-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A82IRSxEsG6Wr2NnOKindkQj7mrAv9DpJUrIleE2Q/vKvOFDVwUsAog6Jm7vjH+i Z9hmYQWmQyQDudaBq7vp5A== 0000927016-98-000915.txt : 19980312 0000927016-98-000915.hdr.sgml : 19980312 ACCESSION NUMBER: 0000927016-98-000915 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980311 SROS: NONE GROUP MEMBERS: FOUNTAIN VIEW INC GROUP MEMBERS: FV-SCC ACQUISITION CORP. GROUP MEMBERS: HERITAGE FUND II, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SUMMIT CARE CORP CENTRAL INDEX KEY: 0000875192 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 953656297 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-43590 FILM NUMBER: 98563581 BUSINESS ADDRESS: STREET 1: 2600 W MAGNOLIA BLVD CITY: BURBANK STATE: CA ZIP: 91505-3031 BUSINESS PHONE: 8189724035 MAIL ADDRESS: STREET 1: 2600 W MAGNOLIA BLVD CITY: BURBANK STATE: CA ZIP: 91505-3031 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FOUNTAIN VIEW INC CENTRAL INDEX KEY: 0001055468 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 11900 W OLYMPIC BLVD STREET 2: STE 680 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3105710351 MAIL ADDRESS: STREET 1: 11900 W OLYMPIC BLVD STREET 2: STE 680 CITY: LOS ANGELES STATE: CA ZIP: 90064 SC 14D1/A 1 AMENDMENT TO SCHEDULE 14D1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 11, 1998 =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT (PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) AMENDMENT NO. 1 ------------------------ SUMMIT CARE CORPORATION (NAME OF SUBJECT COMPANY) FOUNTAIN VIEW, INC. FV-SCC ACQUISITION CORP. HERITAGE FUND II, L.P. (NAME OF PERSONS FILING STATEMENT) ------------------------ COMMON STOCK, NO PAR VALUE PER SHARE (TITLE OF CLASS OF SECURITIES) ------------------------ 865910103 (CUSIP NUMBER OF CLASS OF SECURITIES) ROBERT M. SNUKAL FOUNTAIN VIEW, INC. 11900 W. OLYMPIC BOULEVARD SUITE 680 LOS ANGELES, CA 90064 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT) ------------------------ WITH A COPY TO: STEPHEN M. L. COHEN, ESQ. CHOATE, HALL & STEWART EXCHANGE PLACE 53 STATE STREET BOSTON, MA 02109 (617) 248-5000 - -------------------------------------------------------------------------------- CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- TRANSACTION VALUATION* AMOUNT OF FILING FEE** $143,062,500 $28,613.00 - -------------------------------------------------------------------------------- * FOR PURPOSES OF CALCULATING THE FILING FEE ONLY. THIS CALCULATION ASSUMES THE PURCHASE OF AN AGGREGATE OF 6,812,500 SHARES OF COMMON STOCK, NO PAR VALUE PER SHARE, OF SUMMIT CARE CORPORATION (THE "SHARES") AT $21.00 NET PER SHARE IN CASH. ** THE AMOUNT OF THE FILING FEE, CALCULATED IN ACCORDANCE WITH RULE 0-11(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EQUALS 1/50TH OF 1% OF THE AGGREGATE VALUE OF CASH OFFERED BY FV-SCC ACQUISITION CORP. FOR SUCH NUMBER OF SHARES. [X] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE 0-11(a)(2) AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS PREVIOUSLY PAID. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING. AMOUNT PREVIOUSLY PAID: $28,613.00 FILING PARTY: FV-SCC Acquisition Corp. and Fountain View, Inc. FORM OF REGISTRATION NO.: Schedule 14D-1, File No. 5-43590 DATE FILED: February 13, 1998 ============================================================================= CUSIP NO. 86590103 14D-1 -------- - -------------------------------------------------------------------------------- 1. Name of Reporting Person: Fountain View, Inc. - -------------------------------------------------------------------------------- 2. Check Appropriate Box if (a) [_] a member of a Group (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Sources of Funds: BK AF - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of [_] Legal Proceedings Required Pursuant to Item 2(e) or 2(f) - -------------------------------------------------------------------------------- 6. Place of Organization: Delaware - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned: 0 Shares - -------------------------------------------------------------------------------- 8. Check if Amount in Row 7 Excludes Certain Shares [_] - -------------------------------------------------------------------------------- 9. Percent