-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cQwP2iDLT3TUUV/tp8nNpNBbybE3G8YcEOV4wZjgBl4h2zXx4YAo86pRdB98yruH DWySWoeflTZPhNpa7B98Rg== 0000912057-95-002327.txt : 19950414 0000912057-95-002327.hdr.sgml : 19950414 ACCESSION NUMBER: 0000912057-95-002327 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950410 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL MEDICAL SYSTEMS INC /DE/ CENTRAL INDEX KEY: 0000802284 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 510287965 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-37910 FILM NUMBER: 95527995 BUSINESS ADDRESS: STREET 1: 600 WILSON LN STREET 2: P O BOX 715 CITY: MECHANICSBURG STATE: PA ZIP: 17055 BUSINESS PHONE: 7177908300 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HORIZON HEALTHCARE CORP CENTRAL INDEX KEY: 0000806151 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 911346899 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 6001 INDIAN SCHOOL RD NE STE 530 CITY: ALBUQUERQUE STATE: NM ZIP: 87110 BUSINESS PHONE: 5058814961 MAIL ADDRESS: STREET 1: 6001 INDIAN SCHOOL RD NE STREET 2: STE 530 CITY: ALBUQUERQUE STATE: NM ZIP: 87110 FORMER COMPANY: FORMER CONFORMED NAME: HORIZON HEALTH SYSTEMS LP DATE OF NAME CHANGE: 19870316 SC 13D 1 SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 CONTINENTAL MEDICAL SYSTEMS, INC. - ----------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.01 per share - ----------------------------------------------------------------------------- (Title of Class of Securities) 21164210 - ----------------------------------------------------------------------------- (CUSIP Number) Scot Sauder General Counsel Horizon Healthcare Corporation 6001 Indian School Road, N.E., Suite 530 Albuquerque, NM 87110 (505) 881-4961 - ----------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 31, 1995 - ----------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. / / Check the following box if a fee is being paid with this statement. /X/ The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section of the Exchange Act but shall be subject to all other provisions of the Exchange Act. Ownership percentages set forth herein assume that at March 31, 1995 there were 38,623,786 shares outstanding. - ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON . . . . . . . . . . . . . . HORIZON HEALTHCARE CORPORATION S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON . . . . . . . . . . . . . . . . . . . . . . 91-1346899 - ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / - ----------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - ----------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ----------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 5,793,567(1) SHARES --------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,440,239 EACH --------------------------------------------------------------- REPORTING 9 SOLE DISPOSTIVE POWER PERSON WITH: 5,793,567(1) --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,233,806(1) - ----------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / - ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.8% - ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ----------------------------------------------------------------------------- - -------------------- (1) Pursuant to Rule 13d-4 under the Exchange Act, the Reporting Person disclaims beneficial ownership of the 5,793,567 shares listed under the headings "Sole Voting Power" and "Sole Dispositive Power". See Item 5 of this Schedule 13D. ITEM 1. SECURITY AND ISSUER. This Schedule 13D relates to the common stock, par value $.01 per share ("CMS Common Stock"), of Continental Medical Systems, Inc., a corporation organized under the laws of the State of Delaware ("CMS"). The principal executive offices of CMS are located at P.O. Box 715, 600 Wilson Lane, Mechanicsburg, Pennsylvania 17055. ITEM 2. IDENTITY AND BACKGROUND. This Schedule 13D is being filed by Horizon Healthcare Corporation, a corporation organized under the laws of the State of Delaware ("Horizon"). Horizon provides specialty healthcare services and long-term nursing care. The principal offices of Horizon are located at 6001 Indian School Road, N.E., Suite 530, Albuquerque, New Mexico 87110. Other than executive officers and directors, there are no persons or corporations controlling or ultimately in control of Horizon. During the last five years, to the best of Horizon's knowledge, neither Horizon nor any of its executive officers or directors has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which Horizon or such person was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. Each executive officer and each director of Horizon is a citizen of the United States. The name, business address and present principal occupation of each executive officer and director of Horizon are set forth in Exhibit A to this Schedule 13D and are specifically incorporated herein by reference. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The exercise of an irrevocable option (the "Stock Option") held by Horizon pursuant to a Stock Option Agreement, dated as of March 31, 1995 (the "Stock Option Agreement"), by and among Horizon and CMS, for the full number of shares of CMS Common Stock currently covered thereby would require a maximum aggregate of funds of $75,316,371. It is anticipated that should the Stock Option become exercisable and should Horizon decide to exercise the Stock Option, Horizon would obtain the funds necessary for the purchase from working capital, which may include borrowings under its current revolving credit facility. The Stock Option Agreement also grants Horizon the right to require CMS to repurchase all or any portion of the Stock Option, subject to certain limitations, the effect of which would be to reduce the amount of funds necessary to exercise the Stock Option. -1- ITEM 4. PURPOSE OF TRANSACTION. Pursuant to the Stock Option Agreement, Horizon has the right to purchase up to 5,793,567 shares of CMS Common Stock (15% of the number of shares outstanding on March 31, 1995), subject to certain adjustments, at a price, subject to certain adjustments, of $13.00 per share. The Stock Option was granted by CMS as a condition of and in consideration for Horizon's entering into the Agreement and Plan of Merger, dated as of March 31, 1995 (the "Merger Agreement"), by and among Horizon, CMS Merger Corporation, a corporation organized under the laws of the State of Delaware and a wholly owned subsidiary of Horizon ("Merger Sub") and CMS. Simultaneously with the execution of the Stock Option Agreement, Horizon, Merger Sub and CMS entered into the Merger Agreement, pursuant to which Merger Sub would merge with and into CMS (the "Merger"). Pursuant to the Merger Agreement, each share of CMS Common Stock issued and outstanding immediately prior to the effective time of the Merger (the "Effective Time") will be converted into a number of shares of common stock, par value $.001 per share ("Horizon Common Stock"), of Horizon equal to $13.00 divided by the Horizon Transaction Value (as defined below), rounded to four decimal places (the "CMS Common Stock Exchange Ratio"); provided, however, that notwithstanding the foregoing, the CMS Common Stock Exchange Ratio may not be less than .4415 nor more than .5397. Consequently, the CMS Common Stock will cease to be traded on the New York Stock Exchange or any other exchange and will cease to be registered pursuant to the Exchange Act. The term "Horizon Transaction Value" means the average closing price on the New York Stock Exchange Composite Tape of the Horizon Common Stock for the twenty New York Stock Exchange trading days ending with the third New York Stock Exchange trading day immediately preceding the date of mailing of the proxy statement/prospectus relating to the Merger to stockholders of CMS. Notwithstanding the foregoing, if between March 31, 1995 and the Effective Time the outstanding shares of Horizon Common Stock or CMS Common Stock have been changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, the CMS Common Stock Exchange Ratio will be correspondingly adjusted to reflect such stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares. Pursuant to the Merger Agreement, the CMS management will continue to serve as such subsequent to the Merger and the CMS board of directors shall be replaced by the board of directors of Merger Sub, currently consisting of three directors of Horizon. Consummation of the transactions contemplated by the Merger Agreement is subject to the terms and conditions contained in the Merger Agreement, including the receipt of approval of