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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 16
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)
---------------------
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 the statement)
---------------------
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. 16 amends and supplements the Schedule 14D-9 filed with
the Securities and Exchange Commission on January 31, 1997 (as amended, the
"Schedule 14D-9") 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.
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ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Item 8 of the 14D-9 is hereby amended and supplemented by adding the
following information:
On June 25, 1997, Healthdyne filed its Motion to Amend to Add Second
Counterclaim (the "Motion to Amend to Add Second Counterclaim"), as well as a
brief in support of its motion and in response to Invacare's motion to strike
the Second Counterclaim. A copy of Healthdyne's Motion to Amend to Add Second
Counterclaim and supporting brief is attached hereto as Exhibit 53.
On June 27, 1997, Mr. Petit sent a letter to Mr. Mixon, a copy of
which is attached hereto as Exhibit 54.
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
Exhibit 53 -- Healthdyne's Motion to Amend to Add Second Counterclaim and
Supporting Brief
Exhibit 54 -- Letter from Mr. Petit to Mr. Mixon dated June 27, 1997
- ---------------
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
------------------------------------
Name: M. Wayne Boylston
Title: Vice President -- Finance,
Chief Financial Officer and
Treasurer
Dated: June 27, 1997
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EXHIBIT 53
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
INVACARE CORPORATION and :
I.H.H. CORP., :
:
Plaintiffs, :
: CIVIL ACTION NO.
v. : 1:97-CV-0205-CC
:
HEALTHDYNE TECHNOLOGIES, INC., :
CRAIG B. REYNOLDS, :
J. TERRY DEWBERRY, :
ALEXANDER H. LORCH, :
J. LELAND STRANGE, :
JAMES J. WELLMAN, and :
J. PAUL YOKUBINAS, :
Defendants.
DEFENDANT HEALTHDYNE TECHNOLOGIES, INC.'S
BRIEF IN RESPONSE TO PLAINTIFFS' MOTION TO STRIKE AND IN SUPPORT OF ITS MOTION
TO AMEND TO ADD SECOND COUNTERCLAIM
COMES NOW Healthdyne Technologies, Inc. ("Healthdyne"), defendant in
the above-captioned action, and states in response to plaintiffs' motion to
strike Healthdyne's Second Counterclaim and in support of Healthdyne's Motion
To Amend To Add Second Counterclaim pursuant to Fed. R. Civ. P. 13(e) the
following:
INTRODUCTION
On June 16, 1997, Healthdyne filed its Second Counterclaim against
Invacare Corporation ("Invacare") in order to stop Invacare's secret campaign
to spread misinformation to Healthdyne's customers in order to damage
Healthdyne's second quarter 1997 sales results. The Second
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Counterclaim, which alleges violations of federal securities laws within the
jurisdiction of this Court, is intimately related to the other issues raised in
this lawsuit. Invacare is carrying out its unlawful scheme, and has failed to
disclose its conduct and related business plans to Healthdyne's shareholders,
to support its hostile tender offer for securities of Healthdyne, and its proxy
contest to replace the Healthdyne Board of Directors and amend Healthdyne's
bylaws. Healthdyne requests preliminary and permanent injunctive relief and
damages resulting from Invacare's disparagement of Healthdyne's business in
violation of the Uniform Deceptive Trade Practices Act, O.C.G.A. Section 10-
1-370 through 375; tortious interference with Healthdyne's business relations
and prospective business opportunities; and violations of federal securities
laws.
In response, Invacare has moved to strike the counterclaim for failure
to request leave of the Court to serve and file its counterclaim. Invacare's
own conduct demonstrates the weakness of its position. Invacare itself filed a
pleading labeled a "counterclaim" without seeking leave to file a counterclaim
pursuant to Rule 13(e) or requesting leave to amend its complaint pursuant to
Rule 15(a). Yet when Healthdyne did the same, Invacare chose to
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burden the Court with its frivolous motion.(1) Then Invacare filed a reply to
the Second Counterclaim "[i]n the event this Court denies the motion."
(Plaintiffs' Reply To Healthdyne's Second Counterclaim at 1).
A resolution of Invacare's motion to strike is unnecessary. Even if,
as Invacare now contends, Rule 13(e) requires leave of the Court in all
circumstances, the Court should grant Healthdyne such leave. Invacare presents
no reason for not allowing the Second Counterclaim. Indeed, it has already
filed a reply. Thus, to avoid any argument regarding technical deficiencies of
its pleading, Healthdyne moves for leave to file the Second Counterclaim.
