-----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, FQO8k2GQV8bQt0WNSdM5h1v3y46tF2Uwr3H7nMSwjEbuUf8Re3mPqiwHbdIppGcM C25s41vi/uK/mfiWdBwbjA== 0000947871-02-000694.txt : 20020416 0000947871-02-000694.hdr.sgml : 20020416 ACCESSION NUMBER: 0000947871-02-000694 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020412 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNILAB CORP /DE/ CENTRAL INDEX KEY: 0000899714 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEDICAL LABORATORIES [8071] IRS NUMBER: 954415490 STATE OF INCORPORATION: DE FISCAL YEAR END: 0326 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42855 FILM NUMBER: 02609582 BUSINESS ADDRESS: STREET 1: 18448 OXNARD ST CITY: TARZANA STATE: CA ZIP: 91356 BUSINESS PHONE: 8187586642 MAIL ADDRESS: STREET 1: UNILAB CORP STREET 2: 18448 OXNARD ST. CITY: TARZANA STATE: CA ZIP: 91356 FORMER COMPANY: FORMER CONFORMED NAME: METCAL INC DATE OF NAME CHANGE: 19930401 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: QUEST DIAGNOSTICS INC CENTRAL INDEX KEY: 0001022079 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEDICAL LABORATORIES [8071] IRS NUMBER: 161387862 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: ONE MALCOLM AVE CITY: TETERBORO STATE: NJ ZIP: 07608 BUSINESS PHONE: 2013935000 MAIL ADDRESS: STREET 1: ONE MALCOLM AVE CITY: TETERBORO STATE: NJ ZIP: 07601 FORMER COMPANY: FORMER CONFORMED NAME: CORNING CLINICAL LABORATORIES INC DATE OF NAME CHANGE: 19960903 SC 13D 1 sch13d_041102-unilab.txt SCHEDULE 13 D FOR UNILAB CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 UNILAB CORPORATION (Name of Issuer) Common Stock, Par Value $.01 Per Share (Title of Class of Securities) 904763208 (CUSIP Number of Class of Securities) Leo C. Farrenkopf, Jr. Quest Diagnostics Incorporated Vice President and Secretary One Malcolm Avenue (201) 393-5000 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of filing persons) Copy to: Clare O'Brien Shearman & Sterling 599 Lexington Avenue New York, New York 10022 (212) 848-4000 April 2, 2002 (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 that is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. 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 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 904763208 - --------- ---------------------------------------------------------------------- 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person QUEST DIAGNOSTICS INCORPORATED - --------- ---------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (a): /_/ (b): /_/ - --------- ---------------------------------------------------------------------- 3 SEC Use Only - --------- ---------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO; BK - --------- ---------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): - --------- ---------------------------------------------------------------------- 6 Citizenship or Place of Organization DELAWARE - --------- ---------------------------------------------------------------------- - -------------------------------------------------------------------------------- NUMBER OF 7 Sole Voting Power SHARES 0 BENEFICIALLY ------------------------------------------------ OWNED BY 8 Shared Voting Power EACH 13,841,178* REPORTING ------------------------------------------------ PERSON 9 Sole Dispositive Power WITH 0 ------------------------------------------------ 10 Shared Dispositive Power 0 - -------------------------------------------------------------------------------- - --------- ---------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 13,841,178* shares of common stock - --------- ---------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): - --------- ---------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 41.33%** - --------- ---------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) CO - --------- ---------------------------------------------------------------------- - -------------------- * Reflects the number of shares of common stock of Unilab Corporation collectively held by Kelso Investment Associates VI, L.P. and KEP VI, LLC as of April 2, 2002, as represented and warranted by such persons in the Stockholders Agreement (as defined below). ** Based on 33,487,650 shares of common stock of Unilab Corporation outstanding as of March 25, 2002, as represented and warranted by Unilab Corporation in the Merger Agreement (as defined below). 2 CUSIP No. 904763208 - --------- ---------------------------------------------------------------------- 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person QUEST DIAGNOSTICS NEWCO INCORPORATED - --------- ---------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (a): /_/ (b): /_/ - --------- ---------------------------------------------------------------------- 3 SEC Use Only - --------- ---------------------------------------------------------------------- 4 Source of Funds (See Instructions) AF; OO; BK - --------- ---------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): - --------- ---------------------------------------------------------------------- 6 Citizenship or Place of Organization DELAWARE - --------- ---------------------------------------------------------------------- - -------------------------------------------------------------------------------- NUMBER OF 7 Sole Voting Power SHARES 0 BENEFICIALLY ------------------------------------------------ OWNED BY 8 Shared Voting Power EACH 13,841,178* REPORTING ------------------------------------------------ PERSON 9 Sole Dispositive Power WITH 0 ------------------------------------------------ 10 Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 13,841,178* shares of common stock - --------- ---------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): - --------- ---------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 41.33%** - --------- ---------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) CO - --------- ---------------------------------------------------------------------- - -------------------- * Reflects the number of shares of common stock of Unilab Corporation collectively held by Kelso Investment Associates VI, L.P. and KEP VI, LLC as of April 2, 2002, as represented and warranted by such persons in the Stockholders Agreement. ** Based on 33,487,650 shares of common stock of Unilab Corporation outstanding as of March 25, 2002, as represented and warranted by Unilab Corporation in the Merger Agreement. 