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Exhibit 2
[ARBOR HEALTH CARE COMPANY LOGO] FOR FURTHER INFORMATION CONTACT:
Xxxx X. Xxxxx
ARBOR HEALTH CARE COMPANY Chairman, President and
0000 Xxxxxxx Xxxx, Xxx 000 Xxxxx Xxxxxxxxx Xxxxxxx
Xxxx, Xxxx 00000-0840 (000) 000-0000
000-000-0000
Fax 000-000-0000 Xxxxxxxx Xxxx
Xxxxxxx Financial
(000) 000-0000
FOR IMMEDIATE RELEASE
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ARBOR HEALTH CARE ADOPTS STOCKHOLDER RIGHTS AGREEMENT
Lima, OH, November 18, 1996 -- Arbor Health Care Company (Nasdaq: AHCC), today
announced that its Board of Directors has adopted a Stockholder Rights Agreement
to assure that all Arbor stockholders receive fair and equal treatment in the
event of a coercive takeover attempt of the Company. Under the Plan,
shareholders will receive one right for each outstanding share of Arbor common
stock. The rights will attach on November 21, 1996, to stockholders of record on
November 14, 1996. The rights will expire on November 14, 2006.
Xxxx Xxxxx, Chairman, President and CEO of Arbor stated, "This move by the Board
is not in response to any pending or anticipated takeover threat to the Company,
but rather as a measure to ensure fair and equal treatment for all Arbor
shareholders in the event that an unfriendly or unfair offer is made for the
Company. The rights protect Arbor stockholders by giving the Board of Directors
a mechanism by which the Directors could force a potential acquiror to propose
an adequate and fair price in any takeover attempt. More than 1,700 other
corporations, including our peer companies, have issued Rights Plans similar to
the one we have approved."
Since the rights may be redeemed by the Board of Directors under certain
circumstances, they will not interfere with any merger or other business
combination approved by the Board. The issuance of the rights does not in any
way dimminish the financial strength of Arbor or interfere with its business
plans. The issuance of the rights has no dilutive effect, will not affect
reported earnings per share, and will not change the way Arbor common stock is
currently traded.
The Rights Plan provides for the issuance of one right for each outstanding
share of Arbor common stock. The rights will become exercisable only if a person
or group hereafter acquires 15% or more of Arbor's outstanding voting stock or
announces a tender or exchange offer that would result in ownership of 15% or
more of Arbor's voting stock. Each right will entitle stockholders to buy one
one-thousandth (1/1000th) of a share of a new series of junior participating
cumulative preferred stock at an exercise price of $100 per right, subject to
antidilution adjustments. Each one one-thousandth (1/1000th) of a share of this
new preferred stock has the dividend and voting rights of and is designed to be
substantially equivalent to one share of common stock. Arbor's Board of
Directors may redeem all rights for $0.01 per right at any time prior to the
acquisition of 15% or more of Arbor's stock by a person or group.
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In addition, the Rights Plan includes an exchange option whereby if a person or
group hereafter acquires 15% or more of the outstanding voting stock, the Board
of Directors may, at its option, exchange the rights in whole or in part for
shares of Arbor stock. Under this option, Arbor would issue one share of common
stock, or one one-thousandth (1/1000th) of a share of the new preferred stock,
for each right then exercisable. This exchange would not apply to shares held by
the person or group holding 15% or more of Arbor's voting stock.
If, after the rights have become exercisable, Arbor decides to merge or
otherwise combine with another entity, or sells more than 50% of its assets or
earnings power, each right then outstanding will entitle its holder to purchase
for $100, subject to antidilution adjustments, a number of the acquiring party's
common stock having a market value of twice that amount.
Xxxxxxxxx, Xxxxxxxx & Co. acted as the financial advisor for Arbor Health Care
Company in connection with the establishment of the Rights Plan.
Arbor Health Care Company provides subacute medical services, including medical
rehabilitation, ventilator weaning and respiratory therapy, and complex medical
services such as cardiac recovery, infusion therapy and wound care, as well as
basic health care services for geriatric or chronically ill patients. The
Company operates 29 licensed nursing centers in five states with a total of
3,458 beds. Arbor's Pharmacy Division, with operations in Ohio and Florida,
serves approximately 23,900 beds, including 3,300 Arbor beds.
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