of Class: 0% - -------------------------------------------------------------------------------- 10. Type of Reporting Person: CO - -------------------------------------------------------------------------------- CUSIP NO. 86590103 14D-1 -------- - -------------------------------------------------------------------------------- 1. Name of Reporting Person: FV-SCC ACQUISITION CORP. - -------------------------------------------------------------------------------- 2. Check Appropriate Box if (a) [_] a member of a Group (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Sources of Funds: AF - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of [_] Legal Proceedings Required Pursuant to Item 2(e) or 2(f) - -------------------------------------------------------------------------------- 6. Place of Organization: Delaware - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned: None - -------------------------------------------------------------------------------- 8. Check if Amount in Row 7 Excludes Certain Shares [_] - -------------------------------------------------------------------------------- 9. Percent of Class: 0% - -------------------------------------------------------------------------------- 10. Type of Reporting Person: CO - -------------------------------------------------------------------------------- CUSIP NO. 86590103 14D-1 -------- - -------------------------------------------------------------------------------- 1. Name of Reporting Person: Heritage Fund II, L.P. - -------------------------------------------------------------------------------- 2. Check Appropriate Box if (a) [_] a member of a Group (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Sources of Funds: WC - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of [_] Legal Proceedings Required Pursuant to Item 2(e) or 2(f) - -------------------------------------------------------------------------------- 6. Place of Organization: Delaware - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned: 0 Shares - -------------------------------------------------------------------------------- 8. Check if Amount in Row 7 Excludes Certain Shares [_] - -------------------------------------------------------------------------------- 9. Percent of Class: 0% - -------------------------------------------------------------------------------- 10. Type of Reporting Person: CO - -------------------------------------------------------------------------------- INTRODUCTION This Amendment No. 1 (the "Amendment") to the Tender Offer Statement on Schedule 14D-1 (the "Statement") filed by Fountain View, Inc., a Delaware corporation ("Parent"), FV-SCC Acquisition Corp., a Delaware corporation ("Purchaser") and Heritage Fund II, L.P., (a Delaware limited partnership ("Heritage"), relates to the offer by Purchaser, a wholly owned subsidiary of Parent, to purchase all outstanding Shares of Summit Care Corporation, a California corporation (the "Company"), at a price of $21.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase dated February 13, 1998, as supplemented by a Supplement to Offer to Purchase dated March __, 1998 (the "Offer to Purchase") and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1), (a)(9) and (a)(2), respectively. This Amendment amends and restates the Statement originally filed on February 13, 1998 by Purchaser and Parent. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is Summit Care Corporation, a California corporation, which has its principal executive offices at 2600 W. Magnolia Blvd., Burbank, California, 91505. (b) The class of equity securities being sought is all the outstanding shares of common stock, no par value per share, of the Company. The information set forth under "INTRODUCTION" and "THE TENDER OFFER -- Terms of the Offer; Expiration Date" in the Offer to Purchase is incorporated herein by reference. (c) The information concerning the principal market in which the Shares are traded and certain high and low sales prices for the Shares in such principal market is set forth in "THE TENDER OFFER -- Price Range of Shares" in the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d) and (g) The information set forth under "THE TENDER OFFER -- Certain Information Concerning Purchaser and