ARGUMENT AND CITATION OF AUTHORITIES
Pursuant to Rule 13(e) of the Federal Rules of Civil Procedure,
Healthdyne requests leave of the Court to amend its pleading to add its Second
Counterclaim. Fed. R. Civ. P. 13(e). Rule 13(e) provides that a claim that
matured or was acquired by the pleader after serving a pleading or a claim
(1) If Invacare sincerely believes that Healthdyne's Second Counterclaim is
procedurally improper (despite its own identical conduct), then Invacare should
have sought to resolve this technical problem, which has no bearing on the
outcome of the claims raised in the Second Counterclaim, without burdening the
Court and the parties with a contested motion to strike. Healthdyne can only
surmise from Invacare's conduct that its strategy is to delay as long as
possible the day on which it will have to answer the detailed allegations in
the Second Counterclaim.
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that is otherwise excluded from the original pleading may be presented as a
counterclaim in a supplemental pleading with the permission of the court. Fed.
R. Civ. P. 13(e). Healthdyne's Second Counterclaim arises out of conduct that
has occurred since Healthdyne filed its last counterclaim.
The Federal Rules of Civil Procedure permit, and in fact promote,
liberal amendment of pleadings to assure that all issues may be fully
considered by the Court and/or the jury at one time. The United States Court
of Appeals for the Eleventh Circuit has had several opportunities to construe
the language of Fed. R. Civ. P. 15, which is the general rule that allows for
supplemental pleadings. In Shipper v. Eastern Airlines, 868 F.2d 401 (11th
Cir. 1989), the Court recognized that the decision to permit amendment of a
pleading was within the sound discretion of the district court. Id. at 406.
The Court also noted, however, that, unless a substantial reason exists for
denying leave, the court should allow the amendment. Id. at 407. See also,
Motorcity of Jacksonville, Ltd. v. Southeast Bank, 83 F.3d 1317, 1323 (11th
Cir. 1996); Moore v. Baker, 989 F.2d 1129, 1131 (11th Cir. 1993). No such
substantial reason exists in the case currently before the Court. There has
been no undue delay nor has there been any undue prejudice or bad faith. On
the contrary, recent events have given rise to Healthdyne's Second Counter-
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claim and, since those events have occurred, Healthdyne has vigorously sought
to bring its claim to the Court's attention. As such, this Court should allow
Healthdyne to amend its answer to add the Second Counterclaim.
For similar reasons, the amendment is also proper under Rule 13(e). In
T.J. Stevenson & Co. v. 81,193 Bags of Flour, 629 F.2d 338, 370 n.68 (5th Cir.
1980) and Spartan Grain and Mill Co. v. Ayers, 517 F.2d 214, 220 (5th Cir.
1975),(2) this Court recognized the similarity between the application of Rules
15 and 13, including the liberal standards for allowing amendment. The same
reasons set forth above which justify amendment under Rule 15 also justify an
amendment under Rule 13(e). See Skaro v. Eastern Sav. Bank, 866 F.Supp. 229,
233-34 (W.D.Pa. 1994) (acknowledging that closely related claims, including
after acquired counterclaims, should be tried together to avoid diseconomies of
multiple proceedings); National Union Fire Ins. Co. v. Continental Ill. Corp.,
113 F.R.D. 527, 530-31 (N.D.Ill. 1986) (allowing defendant to supplement
pleadings to add after-acquired counterclaim). The allegations in Healthdyne's
Second Counterclaim focus largely on actions taken after the original pleading
and
(2) In Bonner v. City of Prichard, Alabama, 661 F.2d 1206, 1207 (11th Cir.
1981) (en banc), the Eleventh Circuit adopted as precedent Fifth Circuit case
law decided before 1981.
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counterclaim had been filed. Rule 13(e) allow for additional counterclaims
under these circumstances.
Invacare has also requested attorneys' fees and costs based on its
unsupported speculation as to Healthdyne's motivation for pursuing its valid
claims against Invacare. At trial, Healthdyne will prove that Invacare is
committing the misconduct described in the Second Counterclaim. The Court
should give no consideration to Invacare's specious attempt to impugn the
motives of Healthdyne for pursuing its legal rights to stop Invacare's wrongful
and unlawful conduct.
CONCLUSION
For all of the foregoing reasons, Invacare's motion to strike should be
denied; or the Court should authorize the filing of Healthdyne's Second
Counterclaim in this action.
Respectfully submitted this 25th day of June, 1997.
TROUTMAN SANDERS LLP
/s/ John M. Bowler
----------------------
Winifred D. Simpson
Georgia Bar No. 648275
John M. Bowler
Georgia Bar No. 071770
NationsBank Plaza
600 Peachtree Street, N.E.
Suite 5200
Atlanta, Georgia 30308-2216
(404) 885-3000
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Of Counsel
Edward P. Welch
Andrew J. Turezyn
Paul J. Lockwood
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
(302) 651-3000
Attorneys for Defendant
Healthdyne Technologies, Inc.
