condition and the expiration or termination of the waiting period under
the HSR Act cannot be waived without the consent of the Company.
THE MERGER. The Merger Agreement provides that, subject to the terms and
conditions thereof, and in accordance with Delaware Law, the Purchaser shall be
merged with and into the Company as soon as practicable after satisfaction or
waiver of the conditions set forth in the Merger Agreement (the "Effective
Time"). The Merger shall become effective upon the filing of a Certificate of
Merger with the Secretary of State of the State of Delaware. As a result of the
Merger, the separate corporate existence of the Purchaser will cease and the
Company will continue as the surviving corporation (the "Surviving
Corporation"). In the Merger, each issued and outstanding Share (other than
Shares owned directly or indirectly by Laidlaw or any of its subsidiaries or by
the Company as treasury stock, and other than Shares owned by stockholders who
have properly exercised rights of appraisal under Delaware Law) will be
converted into the right to receive $38.00 per Share, without interest, and the
issued and outstanding share of common stock of the Purchaser will be converted
into 8,250,546 fully paid and non-assessable shares of common stock of the
Surviving Corporation (which will constitute the only issued and outstanding
capital stock of the Surviving Corporation).
The Merger Agreement provides that the certificate of incorporation and
by-laws of the Purchaser at the Effective Time will be the certificate of
incorporation and by-laws of the Surviving Corporation until amended in
accordance with applicable law. The Merger Agreement also provides that the
directors of the Purchaser at the Effective Time will be the directors of the
Surviving Corporation, and the officers of the Company at the Effective Time
will be the officers of the Surviving Corporation.
THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that,
commencing upon the purchase of Shares pursuant to the Offer, and from time to
time thereafter, Purchaser will be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of the
Company as will give Purchaser representation on the Board equal to the product
of (i) the total number of directors on the Board and (ii) the percentage that
the number of Shares owned by the Purchaser and its affiliates (including Shares
purchased pursuant to the Offer) bears to the total number of outstanding
Shares; provided that at all times there shall be at least two directors who are
not designees of the Purchaser and the number of directors shall not be more
than ten or less than six, and the Company has agreed, upon request of the
Purchaser, promptly either to increase the size of the Board (to the extent
permitted by the Company's Restated Certificate of Incorporation) and/or to use
its reasonable best efforts to secure the resignations of such number of
directors as is necessary to enable the Purchaser's designees to be elected to
the Board and to cause the Purchaser's designees to be so elected. The Merger
Agreement
18
<PAGE>
also provides that following the election or appointment of Purchaser's
designees to the Company's Board of Directors any amendment of the Merger
Agreement or any amendment to the Restated Certificate of Incorporation or
By-laws of the Company inconsistent with the Merger Agreement, any termination
of the Merger Agreement by the Company, any extension of time for performance of
any of the obligations or other acts of Laidlaw or Purchaser or any waiver of
any of the Company's rights under the Merger Agreement will require the
concurrence of a majority of the directors of the Company (or the concurrence of
the director, if there is only one remaining) then in office who are not
designees of the Purchaser or employees of the Company. The Company's obligation
to appoint the Purchaser's designees to the Board of Directors is subject to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder.
STOCKHOLDERS MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call and
hold a special meeting of its stockholders (the "Special Meeting") as soon as
practicable following the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the Merger Agreement. The Board shall recommend approval and adoption of
the Merger Agreement by the Company's stockholders; provided, however, that such
recommendation may be modified or withdrawn as provided in the Merger Agreement
or if the Board determines in good faith and after consultation with independent
counsel, that such action is necessary to properly discharge its fiduciary
duties.
INTERIM OPERATIONS. In the Merger Agreement, the Company has agreed that,
except as otherwise agreed in writing by Laidlaw, which agreement will not be
unreasonably withheld or delayed, the businesses of the Company and its
subsidiaries shall be conducted only in the ordinary course of business
consistent with past practice, the Company will use its reasonable commercial
efforts to preserve substantially intact its business organization, keep
available the services of the present officers, employees and consultants of the
Company and its subsidiaries, and preserve the present relationships of the
Company and it subsidiaries with customers, suppliers, and other persons with
which the Company or any of its subsidiaries has significant business relations.
In addition, except as expressly contemplated by the Merger Agreement or without
the prior written consent of Laidlaw, which consent will not be unreasonably
withheld or delayed, each of the Company and its subsidiaries will not:
(a) amend or otherwise change the Certificate of Incorporation or
By-Laws of the Company or any of its subsidiaries;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of capital stock, or any
other ownership interest (including, without limitation, any phantom
interest) in the Company (except for (i) the issuance of shares of Company
Common Stock issuable pursuant to certain stock options and certain existing
contractual obligations; and (ii) the grant of options under the Company's
stock option plans consistent with past practice and the issuance of shares
upon exercise thereof);
(c) sell, pledge, dispose of or encumber any assets of the Company or
any of its subsidiaries (except for (i) sales of assets in the ordinary
course of business and in a manner consistent with past practice, (ii)
disposition of obsolete or worthless assets, (iii) sales of immaterial
assets not in excess of $500,000, and (iv) encumbrances on assets to secure
purchase money financings of equipment and capital improvements and in
connection with the financing of permitted acquisitions);
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof)
in respect of any of its capital stock, except that a wholly owned
subsidiary of the Company may declare and pay a dividend or make advances to
its parent or the Company, (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) amend the terms or change the period of
exercisability of, purchase, repurchase, redeem or otherwise acquire, or
permit any subsidiary to purchase, repurchase, redeem or otherwise acquire,
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any of its securities or any securities of its subsidiaries, including,
without limitation, shares of Company Stock or any option, warrant or right,
directly or indirectly, to acquire shares of Company Common Stock, or
propose to do any of the foregoing, except for the acceleration of options
pursuant to the terms of the Company stock options and the net exercise of
such options or as approved in the Merger Agreement;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof other than emergency health care providers, emergency
physician practice management groups or other emergency health care entities
in each case located in the United States, provided that the total
consideration paid for all such acquisitions completed after July 29, 1997
shall not exceed $12 million; (ii) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or endorse or otherwise as
an accommodation become responsible for, the obligations of any person or,
except in the ordinary course of business consistent with past practice or
in connection with purchases of equipment or capital improvements or in
permitted acquisitions, or make any loans or advances (other than loans or
advances to or from direct or indirect wholly owned subsidiaries or in
connection with permitted acquisitions), (iii) except as approved in the
Merger Agreement, enter into or amend any material contract or agreement
other than in the ordinary course of business or where such contract or
amendment would not have a material adverse effect; or (iv) authorize any
capital expenditures or purchase of fixed assets which are, in the
aggregate, in excess of the amounts set forth in the Merger Agreement;
(f) except as set forth in the Merger Agreement or as may be required by
law or in the ordinary course of business consistent with past practice,
increase the compensation payable or to become payable to its officers or
employees, except as may be required by law or in the ordinary course of
business consistent with past practice, grant any severance or termination
pay to, or enter into any employment or severance agreement with any
director, officer or other employee of the Company or any of its
subsidiaries, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or
employees;
(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts
receivable);
(h) except as would not result in any material adverse effect, make any
material tax election inconsistent with past practice or settle or
compromise any federal, state, local or foreign tax liability or agree to an
extension of a statute of limitations, except to the extent the amount of
any such settlement has been reserved for in the financial statements
contained in the Company SEC reports filed prior to July 29, 1997; or
(i) take, or agree in writing or otherwise to take, any of the actions
described in subparagraphs (a)-(h) above, or any action which would make any
of the representations or warranties of the Company contained in the Merger
Agreement untrue or incorrect in any material respect or prevent the Company
from performing or cause the Company not to perform in any material respect
its covenants under the Merger Agreement.
NO SOLICITATION. In the Merger Agreement, the Company has agreed not to
directly or indirectly, through any officer, director, employee, representative
or agent of the Company or any of its subsidiaries, (i) solicit or initiate any
"Business Combination Proposal" (as defined below), (ii) enter into any
agreement with respect to any Business Combination Proposal or (iii) participate
in any negotiations with
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or furnish any non-public written information to any person in connection with
any proposal that constitutes or may reasonably be expected to lead to any
Business Combination Proposal; PROVIDED, HOWEVER, that the Company may (A)
participate in negotiations with or furnish information to any persons or group
(other than Parent or an affiliate of Parent) that makes a Business Combination
Proposal not so solicited that the Board determines may reasonably be expected
to result in a Superior Proposal or if the Board determines, in good faith and
after consultation with independent counsel, that such action is required in
order to discharge properly its fiduciary duties, and enter into any
confidentiality agreement or standstill agreement with such third party in
connection with such a Business Combination Proposal, (B) comply with Rule 14e-2
promulgated under the Exchange Act with regard to any Business Combination
Proposal (assuming that such Business Combination Proposal includes a tender
offer requiring the Company's response pursuant to such Rule), (C) withdraw or
modify its recommendation of the Offer and the Merger if there exists a Business
Combination Proposal that is a Superior Proposal or if the Board determines, in
good faith and after consultation with independent counsel, that such action is
required to discharge properly its fiduciary duties, and (D) recommend to its
stockholders a Business Combination Proposal if it is a Superior Proposal or if
the Board determines, in good faith and after consultation with independent
counsel, that such action is required to discharge properly its fiduciary
duties.
The term "Business Combination Proposal" means, with respect to the Company,
the commencement of any tender or exchange offer, and bona fide, written
proposal for a merger, consolidation or other business combination involving the
Company or any of its subsidiaries, or any other bona fide written proposal or
offer to enter into a "Business Combination" or any public announcement of a
proposal, plan or intention to do any of the foregoing. The term "Superior
Proposal" means any Business Combination Proposal for which any required
financing is supported by reasonable commitments and which the Board determines
in good faith will be more favorable to the Company's stockholders than the
Offer and the Merger. The term "Business Combination" means the occurrence of
any of the following events: (a) the Company or any subsidiary is acquired by
merger or otherwise; (b) the Company or any subsidiary enters into any agreement
that contemplates the acquisition of 35% or more of the total assets of the
Company and its subsidiaries taken as a whole; (c) the Company or any of its
subsidiaries enters into a merger or other agreement that contemplates the
acquisition of more than 35% of the outstanding shares of the Company's capital
stock; or (d) a third party acquires more than 35% of the outstanding shares of
the Company's capital stock.
DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. For a period of five
years after the Effective Time, Laidlaw has agreed to cause the Surviving
Corporation to maintain in effect, if available, directors' and officers'
liability insurance covering those persons who are currently covered by the
Company's directors' and officers' liability insurance policy on terms
(including the amounts of coverage and the amounts of deductibles, if any) that
are comparable to the terms now applicable to directors and officers of Laidlaw,
or, if more favorable to the Company's directors and officers, the terms now
applicable to them under the Company's current policies; provided, that in no
event shall Laidlaw or the Surviving Corporation be required to expend in excess
of 300% of the annual premium currently paid by the Company for such coverage;
and provided further, that if the premium for such coverage exceeds such amount,
Laidlaw or the Surviving Corporation shall purchase a policy with the greatest
coverage available for such 300% of the annual premium.
The Merger Agreement provides that the Certificate of Incorporation and
By-Laws of the Surviving Corporation shall contain the provisions with respect
to indemnification and exculpation set forth in the Certificate of Incorporation
and By-Laws of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who at
the Effective Time were directors, officers, employees or agents of the Company,
unless such modification is required by law. In addition, the Merger Agreement
provides that the Company shall, to the fullest extent permitted under
applicable law or under the Company's Certificate of Incorporation or By-Laws
and regardless of whether the Merger becomes
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effective, indemnify and hold harmless, and, after the Effective Time, Laidlaw
and the Surviving Corporation shall, to the fullest extent permitted under
applicable law or under the Surviving Corporation's Certificate of Incorporation
or By-Laws, indemnify and hold harmless, each present and former director,
officer or employee of the Company or any of its subsidiaries against any costs
or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages and liabilities incurred in connection with, and amounts paid in
settlement of, any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative and wherever asserted, brought
or filed, arising out of or pertaining to any acts or omissions or alleged acts
or omissions by them in their capacity as such, including without limitation the
transactions contemplated by the Merger Agreement in each case for a period of
six years after July 29, 1997.
COMPANY STOCK OPTIONS. At the Effective Time each outstanding option to
purchase a Share (a "Company Stock Option"), whether or not exercisable, shall
become exercisable and each holder of a Company Stock Option who executes an
agreement to cancel such Company Stock Option shall be entitled to receive from
the Company, in consideration for such cancellation, an amount in cash (less
applicable withholding taxes) equal to the product of (i) the number of Shares
previously subject to such Company Stock Option multiplied by (ii) the excess,
if any, of $38.00 over the exercise price per Share previously subject to such
Company Stock Option.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the respective
obligations of the Company, Laidlaw and the Purchaser to consummate the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions: (i) the Purchaser shall have purchased shares pursuant to
the Offer; (ii) any waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated; (iii) no temporary
restraining order, preliminary or permanent injunction or other order or other
legal restraint or prohibition preventing the consummation of the Merger shall
be in effect, and there shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or applicable to the Merger which
makes the consummation of the Merger illegal; and (iv) there shall not be in
effect any judgment, decree or order of any governmental authority,
administrative agency or court of competent jurisdiction that prohibits or
limits Laidlaw from exercising all material rights and privileges pertaining to
its ownership of the Surviving Corporation or the ownership or operation by
Laidlaw or any of its subsidiaries of all or a material portion of the business
or assets of Laidlaw or any of its subsidiaries, or seeking to compel Laidlaw or
any of its subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of Laidlaw or any of its subsidiaries
(including the Surviving Corporation and its subsidiaries), as a result of the
Merger or the transactions contemplated by the Merger Agreement.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to Laidlaw and the Purchaser with
respect to, among other things, its organization, capitalization, financial
statements, labor relations, employee benefit plans, insurance, compliance with
laws, tax matters, intellectual property, consents and approvals and undisclosed
liabilities.
TERMINATION; FEES. The Merger Agreement may be terminated and the
transaction abandoned at any time prior to the Effective Time, notwithstanding
the approval by the stockholders of the Company or Laidlaw, (i) by mutual
written consent duly authorized by the Boards of Directors of the Company, the
Purchaser and Laidlaw; (ii) by either Laidlaw or the Company if a court of
competent jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a nonappealable final order, decree or ruling or
taken any other action having the effect of permanently restraining, enjoining
or otherwise prohibiting the Merger (provided that the right to terminate the
Merger Agreement under this provision is not available to any party who has not
complied with its obligations and such noncompliance materially contributed to
the issuance of any such order, decree or ruling or the taking of such action);
(iii) by either Laidlaw or the Company if the Purchaser shall have failed to
accept for purchase and pay for Shares pursuant to the Offer by October 31, 1997
(provided that the right to terminate the Merger
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Agreement under this provision is not available to any party whose failure to
fulfill any obligation under the Merger Agreement has been the cause of or
resulted in any of the circumstances described in this provision before such
date); (iv) by Laidlaw or the Company, prior to the purchase of Shares pursuant
to the Offer, if the Board of Directors of the Company shall withdraw, modify or
change its approval or recommendation of the Offer, the Merger Agreement or the
Merger in a manner adverse to Laidlaw; (v) by the Company, prior to the purchase
of Shares pursuant to the Offer, (A) if any representation or warranty of the
Purchaser or Laidlaw set forth in the Merger Agreement shall be untrue in any
material respect when made, or (B) upon a breach in any material respect of any
covenant or agreement on the part of the Purchaser or Laidlaw set forth in the
Merger Agreement; (vi) by the Company, if the Offer shall have expired or shall
have been withdrawn, abandoned or terminated without the Purchaser purchasing
any Shares pursuant thereto; or (vii) by Laidlaw, if the Purchaser shall have
terminated the Offer without purchasing any Shares thereunder in accordance with
the terms of the Offer; provided Laidlaw may not terminate the Merger Agreement
pursuant to this provision if the Purchaser has failed to purchase the Shares in
the Offer in breach of the terms thereof.
If the Merger Agreement is terminated by Laidlaw or Purchaser pursuant to
their rights described in clause (iv) of the preceding paragraph, the Company
will reimburse Laidlaw and the Purchaser for all documented out-of-pocket
expenses and fees up to $1,500,000.
If the Merger Agreement is terminated by Laidlaw or Purchaser pursuant to
their rights described in clause (iv) above and within twelve months following
the date of such termination the Company either (x) consummates a transaction
the proposal of which would otherwise qualify as a Business Combination Proposal
or (y) enters into a definitive agreement with respect to such a transaction,
the Company shall promptly pay Laidlaw a fee of $6,275,000 less any amounts paid
pursuant to the preceding paragraph.
EMPLOYMENT AGREEMENTS. Each of Leonard M. Riggs, Jr., M.D., the Chairman of
the Board and Chief Executive Officer of the Company, and William F. Miller,
III, the President and Chief Operating Officer of the Company, have severally
agreed to enter into an employment agreement with the Company immediately
following the acceptance of the Shares pursuant to the Offer.
Under the terms of these agreements Dr. Riggs and Mr. Miller will be paid an
annual base salary of not less than $325,000 per year, and will be eligible for
an annual bonus in the amount of $800,000 subject to the Company achieving
earnings growth at the level agreed to by the executive and the Chief Executive
Officer of Laidlaw, and shall remain eligible for this annual bonus for five
years. Should the Company, in any year, not achieve the specified earnings
target, but achieve 80% of the target, the executive shall be entitled to
receive 50% of the annual bonus plus a percentage of the balance equal to the
percentage of the target achieved between 80% and 100%. Should the executive
remain employed by the Company for five years and not have received the maximum
bonus in each of the five years, the executive shall be eligible for an
additional bonus not to exceed the aggregate unpaid amounts, in accordance with
criteria agreed to by the executive and Chief Executive Officer of Laidlaw.
In order to induce the executive to remain in his position with the Company
following the Offer and the Merger, the Company will pay or cause to be paid to
each executive a retention bonus ($799,297 in the case of Dr. Riggs and $786,544
in the case of Mr. Miller) upon execution of the employment agreement. The
executive is entitled to receive a pro rata portion of the 1997 fiscal bonus to
August 31, 1997, determined on a basis consistent with previous years, payable
at the time other annual bonuses are paid to executives and shall not exceed
$110,000.
The agreements also provide that each of Dr. Riggs and Mr. Miller will be
granted, as soon as practicable following execution of his respective employment
agreement, an option to purchase 30,000 of Laidlaw's common shares at an
exercise price equal to the fair market value of such common stock at the time
of grant, such options to vest consistent with the terms of the Laidlaw stock
option plan under which such options are issued.
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AGREEMENT TO TENDER; PROXY. Concurrently with the execution of the Merger
Agreement, Laidlaw, the Purchaser, Dr. Riggs and Mr. Miller entered into an
agreement pertaining to Shares held by each of Dr. Riggs and Mr. Miller (the
"Tender Agreement"). Pursuant to the Tender Agreement Dr. Riggs and Mr. Miller
(each a "Seller") have each severally agreed that he will promptly tender
pursuant to the terms of the Offer, and not withdraw, the Shares of which he is
the holder or beneficial owner, or over which he has dispositive and voting
authority (the "Seller's Shares"). In addition, pursuant to the Tender
Agreement, each Seller has granted to Purchaser, James R. Bullock, the President
and Chief Executive Officer of Laidlaw, and Ivan R. Cairns, the Senior Vice
President and General Counsel of Laidlaw, or any of them, each with full power
of substitution, a proxy to exercise all voting and other rights with respect to
such shares, including without limitation, with respect to the Merger and the
other matters contemplated by the Merger Agreement.
NO NEGOTIATIONS. The Tender Agreement provides that each Seller will
not, directly or indirectly, (i) initiate, contract with, solicit or enter into
negotiations with any corporation, partnership, person or other entity
concerning any possible proposal that constitutes, or a may reasonably be
expected to lead to, an Acquisition Proposal (as defined below), or (ii) furnish
any internal nonpublic financial or business information to any corporation,
partnership, person or other entity (a "Third Party") in connection with any
Acquisition Proposal; and each Seller severally agrees to notify Purchaser
immediately if any discussions or negotiations are sought to be initiated, or
any such information is requested, with respect to an Acquisition Proposal or
potential Acquisition Proposal or if any Acquisition Proposal is received or
indicated to be forthcoming. The term "Acquisition Proposal" means the
occurrence of any of the following events: (a) the Company or any Company
subsidiary is acquired by merger or otherwise by any Third Party; (b) the
Company or any Company subsidiary enters into an agreement with a Third Party
that contemplates the acquisition of 35% or more of the total assets of the
Company and the Company subsidiaries taken as a whole; (c) the Company enters
into a merger or other agreement with a Third Party that contemplates the
acquisition of beneficial ownership of more than 35% of the outstanding shares
of the Company's capital stock; or (d) a Third Party acquires more than 35% of
the outstanding shares of the Company's capital stock.
OTHER TRANSACTIONS. Each Seller has severally agreed that such Seller
shall not engage in any action or omission that would have the effect of
preventing or disabling such Seller from delivering the Shares of such Seller to
Purchaser or otherwise performing such Seller's obligations under the Tender
Agreement or causing any representation or warranty to be untrue. Without
limiting the foregoing, each Seller severally agrees not to sell or transfer, or
agree to sell or transfer, any of the Shares of such Seller or any interest in
such Shares, and shall keep such Shares free and clear of all liens, charges and
encumbrances and voting agreements, commitments, agreements, understandings and
arrangements of every kind and shall not give any proxy with respect to the
voting power of such Shares.
TERMINATION. The Tender Agreement terminates at the earliest of (a) the
time mutually agreed to by Purchaser, Parent and the Sellers expressed in
writing or (b) so long as Sellers are not in default under the Tender Agreement,
the termination of the Merger Agreement in accordance with its terms.
FIDUCIARY DUTY. The Tender Agreement provides that nothing therein
shall in any way affect any action taken by any director or executive officer of
the Company that is required to be taken in order to discharge properly their
fiduciary duties to the Company.
STOCK PURCHASE AGREEMENT. Pursuant to the Stock Purchase Agreement, dated
as of July 29, 1997, among Laidlaw, Dr. Riggs and Mr. Miller, (a) Parent has
agreed to sell to Dr. Riggs, and Dr. Riggs has agreed to purchase, a number of
common shares of Laidlaw ("Laidlaw Common Shares") determined by dividing
$7,000,000 by the Market Price (as defined below) and (b) Laidlaw has agreed to
sell to Mr. Miller, and Mr. Miller has agreed to purchase, a number of Laidlaw
Common Shares determined by dividing $3,000,000 by the Market Price, in each
case for cash at a price per share equal to the Market Price. The Market Price
is the closing sale price of Laidlaw Common Shares on the New York Stock
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Exchange on the trading day immediately preceding the day of closing. The
closing will take place immediately following the acceptance of Shares by
Purchaser pursuant to the Offer, or at such other time as Laidlaw and Dr. Riggs
and Mr. Miller may agree in writing.
TRANSFER RESTRICTIONS. None of the Laidlaw Common Shares purchased
pursuant to the Stock Purchase Agreement shall be sold, pledged, assigned or
otherwise transferred, voluntarily or involuntarily, by Dr. Riggs or Mr. Miller
except (a) on the first anniversary of the date of the Stock Purchase Agreement,
the restrictions on transfer shall lapse with respect to 10% of the shares of
Laidlaw Common Shares purchased; (b) on the second anniversary of the date of
the Stock Purchase Agreement, the restrictions on transfer shall lapse with
respect to an additional 10% of the shares of Laidlaw Common Shares purchased,
and (c) on the third anniversary of the date of the Stock Purchase Agreement,
the restrictions on transfer shall lapse with respect to all remaining shares of
Laidlaw Common Shares. The restrictions on transfer do not apply with respect to
transfers pursuant to applicable laws of descent and distribution or to
transfers among the purchaser's spouse and descendants and any trust or
partnership solely for the benefit of such purchaser or such purchaser's spouse
or descendants, provided that the restrictions will continue to be applicable to
the shares of Laidlaw Common Shares after such transfer and the transferees of
such shares shall agree in writing to be bound by the provisions of the Stock
Purchase Agreement. The restrictions terminate upon the first to occur of the
death of such purchaser and the sale of the Company by Laidlaw (whether by stock
or asset sale, merger or otherwise). Additionally, the Laidlaw Common Shares
will not be registered under the Securities Act of 1933, as amended ("Securities
Act") and cannot be sold unless subsequently registered or unless an exemption
from such registration is available.
REPRESENTATIONS AND WARRANTIES. Laidlaw has made customary
representations and warranties to Dr. Riggs and Mr. Miller, including that the
certain reports filed by Laidlaw with the SEC did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Dr. Riggs and Mr.
Miller have each severally made customary representations and warranties to
Laidlaw, including as to the access to information concerning Laidlaw, his
status as an "accredited investor" and that the Laidlaw Common Shares will be
"restricted securities" within the meaning of Rule 144 under the Securities Act.
Laidlaw has agreed to continue to file all reports, schedules, forms, statements
and other documents in accordance with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder.
PLANS FOR THE COMPANY. Laidlaw intends, upon acquiring control of the
Company, to continue its review and evaluation of the Company and its
subsidiaries and their respective assets, businesses, corporate structure,
capitalization, operations, properties, policies, management and personnel.
Generally, Laidlaw intends to integrate the emergency department management
business of its American Medical Response unit into the Company's business, with
a view to achieving operating efficiencies and cost savings while maintaining
and enhancing customer service. After Laidlaw conducts its review of the
Company, it is possible that Laidlaw might modify some of its current plans.
SECTION 12. DIVIDENDS AND DISTRIBUTIONS. As described above, the Merger
Agreement provides that, prior to the Effective Time, the Company and each of
its subsidiaries will not declare, pay, set aside or make any dividend or other
distribution with respect to, or split, combine, reclassify, purchase, redeem or
otherwise acquire any shares of its capital stock.
Pursuant to the provisions of the Merger Agreement the Company may not
issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale,
pledge, disposition or encumbrance of, any shares of capital stock of any class,
or any options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital stock or any other ownership interest (including,
without limitation, any phantom interest) in the Company (except for (i) the
issuance of shares of Company Common Stock issuable pursuant to the Company
Stock Options outstanding on the date of the Merger Agreement and
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pursuant to preexisting contractual obligations (ii) the grant of options under
the Company's stock option plans consistent with past practice and the issuance
of shares upon exercise thereof).
Pursuant to the Merger Agreement, the Company also may not (i) declare, set
aside, make or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of any of its capital stock,
except that a wholly owned subsidiary of the Company may declare and pay a
dividend or make advances to its parent or the Company, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) amend the terms or change the period
of exercisability of, purchase, repurchase, redeem or otherwise acquire, or
permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any
of its securities or any securities of its subsidiaries, including, without
limitation, shares of Company Common Stock or any option, warrant or right,
directly or indirectly, to acquire shares of Company Common Stock, or propose to
do any of the foregoing, except for the acceleration of options pursuant to the
terms of the Company Common stock plans and the net exercise of such options.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the preceding paragraphs, and
nothing herein shall constitute a waiver by the Purchaser or Laidlaw of any of
its rights under the Merger Agreement or a limitation of remedies available to
the Purchaser or Laidlaw for any breach of the Merger Agreement, including
termination thereof.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ
NATIONAL MARKET LISTING AND EXCHANGE ACT REGISTRATION. Depending upon the
aggregate market value and per Share price of any Shares not purchased pursuant
to the Offer, following the Offer the Shares may no longer meet the standards
for continued listing on the Nasdaq National Market which requires an issuer to
have at least 100,000 publicly held shares with an aggregate market value of at
least $5,000,000. Shares held by directors and officers (or their immediate
families) of the Company and other concentrated holdings of 10% or more of the
Shares outstanding generally will not be considered to be publicly held for the
purpose of the foregoing standards. In the event that the Shares were no longer
quoted on the Nasdaq National Market, it is possible that the Shares could
continue to trade in the over-the-counter market and that quotations would
continue to be reported through other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of stockholders remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration of the Shares may be terminated upon application of the Company to
the Commission if the Shares are not listed on a national securities exchange or
quoted on Nasdaq National Market and there are fewer than 300 holders of record
of the Shares. Deregistration of the Shares under the Exchange Act would reduce
substantially the information required to be furnished by the Company to holders
of Shares and to the Commission and would render inapplicable certain of the
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of Section 14(a) that the Company
furnish stockholders with proxy materials in connection with stockholders'
meetings and the requirements of Rule 13e-3 promulgated under the Exchange Act
with respect to "going private" transactions. Furthermore, "affiliates" of the
Company and persons holding "restricted securities" of the Company might be
deprived of the ability to dispose of Shares pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
If registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be "margin securities." It is the current intention of Laidlaw
to cause the Company to deregister the Shares after the consummation of the
Offer if the requirements for termination of registration are met.