Parent" and Schedule I in the Offer to Purchase is incorporated herein by reference. (e) and (f) During the last five years, none of Heritage, Purchaser or Parent or, to the best knowledge of Heritage, Purchaser or Parent, none of the individuals listed in Schedule I of the Offer to Purchase, has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, United States federal or state securities laws or finding any violation of such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a) The information set forth under "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Interests of Certain Persons in the Offer and the Merger", "SPECIAL FACTORS -- The Merger Agreement and Related Agreements" and "THE TENDER OFFER -- Certain Information Concerning Purchaser and Parent" in the Offer to Purchase is incorporated herein by reference. (b) The information set forth under "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- The Merger Agreement and Related Agreements", "SPECIAL FACTORS -- Purpose and Effects of the Offer and the Merger; Reasons for the Offer and the Merger" and "THE TENDER OFFER -- Certain Information Concerning Purchaser and Parent" in the Offer to Purchase is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) The information set forth under "THE TENDER OFFER -- Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. (c) Not applicable. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(e) The information set forth under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Purpose and Effects of the Offer and the Merger; Reasons for The Offer and The Merger", "SPECIAL FACTORS -- Plans for the Company after the Offer and the Merger" and "SPECIAL FACTORS -- The Merger Agreement and Related Agreements" in the Offer to Purchase is incorporated herein by reference. (f)-(g) The information set forth under "SPECIAL FACTORS -- Plans for the Company after the Offer and the Merger" and "THE TENDER OFFER -- Effect of the Offer on the Market for the Shares; Exchange Listing and Exchange Act Registration" in the Offer to Purchase is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) and (b) The information set forth under "INTRODUCTION" and "THE TENDER OFFER -- Certain Information Concerning Purchaser and Parent" in the Offer to Purchase is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Purpose and Effects of the Offer and the Merger; Reasons for The Offer and The Merger", "SPECIAL FACTORS -- Plans for the Company after the Offer and the Merger", "SPECIAL FACTORS -- Interests of Certain Persons in the Offer and the Merger", "SPECIAL FACTORS -- The Merger Agreement and Related Agreements", "THE TENDER OFFER -- Certain Information Concerning Purchaser and Parent" and "THE TENDER OFFER -- Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth under "INTRODUCTION" and "THE TENDER OFFER -- Fees and Expenses" in the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth under "THE TENDER OFFER -- Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a)-(d),(f) The information set forth under "THE TENDER OFFER -- Certain Legal Matters; Regulatory Approvals", "THE TENDER OFFER -- Effect of the Offer on the Market for the Shares, Exchange Listing and Exchange Act Registration" and "Special Factors - The Merger Agreement and Related Agreements" in the Offer to Purchase hereto is incorporated herein by reference. The information set forth in the Offer to Purchase, the Supplement to the Offer to Purchase and the Agreement and Plan of Merger, dated as of February 6, 1998 among the Company, Parent, Purchaser and Heritage Fund II, L.P., copies of which are attached hereto as Exhibits (a)(1), (a)(9) and (c)(1), respectively, is incorporated herein by reference. (e) There are no material legal proceedings relating to the tender offer. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Form of Offer to Purchase, dated February 13, 1998.* (a)(2) Form of Letter of Transmittal.* (a)(3) Form of Notice of Guaranteed Delivery.* (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* (a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients.* (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (a)(7) Summary Advertisement as published in The Wall Street Journal on February 13, 1998.* (a)(8) Text of Press Release issued by the Company on February 9, 1998.* (a)(9) Proposed Supplement to Offer to Purchase dated March __, 1998. (b) Commitment letter dated February 6, 1998 issued by the Bank of Montreal.* (c)(1) Agreement and Plan of Merger, dated as of February 6, 1998, by and among the Company, Parent, Purchaser and Heritage Fund II, L.P.* (c)(2) Agreement entered into as of February 6, 1998 by and among Parent, Robert Snukal, Sheila Snukal, William Scott and Heritage Fund II, L.P.* (c)(3) Summit Care Corporation Special Severance Pay Plan.* (d) Not Applicable. (e) Not Applicable. (f) Not Applicable.