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
INVACARE CORPORATION and :
I.H.H. CORP., :
Plaintiffs, :
: CIVIL ACTION NO.
v. :
: 1:97-CV-0205-CC
HEALTHDYNE TECHNOLOGIES, INC., :
et al., :
Defendants. :
CERTIFICATE OF SERVICE
I hereby certify that I have this day served a copy of the
foregoing DEFENDANT HEALTHDYNE TECHNOLOGIES, INC.'S BRIEF IN SUPPORT OF ITS
MOTION TO AMEND TO ADD SECOND COUNTERCLAIM upon the interested parties by the
following means addressed as follows:
VIA FIRST CLASS U.S. MAIL VIA FIRST CLASS U.S. MAIL
M. Robert Thornton J. Andrew Ward
Michael R. Smith SIMPSON THACHER & BARTLETT
David J. Onorato 425 Lexington Avenue
KING & SPALDING New York, New York 10017
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
This 25th day of June, 1997.
/s/ John M. Bowler
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John M. Bowler
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
INVACARE CORPORATION and :
I.H.H. CORP., :
Plaintiffs, :
:
v. : CIVIL ACTION NO.
: 1:97-CV-0205-CC
HEALTHDYNE TECHNOLOGIES, INC. :
CRAIG B. REYNOLDS, :
J. TERRY DEWBERRY, :
ALEXANDER H. LORCH, :
J. LELAND STRANGE, :
JAMES J. WELLMAN, and :
J. PAUL YOKUBINAS, :
Defendants.
DEFENDANT HEALTHDYNE TECHNOLOGIES, INC.'S
MOTION TO AMEND TO ADD SECOND COUNTERCLAIM
COMES NOW defendant Healthdyne Technologies, Inc.
("Healthdyne"), and hereby moves the Court pursuant to Fed. R. Civ. P. 13(e)
for an Order permitting the filing of a supplemental pleading to add a second
counterclaim. A true and correct copy of the second counterclaim is attached
to this Motion as Exhibit "A."
The ground for this Motion to Amend is, as set forth more
fully in Healthdyne's Brief in Support filed concurrently with this Motion,
that the second counterclaim in issue matured after the serving of Healthdyne's
answer and original counterclaim. A proposed form of Order is attached hereto
as Exhibit "B" for the Court's convenience.
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WHEREFORE, Healthdyne respectfully requests that the Court enter an
Order granting Healthdyne's Motion to Amend to Add Second Counterclaim.
This 25th day of June, 1997.
Respectfully submitted,
TROUTMAN SANDERS LLP
/s/ John M. Bowler
-------------------
Winifred D. Simpson
Georgia Bar No. 648275
John M. Bowler
Georgia Bar No. 071770
NationsBank Plaza
600 Peachtree Street, N.E.
Suite 5200
Atlanta, GA 30308-2216
(404) 885-3000
Of Counsel
Edward P. Welch
Andrew J. Turezyn
Paul J. Lockwood
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
(302) 651-3000
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
INVACARE CORPORATION and :
I.H.H. CORP., :
Plaintiffs, :
:
v. : CIVIL ACTION NO.
: 1:97-CV-0205-CC
HEALTHDYNE TECHNOLOGIES, INC. :
CRAIG B. REYNOLDS, :
J. TERRY DEWBERRY, :
ALEXANDER H. LORCH, :
J. LELAND STRANGE, :
JAMES J. WELLMAN, and :
J. PAUL YOKUBINAS, :
Defendants.
CERTIFICATE OF SERVICE
I hereby certify that I have this day served a copy of the foregoing
DEFENDANT HEALTHDYNE TECHNOLOGIES, INC.'S MOTION TO AMEND TO ADD SECOND
COUNTERCLAIM upon the interested parties by the following means addressed as
follows:
VIA FIRST CLASS VIA FIRST CLASS
U.S. MAIL U.S. MAIL
M. Robert Thornton J. Andrew Ward
Michael R. Smith SIMPSON THACHER & BARTLETT
David J. Onorato 425 Lexington Avenue
KING & SPALDING New York, New York 10017
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
This 25th day of June, 1997.
/s/ John M. Bowler
------------------
John M. Bowler
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
INVACARE CORPORATION and :
I.H.H. CORP., :
Plaintiffs, :
:
v. : CIVIL ACTION NO.
: 1:97-CV-0205-CC
HEALTHDYNE TECHNOLOGIES, INC. :
CRAIG B. REYNOLDS, :
J. TERRY DEWBERRY, :
ALEXANDER H. LORCH, :
J. LELAND STRANGE, :
JAMES J. WELLMAN, and :
J. PAUL YOKUBINAS, :
Defendants.
