<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 24
TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
HEALTHDYNE TECHNOLOGIES, INC.
(Name of Subject Company)
I.H.H. CORP.
INVACARE CORPORATION
(Bidders)
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COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
18139610
(CUSIP Number of Class of Securities)
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THOMAS R. MIKLICH, ESQ.
CHIEF FINANCIAL OFFICER, GENERAL COUNSEL, TREASURER AND CORPORATE SECRETARY
INVACARE CORPORATION
899 CLEVELAND STREET
ELYRIA, OHIO 44035
TELEPHONE: (216) 329-6000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidders)
------------------------
COPY TO:
ROBERT E. SPATT, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
TELEPHONE: (212) 455-2000
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This Amendment No. 24 amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed on January 27, 1997 (as amended, the "Schedule 14D-1")
relating to the offer by I.H.H. Corp., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of Invacare Corporation, an Ohio corporation (the
"Parent"), to purchase all of the outstanding shares of Common Stock, par value
$0.01 per share (the "Shares"), of Healthdyne Technologies, Inc., a Georgia
corporation (the "Company"), and unless and until the Purchaser declares that
the Rights Condition as defined in the Offer to Purchase referred to below is
satisfied) the associated Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, as amended, dated as of May 22, 1995, between
the Company and SunTrust Bank, Atlanta (formerly Trust Company Bank), as Rights
Agent, at a purchase price of $15 per Share (and associated Right), 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 January 27, 1997, as amended
and supplemented by the Supplements thereto dated April 4, 1997 and June 6, 1997
(the "Offer to Purchase"), and in the related Letter of Transmittal. Unless
otherwise indicated, all capitalized terms used but not defined herein shall
have the meanings assigned to them in the Schedule 14D-1.
The Schedule 14D-1 is hereby amended and supplemented as follows:
On July 3, 1997, the Court issued an Order in the Defensive Tactics
Litigation which denied the Parent and the Purchaser's Motion for Preliminary
Injunction to declare the "dead-hand pill" restrictions of the Rights Agreement
invalid and which granted the Company's Motion for Summary Judgment on the
Parent and the Purchaser's proposed bylaw to eliminate the "dead-hand pill"
restrictions of the Rights Agreement. The full text of the Order is set forth
in Exhibit 11(g)(17).
On July 7, 1997, the Parent issued a press release, the full text of which
is set forth in Exhibit 11(a)(40) and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(40) Press Release issued by the Parent on July 7, 1997.
(g)(17) Order issued by the Court on July 3, 1997.
2
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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.
INVACARE CORPORATION
By: /s/ THOMAS R. MIKLICH
-----------------------------------------
Name: Thomas R. Miklich
Title: Chief Financial Officer
I.H.H. CORP.
By: /s/ THOMAS R. MIKLICH
-----------------------------------------
Name: Thomas R. Miklich
Title: President
Date: July 7, 1997
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
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<S> <C> <C>
Exhibit 11(a)(40) Press Release issued by the Parent on July 7, 1997....................................
Exhibit 11(g)(17) Order issued by the Court on July 3, 1997.............................................
</TABLE>
<PAGE>
EXHIBIT 11(a)(40)
NEWS RELEASE [MACKENZIE PARTNERS, INC. LETTERHEAD]
FOR IMMEDIATE RELEASE
Contact: Mark H. Harnett
MacKenzie Partners, Inc.
(212) 929-5877
INVACARE CHALLENGES HEALTHDYNE TECHNOLOGIES TO
CONDUCT REAL AUCTION AND ANNOUNCE DEAL BEFORE JULY 30 MEETING;
INVACARE APPEALING COURT'S DECISION IN LITIGATION OVER HEALTHDYNE POISON PILL
Elyria, Ohio -- (July 7, 1997) -- Invacare Corporation (NASDAQ/NMS:IVCR)
issued the following statement regarding the announcement made earlier today by
Healthdyne Technologies, Inc. (NASDAQ/NMS:HDTC) that the company hoped to
announce a "value enhancing transaction" in the next several weeks.
A. Malachi Mixon, III, Chairman and Chief Executive Officer of Invacare,
stated, "We are very skeptical that any deal is imminent between Healthdyne and
a third party acquirer. We suspect this is a ruse designed merely to persuade
shareholders to re-elect the incumbent board, which has said for more than six
months that the company is not for sale."
Mr. Mixon added, "Healthdyne has left unanswered the fundamental question
as to whether this value enhancing transaction' is a sale or some lesser
transaction designed solely to evade shareholder criticism. Remember, only one
week ago, in their letter to shareholders, the company wrote that they have
only just begun the process' of exploring alternatives. How can they now expect
shareholders to believe that action is imminent? In our view, it is most likely
that nothing at all will be unveiled by this board prior to the July 30
meeting."
