-----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, MRIAxBHorTj10uETaXrF9QSvjEdt8dwcEG7meLEQwJdyo+11GqnJsQJ0KZg7sehY rCBUBcOrwHhYKBQKhczriw== 0000912057-97-021640.txt : 19970625 0000912057-97-021640.hdr.sgml : 19970625 ACCESSION NUMBER: 0000912057-97-021640 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970624 SROS: NASD GROUP MEMBERS: I.H.H. CORP. GROUP MEMBERS: INVACARE CORP 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: 97628555 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. 22 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. 22 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 $15 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, as amended and supplemented by the Supplements thereto dated April 4, 1997 and June 6, 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. The Schedule 14D-1 is hereby amended and supplemented as follows: On June 16, 1997, the day before the hearing in the Defensive Tactics Litigation on the various motions regarding the Company's "dead-hand pill" restrictions, the Company filed a Second Counterclaim (the "Second Counterclaim") in the Defensive Tactics Litigation alleging that certain of the Parent's sales representatives had told potential oxygen concentrator customers that the acquisition of the Company was a "done deal" and that the Parent would close the Company's Marietta, Georgia oxygen concentrator manufacturing facility and discontinue the Company's line of oxygen concentrators. The Second Counterclaim asserts claims for unfair business practices as well as violations of federal securities laws based on the claim that the Parent's and the Purchaser's tender offer and proxy materials do not disclose such alleged "plans." A copy of the Second Counterclaim is set forth in Exhibit 11 (g) (16). On June 20, 1997, the Parent and the Purchaser filed a Motion to Strike the Second Counterclaim on the grounds that the Company failed to seek or obtain leave from the Court prior to filing the Second Counterclaim. On June 23, 1997, the Parent and the Purchaser filed an Answer to the Second Counterclaim denying the allegations and reaffirming that, as fully disclosed in all relevant materials, the Parent has no present intention to close the Marietta facility or decrease manufacturing employment of the Company. A copy of the Answer is set forth in Exhibit 11 (g) (17). On June 23, 1997, the Parent issued a press release announcing that the Purchaser had extended the period during which the Offer will remain open to 6:00 p.m., New York City time, on Friday, August 1, 1997, unless further extended in the manner described in the Offer to Purchase. The full text of the press release is set forth in Exhibit 11(a) (38) and is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(38) Press Release issued by the Parent on June 23, 1997. (g)(16) Second Counterclaim filed by the Company on June 16, 1997. (g)(17) Answer to Second Counterclaim filed by the Parent and the Purchaser on June 23, 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: June 23, 1997 EXHIBIT INDEX
EXHIBIT PAGE NO. DESCRIPTION NO. - ------------------- -------------------------------------------------------------------------------------- --------- Exhibit 11(a)(38) Press Release issued by the Parent on June 23, 1997................................... Exhibit 11(g)(16) Second Counterclaim filed by the Company on June 16, 1997............................. Exhibit 11(g)(17) Answer to Second Counterclaim filed by the Parent and the Purchaser on June 23, 1997..................................................................................
EX-11.(A)(38) 2 EX.11(A)(38) PRESS RELEASE DATED 6/23/97 Exhibit 11(a)(38) [LETTERHEAD OF MACKENZIE PARTNERS, INC.] FOR IMMEDIATE RELEASE Contact: Mark H. Harnett MacKenzie Partners, Inc. (212) 929-5877 INVACARE CORPORATION ANNOUNCES EXTENSION OF TENDER OFFER FOR HEALTHDYNE TECHNOLOGIES Elyria, Ohio -- (June 23, 1997) -- Invacare Corporation (NASDAQ/NMS:IVCR) announced today that its wholly owned subsidiary I.H.H. Corp. has extended its $15 per share tender offer to purchase all outstanding shares of common stock of Healthdyne Technologies, Inc. (NASDAQ/NMS:HDTC) until 6:00 p.m., New York City time, Friday, August 1, 1997, unless further extended in the manner described in the Offer to Purchase dated January 27, 1997, as amended and supplemented by the Supplements thereto dated April 4, 1997 and June 6, 1997. The offer had been scheduled to expire on June 20, 1997. As of June 20, 1997, 3,902,107 shares of Healthdyne common stock had been tendered in the offer, which, together with the 600,000 shares owned by Invacare, constitutes over 35% of outstanding Healthdyne common stock, based on the most recent information provided by Healthdyne. As previously announced, on June 4, 1997, Invacare raised its offer for Healthdyne to $15 per share, representing its best and final price. At that time, Invacare emphasized that, absent a negotiated transaction in which Healthdyne management substantiated additional value, Invacare did not intend to raise its offer again. A. Malachi Mixon, III, Invacare's Chairman and Chief Executive Officer, said, "We are pleased with the growing shareholder support our offer is receiving. Thirty-five percent represents the highest level to date, which is particularly impressive in light of the fact that significant conditions to the tender offer remain to be satisfied. As the July 30 annual meeting approaches and with Healthdyne continuing to stonewall, we are confident that even more shareholders will express their support for our $15 per share premium offer through tendering their shares and voting to elect a new board of directors." Invacare's $15 per share tender offer represents a premium of approximately 70% over Healthdyne's $8.88 stock price on the trading day before Invacare made its initial acquisition proposal. # # # PARTICIPANT INFORMATION Invacare may solicit proxies for Healthdyne's 1997 annual meeting with respect to its previously announced 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, Chief Operating Officer and Director), Thomas R. Miklich (Chief Financial Officer, Secretary, General Counsel and Treasurer), Joseph B. Richey, II (Senior Vice President--Total Quality Management and Director), Donald P. Andersen (Group Vice President--Respiratory - MORE - Invacare/Healthdyne June 23, 1997 Page Two 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 connectionwith 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)(16) 3 SECOND COUNTERCLAIM Exhibit 11(g)(16) 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. : SECOND COUNTERCLAIM Counterclaim plaintiff Healthdyne Technologies, Inc. ("Healthdyne"), by its undersigned counsel, alleges upon knowledge with respect to itself and its acts and upon information and belief as to all other matters, as follows: INTRODUCTION 1. The claims alleged herein arise out of Invacare Corporation's ("Invacare") secret campaign to spread misinformation to Healthdyne's customers in order to damage Healthdyne's second quarter 1997 sales results. Invacare is carrying out this 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. ss. 10-1-370 through 375, tortious interference with Healthdyne's business relations and prospective business opportunities; and violations of federal securities laws. 2. Invacare has conducted its campaign of misinformation on two fronts. In dealing with Healthdyne's customers, Invacare has stated that its hostile acquisition of Healthdyne is a "done deal." Invacare has told Healthdyne's customers that Invacare intends to close Healthdyne's Marietta, Georgia facility that manufactures oxygen concentrators and will discontinue Healthdyne's line of oxygen concentrators. Invacare's sales representatives have made these misrepresentations in order to persuade Healthdyne's customers to order Invacare's oxygen concentrators instead of Healthdyne's oxygen concentrators. 2 3. Invacare tells a very different story to Healthdyne's stockholders. In its Schedule 14D-1 Tender Offer Statement (the "Offer Statement"), which was filed with the Securities and Exchange Commission (the "SEC") on January 27, 1997 and has subsequently been amended several times, Invacare states that it has made no decisions regarding its plans for Healthdyne. Invacare represents that such decisions will await Invacare's access to Healthdyne's books and records. Invacare omits any reference to its intention to close the Marietta, Georgia facility and discontinue the line of concentrator products. Moreover, Invacare does not disclose its campaign designed to damage Healthdyne's sales of oxygen concentrators. Invacare similarly omits all of this information from its Preliminary Proxy Statement (the "Proxy Statement"), which was filed with the SEC on April 4, 1997. 4. Invacare's objective in waging this two front campaign of deception is clear. Invacare wants to artificially depress Healthdyne's second quarter 1997 earnings, which will be announced just prior to Healthdyne's July 30, 1997 annual shareholders meeting. As a result, Healthdyne's shareholders may misperceive the value of their shares when they vote on July 30, 3 1997. At the meeting, the shareholders will in essence be deciding whether to sell their shares at the price Invacare is offering or to continue to hold their shares and participate in Healthdyne's continued growth and greatly improving profitability. Invacare's secret campaign to damage Healthdyne's second quarter results is designed to cause the shareholders to make their decision on the basis of inaccurate information. 5. By its illegal conduct, Invacare is causing, and, unless enjoined, will continue to cause serious irreparable injury to Healthdyne, its shareholders, and the investing public. Through this first amended counterclaim, Healthdyne seeks to recover from Invacare for the injury, loss and damage caused by Invacare's tortious conduct and to enjoin Invacare from further deception of Healthdyne's customers and shareholders. JURISDICTION 6. The claims based on Invacare's violation of federal securities laws arise under Sections 14(a), 14(d), and 14(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. ss. ss. 78(a) and 78(e) and the rules and regulations promulgated pursuant thereto. This Court has subject matter jurisdiction over these claims based on Section 29 of the Exchange Act, 15 U.S.C. 4 ss. 28aa; and 28 U.S.C. ss. 1331. The matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. 7. This Court has subject matter jurisdiction over the claims based on Invacare's violations of Georgia law based on 28 U.S.C. ss. 1332(a) and 28 U.S.C. ss. 1367(a). BACKGROUND Invacare's Deception of Healthdyne's Customers 8. Invacare is engaging in a nationwide campaign of providing false and misleading information to Healthdyne's customers in order to persuade the customers not to purchase Healthdyne's oxygen concentrator products. Invacare directly competes with Healthdyne in the market for oxygen concentrators. Specific examples of Invacare's conduct are discussed below. 9. Several times within the last 30 days, Invacare's sales representative in the Memphis, Tennessee region, Carl Tisdale, has approached at least three longstanding customers of Healthdyne and given them false and misleading information about Healthdyne in order to induce them not to order Healthdyne's concentrator products. Upon information and belief, Invacare's representative has engaged in similar conduct with all or 5 nearly all of Healthdyne's customers in the region. 