3 Item 1. Security and Issuer. The class of equity securities to which this statement on Schedule 13D (the "Statement") relates is the common stock, par value $.01 per share (the "Common Stock"), of Unilab Corporation, a Delaware corporation (the "Issuer"). The principal executive offices of the Issuer are located at 18448 Oxnard Street, Tarzana, California 91356. Item 2. Identity and Background. a. The names of the persons filing this Statement are Quest Diagnostics Incorporated, a Delaware corporation ("Quest Diagnostics"), and Quest Diagnostics Newco Incorporated, a Delaware corporation and a wholly owned subsidiary of Quest Diagnostics ("Merger Sub" and, together with Quest Diagnostics, the "Filing Persons"). b. The address of the principal business and the principal executive offices of each of the Filing Persons is: One Malcolm Avenue, Teterboro, New Jersey 07608. c. Quest Diagnostics is a provider of diagnostic testing and related services for the healthcare industry. Quest Diagnostics offers a range of clinical laboratory testing services used by physicians in the detection, diagnosis, evaluation, monitoring and treatment of diseases and other medical conditions. Quest Diagnostics has a national network of laboratories and patient service centers. Merger Sub has no operations and was incorporated solely for the purpose of the Offer and the Merger (as defined below). d. During the last five years, neither Quest Diagnostics nor Merger Sub has been convicted in any criminal proceeding. e. During the last five years, neither Quest Diagnostics nor Merger Sub has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, as a result of which proceeding it is or was 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. f. All of the directors and executive officers of Quest Diagnostics and Merger Sub are citizens of the United States. Information regarding the directors and executive officers of Quest Diagnostics and Merger Sub is set forth on Schedule I and Schedule II, respectively, attached hereto. During the last five years, to the knowledge of the Filing Persons, no person named on Schedule I or Schedule II has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding is or was 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. 4 Item 3. Source and Amount of Funds or Other Consideration. On April 2, 2002, Quest Diagnostics, Merger Sub and the Issuer entered into an Agreement and Plan of Merger (the "Merger Agreement") under which Merger Sub will commence an exchange offer (the "Offer") to acquire all of the outstanding shares of Common Stock. In the Offer, the Issuer's stockholders may elect to receive $26.50 in cash, or 0.3256 of a share of Quest Diagnostics common stock, in exchange for each of their shares of Common Stock. However, the aggregate cash consideration payable to the Issuer's stockholders will be limited to 30% of the total consideration payable for all of the shares of Common Stock in the Offer and the Merger. After completion of the Offer, Quest Diagnostics intends to effect a merger of the Issuer with Merger Sub (the "Merger"). At the effective time of the Merger, each outstanding share of Common Stock not acquired in the Offer will be converted into 0.3256 of a share of Quest Diagnostics common stock. The Offer is not conditioned upon any financing arrangements. Assuming the Issuer's stockholders elect to receive 30% of the offer consideration in the form of cash, Quest Diagnostics expects to pay approximately $295 million in cash to the Issuer's stockholders in connection with the Offer and the Merger. As described in the immediately preceding paragraph, the remaining portion of the consideration payable to the Issuer's stockholders in the Offer and the Merger will be paid in the form of shares of Quest Diagnostics common stock. Pursuant to a commitment letter dated March 27, 2002, each of Bank of America, N.A. and Merrill Lynch Capital Corporation have agreed to lend Quest Diagnostics $275 million as part of a $550 million bridge loan facility that will be provided to Quest Diagnostics in connection with the Offer and the Merger. The bridge loan facility will contain customary terms and conditions, including, without limitation, with respect to fees, indemnification and events of default. Quest Diagnostics expects to use a portion of the proceeds of the bridge loan facility to pay the cash consideration and the fees and expenses of the Offer and the Merger. Concurrently upon entering into the Merger Agreement, on April 2, 2002, Quest Diagnostics and Merger Sub entered into a Stockholders Agreement (the "Stockholders Agreement") with Kelso Investment Associates VI, L.P., a Delaware limited partnership ("LP"), and KEP VI, LLC., a Delaware limited liability company ("LLC" and, together with LP, "Kelso"). Certain terms of the Stockholders Agreement are summarized in Item 4 below. References to, and descriptions of, the Offer, the Merger, the Merger Agreement, the Stockholders Agreement, the commitment letter and the bridge loan facility as set forth above in this Item 3 are qualified in their entirety by reference to the copies of the Merger Agreement, the Stockholders Agreement and the commitment letter, respectively, included as Exhibits 2.1, 99.2 and 99.4 to this Statement, and incorporated in this Item 3 in their entirety where such references and descriptions appear. Item 4. Purpose of Transaction. (a) - (b) As described in Item 3 above, pursuant to the Merger Agreement, Merger Sub shall commence the Offer to acquire all of the outstanding shares of Common Stock. The 5 purpose of the Offer is for Quest Diagnostics to acquire control of, and ultimately the entire common equity interest in, the Issuer. Upon completion of the Offer, Quest Diagnostics shall cause Merger Sub to be merged with the Issuer. The purpose of the Merger is for Quest Diagnostics to acquire all of the shares of Common Stock that are not exchanged in the Offer. As an inducement for Quest Diagnostics and Merger Sub to enter into the Merger Agreement and as a condition thereof, Kelso entered into the Stockholders Agreement. Under the Stockholders Agreement, Kelso has agreed, among other things, to: (i) promptly tender into the Offer, and not withdraw, all of the shares of Common Stock held by Kelso; (ii) vote all of the shares of Common Stock held by Kelso at any meeting of the Issuer's stockholders, or in any action by consent of the Issuer's stockholders, in favor of adoption of the Merger Agreement and the transactions contemplated thereby and against any action that could reasonably be expected to adversely affect the Offer or the Merger; (iii) in the event of