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Delaware | 2835 | 04-3565120 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
Scott F. Duggan, Esq. Goodwin ProcterLLP 53 State Street Boston, Massachusetts 02109 (617) 570-1000 | Matria Healthcare, Inc. 1850 Parkway Place, Suite 1200 Marietta, Georgia 30067 Attn: Roberta L. McCaw General Counsel (770) 767-4500 | James L. Smith III David W. Ghegan Troutman Sanders LLP 600 Peachtree Street, N.E. Atlanta, Georgia 30308 (404) 885-3000 |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
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The information in this proxy statement/prospectus is not complete and may be changed. Inverness may not sell these securities until the registration statement filed with the Securities and Exchange Commission, of which this document is a part, is declared effective. This proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any representation to the contrary is a criminal offense. |
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Ex-5.1 form of Opinion of Jay Mcnamara, Esq., Senior Counsel, Corporate & Finance, of Inverness Medical Innovations, Inc. | ||||||||
Ex-8.1 Form of Opinion of Goodwin Procter LLP relating to tax matters. | ||||||||
Ex-12 Statement of computation of ratios of earnings to fixed charges | ||||||||
Ex-23.1 Consent of BDO Seidman, LLP | ||||||||
Ex-23.2 Consent of KPMG LLP | ||||||||
Ex-23.3 Consent of PricewaterhouseCoopers LLP | ||||||||
Ex-23.4 Consent of Ernst & Young LLP | ||||||||
Ex-23.5 Consent of Colby & Company, PLC | ||||||||
Ex-99.3 Consent of SunTrust Robinson Humphrey |
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51 Sawyer Road, Suite 200
Waltham, Massachusetts 02453
(781) 647-3900
Attention: Investor Relations
1850 Parkway Place, Suite 1200
Marietta, Georgia 30067
(770) 767-4500
Attention: Secretary
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Q: | Why am I receiving this proxy statement/prospectus? |
A: | Inverness has agreed to acquire Matria under the terms of a merger agreement that is described in this proxy statement/prospectus. Please see “The Merger Agreement” beginning on page 91 of this proxy statement/prospectus. A copy of the merger agreement is attached to this proxy statement/prospectus as Annex A. |
In order to complete the merger, Matria stockholders must approve the merger and adopt the merger agreement, and all other conditions to the merger must be satisfied or waived. Matria will hold a special meeting of its stockholders to obtain this approval. | ||
This proxy statement/prospectus contains important information about the merger, the merger agreement and the special meeting of the stockholders of Matria, and you should read this proxy statement/prospectus carefully. | ||
Your vote is very important. We encourage you to vote as soon as possible. The enclosed proxy materials allow you to vote your Matria shares without attending the special meeting. For more specific information on how to vote, please see the questions and answers below. | ||
Q: | Why are Inverness and Matria proposing this transaction? |
A: | The boards of directors of Inverness and Matria believe that the transaction is in the best interests of each company and its stockholders and will provide strategic and financial benefits to the stockholders of both companies. Inverness and Matria expect to realize benefits including operating synergies and broader market opportunities from combining Inverness’ emerging disease and health management businesses with Matria’s established disease management and wellness businesses. Inverness views the acquisition of Matria as an important part of its overall health management growth strategy that will also complement its rapid diagnostics efforts. To review the parties’ reasons for the merger in greater detail, see “The Merger — Recommendation of Matria’s Board of Directors and Matria’s Reasons for the Merger” beginning on page 65 and “The Merger - Inverness’ Reasons for the Transaction” beginning on page 74 of this proxy statement/prospectus. |
Q: | How does Matria’s board of directors recommend that Matria stockholders vote? |
A: | The Matria board of directors recommends that Matria stockholders vote“FOR”the proposal to approve the merger and adopt the merger agreement. The Matria board of directors has determined that the merger agreement and the merger are advisable, fair to and in the best interests of Matria and its stockholders. Accordingly, the Matria board of directors has approved the merger agreement and the merger contemplated by the merger agreement. For a more complete description of the recommendation of the Matria board of directors, see “The Matria Special Meeting” beginning on page 57 of this proxy statement/prospectus and “The Merger — Recommendation of Matria’s Board of Directors and Matria’s Reasons for the Merger” beginning on page 65 of this proxy statement/prospectus. |
Q: | Am I being asked to vote on anything else? | |
A: | Yes. The Matria board of directors is asking you to authorize Matria management to adjourn the special meeting to a date not later than , 2008 if the number of shares of Matria common stock represented and voting in favor of approval of the merger and adoption of the merger agreement is insufficient |
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to approve the merger and adopt the merger agreement under Delaware law. Adjourning the special meeting to a later date will give Matria additional time to solicit proxies to vote in favor of the approval of the merger and adoption of the merger agreement. The Matria board of directors recommends that you vote“FOR”the adjournment proposal. | ||
Q: | What will happen in the proposed transaction? | |
A: | Pursuant to the terms of the merger agreement, Milano MH Acquisition Corp., a wholly owned subsidiary of Inverness, which we refer to as “Merger Sub,” will merge with and into Matria, and Matria will survive and continue as the interim surviving corporation. The merger will be followed, as soon as reasonably practicable, by a second merger, which we refer to as the “upstream merger.” In the upstream merger, the interim surviving corporation will merge with and into Milano MH Acquisition LLC, a wholly owned subsidiary of Inverness, which we refer to as “Merger LLC,” and Merger LLC will survive and continue to exist as a wholly owned subsidiary of Inverness. We refer to the merger and the upstream merger, together, as the “transaction.” | |
Q: | What consideration will Matria stockholders receive in the merger? | |
A: | For each share of Matria common stock they own, each Matria stockholder who does not properly exercise appraisal rights will receive a combination of (i) $6.50 in cash, and (ii) a portion of a share of newly created convertible perpetual preferred stock of Inverness, which we refer to as “Inverness Series B preferred stock,” having a stated value of $32.50 (the $400 liquidation value of a share of Inverness Series B preferred stock multiplied by 0.08125, which is the exchange ratio for the issuance of Inverness Series B preferred stock in the merger). Each Matria stockholder who does not properly exercise appraisal rights will receive cash for any fractional share of Inverness Series B preferred stock that such stockholder would be entitled to receive in the merger after aggregating all fractional shares to be received by such stockholder. However, under the merger agreement, at any time prior to the completion of the merger, Inverness may elect, in its sole discretion, to pay cash for each share of Matria common stock, in which case no Inverness Series B preferred stock will be issued in exchange for shares of Matria common stock and there will be no obligation among the parties to complete the upstream merger. | |
Q: | What are the terms of the Inverness Series B preferred stock? |
A: | We have included a summary of the Inverness Series B preferred stock, as well as a more complete description of the Series B preferred stock, beginning on pages 9 and 126, respectively. In addition, the form of certificate of designations for the Series B preferred stock is attached as Annex B to this proxy statement/prospectus. Matria stockholders are encouraged to read these descriptions and any other documents referred to or incorporated by reference therein. |
Generally, the Inverness Series B preferred stock is convertible into shares of Inverness common stock in certain limited circumstances, is senior to Inverness common stock, accumulates a dividend of 3% per annum, is not redeemable or payable and has certain limited voting rights but does not vote with the Inverness common stock. In addition, Inverness may settle any conversion by a holder of its Series B preferred stock in cash or a combination of cash and its common stock in lieu of settling entirely in shares of its common stock. Inverness’ ability to deliver shares of its common stock to satisfy its obligations upon conversion will be subject to a sufficient number of shares of Inverness common stock being available for issuance. Inverness will use its best efforts to obtain such stockholder approvals at its next annual meeting of stockholders as are necessary to increase the number of shares of common stock authorized and to otherwise allow for conversion of all shares of Series B preferred stock into shares of Inverness common stock. |
Q: | Will the Series B Preferred Stock be listed for trading on a stock exchange? | |
A: | Inverness will file an application to have the shares of Inverness Series B preferred stock issued in the merger and the shares of Inverness common stock issuable upon conversion thereof approved for listing on the American Stock Exchange LLC, which we refer to as “AMEX” throughout this proxy statement/prospectus. In addition, the merger agreement provides that Matria is not obligated to consummate the merger |
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unless UBS Securities LLC or another financial institution reasonably acceptable to Matria shall have confirmed that it is qualified and intends to serve as a market maker for the Series B preferred stock on AMEX and that such market maker shall have conducted a “road show” or similar marketing efforts with respect to the Series B preferred stock prior to the effective time of the merger. However, as described more fully in the risk factors relating to the Series B preferred stock beginning on page 31 of this proxy statement/prospectus, even if the Series B preferred stock is listed on AMEX and one or more market makers exist for the Series B preferred stock, an established trading market might not develop in the future. |
Q: | When do Inverness and Matria expect the transaction to be completed? | |
A: | Inverness and Matria are working to complete the merger as quickly as practicable and currently expect that the merger could be completed promptly after the special meeting. However, Inverness and Matria cannot predict the exact timing of the completion of the merger because it is subject to regulatory approvals and other conditions. | |
Q: | What are the material United States federal income tax consequences of the transaction? | |
A: | If Inverness does not exercise its right to pay the aggregate merger consideration solely in cash pursuant to the terms of the merger agreement, Inverness expects the merger and the upstream merger, considered together as a single integrated transaction, to qualify as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended, which we refer to throughout this proxy statement/prospectus as the “Internal Revenue Code.” In that case, Matria stockholders who do not perfect their appraisal rights generally will recognize gain (but not loss) equal to the lesser of the amount of cash received in the merger and the amount of gain realized in the merger. If Inverness exercises its right to pay the aggregate merger consideration solely in cash pursuant to the terms of the merger agreement, a holder of Matria common stock who receives cash in exchange for its shares generally will recognize gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount of cash received and the holder’s adjusted tax basis in the shares surrendered. |
Matria stockholders should read the discussion in the section entitled “The Merger — Material United States Federal Income Tax Consequences of the Merger and the Upstream Merger” beginning on page 79 of this proxy statement/prospectus and should consult their own tax advisors as to the United States federal income tax consequences of the merger, as well as the effects of state, local and foreign tax laws. |
Q: | What vote of Matria stockholders is required to approve the merger and adopt the merger agreement? | |
A: | Approval of the of the merger and adoption of the merger agreement requires the affirmative vote of the holders of a majority of the shares of Matria common stock outstanding on the record date. Only holders of record of Matria common stock at the close of business on , 2008, which we refer to as the record date, are entitled to notice of and to vote at the special meeting. As of the record date, there were shares of Matria common stock outstanding and entitled to vote at the special meeting. | |
Q: | What vote of Matria stockholders is required to approve the adjournment proposal? | |
A: | Approval of the adjournment proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Matria common stock present, either in person or by proxy, and entitled to vote at the special meeting. | |
Q: | Are there any risks related to the merger or any risks related to owning Matria common stock or Inverness Series B preferred stock? |
A: | Yes. You should carefully review the section entitled “Risk Factors” beginning on page 27 of this proxy statement/prospectus. |
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Q: | Are any stockholders already committed to vote in favor of the merger? |
A: | Yes. Pursuant to a voting agreement with Inverness, Matria’s Chief Executive Officer, Parker H. Petit, and certain other parties affiliated with Mr. Petit have agreed to vote all of the shares of Matria common stock that they directly, indirectly or beneficially own or control at the special meeting in favor of the merger proposal. These shares represented approximately 4.7% (or 8% if Mr. Petit exercises all of his vested and outstanding options to purchase Matria common stock prior to the record date) of the outstanding shares of Matria common stock as of the date of the voting agreement. For a more complete description of the voting agreement, see “The Voting Agreement” beginning on page 107 of this proxy statement/prospectus. The voting agreement is also attached to this proxy statement/prospectus as Annex C. |
Q: | Am I entitled to appraisal rights? |
