-----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, IXjF6WTxVgRWjMrBOfdfIU93JH6o6l7SfcbUXqzxNwjgTLWJcUdroRINBhFHe42L xeelQemiHdPCQT8g5XQq4g== 0000912057-97-009709.txt : 19970324 0000912057-97-009709.hdr.sgml : 19970324 ACCESSION NUMBER: 0000912057-97-009709 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970321 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HEALTHDYNE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000900307 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 521756497 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44621 FILM NUMBER: 97560291 BUSINESS ADDRESS: STREET 1: 1255 KENNESTONE CIRCLE CITY: MARIETTA STATE: GA ZIP: 30066 BUSINESS PHONE: 4044234500 MAIL ADDRESS: STREET 1: 1255 KENNESTONE CIRCLE CITY: MARIETTA STATE: GA ZIP: 30066 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INVACARE CORP CENTRAL INDEX KEY: 0000742112 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 952680965 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 899 CLEVELAND ST STREET 2: P O BOX 4028 CITY: ELYRIA STATE: OH ZIP: 44036 BUSINESS PHONE: 2163296000 SC 14D1/A 1 SC 14D1/A - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 5 TO SCHEDULE 14D-1 TENDER OFFER STATEMENT (PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) HEALTHDYNE TECHNOLOGIES, INC. (Name of Subject Company) I.H.H. CORP. INVACARE CORPORATION (Bidders) ------------------------ COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 18139610 (CUSIP Number of Class of Securities) ------------------------ THOMAS R. MIKLICH, ESQ. CHIEF FINANCIAL OFFICER, GENERAL COUNSEL, TREASURER AND CORPORATE SECRETARY INVACARE CORPORATION 899 CLEVELAND STREET ELYRIA, OHIO 44035 TELEPHONE: (216) 329-6000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidders) ------------------------ COPY TO: ROBERT E. SPATT, ESQ. SIMPSON THACHER & BARTLETT 425 LEXINGTON AVENUE NEW YORK, NEW YORK 10017-3954 TELEPHONE: (212) 455-2000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- This Amendment No. 5 amends and supplements the Tender Offer Statement on Schedule 14D-1 filed on January 27, 1997 (as amended, the "Schedule 14D-1") relating to the offer by I.H.H. Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Invacare Corporation, an Ohio corporation (the "Parent"), to purchase all of the outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of Healthdyne Technologies, Inc., a Georgia corporation (the "Company"), and unless and until the Purchaser declares that the Rights Condition as defined in the Offer to Purchase referred to below is satisfied) the associated Preferred Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, as amended, dated as of May 22, 1995, between the Company and SunTrust Bank, Atlanta (formerly Trust Company Bank), as Rights Agent, at a purchase price of $13 per Share (and associated Right), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 27, 1997 (the "Offer to Purchase"), and in the related Letter of Transmittal. Unless otherwise indicated, all capitalized terms used but not defined herein shall have the meanings assigned to them in the Schedule 14D-1. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY Item 3(b) of the Schedule 14D-1 is hereby amended and supplemented as follows: On March 20, 1997, the Parent delivered a notice ("Notice") to the Company pursuant to the Company's By-Laws notifying the Company of the Parent's intent to nominate a full slate of seven nominees for election to the Company's Board of Directors at the Company's upcoming annual meeting of shareholders (the "Annual Meeting") and of Parent's intent to propose a set of corporate governance By-Law amendments for consideration by shareholders at the Annual Meeting. The full text of the Notice is filed herewith as Exhibit (g)(2) and is incorporated herein by reference. The full text of a press release issued by Parent on March 20, 1997 with respect to the Notice is filed herewith as Exhibit (a)(13) and is incorporated herein by reference. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. Items 5(c) of the Schedule 14D-1 is hereby amended and supplemented as follows: See Item 3 above. ITEM 10. ADDITIONAL INFORMATION. Item 10(f) of the Schedule 14D-1 is hereby amended and supplemented as follows: On March 21, 1997, the Parent issued a press release regarding proposed legislation in the Georgia legislature which, if adopted, would, among other things, impose on all publicly held Georgia companies a "staggered board" scheme and eliminate the right of shareholders of such companies to remove directors without cause, unless the board of directors effectively chose not to be governed by such provisions. The full text of the press release is set forth in Exhibit 11(a)(14) and is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. Item 11 is hereby amended and supplemented to add the following: (a)(13) Press Release issued by the Parent on March 20, 1997. (a)(14) Press Release issued by the Parent on March 21, 1997. (g)(2) Notice delivered by the Parent to the Company on March 20, 1997. 2 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. INVACARE CORPORATION By: /s/ THOMAS R. MIKLICH ----------------------------------------- Name: Thomas R. Miklich Title: Chief Financial Officer I.H.H. CORP. By: /s/ THOMAS R. MIKLICH ----------------------------------------- Name: Thomas R. Miklich Title: President Date: March 21, 1997 EXHIBIT INDEX