"Shareholders should carefully consider, as the meeting date nears, whether
our nominees commitment to conduct a prompt auction is worth more than
Healthdyne's vague promises - especially given the company's history of
disappointing forecasts and the board's failure after more than one-half year to
sell the company. We doubt that the much awaited second quarter results, which
Healthdyne continues to boast about without having released the details, will
have any material impact on the auction process. All bidders, including
Invacare, have known about their much touted trends for months. Shareholders
will get the full benefits in a real auction where all parties have access to
the same financial information."
"Shareholders should also not be fooled by Healthdyne's false assertion
that our nominees will rig the auction in Invacare's favor. These nominees
fully recognize their fiduciary duty to all shareholders. The nominees on the
Gold Proxy are the only nominees who have been willing to commit to a fair
auction process in which all parties that have expressed an interest in
acquiring Healthdyne will be asked by the new Board to put their best bids on
the table."
Invacare also announced that it is appealing the district court's July 3rd
decision in the litigation against Healthdyne, that it would not enter a
preliminary injunction against the "dead-hand" provisions of Healthdyne's poison
pill and that Invacare's proposal to amend Healthdyne's by-laws to require
immediate removal of the "dead-hand" provisions, if adopted by the shareholders
at the upcoming July 30 Annual Meeting, will not be legally binding on
Healthdyne's Board of Directors under Georgia law.
Mr. Mixon commented, "We are, of course, disappointed at the court's
rulings, and are confident that the appellate court will see things
differently."
- more -
<PAGE>
Invacare Corporation
Page 2
July 7, 1997
Invacare's wholly owned subsidiary I.H.H. Corp. is making a tender offer
for all outstanding shares of Healthdyne common stock at a price of $15 per
share. The offer represents a premium of approximately 70% over Healthdyne's
$8.88 stock price on the trading day before Invacare made its initial
acquisition proposal. The tender offer is currently scheduled to expire at 6:00
p.m., New York City time, on Friday, August 1, 1997, unless further extended in
the manner described in the Offer to Purchase dated January 27, 1997 and the
Supplements thereto dated April 4, 1997 and June 6, 1997.
# # #
<PAGE>
Exhibit 11(g)(17)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
INVACARE CORPORATION and :
I. H. H. CORP., :
:
Plaintiffs, : CIVIL ACTION NO.
:
: 1:97-cv-0205-CC
:
vs. :
:
HEALTHDYNE TECHNOLOGIES, :
INC., et al., :
:
Defendants. :
ORDER
-----
Pending before the court in the above-styled case are the following
motions: Plaintiffs' Motion for Preliminary Injunction [37-1], Defendant
Healthdyne Technologies, Inc.'s Motion for Summary Judgment [20-1],
Plaintiffs' Motion for Summary Judgment [42-1] and Plaintiffs' Motion to
Strike Portions of Affidavit of Donald G. Margotta [53-1].
I. SUMMARY OF FACTS
Healthdyne Technologies, Inc. ("Healthdyne") is a Georgia corporation in
the business of developing and manufacturing respiratory and sleep disorder
products. Invacare Corporation is an Ohio corporation, and I.H.H. Corp. is
its wholly owned subsidiary (collectively referred to as "Invacare" or
"Plaintiffs"). Invacare designs, manufactures and distributes medical
equipment for the home health care and extended
<PAGE>
care markets.
On January 2, 1997, Invacare, through its chairman, proposed an
acquisition in which Healthdyne shareholders would receive $12.50 in cash for
each share of Healthdyne common stock. Healthdyne's Board of Directors
rejected the proposal on January 23, 1997, finding that the offer was
"grossly inadequate" from a financial perspective. On January 24, 1997,
Invacare commenced an all cash tender offer for all outstanding shares of
Healthdyne common stock for $13 per share. Healthdyne concluded that the
offer was still "grossly inadequate" and urged its shareholders not to accept
the offer. Invacare subsequently gave Healthdyne notice that it would
propose a new slate of directors at the next annual meeting of Healthdyne.
The meeting is currently scheduled for July 30, 1997. On March 31, 1997,
Invacare increased its offer to $13.50 per share, but this offer was also
rejected after Healthdyne's board advised that it was "grossly inadequate."
Shortly before the hearing on Invacare's Motion for Preliminary Injunction
and the Cross-Motions for Summary Judgment on Healthdyne's Counterclaim,
Invacare raised its offer to $15 per share, and this offer was also rejected.
