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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)
HEALTHDYNE TECHNOLOGIES, INC.
(Name of Subject Company)
I.H.H. CORP.
INVACARE CORPORATION
(Bidders)
------------------------
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
18139610
(CUSIP Number of Class of Securities)
------------------------
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
------------------------
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$180,687,507 $36,138
</TABLE>
* Based on the offer to purchase all of the outstanding shares of Common Stock
of the Subject Company and the associated Preferred Stock Purchase Rights at
$13.00 cash per share, the number of shares outstanding as reported as of
November 1, 1996 in the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 of the Subject Company and the number of options
outstanding as of December 31, 1995 as reported in the Annual Report on Form
10-K for the fiscal year ended December 31, 1995 of the Subject Company,
less the number of shares owned by the Parent and the Purchaser.
** 1/50 of 1% of Transaction Valuation.
/ / 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.
<TABLE>
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AMOUNT PREVIOUSLY PAID: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
</TABLE>
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This Tender Offer Statement on Schedule 14D-1 relates 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,
dated as of May 22, 1995, between the Company and Trust Company Bank, as Rights
Agent, at a purchase price of $13 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 (the "Offer
to Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the
related Letter of Transmittal, a copy of which is attached hereto as Exhibit
(a)(2) (which, together with any amendments or supplements thereto, constitute
the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Healthdyne Technologies, Inc. The
information set forth in Section 7 ("Certain Information Concerning the
Company") of the Offer to Purchase is incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Stock, par value $0.01 per share, including the associated
Preferred Stock Purchase Rights, of the Company. The information set forth in
the Introduction (the "Introduction") of the Offer to Purchase is incorporated
herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d); (g) This Statement is filed by the Purchaser and the Parent. The
information set forth in the Introduction and Section 8 ("Certain Information
Concerning the Purchaser and the Parent") of the Offer to Purchase and Schedule
I thereto is incorporated herein by reference.
(e)-(f) During the last five years, neither the Purchaser, the Parent nor
any persons controlling the Purchaser, nor, to the best knowledge of the
Purchaser or the Parent, 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
which any such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser and the Parent") and Section 10
("Background of the Offer; Contacts with the Company") of the Offer to Purchase
is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
2
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("Purpose of
the Offer; the Merger, Plans for the Company"), Section 12 ("Dividends and
Distributions") and Section 13 ("Effect of the Offer on the Market for the
Shares, Stock Exchange Listing and Exchange Act Registration") of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction and in Section 8
("Certain Information Concerning the Purchaser and the Parent") of the Offer to
Purchase and Schedules I and II thereto 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 Introduction, Section 8 ("Certain
Information Concerning the Purchaser and the Parent"), Section 10 ("Background
of the Offer; Contacts with the Company"), Section 11 ("Purpose of the Offer,
the Merger; Plans for the Company") and Section 16 ("Fees and Expenses") of the
Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning the
Purchaser and the Parent") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b)-(c) The information set forth in the Introduction, Section 11 ("Purpose
of the Offer; the Merger; Plans for the Company") and Section 15 ("Certain Legal
Matters and Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in Section 15 ("Certain Legal Matters and
Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(e) The information set forth in the Introduction, Section 10 ("Background
of the Offer; Contacts with the Company"), Section 11 ("Purpose of the Offer;
the Merger; Plans for the Company") and Section 15 ("Certain Legal Matters and
Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated January 27, 1997.
(a)(2) Letter of Transmittal.
3
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(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) Summary Advertisement dated January 27, 1997.
(a)(8) Text of Press Release issued by the Parent on January 27, 1997.
(b)(1) Commitment Letter dated December 30, 1996 to the Parent from NBD Bank
and First Chicago Capital Markets, Inc.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Complaint in INVACARE CORPORATION AND I.H.H. CORP. V. HEALTHDYNE
TECHNOLOGIES, INC., ET AL., U.S. District Court for the Northern
District of Georgia.
4
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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: January 27, 1997
<PAGE>
EXHIBIT INDEX
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EXHIBIT PAGE
NO. DESCRIPTION NO.
- --------- ------------------------------------------------------------------------------------------------ ---------
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11(a)(1) Offer to Purchase dated January 27, 1997........................................................
11(a)(2) Letter of Transmittal...........................................................................
11(a)(3) Notice of Guaranteed Delivery...................................................................
11(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees........................................................................................
11(a)(5) Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees...
11(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.............................................................................
11(a)(7) Summary Advertisement dated January 27, 1997....................................................
11(a)(8) Text of Press Release issued by the Parent on January 27, 1997..................................
11(b)(1) Commitment Letter dated December 30, 1996 to the Parent from NBD Bank and First Chicago Capital
Markets, Inc....................................................................................
11(g)(1) Complaint in INVACARE CORPORATION AND I.H.H. CORP V. HEALTHDYNE TECHNOLOGIES, INC., ET AL., U.S.
District Court for the Northern District of Georgia.............................................
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
AT
$13 NET PER SHARE
BY
I.H.H. CORP.
A WHOLLY OWNED SUBSIDIARY OF
INVACARE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, FEBRUARY 24, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS: (1) THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THERE HAVE BEEN VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES OF
COMMON STOCK OF THE COMPANY WHICH, WHEN ADDED TO THE 600,000 SHARES BENEFICIALLY
OWNED BY THE PURCHASER AND ITS AFFILIATES, WOULD CONSTITUTE AT LEAST 51% OF THE
VOTING POWER (DETERMINED ON A FULLY DILUTED BASIS) ON THE DATE OF PURCHASE OF
ALL SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS AND IN A MERGER; (2) THE COMPANY'S PREFERRED STOCK PURCHASE RIGHTS
HAVING BEEN REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH PREFERRED STOCK PURCHASE RIGHTS
HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO, OR THAT THE DILUTIVE
PROVISIONS THEREOF WOULD NOT BE TRIGGERED BY, THE OFFER OR THE PROPOSED MERGER
DESCRIBED HEREIN; (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION,
THAT THE RESTRICTIONS ON BUSINESS COMBINATIONS CONTAINED IN SECTIONS 14-2-1131
THROUGH 14-2-1133 OF THE GEORGIA BUSINESS CORPORATION CODE (THE "GBCC") WOULD
NOT APPLY TO THE PURCHASER OR THE PARENT IN CONNECTION WITH THE OFFER OR THE
PROPOSED MERGER (AS A RESULT OF ACTION BY THE COMPANY'S BOARD OF DIRECTORS, THE
OWNERSHIP BY THE PURCHASER AND ITS AFFILIATES UPON CONSUMMATION OF THE OFFER OF
AT LEAST 90% OF THE OUTSTANDING VOTING STOCK OF THE COMPANY (OTHER THAN SHARES
HELD BY DIRECTORS, OFFICERS AND CERTAIN EMPLOYEE STOCK PLANS OF THE COMPANY) OR
OTHERWISE); AND (4) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT
THE RESTRICTIONS ON BUSINESS COMBINATIONS CONTAINED IN SECTIONS 14-2-1110
THROUGH 14-2-1113 OF THE GBCC WOULD NOT APPLY TO THE PURCHASER OR THE PARENT IN
CONNECTION WITH THE OFFER OR THE PROPOSED MERGER OR ARE INVALID (IN EITHER CASE,
AS A RESULT OF ACTION BY THE COMPANY'S BOARD OF DIRECTORS, JUDICIAL ACTION OR
OTHERWISE) OR THAT THE PROPOSED MERGER MAY BE CONSUMMATED WITHOUT ANY APPROVAL
REQUIRED UNDER SUCH SECTIONS OF THE GBCC AT A PRICE PER SHARE NOT IN EXCESS OF
THE PRICE PER SHARE TO BE PAID IN THE OFFER. THE OFFER IS NOT CONDITIONED ON THE
RECEIPT OF FINANCING.
--------------------------
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON BROTHERS INC
---------------
January 27, 1997 (CONTINUED ON NEXT PAGE)
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of Common Stock, par value $0.01 per share (the "Shares"), and the
associated Preferred Stock Purchase Rights (the "Rights"), of the Company should
either (1) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal, mail or
deliver the Letter of Transmittal (or such facsimile) and any other required
documents to the Depositary (as defined herein), and either deliver the
certificates representing the tendered Shares and, if separate, the certificates
representing the associated Rights and any other required documents to the
Depositary or tender such Shares (and Rights, if applicable) pursuant to the
procedure for book-entry transfer set forth in Section 3 or (2) request such
shareholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such shareholder. Shareholders having Shares (and
Rights, if applicable) registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if they desire to tender Shares
(and Rights, if applicable) so registered. Unless and until the Purchaser
declares that the Rights Condition (as defined herein) is satisfied, holders of
Shares will be required to tender one Right for each Share tendered in order to
effect a valid tender of such Share.
A shareholder who desires to tender Shares and Rights and whose certificates
representing such Shares (and Rights, if applicable) are not immediately
available, or who cannot comply with the procedure for book-entry transfer on a
timely basis, must tender such Shares (and Rights, if applicable) by following
the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to Salomon Brothers
Inc, the Dealer Manager, and MacKenzie Partners, Inc., the Information Agent, at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or from brokers, dealers, commercial banks and trust
companies.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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INTRODUCTION............................................................................................... 1
THE TENDER OFFER........................................................................................... 10
1. Term of the Offer; Expiration Date................................................................. 10
2. Acceptance for Payment and Payment for Shares...................................................... 11
3. Procedure for Tendering Shares and Rights.......................................................... 13
4. Withdrawal Rights.................................................................................. 16
5. Certain Federal Income Tax Consequences............................................................ 17
6. Price Range of Shares; Dividends................................................................... 18
7. Certain Information Concerning the Company......................................................... 18
8. Certain Information Concerning the Purchaser and the Parent........................................ 20
9. Source and Amount of Funds......................................................................... 22
10. Background of the Offer; Contacts with the Company................................................. 23
11. Purpose of the Offer; the Merger; Plans for the Company............................................ 29
12. Dividends and Distributions........................................................................ 40
13. Effect of the Offer on the Market for the Shares, Nasdaq Listing and Exchange Act Registration..... 40
14. Certain Conditions of the Offer.................................................................... 41
15. Certain Legal Matters and Regulatory Approvals..................................................... 46
16. Fees and Expenses.................................................................................. 48
17. Miscellaneous...................................................................................... 49
</TABLE>
Schedule I Directors and Executive Officers of the Purchaser and the Parent
Schedule II Parent Purchases of Shares
i
<PAGE>
To: The Shareholders of
HEALTHDYNE TECHNOLOGIES, INC.
INTRODUCTION
I.H.H. Corp., a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of Invacare Corporation, an Ohio corporation (the "Parent"), hereby
offers 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 below) is satisfied) the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of May 22, 1995 (the "Rights Agreement"), between the Company and Trust
Company Bank, as Rights Agent (the "Rights Agent"), at a purchase price of $13
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 this Offer to
Purchase and in the related Letter of Transmittal (which, as amended from time
to time, together constitute the "Offer"). Unless the context requires
otherwise, all references in this Offer to Purchase to Shares shall be deemed to
refer also to the associated Rights, and all references to Rights shall be
deemed to include all benefits that may inure to the shareholders of the Company
or to holders of the Rights pursuant to the Rights Agreement. Based on publicly
available information, the Purchaser believes that one Right is currently
associated with each Share.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares and Rights pursuant to the
Offer. The Purchaser will pay all fees and expenses of Salomon Brothers Inc,
which is acting as Dealer Manager for the Offer (in such capacity, the "Dealer
Manager"), IBJ Schroder Bank & Trust Company (the "Depositary") and MacKenzie
Partners, Inc. (the "Information Agent") incurred in connection with the Offer.
See Section 16.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Purchaser intends to propose, and to seek to have
the Company consummate as soon as practicable after consummation of the Offer, a
merger or similar business combination (the "Merger") with the Purchaser or
another direct or indirect subsidiary of the Parent, pursuant to which each then
outstanding Share (other than Shares held by the Parent, the Purchaser or any
other wholly owned subsidiary of the Parent, Shares held in the treasury of the
Company and Shares held by shareholders who properly exercise appraisal rights
under Georgia law) would be converted into the right to receive in cash the
price per Share paid by the Purchaser pursuant to the Offer.
The Purchaser will seek to have the Company consummate the Merger as soon as
practicable after consummation of the Offer. However, if the Board of Directors
of the Company opposes the Offer and the Merger, certain terms of the Rights and
certain provisions of the Georgia Business Corporation Code (the "GBCC") and the
Company's by-laws (the "By-Laws"; discussions in this Offer to Purchase of
provisions of the By-Laws are based upon the By-Laws as most recently publicly
disclosed by the Company) may affect the ability of the Purchaser to obtain
control of the Company and to effect the Merger. Accordingly, the timing and
details of the Merger will depend on a variety of factors and legal
requirements, the actions of the Board of Directors of the Company, the number
of Shares acquired by the Purchaser pursuant to the Offer, and whether the
Minimum Condition, the Rights Condition, the Georgia Business Combination
Statute Condition and the Georgia Fair Price Statute Condition (each as defined
below) are satisfied.
If the current Board of Directors of the Company opposes the Offer and the
Merger, the Parent intends, if necessary to facilitate the Offer and the Merger,
(i) to nominate individuals for election as directors of the Company who, if
elected, would be committed to an acquisition of the Company in accordance with
the terms of the Offer and the Merger (subject to any fiduciary duties such
nominees would have as directors) and (ii) to consider making other proposals at
the Company's upcoming annual
1
<PAGE>
meeting of shareholders, and to solicit proxies from shareholders for the
purpose of electing such director candidates and approving any such other
proposals. Under the By-Laws, shareholder nominations and proposals to be
brought before the annual meeting are required to be submitted to the Company at
any time between February 22, 1997 and March 24, 1997, assuming that the annual
meeting is held on approximately the same date as the Company's 1996 annual
meeting (May 23), and the Parent would make any such nominations and proposals
within such period. If elected, any director candidates nominated by the Parent
would be committed to taking all such actions necessary or appropriate (subject
to such directors' fiduciary duties) to approve and effectuate the consummation
of the Offer and the Merger, including taking action to execute an agreement and
plan of merger and to satisfy the Rights Condition, the Georgia Business
Combination Statute Condition and the Georgia Fair Price Statute Condition. As
described under "Rights Condition" below, the Parent and the Purchaser are
commencing litigation seeking, among other things, to declare illegal certain
provisions of the Rights Agreement which would purport to limit the ability of
the Parent's nominees, if elected, to satisfy the Rights Condition under certain
circumstances.
If the Parent does not nominate director candidates for election at the
annual meeting, or if such candidates are not elected, and the conditions to the
Offer are not otherwise satisfied, the Parent will explore the other options
available to it, including taking action to call a special meeting of the
Company's shareholders or utilizing any other available methods for the purpose
of removing members of the current Board of Directors of the Company and
electing director candidates nominated by the Parent or taking other actions to
facilitate the consummation of the Offer and the Merger. Under the By-Laws, the
Company is required to call a special meeting of the shareholders upon the
demand of the holders of sixty percent (60%) of the outstanding Shares.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS OR ANY ACTION IN LIEU THEREOF. ANY
SUCH SOLICITATION WHICH THE PURCHASER MAY MAKE WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").
Upon consummation of the Offer, assuming the Minimum Condition, the Rights
Condition, the Georgia Business Combination Statute Condition, the Georgia Fair
Price Statute Condition and the other conditions to the Offer set forth in
Section 14 are satisfied, the Purchaser will own sufficient Shares, subject to
the procedures described in Section 11, ultimately to remove and/or replace the
Company's Board of Directors and to approve the Merger without the vote of any
other shareholder. For a discussion of certain appraisal rights available to
shareholders upon consummation of the Merger, see Section 11.
THE OFFER IS CONDITIONED, AMONG OTHER THINGS, UPON SATISFACTION OF THE
FOLLOWING CONDITIONS: (1) THE MINIMUM CONDITION, (2) THE RIGHTS CONDITION, (3)
THE GEORGIA BUSINESS COMBINATION STATUTE CONDITION AND (4) THE GEORGIA FAIR
PRICE STATUTE CONDITION, EACH OF WHICH IS DESCRIBED BELOW. CERTAIN OTHER
CONDITIONS TO THE OFFER ARE DESCRIBED IN SECTION 14. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING.
THE MINIMUM CONDITION. The Offer is subject to the condition (the "Minimum
Condition") that the Purchaser shall be satisfied, in its sole discretion, that
there shall have been validly tendered and not properly withdrawn on or prior to
the Expiration Date (as defined below) a number of Shares which, when added to
the Shares beneficially owned by the Purchaser and its affiliates (including the
Parent), constitute at least 51% of the voting power (determined on a fully
diluted basis) on the date of purchase of all securities of the Company entitled
to vote generally in the election of directors and in a merger.
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996 (the "September 10-Q"), 12,625,039 Shares were
outstanding at November 1, 1996. According to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 (the "1995
2
<PAGE>
10-K"), options covering a total of approximately 1,874,000 Shares were
outstanding under the Company's various stock option plans at December 31, 1995.
The Parent currently beneficially owns an aggregate of 600,000 Shares (including
100 Shares owned by the Purchaser), representing approximately 4.8% of the
Shares outstanding based on the number of Shares reported by the Company as
outstanding at November 1, 1996. See Section 8. Based on this information, the
Purchaser believes that the Minimum Condition will be satisfied if approximately
6,794,510 Shares are validly tendered pursuant to the Offer and not properly
withdrawn. However, the Minimum Condition will depend on the facts as they exist
on the date on which Shares are purchased pursuant to the Offer.
If, upon consummation of the Offer, the Purchaser and the Parent together
own at least 51% of the outstanding Shares (determined on a fully diluted
basis), then the Purchaser and the Parent will own sufficient Shares to enable
them to effect shareholder approval of the Merger (assuming that the Georgia
Business Combination Statute Condition and the Georgia Fair Price Statute
Condition are satisfied).
THE RIGHTS CONDITION. The Offer is subject to the condition (the "Rights
Condition") that the Purchaser shall be satisfied, in its sole discretion, that
the Rights shall have been redeemed by the Company's Board of Directors or that
such Rights have been invalidated or are otherwise inapplicable to, or the
dilutive provisions thereof will not be triggered by, the Offer or the Merger.
The Rights are described in the Company's Form 8-A dated May 19, 1995 (the "May
19 Form 8-A"). The following discussion, including the summary of certain
aspects of the Rights, is based in part on information contained in the May 19
Form 8-A and is qualified by reference to such information. Although the
Purchaser and the Parent do not have any knowledge that would indicate that any
statements contained herein based upon such document are untrue, neither the
Purchaser nor the Parent assumes any responsibility for the accuracy or
completeness of the information contained in such document, or for any failure
by the Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser and the Parent. A more detailed description of the Rights is contained
in Section 11.
FLIP-IN AND FLIP-OVER. If at any time following the Distribution Date
(as defined in Section 11), (i) a person or group of affiliated or
associated persons becomes the beneficial owner of 20% or more of the then
outstanding Shares (except pursuant to a tender offer or exchange offer for
all outstanding Shares determined by a majority of the Continuing Directors
(as defined below) to be fair to shareholders and otherwise in the best
interests of the Company and its shareholders) or (ii) certain other
transactions take place involving an Acquiring Person (as defined in Section
11) or between an Acquiring Person or an affiliate of an Acquiring Person
and the Company, each holder of a Right will thereafter have the right to
receive, upon exercise, Shares (or, in certain circumstances, cash, property
or other securities of the Company) having a value equal to two times the
exercise price of the Right (the "Flip-In"). However, Rights are not
exercisable following the occurrence of any of the events set forth above
until such time as the Rights are no longer redeemable by the Company as set
forth below. If at any time following the Stock Acquisition Date (as defined
in Section 11), (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving
corporation or in which all or part of its Shares are changed or exchanged
(unless such transaction follows a tender offer or exchange offer approved
by the Continuing Directors as set forth above) or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a
Right shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the
exercise price of the Right (the "Flip-Over"). The events described in the
Flip-In and the Flip-Over are referred to as the "Triggering Events." The
term "Continuing Director" means any member of the Company's Board of
Directors who was a member of the Board prior to May 22, 1995, the date of
the Rights Agreement, or has been subsequently elected to the Board if such
person was recommended or approved by a majority of the Continuing
Directors, but does not include an Acquiring Person or any representative
thereof. Notwithstanding any of the foregoing, following the occurrence of
any of the Triggering
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Events, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will
be null and void.
The Purchaser believes that, unless the Rights are redeemed or amended,
or a majority of the current Board of Directors approves the Offer for the
purposes of the determination described above, the consummation of the Offer
likely would cause the Purchaser to become an Acquiring Person and trigger
the Flip-In and, as a result, could permit significant dilution to the
Purchaser's and the Parent's interest in the Company, rendering the Offer
and the Merger economically unattractive for the Purchaser and the Parent.
REDEMPTION AND AMENDMENT; DEAD-HAND PILL RESTRICTIONS. Except as set
forth in the next sentence, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right at any time until the tenth day
following the Stock Acquisition Date (as such period may be extended by the
Company). However, the Rights Agreement contains unusual provisions,
commonly referred to as "dead-hand pill" restrictions, which, under certain
circumstances, purport to prevent a newly elected Board of Directors from
redeeming or amending the Rights without the consent of the old directors.
Among other things, the "dead-hand pill" restrictions purport to require the
concurrence of a majority of the Continuing Directors to redeem the Rights
on or after the time a person becomes an Acquiring Person or on or after a
change (resulting from a proxy or consent solicitation) in a majority of the
Company's directors if any person who participates in such solicitation
states or a majority of the Board of Directors of the Company determines in
good faith that such person (or any of its affiliates or associates) intends
to take, or may consider taking, any action which would result in such
person becoming an Acquiring Person or which would cause the occurrence of a
Triggering Event. After the initial redemption period, the right of
redemption may be reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding Shares in a transaction or
series of transactions not involving the Company and there are no other
Acquiring Persons. In addition, from the end of the initial redemption
period until the occurrence of a Triggering Event, the Company may redeem
the Rights provided that such redemption is incidental to a merger,
consolidation or other business combination involving the Company or a
reorganization or restructuring of the Company which is approved by a
majority of the Continuing Directors. The "dead-hand pill" restrictions
further purport to require the concurrence of a majority of the Continuing
Directors for any supplement or amendment to the Rights Agreement.
RIGHTS CERTIFICATES. Until the Distribution Date, the Rights will be
transferred with and only with the Shares. Until the Distribution Date, the
surrender for transfer of any of the certificates representing Shares (the
"Share Certificates") will also constitute the surrender for transfer of the
Rights associated with the Shares represented by such Share Certificates. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of Shares as of the close of business on the Distribution Date. After
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
Unless and until the Purchaser declares that the Rights Condition is
satisfied, holders of Shares will also be required to tender one Right for each
Share tendered in order to effect a valid tender of such Share. If separate
certificates for the Rights are not issued, a tender of Shares will also
constitute a tender of associated Rights.
The Purchaser believes that currently the Rights are not exercisable, Rights
Certificates have not been issued and the Rights are evidenced by the Share
Certificates. The Purchaser believes that under the Rights Agreement, as a
result of the commencement of the Offer, the Distribution Date will be as early
as February 10, 1997, unless prior to that date the Company's Board of Directors
redeems the Rights or takes action to delay the Distribution Date.
The Purchaser is hereby requesting that the Company's Board of Directors
redeem the Rights or take other action to invalidate the Rights or otherwise
render the Rights inapplicable to, or prevent the
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dilutive provisions thereof from being triggered by, the Offer or the Merger, in
each case in order to permit the Offer and the Merger to be consummated,
including by making the determination that the Offer is fair to the shareholders
and in the best interests of the Company and its shareholders. The Purchaser
believes that under the circumstances of the Offer and under applicable law, the
Board of Directors of the Company is obligated by its fiduciary responsibilities
to redeem the Rights or take such other action described above. However, there
can be no assurance that the Board of Directors will take any such action.
If the current Board of Directors does not so redeem the Rights or take such
other action, any action by the Parent to change the composition of the Board of
Directors would be intended, among other things, to result in the reconstituted
Board taking action to effect such redemption or take such other actions.
However, such a reconstituted Board of Directors may, under the purported terms
of the "dead-hand pill" restrictions described above, be powerless to effect
such redemption or take such other actions, notwithstanding the mandate the
Company's shareholders will have given to the Parent's nominees to the Board of
Directors in such election, unless one or more Continuing Directors remain on
the Board of Directors and a majority of them approve the redemption or such
other actions.
The Parent and the Purchaser believe that the "dead-hand pill" restrictions,
which were adopted by the current Board of Directors of the Company without
shareholder approval, are a collection of draconian and extreme
director-entrenching provisions which, in purporting to limit the ability of
future Boards of Directors of the Company (including any nominated by the Parent
or the Purchaser) from acting in the best interests of the Company and its
shareholders by redeeming or otherwise nullifying the Rights in connection with
a proposed transaction, denies the shareholders and future Boards of Directors
meaningful access to and control over the assets of the Company and hinders and
prevents the exercise of fundamental shareholder rights under Georgia law. The
Parent and the Purchaser believe that such provisions violate Georgia and
federal law and are commencing litigation against the Company and certain of its
directors in the United States District Court for the Northern District of
Georgia (the "Defensive Tactics Litigation") seeking, among other things, (i) an
order declaring the "dead-hand pill" restrictions of the Rights Agreement
illegal and unenforceable and compelling the Company's Board of Directors to
amend the Rights Agreement to remove such restrictions and (ii) an order
compelling the Company's Board of Directors to fulfill their fiduciary duties by
redeeming the Rights or amending the Rights Agreement to make the Rights
inapplicable to the Offer and the Merger. A more detailed description of the
Defensive Tactics Litigation is contained in Section 15.
THE GEORGIA BUSINESS COMBINATION STATUTE CONDITION. The Offer is subject to
the condition (the "Georgia Business Combination Statute Condition") that the
Purchaser shall be satisfied, in its sole discretion, that the restrictions on
business combinations contained in Sections 14-2-1131 through 14-2-1133 of the
GBCC (collectively, the "Georgia Business Combination Statute") would not apply
to the Purchaser or the Parent in connection with the Offer or the Merger (as a
result of action by the Company's Board of Directors, the ownership by the
Purchaser upon consummation of the Offer of at least 90% of the outstanding
voting stock of the Company (other than Shares held by directors, officers and
certain employee stock plans of the Company) or otherwise).
In general, the Georgia Business Combination Statute prohibits any person
who is defined to be an "Interested Shareholder", including a beneficial owner
of 10% or more of the voting power of the outstanding voting shares of a
corporation, from engaging in certain business combinations (including business
combinations such as the Merger) with such corporation for a period of five
years following the date on which such person became an Interested Shareholder,
unless (i) either the transaction by which such person became an Interested
Shareholder or the business combination is approved by the board of directors of
the corporation prior to the date on which such person became an Interested
Shareholder, (ii) upon consummation of the transaction which resulted in such
person becoming an Interested Shareholder, such person owned at least 90% of the
voting stock outstanding at the time the transaction commenced, excluding shares
owned by (a) persons who are officers or directors of the corporation and
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their affiliates or associates, (b) subsidiaries of the corporation and (c) any
employee stock plan under which employee participants do not have the right to
determine confidentially the extent to which shares held subject to the plan
will be tendered in a tender or exchange offer (all such non-excluded voting
stock, "Eligible Voting Stock"), or (iii) subsequent to the date on which such
person became an Interested Shareholder, the Interested Shareholder becomes the
owner of 90% of the outstanding voting stock of the corporation and the business
combination is approved by the board of directors of the corporation and
authorized by the affirmative vote, at an annual meeting or a special meeting of
the shareholders, of at least a majority of the outstanding voting stock not
beneficially owned by the Interested Shareholder or any of its affiliates or
associates or by persons who are directors or officers of the Interested
Shareholder. The requirements of the Georgia Business Combination Statute do not
apply unless the corporation adopts a by-law expressly electing to be governed
thereby. According to publicly available information, the Company's By-Laws have
included such a provision at least since December 31, 1995. Accordingly, the
requirements of the Georgia Business Combination Statute apply to the Company.
Consequently, under the Georgia Business Combination Statute, unless the Board
of Directors of the Company approves the Offer and the Merger in advance of the
consummation of the Offer or the Purchaser and the Parent own 90% of the
Eligible Voting Stock upon consummation of the Offer, the Merger could not occur
for five years following the consummation of the Offer unless the Parent and its
affiliates acquire 90% of the outstanding Shares and the Merger is approved by
the Board of Directors of the Company and by a majority of the outstanding
Shares not owned by the Parent or its affiliates.
According to the September 10-Q, 12,625,039 Shares were outstanding at
November 1, 1996 and, according to the Company's 1996 Proxy Statement, at March
15, 1996, directors and officers of the Company beneficially owned an aggregate
of approximately 1,878,262 Shares (which number includes options to acquire an
unspecified number of Shares exercisable at that time or within 60 days thereof,
and which thus is not directly comparable to the aggregate number of Shares
reported by the Company to be outstanding at November 1, 1996). In addition,
according to publicly available Statements of Beneficial Ownership on Form 4
filed prior to the date hereof, the Purchaser believes that Parker H. Petit,
Chairman of the Board of Directors of the Company, has disposed of 349,860, or
37%, of the 955,411 Shares reported to have been beneficially owned by him at
March 15, 1996 (excluding options), including the sale in May 1996 of an
aggregate of 159,926 Shares at prices ranging from $13.00 to $14.25 per Share,
the exchange in June 1996 of 185,000 Shares for interests in a limited
partnership "exchange" fund sponsored by a third-party investment bank and the
distribution from trust of 4,934 Shares to persons not affiliated with the
Company. No information contained in the Company's public filings to date
indicates that the Company has any employee stock plans which would hold
non-Eligible Voting Stock. Because of the differences in times and methods of
reporting the aggregate number of outstanding Shares and the aggregate number of
Shares beneficially owned by directors and officers of the Company, the
Purchaser is unable to calculate with precision the current aggregate amount of
the outstanding Shares, on either a primary or a fully-diluted basis,
constituted by Eligible Voting Stock. Accordingly, the Purchaser is unable to
calculate with precision at this time the number of Shares needed to be tendered
in the Offer in order for the Georgia Business Combination Statute Condition to
be satisfied as a result of the Purchaser and the Parent owning 90% of the
Eligible Voting Stock upon consummation of the Offer.
The Purchaser is hereby requesting that the Board of Directors approve the
Offer and the Merger for purposes of the Georgia Business Combination Statute.
Under the circumstances of the Offer and under applicable law, the Purchaser
believes that the Board of Directors of the Company is obligated by its
fiduciary responsibilities to approve, pursuant to the Georgia Business
Combination Statute, the acquisition of Shares pursuant to the Offer and the
Merger. However, there can be no assurance that the Board of Directors will do
so. The Parent and the Purchaser are seeking an order in the Defensive Tactics
Litigation to compel the Company's Board of Directors to approve the Offer and
the Merger for purposes of the Georgia Business Combination Statute. If the
Board does not so approve the Offer and the Merger but upon consummation of the
Offer the Purchaser and the Parent together own at least 90% of the
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Eligible Voting Stock of the Company, then the restrictions on business
combinations contained in the Georgia Business Combination Statute would not be
applicable.
As indicated above, any action by the Purchaser and the Parent to change the
composition of the Board of Directors would be intended, among other things, to
result in the reconstituted Board taking action to approve the Offer and the
Merger in order to satisfy the Georgia Business Combination Statute Condition.
THE GEORGIA FAIR PRICE STATUTE CONDITION. The Offer is subject to the
condition (the "Georgia Fair Price Statute Condition") that the Purchaser shall
be satisfied, in its sole discretion, that the restrictions on business
combinations contained in Sections 14-2-1110 through 14-2-1113 of the GBCC
(collectively, the "Georgia Fair Price Statute") would not apply to the
Purchaser or the Parent in connection with the Offer or the Merger or are
invalid (in either case, as a result of action by the Company's Board of
Directors, judicial action or otherwise) or that the Merger may be consummated
without any approval required under the Georgia Fair Price Statute at a price
per Share not in excess of the price per Share to be paid in the Offer.
The requirements of the Georgia Fair Price Statute do not apply unless the
corporation adopts a by-law expressly electing to be governed thereby. According
to publicly available information, the Company's By-Laws did not include such a
provision until January 23, 1997, when the Company's Board of Directors, after
the Parent had made public its interest in an acquisition of the Company,
amended the By-Laws to include such a provision. Accordingly, the requirements
of the Georgia Fair Price Statute now purport to apply to the Company.
In general, except as provided below, the Georgia Fair Price Statute
requires that certain business combinations (including business combinations
such as the Merger) between a Georgia corporation and an Interested Shareholder,
including a beneficial owner of 10% or more of the voting power of the
outstanding voting shares of the corporation, be either (i) 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 (ii) recommended by at least two-thirds of the continuing directors and
approved by a majority of the votes entitled to be cast by holders of voting
shares, other than voting shares beneficially owned by the Interested
Shareholder. As used with respect to the Georgia Fair Price Statute, a
"continuing director" means any member of the corporation's board of directors
who is not an affiliate or associate of the Interested Shareholder or any of its
affiliates (other than the corporation or any of its subsidiaries) and who was a
director of the corporation prior to the date on which the Interested
Shareholder first became such, and any successor to such continuing director who
is not an affiliate or an associate of the Interested Shareholder or any of its
affiliates (other than the corporation or its subsidiaries) and is recommended
or elected by a majority of all the continuing directors.
However, the board and shareholder approval requirements of the Georgia Fair
Price Statute do not apply to a business combination in which the only
outstanding securities of the corporation are common shares of the same class
for which cash consideration only will be paid if each of the following
conditions (as described more fully in Section 11, the "Merger Price
Provisions") is met:
(i) the aggregate amount of cash to be received per share by
shareholders is at least equal to the highest of:
(a) the highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the Interested
Shareholder for any common shares acquired by it (1) within the two-year
period immediately prior to the first general public announcement of the
proposal of the business combination (the "Announcement Date"), or (2) in
the transaction in which it became an Interested Shareholder, whichever
is higher, or
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(b) the "fair market value" (defined as the highest closing sale
price during the 30-day period including and immediately preceding the
date in question) per share as determined (x) on the Announcement Date or
(y) the date on which an Interested Shareholder first became such,
whichever fair market value is higher;
(ii) after the Interested Shareholder has become such and prior to the
consummation of such business combination, unless approved by a majority of
the continuing directors, (x) there has been no effective change in the
dividend policy of the corporation which adversely affects the shareholders
and (y) there has been no increase in the Interested Shareholder's
percentage ownership of common shares by more than 1% in any twelve-month
period; and
(iii) after the Interested Shareholder has become such, the Interested
Shareholder has not received any direct or indirect benefit from the
corporation not received by all other shareholders proportionately.
