HCR MANOR CARE INC
8-K, 1998-10-01
SKILLED NURSING CARE FACILITIES
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<PAGE>   1

                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549


                                     FORM 8-K

                                  CURRENT REPORT
                        PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

      Date of Report (Date of earliest event reported): September 25, 1998
                              HCR MANOR CARE, INC.
              (Exact name of registrant as specified in charter)

<TABLE>
<S>                              <C>                    <C>
Delaware                         0-10858                34-1687107 (State or  
(Jurisdiction                    (Commission            (I.R.S. Employer
of Incorporation)                File Number)           Identification No.)
</TABLE>

<TABLE>
<S>                                                     <C>
One SeaGate                                             43604-2616
Toledo Ohio                                             (Zip Code)
(Address of Principal
Executive Offices)
</TABLE>


Registrant's telephone number, including area code: (419) 252-5500

Registrants former name, changed since last report: Health Care and Retirement
Corporation


Item 2.  Acquisition or Disposition of Assets.

     On September 25, 1998, Manor Care, Inc., a Delaware corporation ("Manor
Care") and Health Care and Retirement Corporation ("HCR") and Catera Acquisition
Corporation, a Delaware corporation ("Merger Sub"), consummated their merger
transaction as set forth in the Amended and Restated Agreement and Plan of
Merger dated as of June 10, 1998 between HCR, Merger Sub and Manor Care (the
"Merger Agreement"), as amended, whereby Merger Sub merged with and into Manor
Care and Manor Care remained as the surviving corporation and a wholly owned
subsidiary of HCR (the "Merger"). Upon consummation of the Merger, HCR has been
renamed HCR Manor Care, Inc. 

     Pursuant to the Merger Agreement, upon consummation of the Merger, with
certain limited exceptions, the owner of each issued and outstanding share of
Manor Care common stock, par value $.10 per share is converted into the right
to receive one (1.0) share of HCR Manor Care, Inc. common stock, par value 
$.01 per share. Upon completion of the transaction, the stockholders of Manor
Care will become stockholders of HCR Manor Care, Inc.

     In connection with the execution and delivery of the Merger Agreement and
the transactions contemplated thereby, the Board of Directors of HCR authorized
the execution and delivery of a Second Amendment, dated as of June 10, 1998,
to HCR's Rights Agreement dated as of May 2, 1995, as amended, which is filed
herewith as Exhibit 4.1.

     In connection with the consummation of the Merger, HCR Manor Care, Inc.
entered into a Registration Rights Agreement with certain affiliates of Manor
Care, which is filed herewith as Exhibit 4.2.

     HCR and Manor Care issued a joint press release on September 24, 1998
announcing approval of the Merger transaction by the stockholders of HCR and
Manor Care, which is filed herewith as Exhibit 99.1.

                                       1



<PAGE>   2


     HCR Manor Care, Inc. issued a press release on September 25, 1998
announcing the consummation of the Merger transaction between HCR and Manor
Care, which is filed herewith as Exhibit 99.2.


Item 7.   Financial Statements and Exhibits.

     (c)  The following exhibits are filed with this report:

          2.1  Amended and Restated Agreement and Plan of Merger, dated June 10,
               1998, by and among Manor Care, Inc., Catera Acquisition Corp. and
               Health Care and Retirement Corporation (filed as Annex A to the
               Joint Proxy Statement/Prospectus included in Registration
               Statement number 333-61677).  Exhibits and Schedules to the
               Amended and Restated Agreement and Plan of Merger have not been
               filed, but will be provided supplementally to Commission upon
               request.

          4.1  Second Rights Amendment dated as of June 10, 1998 between
               Health Care and Retirement Corporation and Harris Trust
               and Savings Bank.

          4.2  Registration Rights Agreement dated as of September
               25, 1998 between HCR Manor Care, Inc. and Stewart Bainum,
               Stewart Bainum, Jr., Bainum Associates Limited Partnership, MC
               Investment Limited Partnership, Realty Investment Company, Inc.
               Mid Pines Associates Limited Partnership, The Stewart Bainum
               Declaration of Trust and The Jane L. Bainum Declaration of
               Trust.

         99.1  Press Release dated September 24, 1998.

         99.2  Press Release dated September 25, 1998.





                                       2



<PAGE>   3
                                  SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.



                                           HCR MANOR CARE, INC.


Date: October 1, 1998                      By:  /s/ R. Jeffrey Bixler
                                              -----------------------
                                           Vice President, General Counsel




                                       3




<PAGE>   1




                                                                     EXHIBIT 4.1
                     HEALTH CARE AND RETIREMENT CORPORATION
                            RIGHTS SECOND AMENDMENT


     SECOND AMENDMENT, dated as of June 10, 1998 (this "Amendment"), to the
Rights Agreement, dated as of May 2, 1995 as amended by the Amendment dated as
of June 10, 1998, between HEALTH CARE AND RETIREMENT CORPORATION, a Delaware
corporation (the "Company"), and HARRIS TRUST AND SAVINGS BANK (the "Rights
Agent"), as authorized by resolution of the board of directors of the Company
on June 9, 1998 and ratified by such board on August 13, 1998 (the "Rights
Agreement").

     The Company and the Rights Agent have heretofore executed and entered into
the Rights Agreement.  Pursuant to Section 26 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with the provisions of Section 26 thereof.  All
acts and things necessary to make this Amendment a valid agreement according to
its terms have been done and performed, and the execution and delivery of this
Agreement by the Company and the Rights Agent have been in all respects
authorized by the Company and the Rights Agent.

     In consideration of the foregoing premises and mutual agreements set forth
in the Rights Agreement and this Amendment, the parties hereto agree as
follows:

     1. The first sentence of Section 1.1 of the Rights Agreement is hereby
amended by replacing "and (B)" in the 31st line thereof with "or (B)".

     2. Each of Sections 7.1 and 13.2 of the Rights Agreement is hereby amended
by adding the following proviso: "provided, however, none of the Merger, the
Merger Agreement, the Ancillary Agreements or the transactions contemplated by
any of such agreements shall be subject to this Section."

     3. Except as expressly amended hereby, the Rights Agreement remains in full
force and effect in accordance with its terms.

     4. The Rights Agreement, as amended by this Amendment, and each Right and
each Rights Certificate exist under and pursuant to the Delaware General
Corporation Law.

     5. This Amendment to the Rights Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

     6. This Amendment to the Rights Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed an
original, and all such counterparts shall together constitute but one and the
same instrument.