- ------------ * Previously filed. SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Amendment is true, complete and correct. March 11, 1998 FV-SCC ACQUISITION CORP. By: /s/ Robert M. Snukal ------------------------------- Name: Robert M. Snukal ----------------------------- Title: President and Treasurer FOUNTAIN VIEW, INC. By: /s/ Robert M. Snukal ------------------------------- Name: Robert M. Snukal ----------------------------- Title: Chief Executive Officer and President HERITAGE FUND II, L.P. By: HF Partners II, L.L.C. (its general partner) By: /s/ Michel Reichert ------------------------------- Name: Michel Reichert ----------------------------- Title: Manager EXHIBIT INDEX ------------- (a)(1) Form of Offer to Purchase, dated February 13, 1998.* (a)(2) Form of Letter of Transmittal.* (a)(3) Form of Notice of Guaranteed Delivery.* (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* (a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients.* (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (a)(7) Summary Advertisement as published in The Wall Street Journal on February 13, 1998.* (a)(8) Text of Press Release issued by the Company on February 9, 1998.* (a)(9) Proposed Supplement to Offer to Purchase dated March __, 1998 (b) Commitment letter dated February 6, 1998 issued by the Bank of Montreal.* (c)(1) Agreement and Plan of Merger, dated as of February 6, 1998, by and among the Company, Parent, Purchaser and Heritage Fund II, L.P.* (c)(2) Agreement entered into as of February 6, 1998 by and among Parent, Robert Snukal, Sheila Snukal, William Scott and Heritage Fund II, L.P.* (c)(3) Summit Care Corporation Special Severance Pay Plan.* (d) Not Applicable. (e) Not Applicable. (f) Not Applicable.
- -------------- *Previously filed EX-99.A(9) 2 SUPPLEMENT TO OFFER TO PURCHASE SUPPLEMENT DATED MARCH , 1998 TO OFFER TO PURCHASE DATED FEBRUARY 13, 1998 OF FV-SCC ACQUISITION CORP., A WHOLLY-OWNED SUBSIDIARY OF FOUNTAIN VIEW, INC. THE OFFER HAS BEEN EXTENDED. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON , MARCH , 1998, UNLESS THE OFFER IS FURTHER EXTENDED To the Holders of Common Stock of Summit Care Corporation: This Supplement amends and supplements the Offer to Purchase dated February 13, 1998 (and related documents) (collectively, the "Offer to Purchase") of FV-SCC Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Fountain View, Inc., a Delaware corporation (the "Parent"), with respect to the tender offer made by Purchaser to purchase all of the outstanding shares of common stock, no par value per share (the "Common Stock"), of Summit Care Corporation, a California corporation (the "Company"), at a price of $21.00 per share net to the seller in cash upon the terms and subject to the conditions set forth in the Offer to Purchase. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Offer to Purchase. 1. All of the directors of the Company, except William C. Scott, were present at the meeting on February 6, 1998, and all the directors except for Mr. Scott, who was absent, acting on the unanimous recommendation of a special committee of independent directors, by unanimous vote (a) have determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to and in the best interests of the Company and the shareholders of the Company, (b) have approved and adopted the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and (c) recommend acceptance of the Offer by shareholders of the Company. 