Healthdyne's Board of Directors has put in place a shareholders rights
plan (the "rights plan"), or "poison pill" as it is sometimes called, to help
protect against hostile takeovers. A shareholders rights plan is commonly used
as a takeover defense because it makes consummation of a tender offer
prohibitively expensive until such time as the rights are redeemed.(1) When
Healthdyne's rights plan is triggered, each shareholder with the exception
of the hostile bidder (in this case Invacare) will have the right to purchase
- ----------------------
(1) Invacare also has a shareholders rights plan, although their plan is not
in issue in this case.
2
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additional shares of common stock at half-price under certain circumstances.
Healthdyne's rights plan also has a "continuing director" feature, which
requires that any redemption or amendment of the rights plan be approved by
one or more directors who were members of the Board prior to the adoption of
the rights plan, or who were subsequently elected to the Board with the
recommendation and approval of the other continuing directors. The effect of
the continuing directors provision is that if Healthdyne's shareholders vote
at the July 30th meeting to replace the incumbent directors with
Invacare's slate of directors, the new Board of Directors could not redeem
the rights plan because they would not be "continuing director."
Invacare seeks a preliminary injunction declaring that the continuing
directors provision is invalid and directing the Healthdyne Board of
Directors to remove the provision from the rights plan. Invacare has also
proposed a bylaw to be voted upon by Healthdyne's shareholders at the annual
meeting. The proposed bylaw requires the current Board of Directors of
Healthdyne to amend the rights plan to eliminate the continuing directors
feature. Healthdyne contends that the proposed bylaw violates Georgia law.
II. DISCUSSION
A. Plaintiffs' Motion for Preliminary Injunction
To be entitled to a preliminary injunction, the movant must show: (1)
that movant has a substantial likelihood of success on the merits; (2) that
the movant will suffer
3
<PAGE>
irreparable injury if the injunction is not issued; (3) that the threatened
injury to the movant is greater than any damage the proposed injunction may
cause the opposing party; and (4) that the injunction will not disserve the
public interest. Carillon Importers v. Frank Pesce International Group, Ltd.,
-----------------------------------------------------------
112F.3d 1125, 1126 (11th Cir. 1997).
O.C.G.A. Section 14-2-801(b) provides:
All corporate powers shall be exercised by or under the authority of, and
the business and affairs of the corporation managed under the direction
of, its board of directors, subject to any limitation set forth in the
articles of incorporation, bylaws approved by the shareholders, or
agreements among the shareholders which are otherwise lawful.
Invacare argues that the continuing directors provision is illegal under
Section 801(b) because it is a significant limitation on the Board of
Directors' powers, and the limitation is not included in the articles of
incorporation or the bylaws.
O.C.G.A. Section 14-2-624(a) provides:
A corporation may issue rights, options, or warrants with respect to the
shares of the corporation whether or not in connection with the issuance
and sale of any of its shares or other securities. The board of directors
shall determine the terms upon which the rights, options, or warrants are
issued, their form and content, the consideration for which they are to
be issued, and the terms and conditions relating to their exercise,
including the time or times, the conditions precedent, and the prices at
which and the holders by whom the rights, options, or warrants may be
exercised.
Subsection (c) provides, in relevant part, that "[n]othing contained in Code
Section 14-2-601 shall be deemed to limit the board of directors authority
to determine, in its sole discretion, the terms and conditions of the rights,
options, or warrants issuable pursuant to this Code section. Such terms and
conditions need not be set forth in the articles of
4
<PAGE>
incorporation." The Official Comment to O.C.G.A. Section 14-2-624(c)
reveals that the board of directors' discretion to set the conditions of a
rights plan is limited only by their fiduciary obligations to the corporation.
The Healthdyne Board of Directors exercised its discretion to include a
continuing directors provision in the rights plan. Invacare, in essence,
contends that the court should read an exception into Section
14-2-624 so that the board of directors could never exercise its discretion
to include a provision which limits the authority of future boards of
directors; however, to read such an exception into Section 624 is
clearly contrary to the plain language of the statute.
Invacare relies primarily on Bank of New York v. Irving Bank Corporation,
-------------------------------------------
528 N.Y.S.2d 482 (Sup. Ct. 1988), in which the New York Supreme Court
invalidated a continuing directors provision because it restricted the power
of the Board of Directors to manage the corporation. The Bank of New York case
----------------
involved a New York statute that provided that "[a] restriction of the board's
power to manage the business of the corporation is invalid unless (1) all of
the incorporators or all of the shareholders of record have authorized such
provision on the certificate of incorporation...." The Georgia Business
Corporation Code has no such express limitation within its statutory scheme,
and this court does not read Section 14-2-801 to include such a limitation,
particularly in light of Section 14-2-624(c) which gives the board of
directors sole discretion to determine the terms and conditions of the rights
agreement. Furthermore, Section 624(c) provides that the terms and conditions,
including any restrictions, do not have to be set forth in the articles of
incorporation.