A more detailed description of the Georgia Fair Price Statute is contained
in Section 11.
The price per Share to be paid in the Offer (the "Offer Price") is higher
than both (i) the highest per share price paid by the Parent and the Purchaser
for any Shares acquired by them within the two-year period immediately prior to
the relevant Announcement Date, January 10, 1997, the date on which the Parent
first publicly announced its proposal of an acquisition of the Company in a
merger transaction, and (ii) the fair market value of the Shares as of such
Announcement Date.
The Georgia Fair Price Statute is designed to protect shareholders against
the inequities of certain takeover tactics, such as so-called "two-tiered"
transactions in which lesser consideration is paid in the second-step merger
than in the first-step tender offer, which result in minority shareholders who
do not participate in the initial tender offer receiving a lower price or less
desirable form of consideration than the tendering shareholders. Because holders
of Shares are to receive the same cash consideration per Share in the Merger as
that paid by the Purchaser pursuant to the Offer, the Parent and the Purchaser
believe that the Offer and the Merger are in accord with the purpose and intent
of the Georgia Fair Price Statute. Moreover, if the highest closing stock price
for the Shares during the 30-day period including and immediately preceding the
date of consummation of the Offer is not in excess of the Offer Price and the
other procedural requirements of the Merger Price Provisions are met, the terms
of the Merger Price Provisions would not require a higher price to be paid in
the Merger than in the Offer, and the Georgia Fair Price Statute Condition would
be satisfied, without the need for any action or approval of the Board of the
Directors or the shareholders of the Company. However, the Parent and the
Purchaser are unable to predict whether the closing stock price for the Shares
on any day in the 30-day period including and immediately preceding the date on
which the Offer is consummated will be in excess of the Offer Price, whether as
a result of anomalous or manipulative trading activity or otherwise.
If the Merger Price Provisions are not met, the terms of the Georgia Fair
Price Statute would purport to prohibit the Merger from occuring after
consummation of the Offer unless the Merger is either (i) unanimously approved
by the continuing directors, and such continuing directors constitute at least
three members of the Company's Board of Directors at the time of such approval,
or (ii) recommended by at least two-thirds of the continuing directors and
approved by holders of a majority of Shares other than voting shares
beneficially owned by the Purchaser or its affiliates. The Purchaser is hereby
requesting that the Board of Directors unanimously approve the Offer and the
Merger for purposes of the Georgia Fair Price Statute. Under the circumstances
of the Offer and under applicable law, the Purchaser believes that the Board of
Directors of the Company is obligated by its fiduciary responsibilities to
unanimously approve, pursuant to the Georgia Fair Price Statute, the acquisition
of Shares pursuant to the Offer and the Merger. However, there can be no
assurance that the Board of Directors will do so.
If the current Board of Directors does not so approve the Offer and the
Merger, any action by the Parent to change the composition of the Board of
Directors would be intended, among other things, to
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result in the reconstituted Board taking unanimous action to approve the Offer
and the Merger in order to satisfy the Georgia Fair Price Statute Condition.
To the extent that the Georgia Fair Price Statute purports to require
approval of continuing directors or minority shareholders in order for an
all-cash, non-coercive tender offer and merger, such as the Offer and the
Merger, to be effected at the same price, the Parent and the Purchaser believe
that the Georgia Fair Price Statute is invalid and violates the Georgia and
United States Constitutions. The Defensive Tactics Litigation seeks, among other
things, (i) an order declaring the Georgia Fair Price Statute illegal and
unenforceable to such extent and (ii) an order compelling the Company's Board of
Directors to approve the Offer and the Merger for purposes of the Georgia Fair
Price Statute.
* * *
The Purchaser expressly reserves the right to waive any one or more of the
conditions to the Offer. See Sections 11, 14 and 15.
As indicated in the Parent's press release announcing the commencement of
the Offer (set forth in full in Section 10), in the context of a negotiated
transaction the Parent would consider discussing the Offer Price if the
Company's management is able to substantiate significant additional values to
the Parent's satisfaction, and is prepared to discuss all other aspects of the
Offer fully with the Company, including the structure of the transaction and the
form of consideration. If the Company and the Parent should enter into
discussions and negotiations resulting in a definitive merger or other agreement
between the Company and the Parent, certain material terms of the Offer and/or
the Merger, such as the amount or form of purchase price consideration, may
change. Alternatively, such negotiations could result in, among other things,
termination of the Offer and submission of a different acquisition proposal to
the Company's shareholders for their approval. If prior to the Expiration Date
the Purchaser increases the consideration offered to shareholders pursuant to
the Offer, such increased consideration will be paid to all shareholders whose
Shares are purchased pursuant to the Offer, whether or not such Shares were
tendered prior to such increase in consideration.
In the event the Offer is not consummated, the Purchaser intends to explore
all options which may be available to it at such time, which may include,
without limitation, the acquisition of Shares through open-market purchases,
privately negotiated transactions, another tender offer or exchange offer or
otherwise, upon such terms and at such prices as it shall determine, which may
be more or less than the price to be paid pursuant to the Offer. The Purchaser
also reserves the right to sell or otherwise dispose of Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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THE TENDER OFFER
1. TERM 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 prior to the Expiration
Date and not properly withdrawn in accordance with Section 4. The term
"Expiration Date" means 12:00 midnight, New York City time, on Monday, February
24, 1997, unless and until the Purchaser, in its sole discretion, shall have
extended the period 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 THE SATISFACTION OF THE MINIMUM CONDITION, THE
RIGHTS CONDITION, THE GEORGIA BUSINESS COMBINATION STATUTE CONDITION, THE
GEORGIA FAIR PRICE STATUTE CONDITION, 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") AND THE
SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN SECTION 14. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING.
If by the Expiration Date any or all of such conditions have not been
satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the applicable rules and regulations of the Securities
and Exchange Commission (the "Commission"), (i) to decline to purchase any of
the Shares tendered and terminate the Offer, (ii) to waive all of the
unsatisfied conditions and purchase all Shares validly tendered, (iii) to extend
the Offer and, subject to the right of tendering shareholders 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 amend the Offer.
Subject to the applicable rules and regulations of the Commission, the
Purchaser reserves the right, in its sole discretion, at any time and from time
to time, regardless of whether the conditions specified in Section 14 shall have
been satisfied or any of the events or facts set forth in Section 14 shall have
occurred, (i) to extend the period during which the Offer is open and thereby
delay acceptance for payment of and payment for any tendered Shares or (ii) to
waive any condition or otherwise amend the Offer in any respect, in each case by
giving oral or written notice of such extension, waiver or amendment to the
Depositary. During any such extension, all Shares previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the rights of a
tendering shareholder to withdraw such shareholder's Shares. See Section 4.
UNDER NO CIRCUMSTANCE WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT FOR
TENDERED SHARES.
The Purchaser acknowledges (i) that Rule 14e-1(c) under 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) that
the Purchaser may not (except in order to comply with applicable law) delay
acceptance for payment of, or payment for, any Shares upon the occurrence of any
of the events or facts specified in Section 14 without extending the period of
time during which the Offer is open.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by a public announcement thereof, which
announcement in the case of an extension will be made no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Purchaser may choose
to make any public announcement, except as provided by applicable law (including
Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that material
changes be promptly disseminated to holders of Shares), the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service. For
purposes of the Offer, a "business
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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.
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 disseminate
additional tender offer materials and 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 the 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 then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or, subject to certain limitations, a change in the
percentage of securities sought, a minimum period of ten business days from the
day of such change is generally required to allow for adequate dissemination to
shareholders.
Requests are being made to the Company pursuant to Rule 14d-5 of the
Exchange Act and Sections 14-2-1602 and 14-2-1603 of the GBCC for the use of the
Company's shareholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares and, in the case of the request
under the GBCC, to otherwise communicate with the other shareholders regarding,
among other things, the annual meeting and any special meeting. This Offer to
Purchase, the related Letter of Transmittal and other relevant materials will be
mailed to record holders of Shares, 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 shareholder lists, or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares, by the Purchaser
following receipt of such lists or listings from the Company, or by the Company
if it so elects under Rule 14d-5.
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 as soon as
practicable after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of 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.
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. Any such delays will be effected in compliance with Rule 14e-1(c) under the
Exchange Act.
The Parent 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 Premerger Notification and
Report Form under the HSR Act with respect to the Offer. Under the provisions of
the HSR Act applicable to the Offer, the purchase of Shares pursuant to the
Offer may not be consummated until the expiration of a 15-calendar day waiting
period following the filing by the Parent, 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 from the Parent. 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 the Parent with
such request. Thereafter, the waiting period may only be extended by court
order. The waiting period under the HSR Act may be terminated by the FTC and the
Antitrust Division prior to its expiration. For information with respect to
approvals required to be obtained prior to the consummation of the Offer,
including under the HSR Act, 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)
Share Certificates for such Shares and, if applicable, Rights Certificates, or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Shares and, if applicable, Rights into the Depositary's account at The
Depository Trust
11
<PAGE>
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) a 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 transmitted by a Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares and, if applicable, Rights which are the
subject of such Book-Entry Confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
Unless and until the Purchaser declares that the Rights Condition is
satisfied, if Rights Certificates have been distributed to holders of Shares,
such holders are required to tender, or make book-entry transfer of, Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered in order to effect a valid tender of such Shares.
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 of the Purchaser's acceptance for payment of such Shares 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 shareholders for the purpose of receiving payments from the Purchaser
and transmitting such payments to shareholders whose Shares have been accepted
for payment. UNDER NO CIRCUMSTANCE 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 and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Shares and such Shares may not
be withdrawn except to the extent that the tendering shareholder is entitled to
and duly exercises withdrawal rights as described in Section 4.
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
without expense to the tendering shareholder (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), in each
case with the related Rights Certificates, if any, as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
IF PRIOR TO THE EXPIRATION DATE THE PURCHASER INCREASES THE CONSIDERATION
OFFERED TO SHAREHOLDERS PURSUANT TO THE OFFER, SUCH INCREASED CONSIDERATION WILL
BE PAID TO ALL SHAREHOLDERS WHOSE SHARES ARE PURCHASED PURSUANT TO THE OFFER,
WHETHER OR NOT SUCH SHARES WERE TENDERED OR ACCEPTED FOR PAYMENT PRIOR TO SUCH
INCREASE IN CONSIDERATION.
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 and Rights tendered pursuant to the Offer, but any
such transfer or assignment will not relieve the Purchaser of its obligations
under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
12
<PAGE>
3. PROCEDURE FOR TENDERING SHARES AND RIGHTS. VALID TENDER. Except as set
forth below, in order for Shares and, prior to the Distribution Date, Rights to
be validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares and Rights, 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 either (i) Share Certificates and Rights Certificates,
if applicable, evidencing tendered Shares and Rights must be received by the
Depositary at such address or such Shares and Rights 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 (ii) the guaranteed delivery procedures described below must
be complied with.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights Certificates. Unless and until the
Purchaser declares that the Rights Condition is satisfied, holders of Shares
will be required to tender one Right for each Share tendered in order to effect
a valid tender of such Share. ACCORDINGLY, SHAREHOLDERS WHO SELL THEIR RIGHTS
SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT BE ABLE
TO SATISFY THE REQUIREMENTS OF THE OFFER FOR A VALID TENDER OF SHARES.
RIGHTS CERTIFICATES. If separate Rights Certificates are not issued, a
tender of Shares will also constitute a tender of associated Rights. If the
Distribution Date has occurred and Rights Certificates have been distributed to
holders prior to the date of tender pursuant to the Offer, Rights Certificates
representing a number of Rights equal to the number of Shares being tendered
must be delivered to the Depositary or, if available, a Book-Entry Confirmation
must be received by the Depositary with respect thereto in order for such Shares
to be validly tendered. If the Distribution Date has occurred and Rights
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, Rights may be tendered prior to a shareholder receiving
Rights Certificates by use of the guaranteed delivery procedures described
below. A tender of Shares without Rights Certificates constitutes an agreement
by the tendering shareholder to deliver Rights Certificates representing a
number of Rights equal to the number of Shares tendered pursuant to the Offer to
the Depositary within three business days after the date such Rights
Certificates are distributed. If the Rights Condition is not satisfied and the
Distribution Date occurs prior to the Expiration Date, the Purchaser reserves
the right to require that the Depositary receive such Rights Certificates or a
Book-Entry Confirmation with respect to such Rights prior to accepting Shares
for payment. In that event, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of, or Book-Entry Confirmation with respect to, among other things, Rights
Certificates, if Rights Certificates have been distributed to holders of Shares.
See Section 1.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES OR RIGHTS CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). 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.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts 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 such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a
13
<PAGE>
facsimile thereof), properly completed and duly executed, together 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 guaranteed delivery procedures described below must
be complied with.
If the Distribution Date occurs, to the extent that the Rights become
eligible for book-entry transfer under procedures established by a particular
Book-Entry Transfer Facility, the Depositary will make a request to establish an
account with respect to the Rights at such Book-Entry Transfer Facility as soon
as practicable. If book-entry delivery of Rights is available, the foregoing
book-entry transfer procedure will also apply to Rights. However, no assurance
can be given that book-entry delivery of Rights will be available. If book-entry
delivery is not available and if separate Rights Certificates have been issued,
a tendering shareholder is not relieved of delivery requirements hereunder and
thus will be required to tender Rights by means of actual physical delivery of
Rights Certificates to the Depositary or pursuant to the guaranteed delivery
procedures set forth below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH 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 the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each of the
foregoing being referred to as an "Eligible Institution"), except in cases where
Shares or Rights are tendered (i) by a registered holder of Shares and Rights
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.
If the Share Certificates or Rights Certificates are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made, or Share Certificates or Rights Certificates not accepted for
payment or not tendered are to be returned, to a person other than the
registered holder, the Share Certificates or Rights Certificates, as the case
may be, must be endorsed or accompanied by appropriate stock powers, in either
case, signed exactly as the name of the registered holder appears on such
certificates, with the signatures on such certificates or stock powers
guaranteed as aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates and Rights Certificates are forwarded separately to
the Depositary, a properly completed and duly executed Letter of Transmittal (or
a facsimile thereof) must accompany each such delivery.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares and Rights
pursuant to the Offer and such shareholder's Share Certificates or Rights
Certificates are not immediately available (including because Rights
Certificates have not yet been distributed by the Company), or such shareholder
cannot deliver the Share Certificates or Rights Certificates and all other
required documents to reach the Depositary on or prior to the Expiration Date,
or such shareholder cannot complete the procedure for delivery by book-entry
transfer on a timely basis, such Shares and Rights may nevertheless be tendered,
provided that all of the following conditions are satisfied:
(i) such tender is 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 is
received by the Depositary as provided below on or prior to the Expiration
Date; and
14
<PAGE>
(iii) the Share Certificates or Rights Certificates, as the case may be
(or a Book-Entry Confirmation), representing all tendered Shares or Rights,
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
transfer, an Agent's Message) and any other documents required by the Letter
of Transmittal are received by the Depositary within (x) in the case of
Shares, three trading days after the date of execution of such Notice of
Guaranteed Delivery or (y) in the case of Rights, a period ending on the
later of (1) three trading days after the date of execution of such Notice
of Guaranteed Delivery and (2) three business days after the date the Rights
Certificates are distributed to shareholders of the Company. A "trading day"
is any day on which the Nasdaq National Market operated by the National
Association of Securities Dealers, Inc. (the "NASD") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
shareholder owns the Shares and, if applicable, Rights tendered within the
meaning of, and that the tender of the Shares and, if applicable, Rights
effected thereby complies with, Rule 14e-4 under the Exchange Act, each in the
form set forth in such 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 Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, and if the Distribution Date has
occurred, Rights Certificates for, or a Book-Entry Confirmation if available
with respect to, the associated Rights (unless the Purchaser elects, in its sole
discretion, to make payment for such Shares pending receipt of the Rights
Certificates for, or a Book-Entry Confirmation with respect to, such Rights), a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), together 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. Accordingly, payment might not be made to all
tendering shareholders at the same time and will depend upon when Share
Certificates (or Rights Certificates) or Book-Entry Confirmations of such Shares
(or Rights, if available) are received into the Depositary's account at a
Book-Entry Transfer Facility. UNDER NO CIRCUMSTANCE WILL INTEREST ON THE
PURCHASE PRICE FOR SHARES BE PAID.
If the Rights Condition is satisfied, the guaranteed delivery procedure with
respect to Rights Certificates and the requirement for the tender of Rights will
no longer apply.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
shareholder irrevocably appoints designees of the Purchaser and each of them as
such shareholder'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 shareholder's rights with respect to the Shares and Rights
tendered by such shareholder and accepted for payment by the Purchaser (and with
respect to any and all other Shares or Rights or other securities issued or
issuable in respect of such Shares or Rights on or after the date hereof). All
such powers of attorney and proxies shall be considered irrevocable and coupled
with an interest in the tendered Shares and Rights. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts such Shares
and Rights for payment as provided herein. Upon such acceptance for payment, all
prior powers of attorney and proxies given by such shareholder with respect to
such Shares and Rights (and such other shares and securities) will be revoked
without further action, and no subsequent powers of attorney and proxies may be
given nor any subsequent written consents executed (and, if given or executed,
will not be deemed effective). The designees of the Purchaser will, with respect
to the Shares and Rights (and such other shares and securities) for which such
appointment is effective, be empowered to exercise all voting and other rights
of such shareholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's shareholders 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
and Rights to be deemed validly
15
<PAGE>
tendered, immediately upon the Purchaser's payment for such Shares and Rights
the Purchaser must be able to exercise full voting rights with respect to such
Shares, Rights and other securities, including voting at any meeting of
shareholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares and Rights 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 of the conditions of the Offer or any defect or irregularity in any
tender of Shares and Rights of any particular shareholder, whether or not
similar defects or irregularities are waived in the case of other shareholders.
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, the Parent,
any of their affiliates or assigns, the Dealer Manager, 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.
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 SHAREHOLDER SURRENDERING
SHARES IN THE OFFER MUST, UNLESS AN EXEMPTION APPLIES, PROVIDE THE PAYOR OF SUCH
CASH WITH SUCH SHAREHOLDER'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 SUCH SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING. IF A
SHAREHOLDER DOES NOT PROVIDE ITS CORRECT TIN OR FAILS TO PROVIDE THE
CERTIFICATIONS DESCRIBED ABOVE, THE INTERNAL REVENUE SERVICE ("IRS") MAY IMPOSE
A PENALTY ON SUCH SHAREHOLDER AND PAYMENT OF CASH TO SUCH SHAREHOLDER PURSUANT
TO THE OFFER MAY BE SUBJECT TO BACKUP WITHHOLDING OF 31%. ALL SHAREHOLDERS
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). CERTAIN SHAREHOLDERS (INCLUDING AMONG OTHERS ALL CORPORATIONS AND
CERTAIN FOREIGN INDIVIDUALS AND ENTITIES) ARE NOT SUBJECT TO BACKUP WITHHOLDING.
NONCORPORATE FOREIGN SHAREHOLDERS 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 11 OF THE
LETTER OF TRANSMITTAL.
Backup withholding is not an additional tax. Rather, the amount of the
backup withholding can be credited against the Federal income tax liability of
the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the shareholder upon filing a Federal income
tax return.
OTHER REQUIREMENTS. The Purchaser's acceptance for payment of Shares and,
if applicable, Rights tendered pursuant to any of the procedures described above
will constitute a binding agreement between the tendering shareholder and the
Purchaser upon the terms and subject to the conditions of the Offer, including
the tendering shareholder's representation and warranty that the shareholder is
the holder of the Shares within the meaning of, and that the tender of the
Shares and Rights complies with, Rule 14e-4 under the Exchange Act.
4. WITHDRAWAL RIGHTS. Tenders of Shares and Rights made pursuant to the
Offer are irrevocable, except that Shares and Rights 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 March 28, 1997 (or such later date as
may apply in case the Offer is extended). If the Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares and
16
<PAGE>
Rights or is unable to purchase Shares and Rights validly tendered pursuant to
the Offer for any reason, then without prejudice to the Purchaser's rights under
the Offer, the Depositary may nevertheless, on behalf of the Purchaser, retain
tendered Shares and Rights and such Shares and Rights may not be withdrawn
except to the extent that tendering shareholders are entitled to withdrawal
rights as described in this Section 4. 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, telex 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
or Rights to be withdrawn, the number of Shares or Rights to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares or Rights. If Share Certificates or Rights Certificates 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 signatures on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares or Rights have been tendered for the account of any Eligible Institution.
If Shares or Rights 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 or Rights, in which case a notice of
withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph. A withdrawal of
Shares or Rights shall also constitute a withdrawal of the associated Rights or
Shares, as applicable.
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, the Parent, any of their affiliates or assigns, the Dealer Manager,
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 and Rights may not be rescinded. Any Shares or Rights
properly withdrawn will thereafter be deemed not to have been validly tendered
for purposes of the Offer. However, withdrawn Shares or Rights may be
re-tendered at any time prior to the Expiration Date by again following one of
the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The summary of tax
consequences set forth below is for general information only and is based on the
law as currently in effect. The tax treatment of each shareholder will depend in
part upon such shareholder'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, shareholders 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
SHAREHOLDERS 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.
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, for Federal income tax
purposes, a tendering shareholder will recognize gain or loss in an amount equal
to the difference between the cash received by the shareholder pursuant to the
Offer or the Merger and the shareholder's adjusted tax basis in the Shares (and
the associated Rights) tendered by the shareholder and purchased pursuant to the
Offer or converted in the Merger, as the case may be. Gain or loss will be
calculated
17
<PAGE>
separately for each block of Shares tendered and purchased pursuant to the Offer
or converted in the Merger, as the case may be.
If Shares are held by a shareholder as capital assets, gain or loss
recognized by the shareholder will be capital gain or loss, which will be
long-term capital gain or loss if the shareholder's holding period for the
Shares exceeds one year. There are limitations on the deductibility of capital
losses. See Section 3 ("Procedure for Tendering Shares and Rights--Backup
Federal Income Tax Withholding and Substitute Form W-9").
6. PRICE RANGE OF SHARES; DIVIDENDS. According to the 1995 10-K, the
Shares are traded in the over-the-counter market and are quoted principally on
the Nasdaq National Market. The following table sets forth, for the quarters
indicated, the high and low sales prices per Share on the Nasdaq National Market
as reported in the 1995 10-K with respect to periods occurring in 1995 and as
reported by the Dow Jones News Service thereafter. According to the 1995 10-K
and publicly available sources, the Company did not pay any cash dividends
during such periods.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
Year Ended December 31, 1995:
First Quarter.............................................................................. $ 12.63 $ 8.63
Second Quarter............................................................................. 12.13 9.88
Third Quarter.............................................................................. 15.88 10.25
Fourth Quarter............................................................................. 13.75 9.63
Year Ended December 31, 1996:
First Quarter.............................................................................. 13.50 8.50
Second Quarter............................................................................. 14.88 9.88
Third Quarter.............................................................................. 13.25 8.13
Fourth Quarter............................................................................. 10.00 7.63
Year Ended December 31, 1997:
First Quarter (through January 24, 1997)................................................... 14.00 9.06
</TABLE>
The Offer represents more than a 45% premium over the $8.88 closing sale
price per Share reported on the Nasdaq National Market on December 31, 1996, the
last full trading day before the Parent delivered its January 2, 1997 letter to
the Company proposing to acquire the Company at a price of $12.50 per Share in
cash. On January 9, 1997, the day prior to the Parent's issuance of the press
release announcing the transmission of the Parent's January 10, 1997 public
letter offering to acquire the Company in a transaction in which shareholders
would receive $12.50 per Share in cash, the closing sale price per Share
reported on the Nasdaq National Market was $9.25. On January 24, 1997, the last
full trading day prior to announcement of the Offer and the day on which the
Company announced rejection of the Parent's prior offer, the closing sale price
per Share reported on the Nasdaq National Market was $14.00. SHAREHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Rights are currently attached to the outstanding Shares and may not be
traded separately. As a result of the commencement of the Offer, the
Distribution Date may be as early as February 10, 1997, after which the Rights
could begin trading separately from the Shares. See Section 11. IN SUCH EVENT,
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION, IF ANY, FOR THE
RIGHTS. Unless and until the Purchaser declares that the Rights Condition is
satisfied, holders of Shares will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share. Accordingly,
shareholders who sell their Rights separately from their Shares and do not
otherwise acquire Rights may not be able to satisfy the requirements of the
Offer for a valid tender of Shares.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or based upon
18
<PAGE>
publicly available documents and records on file with the Commission and other
public sources. The summary information concerning the Company in this Section 7
and elsewhere in this Offer to Purchase is derived from the 1995 10-K, the
September 10-Q and other publicly available information. The summary information
set forth below is qualified in its entirety by reference to such reports (which
may be obtained and inspected as described below) and should be considered in
conjunction with the more comprehensive financial and other information in such
reports and other publicly available reports and documents filed by the Company
with the Commission and other publicly available information. Although the
Purchaser and the Parent do not have any knowledge that would indicate that any
statements contained herein based upon such reports are untrue, neither the
Purchaser nor the Parent assumes any responsibility for the accuracy or
completeness of the information contained therein, or for any failure by the
Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser and the Parent.
GENERAL. The Company is a Georgia corporation with its principal executive
offices located at 1255 Kennestone Circle, Marietta, Georgia 30066. The
telephone number of the Company at such offices is (770) 499-1212.
The Company designs, manufactures, and markets technologically advanced
medical devices for use in the home and in specialized clinical settings, such
as subacute facilities, sleep laboratories, clinics and physician offices. The
Company's principal products include diagnostic and therapeutic devices for
evaluation and treatment of sleep disorders, such as obstructive sleep apnea;
peak flow meters and drug delivery devices for the treatment of asthma; oxygen
concentrators, medication nebulizers, and pressure support non-invasive
ventilators for the treatment of respiratory disorders; and monitors for infants
at risk for Sudden Infant Death Syndrome.
FINANCIAL INFORMATION. Set forth below are certain selected consolidated
financial data for the Company's three fiscal years ending December 31, 1995
which were derived from the 1995 10-K, and for the nine-month periods ending
September 30, 1996 and 1995, which were derived from the Company's Quarterly
Reports on Form 10-Q for the quarters ended September 30, 1996 and September 30,
1995. More comprehensive financial information is included in such documents
(including management's discussion and analysis of financial condition and
results of operations) and other documents filed by the Company with the
Commission, and the following financial data is qualified in its entirety by
reference to such other documents including the financial information and
related notes contained therein. Such other documents may be examined and copies
thereof may be obtained from the offices of the Commission and the Nasdaq Stock
Market in the manner set forth below.
19
<PAGE>
HEALTHDYNE TECHNOLOGIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------------- ---------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1995 1994 1993
--------- --------- ----------- --------- ---------
INCOME STATEMENT DATA
Revenues..................................................... $ 85,266 $ 81,529 $ 110,494 $ 89,012 $ 68,598
Operating Earnings........................................... 8,831 8,721 12,209 8,712 9,202
Earnings before Income Taxes................................. 7,252 7,450 10,389 8,488 8,577
Income Tax Expense........................................... (2,894) (2,943) (4,102) (3,383) (3,362)
--------- --------- ----------- --------- ---------
Net Earnings................................................. $ 4,358 $ 4,507 $ 6,287 $ 5,105 $ 5,215
--------- --------- ----------- --------- ---------
--------- --------- ----------- --------- ---------
Net Earnings per Common Share................................ $ 0.34 $ 0.36 $ 0.50 $ 0.41 $ 0.47
Weighted Average Number of Common Shares Outstanding for EPS
Calculation................................................ 12,963 12,633 12,694 12,401 11,184
<CAPTION>
AT SEPTEMBER 30, AT DECEMBER 31,
-------------------- ---------------------------------
1996 1995 1995 1994 1993
--------- --------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total Assets................................................. $ 91,552 $ 78,773 $ 82,876 $ 69,412 $ 44,629
Total Liabilities............................................ 48,988 44,350 45,975 36,377 14,642
Total Shareholders' Equity................................... 42,564 34,423 36,901 29,535 24,487
</TABLE>
The Shares are registered under the Exchange Act. Accordingly, the Company
is subject to the informational filing requirements of the Exchange Act and in
accordance 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, 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 shareholders and filed
with the Commission. Such 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 1401 Brickell Avenue, Suite 200,
Miami, Florida 33131, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York, New
York 10048. Such reports, proxy statements and other information may also be
obtained at the Web site that the Commission maintains at http://www.sec.gov.
Copies of this material should be obtainable, 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 the library of the Nasdaq Stock Market, 1735 K
Street, NW, Washington, D.C. 20006. Except as otherwise noted in this Offer to
Purchase, all of the information with respect to the Company set forth in this
Offer to Purchase has been derived from publicly available information.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND THE PARENT. The
Purchaser, a Delaware corporation and a wholly owned subsidiary of the Parent,
was organized in connection with the proposed acquisition of the Company and has
not carried on any unrelated activities to date other than those incident to its
formation.
The Parent is the leading home medical equipment manufacturer in the world
based upon its distribution channels, the breadth of its product line and sales.
The Parent designs, manufactures and
20
<PAGE>
distributes an extensive line of medical equipment for the home health care and
extended care markets. The Parent continuously revises and expands its product
lines to meet changing market demands. Its products are sold principally to over
10,000 home health care and medical equipment provider locations throughout the
world. Products are sold through its world-wide distribution network by its
sales force, telemarketing employees and various organizations of independent
manufacturer's representatives. The Parent also uses its extensive dealer
network to distribute medical equipment and related supplies manufactured by
others.
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 the Parent and certain other information are set
forth in Schedule I hereto.
Set forth below are certain selected consolidated financial data relating to
the Parent and its subsidiaries for the Parent's three fiscal years ending
December 31, 1995 which were derived from the Parent's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, and for the nine-month periods
ending September 30, 1996 and 1995, which were derived from the Parent's
Quarterly Reports on Form 10-Q for the quarters ended September 30, 1996 and
September 30, 1995. More comprehensive financial information is included in such
documents (including management's discussion and analysis of financial condition
and results of operations) and other documents filed by the Parent with the
Commission, and the following financial data is qualified in its entirety by
reference to such other documents including the financial information and
related notes contained therein. Such other documents may be examined and copies
thereof may be obtained from the offices of the Commission and the Nasdaq Stock
Market in the same manner as set forth with respect to information about the
Company in Section 7.
INVACARE CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1995 1994 1993
----------- ----------- ----------- ----------- -----------
INCOME STATEMENT DATA
Net Sales............................................... $ 451,776 $ 360,577 $ 504,032 $ 411,123 $ 365,457
Income from Operations.................................. 44,943 36,875 54,144 43,736 36,870
Earnings Before Income Taxes............................ 43,281 34,787 51,845 41,877 33,510
Income Taxes............................................ (16,875) (13,210) (19,680) (15,500) (11,400)
----------- ----------- ----------- ----------- -----------
Net Earnings............................................ $ 26,406 $ 21,577 $ 32,165 $ 26,377 $ 22,110
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net Earnings per Share.................................. $ 0.87 $ 0.72 $ 1.07 $ 0.89 $ 0.75
Weighted Average Number of Shares Outstanding for EPS
Calculation........................................... 30,387 30,012 30,077 29,696 29,475
<CAPTION>
AT SEPTEMBER 30, AT DECEMBER 31,
------------------------ -------------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working Capital......................................... $ 155,806 $ 112,690 $ 119,749 $ 112,768 $ 95,278
Total Assets............................................ 488,082 376,764 408,750 338,109 286,367
Total Liabilities....................................... 260,681 188,210 207,431 174,102 151,405
Total Shareowners' Equity............................... 227,401 188,554 201,319 164,007 134,962
</TABLE>
21
<PAGE>
The Parent currently beneficially owns an aggregate of 600,000 Shares
(including 100 Shares owned by the Purchaser), representing approximately 4.8%
of the 12,625,039 Shares reported by the Company as outstanding at November 1,
1996, 83,000 of which Shares were acquired by the Parent during the past 60 days
in the transactions described in Schedule II.
Except as described in this Offer to Purchase and in Schedules I and II,
none of the Purchaser, the Parent nor, to the best knowledge of the Purchaser
and the Parent, any of the persons listed on Schedule I hereto or any associate
or majority-owned subsidiary of the Purchaser, the Parent or any of the persons
so listed, beneficially owns or has a right to acquire directly or indirectly
any Shares, and none of the Purchaser, the Parent nor, to the best knowledge of
the Purchaser and the Parent, 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 60
days.
Except as set forth in this Offer to Purchase, neither the Purchaser nor the
Parent or, to the best knowledge of the Purchaser and the Parent, any of the
persons listed on Schedule I hereto, 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, neither the Purchaser
nor the Parent or, to the best knowledge of the Purchaser and the Parent, any of
the persons listed on Schedule I hereto, has had since January 1, 1994 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 the Parent, the Purchaser
or, to the best knowledge of the Purchaser and the Parent, any of the persons
listed in Schedule I hereto, 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.
9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all of the outstanding Shares (on a fully-diluted basis)
and pay related fees and expenses is expected to be approximately $187 million.
The Purchaser will obtain such funds through capital contributions by the Parent
and/or various wholly-owned direct or indirect subsidiaries of the Parent. The
Parent has in place committed bank facilities sufficient to provide such funds.
However, the Offer is not conditioned on the receipt of financing.
The Parent has accepted a commitment letter (the "Commitment Letter") from
NBD Bank ("NBD"), as agent, and its affiliate First Chicago Capital Markets,
Inc. ("First Chicago"), as arranger, which provides that NBD will provide to the
Parent, on specified terms and subject to specified conditions, up to $200
million, a portion of which may be provided by a syndicate of lenders selected
by First Chicago in consultation with the Parent, and will act as administrative
agent for the Facility (as defined below).
The Commitment Letter contemplates a two-year revolving credit facility in
the amount of $200 million (the "Facility"). The proceeds of the Facility may be
used by the Parent or a wholly owned subsidiary of the Parent to finance the
acquisition of the Company, provided that a certain amount of proceeds
acceptable to NBD may be used for other acquisitions and working capital
purposes. The Facility will be guaranteed by the Parent's significant
subsidiaries including, after the Merger, the Company.
Loans under the Facility ("Loans") will bear interest, at the Parent's
option, at NBD's Prime Rate, at specified spreads above LIBOR (adjusted for
reserves) or at negotiated fixed rates to the extent available and mutually
agreed. Loans bearing interest at LIBOR will be for interest periods of 1, 2, 3
and 6 month
22
<PAGE>
periods. All interest will be paid at the end of the applicable interest period
or quarterly, whichever is earlier.
