As filed with the Securities and
Exchange Commission on August 30, 2000 Registration No. 333-36604
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------------
VETERINARY CENTERS OF AMERICA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4097995
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
12401 WEST OLYMPIC BOULEVARD
LOS ANGELES, CALIFORNIA 90064-1022
(310) 584-6500
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
----------------------------
TOMAS FULLER
VETERINARY CENTERS OF AMERICA, INC.
12401 WEST OLYMPIC BOULEVARD
LOS ANGELES, CALIFORNIA 90064-1022
(310) 584-6500
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
COPIES OF CORRESPONDENCE TO:
C.N. FRANKLIN REDDICK III, ESQ.
TROOP STEUBER PASICH REDDICK & TOBEY, LLP
2029 CENTURY PARK EAST, 24TH FLOOR
LOS ANGELES, CALIFORNIA 90067
(310) 728-3000
Approximate date of commencement of proposed
sale to the public: As soon as practicable after
this registration statement becomes effective.
-----------------------------
If the only securities on this form are being offered pursuant to dividend
or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
Proposed Maximum Proposed Maximum
Title Of Shares Amount To Be Aggregate Price Aggregate Amount Of
To Be Registered Registered Per Unit(1) Offering Price(1) Registration Fee (3)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value per share
(including preferred stock purchase
rights)(2) 170,867 $13.345 $2,280,220 $602
=========================================================================================================================
<FN>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average high and low prices of
registrant's common stock reported on the Nasdaq Stock Market's National
Market on May 8, 2000.
(2) Preferred stock purchase rights are attached to and trade with the shares
of our common stock.
(3) Paid on May 9, 2000.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
<PAGE>
Subject to Completion, dated August 30, 2000
PROSPECTUS
VETERINARY CENTERS OF AMERICA, INC.
170,867 SHARES OF OUR COMMON STOCK
(par value $0.001 per share)
---------------------------
This is an offering of 170,867 shares of our common stock, par value $0.001
per share (the "Common Stock"). These shares are being sold by the selling
stockholders named in this prospectus. The selling stockholders acquired their
shares in connection with our acquisition of AAH Management Corp. on April 1,
1999. The selling stockholders will determine the selling price of the shares at
the time of sale, and we will not receive any of the proceeds from the sale of
the shares.
Our company will not receive any proceeds from the sale of the Common Stock
offered by the selling stockholders hereby.
Our common stock is quoted on the Nasdaq Stock Market's National Market
under the symbol "VCAI." On August 28, 2000 the closing price of the Common
Stock on the National Market was $14.50.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETED AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SEC.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF FACTORS YOU
SHOULD CONSIDER BEFORE YOU INVEST IN THE COMMON STOCK BEING SOLD WITH THIS
PROSPECTUS.
Our executive offices are located at 12401 West Olympic Boulevard, Los
Angeles, California 90064-1022, and our telephone number is (310) 584-6500.
----------------------------------
The date of this prospectus is August _, 2000
<PAGE>
SUMMARY BUSINESS INFORMATION
ABOUT OUR COMPANY.
Our company was founded in 1986, and we are a leading animal health care
company. We have established a premier position in two core businesses, animal
hospitals and veterinary diagnostic laboratories. In addition, we own a
partnership interest in a joint venture, Vet's Choice, with Heinz Pet Products,
which joint venture markets and distributes premium pet foods. We operate the
largest network of free-standing, full-service animal hospitals in the country
and the largest network of veterinary-exclusive laboratories in the nation.
Our animal hospitals offer a full range of medical and surgical services
for companion animals, including dogs, cats, birds and other household pets. In
addition to treating disease and injury, our animal hospitals emphasize pet
wellness and offer programs to encourage routine vaccinations, health
examinations, spaying and neutering and dental care. Our veterinary laboratories
offer a full range of diagnostic and reference tests. Laboratory tests are used
by veterinarians to diagnose, monitor and treat diseases through the detection
of substances in blood, urine or tissue samples and other specimens. We do not
conduct experiments on animals and are not engaged in animal research.
Our goal is to strengthen our position as a leading animal health care
company serving the animal hospital and veterinary diagnostic laboratory
markets. We intend to achieve this goal by continuing to:
o expand our animal hospitals and laboratories businesses through
internal growth and acquisitions;
o achieve cost savings by consolidating operations and realizing
economies of scale in marketing, purchasing and administrative support
functions, and by implementing our standard management programs;
o establish brand identification with our company's name through
signage, marketing and association with our pet healthcare
publication, VCA Family Pet;
o take advantage of our unique opportunity to deliver our products and
services through multiple channels to our customers, primarily
veterinarians and pet owners; and
o capitalize on our leadership position within the animal health care
industry to expand into other products and services for veterinarians
and pet owners.
