1
EXHIBIT 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of June 10, 1998 (the "Agreement"), between
the undersigned holders (collectively the "Holders" and each a "Holder") of
shares of the common stock, $.10 par value (the "Manor Care Common Stock"), of
MANOR CARE, INC., a Delaware corporation ("Manor Care"), and HEALTH CARE AND
RETIREMENT CORPORATION, a Delaware corporation ("HCR").
RECITALS
Manor Care, HCR and Catera Acquisition Corp., a Delaware corporation
and a wholly-owned subsidiary of HCR ("Merger Sub"), propose to enter into an
Agreement and Plan of Merger dated the date hereof (the "Merger Agreement";
capitalized terms not otherwise defined herein being used herein as therein
defined), pursuant to which Merger Sub would be merged (the "Merger") with and
into Manor Care, and each outstanding share of Manor Care Common Stock would be
converted into the right to receive shares ("HCR Shares") of HCR Common Stock;
As a condition of its entering into the Merger Agreement, HCR has
requested each Holder to agree, and each Holder has agreed, to enter into this
Agreement;
Prior to the date hereof, HCR and the Holders had no agreement,
arrangement or understanding (as such terms are used in Section 203 of the
Delaware General Corporation Law (the "DGCL")) for the purpose of acquiring,
holding, voting or disposing of shares of Manor Care Common Stock; and
In consideration for the agreements contained herein, prior to the
execution hereof, and prior to HCR becoming an "interested stockholder" for
purposes of Section 203 of the DGCL, the board of the directors of Manor Care
has approved this Agreement, the Merger Agreement and the transactions
contemplated hereby and thereby, including the agreement of the Holders to vote
as provided in Section 2 of this Agreement and not to transfer shares of Manor
Care Common Stock as provided in Section 5(B) of this Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Representations and Warranties of the Holders. Each Holder, with
respect to itself and its Subject Securities, represents and warrants, severally
and not jointly, to HCR as follows:
A. Ownership of Securities. Each Holder is the record and/or
beneficial owner of the number of shares of Manor Care Common Stock (the
"Existing Securities") (together with any shares of Manor Care Common Stock
or other securities of Manor
1
2
Care hereafter acquired by the Holder, the "Subject Securities") set forth
on the signature page to this Agreement, with such authority or power
concerning such shares as is described on Schedule 1.A hereto with respect
to such Holder. Such Holder does not beneficially or of record own any
securities of Manor Care on the date hereof other than the Existing
Securities. The Holder has sole voting power and sole power to issue
instructions with respect to the voting of the Existing Securities, sole
power of disposition, sole power of exercise and the sole power to demand
appraisal rights, except as described on Schedule 1.A, in each case with
respect to all of the Existing Securities, except as indicated on said
Schedule and, on the date of the Manor Care Stockholders Meeting (as
defined in the Merger Agreement), will have the sole voting power and power
to issue instructions with respect to the voting of all of such Holder's
Subject Securities, the sole powers of disposition, exercise and the sole
power to demand appraisal rights, in each case with respect to all of such
Holder's Subject Securities, except as described on Schedule 1.A.
B. Power; Binding Agreement. Each Holder has the legal capacity,
power and authority to enter into and perform all of such Holder's
obligations under this Agreement. The execution, delivery and performance
of this Agreement by each Holder will not violate any other agreement
relating to the Subject Securities to which the Holder is a party,
including, without limitation, any voting agreement, shareholder's
agreement, partnership agreement or voting trust. This Agreement has been
duly and validly executed and delivered by such Holder and constitutes a
valid and binding agreement of such Holder, enforceable against such Holder
in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
C. No Conflicts. No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Holder and the
consummation by such Holder of the transactions contemplated hereby and
neither the execution and delivery of this Agreement by such Holder nor the
consummation by such Holder of the transactions contemplated hereby nor
compliance by such Holder with any of the provisions hereof shall conflict
with or result in any breach of any applicable partnership or other
organizational documents applicable to such Holder, result in a violation
or breach of, or constitute (with or without notice or lapse of time or
both) a default (or give rise to any third-party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or
other instrument or obligation of any kind to which such Holder is a party
or by which such Holder's properties or assets may be bound or violate any
order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to such Holder or any of such Holder's properties or
assets,
2
3
except for any such conflicts, breaches, defaults or violations as would
not materially impair such Holder's performance of its obligations
hereunder.