NBD's commitment to provide the Facility is subject to customary conditions,
including (i) the preparation, execution and delivery of mutually acceptable
definitive loan documentation, (ii) consummation of the Offer upon terms and
conditions reasonably satisfactory to NBD, (iii) NBD and First Chicago being
satisfied with the structure of the acquisition of the Company and the legal and
tax aspects thereof and (iv) the amendment of the Parent's other credit
facilities with NBD to conform generally to the terms of the Facility. The
commitment may be terminated in the event of certain customary events,
including: (i) if information provided to NBD or First Chicago by or on behalf
of the Parent proves to be inaccurate or incomplete in any respect material to
the Parent or the Company or (ii) if NBD or First Chicago reasonably determines
that there has been any material adverse change in (a) the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Parent or the Company since December 31, 1995 or (b) primary or secondary
loan syndication markets or capital markets generally.
The definitive documentation relating to the Facility also will contain
representations, warranties, covenants and events of default and conditions
customary for transactions of this type. In addition, the Facility will contain
financial covenants with respect to an interest coverage ratio, a
debt-to-capitalization ratio and net worth, in each case of the Parent on a
consolidated basis. The Parent will also agree to cause the Merger to be
consummated as soon as reasonably possible following the consummation of the
Offer.
The Parent has agreed to pay specified fees to NBD, First Chicago and the
lenders in connection with the Facility. The Parent also has agreed to pay
certain expenses of, and provide customary indemnities to, NBD, First Chicago
and (under certain circumstances) the other lenders under the Facility.
The foregoing summary of the source and amount of funds is qualified in its
entirety by reference to the text of the Commitment Letter, a copy of which is
filed as an exhibit to the Tender Offer Statement on Schedule 14D-1 of the
Purchaser and the Parent filed with the Commission in connection with the Offer
(the "Schedule 14D-1") and is incorporated herein by reference and may be
inspected in the same manner as set forth in Section 7. When definitive
agreements relating to the Facility are executed, copies will be filed as
exhibits to amendments to the Schedule 14D-1.
The Parent intends to repay any loans under the Facility with internally
generated funds, including those of the Company if the Merger is consummated,
and from the proceeds of future borrowings or other debt or equity financings.
At this time, no specific plans or arrangements have been made for any such
future borrowings or other financings. Such plans or arrangements, if any, when
made will be based on the Parent'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. However, after consummation of the Merger, the Parent
intends to explore various possible plans for long-term debt financing that
might be considered to refinance all or part of the Facility.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
In the late summer of 1996, Thomas R. Miklich, Chief Financial Officer and
General Counsel of the Parent, contacted Robert Johnson, a Senior Vice President
of the Company, and indicated that the Parent would be interested in discussing
a potential combination of the two entities. Mr. Johnson responded shortly
thereafter that the Board of Directors of the Company had determined that the
Company was not for sale. A brief time later, A. Malachi Mixon, III, Chairman
and Chief Executive Officer of the Parent, called Craig B. Reynolds, President
and Chief Executive Officer of the Company, with the intent of inquiring again
about a potential combination. His call was not returned by Mr. Reynolds. Mr.
Mixon then suggested to an acquaintance who had a business relationship with the
former parent of the
23
<PAGE>
Company that a combination of the Parent and the Company would be beneficial to
the shareholders of both, and requested that the acquaintance let Parker H.
Petit, Chairman of the Board of Directors of the Company, know of the Parent's
interest. Within a few days, Mr. Mixon received a terse voice mail message from
Mr. Petit in which Mr. Petit stated, and then repeated, that the Company was not
for sale. Less than a week after receiving Mr. Petit's voice mail message, Mr.
Mixon encountered Mr. Reynolds at a trade show and suggested that the Parent and
the Company meet to discuss the potential for a transaction as he felt it would
be beneficial for shareholders of both companies. Mr. Reynolds responded that he
was not in a position to schedule such a meeting because the Board of Directors
of the Company had previously decided that the Company was not for sale.
On January 2, 1997, Mr. Mixon called Mr. Reynolds and was told that he was
in a meeting and was unable to take Mr. Mixon's call. Mr. Mixon then indicated
that he was faxing a confidential letter and requested that Mr. Reynolds'
secretary hand the letter directly to Mr. Reynolds. He then asked that Mr.
Reynolds call him once he had the opportunity to review the letter. Mr. Reynolds
did not and has not to date called Mr. Mixon. The text of the January 2, 1997
letter is as follows:
January 2, 1997
Mr. Craig B. Reynolds
President & CEO
Healthdyne Technologies, Inc.
1255 Kennestone Circle
Marietta, GA 30066
Dear Craig:
I am writing this letter to follow up on our communication several
weeks ago, which I am disappointed did not result in more specific
discussions at that time. We believe that there are clear and compelling
advantages to both Invacare Corporation and Healthdyne Technologies from
the combination of our two companies and that such a transaction would
create great value for each of our companies and our respective
stockholders. We therefore propose that Invacare Corporation acquire
Healthdyne Technologies through a negotiated merger transaction in which
Healthdyne stockholders would receive $12.50 in cash for each share of
outstanding common stock. This price would represent a premium of more
than 40% over your closing stock price on December 31, 1996.
As I am sure you are aware, Invacare is an important participant in
the medical device market, with annual sales in excess of $600 million.
We have, as you do, an enviable reputation for the quality of our
products and service. We are extremely impressed with the businesses you
and your management team have developed and the manner in which they
complement our businesses. We believe the complementary aspects of our
two companies' products, customers and distribution capabilities would
enable the combined entity to be an even more effective competitor.
We are prepared to meet with you or your representatives at your
earliest convenience to discuss our proposal and begin negotiations of
definitive documentation, which we are confident could be quickly and
successfully concluded. We have committed bank facilities in place
sufficient to fund the proposed transaction.
Of course, our proposal contemplates, among other things, the
negotiation and execution of mutually acceptable definitive merger and
other agreements containing provisions customary for transactions of
this type, the receipt of any required regulatory approvals and
third-party consents, the operation of Healthdyne in the ordinary
course, and the taking of all necessary actions to eliminate the
applicability of, or to satisfy, any anti-takeover or other defensive
24
<PAGE>
provisions contained in the applicable corporate statutes or
Healthdyne's charter and by-laws (including Healthdyne's poison pill).
We do not expect anti-trust concerns to provide a significant hurdle to
the closing of the transaction.
We hope that you and your Board of Directors will view this proposal
as we do--an excellent opportunity for the stockholders of Healthdyne to
realize full value for their shares to an extent not likely to be
available to them in the marketplace. In the context of a negotiated,
friendly transaction, we are prepared to discuss all aspects of our
proposal fully with you, including structure, economics and your views
as to the proper roles for our respective managers and employees in the
combined company. We wish, and are prepared, to enter into immediate
discussions with you and your directors, management and advisors to
answer any questions about our proposal and to proceed with negotiations
leading to the execution of a definitive merger agreement.
We hope that you will agree that best way to proceed at this point
would be to begin confidential, non-public discussions to see if we can
negotiate a transaction that can be presented to your stockholders as
the joint effort of Invacare's and Healthdyne's Board of Directors and
management. At this point, therefore, we hope this letter and its
contents will remain private between us.
We would appreciate it if you and your Board of Directors will give
this proposal prompt and serious consideration. We would request a
response as soon as possible, and preferably no later than January 10,
1997.
We are enclosing copies of this letter, as well as information on
Invacare, for distribution to Mr. Petit and the other members of the
Board of Directors so they can familiarize themselves with our proposal
and our company.
I hope you and yours had a happy and healthy holiday season and wish
you all the best for the New Year.
Sincerely,
A. Malachi Mixon, III
Chairman and CEO
On January 8, 1997, Mr. Reynolds sent the following letter to Mr.
Mixon:
January 8, 1997
A. Malachi Mixon, III
Chairman & CEO
Invacare Corporation
899 Cleveland Street
P.O. Box 4028
Elyria, OH 44036-2125
Dear Mr. Mixon:
Thank you for your letter dated January 2, 1997. I am
forwarding your letter together with enclosures to our Board of
Directors for review. The Board of Directors
25
<PAGE>
some time ago established procedures for reviewing inquiries of this
sort. The Board will review your letter at its next regularly-scheduled
Board Meeting in February, and you can expect the Company's response
thereafter.
Thank you for the kind statements in your letter concerning the
Company's reputation for the quality of our products and service.
Sincerely,
Craig B. Reynolds
President and Chief Executive Officer
On January 10, 1997, the Parent issued the following press release and sent
the letter reprinted therein to the Company:
Elyria, Ohio--(January 10, 1997)--Invacare Corporation announced
today that it has offered to acquire Healthdyne Technologies, Inc. in a
negotiated merger transaction for $12.50 per share in cash. The offer
was originally made in a private letter to Healthdyne delivered on
January 2, 1997. After Healthdyne responded in writing that its Board of
Directors would not consider the offer until its February Board meeting,
Invacare determined to publicly confirm its offer in a letter to
Healthdyne dated January 10, 1997. The offered price represents more
than a 40% premium over Healthdyne's closing stock price on December 31,
1996, the last trading day prior to the date the original proposal was
made. Based on the prospects and synergies that can be identified from
publicly available information, Invacare believes that the acquisition
will be accretive to its earnings per share within 12 to 18 months.
The full text of Invacare's January 10, 1997 letter to Mr. Craig B.
Reynolds, President and CEO of Healthdyne Technologies, Inc., is as
follows:
Thank you for your letter of January 8, 1997 noting that your Board
of Directors will consider our January 2, 1997 acquisition proposal to
acquire Healthdyne Technologies, Inc. at $12.50 per share in cash at its
next regularly scheduled meeting in February. We are pleased that
Healthdyne's Board of Directors plans to consider our proposal, but we
are disappointed that Healthdyne has chosen to defer its consideration
for such a long time without seeking any discussions with us. We had
expected that an acquisition proposal offering a 40% premium over your
year-end stock price would have encouraged a prompt and constructive
dialogue. We continue to believe that there are clear and compelling
advantages to both Invacare Corporation and Healthdyne from the
combination of our two companies and that such a transaction would
create great value for each of our companies and our respective
stockholders. As a result, we feel obligated and are fully committed to
pursue this matter more expeditiously.
We hereby reiterate our offer to acquire Healthdyne Technologies,
Inc. through a negotiated merger transaction in which Healthdyne
stockholders would receive $12.50 in cash for each share of outstanding
common stock.
Because of the critical importance of our offer to the stockholders
of both Healthdyne and Invacare, and because of the length of time until
your Board of Directors may consider our offer, particularly in light of
the recent unusual trading volumes in Healthdyne's stock, we feel
compelled to release this letter publicly. We believe that the
stockholders of Healthdyne will enthusiastically support our offer, and
that your Board of Directors should have the benefit of the reaction of
Healthdyne's stockholders in evaluating our offer. We continue to be
interested in meeting with you to give you the opportunity to discuss
our offer and to begin negotiations of definitive documentation, which
we are confident could be quickly and successfully concluded.
26
<PAGE>
We have committed bank facilities in place sufficient to fund the
proposed transaction. We are the owners of approximately 4.9% of
Healthdyne's outstanding common stock.
As we have said before, Invacare is an important participant in the
medical device market with annual sales in excess of $600 million. We
have, as you do, an enviable reputation for the quality of our products
and services. We are extremely impressed with the businesses you and
your management team have developed and the manner in which they
complement our businesses. We believe the complementary aspects of our
two companies' products, customers and distribution capabilities would
enable the combined entity to be an even more effective competitor.
Of course, this offer is subject to, among other things, the
negotiation and execution of mutually acceptable definitive merger and
other agreements containing provisions customary for transactions of
this type, the receipt of any required regulatory approvals and
third-party consents, the operation of Healthdyne in the ordinary
course, the taking of all necessary actions to eliminate the
applicability of, or to satisfy, any anti-takeover or other defensive
provisions contained in the applicable corporate statutes or
Healthdyne's charter and by-laws (including Healthdyne's poison pill)
and the absence of any actions by Healthdyne's Board which would seek to
frustrate our offer. We do not expect anti-trust concerns to provide a
significant hurdle to the closing of the transaction.
We note from your public filings that Healthdyne has in place a
number of provisions that may be fairly characterized as defensive in
nature. We would request that you satisfy or eliminate their
applicability to our offer and that you not implement or take any action
to trigger any additional defensive measures that could adversely affect
the ability of your stockholders to ultimately express their views on,
or receive the benefits of, our offer, or enter into any significant
transactions or take any other actions that could impede or necessitate
an adjustment to the terms of our offer.
We believe that you and your Board of Directors should carefully and
promptly consider this offer and view it as we do -- an excellent
opportunity for the stockholders of Healthdyne to realize full value for
their shares to an extent not likely to be available to them in the
marketplace absent our offer. We are certain that, upon reflection, you
and your fellow members of the Board of Directors will recognize the
extraordinary opportunity that our offer presents Healthdyne and its
stockholders. In the context of a negotiated, friendly transaction, we
would be prepared to discuss all aspects of our offer fully with you.
We hope that you and your Board of Directors will give our offer
prompt and serious consideration so that we may move forward, in our
preferred course, to a negotiated transaction which can be presented to
your stockholders as the joint effort of Invacare's and Healthdyne's
Board of Directors and management. We would request that you accelerate
your Board of Directors' review of our offer and confirm to us as soon
as possible that your Board of Directors will consider our offer
shortly.
Following the Parent's January 10 press release, the Company issued a press
release on January 10, 1997 in which it stated that its Board of Directors would
consider the Parent's proposal in due course.
On Friday, January 24, 1997, the Company issued a press release stating that
its Board of Directors had "unanimously rejected" the Parent's January 10 offer,
adding that "[t]he Board has not been and is not seeking to sell the Company."
The Company also stated that it had received the opinion of its investment
bankers that the $12.50 per Share offer was "grossly inadequate", and indicated
that the Company planned to release in early February information concerning
various developments and potential developments which Mr. Reynolds asserted had
not been "fully appreciated by the investment
27
<PAGE>
community." Later that day, the Company filed with the Commission a Current
Report on Form 8-K which disclosed that on January 23, 1997, after the Parent
had made public its interest in an acquisition of the Company, the Company's
Board of Directors had amended the By-Laws to (i) elect that the Company be
governed by the Georgia Fair Price Statute and (ii) remove from the By- Laws a
provision requiring the annual meeting of shareholders to be held on the fourth
Tuesday in April unless a different date was set by the Board of Directors.
Neither action was disclosed in the Company's press release issued earlier that
day.
On the following Monday, January 27, 1997, the Parent and the Purchaser
commenced the Offer, delivered to the Company letters making the requests for
shareholder information described in Section 1, commenced the Defensive Tactics
Litigation and issued the following press release:
INVACARE CORPORATION LAUNCHES TENDER OFFER FOR HEALTHDYNE
TECHNOLOGIES, INC. AT INCREASED PRICE OF $13 PER SHARE
AND COMMENCES LITIGATION
Elyria, Ohio--(January 27, 1997)--Invacare Corporation announced
today that its wholly owned subsidiary I.H.H. Corp. has commenced an
all-cash tender offer for all outstanding shares of common stock of
Healthdyne Technologies, Inc. at $13 per share, to be followed by a
second-step merger in which holders of shares not validly tendered would
receive the same per share price as in the offer.
The tender offer price represents more than a 45% premium over
Healthdyne's closing stock price on December 31, 1996, the trading day
prior to Invacare's making its original acquisition proposal to
Healthdyne on January 2, 1997, and reflects a $.50 per share increase
over Invacare's previous offer to Healthdyne.
A. Malachi Mixon, III, Chairman and Chief Executive Officer of
Invacare, said: "We are surprised and disappointed that Healthdyne's
Board of Directors has rejected our offer without even calling us or
seeking any discussions with us whatsoever. We have difficulty
understanding how our original offer, which represented more than a 40%
premium over the prevailing market price, could have been viewed by
Healthdyne, its Board of Directors or its financial advisors as 'grossly
inadequate', especially since the Company's Chairman sold approximately
one-third of his shares at prices ranging from $13.00 to $14.25 as
recently as last May and June. While we, like Healthdyne's other
stockholders, would certainly be interested in seeing and understanding
the detailed information which the Company's management has claimed will
improve its prospects and has promised for release in early February, we
note that in recent periods the Company has disappointed its
stockholders by failing to meet analysts' published expectations.
However, because we remain fully committed to this acquisition on terms
that bring value to the stockholders of both companies, we are
increasing our offer price from $12.50 to $13 in the interests of
completing this transaction expeditiously.
"Although we would have preferred to have conducted discussions with
Healthdyne regarding our offer and continue to look forward to the
opportunity to do so, their rejection of our prior offer and continued
refusal to have any discussions or contacts with us force us to make our
offer directly to the stockholders in a manner which, under the tender
offer rules, will require Healthdyne's Board to provide a prompt and
more thorough response.
"We hope that when Healthdyne's Board considers our increased offer
it will view it as we do -- an excellent opportunity for the
stockholders of Healthdyne to realize full value for their shares to an
extent not otherwise likely to be available to them. We continue to be
interested in meeting with Healthdyne to discuss our offer in the hopes
of promptly negotiating a mutually agreeable transaction. In the context
of a negotiated transaction, we would consider discussing our offer
price if Healthdyne's management is able to substantiate significant
additional values
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to Invacare's satisfaction, and are prepared to discuss all other
aspects of our offer fully with Healthdyne, including structure, form of
consideration and the proper roles for our respective managers and
employees in the combined company."
Invacare also announced that it was commencing litigation against
Healthdyne and certain of its directors to declare various defensive
mechanisms, including Healthdyne's "poison pill" rights plan, illegal
and to require Healthdyne and its Board of Directors to take certain
actions to permit its stockholders to effectively consider the Invacare
offer. Thomas R. Miklich, Chief Financial Officer and General Counsel of
Invacare, said: "We regret the necessity of commencing litigation.
However, among other defensive tactics, Healthdyne has a 'poison pill'
containing certain unusual and draconian director-entrenching
provisions, commonly referred to as 'dead-hand pill' restrictions, which
purport, under certain circumstances, to prevent future directors from
redeeming or otherwise nullifying the pill in connection with a proposed
transaction which the future Board determines to be in the best
interests of the Company and its stockholders. We believe that such
restrictions are illegal and that Healthdyne has a duty to take actions
to permit its stockholders to effectively consider our offer free of
these and Healthdyne's other defensive provisions."
Invacare's tender offer is conditioned on, among other things, the
acquisition of at least 51% of Healthdyne's shares on a fully diluted
basis, the redemption or inapplicability of Healthdyne's "poison pill"
rights plan and the inapplicability, invalidation or satisfaction of the
Georgia anti-takeover statutes (parts of which Healthdyne's Board of
Directors has only recently opted into by adopting a by-law amendment
immediately prior to the public announcement of its rejection of
Invacare's offer). The offer is not contingent on the receipt of
financing. The full terms and conditions of the offer will be set forth
in tender offer materials being filed today with the SEC which will be
mailed promptly to Healthdyne stockholders. The offer and withdrawal
rights with respect thereto will expire at 12:00 midnight, New York City
time, on Monday, February 24, 1997, unless the offer is extended.
Invacare currently holds (including through I.H.H. Corp.) 600,000 shares
of Healthdyne common stock, representing approximately 4.8% of
Healthdyne's outstanding shares based on publicly available information.
Salomon Brothers Inc is acting as Dealer Manager for the offer, and
MacKenzie Partners, Inc. is acting as Information Agent.
11. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY. The purpose
of the Offer is to acquire control of, and the entire equity interest in, the
Company.
THE MERGER. The Purchaser intends to propose, and to seek to have the
Company consummate, the Merger as soon as practicable after consummation of the
Offer. However, if the Board of Directors of the Company opposes the Offer and
the Merger, certain terms of the Rights and certain provisions of the GBCC and
the By-Laws may affect the ability of the Purchaser to obtain control of the
Company and to effect the Merger. Accordingly, the timing and details of the
Merger will depend on a variety of factors and legal requirements, the actions
of the Board of Directors of the Company, the number of Shares acquired by the
Purchaser pursuant to the Offer and whether the Minimum Condition, the Rights
Condition, the Georgia Business Combination Statute Condition and the Georgia
Fair Price Statute Condition are satisfied.
BOARD APPROVAL. Except in the case of a short-form merger in accordance
with the GBCC described below, the GBCC requires that the Merger be approved by
the Company's Board of Directors. As described above, the Parent and the
Purchaser have previously requested and continue to request that the Company's
Board of Directors approve the Merger and believe that the Company's Board of
Directors is obligated by its fiduciary responsibilities to do so. The Parent
intends, if necessary to facilitate the Offer and the Merger, (i) to nominate
individuals for election as directors of the Company who, if elected, would be
committed to an acquisition of the Company in accordance with the terms of
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the Offer and the Merger (subject to any fiduciary duties such nominees would
have as directors) and (ii) to consider making other proposals at the Company's
upcoming annual meeting of shareholders, and to solicit proxies from
shareholders for the purpose of electing such director candidates and approving
any such other proposals. If elected, any director candidates nominated by
Parent would be committed to taking all such actions necessary or appropriate
(subject to such directors' fiduciary duties) to approve and effectuate the
consummation of the Offer and the Merger, including taking action to execute an
agreement and plan of merger and to satisfy the Rights Condition, the Georgia
Business Combination Statute Condition and the Georgia Fair Price Statute
Condition. As described under "The Rights" below, the Parent and the Purchaser
are commencing the Defensive Tactics Litigation seeking, among other things, to
declare illegal certain provisions of the Rights Agreement which would purport
to limit the ability of the Parent's nominees, if elected, to satisfy the Rights
Condition under certain circumstances.
If the Parent does not nominate director candidates for election at the
annual meeting, or if such candidates are not elected, and the conditions to the
Offer are not otherwise satisfied, the Parent will explore the other options
available to it, including taking action to call a special meeting of the
Company's shareholders or utilizing other available methods for the purpose of
removing members of the current Board of Directors of the Company and electing
director candidates nominated by the Parent or taking other actions to
facilitate the consummation of the Offer and the Merger. Under the By-Laws, the
Company is required to call a special meeting of the shareholders upon the
demand of the holders of sixty percent (60%) of the outstanding Shares.
There are currently seven members of the Company's Board of Directors. The
directors are all elected for a term of one year at each annual meeting of the
shareholders of the Company. The Company does not have a "staggered" board of
directors under which only a portion of the Board is elected each year, and
under the GBCC the Company cannot implement such a "staggered" board without an
amendment to its Amended and Restated Articles of Incorporation, as amended (the
"Charter"), or its By-Laws which is approved by the shareholders of the Company.
The GBCC and the By-Laws provide that any director, or the entire Board of
Directors, may be removed from office at any time by the affirmative majority
vote of the outstanding Shares entitled to vote for directors. The By-Laws
provide that the vacancy caused by any such removal may be filled by the
shareholders, or, if authorized by the shareholders, by the remaining directors.
Under the GBCC, amendment of the Charter generally requires a resolution of
the Board of Directors and the affirmative vote of a majority of the outstanding
Shares entitled to vote. The By-Laws generally may be amended by the
shareholders by a majority vote of the outstanding shares or, subject to the
GBCC and the Charter, by the Board of Directors.
If all the conditions to the Offer are satisfied even though the Company's
Board of Directors does not take the actions requested by the Purchaser to
approve the Offer and the Merger, and if the Parent does not seek or is
unsuccessful in seeking election of a majority of the seven directors at the
upcoming annual meeting, then the Parent and the Purchaser intend to take such
action as may be necessary and lawful to secure control of the Board of
Directors of the Company. Such action may include calling a special meeting of
the shareholders of the Company, which under the By-Laws the Parent and the
Purchaser will have the power to effect without the action of any other
shareholder if the Parent and the Purchaser hold sixty percent (60%) or more of
the outstanding Shares following consummation of the Offer. In the event the
Parent obtains control of the Company's Board of Directors, the Parent would
expect to seek approval of the Merger as soon as practicable thereafter,
consistent with the fiduciary obligations of the Board.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS OR ANY ACTION IN LIEU THEREOF. ANY
SUCH SOLICITATION WHICH THE PURCHASER MAY MAKE WILL BE MADE ONLY
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PURSUANT TO SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF
SECTION 14(A) OF THE EXCHANGE ACT.
SHAREHOLDER APPROVAL. The GBCC requires that, unless otherwise provided by
the Company's Charter, the Merger be approved by the affirmative vote of the
holders of a majority of all votes entitled to be cast. The Minimum Condition
requires that the Purchaser be satisfied, in its sole discretion, that there
shall have been validly tendered and not properly withdrawn on or prior to the
Expiration Date a number of Shares which, when added to the Shares beneficially
owned by the Purchaser and its affiliates (including the Parent), constitutes at
least 51% of the voting power (determined on a fully diluted basis) on the date
of purchase of all securities entitled to vote generally in the election of
directors and in a merger. Upon consummation of the Offer and assuming the
Minimum Condition is satisfied, the Parent and the Purchaser will own sufficient
Shares to enable them to effect shareholder approval of the Merger with the
affirmative vote of the Shares owned by them (assuming that the Georgia Business
Combination Statute and the Georgia Fair Price Statute are satisfied).
THE OFFER IS CONDITIONED UPON THE MINIMUM CONDITION BEING SATISFIED.
The foregoing description of the Charter and the By-Laws is based upon and
qualified in its entirety by reference to the text of the Charter and By-Laws
filed by the Company as exhibits to documents filed with the Commission, which
may be obtained in the manner described in Section 7.
THE RIGHTS. The following discussion, including the summary of certain
aspects of the Rights, is based in part on information contained in the
Company's May 19 Form 8-A and is qualified by reference to such information.
Although the Purchaser and the Parent do not have any knowledge that would
indicate that any statements contained herein based upon such document are
untrue, neither the Purchaser nor the Parent assumes any responsibility for the
accuracy or completeness of the information contained in such document, or for
any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information but which are
unknown to the Purchaser and the Parent.
On April 20, 1995, the Board of Directors of the Company, declared a
dividend distribution of one Right for each outstanding Share to the
shareholders of record at the close of business on May 22, 1995 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company a
unit consisting of one one-hundredth of a share (a "Unit") of Series B
Cumulative Preferred Stock, par value $0.01 per share (the "Preferred Stock"),
at a purchase price of $50 per Unit (the "Purchase Price"), subject to
adjustment. On April 20, 1995, each holder of an outstanding Share received one
Right. As long as the Rights are attached to the Shares, the Company will issue
one Right for each Share issued between the Record Date and the Distribution
Date.
Initially, Rights are attached to all Share Certificates outstanding and no
separate Right Certificates are distributed. A "Distribution Date" for the
Rights will occur upon the earlier of (i) the tenth business day following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Shares (the "Stock
Acquisition Date") or (ii) the tenth business day after the date of the
commencement of a tender offer or exchange offer if upon consummation thereof
the person or group proposing such offer would be the beneficial owner of 20% or
more of the outstanding Shares.
Until the Distribution Date, the Rights will be evidenced by Share
Certificates and will be transferred with and only with Share Certificates and
new Share Certificates issued upon transfer or new issuances of Shares after May
22, 1995 will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any Share Certificate will also
constitute the transfer of the Rights associated with the Shares represented by
such Share Certificate.
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The Rights are not exercisable until the Distribution Date (or the
expiration of the Company's redemption rights, as described below) and will
expire at the close of business on May 22, 2005, unless earlier redeemed by the
Company as described below.
As soon as practicable following the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Shares as of the close
of business on the Distribution Date. After the Distribution Date, such separate
Rights Certificates alone will evidence the Rights. Except as otherwise
determined by the Board of Directors of the Company, only Shares issued prior to
the Distribution Date will be issued with Rights.
In the event that, at any time following the Distribution Date, (i) the
Company is the surviving corporation in a merger or other business combination
with an Acquiring Person or an associate or affiliate of an Acquiring Person in
which the Shares are not changed or exchanged, or (ii) a person or group of
affiliated or associated persons becomes the beneficial owner of 20% or more of
the then outstanding Shares (except pursuant to a tender offer or exchange offer
for all outstanding Shares determined by a majority of the Continuing Directors
to be fair to shareholders and otherwise in the best interests of the Company
and its shareholders) or (iii) during such time as there is an Acquiring Person,
an event occurs which results in such Acquiring Person's ownership interest
being increased by more than 1% (e.g., a reverse stock split), or (iv) certain
transactions take place between an Acquiring Person or an affiliate of an
Acquiring Person and the Company, each holder of a Right will thereafter have
the right to receive, upon exercise, Shares (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right. Notwithstanding any of the foregoing, following
the occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. Moreover, the
Rights shall not be exercisable, and shall be null and void so long as held, by
a holder in any jurisdiction where the requisite qualification for the issuance
to such holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable. In any case, Rights
are not exercisable following the occurrence of any of the events set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation, (ii) the Company is the
surviving corporation in a merger or consolidation with another person and all
or part of its Shares are changed or exchanged (unless, in the case of clause
(i) or (ii), such merger or other business combination is with a person or
subsidiary thereof who consummated a tender offer or exchange offer approved by
the Continuing Directors as set forth in the preceding paragraph), or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right.
The Purchase Price payable and the number of Units or other securities or
property issuable upon exercise of Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on or a
subdivision, combination or reclassification of the Preferred Stock or the
Shares, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding dividends payable in Preferred Stock) or cash (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Units will be issued
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and in lieu thereof an adjustment in cash will be made based on the market price
of the Preferred Stock on the last trading date prior to the date of exercise.
At any time until the tenth day following the Stock Acquisition Date (as
such period may be extended by the Company), the Company may redeem the Rights
in whole, but not in part, at a price (the "Redemption Price") of $.01 per
Right, except that under the purported terms of the "dead-hand pill"
restrictions such authorization to redeem will require the concurrence of a
majority of the Continuing Directors (as defined below) when (i) such
authorization occurs on or after the time a person becomes an Acquiring Person,
or (ii) such authorization occurs on or after the date of a change (resulting
from a proxy or consent solicitation) in a majority of the directors in office
at the commencement of such solicitation if any person who is a participant in
such solicitation has stated (or, if upon the commencement of such solicitation,
a majority of the Board of Directors of the Company has determined in good
faith) that such person (or any of its affiliates or associates) intends to
take, or may consider taking, any action which would result in such person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event. After this 10-day period has expired, this right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 10% or
less of the outstanding Shares in a transaction or series of transactions not
involving the Company and there are no other Acquiring Persons. In addition,
from the expiration of the above 10-day period until the occurrence of a
Triggering Event, the Company may redeem the Rights provided that such
redemption is incidental to a merger, consolidation or other business
combination involving the Company or a reorganization or restructuring of the
Company which is approved by a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors of the Company
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price. Rights will
not be exercisable prior to the expiration of the Company's right of redemption
described above.
Until a Right is exercised, it will not entitle the holder thereof to any
rights as a shareholder of the Company, including without limitation the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Shares (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
Under the purported provisions of the "dead-hand pill" restrictions, the
Rights Agreement may be amended only so long as there are Continuing Directors
and a majority of such Continuing Directors votes in favor of the proposed
amendment. Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended in order to cure any ambiguity, to correct
or supplement any provision contained in the Rights Agreement which is defective
or inconsistent with another provision therein, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not redeemable
and no amendment shall be made to lengthen any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of the common equity of the Company,
including the holders of the Rights.
Under the Rights Agreement, as a result of the commencement of the Offer,
the Distribution Date will be as early as February 10, 1997, unless prior to
such date the Company's Board of Directors redeems the Rights or takes action to
delay the Distribution Date. The Purchaser believes that, unless the Rights are
redeemed or amended, or a majority of the current Board of Directors approves
the Offer for the purposes of the determination described above, the
consummation of the Offer likely would cause the Purchaser to become an
Acquiring Person and constitute a Triggering Event and, as a result, could
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permit significant dilution to the Purchaser's and the Parent's interest in the
Company, rendering the Offer and the Merger economically unattractive for the
Purchaser and the Parent.
The Rights Condition requires that the Purchaser shall be satisfied, in its
sole discretion, that the Rights shall have been redeemed by the Company's Board
of Directors or that the Rights have been invalidated or are otherwise
inapplicable to, or the dilutive provisions thereof will not be triggered by,
the Offer or the Merger. The Purchaser believes that under the circumstances of
the Offer and under applicable law, the Board of Directors of the Company is
obligated by its fiduciary responsibilities to redeem the Rights or take such
other action to invalidate the Rights or otherwise render the Rights
inapplicable to, or prevent the dilutive provisions thereof from being triggered
by, the Offer or the Merger, in each case in order to permit the Offer and the
Merger to be consummated, including by making the determination that the Offer
is fair to the shareholders and in the best interests of the Company and its
shareholders. The Purchaser is hereby requesting that the Company's Board of
Directors redeem the Rights or take such other action described above. However,
there can be no assurance that the Board of Directors will take any such action.
If the current Board of Directors does not so redeem the Rights or take such
other action, any action by the Parent to change the composition of the Board of
Directors would be intended, among other things, to result in the reconstituted
Board taking action to effect such redemption or take such other actions.
However, such a reconstituted Board of Directors may, under the purported terms
of the "dead-hand pill" restrictions described above, be powerless to effect
such redemption or take such other actions, notwithstanding the mandate the
Company's shareholders will have expressed in electing the Parent's nominees to
the Board of Directors, unless one or more Continuing Directors remain on the
Board of Directors and a majority of them approve the redemption or such other
actions. The Parent and the Purchaser believe that the "dead-hand pill"
restrictions violate Georgia and federal law and are commencing the Defensive
Tactics Litigation seeking, among other things, (i) an order declaring the
"dead-hand pill" restrictions of the Rights Agreement illegal and unenforceable
and compelling the Company's Board of Directors to amend the Rights Agreement to
remove such provisions and (ii) an order compelling the Company's Board of
Directors to fulfill their fiduciary duties by redeeming the Rights or amending
the Rights Agreement to make the Rights inapplicable to the Offer and the
Merger.
UNLESS THE RIGHTS ARE REDEEMED, HOLDERS OF SHARES WILL BE REQUIRED TO TENDER
ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH
SHARE. IF SEPARATE CERTIFICATES FOR THE RIGHTS ARE NOT ISSUED, A TENDER OF
SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
THE OFFER IS CONDITIONED UPON THE RIGHTS CONDITION BEING SATISFIED.