10. Specifically, Invacare's sales representative has falsely told Healthdyne's customers that Invacare's hostile acquisition of Healthdyne is a "done deal." He has said that Invacare plans to close Healthdyne's Marietta, Georgia facility that manufacturers oxygen concentrators and will discontinue Healthdyne's line of oxygen concentrator products. 11. Invacare intentionally made these false statements to Healthdyne's customers in order to damage Healthdyne's sales of oxygen concentrators. Invacare is well aware that its hostile acquisition of Healthdyne is not a "done deal." Invacare has not met the conditions of its tender offer and may never do so. Nor has Invacare announced an intention to discontinue Healthdyne's line of oxygen concentrators if its hostile takeover succeeds. 12. Invacare's sales representative in San Antonio, Texas, Larry Ropka, has engaged in similar activity. Mr. Ropka has contacted Healthdyne's customers in the San Antonio region and told them that Invacare's acquisition of Healthdyne is imminent and that after the acquisition Healthdyne's line of oxygen concentrators will become "obsolete." 6 13. Based on these identical incidents in widespread geographic areas, Healthdyne avers that Invacare is disparaging Healthdyne's business to all of its customers nationwide. 14. Invacare's representatives are making these false statements in order to mislead or confuse Healthdyne's customers into not ordering Healthdyne's concentrator products. As a direct result of Invacare's unlawful conduct, some of Healthdyne's customers have not ordered Healthdyne's concentrators. 15. For example, in San Antonio, a long standing Healthdyne customer had placed an order for 50 oxygen concentrators with a Healthdyne representative. After the customer had made the order, Invacare's representative contacted the customer and provided the false and misleading information described above. The customer thereafter canceled the order for 50 Healthdyne oxygen concentrators. The customer told Healthdyne's representative that it was canceling the order and placing it instead with Invacare (at a higher price per concentrator than the Healthdyne order) because of the statements made by Invacare's representative. 16. Upon information and belief, Healthdyne avers that it has lost other orders for oxygen concen- 7 trators as a result of Invacare's unlawful conduct. Invacare's Deception of Healthdyne's Shareholders 17. Invacare has simultaneously misled Healthdyne's shareholders and the investing public by failing to disclose its campaign to unlawfully reduce Healthdyne's sales of oxygen concentrators and its intention to discontinue Healthdyne's line of oxygen concentrators. 18. Invacare's Offer Statement contains an incomplete and misleading description of Invacare's plans for Healthdyne if it successfully acquires Healthdyne as a result of its hostile takeover. The Offer Statement provides: Except as described in the Offer to Purchase, none of the Purchaser, the Parent nor, to the best knowledge of the Purchaser and the Parent, any of the persons listed on Schedule I have any present plans or proposals that would relate to or result in an extraordinary corporate transaction such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries or a sale or other transfer of a material amount of assets of the Company or any of its subsidiaries; any material change in the capitalization or dividend policy of the Company or any other material --------------------- change in the Company's corporate structure or business or the composition ------------------------------------------------------- of its Board of Directors or management. Offer Statement at 39-40 (emphasis added). 8 19. The Offer Statement intentionally omits Invacare's plan to close Healthdyne's Marietta, Georgia facility that manufactures concentrators and to discontinue Healthdyne's line of oxygen concentrators. Invacare has not disclosed this information in any other publicly available document, including Invacare's Proxy and the numerous press releases Invacare has made regarding Healthdyne since it publicly announced its hostile takeover on January 10, 1997. 20. In fact, Invacare's chairman, A. Malachi Mixon III, has repeatedly been quoted in the Atlanta Journal and Constitution stating that Invacare plans to grow, not cut, the company's local operations. See Atlanta Journal and --- Constitution, March 27 and 28, 1997. 21. The Offer Statement, the Proxy, and Invacare's press releases also omit any reference to Invacare's conduct relating to its effort to reduce Healthdyne's sales of oxygen concentrators by making false and disparaging statements to Healthdyne's customers. These omissions are particularly significant in light of the importance Healthdyne's second quarter 1997 results will have on Healthdyne's shareholders' decisions regarding Invacare's proxy contest and tender offer. 9 22. Healthdyne's second quarter results, which will be available in mid July 1997, will likely be the most significant fact in Healthdyne's shareholders' consideration of Invacare's hostile offer and proxy contest. In the first quarter of 1997, Healthdyne achieved spectacular earnings growth, exceeding analysts' expectations. Invacare fears that similar results for the second quarter of 1997 will cause Healthdyne's shareholders to fully recognize the value of their shares and thereby foreclose Invacare's attempt to acquire Healthdyne at a grossly inadequate bargain price. 