A: | Under the Delaware General Corporation Law, holders of Matria common stock who do not vote for the adoption of the merger agreement have the right to seek appraisal and receive cash for the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they comply with all requirements of Delaware law, which are summarized in this proxy statement/prospectus. This appraisal amount could be more than, the same as, or less than the amount a Matria stockholder would be entitled to receive under the terms of the merger agreement. Any holder of Matria common stock intending to exercise its appraisal rights, among other things, must submit a written demand for appraisal to Matria prior to the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Failure to follow exactly the procedures specified under Delaware law will result in the loss of appraisal rights. Because of the complexity of the Delaware law relating to appraisal rights, if you are considering exercising your appraisal right, we encourage you to seek the advice of your own legal counsel. For a full description of appraisal rights, see ‘‘Appraisal Rights” beginning on page 153 of this proxy statement/prospectus. |
Q: | What will happen to Matria’s outstanding options in the merger? | |
A: | Matria’s outstanding options will be assumed by Inverness in the merger. Each option so assumed will thereafter represent an option to purchase a number of shares of Inverness common stock equal to the number of shares of Matria common stock subject to the option immediately prior to the merger (whether or not vested) multiplied by the option exchange ratio, rounded down to the nearest whole share. The Matria options to be assumed by Inverness will have fully vested prior to the effective time of the merger in accordance with their terms and any holder may exercise his or her Matria options prior to the merger, in which case the holder will receive the merger consideration for the shares of Matria common stock so acquired. The exercise price per share for each assumed Matria option will be equal to the exercise price per share of the original Matria option divided by the option exchange ratio, rounded up to the nearest whole cent. |
The “option exchange ratio” means the quotient obtained by dividing the closing price of a share of Matria common stock on the last trading day immediately prior to the effective time of the merger, as reported on The NASDAQ Global Select Market, by the average closing price of a share of Inverness common stock for the five most recent days that Inverness common stock has traded ending on the trading day immediately prior to the effective time of the merger, as reported on AMEX. For a full description of the treatment of Matria options see “The Merger Agreement — Treatment of Matria Stock Options and Assumption of Matria Stock Option Plans” on page 92 of this proxy statement/prospectus. |
Q: | How will Inverness pay for the cash portion of the merger consideration? |
A: | Inverness intends to pay the cash portion of the merger consideration with cash on hand and/or borrowings under existing revolving credit facilities. For a more detailed description of the sources of cash for the payment of the cash portion of the merger consideration, see “The Merger — Financing of the Merger” beginning on page 79 of this proxy statement/prospectus. |
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Q: | When and where will the special meeting of Matria stockholders be held? | |
A: | The special meeting will be held at 1850 Parkway Place, Suite 600A, Marietta, Georgia 30067 on , 2008, at local time. | |
Q: | Who can attend and vote at the special meeting? | |
A: | All Matria stockholders of record as of the close of business on the record date are entitled to receive notice of and to vote at the special meeting. | |
Q: | What should I do now in order to vote on the proposals being considered at the special meeting? | |
A: | Matria stockholders as of the record date may vote by proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold Matria common stock in “street name,” which means that your shares are held of record by a broker, bank or other nominee, you must complete, sign, date and return the enclosed voting instruction form to the record holder of your shares with instructions on how to vote your shares. Please refer to the voting instruction form used by your broker, bank or other nominee to see if you may submit voting instructions using the Internet or telephone. | |
Additionally, you may also vote in person by attending the special meeting. If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the special meeting. Please note, however, that if your shares are held in “street name,” and you wish to vote at the special meeting, you must bring a proxy from the record holder of the shares authorizing you to vote at the special meeting. Whether or not you plan to attend the special meeting, you should submit your proxy card or voting instruction form as described in this proxy statement/prospectus. | ||
Q: | Do I need to send in my Matria stock certificates now? | |
A: | No. You should not send in your Matria stock certificates now. Following the merger, a letter of transmittal will be sent to Matria stockholders informing them where to deliver their Matria stock certificates in order to receive the cash consideration payable in the merger, the shares of Inverness Series B preferred stock issuable in the merger and any cash in lieu of a fractional share of Inverness Series B preferred stock. You should not send in your Matria common stock certificates prior to receiving this letter of transmittal. | |
Q: | What will happen if I abstain from voting or fail to vote? | |
A: | Your abstention or failure to vote or to instruct your broker, bank or other nominee to vote if your shares are held in “street name” (referred to as a broker non-vote) will have the same effect as a vote against the proposal to approve the merger and adopt the merger agreement. Your abstention will have the same effect as a vote against the adjournment proposal. Broker non-votes will have no effect on the outcome of the vote on the adjournment proposal. If you submit a signed proxy without specifying the manner in which you would like your shares to be voted, your shares will be voted“FOR” the merger proposal and the adjournment proposal. | |
Q: | Can I change my vote after I have delivered my proxy? | |
A: | Yes. If you are a holder of record, you can change your vote at any time before your proxy is voted at the special meeting by: | |
• delivering a signed written notice of revocation to the Corporate Secretary of Matria; | ||
• signing and delivering a new, valid proxy bearing a later date; or | ||
• attending the special meeting and voting in person, although your attendance alone will not revoke your proxy. | ||
If your shares are held in “street name,” you must contact your broker, bank or other nominee to change your vote. |
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Q: | What should I do if I receive more than one set of voting materials for the special meeting? | |
A: | You may receive more than one set of voting materials for the special meeting, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. For each and every proxy card and voting instruction form that you receive, please vote as soon as possible by completing, signing, dating and returning the enclosed proxy card in the postage-prepaid envelope enclosed for that purpose. | |
Q: | Who can help answer my questions? | |
A: | If you have any questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card or voting instructions, you should contact: |
1850 Parkway Place, Suite 1200
Marietta, Georgia 30067
(770) 767-4500
Attention: Secretary
48 Wall Street
22nd Floor
New York, New York, 10005
(800) 758-5880
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• | severance and change of control benefits that will be owed to certain executive officers of Matria if they are terminated or leave for good reason after the transaction; | |
• | the vesting of options and shares of restricted stock held by certain directors and executive officers of Matria by their terms prior to the effective time of the merger; | |
• | Matria’s supplemental executive retirement plans, in which certain executive officers are participants, that fully vest upon completion of the merger; and | |
• | the continued indemnification and directors’ and officers’ insurance coverage of current Matria directors and officers following the merger. |
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• | the approval of the merger and adoption of the merger agreement by Matria stockholders; | |
• | the effectiveness of a registration statement onForm S-4 and there being no pending or threatened stop order relating thereto; | |
• | the absence of any law or order that makes the consummation of the merger illegal; | |
• | the termination or expiration of all necessary waiting periods under theHart-Scott-Rodino Antitrust Improvements Act of 1976, referred to as the HSR Act; |
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• | the absence of any instituted or pending action or proceeding by any governmental entity seeking (a) to interfere with the ownership or operation by Inverness of the business of Matria or Inverness or any of their subsidiaries, (b) to compel Inverness to dispose of or hold separate any portion of the business or assets of Matria or Inverness or any of their subsidiaries, (c) to impose limitations on the ability of Inverness to exercise full rights of ownership of the shares of Matria common stock, or (d) to require divestiture by Inverness or any of its subsidiaries of any shares of Matria common stock; | |
• | the continued accuracy, in all material respects, of the representations and warranties of the parties regarding their capital structures and the due authorization of the merger agreement and, in the case of Matria, representations and warranties regarding its board approval, absence of certain changes, and brokers; | |
• | the continued accuracy of all other representations and warranties of the parties, except to the extent that breaches of such representations and warranties would not result in a material adverse effect on the party making the representation or warranty; | |
• | the performance or compliance in all material respects of each party with all agreements and covenants contained in the merger agreement and required to be performed or complied with at or before the closing; | |
• | the delivery of tax opinions of legal counsel to the effect that the transaction will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, unless Inverness exercises its right to pay the merger consideration entirely in cash; | |
• | the absence of material adverse effects with respect to either party since January 27, 2008; | |
• | the authorization for listing on AMEX of the shares of Inverness Series B preferred stock to be issued in the merger and the shares of Inverness common stock issuable upon conversion thereof; and | |
• | UBS Securities LLC or another financial institution reasonably acceptable to Matria shall have confirmed that it is qualified and intends to serve as a market maker for the Series B preferred stock on AMEX and such market maker shall have conducted a “road show” or similar marketing efforts with respect to the Series B preferred stock prior to the effective time of the merger. |
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• | Inverness and Matria mutually agree to terminate the merger agreement; | |
• | the merger is not consummated by July 31, 2008, unless the sole reason for the failure to consummate the merger is that the waiting period (or an extension thereof) under the HSR Act has not expired, in which case the date will be extended to October 31, 2008; | |
• | a final, non-appealable order is issued or granted by a governmental entity in the United States or any foreign jurisdiction that enjoins or otherwise prohibits the merger from proceeding; or | |
• | the Matria stockholders do not approve the merger and adopt the merger agreement at the special meeting. |
• | the merger agreement is terminated following the occurrence of any of the triggering events identified in the merger agreement; | |
• | either party terminates the merger agreement because the merger is not consummated by July 31, 2008, unless the sole reason for the failure to consummate the merger is that the waiting period (or an extension thereof) under the HSR Act has not expired, in which case the date will be extended to October 31, 2008, or because the Matria stockholders do not approve the merger and adopt the merger agreement, in either case if, prior to the termination of the merger agreement, an acquisition proposal is publicly announced and, within twelve months following the termination, Matria enters into a definitive agreement providing for the acquisition of Matria; or | |
• | Matria terminates the merger agreement upon a change of recommendation by its board of directors in connection with a superior offer. |
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Title | Series B Convertible Perpetual Preferred Stock (the “Series B preferred stock”). | |
Liquidation preference | $400 per share, plus accumulated but unpaid dividends. | |
Dividend | $12.00, or 3%, for each share of Series B preferred stock per year. Dividends will be cumulative from the date of issuance and, to the extent (a) permitted under Inverness’ credit facility, (b) assets are legally available under Delaware law to pay dividends and (c) Inverness’ board of directors or an authorized committee of its board declares a dividend payable, Inverness will pay dividends in (i) cash, (ii) shares of its common stock, (iii) if the dividend is paid on or before June 4, 2015, shares of Series B preferred stock (or convertible preferred stock having substantially the same terms as the Series B preferred stock) or (iv) any combination thereof at Inverness’ discretion, every quarter. | |
If Inverness elects to make any dividend payment, or portion thereof, in shares of its common stock, such shares shall be valued for such purpose at 97% of the average of the daily volume-weighted average price per share of its common stock for each of the five consecutive trading days ending on the second trading day immediately prior to the record date for such dividend. |
If Inverness elects to make any dividend payment, or portion thereof, in shares of Series B preferred stock, such shares shall be valued for such purpose at 97% of the average of the daily volume-weighted average price per share of the Series B preferred stock for each of the five consecutive trading days ending on the second trading day immediately prior to the record date of such dividend. |
If Inverness elects to make any dividend payment, or portion thereof, in shares of convertible preferred stock having substantially the same terms as the Series B preferred stock, such shares shall be valued for such purpose at 97% of the price per share of such convertible preferred stock determined by a nationally recognized investment banking firm (unaffiliated with Inverness) retained for this purpose to be such shares’ fair market value. |