EXHIBIT PAGE NO. DESCRIPTION NO. - ----------- ---------------------------------------------------------------------------------------------- --------- 11(a)(13) Press Release issued by the Parent on March 20, 1997.......................................... 11(a)(14) Press Release issued by the Parent on March 21, 1997.......................................... 11(g)(2) Nomination Notice delivered by the Parent to the Company on March 20, 1997....................
EX-11.(A)(13) 2 PRESS RELEASE OF PARENT ON 3/20/97 [MACKENZIE PARTNERS LOGO] 156 FIFTH AVENUE NEW YORK, NY 10010 212 929-5500 FAX 212 929-0308 CONTACT: Mark H. Harnett MacKenzie Partners, Inc. (212) 929-5877 FOR IMMEDIATE RELEASE: INVACARE SUBMITS BOARD SLATE AND PROPOSALS TO HEALTHDYNE TECHNOLOGIES FOR ANNUAL MEETING. ELYRIA, OHIO, March 20, 1997 -- Invacare Corporation (NASDAQ/NMS:IVCR) announced today that it has provided notice to Healthdyne Technologies, Inc. (NASDAQ/NMS:HDTC) of its intention to nominate seven director candidates at Healthdyne's upcoming (but as yet unscheduled) 1997 annual meeting. In the notice given to Healthdyne, Invacare also submitted a set of corporate governance bylaw amendments for consideration by shareholders at the annual meeting. The proposed amendments are designed to facilitate the change in the Board and the consummation of Invacare's fully-financed, premium tender offer; prevent manipulation by the current Board of Healthdyne's by-laws and of the size of the Board to be elected at the annual meeting; allow for a special meeting to be called by shareholders owning 10% of the Company's stock; and cause the existing Board to eliminate the Company's "dead-hand" pill provisions. Invacare has submitted the slate and proposals to Healthdyne at this time in order to comply with the Company's advance notification bylaw, which requires notifying Healthdyne prior to Tuesday, March 25, 1997. A. Malachi Mixon, III, Chairman and Chief Executive Officer of Invacare, said, "We are very proud to assemble this exceptionally strong slate of seven well-qualified, independent candidates. Given the Company's refusal to date to sit down and talk to us regarding our fully-financed, premium tender offer, we are forced to take this action now to preserve our rights to seek replacement of the Board and make related proposals at the annual meeting." "We urge the Board of Healthdyne to spare their shareholders the expense and delay of proceeding with a proxy contest, abandon their 'not-for-sale' position and begin discussions with us so that all shareholders can receive immediate value for their investment." Although Healthdyne held last year's annual meeting on May 23 and the previous year's meeting in April, it has yet to announce either a record date or meeting date for the 1997 annual meeting. Thomas R. Miklich, Chief Financial Officer and General Counsel of Invacare, said, "Shortly after we announced our interest in acquiring Healthdyne, their Board of Directors amended their bylaws to eliminate the long-standing provision that set the fourth Tuesday in April as the date for annual meetings unless an alternative date was designated by the Board. Invacare believes that the Healthdyne Board is obligated by its fiduciary duties and Georgia law to hold its annual meeting promptly and intends to request the courts to order the meeting to be held if Healthdyne does not call the meeting on a timely basis." - more - Invacare Corporation March 20, 1997 Page Two The Invacare candidates nominated for election at the annual meeting are Messrs. Nicholas J. DiCicco, Jr., Donald F. Hastings, Jack Kahl, Jr., Ernest Peter Mansour, Jon H. Outcalt, James Allen Rutherford and Bill R. Sanford. Mr. DiCicco has been President and Chief Executive Officer of Midwestern National Life Insurance Company of Ohio since 1975. Mr. Hastings has been Chairman of the Board of the Lincoln Electric Company, a welding products manufacturer, since 1992, and was also Chief Executive Officer of The Lincoln Electric Company from 1992 to 1996. Mr. Kahl has been Chairman of the Board and Chief Executive Officer of Manco, Inc., a company specializing in the production of heavy duty adhesive tape, since 1971. He is currently a member of the Board of Directors of Royal Appliance MFG. Co. and Applied Industrial Technologies, Inc. Mr. Mansour is managing partner of the Cleveland law firm of Mansour, Gavin, Gerlack & Manos Co., L.P.A. Mr. Outcalt has been Chairman of the Board of NCS Healthcare, Inc. since 1986 and Senior Vice President of Alliance Capital Management from 1975 until 1995. He serves on the Boards of Myers Industries, Inc. and Ohio Savings Financial Corp. Mr. Rutherford is Chairman and Managing Director of Wingset Investments Ltd., a technology venture fund. He is a member of the of