a failure by Kelso to comply with its obligations described in clause (ii) above, grant an irrevocable proxy to Quest Diagnostics to vote all of the shares of Common Stock held by Kelso at any meeting of the Issuer's stockholders, or in any action by consent of the Issuer's stockholders, in favor of adoption of the Merger Agreement and the transactions contemplated thereby and against any action that could reasonably be expected to adversely affect the Offer or the Merger; (iv) in the event the Merger Agreement is terminated in certain circumstances, sell to Quest Diagnostics all of the shares of Common Stock held by Kelso for a per share purchase price of $26.50; and (v) not sell, transfer or tender (except pursuant to the Offer) any of the shares of Common Stock held by Kelso until the earlier of the effective time of the Merger or the close of business on the 45th day after the termination of the Merger Agreement. Each of the foregoing covenants is also applicable to any shares of Common Stock acquired by Kelso after April 2, 2002. (c) Not applicable. (d) Upon the purchase by Merger Sub of shares of Common Stock pursuant to the Offer, Quest Diagnostics shall be entitled to designate the number of directors, rounded up to the next whole number, on the Issuer's Board of Directors (the "Board") equal to the product of the total number of directors on the Board (giving effect to the directors elected pursuant to Section 2.03 of the Merger Agreement) multiplied by the percentage that the number of shares of Common Stock beneficially owned by Quest Diagnostics and Merger Sub (following such 6 purchase) bears to the total number of shares of Common Stock then outstanding. In the Merger Agreement, the Issuer has agreed that, at such time, it shall take all actions necessary to cause Quest Diagnostics' designees to be elected as directors of the Issuer, including increasing the size of the Board and securing the resignations of incumbent directors. The Merger Agreement also provides that, at such time, the Issuer shall use its best efforts to cause persons designated by Quest Diagnostics to constitute the number of members, rounded up to the next whole number, on (a) each committee of the Board, (b) each board of directors of each subsidiary of the Issuer, and (c) each committee of each such board that represents the same percentage as such individuals represent on the Board, in each case only to the extent permitted by applicable law. Notwithstanding the foregoing, until the effective time of the Merger, the Board shall have at least two directors who were directors of the Issuer on the date of the Merger Agreement. Upon consummation of the Merger, the directors of Merger Sub shall become the directors of the surviving corporation. At the effective time of the Merger, the officers of the Issuer immediately prior to the effective time of the Merger shall be the officers of the surviving corporation, until their respective successors are duly elected or appointed and qualified. (e) None, other than the change in the number of outstanding shares of Common Stock as contemplated by the Merger Agreement. (f) Not applicable. (g) If the Merger of the Issuer with and into Merger Sub is consummated as planned, the certificate of incorporation and by-laws of Merger Sub shall be the certificate of incorporation and by-laws of the surviving corporation resulting from the Merger. (h) If the Merger is consummated as planned, the Common Stock will cease to be authorized to be listed on the Nasdaq National Market or any other quotation system or exchange. (i) If the Merger is consummated as planned, the Common Stock will be deregistered pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended. (j) Other than as described above, the Filing Persons currently have no plan or proposal which relates to, or may result in, any of the matters listed in Items 4(a)-(i) of this Statement (although the Filing Persons reserve the right to develop such plans). References to, and descriptions of, the Offer, the Merger, the Merger Agreement and the Stockholders Agreement as set forth above in this Item 4 are qualified in their entirety by reference to the copies of the Merger Agreement and the Stockholders Agreement, respectively, included as Exhibits 2.1 and 99.2 to this Statement, and incorporated in this Item 4 in their entirety where such references and descriptions appear. Item 5. Interest in Securities of the Issuer. 7 (a)-(b) As a result of the Stockholders Agreement, the Filing Persons may be deemed to be the beneficial owner of 13,841,178 shares of Common Stock, representing 41.33% of the outstanding shares of Common Stock. The calculation of the foregoing percentage is based on the number of shares of Common Stock outstanding as of March 25, 2002, as represented and warranted by the Issuer in the Merger Agreement. The Filing Persons may be deemed to have shared power to vote such shares of Common Stock with respect to the limited matters described in clauses (a) and (b) of Item 4 above. However, the Filing Persons (i) are not entitled to any rights as a stockholder of the Issuer with respect to such shares of Common Stock and (ii) disclaim any beneficial ownership of the shares of Common Stock that are covered by the Stockholders Agreement. The Filing Person do not have the power to dispose of such shares of Comon Stock. Except as set forth herein, to the knowledge of the Filing Persons, no director or executive officer of the Filing Persons beneficially owns any shares of Common Stock. (c) The Filing Persons have not effected any transaction in the shares of Common Stock during the past sixty days. To the knowledge of the Filing Persons, no person named in either Schedule I or Schedule II has effected any transaction in the shares of Common Stock during the past sixty days. (d) To the knowledge of the Filing Persons, Kelso has the right to receive, or the power to direct the receipt of, dividends in respect of its shares of Common Stock. Other than as a result of the restrictions on transfer described under Item 4(a)-(b) above, which restrictions preclude the sale, transfer or tender of the shares of Common Stock held by Kelso until the earlier of the effective time of the Merger or the close of business on the 45th day after the termination of the Merger Agreement, to the knowledge of the Filing Persons, Kelso has the power to direct the proceeds from the sale of such shares of Common Stock. (e) Not applicable. Item 6. Contracts, Arrangements, Understanding or Relationships With Respect to Securities of the Issuer. Other than the Merger Agreement and the Stockholders Agreement, to the knowledge of the Filing Persons, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangement, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. 