The Shares currently are "margin securities" under the rules of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), which has
the effect, among other things, of allowing
26
<PAGE>
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that following the Offer, the Shares would cease to constitute "margin
securities" for the purpose of the Federal Reserve Board's margin regulations
and, therefore, could no longer be used as collateral for margin loans made by
brokers.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other
provision of the Offer, and in addition to (and not in limitation of) the
Purchaser's rights to amend the Offer (subject to the terms of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including without
limitation Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or to return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares tendered pursuant to the Offer, and
may postpone the acceptance for payment or, subject to the restrictions referred
to above, payment for, any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer and not accept for payment any Shares if (i) the
Minimum Condition shall not have been satisfied, (ii) any applicable waiting
period under the HSR Act at any time prior to the Expiration Date, shall not
have expired or been terminated, or (iii) at any time on or after five days
after announcement and prior to the Expiration Date, any of the following
conditions shall occur:
(a) there shall have been any action or proceeding brought by any
governmental authority before any court located or having jurisdiction
within the United States or any statute, regulation, legislation, judgment
or order, enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to the Offer or the Merger by any court, governmental,
administrative or regulatory authority or agency located or having
jurisdiction within the United States that could result in a material
adverse effect on the Company and its subsidiaries taken as a whole and have
the effect of: (i) making illegal, or otherwise directly or indirectly
restraining or prohibiting or imposing material penalties or fines or
requiring the payment of material damages in connection with the making of,
the Offer, the acceptance for payment of, payment for, or ownership,
directly or indirectly, of some of or all the Shares by Laidlaw or the
Purchaser, the consummation of the Offer or the Merger; (ii) prohibiting or
materially limiting the direct or indirect ownership or operation by the
Company or by Laidlaw of all or any material portion of the business or
assets of the Company and its subsidiaries, taken as a whole, or compelling
Laidlaw to dispose of or hold separate all or any material portion of the
business or assets of the Company and its subsidiaries, taken as a whole, as
a result of the transactions contemplated by the Merger Agreement; (iii)
imposing or confirming material limitations on the ability of Laidlaw
effectively to hold or to exercise full rights of ownership of Shares,
including, without limitation, the right to vote any Shares on all matters
properly presented to the stockholders of the Company; or (iv) requiring
divestiture by Laidlaw or the Purchaser, directly or indirectly, of any
Shares; or
(b) the Company shall have breached or failed to perform in any material
respect any of its covenants or agreements under the Merger Agreement or any
of the representations and warranties of the Company set forth in the Merger
Agreement shall not be true and correct both when made and as of the date of
consummation of the Offer (except to the extent such representations and
warranties of the Company address matters only as of a particular date, in
which case as of such date) except where the failure to perform such
covenants or agreements or the failure of such representation and warranties
to be so true and correct would not have a material adverse effect on the
Company and its subsidiaries taken as a whole; or
(c) The Merger Agreement shall have been terminated in accordance with
its terms;
which in the reasonable judgment of the Purchaser in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with such acceptance for payment or payment of Shares;
provided, that prior to October 31, 1997, the Purchaser shall not terminate the
Offer by reason of the nonsatisfaction of any of the conditions and shall extend
the Offer.
27
<PAGE>
The foregoing conditions are for the sole benefit of the Purchaser and may
be asserted by the Purchaser regardless of the circumstances giving rise to any
such condition unless Laidlaw, the Purchaser or their affiliates shall have
caused the circumstances giving rise to such condition or may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion. The failure by the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
A public announcement will be made of a material change in, or waiver of,
such conditions to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, and the Offer will be extended in connection with any such change
or waiver to the extent required by such rules.
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. Except as otherwise disclosed herein, based upon an examination of
publicly available information filed by the Company with the Commission, neither
the Purchaser nor Laidlaw is aware of (i) any license or other regulatory permit
that appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the Purchaser's
acquisition of Shares (and the indirect acquisition of the stock of the
Company's subsidiaries) pursuant to the Offer or the Merger, or (ii) any
filings, approvals or other actions by or with any domestic (federal or state),
foreign or supranational governmental authority or administrative or regulatory
agency that would be required prior to the acquisition of Shares (or the
indirect acquisition of the stock of the Company's subsidiaries) by the
Purchaser as contemplated herein. Should any such approval or other action be
required, it is the Purchaser's present intention to seek such approval or
action. However, the Purchaser does not presently intend to delay the purchase
of Shares tendered pursuant to the Offer pending the receipt of any such
approval or the taking of any such action (subject to the Purchaser's right to
delay or decline to purchase Shares if any of the conditions in Section 14 shall
have occurred). There can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company, Laidlaw or
the Purchaser or that certain parts of the businesses of the Company, Laidlaw or
the Purchaser might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain such approval or other
action or, in the event that such approval was not obtained or such other action
was not taken, any of which could cause the Purchaser to elect to terminate the
Offer without the purchase of the Shares thereunder. The Purchaser's obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions, including conditions relating to the legal matters discussed in this
Section 15. See Section 14.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the Delaware Law prevents an
"interested stockholder" (generally a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock, or an affiliate
or associate thereof) from engaging in a "business combination" (defined to
include mergers and certain other transactions) with a Delaware corporation for
a period of three (3) years following the date such person became an interested
stockholder unless, among other things, prior to such date the board of
directors of the corporation approved either the business combination or the
transaction in which the interested stockholder became an interested
stockholder. In connection with the review of the proposed transaction, the
Company's Board of Directors prior to the execution of the Merger Agreement (i)
unanimously approved the Offer and the Merger and (ii) determined that the terms
of the Offer and the Merger including the Offer price of $38.00 per Share in
cash, are in the best interest of, the stockholders of the Company, and (iii)
recommended that the stockholders of the Company accept the Offer and tender
their shares pursuant to the Offer. Accordingly, the Purchaser and Laidlaw
believe that Section 203 of the Delaware Law is inapplicable to the Merger
Agreement, the Offer and the Merger because its provisions have been satisfied.
28
<PAGE>
A number of other states have also adopted takeover laws and regulations
which purport to varying degrees to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
or whose business operations have substantial economic effects in such states,
or which have substantial assets, security holders, principal executive offices
or principal places of business therein. To the extent that certain provisions
of certain of these state takeover statutes purport to apply to the Offer, the
Purchaser believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in Edgar v. MITE Corp., invalidated on constitutional grounds
the Illinois Business Takeovers Act, which, as a matter of state securities law,
made takeovers of corporations meeting certain requirements more difficult.
However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
of the United States held that the State of Indiana could, as a matter of
corporate law and in particular those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders, provided that such laws were applicable only under
certain conditions. Subsequently, a number of federal courts have ruled that
various state takeover statutes were unconstitutional insofar as they apply to
corporations incorporated outside the state of enactment.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not taken any action to comply
with any such laws. Should any person seek to apply any state takeover law, the
Purchaser will take reasonable efforts to resist such application, which may
include challenging the validity or applicability of any such statute in
appropriate court proceedings. In the event it is asserted that one or more
state takeover laws is applicable to the Offer or the Merger, and an appropriate
court does not determine that it is inapplicable or invalid as applied to the
Offer, the Purchaser might be required to file certain information with, or
receive approvals from, the relevant state authorities. In addition, if
enjoined, the Purchaser might be unable to accept for payment or pay for any
Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer and the Merger. In such case, the Purchaser may not be
obligated to accept for payment, or pay for, any Shares tendered. See Section
14.
SHORT-FORM MERGER. Delaware Law would permit the Merger to occur without a
vote of the Company's stockholders (a "short-form merger") if the Purchaser were
to acquire at least 90% of the outstanding Shares. If, however, the Purchaser
does not acquire at least 90% of the then outstanding Shares pursuant to the
Offer or otherwise, and a vote of the Company's stockholders is required under
Delaware Law, a longer period of time will be required to effect the Merger.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company would
have certain rights to dissent and demand appraisal of their Shares under
Section 262 of Delaware Law. Dissenting stockholders who comply with the
requisite statutory procedures under Delaware Law would be entitled to a
judicial determination and payment of the "fair value" of their Shares as of the
close of business on the day prior to the date of stockholder authorization of
the Merger, together with interest thereon, at such rate as the court finds
equitable, from the date the Merger is consummated until the date of payment.
Under Delaware Law, in fixing the fair value of the Shares, a court would
consider the nature of the transaction giving rise to the stockholders' right to
receive payment for Shares and its effects on the Company and its stockholders,
the concepts and methods then customary in the relevant securities and financial
markets for determining fair value of shares of a corporation engaging in a
similar transaction under comparable circumstances, and all other relevant
factors.
The foregoing summary of the rights of objecting stockholders does not
purport to be a complete statement of the procedures to be followed by
stockholders desiring to exercise any available dissenters' rights. The
preservation and exercise of dissenters' rights require strict adherence to the
applicable provisions of Delaware Law.
29
<PAGE>
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by the Purchaser pursuant to the Offer is subject to the HSR Act
requirements. See Section 2.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchase may not be made until the expiration of a
15-calendar day waiting period following the required filing of a Pre-merger
Notification and Report Form under the HSR Act by Laidlaw, which Laidlaw intends
to submit as soon as practicable after the date hereof. The waiting period under
the HSR Act would expire at 11:59 p.m., New York City time, 15 days after the
filing date, unless early termination of the waiting period were granted or
Laidlaw received a request from the Antitrust Division or the FTC for additional
information or documentary material prior thereto. If such a request were made,
the waiting period applicable to the Offer will expire on the tenth calendar day
after the date of substantial compliance by Laidlaw with such request.
Thereafter, the waiting period may be extended by court order or by consent of
Laidlaw. Although the Company is required to file certain information and
documentary material with the Antitrust Division and the FTC in connection with
the Offer, neither the Company's failure to make such filings nor a request to
the Company from the Antitrust Division or the FTC for additional information or
documentary material will extend the waiting period.
The waiting period under the HSR Act may be terminated by the FTC and the
Antitrust Division prior to its expiration. Accordingly, pursuant to the HSR Act
each of Laidlaw and the Company intend to request early termination of the
waiting period applicable to the Offer. There can be no assurance, however, that
the 15-day HSR Act waiting period will be terminated early. Shares will not be
accepted for payment or paid for pursuant to the Offer until the expiration or
earlier termination of the applicable waiting period under the HSR Act. See
Section 2. Subject to Section 4, any extension of the waiting period will not
give rise to any withdrawal rights not otherwise provided for by applicable law.
If the Purchaser's acquisition of Shares is delayed due to a request by the
Antitrust Division or the FTC for additional information or documentary material
pursuant to the HSR Act and all other conditions to the Offer have been
satisfied, the Offer will be extended (and re-extended) until at least October
31, 1997, and may, with the consent of Laidlaw, the Purchaser and the Company,
be extended beyond that date.
No separate HSR Act requirements with respect to the Merger or the Merger
Agreement will apply if the 15-day waiting period relating to the Offer (as
described above) has expired or been terminated. However, if the Offer is
withdrawn or if the filing relating to the Offer is withdrawn prior to the
expiration or termination of the 15-day waiting period relating to the Offer,
the Merger may not be consummated until 30 calendar days after receipt by the
Antitrust Division and the FTC of the Pre-merger Notification and Report Forms
of both Laidlaw and the Company, unless the 30-day period is earlier terminated
by the Antitrust Division and the FTC. Within such 30-day period, the Antitrust
Division or the FTC may request additional information or documentary materials
from Laidlaw and/or the Company, in which event, the acquisition of Shares
pursuant to the Merger may not be consummated until twenty (20) days after both
Laidlaw and the Company substantially comply with such requests. Thereafter, the
waiting periods may be extended only by court order or by consent.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either the FTC or the Antitrust
Division could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or seeking the divestiture of Shares purchased
by the Purchaser or the divestiture of substantial assets of Laidlaw, the
Company or any of their respective subsidiaries. Private parties and state
attorneys general may also bring legal action under federal or state antitrust
laws under certain circumstances.
30
<PAGE>
Although the Purchaser believes that the acquisition of Shares pursuant to
the Offer would not violate the antitrust laws, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if a challenge
is made, what the outcome will be.
SECTION 16. FEES AND EXPENSES. Except as set forth below, neither Laidlaw
nor the Purchaser will pay any fees or commissions to any broker, dealer or
other person in connection with the solicitation of tenders of Shares pursuant
to the Offer.
Morgan Stanley & Co. Incorporated ("Morgan Stanley") is acting as Dealer
Manager in connection with the Offer and has provided certain financial advisory
services in connection with the acquisition of the Company. Laidlaw has agreed
to pay Dean Witter (which, subsequent to the merger of Dean Witter, Discover &
Co. with Morgan Stanley Group Inc., the execution of the engagement was assumed
by Morgan Stanley) a fee of $1,000,000 payable upon consummation of the Offer.
Laidlaw has also agreed to reimburse Morgan Stanley for all out-of-pocket
expenses incurred by Morgan Stanley, including the fees and expenses of legal
counsel and to indemnify Morgan Stanley against certain liabilities and expenses
in connection with its engagement, including certain liabilities under federal
securities laws.
In the ordinary course of its business, Morgan Stanley engages in securities
trading, market-making and brokerage activities and may, at any time, hold long
or short positions and may trade or otherwise effect transactions in securities
of the Company. As of August 1, 1997, Morgan Stanley held a net long position of
1,400 Shares.
The Purchaser has also retained Morrow & Co., Inc. to act as the Information
Agent and ChaseMellon Shareholder Services to act as the Depositary in
connection with the Offer. The Dealer Manager and Information Agent may contact
holders of Shares by mail, telephone, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward the Offer
materials to beneficial owners. The Information Agent and the Depositary will
receive reasonable and customary compensation for their services relating to the
Offer and will be reimbursed for certain out-of-pocket expenses. The Purchaser
and Laidlaw have also agreed to indemnify the Information Agent, the Dealer
Manager and the Depositary against certain liabilities and expenses in
connection with the Offer, including certain liabilities under the federal
securities laws.
Brokers, dealers, commercial banks and trust companies will, upon request,
be reimbursed by the Purchaser for customary mailing and handling expenses
incurred by them in forwarding the Offer materials to their customers.
SECTION 17. MISCELLANEOUS. The Offer is being made solely by this Offer to
Purchase and the related Letter of Transmittal and is being made to all holders
of Shares. The Purchaser is not aware of any state where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute or
seek to have such statute declared inapplicable to the Offer. If after such good
faith effort, the Purchaser cannot comply with such state statute, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in such state. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
The Purchaser and Laidlaw have filed with the Commission a Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the offices of the Commission (except that they will not be
available at the regional offices of the Commission) in the manner set forth in
Section 7 of this Offer to Purchase.
31
<PAGE>
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or Laidlaw not contained in this Offer
to Purchase or in the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
EHI ACQUISITION CORP.
August 5, 1997
32
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES
<TABLE>
<CAPTION>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND:
<S> <C> <C>
ChaseMellon (For Eligible Institutions Only) ChaseMellon
Shareholder Services (201) 329-8936 Shareholder Services
85 Challenger Road CONFIRM FACSIMILE BY TELEPHONE: 120 Broadway, 13th Floor
Ridgefield Park, NJ 07660 (201) 296-4860 New York, NY 10271
(201) 296-4860 (For Confirmation Only) BY OVERNIGHT COURIER:
ChaseMellon
Shareholder Services
85 Challenger Road
Ridgefield Park, NJ 07660
</TABLE>
33
<PAGE>
SCHEDULE I
INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICERS OF
LAIDLAW AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF LAIDLAW. Set forth in the table
below are the name and the present principal occupations or employment and the
name, principal business and address of any corporation or other organization in
which such occupation or employment is conducted, and the five-year employment
history of each of the directors and executive officers of Laidlaw. Laidlaw
indirectly owns 100% of the equity interest in the Purchaser. Unless otherwise
indicated, each person identified below is employed by Laidlaw. The principal
business address of Laidlaw and, unless otherwise indicated, the business
address of each person identified below is 3221 North Service Road, Burlington,
Ontario L7R 3Y8. Directors are identified by an asterisk. Unless otherwise
indicated, each person identified below is a Canadian citizen.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Peter N.T. Widdrington* ................................ Mr. Widdrington, 67, has been Chairman of the Board
248 Pallmall Street since August 1990 and a director of Laidlaw since 1986.
Suite 400 Since June 1996, he has been Chief Executive Officer of
London, Ontario N6A 5P6 Cuddy International Corporation, a poultry producer. He
was Chairman of the Board of The Toronto Blue Jays
Baseball Club, a professional baseball club from
January 1992 until 1995. For more than one year prior
thereto, he was Chairman of the Board of John Labatt
Limited, a food and beverage company. Mr. Widdrington
is also a director of Canadian Imperial Bank of
Commerce, CEC Resources Ltd., Cuddy International
Corporation, Ellis-Don Inc., SNC-Lavalin Group Inc. and
Talisman Energy Inc.
James R. Bullock*....................................... Mr. Bullock, 53, has been a director of Laidlaw since
1991 and President and Chief Executive Officer of the
Company since October 1993. For more than two years
prior thereto, he was President and Chief Executive
Officer of Cadillac Fairview Corporation Limited, a
property development company.
William P. Cooper* ..................................... Mr. Cooper, 57, has been a director of Laidlaw since
85 The East Mall 1983. For more than five years, he has been President
Toronto, Ontario M8Z 5W4 and Chief Executive Officer of Cooper Construction
Limited, a construction company. Mr. Cooper is also a
director of Baton Broadcasting Inc., Mutual Life of
Canada and Stelco Inc.
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Jack P. Edwards* ....................................... Mr. Edwards, 52, has been a director of Laidlaw since
3650 - 131st Avenue S.E. January 1996. He has been President and Chief Executive
Suite 700 Officer of Danzas Corporation, a worldwide
Bellevue, Washington 98006 transportation company, since June 1994. Prior thereto,
he was Chief Operating Officer of Circle International
for one and one-half years and President and Chief
Executive Officer of Itel's Transportation Group for
more than five years. Mr. Edwards is a United States
citizen.
William A. Farlinger* .................................. Mr. Farlinger, 67, has been a director of Laidlaw since
700 University Avenue January 1994. He became Chairman of Ontario Hydro, a
19th Floor public utility, in November 1995. Prior thereto, he was
Toronto, Ontario M56 1X6 President and Chief Executive Officer of William A.
Farlinger & Associates, a consulting company, since
October 1993. For more than two years prior thereto, he
was Chairman and Chief Executive Officer of Ernst &
Young, Chartered Accountants, in Canada. Mr. Farlinger
is also a director of Cara Operations, Hongkong Bank of
Canada and Manulife Financial.
Gordon R. Ritchie* ..................................... Mr. Ritchie, 53, has been a director of Laidlaw since
45 O'Connor Street January 1994. He has been Chief Executive Officer of
20th Floor Strategico Inc., a consulting company, since 1988. Mr.
Ottawa, Ontario K1P 1A4 Ritchie is also a director of Telemedia Inc., Maple
Leaf Foods Inc. and Cambior Inc.
Stella M. Thompson* .................................... Mrs. Thompson, 52, has been a director of Laidlaw since
2604 Toronto Crescent N.W. July 1994. She has been President of Stellar Energy
Calgary, Alberta T2N 3W1 Ltd., a consulting company, since 1991. For more than
one year prior thereto, she was a Vice-President of
Petro-Canada Inc. Mrs. Thompson is also a director of
Allstate Insurance Company of Canada, AGRA Industries
Ltd. and Talisman Energy, Inc.
Ivan R. Cairns.......................................... Mr. Cairns, 51, has been Senior Vice-President and
General Counsel of Laidlaw since October 1990 and,
prior thereto, was Vice-President and General Counsel
and Secretary since November 1981.
John R. Grainger........................................ Mr. Grainger, 48, has been President of Laidlaw Transit,
Laidlaw's passenger services group, since May 1992.
From February 1990 to that date, he was a Senior
Vice-President of Laidlaw Transit.
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Leslie W. Haworth....................................... Mr. Haworth, 54, has been Senior Vice-President and
Chief Financial Officer of Laidlaw since October 1990
and, prior thereto, was Vice-President, Finance and
Chief Financial Officer since March 1978.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. Set forth in the
table below are the name and the present principal occupations or employment and
the name, principal business and address of any corporation or other
organization in which such occupation or employment is conducted, and the
five-year employment history of each of the directors and executive officers of
the Purchaser. Each person identified below is employed by Laidlaw. The
principal business address of the Purchaser is 669 Airport Freeway, Suite 400,
Hurst, Texas 76053, and the principal business address of each person identified
below is 3221 N. Service Road, Burlington, Ontario L7R 3Y8. All persons
identified below are Canadian citizens.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
James R. Bullock*....................................... Mr. Bullock, 53, has served as President and Director of
Purchaser since its inception in July 1997. He also has
been President and Chief Executive Officer of Laidlaw
since October 1993. For more than two years prior
thereto, he was President and Chief Executive Officer
of Cadillac Fairview Corporation Limited, a property
development company.
Ivan R. Cairns*......................................... Mr. Cairns, 51, has served as Senior Vice-President,
General Counsel, Secretary and Director of Purchaser
since its inception in July 1997. He also has been
Senior Vice-President and General Counsel of Laidlaw
since October 1990 and, prior thereto, was Vice-
President and General Counsel and Secretary since
November 1981.
Leslie W. Haworth*...................................... Mr. Haworth, 54, has served as Senior Vice-President and
Director of Purchaser since its inception in July 1997.
He also has been Senior Vice-President and Chief
Financial Officer of Laidlaw since October 1990 and,
prior thereto, was Vice-President, Finance and Chief
Financial Officer since March 1978.
</TABLE>
S-3
<PAGE>
Any questions and requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and related materials may be directed to
the Information Agent or Dealer Manager at their addresses and telephone numbers
set forth below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-7628
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 5, 1997
BY
EHI ACQUISITION CORP.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
LAIDLAW INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME,
ON WEDNESDAY, SEPTEMBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND:
ChaseMellon Shareholder Services (201) 329-8936 ChaseMellon Shareholder Services
85 Challenger Road (For Eligible Institutions Only) 120 Broadway, 13th Floor
Ridgefield Park, New Jersey CONFIRM FACSIMILE BY TELEPHONE: New York, New York 10271
07660 (201) 296-4860 BY OVERNIGHT COURIER:
(201) 296-4860 (For Confirmation Only) ChaseMellon Shareholder Services
85 Challenger Road
Ridgefield Park, New Jersey
07660
</TABLE>
------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS,
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER,
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in Section 2 of the Offer to Purchase)
is utilized, if tenders of Shares are to be made by book-entry transfer into the
account of ChaseMellon Shareholder Services, as Depositary (the "Depositary"),
at The Depository Trust Company or the Philadelphia Depository Trust Company
(each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase (as defined below). Stockholders who tender Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders."
Holders of Shares whose certificates evidencing such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
REGISTERED HOLDER(S) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR(S) ON
CERTIFICATE(S))
TOTAL NUMBER OF
SHARE SHARES
CERTIFICATE REPRESENTED BY NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
TOTAL SHARES ...................
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered. See Instruction 4.
</TABLE>
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution_______________________________________________
Check box of Book-Entry Transfer Facility (check one):
/ / The Depository Trust Company / / Philadelphia Depository Trust Company
Account Number _________________ Transaction Code Number ________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): ____________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer
Facility (check one):
/ / The Depository Trust Company / / Philadelphia Depository Trust Company
Account Number _________________ Transaction Code Number ________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to EHI Acquisition Corp. (the "Purchaser"), a
Delaware corporation and an indirect wholly-owned subsidiary of Laidlaw Inc., a
Canadian corporation, ("Laidlaw"), the above-described shares of common stock,
par value $.01 per share (the "Shares"), of EmCare Holdings Inc., a Delaware
corporation (the "Company"), at a purchase price of $38.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated August 5, 1997 (the "Offer
to Purchase") and in this Letter of Transmittal (which, together with any
supplements and amendments, collectively constitute the "Offer"), receipt of
which is hereby acknowledged. The undersigned understands that the Purchaser
reserves the right to transfer or assign, in whole or from time to time in part,
to one or more of its affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer.
Upon the terms and conditions of the Offer and subject to, and effective
upon, acceptance for payment for the Shares tendered herewith in accordance with
the terms of the Offer, the undersigned hereby sells, assigns and transfers to,
or upon the order of, the Purchaser all right, title and interest in and to all
of the Shares that are being tendered hereby and any and all dividends,
distributions (including additional Shares) or rights declared, paid or issued
with respect to the tendered Shares on or after July 29, 1997 and payable or
distributable to the undersigned on a date prior to the transfer to the name of
the Purchaser or nominee or transferee of the Purchaser on the Company's stock
transfer records of the Shares tendered herewith, and appoints the Depositary
the true and lawful agent and attorney-in-fact of the undersigned with respect
to such Shares with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a) deliver such
Share Certificates (as defined herein) or transfer ownership of such Shares on
the account books maintained by a Book-Entry Transfer Facility, together in
either case with all accompanying evidences of transfer and authenticity, to the
Depositary for the account of the Purchaser upon receipt by the Depositary of
the purchase price, (b) present such Shares for transfer on the books of the
Company and (c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms and
subject to the conditions of the Offer.
The undersigned irrevocably appoints the Purchaser, its officers and its
designees, and each of them, the attorneys-in-fact and proxies of the
undersigned, with full power of substitution, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by the Purchaser and with respect to any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after July 29, 1997. This proxy and power of attorney is coupled with an
interest in the Shares tendered hereby and is irrevocable and is granted in
consideration of, and is effective upon, the acceptance for payment of such
Shares by the Purchaser in accordance with the terms of the Offer. Upon such
acceptance for payment, all prior proxies given by such stockholder with respect
to such Shares (and such other shares and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective) with respect thereto by the undersigned. The Purchaser, its officers
and its designees will, with respect to the Shares (and such other securities)
tendered, be empowered to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual or
special meeting of the Company's stockholders or any adjournment or postponement
thereof, by written consent in lieu of any such meeting or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's payment for such Shares the
Purchaser must be able to exercise full voting rights with respect to such
Shares and other securities, including voting at any meeting of stockholders.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and (b) when the Shares are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title to
the Shares, free and clear of all liens, restrictions, charges and encumbrances,
and the same will not be subject to any adverse claim. The undersigned, upon
request, will execute and deliver any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
<PAGE>
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after October 3, 1997. See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto and acceptance for payment of such Shares will constitute a
binding agreement between the undersigned and the Purchaser upon the terms and
subject to the conditions set forth in the Offer, including the undersigned's
representation that the undersigned owns the Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated herein under "Special Delivery
Instructions," please mail the check for the purchase price and/or any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered." In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or any
certificate(s) for Shares not tendered or accepted for payment in the name of,
and deliver such check and/or such certificates to, the person or persons so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name(s) of the registered holder(s) thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above, or (b)
if such Shares are tendered for the account of a firm which is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of a recognized Medallion Signature Guarantee Program (each of the
foregoing being referred to as an "Eligible Institution"). In all other cases,
all signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5 of this Letter of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility, as well as this Letter of Transmittal
(or a facsimile hereof), properly completed and duly executed with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the front
page of this Letter of Transmittal prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase). Stockholders whose Share Certificates are
not immediately available or who cannot deliver their Share Certificates and all
other required documents to the Depositary prior to the Expiration Date or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis may tender their Shares by properly completing and duly executing a Notice
of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth
in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such
tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser, must be received by the Depositary prior
to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer, in
each case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed with any required signature guarantees (or,
in the case of a book-entry delivery, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery. If Share Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased (unless you are tendering all of the Shares
you own). All tendering stockholders, by execution of this Letter of Transmittal
(or a facsimile hereof), waive any right to receive any notice of the acceptance
of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO BOOK-ENTRY STOCKHOLDERS) If fewer
than all of the Shares evidenced by any Share Certificate delivered to the
Depositary are to be tendered, fill in the number of Shares which are to be
tendered in the box entitled "Number of Shares Tendered." In such a case, new
Share Certificates for the Shares that were evidenced by your old Share
Certificates, but were not tendered by you, will be sent to you (unless
otherwise provided in the appropriate box on this Letter of Transmittal) as soon
as practicable after the Expiration Date. All Shares represented by Share
Certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
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.
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock 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
Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificate(s)
for such Shares. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay or cause to be paid any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificate(s) for Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder(s), if a
transfer tax is imposed for any reason other than the sale or transfer of Shares
to Purchaser pursuant to the Offer, or if tendered certificate(s) are registered
in the name of any person other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder(s) or such person) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes or an exemption therefrom is submitted.
EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY
FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN THIS
LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer may request that Shares not
purchased be credited to such account at any of the Book-Entry Transfer
Facilities as such stockholder may designate under "Special Payment
Instructions." If no such instructions are given, any such Shares not purchased
will be returned by crediting the account at the Book-Entry Transfer Facilities
designated above.
8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. 31% BACKUP WITHHOLDING, SUBSTITUTE FORM W-9. Each tendering stockholder
is required to provide the Depositary with a correct Taxpayer Identification
Number ("TIN"), generally the stockholder's social security or federal employer
identification number, on Substitute Form W-9 below. Failure to provide the
information on the form may subject the tendering stockholder to 31% federal
income tax withholding on the payment of the purchase price. The box in Part 3
of the form may be checked if the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future. If the box in Part 3 is checked and the Depositary is not provided with
a TIN by the time of payment, the Depositary will withhold 31% of all payments
of the purchase price thereafter until a TIN is provided to the Depositary.
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is his or her social security number. If a
stockholder fails to provide a TIN to the Depositary, such stockholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding of 31%.
<PAGE>
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained 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 such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the 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.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder 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, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares or of
the last transferee appearing on the transfers attached to, or endorsed on, the
Shares. If the Shares are in more than one name or are 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.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Information Agent at its address and
telephone numbers set forth below. Additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may also be
obtained from the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth below, or from brokers, dealers,
commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate evidencing
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary. The stockholder will then be instructed as to the steps
that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
<PAGE>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT THE Social Security Number
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. or Employer Identification Number
------------------------------------
FORM W-9 PART 2--For Payees exempt from backup withholding, see the enclosed Guidelines for Certification of
Department of the Treasury, Taxpayer Identification Number on Substitute Form W-9 and complete as instructed therein.
Internal Revenue Service Certification--Under penalties of perjury, I certify that:
PAYER'S REQUEST FOR (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for
TAXPAYER IDENTIFICATION a number to be issued to me) and
NUMBER ("TIN") (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (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 under-reporting 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). (Also see instructions in the enclosed
Guidelines.)