If Inverness fails to pay dividends on the shares of its Series B preferred stock for six quarterly dividend periods (whether consecutive or not), then holders of shares of Inverness Series B preferred stock will be entitled to receive, when, as and if declared by Inverness’ board of directors, out of funds legally available therefor, dividends at the rate per annum equal to 3.0% plus 1.0% until it has paid all dividends on the shares of its Series B preferred stock for all dividend periods up to and including the dividend payment date on which the accumulated and unpaid dividends are paid in full. Any further failure to pay dividends would cause the dividend rate to increase again by 1.0% to 5.0% per annum until Inverness has again paid all dividends for all dividend periods up to and |
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including the dividend payment date on which the accumulated and unpaid dividends are paid in full. | ||
No dividends or other distributions (other than a dividend payable solely in shares of a like or junior ranking) may be paid or set apart for payment upon any parity shares or junior shares, nor may any parity shares or junior shares be redeemed or acquired for any consideration by Inverness or any liquidation amount with respect to any such parity or junior shares (except by conversion into or exchange for shares of a like or junior ranking) unless all accumulated and unpaid dividends have been paid or funds or shares of common stock or Series B preferred stock (if permitted) therefor have been set apart on the Series B preferred stock and any parity shares. | ||
Dividend payment dates | The l5th calendar day (or the following business day if the 15th is not a business day) of each January, April, July, and October, commencing following the first full calendar quarter after the issuance date. | |
Ranking | Inverness Series B preferred stock will rank: | |
• senior to all of the shares of its common stock and to all of its other capital stock issued in the future unless the terms of such capital stock expressly provide that it ranks senior to, or on a parity with, shares of its Series B preferred stock; |
• on a parity with all of its other capital stock issued in the future the terms of which expressly provide that it will rank on a parity with the shares of its Series B preferred stock; and |
• junior to all shares of its capital stock issued in the future the terms of which expressly provide that such shares will rank senior to the shares of its Series B preferred stock. |
The issuance of any class or series of capital stock having rights on liquidation or as to distributions (including dividends) senior to the Series B preferred stock is subject to the requirements set forth below under “Voting Rights.” | ||
Redemption | Shares of Inverness Series B preferred stock will not be redeemable by Inverness. | |
Put rights | Holders will not have a right to require Inverness to repurchase shares of the Series B preferred stock, which we refer to as a “put right.” |
Conversion at election of holder | Each share of Series B preferred stock will be convertible, at the option of the holder, into 5.7703 shares of Inverness common stock (the “conversion rate”) (which is equivalent to an initial conversion price of approximately $69.32 per share, as calculated by dividing the $400 per share liquidation preference by the 5.7703 conversion rate), plus cash in lieu of fractional shares, in the following circumstances and, until the Authorized Share Increase described below is obtained, Inverness’ ability to deliver shares of its common stock to satisfy its obligations upon conversion will be subject to a sufficient number of shares of Inverness common stock being available for issuance: |
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• During any calendar quarter beginning with the second calendar quarter after the issuance date of the Series B preferred stock, if the closing sale price of Inverness common stock on AMEX for each of 20 or more trading days within any period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price per share of common stock in effect on the last trading day of the immediately preceding calendar quarter. For example, if the conversion price per share of Inverness common stock in effect on the last trading of the immediately preceding calendar quarter was $69.32, the Series B preferred stock would not be convertible unless the Inverness common stock closing sale price exceeded $90.11 for each of 20 or more trading days within any period of 30 consecutive trading days ending on the last trading day of such immediately preceding calendar quarter. |
• During the 5 consecutive business days immediately after any 5 consecutive trading day period (such 5 consecutive trading day period, the “preferred measurement period”) in which the average trading price per share of Series B preferred stock was equal to or less than 97% of the average conversion value of the Series B preferred stock during the preferred measurement period. |
• Upon the occurrence of a fundamental change, as described below under “Additional conversion right upon a fundamental change.” |
• If Inverness is party to a consolidation, amalgamation, statutory arrangement, merger or binding share exchange pursuant to which its common stock would be converted into or exchanged for, or would constitute, solely the right to receive, cash, securities or other property. |
At Inverness’ option, the settlement of a conversion may also be made in cash or a combination of cash and shares as described below under “Optional Settlement of Conversions.” | ||
Upon conversion, holders will not receive any cash payment representing accumulated dividends, if any. | ||
The conversion rate will be subject to adjustments as described below under “Anti-dilution adjustments.” | ||
Forced Conversion | Inverness may, at its option and, until the Authorized Share Increase described below is obtained, subject to a sufficient number of shares of Inverness common stock being available for issuance upon conversion, cause the Series B preferred stock to be automatically converted into that number of shares of common stock that are issuable at the then prevailing conversion rate under the circumstances described below. Inverness may exercise its right to force conversion on or prior to the third anniversary of the issuance date if, for 20 trading days within any period of 30 consecutive trading days (including the last trading day of such period), the closing price of Inverness common stock on AMEX exceeds 150% of the then prevailing conversion price of the Series B preferred stock. Inverness may exercise its right to force conversion after the third |
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anniversary of the issuance date if, for 20 trading days within any period of 30 consecutive trading days (including the last trading day of such period), the closing price of Inverness common stock on AMEX exceeds 130% of the then prevailing conversion price of the Series B preferred stock. |
At Inverness’ option, the settlement of an automatic conversion may alternatively be made in cash or a combination of cash and shares as described below under “Optional Settlement of Conversion.” |
If Inverness exercises its right to force conversion on or prior to the third anniversary of the issuance date, Inverness will also pay to each holder of Series B preferred stock the following payments: (1) a payment equal to the aggregate amount of any unpaid dividends such holder was entitled to with respect to any dividend periods terminating on or prior to the date of such forced conversion and (2) a redemption premium equal to the amount of dividends such holder would have received after the date of such forced conversion through the three-year anniversary of the issuance date of the Series B preferred stock, which is referred to as the “Series B Issue Date,” if such holder’s shares had not otherwise been converted. At Inverness’ option, these payments may be made in the form of cash, shares of Inverness common stock, or a combination of cash and shares of Inverness common stock; provided that any payment or partial payment made in the form of Inverness common stock will be valued at 97% of the daily volume-weighted average price of Inverness common stock on the trading day immediately preceding the date of the forced conversion. |
Optional Settlement of Conversion | Upon a conversion of shares of Series B preferred stock, Inverness may, at its option and in its sole discretion, satisfy the entire conversion obligation in cash, or through a combination of cash and common stock, to the extent permitted under its credit facility and under Delaware law and, until the Authorized Share Increase described below is obtained, subject to a sufficient number of shares of Inverness common stock being available for issuance upon conversion. |
Cash Settlement. If Inverness elects to satisfy the entire conversion obligation in cash, then it will deliver to each holder of Series B preferred stock, for each of the 20 trading days in the applicable conversion measurement period, a cash settlement amount equal to the daily conversion value per share of Series B preferred stock, as described below. | ||
Combined Settlement. If Inverness elects to satisfy a portion of the conversion obligation in cash (expressed either as a dollar amount or as a percentage of the daily conversion value) and a portion of the conversion obligation in shares of common stock, then Inverness will deliver for each share of Series B preferred stock, for each of the 20 trading days in the applicable conversion measurement period, (1) such partial cash settlement amount divided by 20 (or, if expressed as a percentage of the conversion obligation, such partial cash settlement amount calculated as a percentage of |
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the daily conversion value), plus (2) a number of shares equal to (a) the daily conversion value minus such daily partial cash settlement amount divided by (b) the daily volume-weighted average price of Inverness common stock on that trading day. | ||
As used above, the term “conversion measurement period” means the 20 consecutive trading days beginning on the third trading day following the date on which the shares of Series B preferred stock are tendered for conversion. | ||
As used above, the “daily conversion value” means, for each of the 20 trading days during the applicable conversion measurement period, one-twentieth (1/20) of the product of (1) the then applicable conversion rate and (2) the daily volume-weighted average price of a share of Inverness common stock on that trading day. | ||
Anti-dilution adjustments | The conversion rate of the Series B preferred stock is subject to adjustment upon the occurrence of certain events (including payment of cash distributions to holders of Inverness common stock, stock splits, combinations, reclassifications, distribution of certain rights and warrants, certain distributions of non-cash property, certain tender and exchange offers and certain business combinations in which Inverness is not the surviving entity), but will not be adjusted for accumulated and unpaid dividends. | |
If, however, application of the above would result in a decrease in the conversion rate (other than a share split or share combination), no adjustment to the conversion rate shall be made. |
Inverness share increase and issuance | Inverness will use its best efforts to obtain such stockholder approvals at its next annual meeting of stockholders as are necessary to increase the number of shares of authorized common stock and to otherwise allow for conversion of all shares of Series B preferred stock into shares of Inverness common stock (the “Authorized Share Increase”). Inverness also will seek its stockholders’ approval to permit Inverness to issue shares of its common stock in an amount equal to or in excess of 20% of Inverness’ common stock outstanding on the effective date of the merger upon conversion of, and as dividend payments on, the Series B preferred stock and upon exercise of Matria stock options assumed by Inverness (the “Share Issuance Approval”). |
Additional conversion right upon a fundamental change | Upon the occurrence of a fundamental change (as described below), if the market value per share of Inverness common stock multiplied by the conversion rate then in effect is less than the liquidation preference, each holder will have the option to convert all or a portion of its Series B preferred stock into Inverness common stock, at an adjusted conversion rate equal to the lesser of (1) the liquidation preference divided by the market value per share of Inverness common stock and (2) 11.5406 shares (two times the initial conversion rate). In lieu of issuing common stock pursuant to this alternative conversion right in the event of a fundamental change, Inverness may make a cash payment to converting holders equal to the liquidation preference of such Series B preferred stock, plus accrued but unpaid dividends. Inverness’ ability to deliver shares of |
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its common stock to satisfy its obligations upon conversion will be subject to a sufficient number of shares of Inverness common stock being available for issuance until the Authorized Share Increase is approved and, as applicable, the Share Issuance Approval is received. |
A “fundamental change” will be deemed to have occurred upon the occurrence of any of the following: | ||
• the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Inverness assets (determined on a consolidated basis) to any person or group (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); | ||
• the adoption of a plan the consummation of which would result in Inverness’ liquidation or dissolution; | ||
• the acquisition, directly or indirectly, by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act), of beneficial ownership (as defined inRule 13d-3 under the Exchange Act) of more than 50% of the aggregate voting power of Inverness voting stock; | ||
• any share exchange, consolidation or merger of Inverness (excluding a merger solely for the purpose of changing its jurisdiction of incorporation) pursuant to which Inverness common stock will be converted into cash, securities or other property, to or with any person other than one of its subsidiaries; provided that any such transaction where the holders of more than 50% of all classes of Inverness common equity immediately prior to such transaction continue to own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event shall not be a fundamental change; | ||
• during any period of two consecutive years, individuals who at the beginning of such period comprised Inverness’ board of directors (together with any new directors whose election by such board of directors or whose nomination for election by Inverness stockholders was approved by a vote of a majority of Inverness directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of Inverness’ board of directors then in office; or | ||
• Inverness common stock ceases to be listed on a national securities exchange including AMEX, or quoted on an over-the-counter market in the United States. | ||