D. No Liens. The Existing Securities are now and, at all times during
the term hereof, the Subject Securities will be held by such Holder, or by
a nominee or custodian for the benefit of such Holder, free and clear of
all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any encumbrances arising hereunder or as set forth
on Schedule 1.A.
E. Certain Representations. Each Holder covenants that, at or
immediately prior to the Effective Time, it will execute and deliver to
each of HCR and Manor Care a letter in substantially the form of Exhibit A
attached hereto. Each Holder acknowledges that the representations made in
such letter may, among other things, be relied upon by counsel in opining
that the Merger constitutes a reorganization within the meaning of Section
368(a) of the Internal Revenue Code.
2. Agreement to Vote Shares. At every meeting of the stockholders of
Manor Care called with respect to any of the following, and at every adjournment
thereof, and on every action or approval by written consent of the stockholders
of Manor Care with respect to any of the following, each Holder, severally and
not jointly, agrees that it shall vote or execute a written consent, with
respect to, as appropriate all the Subject Securities as to which it has power
to vote in any such vote or consent: (i) in favor of the Merger, the adoption
of and execution and delivery of the Merger Agreement and the approval of the
terms thereof and each of the other transactions contemplated by the Merger
Agreement and (ii) against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement): (1) any extraordinary
corporate transaction, including, but not limited to a merger, consolidation or
other business combination involving Manor Care or any of its subsidiaries
(other than IHH); (2) a sale, lease or transfer of a material amount of assets
of Manor Care or any of its subsidiaries (other than IHH) or a reorganization,
recapitalization, dissolution or liquidation of Manor Care or any of its
subsidiaries (other than IHH); (3) (a) any change in the majority of the board
of directors of Manor Care except as contemplated by this Agreement; (b) any
material change in the present capitalization of Manor Care or any amendment of
Manor Care's Certificate of Incorporation; (c) any other material change in
Manor Care's corporate structure or business; or (d) any other action, which, in
the case of each of the matters referred to in clauses (a), (b), (c) or (d)
above, is intended, or could reasonably be expected, to impede, interfere with,
delay, postpone, discourage or materially adversely affect the consummation of
the Merger or the transactions contemplated by the Merger Agreement or this
Agreement.
3. IRREVOCABLE PROXY. EACH HOLDER HEREBY, SEVERALLY AND NOT JOINTLY,
GRANTS TO, AND APPOINTS MERGER SUB AND THE PRESIDENT OF MERGER SUB AND THE
TREASURER OF MERGER SUB, IN THEIR RESPECTIVE CAPACITIES AS OFFICERS OF MERGER
SUB, AND ANY INDIVIDUAL WHO SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF MERGER
SUB, AND ANY OTHER
3
4
DESIGNEE OF MERGER SUB, EACH OF THEM INDIVIDUALLY, SUCH HOLDER'S PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE OR ACT BY WRITTEN
CONSENT WITH RESPECT TO SUCH HOLDER'S SUBJECT SECURITIES IN ACCORDANCE WITH
SECTION 2 HEREOF. THIS PROXY IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE, AND EACH HOLDER WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER
INSTRUMENTS AS MAY REASONABLY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS
PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY IT WITH RESPECT TO THE
SUBJECT SECURITIES.
