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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 4
TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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HEALTHDYNE TECHNOLOGIES, INC.
(Name of Subject Company)
HEALTHDYNE TECHNOLOGIES, INC.
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
422206102
(CUSIP Number of Class of Securities)
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LESLIE R. JONES, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
HEALTHDYNE TECHNOLOGIES, INC.
1255 KENNESTONE CIRCLE
MARIETTA, GEORGIA 30066
(770) 499-1212
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person filing statement)
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COPY TO:
BLAINE V. FOGG, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
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This Amendment No. 4 amends and supplements the Schedule 14D-9 filed with the
Securities and Exchange Commission on January 31, 1997 as amended by Amendment
No. 1 filed February 13, 1997, Amendment No. 2 filed February 27, 1997
and Amendment No. 3 filed March 4, 1997, by Healthdyne Technologies, Inc., a
Georgia corporation ("Healthdyne"), relating to the proposed tender offer by
I.H.H. Corporation, a Delaware corporation ("IHH") and a wholly owned
subsidiary of Invacare Corporation, an Ohio corporation ("Invacare"), to
purchase for cash all outstanding shares of Common Stock, par value $.01 per
share, of Healthdyne.
Item 3. IDENTITY AND BACKGROUND.
Item 3 (b) of the Schedule 14D-9 is hereby amended and supplemented by
adding the following:
On March 20, 1997, the Board of Directors of Healthdyne authorized
Healthdyne to enter into indemnification agreements with its directors and
executive officers (the "Indemnity Agreements"). The Indemnity Agreements are
consistent with and are intended to implement the existing provisions of the
By-Laws, which provide for the indemnification of and the advancing of expenses
to directors and officers to the full extent permitted by law, and also provide
for continued indemnification and coverage of these persons under Healthdyne's
directors' and officers' liability insurance policies after a change in
control.
Copies of the forms of the Indemnity Agreements are filed as Exhibits
29 and 30 hereto.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Item 5 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following:
On March 14, 1997, Healthdyne retained Morrow & Co., Inc. to act as
proxy solicitor in connection with the Invacare Offer for customary fees.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 of the Schedule 14D-9 is hereby amended and supplemented by
adding the following:
On March 20, 1997, the Board of Directors of Healthdyne approved
amendments to the provisions of its By-Laws regarding the calling of special
meetings upon the request of holders of at least 60% of Healthdyne's
outstanding Common Stock. The amendments to these provisions set forth
specific procedures to be followed in the event that the holders of less than
60% of the outstanding Common Stock request the calling of a special meeting
of the shareholders, including notice requirements, procedures for determining
the validity of shareholder requests, the setting of record dates and meeting
dates and related matters.
A copy of the amendment to the By-Laws of Healthdyne is filed as
Exhibit 31 hereto.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 of the Schedule 14D-9 is hereby amended by adding the following
exhibits:
Exhibit 29-- Form of Indemnity Agreement of Director.
Exhibit 30-- Form of Indemnity Agreement of Executive Officer.
Exhibit 31-- Amendment to By-Laws of Healthdyne Technologies, Inc.
Exhibit 32-- Press Release issued by Healthdyne on March 21, 1997.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
HEALTHDYNE TECHNOLOGIES, INC.