Since 1986, we have expanded rapidly from a single animal hospital in Los
Angeles to a nationwide network of 197 animal hospitals in 29 states at June 30,
2000. As a result of these acquisitions and their successful integration into
our operations, we have gained a leadership position in the animal hospital
industry, which has allowed us to expand into the veterinary diagnostics
laboratory business. Since March 1994, we have acquired the businesses of 18
veterinary diagnostic laboratories, which have been consolidated into 13
facilities as of June 30, 2000, making us the nation's largest network of
veterinary-exclusive diagnostic laboratories serving over 13,000 animal
hospitals located in all 50 states. We plan to continue our aggressive hospital
acquisition program. We will also consider acquiring multiple hospital
organizations and veterinary diagnostic laboratories, as opportunities arise.
THE MERGER.
On August 11, 2000, we entered into an Amended and Restated Agreement and
Plan of Merger with Vicar Recap, Inc., a Delaware corporation and wholly owned
by Green Equity Investors III, L.P., and Vicar Operating Company, Inc., a
Delaware corporation and wholly owned subsidiary of our company. According to
the terms of the merger agreement, we will be merged with and into Vicar Recap,
with our company as the surviving corporation. As a result of the merger, Green
Equity Investors III, along with certain other investors, and a group of our
directors, officers and employees will own, in the aggregate, approximately
94.25%, on a
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fully diluted basis, of our common stock. In the merger, each outstanding share
of our common stock, par value $0.001 per share, (other than shares held by a
group of our directors, officers and employees that will be retained as shares
of the surviving corporation, shares held by dissenting stockholders, Vicar
Recap, Green Equity Investors III and shares held in our treasury) will be
converted into the right to receive a cash payment of $15.00, without interest.
Since certain members of management of our company have a direct financial
interest in the merger, the Board of Directors established a special committee,
comprised of members with no financial interest in the merger, to assess the
merger. The special committee retained two financial advisors, Jefferies &
Company, Inc. and Houlihan Lokey Howard & Zukin Capital, to assess the fairness
of the merger. Both financial advisors found the $15.00 per share price to be
fair, from a financial point of view, to our public stockholders. Relying on the
special committee's unanimous approval of the merger agreement and related
transactions, the Board of Directors approved the merger agreement and related
transactions.
Completion of the merger is subject to various conditions, including
approval of the merger by our stockholders, securing the financing necessary in
connection with the consummation of the merger and obtaining all necessary
permits and approvals. In addition, the completion of the merger is subject to
the execution of certain agreements including a management services agreement, a
stockholders' agreement and various employment agreements.
The merger agreement provides that under certain conditions, we may
terminate the merger agreement and accept a proposal determined by the Board of
Directors to be superior, from a financial point of view, to our stockholders
(other then to the management stockholders), subject to the payment of a
termination fee to Vicar Recap of $10 million. The merger agreement further
provides that in the event we are not required to pay the $10 million
termination fee and the merger is terminated because we breached a covenant or
representation or warranty contained in the merger agreement or are unable to
obtain stockholder approval of the merger agreement and related transactions, we
may be required to pay Vicar Recap fees and expenses, up to $1 million, incurred
in connection with the merger. Either party may terminate the merger agreement
if the merger is not consummated on or before September 30, 2000, subject to
certain conditions.
On May 30, 2000 we filed with the Commission a preliminary Proxy Statement
on Schedule 14A pursuant to Rule 14a-1 of the Exchange Act, with respect to the
scheduling of a special meeting of our stockholders to vote on the approval and
adoption of the merger agreement and related transactions. Concurrently with
such filing, we also filed with the Commission a Schedule 13E-3 Transaction
Statement pursuant to Rule 13E-3 of the Exchange Act with respect to the merger
and related transactions. We subsequently filed an amendment and definitive
filing on August 2, 2000 and August 14, 2000, respectively, to the preliminary
Proxy Statement on Schedule 14A and the Schedule 13E-3 Transaction Statement. In
addition, our company and Green Equity Investors III, L.P. filed on June 23,
2000 with the Antitrust Division of the Department of Justice and the Federal
Trade Commission certain notification and report forms with respect to the
merger and related transactions pursuant to the requirements of the
Hart-Scott-Rodino Antitrusts Improvements Act of 1976, as amended, or HSR Act,
and the rules and regulations promulgated thereunder. Early termination with
respect to the merger under the HSR Act was granted on July 10, 2000.