GEORGIA BUSINESS COMBINATION STATUTE. In general, the Georgia Business
Combination Statute prohibits any person who is an Interested Shareholder,
including a beneficial owner of 10% or more of the voting power of the
outstanding voting shares of a corporation, from engaging in certain business
combinations (including the Merger) with such corporation for a period of five
years following the date on which such person became an Interested Shareholder,
unless (i) either the transaction by which such person became an Interested
Shareholder or the business combination is approved by the board of directors of
the corporation prior to the date on which such person became an Interested
Shareholder, (ii) upon consummation of the transaction which resulted in such
person becoming an Interested Shareholder, such person owned at least 90% of the
Eligible Voting Stock outstanding at the time the transaction commenced, which
excludes shares owned by (a) persons who are officers or directors of the
corporation and their affiliates or associates, (b) subsidiaries of the
corporation and (c) any employee stock plan under which employee participants do
not have the right to determine confidentially the extent to which shares held
subject to the plan will be tendered in a tender or exchange offer, or (iii)
subsequent to the date on which such person became an Interested Shareholder,
the Interested Shareholder becomes the owner of 90% of the outstanding voting
stock of the corporation and the business combination is approved by the board
of directors of the corporation and authorized by the
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affirmative vote, at an annual or special meeting of shareholders, of at least a
majority of the outstanding voting stock not beneficially owned by the
Interested Shareholder or any of its affiliates or associates or by persons who
are directors or officers of the Interested Shareholder. The requirements of the
Georgia Business Combination Statute do not apply unless the corporation adopts
a by-law expressly electing to be governed thereby. According to publicly
available information, the Company's By-Laws have included such a provision at
least since December 31, 1995. Accordingly, the requirements of the Georgia
Business Combination Statute apply to the Company.
The Purchaser hereby requests that the Company's Board of Directors approve
the Offer and the Merger for all purposes, including the Georgia Business
Combination Statute. Under the circumstances of the Offer and under applicable
law, the Purchaser believes that the Board of Directors of the Company is
obligated by its fiduciary responsibilities to approve, pursuant to the Georgia
Business Combination Statute, the acquisition of Shares pursuant to the Offer
and the Merger. However, there can be no assurance that the Board of Directors
will do so. The Parent and the Purchaser are seeking an order in the Defensive
Tactics Litigation to compel the Company's Board of Directors to approve the
Offer and the Merger for purposes of the Georgia Business Combination Statute.
If the Board does not so approve the Offer and the Merger but upon consummation
of the Offer the Purchaser and the Parent together own at least 90% of the
Eligible Voting Stock of the Company, then the restrictions on business
combinations contained in the Georgia Business Combination Statute would not be
applicable. Any action by the Purchaser and the Parent to change the composition
of the Board of Directors would be intended, among other things, to result in
the reconstituted Board taking action to approve the Offer and the Merger in
order to satisfy the Georgia Business Combination Statute Condition.
THE OFFER IS CONDITIONED UPON THE GEORGIA BUSINESS COMBINATION STATUTE
CONDITION BEING SATISFIED.
GEORGIA FAIR PRICE STATUTE. In 1985, the Georgia legislature adopted a
series of provisions which were designed to protect shareholders of Georgia
corporations against the inequities of certain tactics, such as so-called
"two-tiered" transactions in which lesser consideration is paid in the
second-step merger than in the first-step tender offer, which result in minority
shareholders who do not participate in the initial tender offer receiving a
lower price or less desirable form of consideration than tendering shareholders.
In general, except as provided below, the Georgia Fair Price Statute requires
that, in addition to any vote otherwise required by law or the articles of
incorporation of a corporation, certain business combinations (including
business combinations such as the Merger) between an Interested Shareholder (as
defined below), including a beneficial owner of 10% or more of the voting power
of the outstanding voting shares of a corporation, and a Georgia corporation be
either (i) 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 (ii) recommended by at least two-thirds of the
continuing directors and approved by a majority of the 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.
However, the board and shareholder approvals required by the above-described
provisions do not apply to a business combination if each of the following
conditions is met:
(i) the aggregate amount of cash, and the fair market value as of five
days before the consummation of the business combination of consideration
other than cash, to be received per share by holders of any class of common
shares or any class or series of preferred shares in such business
combination is at least equal to the highest of the following:
(a) the highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the Interested
Shareholder for any shares of the same class or series acquired by it (1)
within the two-year period immediately prior to the Announcement Date
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of the proposal of the business combination, or (2) in the transaction in
which it became an Interested Shareholder, whichever is higher;
(b) the fair market value (defined as the highest closing sale price
during the 30-day period including and immediately preceding the date in
question) per share of such class or series on the Announcement Date or
on the date on which the Interested Shareholder became an Interested
Shareholder, whichever fair market value is higher; or
(c) in the case of shares other than common shares, the highest
preferential amount per share to which the holders of shares of such
class or series are entitled in the event of any voluntary liquidation,
dissolution, or winding up of the corporation; provided that this clause
only applies if the Interested Shareholder has acquired shares of such
class or series within the two-year period immediately prior to the
Announcement Date;
(ii) the consideration to be received by holders of any class or series
of outstanding shares shall be in cash or in the same form as the Interested
Shareholder has previously paid for shares of the same class or series, and
if the Interested Shareholder has paid for shares of any class or series of
shares with varying forms of consideration, the form of consideration for
such class or series of shares shall be either cash or the form used to
acquire the largest number of shares of such class or series previously
acquired by it;
(iii) after such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such business combination,
unless approved by a majority of the continuing directors and with other
specified exceptions, there shall have been (a) no failure to declare and
pay at the regular rate therefor any full periodic dividends on any
outstanding preferred shares; (b) no reduction in the annual rate of
dividends paid on common shares, except as necessary to reflect any
subdivision of the shares; (c) an increase in such annual rate of dividends
as is necessary to reflect any reclassification, recapitalization,
reorganization, or any similar transaction which has the effect of reducing
the number of outstanding shares; and (d) no increase in the interested
shareholder's percentage ownership of any class or series of shares of the
corporation by more than 1% in any twelve-month period; and
(iv) after such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a shareholder),
of any loans, advances, guarantees, pledges, or other financial assistance
or any tax credits or other tax advantages provided by the corporation or
any of its subsidiaries, whether in anticipation of or in connection with
such business combination or otherwise.
In addition, the board and shareholder approval requirements of the Georgia
Fair Price Statute would not apply to any business combination with an
Interested Shareholder or its affiliates if, during the three-year period
immediately preceding the consummation of the business combination, the
Interested Shareholder has not, during such period (i) ceased to be an
Interested Shareholder or (ii) increased its percentage ownership of any class
or series of common or preferred shares by more than 1% in any twelve-month
period.
The requirements of the Georgia Fair Price Statute do not apply unless the
corporation adopts a by-law expressly electing to be governed thereby. According
to publicly available information, on January 23, 1997, after the Parent had
made public its interest in an acquisition of the Company, the Company's Board
of Directors amended the By-Laws to include such a provision. Accordingly, the
requirements of the Georgia Fair Price Statute now purport to apply to the
Company.
The Offer Price is higher than both (i) the highest per share price paid by
the Parent and the Purchaser for any Shares acquired by them within the two-year
period immediately prior to the relevant Announcement Date, January 10, 1997,
the date on which the Parent first publicly announced its
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proposal of an acquisition of the Company in a merger transaction, and (ii) the
fair market value of the Shares as of such Announcement Date.
The Georgia Fair Price Statute is designed to protect shareholders against
the inequities of so-called "two-tiered" transactions in which lesser
consideration is paid in the second-step merger than in the first- step offer.
Because holders of Shares are to receive the same cash consideration per Share
in the Merger as that paid by the Purchaser pursuant to the Offer, the Parent
and the Purchaser believe that the Offer and the Merger are in accord with the
purpose and intent of the Georgia Fair Price Statute. Moreover, if the highest
closing stock price for the Shares during the 30-day period including and
immediately preceding the date of consummation of the Offer is not in excess of
the Offer Price and the other procedural requirements of the Merger Price
Provisions are met, the terms of the Merger Price Provisions would not require a
higher price to be paid in the Merger than in the Offer, and the Georgia Fair
Price Statute Condition would be satisfied, without the need for any action or
approval of the Board of the Directors or the shareholders of the Company.
However, the Parent and the Purchaser are unable to predict whether the closing
stock price for the Shares on any day in the 30-day period including and
immediately preceding the date on which the Offer is consummated will be in
excess of the Offer Price, whether as a result of anomalous or manipulative
trading activity or otherwise.
If the Merger Price Provisions are not met, the terms of the Georgia Fair
Price Statute would purport to prohibit the Merger from occuring after
consummation of the Offer unless the Merger is either (i) unanimously approved
by the continuing directors, and such continuing directors constitute at least
three members of the Company's Board of Directors at the time of such approval,
or (ii) recommended by at least two-thirds of the continuing directors and
approved by holders of a majority of Shares other than voting shares
beneficially owned by the Purchaser or its affiliates. The Purchaser is hereby
requesting that the Board of Directors unanimously approve the Offer and the
Merger for purposes of the Georgia Fair Price Statute. Under the circumstances
of the Offer and under applicable law, the Purchaser believes that the Board of
Directors of the Company is obligated by its fiduciary responsibilities to
unanimously approve, pursuant to the Georgia Fair Price Statute, the acquisition
of Shares pursuant to the Offer and the Merger. However, there can be no
assurance that the Board of Directors will do so.
If the current Board of Directors does not so approve the Offer and the
Merger, any action by the Parent to change the composition of the Board of
Directors would be intended, among other things, to result in the reconstituted
Board taking unanimous action to approve the Offer and the Merger in order to
satisfy the Georgia Fair Price Statute Condition.
To the extent that the Georgia Fair Price Statute purports to require
approval of continuing directors or minority shareholders in order for an
all-cash, non-coercive tender offer and merger, such as the Offer and the
Merger, to be effected at the same price, the Parent and the Purchaser believe
that the Georgia Fair Price Statute is invalid and violates the Georgia and
United States Constitutions. The Defensive Tactics Litigation seeks, among other
things, (i) an order declaring the Georgia Fair Price Statute illegal and
unenforceable to such extent and (ii) an order compelling the Company's Board of
Directors to approve the Offer and the Merger for purposes of the Georgia Fair
Price Statute.
THE OFFER IS CONDITIONED UPON THE GEORGIA FAIR PRICE STATUTE CONDITION BEING
SATISFIED.
SHORT-FORM MERGER. Section 14-2-1104 of the GBCC provides that if a
corporation owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge such other corporation
into itself without any action or vote on the part of the board of directors or
the shareholders of such other corporation (a "short-form merger"). If,
following consummation of the Offer, the Purchaser owns 90% or more of the
outstanding Shares, the Purchaser would have the power to consummate the Merger
without the approval of the Board of Directors or the vote of other shareholders
of the Company, subject to compliance with the provisions of Section 14-2-1104
of the GBCC. The Parent presently intends to merge the Purchaser into the
Company, a transaction which could not be effected through a short-form merger.
If, however the Parent determines instead to cause
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the Company to be merged into the Purchaser and the Purchaser owns 90% or more
of the outstanding Shares following consummation of the Offer, a short-form
merger could be employed or, if the Purchaser does not own 90% of the
outstanding Shares following consummation of the Offer, it may seek to purchase
additional shares in the open market or otherwise in order to reach the 90%
threshold and employ a short-form merger. The per share consideration paid for
any Shares so acquired may be greater or less than that paid in the Offer.
APPRAISAL RIGHTS IN CONNECTION WITH THE OFFER. Shareholders do not have
appraisal rights as a result of the Offer. However, if the Merger is
consummated, shareholders of the Company who did not vote in favor of the Merger
have certain rights under Georgia law to dissent and demand payment of the fair
value of their Shares. Such rights, if a dissenting shareholder complied with
the applicable statutory procedures, could lead to a judicial determination of
the fair value required to be paid to such dissenting holder of his Shares. The
Purchaser cannot make any representation as to the outcome of the appraisal of
fair value as determined by the Georgia courts, and shareholders should
recognize that such an appraisal could result in a determination of a value
higher or lower than, or equivalent to, the consideration per Share provided in
the Offer. In an appraisal proceeding, however, the Purchaser may argue that for
purposes of such proceeding the fair value of the Shares is less than the
consideration per Share provided in the Offer.
Under the GBCC, dissenting shareholders who comply with the applicable
statutory procedures will be entitled to fair value for their Shares (i.e., the
value of the Shares immediately before the consummation of the Merger, excluding
any appreciation or depreciation in anticipation of the Merger) and to receive
payment of such fair value in cash. If a shareholder demand to the Company for
payment of such fair value remains unsettled, the Company is required within 60
days of receiving the demand to commence a proceeding for judicial determination
of the fair value of the Shares and interest accrued since the consummation of
the Merger. If the Company does not commence the proceeding within the 60-day
period, it shall pay each such dissenting shareholder the amount demanded. In
Grace Bros., Ltd. v. Farley Industries, Inc., the Georgia Supreme Court stated
that any facts which shed light on the value of dissenting shareholders'
interests are to be considered in arriving at "fair value" under the statutory
appraisal remedy. Shareholders should recognize that the value so determined
could be higher or lower than the price per Share paid pursuant to the Offer or
the consideration per Share to be paid in the Merger or other similar business
combination. A shareholder entitled to dissent and obtain payment for his Shares
under the GBCC may not challenge the Merger except for failure to comply with
the procedural requirements of the GBCC or the Charter or By-Laws or in cases of
fraud or deception. Pursuant to Section 14-2-1302(b) of the GBCC, statutory
appraisal rights are the exclusive remedy for dissenting shareholders.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE GBCC.
The foregoing description of the GBCC, including the descriptions of the
Georgia Business Combination Statute and the Georgia Fair Price Statute, is not
necessarily complete and is qualified in its entirety by reference to the GBCC.
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby
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shareholders of the Company receive consideration less than that paid pursuant
to the Offer, in either case at a time when the Shares are still registered
under the Exchange Act, the Purchaser may be required to comply with Rule 13e-3
under the Exchange Act. If applicable, Rule 13e-3 would require, among other
things, that certain financial information concerning the Company and certain
information relating to the fairness of the Merger or such alternative
transaction and the consideration offered to minority shareholders in the Merger
or such alternative transaction, be filed with the Commission and disclosed to
shareholders prior to consummation of the Merger or such alternative
transaction. The purchase of a substantial number of Shares pursuant to the
Offer may result in the Company being able to terminate its Exchange Act
registration. See Section 13. If such registration were terminated, Rule 13e-3
would be inapplicable to any such future Merger or such alternative transaction.
OTHER. The timing and details of the Merger will depend on a variety of
factors and legal requirements, the action of the Company's Board of Directors,
the number of Shares acquired by the Purchaser pursuant to the Offer and whether
the Minimum Condition, the Rights Condition, the Georgia Business Combination
Statute Condition and the Georgia Fair Price Statute Condition are satisfied or
waived. Although the Purchaser has proposed the Merger to the Company and seeks
to have the Company consummate the Merger as soon as practicable after
consummation of the Offer, the Purchaser can give no assurance that the Merger
will be consummated or as to the timing of the Merger if it is consummated.
Although the Purchaser has proposed the Merger on the terms described above, it
is possible that as a result of delays in the Purchaser's ability to effect the
Merger, information hereafter obtained by the Purchaser, changes in general
economic or market conditions or in the business, operations or financial
condition or prospects of the Company, any of the Minimum Condition, the Rights
Condition, the Georgia Business Combination Statute Condition and/or the Georgia
Fair Price Statute Condition not being satisfied or any other currently
unforeseen factors, the Merger may not be so proposed, may be delayed or
abandoned or may be proposed on different terms. Although it has no current
intention to do so, the Purchaser reserves the right to propose a merger on
terms other than those described above and the right to withdraw any merger
proposal.
The Purchaser reserves the right to purchase, following consummation or
termination of the Offer, additional Shares or Rights in the open market, in
privately negotiated transactions, in another tender offer or exchange offer or
otherwise. In addition, in the event that the Purchaser decides not to propose
the Merger, to propose a Merger on terms other than those described above or to
withdraw any Merger previously proposed, the Purchaser will evaluate its other
alternatives. Such alternatives could include purchasing additional Shares or
Rights in the open market, in privately negotiated transactions, in another
tender offer or exchange offer or otherwise, or taking no further action to
acquire additional Shares or Rights. Any additional purchases of Shares or
Rights could be at a price greater or less than the price to be paid for Shares
and Rights in the Offer and could be for cash or other consideration.
Alternatively, the Purchaser and the Parent may sell or otherwise dispose of any
or all Shares or Rights acquired pursuant to the Offer or otherwise. Such
transactions may be effected on terms and at prices then determined by the
Purchaser and the Parent, which may vary from the price paid for Shares and
Rights in the Offer.
PLANS FOR THE COMPANY. Based upon publicly available information, the
Parent believes that significant operating and sales synergies may be achievable
by the combined entity, which could include both increases in sales and margins
and reduced expenses. If and to the extent that the Purchaser acquires control
of the Company or otherwise obtains access to the books and records of the
Company, the Parent and the Purchaser intend to conduct a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and consider and
determine what, if any, changes would be desirable in light of the circumstances
which then exist. Such strategies could include, among other things, changes in
the Company's business, corporate structure, Charter, By-Laws, capitalization,
management or dividend policy. As the Parent has previously stated, in a
negotiated transaction the Parent is prepared to discuss the proper roles for
the Parent's and the Company's managers and employees in a combined company.
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Except as described in this Offer to Purchase, none of the Purchaser, the
Parent nor, to the best knowledge of the Purchaser and the Parent, any of the
persons listed on Schedule I have any present plans or proposals that would
relate to or result in an extraordinary corporate transaction such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries
or a sale or other transfer of a material amount of assets of the Company or any
of its subsidiaries, any material change in the capitalization or dividend
policy of the Company or any other material change in the Company's corporate
structure or business or the composition of its Board of Directors or
management.
12. DIVIDENDS AND DISTRIBUTIONS. If on or after October 1, 1996 (except to
the extent publicly disclosed by the Company with specificity in documents filed
with the Commission prior to January 2, 1997) and prior to the termination of
the Offer, the Company shall have (i) split, combined or otherwise changed the
Shares or its capitalization, or disclosed that it has taken any such action,
(ii) acquired or otherwise caused a reduction in the number of outstanding
Shares or other securities or (iii) issued or sold additional Shares (except for
the issuance of up to approximately 1,874,000 Shares assumed to be reserved for
issuance on or prior to December 31, 1995 pursuant to the exercise of then
outstanding employee stock options, in accordance with their terms as publicly
disclosed prior to January 2, 1997), shares of any other class of capital stock,
other voting securities or any securities convertible into, or rights, warrants
or options, conditional or otherwise, to acquire, any of the foregoing, then,
without prejudice to the Purchaser's rights under Section 14, the Purchaser may
make such adjustments to the purchase price and other terms of the Offer as it
deems appropriate.
If on or after October 1, 1996 (except to the extent publicly disclosed by
the Company with specificity in documents filed with the Commission prior to
January 2, 1997) and prior to the termination of the Offer the Company shall
have declared or paid any cash or stock dividend or other distribution on the
Shares, or issued with respect to the Shares any additional Shares, shares of
any other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, payable or distributable to shareholders of
record on a date prior to the transfer to the name of the Purchaser or the
nominee or transferee of the Purchaser on the Company's stock transfer records
of such Shares that are purchased pursuant to the Offer (except that if the
Rights are redeemed by the Board of Directors in accordance with the terms of
the Rights Agreement, tendering shareholders who are holders of record as of the
applicable record date will be entitled to receive and retain the redemption
price of $.01 per Right in accordance with the Rights Agreement), then, without
prejudice to the Purchaser's rights under Section 14, (i) the purchase price
payable per Share by the Purchaser pursuant to the Offer will be reduced to the
extent any such dividend or distribution is payable in cash and (ii) any
non-cash dividend, distribution or issuance received and held by a tendering
shareholder shall (x) be required to be promptly remitted and transferred by the
tendering shareholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer, or (y) at the direction of
the Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will promptly be remitted to the Purchaser. Pending
such remittance or appropriate assurance thereof, the Purchaser will, subject to
applicable law, be entitled to all rights and privileges as owner of any such
non-cash dividend, distribution or right and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the Offer will
likely reduce the number of Shares that might otherwise trade publicly and will
reduce the number of holders of Shares. This could adversely affect the
liquidity and market value of the remaining Shares held by the public. Depending
upon the number of Shares purchased pursuant to the Offer, the Shares may no
longer meet the requirements of the NASD for continued inclusion in the Nasdaq
National Market, which require, among other things, that an issuer have at least
200,000 publicly held shares, held by at least 300 shareholders, with a market
value of at least $1 million and have net tangible assets of at least $1
million, $2 million or $4 million,
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depending on profitability levels during the issuer's four most recent fiscal
years. If these and certain other standards are not met, the Shares might
nevertheless continue to be included in the NASD's Nasdaq Stock Market (the
"Nasdaq Stock Market") with quotations published in the Nasdaq "additional list"
or in one of the "local lists", but if the number of holders of the Shares were
to fall below 300, or if the number of publicly held Shares were to fall below
200,000 or there were not at least two registered and active market makers for
the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for Nasdaq Stock Market reporting and the Nasdaq Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for this purpose. According to the 1995 10-K,
as of March 15, 1996 there were 2,188 holders of record of Shares.
If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in the Nasdaq National Market or in any other tier of the Nasdaq Stock
Market and the Shares are no longer included in the Nasdaq National Market or in
any other tier of the Nasdaq Stock Market, as the case may be, the market for
Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of the Nasdaq Stock Market, it is possible that
the Shares would continue to trade in the over-the-counter market and that price
quotations would be reported by other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of holders of Shares remaining, at such time, the interest in
maintaining a market in 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 "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 brokers to extend credit on the
collateral of such Shares for the purpose of buying, carrying, or trading in
securities ("purpose loans"). Depending upon factors similar to those described
above with respect to stock exchange listing and market quotations, the Shares
might no longer constitute "margin securities" for the purposes of the Federal
Reserve Board's margin regulations and therefore could no longer be used as
collateral for purpose loans made by brokers.
The Shares are currently registered under the Exchange Act. The purchase of
Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. 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 and there are fewer than 300 record
holders. The termination of the registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement pursuant to Section 14(a)
of the Exchange Act in connection with shareholders' meetings and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Shares. Furthermore,
"affiliates" of the Company and persons holding "restricted securities" of the
Company may be deprived of the ability to dispose of the securities pursuant to
Rule 144 under the Securities Act of 1933. If registration of the Shares under
the Exchange Act were terminated, the Shares would no longer be "margin
securities" or eligible for continued inclusion in any tier of the Nasdaq Stock
Market. The Purchaser intends to seek to cause the Company to terminate the
registration of the Shares as soon after the consummation of the Offer or Merger
as the requirements for termination of registration are met.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer, the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations
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of the Commission, including Rule 14e-1(c) under the Exchange Act (relating to
the Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for any Shares or Rights tendered
pursuant to the Offer, and may postpone the acceptance for payment or, subject
to the restriction referred to above, payment for any Shares or Rights tendered
pursuant to the Offer, and may amend or terminate the Offer (whether or not any
Shares have theretofore been purchased or paid for) if, in the sole judgment of
the Purchaser, the Minimum Condition, the Rights Condition, the Georgia Business
Combination Statute Condition or the Georgia Fair Price Statute Condition shall
not have been satisfied or if, at any time on or after October 1, 1996 and prior
to the acceptance for payment of or payment for Shares, any one or more of the
events listed below shall have occurred or shall be determined by the Parent or
the Purchaser to have occurred (except for any such events occurring between
September 30, 1996 and January 2, 1997 which shall have been publicly disclosed
prior to January 2, 1997):
(a) there shall have been threatened, instituted or pending any action,
proceeding, claim or application by or before any federal, state, local,
provincial or other government or governmental regulatory or administrative
authority or agency or court or tribunal, domestic, foreign or supranational
(each, a "Governmental Entity"), that (i) challenges or seeks to make
illegal, to delay or otherwise directly or indirectly to restrain or
prohibit, or which is likely to impose, in the sole judgment of the
Purchaser, voting, procedural, price or other requirements in addition to
those required by the provisions of the GBCC described in Section 11 and
federal securities law (each as in effect on the date hereof) in connection
with the acquisition of Shares by the Purchaser or any of its affiliates,
the making of the Offer, the acceptance for payment of or payment for Shares
by the Purchaser or any of its affiliates or the consummation of the Merger
or any other business combination involving the Company or the performance
of any of the contracts or other arrangements entered into by the Purchaser
or any of its affiliates in connection with the acquisition of the Company,
seeking to obtain any material damages as a result thereof or otherwise
directly or indirectly relating to the Offer or the Merger or such other
business combination, (ii) seeks to restrain, prohibit or limit the exercise
of full rights of ownership or operation by the Purchaser or any of its
affiliates of all or any portion of the business or assets of the Company or
any of its subsidiaries or the Purchaser or any of its affiliates or to
compel the Purchaser or any of its affiliates to dispose of or to hold
separately all or any portion of the business or assets of the Company or
any of its subsidiaries or the Purchaser or any of its affiliates, or seeks
to impose any limitation on the ability of the Purchaser or any of its
affiliates to conduct such business or own such assets, (iii) seeks to
impose or confirm limitations on the ability of the Purchaser or any of its
affiliates effectively to acquire or hold or to exercise full rights of
ownership of Shares, including without limitation the right to vote the
Shares acquired or owned by the Parent, the Purchaser or any of its
affiliates on all matters properly presented to the shareholders of the
Company, or the right to vote any shares of capital stock of any subsidiary
directly or indirectly owned by the Company, (iv) seeks to require
divestiture by the Parent or the Purchaser or any of its affiliates of any
Shares, (v) might result, in the sole judgment of the Purchaser, in a
diminution of the benefits expected to be derived by the Purchaser or any of
its affiliates as a result of the Offer or the Merger or any other business
combination involving the Company, or in a diminution of the value of the
Shares or the Company or any of its subsidiaries to the Purchaser or any of
its affiliates, (vi) otherwise directly or indirectly relating to the Offer
or which, in the sole judgment of the Purchaser, might otherwise materially
adversely affect the Company or any of its subsidiaries or the value of the
Shares, (vii) in the sole judgment of the Purchaser, materially adversely
affects the business, properties, assets, liabilities, shareholders' equity,
condition (financial or otherwise), capitalization, licenses, franchises,
operations, results of operations or prospects of the Company or any of its
subsidiaries, or (viii) challenges or adversely affects the financing of the
Offer or the Merger or any other business combination involving the Company;
or
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(b) other than the application of the waiting periods under the HSR Act
and the necessity for the approvals and other actions by any Governmental
Entity described in Section 15, there shall have been proposed, sought,
promulgated, enacted, entered, enforced or deemed applicable to the Offer,
the Merger or any other business combination involving the Company by any
Governmental Entity, any statute, rule, regulation, judgment, decree,
decision, order or injunction that, in the sole judgment of the Purchaser,
might, directly or indirectly, result in any of the consequences referred to
in clauses (i) through (viii) of paragraph (a) above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, shareholders' equity, condition (financial
or otherwise), capitalization, licenses, franchises, permits, operations,
results of operations or prospects of the Company or any of its subsidiaries
or affiliates (or the Purchaser shall have become aware thereof) or in
general political, market, economic or financial conditions in the United
States or abroad that, in the sole judgment of the Purchaser, is or may be
materially adverse to the Company or any of its subsidiaries or affiliates,
or the Purchaser shall have become aware of any facts that, in the sole
judgment of the Purchaser, have or may have material adverse significance
with respect to either the value of the Company or any of its subsidiaries
or affiliates or the value of the Shares to the Parent or the Purchaser or
any of its affiliates; or
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the United States over-the-counter
market, (ii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any material
adverse change (or any existing or threatened condition, event or
development involving a prospective material adverse change) in United
States or any other currency exchange rates or a suspension of, or a
limitation on, the markets therefor, (iv) any extraordinary or material
adverse change in the financial markets or major stock exchange indices in
the United States or abroad or in the market price of Shares, (v) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (vi) any
limitation (whether or not mandatory) by any Governmental Entity or any
other event that, in the sole judgment of the Purchaser, may have material
adverse significance with respect to the extension of credit by banks or
other lending institutions or the financing of the Offer or the Merger or
any other business combination involving the Company or (vii) in the case of
any of the situations described in clauses (i) through (vi) above existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof; or
(e) a tender or exchange offer for some or all of the Shares shall have
been publicly proposed to be made or shall have been made by another person
(including the Company or any of its subsidiaries or affiliates), or it
shall have been publicly disclosed or the Purchaser shall have otherwise
deemed that (i) any person, entity (including the Company or any of its
subsidiaries or affiliates) or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire
beneficial ownership of more than 5% of any class or series of capital stock
of the Company (including the Shares) through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted any option,
right or warrant, conditional or otherwise, to acquire beneficial ownership
of more than 5% of any class or series of capital stock of the Company
(including the Shares) other than acquisitions for bona fide arbitrage
purposes only and other than as disclosed in a Schedule 13D or 13G on file
with the Commission prior to January 2, 1997, (ii) any such person, entity
or group which, prior to such date, had filed such a Schedule with the
Commission, shall have acquired or proposed to acquire, through the
acquisition of stock, the formation of a group or otherwise, beneficial
ownership of additional shares of any class or series of capital stock of
the Company (including the Shares) constituting 1% or more of any such class
or series, or shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of shares of any
class or series of capital stock of the
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<PAGE>
Company (including the Shares) constituting 1% or more of any such class or
series, (iii) any person, entity or group shall have entered into a
definitive agreement or an agreement in principle or made a proposal with
respect to a tender or exchange offer for some or all the Shares or a
merger, consolidation or other business combination with or involving the
Company or any of its subsidiaries or affiliates or (iv) any person, entity
or group shall have filed a Notification and Report Form under the HSR Act
or made a public announcement reflecting an intent to acquire the Company or
any of its subsidiaries or any assets or securities of the Company or any of
its subsidiaries; or
(f) the Company or any of its subsidiaries shall have, directly or
indirectly, (i) split, combined or otherwise changed, or authorized or
proposed the split, combination or other change of, the Shares or its
capitalization, (ii) acquired or otherwise caused a reduction in the number
of, or authorized or proposed the acquisition or other reduction in the
number of, any outstanding Shares or other securities of the Company or any
subsidiary thereof (other than as a redemption of the Rights in accordance
with the terms of the Rights Agreement as publicly disclosed to be in effect
on May 22, 1995), (iii) issued, distributed or sold, or authorized, proposed
or announced the issuance, distribution or sale of, (A) any additional
Shares, shares of any other class or series of capital stock, other voting
securities, or any securities convertible into or exchangeable or
exercisable for any of the foregoing, or options, rights or warrants,
conditional or otherwise, to acquire any of the foregoing, except for the
issuance of up to approximately 1,874,000 Shares assumed to be reserved for
issuance prior to December 31, 1995 pursuant to the exercise of then
outstanding employee stock options, in accordance with their terms or (B)
any other securities or rights in respect of, in lieu of or in substitution
or exchange for any shares of its capital stock, (iv) permitted the issuance
or sale of any shares of any class of capital stock or other debt or equity
securities of any subsidiary of the Company or any securities convertible
into or exchangeable or exercisable for any of the foregoing, (v) declared,
paid or proposed to declare or pay any dividend or other distribution,
whether payable in cash, securities or other property, on, or in respect of,
any Shares (other than a distribution of the Rights Certificates or a
redemption of the Rights in accordance with the Rights Agreement as publicly
disclosed to be in effect on May 22, 1995), (vi) altered or proposed to
alter any material term of any outstanding security of the Company or any of
its subsidiaries (including the Rights), (vii) issued, distributed or sold,
or authorized or proposed the issuance, distribution or sale of, any debt
securities or securities convertible into or exchangeable or exercisable for
debt securities or any rights, warrants or options entitling the holder
thereof to purchase or otherwise acquire any debt securities, or otherwise
incurred, authorized or proposed the incurrence of, any debt other than in
the ordinary course of business and consistent with past practice or any
debt containing burdensome covenants, (viii) authorized, recommended,
proposed, effected or announced its intention to engage in any merger (other
than the Merger), consolidation, liquidation, dissolution, business
combination, acquisition (including by way of exchange) of assets or
securities, disposition (including by way of exchange) of assets or
securities, joint venture, release or relinquishment of any material
contract or other rights of the Company or any of its affiliates or any
comparable event not in the ordinary course of business, (ix) authorized,
recommended, proposed or announced its intent to enter into, or entered
into, any agreement or arrangement with any person, entity or group that, in
the sole judgment of the Purchaser, has or may have material adverse
significance with respect to the value of the Company or any of its
affiliates, or the value of the Shares to the Purchaser or any of its
affiliates, (x) amended or proposed, adopted or authorized any amendment
(other than those amendments to the By-Laws described in the Company's
Current Report on Form 8-K filed on January 24,1997 with the Commission, any
amendment which provides that the Rights are inapplicable to the Offer and
the Merger or is otherwise proposed by the Parent or the Purchaser) to the
Charter or the By-Laws or similar organizational documents of the Company or
any of its subsidiaries or the Rights Agreement or the Purchaser shall have
learned that the Company or any of its subsidiaries shall have proposed or
adopted any such amendment that was not disclosed in
44
<PAGE>
publicly available filings prior to January 2, 1997, (xi) entered into or
amended any employment, severance or similar agreement, arrangement or plan
with or for the benefit of any employee of the Company or any of its
subsidiaries (other than in the ordinary course of business) or so as to
provide for increased or accelerated benefits to employees as a result of or
in connection with the making of the Offer, the acceptance for payment of or
payment for Shares by the Purchaser or the consummation by the Purchaser or
any of its affiliates of the Merger or any other business combination
involving the Company, (xii) except as may be required by law, taken any
action to terminate or amend any employee benefit plan (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended) of the Company or any of its affiliates, or the Purchaser shall
have become aware of any such action which shall not have been disclosed in
publicly available filings prior to January 2, 1997, (xiii) agreed in
writing or otherwise to take any of the foregoing actions, or (xiv)
otherwise acted in a manner not in the ordinary course of business
consistent with past practice; or
(g) the Purchaser shall become aware (i) that any material contractual
right of the Company or any of its subsidiaries shall be impaired or
otherwise adversely affected or that any material amount of indebtedness of
the Company or any of its subsidiaries shall become accelerated or otherwise
become due or become subject to acceleration prior to its stated due date,
in each case with or without notice or the lapse of time or both, as a
result of or in connection with the Offer or the consummation by the
Purchaser or any of its affiliates of the Merger or any other business
combination involving the Company, (ii) of any covenant, term or condition
in any of the instruments or agreements of the Company or any of its
subsidiaries that, in the sole judgment of the Purchaser, is or may be
(whether considered alone or in the aggregate with other such covenants,
terms or conditions) materially adverse to either the value of the Company
or any of its subsidiaries (including without limitation any event of
default that may occur as a result of or in connection with the Offer, the
consummation by the Purchaser or any of its affiliates of the Merger or any
other business combination involving the Company) or the value of the Shares
to the Purchaser or any of its affiliates or the consummation by the
Purchaser or any of its affiliates of the Merger or any other business
combination involving the Company, or (iii) that any report, document,
instrument, financial statement or schedule of the Company filed with the
Commission contained, when filed, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading; or
(h) any waiting periods under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated, or
any approval, permit, authorization or consent of any Governmental Entity
(including those described or referred to in Section 15) which is required
or believed to be appropriate shall not have been obtained on terms
satisfactory to the Parent in its sole discretion; or
(i) (i) the Purchaser or any of its affiliates shall have entered into
a definitive agreement or announced an agreement in principle with respect
to the Merger or any other business combination with the Company or any of
its affiliates or the purchase of any material portion of the securities or
assets of the Company or any of its subsidiaries, or (ii) the Purchaser or
any of its affiliates and the Company shall have agreed that the Purchaser
shall amend or terminate the Offer or postpone the payment for the Shares
pursuant thereto;
which, in the sole judgment of the Purchaser with respect to each and every
matter referred to above and regardless of the circumstances (including any
action or inaction by the Purchaser or any of its affiliates) giving rise to any
such condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment of or payment for Shares.