By: /s/ M. WAYNE BOYLSTON
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Name: M. Wayne Boylston
Title: Vice President -- Finance,
Chief Financial Officer and
Treasurer
Dated: March 21, 1997
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EXHIBIT 29
INDEMNITY AGREEMENT OF DIRECTOR
AGREEMENT, effective as of _________________, 19__, between HEALTHDYNE
TECHNOLOGIES, INC., a Georgia corporation (the "Company"), and
_______________________ (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as directors
the most capable persons available; and
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other Claims being asserted against directors of public
companies in today's environment; and
WHEREAS, damages sought by class action plaintiffs in some cases amount to
tens of millions of dollars and, whether or not the case is meritorious, the
cost of defending them is enormous with few individual directors having the
resources to sustain such legal costs, not to mention the risk of a judgment
running into millions even in cases where the defendant was neither culpable
nor profited personally to the detriment of the corporation; and
WHEREAS, Section 14-2-851 of the Georgia Business Corporation Code, under
which the Company is organized, empowers corporations to indemnify persons
serving as a director of the corporation or a person who serves at the request
of the corporation as a director, trustee, officer, partner, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise; and
WHEREAS, the Bylaws of the Company require the Company to indemnify any
person who was or is a party or is threatened to made a party to a proceeding
by reason of the fact that he is or was a director or officer of the Company to
the maximum extent permitted by, and in the manner provided by, the Georgia
Business Corporation Code; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's service to the
Company in an effective manner, the increasing difficulty in obtaining
satisfactory directors' and officers' liability insurance coverage, and in part
to provide Indemnitee with specific contractual assurance that indemnification
protection provided under the Company's Bylaws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of the
Articles of Incorporation ("Articles") or Bylaws ("Bylaws") of the Company or
any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) authorized or
permitted by law and as set forth in this Agreement, and for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies; and
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WHEREAS, in order to induce Indemnitee to serve or continue to serve as a
director, the Company has agreed to provide Indemnitee with the benefits
contemplated by this Agreement; and
WHEREAS, the Board of Directors is making no determination by this
Agreement that indemnification of Indemnitee for any particular act or omission
giving rise to a proceeding is permissible because Indemnitee has met the
relevant standard of conduct set forth in Section 14-2-851 of the Georgia
Business Corporation Code;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
agreeing to serve or to continue to serve the Company directly or, at its
request, another enterprise, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Basic Indemnification Arrangement.
a) In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party
to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall
indemnify Indemnitee to the full extent authorized or permitted by
law as soon as practicable but in any event no later than thirty
(30) days after written demand is presented to the Company, against
any and all Expenses, judgments, fines, penalties and amounts paid
in settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such
Claim; provided, however, that, except for proceedings to enforce
rights to indemnification, the Company shall not be obligated to
indemnify Indemnitee in connection with a proceeding (or part
thereof) initiated by Indemnitee unless such proceeding (or part
thereof) was authorized in advance, or unanimously consented to, by
the Board of Directors of the Company. If so requested by
Indemnitee, the Company shall advance (within two (2) business days
of such request) any and all Expenses to Indemnitee (an "Expense
Advance").
b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 1(a) shall be subject to the condition
that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the Independent Legal Counsel referred
to in Section 2 hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the
obligation of the Company to make an Expense Advance pursuant to
Section 1(a) shall be subject to the condition that, if, when and to
the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee (who hereby
agrees to reimburse the Company) for all such amounts theretofore
paid; provided, however, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made
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by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination
is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not been a
Change in Control, the Reviewing Party shall be selected by the
Company's Board of Directors, and if there has been such a Change in
Control, the Reviewing Party shall be the Independent Legal Counsel
referred to in Section 2 hereof. If there has been no determination
by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in
whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the State of Georgia
having subject matter jurisdiction thereof and in which venue is
proper seeking an initial determination by the court or challenging
any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company
hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise
shall be conclusive and binding on the Company and Indemnitee.
c) No change in the Company's Articles or Bylaws or in the
Georgia Business Corporation Code subsequent to the date of this
Agreement shall have the effect of limiting or eliminating the
indemnification available under this Agreement as to any act,
omission or capacity for which this Agreement provides
indemnification at the time of such act, omission or capacity. If
any change after the date of this Agreement in any applicable law,
statute or rule expands the power of the Company to indemnify the
Indemnitee, such change shall to the same extent expand the
Indemnitee's rights and the Company's obligations under this
Agreement. If any change in any applicable law, statute or rule
diminishes the power of the Company to Indemnify the Indemnitee,
such change, except to the extent otherwise required by law, statute
or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties' rights and obligations hereunder.
