Exhibit 4
CONFORMED COPY
FIRST AMENDMENT, dated as of May 19, 1998 (the "First
Amendment"), to the Agreement and Plan of Merger dated as of
April 19, 1998 (the "Merger Agreement") among KAPSON SENIOR
QUARTERS CORP., a Delaware corporation ("Parent"), KA
ACQUISITION CORP., a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and ATRIA COMMUNITIES, INC., a
Delaware corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company, have previously approved the merger of the Sub (the "Merger") with
and into the Company, upon the terms and subject to the conditions set
forth in the Merger Agreement; and
WHEREAS Parent, Sub and the Company desire to amend the Merger
Agreement as set forth herein and the respective Boards of Directors of
Parent, Sub and the Company have approved the Merger upon the terms and
subject to the conditions set forth in the Merger Agreement as amended
hereby;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Amendment to Section 3.01 of the Merger Agreement.
Section 3.01(a) of the Merger Agreement is hereby amended and restated to
read in its entirety as follows:
"(a) Capital Stock of Sub. Each issued and outstanding share of
the common stock of Sub shall be converted into and become 9,135.802
fully paid and nonassessable shares of Common Stock, par value $0.01
per share, of the Surviving Corporation; provided, however, that at
any time prior to ten calendar days prior the Stockholders Meeting,
Parent and Sub may elect, by written notice to the Company and Vencor,
to change the number of shares of Common Stock of the Surviving
Corporation into which each share of capital stock of Sub shall be
converted at the Effective Time of the Merger to any number of shares
not less than 9,135.802 and not greater than 11,111.111; provided
further, however, that, at or immediately prior to the Effective Time
of the Merger, Parent shall make an equity contribution to Sub in an
aggregate amount equal to the product of (x) $20.25 and (y) the
aggregate number of shares of Common Stock of the Surviving
Corporation into which the outstanding shares of common stock of Sub
shall be converted at the Effective Time of the Merger."
SECTION 2. Amendment to Section 4.02(h). Section 4.02(h) of the
Merger Agreement is hereby amended by adding the following sentence to the
end of such Section: "Parent and Sub hereby represent and warrant to the
Company that the outstanding capital stock of Sub immediately prior to the
Effective Time of the Merger will consist solely of 1,000 shares of common
stock, par value $0.01 per share, owned of record and beneficially by
Parent or an affiliate of Parent."
SECTION 3. Amendment to Certain Provisions Relating to Rollover
Options. (a) Subparagraph (ii) of Section 4.01(l) of the Merger Agreement
is hereby amended by replacing the reference to "Rollover Options" to a
reference to "Nonaccelerating Rollover Options".
(b) The first sentence of Section 6.05(d) is hereby amended by
replacing the reference to "Schedule 6.05(d)" to "Schedule 6.05(d)(i)".
(c) The fourth sentence of Section 6.05(d) of the Merger
Agreement is hereby amended and restated in its entirety as follows:
"The Rollover Options shall be subject after the Effective Time
of the Merger to the same terms and conditions that applied
before the Effective Time of the Merger (including terms and
conditions that will cause the accelerated vesting of the
Rollover Options as a result of the transactions contemplated by
this Agreement) with the following exceptions: (i) with respect
to the Company Stock Options identified on Schedule 6.05(d)(ii)
(the "Nonaccelerating Rollover Options"), any provision or
agreement providing for (x) the accelerated vesting of such
Nonaccelerating Rollover Options as a result of the transactions
contemplated by this Agreement or (y) the expiration or
cancelation of such Nonaccelerating Rollover Options upon
termination of employment for any reason ("Termination") of the
holder of Nonaccelerating Rollover Options shall not be given
effect provided, that, (1) the original vesting schedule shall
continue to apply to such Nonaccelerating Rollover Options and
(2) upon the vesting of any Nonaccelerating Rollover Options that
have not vested as of the date of Termination, the holder thereof
shall receive an amount of cash therefor equal to the aggregate
spread with respect to each Nonaccelerating Rollover Option; (ii)
upon Termination of the holder of any Rollover Options, such
holder shall receive an amount of cash equal to the aggregate
spread with respect to each Rollover Option, except for
Nonaccelerating Rollover Options that are unvested as of such
Termination (which are governed by clause (i) above); and (iii)
the shares of the Surviving Corporation delivered upon exercise
of the Rollover Options shall be subject to the shareholder
provisions set forth in the Shareholders Agreement. For purposes
of the immediately preceding sentence, the aggregate "spread"
with respect to each Rollover Option shall be equal to the
product of (x) the number of shares covered by such Rollover
Option and (y) the excess of (A) the fair market value of one
share of Common Stock of the Surviving Corporation at the date of
determination (either the date of Termination or vesting, as
applicable), over (B) the exercise price of such Rollover
Option."