                                       4



<PAGE>   2
     7. Except as expressly set forth herein, this Amendment to the Rights
Agreement shall not by implication or otherwise alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements
contained in the Rights Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Rights Agreement to be duly executed as of the day and year first above
written.


                                     HEALTH CARE AND RETIREMENT
                                     CORPORATION



                                     By: /s/ R. Jeffrey Bixler        
                                         -----------------------------
                                         Title: Vice President


                                     HARRIS TRUST AND SAVINGS BANK


                                     By: /s/ Laura J. Kochis            
                                         ------------------------------
                                         Title: Vice President






                                       5




<PAGE>   1


                                                                     Exhibit 4.2

                         REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (this "Agreement") by and between HCR Manor
Care, Inc., a Delaware corporation (the "Company"), and the persons listed on
the signature pages hereof (the "Stockholders"), dated September 25, 1998.
Capitalized terms used without definition in this Agreement have the meanings
ascribed thereto in the Rights Agreement between the Company and Harris Trust
and Savings Bank, as amended as of June 10, 1998.

                                    RECITALS

     A. The Company and the Stockholders desire to enter into this Agreement
for the purpose of granting to the Stockholders certain rights with respect to
registering under the Securities Act of 1933, as amended, shares of common
stock, par value $.01 per share, of the Company.

     B. Such common stock is being acquired by the Stockholders pursuant to the
transactions (the "Transactions") contemplated by the Agreement and Plan of
Merger, dated as of June 10, 1998, among Manor Care, Inc., a Delaware
corporation, Catera Acquisition Corp. and the Company, as amended to the date
hereof (the "Merger Agreement").

                                   AGREEMENT

     In consideration of the recitals, covenants and mutual promises contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:

     1. Definitions.  As used in this Agreement, the following terms shall have
the following meanings:

     "Advice" shall have the meaning set forth in Section 5 hereof.

     "Affiliate" means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person.  For the purposes of this
definition, "control" when used with respect to any specified person, means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

     "Business Day" means any day that is not a Saturday, a Sunday or a legal
holiday on which the New York Stock Exchange is not scheduled to be open for
trading.

     "Capital Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock issued by such person, including each class of common stock and
preferred stock of such person.


                                       8



<PAGE>   2


     "Common Stock"  means the common stock, par value $0.01 per share, of the
Company.

     "Company" shall have the meaning set forth in the heading hereof.

     "Company Offering" shall have the meaning set forth in Section 2(d).

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

     "Holder" means a person who owns Registrable Shares and is either (i) a
Stockholder or (ii) a Permitted Transferee.

     "Maximum Number" means 10,000,000 Registrable Shares, subject to equitable
adjustment by the Board of Directors of the Company to reflect any stock
dividend or stock split or other change, conversion, exchange, subdivision,
combination, distribution, recapitalization or reclassification, which limit
may be waived by the Company in its sole discretion.

     "Minimum Number" means the lesser of  2,500,000 Registrable Shares,
subject to equitable adjustment by the Board of Directors of the Company to
reflect any stock dividend or stock split or other change, conversion,
exchange, subdivision, combination, distribution, recapitalization or
reclassification, or that number of Registrable Shares which would yield $100
million or more in aggregate gross proceeds in any public offering thereof,
which minimum may be waived by the Company in its sole discretion.

     "Permitted Transferees" means (a) Stewart Bainum or his spouse or widow,
their lineal descendants or their spouses or widows or widowers (so long as
they remain spouses) (each a "Member of the Bainum Family"), or the estate of
the foregoing persons (but only until such time as the Common Stock are
distributed therefrom), and (b) any partnership, trust, corporation or other
entity (each, an "Entity"), but only if a Member or Members of the Bainum
Family or another Entity satisfying the requirements hereof are the sole
"Beneficial Owners" (as such term is defined in the HCR Rights Plan (as defined
in the Merger Agreement)) of the Common Stock held by such Entity, other than
any officer, trustee, director, or other managing person or managing partner or
managing member of any such Entity to the extent any such person is deemed to
be the Beneficial Owner of Common Stock held by such Entity, provided such
person is not the Beneficial Owner, other than through an Entity described in
this clause (b), of in excess of 1% of the total outstanding Common Stock.

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Piggyback Registration" shall have the meaning set forth in Section 3
hereof.

     "Prospectus" means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as


                                       9



<PAGE>   3



part of an effective registration statement in reliance upon Rule 430A), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Shares covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.

     "Registrable Shares" means any Common Stock issued to any Holder named on
the signature pages hereof in the Transactions or any other shares of capital
stock or other securities of the Company into which such shares of Common Stock
shall be reclassified, converted, exchanged or changed, including, without
limitation, by reason of a merger, consolidation, subdivision, stock
combination, exchange, reorganization or recapitalization.  If the Common Stock
has been so reclassified or changed, or if the Company pays a dividend or makes
a distribution on the Common Stock in shares of capital stock or splits or
subdivides (or combines) its outstanding shares of Common Stock into a greater
(or smaller) number of shares of Common Stock, a share of Common Stock shall be
deemed to be such number of shares of stock and amount of other securities to
which a holder of a share of Common Stock outstanding immediately prior to such
change, conversion, reclassification, exchange, dividend, distribution,
subdivision, split or combination would be entitled.  As to any particular
Registrable Shares, once issued such shares shall cease to be Registrable
Shares when (i) a Registration Statement with respect to the sale of such
shares shall have become effective under the Securities Act and such shares
shall have been disposed of in accordance with such Registration Statement,
(ii) they shall have been distributed to the public pursuant to Rule 144 (or
any successor provision) under the Securities Act, (iii) they shall have been
otherwise transferred and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any state securities or blue sky law then
in force, (iv) they shall have ceased to be outstanding, (v) when sold, or
otherwise transferred to, any Person who is not a Holder or Permitted
Transferee or (vi) there has occurred the first date on which the number of
Registrable Shares outstanding is less than five percent (5%) of the then
outstanding shares of Common Stock.

     "Registration" means registration under the Securities Act of an offering
of Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.

     "Registration Period" means, as to any Holder, the period beginning on the
date hereof and ending on the date which is the earlier of (i) the fourth
anniversary of the date hereof and (ii) the date when such Holder no longer
owns any Registrable Shares.

     "Registration Statement" means any registration statement of the Company
under the Securities Act that covers any of the Registrable Shares pursuant to
the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.