2. Change in Control. The Company agrees that if there is a Change in Control
of the Company, then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and Expense Advances
under this Agreement or any other agreement, or any Article or Bylaw provision
now or hereinafter in effect relating to Claims for Indemnifiable Events, the
Company shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
the Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto
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3. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys' fees) and, if
requested by Indemnitee, shall (within two (2) business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement, or any Article or Bylaw provision now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the
Company; provided, however, that if there is a final judicial determination (as
to which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to such indemnification, advance payment of expenses
or insurance recovery, Indemnitee shall reimburse the Company for all such
expenses theretofore paid under this Section 3.
4. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Moreover, notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection with such Claims as to which Indemnitee has been successful.
5. Burden of Proof. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
6. No Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief
or that a court has determined that indemnification is not permitted by
applicable law. In addition, neither the failure of the Reviewing Party to
have made a determination as to whether Indemnitee has met any particular
standard of conduct or had any particular belief, nor an actual determination
by a Reviewing Party that Indemnitee has not met such standard of conduct or
did not have such belief, prior to the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief.
7. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Articles,
Bylaws or the Georgia Business Corporation Code or otherwise. To the extent
that a change in the Georgia Business Corporation Code (whether by statute or
judicial decision) permits greater indemnification by agreement than
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would be afforded currently under the Articles, Bylaws and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such change.
8. Liability Insurance.
a) The Company hereby represents and warrants that the Company
has purchased and maintains directors' and officers' liability
insurance consisting of a primary policy issued by American
International Group, Inc. providing $10,000,000 in coverage (the
"D&O Insurance").
b) The Company hereby covenants and agrees that, so long as
Indemnitee shall continue to serve as a director of the Company and
thereafter so long as Indemnitee shall be subject to any possible
Claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of
the fact that Indemnitee was a director of the Company, the Company
shall maintain in full force and effect the D&O Insurance, or
substantially equivalent insurance coverage; provided, however, that
the Company shall not be obligated hereunder to pay annual premiums
for directors' and officers' liability insurance in excess of one
hundred fifty percent (150%) of the annualized rate of premiums paid
by the Company for D&O Insurance in Fiscal Year 1996 (the "Increased
Rate"), and if the premiums for such insurance coverage would exceed
the Increased Rate in any fiscal year, and the Company determines
not to spend in excess of the Increased Rate, the Company shall
endeavor to retain such type of coverage by amending the levels of
self-insured retention and/or limits of liability of such insurance
coverage so as not to exceed the Increased Rate.
c) In all policies of D&O Insurance, Indemnitee shall be named
as an insured in such manner as to provide Indemnitee the same
rights and benefits, subject to the same limitations, as are
accorded to the Company's directors or officers most favorably
insured by such policy.
9. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two (2) years from the date of accrual
of such cause of action, and any Claim or cause of action of the Company shall
be extinguished and deemed released unless asserted by the timely filing of a
legal action within such two (2) year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action such shorter period shall govern.
10. Notices
a) The Indemnitee shall give to the Company notice in writing as
soon as practicable of any Claim made against him for which
indemnification will or could be sought under this Agreement.
Failure to give such notice shall not be cause for the
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Company not to indemnify Indemnitee or advance Expenses unless
the Company can demonstrate that it was prejudiced by such failure.
b) Notices shall be in writing and shall be either personally
delivered or sent by Federal Express or other reputable overnight
courier for next business day delivery, or sent by certified mail,
return receipt requested, addressed as follows:
If to the Company: Healthdyne Technologies, Inc.
1255 Kennestone Circle
Marietta, Georgia 30066
Attn: Chief Executive Officer
Attn: General Counsel
If to the Indemnitee: at Indemnitee's address stated above
or at such other address as from time to time designated by written notice
delivered in accordance herewith. Any notice personally served shall be deemed
delivered on the date of such service. Any notice sent by overnight courier as
provided above shall be deemed delivered on the first business day after the
date such notice was actually delivered by such overnight courier or refused.