However, a fundamental change will not be deemed to have occurred in the case of a merger or consolidation, if (i) at least 90% of the consideration (excluding cash payments for fractional shares and cash payments pursuant to dissenters’ appraisal rights) in the merger or consolidation consists of common stock of a United States company traded on a national securities exchange including AMEX (or which will be so traded when issued or |
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exchanged in connection with such transaction) and (ii) as a result of such transaction or transactions the shares of Series B preferred stock become convertible solely into such common stock. This type of transaction is referred to as an “Excluded Transaction.” |
Adjustment to conversion rate upon the occurrence of a make-whole fundamental change | If a make-whole fundamental change (as described below) occurs, Inverness will increase the conversion rate applicable to the shares of Series B preferred stock that are surrendered at any time from, and including, the 30th day before the date Inverness originally announces as the anticipated effective date of the make-whole fundamental change to, and including, the 40th business day after the effective date of the make-whole fundamental change. Until the Authorized Share Increase is approved, Inverness’ ability to deliver shares of its common stock to satisfy its obligations upon conversion will be subject to a sufficient number of shares of Inverness common stock being available for issuance. The increase in the conversion rate upon a make-whole fundamental change is designed to provide some level of compensation for the lost option time value of the shares of Series B preferred stock as a result of the make-whole fundamental change. However, the increase is only an approximation of such lost value and may not adequately compensate for such loss. |
A “make-whole fundamental change” will be deemed to have occurred upon the occurrence of any of the following: | ||
• the sale, transfer, lease conveyance or other disposition of all or substantially all of Inverness property or assets to any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (an “asset sale make-whole fundamental change”); or | ||
• a transaction or series of related transactions (other than an Excluded Transaction), in connection with which Inverness common stock is exchanged for, converted into, acquired for or constitutes solely the right to receive other securities, other property, assets or cash. | ||
In connection with the make-whole fundamental change, Inverness will increase the conversion rate by an amount equal to: | ||
• the excess, if any, of (1) the average trading price per share of Series B preferred stock for the five consecutive trading days immediately preceding the public announcement of the make-whole fundamental change, over (2) the product of (a) the market value (as defined in “Description of the Series B Preferred Stock — Adjustment to Conversion Rate Upon Make-Whole Fundamental Change”) per share of Inverness common stock for the five consecutive trading days immediately preceding the public announcement of the make-whole fundamental change, and (b) the conversion rate then in effect; divided by | ||
• the applicable price (as defined in “Description of the Series B Preferred Stock — Adjustment to Conversion Rate Upon Make-Whole Fundamental Change”). | ||
If the make-whole fundamental change is an asset sale make-whole fundamental change and the consideration paid for Inverness |
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property and assets consists solely of cash, then the change in the conversion rate will be based on (i) the amount of cash paid for its property and assets (expressed as an amount per share of Inverness common stock outstanding on the effective date of the asset sale make-whole fundamental change) and (ii) the effective date of the make-whole fundamental change. If the make-whole fundamental change is of the type described in the second bullet-point above and the consideration paid for Inverness common stock consists solely of cash, then the change in the conversion rate will be based on (i) the cash amount paid per share of Inverness common stock in the make-whole fundamental change and (ii) the effective date of the make-whole fundamental change. In all other cases, the conversion rate will be based on the average of the closing sale prices per share of Inverness common stock on AMEX for the 5 consecutive trading days immediately preceding the effective date of the make-whole fundamental change. | ||
A make-whole fundamental change will not be deemed to have occurred in the case of an Excluded Transaction. | ||
Voting rights | The holders of Series B preferred stock will have no voting rights except as set forth below or as otherwise required by Delaware law from time to time. If dividends payable on the Series B preferred stock are in arrears for six or more quarterly periods (whether or not consecutive), the holders of the Series B preferred stock, voting as a single class with the shares of any other preferred stock or preference securities having similar voting rights, will be entitled at the next regular or special meeting of Inverness stockholders to elect two directors and the number of directors that comprise Inverness’ board of directors will be increased by the number of directors so elected. These voting rights and the terms of the directors so elected will continue until such time as the dividend arrearage on the preferred stock has been paid in full. |
In addition, for so long as any shares of Series B preferred stock remain outstanding, Inverness shall not, without first obtaining the affirmative vote or written consent of the holders of at leasttwo-thirds of the then outstanding shares of Series B preferred stock: |
• alter, amend or repeal any provision of, or add any provision to, its certificate of incorporation or bylaws that has an adverse change to the powers, preferences, rights, qualifications, limitations or restrictions of the Series B preferred stock; or |
• authorize or designate any class or series of capital stock having rights on liquidation or as to distributions (including dividends) senior to the Series B preferred stock. |
Furthermore, for so long as any shares of Series B preferred stock remain outstanding, Inverness shall not, without first obtaining the affirmative vote or written consent of at least a majority of the then outstanding shares of Series B preferred stock, increase or decrease the total number of authorized or issued Series B preferred stock except for the payment of dividends to holders of Series B preferred stock. |
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Inverness’ board of directors may create, without a vote of the holders of Series B preferred stock, a class or series of preferred stock that ranks, including with respect to rights on liquidation and as to distributions (including dividends), pari passu to the Series B preferred stock. |
Trading | Inverness will apply to list the Series B preferred stock and the underlying shares of common stock on AMEX, on which Inverness common stock currently trades. | |
Form and denomination | Inverness expects that the Series B preferred stock will be represented by one or more global securities, deposited with The Depository Trust Company, and registered in the name of Cede & Co., DTC’s nominee. |
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Year Ended December 31, | ||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||
Net product and services revenue | $ | 285,430 | $ | 365,432 | $ | 406,457 | $ | 552,130 | $ | 817,561 | ||||||||||||||||||
License and royalty revenue | 9,728 | 8,559 | 15,393 | 17,324 | 21,979 | |||||||||||||||||||||||
Net revenue | 295,158 | 373,991 | 421,850 | 569,454 | 839,540 | |||||||||||||||||||||||
Cost of sales | 167,641 | 226,987 | 269,538 | 340,231 | 445,813 | |||||||||||||||||||||||
Gross profit | 127,517 | 147,004 | 152,312 | 229,223 | 393,727 | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Research and development | 24,367 | 31,954 | 30,992 | 48,706 | 69,547 | |||||||||||||||||||||||
Purchase of in-process research and development | — | — | — | 4,960 | 173,825 | |||||||||||||||||||||||
Sales and marketing | 52,504 | 57,957 | 72,103 | 94,445 | 165,328 | |||||||||||||||||||||||
General and administrative | 35,812 | 52,707 | 59,990 | 71,243 | 158,438 | |||||||||||||||||||||||
Loss on dispositions, net | — | — | — | 3,498 | — | |||||||||||||||||||||||
Operating income (loss) | 14,834 | 4,386 | (10,773 | ) | 6,371 | (173,411 | ) | |||||||||||||||||||||
Interest expense and other expenses, net | (3,270 | ) | (18,707 | ) | (1,617 | ) | (17,822 | ) | (74,251 | ) | ||||||||||||||||||
(Loss) income from continuing operations before provision for income taxes | 11,564 | (14,321 | ) | (12,390 | ) | (11,451 | ) | (247,662 | ) | |||||||||||||||||||
Provision (benefit) for income taxes | 2,911 | 2,275 | 6,819 | 5,727 | (1,799 | ) | ||||||||||||||||||||||
Equity earnings of unconsolidated entities, net of tax | — | — | — | 336 | 4,372 | |||||||||||||||||||||||
(Loss) income from continuing operations | $ | 8,653 | $ | (16,596 | ) | $ | (19,209 | ) | $ | (16,842 | ) | $ | (241,491 | ) | ||||||||||||||
(Loss) income from continuing operations available to common stockholders — basic and diluted(1) | $ | 7,695 | $ | (17,345 | ) | $ | (19,209 | ) | $ | (16,842 | ) | $ | (241,491 | ) | ||||||||||||||
(Loss) income per common share(1): | ||||||||||||||||||||||||||||
Basic(1) | $ | 0.49 | $ | (0.87 | ) | $ | (0.79 | ) | $ | (0.49 | ) | $ | (4.69 | ) | ||||||||||||||
Diluted(1) | $ | 0.44 | $ | (0.87 | ) | $ | (0.79 | ) | $ | (0.49 | ) | $ | (4.69 | ) | ||||||||||||||
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December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 24,622 | $ | 16,756 | $ | 34,270 | $ | 71,104 | $ | 414,732 | ||||||||||
Working capital | $ | 44,693 | $ | 62,615 | $ | 84,523 | $ | 133,313 | $ | 674,066 | ||||||||||
Total assets | $ | 540,529 | $ | 568,269 | $ | 791,166 | $ | 1,085,771 | $ | 4,883,201 | ||||||||||
Total debt | $ | 176,181 | $ | 191,224 | $ | 262,504 | $ | 202,976 | $ | 1,387,849 | ||||||||||
Redeemable convertible preferred stock | $ | 6,185 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Total stockholders’ equity | $ | 265,173 | $ | 271,416 | $ | 397,308 | $ | 714,138 | $ | 2,589,929 |
(1) | Basic and diluted (loss) income from continuing operations available to common stockholders and basic and diluted (loss) income per common share are computed as described in Notes 2(n) and 14 of Inverness’ consolidated financial statements included in its Annual Report onForm 10-K for the year ended December 31, 2007. |
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• | Inverness’ issuance of 13.6 million shares of common stock in November 2007 for net proceeds of $806.9 million; | |
• | Inverness’ acquisition of Cholestech in September 2007; | |
• | Inverness’ acquisition of Biosite in June 2007, including the related financing transactions; |
• | the formation of Inverness’ 50/50 joint venture with P&G in May 2007 for the development, manufacturing, marketing and sale of certain consumer diagnostic products, pursuant to which Inverness contributed its consumer diagnostics net assets to the joint venture and received a cash payment of $325 million; and |
• | Inverness’ acquisition of Instant Technologies in March 2007. |
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Year Ended | ||||
December 31, 2007 | ||||
(In thousands, except | ||||
per share amounts) | ||||
Pro Forma Condensed Combined Statement of Operations Data: | ||||
Net product and services revenues | $ | 1,337,499 | ||
Research and license revenues | 24,697 | |||
Net revenues | 1,362,196 | |||
Cost of sales | 667,484 | |||
Gross profit | 694,712 | |||
Operating expenses: | ||||
Research and development | 93,286 | |||
Purchase of in-process research and development | 4,960 | |||
Sales and marketing | 295,493 | |||
General and administrative | 235,153 | |||
Operating income | 65,820 | |||
Interest and other income (expense), net | (121,496 | ) | ||
Loss before income taxes | (55,676 | ) | ||
Income tax provision | 532 | |||
Net loss | $ | (56,208 | ) | |
Preferred dividends | 21,489 | |||
Net loss available to common stockholders | $ | (77,697 | ) | |
Net loss per common share: | ||||
Basic and diluted | $ | (1.14 | ) | |
Weighted average shares — basic and diluted | 68,335 |
As of | ||||
December 31, 2007 | ||||
(In thousands) | ||||
Pro Forma Condensed Combined Balance Sheet Data: | ||||
Cash and cash equivalents | $ | 152,717 | ||
Working capital | $ | 273,887 | ||
Total assets | $ | 5,747,368 | ||
Total long-term liabilities, excluding current portion | $ | 2,046,880 | ||
Total stockholders’ equity | $ | 3,355,094 |
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Years Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||
Revenues | $ | 123,196 | $ | 145,087 | $ | 179,231 | $ | 336,139 | $ | 352,235 | ||||||||||
Cost of revenues | 57,302 | 64,938 | 72,972 | 109,924 | 107,513 | |||||||||||||||
Selling and administrative expenses | 64,297 | 79,309 | 94,291 | 159,021 | 174,622 | |||||||||||||||
Provision for doubtful accounts | 3,382 | 2,412 | 3,493 | 4,093 | 5,252 | |||||||||||||||
Amortization of intangible assets | — | — | 365 | 7,144 | 7,144 | |||||||||||||||
Total costs and operating expenses | 124,981 | 146,659 | 171,121 | 280,182 | 294,531 | |||||||||||||||
Operating earnings (loss) from continuing operations | (1,785 | ) | (1,572 | ) | 8,110 | 55,957 | 57,704 | |||||||||||||
Interest income | 222 | 498 | 829 | 1,548 | 1,601 | |||||||||||||||
Interest expense | (13,730 | ) | (10,127 | ) | (2,418 | ) | (27,591 | ) | (23,933 | ) | ||||||||||
Other income, net | 1,350 | 681 | 226 | 1,329 | 227 | |||||||||||||||
Loss on retirement of 11% Senior Notes | — | (22,886 | ) | — | — | — | ||||||||||||||
Earnings (loss) from continuing operations before income taxes | (13,943 | ) | (33,406 | ) | 6,747 | 31,243 | 35,599 | |||||||||||||
Income tax benefit (expense) | 5,438 | 13,329 | (2,733 | ) | (12,768 | ) | (14,534 | ) | ||||||||||||
Earnings (loss) from continuing operations | $ | (8,505 | ) | $ | (20,077 | ) | $ | 4,014 | $ | 18,475 | $ | 21,065 | ||||||||
Net earnings (loss) per common share: | ||||||||||||||||||||
Basic | $ | (0.56 | ) | $ | (1.29 | ) | $ | 0.21 | $ | 0.88 | $ | 0.99 | ||||||||
Diluted | $ | (0.56 | ) | $ | (1.29 | ) | $ | 0.20 | $ | 0.85 | $ | 0.96 | ||||||||
Shares used to compute net earnings (loss) per common share:: | ||||||||||||||||||||
Basic | 15,198 | 15,520 | 18,795 | 21,025 | 21,361 | |||||||||||||||
Diluted | 15,198 | 15,520 | 19,874 | 21,665 | 21,865 | |||||||||||||||
December 31, | ||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 3,942 | $ | 7,736 | $ | 35,317 | $ | 22,758 | $ | 19,839 | $ | 19,501 | ||||||||||||
Working capital | $ | 153,826 | $ | 62,161 | $ | 159,297 | $ | 141,594 | $ | (11,903 | ) | $ | 10,222 | |||||||||||
Total assets | $ | 291,407 | $ | 333,482 | $ | 307,392 | $ | 323,207 | $ | 711,373 | $ | 686,238 | ||||||||||||
Total long-term liabilities | $ | 122,826 | $ | 126,816 | $ | 91,068 | $ | 7,887 | $ | 283,977 | $ | 252,964 | ||||||||||||