2. The following paragraph is added to end of the section of the Offer to Purchase entitled "SPECIAL FACTORS--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger": Net book value per share as stated in "Certain Information Concerning the Company" was $11.73 as of December 31, 1997, which is significantly below the $21.00 per share price in the Offer. As a result, the Board did not view net book value per share as a relevant measure of value. Liquidation value per share was not deemed relevant by the Board because the Company's value on a liquidation basis would be substantially below the Offer price. This is based on numerous factors, including the fact that the Company's valuable regulatory licenses and permits would not be transferrable in a liquidation. 3. The following additional language is added at the end of the second paragraph under the subsection entitled "SPECIAL FACTORS--The Merger Agreement and Related Agreements--Employee Matters", as it is expected that the Merger Agreement will be amended to modify this provision: "provided, however, that the Company shall be permitted to make adjustments in base salary, wage rates and benefits which the Company believes are necessary in order to enable the Company to remain competitive in the marketplace." 4. The following subsection is hereby added to the section of the Offer to Purchase entitled "THE TENDER OFFER--Certain Information Concerning Purchaser and Parent": Heritage. Heritage is a Delaware limited partnership with its principal executive offices located at 30 Rowes Wharf, Suite 300, Boston, MA 02110. Heritage is engaged in the business of making private equity investments in businesses in a wide range of industries. Heritage (excluding its related funds) has approximately $380 million of capital under management. The name, citizenship, business address, principal occupation or employment and five-year employment history for each of the directors and executive officers of Heritage are set forth in Schedule I of the Offer to Purchase. Except as set forth in the Offer to Purchase, neither Heritage, nor, to the best knowledge of Heritage, any of the persons listed in Schedule I hereto, or any associate or majority owned subsidiary of such persons, beneficially owns any equity security of the Company, and neither Heritage, nor, to the best knowledge of Heritage, any of the other persons referred to above, or any of the directors, executive officers or subsidiaries of any of the foregoing, has effected any transaction in any equity security of the Company during the past 60 days. Except as set forth in this Offer to Purchase, neither Heritage, nor, to the best knowledge of Heritage, any of the persons listed in Schedule I hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, without limitation, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities of the Company, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss, or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, neither Heritage, nor, to the best knowledge of Heritage, any of the persons listed in Schedule I hereto has effected any transactions with the Company, or any of its executive officers, directors or affiliates that would require reporting under the rules of the Commission. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between Heritage, or its subsidiaries, or, to the best knowledge of Heritage, any of the persons listed in Schedule I hereto, on the one hand, and the Company or its executive officers, directors or affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors, or a sale or other transfer of a material amount of assets. 5. The following disclosure replaces the current disclosure contained in the section of the Offer to Purchase entitled "SPECIAL FACTORS--Position of Purchaser and Parent Regarding Fairness of the Offer and the Merger": 4. POSITION OF PURCHASER, PARENT AND HERITAGE REGARDING FAIRNESS OF THE OFFER AND THE MERGER. Purchaser, Parent and Heritage believe that the Offer Price is fair to the Company's shareholders. Purchaser, Parent and Heritage base their belief on: (a) the fact that the Special Committee, consisting solely of independent directors, was appointed in connection with the Merger Agreement to represent the interests of shareholders, (b) the fact that the Special Committee was advised by independent financial and legal advisors, (c) the fact that the Company Board (with Mr. Scott absent during the vote), acting upon the unanimous