8 2.1 Agreement and Plan of Merger, dated as of April 2, 2002, among Quest Diagnostics, Merger Sub and the Issuer.* 99.2 Stockholders Agreement, dated as of April 2, 2002, among Quest Diagnostics, Merger Sub and Kelso.** 99.3 Joint Filing Agreement, dated as of April 12, 2002, among Quest Diagnostics and Merger Sub. 99.4 Commitment Letter, dated as of March 27, 2002, between Quest Diagnostics, Bank of America, N.A. and Merrill Lynch Capital Corporation. - ----------------------- * Incorporated herein by reference to Exhibit 2.1 of Quest Diagnostics' Current Report on Form 8-K filed with the Commission on April 2, 2002. ** Incorporated herein by reference to Exhibit 99.2 of Quest Diagnostics' Current Report on Form 8-K filed with the Commission on April 2, 2002. 9 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. Dated: April 12, 2002 QUEST DIAGNOSTICS INCORPORATED By: /s/ Leo C. Farrenkopf, Jr. --------------------------------- Name: Leo C. Farrenkopf, Jr. Title: Vice President and Secretary QUEST DIAGNOSTICS NEWCO INCORPORATED By: /s/ Leo C. Farrenkopf, Jr. --------------------------------- Name: Leo C. Farrenkopf, Jr. Title: Secretary EXHIBIT INDEX 2.1 Agreement and Plan of Merger, dated as of April 2, 2002, among Quest Diagnostics, Merger Sub and the Issuer.* 99.2 Stockholders Agreement, dated as of April 2, 2002, among Quest Diagnostics, Merger Sub and Kelso.** 99.3 Joint Filing Agreement, dated as of April 12, 2002, among Quest Diagnostics and Merger Sub. 99.4 Commitment Letter, dated as of March 27, 2002, between Quest Diagnostics, Bank of America, N.A. and Merrill Lynch Capital Corporation. - ----------------------- * Incorporated herein by reference to Exhibit 2.1 of Quest Diagnostics' Current Report on Form 8-K filed with the Commission on April 2, 2002. ** Incorporated herein by reference to Exhibit 99.2 of Quest Diagnostics' Current Report on Form 8-K filed with the Commission on April 2, 2002. SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF QUEST DIAGNOSTICS INCORPORATED The following table sets forth the name and current principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of Quest Diagnostics. Unless otherwise indicated, the current business address of each person is Quest Diagnostics Incorporated, One Malcolm Avenue, Teterboro, NJ 07608. Name Quest Diagnostics Directors and Executive Officers ---- Present Principal Occupation or Employment; Material Positions Held During the Past Five Years -------------------------------------------------- Kenneth D. Brody Mr. Brody is the founding partner of Winslow Partners LLC, a Washington, D.C. private investment firm with an address at 1300 Connecticut Avenue, N.W., 8th Floor, Washington, D.C. 20036. He is also the co-founder and principal of Taconic Capital Advisors, an investment adviser firm. From 1993 to early 1996, he was the chairman and president of the Export-Import Bank of the United States, a position to which he was appointed by President Clinton. From 1971 to 1991, Mr. Brody was with Goldman, Sachs & Co., where he was a partner and member of the management committee. Mr. Brody is a director of Federal Realty Investment Trust. Mr. Brody has been a director of Quest Diagnostics since January 1997. William F. Buehler Mr. Buehler recently retired as vice chairman of Xerox Corporation, which he joined in 1991. Prior to joining Xerox, Mr. Buehler spent 27 years with AT&T, primarily in sales, marketing and general management positions. Mr. Buehler is a director of A.O. Smith. Mr. Buehler has been a director of Quest Diagnostics since July 1998. Van C. Campbell Mr. Campbell retired in 1999 as vice chairman of Corning Incorporated, which he joined in 1965. He was elected treasurer in 1972, a vice president in 1973, financial vice president in 1975 and senior vice president for finance in 1980. He became general manager of the Consumer Products Division in 1981. Mr. Campbell was elected vice chairman and a director in 1983 and during 1995 was appointed to the additional position of chairman of Corning Life Sciences Inc. He is a director of Armstrong World Industries, Inc. Mr. Campbell has been a director of Quest Diagnostics since January 1991. Mary A. Cirillo Ms. Cirillo is chairperson and chief executive officer of OPCENTER, which provides help desk and network operations services. OPCENTER's address is 660 Madison Avenue, 14th Floor, New York, New York 10021. She was chief executive officer of Global Institutional Services of Deutsche Bank from July 1999 until February 2000. Previously, she served as executive vice president and managing director of Bankers Trust Company (which was acquired by Deutsche Bank), which she joined in 1997. From 1977 to 1997, she was with Citibank, N.A., most recently serving as senior vice president. Ms. Cirillo is on the advisory board of Cisco Systems, Inc. and is a director of Digital Island Inc. Ms. Cirillo has been a director of Quest Diagnostics since April 1997. William R. Grant Mr. Grant has been chairman of Galen Associates, a New York investment firm, since 1989. Galen Associates' address is 610 Fifth Avenue New York, New York 10020. From 1987 to 1989 he was chairman of New York Life International and from 1979 to 1987 of MacKay-Shields Financial Corp. He is also a former director and vice-chairman of SmithKline Beecham plc, and is currently a director of Allergan, Inc., Massey Energy Co., Ocular Sciences, Inc. and Vasogen Inc. He has been a director of Quest Diagnostics since August 1999. Rosanne Haggerty Ms. Haggerty is the founder and executive director of Common Ground, a not-for-profit housing development and management organization with an address at 14 East 28th Street, New York, New York 10016. Prior to founding Common Ground, she was the coordinator of housing development at Brooklyn Catholic Charities. Ms. Haggerty is a 2001 MacArthur Foundation Fellow. Ms. Haggerty has been a director of Quest Diagnostics since February 2002. Dan C. Stanzione Mr. Stanzione is president emeritus of Bell Laboratories at Lucent Technologies Incorporated, 3008 Southview Drive, Stuart, Florida 34996. Dr. Stanzione began his career in 1972 with Bell Labs, where he led the teams working on the first microprocessors and digital signal processors. He was appointed president of Network