Accumulated deficit | $ | (197,362 | ) | $ | (190,057 | ) | $ | (162,989 | ) | $ | (149,026 | ) | $ | (97,149 | ) | $ | (76,389 | ) | ||||||
Total stockholders’ equity | $ | 113,780 | $ | 123,547 | $ | 159,660 | $ | 251,938 | $ | 318,976 | $ | 351,240 |
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• | Inverness’ issuance of 13.6 million shares of common stock in November 2007 for net proceeds of $806.9 million; | |
• | Inverness’ acquisition of Cholestech in September 2007; | |
• | Inverness’ acquisition of Biosite in June 2007, including the related financing transactions; |
• | the formation of Inverness’ 50/50 joint venture with P&G in May 2007 for the development, manufacturing, marketing and sale of certain consumer diagnostic products, pursuant to which Inverness contributed its consumer diagnostics net assets to the joint venture and received a cash payment of $325.0 million; and |
• | Inverness’ acquisition of Instant Technologies in March 2007. |
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Year Ended/As of | ||||||||
December 31, 2007 | ||||||||
Inverness historical data: | ||||||||
Net loss per basic share | $ | (4.69 | ) | |||||
Net loss per diluted share | $ | (4.69 | ) | |||||
Cash dividends per share | — | |||||||
Book value per share | $ | 33.73 | ||||||
Inverness pro forma data(1): | ||||||||
Net loss per basic share | $ | (1.62 | ) | |||||
Net loss per diluted share | $ | (1.62 | ) | |||||
Cash dividends per share | — | |||||||
Book value per share | $ | 33.73 | ||||||
Matria historical data: | ||||||||
Net income per basic share | $ | 0.99 | ||||||
Net income per diluted share | $ | 0.96 | ||||||
Cash dividends per share | — | |||||||
Book value per share | $ | 15.94 | ||||||
Pro forma combined data(2): | ||||||||
Net loss per basic share | $ | (1.14 | ) | |||||
Net loss per diluted share | $ | (1.14 | ) | |||||
Cash dividends per share | — | |||||||
Book value per share | $ | 34.37 | ||||||
Pro forma combined equivalent data: | ||||||||
Net loss per basic share | $ | (0.83 | ) | |||||
Net loss per diluted share | $ | (0.83 | ) | |||||
Cash dividends per share | — | |||||||
Book value per share | $ | 25.14 |
(1) | Reflects the pro forma effects of the acquisitions of Cholestech, Biosite and Instant Technologies and the formation of the 50/50 joint venture with P&G. |
(2) | Reflects the pro forma effects of both the transactions described in note (1) and the proposed acquisition of Matria. |
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Inverness | Matria | Matria | ||||||||||
Common Stock | Common Stock | Pro Forma Equivalent | ||||||||||
January 25, 2008 | $ | 52.23 | $ | 30.69 | N/A | (1) | ||||||
March 24, 2008 | $ | 28.05 | $ | 21.41 | N/A | (1) |
(1) | Inverness Series B preferred stock is a new series of preferred stock and such shares are not listed on a national securities exchange. Accordingly, there is no pro forma equivalent market price per share information. In the event the merger is consummated, each share of Matria common stock will be converted into the right to receive (a) $6.50 (the cash portion of the merger consideration for each share of Matria common stock in the merger) plus (b) a portion of a share of Series B preferred stock with a stated value of $32.50 (the $400 liquidation preference of a share of Inverness Series B preferred stock multiplied by 0.08125, which is the exchange ratio for the issuance of Inverness Series B preferred stock in the merger). |
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Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||
Ratio of Earnings to Fixed Charges(1) | — | (2) | 0.6 | x(2) | 0.5 | x(2) | 0.4 | x(2) | 2.0 | x |
(1) | For purposes of computing the ratio of earnings to fixed charges, earnings consist of income before provision for income taxes plus fixed charges (excluding capitalized interest) and fixed charges consist of interest expensed and capitalized, amortized premiums, discounts and capitalized expenses related to indebtedness and an estimate of the interest within rental expense. |
(2) | Due to the loss from operations for the years ended December 31, 2007, 2006, 2005 and 2004 there were insufficient earnings of $244.5 million, $11.8 million, $12.4 million and $14.3 million, respectively, to cover fixed charges. |
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• | consolidating informatics and research and development operations, where appropriate; | |
• | integrating Matria’s business into Inverness’ financial reporting system; | |
• | coordinating sales, distribution and marketing functions; | |
• | preserving the important licensing, research and development, supply, distribution, marketing, customer and other relationships of Matria; | |
• | minimizing the diversion of management’s attention from ongoing business concerns; and | |
• | coordinating geographically separate organizations. |
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• | Matria may incur and be required to pay significant merger-related expenses, such as legal and accounting fees, without realizing the expected benefits of the merger; | |
• | Matria may be required to pay Inverness a termination fee of $27.0 million; and | |
• | the price of Matria common stock may decline to the extent that the current market price of Matria common stock reflects an assumption that the merger will be completed. |
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• | quarterly and annual operating results, including failure to meet the performance estimates of securities analysts; | |
• | changes in financial estimates of revenues and operating results or buy/sell recommendations by securities analysts; | |
• | the timing of announcements by Inverness or its competitors of significant products, contracts or acquisitions or publicity regarding actual or potential results or performance thereof; | |
• | changes in general conditions in the economy, the financial markets or the health care industry; | |
• | government regulation in the health care industry; | |
• | changes in other areas such as tax laws; | |
• | sales of substantial amounts of Inverness common stock or the perception that such sales could occur; | |
• | additional acquisitions by Inverness; | |
• | a downgrade in Inverness’ credit rating; | |
• | changes in investor perception of Inverness’ industry, businesses or prospects; | |
• | the loss of key employees, officers or directors; or | |
• | other developments affecting Inverness or its competitors. |
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• | issuances of common stock by Inverness as consideration for future acquisitions; | |
• | issuances of common stock by Inverness upon the conversion of Inverness’ convertible notes; | |
• | issuances of common stock by Inverness as a result of the exercise of Inverness stock options or under other employee or director compensation plans, including under plans assumed by Inverness in connection with acquisitions of other companies, such as will occur in the event the proposed acquisition of Matria is completed; and | |
• | issuances of common stock by Inverness in connection with future public offerings. |
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• | its total liabilities, including its contingent liabilities, and |
• | the amount of its capital. |
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• | make it more difficult to satisfy Inverness’ obligations under the senior subordinated convertible notes, its secured credit facilities and its other debt-related instruments; | |
• | require Inverness to use a large portion of its cash flow from operations to pay principal and interest on its indebtedness, which would reduce the amount of cash available to finance its operations and service obligations, to delay or reduce capital expenditures or the introduction of new productsand/or forego business opportunities, including acquisitions, research and development projects or product design enhancements; | |
• | limit Inverness’ flexibility to adjust to market conditions, leaving it vulnerable in a downturn in general economic conditions or in its business and less able to plan for, or react to, changes in its business and the industries in which it operates; | |
• | impair Inverness’ ability to obtain additional financing; | |
• | place Inverness at a competitive disadvantage compared to its competitors that have less debt; and | |
• | expose Inverness to fluctuations in the interest rate environment with respect to its indebtedness that bears interest at variable rates. |
• | incur additional indebtedness; | |
• | pay dividends or make distributions or repurchase or redeem its stock; | |
• | acquire other businesses; | |
• | make investments; | |
• | make loans to or extend credit for the benefit of third parties or its subsidiaries; | |
• | enter into transactions with affiliates; | |
• | raise additional capital; |
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• | make capital or finance lease expenditures; | |
• | dispose of or encumber assets; and | |
• | consolidate, merge or sell all or substantially all of its assets. |
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• | consolidating manufacturing and research and development operations, where appropriate; | |
• | integrating newly acquired businesses or product lines into a uniform financial reporting system; | |
• | coordinating sales, distribution and marketing functions and strategies, including the integration of Inverness’ current health management products and services with those of Matria; | |
• | establishing or expanding manufacturing, sales, distribution and marketing functions in order to accommodate newly acquired businesses or product lines or rationalizing these functions to take advantage of synergies; | |
• | preserving the important licensing, research and development, manufacturing and supply, distribution, marketing, customer and other relationships; | |
• | minimizing the diversion of management’s attention from ongoing business concerns; and | |
• | coordinating geographically separate organizations. |
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• | the inability to complete the acquisition or investment; | |
• | disruption of Inverness’ ongoing businesses and diversion of management attention; | |
• | difficulties in integrating the acquired entities, products or technologies; | |
• | difficulties in operating the acquired business profitably; | |
• | difficulties in transitioning key customer, distributor and supplier relationships; | |
• | risks associated with entering markets in which Inverness has no or limited prior experience; and | |
• | unanticipated costs. |
• | issuances of dilutive equity securities, which may be sold at a discount to market price; | |
• | use of significant amounts of cash; | |
• | the incurrence of debt; | |
• | the assumption of significant liabilities; | |
• | unfavorable financing terms; | |
• | large one-time expenses; and | |
• | the creation of intangible assets, including goodwill, the write-down of which may result in significant charges to earnings. |
• | difficulties in integrating the respective corporate cultures and business objectives of Inverness and P&G into the new joint venture; | |
• | difficulties or delays in transitioning clinical studies; | |
• | diversion of Inverness management’s time and attention from other business concerns; | |
• | higher than anticipated costs of integration at the joint venture; | |
• | difficulties in retaining key employees who are necessary to manage the joint venture; or | |
• | difficulties in working with an entity based in Switzerland and thus remote or inconvenient to Inverness’ Waltham, Massachusetts headquarters. |
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• | any of the products under development will prove to be effective in clinical trials; | |
• | it will be able to obtain, in a timely manner or at all, regulatory approval to market any of its products that are in development or contemplated; |
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• | the products it develops can be manufactured at acceptable cost and with appropriate quality; or | |
• | these products, if and when approved, can be successfully marketed. |
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• | Inverness’ ability to differentiate its health management services from those of its competitors; | |
• | The extent and timing of the acceptance of its services as a replacement for, or supplement to, traditional managed care offerings; | |
• | The effectiveness of Inverness’ sales and marketing efforts; |
• | Inverness’ ability to sell and implement new and additional services beneficial to health plans and employers; |
• | Inverness’ ability to achieve, measure and effectively communicate cost savings for health plans and employers through the use of its services; and |
• | Inverness’ ability to retain health plan and employee accounts as competition increases. |
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• | increased costs or reduced revenue as a result of movements in foreign currency exchange rates; | |
• | decreased liquidity resulting from longer accounts receivable collection cycles typical of foreign countries; | |
• | lower productivity resulting from difficulties managing sales, support and research and development operations across many countries; | |
• | lost revenues resulting from difficulties associated with enforcing agreements and collecting receivables through foreign legal systems; | |
• | lost revenues resulting from the imposition by foreign governments of trade protection measures; | |
• | higher cost of sales resulting from import or export licensing requirements; | |
• | lost revenues or other adverse affects as a result of economic or political instability in or affecting foreign countries in which Inverness sells its products or operates; and | |
• | adverse effects resulting from changes in foreign regulatory or other laws affecting the sales of Inverness products or its foreign operations. |
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• | develop technologies and products that are more effective than Inverness products or that render Inverness technologies or products obsolete or noncompetitive; | |
• | obtain patent protection or other intellectual property rights that would prevent Inverness from developing potential products; or | |
• | obtain regulatory approval for the commercialization of their products more rapidly or effectively than Inverness does. |
• | the pending patent applications it has filed or to which it has exclusive rights may not result in issued patents or may take longer than it expects to result in issued patents; | |
• | the claims of any patents which are issued may not provide meaningful protection; | |
• | it may not be able to develop additional proprietary technologies that are patentable; | |
• | the patents licensed or issued to it or its customers may not provide a competitive advantage; |
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• | other parties may challenge patents or patent applications licensed or issued to it or its customers; | |