                                       10



<PAGE>   4


     "HCR Rights Plan Amendment" shall have the meaning ascribed to such term
in the Merger Agreement.

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

     "Underwritten Registration" or "Underwritten Offering" means a
registration under the Securities Act in which securities of the Company are
sold to an underwriter for reoffering to the public.

     2. Demand Registration.

        (a) Any person designated by the Holders of at least 50% of the
Registrable Shares shall have the right during the Registration Period, by
written notice (the "Demand Notice") given to the Company, to request the
Company to register under and in accordance with the provisions of the
Securities Act all or any portion of the Registrable Shares designated by such
Holders; provided, however, that the aggregate number of Registrable Shares
requested to be registered pursuant to any Demand Notice shall be at least the
Minimum Number.  As of the date of this Agreement, until such time as the
Holders of at least 50% of the Registrable Shares shall have notified the
Company of another designee, the person designated to give the Demand Notice
shall be Realty Investment Company, Inc. (and the Company shall be entitled to
receive evidence of all requisite corporate action of Realty Investment Company,
Inc. with respect to such Demand Notice).  Upon receipt of any such Demand
Notice, the Company shall promptly notify all other Holders of the receipt of
such Demand Notice and allow them the opportunity, subject to the other terms of
this Section 2, to include Registrable Shares held by them in the proposed
registration by submitting their own written notice to the Company requesting
inclusion of a specified number of such Holders' Registrable Shares (the
"Inclusion Notice").  The Holders as a group shall be entitled to four Demand
Registrations pursuant to this Section 2; if any such Demand Registration does
not become effective or is not maintained for the period (whether or not
continuous) required by Section 2(c), the affected Holders will be entitled to
an additional Demand Registration pursuant hereto.  It is agreed that the
registration of Registrable Shares pursuant to an Inclusion Notice shall not be
deemed to be a Demand Registration.  Nothing in this Section 2(a) shall limit
any rights pursuant to Section 3 hereof.

        (b) Subject to the other terms of this Section 2, the Company, within
45 days of the date on which the Company receives a Demand Notice given by
Holders in accordance with Section 2(a) hereof, shall file with the SEC, and the
Company shall thereafter use commercially reasonable efforts to cause to be
declared effective, a Registration Statement on the appropriate form for the
registration and sale, in accordance with the intended method or methods of
distribution, of the total number of Registrable Shares specified by the Holders
in such Demand Notice, which may include a "shelf" registration (a "Shelf
Registration") pursuant to Rule 415 under the Securities Act (a "Demand
Registration").


                                       11



<PAGE>   5



     (c) The Company shall use commercially reasonable efforts to cause the
Registration Statement to be declared effective and to keep each Registration
Statement filed pursuant to this Section 2 continuously effective and usable
for the resale of the Registrable Shares covered thereby (i) in the case of a
Registration that is not a Shelf Registration, for a period of 60 days from the
date on which the SEC declares such Registration Statement effective and (ii)
in the case of a Shelf Registration, for a period of 120 days from the date on
which the SEC declares such Registration Statement effective, except, in either
case, (x) if earlier, then only until the date all the Registrable Shares
covered by such Registration Statement have been sold pursuant to such
Registration Statement, and (y) if later, until such later date as may be
extended pursuant to this Section 2.

     (d) Company's Ability to Postpone.

         (i) If, upon receipt of a Demand Notice pursuant to this Section 2,
the Board of Directors of the Company determines in good faith that a
registration at the time and on the terms requested would adversely affect any
public offering of securities of the Company by the Company (other than in
connection with employee benefit and similar plans) or by or on behalf of any
stockholder of the Company exercising a demand registration right (collectively,
a "Company Offering") with respect to which the Company has commenced
preparations for a registration or received notice of the exercise of such
demand registration right prior to the receipt of a Demand Notice and the
Company furnishes the Holders with a certificate signed by the chief financial
officer of the Company to such effect (the "Transaction Delay Notice") promptly
after such Demand Notice, the Company shall not be required to file a
Registration Statement pursuant to this Section 2 until the earliest of (A) 45
days after the completion of such Company Offering, (B) promptly after the
abandonment of such Company Offering or (C) 90 days after the date of the
Transaction Delay Notice; provided, however, that in any event the Company shall
not be required to file any Registration Statement prior to the termination,
waiver or reduction of any "blackout period" or Holdback Period required by the
underwriters to be applicable to the Holders or the Company, if any, in
connection with any Company Offering or Section 4 hereof.

         (ii) If upon receipt of a Demand Notice pursuant to this Section 2 or
while a registration requested pursuant to this Section 2 is pending, the
Company determines in its good faith judgment after consultation with the
Company's principal securities counsel that the filing of a Registration
Statement would require disclosure of material information which the Company has
a bona fide business purpose for preserving as confidential and the Company
provides the Holders written notice (the "Information Delay Notice" and,
together with the Transaction Delay Notice, the "Delay Notice") thereof promptly
after the Company makes such determination, which shall be made promptly after
the receipt of any Demand Notice, the Company shall not be required to comply
with its obligations under this Section 2 until the earlier of (A) the date upon
which such material information is disclosed to the public or ceases to be
material or (B) 90 days after the Holders' receipt of such Delay Notice.


                                       12



<PAGE>   6



         (iii) Notwithstanding the foregoing provisions of this Section 2(d),
the Company shall be entitled to serve only one Delay Notice (i) within any
period of 270 consecutive days or (ii) with respect to any two consecutive
registrations requested pursuant to this Section 2.

         (iv) At any time when a Registration Statement effected pursuant to
this Section 2 relating to Registrable Shares is effective, and a Prospectus
relating thereto is required to be delivered under the Securities Act in
connection therewith, and the Company becomes aware that the Prospectus included
in such Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing, to the extent that the amendment or
supplement to such prospectus necessary to correct such untrue statement of a
material fact or omission to state a material fact would require disclosure of
material information which the Company has a bona fide business purpose for
preserving as confidential and the Company provides the Holders written notice
thereof promptly after the Company makes such determination, the Holders shall
suspend sales of Registrable Shares pursuant to such Registration Statement and
the Company shall not be required to comply with its obligations under Sections
5(e) or 5(h) until the earlier of (A) the date upon which such material
information is disclosed to the public or ceases to be material or (B) 90 days
after the Holders' receipt of such written notice. If the Holders' disposition
of Registrable Shares is discontinued pursuant to the foregoing sentence, unless
the Company thereafter extends the effectiveness of the Registration Statement
to permit dispositions of Registrable Shares by the Holders for an aggregate of
60 days, the Registration Statement shall not be counted for purposes of
determining the number of registrations permitted under Section 2 hereof.