Any notice sent by mail as provided above shall be deemed delivered on the date
of actual receipt or refusal thereof.
11. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
12. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
13. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Articles, Bylaws or otherwise) of the amounts
otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, executors and personal
and legal representatives. This Agreement shall continue in effect regardless
of whether Indemnitee continues to serve as a director of the Company.
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15. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable in any respect, and
the validity and enforceability of any such provision in every other respect
and of the remaining provisions hereof shall not be in any way impaired and
shall remain enforceable to the full extent permitted by law.
16. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
17. Certain Definitions.
a) Change in Control. For purposes of this Agreement, a Change
in Control shall be deemed to have occurred if (a) there shall
be consummated (i) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's common stock would be
converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's common
stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company, or (b) the
stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (c) any person (as
such term is used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), shall become
the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 30% of the Company's outstanding Common Stock, or
(d) during any period of two consecutive years, individuals who at
the beginning of such period constitute the entire Board of
Directors of the Company shall cease for any reason to constitute a
majority thereof unless the election, or the nomination for election
by the Company's stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
b) Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by
or in the right of the Company or any other party, that Indemnitee
in good faith believes might lead to the institution of any such
action, suit or proceeding, whether civil, criminal, administrative,
investigative or other.
c) Expenses: include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or
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participating in (including on appeal), or preparing to defend,
be a witness in or participate in any Claim relating to any
Indemnifiable Event.
d) Indemnifiable Event: any event or occurrence related to the
fact that Indemnitee is or was a director of the Company, or is or
was serving at the request of the Company as a director, officer, or
trustee of another corporation, trust or other enterprise, or by
reason of anything done or not done by Indemnitee in any such
capacity.
e) Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 2, who shall
not have otherwise performed services for the Company or Indemnitee
within the last five (5) years.
f) Reviewing Party: any appropriate person or body consisting
of a member or members of the Company's Board of Directors or any
other person or body appointed by the Board who is not a party to
the particular Claim for which Indemnitee is seeking
indemnification, or Independent Legal Counsel.
g) Voting Securities: any securities of the Company which vote
generally in the election of directors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
____ day of _______________, 1997.
HEALTHDYNE TECHNOLOGIES, INC.
By:________________________________
Name:
Title:
________________________________
Indemnitee
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EXHIBIT 30
INDEMNITY AGREEMENT OF EXECUTIVE OFFICER
AGREEMENT, effective as of _________________, 19____, between HEALTHDYNE
TECHNOLOGIES, INC., a Georgia corporation (the "Company"), and
___________________________ (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as officers
the most capable persons available; and
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other Claims being asserted against officers of public companies
in today's environment; and
WHEREAS, damages sought by class action plaintiffs in some cases amount to
tens of millions of dollars and, whether or not the case is meritorious, the
cost of defending them is enormous with few individual officers having the
resources to sustain such legal costs, not to mention the risk of a judgment
running into millions even in cases where the defendant was neither culpable
nor profited personally to the detriment of the corporation; and
WHEREAS, Section 14-2-857 of the Georgia Business Corporation Code, under
which the Company is organized, empowers corporations to indemnify persons
serving as officers, employees or agents of the corporation, who are not
directors of the corporation, to the extent, consistent with public policy,
that may be provided by its Articles of Incorporation, Bylaws, general or
specific action of its board of directors, or contract; and
WHEREAS, the Bylaws of the Company require the Company to indemnify any
person who was or is a party or is threatened to made a party to a proceeding
by reason of the fact that he is or was a director or officer of the Company to
the maximum extent permitted by, and in the manner provided by, the Georgia
Business Corporation Code; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's service to the
Company in an effective manner, the increasing difficulty in obtaining
satisfactory directors' and officers' liability insurance coverage, and in part
to provide Indemnitee with specific contractual assurance that indemnification
protection provided under the Company's Bylaws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of the
Articles of Incorporation ("Articles") or Bylaws ("Bylaws") of the Company or
any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) authorized or
permitted by law and as set forth in this Agreement, and for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies; and
WHEREAS, in order to induce Indemnitee to serve or continue to serve as an
executive officer, the Company has agreed to provide Indemnitee with the
benefits contemplated by this Agreement; and
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WHEREAS, the Board of Directors is making no determination by this
Agreement that indemnification of Indemnitee for any particular act or omission
giving rise to a proceeding is permissible;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
agreeing to serve or to continue to serve the Company directly or, at its
request, another enterprise, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Basic Indemnification Arrangement.