the Boards of Ciber, Inc. and Symix Systems, Inc. Mr. Sanford is Chairman, President and Chief Executive Officer of STERIS Corporation, an infection prevention and surgical support company. He is a Board member of KeyBank, N.A. Invacare's $13 per share tender offer is currently scheduled to expire at 6:00 p.m. on Monday, March 24, 1997, unless extended. # # # PARTICIPANT INFORMATION Invacare may solicit proxies for Healthdyne's 1997 annual meeting with respect to the above-described nominees and proposals. Besides Invacare and the nominees, other participants in this solicitation may include the following directors and/or executive officers of Invacare; A. Malachi Mixon, III (Chairman, Chief Executive Officer and Director), Gerald B. Blouch (President and Chief Operating Officer), Thomas R. Miklich (Chief Financial Officer, Secretary, General Counsel and Treasurer), J.B. Richey, III (Senior Vice President--Total Quality Management and Director), Donald P. Andersen (Group Vice President--Respiratory Products) and Louis F.J. Slangen (Senior Vice President--Sales & Marketing). Although Salomon Brothers Inc ("Salomon Brothers"), which is acting as dealer manager in connection with the tender offer and serving as financial advisor to Invacare in connection with the proposed acquisition of Healthdyne, does not admit that it or any of its directors, officers, employees or affiliates is a "participant", as defined in Schedule 14A promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or that such Schedule 14A requires the disclosure of certain information concerning them, the following employees of Salomon Brothers may assist Invacare in such a solicitation: Scott Wilson (Managing Director), Wilder Fulford (Managing Director), John Fowler (Managing Director), John Chambers (Director) and Sarah Barnes (Vice President). Invacare Corporation March 20, 1997 Page Three Invacare beneficially owns an aggregate of 600,000 shares of Healthdyne's common stock. Salomon Brothers will receive customary financial advisor and dealer manager fees, reimbursement and indemnification from Invacare in connection with the tender offer and any acquisition by Invacare of Healthdyne. Salomon Brothers will not receive any additional fee for or in connection with assisting in any solicitation of proxies. Salomon Brothers engages in a full range of investment banking, securities trading, market-making and brokerage services for institutional and individual clients. In the ordinary course of its business, Salomon Brothers maintains customary arrangements and effects transactions in the securities of Healthdyne for the accounts of its customers. As a result of its engagement by Invacare, Salomon Brothers has restricted its proprietary trading in the securities of Healthdyne (although it may still execute trades for customers on an unsolicited agency basis). EX-11.(A)(14) 3 PRESS RELEASE OF PARENT ON 3/21/97 NEWS RELEASE [MACKENZIE PARTNERS LOGO] 156 FIFTH AVENUE NEW YORK, NY 10010 212 929-5500 FAX 212 929-0308 CONTACTS: Bruce Hawthorne; Robert P. Bryant King & Spalding (404) 572-4600 Mark H. Harnett MacKenzie Partners, Inc. (212) 929-5877 FOR IMMEDIATE RELEASE: INVACARE FAULTS PROPOSED GEORGIA LAW MANDATING STAGGERRED BOARDS FOR GEORGIA COMPANIES; SUSPECTS HEALTHDYNE TECHNOLOGIES BEHIND PROPOSAL ELYRIA, OHIO, March 21, 1997 - A. Malachi Mixon, III, Chairman and Chief Executive Officer of Invacare Corporation (NASDAQ/NMS:IVCR) made the following comment regarding an anti-takeover proposal introduced yesterday as a last minute amendment to a routine bill in the Georgia legislature. This bill could be passed as early as today and, if adopted, would have a substantial adverse impact on shareholders of Healthdyne Technologies, Inc. (NASDAQ/NMS:HDTC) and other public Georgia companies which elect their entire Board of Directors annually: "We are incredulous to find out that an eleventh hour bill has been introduced that would impose a "staggered board" scheme on all publicly-held Georgia companies. Under a staggered board scheme only one third of a board would stand for election each year, thus entrenching the remaining two thirds. Virtually every state in America requires a shareholder vote to approve a staggered board. The effect of this proposed bill would be to deprive all investors in Georgia publicly traded companies of their right to decide whether they should be able to elect an entire board at each year's meeting. The bill also contains other provisions that would entrench management at the expense of shareholders, including stripping shareholders of their current right to remove directors for any reason." "We strongly suspect that Healthdyne's board and management, who are the most obvious beneficiaries of this bill, are behind this proposal. This proposed bill was introduced on the same day that Healthdyne received Invacare's notice of nomination of directors to replace the entire Healthdyne board of directors at their upcoming annual meeting." "Without this bill Healthdyne's entire Board must stand for re-election at the upcoming 1997 Annual Meeting. This