45
<PAGE>
The foregoing conditions are for the sole benefit of the Purchaser and may
be waived by the Purchaser in whole or in part at any time and from time to time
in its sole discretion. Any determination by the Purchaser concerning the events
described above shall be final and binding upon all parties including tendering
shareholders. 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 and each such
right shall be deemed an ongoing right which 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.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS. GENERAL. Except as set
forth below, based upon its examination of publicly available filings by the
Company with the Commission and other publicly available information concerning
the Company, neither the Purchaser nor the Parent is aware of any licenses or
other regulatory permits that appear 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) as contemplated herein, or of any filings,
approvals or other actions by or with any Governmental Entity 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 pursuant to the Offer 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, the Parent or the Purchaser or
that certain parts of the businesses of the Company, the Parent 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.
DEFENSIVE TACTICS LITIGATION. The Parent and the Purchaser are commencing
the Defensive Tactics Litigation in the United States District Court for the
Northern District of Georgia, which names the Company and certain of its
directors as defendants and seeks declaratory and injunctive relief in
connection with the Offer and the Merger. The Defensive Tactics Litigation asks
the court either to invalidate or cause the Company and its Board of Directors
to remove several defensive mechanisms embodied in the GBCC and the By-Laws
which, absent the relief sought, could effectively prevent the Purchaser from
consummating the Offer and the Merger. In particular, the Defensive Tactics
Litigation seeks relief including: (i) invalidating and requiring the removal of
the "dead-hand pill" restrictions on the grounds that they violate the director
defendants' fiduciary duties and violate Georgia law, or, if not, that the
Georgia law violates the United States Constitution; (ii) requiring the director
defendants to fulfill their fiduciary duties by redeeming the Rights or amending
the Rights Agreement to make them inapplicable to the Offer and Merger; (iii)
compelling the director defendants to fulfill their fiduciary duties by
approving the Offer and the Merger for the purposes of the Georgia Business
Combination Statute and the Georgia Fair Price Statute; (iv) declaring that the
application of the Georgia Fair Price Statute to the Offer and the Merger would
violate the Georgia and United States Constitutions; (v) declaring that the
Georgia laws referred to above, as implemented and applied together to the Offer
and the Merger, would violate the United States Constitution; (vi) declaring
that the Offer and Merger comply with all applicable laws, obligations and
agreements; and (vii) preventing the Company, the director defendants and the
46
<PAGE>
Company's other agents from taking any steps to interfere with the Offer and the
Merger, including the commencement of judicial proceedings.
STATE TAKEOVER LAWS. A number of states have adopted takeover laws and
regulations which purport to varying degrees to be applicable to attempts to
acquire securities of corporations which are incorporated, or which have
substantial business operations in or having substantial economic effects, or
which have substantial assets, security holders, principal executive offices or
principal places of business, in such states. 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 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. Other than the Georgia Business Combination Statute and the Georgia Fair
Price Statute, the Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer and has not complied with any such laws. Should
any person seek to apply any such state takeover law to the Offer, the Purchaser
will take such action as then appears desirable, 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 such state takeover
laws is applicable to the Offer, 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 any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for payment any Shares tendered. See Section 14.
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 pursuant to the Offer is subject to such requirements. See Section 2.
The Parent intends to file as soon as practicable after the date hereof with
the FTC and the Antitrust Division a Premerger Notification and Report Form in
connection with the purchase of Shares pursuant to the Offer. Under the
provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by the Parent, unless such
waiting period is extended by a request from the FTC or the Antitrust Division
for additional information or documentary material prior to the expiration of
the waiting period. If either the FTC or the Antitrust Division were to request
additional information or documentary material from the Parent, the waiting
period would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by the Parent with such request.
Thereafter, the waiting period could be extended only by court order. If the
acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the Offer may, but need not, be extended and in any event the
purchase of and payment for Shares will be deferred until ten days after the
request is substantially complied with, unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. See Section 2. Only one
extension of such waiting period pursuant to a request for additional
information is authorized by the HSR Act and the rules promulgated thereunder,
except by court order. Any such extension of the waiting
47
<PAGE>
period will not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4. 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 from the Antitrust Division or the FTC for additional information
or documentary material made to the Company will extend the waiting period.
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 of the FTC and 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
purchase of Shares pursuant to the Offer or seeking the divestiture of Shares
purchased by the Purchaser or the divestiture of assets of the Parent, its
subsidiaries or the Company. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances.
Based solely upon an examination of publicly available information relating
to the businesses in which the Company is engaged, the Parent and the Purchaser
believe that the acquisition of Shares by the Purchaser will not violate the
antitrust laws. Nevertheless, there can be no assurance that a challenge to the
Offer or other acquisition of Shares by the Purchaser on antitrust grounds will
not be made or, if such a challenge is made, what the outcome will be. See
Section 14 for certain conditions to the Offer, including conditions with
respect to litigation and certain government actions.
MARGIN CREDIT REGULATIONS. Federal Reserve Board Regulations G, T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
16. FEES AND EXPENSES. Salomon Brothers Inc ("Salomon Brothers") is acting
as Dealer Manager in connection with the Offer and serving as financial advisor
to the Parent and the Purchaser in connection with the proposed acquisition of
the Company. The Parent has paid Salomon Brothers a fee of $100,000 and has
agreed to pay an additional fee of $250,000, which became payable upon the
public announcement of the offer to acquire the Company. Upon the acquisition by
the Parent, the Purchaser or another subsidiary of the Parent of the Company, or
all or a significant portion of the assets of the Company or more than 10% of
the equity securities of the Company, the Parent has agreed to pay Salomon
Brothers an additional fee of $1,650,000. The Parent and the Purchaser will also
reimburse Salomon Brothers for reasonable out-of-pocket expenses, including
reasonable attorneys' fees and expenses, and have also agreed to indemnify
Salomon Brothers against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
The Purchaser has retained MacKenzie Partners, Inc. to act as the
Information Agent and IBJ Schroder Bank & Trust Company to act as the Depositary
in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee shareholders to forward the Offer
materials to beneficial owners. The Information Agent and the Depositary will
receive reasonable and customary compensation for services relating to the Offer
and will be reimbursed for certain out-of-pocket expenses. The Purchaser and the
Parent have also agreed to indemnify the Information Agent and the Depositary
against certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws.
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<PAGE>
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Manager and the Information Agent). 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 offering materials to their customers.
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 all Shares. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Shares in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction or any administrative or
judicial action pursuant thereto. However, the Purchaser may in its discretion
take such actions as it may deem necessary to make the Offer in any jurisdiction
and extend the Offer to holders of Shares in such jurisdiction. In those
jurisdictions 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 Salomon Brothers Inc, the Dealer Manager, or one more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
The Purchaser and the Parent 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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR THE PARENT NOT CONTAINED HEREIN OR
IN THE LETTER OF TRANSMITTAL AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
I.H.H. Corp.
January 27, 1997
49
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE PURCHASER AND THE PARENT
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name and
position with the Purchaser of each director and executive officer of the
Purchaser are set forth below. The other required information with respect to
each such person is set forth under "Directors and Executive Officers of the
Parent" below. All directors and executive officers listed below are citizens of
the United States.
<TABLE>
<CAPTION>
NAME POSITION
- ---------------------------------------------- ----------------------------------------------
<S> <C>
Thomas R. Miklich............................. Director, President, Treasurer and Assistant
Secretary
Gerald B. Blouch.............................. Vice President, Secretary and Assistant
Treasurer
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. The name, business
address, present principal occupation or employment and material occupations,
positions, offices or employments during the last five years of each director
and executive officer of the Parent and certain other information are set forth
below. Unless otherwise indicated, the business address of each such director
and executive officer is c/o Invacare Corporation, 899 Cleveland Street, P.O.
Box 4028, Elyria, Ohio 44036. Unless otherwise indicated, each occupation set
forth opposite an individual's name refers to employment with the Parent. All
directors and executive officers listed below are citizens of the United States,
except that Benoit Juranville is a citizen of France.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT
NAME AND ADDRESS HELD DURING THE LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
A. Malachi Mixon, III..................... A. Malachi Mixon, III, has been Chief Executive Officer and a
Director of the Company since 1979 and Chairman of the Board since
1983. Mr. Mixon also served as President from 1979 until November of
1996. Mr. Mixon also serves as a Director of The Lamson & Sessions
Co., Cleveland, Ohio, a New York Stock Exchange listed company and a
supplier of engineered thermoplastic products, The Sherwin-Williams
Company, Cleveland, Ohio, a New York Stock Exchange listed company
and a manufacturer and distributor of coatings and related products,
NCS HealthCare, Inc., a NASDAQ listed company and a provider of
pharmacy services to long term care institutions and PRIMUS, a
Cleveland-based venture capital company. Mr. Mixon also serves as a
Trustee of The Cleveland Clinic Foundation, Cleveland, Ohio, one of
the world's leading teaching and health care institutions.
Frank B. Carr............................. Frank B. Carr has been a Director since 1982. From 1983 to 1996, when
he retired, Mr. Carr was a Managing Director of McDonald & Company
Securities, Inc., Cleveland, Ohio, an investment banking and
brokerage firm, and a partner in its predecessor firm (McDonald &
Company) since 1968. Mr. Carr
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT
NAME AND ADDRESS HELD DURING THE LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
also serves as a Director of Brush Wellman Inc., Cleveland, Ohio, a
New York Stock Exchange listed company and a producer of engineered
materials containing beryllium, and Preformed Line Products Company,
Cleveland, Ohio, a supplier of supports and connectors for electric
power and communications lines.
<S> <C>
Michael F. Delaney........................ Michael F. Delaney has been a Director since 1986. From 1992 to the
Paralyzed Veterans of America present, Mr. Delaney has been the Associate Director of Development
801 18th Street, N.W. of the Paralyzed Veterans of America, Washington, D.C.
Washington, D.C. 20006
Dr. Bernadine P. Healy.................... Dr. Bernadine P. Healy has been a Director since 1996. From 1995 to
College of Medicine the present, Dr. Healy has been the Dean of the College of Medicine
The Ohio State University and Professor of Medicine at The Ohio State University, Columbus,
Columbus, OH 43210 Ohio. From 1994 to 1995, Dr. Healy served as Senior Policy Advisor of
the Page Center for Health and Science Policy Studies at The
Cleveland Clinic Foundation, Cleveland, Ohio and from 1991 to 1993
served as Director of the National Institutes of Health in Bethesda,
Maryland. From 1985 to 1991, Dr. Healy served as the Chairman of the
Research Institute of The Cleveland Clinic Foundation, Cleveland,
Ohio. Dr. Healy also serves as Trustee of the Battelle Memorial
Institute in Columbus, Ohio. Dr. Healy also serves as a director of
Medtronic, Inc. a New York Stock Exchange listed Company and producer
of cardiac pacemakers and on the Board of National City Corporation,
Cleveland, Ohio, a New York Stock Exchange listed Company and a bank
holding company.
Francis J. Callahan, Jr................... Francis J. Callahan, Jr., has been a Director since 1980. From 1958
Crawford Fitting Company to the present, Mr. Callahan has been President of Crawford Fitting
29500 Solon Road Company, Cleveland, Ohio, a manufacturer of tube fittings and valves.
Solon, OH 44139 Mr. Callahan also serves as a Trustee of The Cleveland Clinic
Foundation, Cleveland, Ohio.
Whitney Evans............................. Whitney Evans has been a Director since 1980. From 1980 to the
Pine Tree Investments, Inc. present, Mr. Evans has been a private investor. From 1980 to the
4480 Grove Street present, Mr. Evans has been Vice President of Pine Tree Investments,
Sonoma, CA 95476 Inc., Cleveland, Ohio, a business and a real estate investment firm.
From 1987 to 1995, Mr. Evans served as the President of Harmony
Group, Sonoma, California, a consultant to non-profit organizations.
Dan T. Moore, III......................... Dan T. Moore, III has been a Director since 1980. Since 1993, Mr.
Perfect Impression Moore has served as President of Perfect Impression, Cleveland, Ohio,
12801 Coit Road a manufacturer of a polymer footbed that molds to the exact contours
Cleveland, OH 44108 of the foot using a brief microwave heating system. Since 1993, Mr.
Moore has served as Managing Partner of Whiskey Island Partners,
which is developing a marina complex on 35 acres of land on
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT
NAME AND ADDRESS HELD DURING THE LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
Cleveland's Lakefront. Since March 1993, Mr. Moore has been Chairman
and Treasurer of Advanced Ceramics Corporation, a closely-held
manufacturer of industrial ceramic products. From 1979 to the
present, Mr. Moore has been President of Dan T. Moore Co., Cleveland,
Ohio. Since 1988, Mr. Moore has also served as President of
Soundwich, Inc., Cleveland, Ohio, a closely-held company that
produces polymers for damping sheet metal engine components and since
1985 has served as President of Flow Polymers, Inc., a manufacturer
of homogenizing aids for rubber tire compounds.
<S> <C>
E. P. Nalley.............................. E. P. Nalley has been a Director since 1983. From 1987 to 1991, when
he retired, Mr. Nalley was the Company's Senior Vice President--Sales
and Assistant to the President. Mr. Nalley is now a private investor.
Mr. Nalley also serves as a Director of Royal Appliance Manufacturing
Co., Cleveland, Ohio, a New York Stock Exchange listed manufacturer
of vacuum cleaners.
Joseph B. Richey, II...................... Joseph B. Richey, II has been a Director since 1980. In 1992 he was
named President--Invacare Technologies and Senior Vice
President--Total Quality Management. From 1989 to 1992, he was Senior
Vice President and General Manager--North American Operations and was
Senior Vice President and General Manager--Rehabilitation and
Respiratory Division from 1984 to 1989. Mr. Richey also serves as a
Director of Steris Corporation, Cleveland, Ohio, a NASDAQ listed
manufacturer and distributor of medical sterilizing equipment, a
Director of Royal Appliance Manufacturing Co., Cleveland, Ohio, a New
York Stock Exchange listed manufacturer of vacuum cleaners, and a
Director of Unique Mobility Inc., Golden, Colorado, an American Stock
Exchange listed engineering concern and manufacturer of high
efficiency permanent magnet motors and electronic controls.
William M. Weber.......................... William M. Weber has been a Director since 1988. In 1994, Mr. Weber
Roundcap L.L.C. became President of Roundcap L.L.C. and a principal of Roundwood
25800 Science Park Drive Capital, a partnership that invests in public and private companies.
Beachwood, OH 44122 From 1968 to 1994, Mr. Weber was President of Weber, Wood, Medinger,
Inc., Cleveland, Ohio, a commercial real estate brokerage and
consulting firm.
Gerald B. Blouch.......................... Gerald B. Blouch was named President in November 1996 and has been
Chief Operating Officer since December 1994 and Chairman--Invacare
International since December 1993. Previously, Mr. Blouch was
President--Home Care Division from March 1994 to December 1994 and
Senior Vice President--Home Care Division from September 1992 to
March 1994. Mr. Blouch served as Chief Financial Officer from May
1990 to May 1993 and Treasurer from March 1991 to May 1993.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL OCCUPATIONS, POSITIONS, OFFICES OR EMPLOYMENT
NAME AND ADDRESS HELD DURING THE LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Thomas R. Miklich......................... Thomas R. Miklich has been Chief Financial Officer, General Counsel
and Treasurer since May 1993 and in September 1993 was named
Secretary. Previously, Mr. Miklich was Executive Vice President and
Chief Financial Officer of Van Dorn Company from 1991 to 1993, and
Chief Financial Officer of The Sherwin-Williams Company from 1986 to
1991.
Benoit Juranville......................... Benoit Juranville has been President--Invacare Europe since December
1993 and previously was President of Poirier S.A. which was purchased
by Invacare in 1992. He was added to the company's Executive
Committee in December of 1994. Mr. Juranville has also been Chairman
and Chief Executive Officer of Jufine S.A. (France), a management
consulting company, since January 1995. From 1983 through 1992, Mr.
Juranville was Chairman of the Board and Managing Director of
Poirier, S.A.
Louis F. J. Slangen....................... Louis F. J. Slangen was named Senior Vice President--Sales &
Marketing in December 1994 and from September 1989 to December 1994
was Vice President--Sales and Marketing. Mr. Slangen was previously
Vice President and General Manager--Rehab Division from 1992 to 1994.
M. Louis Tabickman........................ M. Louis Tabickman was named Group Vice President--Rehab Products in
August 1995. Mr. Tabickman has been an officer since July 1985 and
was named President--Invacare Canada in March, 1994. Previously, Mr.
Tabickman was Vice President & General Manager--Power Business Unit
from December 1994 to August 1995, Vice President and General
Manager-- Invacare Canada from September 1992 to March 1994 and Vice
President and General Manager of Service and Distribution from July
1985 until September 1992.
Thomas J. Buckley......................... Thomas J. Buckley was named Group Vice President-- Standard Products
in August 1995. Mr. Buckley was previously General Manager of Manual
Wheelchairs from December 1994 to August 1995. From November 1993 to
December 1994 Mr. Buckley was the Business Unit Leader of the Bed
Products and Pressure Relief Business Units. Before this period, Mr.
Buckley served as Director of Distribution.
Donald P. Andersen........................ Mr. Donald P. Andersen has been Group Vice President-- Respiratory
Products since 1996. Prior to that, Mr. Andersen was Senior Director
and General Manager of the Cryogenic Division for Puritan-Bennett
Corporation from 1993 to 1996 and Eastern Regional Manager for
Puritan-Bennett Corporation from 1989 to 1993.
</TABLE>
I-4
<PAGE>
SCHEDULE II
TRANSACTIONS IN SHARES DURING THE PAST 60 DAYS BY THE PARENT
(ALL PURCHASES WERE MADE ON THE OPEN MARKET)
<TABLE>
<CAPTION>
NUMBER OF PRICE PER
DATE SHARES SHARE
- ---------- ----------- -----------
<S> <C> <C>
12/9/96 13,000 8.8750
12/11/96 31,000 9.1450
12/13/96 16,000 9.2500
12/16/96 20,000 9.2500
12/16/96 3,000 9.1250
</TABLE>
On January 2, 1997, the Parent contributed 100 Shares to the Purchaser in
exchange for 100 shares of common stock, par value $0.01 per share, of the
Purchaser.
II-1
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and/or Rights and any other required documents should be sent or delivered by
each shareholder of the Company or his broker, dealer, commercial bank, trust
company or other nominee to the Depositary as follows:
THE DEPOSITARY FOR THE OFFER IS:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT
DELIVERY:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York Operations Department Attn: Securities Processing
10274-0084
Window, Subcellar One
Attn: Reorganization CONFIRM FACSIMILE BY
Operations Department TELEPHONE:
(212) 858-2103
</TABLE>
Any questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and addresses
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent. You may also contact your broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE: (800) 322-2885
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-6592 (Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED JANUARY 27, 1997
BY
I.H.H. CORP.
A WHOLLY OWNED SUBSIDIARY OF
INVACARE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, FEBRUARY 24, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT DELIVERY:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn.: Reorganization New York, New York 10004
New York, New York Operations Department Attn.: Securities Processing
10274-0084 Window, Subcellar One
Attn.: Reorganization CONFIRM FACSIMILE BY
Operations Department TELEPHONE: (212) 858-2103
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSIONS 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 shareholders either if
certificates for Shares or Rights (as such terms are defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of the
Offer to Purchase (as defined below)) is utilized, if tenders of Shares or
Rights are to be made by book-entry transfer into the account of IBJ Schroder
Bank & Trust Company, as Depositary (the "Depositary"), at The Depository Trust
Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (each a
"Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer
Facilities") pursuant to the book-entry procedures set forth in Section 3 of the
Offer to Purchase (as defined below). Shareholders who tender Shares or Rights
by book-entry transfer are referred to herein as "Book-Entry Shareholders".
Unless and until I.H.H. Corp., a Delaware corporation (the "Purchaser"),
declares that the Rights Condition (as defined in the Offer to Purchase) is
satisfied, holders of Shares will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share. If the Distribution
Date (as defined in the Offer to Purchase) has not occurred prior to the time
Shares are tendered pursuant to the Offer (as defined below), a tender of Shares
will also constitute a tender of the associated Rights. See Section 3 of the
Offer to Purchase. If the Distribution Date has occurred, and certificates
representing Rights (the "Rights Certificates") have been distributed to holders
of Shares, such holders will be required to tender Rights Certificates
representing a number of Rights equal to the number of Shares being tendered in
order to effect a valid tender of such Shares. Holders of Shares and Rights
whose certificates for such Shares (the "Share Certificates") and, if
applicable, Rights Certificates are not immediately available or who cannot
deliver their Share Certificates or, if applicable, Rights 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
and Rights 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>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
<TABLE>
<S> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C>
<CAPTION>
SHARES
SHARE EVIDENCED BY
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C>
TOTAL SHARES......................................................
* NEED NOT BE COMPLETED BY BOOK-ENTRY SHAREHOLDERS.
** UNLESS OTHERWISE INDICATED, ALL SHARE CERTIFICATES DELIVERED TO THE DEPOSITARY WILL BE DEEMED TO
HAVE BEEN TENDERED. SEE INSTRUCTION 4.
</TABLE>
<TABLE>
<S> <C> <C>
DESCRIPTION OF RIGHTS TENDERED*
<CAPTION>
RIGHTS CERTIFICATE(S) AND RIGHT(S) TENDERED
(ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C>
<CAPTION>
RIGHTS
RIGHTS EVIDENCED BY
CERTIFICATE RIGHTS RIGHTS
NUMBER(S)** CERTIFICATE(S)** TENDERED***
<S> <C> <C>
TOTAL RIGHTS......................................................
* NEED NOT BE COMPLETED IF THE DISTRIBUTION DATE HAS NOT OCCURRED.
** NEED NOT BE COMPLETED BY BOOK-ENTRY SHAREHOLDERS.
*** UNLESS OTHERWISE INDICATED, ALL RIGHTS CERTIFICATES DELIVERED TO THE DEPOSITARY WILL BE DEEMED
TO HAVE BEEN TENDERED. SEE INSTRUCTION 4.
</TABLE>
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER RIGHTS BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution __________________________________________________
Check box of applicable Book-Entry Transfer Facility:
(CHECK ONE) / / DTC / / PDTC
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.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Holder(s) ________________________________________________
Window Ticket No. (if any) _____________________________________________________
Date of Execution of Notice of Guaranteed Delivery _____________________________
Name of Institution which Guaranteed Delivery __________________________________
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer Facility
(check one):
(CHECK ONE) / / DTC / / PDTC
Account Number Transaction Code Number
- ------------------------ -----------------------
<PAGE>
/ / CHECK HERE IF RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER RIGHTS BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution __________________________________________________
Check box of applicable Book-Entry Transfer Facility:
(CHECK ONE) / / DTC / / PDTC
Account Number Transaction Code Number
- ------------------------ -----------------------
/ / CHECK HERE IF RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Holder(s) ________________________________________________
Window Ticket No. (if any) _____________________________________________________
Date of Execution of Notice of Guaranteed Delivery _____________________________
Name of Institution which Guaranteed Delivery __________________________________
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer Facility
(check one):
(CHECK ONE) / / DTC / / PDTC
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 I.H.H. Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Invacare Corporation, an Ohio
corporation (the "Parent"), the above-described 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
described below) is satisfied), the associated Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of May 22, 1995
(the "Rights Agreement"), between the Company and Trust Company Bank, as Rights
Agent (the "Rights Agent"), at a purchase price of $13 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 (the "Offer to Purchase") and in this Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer"). Unless the context
requires otherwise, all references to Shares shall be deemed to refer also to
the associated Rights, and all references to Rights shall be deemed to include
all benefits that may inure to the shareholders of the Company or to holders of
the Rights pursuant to the Rights Agreement. 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 and Rights tendered pursuant to the Offer, receipt of
which is hereby acknowledged.
The undersigned understands that if the Distribution Date (as defined in the
Offer to Purchase) has occurred and certificates representing Rights (the
"Rights Certificates") have been distributed to holders prior to the date of
tender of the Shares and Rights tendered herewith pursuant to the Offer, Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered herewith must be delivered to the Depositary (as defined below) or, if
available, a Book-Entry Confirmation (as defined herein) must be received by the
Depositary with respect thereto in order for such Shares tendered herewith to be
validly tendered. If the Distribution Date has occurred and Rights Certificates
have not been distributed prior to the time Shares are tendered herewith
pursuant to the Offer, the undersigned agrees to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered herewith
to IBJ Schroder Bank & Trust Company (the "Depositary") within three business
days after the date such Rights Certificates are distributed. A tender of Shares
without Rights Certificates constitutes an agreement by the tendering
shareholder to deliver Rights Certificates representing a number of Rights equal
to the number of Shares tendered pursuant to the Offer to the Depositary within
three business days after the date such Rights Certificates are distributed. The
undersigned understands that if the Rights Condition is not satisfied and the
Distribution Date occurs prior to the Expiration Date, the Purchaser reserves
the right to require that the Depositary receive such Rights Certificates or a
Book-Entry Confirmation with respect to such Rights prior to accepting Shares
for payment. In that event, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of, or Book-Entry Confirmation with respect to, among other things, Rights
Certificates, if Rights Certificates have been distributed to holders of Shares.
Subject to, and effective upon, acceptance for payment of the Shares and
Rights 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 and Rights
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 October 1, 1996 (except to the extent publicly
disclosed by the Company with specificity in documents filed with the Commission
prior to January 2, 1997) and payable or distributable to the undersigned on a
date prior to 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 (except that if the Rights are redeemed by the Company's Board of
Directors in accordance with the terms of the Rights Agreement, tendering
stockholders who are holders of record as of the applicable record date will be
entitled to receive and retain the redemption price of $.01 per Right in
accordance with the Rights Agreement) (collectively, a "Distribution"), and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares and Rights (and any Distribution) with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (i) deliver such Share
Certificates (as defined herein) evidencing such shares and Rights Certificates
(and any Distribution) or transfer ownership of such Shares and Rights (and any
Distribution) on the account books maintained by a Book-Entry Transfer Facility,
together, in either case, with appropriate evidences of transfer, to the
Depositary for the account of the Purchaser, (ii) present such Shares and Rights
(and any Distribution) for transfer on the books of the Company and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares and Rights and any Distribution, all in accordance with the terms
and subject to the conditions of the Offer.
<PAGE>
By executing this Letter of Transmittal, the undersigned irrevocably
appoints designees of the Purchaser and each of them as such shareholder's
attorneys-in-fact and proxies, with full power of substitution, in the manner
set forth in this Letter of Transmittal, to the full extent of such
shareholder's rights with respect to the Shares and Rights tendered by such
shareholder and accepted for payment by the Purchaser (and with respect to any
and all other Shares or Rights or other securities issued or issuable in respect
of such Shares or Rights on or after the date hereof). All such powers of
attorney and proxies shall be considered irrevocable and coupled with an
interest in the tendered Shares and Rights. Such appointment will be effective
when, and only to the extent that, the Purchaser accepts such Shares and Rights
for payment. Upon such acceptance for payment, all prior powers of attorney and
proxies given by such shareholder with respect to such Shares and Rights (and
such other shares and securities) will be revoked without further action, and no
subsequent powers of attorney and proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective). The designees of the Purchaser will, with respect to the Shares and
Rights (and such other shares and securities) for which such appointment is
effective, be empowered to exercise all voting and other rights of such
shareholder as they in their sole discretion may deem proper at any annual or
special meeting of the Company's shareholders 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 and Rights to
be deemed validly tendered, immediately upon the Purchaser's payment of such
Shares and Rights, the Purchaser must be able to exercise full voting rights
with respect to such Shares and Rights and other securities, including voting at
any meeting of shareholders.
The undersigned hereby represents and warrants that the (a) undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights tendered hereby (and any Distribution) and (b) when the Shares and Rights
are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title to the Shares and Rights (and any
Distribution), 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 all additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares and Rights tendered
hereby (and any Distribution). In addition, the undersigned shall promptly remit
and transfer to the Depositary for the account of the Purchaser any and all
Distributions in respect of the Shares and Rights tendered hereby, accompanied
by appropriate documentation of transfer; and, pending such remittance and
transfer or appropriate assurance thereof, the Purchaser shall be, subject to
applicable law, entitled to all rights and privileges as the owner of each such
Distribution, and may withhold the entire purchase price of the Shares and or
deduct from the purchase price, the amount or value of such Distribution, as
determined by the Purchaser in its sole discretion.
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.
Tenders of Shares and Rights made pursuant to the Offer are irrevocable,
except that Shares and Rights 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 March 28, 1997 (or such later date as
may apply in case the Offer is extended). See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares and Rights pursuant to
any of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto 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 and warranty that the
undersigned owns the Shares and Rights 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 and Rights not tendered or not accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered" and "Description of Rights Tendered", respectively. Similarly, unless
otherwise indicated "Special Delivery Instructions", please mail the check for
the purchase price and/or any certificate(s) for Shares and Rights 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" and "Description of Rights Tendered", respectively. 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 and Rights not tendered or accepted for payment in the
name of, and deliver such check and/or certificates to, the person or persons so
indicated. Unless otherwise indicated herein under "Special Payment
Instructions", please credit any Shares and Rights tendered herewith by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility designated above. The undersigned recognizes
that the Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares or Rights from the name(s) of the
registered holder(s) thereof if the Purchaser does not accept for payment any of
the Shares or Rights so tendered.
<PAGE>
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for To be completed ONLY if certificate(s) for
Shares and Rights not tendered or not Shares and Rights not tendered or not
accepted for payment and/or the check for accepted for payment and/or the check for
the purchase price of Shares and Rights the purchase price of Shares and Rights
accepted for payment are to be issued in the accepted for payment are to be sent to
name of someone other than the undersigned someone other than the undersigned or to the
or if Shares or Rights tendered by undersigned at an address other than that
book-entry transfer which are not accepted shown above.
for payment are to be returned by credit to
an account maintained at a Book-Entry
Transfer Facility.
Issue: / / check / / certificates to: Mail: / / check / / certificates to:
Name........................................ Name........................................
(PLEASE PRINT) (PLEASE PRINT)
Address..................................... Address.....................................
............................................ ...........................................
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
........................................... ...........................................
(TAX ID. OR SOCIAL SECURITY NO.) (TAX ID. OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON THE REVERSE SIDE) (SEE SUBSTITUTE FORM W-9 ON THE REVERSE SIDE)
Credit Shares and Rights tendered by book-
entry transfer that are not accepted for
payment to
(Check one):
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
............................................
(DTC OR PDTC ACCOUNT NO.)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SIGN IMPORTANT SIGN
HERE SHAREHOLDERS: SIGN HERE HERE
[arrow] AND COMPLETE SUBSTITUTE FORM W-9 [arrow]
...................................................................................
...................................................................................
(SIGNATURE(S) OF HOLDER(S))
Dated:...................................................................... , 1997
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share
Certificate(s) or Rights 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 trustee, executor, administrator,
guardian, attorney-in-fact, officer of corporation or other person 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. ...............................................................
GUARANTEE OF SIGNATURE(S)
(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>
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) of Shares and Rights (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 and/or
Rights) 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 and/ or Rights 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 the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion 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 shareholders either if certificates are 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 herein prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase) and,
unless and until the Purchaser declares that the Rights Condition (as defined in
the Offer to Purchase) is satisfied, Rights Certificates or timely confirmation
of a book-entry transfer of Rights into the Depositary's account at a Book-Entry
Transfer Facility, if available (together with, if Rights are forwarded
separately from Shares, a properly completed and duly executed Letter of
Transmittal (or a facsimile hereof) with any required signature guarantees, or
an Agent's Message in the case of a book-entry delivery, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth herein prior to the Expiration Date or, if later,
within three business days after the date such Rights Certificates are
distributed. Shareholders whose Share Certificates or Rights Certificates are
not immediately available (including Rights Certificates that have not yet been
distributed by the Company) or who cannot deliver their Share Certificates or
Rights 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 and Rights 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; (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; and (iv)
unless and until the Purchaser declares that the Rights Condition is satisfied,
the Rights Certificates, if issued, representing the appropriate number of
Rights or a Book-Entry Confirmation, if available, in each case together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), 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, or if later, three business days after Rights
Certificates are distributed to shareholders, all as provided in Section 3 of
the Offer to Purchase. If Share Certificates and Rights Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
<PAGE>
THE METHOD OF DELIVERY OF SHARE CERTIFICATES OR RIGHTS CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. 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 and Rights will be purchased. All tendering shareholders, by
execution of this Letter of Transmittal (or a facsimile hereof), waive any right
to receive any notice of the acceptance of their Shares and Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and Rights and any other
required information should be listed on a separate signed schedule attached
hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO BOOK-ENTRY SHAREHOLDERS) If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered". If fewer than all the Rights evidenced by
any Rights Certificates submitted are to be tendered, fill in the number of
Rights which are to be tendered in the box entitled "Number of Rights Tendered".
In such cases, new Share Certificates or Rights Certificates, as the case may
be, for the Shares or Rights that were evidenced by your old Share Certificates
or Rights 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 and all Rights represented by Rights 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
and Rights tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares and Rights 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 and Rights 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 and Rights 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 or Rights 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).