4. Representations and Warranties of HCR.
A. Power; Binding Agreement. HCR has full corporate power and
authority to enter into and perform all of HCR's obligations under this
Agreement. This Agreement has been duly and validly executed and delivered
by HCR and constitutes a valid and binding agreement of HCR, enforceable
against HCR in accordance with its terms, except that (i) such enforcement
may be subject to applicable bankruptcy, insolvency or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
B. No Conflicts. No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by HCR and the consummation
by HCR of the transactions contemplated hereby and neither the execution
and delivery of this Agreement by HCR nor the consummation by HCR of the
transactions contemplated hereby nor compliance by HCR with any of the
provisions hereof shall conflict with or result in any breach of any
organizational documents applicable, to HCR result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third-party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or
other instrument or obligation of any kind to which HCR is a party or by
which HCR's properties or assets may be bound or violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable
to HCR or any of HCR's properties or assets, except for any such conflicts,
breaches, defaults or violations as would not materially impair HCR's
performance of its obligations hereunder.
5. Covenants of the Holders. Each Holder, severally and not jointly,
hereby agrees and covenants that:
A. No Solicitation. Such Holder shall not, directly or indirectly,
solicit (including by way of furnishing information) or respond to any
inquiries or the making of
4
5
any proposal by any person or entity (other than HCR or any affiliate of
HCR) with respect to Manor Care that constitutes or could reasonably be
expected to lead to an Alternative Transaction. If any Holder receives any
such inquiry or proposal, then it shall promptly inform HCR of the terms
and conditions, if any, of such inquiry or proposal and the identity of the
person making it. Such Holder will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
B. Restriction on Transfer, Proxies and Noninterference. Such Holder
shall not, directly or indirectly: (i) except pursuant to the terms of the
Merger Agreement, offer for sale, sell, transfer (whether by merger,
operation of law or otherwise), tender, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for
sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of such Holder's Subject Securities; provided,
however, that such Holder may in connection with its estate planning
objectives, transfer or assign any or all of its Subject Securities to (a)
Xxxxxxx Xxxxxx or his spouse or widow, their lineal descendants or their
spouses or widows or widowers (so long as they remain spouses) (each a
"Member of the Xxxxxx Family"), or the estate of the foregoing persons (but
only until such time as such shares of the Common Stock are distributed
therefrom), (b) any partnership, trust, corporation or other entity (each,
an "Entity"), but only if a Member or Members of the Xxxxxx Family or
another Entity satisfying the requirements hereof are the sole "Beneficial
Owners" (as such term is defined under the HCR Rights Plan (as defined in
the Merger Agreement)) of the Common Stock held by such Entity, other than
any officer, trustee, director, or other managing person or managing
partner or managing member of any such Entity to the extent any such person
is deemed to be the Beneficial Owner of Common Stock held by such Entity,
provided such person is not the Beneficial Owner, other than through an
Entity described in this clause (b), of in excess of 1% of the total
outstanding Common Stock; (ii) except as contemplated hereby, grant any
proxies or powers of attorney, deposit any such Subject Securities into a
voting trust or enter into a voting agreement with respect to any of such
Holder's Subject Securities; or (iii) take any action that would make any
representation or warranty contained herein untrue or incorrect or have the
effect of preventing or disabling such Holder from performing its
obligations under this Agreement. The Holder's Manor Care stock
certificates shall be legended to reflect the above restrictions.
6. Fiduciary Duties. Notwithstanding anything in this Agreement to the
contrary, the covenants and agreements set forth herein shall not prevent any
Holders serving on Manor Care's Board of Directors from taking any action,
subject to applicable provisions of the Merger Agreement, which such director
shall deem to be required by his fiduciary duties to Manor Care or its
stockholders while acting in such person's capacity as a director of Manor Care.
7. Assignment; Benefits. The rights (but not the obligations) of HCR
hereunder may be assigned, in whole or in part, to Merger Sub or any other
direct wholly-owned subsidiary of
5
6
HCR, to the extent and for so long as it remains a direct wholly-owned
subsidiary of HCR. Other than as permitted in the preceding sentence, this
Agreement may not be assigned by any party hereto without the prior written
consent of the other party. This Agreement shall be binding upon, and shall
inure to the benefit of, the Holder, HCR and their respective successors and
permitted assigns.
8. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
if and when delivered personally or by overnight courier or sent by electronic
transmission, with confirmation received, as specified below:
If to each Holder:
AT THE ADDRESSES SET FORTH ON THE SIGNATURE PAGES HERETO
If to HCR:
Xxx XxxXxxx
Xxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: R. Xxxxxxx Xxxxxx
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
or to such other address or telecopy number as any party may have furnished to
the other parties in writing in accordance herewith.