• | patents issued to other companies may harm its ability to do business; and | |
• | other companies may design around technologies it has patented, licensed or developed. |
• | assert claims of infringement; |
• | enforce Inverness’ patents; |
• | protect Inverness’ trade secrets or know-how; or |
• | determine the enforceability, scope and validity of the proprietary rights of others. |
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• | the timing of new product announcements and introductions by Inverness and its competitors; |
• | market acceptance of new or enhanced versions of Inverness’ products; |
• | the extent to which Inverness’ current and future products rely on rights belonging to third parties; |
• | changes in manufacturing costs or other expenses; | |
• | competitive pricing pressures; | |
• | changes in healthcare reimbursement policies and amounts; | |
• | regulatory changes; | |
• | the gain or loss of significant distribution outlets or customers; | |
• | increased research and development expenses; | |
• | length of sales cycle and implementation process for new health management customers; | |
• | the timing of any future acquisitions; | |
• | general economic conditions; or | |
• | general stock market conditions or other economic or external factors. |
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• | Inverness’ certificate of incorporation provides for three classes of directors with the term of office of one class expiring each year, commonly referred to as a staggered board. By preventing stockholders from voting on the election of more than one class of directors at any annual meeting of stockholders, this provision may have the effect of keeping the current members of Inverness’ board of directors in control for a longer period of time than stockholders may desire; | |
• | Inverness’ certificate of incorporation authorizes its board of directors to issue shares of preferred stock without stockholder approval and to establish the preferences and rights of any preferred stock issued, which would allow the board to issue one or more classes or series of preferred stock that could discourage or delay a tender offer or change in control; | |
• | Inverness’ certificate of incorporation prohibits its stockholders from filling board vacancies, calling special stockholder meetings or taking action by written consent; | |
• | Inverness’ certificate of incorporation provides for the removal of a director only with cause and by the affirmative vote of the holders of 75% or more of the shares then entitled to vote at an election of directors; and | |
• | Inverness’ bylaws require advance written notice of stockholder proposals and director nominations. |
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• | Matria’s ability to differentiate its products and service offerings from those of its competitors; | |
• | The extent and timing of the acceptance of Matria’s services as a replacement for, or supplement to, traditional managed care offerings; | |
• | The effectiveness of Matria’s sales and marketing efforts; | |
• | Matria’s ability to implement new and additional services beneficial to health plans and employers; | |
• | Matria’s ability to effect and sufficiently communicate cost savings for health plans and employers through the use of its programs; and | |
• | Matria’s ability to improve patient compliance with the complex drug therapies offered by its pharmaceutical customers. |
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• | the loss or addition of customers and referral sources; | |
• | investments required to support growth and expansion; | |
• | changes in the mix of Matria’s products and customers; | |
• | changes in healthcare reimbursement policies and amounts; | |
• | length of sales cycle and implementation process for new disease management customers; | |
• | increases in costs of revenues and operating expenses; | |
• | recognition of deferred revenues; | |
• | incurrence of performance penalties; | |
• | increased or more effective competition; and | |
• | regulatory changes. |
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• | Matria’s current business, prospects, financial condition, results of operations and strategy, including industry consolidation which may have limited Matria’s future opportunities; | |
• | current market conditions and Matria’s historical trading price, along with the board of directors’ belief that Matria was undervalued in the market and the fact that accurately predicting revenues would continue to become more difficult as Matria pursued future initiatives; | |
• | Inverness’ proposal affords Matria’s stockholders with an opportunity to exchange their common stock for Inverness convertible preferred stock and cash at a price that represents a substantial premium over |
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the closing price of Matria common stock immediately prior to the public announcement of Matria’s intention to pursue strategic alternatives; |
• | the liquidity that the cash component of the merger consideration would provide to Matria stockholders; | |
• | Inverness’5-year compounded annual growth rate of 27% in its stock price and outstanding revenue growth; | |
• | by combining Matria with Inverness, Matria’s stockholders would participate in the benefits of synergies expected to be derived from the merger. Given the complementary nature of the technology and products of Matria and Inverness, the combined company is expected to be able to serve the health management market more effectively and efficiently. For example, following the merger: |
• | the combined company is expected to be able to leverage Matria’s expertise in disease management and wellness and its technology and informatics assets to significantly improve the health management of patients, and will complement the Paradigm Health and Alere businesses acquired by Inverness; | |
• | the combined company will have greater capacity to broaden the outreach of outstanding disease management, productivity enhancement, maternity management and informatics products and services and will present an expanded footprint of products and services to physicians and consumers; | |
• | the combined company is expected to generate significant cost synergies, including from sales and marketing efforts and through the elimination of the costs of operating Matria as an independent company; and | |
• | the combined company may be able to compete more effectively than Matria alone due to greater marketing resources and financial strength, which may present improved opportunities for marketing the products of the combined company. |
• | financial analysis and other information with respect to the companies presented by The Maren Group to the Matria board of directors, along with SunTrust Robinson Humphrey’s opinion that, as of the date of its opinion and based upon and subject to the assumptions, procedures, factors, limitations and qualifications set forth in such opinion, the merger consideration is fair from a financial point of view to Matria’s stockholders; | |
• | the terms of the merger and the merger agreement are fair to Matria’s stockholders in light of the following considerations: |
• | the belief of the Matria directors that the terms of the merger agreement, including the parties’ mutual representations, warranties and covenants, and closing conditions, are reasonable and that the prospects for completing the merger are high; | |
• | the ability of Matria’s board of directors to change its recommendation in order to comply with the Matria directors’ fiduciary duties or to terminate the merger agreement to enter into an agreement for an unsolicited superior proposal subject to a reasonable termination fee; | |
• | the analyses of Matria’s management, financial advisors and legal counsel, including information relating to the due diligence review that was conducted regarding Inverness’ business; | |
• | Matria’s board of directors’ view that the combination of the businesses of Matria and Inverness would result in an organization with greater financial, technical and other resources than Matria could provide as a stand-alone entity; |
• | the fact that the transaction would allow Matria’s stockholders to receive cash, along with an interest in Inverness, and thereby provide the stockholders with both liquidity and an opportunity to participate in the potential success of Matria, as well as that of Inverness; |
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• | the expected tax treatment for Matria’s stockholders of the exchange of Matria common stock for Inverness convertible preferred stock; | |
• | the process undertaken on behalf of Matria to solicit indications of interest in a possible transaction with Matria and Matria’s board of directors’ view, based on this process, as to the potential for other third parties to enter into strategic relationships with or to acquire Matria; and | |
• | Matria’s board of directors’ assessment of Matria’s strategic alternatives and its view that merging with Inverness at the proposed merger consideration presented a more attractive opportunity than staying independent. |
• | the risk that the integration of the two companies’ management and cultures might not be accomplished quickly or smoothly; | |
• | the loss of control over the future operations of Matria following the merger; | |
• | the potential loss of key Matria and Inverness employees critical to the ongoing success of Matria’s and Inverness’ businesses and to the successful integration of the two companies; | |
• | the risk that the merger may not be completed in a timely manner, or at all; |
• | to the extent that the Matria stockholders receive cash consideration, they will not participate in future growth potential of the combined company; |
• | the fact that the preferred stock portion of the merger consideration may decline in value prior to the consummation of the merger; | |
• | the possible effects of the provisions in the merger agreement regarding termination fees; | |
• | the potential adverse effect of the public announcement of the transaction on Matria’s customers, suppliers and distributors and other key relationships, its ability to attract and retain key management, marketing and technical personnel, and its overall competitive position; | |
• | the possible adverse impact arising from senior management devoting significant time and effort to completing the transaction and integrating the two businesses; | |
• | the fact that Matria would be forgoing other potential opportunities by entering into the merger agreement; and |
• | the other risks described above under “Risk Factors” beginning on page 27 of this proxy statement/prospectus. |
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• | reviewed the financial terms and conditions as stated in the merger agreement; | |
• | reviewed the audited financial statements of Matria as of and for the years ended December 31, 2003, 2004, 2005 and 2006 and the unaudited financial statements for the nine month period ended September 30, 2007; | |
• | reviewed Matria’s annual report filed onForm 10-K for the fiscal year ended December 31, 2006 and the quarterly report filed onForm 10-Q for the quarter ended September 30, 2007; | |
• | reviewed Inverness’ annual report filed onForm 10-K for the year ended December 31, 2006 and the quarterly report filed on Form10-Q for the quarter ended September 30, 2007; | |
• | reviewed other Matria and Inverness financial and operating information requested fromand/or provided by Matria and Inverness, respectively; | |
• | reviewed certain other publicly available information on Matria and Inverness; | |
• | discussed with members of the senior management of Matria and Inverness certain information relating to the aforementioned; and | |
• | considered such other quantitative and qualitative factors that SunTrust Robinson Humphrey deemed to be relevant to its analysis. |
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Price per | Implied | |||||||
Share | Premium | |||||||
Merger Consideration Value | $ | 39.00 | — | |||||
Matria Closing Stock Price 1 Day Prior to Announcement of Pursuit of Strategic Alternatives (1/14/08) | $ | 24.47 | 59.4 | % | ||||
Matria Closing Stock Price on January 25, 2008 | $ | 30.69 | 27.1 | % | ||||
52-Week High Matria Stock Price (6/1/07) | $ | 32.49 | 20.0 | % | ||||
30 Day Trading Average at January 25, 2008 | $ | 24.72 | 57.7 | % | ||||
60 Day Trading Average at January 25, 2008 | $ | 23.98 | 62.6 | % | ||||
90 Day Trading Average at January 25, 2008 | $ | 24.72 | 57.7 | % | ||||
180 Day Trading Average at January 25, 2008 | $ | 26.64 | 46.4 | % |
• Disease Management / Patient-Centric Care — Healthways, Inc. — I-trax, Inc. — WebMD Health Corp. | • Healthcare Information Services — Allscripts Healthcare Solutions, Inc. — Cerner Corporation — Eclipsys Corporation — McKesson Corporation | |
• Benefits Management / PBMs — Allion Healthcare, Inc. — BioScrip, Inc. — Express Scripts, Inc. — Healthextras, Inc. — Medco Health Solutions, Inc. — National Medical Health Card Systems, Inc. — Omnicare, Inc. — SXC Health Solutions Corp. |
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CY 2008 Estimates | ||||||||||||
Enterprise Value | Enterprise Value | Equity Value per | ||||||||||
Valuation Multiples | to EBITDA | to Revenue | Share to EPS | |||||||||
Mean | 12.2 | x | 1.4 | x | 23.8 | x | ||||||
Median | 12.2 | x | 0.9 | x | 23.0 | x | ||||||
Minimum | 4.6 | x | 0.2 | x | 10.4 | x | ||||||
Maximum | 22.8 | x | 4.7 | x | 46.2 | x | ||||||
Merger Consideration | 12.8 | x | 3.1 | x | 31.2 | x |
• | British United Provident Association, Ltd. acquisition of Health Dialog Services Corporation | |
• | Inverness Medical Innovations, Inc. acquisition of ParadigmHealth, Inc. | |
• | UnitedHealth Group Incorporated acquisition of Fiserv Health, Inc. | |
• | Inverness Medical Innovations, Inc. acquisition of Alere Medical, Inc. | |
• | Medco Health Solutions, Inc. acquisition of PolyMedica Corporation | |
• | Healthways, Inc. acquisition of AXIA Health Management, LLC | |
• | Magellan Health Services, Inc. acquisition of ICORE Healthcare, LLC | |
• | Matria Healthcare, Inc. acquisition of CorSolutions Medical, Inc. | |
• | Express Scripts, Inc. acquisition of Priority Healthcare Corporation | |
• | Aetna Inc. acquisition of ActiveHealth Management | |
• | SHPS Holdings, Inc. acquisition of Landacorp, Inc. | |
• | I—trax, Inc. acquisition of Meridian Occupational Healthcare Associates, Inc. (dba CHD Meridian Healthcare) | |
• | Healthways, Inc. acquisition of StatusOne Health Systems | |
• | Philips Holding USA Inc. acquisition of Visicu, Inc. | |
• | Vista Equity Partners acquisition of Sunquest Information Systems Inc. from Misys Healthcare Systems, Inc. | |
• | Battery Ventures acquisition of Quovadx, Inc. | |
• | Onex Healthcare Holdings, Inc. acquisition of Eastman Kodak Company Health Group | |
• | WebMD Health Corp. acquisition of Subimo, LLC | |
• | DST Systems, Inc. acquisition of Amysis Synertech, Inc. | |
• | WebMD Health Corp. acquisition of Summex Corporation | |