recommendation of the Special Committee, and the Special Committee, based on the factors considered by the Special Committee set forth above, concluded that the Offer and Merger are fair to and in the best interests of the Company and the Company's shareholders, (d) the fact that Parent, Purchaser, Heritage and the Company Board (through the Special Committee), with their respective financial and legal advisors, negotiated the terms of the Merger and the Merger Agreement with the Special Committee on an arm's- length basis over a period of time and (e) the fact that the consideration to be paid in the Offer and the Merger represents a premium of approximately 28.6% over the average reported closing price for the Shares on the 20 trading days prior to the public announcement of the Merger Agreement. Purchaser, Parent and Heritage have reviewed the factors considered by the Special Committee and the Company Board in support of its decision described above and had no basis to question its consideration of or reliance on those factors. In reaching their conclusions, Parent and Purchaser also considered generally the current and historical market price for the Shares. Purchaser, Parent and Heritage did not find it practicable to, and did not, assign relative weights to the individual factors discussed above in reaching their conclusion as to fairness. In light of the nature of the Company's business, Purchaser, Parent and Heritage did not deem net book value or liquidation value to be relevant indicators of the value of the Shares. S-2 6. The following disclosure replaces the current disclosure contained under the subheading "Certain Company Projections" in the section of the Offer to Purchase entitled "THE TENDER OFFER--Certain Information Concerning the Company": Certain Company Projections. In connection with Parent's and Purchaser's due diligence review of the Company and in the course of the negotiations between the Company, Parent and Purchaser described in "SPECIAL FACTORS--Background of the Offer, and the Merger" which led to the execution of the Merger Agreement, the Company provided Parent and Purchaser with certain projections of future operating performance of the Company which Parent and Purchaser believe are not publicly available. Such projections, which were prepared in the course of the Company's normal budget and planning process in June 1997, cover the five- year period beginning with 1998. Such information included, among other things, the Company's projection of net revenues, earnings before interest, taxes, depreciation and amortization ("EBITDA") and net income as follows:
YEAR ENDED JUNE 30, -------------------------------------------- 1998 1999 2000 2001 2002 -------- -------- -------- -------- -------- (IN THOUSANDS) Total net revenues................. $236,100 $255,300 $269,600 $282,700 $296,000 EBITDA(1).......................... 30,400 34,000 36,200 37,900 38,700 Net income(1)...................... 7,600 10,200 11,800 13,100 13,900
- -------- (1) During the time negotiations with Parent were underway, the Company revised downward its EBITDA and net income projections for fiscal 1998 to $29,600 and $6,400, respectively, to reflect the Company's actual results of operations for the quarter ended December 31, 1997. THE INFORMATION SET FORTH ABOVE IS "FORWARD-LOOKING" INFORMATION, AS THAT TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE COMPANY DOES NOT AS A MATTER OF COURSE MAKE PUBLIC ANY PROJECTIONS AS TO FUTURE PERFORMANCE OR EARNINGS, AND THE PROJECTIONS SET FORTH ABOVE ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE THE INFORMATION WAS MADE AVAILABLE TO PARENT AND PURCHASER BY THE COMPANY. THE COMPANY HAS INFORMED PARENT AND PURCHASER THAT THESE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS AND FORECASTS. THE COMPANY HAS ALSO INFORMED PARENT AND PURCHASER THAT ITS INTERNAL FINANCIAL FORECASTS (UPON WHICH THE PROJECTIONS PROVIDED TO THE PARENT AND THE PURCHASER WERE BASED IN PART) ARE, IN GENERAL, PREPARED SOLELY FOR INTERNAL USE AND ARE SUBJECTIVE IN MANY RESPECTS AND THUS SUSCEPTIBLE TO VARIOUS INTERPRETATIONS AND PERIODIC REVISION BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENTS. PROJECTED INFORMATION OF THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS WHICH THEMSELVES ARE BASED ON EVENTS AND CIRCUMSTANCES THAT HAVE NOT TAKEN PLACE AND ARE INHERENTLY SUBJECT TO SIGNIFICANT FINANCIAL, MARKET, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY, PURCHASER OR PARENT. THE PROJECTIONS WERE PREPARED IN JUNE 1997, AND, ACCORDINGLY DUE TO THE PASSAGE OF TIME AND CHANGES IN CIRCUMSTANCES, MANY OF THE ASSUMPTIONS ON WHICH THEY WERE BASED MAY NO LONGER BE VALID. MANY OF THE ASSUMPTIONS UPON WHICH THE FOREGOING PROJECTIONS WERE BASED, NONE OF WHICH WERE APPROVED BY PARENT OR PURCHASER, ARE DEPENDENT UPON ECONOMIC FORECASTING (BOTH GENERAL AND SPECIFIC TO THE COMPANY'S BUSINESS), WHICH IS INHERENTLY UNCERTAIN AND SUBJECTIVE. AMONG OTHER THINGS, THE COMPANY'S FUTURE RESULTS OF OPERATIONS MAY BE IMPACTED BY CHANGES IN MEDICARE RATE REIMBURSEMENT RULES, THE IMPACT OF THE S-3 PROSPECTIVE PAYMENT SYSTEM, CHANGES IN CENSUS AND QUALITY MIX AT THE COMPANY'S FACILITIES, CHANGES IN STATE HEALTH CARE REGULATORY REQUIREMENTS AND OTHER MATTERS. THEREFORE, IT IS EXPECTED THAT THERE WILL BE DIFFERENCES BETWEEN THE ACTUAL AND PROJECTED RESULTS AND THAT THE ACTUAL RESULTS MAY BE MATERIALLY HIGHER OR LOWER THAN THOSE PROJECTED. INCLUSION OF THE FOREGOING PROJECTIONS SHOULD NOT BE REGARDED AS AN INDICATION THAT PARENT, PURCHASER, THE COMPANY OR ANY OTHER PERSON WHO RECEIVED SUCH INFORMATION CONSIDERS IT AN ACCURATE PREDICTION OF FUTURE EVENTS, AND NEITHER PURCHASER NOR PARENT HAS RELIED ON THEM AS SUCH. NONE OF PARENT, PURCHASER OR THE COMPANY INTENDS TO PUBLICLY UPDATE OR OTHERWISE PUBLICLY REVISE THE PROJECTIONS SET FORTH ABOVE. THE INDEPENDENT ACCOUNTANTS FOR THE COMPANY, PARENT AND PURCHASER HAVE NOT EXAMINED, REVIEWED OR COMPILED THESE PROJECTIONS AND ACCORDINGLY DO NOT EXPRESS AN OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT TO THEM. 7. The section entitled "THE TENDER OFFER--Source and Amount of Funds" is amended by adding the following paragraph at the end of such section: Parent is currently proceeding with negotiations to issue up to $150 million of unsecured senior subordinated notes pursuant to Rule 144A in an offering arranged by Goldman Sachs & Co., Paribas Corporation and Nesbitt Securities Inc. (the "144A Offering"). It is anticipated that the notes will have a ten year maturity, and it is currently expected that the obligations under the notes will be guaranteed by some or all of Parent's subsidiaries, including the Company. An interest rate has not yet been determined. It is anticipated that the 144A Offering will close simultaneously with the effective time of the Merger. A portion of the proceeds from the 144A Offering is expected to be used to reduce amounts which Parent would otherwise have borrowed pursuant to Facility C. Parent's overall indebtedness for borrowed money is not expected to be greater as a result of the 144A Offering than it would be if the 144A Offering is not completed. Neither the Offer nor the Merger are contingent upon successful completion of the 144A Offering. 8. A new sentence has been added at the end of the section entitled "THE TENDER OFFER--Certain Conditions of the Offer" as follows: "The foregoing notwithstanding, the Purchaser's obligation to pay for or return tendered Shares after termination or withdrawal of the Offer is subject to any applicable rules and regulations of the Commission, including Rule 14e- 1(c) of the Exchange Act." 9. The section entitled "THE TENDER OFFER--Certain Conditions of the Offer" is further amended by adding the following sentence to the end of such section, after the language added by Item 7 above: The waiting period under the HSR Act applicable to the Offer expired at 11:59 p.m., New York City time, on March 6, 1998. Consequently, the HSR condition has been satisfied. 10. In order to give the Purchaser designees a majority of the seats on the Board of Directors of the Company, one or two members of the Special Committee (but not Mr. Massimino, its Chairman) are expected to resign. Mr. Massimino will be granted the authority to address on behalf of the Company any issues that arise under the Merger Agreement between the Company, on the one hand, and Parent and Purchaser, on the other hand. March , 1998 FV-SCC ACQUISITION CORP. S-4 -----END PRIVACY-ENHANCED MESSAGE-----