     (e) Maximum Registration.  In no event shall the Company be required to
effect the registration of Registrable Shares under either Section 2 or 3
hereof which would, when aggregated with prior registrations of Registrable
Shares,  concern or result in the sale or resale of more than the Maximum
Number in any twelve month period.

     (f) Company and Other Holders.  Subject to Section 2(g), the Company and
other holders of Common Stock may include Common Stock in any Demand
Registration, provided that Company and such holders of Common Stock pay a pro
rata portion of the costs incurred in the preparation and filing of such
Registration Statement based upon the number of shares of Common Stock
registered pursuant to the effective Registration Statement.

     (g) Revocation.  Holders of a majority in number of the Registrable Shares
to be included in a Registration Statement pursuant to this Section 2 may, at
any time prior to the effective date of the Registration Statement relating to
such Registration, revoke such request by providing a written notice to the
Company revoking such request.  The Holders of Registrable Shares who revoke
such request shall reimburse the Company for all its out-of-pocket expenses
incurred in the preparation, filing and processing of the Registration
Statement.  In addition, if pursuant to the terms of this Section 2(g), the
Holders reimburse the Company for


                                       13



<PAGE>   7


its out-of-pocket expenses incurred in the preparation, filing and processing
of any Registration Statement requested and subsequently revoked by such
Holder(s), such Holder(s) registrations shall not count against the maximum
number of Demand Registrations to which the applicable Holder(s) are entitled
under Section 2(a).

        (h) Priority on Demand Registrations.  Notwithstanding any other term of
this Section 2, if (i) a Registration pursuant to this Section 2 involves an
Underwritten Offering and the managing underwriter or underwriters of such
proposed Underwritten Offering advises Company that the number of securities
requested to be included in such Demand Registration exceeds the number which
can be sold in the offering covered by such Demand Registration without a
significant adverse effect on the price, timing or distribution of the
securities offered, or (ii) the number of Registrable Shares requested to be
included in such Demand Registration exceeds the Maximum Number, then the
Company will include in such Registration (A) first, the number of Registrable
Shares that is the lesser of (x) the Maximum Number and (y) the number which, in
the opinion of such managing underwriter or underwriters, can be sold in the
offering without a significant adverse effect on the price, timing or
distribution of the securities offered, selected pro rata among the Holders
which have requested to be included in such Demand Registration based upon their
relative proportionate total holdings of Common Stock on the date of this
Agreement, (B) second, the lesser of (x) the number of shares of Common Stock
which Company has requested be included in such Registration, which, in the
opinion of the managing underwriter or underwriters, can be sold without such
adverse effect referred to above and (y) if a cutback has been effected on the
basis of the Maximum Number under clause (A), zero (0), and (C) third, the
lesser of (x) the number of shares of Common Stock which other holders have
requested be included in such Registration, which, in the opinion of the
managing underwriter or underwriters, can be sold without such adverse effect
referred to above, such amount to be allocated pro rata among such other holders
based upon their relative proportionate holdings of Common Stock and (y) if a
cutback has been effected on the basis of the Maximum Number, zero (0).

        (i) Selection of Underwriters.  If any offering pursuant to a Demand
Registration involves an Underwritten Offering, the Company and Manor Care shall
select a mutually acceptable managing underwriter or underwriters to administer
the offering, which managing underwriters shall be a firm of nationally
recognized standing and reasonably satisfactory to holders of a majority of the
Registrable Shares sought to be included in such Registration Statement.

     3. Piggyback Registration.

        (a) Right to Piggyback.  If at any time during the Registration Period
the Company proposes to file a registration statement under the Securities Act
with respect to a public offering of securities of the same type as the
Registrable Shares pursuant to a firm commitment underwritten offering solely
for cash for its own account (other than a registration statement (i) on Form
S-4 or S-8 or any successor forms thereto, or (ii) filed solely in connection
with a dividend reinvestment plan or employee benefit plan of the Company or its
Affiliates) or for the account of any holder of securities of the same type as
the Registrable Shares (to the


                                       14



<PAGE>   8


extent that the Company has the right to include Registrable Shares in any
registration statement to be filed by the Company on behalf of such holder),
then the Company shall give written notice of such proposed filing to the
Holders at least 15 days before the anticipated effective date.  Such notice
shall offer the Holders the opportunity to register such amount of Registrable
Shares as they may request (a "Piggyback Registration").  Subject to Section
3(b) hereof, the Company shall include in each such Piggyback Registration all
Registrable Shares with respect to which the Company has received written
requests for inclusion therein within 10 days after notice has been given to
the Holders.  Each Holder shall be permitted to withdraw all or any portion of
the Registrable Shares of such Holder from a Piggyback Registration at any time
prior to the effective date of such Piggyback Registration; provided, however,
that if such withdrawal occurs after the filing of the Registration Statement
with respect to such Piggyback Registration, the withdrawing Holders shall
reimburse the Company for the portion of the registration expenses payable with
respect to the Registrable Shares so withdrawn.

     (b) Priority on Piggyback Registrations.  Notwithstanding any other term
of this Section 3, if a Registration pursuant to this Section 3 involves an
Underwritten Offering and the managing underwriter or underwriters of such
proposed Underwritten Offering advises Company that in its opinion the number
of securities requested to be included in such Piggyback Registration exceeds
the number which can be sold in the offering covered by such Piggyback
Registration without a significant adverse effect on the price, timing or
distribution of the securities offered, then the Company will include in such
Registration (i) first, the number of Registrable Shares sought to be sold by
the person(s) or entities (including the Company) which initiated such
Registration that, in the opinion of such managing underwriter or underwriters,
can be sold in the offering without a significant adverse effect on the price,
timing or distribution of the securities offered, selected pro rata among the
Company and such holders based upon the relative proportionate shares they
proposed to sell in such Registration and (ii) the number of shares of Common
Stock which other holders (including the Holders) have requested be included in
such Registration, which, in the opinion of the managing underwriter or
underwriters, can be sold without such adverse effect referred to above, such
amount to be allocated pro rata among such Holders and other holders based upon
the relative proportionate shares they propose to sell in such Registration.