Systems, Lucent's largest business unit, in 1996 and was appointed chief operating officer of Lucent in 1997. Dr. Stanzione is a director of Avaya Inc. Dr. Stanzione has been a director of Quest Diagnostics since January 1997. Gail R. Wilensky Ms. Wilensky is the John M. Olin Senior Fellow at Project HOPE, an international non-profit health foundation, which she joined in 1993. The address of Project Hope is Suite 600, 7500 Old Georgetown Road, Bethesda, Maryland 20814. She is currently the chair of the Medicare Payment Advisory Commission, which advises Congress on all issues relating to Medicare. From 1995 to 1997 she chaired the Physician Payment Review Commission, which advised Congress on physician payment and other Medicare issues. In 1992 and 1993, Dr. Wilensky served as a deputy assistant to the President for policy development relating to health and welfare issues. From 1990 to 1992, she was the administrator of the Health Care Financing Administration where she directed the Medicare and Medicaid programs. Dr. Wilensky is a director of Advanced Tissue Sciences Inc., Gentiva Health Services, Inc., Manor Care Inc., Syncor Corporation and United Healthcare Corporation. Dr. Wilensky has been a director of Quest Diagnostics since January 1997. 2 John B. Ziegler Mr. Ziegler is the president, Worldwide Consumer Healthcare, of GlaxoSmithKline (the parent of SmithKline Beecham plc), One Franklin Plaza, Philadelphia, Pennsylvania 19102. Mr. Ziegler joined SmithKline Beecham in 1991 as the head of SB Consumer Healthcare-North American Division. He became executive vice president of SmithKline Beecham in 1996 and assumed his current responsibilities in 1998. He has been a director of Quest Diagnostics since May 2000. Kenneth W. Freeman Mr. Freeman is chairman of the Board and chief executive officer of Quest Diagnostics. Mr. Freeman joined Quest Diagnostics in May 1995 as president and chief executive officer, was elected a director in July 1995 and was elected chairman of the Board in December 1996. Prior to 1995, he served in a variety of financial and managerial positions at Corning, which he joined in 1972. He was elected controller and a vice president of Corning in 1985, senior vice president in 1987, general manager of the Science Products Division in 1989 and executive vice president in 1993. He was appointed president and chief executive officer of Corning Asahi Video Products Company in 1990. Surya N. Mohapatra, Mr. Mohapatra is president and chief operating Ph.D. officer. Prior to joining Quest Diagnostics in February 1999 as senior vice president and chief operating officer, he was senior vice president of Picker International, a worldwide leader in advanced medical imaging technologies, where he served in various executive positions during his 18-year tenure. Lucia L. Quinn Ms. Quinn is senior vice president for Advanced Diagnostics. Ms. Quinn has overall responsibility for Science and Innovation, Business Development, Pharmaceutical Services and Consumer Health. Ms. Quinn joined Quest Diagnostics in April 2001 as vice president, Developing Businesses. From 1999 through April 2001 she was with Allied Signal/Honeywell, serving most recently as vice president Strategic Marketing. From 1989 through 1999, Ms. Quinn was employed by Digital Equipment Corporation/Compaq, most recently serving as vice president - Corporate Strategy. She assumed her current responsibilities in October 2001. Richard L. Bevan Mr. Bevan is corporate vice president for Human Resources. From 1982 until August 1999, Mr. Bevan served in a variety of human resources positions for SmithKline Beecham's pharmaceutical and clinical laboratory businesses, most recently serving as vice president and director of human resources-operations for SBCL. Mr. Bevan was appointed corporate vice president for Human Resource Strategy and Development in August 1999, and to his present position in January 2001. Catherine Doherty Ms. Doherty is vice president for Communications and Public Affairs. Ms. Doherty has overall responsibility for internal and external communications and government affairs. Ms. Doherty has been employed by Quest Diagnostics since 1990. She served as chief accounting officer from 1996 until July 2000, when she became vice president - Investor Relations. Ms. Doherty assumed her current responsibilities in November 2001. 3 Robert A. Hagemann Mr. Hagemann is vice president and chief financial officer. He joined Corning Life Sciences, Inc., in 1992, where he held a variety of senior financial positions before being named vice president and corporate controller of Quest Diagnostics in 1996. Prior to joining Quest Diagnostics, Mr. Hagemann was employed by Prime Hospitality, Inc. and Crompton & Knowles, Inc. in senior financial positions. He was also previously associated with Ernst & Young. Mr. Hagemann assumed his present responsibilities in August 1998. Gerald C. Marrone Mr. Marrone is senior vice president, Administration and chief information officer. Prior to joining Quest Diagnostics in November 1997 as chief information officer, Mr. Marrone was with Citibank, N.A. for 12 years. During his tenure he was most recently vice president, division executive for Citibank's Global Production Support Division. While at Citibank, he was also the chief information officer of Citibank's Global Cash Management business. Prior to joining Citibank, he was the chief information officer for Memorial Sloan-Kettering Cancer Center in New York for five years. Michael E. Prevoznik Mr. Prevoznik is vice president for Legal and Compliance and general counsel. Prior to joining SmithKline Beecham Clinical Laboratories, Inc. in 1994 as its chief legal compliance officer, Mr. Prevoznik was with Dechert Price & Rhodes. In 1996, he became vice president and chief legal compliance officer for SmithKline Beecham Healthcare Services. In 1998, he was appointed vice president, Compliance for SmithKline Beecham, assuming additional responsibilities for coordinating all compliance activities within SmithKline Beecham worldwide. Mr. Prevoznik assumed his current responsibilities with Quest Diagnostics in August 1999. 