5
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The court also notes that Georgia corporate law embraces the concept of
continuing directors as part of a defense against hostile takeovers. The
Georgia Fair Price statute provides that where a vote is needed to approve a
business combination, that business combination must be "(1) unanimously
approved by the continuing directors provided that the continuing directors
constitute at least three members of the board of directors at the time of
such approval; or (2) recommended by at least two-thirds of the continuing
directors and approved by a majority of votes entitled to be cast by holders
of voting shares, other than voting shares beneficially owned by the
interested shareholder who is, or whose affiliate is, a party to the business
combination." O.C.G.A. Section 14-2-1111. Also, the Georgia Business
Combination statute provides that a bylaw opting into the statute cannot be
repealed without "the affirmative vote of at least two-thirds of the
continuing directors...." O.C.G.A. Section 14-2-1133(b). Thus, the continuing
director features of these statutes recognize a benefit to shareholders in
not allowing a hostile bidder to acquire a corporation by installing its own
board of directors to eliminate any takeover defense mechanisms of a rights
plan. The court recognizes the distinction between these statutory provisions
for continuing directors and the provision contained in Healthdyne's rights
agreement; however, the court is satisfied that the concept of continuing
directors is an integral part of a takeover defense and is not contrary to
public policy in Georgia.
Invacare also argues that the continuing director provision of the
rights plan violates the directors' fiduciary duties. Georgia law requires
directors to perform their duties in good faith in a manner believed to be
in the best interest of the corporation. O.C.G.A. Section 14-2-830(a)(1).
Invacare has not shown, and does not argue, that the
6
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Healthdyne directors violated their fiduciary duties by implementing the rights
plan with the continuing directors provision, but rather Invacare argues that
such provisions are invalid as a matter of law. The court concludes that
Healthdyne has not breached its fiduciary duties as set forth by Georgia law.
Invacare also contends that the continuing directors provision
interferes with the exercise of shareholder voting rights and urges this
court to adopt a rule requiring the directors to show a "compelling
justification" for their actions. The court finds that a "compelling
justification" requirement is inconsistent with the standard set forth in
O.C.G.A. Section 14-2-830. Moreover, the court concludes that
unlike the situation in Blasius Industries v. Atlas Corp., 564 A.2d 651 (Del.
---------------------------------
Ch. 1988), the continuing director feature in the Healthdyne rights plan does
not infringe on the shareholders' right to elect a new board. The continuing
director provision only ensures that the rights plan can not be redeemed or
amended without the consent of at least one of the continuing directors. In
this respect, the continuing director provision does not interfere with
shareholder voting rights; nor is it coercive.
The court concludes that Invacare has failed to show a substantial
likelihood of succeeding on the merits of its claim. The court also finds
that Invacare will not suffer irreparable harm if the request for injunctive
relief is denied and the issuance of an injunction is not in the public
interest. Consequently, plaintiffs' Motion for Preliminary Injunction must
be DENIED.
7
<PAGE>
B. Cross-Motions for Summary Judgment on Claims Related to Invacare's
Proposed Bylaw Amendment
Invacare formally notified Healthdyne that at the 1997 Annual Meeting of
Shareholders of Healthdyne, Invacare will introduce a proposal to amend
Healthdyne's bylaws. The proposed bylaw provides:
the incumbent Board of Directors will be in violation of the Bylaws
if such Board, including any requisite group of continuing directors,
fails to immediately take all necessary action (prior to consideration
of the election of directors at the Annual Meeting) to amend any
shareholder rights plan of the Company to remove all such limitations."
Healthdyne filed a counterclaim against Invacare seeking a declaration as
to the validity of the proposed bylaw and seeking to enjoin Invacare from
soliciting proxies in support of the bylaw. The parties have filed
cross-motions for summary judgment on the issue of the validity of the
proposed bylaw amendment.
Summary judgment is only proper when "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of law."
Fed. R. Civ. P. 56(c). Because the procedure deprives the parties of a
trial on the issues, the court must be careful to ensure that only those
claims for which there is no need for a factual determination are disposed of
by summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548,
------------------------
91 L.Ed. 2d. 265 (1986). In assessing whether the movant is entitled to
summary judgment, the court must review the evidence and reasonable factual
inferences arising from it in the light most
8
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favorable to the nonmoving party. Welch v. Celotex Corp. 951 F.2d 1235, 1237
----------------------
(11th Cir. 1992). When deciding cross-motions for summary judgment, the
standard is the same as that for individual motions for summary judgment and
the court must consider each motion independent of the other. Heublin Inc. v.