bill, if passed, would entrench the Board well into 1998 and permit the Board to frustrate the wishes of the rightful owners of Healthdyne. Shareholders of Georgia corporations like Healthdyne should continue to have the right to make this basic governance decision, not the state legislature." "We hope the Georgia legislature will recognize this last minute bill for what it is: an attempt to entrench the incumbent management of one company at the expense of shareholders of all Georgia companies." "Shareholders of all Georgia companies who elect their entire Board annually, including Healthdyne, should be outraged at this bill and should contact the Georgia legislature and Governor and the management of their companies as soon as possible to express their opposition." - more - Proposed Georgia Legislation March 21, 1997 page 2 As previously announced, Invacare is proposing a slate of seven director nominees and set of corporate governance bylaw amendments for consideration by shareholders at the annual meeting. The Invacare candidates nominated for election at the annual meeting are Messrs. Nicholas J. DiCicco, Jr., Donald F. Hastings, Jack Kahl, Jr., Ernest Peter Mansour, Jon H. Outcalt, James Allen Rutherford and Bill R. Sanford. The proposed amendments are designed to facilitate the change in the Board and the consummation of Invacare's fully-financed, premium tender offer; prevent manipulation by the current Board of Healthdyne's by-laws and of the size of the Board to be elected at the annual meeting; allow for a special meeting to be called by shareholders owning 10% of the Company's stock; and cause the existing Board to eliminate the Company's "dead-hand" pill provisions. Invacare's $13 per share tender offer is currently scheduled to expire at 6:00 p.m. on Monday March 24, 1997, unless extended. PARTICIPANT INFORMATION Invacare may solicit proxies for Healthdyne's 1997 annual meeting with respect to the above-described nominees and proposals. Besides Invacare and the nominees, other participants in this solicitation may include the following directors and/or executive officers of Invacare: A. Malachi Mixon, III (Chairman, Chief Executive Officer and Director), Gerald B. Blouch (President and Chief Operating Officer), Thomas R. Miklich (Chief Financial Officer, Secretary, General Counsel and Treasurer), J.B. Richey, III (Senior Vice President--Total Quality Management and Director), Donald P. Andersen (Group Vice President--Respiratory Products) and Louis F.J. Slangen (Senior Vice President--Sales & Marketing). Although Salomon Brothers Inc ("Salomon Brothers"), which is acting as dealer manager in connection with the tender offer and serving as financial advisor to Invacare in connection with the proposed acquisition of Healthdyne, does not admit that it or any of its directors, officers, employees or affiliates is a "participant", as defined in Schedule 14A promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or that such Schedule 14A requires the disclosure of certain information concerning them, the following employees of Salomon Brothers may assist Invacare in such a solicitation: Scott Wilson (Managing Director), Wilder Fulford (Managing Director), John Fowler (Managing Director), John Chambers (Director) and Sarah Barnes (Vice President). Invacare beneficially owns an aggregate of 600,000 shares of Healthdyne's common stock. Salomon Brothers will receive customary financial advisor and dealer manager fees, reimbursement and indemnification from Invacare in connection with the tender offer and any acquisition by Invacare of Healthdyne. Salomon Brothers will not receive any additional fee for or in connection with assisting in any solicitation of proxies. Salomon Brothers engages in a full range of investment banking, securities trading, market-making and brokerage services for institutional and individual clients. In the ordinary course of its business, Salomon Brothers maintains customary arrangements and effects transactions in the securities of Healthdyne for the accounts of its customers. As a result of its engagement by Invacare, Salomon Brothers has restricted its proprietary trading in the securities of Healthdyne (although it may still execute trades for customers on an unsolicited agency basis). # # # EX-11.(G)(2) 4 NOTICE March 20, 1997 To: Secretary of Healthdyne Technologies, Inc. 1255 Kennestone Circle Marietta, Georgia 30066 NOTICE OF BUSINESS TO BE BROUGHT BEFORE THE 1997 ANNUAL MEETING OF SHAREHOLDERS OF HEALTHDYNE TECHNOLOGIES, INC. I. INTRODUCTION Invacare Corporation, an Ohio corporation, is the beneficial owner of 600,000 shares of common stock ("Common Stock"), par value $0.01 per share, of Healthdyne Technologies, Inc., a Georgia corporation (the "Company"), representing in the aggregate approximately 4.7% of the Company's outstanding Common Stock (based on the most recent information provided to Invacare by the Company). Invacare is the record owner of 100 shares of Common Stock. This notice (the "Notice") of the intention of Invacare to make nominations at and bring business before