4 SCHEDULE II DIRECTORS AND EXECUTIVE OFFICERS OF QUEST DIAGNOSTICS NEWCO INCORPORATED The following table sets forth the name and current principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of Merger Sub. Unless otherwise indicated, the current business address of each person is Quest Diagnostics Newco Incorporated c/o Quest Diagnostics Incorporated, One Malcolm Avenue, Teterboro, NJ 07608. Quest Diagnostics Newco Incorporated Directors and Executive Officers Present Principal Occupation or Employment; Material Positions Held During the Past Name Five Years ---- ---------- Kenneth W. Freeman Mr. Freeman is chief executive officer of Merger Sub. Mr. Freeman is also chairman of the Board and chief executive officer of Quest Diagnostics. Mr. Freeman joined Quest Diagnostics in May 1995 as president and chief executive officer, was elected a director in July 1995 and was elected chairman of the Board in December 1996. Prior to 1995, he served in a variety of financial and managerial positions at Corning, which he joined in 1972. He was elected controller and a vice president of Corning in 1985, senior vice president in 1987, general manager of the Science Products Division in 1989 and executive vice president in 1993. He was appointed president and chief executive Officer of Corning Asahi Video Products Company in 1990. Surya N. Mohapatra, Mr. Mohapatra is a director of Merger Sub, as well as Ph.D. president and chief operating officer of Merger Sub. Prior to joining Quest Diagnostics in February 1999 as senior vice president and chief operating officer, he was senior vice president of Picker International, a worldwide leader in advanced medical imaging technologies, where he served in various executive positions during his 18-year tenure. Robert A. Hagemann Mr. Hagemann is a director of Merger Sub, as well as vice president and chief financial officer of Merger Sub. He joined Corning Life Sciences, Inc., in 1992, where he held a variety of senior financial positions before being named vice president and corporate controller of Quest Diagnostics in 1996. Prior to joining Quest Diagnostics, Mr. Hagemann was employed by Prime Hospitality, Inc. and Crompton & Knowles, Inc. in senior financial positions. He was also previously associated with Ernst & Young. Mr. Hagemann assumed his present responsibilities in August 1998. 5 EX-99.3 3 exh99-3_041102.txt JOINT FILING AGREEMENT EXHIBIT 99.3 JOINT FILING AGREEMENT The undersigned acknowledge and agree that the foregoing Statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the others making the filing, except to the extent that it knows or has reason to believe that such information is inaccurate. This agreement may be executed in counterparts and each of such counterparts taken together shall constitute one and the same instrument. Dated: April 12, 2002 QUEST DIAGNOSTICS NEWCO INCORPORATED By: /s/ Leo C. Farrenkopf, Jr. ------------------------------------- Name: Leo C. Farrenkopf, Jr. Title: Secretary QUEST DIAGNOSTICS INCORPORATED By: /s/ Leo C. Farrenkopf, Jr. ------------------------------------- Name: Leo C. Farrenkopf, Jr. Title: Vice President and Secretary EX-99.4 4 ex99-4_041102.txt BRIDGE LOAN FACILITY EXHIBIT 99.4 March 27, 2002 Quest Diagnostics Incorporated One Malcolm Avenue Teterboro, New Jersey 07608 Attention: Joseph P. Manory, Vice President, Treasurer Re: $550,000,000 Bridge Loan Facility Ladies and Gentlemen: You have advised us that Quest Diagnostics Incorporated ("Quest") intends, through a wholly-owned subsidiary, to (i) acquire all of the outstanding common stock of the public company previously identified by Quest to Bank of America and ML with the code name "Mozart" (the "Target") in either a one-step or two-step transaction (the "Acquisition"), (ii) in connection with the consummation of the Acquisition, refinance the existing senior indebtedness of the Target (the "Refinancing") and (iii) in connection with the consummation of the Acquisition, tender for all outstanding high yield notes of the Target (the "Note Tender"). You have advised us that the sum required to consummate the Acquisition, the Refinancing and the Note Tender (including payment of transaction fees and expenses in an estimated amount of $55 million but excluding the value of the stock issued in connection therewith) is approximately $550 million. The Acquisition, the Refinancing, the Note Tender and the payment of transaction fees and expenses in connection therewith are collectively referred to herein as the "Transaction". You have advised us that up to $550 million in senior bridge financing will be required to finance the Transaction and that no other external debt financing other than such senior bridge financing will be required in connection with the Transaction. You have further advised us that in connection with the Transaction, Quest will issue up to $700 million of its own stock to existing shareholders of the Target. In connection with the foregoing, and upon and subject to the terms and conditions of this letter and the Summary of Terms and Conditions attached hereto as Schedule I (the "Summary of Terms"), Bank of America, N.A. ("Bank of America") is pleased to offer its commitment to lend up to $275,000,000 and Merrill Lynch Capital Corporation ("ML") is pleased to offer its commitment to lend up to $275,000,000 toward a $550 million senior bridge facility to Quest (the "Bridge Loan Facility"). Bank of America will act as sole and exclusive Administrative Agent for the Bridge Loan Facility and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill") will act as Syndication Agent for the Bridge Loan Facility (collectively, the "Agents"). Banc of America Securities LLC ("BAS") and Merrill will act as Co-Lead Arrangers and Joint Book Managers (collectively, the "Co-Lead Arrangers") for the Bridge Loan Facility. No additional agents, co-agents, book managers or arrangers will be appointed and no other titles will be awarded without our consent. Quest Diagnostics Incorporated Commitment Letter March 27, 2002 Page 2 BAS, in consultation with Merrill and you, intends to commence syndication efforts promptly, and you agree to actively assist BAS in achieving a syndication of the Bridge Loan Facility that is satisfactory to you and us; provided that it is the intent of the Co-Lead Arrangers that they will only syndicate the Bridge Loan Facility to co-managers of the Note Offering (as defined below) for the first 90 days following the closing of the Bridge Loan Facility (it being understood that this provision does not prevent BAS and Merrill from proceeding with the syndication of the Five Year Term Loan (as defined below)). Such assistance shall include (a) your providing and causing your advisors to provide us and the other financial institutions we identify (the "Lenders"), upon request and on a confidential basis, with all information reasonably deemed necessary by us to complete