23. In order to prevent a fully informed shareholder vote, Invacare first tried to force an early meeting of the shareholders of Healthdyne. Invacare filed a motion for preliminary injunction seeking to compel the annual meeting by June 30, 1997, which would have caused the meeting to be held just before the second quarter results became available. 24. Invacare simultaneously tried to cast doubt on Healthdyne's outstanding first quarter results by making false statements about the reasons for Healthdyne's success. Invacare's Chairman, A. Malachi Mixon, III, publicly released a letter dated March 31, 1997 to Healthdyne's Chairman, Parker H. Petit, that in- 10 cludes the following false statement: "We have heard in the marketplace that Healthdyne may have taken extraordinary actions meant to provide a short-term boost to first quarter earnings." He described Healthdyne's outstanding results as a "window dressed quarter." 25. In part because of Invacare's and Mixon's false, insulting and self- serving attacks on Healthdyne's outstanding first quarter results, Healthdyne's board of directors scheduled the annual meeting of shareholders for July 30 in order to ensure that Healthdyne's second quarter results would be available to shareholders. The second quarter results will demonstrate to the shareholders the continued progress of Healthdyne's strategic plan. Because its attempt to force a premature shareholders meeting was meritless, Invacare consented to the July 30 meeting date. 26. Invacare now seeks to directly damage Healthdyne's second quarter results through its campaign of deception and misinformation aimed at Healthdyne's customers. Invacare's conduct is designed to have a material effect on Healthdyne's second quarter results. Invacare thus seeks to manipulate the shareholders' perception of the value of their shares and the market price of Healthdyne's stock. By its secret actions, Invacare 11 intends to persuade Healthdyne's shareholders to accept its proxy solicitation and tender into its offer. COUNT I (For violation of Section 14(m) of the 1934 Act and Rule 14a-9 promulgated thereunder) 27. Healthdyne realleges and reincorporates by reference each and every allegation contained in the foregoing paragraphs. 28. Section 14(a) of the Exchange Act provides that it is unlawful to use the mails or any means or instrumentality of interstate commerce to solicit proxies in contravention of any rule promulgated by the SEC. 15 U.S.C. ss. 78n(a). 29. Rule 14a-9 provides in pertinent part: "No solicitation subject to this regulation shall be made by means of any ... communication, written or oral, containing any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading ..." 17 C.F.R. ss. 240.14a-9. Invacare has violated and threatens to continue to violate Section 14(a) and Rule 14a-9. 12 30. The Preliminary Proxy Statement and the Offer Statement constitute communications made under circumstances reasonably calculated to result in the procurement of votes from Healthdyne shareholders in the proxy contests relating to the election of directors to serve on the Healthdyne Board and Invacare's Proposed Amendments to the Healthdyne Bylaws. 31. The intentional omissions of material facts in these documents are designed to predispose Healthdyne's shareholders to vote in favor of the Invacare Nominees and Invacare's Proposed Bylaws at the Annual Meeting of Healthdyne Shareholders. Such statements are continuing and unless enjoined will continue to improperly influence Healthdyne's shareholders to vote in favor of the Invacare Nominees and Invacare's Proposed Bylaws. 32. As a result of Invacare's unlawful conduct, Healthdyne's shareholders and the investing public have been deprived of the truthful and complete information required to be disclosed by SEC Rule 14a-9 and are being asked to make important voting decisions without the benefit of federally mandated disclosure. If the dissemination of this misinformation is allowed to continue, Healthdyne's shareholders will be irreparably 13 harmed as they will be deprived of the right to exercise meaningfully their voting franchise. 33. The omissions in the Preliminary Proxy and Offer Statement will continue to have a material effect on the voting power relating to the Proxy Contest. 34. Healthdyne has no adequate remedy at law. COUNT II (For violation of Section 14(d) of the 1934 Act and rules and regulations promulgated thereunder) 35. Healthdyne realleges and incorporates by reference each and every allegation contained in the foregoing paragraphs. 36. Section 14(d) provides in pertinent part: "It shall be unlawful for any person, directly or indirectly, by use of the mails or by any means or instrumentality of interstate commerce or of any facility of a national securities exchange or otherwise, to make a tender offer ... unless ... such person has filed with the Commission a statement containing ... such additional information as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors." 37. Rule 14d-3 provides in pertinent part: "no bidder shall make a tender offer ... unless ... such 14 bidder: (1) Files with the Commission ten copies of a Tender Offer Statement on Schedule 14D-1 ..." 38. Schedule 14D-1, Item 5, provides in pertinent part: "Describe any plans or proposals which relate to or would result in: ... (e) any material change in the subject company's corporate structure or business ..." 39. The omissions in the Offer Statement, described above, constitute a violation of the express requirements of Schedule 14D-1. 40. Healthdyne has no adequate remedy at law. COUNT III (For violation of Section 14(e) of the 1934 Act and rules and regulations promulgated thereunder) 41. Healthdyne realleges and incorporates by reference each and every allegation contained in the foregoing paragraphs. 