the 1997 Annual Meeting of Shareholders of the Company (including any adjournment or postponement thereof) (the "Annual Meeting") is being made pursuant to and in reliance on Article I, Section 6 of the Bylaws of the Company (the "Notice Requirements"), as such Bylaws were provided to Invacare by the Company on February 5, 1997. If the Bylaws have been changed from the form referenced above, Invacare hereby demands that the Company promptly notify it of any such changes. It is Invacare's current intention to appear in person and/or by proxy at the Annual Meeting to (i) nominate the Invacare Nominees (as defined below) and (ii) introduce the other matters which are briefly described in Section III below for consideration by the 2 shareholders of the Company. The address of Invacare is 899 Cleveland Street, Elyria, Ohio 44035. A wholly owned subsidiary of Invacare, I.H.H. Corp. ("I.H.H."), has commenced an offer to purchase all of the outstanding Common Stock and the associated Preferred Stock Purchase Rights (the "Rights") at a purchase price of $13 per share of Common Stock (and associated Right), net to the seller in cash without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 27, 1997 and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The purpose of the Offer is to acquire control of, and the entire equity interest in, the Company. Invacare intends to propose, and to seek to have the Company consummate as soon as practicable after consummation of the Offer, a merger or similar business combination (the "Merger") with I.H.H. or another direct or indirect subsidiary of Invacare, pursuant to which each then outstanding share of Common Stock (other than shares of Common Stock held by Invacare, I.H.H. or any other wholly owned subsidiary of Invacare, shares of Common Stock held in the treasury of the Company and shares of Common Stock held by shareholders who properly exercise appraisal rights under Georgia law) would be converted into the right to receive in cash the price per share of Common Stock paid by I.H.H. pursuant to the Offer. Invacare desires to propose the following business at the Annual Meeting in order to facilitate the Offer and the Merger. A description of the background of the Offer is contained in Invacare's Tender Offer Statement on Schedule 14D-1 which was delivered to the Company on January 27, 1997, and is incorporated herein by reference. 3 II. NOMINATION OF DIRECTORS At the Annual Meeting, Invacare intends to nominate the seven (7) individuals named in Appendix I hereto (the "Invacare Nominees") for election to the Board of Directors of the Company. Based on the current size of the Board of Directors on the date hereof as reflected in the Company's most recent public filings, the slate of Invacare Nominees would, after its election, constitute the entire Board of Directors of the Company. All of the Invacare Nominees are committed to taking all such actions necessary or appropriate (subject to any fiduciary duties they would have as directors) to approve and effectuate the consummation of the Offer and the Merger. Set forth in Appendix I attached hereto, which is incorporated herein by reference, is the additional information required to be provided under the Notification and Proposal Requirements with respect to the Invacare Nominees. Each of the Invacare Nominees has consented in writing to being named in the proxy statement relating to his nomination and to serving as a director of the Company if elected; copies of consents of the Invacare Nominees are available from Invacare upon request. If the number of members of the Board of Directors is or becomes (by action of the Board or otherwise) greater than seven (7), Invacare hereby demands that the Company promptly notify it of such increase and reserves the right to nominate a number of additional Invacare Nominees so that the total number of Invacare Nominees is equal to the increased number of members of the Board of Directors. Invacare undertakes to provide promptly to the Company the information required with respect to any such additional nominees following the receipt by Invacare of notice of such increase. If, for any reason, any Invacare Nominee named herein is unable to serve as a director of the Company, Invacare reserves the right to 4 replace such Invacare Nominee and undertakes to provide the Company promptly the information required with respect to any such replacement nominee. III. SHAREHOLDER PROPOSALS Invacare currently intends to introduce at the Annual Meeting shareholder proposals (the "Shareholder Proposals") for consideration by the shareholders of the Company which are intended to facilitate the Offer and the Merger, among other things, by (i) ensuring that the shareholders of the Company will have the opportunity to elect the Invacare Nominees as all of the directors of the Company, or any lesser proportion as the shareholders should desire, (ii) limiting the authority of the Board of Directors of the Company to impose or permit to exist certain restrictions on the ability of any future Board to exercise its power and