     (c) Right to Suspend or Abandon.  Nothing in this Section 3 or Section  5
hereof (with respect to an offering under this Section 3) shall create any
liability or obligation on the part of the Company to the Holders if the
Company in its sole discretion should decide (i) not to file a registration
statement proposed to be filed pursuant to Section 3(a) hereof, (ii) to
withdraw such registration statement subsequent to its filing and prior to the
later of its effectiveness or the release of the Registrable Shares for public
offering by the managing underwriter, in the case of an underwritten public
offering or (iii) to suspend or terminate any offering or the effectiveness of
any registration statement by the Company or at the request of any person,
entity or governmental authority, regardless of any action whatsoever that a
Holder may have taken, whether as a result of the issuance by the Company of
any notice hereunder or otherwise.


                                       15



<PAGE>   9



     4. Holdback Agreement.  If (i) the Company shall file a registration
statement with respect to the Common Stock or similar securities or securities
convertible into, or exchangeable or exercisable for, such securities and (ii)
the Company (in the case of a nonunderwritten public offering by the Company
pursuant to such registration statement) advises the Holders in writing that a
public sale or distribution of Registrable Shares would materially adversely
affect such offering or the managing underwriter or underwriters (in the case
of an underwritten public offering by the Company pursuant to such registration
statement) advises the Company in writing (in which case the Company shall
notify the Holders) that a public sale or distribution of Registrable Shares
would have a significant adverse effect on the price, timing or distribution of
such offering, then each Holder shall, to the extent not inconsistent with
applicable law, refrain from effecting any public sale or distribution of
Registrable Shares during the 7 days prior to the effective date of such
registration statement and until the earliest of (A) the abandonment of such
offering, (B) 120 days from the effective date of such registration statement
and (C) if such offering is an Underwritten Offering, the termination of any
"hold back" period obtained by the underwriter or underwriters in such offering
from the Company in connection therewith (each such period, a "Holdback
Period").

     5. Registration Procedures.  In connection with the registration
obligations of the Company pursuant to and in accordance with Sections 2 and 3
hereof (and subject to Sections 2 and 3 hereof), the Company shall use its best
efforts to effect such registration to permit the sale of such Registrable
Shares in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company shall as expeditiously as possible
(but subject to Sections 2 and 3 hereof):

        (a) at least ten (10) business days before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, furnish to the
Holders who are participating in such Registration Statement and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of such Holders and such underwriters,
and one counsel selected by the Holders of a majority of the Registrable Shares
participating in such Registration Statement ("Holder Counsel") and the
underwriters' counsel, and, in the case of a Demand Registration, the Company
will not file any Registration Statement or amendment thereto or any Prospectus
or any supplement thereof to which the Holders of Registrable Shares
participating in such Registration Statement or the underwriters, if any, shall
reasonably object;

        (b) prepare and file with the SEC a Registration Statement for the sale
of the Registrable Shares on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate in accordance with such
Holders' intended method or methods of distribution thereof, subject to Section
2(b) hereof, and, subject to the Company's right to suspend, terminate or
abandon a registration pursuant to Section 3(c) hereof, use commercially
reasonable efforts to cause such Registration Statement to become effective and
remain effective as provided herein;

        (c) prepare and file with the SEC such amendments (including
post-effective amendments) to such Registration Statement, and such supplements
to the related


                                       16



<PAGE>   10


Prospectus, as may be required by the rules, regulations or instructions
applicable to the Securities Act during the applicable period in accordance
with the intended methods of disposition specified by the Holders of the
Registrable Shares covered by such Registration Statement, make generally
available earnings statements satisfying the provisions of Section 11(a) of the
Securities Act (provided that the Company shall be deemed to have complied with
this clause if it has complied with Rule 158 under the Securities Act), and
cause the related Prospectus as so supplemented to be filed pursuant to Rule
424 under the Securities Act; provided, however, that before filing a
Registration Statement or Prospectus, or any amendments or supplements thereto
(other than reports required to be filed by it under the Exchange Act), the
Company shall furnish to the Holders of Registrable Shares covered by such
Registration Statement and the Holder Counsel for review and comment, copies of
all documents required to be filed;

     (d) notify the Holders of any Registrable Shares covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding such Holders,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of such Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (v) of the happening of any
event that requires the making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be incorporated therein by
reference so that they will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading:

     (e) subject to Section 2(d), use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of such Registration Statement, or
the lifting of any suspension of the qualification or exemption from
qualification of any Registrable Shares for sale in any jurisdiction in the
United States;

     (f) furnish to the Holder of any Registrable Shares covered by such
Registration Statement, Holder Counsel for such Holders and counsel for each
managing underwriter, if any, without charge, one conformed copy of such
Registration Statement, as declared effective by the SEC, and of each
post-effective amendment thereto, in each case including financial statements
and schedules and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without charge, such number of
copies of the preliminary prospectus, any amended preliminary prospectus, each
final Prospectus and any post-effective amendment or supplement thereto, as
such Holder may reasonably request in order to facilitate the disposition of
the Registrable Shares of such Holder covered by such Registration Statement in
conformity with the requirements of the Securities Act;


                                       17



<PAGE>   11



     (g) prior to any public offering of Registrable Shares covered by such
Registration Statement, use commercially reasonable efforts to register or
qualify such Registrable Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Holders of such Registrable Shares shall
reasonably request in writing; provided, however, that the Company shall in no
event be required to qualify generally to do business as a foreign corporation
or as a dealer in any jurisdiction where it is not at the time so qualified or
to execute or file a general consent to service of process in any such
jurisdiction where it has not theretofore done so or to take any action that
would subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;

     (h) subject to Section 2(d), upon the occurrence of any event contemplated
by paragraph 5(d)(v) above, prepare a supplement or post-effective amendment to
such Registration Statement or the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference and file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Shares being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;

     (i) use its best efforts to cause all Registrable Shares covered by such
Registration Statement to be listed on each securities exchange or automated
interdealer quotation system, if any, on which similar securities issued by the
Company are then listed or quoted;

     (j) use its best efforts to comply with all applicable rules and
regulations of the SEC and any securities exchange or regulatory body;

     (k) on or before the effective date of such Registration Statement,
provide the transfer agent of the Company for the Registrable Shares with
printed certificates for the Registrable Shares covered by such Registration
Statement which are in a form eligible for deposit with The Depository Trust
Company;

     (l) if such offering is an Underwritten Offering, make available for
inspection by any Holder of Registrable Shares included in such Registration
Statement, any underwriter participating in any offering pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the "Inspectors"), such financial
and other records and other information, pertinent corporate documents and
properties of any of the Company and its subsidiaries and affiliates
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities; provided, however, that the
Records that the Company determines, in good faith, to be confidential and
which it notifies the Inspector in writing are confidential shall not be
disclosed to any Inspector unless such Inspector signs a confidentiality
agreement reasonably satisfactory to the Company; and