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
Unless and until the Purchaser declares the Rights Condition to be
satisfied, if Rights Certificates have been distributed to holders of Shares,
such holders are required to tender Rights Certificate(s) representing a number
of Rights equal to the number of Shares tendered in order to effect a valid
tender of such Shares. It is necessary that shareholders follow all signature
requirements of this Instruction 5 with respect to the Rights in order to tender
such Rights.
<PAGE>
6. STOCK TRANSFER TAXES. Except as provided in this Instruction 6, the
Purchaser will pay any stock transfer taxes with respect to the transfer and
sale of Shares and Rights 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
and Rights not tendered or accepted for payment are to be registered in the name
of, any person other than the registered holder(s), 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 provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares and Rights not tendered or not
accepted for payment are to be issued or returned to, a person other than the
signer of this Letter of Transmittal or to an address other than that shown in
this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal
must be completed. A Book-Entry Shareholder may request that Shares and/or
Rights not accepted for payment be credited to such account maintained at a
Book-Entry Transfer Facility as such Book-Entry Shareholder may designate under
"Special Payment Instructions". If no such instructions are given, such Shares
or Rights not accepted for payment will be returned by crediting the account of
the Book-Entry Transfer Facility 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. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses 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 from
brokers, dealers, commercial banks or trust companies.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares or Rights has been lost, destroyed or stolen, the
shareholder should promptly notify the Information Agent. The shareholder 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.
11. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided below, and to certify, under penalties of
perjury, that such number is correct and that such shareholder is not subject to
backup withholding of federal income tax. If a tendering shareholder has been
notified by the Internal Revenue Service that such shareholder is subject to
backup withholding, such shareholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such shareholder has since
been notified by the Internal Revenue Service that such shareholder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering shareholder to 31% federal income
tax withholding on the payment of the purchase price of all Shares purchased
from such shareholder. If the tendering shareholder has not been issued a TIN
and has applied for one or intends to apply for one in the near future, such
shareholder should write "Applied For" in the space provided for the TIN in Part
I of the Substitute Form W-9, and sign and date the Substitute Form W-9 and sign
the certification provided below. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN by the time of payment, the Depositary
will withhold 31% on all payments of the purchase price to such shareholder
until a TIN is provided to the Depositary. See Sections 3 and 5 of the Offer to
Purchase.
IMPORTANT: THIS LETTER OR TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH
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>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number--
FOR ALL ACCOUNTS Enter taxpayer identification number in Social Security Number or
FORM W-9 the box at right. (For most individuals, Employer Identification Number
this is your social security number. If
you do not have a number, see Obtaining a
Number in the enclosed Guidelines.)
Certify by signing and dating below. Note:
If the account is in more than one name,
see the chart in the enclosed Guidelines
to determine which number to give the
payer.
DEPARTMENT OF THE PART II--For Payees Exempt From Backup Withholding, see the enclosed Guidelines and
TREASURY complete as instructed therein.
INTERNAL REVENUE CERTIFICATION--Under penalties of perjury, I certify that:
OR (1) The number shown on this form is my correct Taxpayer Identification Number (or I
PAYER'S REQUEST am waiting for a number to be issued to me), and
FOR TAXPAYER (2) I am not subject to backup withholding either because I have not been notified by
IDENTIFICATION the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a
NUMBER ("TIN") result of failure to report all interest or dividends, or the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been notified
by the IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS
that you were subject to backup withholding you received another notification from the
IRS that you are no longer subject to backup withholding, do not cross out item (2).
(Also see instructions in the enclosed Guidelines.)
SIGN HERE SIGNATURE: DATE: , 1997
-->
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
IN THE SPACE PROVIDED FOR THE TIN IN PART I OF SUBSTITUTE FORM W-9.
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>
THE INFORMATION AGENT FOR THE OFFER IS:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048 (212) 783-6592 (Call Collect)
January 27, 1997
<PAGE>
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
TO
I.H.H. CORP.
A WHOLLY OWNED SUBSIDIARY OF
INVACARE CORPORATION
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 certificates for Shares (as defined below) or the
associated Preferred Stock Purchase Rights (the "Rights") are not immediately
available or the certificates for Shares or Rights 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 if the procedure for delivery
by book-entry transfer cannot be completed on a timely basis. This instrument
may be delivered by hand or transmitted by facsimile transmission or mail to the
Depositary.
THE DEPOSITARY FOR THE OFFER IS:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<CAPTION>
BY HAND OR OVERNIGHT
BY MAIL: BY FACSIMILE TRANSMISSION: DELIVERY:
<S> <C> <C>
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York Operations Department Attn: Securities Processing
10274-0084 Window, Subcellar One
Attn: Reorganization CONFIRM FACSIMILE BY
Operations Department TELEPHONE:
(212) 858-2103
</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, such signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to I.H.H. Corp., a Delaware corporation and
a wholly owned subsidiary of Invacare Corporation, an Ohio corporation, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
January 27, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), receipt of which is hereby acknowledged, the number of shares of
Common Stock, par value $0.01 per share (the "Shares"), and the number of
Rights, indicated below of Healthdyne Technologies, Inc., a Georgia corporation,
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase.
Signature(s)....................................................................
Name(s) of Record Holders
...............................................................................
PLEASE TYPE OR PRINT
Number of Shares and Rights ....................................................
Certificate Nos. (If Available)
...............................................................................
...............................................................................
Dated ...................................................................., 1997
Address(es).....................................................................
...............................................................................
ZIP CODE
Area Code(s) and Tel. No(s) ....................................................
Check one box (if Shares and Rights will be tendered by book-entry transfer):
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number .................................................................
...............................................................................
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which 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, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program,
hereby (a) represents that the above named person(s) "own(s)" the Shares and/or
Rights tendered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended ("Rule 14e-4"), (b) represents that such tender
of 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 Depository Trust Company or the
Philadelphia Depository Trust Company (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 and (d) guarantees, if
applicable, to deliver certificates representing the Rights ("Rights
Certificates") in proper form for transfer, or to deliver such Rights pursuant
to the procedure for book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility together with, if Rights are forwarded separately,
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 the later of (1) three Nasdaq National
Market trading days after the date hereof and (2) three business days after the
date the Rights Certificates are distributed to holders of Shares.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
Name
- ---------------------------------------------
ADDRESS PLEASE TYPE OR PRINT
Title
- ---------------------------------------------
ZIP CODE AUTHORIZED SIGNATURE
Dated
--------------------------------------- ,
AREA CODE AND TEL NO. 1997
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
--------------------
SALOMON BROTHERS
--------------------
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
AT
$13 NET PER SHARE
BY
I.H.H. CORP.
A WHOLLY OWNED SUBSIDIARY OF
INVACARE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, FEBRUARY 24, 1997, UNLESS THE OFFER IS EXTENDED.
January 27, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by I.H.H. Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Invacare Corporation, an Ohio
corporation (the "Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all 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) is satisfied) the
associated Preferred Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of May 22, 1995 (the "Rights Agreement"), between the
Company and Trust Company Bank, as Rights Agent, at a price of $13 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 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith. Unless and until the Purchaser declares that the
Rights Condition is satisfied, holders of Shares will be required to tender one
Right for each Share tendered in order to effect a valid tender of such Share.
If the Distribution Date (as defined in the Offer to Purchase) has not occurred
prior to the time Shares are tendered pursuant to the Offer, a tender of Shares
will constitute a tender of the associated Rights. If the Distribution Date has
occurred and the certificates representing such Rights ("Rights Certificates")
have been distributed by the Company to holders of Shares, such holders of
Shares shall be required to tender Rights Certificates representing a number of
Rights equal to the number of Shares being tendered in order to effect valid
tender of such Shares. Holders of Shares and Rights whose certificates for such
Shares (the "Share Certificates") and, if applicable, Rights Certificates are
not immediately available or who cannot deliver their Share Certificates or, if
applicable, their Rights 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,
<PAGE>
must tender their Shares and Rights according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. Unless the context
otherwise requires, all references to Shares shall include the associated
Rights, and all references to Rights shall include all benefits that may inure
to holders of Rights pursuant to the Rights Agreement.
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 conditioned upon, among other things: (1) the Purchaser being
satisfied, in its sole discretion, that there have been validly tendered and not
properly withdrawn prior to the expiration of the Offer that number of Shares
which, when added to the 600,000 Shares beneficially owned by the Purchaser and
its affiliates, would constitute at least 51% of the voting power (determined on
a fully diluted basis) on the date of purchase of all securities of the Company
entitled to vote generally in the election of directors and in a merger; (2) the
Purchaser being satisfied, in its sole discretion, that the Rights have been
redeemed by the Company's Board of Directors or that such Rights have been
invalidated or are otherwise inapplicable to, or that the dilutive provisions
thereof would not be triggered by, the Offer or the proposed Merger (as defined
in the Offer to Purchase); (3) the Purchaser being satisfied, in its sole
discretion, that the restrictions on business combinations contained in Sections
14-2-1131 through 14-2-1133 of the Georgia Business Corporation Code (the
"GBCC") would not apply to the Purchaser or the Parent in connection with the
Offer or the proposed Merger (as a result of action by the Company's Board of
Directors, the ownership by the Purchaser and its affiliates upon consummation
of the Offer of at least 90% of the outstanding voting stock of the Company
(other than shares held by directors, officers and certain employee stock plans
of the Company) or otherwise); and (4) the Puchaser being satisfied, in its sole
discretion, that the restrictions on business combinations contained in Sections
14-2-1110 through 14-2-1113 of the GBCC would not apply to the Purchaser or the
Parent in connection with the Offer or the proposed Merger or are invalid (in
either case, as a result of action by the Company's Board of Directors, judicial
action or otherwise) or that the proposed Merger may be consummated without any
approval required under such Sections of the GBCC at a price per Share not in
excess of the price per Share to be paid in the Offer. The Offer is also subject
to other terms and conditions. See the Introduction and Sections 1 and 14 of the
Offer to Purchase. The Offer is not conditioned on the receipt of financing.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated January 27, 1997.
2. The GREEN 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 GOLD Notice of Guaranteed Delivery for Shares and Rights to be
used to accept the Offer if Share Certificates or Rights Certificates are
not immediately available or if such certificates and all other required
documents cannot be delivered to IBJ Schroder Bank & Trust Company (the
"Depositary") by the Expiration Date or if the procedure for book-entry
transfer cannot be completed by the Expiration Date.
4. A GRAY 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 such 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.
6. A return envelope addressed to IBJ Schroder Bank & Trust Company,
the Depositary.
2
<PAGE>
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 MONDAY, FEBRUARY 24, 1997, UNLESS THE
OFFER IS EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and 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 or Rights, and any other required documents should
be sent to the Depositary, and (ii) either Share Certificates, and if
applicable, Rights Certificates, representing the tendered Shares (and, if
applicable, tendered Rights) should be delivered to the Depositary, or such
Shares (and, if applicable, tendered Rights) 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, if applicable, Rights 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 fees or commissions to any broker, dealer or
any other person (other than the Dealer Manager and MacKenzie Partners, Inc.
(the "Information Agent") (as described in the Offer to Purchase)) for
soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however,
upon request, reimburse you for customary mailing and handling expenses incurred
by you in forwarding any of the enclosed materials to your customers. The
Purchaser will pay or cause 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
Salomon Brothers Inc, the Dealer Manager, or the Information Agent, at their
respective addresses and telephone numbers set forth on the back cover page of
the Offer to Purchase. Additional copies of the enclosed materials may be
obtained from the Information Agent.
Very truly yours,
SALOMON BROTHERS INC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENTS OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
AT
$13 NET PER SHARE
BY
I.H.H. CORP.
A WHOLLY OWNED SUBSIDIARY OF
INVACARE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, FEBRUARY 24, 1997, UNLESS THE OFFER IS EXTENDED.
January 27, 1997
TO OUR CLIENTS:
Enclosed for your consideration is an Offer to Purchase, dated January 27,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal relating
to an 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) is satisfied) the
associated Preferred Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of May 22, 1995 (the "Rights Agreement"), between the
Company and Trust Company Bank, as Rights Agent, at a price of $13 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 and
in the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"). Unless the context requires otherwise, all
references to "Shares" shall be deemed to refer also to the associated Rights,
and all references to Rights shall be deemed to include all benefits that may
inure to the shareholders of the Company or to the holders of the Rights
pursuant to the Rights Agreement. 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.
Unless and until the Purchaser declares that the Rights Condition is
satisfied, holders of Shares will be required to tender a number of Rights equal
the number of Shares being tendered in order to effect a valid tender of such
Shares. Based on the Company's filings with the Securities and Exchange
Commission (the "Commission"), until the Distribution Date (as defined in the
Offer to Purchase), the surrender for transfer of any of the certificates
representing Shares (the "Share Certificates") will also constitute the
surrender for transfer of the Rights associated with the Shares represented by
such Share Certificates. Based on the Company's filings with the Commission, as
soon as practicable following the Distribution Date, separate certificates
representing the Rights ("Rights Certificates") will be mailed to holders of
record of Shares as of the close of business on the Distribution Date; after the
Distribution Date, such separate Rights Certificates alone will evidence the
Rights. See Section 3 of the Offer to Purchase.
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
<PAGE>
to Purchase. Your instructions to tender Shares held by us for your account will
also constitute a direction to us to tender a number of Rights held by us for
your account equal to the number of Shares tendered.
Your attention is invited to the following:
1. The tender price is $13 per share, net to the seller in cash without
interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Monday, February 24, 1997, unless the Offer is extended.
4. The Offer is conditioned upon, among other things: (1) the Purchaser
being satisfied, in its sole discretion, that there have been validly
tendered and not properly withdrawn prior to the expiration of the Offer
that number of Shares which, when added to the Shares beneficially owned by
the Purchaser and its affiliates, would constitute at least 51% of the
voting power (determined on a fully diluted basis) on the date of purchase
of all securities of the Company entitled to vote generally in the election
of directors and in a merger; (2) the Purchaser being satisfied, in its sole
discretion, that the Rights have been redeemed by the Company's Board of
Directors or that such Rights have been invalidated or are otherwise
inapplicable to, or that the dilutive provisions thereof would not be
triggered by, the Offer or the proposed Merger (as defined in the Offer to
Purchase); (3) the Purchaser being satisfied, in its sole discretion, that
the restrictions on business combinations contained in Sections 14-2-1131
through 14-2-1133 of the Georgia Business Corporation Code (the "GBCC")
would not apply to the Purchaser or the Parent in connection with the Offer
or the proposed Merger (as a result of action by the Company's Board of
Directors, the ownership by the Purchaser and its affiliates upon
consummation of the Offer of at least 90% of the outstanding voting stock of
the Company (other than Shares held by directors, officers and certain
employee stock plans of the Company) or otherwise); and (4) the Purchaser
being satisfied, in its sole discretion, that the restrictions on business
combinations contained in Sections 14-2-1110 through 14-2-1113 of the GBCC
would not apply to the Purchaser or the Parent in connection with the Offer
or the proposed Merger or are invalid (in either case, as a result of action
by the Company's Board of Directors, judicial action or otherwise) or that
the proposed Merger may be consummated without any approval required under
such Sections of the GBCC at a price per Share not in excess of the price
per Share to be paid in the Offer. The Offer is also subject to other terms
and conditions. See the Introduction and Sections 1 and 14 of the Offer to
Purchase. The Offer is not conditioned on the receipt of financing.
5. 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.
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 all Shares. The Offer
is not being made to (nor will tenders be accepted from or on behalf of) holders
of Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the securities, blue sky or other laws
of such jurisdiction or any administrative or judicial action pursuant thereto.
However, the Purchaser may in its discretion take such actions as it may deem
necessary to make the Offer in any jurisdiction and extend the Offer to holders
of Shares in such jurisdiction. In those jurisdictions 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 Salomon
Brothers Inc, the Dealer Manager, or one 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. 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.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated January 27, 1997, and the related Letter of Transmittal (the
"Offer to Purchase") in connection with the offer by I.H.H. Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Invacare
Corporation, an Ohio corporation, to purchase all outstanding shares of Common
Stock, par value $0.01 per share (the "Shares"), of Healthdyne Technologies,
Inc., a Georgia corporation, and (unless and until the Purchaser declares that
the Rights Condition (as defined in the Offer to Purchase) is satisfied) the
associated Preferred Stock Purchase Rights (the "Rights").
This will instruct you to tender the number of Shares and Rights indicated
below (or, if no number is indicated below, all Shares and Rights) 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 (and Rights) to be SIGN HERE
Tendered* ....................................................
................................ Shares (and Rights) ....................................................
Dated ........................................, 1997 Signature(s)
....................................................
Please print names(s)
....................................................
Address
....................................................
Area Code and Telephone Number
....................................................
Taxpayer Identification or Social Security Number
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all of your Shares (and
Rights) held by us for your account are to be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- 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., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- -----------------------------------------------------
<S> <C> <C>
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, any
one of the
individuals(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(1)
4. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent
committee for a person(3)
designated ward,
minor, or
incompetent person
7. a. The usual The
revocable savings grantor-trustee(1)
trust account
(grantor is also
trustee)
b. So-called trust
account that is The actual owner(1)
not a legal or
valid trust under
State law
8. Sole proprietorship The owner(4)
account
- -----------------------------------------------------
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<S> <C> <C>
- -----------------------------------------------------
9. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, 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 renewed 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 non-resident aliens.
- Payments on tax-free covenant 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. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES.
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure 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.
<PAGE>
Exhibit 11(a)7
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated January
27, 1997 and the related Letter of Transmittal. The Offer is not being made to
(nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other laws of such
jurisdiction or any administrative or judicial action pursuant thereto. However,
the Purchaser may in its discretion take such actions as it may deem necessary
to make the Offer in any jurisdiction and extend the Offer to holders of Shares
in such jurisdiction. In those jurisdictions 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 Salomon Brothers Inc
(the "Dealer Manager") or one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
HEALTHDYNE TECHNOLOGIES, INC.
AT
$13 NET PER SHARE
BY
I.H.H. CORP.
A WHOLLY OWNED SUBSIDIARY OF
INVACARE CORPORATION
I.H.H. Corp., a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of Invacare Corporation, an Ohio corporation (the "Parent"), is
offering 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 below) is satisfied) the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of May 22, 1995, between the Company and Trust Company Bank, as Rights
Agent (the "Rights Agreement"), at a purchase price of $13 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 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together, as amended from time to time, constitute the
"Offer"). Unless the context requires otherwise, all references to Shares shall
be deemed to refer also to the associated Rights, and all references to Rights
shall be deemed to include all benefits that may inure to the shareholders of
the Company or to holders of Rights pursuant to the Rights Agreement.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, FEBRUARY 24, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS: (1) THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THERE HAVE BEEN VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES
WHICH, WHEN ADDED TO THE 600,000 SHARES BENEFICIALLY OWNED BY THE PURCHASER AND
ITS AFFILIATES, WOULD CONSTITUTE AT LEAST 51% OF THE VOTING POWER (DETERMINED ON
A FULLY DILUTED BASIS) ON THE DATE OF PURCHASE OF ALL SECURITIES OF THE COMPANY
ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS AND IN A MERGER; (2) THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN
REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR THAT SUCH RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO, OR THAT THE DILUTIVE PROVISIONS
THEREOF WOULD NOT BE TRIGGERED BY, THE OFFER OR THE PROPOSED MERGER DESCRIBED
BELOW (THE "RIGHTS CONDITION"); (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE RESTRICTIONS ON BUSINESS COMBINATIONS CONTAINED IN SECTIONS
14-2-1131 THROUGH 14-2-1133 OF THE GEORGIA BUSINESS CORPORATION CODE (THE
"GBCC") WOULD NOT APPLY TO THE PURCHASER OR THE PARENT IN CONNECTION WITH THE
OFFER OR THE PROPOSED MERGER (AS A RESULT OF ACTION BY THE COMPANY'S BOARD OF
DIRECTORS, THE OWNERSHIP BY THE PURCHASER AND ITS AFFILIATES UPON CONSUMMATION
OF THE OFFER OF AT LEAST 90% OF THE OUTSTANDING VOTING STOCK OF THE COMPANY
(OTHER THAN SHARES HELD BY DIRECTORS, OFFICERS AND CERTAIN EMPLOYEE STOCK PLANS
OF THE COMPANY) OR OTHERWISE); AND (4) THE PURCHASER BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT THE RESTRICTIONS ON BUSINESS COMBINATIONS CONTAINED IN
SECTIONS 14-2-1110 THROUGH 14-2-1113 OF THE GBCC WOULD NOT APPLY TO THE
PURCHASER OR THE PARENT IN CONNECTION WITH THE OFFER OR THE PROPOSED MERGER OR
ARE INVALID (IN EITHER CASE, AS A RESULT OF ACTION BY THE COMPANY'S BOARD OF
DIRECTORS, JUDICIAL ACTION OR OTHERWISE) OR THAT THE PROPOSED MERGER MAY BE
CONSUMMATED WITHOUT ANY APPROVAL REQUIRED UNDER SUCH SECTIONS OF THE GBCC AT A
PRICE PER SHARE NOT IN EXCESS OF THE PRICE PER SHARE TO BE PAID IN THE OFFER.
THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Purchaser intends to propose, and to seek to have
the Company consummate as soon as practicable after consummation of the Offer, a
merger or similar business combination (the "Merger") with the Purchaser or
another direct or indirect subsidiary of the Parent, pursuant to which each then
outstanding Share (other than Shares held by the Parent, the Purchaser or any
other wholly-owned subsidiary of the Parent, Shares held in the treasury of the
Company and Shares held by shareholders who properly exercise appraisal rights
under Georgia law) would be converted into the right to receive in cash the
price per Share paid by the Purchaser pursuant to the Offer.
UNLESS AND UNTIL THE PURCHASER DECLARES THAT THE RIGHTS CONDITION IS
SATISFIED, HOLDERS OF SHARES WILL ALSO BE REQUIRED TO TENDER ONE RIGHT FOR EACH
SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. IF SEPARATE
CERTIFICATES FOR THE RIGHTS ("RIGHTS CERTIFICATES") ARE NOT ISSUED, A TENDER OF
SHARES WILL ALSO CONSTITUTE A TENDER OF ASSOCIATED RIGHTS.
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
for payment of such Shares 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 shareholders for the purpose
of receiving payments from the Purchaser and transmitting such payments to
shareholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCE
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY THE PURCHASER,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH 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 representing Shares ("Share Certificates") and, if applicable,
Rights Certificates, or timely confirmation of a book-entry transfer of such
Shares and, if applicable, Rights into the Depositary's account at The
Depository Trust Company or the Philadelphia Depository Trust Company (each, a
"Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section
3 of the Offer to Purchase, (ii) a 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 Section 2 of the Offer to
Purchase) in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission, the Purchaser reserves the right, in its sole discretion,
at any time or from time to time, regardless of whether the conditions specified
in Section 14 of the Offer to Purchase shall have been satisfied or any of the
events or facts set forth in Section 14 of the Offer to Purchase shall have
occurred, to extend the period during which the Offer is open by giving oral or
written notice of such extension to the Depositary. During any such extension,
all Shares previously tendered and not properly withdrawn will remain subject to
the Offer, subject to the rights of a tendering shareholder to withdraw such
shareholder's Shares. Any such extension will be followed as promptly as
practicable by a public announcement thereof, which announcement will be made no
later than 9:00 A.M., New York City time, on the next business day after the
previously scheduled Expiration Date.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Monday, February 24, 1997, unless and until the Purchaser, in its sole
discretion, shall have extended the period 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.
Tenders of Shares and Rights made pursuant to the Offer are irrevocable,
except that Shares and Rights 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 March 28, 1997 (or such later date as may apply in case the Offer is
extended). 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 its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares or Rights to be withdrawn, the number of Shares or Rights to
be withdrawn and the name of the registered holder, if different from that of
the person who tendered such Shares or Rights. If Share Certificates or Rights
Certificates 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
signatures 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 or Rights have been tendered for the account of any Eligible Institution.
If Shares or Rights 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 to be credited with the withdrawn Shares or Rights, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in the second sentence of this paragraph. A
withdrawal of Shares or Rights shall also constitute a withdrawal of the
associated Rights or Shares, as applicable. 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.
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.
Requests are being made to the Company for the use of the Company's
shareholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares and communicating with shareholders in connection
with the Offer. The Offer to Purchase and the related Letter of Transmittal and,
if required, other relevant materials will be mailed to record holders of Shares
whose names appear on the Company's shareholder 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 shareholder 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 by
the Purchaser following receipt of such lists or listings from the Company, or
by the Company, if it so elects.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses and telephone numbers as
set forth below. The Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares and Rights pursuant to the
Offer. Additional copies of the Offer to Purchase, the Letter of Transmittal and
all other tender offer materials may be obtained from the Information Agent or
from brokers, dealers, commercial banks and trust companies, and will be
furnished promptly at the Purchaser's expense.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
[SALOMON BROTHERS INC LOGO]
Seven World Trade Center
New York, New York 10048
(212) 783-6592
(CALL COLLECT)
January 27, 1997
<PAGE>
FOR IMMEDIATE RELEASE
CONTACTS: Daniel Burch
Mark Harnett
MacKenzie Partners, Inc.
(212) 929-5500
INVACARE CORPORATION LAUNCHES TENDER OFFER FOR HEALTHDYNE TECHNOLOGIES, INC. AT
INCREASED PRICE OF $13 PER SHARE AND COMMENCES LITIGATION
Elyria, Ohio - (January 27, 1997) - Invacare Corporation (NASDAQ/NMS:IVCR)
announced today that its wholly owned subsidiary I.H.H. Corp. has commenced an
all-cash tender offer for all outstanding shares of common stock of Healthdyne
Technologies, Inc. (NASDAQ/NMS:HDTC) at $13 per share, to be followed by a
second-step merger in which holders of shares not validly tendered would receive
the same per share price as in the offer.
The tender offer price represents more than a 45% premium over Healthdyne's
closing stock price on December 31, 1996, the trading day prior to Invacare's
making its original acquisition proposal to Healthdyne on January 2, 1997, and
reflects a $.50 per share increase over Invacare's previous offer to Healthdyne.
A. Malachi Mixon, III, Chairman and Chief Executive Officer of Invacare,
said: "We are surprised and disappointed that Healthdyne's Board of Directors
has rejected our offer without even calling us or seeking any discussions with
us whatsoever. We have difficulty understanding how our original offer, which
represented more than a 40% premium over the prevailing market price, could have
been viewed by Healthdyne, its Board of Directors or its financial advisors as
'grossly inadequate', especially since the Company's Chairman sold approximately
one-third of his shares at prices ranging from $13.00 to $14.25 as recently as
last May and June. While we, like Healthdyne's other stockholders, would
certainly be interested in seeing and understanding the detailed information
which the Company's management has claimed will improve its prospects and has
promised for release in early February, we note that in recent periods the
Company has disappointed its stockholders by failing to meet analysts' published
expectations. However, because we remain fully committed to this acquisition on
terms that bring value to the stockholders of both companies, we are increasing
our offer price from $12.50 to $13 in the interests of completing this
transaction expeditiously.
"Although we would have preferred to have conducted discussions with
Healthdyne regarding our offer and continue to look forward to the opportunity
to do so, their rejection of our prior offer and continued refusal to have any
discussions or contacts with us force us to make our offer directly to the
stockholders in a manner which, under the tender offer rules, will require
Healthdyne's Board to provide a prompt and more thorough response.
-MORE-
<PAGE>
"We hope that when Healthdyne's Board considers our increased offer it
will view it as we do -- an excellent opportunity for the stockholders of
Healthdyne to realize full value for their shares to an extent not otherwise
likely to be available to them. We continue to be interested in meeting with
Healthdyne to discuss our offer in the hopes of promptly negotiating a
mutually agreeable transaction. In the context of a negotiated transaction,
we would consider discussing our offer price if Healthdyne's management is
able to substantiate significant additional values to Invacare's
satisfaction, and are prepared to discuss all other aspects of our offer
fully with Healthdyne, including structure, form of consideration and the
proper roles for our respective managers and employees in the combined
company."
Invacare also announced that it was commencing litigation against
Healthdyne and certain of its directors to declare various defensive mechanisms,
including Healthdyne's "poison pill" rights plan, illegal and to require
Healthdyne and its Board of Directors to take certain actions to permit its
stockholders to effectively consider the Invacare offer. Thomas R. Miklich,
Chief Financial Officer and General Counsel of Invacare, said: "We regret the
necessity of commencing litigation. However, among other defensive tactics,
Healthdyne has a 'poison pill' containing certain unusual and draconian
director-entrenching provisions, commonly referred to as 'dead-hand pill'
restrictions, which purport, under certain circumstances, to prevent future
directors from redeeming or otherwise nullifying the pill in connection with a
proposed transaction which the future Board determines to be in the best
interests of the Company and its stockholders. We believe that such
restrictions are illegal and that Healthdyne has a duty to take actions to
permit its stockholders to effectively consider our offer free of these and
Healthdyne's other defensive provisions."
Invacare's tender offer is conditioned on, among other things, the
acquisition of at least 51% of Healthdyne's shares on a fully diluted basis, the
redemption or inapplicability of Healthdyne's "poison pill" rights plan and the
inapplicability, invalidation or satisfaction of the Georgia anti-takeover
statutes (parts of which Healthdyne's Board of Directors has only recently opted
into by adopting a by-law amendment immediately prior to the public announcement
of its rejection of Invacare's offer). The offer is not contingent on the
receipt of financing. The full terms and conditions of the offer will be set
forth in tender offer materials being filed today with the SEC which will be
mailed promptly to Healthdyne stockholders. The offer and withdrawal rights
with respect thereto will expire at 12:00 midnight, New York City time, on
Monday, February 24, 1997, unless the offer is extended. Invacare currently
holds (including through I.H.H. Corp.) 600,000 shares of Healthdyne common
stock, representing approximately 4.8% of Healthdyne's outstanding shares
based on publicly available information.
-MORE-
<PAGE>
Salomon Brothers Inc is acting as Dealer Manager for the offer, and
MacKenzie Partners, Inc. is acting as Information Agent.
Invacare is the world's leading manufacturer and distributor of home health
care products and mobility products for people with disabilities. The company's
headquarters are located in Elyria, Ohio, with manufacturing facilities in the
United States, Australia, Canada, France, Germany, Mexico, New Zealand,
Portugal, Switzerland and the United Kingdom. Products are distributed
worldwide through a network of more than 10,000 provider locations.
# # #
<PAGE>
Exhibit 11(b)(1)
December 30, 1996
Invacare Corporation
899 Cleveland Street
P.O. Box 4028
Elyria, Ohio 44036-2125
Attention: Thomas R. Miklich
Ladies and Gentlemen:
Invacare Corporation (the "Borrower") has requested senior credit
facilities (the "Facilities") to be provided to the Borrower in the aggregate
principal amount of $200,000,000 (the "Aggregate Commitment") to finance the
acquisition (the "Acquisition") of all of the stock of a public company
previously identified by the Borrower to us (the "Seller"). The Acquisition
will be accomplished through a cash tender offer (the "Tender Offer") by a
wholly owned subsidiary of the Borrower ("AcquisitionCo") for not less than a
majority of the shares of the Seller (on a fully diluted basis). The Tender
Offer will be in an aggregate amount consistent with the total cost of the
Acquisition previously disclosed by the Borrower to us and consistent with the
terms previously disclosed to us.
The commitment of NBD (the "Agent") hereunder is contingent upon the
consummation of the Acquisition and the Tender Offer upon terms and conditions
reasonably satisfactory to the Agent, the Agent's satisfactory review of all
agreements and documents executed or filed in connection therewith, the
Acquisition and the Tender Offer, the structure of the Borrower and
AcquisitionCo and its other subsidiaries before and after the Acquisition, and
the legal, accounting and tax aspects of the Acquisition and the Tender Offer
being satisfactory to Agent and Arranger and its counsel, the total amounts of
the Facilities or any other funds of the Borrower which are being used to
consummate the Acquisition, directly or indirectly, being consistent with the
amounts previously disclosed by the Borrower to the Agent and Arranger, the
Borrower amending the covenants, pricing and other appropriate terms in its
other credit facilities with the Agent, in a manner satisfactory to the Agent,
to those described in the attached Term Sheet (as defined below) and the other
terms and conditions set forth in this letter and the attached Term Sheet. The
Term Sheet and this Commitment Letter are intended as an outline only and do not
purport to summarize all of the terms, conditions, covenants, representations,
warranties and other provisions which will be contained in definitive legal
documentation for the transaction which is the subject of this Commitment
Letter.
NBD Bank is pleased to provide you with a financing commitment for, and to
agree to act as administrative agent bank (the "Agent") in connection with, the
entire amount of the Facilities on the terms and conditions set forth in the
term sheet attached hereto ("Term Sheet") and subject to the conditions set
forth in this letter. First Chicago Capital Markets, Inc. (the "Arranger"), an
affiliate of the Agent, is pleased to provide you with its undertaking to
syndicate all or a portion of the Facilities to a syndicate of lenders
(collectively, including NBD Bank, the "Lenders"). While the Agent's agreement
herein is to provide the entire amount of the Facilities on a fully underwritten
basis, the Arranger reserves the right to syndicate all or a portion of the
Facilities to additional Lenders with a corresponding reduction in the Agent's
commitment.
In the event that any information relating to conditions or events not
previously disclosed to either Agent or Arranger or relating to new information
or additional developments concerning conditions or events previously disclosed
which may have a material adverse effect on the condition, assets, properties,
business or prospects of the Borrower and its subsidiaries or the Seller, or any
conditions set forth in definitive financing documentation are not satisfied,
either may, in its sole discretion, suggest alternative financing amounts or
structures that ensure
<PAGE>
Sheet no. 2
adequate protection for the Lenders or decline to participate in the proposed
financing. The Agent and the Arranger and officers and employees of each of the
Agent and Arranger will have the right to share information received from the
Borrower, the Seller and their respective affiliates, agents, officers, and
employees.