authority, including certain restrictions with respect to amending the Rights plan or redeeming the Rights, (iii) preventing the Board of Directors of the Company from taking certain actions with respect to the Bylaws without the approval of the shareholders of the Company and (iv) increasing the ability of the shareholders of the Company to demand special meetings in order to exercise oversight of the Board of Directors of the Company, change the composition of the Board of Directors and/or take other appropriate shareholder actions from time to time between Annual Meetings, including the following: (1) A proposal, to be considered prior to the election of directors at the Annual Meeting, to amend the Bylaws to fix the maximum number of directors of the Company at seven (7) and to provide that such Bylaw may not be further amended, or any new Bylaw provision which is in any manner inconsistent therewith be adopted, without the approval of the shareholders; (2) A proposal, to be considered prior to the election of directors at the Annual Meeting, to amend the Bylaws to provide that the Board of Directors shall have no authority to take any action, or omit to take any action, the effect of which action or omission would be to impose, or permit to continue or be imposed, any limitation (directly or indirectly, and including any such limitation imposed by means of a requirement for concurrence or other action by any particular 5 director or particular type of director), resulting from or becoming operative in light of in whole or in part, a change in the composition of the Board of Directors (whether or not under specified circumstances), on the exercise by any future Board of Directors of any power or authority that it would otherwise have, including any such limitation on the ability of a Board of Directors to redeem or amend any shareholder rights plan of the Company which limitation results from or becomes operative in light of, in whole or in part, a change in the composition of the Board of Directors (whether or not under specified circumstances). In particular, but not in limitation, such amendment will also specifically provide that the incumbent Board of Directors will be in violation of the Bylaws if such Board, including any requisite group of "continuing directors", fails to immediately take all necessary action (prior to the consideration of the election of directors at the Annual Meeting) to amend any shareholder rights plan of the Company to remove all such limitations; Such amendment will further provide that such Bylaw may not be amended, or any new Bylaw provision which is in any manner inconsistent therewith be adopted, without the approval of the shareholders; (3) A proposal to repeal each and every provision of the Bylaws of the Company or amendments thereto which was adopted on or after June 30, 1996 and prior to the date of adoption of such proposal, other than those provisions which were fully disclosed and properly reflected in the public filings made by the Company with the Securities and Exchange Commission prior to the date of this Notice and those provisions which were duly approved by the shareholders; and to provide that, without the approval of the shareholders, the Board of Directors may not thereafter amend any section of the Bylaws affected by such repeal or adopt any new Bylaw provision in a manner which serves to reinstate any repealed provision or any similar provision; (4) A proposal to amend the Bylaws to (a) give the holders of 10% or more of the outstanding Common Stock the right to demand a special meeting and (b) provide definitive procedures with respect to such meeting, including (i) setting the date of such meeting, (ii) setting record dates in connection with such demand and meeting, (iii) giving notice of such meeting and (iv) establishing the business to be conducted at such meeting; and to provide that such Bylaw may not be further amended, or any new Bylaw provision which is in any manner inconsistent therewith be adopted, without the approval of the shareholders; and (5) Other proposals as are necessary or desirable in furtherance of the foregoing. IV. GENERAL If this Notice shall be deemed for any reason by a court of competent jurisdiction to be ineffective with respect to the nomination of one or more of the Invacare Nominees at the Annual Meeting or the proposal of one or more of the Shareholder 6 Proposals, this Notice shall continue to be effective with respect to all other Invacare Nominees and/or Shareholder Proposals and as to any suitable replacement nominees selected or proposals made by Invacare. Invacare undertakes to provide the information required with respect to any such replacement nominees or proposals as soon as practicable following the receipt by Invacare of notice that this Notice is so ineffective. While it is Invacare's present intention to nominate the Invacare Nominees and make the Shareholder Proposals at the Annual Meeting, Invacare also reserves the right, in light of changed circumstances existing at the time, not to nominate, one or more of the