SIGN HERE --> Signature --------------------------- PART 3
Date: ------------------------, 1997 Awaiting TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
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 , 1997
<PAGE>
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1 AND 7)
To be completed ONLY if certificate(s) for Shares not To be completed ONLY if certificate(s) for Shares not
tendered or not accepted for payment and/or the check for tendered or not accepted for payment and/or the check for
the purchase price of Shares accepted for payment are to be the purchase price of Shares accepted for payment are to be
issued in the name of someone other than the undersigned. sent to someone other than the undersigned or to the
Issue: / / check and/or / / certificates to: undersigned at an address other than that appearing under
Name: ...................................................... "DESCRIPTION OF SHARES TENDERED."
(Please Print) Mail: / / check and/or / / certificates to:
Address: ................................................... Name: ......................................................
........................................................... (Please Print)
(Include Zip Code) Address: ...................................................
........................................................... ............................................................
(Tax Identification or Social Security No.) (Include Zip Code)
(See Substitute Form W-9) ............................. .............................
/ / Credit unpurchased Shares tendered by book-entry (Tax Identification or Social Security No.)
transfer to the account set forth below: (See Substitute Form W-9)
Name of Account Party ......................................
Account No. ............................................. at
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
SIGN SIGN HERE SIGN
HERE AND COMPLETE SUBSTITUTE FORM W-9 HERE
ARROW ................................................................................................ ARROW
................................................................................................
(Signature of Holder(s))
Dated: ................................................................................ , 1997
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share Certificate(s)
or on a security position listing or by person(s) authorized to become registered holder(s) by
certificates and documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information and See
Instruction 5.)
Name(s) .......................................................................................
................................................................................................
(Please Print)
Capacity (Full Title) .........................................................................
Address ........................................................................................
................................................................................................
(Include Zip Code)
Area Code and Telephone Number .................................................................
Tax Identification or
Social Security No. ...........................................................................
(See Substitute Form W-9)
GUARANTEE OF SIGNATURE(S)
(If Required -- See Instructions 1 and 5)
Authorized Signature ...........................................................................
Name ...........................................................................................
Name of Firm ...................................................................................
(Please Print)
Address ........................................................................................
(Include Zip Code)
Area Code and Telephone Number .................................................................
Dated: ................................................................................ , 1997
</TABLE>
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-7628
August 5, 1997
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
As set forth in Section 3 of the Offer to Purchase described below, this
instrument or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if (i) certificates evidencing Shares of common stock,
par value $.01 per share (the "Shares") are not immediately available, (ii) the
certificates evidencing Shares and all other required documents cannot be
delivered to the Depositary prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase), or (iii) the procedure for delivery by book-entry
transfer cannot be completed on a timely basis. This instrument may be
transmitted by facsimile transmission or delivered by hand or mail to the
Depositary.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND:
ChaseMellon (for Eligible Institutions) ChaseMellon
Shareholder Services (201) 329-8936 Shareholder Services
85 Challenger Road 120 Broadway, 13th Floor
Ridgefield Park, New Jersey 07660 CONFIRM FACSIMILE BY TELEPHONE: New York, New York 10271
(201) 296-4860 (201) 296-4860
(For Confirmation Only) BY OVERNIGHT COURIER:
ChaseMellon
Shareholder Services
85 Challenger Road
Ridgefield Park, New Jersey 07660
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
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, the signature guarantee must appear on the
applicable space provided in the signature box in the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to EHI Acquisition Corp., a Delaware
corporation and an indirect wholly-owned subsidiary of Laidlaw Inc., a Canadian
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated July 29, 1997 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with any supplements and amendments,
collectively constitute the "Offer"), receipt of which is hereby acknowledged,
the number of Shares indicated below of EmCare Holdings Inc., a Delaware
corporation, pursuant to the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase.
<TABLE>
<S> <C>
Signature(s) ..................................... Address(es) ......................................
................................................. ..................................................
ZIP CODE
Name(s) of Record Holders ........................ Area Code and Tel. No.(s) ........................
.................................................
Please Type or Print
................................................. Check one box if Shares will be
tendered by book-entry transfer
................................................. / / The Depository Trust Company
Number of Shares .................................
Certificate No.(s) (If Available)
................................................. / / Philadelphia Depository Trust Company
.................................................
Dated ................................... , 1997 Account Number ...................................
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, (a) represents that the above
named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b)
represents that the tender of those Shares complies with Rule 14e-4, (c)
guarantees to deliver to the Depositary either the certificates evidencing all
tendered Shares, in proper form for transfer, or to deliver Shares pursuant to
the procedure for book-entry transfer into the Depositary's account at the book
entry facility identified above (each a "Book-Entry Transfer Facility"), in
either case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed with any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery, and any other required documents, all within three Nasdaq
National Market trading days after the date hereof.
<TABLE>
<S> <C>
................................................. ..................................................
NAME OF FIRM AUTHORIZED SIGNATURE
................................................. Name .............................................
ADDRESS PLEASE TYPE OR PRINT
................................................. Title ............................................
ZIP CODE
Area Code and Tel. No. ........................... Date .................................... , 1997
</TABLE>
NOTE: DO NOT SEND CERTIFICATES EVIDENCING SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
1585 BROADWAY
NEW YORK, NEW YORK 10036
TEL: (212) 761-7628
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
AT
$38.00 NET PER SHARE
BY
EHI ACQUISITION CORP.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
LAIDLAW INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, SEPTEMBER 3, 1997, UNLESS THE OFFER IS EXTENDED
August 5, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by EHI Acquisition Corp. (the "Purchaser"), a Delaware
corporation and an indirect wholly-owned subsidiary of Laidlaw Inc., a Canadian
corporation ("Laidlaw"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase for cash all of the outstanding shares of common
stock, par value $.01 per share, of EmCare Holdings Inc., a Delaware corporation
(the "Company"), (the "Shares") at a purchase price of $38.00 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer") enclosed herewith. Holders of Shares whose certificates
evidencing such Shares (the "Share Certificates") are not immediately available
or who cannot deliver their Share Certificates and all other required documents
to the Depositary (as defined below) prior to the Expiration Date (as defined in
the Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
The Offer is subject to there being validly tendered and not properly
withdrawn prior to the expiration of the Offer a number of Shares which
constitutes at least fifty-one percent (51%) of the outstanding Shares of the
Company, assuming certain exercises. The Offer is also subject to other terms
and conditions. See the Introduction and Section 14 of the Offer to Purchase.
<PAGE>
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated August 5, 1997.
2. The BLUE Letter of Transmittal to tender Shares for your use and for
the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
3. The GREY Notice of Guaranteed Delivery for Shares to be used to
accept the Offer if Share Certificates are not immediately available, if
such certificates and all other required documents cannot be delivered to
ChaseMellon Shareholder Services (the "Depositary") by the Expiration Date,
or if the procedure for book-entry transfer cannot be completed by the
Expiration Date.
4. A YELLOW printed form of letter which may be sent to your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining your clients' instructions
with regard to the Offer.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding.
6. A return envelope addressed to ChaseMellon Shareholder Services.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, SEPTEMBER 3, 1997, UNLESS THE
OFFER IS EXTENDED.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will be deemed to have accepted for payment, and will
pay for, all Shares validly tendered and not properly withdrawn prior to the
Expiration Date when, as and if the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance of such Shares for payment pursuant
to the Offer. Payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of certificates for such Shares (or
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as described in the Offer
to Purchase)), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) (unless, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) is utilized) and any other
documents required by the Letter of Transmittal.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal with any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and any other required documents should be sent
to the Depositary, and (ii) Share Certificates representing the tendered Shares
should be delivered to the Depositary, or such Shares should be tendered by
book-entry transfer into the Depositary's account maintained at one of the
Book-Entry Transfer Facilities (as described in the Offer to Purchase), all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Depositary, the Dealer Manager and the Information
Agent) in connection with the solicitation of tenders of Shares pursuant to the
Offer. The Purchaser will, however, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Purchaser will pay or cause
<PAGE>
to be paid any stock transfer taxes payable on the transfer of Shares to it,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
us or Morrow & Co., Inc., the Information Agent, at its address and telephone
numbers set forth on the back cover of the Offer to Purchase.
VERY TRULY YOURS,
MORGAN STANLEY DEAN WITTER
AS DEALER MANAGER
MORGAN STANLEYDEAN WITTER
AS DEALER MANAGER
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, LAIDLAW, THE COMPANY, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
AT
$38.00 NET PER SHARE
BY
EHI ACQUISITION CORP.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
LAIDLAW INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, SEPTEMBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
August 5, 1997
TO OUR CLIENTS:
Enclosed for your consideration is an Offer to Purchase dated August 5, 1997
(the "Offer to Purchase") and the related Letter of Transmittal relating to an
offer by EHI Acquisition Corp. (the "Purchaser"), a Delaware corporation and an
indirect wholly-owned subsidiary of Laidlaw Inc., a Canadian corporation
("Laidlaw"), to purchase all of the outstanding shares of common stock, par
value $.01 per share, of EmCare Holdings Inc., a Delaware corporation (the
"Company"), (the "Shares") at a purchase price of $38.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer"). We are the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES 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 SHARES 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 such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $38.00 per Share, net to the seller in cash,
without interest thereon.
2. The Offer is being made for all outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on September 3, 1997, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there being
validly tendered and not properly withdrawn prior to the Expiration Date (as
defined in the Offer to Purchase) a number of Shares which constitutes at
least fifty-one percent (51%) of the outstanding Shares of the Company
assuming certain exercises. The Offer is also subject to other terms and
conditions. See the Introduction and Section 14 of the Offer to Purchase.
5. The Board of Directors of the Company has unanimously approved the
Offer.
<PAGE>
6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. However, federal income tax backup withholding at a rate of 31% may
be required, unless a exemption is provided or unless the required taxpayer
identification information is provided. See Instruction 9 of the Letter of
Transmittal.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Purchaser
is not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such state statute or seek to have such
statute declared inapplicable to the Offer. If after such good faith effort, the
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope to return your
instructions to us is enclosed. If you authorize a tender of your Shares, all
such Shares will be tendered unless otherwise specified in such instruction
form. Your instructions should be forwarded to us in ample time to permit us to
submit a tender on your behalf prior to the expiration of the Offer. Holders of
Shares whose Share Certificates (as defined in the Offer to Purchase) are not
immediately available or who cannot deliver their Certificates and all other
required documents to ChaseMellon Shareholder Services, as depositary (the
"Depositary"), or complete the procedures for book-entry transfer prior to the
Expiration Date must tender their Shares according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase.
Payment for Shares purchased pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) Share Certificates or timely
confirmation of the book-entry transfer of such Shares into the account
maintained by the Depositary at The Depository Trust Company or Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"),
pursuant to the procedure set forth in Section 3 of the Offer to Purchase, (b)
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery, and
(c) any other documents required by the Letter of Transmittal. Accordingly,
payment may not be made to all tendering shareholders at the same time depending
upon when Share Certificates for or confirmation of book-entry transfer of such
Shares into the Depositary's account at a Book-Entry Transfer Facility are
actually received by the Depositary.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase dated August 5, 1997 (the "Offer to Purchase") and the related Letter
of Transmittal pursuant to an offer by EHI Acquisition Corp., a Delaware
corporation and an indirect wholly-owned subsidiary of Laidlaw Inc., a Canadian
corporation, to purchase all outstanding shares of common stock, par value $0.01
per share, of EmCare Holdings Inc., a Delaware corporation (the "Shares").
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) which are 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 in the related Letter of Transmittal
furnished to the undersigned.
<TABLE>
<S> <C>
Number of Shares to be Tendered*: SIGN HERE
___________________________ Shares ----------------------------------------
Account
Number _______________________________ ----------------------------------------
Dated , 1997 Signature(s)
----------------------------------------
----------------------------------------
Please type or print name(s)
----------------------------------------
----------------------------------------
Address
----------------------------------------
----------------------------------------
Area Code and Telephone Number
----------------------------------------
Tax Identification or Social Security
Number
----------------------------------------
</TABLE>
- ------------------------
*Unless otherwise indicated, it will be assumed that all of your Shares held by
us for your account are to be tendered.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 000-000000. The table below will help determine the number to
give the Payor.
<TABLE>
<CAPTION>
GIVE THE GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION NUMBER
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: OF--
- ----------------------------- ------------------------ ----------------------------- ------------------------
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship The owner(4)
account
2. Two or more individuals The actual owner of the 9. A valid trust, estate, or Legal entity (Do not
(joint account) account or, if combined pension trust furnish the identifying
funds, any one of the number of the personal
individual's(1) representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(5)
3. Husband and wife (joint The actual owner of the 10. Corporate account The Corporation
account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2) 11. Religious, charitable, or The organization
minor (Uniform Gift to educational organization
Minors Act) account
5. Adult and minor (joint The adult or, if the 12. Partnership account held The partnership
account) minor is the only in the name of the business
contributor, the
minor(1)
6. Account in the name of The ward, minor, or 13. Association, club or The organization
guardian or committee for incompetent person(3) other tax-exempt organization
a designated ward, minor,
or incompetent person
7. a. The usual revocable The grantor-trustee(1) 14. A broker or registered The broker or nominee
savings trust account nominee
(grantor is also trustee)
b. So-called trust account The actual owner(1) 15. Account with the The public entity
that is not a legal or Department of Agriculture
valid trust under State in the name of a public
law entity (such as a State
of local governmental
school district or
prison) that receives
agricultural program
payments.
</TABLE>
- ------------------------------
(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.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- A corporation.
- A financial institution
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust,
or a non-exempt trust described in section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenants bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
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 IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, 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 NUMBERS.--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.--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.
2
<PAGE>
[Form of Advertisement]
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS BEING MADE SOLELY BY THE OFFER TO PURCHASE DATED
AUGUST 5, 1997 AND THE RELATED LETTER OF TRANSMITTAL AND IS BEING MADE TO ALL
HOLDERS OF SHARES. THE PURCHASER IS NOT AWARE OF ANY STATE WHERE THE
MAKING OF THE OFFER IS PROHIBITED BY ADMINISTRATIVE OR JUDICIAL ACTION
PURSUANT TO ANY VALID STATE STATUTE. IF THE PURCHASER BECOMES AWARE OF
ANY VALID STATE STATUTE PROHIBITING THE MAKING OF THE OFFER OR THE
ACCEPTANCE OF SHARES PURSUANT THERETO, THE PURCHASER WILL MAKE A
GOOD FAITH EFFORT TO COMPLY WITH SUCH STATE STATUTE OR SEEK TO
HAVE SUCH STATUTE DECLARED INAPPLICABLE TO THE OFFER. IF, AFTER
SUCH GOOD FAITH EFFORT, THE PURCHASER CANNOT COMPLY WITH SUCH
STATE STATUTE, THE OFFER WILL NOT BE MADE TO (NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF) THE HOLDER OF
SHARES IN SUCH STATE. IN ANY JURISDICTION WHERE
SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO
BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER
SHALL BE DEEMED TO BE MADE ON BEHALF OF THE
PURCHASER BY MORGAN STANLEY & CO. INCORPORATED
(THE "DEALER MANAGER") OR ONE OR MORE
REGISTERED BROKERS OR DEALERS LICENSED UNDER
THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
EMCARE HOLDINGS INC.
AT
$38.00 NET PER SHARE
BY
EHI ACQUISITION CORP.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
LAIDLAW INC.
EHI Acquisition Corp. (the "Purchaser"), a Delaware corporation and an
indirect wholly-owned subsidiary of Laidlaw Inc., a Canadian corporation
("Laidlaw"), hereby offers to purchase all of the outstanding shares of common
stock, par value $.01 per share, of EmCare Holdings Inc., a Delaware corporation
(the "Company"), ("Shares") at a purchase price of $38.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any supplements or amendments, collectively
constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, SEPTEMBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO EXPIRATION OF THE OFFER A NUMBER OF
SHARES REPRESENTING AT LEAST FIFTY-ONE PERCENT (51%) OF THE SHARES OUTSTANDING,
ASSUMING CERTAIN EXERCISES.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 29, 1997 (the "Merger Agreement"), by and among the Company, Laidlaw
and the Purchaser. The Merger Agreement provides, among other things, that as
soon as practicable after the consummation of the Offer and satisfaction or, to
the extent permitted under the Merger Agreement, waiver of all conditions to the
Merger, the Purchaser
<PAGE>
will be merged with and into the Company (the "Merger"). Following consummation
of the Merger, the Company will continue as the surviving corporation of the
Merger and as an indirect wholly-owned subsidiary of Laidlaw. At the effective
time of the Merger, each outstanding Share (other than treasury Shares, Shares
held by Laidlaw, the Purchaser or any other subsidiary of Laidlaw, and Shares
held by stockholders, if any, who properly exercise appraisal rights under
Delaware law) will be converted into and represent the right to receive $38.00
in cash, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT EACH OF THE OFFER AND
THE MERGER IS IN THE BEST INTEREST OF THE COMPANY'S STOCKHOLDERS AND RECOMMENDS
THAT ALL STOCKHOLDERS ACCEPT THE OFFER AND TENDER ALL OF THEIR SHARES PURSUANT
TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary (as defined in the Offer to Purchase) of the Purchaser's acceptance
of such Shares for payment pursuant to the Offer. Upon the terms and subject to
the conditions of the Offer, payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payments from the Purchaser and transmitting such payments to
stockholders whose Shares have been accepted for payment. In all cases, payment
for Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) certificates evidencing such
Shares (or timely Book-Entry Confirmation (as defined in Section 2 of the Offer
to Purchase) with respect to such Shares), (ii) the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed with
any required signature guarantees (or an Agent's Message (as defined in Section
2 of the Offer to Purchase) in connection with a book-entry transfer), and (iii)
all other documents required by the Letter of Transmittal. Under no
circumstances will interest on the purchase price for Shares be paid, regardless
of any delay in making such payment.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Wednesday, September 3, 1997, unless and until the Purchaser, in accordance with
the terms of the Offer and the Merger Agreement, shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Purchaser, shall expire. Subject to the terms of the Merger Agreement, the
Purchaser expressly reserves the right, at any time and from time to time, to
extend the period of time during which the Offer is open for any reason,
including the occurrence of any of the events specified in Section 14 of the
Offer to Purchase, by giving written notice of such extension to the Depositary.
Any such extension will be followed as promptly as practicable by public
announcement to be made not later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after October
3, 1997. For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of the addresses set forth in the Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If certificates evidencing the Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility (as defined in Section 2 of the Offer to Purchase)
to be credited with the withdrawn Shares. All questions as to the form and
validity (including time of receipt) of any notice of withdrawal will be
determined by the Purchaser, in its sole discretion, whose determination will be
final and binding. Any Shares properly withdrawn will be deemed not validly
tendered for purposes of the Offer,
<PAGE>
but may be re-tendered at any subsequent time prior to the Expiration Date by
following any of the procedures described in Section 3 of the Offer to Purchase.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares whose names appear
on the Company's stockholder list and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the Letter of Transmittal contain important
information and should be read carefully and in their entirety before any
decision is made with respect to the Offer.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager as set forth below. Requests for copies of the Offer
to Purchase, the related Letter of Transmittal and other tender offer materials
also may be directed to the Information Agent, and copies will be furnished
promptly at the Purchaser's expense. Neither Laidlaw nor the Purchaser will pay
any fees or commissions to any broker or dealer or any other person (other than
the Information Agent, the Dealer Manager and the Depositary) in connection with
the solicitation of tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-7628
<PAGE>
PRESS RELEASE
LAIDLAW TO EXPAND IN EMERGENCY HEALTHCARE
AGREEMENT SIGNED TO ACQUIRE EMCARE HOLDINGS INC.
BURLINGTON, ONTARIO AND DALLAS, TEXAS, JULY 30, 1997 -- Laidlaw Inc.
(NYSE:LDW.B; TSE and ME:LDM) and EmCare Holdings Inc. (Nasdaq:EMCR) today
announced that they have entered into a definitive agreement under which
Laidlaw will acquire, for cash, all outstanding shares of Dallas,
Texas-based, EmCare Holdings Inc. -- a leading emergency physician practice
management corporation. Under the terms of the agreement, a cash tender
offer, EmCare shareholders will be offered $38.00 (U.S.) per share. Aggregate
value of the transaction is $400.0 million based on approximately 8.2 million
outstanding EmCare shares, $25.0 million of costs associated with stock
options retired and the assumption of $65 million of debt.
EmCare and Laidlaw have signed a merger agreement pursuant to which Laidlaw
will commence a tender offer within five business days from today. EmCare's
Board of Directors have received a fairness opinion from its financial
advisor, Donaldson, Lufkin & Jenrette Securities Corporation, and the Board
is recommending that all EmCare shareholders accept Laidlaw's offer. Morgan
Stanley & Co. Incorporated is acting as advisor to Laidlaw. It is expected
the transaction will be completed in September and is subject to the tender
of a minimum of 51% of EmCare's voting shares and other customary conditions,
including normal regulatory approvals.
EmCare is widely regarded within its industry as a premier provider of
emergency physician practice management services. Founded in 1972, the
company provides a variety of services to hospital emergency departments,
principally physician recruitment and staffing as well as inpatient, primary
and managed care services contracting. More than 90% of its $260 million
annualized revenue is generated by the management of emergency departments
under 131 contracts in 162 hospitals. EmCare operates in 21 states and
contracts with 1,800 physicians who annually provide care for more than three
million patients. EmCare will integrate the STAT emergency department
management business of Laidlaw's American Medical Response (AMR) into its
operations.
-1-
<PAGE>
EmCare's founding chairman and chief executive officer, Dr. Leonard M.
Riggs Jr., and its president and chief operating officer, William F.
Miller III, will remain in their respective positions with EmCare, which will
operate as a division of Laidlaw. They have agreed to tender their EmCare
shares representing, in aggregate, about 15% of the total outstanding. They
have each agreed to reinvest approximately 25% of their after-tax proceeds
from the transaction in Laidlaw shares in order to significantly align their
interests with those of Laidlaw's existing shareholders.
Commenting on the merger, James R. Bullock, Laidlaw's president and CEO said,
"For some time, our intention has been to expand our role in the
healthcare service industry into markets associated with the emergency
transportation we now provide with AMR. The acquisition of EmCare is a
concrete example of this direction.
"EmCare, when added to the base we've built from the integration of AMR
and MedTrans, makes Laidlaw a clear leader in the provision of emergency
healthcare transportation and emergency physician practice management.
Additionally, this acquisition will strengthen our emerging American
Medical Pathways -- a nurse triage service -- and position Laidlaw
as a growing force in a broader range of emergency healthcare services."
EmCare's Dr. Riggs stated,
"With our focus on unscheduled, episodic care we will provide a strong
complement to Laidlaw's existing emergency healthcare services. I look
forward to working with the Laidlaw team to continue EmCare's growth
and success. I believe this transaction is in the best interests of all
EmCare's shareholders."
EmCare Holdings Inc. is a leading provider of physician services management
in hospital emergency departments and other practice settings. EmCare
provides practice management services to its physician contractors and
arranges contracts and schedules for their services. EmCare has managed
emergency physicians for more than 20 years primarily in larger hospitals
with high-volume emergency departments.
-2-
<PAGE>
Based in Burlington, Ontario, Laidlaw Inc. is the largest emergency
healthcare transportation, school busing and municipal transit service
company in North America.
Contacts: 1-800-563-6072
T.A.G. Watson Vice President, Communications
ext. 309 Laidlaw Inc.
Les Haworth Senior Vice President and CFO
ext. 208 Laidlaw Inc.
Website: www.laidlaw.com
Dr. Leonard M. Riggs, Jr. Chairman and C.E.O.
214-712-2000 EmCare Holdings Inc.
Robert P. Jones/Jill Ruja
212-850-5600 Morgen-Walke Associates
David Sassoon Media Contact
212-850-5600 Morgen-Walke Associates
-3-
<PAGE>
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EMCARE HOLDINGS INC.
AND
LAIDLAW INC. (THE "PARENT")
EHI ACQUISITION CORP. ("ACQUISITION")
DATED
JULY 29, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1. THE OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1.1. COMMENCEMENT. . . . . . . . . . . . . . . . . . .1
1.1.2. FILING OFFER DOCUMENTS. . . . . . . . . . . . . .2
1.2. COMPANY ACTION. . . . . . . . . . . . . . . . . . . . . . .3
1.2.1. BOARD APPROVAL. . . . . . . . . . . . . . . . . .3
1.2.2. SCHEDULE 14D-9. . . . . . . . . . . . . . . . . .3
1.2.3. DISSEMINATION OF THE OFFER. . . . . . . . . . . .3
1.3. BOARD OF DIRECTORS AND COMMITTEES; SECTION 14(f). . . . . .4
1.3.1. BOARD REPRESENTATION. . . . . . . . . . . . . . .4
1.3.2. COMPLIANCE WITH SECTION 14(f) . . . . . . . . . .4
1.3.3. ACTION BY DISINTERESTED DIRECTORS . . . . . . . .5
ARTICLE 2. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . .5
2.1.1. EFFECTIVE TIME. . . . . . . . . . . . . . . . . .5
2.1.2. CLOSING . . . . . . . . . . . . . . . . . . . . .5
2.2. EFFECTIVE TIME. . . . . . . . . . . . . . . . . . . . . . .6
2.3. EFFECT OF THE MERGER. . . . . . . . . . . . . . . . . . . .5
2.4. CERTIFICATE OF INCORPORATION; BY-LAWS . . . . . . . . . . .6
2.4.1. CERTIFICATE OF INCORPORATION. . . . . . . . . . .6
2.4.2. BY-LAWS . . . . . . . . . . . . . . . . . . . . .6
2.5. DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . .6
2.6. EFFECT ON CAPITAL STOCK . . . . . . . . . . . . . . . . . .6
2.6.1. CONVERSION OF SECURITIES. . . . . . . . . . . . .6
2.6.2. CANCELLATION. . . . . . . . . . . . . . . . . . .6
2.6.3. STOCK OPTIONS . . . . . . . . . . . . . . . . . .6
2.6.4. CAPITAL STOCK OF ACQUISITION. . . . . . . . . . .7
2.6.5. DISSENTING SHARES . . . . . . . . . . . . . . . .7
2.7. EXCHANGE OF CERTIFICATES. . . . . . . . . . . . . . . . . .7
2.7.1. EXCHANGE AGENT AND PROCEDURES . . . . . . . . . .7
2.7.2. CONSIDERATION . . . . . . . . . . . . . . . . . .8
2.7.3. INVESTMENT OF MERGER CONSIDERATION. . . . . . . .8
2.7.4. TERMINATION OF DUTIES . . . . . . . . . . . . . .8
2.7.5. NO LIABILITY. . . . . . . . . . . . . . . . . . .8
2.7.6. WITHHOLDING RIGHTS. . . . . . . . . . . . . . . .8
2.8. NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK . . . .9
2.9. LOST, STOLEN OR DESTROYED CERTIFICATES. . . . . . . . . . .9
2.10. TAKING OF NECESSARY ACTION; FURTHER ACTION. . . . . . . . .9
2.11. STOCKHOLDERS' MEETING . . . . . . . . . . . . . . . . . . .9
i
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . 10
3.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF THE
COMPANY. . . . . . . . . . . . . . . . . . . . . . . 10
3.2. ORGANIZATION, EXISTENCE AND GOOD STANDING OF
SUBSIDIARIES AND PAS . . . . . . . . . . . . . . . . 10
3.3. CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . 11
3.4. AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . 12
3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . 12
3.6. COMPLIANCE; PERMITS. . . . . . . . . . . . . . . . . . . 13
3.7. SEC FILINGS; FINANCIAL STATEMENTS. . . . . . . . . . . . 14
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . 14
3.9. NO UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . 15
3.10. ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . 15
3.11. EMPLOYEE BENEFIT PLANS, EMPLOYMENT AGREEMENTS. . . . . . 15
3.12. LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . 16
3.13. RESTRICTIONS ON BUSINESS ACTIVITIES. . . . . . . . . . . 16
3.14. TITLE TO PROPERTY. . . . . . . . . . . . . . . . . . . . 17
3.15. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.16. INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . 18
3.17. INTERESTED PARTY TRANSACTIONS. . . . . . . . . . . . . . 18
3.18. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 18
3.19. HEALTHCARE REGULATORY COMPLIANCE . . . . . . . . . . . . 18
3.20. OPINION OF FINANCIAL ADVISOR . . . . . . . . . . . . . . 18
3.21. BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . 18
3.22. SECTION 203 OF THE DELAWARE LAW NOT APPLICABLE . . . . . 18
3.23. SCHEDULE 14D-9 . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF PARENT;
ACQUISITION . . . . . . . . . . . . . . . . . . . . . 19
4.2. AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . 20
4.3. NO CONFLICT, REQUIRED FILINGS AND CONSENTS . . . . . . . 20
4.4. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT . . . . 21
4.5. NO PRIOR ACTIVITIES; FINANCING . . . . . . . . . . . . . 21
ARTICLE 5. CONDUCT OF BUSINESS PENDING THE MERGER . . . . . . . . . . . . 21
5.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. . 22
5.2. NO SOLICITATION. . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 6. ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 25
6.1. HSR ACT. . . . . . . . . . . . . . . . . . . . . . . . . 25
ii
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
6.2. ACCESS TO INFORMATION; CONFIDENTIALITY. . . . . . . . . . 25
6.3. INDEMNIFICATION AND INSURANCE . . . . . . . . . . . . . . 25
6.4. NOTIFICATION OF CERTAIN MATTERS . . . . . . . . . . . . . 27
6.5. FURTHER ACTION. . . . . . . . . . . . . . . . . . . . . . 27
6.6. PUBLIC ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . 27
ARTICLE 7. CONDITIONS TO THE MERGER . . . . . . . . . . . . . . . . . . . 28
7.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
MERGER. . . . . . . . . . . . . . . . . . . . . . . . . 28
7.1.1. PURCHASE OF SHARES. . . . . . . . . . . . . . . 28
7.1.2. HSR ACT . . . . . . . . . . . . . . . . . . . . 28
7.1.3. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. . . . 28
7.1.4. GOVERNMENTAL ACTIONS. . . . . . . . . . . . . . 28
ARTICLE 8. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 28
8.2. EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . 29
ARTICLE 9. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 29
9.1. FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . 29
9.2. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . 30
9.3. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . 31
9.5. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . 32
9.6. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.7. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . 32
9.8. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . 32
9.9. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . 33
9.10. ASSIGNMENT; GUARANTEE OF ACQUISITION OBLIGATIONS. . . . . 33
9.11. PARTIES IN INTEREST . . . . . . . . . . . . . . . . . . . 33
9.12. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . 33
9.13. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 33
9.14. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . 33
9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS . . . . . . . 33
9.15.1. JURISDICTION . . . . . . . . . . . . . . . . . 33
9.15.2. VENUE; INCONVENIENT FORUM. . . . . . . . . . . 34
9.15.3. SERVICE OF PROCESS . . . . . . . . . . . . . . 34
ANNEX A 1
iii
<PAGE>
INDEX OF DEFINED TERMS
Page
----
1997 Company Balance Sheet....................................................14
Acquisition....................................................................1
AFFILIATES....................................................................30
Antitrust Division............................................................24
Associated PA.................................................................10
BENEFICIAL OWNER..............................................................30
Blue Sky Laws.................................................................13
Board..........................................................................1
Business Combination..........................................................24
Business Combination Proposal.................................................24
BUSINESS DAY..................................................................31
Certificate of Merger..........................................................5
Certificates...................................................................7
Code...........................................................................8
Common Stock...................................................................1
Company........................................................................1
Company Common Stock...........................................................1
Company Disclosure Schedule...................................................10
Company Employee Plans........................................................15
Company Permits...............................................................13
Company SEC Reports...........................................................14
Company Stock Plan.............................................................6
Company Subsidiary............................................................10
Confidentiality Letter........................................................25
CONTROL.......................................................................31
Delaware Law...................................................................1
Dissenting Shares..............................................................7
DLJ............................................................................3
DOLLARS.......................................................................30
Effective Time.................................................................5
ERISA.........................................................................15
ERISA Affiliate...............................................................15
Exchange Act...................................................................4
FTC...........................................................................24
HSR Act.......................................................................13
Indemnified Parties...........................................................25
IRS...........................................................................15
MATERIAL ADVERSE EFFECT.......................................................31
Material Contracts............................................................12
i
<PAGE>
Page
----
Merger.........................................................................1
Merger Consideration...........................................................6
Minimum Condition..............................................................2
Offer..........................................................................1
Offer Documents................................................................2
Parent.........................................................................1
Parent Subsidiary.............................................................19
Paying Agent...................................................................7
PBGC..........................................................................15
Per Share Amount...............................................................1
Permitted Acquisitions........................................................22
PERSON........................................................................31
Proxy Statement...............................................................18
Schedule 14D-9.................................................................3
SEC............................................................................2
Securities Act................................................................13
Shares.........................................................................1
Stock Option...................................................................6
Stockholders' Meeting..........................................................9
SUBSIDIARY....................................................................31
Superior Proposal.............................................................24
Surviving Corporation..........................................................5
Tax...........................................................................17
Tax Returns...................................................................17
Taxes.........................................................................17
Third Party...................................................................23
ii
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 29, 1997, is among
EmCare Holdings Inc., a Delaware corporation (the "Company"), Laidlaw Inc., a
Canadian corporation ("Parent") and EHI Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Acquisition").