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RISK FACTORS
Readers should consider carefully the following factors, in addition to the
other information contained in this prospectus, in evaluating us and our
business.
CERTAIN RISKS ASSOCIATED WITH THE MERGER.
On August 11, 2000, we entered into the merger agreement with Vicar Recap
and Vicar Operating, pursuant to which we will be merged with and into Vicar
Recap, with our company as the surviving corporation. Upon the consummation of
the merger, we will be owned by Green Equity Investors III and by certain
current members of management of our company. In the merger, each outstanding
share of our common stock (other than shares held by dissenting stockholders,
Vicar Recap, Green Equity Investors III and in our treasury) will be converted
into the right to receive a cash payment of $15.00, without interest. We
retained two financial advisors to assess the fairness of the merger. Both
financial advisors found the $15.00 per share price to be fair, from a financial
point of view, to our public stockholders.
Consummation of the merger is subject to various conditions, including
approval of the merger by our stockholders, securing the financing necessary to
consummate the merger and related transactions, obtaining all necessary permits
and approvals and the expiration or termination of the applicable waiting period
under the HSR Act. Although Vicar Recap has obtained binding commitments for the
required financing, these commitments also contain a variety of conditions. As a
result of the various conditions to complete the merger, we cannot assure you
that the merger will be consummated.
It is expected that if the merger is not consummated for any reason, our
current management, under the direction of the Board of Directors, will continue
to manage our company as an on-going business. Currently, we are not considering
any other merger proposals as alternatives to the merger. If, for any reason,
the merger is not consummated, we cannot assure you that any other transaction
acceptable to us will be offered or that our operations will not be adversely
impacted.
If the merger is consummated, we will be a privately held corporation. The
public stockholders will cease to have any ownership interest in, or rights as,
stockholders of our company, including the payment of any dividends on our
common stock. Further, the public stockholders will not benefit from any
increase or bear the risk of any decrease in the value of our company.
WE MAY NOT BE ABLE TO MANAGE OUR GROWTH.
Since January 1, 1996, we have experienced rapid growth and expansion. In
1996, we acquired The Pet Practice, Inc., Pets' Rx, Inc., as well as 22
individual animal hospitals and six veterinary diagnostic laboratories. In 1997,
we acquired 15 animal hospitals and three veterinary diagnostic laboratories. In
1998, we acquired 11 animal hospitals and one veterinary diagnostic laboratory.
In 1999, we acquired 39 animal hospitals and two veterinary diagnostic
laboratories. As a result of these acquisitions, our revenues grew from $181.4
million in 1996 to $320.6 million in 1999. In 2000, through August 8, 2000, we
acquired 11 animal hospitals, of which three were merged upon acquisition into
existing facilities of ours, and one veterinary diagnostic laboratory, which was
also merged upon acquisition into an existing facility.
We have experienced, and will continue to experience, a strain on our
administrative and operating resources. Our growth has also increased the
demands on our information systems and controls. We cannot guarantee that we
will be able to identify, consummate and integrate acquired companies without
substantial delays, costs or other problems. Once integrated, these acquired
companies may not be profitable. In addition, acquisitions involve several other
risks including:
o adverse short-term effects on our reported operating results;
o impairments of goodwill and other intangible assets;
o the diversion of management's attention;
o the dependence on retention, hiring and training of key personnel;
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o the amortization of intangible assets; and
o risks associated with unanticipated problems or legal liabilities.
Our failure to manage our growth effectively will have a material adverse
effect on our results of operations and our ability to execute our business
strategy.
DEPENDENCE ON ACQUISITIONS FOR GROWTH--IF WE DO NOT ACHIEVE OUR ACQUISITION
PROGRAM STRATEGY OUR GROWTH WILL BE DIMINISHED.
We plan to grow primarily by acquisitions of established animal hospitals.
Our acquisition strategy involves a number of factors which are difficult to
control including:
o the identification of potential acquisition candidates;
o the willingness of the owners to sell on reasonable terms;
o the satisfactory completion of negotiations; and
o minimal disruption to our existing operations.
Also, our acquisitions may be subject to pre-merger or post-merger review
by governmental authorities for antitrust and other legal and regulatory
compliance. Any adverse regulatory decision may negatively affect our operations
by assessing fines or penalties or requiring us to divest one or more of our
operations.