42. Section 14(e) provides in pertinent part: "It shall be unlawful for any person to make any untrue statement of a material fact or to omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices in connection with any tender offer ... or any solicitation of 15 security holders in opposition to or in favor of any such offer ..." Invacare has violated and threatens to continue to violate Section 14(e). 43. The Preliminary Proxy and the Offer Statement constitute communications made under circumstances reasonably calculated to result in the procurement of tenders from shareholders in favor of Invacare's Offer. 44. The intentional omission of material fact described above are designed to predispose Healthdyne shareholders to accept Invacare's Offer. Such statements are continuing and will continue improperly to influence Healthdyne's shareholders to accept the Invacare Offer and constitute fraudulent, deceptive and manipulative acts and practices. 45. Healthdyne has no adequate remedy at law. COUNT IV (Violations of The Georgia Uniform Deceptive Trade Practices Act) 46. Healthdyne realleges and incorporates by reference each and every allegation contained in the foregoing paragraphs. 47. The Georgia Uniform Trade Practices Act, O.C.G.A. ss. 10-1-372 provides, inter alia, that a person engages in a deceptive trade practice, when, ----- ---- in the 16 course of his business, he disparages the goods, services, or business of another by false or misleading representations of fact or represents or engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding. 48. As set forth herein above, in the course of promoting their services, representatives of Invacare, in conjunction with and through Invacare, have disparaged the products and services of Healthdyne and have misrepresented the future availability of those products and services by issuing statements containing false and misleading representations of fact about Healthdyne's likely demise in the near future and the discontinuation of the oxygen concentrator segment of Healthdyne's business. 49. Invacare's false and misleading representations have deceived and are likely to continue to deceive potential purchasers of Healthdyne's oxygen concentrators about the continued availability of the concentrators and Healthdyne's services and warranties relating to the same and thus to affect adversely customers' and potential customers' buying decisions for Healthdyne's concentrators. 17 50. Invacare made and/or facilitated the making of the disparaging representations regarding Healthdyne and its oxygen concentrator products willfully and with knowledge that they were deceptive. 51. By its actions as alleged above, Invacare is in violation of the Georgia Uniform Deceptive Trade Practices Act, ss. 10-1-370 through 375. 52. As a direct and proximate result of Invacare's violations of the Georgia Deceptive Trade Practices Act, Healthdyne has sustained substantial injury to its business and will continue to sustain injury in the future. 53. Healthdyne is therefore entitled to a preliminary and permanent injunction restraining Invacare from committing further violations of the Georgia Uniform Deceptive Trade Practices Act and an award of its attorneys' fees and costs as authorized by the Act. 54. Healthdyne has no adequate remedy at law. COUNT V (Tortious Interference With Business Relations, Customers And Prospective Economic Advantage) 55. Healthdyne realleges and incorporates by reference each and every allegation contained in the foregoing paragraphs. 18 56. Healthdyne has entered into business relationships and purchase orders with customers involving the sale of oxygen concentrators which contain the probability of future economic rewards for Healthdyne. 57. Invacare has knowledge of Healthdyne's business relationships with its customers involving the sale of oxygen concentrators to those customers. As evidenced by Invacare's solicitation of Healthdyne's customer accounts set forth above, Invacare has take actions intentionally designed to disrupt these business relationships. These actions include, but are not limited to, contacting customers who have purchased or about to purchase the oxygen concentrator products through Healthdyne so that Invacare can attempt to make direct sales to those customers. 58. By the conduct described herein, Invacare has engaged in unfair business practices, and has wrongfully and maliciously interfered with Healthdyne's contractual and business relationships with current customers and has maliciously interfered with Healthdyne's prospective business opportunities. 59. Invacare and its representatives' sole motivation in acting was to further their own business and economic interest to the detriment of Healthdyne. 19 60. As a proximate result of Invacare's actions complained of herein, Healthdyne has been damaged in an amount to be determined in accordance with proof at trial, together with interest thereon. Further, as a direct and proximate result of such actions by Invacare, Healthdyne anticipates that it will suffer future damages in an amount unknown at this time, subject to proof at trial. 61. The foregoing actions of Invacare were willful, malicious and specifically intended to harm Healthdyne or in reckless disregard of Healthdyne's rights. Under all the circumstances herein, Healthdyne is entitled to an award of punitive damages against Invacare in an amount to be determined at trial. 