the Merger Agreement and the transactions contemplated thereby by the respective stockholders of Horizon and CMS, the receipt of certain regulatory approvals, the receipt of legal opinions that the Merger will be tax-free and accountants' confirmation that the Merger will be accounted for as a pooling of interests. The Merger Agreement and the transactions contemplated thereby will be submitted for approval at special meetings of the stockholders of Horizon and CMS called for such purpose. Pursuant to a Voting Agreement, dated as of March 31, 1995 (the "Voting Agreement"), between Horizon and certain stockholders of CMS holding in the aggregate 3,440,239 shares of CMS Common Stock (8.91% of the number of shares outstanding on March 31, 1995), including Rocco A. Ortenzio, Chairman of the Board and Chief Executive Officer of CMS, and Robert A. Ortenzio, President and Chief Operating Officer of CMS (collectively, the "Stockholders"), the Stockholders have, among other things, agreed to vote all CMS Common Stock beneficially owned by them in favor of the Merger and (subject to their agreement, if requested by Horizon, not (i) to attend, or vote any CMS Common Stock beneficially owned by them at, any annual or special meeting of stockholders or (ii) to execute any written consent of stockholders) against any combination proposal or other matter that may interfere or be inconsistent with the Merger. -2- Except as set forth herein, Horizon presently does not have any plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. Each of the Stock Option Agreement, the Merger Agreement and the Voting Agreement are included as Exhibits B, C and D, respectively, and each is specifically incorporated by reference herein. ITEM 5. INTEREST IN SECURITIES OF ISSUER. Although the Stock Option Agreement does not allow Horizon to purchase any shares of CMS Common Stock pursuant thereto unless the specified conditions allowing exercise occur, assuming for purposes of this Item 5 that such conditions occur and Horizon is entitled to purchase shares of CMS Common Stock pursuant to the Stock Option, Horizon would own 5,793,567 shares of CMS Common Stock, which is 15% of the number of shares outstanding on March 31, 1995, or approximately 13% of the total number of shares of CMS Common Stock outstanding as adjusted to reflect the issuance to Horizon of such 5,793,567 shares pursuant to its exercise of the Stock Option. Under the Stock Option Agreement, Horizon currently does not have the right to acquire any shares of CMS Common Stock unless specific events occur. Accordingly, Horizon does not have sole or shared voting or dispositive power with respect to any shares of CMS Common Stock, and Horizon therefore disclaims beneficial ownership of the CMS Common Stock subject to the Stock Option until the events allowing exercise occur. Assuming for purposes of this Item 5, however, that events occur that would enable Horizon to exercise the CMS Option, Horizon would have the right to purchase up to 5,793,567 shares, subject to adjustment as described above, of CMS Common Stock, as to which it would have sole voting power and sole dispositive power. Under the Voting Agreement, the Stockholders, as described above in Item 4, have agreed to vote all CMS Common Stock beneficially owned by them in favor of the Merger and (subject to their agreement, if requested by Horizon, not (i) to attend, or vote any CMS Common Stock beneficially owned by them at, any annual or special meeting of stockholders or (ii) to execute any written consent of stockholders) against any combination proposal or other matter that may interfere or be inconsistent with the Merger. Consequently Horizon shares voting, but not dispositive, power as to such 3,440,239 shares of CMS Common Stock. No other person is known by Horizon to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities covered by this Schedule 13D. To the best of Horizon's knowledge, Neal M. Elliott, Chairman of the Board, President and Chief Executive Officer of Horizon, is the only executive officer or director of Horizon who beneficially owns CMS Common Stock. Mr. Elliott beneficially owns 15,000 shares of CMS Common Stock, which constitute less than 1% of the CMS Common Stock outstanding, and Mr. Elliott has sole voting and investment power with respect to such 15,000 shares. On February 23, 1995, Mr. Elliott purchased 5,000 shares of CMS Common Stock, at a price of $5.875 per share, in an ordinary brokerage transaction. On February 2, 1995, Michael A. Jeffries, Senior Vice President, Operations and a director of Horizon, purchased 1,000 shares of CMS Common Stock, at a price of $5.125 per share, in an ordinary brokerage transaction, and on February 27, 1995, Mr. Jeffries sold such 1,000 shares of CMS Common Stock, at a price of $6 per share, in an ordinary brokerage transaction. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Contracts, arrangements, understandings or relationships with respect to securities of CMS consist of the Stock Option Agreement, the Merger Agreement and the Voting Agreement. The aforementioned documents are attached hereto as Exhibits B, C and D, respectively, and are specifically incorporated herein by reference. See also description of the aforementioned documents in Items 3 and 4 above. -3- ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following Exhibits are filed as part of this Schedule 13D: Exhibit A -- Name, Business Address, and Present Principal Occupation of Each Executive Officer and Director of Horizon. Exhibit B -- Stock Option Agreement, dated as of March 31, 1995, by and among Horizon and CMS. Exhibit C -- Agreement and Plan of Merger, dated as of March 31, 1995, by and among Horizon, Merger Sub and CMS. Exhibit D -- Voting Agreement, dated as of March 31, 1995, between Horizon and certain stockholders of CMS named therein. -4- SIGNATURE After reasonable 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. Date: April 10, 1995 HORIZON HEALTHCARE CORPORATION By: /s/ ERNEST A. SCHOFIELD --------------------------- Name: Ernest A. Schofield Title: Senior Vice President and Chief Financial Officer EXHIBIT INDEX
SEQUENTIAL EXHIBIT DESCRIPTION PAGE NUMBER - ------- ----------- ----------- A Name, Business Address, and Present Principal Occupation of Each Executive Officer and Director of Horizon Healthcare Corporation. B Stock Option Agreement, dated as of March 31, 1995, by and among Horizon Healthcare Corporation and Continental Medical Systems, Inc. (incorporated by reference to Exhibit 2.2 to Horizon Healthcare Corporation's Current Report on Form 8-K dated March 31, 1995). C Agreement and Plan of Merger, dated as of March 31, 1995, by and among Horizon Healthcare Corporation, CMS Merger Corporation and Continental Medical Systems, Inc. (incorporated by reference to Exhibit 2.1 to Horizon Healthcare Corporation's Current Report on Form 8-K dated March 31, 1995). D Voting Agreement, dated as of March 31, 1995, between Horizon Healthcare Corporation and certain stockholders of Continental Medical Systems, Inc. named therein (incorporated by reference to Exhibit 2.3 to Horizon Healthcare Corporation's Current Report on Form 8-K dated March 31, 1995).
EXHIBIT A NAME, BUSINESS ADDRESS AND PRESENT PRINCIPAL OCCUPATION OF EACH EXECUTIVE OFFICER AND DIRECTOR OF HORIZON I. EXECUTIVE OFFICERS OF HORIZON
PRESENT PRINCIPAL NAME BUSINESS ADDRESS OCCUPATION - ---- ---------------- ----------------- Neal M. Elliott 6001 Indian School Road, Chairman of the Board, N.E., Suite 530 President, Chief Executive Albuquerque, NM 87110 Officer and Director Klemett L. Belt, Jr. 6001 Indian School Road, Executive Vice N.E., Suite 530 President and Director Albuquerque, NM 87110 Michael A. Jeffries 6001 Indian School Road, Senior Vice President, N.E., Suite 530 Operations and Albuquerque, NM 87110 Director Charles H. Gonzales 6001 Indian School Road, Senior Vice President, N.E., Suite 530 Subsidiary Operations Albuquerque, NM 87110 and Director Ernest A. Schofield 6001 Indian School Road, Senior Vice President N.E., Suite 530 and Chief Financial Albuquerque, NM 87110 Officer
II. NON-EMPLOYEE DIRECTORS OF HORIZON
PRESENT PRINCIPAL NAME BUSINESS ADDRESS OCCUPATION - ---- ---------------- ----------------- Gerard M. Martin 600 Centre Street Consultant Newton, MA 02158 Frank M. McCord 2828 Colby Avenue Chairman, Cascade Everett, WA 98201 Savings Bank Raymond N. Noveck 460 Totten Pond Road President, Strategic Waltham, MA 02158 Systems, Inc. Barry M. Portnoy One Post Office Square Attorney-at-Law, Boston, MA 02109 Sullivan & Worcester
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