     (m) if such offering is an Underwritten Offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary


                                       18



<PAGE>   12


in underwritten offerings) and take all such other appropriate and reasonable
actions requested by the Holders of a majority of the Registrable Shares being
sold in connection therewith (including those reasonably requested by the
managing underwriters) in order to expedite or facilitate the disposition of
such Registrable Shares, and in such connection, (i) use commercially
reasonable efforts to obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters and Holder Counsel),
addressed to each selling Holder of Registrable Shares covered by such
Registration Statement and each of the underwriters as to the matters
customarily covered in opinions requested in underwritten offerings and such
other matters may be reasonably requested by such counsel and underwriters,
(ii) use commercially reasonable efforts to obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each selling Holder of
Registrable Shares covered by the Registration Statement (unless such
accountants shall be prohibited from so addressing such letters by applicable
standards of the accounting profession) and each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings and
(iii) if requested and if an underwriting agreement is entered into, provide
indemnification provisions and procedures substantially to the effect set forth
in Section 7 hereof with respect to all parties to be indemnified pursuant to
said Section 7.  The above shall be done at each closing under such
underwriting or similar agreement, or as and to the extent required thereunder.

     The Company may require each Holder of Registrable Shares covered by a
Registration Statement to furnish such information regarding such Holder and
such Holder's intended method of disposition of such Registrable Shares as it
may from time to time reasonably request in writing.  If any such information
is not furnished within a reasonable period of time after receipt of such
request, the Company may exclude such Holder's Registrable Shares from such
Registration Statement.

     Each Holder of Registrable Shares covered by a Registration Statement
agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 5(d)(ii), 5(d)(iii), 5(d)(iv) or
5(d)(v) hereof, that such Holder shall forthwith discontinue disposition of any
Registrable Shares covered by such Registration Statement or the related
Prospectus until receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(h) hereof, or until such Holder is advised
in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
(such period during which disposition is discontinued being an "Interruption
Period") and, if requested by the Company, the Holder shall deliver to the
Company (at the expense of the Company) all copies then in its possession,
other than permanent file copies then in such holder's possession, of the
Prospectus covering such Registrable Shares at the time of receipt of such
request.


                                       19



<PAGE>   13


     Each Holder of Registrable Shares covered by a Registration Statement
further agrees not to utilize any material other than the applicable current
preliminary prospectus or Prospectus in connection with the offering such
Registrable Shares.

     6. Registration Expenses.  Whether or not any Registration Statement is
filed or becomes effective, the Company shall pay all costs, fees and expenses
incident to the Company's performance of or compliance with this Agreement,
including (i) all registration and filing fees, including NASD filing fees,
(ii) all fees and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing preliminary and final prospectuses if the
printing of prospectuses is requested by the Holders or the managing
underwriter, if any), (iv) messenger, telephone and delivery expenses, (v) fees
and disbursements of counsel for the Company and the Holder Counsel, (vi) fees
and disbursements of all independent certified public accountants of the
Company (including expense of any "cold comfort" letters required in connection
with this Agreement) and all other persons retained by the Company in
connection with this Agreement) and all other persons retained by the Company
in connection with such Registration Statement, and (vii) all other costs, fees
and expenses incident to the Company's performance or compliance with this
Agreement.  Notwithstanding the foregoing, the fees and expenses of any persons
retained by any Holder, other than the Holder Counsel, and any discounts,
commissions or brokers' fees or fees of similar securities industry
professionals and any transfer taxes relating to the disposition of the
Registrable Shares by a Holder, will be payable by such Holder and the Company
will have no obligation to pay any such amounts.

     7. Indemnification.

        (a) Indemnification by the Company.  The Company shall, without
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each Holder of Registrable Shares whose Registrable Shares are covered
by a Registration Statement or Prospectus, each Affiliate of such Holder, the
officers, directors and agents and employees of each of them, each Person who
controls  (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) each such Holder and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent lawful, from
and against any and all losses, claims, damages, liabilities, judgments, costs
(including, without limitation, costs of preparation and reasonable attorneys'
fees) and expenses (collectively, "Losses"), as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in such Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are based upon information furnished in writing to the Company by or on
behalf of such Holder expressly for use therein or by any underwriter in a
Demand Registration; provided, however, that the Company shall not be liable to
any such Holder to the extent that any such Losses arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus if (i) having previously been
furnished by or on behalf of the Company with copies of the



                                       20



<PAGE>   14


Prospectus, such Holder failed to send or deliver a copy of the Prospectus with
or prior to the delivery of written confirmation of the sale of Registrable
Shares by such Holder to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have corrected in all material respects
such untrue statement or alleged untrue statement or such omission or alleged
omission; and provided further, however, that the Company shall not be liable
in any such case to the extent that any such Losses arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged
omission in the Prospectus, if (x) such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in all material respects
in an amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such
Prospectus as so amended or supplemented, prior to or currently with the sale
of Registrable Shares.  In connection with any Underwritten Offering, the
Company will also indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls (within the meaning
of Section 15 of the Securities Act) such persons to the same extent as
provided above with respect to indemnification of Holders of Registrable
Shares, or on such other terms as are reasonable and customary and requested by
the managing underwriter.

     (b) Indemnification by Holder of Registrable Shares.  In connection with
any Registration Statement in which a Holder is participating, such Holder
shall furnish to the Company in writing such information as the Company
reasonably requests for use in connection with such Registration Statement or
the related Prospectus and agrees to indemnify, to the full extent permitted by
law, the Company, its directors, officers, agents and employees, each Person
who controls (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) the Company  and the directors, officers,
agents and employees of such controlling Persons, from and against all Losses
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in such Registration Statement or the related
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged omission is
based upon any information so furnished in writing by or on behalf of such
Holder to the Company expressly for use in such Registration Statement or
Prospectus.