Invacare Nominees and/or not to make one or more of the Shareholder Proposals, each of which nominations and proposals are individual and independent of the others. Except as disclosed elsewhere herein, there are no arrangements or understandings between Invacare and any other person or persons in connection with the nominations and proposals made hereby other than Invacare's retention of various financial advisors, attorneys, accountants, proxy solicitors and other professionals on customary terms. This Notice complies with the Notice Requirements and all other applicable requirements. If, for any reason, the Company anticipates that any director or officer of the Company or any chairman of the Annual Meeting may determine that this Notice (or any part of this Notice) was not properly made in accordance with the Notice Requirements or any other applicable requirements, Invacare hereby demands that you provide Invacare prompt notice to that effect sufficiently in advance of the Annual Meeting so that any claimed deficiency in this Notice may be corrected. 7 IN WITNESS WHEREOF, Invacare Corporation has hereby caused this Notice to be executed on the date first written above by its duly authorized officer. INVACARE CORPORATION /s/ Thomas R. Miklich _______________________________ Name: Thomas R. Miklich Title: Chief Financial Officer APPENDIX I INFORMATION CONCERNING THE INVACARE NOMINEES To the knowledge of Invacare: 1. Set forth in the table below is the name, age and principal occupations and employment during the past five years of each of the Invacare Nominees and the name and principal business of any corporation or other organization in which such occupations and employment were carried on, and the present principal business address and public directorships of each of the Invacare Nominees. NAME, AGE AND PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE PRINCIPAL BUSINESS ADDRESS DURING LAST FIVE YEARS; CURRENT DIRECTORSHIPS Nicholas J. DiCicco, Jr, 64. . President and Chief Executive Officer of 6650 Beta Drive Midwestern National Life Insurance Company of Mayfield Village, Ohio 44143 Ohio since 1975. Donald F. Hastings, 68 . . . . Chairman, The Lincoln Electric Company, a 22801 St. Claire Avenue welding products manufacturer, since 1992. Cleveland, Ohio 44117 Chief Executive Officer of The Lincoln Electric Company from 1992 to 1996.President and Chief Operating Officer of The Lincoln Electric Company from 1987 to 1992. Jack Kahl, Jr., 56 . . . . . . Chairman of the Board and Chief Executive 32150 Just Imagine Drive Officer of Manco, Inc., a company Avon, Ohio 44011-1355 specializing in the production of heavy-duty adhesive tape, since 1971. Currently a member of the Board of Directors of Royal Appliance MFG. Co. and Applied Industrial Technologies, Inc. Ernest Peter Mansour, 66 . . . Attorney and Managing Partner of Mansour, 55 Public Square, Suite 2150 Gavin, Gerlack & Manos Co., L.P.A., a Cleveland, Ohio 44113 Cleveland law firm, since 1981. Jon H. Outcalt, 60 . . . . . . Chairman of the Board of NCS HealthCare, Inc. 3201 Enterprise Parkway, #220 since 1986. Senior Vice President of Beachwood, Ohio 44122 Alliance Capital Management L.P., a money management firm, from 1975 to 1995. Currently a member of the Board of Directors of Myers Industries, Inc. and Ohio Savings Financial Corp. I-2 NAME, AGE AND PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE PRINCIPAL BUSINESS ADDRESS DURING LAST FIVE YEARS; CURRENT DIRECTORSHIPS James Allen Rutherford, 51 . . Chairman and Managing Director of Wingset 15 S. High St. Investments Ltd. and President of Wingset, P.O. Box 166 Inc., technology venture funds, from 1993 to New Albany, Ohio 43054 present. Former Chairman of Countrysport, Inc., a sports book publisher, from 1994 to 1996. Retired from position of Chairman, Goal Systems International, Inc., a software vending company, in 1992. Currently a member of the Board of Directors of Ciber, Inc. and Symix Systems, Inc. Bill R. Sanford, 53 . . . . . Chairman of the Board, President and Chief 5960 Heisley Road Executive Officer of STERIS Corporation, an Mentor, Ohio 44060 infection prevention and surgical support company, since 1987. Currently a member of the Board of Directors of KeyBank, N.A. 2. Set forth below is the name and residence address of each of the Invacare Nominees. Nicholas J. DiCicco, Jr. 1185 Foxville Drive P.O. Box 636 Gates Mills, Ohio Donald F. Hastings 3205 Fox Hollow Drive Pepper Pike, Ohio 44124 Jack Kahl, Jr. 391 Darby's Run Bay Village, Ohio 44140 Ernest Peter Mansour 22525 Shaker Boulevard Shaker Heights, Ohio 44122 Jon H. Outcalt 14505 Hartwell Trail Novelty, Ohio 44072 James Allen Rutherford 480 Delegate Drive Columbus, Ohio 43235 Bill R. Sanford 4745 Sherwin Road Willoughby, Ohio 44094 I-3 3. Within the past ten years, none of the Invacare Nominees has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors). 4. Other than as disclosed herein, none of the Invacare Nominees has any substantial interest, direct or indirect, by security holdings or otherwise, in any matter to be acted upon at the Annual Meeting. As a group, the Invacare Nominees own in the aggregate less than 1/2% of the total number of shares of Invacare common stock outstanding as of March 20, 1997. 