Our acquisition strategy may cause us to divert our time from operating
matters, which may cause the loss of business and personnel. There are also
possible adverse effects on earnings resulting from the possible loss of
acquired customer bases, amortization of goodwill created in purchase
transactions, and the contingent and latent risks associated with the past
operations of, and other unanticipated problems arising in, the acquired
business. If we have sufficient capital, our acquisition strategy involves the
acquisition of at least 15 to 25 facilities per year. We currently do not have
commitments to effect any material acquisitions but may enter into agreements to
do so in the future. We intend to fund additional animal hospital and veterinary
diagnostic laboratory acquisitions with a combination of cash, assumption of
liabilities, issuance of promissory notes and shares of our common stock. Our
growth is dependent upon our ability to timely identify, acquire, integrate and
manage profitability of acquired businesses. If we cannot do this, our business
and growth may be harmed.
SUBSTANTIAL LEVERAGE--OUR SIGNIFICANT AMOUNT OF INDEBTEDNESS COULD ADVERSELY
AFFECT OUR FINANCIAL HEALTH.
We have a significant amount of indebtedness. We incurred our debt
primarily in connection with the acquisition of our animal hospitals and
veterinary diagnostic laboratories and through the sale of the $84,385,000 of
5.25% convertible debentures in April 1996. In certain instances, the debt we
incur in connection with the acquisition of animal hospitals is secured by the
assets of the acquired hospital. At June 30, 2000, we have consolidated
long-term obligations (including current portion) of $156.5 million and our
ratio of long-term debt (including current portion) to total stockholders'
equity was 0.6 to 1.0. We will require substantial capital to finance our
anticipated growth, so we expect to incur additional debt in the future.
WE HAVE RISKS ASSOCIATED WITH OUR INTANGIBLE ASSETS.
A substantial portion of our assets consists of intangible assets,
including goodwill and covenants not to compete, relating to the acquisition of
animal hospitals and veterinary diagnostic laboratories. At June 30, 2000, our
balance sheet reflected $304.8 million of intangible assets of these types,
which is a substantial portion of our total assets of $446.9 million at that
date. We expect that the aggregate amount of goodwill and other intangible
assets on our balance sheet will increase as a result of future acquisitions. An
increase may have an adverse impact on earnings because goodwill and other
intangible assets will be amortized against earnings. If our company is sold or
liquidated, we cannot assure you that the value of these intangible assets will
be realized.
We continually evaluate whether events and circumstances have occurred that
suggest that we may not be able to recover the remaining balance of our
intangible assets or that the estimated useful lives of
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our intangible assets has changed. If we determine that certain intangible
assets have been impaired, we will reduce the carrying value of those intangible
assets, which could have a material adverse effect on our results of operations
during the period in which we recognize the impairment. Also, if we determine
that the estimated useful life of certain intangible assets has decreased, we
will accelerate depreciation or amortization of that asset, which could have a
material adverse effect on our results of operations. We recognized a write-down
of goodwill and related assets in the amount of $9.5 million as part of our
restructuring plan adopted during the third and fourth quarters of 1996. We may
have further write-down in future periods.
FLUCTUATIONS IN QUARTERLY RESULTS--OUR OPERATING RESULTS VARY SIGNIFICANTLY FROM
QUARTER TO QUARTER WHICH COULD IMPACT OUR STOCK PRICE.
Our operating results may fluctuate significantly in the future. We believe
that quarter to quarter or annual comparisons of our operating results are not a
good indication of our future performance. Historically, we have experienced
higher sales in the second and third quarters than in the first and fourth
quarters. The demand for our veterinary services is higher during warmer months
because pets spend a greater amount of time outdoors, where they are more likely
to be injured and are more susceptible to disease and parasites. Also, use of
veterinary services may be affected by levels of infestation of fleas,
heartworms and ticks, and the number of daylight hours, as well as general
economic conditions. A substantial portion of our costs are fixed and do not
vary with the level of demand for our services. Therefore, net income for the
second and third quarters at individual animal hospitals and veterinary
diagnostic laboratories generally is higher than in the first and fourth
quarters.
OUR SUCCESS DEPENDS ON KEY MEMBERS OF MANAGEMENT.
Our success will continue to depend on our executive officers and other key
management personnel, particularly our Chief Executive Officer, Robert L. Antin.