9. Specific Performance. The parties hereto agree that irreparable harm
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
6
7
10. Amendment. This Agreement may not be amended or modified, except by
an instrument in writing signed by or on behalf of each of the parties hereto.
This Agreement may not be waived by either party hereto, except by an instrument
in writing signed by or on behalf of the party granting such waiver.
11. Governing Law. The Laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding by a party hereto with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any state or federal court of competent jurisdiction in the State
of Delaware, and each party hereto hereby submits to the exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or judgment.
By the execution and delivery of this Agreement, (i) HCR and Merger Sub each
appoints The Corporation Trust Company, at its office in Wilmington, Delaware,
as its agent upon which process may be served in any such suit, action or
proceeding and (ii) each Stockholder appoints CSC/The United States Corporation
Company at its office in Wilmington, Delaware, as its agent upon which process
may be served in any such suit, action or proceeding. Service of process upon
such agent, together with notice of such service given to a party hereto in the
manner provided in Section 8 hereof, shall be deemed in every respect effective
service of process upon it in any suit, action or proceeding. Nothing herein
shall in any way be deemed to limit the ability of a party hereto to serve any
such writs, process or summonses in any other manner permitted by applicable
Law. Each party hereto hereby irrevocably waives any objections which it may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any state or
federal court of competent jurisdiction in the State of Delaware, and hereby
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum. No suit,
action or proceeding against a party hereto with respect to this Agreement may
be brought in any court, domestic or foreign, or before any similar domestic or
foreign authority other than in a court of competent jurisdiction in the State
of Delaware, and each party hereto hereby irrevocably waives any right which it
may otherwise have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority.
12. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
13. Defined Terms. Terms used herein but not otherwise defined shall have
the meanings set forth in the Merger Agreement.
14. Termination. This Agreement shall terminate upon the earlier of (i)
the Effective Time the Merger and (ii) the date of termination of the Merger
Agreement, unless the termination of the Merger Agreement gives rise to the
obligation of Manor Care to pay a termination fee pursuant to Section 9.3 of the
Merger Agreement, in which case the Voting Agreement shall terminate on the date
that is the six month anniversary of the date of termination of the Merger
7
8
Agreement. The date and time at which this Agreement is terminated in
accordance with this Section 14 is referred to herein as the "Termination
Date." Upon any termination of this Agreement, this Agreement shall thereupon
become void and of no further force and effect, and there shall be no liability
in respect of this Agreement or of any transactions contemplated hereby or by
the Merger Agreement on the part of any party hereto or any of its directors,
officers, partners, stockholders, employees, agents, advisors, representatives
or affiliates; provided, however, that nothing herein shall relieve any party
from any liability for such party's willful breach of this Agreement; and
provided further that nothing herein shall limit, restrict, impair, amend or
otherwise modify the rights, remedies, obligations or liabilities of any person
under any other contract or agreement, including, without limitation, the
Merger Agreement.
8
9
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of each of
the parties hereto, all as of the date first above written.
Xxxxxx Associates Limited Partnership 5,417,761
By: /s/ X. Xxxxxxx XxXxxxx
-------------------------------------
X. Xxxxxxx XxXxxxx
Its Voting General Partner
MC Investments Limited Partnership 4,415,250
By: /s/ X. Xxxxxxx XxXxxxx
-------------------------------------
X. Xxxxxxx XxXxxxx
Its Voting General Partner
Mid Pines Associates Limited Partnership 1,779,628
By: /s/ Xxxxxxx Xxxxxx, Xx.
-------------------------------------
Xxxxxxx Xxxxxx, Xx.
Its Managing General Partner
Realty Investment Company, Inc. 3,567,869
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
President
The Xxxxxxx Xxxxxx Declaration of Trust 3,717,542
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
Trustee
The Xxxx X. Xxxxxx Declaration of Trust 798,711
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Trustee