syndication; (b) if needed, assistance in the preparation of an Offering Memorandum (which shall be acceptable to you) to be used in connection with the syndication; (c) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from your existing lending relationships; and (d) otherwise assisting us in our syndication efforts, including by making senior management and advisors of Quest and its subsidiaries reasonably available from time to time to attend and make presentations regarding the business and prospects of Quest and its subsidiaries, as appropriate, at a reasonable number of meetings of prospective Lenders. It is understood and agreed that BAS, in consultation with Merrill and you, will manage and control all aspects of the syndication, including decisions as to the selection of proposed Lenders reasonably acceptable to you and any titles offered to proposed Lenders, when commitments will be accepted and the final allocations of the commitments among the Lenders. It is understood that no Lender participating in the Bridge Loan Facility will receive compensation from you in order to obtain its commitment, except on the terms contained herein, in the Summary of Terms and in the Fee Letter (defined below). It is also understood and agreed among all the parties hereto that any syndication of the Bridge Loan Facility will reduce the commitments of Bank of America and ML hereunder on a pro rata basis. The commitments of Bank of America and ML hereunder and the agreement of the Co-Lead Arrangers to provide the services described herein are subject to the agreement in the preceding paragraph and the satisfaction of each of the following conditions precedent in a manner acceptable to us in our reasonable discretion: (a) satisfaction in all material respects of each of the terms and conditions set forth herein and in the Summary of Terms; (b) satisfaction of each of the terms and conditions set forth in that certain fee letter dated as of the date hereof among Bank of America, ML, the Co-Lead Arrangers and Quest (the "Fee Letter"); (c) our satisfaction that prior to and during the syndication of the Bridge Loan Facility there shall be no competing offering, placement or arrangement of any bank financing by or on behalf of Quest or any of its subsidiaries other than with respect to your receivables financing program and with respect to the Five Year Term Loan (as defined below); (d) the negotiation, execution and delivery of definitive documentation for the Bridge Loan Facility consistent with the Summary of Terms; (e) since the date hereof, no material adverse change in or material disruption of conditions in the financial, banking or capital markets which we, in our reasonable discretion, deem material in connection with the syndication of the Bridge Loan Facility shall have occurred and be continuing; (f) no development or event shall have occurred since December 31, 2001 that has had or is reasonably likely to have a material adverse effect on the business, financial position or results of operations of (i) Quest and its consolidated subsidiaries taken as a whole or (ii) to Quest and its consolidated subsidiaries giving effect to the acquisition of the Target; and (g) our not becoming aware after the date hereof of any information or other matter which in our judgment is inconsistent in a material and adverse manner taken as a whole Quest Diagnostics Incorporated Commitment Letter March 27, 2002 Page 3 with any information or other matter disclosed to us prior to the date hereof (in which case we may, in our sole discretion, suggest alternative financing amounts or structures that ensure adequate protection for the Lenders or terminate this letter and any commitment or undertaking hereunder). You hereby represent, warrant and covenant that (a) all information taken as a whole (excluding information of a general economic nature), other than Projections (defined below), which has been or is hereafter made available to us or the Lenders by you or any of your representatives in connection with the transactions contemplated hereby (the "Information") is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and (b) all financial projections concerning Quest and its subsidiaries that have been or are hereafter made available to us or the Lenders by you or any of your representatives (the "Projections") have been or will be prepared in good faith based upon assumptions you believe at the time to be reasonable. You agree to furnish with such Information and Projections as we may reasonably request and to supplement the Information and the Projections from time to time until the closing date for the Bridge Loan Facility so that the representation, warranty and covenant in the preceding sentence is correct on such closing date. You understand that in arranging and syndicating the Bridge Loan Facility, Bank of America, ML and the Co-Lead Arrangers will be using and relying on the Information and the Projections without independent verification thereof. By acceptance of this offer, Quest agrees to pay all reasonable due diligence and legal expenses incurred before the date hereof and all reasonable out-of-pocket fees and expenses (including reasonable attorneys' fees and expenses and due diligence expenses) incurred after the date hereof by us in connection with the Bridge Loan Facility and the syndication thereof. You agree to indemnify and hold harmless Bank of America, ML, the Co-Lead Arrangers, each Lender and each of their respective affiliates and their respective directors, officers, agents and employees (each an "Indemnitee") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, and costs and expenses of any kind arising out of or relating to this letter or the transactions contemplated hereby, the Bridge Loan Facility, the use of loan proceeds or the commitments, including without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigation, administrative, or judicial proceeding (whether or not such Indemnitee shall be a designated party thereto); provided that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct as determined in a final non-appealable judgment by a court of competent jurisdiction. No Indemnitee shall be liable (i) for any action taken by it or not taken by it in the absence of its own gross negligence or willful misconduct, including any action or inaction in connection with the use by others of Information or other materials obtained through the internet, Intralinks or other similar information transmission systems in connection with the Bridge