WHEREAS, the Board of Directors of Parent, Acquisition and the Company
have each approved the acquisition of the Company by Parent upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Acquisition shall
make a tender offer to acquire all outstanding shares (the "Shares") of common
stock, par value $.01 per share, of the Company (the "Common Stock" or "Company
Common Stock") for a cash amount of $38.00 per Share, net to the seller in cash
(such amount, or any greater amount per Share paid pursuant to the tender offer,
being hereinafter referred to as the "Per Share Amount") in accordance with the
terms and subject to the conditions provided for herein (the "Offer");
WHEREAS, the Board of Directors of the Company (the "Board") has
(i) determined that the consideration to be paid for each Share in the Offer and
the Merger (as defined below) is in the best interests of the stockholders of
the Company and (ii) approved this Agreement and the transactions contemplated
hereby and resolved to recommend acceptance of the Offer and approval and
adoption of this Agreement by the stockholders of the Company; and
WHEREAS, the Boards of Directors of Parent and Acquisition have each
approved the merger (the "Merger") of Acquisition with and into the Company
following the Offer in accordance with the Delaware General Corporation Law (the
"Delaware Law") upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Parent and Acquisition hereby agree as follows:
ARTICLE 1.
THE OFFER
1.1. THE OFFER
1.1.1. COMMENCEMENT. Provided that this Agreement shall not have
been terminated in accordance with SECTION 8.1., as promptly as
practicable, but in any event within five business days of the public
announcement of the terms of this Agreement, Acquisition shall commence
the Offer. The obligation of Acquisition to accept for payment and pay
for Shares tendered pursuant to the Offer shall be subject only to
(A) the
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condition that a number of Shares representing not less than fifty-one
percent (51%) of the Company's outstanding voting power (assuming the
exercise of all outstanding options and rights to purchase shares of
Common Stock), shall have been validly tendered and not withdrawn prior
to the expiration date of the Offer (the "Minimum Condition"), and
(B) the other conditions set forth in Annex A hereto. It is agreed that
the Minimum Condition and the other conditions set forth in Annex A
hereto are for the sole benefit of Acquisition and may be asserted by
Acquisition regardless of the circumstances giving rise to any such
condition unless Parent, Acquisition or their affiliates shall have
caused the circumstances giving rise to such condition. Acquisition
expressly reserves the right in its sole discretion to waive, in whole or
in part, at any time or from time to time, any such condition (other than
the Minimum Condition and the conditions set forth in clause (ii) and
(iii)(c) of Annex A which may not be waived without the prior written
consent of the Company), to increase the price per Share payable in the
Offer or to make any other changes in the terms and conditions of the
Offer; provided that, unless previously approved by the Company in
writing, no change may be made that decreases the price per Share payable
in the Offer, changes the form of consideration payable in the Offer,
reduces the maximum number of Shares to be purchased in the Offer,
imposes conditions to the Offer in addition to those set forth in Annex A
hereto or amends or modifies such conditions, amends any other terms or
conditions of the Offer, or that is otherwise adverse to the holders of
Shares. Acquisition covenants and agrees that, subject to the conditions
of the Offer set forth in Annex A hereto, Acquisition shall accept for
payment and pay for Shares which have been validly tendered and not
withdrawn pursuant to the Offer as soon as it is permitted to do so under
applicable law; provided that, if the number of Shares that have been
validly tendered and not withdrawn represent less than 90% of the
Company's outstanding voting power (calculated as described above),
Acquisition may extend the Offer up to the fifth business day following
the date on which all conditions to the Offer shall first have been
satisfied or waived, provided that if Acquisition so extends the Offer,
its obligation to purchase the Shares tendered pursuant to the Offer
shall be unconditional. The Per Share Amount payable in the Offer shall
be paid net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Acquisition agrees that if all conditions set
forth in Annex A are not satisfied on the initial expiration date of the
Offer, Acquisition shall extend (and re-extend) the Offer through October
31, 1997 to provide time to satisfy such conditions.
1.1.2. FILING OFFER DOCUMENTS. As soon as practicable on the
date of commencement of the Offer, Parent and Acquisition shall file with
the Securities and Exchange Commission (the "SEC") a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer which will contain
the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, the "Offer
Documents"). Parent, Acquisition and the Company each agrees promptly to
correct any information provided by it for use in the Offer Documents if
and to the extent that any such information shall have become false or
misleading in any material respect and Parent and Acquisition each
further agrees to take all steps necessary to cause the Offer Documents
as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by
applicable federal securities laws.
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The Company and its counsel shall be given a reasonable opportunity to
review and comment on the Offer Documents prior to their filing with the
SEC and shall be provided with any comments Parent, Acquisition and their
counsel may receive from the SEC or its staff with respect to the offer
documents promptly after receipt of such comments.
1.2. COMPANY ACTION.
1.2.1. BOARD APPROVAL. The Company hereby approves of and
consents to the Offer and represents and warrants that the Board, at a
meeting duly called and held on July 28, 1997, unanimously (i) determined
that this Agreement and the transactions contemplated hereby, including
the Offer and the Merger, are in the best interests of the stockholders
of the Company, (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and
(iii) resolved to recommend that the stockholders of the Company accept
the Offer, tender their Shares thereunder to Acquisition and, if required
by applicable law, approve and adopt this Agreement and the Merger
(provided, however, that such recommendation may be modified or withdrawn
as contemplated by SECTION 5.2. or if the Board determines, in good faith
and after consultation with independent counsel, that such action is
necessary to properly discharge its fiduciary duties). The Company
further represents and warrants that Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ") has delivered to the Board its opinion to
the effect that, as of the date of the Board's approval of this
Agreement, the Per Share Amount to be received by the holders of Shares
(other than Parent and its affiliates) pursuant to the Offer and the
Merger, taken together, is fair to such holders from a financial point of
view.
1.2.2. SCHEDULE 14D-9. As soon as practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with
any amendments or supplements thereto, the "Schedule 14D-9"). The
Schedule 14D-9 shall, subject to the fiduciary duties of the Board under
applicable law (as determined in good faith after consultation with
independent counsel) and SECTION 5.2., at all times contain the
determinations, approvals and recommendations described in
SECTION 1.2.1.. Parent, Acquisition and the Company each agrees promptly
to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that any such information shall have become false or
misleading in any material respect and the Company further agrees to take
all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws.
Parent, Acquisition and their counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 prior to its
filing with the SEC and shall be provided with any comments the Company
and its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt of such comments.
1.2.3. DISSEMINATION OF THE OFFER. In connection with the Offer,
the Company will promptly furnish Acquisition with mailing labels,
security position listings and any
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available listing or computer file containing the names and addresses of
the record holders of the Shares as of a recent date and shall furnish
Acquisition with such additional information and assistance (including,
without limitation, updated lists of stockholders, mailing labels and
lists of securities positions) as Acquisition or its agents may
reasonably request in communicating the Offer to the record and
beneficial holders of Shares. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Merger,
Acquisition and its affiliates and associates shall hold in confidence
the information contained in any such labels, listings and files, will
use such information only in connection with the Offer and the Merger,
and, if this Agreement shall be terminated, will deliver to the Company
all copies of such information then in their possession.
1.3. BOARD OF DIRECTORS AND COMMITTEES; SECTION 14(f).
1.3.1. BOARD REPRESENTATION. Promptly upon the purchase by
Acquisition of Shares pursuant to the Offer and from time to time
thereafter, Acquisition shall be entitled to designate up to such number
of directors, rounded up to the next whole number, on the Board that
equals the product of (i) the total number of directors on the Board
(giving effect to the election of any additional directors pursuant to
this Section) and (ii) the percentage that the number of Shares owned by
Acquisition and its affiliates (including any Shares purchased pursuant
to the Offer) bears to the total number of outstanding Shares; provided
that at all times there shall be at least two directors who are not
designees of Acquisition and the number of directors shall not be more
than 10 nor less than six. The Company shall, upon request by
Acquisition, subject to the provisions of SECTION 1.3.2., promptly either
increase the size of the Board, to the extent permitted by its
Certificate of Incorporation and/or use its reasonable best efforts to
secure the resignation of such number of directors as is necessary to
enable Acquisition's designees to be elected to the Board and shall cause
Acquisition's designees to be so elected. Promptly upon request by
Acquisition, the Company will, subject to the provisions of
SECTION 1.3.2., use its reasonable best efforts to cause persons
designated by Acquisition to constitute the same percentage as the number
of Acquisition's designees to the Board bears to the total number of
directors on the Board on (i) each committee of the Board, (ii) each
board of directors or similar governing body or bodies of each subsidiary
of the Company designated by Acquisition and (iii) each committee of each
such board or body.
1.3.2. COMPLIANCE WITH SECTION 14(f). The Company's obligations
to appoint designees to the Board shall be subject to Section 14(f) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this SECTION 1.3. and shall include in the
Schedule 14D-9 or a separate Rule 14f-1 Statement provided to
shareholders such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1.
Parent or Acquisition will supply to the Company in
4
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writing and be solely responsible for any information with respect to
either of them and their nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1.
1.3.3. ACTION BY DISINTERESTED DIRECTORS. Following the election
or appointment of Acquisition's designees pursuant to this SECTION 1.3.
and prior to the Effective Time (as defined below), any amendment of this
Agreement or any amendment to the Restated Certificate of Incorporation
or By-Laws of the Company inconsistent with this Agreement, any
termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or
other acts of Parent or Acquisition or any waiver of any of the Company's
rights hereunder will require the concurrence of a majority of the
directors of the Company (or the concurrence of the director, if there is
only one remaining) then in office who are not designees of Acquisition
or employees of the Company.
ARTICLE 2.
THE MERGER
2.1. THE MERGER.
2.1.1. EFFECTIVE TIME. At the Effective Time (as defined below),
and subject to and upon the terms and conditions of this Agreement and
the Delaware Law, Acquisition shall be merged with and into the Company,
the separate corporate existence of Acquisition shall cease, and the
Company shall continue as the surviving corporation. The Company as the
surviving corporation after the Merger is hereinafter sometimes referred
to as the "Surviving Corporation."
2.1.2. CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned
pursuant to SECTION 8.1. and subject to the satisfaction or waiver of the
conditions set forth in SECTION 7.1., the consummation of the Merger will
take place as promptly as practicable (and in any event within two
business days) after satisfaction or waiver of the conditions set forth
in SECTION 7.1., at the offices of Gibson, Dunn & Crutcher LLP, 1717 Main
Street, suite 5400 Dallas, Texas 75201, unless another date, time or
place is agreed to in writing by the parties hereto.
2.2. EFFECTIVE TIME. As promptly as practicable (and in any event within
two business days) after the satisfaction or waiver of the conditions set forth
in ARTICLE 7., the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger as contemplated by the Delaware Law (the
"Certificate of Merger"), together with any required related certificates, with
the Secretary of State of the State of Delaware, in such form as required by,
and executed in accordance with the relevant provisions of, the Delaware Law
(the time of such filing being the "Effective Time").
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2.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the Delaware Law. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Acquisition shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Acquisition shall become the debts, liabilities and duties of the
Surviving Corporation.
2.4. CERTIFICATE OF INCORPORATION; BY-LAWS.
2.4.1. CERTIFICATE OF INCORPORATION. At the Effective Time the
Certificate of Incorporation of Acquisition, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter amended as provided by the
Delaware Law and such Certificate of Incorporation; provided, however,
that at the Effective Time of the Certificate of Incorporation of
Acquisition shall be amended to change its name to "EmCare Holdings
inc.".
2.4.2. BY-LAWS. The By-Laws of Acquisition, as in effect
immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by the
Delaware Law, the Certificate of Incorporation of the Surviving
Corporation and such By-Laws.
2.5. DIRECTORS AND OFFICERS. The directors of Acquisition immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of the
Company shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and qualified.
2.6. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the Parent, Acquisition, the
Company or the holders of any of the following securities:
2.6.1. CONVERSION OF SECURITIES. Each Share issued and
outstanding immediately prior to the Effective Time (excluding any Shares
to be canceled pursuant to SECTION 2.6.2. and Dissenting Shares as
defined in SECTION 2.6.5.) shall be converted into the right to receive
the Per Share Amount (the "Merger Consideration").
2.6.2. CANCELLATION. Each Share held in the treasury of the
Company and each Share owned by Parent, Acquisition or any direct or
indirect wholly owned subsidiary of the Company or Parent immediately
prior to the Effective Time shall cease to be outstanding, be canceled
and retired without payment of any consideration therefor and cease to
exist.
2.6.3. STOCK OPTIONS. At the Effective Time, each outstanding
option to purchase Company Common Stock (a "Stock Option") granted under
the Company's Amended and Restated Stock Option and Restricted Stock
Purchase Plan (the "Company
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Stock Plan") or pursuant to any other stock option plan or agreement
entered into by the Company with any person who is or was employed by or
performing services for the Company, or any Company Subsidiary or
Associated PA listed on SECTION 3.3. of the Company Disclosure Schedule,
whether or not then vested or exercisable, shall vest and become
exercisable for the Merger Consideration, and each holder of a Stock
Option who executes an agreement to cancel such Stock Option shall be
entitled to receive as soon as practicable thereafter from the Company in
consideration for such cancellation an amount in cash (less applicable
withholding taxes) equal to the product of (i) the number of shares of
Company Common Stock previously subject to such Stock Option multiplied
by (ii) the excess, if any, of the Per Share Amount over the exercise
price per share of Company Common Stock previously subject to such Stock
Option.
2.6.4 CAPITAL STOCK OF ACQUISITION. The shares of common stock,
$.01 par value, of Acquisition issued and outstanding immediately prior
to the Effective Time shall be converted into and exchanged for 8,250,546
validly issued, fully paid and nonassessable shares of common stock, $.01
par value, of the Surviving Corporation.
2.6.5 DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, in the event Dissenter's Rights are available
in connection with the Merger pursuant to Section 262 of the Delaware
Law, Shares, if any, of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time that are held by
stockholders who have not voted such shares in favor of the Merger and
who shall have delivered a written demand for appraisal of such shares in
the manner provided in Section 262 the Delaware Law (the "Dissenting
Shares") shall not be converted into or be exchangeable for the right to
receive the consideration provided in SECTION 2.6.1. unless and until
such holder shall have failed to perfect or shall have effectively
withdrawn or lost his right to appraisal under the Delaware Law. If such
holder shall have to failed to perfect or shall have effectively
withdrawn or lost such right, his shares of Company Common Stock shall
thereupon be deemed to have been converted into and to have become
exchangeable for, at the Effective Time, the right to receive the
consideration provided in SECTION 2.6.1. without any interest thereon.
2.7 EXCHANGE OF CERTIFICATES.
2.7.1 EXCHANGE AGENT AND PROCEDURES. Prior to the Effective
Time, a bank or trust company shall be designated by Parent (The "Paying
Agent") to act as agent in connection with the Merger to receive the
funds to which holders of Shares shall become entitled pursuant to
SECTION 2.6.1.. Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each record holder, as of the
Effective Time, of a certificate or certificates (the "Certificates")
that, prior to the Effective Time, represented Shares, a form of letter
of transmittal and instructions for use in effecting the surrender of the
Certificates for payment of the Merger Consideration therefor. Upon the
surrender of each such Certificate formerly representing Shares, together
with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the Paying Agent shall pay the
holder of such Certificate the Merger
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Consideration multiplied by the number of Shares formerly represented by
such Certificate, in exchange therefor, and such Certificate shall
forthwith be canceled. Until so surrendered and exchanged, each such
Certificate (other than Shares held by Parent, Acquisition or the
Company, or any direct or indirect subsidiary thereof or Dissenting
Shares) shall represent solely the right to receive the Merger
Consideration. No interest shall be paid or accrue on the Merger
Consideration. If the Merger Consideration (or any portion thereof) is
to be delivered to any person other than the person in whose name the
Certificate formerly representing Shares surrendered in exchange therefor
is registered, it shall be a condition to such exchange that the
Certificate so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person requesting such exchange
shall pay to the Paying Agent any transfer or other taxes required by
reason of the payment of the Merger Consideration to a person other than
the registered holder of the Certificate surrendered, or shall establish
to the satisfaction of the Paying Agent that such tax has been paid or is
not applicable.
2.7.2. CONSIDERATION. At the Effective Time, Parent or
Acquisition shall deposit, or cause to be deposited, in trust with the
Paying Agent the Merger Consideration to which holders of shares shall be
entitled at the Effective Time pursuant to SECTION 2.6.1.
2.7.3. INVESTMENT OF MERGER CONSIDERATION. The Merger
Consideration shall be invested by the Paying Agent, as directed by
Parent, provided such investments shall be limited to direct obligations
of the United States of America, obligations for which the full faith and
credit of the United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated of the highest
quality by Moody's Investors Service, Inc. or Standard & Poor's Ratings
Group, or certificates of deposit issued by a commercial bank having at
least $25,000,000,000 in assets.
2.7.4. TERMINATION OF DUTIES. Promptly following the date which
is six months after the Effective Time, Parent will cause the Paying
Agent to deliver to the Surviving Corporation all cash and documents in
its possession relating to the transactions described in this Agreement,
and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Certificate formerly representing a Share may surrender such
Certificate to the Surviving Corporation and (subject to applicable
abandoned property, escheat and similar laws) receive in exchange
therefor the Merger Consideration, without any interest thereon.
2.7.5. NO LIABILITY. Neither Parent, Acquisition nor the Company
shall be liable to any holder of Company Common Stock for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
2.7.6. WITHHOLDING RIGHTS. Parent or the Exchange Agent shall be
entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of Company Common Stock
such amounts as Parent or the Exchange Agent is required to deduct and
withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the "Code"), or any
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provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Parent or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
2.8. NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The Merger
Consideration delivered upon the surrender for exchange of Shares in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares, and there shall be no further
registration of transfers on the records of the Surviving Corporation of Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this ARTICLE 2. At
the Effective Time, the stock transfer books of the Company shall be closed.
2.9. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration as may be required pursuant to SECTION 2.6.; provided, however,
that Parent may, in its discretion and as a condition precedent to the delivery
thereof, require the owner of such lost, stolen or destroyed Certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
2.10. TAKING OF NECESSARY ACTION; FURTHER ACTION. If at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Acquisition, the officers and directors of the
Company and Acquisition immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
2.11. STOCKHOLDERS' MEETING. If approval by the Company's stockholders
is required by applicable law to consummate the Merger, the Company, acting
through the Board, shall in accordance with applicable law and subject to the
fiduciary duties of the Board under applicable law (as determined in good faith
after consultation with independent counsel) or as contemplated by SECTION 5.2.,
as soon as practicable following the consummation of the Offer:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Stockholders' Meeting") for the purpose
of considering and taking action upon this Agreement;
(ii) include in the Proxy Statement (as defined in
SECTION 3.23.) the recommendation of the Board that stockholders of the
Company vote in favor of the approval and adoption of this Agreement and
the transactions contemplated hereby (provided, however, that such
recommendation may be modified or withdrawn as provided in SECTION 5.2.
or if the Board determines in good faith, and after consultation
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with independent counsel, that such action is necessary to properly
discharge its fiduciary duties); and
(iii) use its reasonable efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement and,
after consultation with Parent, respond promptly to any comments made by
the SEC with respect to the Proxy Statement and any preliminary version
thereof and cause the Proxy Statement to be mailed to its stockholders at
the earliest practicable time following the consummation of the Offer and
(B) to obtain the necessary approvals by its stockholders of this
Agreement and the transactions contemplated hereby.
At such meeting, Parent and Acquisition will vote all Shares owned by them in
favor of this Agreement and the transactions contemplated hereby.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent and Acquisition
that, except as set forth in the written disclosure schedule delivered on or
prior to the date hereof by the Company to the Parent that is arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this ARTICLE 3. (the "Company Disclosure Schedule"):
3.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all necessary
corporate power and authority to own its properties and assets and to carry on
its business as presently conducted. The Company is qualified to do business
and is in good standing in each jurisdiction where the nature or character of
the property owned, leased or operated by it or the nature of the business
transacted by it makes such qualification necessary, except where the failure to
be so qualified or be in good standing would not have a Company Material Adverse
Effect. The Company has delivered to Parent a complete and correct copy of its
Certificate of Incorporation and By-laws as most recently restated and
subsequently amended to the date hereof.
3.2. ORGANIZATION, EXISTENCE AND GOOD STANDING OF SUBSIDIARIES AND PAS.
(a) SECTION 3.2(a) to the Company Disclosure Schedule sets forth a
list of all subsidiaries of the Company (a "Company Subsidiary"), the
jurisdiction of incorporation or organization, as applicable, of each Company
Subsidiary, the type of each Company Subsidiary, the percentage of the Company's
and Company Subsidiaries' ownership of the outstanding voting stock of each such
corporate Company Subsidiary, the authorized and outstanding capital stock of
each such corporate Company Subsidiary, and the type and percentage of the
Company's and Company Subsidiaries' ownership interest in each other Company
Subsidiary. Each Company Subsidiary is a corporation, business trust, limited
partnership or limited liability company (as specified on SECTION 3.2(a) to the
Company Disclosure Schedule) duly organized, validly
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existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as applicable. Each Company Subsidiary has all
necessary entity power and authority to own its properties and assets and to
carry on its business as presently conducted. Each Company Subsidiary is
qualified to do business and is in good standing in each jurisdiction where the
nature or character of the property owned, leased or operated by it or the
nature of the business transacted by it makes such qualification necessary,
except where the failure to be so qualified or be in good standing would not
have a Company Material Adverse Effect.
(b) Attached as SECTION 3.2(b) to the Company Disclosure Schedule is a
list of all professional corporations or professional associations engaging in
the practice of medicine (A) which are associated with the Company and (B) as
to which the Company or any Company Subsidiary has entered into an
Administrative Management Agreement (each an "Associated PA") and the
jurisdiction of association or incorporation of each Associated PA listed
thereon. Each Associated PA is a professional association or professional
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its association or incorporation. Each Associated PA has
all necessary corporate or association power and authority to own its property
and assets and to carry on its business as presently conducted. Each Associated
PA is qualified to do business and is in good standing in each jurisdiction
where the nature or character of the property owned, leased or operated by it or
the nature of the business transacted by it makes such qualification necessary,
except where the failure to be so qualified or be in good standing would not
have a Company Material Adverse Effect.
(c) Except for the Company Subsidiaries and as set forth in
SECTION 3.2.(c) to the Company Disclosure Schedule, the Company does not,
directly or indirectly, own any equity interest in any other corporation,
association, partnership, joint venture, business organization or limited
liability company or other entity, with respect to which interest the Company or
any Company Subsidiary has invested or is required to invest $500,000 or more,
excluding securities in any publicly traded company held for investment and
comprising less than five percent of the outstanding voting securities of such
company.
(d) For the purposes of the representations and warranties of the
Company set forth in this Agreement, any act, event, or state of facts affecting
any Associated PA, which act, event, or state of facts has or would materially
adversely affect the Company or a Company Subsidiary, shall be deemed an act,
event, or state of facts affecting the Company or Company Subsidiary to the
extent of such materially adverse effect.
3.3. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 25,000,000
shares of Company Common Stock and 5,000,000 shares of preferred stock, $.01 par
value per share. As of June 30, 1997: (i) 8,250,546 shares of Company Common
Stock were issued and outstanding, all of which are validly issued, fully paid
and nonassessable (except as set forth in SECTION 3.3. of the Company Disclosure
Schedule) and none of which shares were held in treasury, and no shares of
preferred stock were issued and outstanding; (ii) 1,422,836 shares of Company
Common Stock were reserved for future issuance pursuant to outstanding stock
options; and
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(iii) 37,570 shares of Company Common Stock were reserved for future issuance in
connection with purchase price payments (including deferred purchase price
payments) in conjunction with acquisitions. Except as set forth in SECTION 3.2.
and 3.3. of the Company Disclosure Schedule, all of the outstanding shares of
capital stock, or other ownership interest, of each Company Subsidiary is
validly issued, fully paid and nonassessable, and is owned by the Company or
another Company Subsidiary, free and clear of all security interests, liens,
claims, pledges, charges or other encumbrances of any nature whatsoever. Except
as set forth in SECTION 3.2. and SECTION 3.3. of the Company Disclosure
Schedule, (A) all of the outstanding shares of capital stock of each Associated
PA are validly issued, fully paid and non-assessable, and (B) are owned by the
holders and in the percentages set forth in SECTION 3.2. of the Company
Disclosure Schedule, and, except as set forth in SECTION 3.3(a) of the Company
Disclosure Schedule, free and clear of all security interests, liens, claims,
pledges, charges or other encumbrances of any nature whatsoever.
(b) SECTION 3.3.(b) of the Company Disclosure Schedule sets forth a
true and complete list of all outstanding rights to purchase Company Common
Stock, the name of each holder thereof, the number of shares purchasable
thereunder and the per share exercise or purchase price of each right. Except
as set forth in SECTION 3.3. of the Company Disclosure Schedule, there are no
options, warrants or other similar rights, agreements, arrangements or
commitments of any character obligating the Company or any Company Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Company Subsidiary. Except as set forth in SECTION 3.3.(b) of
the Company Disclosure Schedule, there are no obligations, contingent or
otherwise, of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or the capital stock or
other equity interest of any Company Subsidiary or to make any investment (in
the form of a loan, capital contribution or otherwise) in any Company Subsidiary
or any other entity.
3.4. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the adoption of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock entitled to vote in accordance with
the Delaware Law and the Company's Certificate of Incorporation and By-Laws).
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Parent and
Acquisition, as applicable, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.
3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) SECTION 3.5.(a) of the Company Disclosure Schedule sets forth a
list of all agreements to which the Company or any Company Subsidiary is a party
or by which any of
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them is bound which, as of the date hereof: (i) are required to be filed as
"material contracts" with the SEC pursuant to the requirements of the Exchange
Act; (ii) under which the consequences of a default, nonrenewal or termination
would have a Company Material Adverse Effect; or (iii) pursuant to which
payments might be required or acceleration of benefits may be required upon a
"change of control" of the Company (collectively, the "Material Contracts").
(b) Except as set forth in SECTION 3.5.(b) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, (i) conflict with
or violate the Certificate of Incorporation or By-Laws of the Company,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or any Company Subsidiary or by which its or
any of their respective properties is bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair the rights of the Company or
any Company Subsidiary or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of any Material Contract, or result in the creation of a lien or
encumbrance on any of the properties or assets of the Company or any Company
Subsidiary pursuant to any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary or any of their respective properties is bound or affected,
except in any such case for any such conflicts, violations, breaches, defaults
or other occurrences that would not have a Company Material Adverse Effect.