a) In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party
to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall
indemnify Indemnitee to the full extent authorized or permitted by
law as soon as practicable but in any event no later than thirty
(30) days after written demand is presented to the Company, against
any and all Expenses, judgments, fines, penalties and amounts paid
in settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such
Claim; provided, however, that, except for proceedings to enforce
rights to indemnification, the Company shall not be obligated to
indemnify Indemnitee in connection with a proceeding (or part
thereof) initiated by Indemnitee unless such proceeding (or part
thereof) was authorized in advance, or unanimously consented to, by
the Board of Directors of the Company; and provided further that the
Company shall not be obligated to indemnify Indemnitee hereunder for
an Indemnifiable Event which is not (i) authorized by the Company's
Board of Directors or (ii) otherwise within the authority of the
Indemnitee. If so requested by Indemnitee, the Company shall
advance (within two (2) business days of such request) any and all
Expenses to Indemnitee (an "Expense Advance").
b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 1(a) shall be subject to the condition that
the Reviewing Party shall not have determined (in a written opinion,
in any case in which the Independent Legal Counsel referred to in
Section 2 hereof is involved) that Indemnitee would not be permitted
to be indemnified under applicable law, and (ii) the obligation of
the Company to make an Expense Advance pursuant to Section 1(a)
shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees
to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and Indemnitee shall not be
required to reimburse the Company for any Expense Advance until a
final judicial determination is made with respect thereto (as to
which all rights of appeal
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<PAGE> 14
therefrom have been exhausted or lapsed). If there has not
been a Change in Control, the Reviewing Party shall be selected by
the Company's Board of Directors, and if there has been such a
Change in Control, the Reviewing Party shall be the Independent
Legal Counsel referred to in Section 2 hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to
be indemnified in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation in any court in the
State of Georgia having subject matter jurisdiction thereof and in
which venue is proper seeking an initial determination by the court
or challenging any such determination by the Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and
the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and
Indemnitee.
c) No change in the Company's Articles or Bylaws or in the
Georgia Business Corporation Code subsequent to the date of this
Agreement shall have the effect of limiting or eliminating the
indemnification available under this Agreement as to any act,
omission or capacity for which this Agreement provides
indemnification at the time of such act, omission or capacity. If
any change after the date of this Agreement in any applicable law,
statute or rule expands the power of the Company to indemnify the
Indemnitee, such change shall to the same extent expand the
Indemnitee's rights and the Company's obligations under this
Agreement. If any change in any applicable law, statute or rule
diminishes the power of the Company to Indemnify the Indemnitee,
such change, except to the extent otherwise required by law, statute
or rule to be applied to this Agreement, shall have no effect on
this Agreement or the parties' rights and obligations hereunder.
2. Change in Control. The Company agrees that if there is a Change in
Control of the Company, then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement, or any Article or Bylaw
provision now or hereinafter in effect relating to Claims for Indemnifiable
Events, the Company shall seek legal advice only from Independent Legal Counsel
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
the Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.
3. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys' fees) and, if
requested by Indemnitee, shall (within two (2) business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for
3
<PAGE> 15
(i) indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement, or any Article or Bylaw provision now or
hereafter in effect relating to Claims for Indemnifiable Events and/or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company; provided, however, that if there is a final judicial
determination (as to which all rights of appeal therefrom have been exhausted
or lapsed) that Indemnitee is not entitled to such indemnification, advance
payment of expenses or insurance recovery, Indemnitee shall reimburse the
Company for all such expenses theretofore paid under this Section 3.
4. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Moreover, notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection with such Claims as to which Indemnitee has been successful.
5. Burden of Proof. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
6. No Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by applicable law. In
addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by a
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief.
7. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Articles, Bylaws or
the Georgia Business Corporation Code or otherwise. To the extent that a
change in the Georgia Business Corporation Code (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Articles, Bylaws and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
4
<PAGE> 16
8. Liability Insurance.
a) The Company hereby represents and warrants that the Company
has purchased and maintains directors' and officers' liability
insurance consisting of a primary policy issued by American
International Group, Inc. providing $10,000,000 in coverage (the
"D&O Insurance").
b) The Company hereby covenants and agrees that, so long as
Indemnitee shall continue to serve as an executive officer of the
Company and thereafter so long as Indemnitee shall be subject to any
possible Claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of
the fact that Indemnitee was an executive officer of the Company,
the Company shall maintain in full force and effect the D&O
Insurance, or substantially equivalent insurance coverage; provided,
however, that the Company shall not be obligated hereunder to pay
annual premiums for directors' and officers' liability insurance in
excess of one hundred fifty percent (150%) of the annualized rate of
premiums paid by the Company for D&O Insurance in Fiscal Year 1996
(the "Increased Rate"), and if the premiums for such insurance
coverage would exceed the Increased Rate in any fiscal year, and the
Company determines not to spend in excess of the Increased Rate, the
Company shall endeavor to retain such type of coverage by amending
the levels of self-insured retention and/or limits of liability of
such insurance coverage so as not to exceed the Increased Rate.
c) In all policies of D&O Insurance, Indemnitee shall be named
as an insured in such manner as to provide Indemnitee the same
rights and benefits, subject to the same limitations, as are
accorded to the Company's directors or officers most favorably
insured by such policy.
9. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two (2) years from the date of accrual
of such cause of action, and any Claim or cause of action of the Company shall
be extinguished and deemed released unless asserted by the timely filing of a
legal action within such two (2) year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action such shorter period shall govern.
10. Notices
a) The Indemnitee shall give to the Company notice in writing as
soon as practicable of any Claim made against him for which
indemnification will or could be sought under this Agreement.
Failure to give such notice shall not be cause for the Company not
to indemnify Indemnitee or advance Expenses unless the Company can
demonstrate that it was prejudiced by such failure.
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<PAGE> 17
b) Notices shall be in writing and shall be either personally
delivered or sent by Federal Express or other reputable overnight
courier for next business day delivery, or sent by certified mail,
return receipt requested, addressed as follows:
If to the Company: Healthdyne Technologies, Inc.
1255 Kennestone Circle
Marietta, Georgia 30066
Attn: Chief Executive Officer
Attn: General Counsel
If to the Indemnitee: at Indemnitee's address stated above
or at such other address as from time to time designated by written notice
delivered in accordance herewith. Any notice personally served shall be deemed
delivered on the date of such service. Any notice sent by overnight courier as
provided above shall be deemed delivered on the first business day after the
date such notice was actually delivered by such overnight courier or refused.
Any notice sent by mail as provided above shall be deemed delivered on the date
of actual receipt or refusal thereof.
11. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
12. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
13. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Articles, Bylaws or otherwise) of the amounts
otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an executive officer of the Company.
15. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable in any respect, and
the validity and enforceability of any such provision in every other respect
and of the
6
<PAGE> 18
remaining provisions hereof shall not be in any way impaired and
shall remain enforceable to the full extent permitted by law.
16. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
17. Certain Definitions.
a) Change in Control: For purposes of this Agreement, a Change
in Control shall be deemed to have occurred if (a) there shall
be consummated (i) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's common stock would be
converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's common
stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company, or (b) the
stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (c) any person (as
such term is used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), shall become
the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 30% of the Company's outstanding Common Stock, or
(d) during any period of two consecutive years, individuals who at
the beginning of such period constitute the entire Board of
Directors of the Company shall cease for any reason to constitute a
majority thereof unless the election, or the nomination for election
by the Company's stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
b) Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by
or in the right of the Company or any other party, that Indemnitee
in good faith believes might lead to the institution of any such
action, suit or proceeding, whether civil, criminal, administrative,
investigative or other, arising in connection with an Indemnifiable
Event.
c) Expenses: include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event.
d) Indemnifiable Event: any event or occurrence related to the
fact that Indemnitee is or was an executive officer of the Company,
or is or was serving at the request of the Company as a director,
officer, or trustee of another corporation, trust or
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<PAGE> 19
other enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity.
e) Independent Legal Counsel: an attorney or firm of attorneys,
selected in accordance with the provisions of Section 2, who shall
not have otherwise performed services for the Company or Indemnitee
within the last five (5) years.
f) Reviewing Party: any appropriate person or body consisting
of a member of members of the Company's Board of Directors or any
other person or body appointed by the Board who is not a party to
the particular Claim for which Indemnitee is seeking
indemnification, or Independent Legal Counsel.
g) Voting Securities: any securities of the Company which vote
generally in the election of directors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
____ day of _______________, 19_____.
HEALTHDYNE TECHNOLOGIES, INC.
By:________________________________
Name:
Title:
_______________________________________
Indemnitee
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<PAGE> 20
EXHIBIT 31
NEW SECTION 7 OF ARTICLE I OF BY-LAWS
Section 7. Special Meeting at Request of Shareholders.
(a) Any holder or holders of record of Common Stock requesting the
Corporation to call a special meeting of shareholders pursuant to Section 2 of
this ARTICLE I (collectively, the "Initiating Shareholder") shall deliver or
mail written notice of such request to the Secretary of the Corporation at its
principal executive offices (the "Notice"). The Notice shall contain all the
information that would be required in a notice to the Secretary given pursuant
to Section 6 of this ARTICLE I in connection with an annual meeting of
shareholders.
(b) If the Initiating Shareholder owns of record at least 60% of the
outstanding Common Stock, the Corporation shall be required to call the special
meeting of shareholders requested by the Initiating Shareholder.
(c) If the Initiating Shareholder does not own of record at least 60% of
the outstanding Common Stock, the provisions of this subsection (c)
shall apply. Within 14 days after the Secretary's receipt of the Notice from
the Initiating Shareholder containing all the information required by
subsection (a) of this Section 7, the Board of Directors shall fix a record
date for determining the shareholders of record entitled to join in the request
for the calling of the special meeting of shareholders. Such record date shall
not be earlier than the date on which the Board of Directors fixes the same and
shall not be later than 30 days after such date. Only holders of record of
Common Stock on the record date shall be entitled to join in the request. The
Corporation shall give prompt written notice of the fixing of the record date
to the Initiating Shareholder. If shareholders of record on the record date
owning of record on such date at least 60% of the outstanding Common Stock
deliver or mail written requests to the Secretary of the Corporation at its
principal executive offices that the Corporation call the special meeting, the
Corporation shall promptly appoint an inspector to perform a ministerial review
of, and render a report to the Corporation and the Initiating Shareholder
concerning, the validity of such requests and any revocations thereof. The
inspector will be instructed to perform such review and render such report
promptly. The Corporation shall not be required to call the special meeting
until the inspector has rendered such report and certified in writing to the
Corporation and the Initiating Shareholder that valid, unrevoked requests for
the calling of the special meeting were received from shareholders of record on
the record date owning of record on such date at least 60% of the outstanding
Common Stock. Nothing contained in this subsection (c) shall be construed to
mean or imply that the Board of Directors or any shareholder shall not be
entitled to contest the validity of any written request or revocation thereof,
whether before or after certification by the inspector, through court
proceedings or otherwise. Any dispute as to whether or not the Corporation is
required to call the special meeting of shareholders will be resolved through
appropriate court proceedings, in which the Corporation will request the court
to resolve the dispute as expeditiously as possible.