     (c) If any Person shall be entitled to indemnity hereunder (an
"Indemnified Party"), the Indemnified Party shall give prompt notice to the
party from which such indemnity is sought (the "Indemnifying Party") of any
claim or of the commencement of any proceeding with respect to which the
Indemnified Party seeks indemnification or contribution pursuant hereto;
provided, however, that the delay or failure to so notify the Indemnifying
Party shall not relieve the Indemnifying Party from any obligation or liability
except to the extent that the Indemnifying Party has been prejudiced by such
delay or failure.  The Indemnifying Party shall have the right, exercisable by
giving written notice to an Indemnified Party promptly after the receipt of
written notice from such Indemnified Party of such claim or proceeding, to
assume, at the Indemnifying Party's expense, the defense of any



                                       21



<PAGE>   15


such claim or proceeding, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that (i) an Indemnified Party shall have
the right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless: (1) the Indemnifying
Party agrees to pay such fees and expenses; (2) the Indemnifying Party fails
promptly to assume the defense of such claim or proceeding or fails to employ
counsel reasonably satisfactory to such Indemnified Party; or (3) the named
parties to any proceeding (including impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnifying Party shall
have been advised by counsel that there may be one or more legal defenses
available to it that are inconsistent with those available to the Indemnifying
Party or that a conflict of interest is likely to exist among such Indemnified
Party and any other indemnified parties (in which case the Indemnifying Party
shall not have the right to assume the defense of such action on behalf of such
Indemnified Party); and (ii) subject to clause (3) above, the Indemnifying
Party shall not, in connection with any one such claim or proceeding or
separate but substantially similar or related claims or proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one firm of attorneys (together
with appropriate local counsel) at any time for all of the indemnified parties,
or for fees and expenses that are not reasonable.  Whether or not such defense
is assumed by the Indemnifying Party, such Indemnified Party shall not be
subject to any liability for any settlement made without its consent, which
shall not be unreasonably withheld.  The Indemnifying Party shall not consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release, in form and substance reasonably satisfactory
to the Indemnified Party, from all liability in respect of such claim or
litigation for which such Indemnified Party would be entitled to
indemnification hereunder.

     (d) Contribution.  If the indemnification provided for in this Section 7
is unavailable to an Indemnified Party in respect of any Losses (other than in
accordance with its terms), then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party, on the one hand, and such Indemnified Party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations.  The relative
fault of such Indemnifying Party, on the one hand, and Indemnified Party, on
the other hand, shall be determined by reference to, among other things,
whether any action in question, including any untrue statement of a material
fact or omission or alleged omission to state a material fact, has been taken
by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission.  The amount paid or payable by a party as a result of any Losses
shall be deemed to include any legal or other fees or expenses incurred by such
party in connection with any investigation or proceeding.  The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph.  Notwithstanding the provision of
this Section 7(d), an



                                       22



<PAGE>   16


Indemnifying Party that is a Holder shall not be required to contribute any
amount which is in excess of the amount by which the total proceeds received by
such Holder from the sale of the Registrable Shares sold by such Holder (net of
all underwriting discounts and commissions) exceeds the amount of any damages
that such Indemnifying Party has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.  No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

     8. Rule 144.  If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will timely file the reports required to be filed by
it under the Securities Act or the Exchange Act (including but not limited to
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the SEC under the Securities Act)
and the rules and regulations adopted by the SEC thereunder (or if the Company
is not required to file such reports, the Company will, upon the request of any
Holder of Registrable Shares, make publicly available other information), and
will take such further action as any Holder of Registrable Shares may
reasonably request, all to the extent required from time to time to enable such
Holder of Registrable Shares to sell Registrable Shares within the exemption
provided by (i) Rule 144 under the Securities Act, as such Rule 144 may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC.  Upon the request of any Holder of Registrable Shares, the
Company will deliver to such Holder, a written statement as to whether it has
complied with such requirements.

     9. Rights Plan Amendment.  Prior to the Effective Time (as defined in the
Merger Agreement), the Company shall have adopted the HCR Rights Plan Amendment
and from and after the Effective Time, the Company shall not amend or modify
such Rights Plan Amendment without the consent of Stewart Bainum Jr. or his
designee or adopt any stockholder rights plan after the Effective Time
inconsistent with the purposes of the Rights Plan Amendment.

     10. Miscellaneous.

         (a) Termination.  This Agreement and the obligations of the Company and
the Holders hereunder (other than Section 7 hereof) shall terminate on the first
date on which no Registrable Shares remain outstanding.

         (b) Notices.  All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case



                                       23



<PAGE>   17


notice shall be sent to the address for such party set forth on the signature
page hereto, as such address may be changed by notice thereof conforming
herewith.

     (c) Interpretation.  When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated.  Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.  Whenever the word "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation".  This Agreement shall not be construed for or against
either party by reason of the authorship or alleged authorship of any provision
hereof or by reason of the status of the respective parties.  All terms defined
in this Agreement in the singular shall have the same comparable meanings when
used in the plural and vice versa, unless otherwise specified.

     (d) Entire Agreement; No Third-Party Beneficiaries.  This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.

     (e) Assignment.  Neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned (whether by operation of law or
otherwise) by any Holder without the consent of the Company, or by the Company
without the consent of Holders of at least a majority in number of the
Registrable Shares then outstanding provided that any Holder can assign its
rights hereunder to a Permitted Transferee without the consent of the Company.
Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.  In no event shall any transferee of Common Stock be
entitled, solely as a result of such transfer, to any of the benefits of this
Agreement or to enforce the same.

     (f) Governing Law.  The Laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding by a party hereto with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any state or federal court of competent jurisdiction in the State
of Delaware, and each party hereto hereby submits to the exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or
judgment.  By the execution and delivery of this Agreement, (i) the Company
appoints The Corporation Trust Company, at its office in Wilmington, Delaware,
as its agent upon which process may be served in any such suit, action or
proceeding and (ii) each Stockholder appoints CSC/The United States Corporation
Company in Wilmington, Delaware, as its agent upon which process may be served
in any such suit, action or proceeding.  Service of process upon such agent,
together with notice of such service given to a party hereto in the manner
provided in Section 9(b) hereof, shall be deemed in every respect effective
service of process upon it in any suit, action or proceeding.  Nothing herein
shall in any way be deemed to limit the ability of a party hereto to serve any
such writs, process or summonses in any other manner permitted by applicable
Law.  Each party hereto hereby irrevocably waives any objections which it may
now or hereafter have to the laying of the venue



                                       24



<PAGE>   18


of any suit, action or proceeding arising out of or relating to this Agreement
brought in any state or federal court of competent jurisdiction in the State of
Delaware, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum.  No suit, action or proceeding against a party hereto with
respect to this Agreement may be brought in any court, domestic or foreign, or
before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of Delaware, and each party hereto hereby
irrevocably waives any right which it may otherwise have had to bring such an
action in any other court, domestic or foreign, or before any similar domestic
or foreign authority.