ORDER GRANTING COUNTERCLAIM PLAINTIFF HEALTHDYNE
TECHNOLOGIES INC.'S MOTION TO AMEND TO ADD SECOND COUNTERCLAIM
COMES NOW defendant Healthdyne Technologies, Inc. ("Healthdyne"),
having moved this Court pursuant to Fed. R. Civ. P. 13(e) for leave to file a
supplemental pleading to add a second counterclaim, and this Court having
reviewed Healthdyne's motion, as well as Healthdyne's second counterclaim, and
this Court finding that the amendment and addition of the second counterclaim
is appropriate.
IT IS HEREBY ORDERED that the motion of Healthdyne to amend in
order to file a supplemental pleading to add a second counterclaim is GRANTED
and that the Clerk of this Court shall accept for filing the original of
Healthdyne's Second Counterclaim.
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IT IS SO ORDERED ______ day of __________, 1997.
__________________________________
JUDGE, UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
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EXHIBIT 54
HEALTHDYNE TECHNOLOGIES, INC.
1255 KENNESTONE CIRCLE
MARIETTA, GEORGIA 30066
(770)499-1212
Dear Mr. Mixon:
Your letter of June 24 has convinced me that you do not understand the
process you started when you began your hostile takeover attempt this January.
For six months, Invacare has been trying to buy Healthdyne
Technologies at a "bargain price." You started at $12.50, then went to $13.00
and then to $13.50. On June 4, 1997, you announced Invacare's "best and final"
offer of $15.00 per share after the arbitrage community withdrew substantial
support for your offer. Your $15.00 offer is universally regarded as grossly
inadequate -- by our Board, by our financial advisors, by the marketplace, by
securities analysts and, most importantly, by the holders of almost 70% of the
non-Invacare shares who at last count had refused to accept Invacare's tender
offer. Your below market, below value tender offer is a "sham" -- to use your
term.
Your "bargain price" bidding history leads to the inescapable
conclusion that Invacare is not prepared -- and will never be prepared -- to
engage in a transaction fully reflective of Healthdyne Technologies' true
value. Accordingly, we don't believe that discussions between the two
companies will lead to a transaction beneficial to Healthdyne Technologies and
its shareholders.
Nevertheless, we remain willing to let Invacare participate in our
process of considering alternatives, but only if Invacare agrees to play by the
same rules that are applicable to others. One reason for our insistence that
Invacare accept these rules is our need to avoid premature public disclosure of
confidential information unless and until such disclosure is required in
connection with a transaction which our Board considers to be in the best
interests of all shareholders. If Invacare's lawyers don't understand how our
material non-public information would have to be publicly disclosed in
Invacare's tender offer and proxy solicitation materials, then Invacare's
lawyers don't understand the federal securities laws and they should contact
our lawyers for a briefing.
More fundamentally, you should understand that the Healthdyne
Technologies Board of Directors -- not Invacare -- will control the Board's
process of assessing alternatives. We believe that allowing Invacare into the
process without accepting the same standstill restrictions applicable to others
would give Invacare an unfair advantage over others and deter others from
participating in the process. You have chosen not to participate in the
process and to seek to disparage it -- again showing your complete ignorance of
the process and the facts.
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You say in your letter that Invacare intends to elect a new board of
directors who will sell Healthdyne Technologies "at the best available price."
Nothing could be further from the truth. Your hand-picked nominees, if
elected, are committed to selling the Company to Invacare for the grossly
inadequate cash price of $15.00 per share. In complete disregard of their
fiduciary duties, they will sell Healthdyne Technologies to Invacare for cash
without seeking the best price or the best transaction for all the Healthdyne
Technologies shareholders.
Compare Invacare's actions and the proposed conduct of its nominees
with the actions of Healthdyne Technologies' Board and management. We have
already created value for the shareholders in excess of Invacare's "best and
final" grossly inadequate $15.00 offer -- by developing and executing a
strategic plan which has already produced dramatically increased revenues and
profits exceeding analysts' expectations. We fully expect this revenue and
profit momentum to continue and to be reflected in our results for the second
quarter of 1997 and future periods. This Board and its members have a track
record of increasing shareholder value through operational performance and
financial transactions when necessary.
The process of exploring alternatives we have recently begun in
earnest could create even greater shareholder value. However, the Healthdyne
Technologies Board is not going to make a final decision unless and until the
Board understands the alternatives -- an eminently prudent and sound position
and the only position that the Board could reasonably take under the
circumstances.
In the last analysis, Healthdyne Technologies' management and Board of
Directors are answerable to the shareholders. We are confident that the
shareholders will recognize that we are committed to increasing shareholder
value even further and will vote to allow us to continue to pursue that
commitment. The shareholders will not foreclose their opportunity to receive
greater value by accepting Invacare's grossly inadequate cash offer.
Very truly yours,
/s/ Parker H. Petit
Parker H. Petit
Chairman of the Board
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