(c) Except as set forth in SECTION 3.5.(c) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except
(i) for applicable requirements, if any, of the Securities Act of 1933, as
amended (the "Securities Act"), the Exchange Act, state securities laws ("Blue
Sky Laws"), the pre-merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Act"), and the filing and
recordation of appropriate merger or other documents as required by the Delaware
Law, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay consummation of the Merger, or otherwise prevent or delay the
Company from performing its obligations under this Agreement, or would not
otherwise have a Company Material Adverse Effect.
3.6. COMPLIANCE; PERMITS.
(a) Except as disclosed in SECTION 3.6.(a) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is in conflict with, or
in default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to the Company or any Company Subsidiary or by which its or
any of their respective properties is bound or affected or (ii) any Material
Contract, except in each case for any such conflicts, defaults or violations
which would not have a Company Material Adverse Effect.
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(b) Except as disclosed in SECTION 3.6.(b) of the Company Disclosure
Schedule, the Company and each Company Subsidiary holds all permits, licenses,
easements, variances, exemptions, consents, certificates, orders and approvals
from governmental authorities that are material to the operation of the business
of the Company and the Company Subsidiaries taken as a whole as it is now being
conducted (collectively, the "Company Permits"), except where the failure to
hold such Company Permits would not have a Company Material Adverse Effect. The
Company and the Company Subsidiaries are in compliance with the terms of the
Company Permits, except where the failure to so comply would not have a Company
Material Adverse Effect.
3.7. SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and documents required to
be filed with the SEC and has made available to Parent (i) its Annual Reports on
Form 10-K for the fiscal years ended December 31, 1995 and 1996, respectively,
(ii) its Quarterly Report on Form 10-Q for the period ended March 31, 1997,
(iii) all proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since January 1, 1996, (iv) all other reports
or registration statements (other than Reports on Form 10-Q not referred to in
clause (ii) above) filed by the Company with the SEC since January 1, 1996, and
(v) all amendments and supplements to all such reports and registration
statements filed by the Company with the SEC since January 1, 1996
(collectively, the "Company SEC Reports"). The Company SEC Reports (i) were
prepared in all material respects in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. None of the
Company Subsidiaries is required to file any forms, reports or other documents
with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and each fairly presents in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries
as at the respective dates thereof and the consolidated statements of income and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments.
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
SECTION 3.8. of the Company Disclosure Schedule or the Company SEC Reports,
since January 1, 1997, there has not occurred: (i) any Company Material Adverse
Effect; (ii) any amendments or changes in the Certificate of Incorporation or
By-Laws of the Company; (iii) any damage to, destruction or loss of any asset of
the Company (whether or not covered by insurance) that would have a Company
Material Adverse Effect; (iv) any material change by the Company in its
accounting methods, principles or practices; (v) any material revaluation by the
Company of any of its assets,
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including, without limitation, writing off notes or accounts receivable other
than in the ordinary course of business; or (vi) any sale of a material amount
of property of the Company or any Company Subsidiary except in the ordinary
course of business.
3.9. NO UNDISCLOSED LIABILITIES. Except as is disclosed in SECTION 3.9.
of the Company Disclosure Schedule, neither the Company nor any Company
Subsidiary has any liabilities (absolute, accrued, contingent or otherwise),
except liabilities (a) in the aggregate adequately provided for in the Company's
unaudited balance sheet (including any related notes thereto) as of March 31,
1997 (the "1997 Company Balance Sheet"), (b) incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected on the 1997 Company Balance Sheet, (c) incurred since March 31, 1997
in the ordinary course of business consistent with past practice, (d) incurred
in connection with this Agreement, (e) disclosed in the Company SEC Reports or
(f) which would not have a Company Material Adverse Effect.
3.10. ABSENCE OF LITIGATION. Except as set forth in SECTION 3.10. of
the Company Disclosure Schedule or the Company SEC Reports, there are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
the Company, overtly threatened against the Company or any Company Subsidiary or
any properties or rights of the Company or any Company Subsidiary before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that would have a Company Material Adverse Effect.
3.11. EMPLOYEE BENEFIT PLANS, EMPLOYMENT AGREEMENTS.
(a) SECTION 3.11.(a) of the Company Disclosure Schedule lists all
employee pension plans (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all material employee
welfare plans (as defined in Section 3(1) of ERISA) and all other material
bonus, stock option, stock purchase, incentive, deferred compensation,
supplemental retirement, severance and other similar fringe or employee benefit
plans, programs or arrangements, and any material employment, executive
compensation, consulting or severance agreements, written or otherwise, for the
benefit of, or relating to, any employee of or consultant to the Company, any
trade or business (whether or not incorporated) which is a member of a
controlled group including the Company or which is under common control with the
Company (an "ERISA Affiliate") within the meaning of Section 414 of the Code, or
any Company Subsidiary, as well as each plan with respect to which the Company
or an ERISA Affiliate could incur liability under Section 4069 (if such plan has
been or were terminated) or Section 4212(c) of ERISA (collectively the "Company
Employee Plans"). There have been made available to Parent copies of (i) each
such written Company Employee Plan (other than those referred to in
Section 4(b)(4) of ERISA), (ii) the most recent annual report on Form 5500
series, with accompanying schedules and attachments, filed with respect to each
Company Employee Plan required to make such a filing, and (iii) the most recent
actuarial valuation for each Company Employee Plan subject to Title IV of ERISA.
For purposes of this SECTION 3.11.(a), the term "material," used with respect to
any Company Employee Plan, shall mean that the Company or
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an ERISA Affiliate has incurred or may incur obligations in an annual amount
exceeding $500,000 with respect to such Company Employee Plan.
(b) Except as set forth in SECTION 3.11.(b) of the Company Disclosure
Schedule: (i) none of the Company Employee Plans provides retiree medical or
other retiree welfare benefits to any person (other than as required under
COBRA), and none of the Company Employee Plans is a "multiemployer plan" as such
term is defined in Section 3(37) of ERISA; (ii) there has been no non-exempt
"prohibited transaction," as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, with respect to any Company Employee Plan, which would
result in a Company Material Adverse Effect; (iii) all Company Employee Plans
are in compliance with the requirements prescribed by any and all statutes
(including ERISA and the Code), orders, or governmental rules and regulations
currently in effect with respect thereto (including all applicable requirements
for notification to participants or the Department of Labor, the Pension Benefit
Guaranty Corporation (the "PBGC"), Internal Revenue Service (the "IRS") or
Secretary of the Treasury) except as would not result in a Company Material
Adverse Effect, and the Company and each Company Subsidiary has performed all
obligations required to be performed by them under, and are not in any material
respect in default under or violation of any of the Company Employee Plans
except as would not result in a Company Material Adverse Effect; (iv) each
Company Employee Plan intended to qualify under Section 401(a) of the Code and
each trust intended to qualify under Section 501(a) of the Code is the subject
of a favorable determination letter from the IRS; (v) all contributions required
to be made to any Company Employee Plan pursuant to Section 412 of the Code, or
the terms of the Company Employee Plan or any collective bargaining agreement,
have been made on or before their due dates; (vi) with respect to each Company
Employee Plan, no "reportable event" within the meaning of Section 4043 of ERISA
(excluding any such event for which the 30 day notice requirement has been
waived under the regulations to Section 4043 of ERISA) nor any event described
in Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither the
Company nor any ERISA Affiliate has incurred, nor reasonably expects to incur,
any liability under Title IV of ERISA (other than liability for premium payments
to the PBGC arising in the ordinary course).
3.12. LABOR MATTERS. Except as set forth in SECTION 3.12. of the
Company Disclosure Schedule: (i) there are no controversies pending or, to the
knowledge of the Company, overtly threatened, between the Company or any Company
Subsidiary and any of their respective employees, which controversies have had
or would have a Company Material Adverse Effect; (ii) neither the Company nor
any Company Subsidiary is a party to any material collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or any Company Subsidiary, nor does the Company know of any activities
or proceedings of any labor union to organize any such employees; and (iii) the
Company has no knowledge of any strikes, slowdowns, work stoppages, lockouts, or
threats thereof, by or with respect to any employees of the Company or any
Company Subsidiary which would have a Company Material Adverse Effect.
3.13. RESTRICTIONS ON BUSINESS ACTIVITIES. Except for this Agreement or
as set forth in SECTION 3.13. of the Company Disclosure Schedule, to the
Company's knowledge, there is no material agreement, judgment, injunction, order
or decree binding upon the Company or any
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Company Subsidiary which has or would have the effect of prohibiting the conduct
of business by the Company or any Company Subsidiary as currently conducted,
except for any prohibition as would not have a Company Material Adverse Effect.
3.14. TITLE TO PROPERTY. Except as set forth in SECTION 3.14. of the
Company Disclosure Schedule, the Company or each Company Subsidiary has good and
defensible title to all of their properties and assets, free and clear of all
liens, charges and encumbrances, except liens for Taxes not yet delinquent and
such liens or other imperfections of title, if any, as do not materially
interfere with the present use of the property affected thereby or which would
not have a Company Material Adverse Effect. To the knowledge of the Company,
all leases pursuant to which the Company or any Company Subsidiary leases from
others material amounts of real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, to
the knowledge of the Company, under any of such leases, any existing material
default or event of default (or event which with notice or lapse of time, or
both, would constitute a material default), except where the lack of such good
standing, validity and effectiveness or the existence of such default or event
of default would not have a Company Material Adverse Effect.
3.15 TAXES.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind, in the nature of, or similar to, taxes, payable to any federal,
state, local or foreign taxing authority, including, without limitation,
(i) income, franchise, profits, gross receipts, ad valorem, net worth, value
added, sales, use, service, real or personal property, special assessments,
capital stock, license, payroll, withholding, employment, social security,
workers' compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes, and (ii) interest, penalties, additional taxes and additions to tax
imposed with respect thereto. For purposes of this Agreement, "Tax Returns"
shall mean returns, reports, and information statements with respect to Taxes
required to be filed with the IRS or any other taxing authority, domestic or
foreign, including, without limitation, consolidated, combined and unitary tax
returns.
(b) Other than as disclosed in SECTION 3.15. of the Company Disclosure
Schedule: (i) the Company and the Company Subsidiaries (for such periods as each
Company Subsidiary was owned, directly or indirectly, by the Company) have filed
all United States federal income Tax Returns and all other Tax Returns required
to be filed by them except where any such failure to file does not have a
Company Material Adverse Effect; and (ii) the Company and the Company
Subsidiaries have paid and discharged all Taxes shown as due and payable on such
Tax Returns, except such Taxes as may be determined to be owed upon completion
of any Tax Return not yet filed based upon an extension of time to file. Except
to the extent the following does not involve, nor would result in, a liability
to the Company or any Company Subsidiary that would have a Company Material
Adverse Effect, (1) there are no Tax liens on any assets of the Company or any
Company Subsidiary, other than liens for Taxes that are not delinquent, and
(2) neither the Company nor any Company Subsidiary has granted any waiver of any
statute of
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limitations with respect to, or any extension of a period for the assessment of,
any Tax. The accruals and reserves for Taxes (including deferred taxes)
reflected in the 1997 Company Balance Sheet are adequate to cover all Taxes
required to be accrued through the date thereof (including interest and
penalties, if any, thereon and Taxes being contested) in accordance with
generally accepted accounting principles, except where such inadequacy would not
have a Company Material Adverse Effect.
3.16. INTELLECTUAL PROPERTY. Except as set forth in SECTION 3.16. of
the Company Disclosure Schedule, the Company and the Company Subsidiaries own,
or are licensed or otherwise possesses legally enforceable rights to use, all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or material
that are used in the business of the Company and the Company Subsidiaries as
currently conducted, except as would not have a Company Material Adverse Effect.
3.17. INTERESTED PARTY TRANSACTIONS. Except as set forth in
SECTION 3.17. of the Company Disclosure Schedule or in the Company SEC Reports,
to the knowledge of the Company, since the date of the Company's proxy statement
dated April 4, 1997, no event has occurred that would be required to be reported
as a Certain Relationship or Related Transaction, pursuant to Item 404 of
Regulation S-K promulgated by the SEC.
3.18. INSURANCE. The Company maintains insurance with financially
responsible insurance companies in amounts customary in its industry to insure
it against risks and losses associated with the operation of the business and
properties of the Company and the Company Subsidiaries.
3.19. HEALTHCARE REGULATORY COMPLIANCE. To the knowledge of the
Company, neither the Company nor any Company Subsidiary has violated federal
Medicare and Medicaid statutes, including, without limitation, 42 U.S.C. (S)
1320a-7b or related state or local statutes or regulations, except for such
violations as would not have a Company Material Adverse Effect.
3.20. OPINION OF FINANCIAL ADVISOR. The Board has received the opinion
of the Company's financial advisor, DLJ, to the effect that, as of the date of
the Board's approval of this Agreement, the per Share Amount to be received by
the holders of Shares (other than Parent and its affiliates) pursuant to the
Offer and the Merger, taken together, is fair from a financial point of view to
such holders.
3.21. BROKERS. No broker, finder or investment banker (other than DLJ)
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has heretofore furnished to
Parent a complete and correct copy of all agreements between the Company and DLJ
pursuant to which such firm would be entitled to any payment relating to the
transactions contemplated hereunder.
3.22. SECTION 203 OF THE DELAWARE LAW NOT APPLICABLE. The Board has
taken all actions so that the restrictions contained in Section 203 of the
Delaware applicable to a "business
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combination" (as defined in Section 203) will not apply to the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated by this Agreement.
3.23. SCHEDULE 14D-9. Neither the Schedule 14D-9, nor any of the
information provided by the Company and/or by its auditors, legal counsel,
financial advisors or other consultants or advisors in writing specifically for
use in the Offer Documents shall, on the respective dates the Schedule 14D-9 or
the Offer Documents are filed with the SEC or on the date first published, sent
or given to the Company's stockholders, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The proxy or
information statement or similar materials distributed to the Company's
stockholders in connection with the Merger, including any amendments or
supplements thereto (the "Proxy Statement"), shall not, at the time filed with
the SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any information provided by Parent, Acquisition
and/or by their auditors, legal counsel, financial advisors or other consultants
or advisors specifically for use in the Schedule 14D-9 or the Proxy Statement.
The Schedule 14D-9 and the Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PARENT AND
ACQUISITION
Parent and Acquisition hereby, jointly and severally, represent and
warrant to the Company that:
4.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF PARENT; ACQUISITION.
(a) The Parent is a corporation duly organized, validly existing and
in good standing under the laws of Canada. Each subsidiary of the Parent (a
"Parent Subsidiary") is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. The
Parent and each Parent Subsidiary has all necessary corporate power and
authority to own its properties and assets and to carry on its business as
presently conducted. The Parent and each Parent Subsidiary is qualified to do
business and is in good standing in each jurisdiction where the nature or
character of the property owned, leased or operated by it or the nature of the
business transacted by it makes such qualification necessary, except where the
failure to be so qualified or be in good standing would not have a Parent
Material Adverse Effect. The Parent has delivered to the Company a complete and
correct copy of its Articles of Association and By-Laws (or other constituent
instruments) as most recently restated and subsequently amended to date.
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(b) Acquisition is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Acquisition has all
necessary corporate power and authority to own its properties and assets and to
carry on its business as presently conducted. Acquisition is qualified to do
business and is in good standing in each jurisdiction where the nature or
character of the property owned, leased or operated by it or the nature of the
business transacted by it makes such qualification necessary, except where the
failure to be so qualified or be in good standing would not have a Parent
Material Adverse Effect. The Parent has delivered to the Company a complete and
correct copy of Acquisition's Certificate of Incorporation and By-Laws.
4.2. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Acquisition and the consummation by Parent and
Acquisition of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and
Acquisition, and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Acquisition and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Parent and Acquisition enforceable against each of
them in accordance with its terms.
4.3. NO CONFLICT, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Parent and
Acquisition do not, and the performance of this Agreement by Parent and
Acquisition will not, (i) conflict with or violate the Articles of Association,
Certificate of Incorporation or By-Laws (or other constituent instruments) of
Parent or Acquisition, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Parent, Acquisition or any Parent
Subsidiary or by which its or their respective properties are bound or affected,
or (iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or impair
Parent's or any Parent Subsidiary's rights or alter the rights or obligations of
any third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Parent or any Parent
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any Parent Subsidiary is a party or by which Parent or any
Parent Subsidiary or its or any of their respective properties are bound or
affected, except in any such case for any such conflicts, violations, breaches,
defaults or other occurrences that would not have a Parent Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Parent and
Acquisition does not, and the performance of this Agreement by Parent and
Acquisition will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, the Blue Sky Laws, the pre-merger notification
requirements
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of the HSR Act, and the filing and recordation of appropriate merger or other
documents as required by the Delaware Law, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Offer or the
Merger, or otherwise prevent Parent or Acquisition from performing their
respective obligations under this Agreement, and would not otherwise have a
Parent Material Adverse Effect.
4.4 OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT. Neither the
Offer Documents, nor any of the information provided by Parent or Acquisition
and/or by their auditors, legal counsel, financial advisors or other consultants
or advisors specifically for use in the Schedule 14D-9 shall, on the respective
dates the Offer Documents, the Schedule 14D-9 or any supplements or amendments
thereto are filed with the SEC or on the date first published, sent or given to
the Company's stockholders, as the case may be, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, neither Parent nor Acquisition makes any representation or warranty
with respect to any information provided by the Company or by its auditors,
legal counsel, financial advisors or other consultants or advisors in writing
specifically for use in the Offer Documents. None of the information provided
by Parent or Acquisition or by their auditors, attorneys, financial advisors or
other consultants or advisors specifically for use in the Proxy Statement shall,
at the time filed with the SEC, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances Under which
they are made, not misleading. The Offer Documents will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
4.5. NO PRIOR ACTIVITIES; FINANCING.
(a) Acquisition was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. As of the date hereof and the
Effective Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by this
Agreement and except for this Agreement and any other agreements or arrangements
contemplated by this Agreement, Acquisition has not and will not have incurred,
directly or indirectly, through any subsidiary or affiliate, any obligations or
liabilities or engaged in any business activities of any type or kind whatsoever
or entered into any agreements or arrangements with any person.
(b) Acquisition has available to it funds necessary to satisfy its
obligations hereunder including, without limitation, the obligation to pay the
Per Share Amount pursuant to the Offer and the Merger Consideration pursuant to
the Merger and to pay all fees and expenses in connection with the Offer and the
Merger.
ARTICLE 5.
CONDUCT OF BUSINESS PENDING THE MERGER
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5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, unless Parent shall otherwise agree in writing, which
agreement shall not be unreasonably withheld or delayed, the Company shall
conduct its business and shall cause the businesses of the Company Subsidiaries
to be conducted only in, and the Company and the Company Subsidiaries shall not
take any action except in, the ordinary course of business in the manner
consistent with past practice. The Company shall use reasonable commercial
efforts to preserve substantially intact the business organization of the
Company and the Company Subsidiaries, to keep available the services of the
present officers, employees and consultants of the Company and the Company
Subsidiaries and to preserve the present relationships of the Company and the
Company Subsidiaries with customers, suppliers and other persons with which the
Company or any Company Subsidiary has significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement,
neither the Company nor any Company Subsidiary shall, during the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Effective Time, directly or indirectly do any of the
following without the prior written consent of Parent, which consent shall not
be unreasonably withheld or delayed:
(a) amend or otherwise change the Certificate of Incorporation or By-
Laws of the Company or Company Subsidiary;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company (except for (i) the issuance of shares of Company Common Stock issuable
pursuant to any stock option or other agreement listed on SECTION 3.3. of the
Company Disclosure Schedule; and (ii) the grant of options under the Company's
Stock Plan consistent with past practice and the issuance of shares upon
exercise thereof;
(c) sell, pledge, dispose of or encumber any assets of the Company or
any Company Subsidiary, except for (i) sales of assets in the ordinary course of
business in a manner consistent with past practice, (ii) disposition of obsolete
or worthless assets, (iii) sales of immaterial assets not in excess of $500,000,
and (iv) encumbrances on assets to secure purchase money financings of equipment
and capital improvements and in connection with the financing of Permitted
Acquisitions (as defined in SECTION 5.1.(e));
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock, except that a wholly owned Company
Subsidiary may declare and pay a dividend or make advances to its parent or the
Company, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, or (iii) amend the terms
or change the period of exercisability of, purchase, repurchase, redeem or
otherwise acquire, or permit any Company Subsidiary to purchase, repurchase,
redeem or otherwise acquire, any of its securities including, without
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limitation, shares of Company Common Stock or any option, warrant or right,
directly or indirectly, to acquire shares of Company Common Stock, or propose to
do any of the foregoing, except for the acceleration of options pursuant to the
terms of the Company Stock Plan and the net exercise of such options, or as
contemplated by SECTION 3.3.(b) of the Company Disclosure Schedule.
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof other than emergency health care providers, emergency physician practice
management groups or other emergency health care entities, in each case located
in the United States ("Permitted Acquisitions"), provided that the total
consideration paid for all such acquisitions completed after the date hereof
shall not exceed $12 million; (ii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any person except in
the ordinary course of business consistent with past practice or in connection
with purchases of equipment or capital improvements or Permitted Acquisitions,
or make any loans or advances (other than loans or advances to or from direct or
indirect wholly owned Company Subsidiary or in connection with Permitted
Acquisitions), (iii) except as set forth on SECTION 5.1(e)(iii) of the Company
Disclosure Schedule, enter into or amend any Material Contract other than in the
ordinary course of business or where such contract or amendment would not have a
Company Material Adverse Effect; or (iv) authorize any capital expenditures or
purchase of fixed assets (but excluding Permitted Acquisitions) which are, in
the aggregate, in excess of the amounts set forth in SECTION 5.1.(e)(iv) of the
Company Disclosure Schedule for the Company and the Company Subsidiaries taken
as a whole;
(f) except as set forth in SECTION 5.1.(f) of the Company Disclosure
Schedule or in each case, as may be required by law or in ordinary course
consistent with past practice, increase the compensation payable or to become
payable to its officers or employees, except in accordance with past practice or
in the ordinary course of business, grant any severance or termination pay to,
or enter into any employment or severance agreement with any director, officer
or other employee of the Company or any Company Subsidiary, or establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any current or former
directors, officers or employees;
(g) change accounting policies or procedures (including, without
limitation, procedures with respect to revenue recognition, payments of accounts
payable and collection of accounts receivable);
(h) except as would not result in a Company Material Adverse Effect,
make any tax election inconsistent with past practice or settle or compromise
any federal, state, local or foreign tax liability or agree to an extension of a
statute of limitations, except to the extent the amount of any such settlement
has been reserved for in the financial statements contained in the Company SEC
Reports filed prior to the date of this Agreement; and
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(i) take, or agree in writing to take, any of the actions described in
SECTIONS 5.1.(a) through (h) above, or any action which would make any of the
representations or warranties of the Company contained in this Agreement untrue
or incorrect in any material respect as contemplated hereby or prevent the
Company from performing or cause the Company not to perform in any material
respect its covenants hereunder.
5.2 NO SOLICITATION.
(a) From and after the date hereof and prior to the Effective Date or
the earlier termination of this Agreement pursuant to SECTION 8.1., the Company
shall not, directly or indirectly, take (nor shall the Company authorize or
permit any Company Subsidiary or its or their officers, directors, employees,
representatives, investment bankers, financial advisors, attorneys, accountants
or other agents, to take) any action to (i) solicit or initiate the submission
of any Business Combination Proposal, (ii) enter into any agreement with respect
to any Business Combination Proposal or (iii) participate in any negotiations
with, or furnish any non-public written information to, any person in connection
with any proposal that constitutes, or may reasonably be expected to lead to,
any Business Combination Proposal; PROVIDED, HOWEVER, that the Company may
(A) participate in negotiations with or furnish information to any persons or
group (other than Parent or an affiliate of Parent) (a "Third Party") that makes
a Business Combination Proposal not so solicited that the Board determines may
reasonably be expected to result in a Superior Proposal or if the Board
determines, in good faith and after consultation with independent counsel, that
such action is required in order to discharge properly its fiduciary duties, and
enter into any confidentiality agreement or standstill agreement with such Third
Party in connection with such a Business Combination Proposal, (B) comply with
Rule 14e-2 promulgated under the Exchange Act with regard to any Business
Combination Proposal (assuming that such Business Combination Proposal includes
a tender offer requiring the Company's response pursuant to such Rule), (C)
withdraw or modify its recommendation referred to in SECTION 1.2.1. if there
exists a Business Combination Proposal that is a Superior Proposal or if the
Board determines, in good faith and after consultation with of independent
counsel, that such action is required to discharge properly its fiduciary
duties, and (D) recommend to its stockholders a Business Combination Proposal if
it is a Superior Proposal or if the Board determines, in good faith and after
consultation with independent counsel, that such action is required to discharge
properly its fiduciary duties. Any actions permitted under, and taken in
compliance with this SECTION 5.2. shall not be deemed a breach of any other
covenant or agreement of the Company contained in this Agreement. For purposes
of this Agreement, "Business Combination Proposal" shall mean, with respect to
the Company, the commencement of any tender or exchange offer, any bona fide,
written proposal for a merger, consolidation or other business combination
involving the Company or any Company Subsidiary or any other bona fide, written
proposal or offer to enter into a Business Combination or any public
announcement of a proposal, plan or intention to do any of the foregoing.
"Superior Proposal" shall mean any Business Combination Proposal for which any
required financing is supported by reasonable commitments and which the Board
determines in good faith will be more favorable to its stockholders than the
Merger. The term "Business Combination" means the occurrence of any of the
following events: (a) the Company or any Company Subsidiary is acquired by
merger or otherwise by any Thirty Party; (b) the Company or any Company
Subsidiary enters into an
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agreement with a Third Party that contemplates the acquisition of 35% or more of
the total assets of the Company and the Company Subsidiaries taken as a whole;
(c) the Company enters into a merger or other agreement with a Third Party that
contemplates the acquisition of beneficial ownership of more than 35% of the
outstanding shares of the Company's capital stock; or (d) a Third Party acquires
more than 35% of the outstanding shares of the Company's capital stock.
(b) In addition to the obligations of the Company set forth in SECTION
5.2.(a), the Company shall promptly advise Parent of any request for non-public
written information or of any Business Combination Proposal, the material terms
and conditions of such request or Business Combination Proposal, and the
identity of the person making any such request or Business Combination Proposal.
The Company shall keep Parent reasonably informed of the status and details of
any such request or Business Combination Proposal.
ARTICLE 6.
ADDITIONAL AGREEMENTS
6.1. HSR ACT. As promptly as practicable after the date of this
Agreement, the Company and Parent shall file notifications under the HSR Act in
connection with the Merger and the transactions contemplated hereby and
thereafter use reasonable best efforts to respond as promptly as practicable to
any inquiries received from the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other governmental authority in connection with antitrust matters.
6.2. ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice
and subject to restrictions contained in confidentiality agreements to which
such party is subject (from which such party shall use reasonable efforts to be
released), the Company shall (and shall cause each Company Subsidiary to) afford
to the officers, employees, accountants, counsel and other representatives of
Parent or Acquisition reasonable access, during the period to the Effective
Time, to all its properties, books, contracts, commitments and records and,
during such period, the Company shall (and shall cause each Company Subsidiary
to) furnish promptly to Parent or Acquisition all information concerning its
business, properties and personnel as such other party may reasonably request,
and each shall make available to the other the appropriate individuals
(including attorneys, accountants and other professionals) for discussion of the
other's business, properties and personnel as either Parent or the Company may
reasonably request. Parent and Acquisition shall keep such information
confidential in accordance with the terms of the confidentiality letter dated
May 21, 1997 (the "Confidentiality Letter"), between Parent's affiliate and the
Company.
6.3. INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation set forth in the Certificate
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of Incorporation and By-Laws of the Company, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who at the Effective Time were directors, officers, employees or
agents of the Company, unless such modification is required by law.
(b) From and after the purchase of any Shares pursuant to the Offer,
the Company shall, to the fullest extent permitted under applicable law or under
the Company's Certificate of Incorporation or By-Laws and regardless of whether
the Merger becomes effective, indemnify and hold harmless, and, after the
Effective Time, Parent and the Surviving Corporation shall, to the fullest
extent permitted under applicable law or under the Surviving Corporation's
Certificate of Incorporation or By-Laws, indemnify and hold harmless, each
present and former director, officer or employee of the Company or any Company
Subsidiary (together with their respective successors, assigns, heirs,
executors, administrators and representatives, collectively, the "Indemnified
Parties") against any costs or expenses (including attorneys' fees), judgments,
fines, losses, claims, damages and liabilities incurred in connection with, and
amounts paid in settlement of, any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative and
wherever asserted, brought or filed, arising out of or pertaining to any acts or
omissions or alleged acts or omissions by them in their capacity as such, in
each case for a period of six years after the date hereof, including, without
limitation, the transactions contemplated hereby. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) any counsel retained by the Indemnified Parties
for any period after the Effective Time shall be reasonably satisfactory to the
Surviving Corporation, (ii) after the Effective Time, the Surviving Corporation
shall pay the reasonable fees and expenses of such counsel, promptly after
statements therefor are received, and (iii) the Surviving Corporation will
cooperate in the defense of any such matter; provided, however, that the
Surviving Corporation shall not be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld or
delayed); and provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until the
disposition of any and all such claims. The Indemnified Parties as a group may
retain only one law firm to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a conflict
between the positions of any two or more Indemnified Parties. The indemnity
agreements of Parent and the Surviving Corporation in this SECTION 6.3.(b) shall
extend, on the same terms to, and shall inure to the benefit of and shall be
enforceable by, each person or entity who controls, or in the past controlled,
any present or former director, officer or employee of the Company or any of its
subsidiaries.