---------------
United States, 996 F.2d 1445 (2d Cir. 1993).
- -------------
O.C.G.A. Section 14-2-624(c) gives the directors of Georgia
corporations the sole discretion to determine the terms and conditions of a
shareholders rights plan. Such broad discretion includes the authority to
include a continuing directors provisions such as the one contained in the
Healthdyne rights plan. The bylaw proposed by Invacare would infringe upon
the board's discretion by requiring the incumbent Healthdyne board to remove
the continuing director provision.
Invacare argues that Section 624(c) and its "sole discretion"
language merely reflects the legislature's judgment that shareholders rights
plans that discriminate against classes of shares are not prohibited by
O.C.G.A. Section 601 and does not give the board unlimited
discretion to adopt any form of poison pill that the directors deem
appropriate. Invacare's argument overlooks the plan language of Section
624(c), which gives the board of directors sole discretion. As the
Comment to this Code Section makes clear, however, this discretion is only
limited by the directors' fiduciary obligations to the corporation.
Invacare further argues that its proposed bylaw is authorized by
O.C.G.A. Section Section 14-2-202(b), 14-2-801(b) and
14-2-1020(c). Section 202(b) provides that the articles of incorporation may
set forth...provisions not inconsistent with law regarding...defining,
limiting, and regulating the powers of the corporation, its board of
directors, and
9
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shareholders." Section 801(b) provides:
All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the
corporation managed under the direction of, its board
of directors, subject to any limitation set forth in
the articles of incorporation, bylaws approved by the
shareholders, or agreements among the shareholders which
are otherwise lawful.
Finally, section 1020(c) provides that "a bylaw limiting the
authority of the board of directors ...may only be adopted, amended or repealed
by the shareholders." Invacare contends that its proposed bylaw amendment is
nothing more than an effort by the shareholders to limit the authority of the
board to implement the continuing directors provision, and the above-cited
Code sections give the shareholders the authority to so limit the board.
Invacare's argument ignores the fact that the proposed bylaw is actually an
attempt to control the board of directors and directly interferes with the
board's authority under section 624(c) to set the terms and
conditions of the rights agreement. The court finds that the proposed bylaw
is contrary to section 624(c) as well as inimical to the corporate
structure contemplated by the Georgia Business Corporation Code, which
separates the rights and duties of directors from those of the shareholders.
The court also finds that any authority given to shareholders through
section 801(b) does not apply to corporations whose shares "are
listed on a national securities exchange or regularly quoted in the markets
maintained by securities dealers or brokers...." O.C.G.A. section
14-2-731(c).(2) Section 731(c) goes further to say that any bylaw to limit
the board's discretion or powers, must be approved by all of the
shareholders. The Comment
- --------------------------
(2) Healthdyne is a publicly traded corporation
10
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to Section 801 states that subsection (b) must be read in
conjunction with Section 731(c). The court finds that Invacare's
proposed bylaw is an attempt to limit the board's discretion to set the terms
and conditions of the shareholders rights plan and ultimately runs afoul of
the board fiduciary obligations to the corporation.
For the foregoing reasons, the court concludes that Invacare's proposed
bylaw is invalid as a matter of law. Healthdyne's Motion for Summary
Judgement is GRANTED, and Invacare's Motion for Summary Judgment is DENIED.
C. Invacare's Motion to Strike Portions of Affidavit of Donald G.
Margotta
Invacare argues that the court should strike paragraphs 19-29 of Donald
G. Margotta's June 4, 1997 affidavit because Professor Margotta does not have
the requisite legal training to give the opinions he sets forth in the
affidavit. The court finds that Professor Margotta's statements regarding
Georgia law are made solely to provide the context for his economics'
opinions. Consequently, the court denies Invacare's Motion to Strike.
CONCLUSION
Plaintiffs' Motion for Preliminary Injunction [37-1] is DENIED.
Defendants' Motion for Summary Judgment [20-1] is GRANTED. Plaintiffs'
Motion for Summary Judgment [43-1] is DENIED. Plaintiffs' Motion to Strike
Portions of Affidavit of Donald
11
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G. Margotta [53-1] is DENIED.
SO ORDERED this 3rd day of July, 1997.
/s/ Clarence Cooper
---------------------------------------
CLARENCE COOPER
UNITED STATES DISTRICT JUDGE
12