• | Allscripts Healthcare Solutions, Inc. acquisition of A4 Health Systems, Inc. | |
• | Merge Technologies Incorporated acquisition of Cedara Software Corp. |
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Enterprise Value to Trailing Twelve Months | ||||||||
Valuation Multiples | Revenue | EBITDA | ||||||
Mean* | 3.2 | x | 17.2 | x | ||||
Median | 3.5 | x | 17.3 | x | ||||
Minimum | 0.7 | x | 11.1 | x | ||||
Maximum | 8.0 | x | 328.6 | x | ||||
Merger Consideration | 3.3 | x | 14.5 | x |
* | Outliers excluded from mean calculation |
Implied Premium | ||||||||
1 Day Prior | 30 Days Prior | |||||||
Mean | 36.9 | % | 47.8 | % | ||||
Median | 28.0 | % | 38.3 | % | ||||
Minimum | (2.0 | %) | (16.9 | %) | ||||
Maximum | 220.0 | % | 161.4 | % | ||||
Merger Consideration | 27.1 | % | 82.7 | % |
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Equity Value per Share | ||||||||||||
Matria Management | Matria Projections with | Wall Street | ||||||||||
Projections | Execution Risk Premium | Projections | ||||||||||
Mean | $ | 52.34 | $ | 48.23 | $ | 22.63 | ||||||
Minimum | $ | 33.88 | $ | 31.10 | $ | 13.26 | ||||||
Maximum | $ | 70.80 | $ | 65.35 | $ | 31.99 | ||||||
Merger Consideration | $ | 39.00 | $ | 39.00 | $ | 39.00 |
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• | Inverness management’s view of the financial performance of Inverness and Matria before and after giving effect to the merger; | |
• | Inverness’ familiarity with Matria’s services and the expected market for those services; | |
• | the developmental status of Inverness’ own health enhancement and wellness programs, and the estimated costs expected to be incurred in connection with the continued development of such patient-centered services; | |
• | the potential benefits of combining Inverness’ existing health management businesses, including Alere and Paradigm Health, with Matria’s historical business; | |
• | the potential benefits of owning and operating both rapid diagnostic businesses and health management businesses; | |
• | the belief that health management services are growing at an increased rate relative to some of Inverness’ existing businesses as a result of the development and acceptance of the services provided by the health management services industry; | |
• | the type and amount of consideration to be paid in the transaction, including the proposal to pay a premium over the then-current market price of Matria common stock; | |
• | the terms of the convertible preferred stock to be offered by Inverness and the relationship of the convertible preferred stock to Inverness common stock; | |
• | the terms of the merger agreement; | |
• | then-current financial market conditions and historical market prices, volatility and trading information for the Inverness common stock and Matria common stock; and | |
• | the results of the due diligence investigation conducted by Inverness’ management, accountants and legal counsel. |
• | the complementary nature of the business of Matria to the business of Inverness’ recently acquired subsidiaries, Alere and Paradigm Health; | |
• | the opportunity to acquire and commercialize certain integrated comprehensive health enhancement and disease management programs of Matria; and | |
• | the opportunity for the combined company to achieve cost savings through the combination of complementary information technology systems and other operational synergies. |
• | the risk that the value of the Matria business could decline after the execution of the merger agreement, particularly in light of the fact that the exchange ratio would not be adjusted to reflect declines in the market price of the Matria common stock; |
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• | the risk that the potential benefits of the merger would not be realized fully as a result of challenges the companies might face in integrating their technology, personnel and operations, as well as general industry-wide or economic conditions or other factors; | |
• | the risk that after the merger Inverness could lose important current customers of Inverness, including the businesses conducted by Alere and Paradigm Health, or Matria; | |
• | the risk that, if the merger is not consummated, Inverness’ management would have devoted substantial time and resources to the combination at the expense of attending to and growing Inverness’ business or other business opportunities; | |
• | the uncertainty associated with operating a disease management company and whether any benefits would be achieved from having both disease management businesses and rapid diagnostic businesses within the same company; | |
• | the potential financial and credit market reaction to Inverness making further investments in service rather than product businesses; | |
• | the differing multiples that the market may apply to service businesses, such as Matria, and rapid diagnostic businesses; | |
• | the risks associated with the additional demands that the acquisition of Matria would place on management, particularly in light of the already substantial additional demands placed on management by the recent acquisitions of Alere and Paradigm Health, and the additional challenges that management would face in integrating the operations of Inverness, Matria, Alere and Paradigm Health, if the Matria acquisition were to be consummated; and | |
• | the potential adverse impact of the resale of additional shares of Inverness capital stock into the stock market after the closing, which could have the effect of putting downward pressure on the trading price of Inverness common stock. |
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Value of | ||||||||||||||||||||||||||||
Name and | Cash | Accelerated | ||||||||||||||||||||||||||
Principal Position | Severance(1) | Bonus | Benefits | Equity Awards(2) | Tax Gross-Ups | Retirement Plans | Total | |||||||||||||||||||||
Parker H. Petit | $ | 1,732,500 | $ | 1,212,750 | $ | 236,976 | $ | 4,370,272 | $ | 2,298,799 | — | $ | 9,851,297 | |||||||||||||||
Chairman of the Board and Chief Executive Officer | ||||||||||||||||||||||||||||
Jeffrey L. Hinton | $ | 572,000 | $ | 257,400 | $ | 92,506 | $ | 647,576 | $ | 520,563 | — | $ | 2,090,045 | |||||||||||||||
Senior Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||
Thomas D. Underwood | $ | 823,000 | $ | 493,800 | $ | 79,560 | $ | 1,950,000 | $ | 1,190,659 | — | $ | 4,537,019 | |||||||||||||||
President and Chief Operating Officer | ||||||||||||||||||||||||||||
Roberta L. McCaw | $ | 542,100 | $ | 216,840 | $ | 78,214 | $ | 782,312 | $ | 235,846 | (3) | $ | 454,039 | (4) | $ | 2,309,351 | ||||||||||||
Senior Vice President, General Counsel and Secretary | ||||||||||||||||||||||||||||
Yvonne V. Scoggins | $ | 813,150 | $ | 325,260 | $ | 134,253 | $ | 848,616 | — | — | $ | 2,121,279 | ||||||||||||||||
Senior Vice President Business Analysis | ||||||||||||||||||||||||||||
Thornton A. Kuntz, Jr. | $ | 478,400 | $ | 191,360 | $ | 85,234 | $ | 718,486 | $ | 306,687 | (3) | $ | 460,407 | (4) | $ | 2,240,574 | ||||||||||||
Senior Vice President and Chief Administrative Officer | ||||||||||||||||||||||||||||
Richard M. Hassett M.D.(5) | $ | 822,900 | $ | 493,740 | $ | 97,360 | $ | 2,509,866 | $ | 1,193,257 | — | $ | 5,117,123 | |||||||||||||||
Former President and Chief Operating Officer |
(1) | Calculated based on the executive officer’s base salary as of February 1, 2008. | |
(2) | Calculated by assuming that the shares of common stock underlying such options have an assumed value equal to $39.00 per share of Matria common stock. However, given the recent volatility in the trading prices of Matria’s and Inverness’ common stock, it is possible that the actual value of the common stock underlying such options may be less than $39.00 per share. | |
(3) | This figure represents tax mitigation payments under the SERP. | |
(4) | This figure represents Ms. McCaw’s three years of additional service under the SERP and since for both Ms. McCaw and Mr. Kuntz, the requirement of attaining age 55 to achieve 100% vesting will be eliminated both Ms. McCaw and Mr. Kuntz will be 100% vested in their SERP benefit upon the change in control. Under the terms of the SERP, Ms. McCaw and Mr. Kuntz are also entitled to receive tax mitigation payments in an amount of approximately 44% of the amount initially contributed by Matria to the SERP. The value of such additional tax mitigation payments is not reflected in the amounts set forth above in the column entitled “Retirement Plans,” but is reflected in the column above entitled “TaxGross-Ups.” |
(5) | Dr. Hassett served as Matria’s President and Chief Operating Officer until January 29, 2008. The amounts set forth in this table include the amounts Dr. Hassett is already entitled to under his Severance, Release and Restrictive Covenant Agreement. |
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• | an individual citizen or resident of the United States; | |
• | a corporation (or an entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; | |
• | an estate, the income of which is subject to United States federal income tax regardless of its source; or | |
• | a trust that (x) is subject to the supervision of a court within the United States and the control of one or more United States persons or (y) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person. |
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• | No gain or loss will be recognized by Inverness, Matria or Merger Sub as a result of the merger and the upstream merger. | |
• | For holders of Matria common stock who exchange their shares of Matria common stock for a combination of Inverness Series B preferred stock and cash (other than cash received in lieu of a fractional share), gain (but not loss) will be recognized, and the gain recognized will be equal to the lesser of (i) the excess, if any, of the sum of the cash and the fair market value of the Inverness Series B preferred stock the holder received in the merger, over the tax basis in the shares of Matria common stock surrendered by the holder in the merger, or (ii) the amount of cash received. Any such recognized gain will be treated as capital gain unless the receipt of the cash has the effect of the distribution of a dividend for United States federal income tax purposes under the Hypothetical Redemption Analysis discussed below, in which case such gain will be treated as ordinary dividend income to the extent of such stockholder’s ratable share of the accumulated earnings and profits of Matria. Any capital gain recognized will be long-term capital gain if the shares of the Matria common stock have been owned by the holder for more than one year as of the effective date of the merger. For a holder who acquired different blocks of Matria common stock at different times and at different prices, realized gain or loss generally must be calculated separately for each identifiable block of shares exchanged in the merger. | |
• | Cash received in the merger by a holder of Matria common stock in lieu of a fractional share of Inverness Series B preferred stock will be treated as received in redemption of such fractional interest and gain or loss will be recognized, measured by the difference between the amount of cash received and the portion of the basis of the shares of Matria common stock allocable to such fractional interest. Such gain or loss will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for such shares is greater than one year. | |
• | A holder’s aggregate tax basis in the Inverness Series B preferred stock received in the merger, including any fractional share interests deemed received by the holder under the treatment described above, will equal its aggregate tax basis in the Matria common stock surrendered in the merger, increased by the amount of taxable gain or dividend income, if any, recognized in the merger (excluding any gain resulting from the deemed receipt and redemption of a fractional share interest), and decreased by the amount of cash, if any, received in the merger (excluding any cash received in lieu of a fractional share interest). If a holder of Matria common stock acquired any of the holder’s shares at different prices or at different times, Treasury Regulations provide guidance on how such holder may allocate its tax basis to shares of Inverness Series B preferred stock received in the merger. Holders of Matria common stock that hold more than one block (that is, shares acquired at the same cost in a single transaction) of Matria common stock should consult their own tax advisors regarding the proper allocation under the Treasury Regulations of their tax basis among shares of Inverness Series B preferred stock received. Any disallowed loss realized upon receipt of merger consideration would be essentially reflected in the adjusted tax basis of the shares of Inverness Series B preferred stock received in the merger. |
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• | The holding period of the Inverness Series B preferred stock received by a holder of Matria common stock in connection with the merger (including any fractional share deemed received and redeemed as described above) generally will include the holding period of the Matria common stock surrendered in connection with the merger. A holder who had differing holding periods with respect to Matria common stock should consult its own tax advisor regarding the particular holding periods of the Inverness Series B preferred stock received in the merger. |
• | Significant holders of Matria common stock will be required to attach a statement to their tax returns for the year of the merger that contains the information listed in Treasury Regulation Section1.368-3(b). Such statement must include the holder’s adjusted tax basis in the holder’s Matria common stock and other information regarding the reorganization. Holders of Matria common stock should consult their own tax advisors with respect to the applicability of this and any other tax reporting requirements to their particular circumstances. |
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• | Test (1): There are no put rights for the Inverness Series B preferred stock generally and upon conversion of the Inverness Series B preferred stock the holders are only entitled to receive stock, even though at Inverness’ option (and not the holder’s) Inverness may settle the conversion obligation partly or wholly in cash. |
• | Test (2): There is no requirement that Inverness or a related person redeem or purchase the Inverness Series B preferred stock. |
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• | Test (3): Inverness does not have an unrestricted right to redeem or purchase the Inverness Series B preferred stock and Inverness does not believe that, as of the date of the issuance of the Inverness Series B preferred stock, it is more likely than not that if Inverness obtained such a right through a “forced conversion” that it would exercise such right by electing to settle the conversion in cash rather than through the issuance of Inverness common stock. Inverness would have the right, at its sole election, to settle a conversion in cash rather than through the issuance of stock, and any decision to settle in cash rather than stock would depend upon a number of considerations that would be evaluated at the time of such settlement, including but not limited to any limitations under Inverness’ credit agreements on the use of cash, financial accounting considerations with respect to such matters as earnings per share, Inverness’ available cash, Inverness’ ability to borrow money and the terms upon which it could borrow money, and Inverness’ management’s assessment of the market price of Inverness common stock at the time. |