Our company has employment contracts with Mr. Robert Antin, Mr. Arthur Antin,
Chief Operating Officer, and Mr. Neil Tauber, Senior Vice President. Each of
these agreements terminates in January 2002. None of our officers is a party to
non-competition covenants which extend beyond the term of their employment with
us. We do not maintain any key man life insurance coverage on the lives of our
senior management. As we continue to grow, we will continue to hire, appoint or
otherwise change senior managers and other key executives. We cannot assure you
that we will be able to retain our executive officers and key personnel or
attract additional qualified members to management in the future. Also, the
success of certain of our acquisitions may depend on our ability to retain
selling veterinarians of the acquired companies. If we lose the services of any
key manager or selling veterinarian, our business may be materially adversely
affected.
COMPETITION.
The animal health care industry is highly competitive. We believe that the
primary competitive factors in connection with animal hospitals include:
o convenient location;
o recommendation of friends;
o reasonable fees;
o quality of care; and
o convenient hours.
Our primary competitors for our animal hospitals in most markets are
individual practitioners or small, regional multi-clinic practices. Also,
regional pet care companies and certain national companies, including operators
of super-stores, are developing multi-regional networks of animal hospitals in
markets in which we operate. We believe that the primary competitive factors in
connection with veterinary diagnostic laboratories include:
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o quality;
o price; and
o time required to report results.
There are many clinical laboratory companies which provide a broad range of
laboratory testing services in the same markets we service. Also, several
national companies provide on-site diagnostic equipment that allows
veterinarians to perform their own laboratory tests.
LITIGATION RELATING TO THE MERGER.
We are aware of six complaints that have been filed relating to the merger.
Our company and members of the Board of Directors have been named as defendants
in class action lawsuits filed in the Delaware Court of Chancery and the
California Superior Court.
While the allegations contained in each complaint are not identical, the
complaints generally assert that the $15.00 per share price to be paid to our
public stockholders is inadequate and does not represent the value of the assets
and future prospects of our company. The complaints also generally allege that
the defendants engaged in self-dealing without regard to conflicts of interest
and that the defendants breached their fiduciary duties in approving the merger
agreement.
The complaints seek certification of a class of all our stockholders whose
stock will be acquired in connection with the merger and seek injunctive relief
that would, if granted, prevent the completion of the merger. The complaints
also seek unspecified damages, attorneys' fees and other relief. We believe that
the allegations contained in the complaints are without merit and intend to
contest the actions vigorously. The individual defendants have advised us that
they also believe that the allegations in the complaints are without merit and
that they intend to contest the actions vigorously.
We cannot assure you that we will successfully defend the allegations
included in the complaints or that a motion to enjoin the transactions
contemplated by the merger agreement will not be made, and if made, that it
would not be granted. The inability of our company to resolve the claims that
are the basis for the lawsuits or to prevail in any related litigation could
result in our company being required to pay substantial monetary damages for
which our company may not be adequately insured, which could have a material
adverse effect on our company's business, financial position and results of
operations. Regardless of whether the merger is consummated or the outcome of
the lawsuits, our company may incur significant related expenses and costs that
could have an adverse effect on our company's business and operations.
Furthermore, the cases could involve a substantial diversion of the time of some
members of management. Accordingly, we are unable to estimate the impact of any
potential liabilities associated with the complaints.
OUR BUSINESS IS SUBJECT TO GOVERNMENT REGULATION.
The laws of many states prohibit veterinarians from splitting fees with
non-veterinarians and prohibit business corporations from providing, or holding
themselves out as providers of, veterinary medical care. These laws vary from
state to state and are enforced by the state or local courts and by regulatory
authorities with broad discretion. While we seek to comply with these laws in
each state in which we operate, we cannot assure you that, given varying and
uncertain interpretations of these laws, we are in compliance with these
restrictions in all states. A determination that we violate any applicable
restriction on the practice of veterinary medicine in any state in which we
operate could have a material adverse effect on our operations if we are unable
to restructure our operations to comply with the requirements of those states.
WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS.
Our Board of Directors is authorized to issue up to 2,000,000 shares of
preferred stock. Our Board is also authorized to determine the price, rights,
preferences and privileges of those shares without any further vote or action by
the stockholders. The rights of the holders of any preferred stock may adversely
affect the rights of holders of our common stock. Our ability to issue preferred
stock gives us flexibility concerning possible
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acquisitions and financings, but it could make it more difficult for a third
party to acquire a majority of our outstanding voting stock. In addition, any
preferred stock to be issued may have other rights, including economic rights,
senior to our common stock which could have a material adverse effect on the
market value of our common stock. However, pursuant to the terms of the merger
agreement the Board waived its right to issue preferred stock, except in
connection with certain acquisitions made in the ordinary course of our
business. As a result, in the event the merger agreement is approved by our
stockholders the Board will only have a limited right to issue preferred stock.