The Borrower agrees to (i) reimburse Agent and Arranger for all out-of-
pocket expenses (including the fees of outside counsel and time charges for
inside counsel) incurred in connection with this Commitment Letter, the
transactions contemplated thereby and Agent's and Arranger's on-going due
diligence therewith, including without limitation travel expenses and costs
incurred in connection with the preparation, negotiation, execution,
administration, syndication, and enforcement of any document relating to this
transaction and its role hereunder, (ii) indemnify and hold harmless the Agent,
Arranger, Lenders and their respective officers, employees, agents and directors
(collectively, the "Indemnified Persons") against any and all losses, claims,
damages, or liabilities of every kind whatsoever to which the Indemnified
Persons may become subject in connection in any way with the transactions
(including without limitation the Acquisition and the providing of the
Facilities) which are the subject of this Commitment Letter, including without
limitation expenses incurred in connection with investigating or defending
against any liability or action whether or not a party thereto, except to the
extent any of the foregoing is found in a final judgment by a court of competent
jurisdiction to have arisen solely from such Lender's gross negligence or
willful misconduct: and (iii) assert no claim against any Indemnified Persons
seeking consequential damages on any theory of liability in connection in any
way with the transaction which is the subject of this Commitment Letter. The
obligations described in this paragraph are independent of all other obligations
hereunder and under the Loan Documents, shall survive the expiration, revocation
or termination of this Commitment Letter, and shall be payable whether or not
the financing transactions contemplated by this Commitment Letter shall close.
Agent's and Arranger's respective obligations under this Commitment Letter are
enforceable solely by the party signing this Commitment Letter and may not be
relied upon by any other person. IF THIS COMMITMENT LETTER, THE TERM SHEET, THE
AGENT FEE LETTER, OR ANY ACT, OMISSION OR EVENT DESCRIBED IN THIS PARAGRAPH
BECOMES THE SUBJECT OF A DISPUTE, THE PARTIES HERETO EACH HEREBY WAIVE TRIAL BY
JURY.
This Agent's commitment and the Arranger's undertaking is subject to, among
other conditions (i) the preparation, execution, and delivery of a mutually
acceptable credit agreement ("Credit Agreement") and other loan documents
(collectively, the "Loan Documents") incorporating, without limitation,
substantially the terms and the conditions outlined herein and in the Term
Sheet; (ii) Agent's and Arranger's respective determination that (a) there is an
absence of a material adverse change in the business, condition (financial or
otherwise), operations, performance, properties, or prospects of the Borrower,
the Seller or any of their material subsidiaries from December 31, 1995 or
otherwise from that disclosed in publicly filed financial statements of the
Seller; and (b) there is an absence of any material adverse change prior to
closing in primary and secondary loan syndication markets or capital markets
generally.
Arranger will manage all aspects of the syndication, including, without
limitation, decisions as to the selection of institutions to be approached and
when they will be approached, when their commitments will be accepted, which
institutions will participate, the allocations of
<PAGE>
Sheet no. 3
the commitments among the Lenders and the amount and distribution of the fees
discussed herein among the Lenders, all in consultation with the Borrower.
Upon Arranger's acceptance of any such commitment from a Lender, Agent shall
be relieved of its commitment to fund such amount. To assist Arranger in its
syndication efforts, the Borrower shall, and shall cause its subsidiaries to:
(a) provide and to cause its advisors to provide Arranger upon request with
all information deemed reasonably necessary by it to complete successfully
the syndication, including, without limitation, all information and
projections prepared by Borrower or on Borrower's behalf relating to the
transactions contemplated hereby; (b) cause the management of the Borrower to
actively participate in, both the preparation of an information package
regarding the operations and prospects of the Borrower and the presentation
of the information to prospective Lenders; and (c) not to make any statement
publicly about the Commitment or the Facilities which might negatively affect
Arranger's ability to syndicate the Facilities. The Agent and the Arranger
acknowledge that, as Seller is a public corporation, under certain
circumstances the only available information may be public information.
Please indicate your acceptance of this commitment by the Agent and
undertaking by the Arranger in the space indicated below and return a copy of
this letter so executed to the Agent. This commitment and undertaking will
expire at 5:00 p.m. (Detroit time) January 2, 1997 unless on or prior to such
time the Agent shall have received a copy of this letter executed by the
Borrower together with the fee required under paragraph 1(a) of the Agent's Fee
Letter of even date herewith (the "Fee Letter"). Notwithstanding timely
acceptance of the commitment pursuant to the preceding sentence, the commitment
will automatically terminate unless definitive Loan Documents are executed on or
before February 28, 1997. By its acceptance hereof, the Borrower agrees to pay
the Agent and the Arranger the fees described in the Fee Letter. This
commitment replaces and supersedes any previous commitment relating to the
transactions described in this letter.
By accepting delivery of this Commitment Letter, the Fee Letter and the
Term Sheet, the Borrower hereby agrees that, prior to executing this
Commitment Letter, the Borrower will not disclose either expressly or
impliedly, without the Agent's and the Arranger's prior written consent, to
any person any of the terms of this Commitment Letter, the Fee Letter or Term
Sheet, or the fact that this Commitment Letter, the Fee Letter or Term Sheet
or the financing proposal represented thereby exists except that the Borrower
may disclose any of the foregoing to any employee or attorney of the Borrower
to whom, in each case, it is necessary to disclose such information so long
as any such employee or attorney is directed to observe this confidentiality
obligation. Upon the Borrower's execution of this Commitment Letter, the
Borrower may make public disclosure of the existence and the amount of the
commitment, and the Borrower may file a copy of this Commitment Letter (but
not the Fee Letter) or make such other disclosures if such disclosure is
required by law, but may not make any other disclosure. If the Borrower does
not accept this commitment, the Borrower is to immediately return this
Commitment Letter, the Fee Letter and the Term Sheet (and all copies of the
foregoing) to the Agent. The Borrower authorizes each of the Agent and the
Arranger to answer inquiries from financial media with respect to the
Facilities.
<PAGE>
Sheet no. 4
This Commitment Letter and Term Sheet supersede any and all prior versions
thereof. This Commitment Letter shall be governed by the internal laws of the
State of Michigan, and may only be amended by a writing signed by all parties
hereto.
Very truly yours,
NBD BANK,
individually and as Agent
By: /s/ Winifred S. Pinet
--------------------------------
Title: First Vice President
-----------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.,
as Arranger
By: /s/ Maher Touma
--------------------------------
Title: Managing Director
-----------------------------
Accepted and agreed:
INVACARE CORPORATION
By: /s/ Thomas R. Miklich
-----------------------
Title: CFO
--------------------
Date: 1/2/97
---------------------
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
PROPOSED SUMMARY TERM SHEET
- --------------------------------------------------------------------------------
BORROWER: Invacare Corporation ("Invacare" or the
"Company"), or a wholly owned subsidiary
of Invacare reasonably acceptable to the
Agent and fully guaranteed by Invacare.
AGENT: NBD Bank ("NBD" or the "Agent").
ARRANGER: First Chicago Capital Markets, Inc.
("FCCM" or the "Arranger").
TYPE OF FACILITIES:
REVOLVING CREDIT: $200,000,000 Two Year Unsecured
Revolving Credit.
PARTICIPANTS: NBD Bank ("NBD") and other banks to be
selected by FCCM, NBD and the Company.
The share of each Participant to be
mutually determined by FCCM, NBC and the
Company.
USE OF PROCEEDS: Finance the acquisition (the
"Acquisition") of a public company
previously identified to the Agent (the
"Seller"). The Acquisition will include
a tender offer (the "Tender Offer") by a
subsidiary of Invacare for a minimum of
51% of the stock of the Seller (on a
fully diluted basis). A certain amount
of the proceeds, in an amount
acceptable to the Agent, may also be
used for other acquisitions and working
capital.
AVAILABILITY
REVOLVING CREDIT: Immediately upon signing of the Credit
Agreement and satisfaction of the
conditions thereunder.
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
MATURITIES:
REVOLVING CREDIT: Two years from date of first funding,
with maturity not later than
October 31, 1999.
PRICING: At the Borrower's Option:
PRIME: The higher of 50 basis points over the
Federal Funds Rate or NBD's Prime Rate
as it exists from time to time, plus the
Applicable Margin. Minimum draws of
$500,000.
LIBOR: Adjusted(1) LIBOR plus the Applicable
Margin (1, 2, 3, and 6 month options).
Minimum draws of $1,000,000.
FIXED: Negotiated fixed rates as available, and
mutually agreed.
FOOTNOTES:
(1) Adjusted for maximum Federal Reserve
Board reserve requirements.
APPLICABLE MARGIN: The Applicable Margin is based upon the
following matrix:
Applicable Margin
- --------------------------------------------------------------------------------
Funded Debt All-in
to Total Cap Prime LIBOR Facility Fee Drawn
- --------------------------------------------------------------------------------
68-58* 0.00 45 bps 20 bps 65 bps
57-50 0.00 30 bps 15 bps 45 bps
49-40 0.00 25 bps 12.5 bps 37.5 bps
Less than 40 0.00 18.5 bps 9 bps 27.5 bps
- --------------------------------------------------------------------------------
*INITIAL PRICING LEVEL.
PREPAYMENT: Prepayment of LIBOR and fixed rate loans
would be subject to appropriate
prepayment indemnities.
- --------------------------------------------------------------------------------
NBD/FCCM -2- December 30, 1996
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
FEES:
UNDERWRITING AND AGENT'S FEES: Per fee letter.
FACILITY FEE: Per annum fee, payable quarterly in
arrears, on the entire facility amount,
as described above.
LEGAL FEES: All reasonable legal fees of Agent's
counsel for the account of the Borrower.
CAPITAL ADEQUACY: Language will be incorporated into the
Facility Agreement requiring that the
Borrower compensate the Participants for
any change in capital requirements or
laws that would have the effect of
reducing the Bank's yields.
INTEREST PAYMENTS: At the end of each applicable Interest
Period or quarterly, if earlier.
INTEREST PERIODS: Interest Periods may be of 1, 2, 3, or 6
months or such other period as may be
agreed to by the Banks.
DOCUMENTATION: The Facility will be subject to a Credit
Agreement, acceptable to all parties and
containing terms and conditions
customary for such a Facility. These
terms and conditions will include
without limitation:
- representations and warranties.
- undertakings including provision
of financial information under
agreed accounting principles;
negative pledge, etc.
- provision for increased costs
(including capital adequacy) and
indemnifications to Participants.
- --------------------------------------------------------------------------------
NBD/FCCM -3- December 30, 1996
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
- transferability, which will
include Banks' right to assign
subject to Borrower's (which may
not be unreasonably withheld and
may not be withheld during a
default) and Agent's consent and
subparticipate without consent,
subject to limitations.
FINANCIAL COVENANTS: Customary in credit agreements of this
nature, with respect to the Borrower and
its Subsidiaries, including but not
limited to:
INTEREST COVERAGE: The Company will at all times maintain
Interest Coverage not less than 3.00 to
1.00 on a four quarter trailing basis;
except when Funded Debt to Total
Capitalization is between 58% and 68%,
at which point Interest Coverage shall
not be less than 2.25:1.0.
FUNDED DEBT TO The Company will at all times maintain a
TOTAL CAPITALIZATION: ratio of Funded Debt to Total
Capitalization not to exceed 68%,
decreasing to 65% on a date not later
than nine months after the initial
funding, but not prior to 12/31/97.
NET WORTH: The Company will at all times maintain
Net Worth at not less than $200,000,000,
increasing annually by 50% of Net
Income, commencing not later than 9
months from initial funding, but not
prior to 12/31/97, and at fiscal year
end thereafter.
All financial covenants tested on a
consolidated basis, effective upon first
funding under the Credit Agreement and
calculated in accordance with U.S. GAAP
unless otherwise noted.
NEGATIVE PLEDGE Customary negative covenants for a
COVENANTS: senior note senior note financing,
including but not limited to:
- -------------------------------------------------------------------------------
NBD/FCCM -4- December 30, 1996
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
(1) negative pledge and sale of assets
and negative negative pledge,
subject to appropriate basket and
permitted sales and exceptions, if
required, for compliance with
Regulations U and G;
(2) Sale of installment contracts
permitted, with limitations;
(3) merger and consolidation
limitations;
(4) other restrictions (subject to
exceptions, as appropriate, to be
negotiated) on investments,
transactions with affiliates,
indebtedness and contingent
liabilities, changes in line of
business, and prepayment or
modification of other debt and
liabilities.
NON-FINANCIAL Customary non-financial covenants for a
COVENANTS: senior bank financing. Additionally,
(a) as soon as reasonably possible after
completion of the Tender Offer the
Company will merge (the "Merger") the
Seller and the subsidiary it formed to
acquire the Seller and (b) guaranties of
the Company's present and future
significant subsidiaries will be
required, provided that the guaranty of
the Seller will not be required until
after the Merger.
REPORTING REQUIREMENTS: Customary in credit agreements of this
nature, including but not limited to
the following:
(1) Annual audited financial
statements, 10K, consolidating and
annual report within 90 days of
each fiscal year end.
(2) Quarterly 10Q financial statements
within 50 days of each quarter
end.
(3) Quarterly compliance certificates
signed by a corporate officer.
- --------------------------------------------------------------------------------
NBD/FCCM -5- December 30, 1996
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
GOVERNING LAW: The Credit Agreement will be governed by
the laws of the State of Michigan.
COUNSEL TO THE AGENT BANK: Dickinson, Wright, Moon, Van Dusen &
Freeman.
EVENTS OF DEFAULT: Customary in credit agreements of this
nature, including but not limited to the
following:
(1) Failure to pay principal when due;
failure to pay interest or fees
within five days of the due date.
(2) Failure to meet covenants (with
grace periods, where appropriate).
(3) Representations or warranties
false in any material respect when
made.
(4) Cross default to other debt of
the Borrower and its Subsidiaries
which is triggered by an event
which causes acceleration thereof
or permits holders thereof to
accelerate their debt.
(5) Change of ownership or control.
(6) other usual defaults with respect
to the Borrower and Subsidiaries,
including but not limited to
insolvency, bankruptcy, ERISA, and
judgment defaults.
CONDITIONS PRECEDENT: Customary conditions precedent to each
advance, including without limitation
the following:
(1) Completion of satisfactory loan
documentation.
- --------------------------------------------------------------------------------
NBD/FCCM -6- December 30, 1996
<PAGE>
CONFIDENTIAL INVACARE CORPORATION
- --------------------------------------------------------------------------------
(2) No material adverse change prior
to closing.
(3) Satisfaction of all conditions
described in the commitment letter
issued in connection with this
proposed summary term sheet,
compliance with all laws and
regulations, satisfactory review
of all agreements, documents and
transactions executed, filed or
delivered in connection with, or
otherwise relating to, the
Acquisition and the Tender Offer
and receipt of all legal opinions
requested by the Agent.
DEFINITIONS:
INTEREST COVERAGE: The ratio of Earnings, subject to
appropriate reductions, before Interest
and Taxes to Interest Expense.
FUNDED DEBT: The sum of all debt and similar
liabilities classified as long term,
including but not limited to debt for
borrowed money, capital leases, letters
of credit and guaranties for any of the
foregoing.
NET WORTH: Shall mean the sum of Stockholder's
Common Equity, Preferred Stock and
Minority Interest, less Treasury stock.
TOTAL CAPITALIZATION: The sum of Net Worth and Funded Debt.
All other defined terms are according to GAAP and acceptable to the Agent.
December 30, 1996
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NBD/FCCM -7- December 30, 1996
<PAGE>
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
____________________________________
)
INVACARE CORPORATION and )
I.H.H. CORP., )
)
Plaintiffs, )
)
v. ) CIVIL ACTION NO:
)
HEALTHDYNE TECHNOLOGIES, INC., )
CRAIG B. REYNOLDS, )
J. TERRY DEWBERRY, )
ALEXANDER H. LORCH, )
J. LELAND STRANGE, )
JAMES J. WELLMAN, and )
J. PAUL YOKUBINAS, )
)
Defendants. )
___________________________________ )
COMPLAINT
Invacare Corporation ("Invacare") and I.H.H. Corp. ("I.H.H."), as and
for their complaint, allege upon knowledge with respect to themselves and their
own acts, and upon information and belief as to all other matters, as follows:
NATURE OF THE ACTION
1. On January 27, 1997, I.H.H., a wholly-owned subsidiary of Invacare,
commenced an all-cash, all-shares, fully-priced, premium tender offer for the
shares of defendant Healthdyne Technologies, Inc. ("Healthdyne") at a price of
$13 per share (the "Offer"). The Offer was
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commenced only AFTER the defendants on Healthdyne's Board of Directors rejected
on January 24, 1997 an earlier Invacare offer without even discussing it with
Invacare and only after the defendants began taking precipitous and unjustified
defensive steps to improperly impede the Offer and entrench the defendant
directors, in gross violation of the individual defendants' fiduciary duties.
The Offer is conditioned on removal or inapplicability of a number of
Healthdyne's anti-takeover devices. Invacare intends, as soon as practicable
following consummation of the Offer, to have Healthdyne merge with I.H.H. or
another wholly-owned subsidiary of Invacare for the same per share cash
consideration as that paid in the Offer (the "Proposed Merger"). The purpose of
the Offer and Proposed Merger is to enable Invacare to acquire control of, and
the entire equity interest in, Healthdyne.
2. The Offer is fully financed, non-coercive and fair to Healthdyne's
shareholders. The Offer represents a premium of more than 45% over the market
price for Healthdyne's shares as of December 31, 1996, the trading day prior to
Invacare's January 2, 1997 initial proposal for the acquisition of Healthdyne.
The Offer and Proposed Merger do not pose any threat to the interests of
Healthdyne's shareholders or to Healthdyne's corporate policy.
3. On January 24, 1997, Healthdyne issued a press release rejecting
Invacare's earlier offer out of hand -- even though Healthdyne had not
negotiated or even discussed with Invacare the merits of Invacare's proposal.
Moreover, prior to issuance of the press release, Healthdyne began taking
defensive measures designed to improperly impede the Offer and to entrench the
incumbent directors. On January 23, 1997, Healthdyne's Board of Directors, at a
special meeting, amended Healthdyne's bylaws to (1) delete a provision
specifying the date of the annual meeting
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of shareholders if not otherwise set by the Board of Directors, and (2) opt into
the so-called "Fair Price Requirements" of the Georgia Business Corporation Code
(the "GBCC"), O.C.G.A. Sections 14-2-1110 through 14-2-1113 (the "Fair Price
Statute"), into which Healthdyne could have opted at any time in its corporate
history, but chose not to do so until immediately before rejecting Invacare's
offer. These actions, taken contemporaneously with rejection of Invacare's
offer, when viewed in context, clearly had only one purpose in mind: to impede
Healthdyne's shareholders from considering the Offer and to entrench the
incumbent directors, in violation of Georgia law and the individual defendants'
fiduciary duties.
4. Healthdyne has available various other anti-takeover devices,
including a "poison pill" shareholder rights plan and the "Business Combinations
With Interested Stockholders" provisions of the GBCC, O.C.G.A. Sections
14-2-1131 through 14-2-1133 (the "Business Combination Statute"), which it may
rely on in an attempt to block the Offer. Healthdyne's "poison pill"
shareholder rights plan contains a set of draconian and illegal redemption and
amendment restrictions which severely limit its shareholders' right to elect new
directors not approved by the incumbent management. In light of their refusal
even to discuss an acquisition and in light of the defensive measures they have
already precipitously taken in response to Invacare's proposals, the defendants
may also attempt to adopt other defensive measures designed to impede, delay, or
prevent consummation of the Offer and the Proposed Merger and to improperly
entrench the incumbent directors.
5. Given the premium price and fair structure of the Offer and Proposed
Merger and its substantial value to Healthdyne's shareholders, Healthdyne should
not be allowed to deprive its
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shareholders of the opportunity to decide upon the merits of the Offer and
Proposed Merger for themselves. Use of Healthdyne's anti-takeover devices and
other defensive measures against the Offer and Proposed Merger -- which
Healthdyne has already begun to undertake in response to Invacare's proposals,
as evidenced by the eleventh-hour bylaw amendments -- represents an unreasonable
response to the Offer and Proposed Merger in violation of the individual
defendants' fiduciary duties.
6. Healthdyne's use of anti-takeover devices to obstruct the Offer and
Proposed Merger will deprive its shareholders of the opportunity to decide upon
their merits for themselves and will cause Invacare irreparable injury as a
result of the loss of the unique opportunity to acquire control of Healthdyne.
Moreover, the presence of such devices is causing confusion and uncertainty in
the market for public securities because investors do not know whether they will
be able to avail themselves of an advantageous financial offer. Thus, the
defendants' use of these illegal measures must be enjoined.
7. Plaintiffs bring this action for injunctive and/or declaratory relief:
(a) to prevent the existing director-entrenching anti-takeover
devices and other defensive measures of Healthdyne, including the Dead-Hand
Provision (as defined below), from impeding or delaying shareholder
consideration of plaintiffs' Offer and Proposed Merger in violation of
Georgia law and the individual defendants' fiduciary duties;
(b) to prevent the application of certain Georgia statutes -- such as
the Fair Price Statute, which Healthdyne recently rushed to opt into, and
the Business Combination Statute -- to plaintiffs' Offer and Proposed
Merger; and
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(c) to prevent the defendants from otherwise taking additional
actions to impede or delay shareholder consideration of plaintiffs' Offer
and Proposed Merger, which Offer and Proposed Merger are being made in
compliance with all applicable laws, obligations, and agreements.
JURISDICTION AND VENUE
8. This action is brought pursuant to the Supremacy Clause (art. VI, cl.
2) and the Commerce Clause (art. I, Section 8, cl. 3), and the Due Process
Clause (amends. V and XIV) of the United States Constitution; O.C.G.A. Sections
14-2-624, 14-2-1110 ET SEQ., and 14-2-1131 ET SEQ.; principles of common law;
and the federal Declaratory Judgments Act, 28 U.S.C. Section 2201. Pursuant to
Rule 24(c) of the Federal Rules of Civil Procedure, plaintiffs call the
attention of the Court to 28 U.S.C. Section 2403, pursuant to which the Court
shall notify the state attorney general of any action in which the
constitutionality of any statute of a state is drawn into question.
9. The Court has jurisdiction of the subject matter of this action
pursuant to 28 U.S.C. Sections 1331, 1332(a), and 1367(a). The plaintiffs and
defendants are citizens of different states, and the matter in controversy
exceeds the sum of $75,000, exclusive of interest and costs.
10. Venue is proper in this district pursuant to 28 U.S.C. Sections
1391(a)-(c).
THE PARTIES
11. Plaintiff Invacare is an Ohio corporation with its principal place of
business in Ohio. Invacare designs, manufactures, and distributes an exclusive
line of medical equipment for the home health care and extended care markets.
Invacare owns common stock of Healthdyne.
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12. Plaintiff I.H.H. is a Delaware corporation with its principal place of
business in Ohio. It is a wholly-owned subsidiary of Invacare, was organized to
acquire control of Healthdyne, and has not conducted any unrelated activities
since its organization. I.H.H. owns common stock of Healthdyne.
13. Defendant Healthdyne is a Georgia corporation with its principal place
of business in Georgia. It is engaged in the business of designing,
manufacturing, and marketing technologically advanced medical devices, primarily
for use in the home, as well as in specialized clinical settings.
14. Defendants Craig B. Reynolds, J. Terry Dewberry, Alexander H. Lorch,
J. Leland Strange, James J. Wellman, and J. Paul Yokubinas (the "Director
Defendants") are directors of Healthdyne and residents of Georgia. The Director
Defendants constitute six of the seven members of Healthdyne's Board of
Directors.
THE OFFER AND PROPOSED MERGER
15. On January 27, 1997, I.H.H. commenced a tender offer for all
outstanding shares of Healthdyne common stock (together with the associated
preferred stock purchase rights issued pursuant to the Rights Agreement between
Healthdyne and Trust Company Bank, dated as of May 22, 1995 (the "Poison
Pill")), at the price of $13 per share net to the seller in cash. The Offer is
conditioned, INTER ALIA, upon:
(a) Invacare and I.H.H. being able to acquire a total of at least 51%
of Healthdyne's shares;
(b) Healthdyne's Poison Pill being redeemed, invalidated, or
otherwise rendered inapplicable;
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(c) I.H.H. being satisfied that the provisions of the Business Combination
Statute, O.C.G.A. Sections 14-2-1131 through 14-2-1133, do not apply
to prevent or impede the Offer or the Proposed Merger; and
(d) I.H.H. being satisfied that the provisions of the Fair Price Statute,
O.C.G.A. Sections 14-2-1100 through 14-2-1113, do not apply to
prevent or impede the Offer or the Proposed Merger or are invalid, or
that the Proposed Merger may be consummated without any approval
required under such sections at a price per share not in excess of the
price per share to be paid in the Offer.
The Offer is explicitly not subject to plaintiffs' receipt of financing for the
Offer or the Proposed Merger.
16. The Offer is being made in conformity with the Williams Act (Sections
14(d)-(e) and 28 of the Securities Exchange Act of 1934), 15 U.S.C. Sections
78n(d)-(e) and 78bb, and the rules and regulations promulgated thereunder by the
Securities and Exchange Commission ("SEC"), 17 C.F.R. Section 240.14d-1 ET SEQ.
(collectively, the "Williams Act"). The Williams Act is a comprehensive federal
statute which regulates all interstate tender offers.
17. As soon as practicable following consummation of the Offer, Invacare
will seek to have Healthdyne consummate the Proposed Merger with I.H.H. The
purpose of the Proposed Merger is to acquire all shares not tendered and
purchased pursuant to the Offer or otherwise. Pursuant to the Proposed Merger,
each then outstanding Healthdyne share would be converted into the right to
receive an amount in cash equal to the price per share paid pursuant to the
Offer.
18. Invacare also intends, if necessary, to nominate a slate of new
directors (the "New Directors") for election at Healthdyne's next annual
meeting. Healthdyne's bylaws require that, under current circumstances, notice
of nominations for directors must be made between February 22, 1997 and March
24, 1997. If elected, the New Directors would be committed, subject to their
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obligations to Healthdyne's shareholders under Georgia law, to: (a) redeeming or
amending the Poison Pill; (b) approving the Offer and the Proposed Merger for
purposes of the Fair Price Statute; (c) approving the Offer and the Proposed
Merger for purposes of the Business Combination Statute; (d) causing Healthdyne
to execute an agreement and plan of merger with respect to the Proposed Merger;
(e) approving, submitting, and recommending to the shareholders of Healthdyne
approval of the Proposed Merger; and (f) taking such other action as may be
required to expedite the prompt consummation of the Offer and the Proposed
Merger.
19. The purpose of the Offer and the Proposed Merger is to enable Invacare
to acquire control of, and the entire equity interest in, Healthdyne.
20. The Offer and Proposed Merger are clearly in the best interests of
Healthdyne's shareholders. The Offer is a fully financed, all-cash offer,
available to all Healthdyne shareholders, for all outstanding shares; it is not
"front-end loaded" or otherwise coercive in nature. The Proposed Merger would
permit shareholders who did not tender their shares in the Offer to receive the
same cash consideration per share as shareholders who tendered in the Offer.
The Offer and Proposed Merger price represents a full and fair value to
Healthdyne's shareholders.
21. The Offer and Proposed Merger provide Healthdyne's shareholders with
the opportunity to realize a premium of more than 45% over the market price of
their shares as of December 31, 1996, the trading day prior to Invacare's
initial January 2, 1997 proposal to acquire Healthdyne. The closing price
quotation of Healthdyne shares on December 31, 1996 was $8.88 per share.
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22. The Offer and Proposed Merger do not pose any threat to the interests
of Healthdyne's shareholders or to Healthdyne's corporate policy and
effectiveness.
23. The Offer and Proposed Merger comply with all applicable laws,
obligations, and agreements. The Offer documents fairly disclose all
information material to the decision of Healthdyne's shareholders whether to
accept or reject the Offer, in compliance with plaintiffs' obligations under all
applicable securities laws. Plaintiffs are making the filings required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
24. Nevertheless, the Offer and Proposed Merger cannot be completed
successfully unless Healthdyne's anti-takeover devices are removed. Given the
premium price and fair structure of the Offer and the Proposed Merger,
Healthdyne and the Director Defendants should remove these barriers and assist
plaintiffs in obtaining any necessary regulatory approvals. In any event,
Healthdyne and the Director Defendants should not be permitted to delay
consummation of the Offer or Proposed Merger by litigation in other forums,
including litigation on the propriety of its anti-takeover devices.
HEALTHDYNE'S REFUSAL TO DISCUSS A TRANSACTION WITH INVACARE
25. In late summer of 1996, Thomas R. Miklich, Invacare's Chief Financial
Officer and General Counsel, contacted Robert Johnson, a Healthdyne officer,
and indicated that Invacare would be interested in discussing a potential
combination of the two entities. Mr. Johnson responded shortly thereafter that
Healthdyne's Board of Directors had determined that Healthdyne was not for
sale.
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26. Shortly thereafter, A. Malachi Mixon, III, Invacare's Chairman and
Chief Executive Officer, called Craig B. Reynolds, Healthdyne's President and
Chief Executive Officer, with the intent of inquiring about a potential
combination. This call was never returned. Mr. Mixon then suggested to an
acquaintance who had a business relationship with Healthdyne's former parent
that a combination of Invacare and Healthdyne would be beneficial to the
shareholders of both. He also requested that the acquaintance inform Parker H.
Petit, Chairman of Healthdyne's Board of Directors, of Invacare's interest.
Within a few days, Mr. Mixon received a terse voice mail message from Mr. Petit
in which Mr. Petit stated, and then repeated, that Healthdyne was not for sale.
27. Less than a week after receiving Mr. Petit's voice mail message, Mr.
Mixon encountered Mr. Reynolds at a trade show and suggested that Invacare and
Healthdyne meet to discuss the potential for a transaction, as he felt it would
be beneficial for shareholders of both companies. Mr. Reynolds responded that
he was not in a position to schedule such a meeting because Healthdyne's Board
had previously decided that Healthdyne was not for sale.
28. On January 2, 1997, Mr. Mixon called Mr. Reynolds and was told that he
was in a meeting and unable to take Mr. Mixon's call. Mr. Mixon then indicated
that he was faxing a confidential letter (the "January 2 Letter") and requested
that Mr. Reynolds' secretary hand the letter directly to Mr. Reynolds. He then
asked that Mr. Reynolds call him once he had the opportunity to review the
letter. Mr. Reynolds did not and has not to date called Mr. Mixon.
29. In the January 2 Letter to Mr. Reynolds and the members of
Healthdyne's Board, Mr. Mixon proposed to acquire Healthdyne through a
negotiated merger transaction with
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Healthdyne in which Healthdyne shareholders would receive $12.50 per share in
cash, although Mr. Mixon added that Invacare would be prepared to discuss all
aspects of the proposal, including structure and economics. Mr. Mixon also
asked for a response by January 10, 1997.
30. On January 8, 1997, Mr. Reynolds responded in a brief letter,
indicating that he was forwarding the January 2 Letter to Healthdyne's Board for
consideration at its regularly scheduled meeting at some unspecified time in
February. He added that Healthdyne's response to the January 2 Letter could be
expected thereafter.
31. Because combining Healthdyne and Invacare is an urgent issue of great
importance to the shareholders of both companies, Invacare restated its offer to
acquire Healthdyne through a negotiated merger at $12.50 per share in a letter
to Mr. Reynolds dated January 10, 1997 (the "January 10 Letter"), which was
publicly released. In the January 10 Letter, Mr. Mixon informed Healthdyne that
Invacare was "disappointed that Healthdyne has chosen to defer its consideration
for such a long time without seeking any discussions with [Invacare]." Mr.
Mixon pointed out that the offer -- representing "a 40% premium over
[Healthdyne's] year-end stock price" -- was "an excellent opportunity for the
shareholders of Healthdyne to realize full value for their shares to an extent
not likely to be available to them in the marketplace absent [Invacare's]
offer." Mr. Mixon concluded the January 10 Letter by offering "to discuss all
aspects of" the offer "[i]n the context of a negotiated, friendly transaction."
32. On the same day, January 10, Healthdyne issued a press release in
response to the January 10 Letter. The press release stated that Healthdyne's
Board of Directors would consider
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Invacare's proposal "in due course", but failed even to give an indication of
when such consideration would take place.
33. On January 24, 1997, Healthdyne issued a press release summarily
rejecting Invacare's offer without negotiating or even discussing it with
Invacare. On that same day, Healthdyne filed a Form 8-K with the Securities and
Exchange Commission indicating that on the previous day, January 23, 1997,
Healthdyne's Board of Directors had amended Healthdyne's bylaws to (1) delete a
provision specifying the date of the annual meeting of shareholders if not
otherwise set by the Board, and (2) opt into the Fair Price Statute, O.C.G.A.
Section 14-2-1110 ET SEQ.
34. As indicated by the foregoing, Healthdyne has refused even to meet
with Invacare to consider or discuss a combination or merger with Invacare and
has in response to Invacare's proposals already begun taking precipitous
measures to improperly impede shareholder consideration of the Offer and
entrench the current directors.
HEALTHDYNE'S POISON PILL, THE POISON PILL'S
DEAD-HAND PROVISION, AND OTHER DEFENSIVE MEASURES
35. Healthdyne has at its disposal various anti-takeover devices and other
defensive measures -- including the Poison Pill, the Fair Price Statute, and the
Business Combination Statute -- which Healthdyne may use illegally to attempt to
block the Offer and Proposed Merger and to entrench the Director Defendants.
36. Given the premium price and fair structure of the Offer and the
Proposed Merger and their substantial value to Healthdyne's shareholders, use of
Healthdyne's Poison Pill or other anti-takeover devices to prevent consummation
of the Offer would represent an unreasonable
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response to the Offer and Proposed Merger, would foreclose effective shareholder
action, and would violate the Director Defendants' fiduciary duties.
37. Healthdyne's Poison Pill was adopted WITHOUT a vote of Healthdyne's
owners -- the shareholders. The Poison Pill was expressly designed to inflict
massive economic penalties on a potential acquiror and to prevent the owners of
Healthdyne from accepting an offer to purchase their shares without the prior
approval of the incumbent Board.
38. As part of the Poison Pill, Healthdyne authorized and declared a
dividend of one capital stock purchase right (a "Right") for each share of
common stock of Healthdyne, payable to shareholders of record as of the close of
business on May 22, 1995. The Rights will expire on May 22, 2005 (the "Final
Expiration Date"), unless the Rights are earlier redeemed or the Final
Expiration Date is extended.
39. Each Right initially entitles the holder to purchase one one-hundredth
of a share of Healthdyne Series B Cumulative Preferred Stock at a price
of $50.
40. The Poison Pill provides that the Rights do not become exercisable
until the "Distribution Date". The "Distribution Date" is the earlier of (a)
ten business days following a public announcement that an acquiror has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares (the "Stock Acquisition Date"), or (b) ten business days
after the commencement of a tender offer or exchange offer that would result in
a person or group beneficially owning 20% or more of the outstanding shares.
After the Distribution Date, the Rights will trade separately from the shares.