     (g) Severability.  Each party agrees that, should any court or other
competent authority hold any provision of this Agreement or part hereof to be
null, void or unenforceable, or order any party to take any action inconsistent
herewith or not to take an action consistent herewith or required hereby, the
validity, legality and enforceability of the remaining provisions and
obligations contained or set forth herein shall not in any way be affected or
impaired thereby.  Upon any such holding that any provision of this Agreement
is null, void or unenforceable, the parties will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible.  Except
as otherwise contemplated by this Agreement, to the extent that a party hereto
took an action inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an order or judgment of a court or
other competent authority, such party shall incur no liability or obligation
unless such party did not in good faith seek to resist or object to the
imposition or entering of such order or judgment.

     (h) Injunctive Relief.  The parties acknowledge that it will be impossible
to measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the event
of any such failure, an aggrieved person or entity will be irreparably damaged
and will not have an adequate remedy at law.  Any such person or entity shall,
therefore, be entitled to injunctive relief, including specific performance, to
enforce such obligations, and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of the parties shall
raise the defense that there is an adequate remedy at law.

     (i) Attorneys' Fees.  If any party to this Agreement brings an action to
enforce its rights under this Agreement, the prevailing party shall be entitled
to recover its costs and expenses, including without limitation reasonable
attorneys' fees, incurred in connection with such action, including any appeal
of such action.

     (j) Cumulative Remedies.  All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.


                                       25



<PAGE>   19



     (k) Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.

     (l) Amendments and Waivers.  Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
except in writing, by the Company and by the Holders of at least a majority in
number of the Registrable Shares then outstanding.

     IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.

                                        HEALTH CARE AND RETIREMENT CORPORATION


                                        By: /s/ R. Jeffrey Bixler
                                           ---------------------------------- 
                                             a duly authorized signatory



                                       26


<PAGE>   20

            Holder Signature Page for Registration Rights Agreement


                                       Stewart Bainum

                                       /s/ Stewart Bainum
                                       ------------------------

                                       Stewart Bainum, Jr.

                                       /s/ Stewart Bainum, Jr.
                                       ------------------------

                                       Bainum Associates Limited Partnership

                                           /s/ Stewart Bainum, Jr.
                                       By: ------------------------
                                           Stewart Bainum, Jr.
                                           Its Managing General Partner

                                       MC Investment Limited Partnership

                                           /s/ Stewart Bainum, Jr.
                                       By: ------------------------
                                           Stewart Bainum, Jr.
                                           Its Managing General Partner

                                       Realty Investment Company, Inc.

                                           /s/ Stewart Bainum
                                       By: ------------------------
                                           Stewart Bainum
                                           President

                                       Mid Pines Associates Limited Partnership

                                           /s/ Stewart Bainum, Jr.
                                       By: ------------------------
                                           Stewart Bainum, Jr.
                                           Its Managing General Partner

                                       The Stewart Bainum Declaration of Trust

                                           /s/ Stewart Bainum
                                       By: ------------------------
                                           Stewart Bainum
                                           Trustee

                                       The Jane L. Bainum Declaration of Trust

                                           /s/ Jane L. Bainum
                                       By: ------------------------
                                           Jane L. Bainum
                                           Trustee



<PAGE>   1
NEWS RELEASE

                                                                    Exhibit 99.1

FOR IMMEDIATE RELEASE:

                   HEALTH CARE AND RETIREMENT CORPORATION AND
           MANOR CARE, INC. ANNOUNCE STOCKHOLDER APPROVALS OF MERGER

TOLEDO, Oh. and GAITHERSBURG, Md. -- Sept. 24, 1998 -- Health Care and 
Retirement Corporation (NYSE-HCR) and Manor Care, Inc. (NYSE-MNR) announced 
that at separate special meetings of their respective stockholders held today 
that the stockholders of HCR approved the Amended and Restated Agreement and 
Plan of Merger by and among HCR, Manor Care and Catera Acquisition Corp., a 
wholly owned subsidiary of HCR and the transactions contemplated by the Merger 
Agreement, and the stockholders of Manor Care approved the Merger Agreement and 
the transactions contemplated by the Merger Agreement. As a result of the 
Merger, Manor Care will become a wholly owned subsidiary of HCR. The combined 
company will immediately be renamed HCR Manor Care, Inc. The shares of HCR 
Manor Care will continue to trade under the symbol HCR.

HCR and Manor Care anticipate that the Merger will be consummated on Friday, 
Sept. 25, 1998. Under the terms of the Merger Agreement, each share of Manor 
Care Common Stock will be exchanged for one share of HCR Manor Care Common 
Stock as soon as reasonably practicable after the consummation of the Merger.

The above statements include forward-looking statements. HCR and Manor Care 
caution investors that any forward-looking statements made by either of them 
are not guarantees of future performance. Numerous factors exist which in some 
cases have caused, and in the future may cause, results to differ materially
from such forward-looking statements.
        
Contact: Geoffrey G. Meyers of Health Care & Retirement Corporation, 
419-252-5345; or Kimberly A. Holland of Manor Care, Inc., 310-979-4000; or 
Daniel H. Burch, 212-929-5748, or Larry Dennedy, 212-929-5239, both of 
MacKenzie Partners, Inc.

<PAGE>   1
                                                                    Exhibit 99.2

PRESS RELEASE:

Contact:  Geoffrey G. Meyers, Chief Financial Officer
          (419) 252-5545
          Internet: [email protected]
          Web Site - http://www.businesswire.com/cnn/hcr.htm

     Toledo, Ohio, September 25, 1998 - HCR Manor Care, Inc. (HCR), announced 
that the merger of Health Care and Retirement Corporation and Manor Care Inc. 
was completed today. Both companies' shareholders had voted to approve the 
merger on September 24, 1998.

     "This is a merger of the two best companies in our industry", said Paul A. 
Ormond, President and Chief Executive Officer of the combined company. "The 
combination of top facilities with a strong record of performance will provide 
a tremendous foundation for our multi-faceted growth strategy for HCR Manor 
Care".

     HCR Manor Care has more than 55,000 employees providing high quality care 
through a network of long term centers, assisted living facilities, outpatient 
rehabilitation clinics, home health care offices, and management service for 
professional organizations. HCR Manor Care shares will continue to be traded on 
the New York Stock Exchange under the ticker symbol HCR.



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