62. Further, unless preliminarily and permanently enjoined by this Court, Invacare and its representatives will continue their tortious interference with Healthdyne's customer relations and prospective business opportunities, and Healthdyne will suffer immediate and irreparable damage for which there is no adequate remedy at law. 20 COUNT VI (Unfair Competition) 63. Healthdyne realleges and incorporates by reference each and every allegation contained in the foregoing paragraphs. 64. The oxygen concentrator segments of Healthdyne and Invacare's businesses are in direct competition with one another. 65. Healthdyne has devoted substantial resources to developing the oxygen concentrator segment of its business and maintaining the relationships with its oxygen concentrator customers and to providing them quality concentrator products. 66. Upon information and belief, by the acts alleged above, Invacare has intentionally used improper and unlawful means to solicit oxygen concentrator customers of Healthdyne. Invacare's malicious intent is reflected, inter alia, ----- ---- by its knowing and intentional false and misleading representations of fact about the likely demise of Healthdyne in the near future as a result of Invacare's hostile tender offer and takeover attempts for Healthdyne and Invacare's subsequent discontinuation of the oxygen concentrator segment of Healthdyne's business. 21 67. Invacare's conduct described above constitutes unfair competition under Georgia law. As a result of such conduct, Healthdyne has suffered commercial injury and damages in an amount to be determined at trial for which Invacare is liable. 68. The foregoing actions of Invacare were willful, malicious and specifically intended to harm Healthdyne or in reckless disregard of Healthdyne's rights. Under all the circumstances herein, Healthdyne is entitled to an award of punitive damages against Invacare in an amount to be determined at trial. WHEREFORE, Healthdyne requests that this Court: (a) Declare and decree that Invacare has violated Section 14(a) of the 1934 Act and the rules and regulations promulgated thereunder; (b) Declare and decree that Invacare has violated Section 14(d) of the 1934 Act and the rules and regulations promulgated thereunder; (c) Declare and decree that Invacare has violated Section 14(e) of the 1934 Act and the rules and regulations promulgated thereunder; (d) Enjoin Invacare, its officers, agents, servants, employees, attorneys and all persons in active concert with them from directly or indirectly continuing 22 with their proposal to acquire Healthdyne or from pursuing the Offer until such time as Invacare has made complete corrective disclosure of the misleading omissions in the statements heretofore made by them; (e) Enjoin Invacare and its officers, agents, servants, employees, attorneys and all persons in active concert with them from violating the federal securities laws, rules and regulations; (f) Enjoin Invacare and its officers, agents, servants, employees, attorneys and all persons in active concert with them from taking further steps to elect any Invacare nominees to the Healthdyne Board of Directors; (g) Order Invacare to make complete disclosure and correct all false and misleading statements heretofore made by them; (h) Order Invacare to cease its violations of the Georgia Uniform Deceptive Trade Practices Act; (i) Order Invacare to cease its tortious interference with Healthdyne's business relations, customers and prospective economic advantage; (j) Order Invacare to cease its unfair competition; 23 (k) Award compensatory damages, the precise amount of which will be determined at trial; (l) Award punitive damages for Invacare's willful and intentional conduct; (m) Award attorneys' fees and costs; and (n) Providing such other relief as shall be just and proper. DATED this 16th 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. Melch 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 24 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 SECOND COUNTERCLAIM upon the interested parties by the following means addressed as follows: via Hand Delivery Via First Class U.S. Mail and Via Facsimile Via Facsimile 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 16th day of June, 1997. /s/ John M. Bowler ----------------------------- John M. Bowler 25 EX-11.(G)(17) 4 ANSWER TO SECOND COUNTERCLAIM EXHIBIT 11(g)(17) UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION - ---------------------------------- ) INVACARE CORPORATION and ) I.H.H. CORP., ) ) Plaintiffs, ) ) v. ) CIVIL ACTION NO: ) 97-CV-0205-CC HEALTHDYNE TECHNOLOGIES, INC., ) CRAIG B. REYNOLDS, ALEXANDER H. ) LORCH, J. LELAND STRANGE, JAMES ) J. WELLMAN, AND J. PAUL ) YOKUBINAS, ) ) Defendants. ) ) - ---------------------------------- PLAINTIFFS' REPLY TO HEALTHDYNE'S SECOND COUNTERCLAIM The Second Counterclaim filed by Defendant Healthdyne Technologies, Inc. ("Healthdyne") is procedurally defective in that Healthdyne failed to request or obtain leave from this Court prior to filing as required by Rule 13(e) of the Federal Rules of Civil Procedure. As a result, Plaintiffs Invacare Corporation and I.H.H. Corp. (collectively "Invacare") filed a motion to strike on June 20, 1997. In the event this Court denies the motion, Invacare, by and through their attorneys, of their own knowledge as to their actions and on information and belief as to the other matters herein, hereby file their reply to the Second Counterclaim and state as follows: 2 1. Invacare denies each and every allegation of paragraph 1 of the Second Counterclaim, except to the extent this paragraph purports to set forth the legal basis for and relief requested under the Second Counterclaim, as to which no responsive pleading is required. 