(d) Schedule 6.05(d) to the Merger Agreement is hereby amended
and restated in its entirety to read as set forth on Exhibit A attached
hereto.
(e) Schedule 4.01(1) to the Merger Agreement is hereby amended
and restated in its entirety to read as set forth on Exhibit B hereto.
SECTION 4. Amendment to Section 6.08(b). The first sentence of
Section 6.08(b) is hereby amended and restated in its entirety as follows:
The Company shall pay to Parent upon demand a fee of $18,209,496,
payable in same day funds, plus all Expenses (as defined below) of Parent,
if (i) the Company terminates this Agreement pursuant to Section 8.01(f);
(ii) Parent terminates this Agreement pursuant to Section 8.01(c), provided
that the breach or failure to perform by the Company giving rise to such
right to terminate under Section 8.01(c) must be a deliberate breach or
failure to perform with the intent of frustrating the Closing; (iii) Parent
terminates this Agreement pursuant to Section 8.01(d); (iv) any person
makes a takeover proposal that was not withdrawn more than ten days prior
to the date of the Stockholders Meeting and thereafter this Agreement is
terminated pursuant to Section 8.01(b)(i); or (v) any person makes a
takeover proposal that was not withdrawn on the date 60 days prior to the
Outside Date (as defined in Section 8.01(b)(ii)) and the Company
Stockholder Approval is not obtained prior to termination of this
Agreement.
SECTION 5. Amendment to Section 9.08 of the Merger Agreement.
Section 9.08 is hereby amended by inserting the following sentence
immediately after the second sentence of such Section:
"Notwithstanding anything to the contrary in Section 2.01 or this
Section 9.08, no person shall be substituted as a constituent
corporation in the Merger unless (i) such person is a wholly
owned subsidiary of Parent or a wholly owned subsidiary of an
affiliate of Parent and (ii) the representations and warranties
of Sub set forth in Sections 4.02(a), (b), (c) and (h) shall be
true and correct with respect to such person."
SECTION 6. Governing Law. This First Amendment shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 7. Counterparts. This First Amendment may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 8. Full Force and Effect. Except as expressly modified
and amended by this First Amendment, the Merger Agreement shall continue in
full force and effect and is hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
First Amendment to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
KAPSON SENIOR QUARTERS CORP.,
by /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: President
KA ACQUISITION CORP.,
by /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: President
ATRIA COMMUNITIES, INC.,
by /s/ J. Xxxxxxx Xxxxxx
--------------------------
Name: J. Xxxxxxx Xxxxxx
Title: Chief Financial Officer, Vice
President of Development and
Secretary
Pursuant to Section 8.03 of the Merger Agreement, VENCOR, INC.
and VENCOR HOLDINGS, L.L.C. hereby approve the amendment of the Merger
Agreement as set forth above.
VENCOR, INC.,
by /s/ Xxxxx. X. Xxxxxxxxxxx, Xx.
--------------------------------
Name: Xxxxx X. Xxxxxxxxxxx, Xx.
Title: Senior Vice President, Planning
and Development
VENCOR HOLDINGS, L.L.C.,
by /s/ Xxxxx X. Xxxxxxxxxxx, Xx.
-------------------------------
Name: Xxxxx X. Xxxxxxxxxxx, Xx.
Title: Senior Vice President, Planning
and Development