Loan Facility or (ii) for any special, consequential, punitive, or indirect damages. This indemnification and limitation of liability shall survive and continue for the benefit of the Indemnitees at all times after Quest's acceptance of this letter agreement, notwithstanding any failure of the Bridge Loan Facility to close. The terms of this letter, the Summary of Terms and the Fee Letter are confidential and, except for disclosure on a confidential basis to our and your respective accountants, attorneys and other professional advisors retained in connection with the Bridge Loan Facility or as may be required by law, rule or Quest Diagnostics Incorporated Commitment Letter March 27, 2002 Page 4 regulation or regulatory authority may not be disclosed by any party hereto in whole or in part to any other person or entity without the prior written consent of each other party hereto; provided, however, that it is understood and agreed that you may disclose the terms of this letter and the Summary of Terms (but not the Fee Letter) (i) on a confidential basis to the board of directors and advisors of the Target in connection with their consideration of the Acquisition and (ii) after your acceptance hereof, in filings with the SEC and other applicable regulatory authorities, and in proxy and other materials disseminated to stockholders. In connection with and for the purposes of services and transactions contemplated hereby, you agree that Bank of America, ML and the Co-Lead Arrangers are permitted to access, use and share with any of their bank or non-bank affiliates, agents, advisors (legal or otherwise) or representatives or with any potential lenders in connection with the syndication of the Bridge Loan Facility on a confidential basis, any information concerning Quest and its subsidiaries related to this financing that is or may come into the possession of Bank of America, ML, the Co-Lead Arrangers or any of such affiliates. It is understood and agreed by all parties hereto that the Bridge Loan Facility shall be refinanced by Quest as soon as possible following the closing thereof. In connection therewith, Quest agrees in good faith to take all such action as may be necessary to refinance or repay the entire amount of the funding under the Bridge Loan Facility as soon as possible after the closing thereof, including, without limitation, with the proceeds of (a) a five year term loan, as set forth in that certain commitment letter among Quest, Bank of America, ML and the Co-Lead Arrangers dated as of the date hereof ( the "Five Year Term Loan") and (b) a note offering as set forth in that certain engagement letter among Quest and the joint book managers party thereto dated as of the date hereof (the "Note Offering"). BAS and ML agree to use all reasonable efforts to assist Quest in refinancing the Bridge Loan Facility as soon as possible and to arrange the most favorable refinancing practical. The provisions of the immediately preceding four paragraphs shall remain in full force and effect notwithstanding the termination of this letter or any commitment or undertaking hereunder and regardless of whether any definitive documentation for the Bridge Loan Facility shall be executed. Quest should be aware that Bank of America, ML and the Co-Lead Arrangers and/or one or more of their affiliates may be providing financing or other services to parties whose interests may conflict with the Borrower's interests. Consistent with the longstanding policies of Bank of America, ML and the Co-Lead Arrangers to hold in confidence the affairs of their customers, neither Bank of America, ML nor the Co-Lead Arrangers nor any of their affiliates will furnish confidential information obtained from Quest to any of their other customers. Furthermore, neither Bank of America, ML nor the Co-Lead Arrangers nor any of their affiliates will make available to Quest confidential information that Bank of America, ML or the Co-Lead Arrangers obtained from any other customer. This letter and the Fee Letter shall be governed by the laws of the State of New York. This letter, together with the Summary of Terms and the Fee Letter, are the only agreements that have been entered into among us with respect to the Bridge Loan Facility and set forth the entire understanding of the parties with respect thereto. This letter may be modified or amended only by the written agreement of all of us. This letter is not assignable by Quest without our prior written consent and is intended to be solely for the benefit of the parties hereto and the Indemnified Parties. Quest Diagnostics Incorporated Commitment Letter March 27, 2002 Page 5 This offer will expire at 5:00 p.m. Eastern Standard Time on April 2, 2002 unless you execute this letter and the Fee Letter and return them to us prior to that time (which may be by facsimile transmission), whereupon this letter and the Fee Letter (each of which may be signed in one or more counterparts) shall become binding agreements. Thereafter, this undertaking and commitment will expire on August 1, 2002 unless definitive documentation for the Bridge Loan Facility is executed and delivered prior to such date. Quest Diagnostics Incorporated Commitment Letter March 27, 2002 Page 6 We are pleased to have the opportunity to work with you in connection with this important financing. Very truly yours, BANK OF AMERICA, N.A. By: /s/ Philip S. Durand ------------------------------------- Name: Philip S. Durand ------------------------------------- Title: Managing Director ------------------------------------- BANC OF AMERICA SECURITIES LLC By: /s/ Robert A. Schleusner ------------------------------------- Name: Robert A. Schleusner ------------------------------------- Title: Vice President ------------------------------------- MERRILL LYNCH CAPITAL CORPORATION By: /s/ Sheila McGillicuddy ------------------------------------- Name: Sheila McGillicuddy ------------------------------------- Title: Vice President ------------------------------------- MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Sheila McGillicuddy ------------------------------------- Name: Sheila McGillicuddy ------------------------------------- Title: Director ------------------------------------- Accepted and Agreed to as of April 1, 2002: ------------- QUEST DIAGNOSTICS INCORPORATED By: /s/ Joseph P. Manory ------------------------------------- Name: Joseph P. Manory ------------------------------------- Title: Vice President, Treasurer ------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----