<PAGE> 21
(d) Notwithstanding any other provision of these By-laws, no written
request to call a special meeting of shareholders shall be effective unless,
within 70 days after the record date fixed pursuant to subsection (c) of this
Section 7, the Corporation has received such written requests from shareholders
of record on such record date owning on such date at least 60% of the
outstanding Common Stock.
(e) The record date for determining the shareholders of record entitled to
vote at a special meeting called pursuant to this Section 7 shall be fixed by
the Board of Directors, but shall not be later than 14 days after it is
determined that the Corporation is required to call such meeting. Written
notice of the meeting shall be mailed by the Corporation to shareholders of
record on such record date within 10 days after the record date (or such longer
period as may be necessary for the Corporation to file its proxy materials
with, and receive and respond to the comments of, the Securities and Exchange
Commission), and the meeting will be held within 50 days after the date of
mailing of the notice, as determined by the Board of Directors.
(f) The business to be conducted at a special meeting called pursuant to
this Section 7 shall be limited to the business set forth in the Notice and
such other business or proposals as the Board of Directors shall determine and
shall be set forth in the notice of meeting. The Board of Directors or the
Chairman of the Board of Directors may determine rules and procedures for the
conduct of the meeting.
<PAGE> 22
EXHIBIT 32
HEALTHDYNE TECHNOLOGIES M. WAYNE BOYLSTON
ANNOUNCES ACTIONS BY ITS MARCH 21, 1997
BOARD OF DIRECTORS (770) 499-1212
FOR IMMEDIATE RELEASE
Marietta, Georgia, March 21, 1997--Healthdyne Technologies, Inc.
("Healthdyne Technologies" or the "Company") (Nasdaq: HDTC) announced that its
Board of Directors approved yesterday amendments to the provisions of the
Company's By-Laws regarding the calling of special meetings in order to assure
an orderly process in the event a special meeting is called. The Company's
By-Law provisions have been amended in order to set forth specific procedures to
be followed in the event that a holder of less than a 60% interest requests the
calling of a special meeting of shareholders, including notice requirements,
procedures for determining the validity of shareholder requests and the setting
of record dates and meeting dates and related matters. The meeting of the Board
of Directors was held and Board actions were taken prior to Healthdyne
Technologies' receipt of notice of Invacare's intention to make nominations at
and bring certain business before the 1997 annual meeting of shareholders of
Healthdyne Technologies.
The Board of Directors also authorized Healthdyne Technologies to enter
into indemnity agreements with its directors and executive officers. These
agreements are consistent with and are intended to implement the existing
provisions of the By-Laws. Finally, the Board of Directors ratified the
appointment of Morrow & Co., Inc. to act as proxy solicitors for Healthdyne
Technologies in connection with the Invacare offer.
Parker H. Petit, Chairman of the Board of the Company, stated, "The Company
intends to review and study Invacare's proposals carefully. It is interesting to
note that Invacare is attempting in its litigation to have the court system
declare unconstitutional Georgia state statutes which were put in place for the
protection of all Georgia corporations and their shareholders. It would appear
that Invacare is now attempting to make these statutes obsolete through the
operation of its shareholder proposals. These actions have broad implications
for all Georgia public corporations and their shareholders."
Healthdyne Technologies designs, manufactures and markets technologically
advanced medical devices for use in the home, as well as other
specialized clinical settings. The Company's products include diagnostic and
therapeutic devices for the evaluation and treatment of sleep disorders,
non-invasive ventilators, oxygen concentrators and medication nebulizers for
the treatment of respiratory disorders, monitors for infants as risk of SIDS,
and products for asthma management.