2. Invacare denies each and every allegation of paragraph 2 of the Second Counterclaim and states that no representative of Invacare has ever been authorized or directed to make the statements alleged therein and, to the best of Invacare's knowledge, no representative of Invacare has ever made such alleged statements. Contrary to such alleged statements, Invacare has no present intention to close the Marietta facility or decrease manufacturing employment if Healthdyne is acquired. 3. Invacare admits that it has filed a Schedule 14D-1 Tender Offer Statement with the Securities and Exchange Commission, which has been amended on a number of occasions (the "14D-1"), and that it has also filed a Preliminary Proxy Statement with the Securities and Exchange Commission (the "Proxy Statement") and respectfully refers the Court to the 14D-1 and to the Proxy Statement for the full and correct terms thereof. Invacare denies the remaining allegations of paragraph 3 of the Second Counterclaim. 4. Invacare admits that Healthdyne's annual shareholders meeting is scheduled for July 30, 1997. Invacare further states that at the meeting, the shareholders should be entitled to "in essence be deciding whether to sell ------ their shares 3 at the price Invacare is offering" but further states that the dead hand provision would prevent shareholders from having this choice. Invacare denies the remaining allegations of paragraph 4 of the Second Counterclaim. 5. Invacare denies each and every allegation of paragraph 5 of the Second Counterclaim except to the extent it purports to set forth the relief sought by Healthdyne, as to which no responsive pleading is necessary. 6. Invacare states that paragraphs 6 and 7 of the Second Counterclaim purport to set forth the jurisdictional bases for the Second Counterclaim, as to which no responsive pleading is necessary. 7. Invacare denies each and every allegation of paragraph 8 of the Second Counterclaim except admits that Healthdyne and Invacare are competitors in the market for oxygen concentrators. 8. Invacare denies each and every allegation of paragraph 9 of the Second Counterclaim except admits that Carl Tisdale is an Invacare territory business manager based in Memphis. 9. Invacare denies each and every allegation of paragraph 10 of the Second Counterclaim. 10. Invacare admits that the acquisition of Healthdyne has not been consummated and is subject to numerous contingencies and conditions, including acceptance by the Healthdyne shareholders. Invacare further admits that Invacare has never 4 announced its intention to discontinue Healthdyne's line of oxygen concentrators because it has no such intention. Invacare denies the remaining allegations of paragraph 11 of the Second Counterclaim. 11. Invacare admits that Larry Ropka is an Invacare territory business manager based in San Antonio. Invacare denies the remaining allegations of paragraph 12 of the Second Counterclaim. 12. Invacare denies each and every allegation of paragraphs 13 and 14 of the Second Counterclaim. 13. Invacare denies that Invacare's representative provided false or misleading information to any Healthdyne customer. Invacare denies knowledge or information sufficient to form a belief as to the truth of the matters asserted in paragraph 15 of the Second Counterclaim. 14. Invacare denies each and every allegation of paragraphs 16 and 17 of the Second Counterclaim. 15. Invacare denies each and every allegation of paragraph 18 of the Second Counterclaim and refers to the 14D-1 for the true and complete contents thereof. 16. Invacare denies each and every allegation of paragraph 19 of the Second Counterclaim and refers to the Proxy Statement and to Invacare's press releases, copies of which have been included as exhibits to the 14D-1, for the true and complete contents thereof. 5 17. In response to paragraph 20 of the Second Counterclaim, Invacare admits that Invacare's Chairman, A. Malachi Mixon, III, was quoted in articles contained in the March 27 and 28 editions of the Atlanta Journal and Constitution and refers to such articles for the true and complete contents thereof. 18. Invacare admits that the 14D-1, the Proxy Statement and Invacare's press releases make no reference to any effort by Invacare "to reduce Healthdyne's sales of oxygen concentrators by making false and disparaging statements to Healthdyne's customers" because Invacare has not made and does not intend to make any such effort. Invacare denies the remaining allegations contained in paragraph 21 of the Second Counterclaim. 19. Invacare denies knowledge or information sufficient to form a belief as to the matters set forth in the first sentence of paragraph 22 of the Second Counterclaim. Invacare denies the remaining allegations contained in paragraph 22 of the Second Counterclaim. 20. Invacare admits that Invacare had filed a motion seeking to compel Healthdyne to set a date for its annual meeting in accordance with Georgia law. Invacare denies the remaining allegations contained in paragraph 23 of the Second Counterclaim. 21. Invacare admits that Mr. Mixon sent a letter dated March 31, 1997 to Healthdyne's Chairman, Parker H. Petit, and refers to that letter for the true and complete contents thereof. 6 Invacare denies the remaining allegations contained in paragraph 24 of the Second Counterclaim. 22. Invacare denies each and every allegation of paragraphs 25 and 26 of the Second Counterclaim. 23. With respect to the allegations contained in paragraph 27 of the Second Counterclaim, Invacare repeats and incorporates its responses to paragraphs 1 through 26 of the Second Counterclaim as if fully set forth herein. 24. With respect to the allegations contained in paragraph 28 of the Second Counterclaim, Invacare states that the cited statute speaks for itself. 