We are subject to Delaware laws that could have the effect of delaying,
deterring or preventing a change in control of our company. One of these laws
prohibits us from engaging in a business combination with any interested
stockholder for a period of three years from the date the person became an
interested stockholder, unless some conditions are met. In addition, provisions
of our Certificate of Incorporation and By-laws could have the effect of
discouraging potential takeover attempts or making it more difficult for
stockholders to change management. Also, H.J. Heinz Company has an option to
purchase our interest in the Vet's Choice joint venture if there is a change in
control (as defined in that agreement), which may have the same effect. As a
result, stockholders may not have the opportunity to sell their shares at a
substantial premium over the market price of the shares.
In addition, we have adopted a stockholder rights plan, under which we
distributed a dividend of one right for each outstanding share of our common
stock. These rights will cause substantial dilution to the ownership of a person
or group that attempts to acquire us on terms not approved by our Board of
Directors and may have the effect of deterring hostile takeover attempts.
SHARES ELIGIBLE fOR FUTURE SALE MAY IMPACT OUR STOCK PRICE.
Future sales by existing stockholders could adversely affect the prevailing
market price of our common stock. As of August 9, 2000, we had 21,321,124 shares
of common stock outstanding, most of which are either freely tradable in the
public market without restriction or tradable in accordance with Rule 144 under
the Securities Act of 1933, as amended. In addition, there were 654,011 shares
held in treasury. As of August 9, 2000, there are also 3,734,482 shares of
common stock issuable upon exercise of outstanding stock options; and 2,456,623
shares issuable upon conversion of convertible debentures.
VOLATILITY OF STOCK PRICE.
Historically, our stock price has been volatile. Factors that may have
significant impact on the market price of our stock include:
o variations in quarterly operating results;
o litigation involving us;
o announcements by us or our competitors; and
o general conditions in the animal health care industry.
The stock market in recent years has fluctuated in price and volume
significantly. These fluctuations have been unrelated or disproportionate to the
operating performance of publicly traded companies. Our future earnings and
stock price may be subject to significant volatility, particularly on a
quarterly basis. Shortfalls in our revenues or earnings in any given period
relative to the levels expected by securities analysts could immediately,
significantly and adversely affect the trading price of our common stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the securities offered by
the selling stockholders hereunder.
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SELLING STOCKHOLDERS
The selling stockholders are former securityholders and/or employees of AAH
Management Corp. We issued the shares covered by this prospectus to the selling
stockholders in connection with our acquisition of AAH Management Corp. on April
1, 1999.
The following table contains certain information about the beneficial
ownership of our common stock by the selling stockholders as of December 31,
1999.
Prior to April 1, 1999, no selling stockholder had ever held any position
or office with us or been employed by us or any of our affiliates. Since April
1, 1999, certain selling stockholders (as indicated in the following table) have
become full-time employees of our company.
<TABLE>
<CAPTION>
Common Stock Owned
Prior to the Common Stock Owned After the Offering(1)
Offering(1) (2)
------------------ ------------------- ----------------------------------------
Number of Shares to
be sold in the
Name of Selling Stockholder Number of Shares Offering Number of Shares Percent of Class
--------------------------- ---------------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
Robert B. Cohen (3) 106,522 42,609 63,913 *
Brian Cohen 17,017 6,807 10,210 *
Jill Cohen UGMA 17,017 6,807 10,210 *
Richard S. Groberg 37,526 15,011 22,515 *
Delainey Groberg UGMA 2,127 851 1,276 *
Lhara Groberg UGMA 2,127 851 1,276 *
Alvin Cohen 23,824 9,530 14,294 *
Mitchell Klein 3,072 1,229 1,843 *
Waveland Partners, L.P. 109,342 43,734 65,608 *
Waveland Partners Limited 865 865 0 *
Page 9
<PAGE>
Common Stock Owned
Prior to the Common Stock Owned After the Offering(1)
Offering(1) (2)
------------------ ------------------- ----------------------------------------
Number of Shares to
be sold in the
Name of Selling Stockholder Number of Shares Offering Number of Shares Percent of Class
--------------------------- ---------------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
W.H.I. Growth Fund, L.P. 37,883 15,154 22,729 *
William Harris & Co. 16,098 6,440 9,658 *
Employee Profit
Sharing Trust
Harris Foundation #2 9,470 3,788 5,682 *
Couderay Partners 7,766 3,107 4,659 *
Astro Communications, Inc 6,846 2,739 4,107 *
Irving Harris Foundation 7,576 3,031 4,545 *
HFF Partners 5,274 2,110 3,164 *
Fred Holubow 1,894 758 1,136 *
Jerome Kahn Jr. 1,894 758 1,136 *
Lawrence Cohen (3) 3,125 3,125 0 *
Joseph Soccadato 1,563 1,563 0 *
-------------------------
<FN>
* Less than one percent.