5. As of the close of business on the date of this notice, Invacare was the beneficial owner of 600,000 shares of Common Stock, representing approximately 4.7% of the outstanding Common Stock (based on the most recent information provided to Invacare by the Company). No Invacare Nominee is the beneficial or record owner, directly or indirectly, of any securities of the Company, or any subsidiary of the Company, nor has any Invacare Nominee purchased or sold any securities of the Company within the past two years. Other than as otherwise set forth herein, no other associate of the Invacare Nominees owns beneficially, directly or indirectly, any securities of the Company, any parent of the Company or any subsidiary of the Company. None of the Invacare Nominees is or has been within the past year a party to any contract, arrangement or understanding with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies. 6. Other than as disclosed herein, none of the Invacare Nominees, any of their associates or any immediate members of their family has or will have any direct or indirect material interest in any transaction or series of similar transactions since January 1, 1996 or any currently projected transaction or series of similar transactions to which the Company or any of its subsidiaries was or is to be a party in which the amount involved exceeds $60,000 or any relationship described in Item 404(b) of Regulation S-K, and none of the Invacare Nominees or any associate of the Invacare Nominees has any arrangement or understanding with any person (A) with respect to future employment by the Company or its affiliates or (B) with respect to any future transactions to which the Company or any of its affiliates will or may be a party except as otherwise provided herein. None of the Invacare Nominees or any associate of the Invacare Nominees has been indebted to the Company or its subsidiaries at any time since January 1, 1996, the beginning of the Company's last fiscal year, in an amount in excess of $60,000. From time to time, the law firm of Mansour, Gavin, Gerlack & Manos Co., L.P.A., of which Mr. Mansour is a partner, has provided legal services to Invacare and its affiliates and is expected to do so in the future. 7. Upon the filing by Invacare with the Commission of a definitive proxy statement with respect to the election of the Invacare Nominees to the Board of Directors of the Company, Invacare has agreed to pay each Invacare Nominee a fee in the amount of $10,000. Invacare has also agreed to indemnify each of the Invacare Nominees against any expenses (including legal fees) and liabilities arising out of participation in the proxy solicitation. According to the Company's public filings with the Commission, if elected as directors of the Company, each Invacare Nominee would receive from the Company a director's fee of $3,000 per quarter, plus $1,000 for each Board meeting and $750 for each committee meeting attended, and would be reimbursed for any travel expense incurred. Invacare also believes that, if elected, the Invacare Nominees would be indemnified by the Company to the extent I-4 indemnification is provided in the Company's Articles of Incorporation and By-Laws. Invacare disclaims any responsibility for the accuracy of the foregoing information which has been extracted from the Company's public filings. 8. There are no material proceedings in which any of the Invacare Nominees or any of their associates is a party adverse to the Company or any of its subsidiaries, or proceedings in which such nominees or associates have a material interest adverse to the Company or any of its subsidiaries. 9. No occupation or employment carried on by any of the Invacare Nominees in the past five years has been with the Company or any corporation or organization which is or was a subsidiary or other affiliate of the Company and none of the Invacare Nominees have ever served on the Company's Board of Directors. 10. Other than as disclosed herein, there are no arrangements or understandings between any of the Invacare Nominees and any other party pursuant to which any such nominee was or is to be selected as a director of the Company. 11. There exist no family relationships among the Invacare Nominees or between any of the Invacare Nominees and any director or executive officer of the Company. 12. During the last five years none of the Invacare Nominees were involved in any of the events described in Item 401(f) of Regulation S-K. 13. None of the Invacare Nominees or any of their associates has received any cash compensation, cash bonus, deferred compensation, compensation pursuant to plans, or other compensation from, or in respect of services rendered on behalf of, the Company, or is subject to any other arrangement described in Item 402 of Regulation S-K. 14. Each of the Invacare Nominees is a citizen of the United States. -----END PRIVACY-ENHANCED MESSAGE-----