(c) The Surviving Corporation shall honor and fulfill in all respects
the obligations of the Company pursuant to indemnification agreements with the
Company's directors and officers existing at or before the Effective Time.
(d) For a period of five years after the Effective Time, Parent shall
cause the Surviving Corporation to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by the Company's directors' and officers' liability insurance policy on
terms (including the amounts of coverage and the amounts
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of deductibles, if any) that are comparable to the terms now applicable to
directors and officers of Parent, or, if more favorable to the Company's
directors and officers, the terms now applicable to them under the Company's
current policies; provided, that in no event shall Parent or Surviving
Corporation be required to spend in excess of 300% of the annual premium
currently paid by the Company for such coverage and provided further if the
premium for such coverage exceeds such amount, Parent or Surviving Corporation
shall purchase a policy with the greatest coverage available for such 300% of
the annual premium.
(e) From and after the Effective Time, Parent shall guarantee the
obligations of the Surviving Corporation under this SECTION 6.3.
(f) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding on all successors and assigns of
the Parent and the Surviving Corporation and shall be enforceable by the
Indemnified Parties. In the event that Parent or Surviving Corporation or any
of their successors or assigns (i) consolidates or merges into any other person
or entity and shall not be the continuing or surviving corporation or entity in
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person or entity, then and in such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation (as the case may be) assume the obligations of Parent and
the Surviving Corporation set forth in this SECTION 6.3..
6.4. NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate the results of which would be a Material
Adverse Effect to the Parent or Company, as applicable, or (ii) any failure of
the Company, Parent or Acquisition, as the case may be, materially to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this SECTION 6.4. shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
6.5. FURTHER ACTION. Upon the terms and subject to the conditions
hereof, including SECTION 5.2. and subject to the fiduciary duties of the Board
under applicable law, as determined in good faith after consultation with
independent counsel, each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
other things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, to
obtain in a timely manner all material waivers, consents and approvals and to
effect all necessary registrations and filings, and otherwise to satisfy or
cause to be satisfied in all material respects all conditions precedent to its
obligations under this Agreement.
6.6. PUBLIC ANNOUNCEMENTS. Parent and the Company shall consult with
each other before issuing any press release with respect to the Merger or this
Agreement and shall not issue any such press release or make any such public
statement without the prior consent of the other
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party, which shall not be unreasonably withheld or delayed; provided, however,
that a party may, without the prior consent of the other party, issue such press
release or make such public statement as may upon the advice of counsel be
required by law or the rules and regulations of the New York Stock Exchange or
the NASDAQ Stock Market if it has used all reasonable efforts to consult with
the other party.
ARTICLE 7.
CONDITIONS TO THE MERGER
7.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
7.1.1. PURCHASE OF SHARES. Acquisition shall have purchased
Shares pursuant to the Offer.
7.1.2. HSR ACT. The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated.
7.1.3. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect,
and there shall not be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or applicable to the Merger which
makes the consummation of the Merger illegal.
7.1.4. GOVERNMENTAL ACTIONS. There shall not be in effect any
judgment, decree or order of any governmental authority, administrative
agency or court of competent jurisdiction that prohibits or limits Parent
from exercising all material rights and privileges pertaining to its
ownership of the Surviving Corporation or the ownership or operation by
Parent or any Parent Subsidiary of all or a material portion of the
business or assets of Parent or any Parent Subsidiary, or seeking to
compel Parent or any Parent Subsidiary to dispose of or hold separate all
or any material portion of the business or assets of Parent or any Parent
Subsidiary (including the Surviving Corporation and its subsidiaries), as
a result of the Merger or the transactions contemplated by this
Agreement.
ARTICLE 8.
TERMINATION
8.1. TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time, notwithstanding approval thereof by the stockholders of
the Company or Parent:
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(a) by mutual written consent duly authorized by the Boards of
Directors of Parent, Acquisition and the Company; or
(b) by either Parent or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued a nonappealable final order, decree or ruling or taken any
other action having the effect of permanently restraining, enjoining or
otherwise prohibiting the merger (provided that the right to terminate this
Agreement under this SECTION 8.1.(b) shall not be available to any party who has
not complied with its obligations under SECTION 6.5. and such noncompliance
materially contributed to the issuance of any such order, decree or ruling or
the taking of such action); or
(c) by either Parent or the Company if Acquisition shall have failed
to accept for purchase and pay for Shares pursuant to the Offer by October 31,
1997 (provided that the right to terminate this Agreement under this SECTION
8.1.(c) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in any of the
circumstances described in this SECTION 8.1.(c) before such date); or
(d) by Parent or the Company, prior to the purchase of Shares pursuant
to the Offer, if the Board shall withdraw, modify or change its approval or
recommendation of the Offer, this Agreement or the Merger in a manner adverse to
Parent; or
(e) by the Company, prior to the purchase of Shares pursuant to the
Offer, (i) if any representation or warranty of the Parent or Acquisition set
forth in this Agreement shall be untrue in any material respect when made, or
(ii) upon a breach in any material respect of any covenant or agreement on the
part of Parent or Acquisition set forth in this Agreement; or
(f) by the Company, if the Offer shall have expired or shall have been
withdrawn, abandoned or terminated without Acquisition purchasing any Shares
pursuant thereto; or
(g) by the Parent, if Acquisition shall have terminated the Offer
without purchasing any Shares thereunder in accordance with the terms of the
Offer; provided Parent may not terminate this Agreement pursuant to this SECTION
8.1.(g) if Acquisition has failed to purchase the Shares in the Offer in breach
of the terms thereof.
8.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to SECTION 8.1., this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto or any of its
affiliates, directors, officers or stockholders (i) except as set forth in
SECTION 9.1. hereof and (ii) except to the extent that such termination results
from the willful and material breach by a party of any of its representations,
warranties, covenants or other agreements set forth in this Agreement.
ARTICLE 9.
GENERAL PROVISIONS
9.1. FEES AND EXPENSES.
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(a) Except as provided in this SECTION 9.1., all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) If this Agreement is terminated pursuant to SECTION 8.1.(d), then
Company shall (provided that Parent or Acquisition is not then in material
breach of its obligations under this Agreement), promptly after the termination
of this Agreement, reimburse Parent and Acquisition for all documented out-of-
pocket expenses and fees (including, without limitation, fees payable to all
banks, investment banking firms and other financial institutions, and their
respective agents and counsel, and all fees of counsel, accountants, financial
printers, experts and consultants to Acquisition and its Affiliates), whether
incurred prior to, on or after the date hereof, in connection with the Offer,
the Merger and the consummation of all transactions contemplated by this
Agreement; provided that in no event shall Company be required to pay in excess
of an aggregate of $1,500,000 pursuant to this SECTION 9.1.(b).
(c) If this Agreement is terminated pursuant to SECTION 8.1.(d) and
within twelve months following the date of such termination the Company either
(x) consummates with any Third Party a transaction the proposal of which would
otherwise qualify as a Business Combination Proposal under SECTION 5.2. or
(y) enters into a definitive agreement with a Third Party with respect to a
transaction the proposal of which would otherwise qualify as a Business
Combination Proposal under SECTION 5.2., then Company shall promptly pay to
Parent a fee of $6,275,000, less any amounts paid by Company pursuant to SECTION
9.1.(b).
9.2. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Except as otherwise provided in this SECTION 9.2., the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time, except that (i) the agreements set forth
in ARTICLE 2. shall survive the Effective Time indefinitely, and (ii) the
agreements in SECTION 6.3. shall survive in accordance with their respective
terms. The Confidentiality Letter shall survive termination of this Agreement
as provided therein.
9.3. NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
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(a) If to Parent or Acquisition:
Laidlaw Inc.
3221 North Service Road
Burlington, Ontario L7R 3Y8
Telecopier No.: (905) 332-6550
Telephone No.: (905) 336-1800
Attention: Ivan R. Cairns, Senior Vice President and General
Counsel
(b) If to the Company:
EmCare Holdings Inc.
1717 Main Street, Suite 5200
Dallas, Texas 75201
Telecopier No.: (214) 712-2061
Telephone No.: (214) 712-2000
Attention: Leonard M. Riggs, Jr., M.D., Chairman of the Board and
Chief Executive Officer
9.4. CERTAIN DEFINITIONS. For purposes of this Agreement, the term:
(a) "$" or "DOLLARS" "means the lawful currency of the United States
of America.
(b) "AFFILIATES" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person, including, without limitation, any
partnership or joint venture in which the Company (either alone, or through or
together with any other subsidiary) has, directly or indirectly, an interest of
10% or more;
(c) "BENEFICIAL OWNER" with respect to any shares of Company Common
Stock means a person who shall be deemed to be the beneficial owner of such
shares (i) which such person or any of its affiliates or associates (as such
term is defined in Rule 12b-2 of the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or associates
has, directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of consideration
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding, or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares;
(d) "BUSINESS DAY" means any day other than a day on which banks in
New York are required or authorized to be closed;
(e) "CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or
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cause the direction of the management or policies of a person, whether through
the ownership of stock, as trustee or executor, by contract or credit,
arrangement or otherwise;
(f) "MATERIAL ADVERSE EFFECT" means, when used in connection with the
Company or any Company Subsidiary or Parent or any Parent Subsidiary, as the
case may be, any change, effect or circumstance that is materially adverse to
the business, assets, financial condition or results of operations of the
Company and the Company Subsidiaries, or Parent and the Parent Subsidiaries, as
the case may be, in each case taken as a whole, other than any such changes,
effects or circumstances: (i) set forth or contemplated by the Company
Disclosure Schedule in the case of the Company or any Company Subsidiary;
(ii) set forth or described in the Company SEC Reports or the Parent SEC
Reports, as the case may be; or (iii) affecting the physician practice
management industry generally;
(g) "PERSON" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, other entity
or group (as defined in Section 13(d)(3) of the Exchange Act); and
(h) "SUBSIDIARY" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means any corporation, partnership,
joint venture, limited liability company, business trust or other legal entity
of which the Company, the Surviving Corporation, Parent or such other person, as
the case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
9.5. AMENDMENT. This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that, after approval of the
Merger by the stockholders of the Company, no amendment may be made which by law
requires further approval by such stockholders without such further approval.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
9.6. WAIVER. At any time prior to the Effective Time, any party hereto
may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
9.7. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.8. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
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manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
9.9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all prior agreements and undertakings (other than the
Confidentiality Letter), both written and oral, among the parties, or any of
them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein.
9.10. ASSIGNMENT; GUARANTEE OF ACQUISITION OBLIGATIONS. This Agreement
shall not be assigned by operation of law or otherwise, except that Parent and
Acquisition may assign all or any of their rights hereunder to any affiliate
provided that no such assignment shall relieve the assigning party of its
obligations hereunder. Parent guarantees the full and punctual performance by
Acquisition of all the obligations hereunder of Acquisition or any such
assignees.
9.11. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, including, without limitation, by way of subrogation, other than
SECTION 6.3. (which is intended to be for the benefit of the Indemnified Parties
and may be enforced by such Indemnified Parties).
9.12. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
9.13. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Delaware applicable to
contracts executed and fully performed within the State of Delaware.
9.14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
9.15.1. JURISDICTION. Each of the parties irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the United States District Court for the Northern
District of Texas, Dallas Division, and any State court sitting in the
County of Dallas, State of Texas, and any appellate court therefrom, in
any
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action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties irrevocably
and unconditionally agrees, to the fullest extent permitted by applicable law,
that all claims in respect of any such action or proceeding may be heard and
determined in any such court. Each of the parties hereto agrees that a final
judgment in any such proceeding shall be conclusive and may be enforced in any
other jurisdictions by suit on the judgment or in any other manner provided by
law.
9.15.2. VENUE; INCONVENIENT FORUM. Each of the parties hereby
irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the transactions
contemplated hereby in the United States District Court for the Northern
District of Texas, Dallas Division and any State court sitting in the
County of Dallas, State of Texas. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding
in such court.
9.15.3. SERVICE OF PROCESS. Each of the parties hereby
irrevocably consents to service of process by registered or certified
mail to the address provided for notices in SECTION 9.3.. Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
[Remainder of page intentionally left blank.]
34
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IN WITNESS WHEREOF, Parent, Acquisition and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
LAIDLAW INC.
By:
----------------------------------------
Name:
Title:
EHI ACQUISITION CORP.
By:
----------------------------------------
Name:
Title:
EMCARE HOLDINGS INC.
----------------------------------------
Name:
Title:
35
<PAGE>
ANNEX A
OFFER CONDITIONS
The capitalized terms used in this Annex A have the meanings set forth in
the attached Agreement, except that the term "Merger Agreement" shall be deemed
to refer to the attached Agreement.
Notwithstanding any other provision of the Offer, Acquisition shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including without limitation, Rule 14e-1(c) under the
Exchange Act (relating to Acquisition's obligation to pay for or return Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares tendered
pursuant to the Offer, and may terminate or amend the Offer and not accept for
payment any Shares, if:
(i) the Minimum Condition shall not have been satisfied; or
(ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated; or
(iii) at any time on or after five days after announcement and prior to
the acceptance for payment of Shares, any of the following conditions occurs:
(a) there shall have been any action or proceeding brought by
any governmental authority before any court located or having
jurisdiction within the United States or any statute, regulation,
legislation, judgment or order, enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to the Offer or the Merger by any
court, governmental, administrative or regulatory authority or agency
located or having jurisdiction within the United States that would result
in a Company Material Adverse Effect and have the effect of: (i) making
illegal, or otherwise directly or indirectly restraining or prohibiting
or imposing material penalties or fines or requiring the payment of
material damages in connection with the making of, the Offer, the
acceptance for payment of, payment for, or ownership, directly or
indirectly, of some of or all the Shares by Parent or Acquisition, the
consummation of the Offer or the Merger; (ii) prohibiting or materially
limiting the direct or indirect ownership or operation by the Company or
by Parent of all or any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or compelling Parent to
dispose of or hold separate all or any material portion of the business
or assets of the Company and its subsidiaries, taken as a whole, as a
result of the transactions contemplated by the Merger Agreement;
(iii) imposing or confirming material limitations on the ability of
Parent effectively to hold or to exercise full rights of ownership of
Shares, including, without limitation, the right to vote any Shares on
all matters properly presented to the stockholders of the Company; or
(iv) requiring divestiture by Parent or Acquisition, directly or
indirectly, of any Shares; or
A-1
<PAGE>
(b) the Company shall have breached or failed to perform in
any material respect any of its covenants or agreements under the Merger
Agreement or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and correct when made and
as of the date of consummation of the Offer (except to the extent such
representations and warranties address matters only as of a particular
date, in which case as of such date), except where the failure to
perform such covenants or agreements or the failure of such
representation and warranties to be so true and correct would not have a
Company Material Adverse Effect; or
(c) The Merger Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable judgment of Acquisition in any such case, and
regardless of the circumstances (including any action or omission by Acquisition
not inconsistent with the Merger Agreement) giving rise to any such condition,
makes it inadvisable to proceed with such acceptance for payment or payments of
Shares; provided, that prior to October 31, 1997, Acquisition shall not
terminate the Offer by reason of the nonsatisfaction of any of the conditions
and shall extend the Offer.
The failure by Acquisition at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, the waiver of any such
right with respect to particular facts or circumstances shall not be deemed a
waiver with respect to any other facts or circumstances, and each such right
shall be deemed an ongoing right that may be asserted at any time or from time
to time.
A-2
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into this 29th day of July,
1997, among Laidlaw Inc., a Canadian corporation ("Parent"), Leonard M. Riggs,
Jr., M.D. ("Riggs") and William F. Miller, III ("Miller" and, together with
Riggs, the "Purchasers").
The Company, EHI Acquisition Corp., a wholly owned Delaware subsidiary
of Parent ("Acquisition"), and EmCare Holdings Inc., a Delaware corporation
("EHI") have entered into an Agreement and Plan of Merger dated July 29, 1997
providing for a tender offer by Acquisition for shares of common stock of EHI
and the subsequent merger of Acquisition with and into EHI (the "Merger
Agreement"). Riggs and Miller are the Chairman of the Board and Chief Executive
Officer and the President and Chief Operating Officer, respectively, of EHI. In
connection with the transactions contemplated by the Merger Agreement, Parent
desires the Purchasers to make, and the Purchasers desire to make, an equity
investment in Parent as provided in this Agreement.
In consideration of the agreements set forth below, Parent and the
Purchasers agree as follows:
1. SALE AND PURCHASE. Subject to the terms and conditions of this
Agreement, at the closing provided for in Section 2, Parent shall sell to Riggs,
and Riggs shall purchase from Parent, a number (rounded to the nearest whole
number) of common shares of Parent (the "Common Shares") determined by dividing
US$7,000,000 by the Market Price (as defined below), and Parent shall sell to
Miller, and Miller shall purchase from Parent, a number (rounded to the nearest
whole number) of Common Shares determined by dividing US$3,000,000 by the
Market Price, in each case for cash at a price per share equal to the Market
Price. The Market Price shall be the closing sale price of the Common Shares on
the New York Stock Exchange on the trading day immediately preceding the day of
the closing. Only whole Common Shares will be issued. The Common Shares sold
and purchased pursuant to this Agreement shall be referred to as the "Shares."
2. CLOSING. The purchase and sale of the Shares shall take place at
the offices of Gibson, Dunn & Crutcher LLP, 1717 Main Street, Suite 5400,
Dallas, Texas 75201 immediately following the acceptance of shares of EHI stock
pursuant to the Offer contemplated by the Merger Agreement, or at such other
time place and/or time as Parent and the Purchasers may agree in writing.
<PAGE>
3. TRANSFER RESTRICTIONS.
a. None of the Shares shall be sold, pledged, assigned or
otherwise transferred, voluntarily or involuntarily, by either of the
Purchasers except as set forth in Section 3(b) hereof and except as
follows:
i. On the first anniversary of the date of this Agreement,
the restrictions on transfer shall lapse with respect to 10% of the
Shares purchased by each Purchaser;
ii. On the second anniversary of the date of this
Agreement, the restrictions on transfer shall lapse with respect to an
additional 10% of the Shares purchased by each Purchaser; and
iii. On the third anniversary of the date of this
Agreement, the restrictions on transfer shall lapse with respect to
all remaining Shares.
Moreover, since the Shares have not been registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), or applicable state
securities laws, the economic risk of investment in the Shares must be borne by
the Purchasers, and the Shares cannot be sold by the Purchasers unless
subsequently registered under the Securities Act and such laws or unless an
exemption from such registration is available.
b. The restrictions contained in this Section 3 will not apply
with respect to transfers of Shares (i) pursuant to applicable laws of
descent and distribution, or (ii) among Purchaser's Family Group (as
defined below), provided that the restrictions contained in this Section 3
will continue to be applicable to the Shares after any such transfer and
the transferees of such Shares shall agree in writing to be bound by the
provisions of this Agreement. "Family Group" means, with respect to each
Purchaser, such Purchaser's spouse and descendants (whether natural or
adopted) and any trust or partnership solely for the benefit of such
Purchaser and/or Purchaser's spouse and/or descendants. Any transferee of
Shares pursuant to a transfer in accordance with the provisions of this
Section 3(b), is herein referred to as a "Permitted Transferee." Upon the
transfer of the Shares pursuant to this Section 3(b), Purchaser will
deliver a written notice (the "Transfer Notice") to Parent. The Transfer
Notice will disclose in reasonable detail the identity of the Permitted
Transferees.
c. This provision of this Section 3 will terminate with respect
to each Purchaser upon the first to occur of (i) the death of such
Purchaser, and (ii) the sale of EHI by Parent (whether by stock or asset
sale, merger or otherwise).
4. RIGHTS AS SHAREHOLDER. From and after the closing, each
Purchaser shall be entitled to all of the rights of a shareholder with respect
to the Shares purchased by him, including
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<PAGE>
the right to vote such Shares and to receive dividends and other distributions
payable with respect to such Shares.
5. STOCK CERTIFICATES AND LEGEND. Certificates representing the
Shares shall be issued in the Purchasers' names, shall bear the legends set
forth in Section 8, and shall be delivered to the Purchasers at the closing.
6. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and
warrants to each of the Purchasers as follows:
a. ORGANIZATION. Parent is a corporation duly organized,
validly existing and in good standing under the Canada Business
Corporations Act and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to conduct its
business as currently conducted.
b. AUTHORITY. Parent has all requisite power and authority to
execute and deliver this Agreement and to perform the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Parent, and no
other approval on the part of Parent is necessary for the execution,
delivery and performance of this Agreement. This Agreement constitutes the
legal, valid and binding obligation of Parent, enforceable against it in
accordance with its terms.
c. NO CONFLICTS. Subject to compliance with the requirements
of federal, state and provincial securities laws with respect to the
issuance of the Shares, the execution and delivery of this Agreement by
Parent and the consummation of the transactions contemplated hereby (a) do
not require Parent to file any notice with or obtain any consent, approval,
authorization or exemption from any person, (b) will not violate any court
order, judgment, law, rule or regulation and (c) will not constitute a
default or breach under any agreement to which Parent is a party or by
which it or any of its properties may be bound.
d. SEC REPORTS. Parent's Annual Report on Form 10-K for the
year ended August 31, 1996, as filed with the Securities and Exchange
Commission (the "SEC"), and all reports, schedules, forms, statements and
other documents subsequently filed by Parent with the SEC, as of their
respective dates, (a) complied with the applicable requirements of the
Securities Act or the Securities Exchange Act of 1934, as the case may be,
and the rules and regulations of the SEC promulgated thereunder, and (b)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. During the entire term of this Agreement, Parent
agrees to continue to file all reports, schedules, forms, statements and
other documents in accordance with the applicable requirements of the
Securities Act and
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<PAGE>
the Securities Exchange Act of 1934, and the rules and regulations of the
SEC promulgated thereunder.
e. SHARES VALID. The Shares will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights.
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each of the
Purchasers severally represents and warrants, as to himself only, as follows:
a. AUTHORITY. Such Purchaser has all requisite authority to
execute and deliver this Agreement and to perform the transactions
contemplated hereby. This Agreement constitutes the legal, valid and
binding obligation of such Purchaser, enforceable against him in accordance
with its terms.
b. NO CONFLICTS. The execution and delivery of this Agreement
by such Purchaser and the consummation of the transactions contemplated
hereby (a) do not require such Purchaser to file any notice with or obtain
any consent, approval, authorization or exemption from any person, (b) will
not violate any court order, judgment, law, rule or regulation and (c) will
not constitute a default or breach under any agreement to which such
Purchaser is a party or by which he or any of his properties may be bound.
c. EXEMPT OFFERING. Such Purchaser understands that the Shares
are not being and will not be registered under the Securities Act and are
being distributed to him in a transaction that is exempt from the
registration requirements of the Securities Act.
d. ACCESS TO INFORMATION. Such Purchaser has reviewed the
Merger Agreement and Parent's SEC Filings and understands the information
contained therein. Such Purchaser has had an opportunity to ask questions
of and receive information and answers from Parent, Acquisition and EHI
concerning the terms and conditions of the Merger Agreement, the Common
Shares and other matters pertaining to this investment and has been given
the opportunity to verify the information provided to such Purchaser in
order for him to evaluate the merits and risks of an investment in the
Shares, and all such questions have been answered and all such information
has been provided to the full satisfaction of such Purchaser. No oral or
written representations have been made to such Purchaser in connection with
the Shares which were in any way inconsistent with the information provided
by Parent. Such Purchaser has determined that an investment in the Common
Shares is a suitable investment for such Purchaser, and that at this time
such Purchaser could bear a complete loss of the investment.
e. INVESTOR SOPHISTICATION. Such Purchaser has the capacity to
protect his interest in connection with this investment and has such
knowledge and experience in financial, tax and business matters as to be
capable of evaluating the merits and risks of
4
<PAGE>
an investment in the Common Shares and protecting such Purchaser's
interests in connection with the investment and, in such Purchaser's
judgment, has obtained sufficient information from Parent to evaluate the
merits and risks of an investment in the Common Shares. Such Purchaser is
an "accredited investor" (within the meaning of Rule 501(a) of Regulation D
under the Securities Act) and has the financial ability to bear the
economic risk of investment in the Shares (including such Purchaser's
possible loss), has adequate means for providing for his current needs and
personal contingencies and has no need for liquidity with respect to the
investment in the Shares.
f. INVESTMENT INTENT. Such Purchaser is acquiring the Shares
solely for his own account, for investment purposes only and not with a
view to the resale or distribution thereof.
g. RESTRICTIONS ON TRANSFER. Such Purchaser understands that
(i) the Shares will be considered "restricted securities" within the
meaning of Rule 144 under the Securities Act ("Rule 144"); (ii) Rule 144
may not be available to exempt from the registration requirements of the
Securities Act sales of such "restricted securities"; (iii) if Rule 144 is
available, sales may be made in reliance upon Rule 144 only in accordance
with the terms and conditions of Rule 144, which among other things
generally requires that the securities be held for at least one year and
that sales be made in limited amounts (which amounts are subject to certain
exceptions depending upon whether the seller is an "affiliate" within the
meaning of Rule 144 and how long the securities have been held); (iv) a
Purchaser may dispose of his Shares pursuant to an exemption from the
registration requirements of the Securities Act other than the exemption
available under Rule 144 if prior to such disposition such Purchaser has
delivered to Parent an opinion of counsel experienced in securities law
matters to the effect that such disposition does not require registration
under the Securities Act; and (v) if an exemption for the disposition of
Shares is not available, registration of the Shares may be required, but
that Parent is under no obligation to effect such a registration.
8. RESTRICTIVE LEGENDS. The certificates representing the Shares
shall bear a legend substantially to the following effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR UNDER ANY APPLICABLE STATE LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY
THE REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A VIEW TO
OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF WITHIN
THE MEANING OF THE 1933 ACT. THE SHARES MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT
5
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UNDER THE PROVISIONS OF THE 1933 ACT OR ANY APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND
STATE SECURITIES LAWS.
IN ADDITION, UNTIL JULY 29, 2000, THE SALE OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY AND SUBJECT TO THE PROVISIONS OF A STOCK
PURCHASE AGREEMENT DATED JULY 29, 1997, A COPY OF WHICH IS
AVAILABLE UPON REQUEST FOR INSPECTION AT THE OFFICES OF THE
CORPORATION. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE
SECRETARY OF THE CORPORATION."
9. INVESTOR AWARENESS. Each Purchaser further acknowledges,
represents, agrees and is aware that:
(i) no federal or state agency has passed upon the Common Shares or
made any finding or determination as to the fairness of this investment;
and
(ii) the representations, warranties, agreements, undertakings and
acknowledgments made by such Purchaser in this Agreement are made with the
intent that they be relied upon by Parent in determining such Purchaser's
suitability as a purchaser of Common Shares, and shall survive the
acquisition of the Shares. In addition, such Purchaser undertakes to
notify Parent immediately of any change in any representation, warranty or
other information relating to him set forth herein.
10. GOVERNMENT REGULATIONS. Notwithstanding anything contained
herein to the contrary, Parent shall not be required to issue or deliver any
certificates for Shares pending compliance with applicable federal, state and
provincial securities laws (including any registration required) and compliance
with applicable stock exchange rules and practices. Parent shall use its best
efforts to cause compliance with those laws, rules and practices.
11. NO RIGHT TO SERVICE. Nothing in this Agreement shall be
construed as creating any right in either Purchaser to continued employment or
as altering or amending the existing terms and conditions of employment of the
Purchasers.
12. TERMINATION. This Agreement shall automatically terminate upon
termination of the Merger Agreement.
13. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware.
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14. SOLE AGREEMENT. This Agreement is the entire agreement between
the parties hereto with respect to the matters described herein, all prior oral
and written representations being merged herein. No amendment or modification
of the terms of this Agreement shall be binding on either party unless reduced
to writing and signed by the party to be bound.
15. SEVERABILITY. The invalidity of any provision of the Agreement
shall not in any manner affect the validity of any other provisions hereof and
each and every provision of the Agreement shall be enforceable regardless of the
invalidity, if any, of any other provision hereof.
16. NOTICE. Notices under the Agreement shall be in writing and sent
by registered mail, return receipt requested, to the following addresses or to
such other address as the party being notified may have previously furnished to
the others by written notice.
If to Parent: Laidlaw Inc.
P.O. Box 5028
Burlington, Ontario L7R 3Y8
Attention: Ivan R. Cairns
If to Riggs: Leonard M. Riggs, Jr., M.D.
c/o EmCare Holdings Inc.
1717 Main Street
Suite 5200
Dallas, Texas 75201
If to Miller: William F. Miller, III
c/o EmCare Holdings Inc.
1717 Main Street
Suite 5200
Dallas, Texas 75201
7
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In Witness Whereof, Parent by its duly authorized officer and each of
the Purchasers have signed this Agreement the day and year first above written.
LAIDLAW INC.
By:
----------------------------------------
Its:
----------------------------------------
---------------------------------------------
Leonard M. Riggs, Jr., M.D.
---------------------------------------------
William F. Miller, III
8
<PAGE>
AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of July 29, 1997, among
Laidlaw Inc., a Canadian corporation ("Parent"), EHI Acquisition Corp., a
Delaware corporation and an indirect wholly owned subsidiary of Parent
("Purchaser"), and each other person whose name is set forth on the signature
pages hereto (individually, a "Seller" and collectively, the "Sellers").