(1) Assumes that the selling stockholder did not purchase or sell any shares of
our common stock following the receipt of such shares offered under this
prospectus.
(2) Assumes that all of the shares registered will be sold in the offering.
(3) Identifies full-time employee of our company.
</FN>
</TABLE>
Page 10
<PAGE>
PLAN OF DISTRIBUTION
We are registering the shares covered by this prospectus on behalf of the
selling stockholders. We have agreed to pay all registration expenses incurred
in connection with registering the shares covered by this prospectus.
The shares may be offered and sold by the selling stockholders directly to
purchasers or through one or more underwriters, brokers, dealers or agents, in
one or more types of transactions:
o on The Nasdaq National Market;
o in negotiated transactions;
o through put or call options relating to the shares;
o through short sales of shares; or
o a combination of these methods of sale, at market prices or at
negotiated prices.
The selling stockholders may also pledge shares under loans, and upon a
default by a selling stockholder, the pledged shares might be sold under this
prospectus.
The selling stockholders and any broker-dealers that act in connection with
the sale of shares might be considered "underwriters" under the Securities Act.
Any commissions received by broker-dealers and any profit on the resale of the
shares sold by them might be considered to be underwriting discounts or
commissions under the Securities Act. Because the selling stockholders may be
considered underwriters under the Securities Act, the selling stockholders will
be required to deliver a prospectus in connection with the sale of their shares.
The anti-manipulative provisions of Regulation M promulgated under the
Securities and Exchange Act of 1934, as amended, may apply to their sales of
shares in the market.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Federal securities law requires us to file information with the Securities
and Exchange Commission concerning our business and operations. We file annual,
quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission. You can read and copy any of these materials
at the Securities and Exchange Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling the Securities Exchange
Commission at 1-800-SEC-0330. Our reports, proxy and information statements and
other information regarding us, filed with the Securities and Exchange
Commission, are also available on the Securities and Exchange Commission's
Internet site at "http://www.sec.gov." You can also inspect such materials at
the offices of the Nasdaq Stock Market at 1735 K Street, N.W., Washington, D.C.
20006.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the Securities and Exchange Commission will
automatically update and supersede this information. We incorporate by reference
the following documents:
o Annual Report on Form 10-K for the year ended December 31, 1999;
o Annual Report on Form 10-K/A Amendment No. 1 to the Annual Report on
Form 10-K for the year ended December 31, 1999;
o Annual Report on Form 10-K/A Amendment No. 1 to the Annual Report on
Form 10-K for the year ended December 31, 1998;
Page 11
<PAGE>
o Annual Report on Form 10-K/A Amendment No. 2 to the Annual Report on
Form 10-K for the year ended December 31, 1999;
o Annual Report on Form 10-K/A Amendment No. 3 to the Annual Report on
Form 10-K for the year ended December 31, 1999;
o Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
o Quarterly Report on Form 10-Q/A Amendment No. 1 for the quarter ended
March 31, 2000;
o Quarterly Report on Form 10-Q for the quarter ended June 30, 2000;
o Current Report on Form 8-K filed April 4, 2000;
o Current Report on Form 8-K filed April 6, 2000;
o Current Report on Form 8-K filed April 14, 2000;
o The description of our common stock contained in our Registration
Statement on Form 8-A filed pursuant to Section 12 of the Exchange
Act, and any amendment or report filed for the purpose of updating
such description;
o The description of our Series B Preferred Stock contained in our
Registration Statement on Form 8-A filed pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of
updating such description; and
o All documents filed by us with the SEC under Section 13(a), 13(c), 14
or 15(d) of the Exchange Act, prior to the termination of this
offering.