25. With respect to the first sentence of paragraph 29 of the Second Counterclaim, Invacare states the quoted Securities and Exchange Commission rule speaks for itself. Invacare denies each and every allegation contained in the second sentence of paragraph 29 of the Second Counterclaim. 26. With respect to paragraph 30 of the Second Counterclaim, Invacare states that the 14D-1 and the Proxy Statement speak for themselves and respectfully refers the Court to such documents for the true and complete contents thereof. 27. Invacare denies each and every allegation contained in paragraphs 31 through 34 of the Second Counterclaim. 28. With respect to the allegations contained in paragraph 35 of the Second Counterclaim, Invacare repeats and incorporates its responses to paragraphs 1 through 34 of the Second Counterclaim as if fully set forth herein. 7 29. With respect to the allegations contained in paragraphs 36 through 38 of the Second Counterclaim, Invacare states that the quoted statutes and rules speak for themselves. 30. Invacare denies each and every allegation contained in paragraphs 39 and 40 of the Second Counterclaim. 31. With respect to the allegations contained in paragraph 41 of the Second Counterclaim, Invacare repeats and incorporates its responses to paragraphs 1 through 40 of the Second Counterclaim as if fully set forth herein. 32. With respect to the first sentence of paragraph 42 of the Second Counterclaim, Invacare states the quoted statute speaks for itself. Invacare denies each and every allegation contained in the second sentence of paragraph 42 of the Second Counterclaim. 33. With respect to paragraph 43 of the Second Counterclaim, Invacare states that the 14D-1 and the Proxy Statement speak for themselves and respectfully refers the Court to such documents for the true and complete contents thereof. 34. Invacare denies each and every allegation contained in paragraphs 44 and 45 of the Second Counterclaim. 35. With respect to the allegations contained in paragraph 46 of the Second Counterclaim, Invacare repeats and incorporates its responses to paragraphs 1 through 45 of the Second Counterclaim as if fully set forth herein. 8 36. With respect to the allegations contained in paragraph 47 of the Second Counterclaim, Invacare states that the cited statute speaks for itself. 37. Invacare denies each and every allegation contained in paragraphs 48 through 54 of the Second Counterclaim. 38. With respect to the allegations contained in paragraph 55 of the Second Counterclaim, Invacare repeats and incorporates its responses to paragraphs 1 through 54 of the Second Counterclaim as if fully set forth herein. 39.Invacare denies knowledge or information sufficient to form a belief as to the truth of the matters asserted in paragraph 56 of the Second Counterclaim. 40. Invacare admits that in the ordinary course of its business, Invacare has marketplace knowledge concerning and contacts with Healthdyne's customers. Invacare denies the remaining allegations of paragraph 57 of the Second Counterclaim. 41. Invacare denies each and every allegation of paragraphs 58 through 62 of the Second Counterclaim. 42. With respect to the allegations contained in paragraph 63 of the Second Counterclaim, Invacare repeats and incorporates its responses to paragraphs 1 through 62 of the Second Counterclaim as if fully set forth herein. 43.Invacare admits the allegations of paragraph 64 of the Second Counterclaim. 9 44. Invacare denies knowledge or information sufficient to form a belief as to the truth of the matters asserted in paragraph 65 of the Second Counterclaim. 45. Invacare denies each and every allegation contained in paragraphs 66 through 68 of the Second Counterclaim. FIRST AFFIRMATIVE DEFENSE ------------------------- 46. The Second Counterclaim, and each and every count thereof, fails to allege facts sufficient to state any claim upon which relief can be granted against Invacare. SECOND AFFIRMATIVE DEFENSE ------------------------- 47. The Second Counterclaim fails to satisfy the requirements of Rule 9 of the Federal Rules of Civil Procedure. THIRD AFFIRMATIVE DEFENSE ------------------------- 48. Invacare's intent with respect to Healthdyne has been publicly disclosed and available to the market. FOURTH AFFIRMATIVE DEFENSE -------------------------- 49. Neither Mr. Tisdal nor Mr. Ropka have actual or apparent authority to speak for Invacare regarding Invacare's intent concerning Healthdyne. WHEREFORE, Invacare prays for judgment against defendant as follows: 1. That this counterclaim action be immediately dismissed; 2. That defendant take nothing by reason of this action; 3. For Invacare's costs of suit incurred herein; and 10 4. For such other and further relief as the Court deems just and proper. DATED: June 23, 1997 KING & SPALDING /s/ M. Robert Thornton -------------------------------- M. Robert Thornton Georgia Bar No. 710475 Michael R. Smith Georgia Bar No. 661689 David J. Onorato Georgia Bar No. 553826 191 Peachtree Street, N.E. Attorneys for Plaintiffs Invacare Atlanta, Georgia 30303 Corporation and I.H.H. Corp. Telephone: (404) 572-4600 Facsimile: (404) 572-5100 Of Counsel: SIMPSON THACHER & BARTLETT 425 Lexington Avenue New York, New York 10017-3954 (212) 455-2000 CERTIFICATE OF SERVICE ---------------------- THIS IS TO CERTIFY that I have this day served a true and exact copy of the PLAINTIFFS' REPLY TO HEALTHDYNE'S SECOND COUNTERCLAIM upon opposing counsel by U.S. Mail, postage prepaid, addressed as follows: Winifred D. Simpson, Esq. Troutman Sanders NationsBank Plaza 600 Peachtree Street, N.E. Suite 5200 Atlanta, Georgia 30308-2216 This 23th day of June, 1997. /s/ M. Graham Loomis ------------------------------ M. Graham Loomis -----END PRIVACY-ENHANCED MESSAGE-----