WHEREAS, Parent, the Purchaser, and EmCare Holdings Inc., a Delaware
corporation (the "Company"), propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, that Purchaser, upon the terms and subject to the conditions
thereof, will make a tender offer (the "Tender Offer") for all of the
outstanding shares of common stock, par value $0.01 per share, of the Company
(the "Common Stock"), and thereafter Purchaser and the Company will be merged
(the "Merger") (the Tender Offer and Merger being collectively referred to as
the "Acquisition Transaction"); and
WHEREAS, each Seller is the holder or beneficial owner of, or has
dispositive and voting authority for, the number of shares of the Common Stock
set forth opposite the name of such Seller on the signature pages hereto
(collectively, the "Shares"); and
WHEREAS, as a condition to the willingness of Purchaser and Parent to
enter into the Merger Agreement, Purchaser and Parent have required, among other
things, that the Sellers execute and deliver this Agreement; and
WHEREAS, the Sellers are desirous of inducing Purchaser and Parent to
enter into the Merger Agreement and, therefore, are desirous of executing and
delivering this Agreement.
NOW, THEREFORE, in contemplation of the foregoing and in consideration
of the mutual agreements, covenants, representations and warranties contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
Acquisition Transaction
Section 1.1 TENDER OFFER. The parties acknowledge that the
Purchaser and Parent would not have entered into the Merger Agreement without
the concurrent execution of this Agreement and that the Sellers, the Parent and
the Purchaser would not have entered into this Agreement without the concurrent
execution of the Merger Agreement. In connection with the Tender Offer, each
Seller severally agrees that such Seller will promptly tender, and not withdraw,
the Shares of such Seller pursuant to the terms of the Tender Offer.
Section 1.2 GRANT OF IRREVOCABLE PROXY. Each Seller hereby
irrevocably grants to the Purchaser, James R. Bullock and Ivan R. Cairns, or
any of them (each a "Proxyholder"), each with full power of substitution, a
proxy to exercise all voting and other rights with respect to all such
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Seller's Shares, including without limitation, with respect to the Merger and
the other matters contemplated by the Merger Agreement. All prior proxies and
powers given by each Seller with respect to such Seller's Shares are, without
further action, hereby revoked for so long as this Agreement is in effect, and
no subsequent proxies or powers may be given, and if given will not be
effective. Each Proxyholder will, with respect to the Shares, be empowered to
exercise all voting and other rights of the Sellers with respect to the Shares
as such Proxyholder, in his or its sole discretion, may deem proper at any
meeting of the Company's shareholders, by written consent or otherwise. The
foregoing proxy may be exercised by any Proxyholder only to the extent
consistent with the terms of this Agreement and the Merger Agreement.
ARTICLE II
Designated Affiliate and Adjustments
Section 2.1 DESIGNATED AFFILIATE. It is understood and agreed
among the parties that Purchaser may cause one or more companies which are
directly or indirectly controlled by or under common control with Parent
designated by it (the "Designated Affiliate" or "Designated Affiliates") to
carry out some or all of the provisions of this Agreement (including, without
limitation, the effectuation of the Acquisition Transaction); PROVIDED, HOWEVER,
that Purchaser shall nevertheless remain liable for all of its obligations and
those of the Designated Affiliate or Affiliates hereunder.
Section 2.1 ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the
event of any change in any of the Shares by reason of any stock dividends,
split-ups, mergers, recapitalization or other changes in the corporate or
capital structure of the Company, the number and kind of such Shares subject to
this Agreement shall be appropriately adjusted.
ARTICLE III
Representations of
and Warranties by the Seller
Each Seller severally hereby represents and warrants to Purchaser and
Parent as follows:
Section 3.1 OWNERSHIP OF THE SHARES. Such Seller has full power
and authority to tender, sell, assign and transfer the number of the shares of
the Common Stock set forth opposite such Seller's name on the signature pages
hereto (which are all the shares of the Common Stock which such Seller so owns),
and will have (without exception) good and unencumbered title with respect to
all of the Shares of such Seller, free and clear of all liens, restrictions,
charges and encumbrances and such Shares will not be subject to any adverse
claim whatsoever, and upon the delivery of and payment for the Shares of such
Seller, Purchaser will receive good and
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unencumbered title with respect to all of such Shares, free and clear of all
liens, restrictions, charges and encumbrances and such Shares will not be
subject to any adverse claim whatsoever.
Section 3.2 AUTHORIZATION, VALID AND BINDING AGREEMENT. This
Agreement has been duly and validly authorized, executed and delivered by such
Seller and constitutes the valid and binding agreement of Seller enforceable
against such Seller in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally or by general equitable
principles.
Section 3.3 NO CONFLICTS. Neither the execution and delivery of
this Agreement nor the performance by such Seller of such Seller's obligations
hereunder will constitute a violation of, or conflict with, or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or restriction of any kind to which such Seller is a party or by which such
Seller is bound or any judgment, decree or order applicable to such Seller.
ARTICLE IV
Representations of and
Warranties by Purchaser and Parent
Purchaser and Parent hereby represent and warrant to such Seller as
follows:
Section 4.1 AUTHORIZATION; VALID AND BINDING AGREEMENT. This
Agreement has been duly authorized by all necessary corporate action on the part
of Purchaser and Parent. This Agreement has been duly and validly executed and
delivered by Purchaser and Parent, and constitutes the valid and binding
agreement of Purchaser and Parent, enforceable against Purchaser and Parent in
accordance with its terms, except to the extent enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally or by general equitable principles.
Section 4.2 NO CONFLICTS. Neither the execution and deliver of
this Agreement nor the performance by Purchaser or Parent of its respective
obligations hereunder will constitute a violation of, or conflict with, or
constitute a default under, any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which Purchaser or Parent is a party
or by which Purchaser or Parent is bound or any judgment, decree or order
applicable to Purchaser or Parent.
ARTICLE V
Covenants
Section 5.1 NEGOTIATIONS. Following the execution of this
Agreement by the Sellers, each Seller severally agrees not to, directly or
indirectly, (i) initiate contact with, solicit or
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enter into negotiations with, any corporation, partnership, person or other
entity (a "Third Party") concerning any possible proposal that constitutes, or
may reasonably be expected to lead to, any Acquisition Proposal (as hereinafter
defined), or (ii) furnish any internal nonpublic financial or business
information to any corporation, partnership, person or other entity in
connection with any Acquisition Proposal; and each Seller severally agrees to
notify Purchaser immediately if any discussions or negotiations are sought to be
initiated, or any such information is requested, with respect to an Acquisition
Proposal or potential Acquisition Proposal of if any Acquisition Proposal is
received or indicated to be forthcoming. Purchaser and Parent each hereby
acknowledge that any action taken by a Seller in such Seller's capacity as a
director or executive officer of the Company contemplated by Section 5.2 of the
Merger Agreement shall not constitute a violation by such Seller of such
Seller's obligations under this Section 5.1. The term "Acquisition Proposal"
means the occurrence of any of the following events: (a) the Company or any
subsidiary of the Company is acquired by merger or otherwise by any Third Party;
(b) the Company or any subsidiary of the Company enters into an agreement with a
Third Party that contemplates the acquisition of 35% or more of the total assets
of the Company and its subsidiaries taken as a whole; (c) the Company enters
into a merger or other agreement with a Third Party that contemplates the
acquisition of beneficial ownership of more than 35% of the outstanding shares
of the Company's capital stock; or (d) a Third Party acquires more than 35% of
the outstanding shares of the Company's capital stock.
Section 5.2 OTHER TRANSACTIONS. Each Seller severally agrees that,
prior to the termination of this Agreement, such Seller shall not engage in any
action or omission that would have the effect of preventing or disabling such
Seller from delivering the Shares of such Seller to Purchaser hereunder or
otherwise performing such Seller's obligations under this Agreement or causing
any representation of or warranty by such Seller to be untrue. Without limiting
the foregoing and except as provided in this Agreement, each Seller severally
agrees not to sell or transfer, or agree to sell or transfer, any of the Shares
of such Seller or any interest in such Shares, shall keep such Shares free and
clear of all liens, charges and encumbrances and voting agreements, commitments,
agreements, understandings and arrangements of every kind and shall not give any
proxy with respect to the voting power of such Shares until the termination of
this Agreement.
Section 5.3 GUARANTY. Parent hereby guarantees the due performance
by Purchaser of any obligations of Purchaser hereunder.
Section 5.4 EMPLOYMENT AGREEMENTS. Each Seller severally agrees
and Parent agrees, and shall cause the Company, to enter into an employment
agreement in the form bearing the name of such Seller attached hereto as EXHIBIT
A OR B, as the case may be, immediately following the acceptance of shares of
the Company's stock pursuant to the Offer contemplated by the Merger Agreement.
ARTICLE VI
[Reserved]
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ARTICLE VII
Termination
Section 7.1 TERMINATION. This Agreement shall terminate at the
earliest of (a) the time mutually agreed to by Purchaser, Parent and the Sellers
expressed in writing, or (b) so long as Sellers are not in default under this
Agreement, the termination of the Merger Agreement in accordance with its terms.
Section 7.2 EFFECT OF THE TERMINATION. In the event of the
termination of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect, without liability on the part of any
party or its directors, officers or shareholders. Nothing contained in this
Article VII shall relieve any party from liability for any breach of this
Agreement.
ARTICLE VIII
Miscellaneous
Section 8.1 EXPENSES. No party hereto will pay any fees and
expenses incurred by any other party in connection with this Agreement,
including without limitation the fees and expenses of such party's financial and
legal advisors and any brokerage or finder's fee incurred by such party, each
party representing that such party has incurred no obligation for any such fee
for which any other party is responsible.
Section 8.2 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Purchaser, Parent and the Seller in this
Agreement or in any instrument delivered by Purchaser, Parent and any Seller
pursuant to this Agreement shall not survive the Closing except for those
contained in Sections 3.1, 4.1 and 8.3 which shall survive the Closing and any
investigation at any time made by or on behalf of any party hereto.
Section 8.3 NON REGISTRATION. Purchaser acknowledges that the sale
of the Shares has not been registered under the securities Act of 1933,
represents that it is not acquiring the Shares with a view to the distribution
thereof, and agrees that it will not sell the Shares except pursuant to a
registration statement under that Act or an exemption from registration
thereunder.
Section 8.4 ASSIGNMENT; PARTIES IN INTEREST. Except as permitted
by Section 2.1 hereof or as required by operation of law, this Agreement shall
not be assignable by the parties hereto without the prior written consent of the
other parties. Notwithstanding the foregoing, Purchaser may assign this
Agreement an entity which controls or is controlled by the same persons who
control Purchaser. This Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and permitted
assigns.
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Section 8.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
documents referred to herein or delivered pursuant hereto which form a part
hereof, contain the entire understanding of the parties with respect to its
subject matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings other than those expressly set forth herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. This Agreement may be
amended only by written instrument duly executed by all the parties. Any
condition to a party's obligations hereunder may be waived in writing by such
party.
Section 8.6 NOTICES. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and will be
deemed to have been duly given (i) when delivered if delivery is made in person,
by cable, telegram, telecopier or telex, (ii) on the next business day after
mailing by means of an overnight delivery service, or (iii) on the fifth
business day after deposit in the mails (registered or certified mail, postage
prepaid, return receipt requested), as follows:
(a) If to Purchaser or Parent, to:
Laidlaw Inc.
3221 N. Service Road
P.O. Box 5028
Burlington, Ontario
Canada L7R 3Y8
Telecopy No. 905-332-6550
Telephone No. 905-336-1800
Attention: Ivan R. Cairns
(b) If to any Seller, to:
EmCare Holdings Inc.
1717 Main Street
Suite 5200
Dallas, Texas 75201
Telecopy No. (214) 712-2444
Telephone No. (214) 712-20000
Attention: [insert Seller's name]
or to such other address as the person to whom notice is to be given may have
previously furnished to the other parties in writing in the manner set forth
above. No notice, claim, certificate, request, demand or other communication
shall be deemed to have been duly given to any party hereto unless
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deemed to have been duly given in the manner set forth above to both such party
and any person or person designated to receive a copy.
Section 8.7 LAW GOVERNING. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
Section 8.8 SEVERABILITY OF PROVISIONS. In case any one or more of
the provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 8.9 COUNTERPARTS; HEADINGS. This Agreement may be executed
simultaneously in several counterparts, each of which will be deemed to be an
original, but all of which together will constitute one and the same instrument.
The article and section headings contained herein are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Agreement.
Section 8.10 REMEDIES. The parties hereto agree that if for any
reason any party hereto shall have failed to perform its obligations under this
Agreement, then any other party hereto seeking to enforce this Agreement against
such non-performing party shall be entitled to specific performance and
injunctive and other equitable relief, and the parties hereto further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. This provision
is without prejudice to any other rights that any party hereto may have against
any other party hereto for any failure to perform its obligations under this
Agreement.
Section 8.11 FIDUCIARY DUTY. Nothing herein shall in any way affect
any action by any director or executive officer of the Company that is required
to be taken in order to discharge properly their fiduciary duties to the
Company.
Section 8.12 FURTHER ASSURANCES. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, property or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, the Sellers, Purchaser or Parent, as the case may be, shall take all
such necessary action.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
EHI ACQUISITION CORP.
By:
---------------------------
Title:
---------------------------
LAIDLAW INC.
By:
---------------------------
Title:
---------------------------
SELLERS
Number of Shares
of Common Stock:______
----------------------------------
Leonard M. Riggs, Jr., M.D.
Number of Shares
of Common Stock:_______ ----------------------------------
William F. Miller, III
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<PAGE>
EMPLOYMENT AGREEMENT
This Agreement between EmCare Holdings, Inc., a Delaware corporation
(the "Company"), and Dr. Leonard M. Riggs, Jr. ("Executive") is hereby entered
into as of , 1997.
RECITALS:
The Company has entered into an agreement and plan of merger (the
"Merger Agreement") dated as of July , 1997 by and among the Company, Laidlaw
Inc., a Canadian corporation ("Laidlaw") and EHI Acquisition Corp., a
wholly-owned subsidiary of Laidlaw ("Acquisition").
Pursuant to the Merger Agreement, Acquisition will make a tender offer
to acquire all outstanding shares of common stock, par value $0.01 per share,
of the Company in accordance with the terms and subject to the conditions
provided for therein (the "Offer"). Subsequent to the Offer, Acquisition will
merge with and into the Company (the "Merger") and the Company will become a
wholly-owned indirect subsidiary of Laidlaw.
Executive is or will be employed by the Company in a confidential
relationship wherein Executive, in the course of his employment with the
Company, has and will become familiar with and aware of information as to the
specific manner of doing business and the customers of the Company, and its
subsidiaries and future plans with respect thereto, all of which will be
established and maintained at great expense to the Company and its
subsidiaries; this information is a trade secret and constitutes the valuable
goodwill of the Company and its subsidiaries.
Executive recognizes that the business of the Company and its
subsidiaries depends upon a number of trade secrets, including secret
techniques, methods and data. The protection of these trade secrets is of
critical importance to the Company and its subsidiaries.
The Company and its subsidiaries will sustain great loss and damage if
Executive should violate the provisions of paragraph 3 of this Agreement.
Further, monetary damages for such losses would be extremely difficult to
measure.
NOW THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each,
effective as of the time of the Merger, it is hereby agreed as follows:
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1. EMPLOYMENT AND DUTIES
(a) The Company hereby employs Executive as Chief Executive Officer of
Emcare Holdings, Inc. to perform the duties normally associated
therewith. Executive shall report directly to the Chief Executive
Officer or Chief Operating Officer of Laidlaw. Executive hereby
accepts this employment upon the terms and conditions herein contained
and agrees to devote his full time, attention and efforts to promote
and further the business and services of the Company. Executive shall
faithfully adhere to, execute and fulfill all policies established by
the Company.
(b) Executive shall perform such duties, assume such responsibilities and
devote such time and energy to the business of the Company as the
Chief Executive Officer or Chief Operating Officer of Laidlaw shall
from time to time require and shall not, during the term of his
employment hereunder, be engaged in any other business activity
pursued for gain, profit or other pecuniary advantage without the prior
approval of the Company.
However, the foregoing limitations shall not be construed as
prohibiting Executive from making personal investments in such form
and manner as will neither require his services in the operation or
affairs of the companies or enterprises in which such investments are
made nor violate the terms of paragraph 3 hereof. The Executive shall
not be prohibited from serving as a director of other entities
provided there is no conflict with the business of the Company or the
ability of the Executive to perform his duties hereunder subject in
any case to the approval of the Chief Executive Officer of Laidlaw,
not to be unreasonably withheld.
(c) All funds received by Executive on behalf of the Company, if any,
shall be held in trust for the Company and shall be delivered to the
Company as soon as possible.
2. COMPENSATION AND EXPENSE
For all services rendered by Executive to the Company, the Company
shall compensate the Executive as follows:
(a) BASE SALARY. The base salary payable to Executive shall be not less
than $325,000 per year payable in accordance with the Company's
customary pay practices.
(b) ANNUAL PERFORMANCE BONUS. Executive shall be eligible for an annual
bonus in the amount of $800,000 per year subject to the Company
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achieving earnings growth at the level agreed to by the Executive and
the Chief Executive Officer of Laidlaw. Executive shall remain
eligible for annual bonus for five years from the date hereof, or, if
earlier, until his employment with the Company has been terminated. The
annual bonus shall be paid to the Executive after each fiscal year at
such time as annual performance bonus would normally be paid to senior
executives of Laidlaw.
Should the Company, in any year, not achieve the specified earnings
target, but achieve 80% of the target, Executive shall be entitled to
receive 50% of the annual bonus plus a percentage of the balance equal
to the percentage of the target achieved between 80% and 100%. Should
the Executive remain employed by the Company for five years from the
date hereof and not have received the maximum bonus hereunder in each
of the five years, the Executive shall be eligible for an additional
bonus not to exceed the aggregate unpaid amounts, in accordance with
criteria agreed to by the Executive and the Chief Executive Officer of
Laidlaw.
(c) RETENTION BONUS. In order to induce Executive to remain in his
position with the Company and to accept the responsibilities arising
from the management of the Company following the Offer and the Merger,
the Company will pay or cause to be paid to Executive on execution of
this agreement, an amount in cash equal to $799,297.
Executive shall be entitled to receive a pro rata portion of the 1997
fiscal bonus to August 31, 1997, determined on a basis consistent,
with previous years, which bonus shall be payable at the time other
annual bonuses are paid to executives and shall not exceed $110,000.
(d) EXPENSES. Executive shall be entitled to reimbursement for expenses
incurred on behalf of the Company in the performance of his duties
hereunder, consistent with the Company's reimbursement policies.
(e) AUTOMOBILE ALLOWANCE. Executive shall receive an automobile allowance
in the amount of $1,172 per month and shall be reimbursed for the cost
of automobile insurance which is intended to cover all expenses
relating to Executive's automobile.
(f) DISABILITY. Executive shall be entitled to receive for a period of up
to six (6) months his base salary and a pro rata portion of his bonus
during such time as, because of illness or physical or mental
disability or other
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incapacity, he is unable to perform his duties under this Agreement.
Such amounts payable shall be offset by any amounts paid to Executive
under disability insurance policies maintained by the Company.
(g) STOCK OPTIONS. As soon as practicable following the date hereof, the
Company will cause Laidlaw to grant to Executive an option to purchase
30,000 Common Shares of Laidlaw at an exercise price equal to the fair
market value of such common stock at the time of the grant, such
options to vest consistent with the terms of the Laidlaw stock option
plan under which such options are issued, Annual grants to the
Executive shall be proposed to the compensation committee of Laidlaw's
board of directors at levels consistent with other Laidlaw
executives.
(h) OTHER BENEFITS. Executive shall be entitled to participate in the
Company's employee benefit programs to the extent that his position,
title, and tenure make him eligible to participate therein, and
subject to and on a basis consistent with the terms, conditions and
overall administration of such programs, including, but not
necessarily limited to participation in the Company's 401(k) plan and
health, vision and dental coverage. In addition to the benefits
described above, Executive shall be entitled to the benefits set forth
on Annex A hereto.
3. NON-COMPETITION AGREEMENT: TRADE SECRETS
(a) Executive agrees that, for the greater of four years from the date
hereof and one year following termination of his employment with the
Company for any reason, he shall not, directly or indirectly, for
himself or on behalf of, or in conjunction with, any other person
company, partnership, corporation or business of whatever nature:
(i) knowingly call upon any past or present customer of the
Company or any of its subsidiaries (including any such customer
obtained by the Executive) for the purpose of soliciting or selling
any services or products in competition with the medical
transportation services and emergency department management services
business of the Company or any of its subsidiaries or affiliates;
(ii) knowingly call upon any employee of the Company or any or any
of its subsidiaries for the purpose or with the intent of enticing
them away from or out of the employ of the Company or any of its
subsidiaries for any reason whatsoever;
(iii) establish, enter into, be employed by or for, advise, consult
with or become an owner in or a part of, any company, partnership,
corporation or other business entity or venture, or in any way engage
in business for
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himself or for others, that competes with the Company or its
affiliates in the business of providing medical transportation
services or emergency department management services within the United
States of America or within 100 miles of any location in which the
Company or any of its subsidiaries conducts business; or
(iv) call upon any prospective acquisition candidates in the
medical transportation services or emergency department services
business on Executive's own behalf or on behalf of any competitor,
which candidate was either called upon by the Executive or for which
Executive made an acquisition analysis for the Company,
Ownership of not more than five percent of the voting stock of a
corporation whose stock is traded on a national securities exchange or
over-the-counter shall not of itself constitute a violation of this
paragraph 3(a).
(b) Executive agrees that he will not, during or after the term of his
employment with the Company, disclose or use for his personal benefit,
information relating to the customers or other trade secrets (whether
in existence or proposed) of the Company or any of its subsidiaries,
or any other confidential information of the Company or its
subsidiaries to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever.
(c) Because of the difficulty of measuring economic losses to the Company
and its subsidiaries as a result of the breach of any of the foregoing
covenants, and because of the immediate and irreparable damage that
would be caused to the Company and its subsidiaries for which they may
have no other adequate remedy, Executive agrees that, in the event of
a breach by him of any of the foregoing covenants, the Company or any
of its subsidiaries may, in addition to obtaining any other remedy or
relief available to it, enforce the foregoing covenants, by all
equitable relief, including injunctions and restraining orders.
(d) The covenants in this paragraph 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the
fullest extent which the court deems reasonable, and this Agreement
shall thereby be reformed.
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(e) It is specifically agreed that the post-termination non-competition
period referred to in paragraph 3(a) shall be computed by excluding
from such computation any time during which Executive is in violation
of any provision of this paragraph 3 as determined by a final and
nonappealable decree of a court of competent jurisdiction.
4. RETURN OF COMPANY PROPERTY. All records, plans, memoranda, lists and
other properly delivered to Executive by or on behalf of the Company
or any of its subsidiaries or affiliates or by a customer of any of
them (including but not limited to, any such customers obtained by
Executive), and all records compiled by the Executive which pertain to
the business of the Company or any of its subsidiaries shall be and
remain the property of the Company or such subsidiary or affiliate, as
the case may be, and be subject at all times to its discretion and
control. Likewise, all correspondence with customers or
representatives, reports, records, charter, advertising materials, and
any data collected by Executive, or by or on behalf of the Company,
any of its respective subsidiaries or affiliates or any representative
of any of them shall be delivered promptly to the Company without
request by them upon termination of Executive's employment
5. INVENTIONS. Executive shall disclose promptly to the Company any and
all conceptions and ideas for inventions, improvements, discoveries
and works, whether or not patentable or copyrightable, which are
conceived or made by Executive solely or jointly with another during
the period of employment or within one (1) year thereafter and which
are related to the business or activities of the Company or any of its
subsidiaries or affiliates or which Executive conceives as a result of
his employment by the Company (collectively, "Proprietary Rights"),
and Executive hereby assigns and agrees to assign all his interests
therein to the Company or its nominee. All copyrightable Proprietary
Rights shall be considered to be "works made for hire". Whenever
requested to do so by the Company, Executive shall execute any and all
applications, assignments or other instruments and do such other acts
that the Company shall request to apply for and obtain Letters Patent
of the United States or any foreign country or to otherwise protect
the Company's interest therein. These obligations shall continue
beyond the termination of employment with respect to inventions,
improvements, discoveries and works, whether or not patentable or
copyrightable, conceived, made or acquired by Executive during the
period of employment or within one (1) year thereafter, and shall be
binding upon Executive's assigns, executors,
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administrators and other legal representatives. Notwithstanding the
provisions of this Paragraph 5, articles or other writings which are
written or co-written for inclusion in academic or other periodicals,
journals, monographs or professionals shall remain the property of
Executive and may be copyrighted by Executive or such publication.
6. TERM: TERMINATION: RIGHTS OF TERMINATION.
(a) The initial term of Executive's employment with the Company hereunder
shall, unless terminated as herein provided, continue for a term of
three (3) years ending on the third anniversary of the date of the
Merger. On the third anniversary of the date of the Merger, unless
either party has given prior written notice of nonrenewal at least 90
days prior to the date of such anniversary, the term of Executive's
employment with the Company shall automatically be renewed for an
additional three (3) year term commencing on such anniversary, on the
same terms and conditions contained herein, unless otherwise terminated
as herein provided. The Executive's employment with the Company may be
terminated in any one of the following ways;
(i) the death of Executive or the inability of Executive,
because of illness or physical or mental disability or other
incapacity which continues for a period in excess of six months, to
perform his duties under this Agreement shall terminate Executive's
employment.
(ii) the Company may terminate the Executive's employment following
ten-days' written notice to Executive for good cause, which includes
the following ("Good Cause"):
(A) Executive's willful and knowing material breach of
this Agreement which results in material detriment to the
Company;
(B) Executive's fraud or gross negligence with respect to
the business or affairs of the Company resulting in material
detriment to the Company or if Employee is convicted of a
felony involving fraud, dishonesty or moral turpitude;
(C) Executive's exclusion from participation in Medicare,
Medicaid or any other governmental third party reimbursement
program, for any reason, or if Executive has had material
civil money penalties or assessments imposed on him under any
federal or state law involving Medicare, Medicaid or any other
governmental third party reimbursement program;
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(D) alcohol or drug abuse, or sexual harassment by
Executive as determined by the final decision of a court of
competent jurisdiction which results in material detriment to
the Company;
(iii) Executive may terminate his employment following 30-days'
written notice to the Company for Good Reason. The Executive shall
have "Good Reason" to terminate employment if: (A) the Executive's
duties, responsibilities or authority as an executive or office to
which he has been appointed are materially reduced or diminished from
those in effect as of the commencement of his employment hereunder
without the Executive's consent; (B) the Executive's compensation or
benefits are reduced; (C) the Company requires that the Executive's
employment be based other than at Dallas, Texas without his consent;
(D) the Company materially breaches any of the provisions of this
Agreement; or (E) the failure of the Company to require a successor to
its business to assume this agreement.
(iv) At any time after the commencement of Executive's employment
with the Company, the Company or Executive may, without cause,
terminate the Executive's employment thirty days after written notice
is provided to the other party.
(b) Upon termination of Executive's employment pursuant to clause (i) of
paragraph 6(a), by Executive pursuant to clause (iii) of paragraph
6(a), or by the Company pursuant to clause (iv) of paragraph 6(a),
Executive or his heirs, as the case may be, shall be entitled to
receive (i) all cash compensation earned under this Agreement to the
date of termination, including the pro rata portion of any performance
bonus payable for the year during which the termination occurred plus
(ii) base compensation as in effect on the day prior to termination for
an additional period of one year plus and subject to any employee
contribution applicable to the Executive on the date of termination,
for a one year period following the date of termination the Company
shall continue to pay for the cost of the Executive's participation in
the Company's group life, disability, medical and dental insurance
plans provided that the Executive is entitled to continue such
participation under applicable state and federal law and plan terms.
(c) Upon termination of Executive's employment by the Company pursuant to
clause (ii) of paragraph 6(a), or by the Executive pursuant to clause
(iv) of paragraph 6(a), Executive shall be entitled to receive all
base cash compensation earned under this Agreement to the date of
termination. Such termination of the Executive's employment shall not
otherwise accelerate the payment date of any monies accrued or
accruing to the
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account of Executive as a result of any bonuses or other compensation,
nor shall termination vest in Executive any right in connection
therewith.
(d) If during the term of this agreement a Change of Control of the
Company occurs as a result of Laidlaw disposing of majority control of
the Company, and during the two (2) year period commencing on the
effective date of such Change of Control, the Executive's employment
is terminated by the Company other than for Good Cause, or by the
Executive for Good Reason, in addition to the benefits Executive is
eligible to receive under paragraph 6(b) above but excluding the
amount specified in 6(b)(ii), Executive shall be entitled to the
following benefits:
1. Any outstanding stock options, restricted stock, or other form
of stock-based grant or award previously granted to Executive by the
Company, to the extent vested in Executive as of the date of such
Termination of Employment, shall remain exercisable in accordance with
the terms of the plan.
2. For a two-year period following such termination of employment
the Executive shall not lose his eligibility for health, dental life,
or disability benefits under any Executive benefit plan, policy,
arrangement, or program (regardless of whether such program is
maintained for Executives in general, highly-compensated Executives
(as that term is defined in Section 414(q) of the Internal Revenue
Code of 1986, as amended (the "Code")), non-highly compensated
Executives, or for a select group of management Executives or
highly-compensated Executives (described in 29 CFR Section
2520.104-24)) at the same employee cost and benefit levels as prior to
the change of control. In the event that under the terms of such plan,
policy, arrangement, or program, the Executive's termination of
employment results in a loss of such coverage, the Company shall
immediately purchase comparable coverage for Executive for any portion
of the 24-month period so remaining. Following this period, Executive
shall be entitled to receive continuation coverage under COBRA,
treating the end of this period as a termination of Executive's
employment other than for gross misconduct.