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41. Healthdyne's Poison Pill has both a "flip-in" feature and a
"flip-over" feature. Each feature operates somewhat differently, but both are
designed to inflict massive economic punishment on an acquiror that is not
favored by current management.
FLIP-IN
42. After the Distribution Date, any of a number of "triggering events",
most significantly any person or group of affiliated or associated persons
becoming the beneficial owner of 20% or more of the outstanding common stock of
Healthdyne, will entitle each holder of a Right (EXCEPT the acquiror and its
affiliates and associates) to buy $100 worth of Healthdyne shares for $50 per
Right. This "flip-in" feature flagrantly discriminates against an acquiror by
diluting its holdings and increasing massively the number of shares the acquiror
would have to purchase in order to consummate a merger.
FLIP-OVER
43. After the Stock Acquisition Date, similar "triggering events", most
significantly a merger in which Healthdyne is not the surviving corporation or
its common stock is changed or exchanged, would also entitle each holder of a
Right to purchase $100 worth of the acquiring company's shares for $50 per
Right. This "flip-over" feature subjects the acquiring company to a massive
half-price sale of its own stock, drastically diluting the interest of its other
shareholders and thereby impairing its capital structure.
44. The obvious purpose of the flip-in and flip-over features is to render
an attempted acquisition of Healthdyne financially impossible without the
approval of the incumbent directors. Furthermore, as described below, the
purported terms of the Poison Pill provide that, in many
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instances, its effects can only be avoided by approval of the incumbent
directors or their hand-picked successors. Unless the Poison Pill is redeemed
or otherwise nullified, Healthdyne's shareholders will be deprived of the
opportunity to decide whether they want to accept Invacare's all-cash,
all-shares, non-coercive Offer. Recognizing the insurmountable barriers posed
by the Poison Pill, Invacare has made its Offer conditional upon the voluntary
or court-ordered redemption, amendment, or invalidation of the Rights.
DEAD-HAND CONTROL
45. Healthdyne's Poison Pill has an illegal aspect which is not found in
most poison pills: it contains a set of redemption and amendment restrictions
commonly referred to as a "dead-hand" provision (the "Dead-Hand Provision").
The Dead-Hand Provision serves no purpose other than to discourage acquisition
activity by making a proxy contest to replace the present Board futile. The
Poison Pill provides methods for removing its punitive provisions through
redemption or amendment. However, under the Dead-Hand Provision, once a
potential acquiror has amassed 15% of Healthdyne's outstanding shares OR
replaced a majority of the directors through a proxy solicitation, the Poison
Pill can only be redeemed by Healthdyne's current Board or their hand-picked
successors (collectively "Dead-Hand Continuing Directors"). Furthermore, the
Dead-Hand Provision provides that the Poison Pill can be amended ONLY by
Dead-Hand Continuing Directors.
46. Accordingly, even if Healthdyne's shareholders at the next annual
meeting vote to replace all incumbent directors with New Directors who support
the Offer and Proposed Merger, the New Directors purportedly could not redeem or
amend the Poison Pill to permit the
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shareholders to get the benefit of the Offer and the Proposed Merger because,
presumably not having been approved by the incumbents, they would not be
Dead-Hand Continuing Directors. Moreover, after such election, NO ONE would
have any power to redeem or amend the Poison Pill, and the shareholders, who by
their vote will have expressed their desire to accept plaintiffs' Offer, would
be effectively prevented from accepting it until the expiration of the Rights in
2005.
ILLEGALITY OF THE DEAD-HAND PROVISION
47. By purporting to remove from all directors other than Dead-Hand
Continuing Directors the power to redeem or amend the Poison Pill in many
instances, the Dead-Hand Provision severely handicaps future boards to the point
of rendering future proxy contests futile and effectively impossible. Under
O.C.G.A. Sections 14-2-803 and 14-2-808 and Healthdyne's bylaws, the
shareholders of Healthdyne have the right to elect and remove directors. By
taking from the shareholders this basic and fundamental right, the
director-entrenching Dead-Hand Provision blatantly violates Georgia law.
48. Further, under O.C.G.A. Section 14-2-801, duly elected directors are
empowered to exercise all corporate powers and to direct the management of the
business and affairs of a corporation, subject only to limitations contained in
the corporation's articles of incorporation. Because the Dead-Hand Provision,
which is not contained in the articles of incorporation, limits the ability of
future directors who are not Dead-Hand Continuing Directors to direct the
management of the business and affairs of the corporation by prohibiting them
from redeeming or modifying the Poison Pill to permit Healthdyne's shareholders
to consider a tender offer or merger proposal such directors support, the
Dead-Hand Provision violates Georgia law.
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49. Because the Dead-Hand Provision violates O.C.G.A. Sections 14-2-801,
14-2-803, and 14-2-808, it is void and unenforceable under Georgia law. If
Georgia law does permit the Dead-Hand Provision, the Georgia law conflicts with
the Williams Act in violation of the Supremacy Clause of the United States
Constitution and impermissibly burdens interstate commerce in violation of the
Commerce Clause of the United States Constitution.
ILLEGALITY OF INVOKING THE POISON PILL TO BLOCK THE OFFER AND PROPOSED MERGER
50. There is no reasonable basis for concluding that the Offer and
Proposed Merger pose a threat of any kind to the shareholders of Healthdyne.
If the shareholders deem the Offer to be inadequate, they, the owners of
Healthdyne, can reject Invacare's Offer and Proposed Merger by refusing to
tender their shares.
51. Indeed, the only potential harm Healthdyne's shareholders now face is
that posed by Healthdyne's refusal to redeem or amend the Poison Pill, which
refusal will make it prohibitively expensive for plaintiffs to consummate the
Offer even if the shareholders want to accept it.
52. Given the premium price and fair structure of the Offer and the
Proposed Merger, Healthdyne and the Director Defendants should redeem the Rights
under the provisions of the Poison Pill, or amend the Poison Pill to make the
Rights inapplicable to the Offer and Proposed Merger, so as to enable the
shareholders to exercise their right as the owners of Healthdyne to decide upon
the merits of the Offer and Proposed Merger for themselves.
53. The Director Defendants' failure to redeem the Rights or amend the
Poison Pill violates the Director Defendants' fiduciary duties because it will
deny the shareholders of
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Healthdyne, including plaintiffs, meaningful access to or control over the
assets of Healthdyne and will hinder or prevent the shareholders of Healthdyne,
including plaintiffs, from exercising their fundamental shareholder rights under
Georgia law.
THE GEORGIA FAIR PRICE STATUTE
54. The Fair Price Statute, O.C.G.A. Sections 14-2-1110 through
14-2-1113, ostensibly intended to assure fair treatment of shareholders of
Georgia corporations in corporate takeovers, imposes substantial restrictions on
business combinations involving interested shareholders (E.G., beneficial owners
of 10% or more of the voting power of the shares of the corporation). The Fair
Price Statute was designed to impede coercive two-tier tender offer and merger
transactions in which the acquiror first makes a premium tender offer to obtain
a major stock interest in the corporation and then attempts to acquire total
ownership by effecting a "freezeout merger" in which minority shareholders who
do not participate in the initial tender offer may receive substantially less
valuable consideration than those who tendered earlier. The Fair Price Statute
was thus designed to impede discriminatory two-step transactions, not tender
offer and merger transactions such as plaintiffs' fully priced, all-cash,
non-coercive Offer and Proposed Merger, under which all shareholders will
receive the same consideration in the Offer and the Proposed Merger.
55. The Fair Price Statute prohibits business combinations between a
Georgia corporation and an interested shareholder unless: (a) the transaction is
unanimously approved by the "continuing directors" of the corporation (I.E.,
those who were directors prior to the interested shareholder becoming such and
are unaffiliated with the interested shareholder); (b) the
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transaction is approved by two-thirds of the continuing directors and a majority
of shares held by shareholders other than the interested shareholder; or (c) the
interested shareholder meets certain so-called "fair price" and procedural
requirements set out in the statute.
56. Absent continuing director approval, the so-called "fair price"
provisions of the statute require that an interested shareholder, in effecting a
business combination subsequent to having consummated a tender offer, must pay
to all shareholders who did not tender into the initial offer a sum which is at
least equal to the HIGHEST of (1) the highest per share price paid by the
interested shareholder for any shares of the same class or series within the
two-year period prior to the date of the first public announcement of the
proposed business combination; (2) the price paid in the transaction in which
the interested shareholder first became an interested shareholder (I.E., the
tender offer); or (3) the highest closing sale price for the stock on its
principal stock exchange during the 30 days including and immediately preceding
(a) the date of the first public announcement of the proposed business
combination, or (b) the date on which the interested shareholder first became an
interested shareholder (I.E., the date on which the tender offer was
consummated), whichever is higher.
57. Thus, by a rigid statutory formula, the Fair Price Statute fixes the
price at which an interested shareholder may effect a business combination with
a Georgia corporation absent unanimous or supermajority approval of the business
combination by the incumbent board of directors.
58. Moreover, while the Fair Price Statute purports only to require "fair"
and "equal" treatment of all shareholders in a takeover situation, the fixed
price which must be paid to non-
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tendering shareholders may actually have to be GREATER than the price paid to
tendering shareholders. Such would be the case, for example, in situations
where the closing price for the corporation's stock on any day of the 30 days
preceding consummation of the tender offer is inflated above the tender offer
price, whether by anomalous or manipulative trading activity or otherwise. In
such a situation, the terms of the Fair Price Statute would purport to impose an
unfair economic penalty upon the interested shareholder and could mandate an
additional premium for non-tendering shareholders beyond the premium already
reflected in the tender offer price received by tendering shareholders. In so
doing, the Fair Price Statute directly contravenes its ostensible purpose of
assuring equal treatment for all shareholders. The statute also discourages
premium, non-coercive, two-step tender offer and merger transactions by
subjecting potential acquirors committed to paying all shareholders equal
consideration to the risk that they would never be able to consummate a tender
offer.
59. The Fair Price Statute applies only if the corporation elects in its
bylaws to be covered by the statute. Healthdyne could have opted into the Fair
Price Statute at any time in its corporate history, but chose not do so until
immediately before rejecting Invacare's prior offer.
60. In contrast, Healthdyne's bylaws have contained provisions "opting-in"
to the Business Combination Statute since at least December 31, 1995, the year
in which a majority of Healthdyne's common stock was distributed to the public.
61. The Offer price is higher than both (i) the highest per share price
paid by plaintiffs for any shares acquired by them within the two-year period
immediately prior to January 10, 1997, when Invacare first publicly announced
its proposal to acquire Healthdyne, and (ii) the
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highest closing price of Healthdyne shares during the 30-day period including
and immediately preceding January 10, 1997. Thus, if the highest closing price
of Healthdyne shares during the 30-day period including and immediately
preceding the date of consummation of the Offer is in excess of the Offer price
and the continuing directors do not approve the Offer and Proposed Merger, the
terms of the Fair Price Statute would prevent the Proposed Merger from being
consummated at the same per share price as the Offer.
62. Given the premium price and fair structure of the Offer and Proposed
Merger, Healthdyne and the Director Defendants should approve the Offer and
Proposed Merger for purposes of the Fair Price Statute. The Director
Defendants' failure to approve the Offer and Proposed Merger for the purposes of
the Fair Price Statute violates the Director Defendants' fiduciary duties
because it will deny the shareholders of Healthdyne, including plaintiffs,
meaningful access to or control over the assets of Healthdyne and will hinder or
prevent the shareholders of Healthdyne, including plaintiffs, from exercising
their fundamental shareholder rights under Georgia law.
GEORGIA BUSINESS COMBINATION STATUTE
63. The Georgia legislature designed the Business Combination Statute,
O.C.G.A. Sections 14-2-1131 through 14-2-1133, to impede coercive and inadequate
tender offers, NOT non-coercive, premium tender offers like the Offer. The
statute provides that no business combination may be consummated by a resident
domestic corporation with an interested shareholder (E.G., a beneficial owner of
10% or more of the voting power of the shares of the corporation) for five years
from the date the interested shareholder became an interested shareholder,
unless:
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(a) before the person became an interested shareholder, the Board approved
either (i) the person's becoming an interested shareholder or (ii) the
business combination;
(b) in the transaction in which the person became an interested
shareholder, the interested shareholder became the beneficial owner of
at least 90 percent of the resident domestic corporation's shares
(other than certain defined "Insider Shares"); OR
(c) after becoming an interested shareholder, the person (i) acquires
additional shares resulting in the interested shareholder owning at
least 90 percent of the shares, not including Insider Shares, and (ii)
the business combination is approved by a majority of the shares not
owned by insiders or the interested shareholder.
64. Given the premium price and fair structure of the Offer and Proposed
Merger, the Director Defendants' failure to approve the Offer and the Proposed
Merger for the purpose of the Business Combination Statute violates the Director
Defendants' fiduciary duties because it will deny the shareholders of
Healthdyne, including plaintiffs, meaningful access to or control over the
assets of Healthdyne and will hinder or prevent the shareholders of Healthdyne,
including plaintiffs, from exercising their fundamental shareholder rights under
Georgia law.
IRREPARABLE INJURY
65. Healthdyne's and the Director Defendants' reliance upon and refusal to
remove or nullify Healthdyne's anti-takeover devices and other defensive
measures so as to obstruct the Offer or Proposed Merger will (a) deny plaintiffs
meaningful access to or control over the assets of Healthdyne, (b) hinder or
prevent plaintiffs from exercising their fundamental shareholder rights under
Georgia law and (c) cause plaintiffs irreparable injury as a result of the loss
of the unique opportunity to acquire control of Healthdyne. These injuries will
be suffered directly by plaintiffs and are separate and distinct from the
injuries that such actions will cause Healthdyne's other
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shareholders, who will be deprived of the fundamental right to decide for
themselves whether or not to accept the Offer and sell their shares for a
substantial premium.
66. Plaintiffs have no adequate remedy at law. Only through the exercise
of the Court's equitable powers will plaintiffs be protected from immediate and
irreparable injury. Unless the Court enjoins the application of Healthdyne's
anti-takeover devices to the Offer and Proposed Merger and enjoins Healthdyne
and the Director Defendants from impeding the Offer or Proposed Merger by any
other defensive measures, including litigation in other forums, plaintiffs will
be (a) precluded from consummating the Offer, which is conditioned on
invalidation or inapplicability of Healthdyne's anti-takeover devices, (b)
denied any meaningful access to or control over the assets of Healthdyne, and
(c) hindered in or prevented from exercising their fundamental shareholder
rights under Georgia law. Should that occur, plaintiffs will have lost the
unique opportunity to acquire control of Healthdyne and the shareholders of
Healthdyne will have lost their opportunity to tender their shares for a 45%
premium over the market price of Healthdyne's shares as of December 31, 1996,
the trading day prior to Invacare's initial proposal for the acquisition of
Healthdyne.
DECLARATORY AND INJUNCTIVE RELIEF
67. The Court may grant the declaratory and injunctive relief sought
herein pursuant to 28 U.S.C. Section 2201 and Fed. R. Civ. P. 57 and 65. A
substantial controversy exists between the parties, as demonstrated by (a) the
defendants' January 24, 1997 rejection of Invacare's January 2, 1997 initial
proposal for the acquisition of Healthdyne, (b) defendants' unwillingness even
to meet with plaintiffs to consider or discuss a combination or merger despite
plaintiffs' premium, all-cash
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Offer, (c) the defendants' eleventh-hour adoption of bylaw amendments in
response to Invacare's proposal, which amendments are designed to entrench the
Director Defendants and to impede the Offer and Proposed Merger, (d) the
defendants' failure to redeem or amend the Poison Pill, and (e) the defendants'
failure and refusal to approve the Offer and Proposed Merger for the purposes of
the Fair Price Statute and the Business Combination Statute. The adverse legal
interests of the parties are real and immediate. The existence of this
controversy is causing confusion and uncertainty in the market for public
securities because investors do not know whether they will be able to avail
themselves of an advantageous financial offer. The granting of the requested
declaratory and injunctive relief will serve the public interest by affording
relief from such uncertainty and by avoiding delay.
COUNT I
INJUNCTIVE AND DECLARATORY RELIEF - DEAD-HAND
PROVISION - VIOLATION OF GEORGIA BUSINESS CORPORATION CODE
68. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 67 of this Complaint as if fully set forth herein.
69. Under the GBCC, the shareholders of Healthdyne have the right to
elect and remove directors. Subject only to limitations contained in the
articles of incorporation, the duly elected directors are empowered to exercise
all corporate powers and to direct the management of the business and affairs of
the corporation.
70. O.C.G.A. Section 14-2-624 ("Section 624") authorizes the Board of a
Georgia corporation to issue certain shareholder rights (such as those commonly
found in "poison pill"
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plans). The comment to Section 624 makes it clear that this authority is
limited by the directors' fiduciary obligations to the corporation. Section 624
does not and cannot authorize the Dead-Hand Provision because its amendment and
redemption restrictions conflict with other provisions of the GBCC and are in
breach of the Director Defendants' fiduciary duties.
71. The Dead-Hand Provision (which is not contained in the articles of
incorporation) violates the GBCC and the Director Defendants' fiduciary duties
by impinging on Healthdyne's shareholders' rights to elect and remove directors,
by rendering any future proxy contest futile, and by preventing future directors
from exercising all corporate powers and managing the business and affairs of
Healthdyne.
72. Plaintiffs have no adequate remedy at law.
COUNT II
INJUNCTIVE AND DECLARATORY RELIEF -
DEAD-HAND PROVISION - SUPREMACY CLAUSE VIOLATION
73. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 72 of this Complaint as if fully set forth herein.
74. Plaintiffs' Offer is being made in conformity with the Williams Act.
The Williams Act establishes a comprehensive, uniform system for regulating
interstate tender offers. In enacting the Williams Act, Congress explicitly
recognized the economic benefits created by tender offers; these benefits
include (a) providing investors an opportunity to sell their shares at
advantageous premiums over prevailing market prices, and (b) providing a
mechanism for the
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removal of entrenched management who fail to generate maximum returns on
shareholders' equity investments.
75. The Williams Act reflects Congress's judgment and philosophy that
shareholders themselves should be able to determine when it is in their best
interests to tender their shares to an offeror. Thus, the Williams Act
deliberately strikes a neutral balance, favoring neither an offeror nor
incumbent management, so that shareholders' interests receive maximum
protection.
76. To achieve these ends, the Williams Act requires that shareholders
receive specific information deemed by the SEC to be material to an informed
decision to tender securities or to decline an offer. Removing all artificial
barriers to the exercise of shareholder choice, the Williams Act is specifically
designed to enable shareholders to take advantage of tender offers that maximize
their economic interests.
77. To the extent Section 624 is adjudged to permit the Dead-Hand
Provision, it conflicts with the Williams Act and is thus unconstitutional
because it violates the Supremacy Clause of the United States Constitution,
which accords supremacy to United States law over conflicting state laws. U.S.
Const. art. VI, cl. 2.
78. Plaintiffs have no adequate remedy at law.
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COUNT III
INJUNCTIVE AND DECLARATORY RELIEF -
DEAD-HAND PROVISION - COMMERCE CLAUSE VIOLATION
79. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 78 of this Complaint as if fully set forth herein.
80. Healthdyne's shares are widely held outside Georgia. Therefore, the
Offer constitutes a substantial securities transaction in interstate commerce,
employing interstate instrumentalities and facilities in the communication of
the Offer and in transactions for the purchase and sale of Healthdyne's
securities occurring across state lines.
81. The Commerce Clause of the United States Constitution provides that:
"Congress shall have the power . . . [t]o regulate commerce . . . among the
several states." U.S. Const., art. 1, Section 8, cl. 3.
82. To the extent Section 624 as applied to the Offer and Proposed Merger
is adjudged to permit the Dead-Hand Provision, it violates the Commerce Clause
by imposing a substantial and adverse burden on interstate commerce.
Specifically, the Dead-Hand Provision:
(a) deters and/or substantially eliminates nationwide tender offers for
Georgia corporations with such provisions, except offers that are
approved by incumbent management;
(b) burdens Invacare and other prospective tender offerors in their
efforts to buy securities from willing sellers of Healthdyne stock
located throughout the United States;
(c) burdens Healthdyne shareholders throughout the United States in their
efforts to sell their shares at a premium;
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(d) substantially interferes with and diminishes access to the national
securities market; and
(e) impedes the injection into interstate commerce of millions of dollars
by means of the Offer and Proposed Merger and interferes with the
efficient allocation of economic resources.
83. These burdens imposed on interstate commerce far outweigh any
purported local benefits. To the extent that the Dead-Hand Provision reduces or
eliminates shareholder autonomy and entrenches existing management, it is
detrimental to the interests of shareholders.
84. The undue burden on interstate commerce created by the Dead-Hand
Provision has a direct and substantial impact in this case.
85. Plaintiffs have no adequate remedy at law.
COUNT IV
INJUNCTIVE AND DECLARATORY RELIEF - POISON PILL -
BREACH OF FIDUCIARY DUTY
86. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 85 of this Complaint as if fully set forth herein.
87. The Offer and Proposed Merger are fully financed; non-coercive and
non-discriminatory; fair to Healthdyne's shareholders; and represent a
substantial premium over the market price of Healthdyne shares as of the trading
date prior to Invacare's initial January 2, 1997 proposal to acquire Healthdyne.
88. The Offer and Proposed Merger comply with all applicable laws,
obligations, and agreements and pose no threat to the interests of Healthdyne's
shareholders or to Healthdyne's corporate policy or effectiveness. Defendants'
use of or reliance upon the Poison Pill, including
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its Dead-Hand Provision, to prevent Healthdyne's shareholders from deciding for
themselves whether or not to accept the Offer is not proportionate to any threat
posed, nor within the range of reasonable responses to the Offer or the Proposed
Merger, forecloses effective shareholder action, and is in breach of the
Director Defendants' fiduciary duties. Plaintiffs seek declaratory and
injunctive relief against such breaches of fiduciary duties.
89. Defendants' refusal to redeem or amend the Poison Pill so as to block
the Offer and Proposed Merger also violates the Director Defendants' fiduciary
duties because such action will deny plaintiffs meaningful access to or control
over the assets of Healthdyne and will hinder or prevent plaintiffs from
exercising their fundamental shareholder rights under Georgia law.
90. Plaintiffs have no adequate remedy at law.
COUNT V
INJUNCTIVE AND DECLARATORY RELIEF - USE OF
FAIR PRICE STATUTE - BREACH OF FIDUCIARY DUTY
91. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 90 of this Complaint as if fully set forth herein.
92. The Fair Price Statute is intended to prevent coercive and inadequate
two-tier tender offer and merger transactions.
93. However, plaintiffs' all-cash Offer is fully-financed, non-coercive,
and non- discriminatory, and non-tendering shareholders are to receive the same
per share cash consideration in the Proposed Merger as in the Offer. The Offer
and the Proposed Merger are fair and represent a substantial premium over the
market price of Healthdyne shares on
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December 31, 1996, the trading day prior to Invacare's initial January 2, 1997
proposal to acquire Healthdyne.
94. Therefore, application of the Fair Price Statute to impede, delay, or
prevent shareholder consideration of the Offer would be improper and in
derogation of the Director Defendants' fiduciary duties.
95. Healthdyne and the Director Defendants should be enjoined from using
the Fair Price Statute for the improper purpose of impeding shareholder
consideration of the Offer.
96. Plaintiffs have no adequate remedy at law.
COUNT VI
INJUNCTIVE AND DECLARATORY RELIEF - USE OF GEORGIA
BUSINESS COMBINATION STATUTE - BREACH OF FIDUCIARY DUTY
97. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 96 of this Complaint as if fully set forth herein.
98. The Business Combination Statute is intended to prevent coercive and
inadequate tender offers.
99. However, Invacare's Offer and Proposed Merger are fully financed,
non-coercive, and non-discriminatory. The Offer and Proposed Merger are fair
and represent a substantial premium over the market price of Healthdyne shares
on December 31, 1996, the trading day prior to Invacare's initial January 2,
1997 proposal to acquire Healthdyne.
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100. Therefore, application of the Business Combination Statute to impede,
delay, or prevent shareholder consideration of the Offer and Proposed Merger
would be improper and in derogation of the Director Defendants' fiduciary
duties.
101. Healthdyne and the Director Defendants should be enjoined from using
the Business Combination Statute for the improper purpose of impeding
shareholder consideration of the Offer and Proposed Merger.
102. Plaintiffs have no adequate remedy at law.
COUNT VII
INJUNCTIVE AND DECLARATORY RELIEF -
FAIR PRICE STATUTE - SUPREMACY CLAUSE VIOLATION
103. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 102 of this Complaint as if fully set forth herein.
104. This claim for relief arises under the Supremacy Clause of the United
States Constitution.
105. To the extent that the Fair Price Statute (a) purports to fix the
price at which shares may be acquired in connection with a business combination
according to a rigid statutory formula, and (b) purports to require payment of a
price to non-tendering shareholders in the merger that is higher than the price
paid to tendering shareholders in the tender offer, it conflicts with the
Williams Act and is thus unconstitutional because it violates the Supremacy
Clause of the United States Constitution, which accords supremacy to United
States law over conflicting state laws. U.S. Const., art. VI, cl. 2.
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106. Plaintiffs have no adequate remedy at law.
COUNT VIII
INJUNCTIVE AND DECLARATORY RELIEF -
FAIR PRICE STATUTE - UNITED STATES AND GEORGIA
CONSTITUTIONAL VIOLATIONS
107. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 106 of this Complaint as if fully set forth herein.
108. This claim for relief arises under the Due Process and Commerce
Clauses of the United States Constitution and the Due Process Clause of the
Constitution of the State of Georgia. U.S. Const. amends. V and XIV; Ga. Const.
art. I, Section I, par. I.
109. By fixing the price at which shares may be acquired in connection with
a business combination according to a rigid statutory formula, the Fair Price
Statute deprives interested shareholders of the fundamental freedoms guaranteed
by the Due Process Clauses of the United States and Georgia Constitutions and
imposes an undue burden on interstate commerce which far outweighs any purported
local benefits in violation of the Commerce Clause of the United States
Constitution.
110. For example, in requiring that, under certain circumstances,
non-tendering shareholders receive a higher price for their shares in the merger
than tendering shareholders in the tender offer, the Fair Price Statute fails to
employ means related to the effectuation of its purported purpose of equal
treatment for all shareholders.
111. Accordingly, to the extent that the Fair Price Statute would require
payment of a price to non-tendering shareholders in the Proposed Merger that is
higher than the price paid to
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tendering shareholders in the Offer, it is invalid, unconstitutional, and void
as so applied under the Due Process and Commerce Clauses of the United States
Constitution and the Due Process Clause of the Georgia Constitution.
112. Plaintiffs have no adequate remedy at law.
COUNT IX
INJUNCTIVE AND DECLARATORY RELIEF -
AGGREGATE EFFECT OF STATE LAWS - SUPREMACY
AND COMMERCE CLAUSE VIOLATIONS
113. Plaintiffs repeat and reallege each allegation in Paragraphs 1 through
112 of this Complaint as if fully set forth herein.
114. As implemented and applied together, Section 624, if adjudged to
permit the Dead-Hand Provision; the Business Combination Statute, if the
Director Defendants fail to approve the Offer and Proposed Merger for the
purposes thereof; and the Fair Price Statute, if the Director Defendants fail to
approve the Offer and Proposed Merger for the purposes thereof and to the extent
that it requires payment of a price to non-tendering shareholders in the
Proposed Merger that is higher than the price paid to tendering shareholders in
the Offer, would
(a) conflict with the Williams Act, and thus violate the Supremacy
Clause of the United States Constitution, article VI, clause 2, which
accords supremacy to United States law over conflicting state laws; and
(b) impose substantial and adverse burdens on interstate commerce
which far outweigh any purported local benefits, and thus violate the
Commerce Clause of the United States Constitution, article 1, section 8,
clause 3.
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115. Plaintiffs have no adequate remedy at law.
COUNT X
INJUNCTIVE AND DECLARATORY RELIEF - OTHER ATTEMPTS
TO IMPEDE OFFER AND PROPOSED MERGER - BREACH OF FIDUCIARY DUTY
116. Plaintiffs repeat and reallege each allegation contained in Paragraphs
1 through 115 of this Complaint as if fully set forth herein.
117. The Offer and Proposed Merger are all-cash, fully-financed,
non-coercive, and non-discriminatory and comply with all applicable laws,
obligations, and agreements. Healthdyne and the Director Defendants should not
be permitted to manipulate the existing corporate machinery or to adopt new
defensive measures that would have the effect of delaying, impeding, or blocking
plaintiffs' Offer, the election of the New Directors, or the Proposed Merger, or
that would have the effect of preventing Healthdyne's shareholders from freely
considering whether to accept the Offer and approve the Proposed Merger. Nor
should Healthdyne and the Director Defendants be permitted to delay, impede, or
prevent consummation of the Offer and Proposed Merger by litigation in other
forums. This matter is now before this Court, which is fully capable of
resolving all issues relating to the Offer and Proposed Merger. Attempts to
litigate these matters in other forums would be for the improper purpose of
delaying, impeding, or preventing consummation of the Offer and Proposed Merger
and therefore would be in derogation of the Director Defendants' fiduciary
duties.
118. Thus, Healthdyne and the Director Defendants should be enjoined from
using such devices for the improper purpose of impeding shareholder
consideration of the Offer.
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119. Plaintiffs have no adequate remedy at law.
WHEREFORE, plaintiffs respectfully request that this Court enter an
order:
(a) declaring and adjudging that the Dead-Hand Provision is invalid
and unenforceable under Georgia law and is in violation of the Director
Defendants' fiduciary duties; compelling the Director Defendants to amend
the Poison Pill to delete the Dead-Hand Provision and enjoining Healthdyne,
the Director Defendants, and Healthdyne's officers, successors, agents,
servants, subsidiaries, employees and attorneys from taking any actions to
enforce or apply the Dead-Hand Provision that (i) would interfere with
plaintiffs' voting rights, (ii) discriminate in any way against plaintiffs
in the exercise of their rights with respect to their Healthdyne stock,
(iii) impede or frustrate the ability of Healthdyne's shareholders to
consider and make their own determination as to whether to elect New
Directors and/or accept the terms of the Offer and/or approve the Proposed
Merger, or (iv) otherwise interfere, impede, or delay the commencement,
continuation, or consummation of the Offer or Proposed Merger;
(b) in the event the Dead-Hand Provision is adjudged permissible
under Section 624, declaring that Section 624 is unconstitutional as
applied to the Offer and Proposed Merger to the extent that it permits the
Dead-Hand Provision because (i) it is in conflict with the Williams Act and
thus violates the Supremacy Clause of the United States Constitution, and
(ii) it violates the Commerce Clause of the United States Constitution;
(c) compelling the Director Defendants to redeem the Rights
associated with the Poison Pill or to amend the Poison Pill so as to make
the Rights inapplicable to the
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Offer and Proposed Merger, and enjoining Healthdyne, the Director Defendants,
and Healthdyne's officers, successors, agents, servants, subsidiaries, employees
and attorneys from taking any action to implement, distribute, or recognize any
rights or powers with respect to said Rights (other than to redeem or amend the
Rights in accordance with the order), and from taking any actions pursuant to
the Poison Pill that would dilute or interfere with plaintiffs' voting rights or
in any other way discriminate against plaintiffs in the exercise of their rights
with respect to their Healthdyne stock;
(d) compelling the Director Defendants to approve the Offer and
Proposed Merger pursuant to the Fair Price Statute and enjoining
Healthdyne, the Director Defendants, and Healthdyne's officers, successors,
agents, servants, subsidiaries, employees and attorneys from taking any
actions to enforce or apply the Fair Price Statute that would interfere
with the commencement, continuation, or consummation of the Offer or
Proposed Merger;
(e) compelling the Director Defendants to approve the Offer and
Proposed Merger for the purpose of the Business Combination Statute and
enjoining Healthdyne, the Director Defendants, and Healthdyne's officers,
successors, agents, servants, subsidiaries, employees and attorneys from
taking any actions to enforce or apply the Business Combination Statute
that would interfere with the commencement, continuation, or consummation
of the Offer or Proposed Merger;
(f) declaring that the Fair Price Statute is unconstitutional as
applied to the Offer and Proposed Merger because (i) it is in conflict with
the Williams Act and thus
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violates the Supremacy Clause of the United States Constitution, and (ii)
it violates the Due Process and Commerce Clauses of the United States
Constitution and the Due Process Clause of the Georgia Constitution;
(g) declaring that Section 624 (to the extent it is adjudged to
permit the Dead-Hand Provision), the Business Combination Statute, and the
Fair Price Statute are, as implemented and applied together to the Offer
and Proposed Merger, unconstitutional because (i) they are in conflict with
the Williams Act and thus violate the Supremacy Clause of the United States
Constitution, and (ii) they violate the Commerce Clause of the United
States Constitution;
(h) enjoining Healthdyne, the Director Defendants, and Healthdyne's
officers, successors, agents, servants, subsidiaries, employees and
attorneys from taking any steps to impede or frustrate the ability of
Healthdyne's shareholders to consider and make their own determination as
to whether to accept the terms of the Offer or approve the Proposed Merger
or taking any other action to thwart or interfere with the Offer or
Proposed Merger;
(i) declaring and adjudging that the Offer and Proposed Merger comply
with all applicable laws, obligations, and agreements;
(j) declaring and adjudging that Healthdyne, the Director Defendants,
and Healthdyne's officers, successors, agents, servants, subsidiaries,
employees and attorneys may not commence, and enjoining them from
commencing, in any forum other than this Court, any judicial proceedings
that would require litigation, by way of claim, defense, or counterclaim,
of any of the claims, defenses, or
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counterclaims which may be asserted in this lawsuit and that would delay or
impede commencement, continuation, or consummation of the Offer or Proposed
Merger, including, without limitation, any proceedings challenging the
Offer or Proposed Merger or seeking to enforce, apply, or declare the
validity of any of Healthdyne's anti-takeover devices or other defensive
measures;
(k) awarding plaintiffs their costs and disbursements in this action,
including reasonable attorneys' fees; and
(l) granting such other and further relief as to the Court seems just
and proper.
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Dated: January 27, 1997
KING & SPALDING
/s/ M. Robert Thornton
-------------------------
M. Robert Thornton
Georgia Bar No. 710475
Michael R. Smith
Georgia Bar No. 661689
David J. Onorato
Georgia Bar No. 553826
191 Peachtree Street, N.E. Attorneys for Plaintiffs Invacare Corporation
Atlanta, Georgia 30303 and I.H.H. Corp.
Telephone: (404) 572-4600
Facsimile: (404) 572-5100
Of Counsel:
SIMPSON THACHER & BARTLETT
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