We will provide to each person, including any beneficial owner, to whom a
prospectus is delivered, a copy of any or all of the information that has been
incorporated by reference in the prospectus but not delivered with the
prospectus. You may request a copy of any or all of the information incorporated
by reference by written or oral request, at no cost, by contacting us at the
following address or telephone number:
Tomas W. Fuller
Veterinary Centers of America, Inc.
12401 West Olympic Boulevard
Los Angeles, California 90064-1022
(310) 584-6500
LEGAL MATTERS
Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles, California, has
rendered to us a legal opinion as to the validity of the common stock covered by
this prospectus.
EXPERTS
The audited consolidated financial statements incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
Page 12
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the offering are as follows:
<TABLE>
<CAPTION>
Amount
---------------
<S> <C>
Registration Fees Under the Securities Act........ $ 602
NASD Filing Fees.................................. $ *
Blue Sky Fees..................................... $ *
Printing and Engraving Fees....................... $ *
Legal Fees........................................ $ 10,000
Accounting Fees................................... $ 2,500
Registrar and Transfer Agent Fees................. $ *
---------------
TOTAL................................... $ 13,102
===============
<FN>
----------------
* Not applicable or none.
</FN>
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Nine of our Certificate of Incorporation and Article Five of our
By-laws provide for the indemnification by us of each of our directors, officers
and employees to the fullest extent permitted by the Delaware General
Corporation Law, or DGCL, as the same exists or may hereafter be amended.
Additionally, Article Nine of our Certificate of Incorporation provides that a
director of our company shall not be liable to us or our stockholders for
monetary damages for breach of fiduciary duty as a director. Section 102(b)(7)
of the DGCL provides that a provision so limiting the personal liability of a
director shall not eliminate or limit the liability of a director for, among
other things: breach of the duty of loyalty; acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of the law;
unlawful payment of dividends; and transactions from which the director derived
an improper personal benefit.
Section 145 of the DGCL provides that we may indemnify an officer or
director who is made a party to a "proceeding" (including a law suit or
derivative action) because of his position, if he acted in good faith in a
manner he reasonably believed to be in or not opposed to our best interests and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe that his conduct was unlawful, and may advance expenses incurred in
defending any proceeding in certain cases. If the director or officer is
successful on the merits or otherwise, he must be indemnified against all
expenses actually and reasonably incurred. If the officer or director is
adjudged liable, indemnity can be made only by court order.
We have also entered into an indemnity agreement with our directors which
provides for mandatory indemnity of an officer or director made party to a
"proceeding" by reason of the fact that he or she is or was one of our a
directors, if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of our company. The
indemnity agreement also obligates us to advance expenses to a director provided
that he or she is not entitled to partial indemnification. Directors are also
entitled to partial indemnification, and indemnification for expenses incurred
as a result of acting at our request as a director, officer or agent of an
employee benefit plan or other partnership, corporation, joint venture, trust or
other enterprise owned or controlled by us.
ITEM 16. EXHIBITS.
See the Exhibit Index of this registration statement.
Page 13
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of the appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California, on August 28,
2000.
VETERINARY CENTERS OF AMERICA, INC.
By: /S/ TOMAS W. FULLER
----------------------------------
Tomas W. Fuller
VICE PRESIDENT,
CHIEF FINANCIAL OFFICER,
AND ASSISTANT SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement on Form S-3 has been signed below by the
following persons in the capacities indicated, on August 28, 2000.
SIGNATURE TITLE
President, Chief Executive Officer and Chairman
* of the Board (Principal Executive Officer) and
---------------------------- Director
Robert L. Antin
Senior Vice President, Chief Operating Officer,
* Secretary and Director
----------------------------
Arthur J. Antin
* Senior Vice President, Treasurer and Director
----------------------------
Neil Tauber
Vice President, Chief Financial Officer
/S/ THOMAS W. FULLER and Assistant Secretary (Principal Financial
---------------------------- and Accounting Officer)
Tomas W. Fuller
Director
----------------------------
John Heil
* Director
----------------------------
John Chickering
Director
----------------------------
Dr. Richard Gillespie
*By: /S/ TOMAS W. FULLER
-----------------------
Attorney-in-fact
Page 15
<PAGE>
EXHIBIT INDEX
NO. ITEM PAGE
5.1 Opinion of Troop Steuber Pasich Reddick & Tobey, LLP*
23.1 Consent of Arthur Andersen LLP
23.3 Consent of Troop Steuber Pasich Reddick & Tobey, LLP
(included as part of Exhibit 5.1)*
24.1 Power of Attorney (included on the signature page hereof)*
-----------------------------
*previously filed
Page 16