3. Immediately following such Termination of Employment, the
Company shall pay to Executive an amount equal to two (2) times the
sum of:
(A) Executive's annual base rate of pay determined as of
the greater of (x) the year in which the termination of
employment occurs, or (y) the beginning of the calendar year
coinciding with or next preceding such Change in Control; plus
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(B) the greater of (x) the average of the last
performance bonuses paid to the Executive under paragraph 2(b)
of this Agreement prior to such Change in Control, or (y) the
average of the first three annual incentive bonuses paid to
Executive under paragraph 2(b) of this Agreement immediately
prior to such termination of employment.
Such amount shall be paid in cash to the Executive within 30
days of such termination of employment
4. If, in the written opinion of a national accounting firm
engaged by either the Company or the Executive for this purpose (at
the Company's expense), or if so alleged by the Internal Revenue
Service, the aggregate of the benefit payments hereunder (other than
under this subparagraph 6(c)(4)) would cause the payment of one or
more of such benefits to constitute an "excess parachute payment" as
defined in Section 280G(B) of the Code, then the Company will pay to
the Executive an additional amount in cash (the "Gross-Up Payment")
equal to the amount necessary to cause the net amount retained by the
Executive, after deduction of any (i) excise tax on the payments
hereunder (other than under this subparagraph 6(c)(4)), (ii) federal,
state or local income tax on the Gross-Up Payment, and (iii) excise
tax on the Gross-Up Payment, to be equal to the aggregate remuneration
the Executive would have received hereunder, excluding such Gross-Up
Payment (net of all federal, state and local excise and income taxes),
as if Sections 280G and 4999 of the Code (and any successor provisions
thereto) had not been enacted into law. The Gross-Up Payment provided
for in this subparagraph shall be made within thirty (30) days after
termination of Executive's employment, provided, however, that if the
amount of the payment cannot be finally determined at the time, the
Company shall pay to Executive an estimate as determined in good faith
by the Company of such payments (together with interest at the rate
provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the forty fifth
(45th) day after the Termination of Employment date.
5. For purposes of this Agreement, a "Change of Control" shall be
defined as (A) an event or series of events by which any "person" or
"group" (as such terms are defined in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, hereinafter known as the "Act"),
together with its or their "affiliates" and "associates" (as defined
in Rule 13d-3 of the Act), becomes the "Beneficial Owner" (as defined
in Rule 13d-3 of the Act modified to include, without regard to the
60-day period referred to in such Rule, all shares that such person or
group has the right to acquire pursuant to any agreement or
arrangement, or upon exercise of conversion rights, warrants or
options, or otherwise), directly or
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indirectly, of securities of the Company, having 51% or more of the
total number of votes entitled to be cast for the election of the
Board of Directors of the Company; (B) the sale or transfer of 50% or
more of the assets or earning power of the Company and its
subsidiaries (taken as a whole); or (C) at any time (i) the Company
shall consolidate with, or merge with, any other person and the
Company shall not be the continuing or surviving corporation, (ii) any
person shall consolidate with, or merge with the Company, and the
Company shall be the continuing or surviving corporation and in
connection therewith, all or part of the outstanding Company stock
shall be changed into or exchanged for stock or other securities of
any other person or cash or any other property, or (iii) the Company
shall be a party to a statutory share exchange with any other person.
Notwithstanding anything in the foregoing to the contrary, any events
occurring in connection with the stock of the Company becoming
publicly traded on a national exchange shall not constitute a "Change
in Control".
(e) In the event of termination of Executive's employment for any reason
provided in this paragraph 6, all rights and obligations of the
Company and Executive under this Agreement shall cease immediately,
except that Executives obligations under paragraphs l(c), 3, 4, 5 and
7 hereof shall survive such termination, and thereafter Executive
shall have the right to receive, and the Company shall be obligated to
pay, the compensation as set forth in paragraphs 6(b), 6(c) or 6(d),
as the case may be.
7. Representations of Executive. Executive has represented and hereby
represents and warrants to the Company that he is not subject to any
restriction or non-competition covenant in favor of a former employer
or any other person or entity, and that the execution of this
Agreement by Executive and his employment by the Company and the
performance of his duties hereunder will not violate or be a breach of
any agreement with a former employer or any other person or entity and
Executive agrees to indemnify the Company for any claim by any third
party that such third party may now have or may hereafter come to have
against the Company based upon or arising out of any non-competition
agreement or invention and secrecy agreement between Executive and
such third party.
8. Complete Agreement. There are no oral representations,
understandings of agreements with the Company or any of its officers,
directors or representatives covering the same subject matter as this
Agreement and this Agreement supersedes any prior agreement or
understanding between the Company and the Executive with respect to
his employment including without limitation that certain Employment
Agreement between the Company and the Executive dated February 5,
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1992. This Agreement is the final, complete and exclusive statement and
expression of this Agreement among the Company and Executive and of
all the terms of this Agreement, and it cannot be varied, contradicted
or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This Agreement may not be later modified except by
a further writing signed by the parties, and no term of this Agreement
may be waived except by writing signed by the party waiving the
benefit of such terms.
9. NO WAIVER. No waiver by the parties hereto of any default or breach of
any term, condition or covenant of this Agreement shall be deemed to
be a waiver of any subsequent default or breach of the same or any
other term, conditon or covenant contained herein.
10. ASSIGNMENT: BINDING EFFECT. Executive understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Executive agrees therefore,
that he cannot assign all or any portion of this Agreement. Subject to
the preceding sentence, this Agreement shall be binding upon and inure
to the benefit of the parties thereto and their respective heirs,
successors and assigns. The Company agrees to require any purchaser,
successor or assigns to assume the obligations hereunder and to agree
to be bound by the terms hereof. Laidlaw Inc. has executed this
Agreement to guarantee performance by the Company.
11. NOTICE. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: c/o Laidlaw Inc.
3221 North Service Road
Burlington, Ontario
L7R 3Y8
Attention: Chief Executive Officer
Fax: 905-332-6550
To Executive: Dr. Leonard M. Riggs, Jr.
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Notice shall be deemed given and effective three (3) days after the
deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying
the other party of such change in accordance with this paragraph 11.
12. SEVERABILITY: HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible,
effect shall be given to the intent manifested by the portion held
invalid or inoperative. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe,
interpret, define or limit the extent or intent of this Agreement or
of any part hereof.
13. MISCELLANEOUS. This Agreement shall in all respects be construed
according to the laws of the State of Texas. The parties agree that
any court proceeding shall be before a judge alone and waive trial by
jury. This Agreement may be executed in any one or more counterparts,
each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
EXECUTIVE:
- -----------------------------------------
Dr. Leonard M. Riggs, Jr., Individually
EMCARE HOLDINGS INC.
By:
--------------------------------------
Name:
Title:
LAIDLAW INC.
By:
--------------------------------------
Name:
Title:
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ANNEX A
Other Benefits
1. Fees or dues reasonably incurred by Executive for country club and
athletic club membership.
2. Term and whole life insurance as presently in place.
3. Disability policy as presently in place.
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EMPLOYMENT AGREEMENT
This Agreement between EmCare Holdings Inc., a Delaware corporation
(the "Company"), and William F. Miller III ("Executive") is hereby entered into
as of , 1997.
RECITALS:
The Company has entered into an agreement and plan of merger (the
"Merger Agreement") dated as of July , 1997 by and among the Company, Laidlaw
Inc., a Canadian corporation ("Laidlaw") and EHI Acquisition Corp., a
wholly-owned subsidiary of Laidlaw ("Acquisition").
Pursuant to the Merger Agreement, Acquisition will make a tender offer
to acquire all outstanding shares of common stock, par value $0.01 per share,
of the Company in accordance with the terms and subject to the conditions
provided for therein (the "Offer"). Subsequent to the Offer, Acquisition will
merge with and into the Company (the "Merger") and the Company will become a
wholly-owned indirect subsidiary of Laidlaw.
Executive is or will be employed by the Company in a confidential
relationship wherein Executive, in the course of his employment with the
Company, has and will become familiar with and aware of information as to the
specific manner of doing business and the customers of the Company, and its
subsidiaries and future plans with respect thereto, all of which will be
established and maintained at great expense to the Company and its
subsidiaries; this information is a trade secret and constitutes the valuable
goodwill of the Company and its subsidiaries.
Executive recognizes that the business of the Company and its
subsidiaries depends upon a number of trade secrets, including secret
techniques, methods and data. The protection of these trade secrets is of
critical importance to the Company and its subsidiaries.
The Company and its subsidiaries will sustain great loss and damage if
Executive should violate the provisions of paragraph 3 of this Agreement.
Further, monetary damages for such losses would be extremely difficult to
measure.
NOW THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each,
effective as of the time of the Merger, it is hereby agreed as follows:
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1. EMPLOYMENT AND DUTIES
(a) The Company hereby employs Executive as President and Chief Operating
Officer of Emcare Holdings, Inc. to perform the duties normally
associated therewith. Executive shall report directly to the Chief
Executive Officer of the Company. Executive hereby accepts this
employment upon the terms and conditions herein contained and agrees
to devote his full time, attention and efforts to promote and further
the business and services of the Company. Executive shall faithfully
adhere to, execute and fulfill all policies established by the
Company.
(b) Executive shall perform such duties, assume such responsibilities and
devote such time and energy to the business of the Company as the
Chief Executive Officer of the Company shall from time to time require
and shall not, during the term of his employment hereunder, be engaged
in any other business activity pursued for gain, profit or other
pecuniary advantage without the prior approval of the Company.
However, the foregoing limitations shall not be construed as
prohibiting Executive from making personal investments in such form
and manner as will neither require his services in the operation or
affairs of the companies or enterprises in which such investments are
made nor violate the terms of paragraph 3 hereof. The Executive shall
not be prohibited from serving as a director of other entities
provided there is no conflict with the business of the Company or the
ability of the Executive to perform his duties hereunder subject in
any case to the approval of the Chief Executive Officer or Laidlaw,
not to be unreasonably withheld.
(c) All funds received by Executive on behalf of the Company, if any,
shall be held in trust for the Company and shall be delivered to the
Company as soon as possible.
2. COMPENSATION AND EXPENSE
For all services rendered by Executive to the Company, the Company
shall compensate the Executive as follows:
(a) BASE SALARY. The base salary payable to Executive shall be not less
than $325,000 per year payable in accordance with the Company's
customary pay practices,
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(b) ANNUAL PERFORMANCE BONUS. Executive shall be eligible for an annual
bonus in the amount of $800,000 per year subject to the Company
achieving earnings growth at the level agreed to by the Executive and
the Chief Executive Officer of Laidlaw. Executive shall remain
eligible for this annual bonus for five years from the date hereof,
or, if earlier, until his employment with the Company has been
terminated. The annual bonus shall be paid to the Executive after each
fiscal year at such time as annual performance bonuses would normally
be paid to senior executives of Laidlaw.
Should the Company, in any year, not achieve the specified earnings
target, but achieve 80% of the target, Executive shall be entitled to
receive 50% of the annual bonus plus a percentage of the balance equal
to the percentage of the target achieved between 80% and 100%. Should
the Executive remain employed by the Company for five years from the
date hereof and not have received the maximum bonus hereunder in each
of the five years, the Executive shall be eligible for an additional
bonus not to exceed the aggregate unpaid amounts, in accordance with
criteria agreed to by the Executive and the Chief Executive Officer of
Laidlaw.
(c) RETENTION BONUS. In order to induce Executive to remain in his
position with the Company and to accept the responsibilities arising
from the management of the Company following the Offer and the Merger,
the Company will pay, or cause to be paid to Executive on execution of
agreement, an amount in cash equal to $786,544.
Executive shall be entitled to receive a pro rata portion of the 1997
fiscal bonus to August 31, 1997, determined on a basis consistent with
previous years, which bonus shall be payable at the time other annual
bonuses are paid to executives and shall not exceed $110,000.
(d) EXPENSES. Executive shall be entitled to reimbursement for expenses
incurred on behalf of the Company in the performance of his duties
hereunder, consistent with the Company's reimbursement policies.
(e) AUTOMOBILE ALLOWANCE. Executive shall receive an automobile allowance
in the amount of $1,172 per month and shall be reimbursed for the cost
of automobile insurance which is intended to cover all expenses
relating to Executive's automobile.
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(f) DISABILITY. Executive shall be entitled to receive for a period of up
to six (6) months his base salary and a pro rata portion of his bonus
during such time as, because of illness or physical or mental
disability or other incapacity, he is unable to perform his duties
under this Agreement Such amounts payable shall be offset by any
amounts paid to Executive under disability insurance policies
maintained by the Company.
(g) STOCK OPTIONS. As soon as practicable following the date hereof, the
Company will cause Laidlaw to grant to Executive an option to
purchase 30,000 Common Shares of Laidlaw at an exercise price equal to
the fair market value of such common stock at the time of the grant,
such options to vest consistent with the terms of the Laidlaw stock
option plan under which such options are issued. Annual grants to the
Executive shall be proposed to the compensation committee of Laidlaw's
board of directors at levels consistent with other Laidlaw executives.
(h) OTHER BENEFITS. Executive shall be entitled to participate in the
Company's employee benefit programs to the extent that his position,
title, and tenure make him eligible to participate therein, and
subject to and on a basis consistent with the terms, conditions and
overall administration of such programs, including, but not
necessarily limited to participation in the Company's 401(k) plan and
health, vision and dental coverage. In addition to the benefits
described above, Executive shall be entitled to the benefits set forth
on Annex A hereto.
3. NON-COMPETITION AGREEMENT: TRADE SECRETS
(a) Executive agrees that, for the greater of four years from the date
hereof and one year following termination of his employment with the
Company for any reason, he shall not, directly or indirectly, for
himself or on behalf of, or in conjunction with, any other person,
company, partnership, corporation or business of whatever nature:
(i) knowingly call upon any past or present customer of the
Company or any of its subsidiaries (including any such customer
obtained by the Executive,) for the purpose of soliciting or selling
any services or products in competition with the medical
transportation services or emergency department management services
business of the Company or any of its subsidiaries or affiliates;
(ii) knowingly call upon any employee of the Company or any of its
subsidiaries for the purpose or with the intent of enticing them away
from or out of the employ of the Company or any of its subsidiaries
for any reason whatsoever;
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(iii) establish, enter into, be employed by or for, advise, consult
with or become an owner in or a part of, any company, partnership,
corporation or other business entity or venture, or in any way engage
in business for himself or for others, that competes with the Company
or its affiliates in the business of providing medical transportation
services or emergency department management services within the
United States of America or within 100 miles of any location in which
the Company or any of its subsidiaries conducts business; or
(iv) call upon any prospective acquisition candidates in the
medical transportation services or emergency department services
business on Executive's own behalf or on behalf of an competitor,
which candidate was either called upon by the Executive or for which
Executive made an acquisition analysis for the Company.
Ownership of not more than five percent of the voting stock of a
corporation whose stock is traded on a national securities exchange or
over-the-counter shall not of itself constitute a violation of this
paragraph 3(a).
(b) Executive agrees that he will not, during or after the term of his
employment with the Company, disclose or use for his personal benefit
information relating to the customers or other trade secrets (whether
in existence or proposed) of the Company or any of its subsidiaries,
of any other confidential information of the Company or its
subsidiaries to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever.
(c) Because of the difficulty of measuring economic losses to the Company
and its subsidiaries as a result of the breach of any of the foregoing
covenants, and because of the immediate and irreparable damage that
would be caused to the Company and its subsidiaries for which they may
have no other adequate remedy, Executive agrees that, in the event of
a breach by him of any of the foregoing covenants, the Company, or any
of its subsidiaries may, in addition to obtaining any other remedy or
relief available to it, enforce the foregoing covenants by all
equitable relief, including injunctions and restraining orders.
(d) The covenants in this paragraph 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the
fullest extent which the court deems reasonable, and this Agreement
shall thereby be reformed.
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(e) It is specifically agreed that the post-termination non-competition
period referred to in paragraph 3(a) shall be computed by excluding
from such computation any time during which Executive is in violation
of any provision of this paragraph 3 as determined by a final and
nonappealable decree of a court of competent jurisdiction.
4. Return of Company Property. All records, plans, memoranda, lists and
other property delivered to Executive by or on behalf of the Company
or any of its subsidiaries or affiliates or by a customer of any of
them (including but not limited to, any such customers obtained by
Executive), and all records compiled by the Executive which pertain to
the business of the Company or any of its subsidiaries shall be and
remain the property of the Company or such subsidiary or affiliate, as
the case may be, and be subject at all times to its discretion and
control. Likewise, all correspondence with customers or
representatives, reports, records, charts, advertising materials, and
any data collected by Executive, or by or on behalf of the Company,
any of its respective subsidiaries or affiliates or any representative
of any of them shall be delivered promptly to the Company without
request by them upon termination of Executive's employment.
3. Inventions. Executive shall disclose promptly to the Company any and
all conceptions and ideas for inventions, improvements, discoveries
and works, whether or not patentable or copyrightable, which are
conceived or made by Executive solely or jointly with another during
the period of employment or within one (1) year thereafter and which
are related to the business or activities of the Company or any of its
subsidiaries or affiliates or which Executive conceives as a result of
employment by the Company (collectively, "Proprietary Rights"), and
Executive hereby assigns and agrees to assign all his interests
therein to the Company or its nominee. All copyrightable Proprietary
Rights shall be considered to be "works made for hire". Whenever
requested to do so by the Company, Executive shall execute any and all
applications, assignments or other instruments and do such other acts
that the Company shall request to apply for and obtain Letters Patent
of the United States or any foreign country or to otherwise protect
the Company's interest therein. These obligations shall continue
beyond the termination of employment with respect to inventions,
improvements, discoveries and works, whether or not patentable or
copyrightable, conceived, made or acquired by Executive during the
period of employment or within one (1) year thereafter, and shall be
binding upon Executive's assigns, executors,
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administrators and other legal representatives. Notwithstanding the
provisions of this Paragraph 5, articles or other writings which are
written or co-written for inclusion in academic or other periodicals,
journals, monographs or professionals shall remain the property of
Executive and may be copyrighted by Executive or such publication.
6. Term: Termination: Rights of Termination.
(a) The initial term of Executive's employment with the Company hereunder
shall, unless terminated as herein provided, continue for a term of
three (3) years ending on the third anniversary of the date of the
Merger. On the third anniversary of the date of the Merger, unless
either party has given prior written notice of nonrenewal at least 90
days prior to the date of such anniversary, the term of Executive's
employment with the Company shall automatically be renewed for an
additional three (3) year term commencing on such anniversary, on the
same terms and conditions contained herein, unless otherwise
terminated as herein provided. The Executive's employment with the
Company may be terminated in any one of the following ways:
(i) the death of Executive or the inability of Executive, because
of illness or physical or mental disability or other incapacity which
continues for a period in excess of six months, to perform his duties
under this Agreement shall terminate Executive's employment.
(ii) the Company may terminate the Executive's employment following
ten-days' written notice to Executive for good cause, which includes
the following ("Good Cause"):
(A) Executive's willful and knowing material breach of
this Agreement which results in material detriment to the
Company;
(B) Executive's fraud or gross negligence with respect to
the business or affairs of the Company resulting in material
detriment to the Company or if Executive is convicted of a
felony involving fraud, dishonesty or moral turpitude;
(C) Executive's exclusion from participation in Medicare,
Medicaid or any other governmental third party reimbursement
program, for any reason, or if Executive has had material
civil money penalties or assessments imposed on him under any
federal or state law involving Medicare, Medicaid or any other
governmental third party reimbursement program;
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(D) alcohol or drug abuse, or sexual harassment by
Executive as determined by the final decision of a court of
competent jurisdiction which results in material detriment
to the Company;
(iii) Executive may terminate his employment following 30-days'
written notice to the Company for Good Reason. The Executive shall
have "Good Reason" to terminate employment if: (A) the Executive's
duties, responsibilities or authority as an executive or office to
which he has been appointed are materially reduced or diminished from
those in effect as of the commencement of his employment hereunder
without the Executive's consent, (B) the Executive's compensation or
benefits are reduced; (C) the Company requires that the Executive's
employment be based other than at Dallas, Texas without his consent;
(D) the Company materially breaches any of the provisions of this
Agreement; or (F) the failure of the Company to require a successor to
its business to assume this agreement.
(iv) At any time after the commencement of Executive's employment
with the Company, the Company or Executive may, without cause,
terminate the Executive's employment thirty days after written notice
is provided to the other party.
(b) Upon termination of Executives employment pursuant to clause (i) of
paragraph 6(a), by Executive pursuant to clause (iii) of paragraph
6(a), or by the Company pursuant to clause (iv) of paragraph 6(a),
Executive or his heirs, as the case may be, shall be entitled to
receive (i) all cash compensation earned under this Agreement to the
date of termination including the pro rata portion of any performance
bonus payable for the year during which the termination occurred plus
(ii) base compensation as in effect on the day prior to termination
for an additional period of one year and subject to any employee
contribution applicable to the Executive on the date of termination,
for a one year period following the date of termination the Company
shall continue to pay for the cost of the Executive's participation in
the Company's group life, disability, medical and dental insurance
plans provided that the Executive is entitled to continue such
participation under applicable state and federal law and plan terms.
(c) Upon termination of Executive's employment by the Company pursuant to
clause (ii) of paragraph 6(a), or by the Executive pursuant to clause
(iv) of paragraph 6(a), Executive shall be entitled to receive all
base cash compensation earned under this Agreement to the date of
termination. Such termination of the Executive's employment shall not
otherwise accelerate the payment date of any monies accrued or
accruing to the
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account of Executive as a result of any bonuses or other compensation,
nor shall termination vest in Executive any right in connection
therewith.
(d) If during the term of this agreement a Change of Control of the
Company occurs as a result of Laidlaw disposing of majority control of
the Company, and during the two (2) year period commencing on the
effective date of such Change of Control, the Executive's employment is
terminated by the Company other than for Good Cause, or by the
Employee for Good Reason, in addition to the benefits Executive is
eligible to receive under paragraph 6(b) above but excluding the
amount specified in 6(b)(ii), Executive shall be entitled to the
following benefits;
1. Any outstanding stock options, restricted stock, or other form
of stock-based grant or award previously granted to Executive by the
Company, to the extent vested in Executive as of the date of such
Termination of Employment, shall remain exercisable in accordance with
the terms of the plan.
2. For a two-year period following such termination of employment,
the Executive shall not lose his eligibility for health, dental, life,
or disability benefits under any Executive benefit plan, policy,
arrangement, or program (regardless of whether such program is
maintained for Executives in general, highly-compensated Executives
(as that term is defined in Section 414(q) of the Internal Revenue
Code of 1986, as amended (the "Code")), non-highly compensated
Executives, or for a select group of management Executives or
highly-compensated Executives (described in 29 CFR Section
2520.104-24)) at the same employee cost and benefit levels as prior to
the change of control. In the event that under the terms of such plan,
policy, arrangement, or program, the Executive's termination of
employment results in a loss of such coverage, the Company shall
immediately purchase comparable coverage for Executive for any portion
of the 24-month period so remaining. Following this period, Executive
shall be entitled to receive continuation coverage under COBRA,
treating the end of this period as a termination of Executive's
employment other than for gross misconduct.
3. Immediately following such Termination of Employment, the
Company shall pay to Executive an amount equal to two (2) times the
sum of:
(A) Executive's annual base rate of pay determined as of
the greater of (x) the year in which the termination of
employment occurs, or (y) the beginning of the calendar year
coinciding with or next preceding such Change in Control; plus
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(B) the greater of (x) the average of the last three
annual performance bonuses paid to the Executive under
paragraph 2(b) of this Agreement prior to such Change in
Control, or (y) the average of the first three annual
incentive bonuses paid to Executive under paragraph 2(b) of
this Agreement immediately prior to such termination of
employment.
Such amount shall be paid in cash to the Executive within 30
days of such termination of employment.
4. If, in the written opinion of a national accounting firm
engaged by either the Company or the Executive for this purpose (at
the Company's expense), or if so alleged by the Internal Revenue
Service, the aggregate of the benefit payments hereunder (other than
under this subparagraph 6(c)(4)) would cause the payment of one or
more of such benefits to constitute an "excess parachute payment" as
defined in Section 280G(b) of the Code, then the Company will pay to
the Executive an additional amount in cash (the "Gross-Up Payment")
equal to the amount necessary to cause the net amount retained by the
Executive, after deduction of any (i) excise tax on the payments
hereunder (other than under this subparagraph 6(c)(4), (ii) federal,
state or local income tax on the Gross-Up Payment, and (iii) excise tax
on the Gross-Up Payment, to be equal to the aggregate remuneration
the Executive would have received hereunder, excluding such Gross-Up
Payment (net of all federal, state and local excise and income taxes),
as if Sections 280G and 4999 of the Code (and any successor provisions
thereto) had not been enacted into law. The Gross-Up Payment provided
for in this subparagraph shall be made within thirty (30) days after
termination of Executive's employment, provided, however, that if the
amount of the payment cannot be finally determined at the time, the
Company shall pay to Executive an estimate as determined in good faith
by the Company of such payments (together with interest at the rate
provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the forty fifth
(45th) day after the Termination of Employment date.
5. For purposes of this Agreement, a "Change of Control" shall be
defined as (A) an event or series of events by which any "person" or
"group" (as such terms are defined in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, hereinafter known as the "Act"),
together with its or their "affiliates" and "associates" (as defined
in Rule 13d-3 of the Act), becomes the "Beneficial Owner" (as defined
in Rule 13d-3 of the Act, modified to include, without regard to the
60-day period referred to in such Rule, all shares that such person or
group has the right to acquire pursuant to any agreement or
arrangement, or upon exercise of conversion rights, warrants or
options, or otherwise), directly or
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indirectly, of securities of the Company having 51% or more of the
total number of votes entitled to be cast for the election of the
Board of Directors of the Company. (B) the sale or transfer of 50% or
more of the assets or earning power of the Company and its
subsidiaries (taken as a whole); or (C) at any time (i) the Company
shall consolidate with, or merge with, any other person and the
Company shall not be the continuing or surviving corporation, (ii) any
person shall consolidate with, or merge with the Company, and the
Company shall be the continuing or surviving corporation and in
connection therewith, all or part of the outstanding Company stock
shall be changed into or exchanged for stock or other securities of
any other person or cash or any other property, or (iii) the Company
shall be a party to a statutory share exchange with any other person.
Notwithstanding anything in the foregoing to the contrary, any events
occurring in connection with the stock of the Company becoming
publicly traded on a national exchange shall not constitute a "Change
in Control".
(e) In the event of termination of Executive's employment for any reason
provided in this paragraph 6, all rights and obligations of the
Company and Executive, under this Agreement shall cease immediately,
except that Executives obligations under paragraphs 1(c), 3, 4, 5 and
7 hereof shall survive such termination, and thereafter Executive
shall have the right to receive, and the Company shall be obligated to
pay, the compensation as set forth in paragraphs 6(b), 6(c) or 6(d),
as the case may be.
7. REPRESENTATIONS OF EXECUTIVE. Executive has represented and hereby
represents and warrants to the Company that he is not subject to any
restriction or non-competition covenant in favor of a former employer
or any other person or entity, and that the execution of this
Agreement by Executive and his employment by the Company and the
performance of its duties hereunder will not violate or be a breach of
any agreement with a former employer or any other person or entity and
Executive agrees to indemnify the Company for any claim by any third
party that such third party may now have or may hereafter come to have
against the Company based upon or arising out of any non-competition
agreement or invention and secrecy agreement between Executive and
such third party.
8. COMPLETE AGREEMENT. There are no oral representations,
understandings or agreements with the Company or any of its officers,
directors or representatives covering the same subject matter as this
Agreement and this Agreement supersedes any prior agreement or
understanding between the Company and the Executive with respect to his
employment including without limitation that certain Employment
Agreement between the Company and the Executive dated February 5,
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1992. This Agreement is the final, complete and exclusive statement
and expression of this Agreement among the Company and Executive and
of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This Agreement may not be
later modified except by a further writing signed by the parties, and
no term of this Agreement may be waived except by writing signed by
the party waiving the benefit of such terms.
9. NO WAIVER. No waiver by the parties hereto of any default or breach of
any term, condition or covenant of this Agreement shall be deemed to
be a waiver of any subsequent default or breach of the same or any
other term, condition or covenant contained herein.
10. ASSIGNMENT: BINDING EFFECT. Executive understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Executive agrees therefore,
that he cannot assign all or any portion of this Agreement. Subject to
the preceding sentence, this Agreement shall be binding upon and inure
to the benefit of the parties thereto and their respective heirs,
successors and assigns. The Company agrees to require any purchaser,
successor or assigns to assume the obligations hereunder and to agree
to be bound by the terms hereof. Laidlaw Inc. has executed this
agreement to guarantee performance by the Company.
11. NOTICE. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: c/o Laidlaw Inc.
3221 North Service Road
Burlington, Ontario
L7R 3Y8
Attention: Chief Executive Officer
Fax: 905-332-6550
To Executive: William F. Miller
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Notice shall be deemed given and effective three (3) days after the
deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when
actually received. Either party may change the address for notice by
notifying the other party of such change in accordance with this
paragraph 11.
12. SEVERABILITY: HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible,
effect shall be given to the intent manifested by the portion held
invalid or inoperative. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe,
interpret, define or limit the extent or intent of this Agreement or
of any part hereof.
13. MISCELLANEOUS. This Agreement shall in all respects be construed
according to the laws of the State of Texas. The parties agree that
any court proceeding shall be before a judge alone and waive trial by
jury. This Agreement may be executed in any one or more counterparts,
each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EXECUTIVE:
- ----------------------------------------------
William F. Miller, Individually
EMCARE HOLDINGS, INC.
by:
-------------------------------------------
Name:
Title:
LAIDLAW INC.
by:
-------------------------------------------
Name:
Title:
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ANNEX A
OTHER BENEFITS
1. Fees or dues reasonably incurred by Executive for country club and
athletic club membership.
2. Term and whole life insurance (annual premium approximately $9,500).
3. Disability policy (annual premium approximately $3,100).
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