• | Test (4): The dividend rate on the Inverness Series B preferred stock will not vary in the manner described. |
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• | If Inverness satisfies its entire conversion obligation in cash, the conversion will be taxable as a distribution under Section 302 of the Internal Revenue Code and will be treated as a payment in exchange for the Inverness Series B preferred stock provided that one of the tests in Section 302(b) of the Internal Revenue Code is met. Otherwise, the cash payment will be taxable as a distribution subject to Section 301 of the Internal Revenue Code, treating the cash distribution as a dividend to the extent |
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of Inverness’ current and accumulated earnings and profits, with the excess consisting of a tax-free return of capital to the extent of the holder’s tax basis in the Inverness Series B preferred stock and then as capital gain. |
• | If the conversion obligation is satisfied entirely or in part with Inverness common stock, then a holder of Inverness Series B preferred stock generally will not recognize gain or loss in respect of the receipt of Inverness common stock. With respect to a payment of cash (including any cash premium determined with respect to the dividends not previously accrued but that a holder would have received through the third anniversary of the issuance date of the Inverness Series B preferred stock), gain (but not loss) may be recognized, and such gain will be equal to the lesser of (i) the excess, if any, of the sum of the cash and the fair market value of the Inverness common stock the holder received in the conversion, over the tax basis in the shares of Inverness Series B preferred stock surrendered by the holder in the conversion, or (ii) the amount of cash received. Any such recognized gain will be treated as capital gain unless the receipt of the cash has the effect of the distribution of a dividend for United States federal income tax purposes under a hypothetical redemption analysis similar to the analysis discussed above, in which case such gain will be treated as ordinary dividend income to the extent of such stockholder’s ratable share of the accumulated earnings and profits of Inverness. Cash received in lieu of a fractional common share will generally be treated as a payment in a taxable exchange for such fractional common share, and gain or loss will be recognized on the receipt of cash in an amount equal to the difference between the amount of cash received and the amount of adjusted tax basis allocable to the fractional common share. The adjusted tax basis of the Inverness common stock received on conversion, including any fractional share interests deemed received by the holder under the treatment described above but excluding any stock received with respect to previously accrued but unpaid dividends, will equal its aggregate tax basis in the Inverness Series B preferred stock converted, increased by the amount of taxable gain or dividend income, if any, recognized in the conversion (excluding any gain resulting from the deemed receipt and redemption of a fractional share interest and from payments with respect to previously accrued but unpaid dividends), and decreased by the amount of cash, if any, received in the conversion (excluding any cash received in lieu of a fractional share interest and from payments with respect to previously accrued but unpaid dividends). The holding period of such Inverness common stock received on conversion generally will include the holding period of the converted Inverness Series B preferred stock prior to conversion. |
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• | restrain, prohibit or otherwise interfere with Inverness’ ownership or operation of any portion of the business of Matria or Inverness or to compel Inverness to dispose of or hold separate any portion of the business or assets of Matria or Inverness; |
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• | impose or confirm limitations on Inverness’ ability effectively to exercise full rights of ownership of shares of common stock of Matria or the surviving corporation; or | |
• | require Inverness to divest itself of any such shares. |
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• | the certificate of incorporation of Merger Sub will be the certificate of incorporation of Matria, except that the name of the surviving corporation will be Matria Healthcare, Inc.; | |
• | the bylaws of Merger Sub will be the bylaws of Matria; and | |
• | the officers and directors of Merger Sub will become the officers and directors of Matria until their respective successors are duly elected or appointed and qualified. |
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• | corporate organization, qualifications to do business and corporate standing of Matria and its subsidiaries; | |
• | capital structure and the absence of preemptive rights of Matria and its subsidiaries; | |
• | corporate authorization to enter into and carry out the obligations contained in the merger agreement; | |
• | the vote of the stockholders required to complete the merger; | |
• | absence of any conflict or violation of the corporate charter and bylaws of Matria and its subsidiaries, any applicable legal requirements, or any agreements with third parties, as a result of entering into and carrying out the obligations contained in the merger agreement; | |
• | governmental and regulatory approvals required to complete the merger; | |
• | SEC filings and the financial statements contained in those filings; | |
• | the absence of undisclosed liabilities; | |
• | compliance with the Sarbanes-Oxley Act of 2002 and any related rules and regulations by the SEC; | |
• | absence of certain changes or events since September 30, 2007; | |
• | taxes and tax returns; | |
• | title to properties; | |
• | intellectual property; | |
• | compliance with applicable law and court orders by Matria and its subsidiaries; | |
• | compliance with regulatory requirements; | |
• | litigation; | |
• | benefit plans, employees and employment practices; | |
• | environmental matters; | |
• | material contracts and the absence of breaches of material contracts; | |
• | Matria’s major customers; | |
• | entitlements to any brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the transactions contemplated by the merger agreement; | |
• | insurance; | |
• | accuracy of the information supplied for this proxy statement/prospectus; | |
• | board of directors approval; | |
• | receipt of a fairness opinion from SunTrust Robinson Humphrey; | |
• | related party transactions; | |
• | internal accounting controls; and | |
• | inapplicability of any state takeover statutes. |
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• | corporate organization, qualifications to do business and corporate standing; | |
• | capital structure and the absence of preemptive rights; | |
• | corporate authorization to enter into and carry out the obligations contained in the merger agreement; | |
• | absence of any conflict or violation of the corporate organizational documents of Inverness, Merger Sub and Merger LLC, any applicable legal requirements, or any agreements with third parties, as a result of entering into and carrying out the obligations contained in the merger agreement; | |
• | governmental and regulatory approvals required to complete the merger; | |
• | SEC filings and the financial statements contained in those filings; | |
• | the absence of undisclosed liabilities; | |
• | absence of certain changes or events since September 30, 2007; | |
• | compliance with applicable law by Inverness and its subsidiaries; | |
• | litigation; | |
• | accuracy of the information supplied for this proxy statement/prospectus; | |
• | entitlements to any brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the transactions contemplated by the merger agreement; | |
• | internal accounting controls; | |
• | the absence of contracts with Matria or ownership of shares of Matria, other than pursuant to the merger agreement; and | |
• | the votes or consents required to complete the merger. |
• | waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or repurchase of restricted stock, or reprice options granted to any employee, consultant or director or authorize cash payments in exchange for any options or take any such action with regard to any warrant or other right to acquire capital stock; | |
• | grant any severance or termination pay to any officer or employee, subject to certain limited exceptions; | |
• | transfer, license, abandon, allow to be cancelled, amend or modify any of its intellectual property rights, other than in the ordinary course of business consistent with past practice; |
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• | declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or split, combine or reclassify any capital stock; | |
• | purchase, redeem or otherwise acquire any shares of capital stock, subject to certain limited exceptions; | |
• | issue, deliver, sell, authorize, pledge or otherwise encumber any capital stock or convertible securities, apart from the issuance of common stock upon exercise of stock options or warrants or the granting of stock options pursuant to Matria’s option plans (other than to directors or officers) in the ordinary course of business consistent with past practice in connection with periodic compensation reviews, ordinary course promotions or to new hires; | |
• | amend its certificate of incorporation or bylaws; | |
• | make any acquisitions, including by merger or consolidation, enter into any material joint venture, strategic relationship or alliance or make any material loan or investment to any person, subject to certain limited exceptions; | |
• | sell, lease, license, encumber or otherwise dispose of any material properties or assets, other than inventory in the ordinary course of business or immaterial assets; | |
• | incur or guarantee indebtedness for borrowed money, subject to certain exceptions including those in the ordinary course of business; | |
• | make changes in employee benefits, subject to certain limited exceptions; | |
• | make any capital expenditures except as identified in Matria’s capital expenditures model, subject to a maximum of $7.0 million of expenditures in the aggregate; | |
• | make any material changes to, or waive any material rights under, certain material contracts or enter into any material contract; | |
• | enter into, modify, amend or cancel any material development services, licensing, distribution, purchase, sales, sales representation or other similar agreement or obligation with respect to any material intellectual property rights, subject to certain exceptions; | |
• | materially revalue any of its assets or, except as required by GAAP, make any change in tax or accounting methods, principles or practices; | |
• | discharge, settle or satisfy any disputed claim, litigation, arbitration, disputed liability or other controversy, including any liability for taxes, other than the payment in the ordinary course of business consistent with past practice, or in accordance with their terms, of liabilities previously disclosed in Matria’s September 30, 2007 balance sheet or incurred in the ordinary course of business since the date of that balance sheet, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill or similar agreements; | |
• | make any material tax election inconsistent with past practices or agree to an extension of a statute of limitations for any assessment of tax; | |
• | take any action that is intended or would reasonably be expected to prevent or materially impede the consummation of the merger, including with respect to any “poison pill” or similar plan, agreement or arrangement, any other anti-takeover measure, or any state takeover statute; | |
• | take any action that is intended or would reasonably be expected to result in any of the conditions to obligations to complete the merger not being satisfied; or | |
• | agree in writing or otherwise to take any of the foregoing actions. |
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• | solicit, initiate, encourage or induce the making, submission or announcement of any acquisition proposal; | |
• | participate in any discussions or negotiations regarding, or furnish to any person any nonpublic information regarding, or take any other action intended or known to assist any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any acquisition proposal; | |
• | engage in discussions with any person regarding any acquisition proposal; | |
• | approve, endorse or recommend any acquisition proposal; or | |
• | enter into any letter of intent, or other similar contract, agreement or commitment relating to any acquisition proposal. |
• | Neither Matria nor any representative of Matria and its subsidiaries violated the provisions in the merger agreement prohibiting solicitation of competing proposals; |
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• | Matria’s board of directors concludes in good faith, after consultation with its outside legal counsel, that such action is required in order for the Matria board of directors to comply with its fiduciary obligations to the Matria stockholders under applicable law; | |
• | Before furnishing nonpublic information to, or entering into discussions with, the person making such acquisition proposal, Matria gives Inverness written notice of the identity of the person or group making such acquisition proposal and the material terms and conditions of such acquisition proposal and of Matria’s intention to furnish nonpublic information to, or enter into discussions with, such person or group and Matria must have received from the person or group a signed confidentiality agreement containing terms at least as restrictive as the confidentiality agreement between Matria and Inverness; and | |
• | Matria provides (to the extent not previously provided) to Inverness a copy of any nonpublic information provided to the person making the acquisition proposal. |
• | the acquisition or purchase of more than a 15% beneficial ownership interest in the total outstanding voting securities of Matria or any of its subsidiaries; | |
• | any tender offer or exchange offer that if consummated would result in any person or group beneficially owning 15% or more of the total outstanding voting securities of Matria or any of its subsidiaries; | |
• | any merger, consolidation, business combination or similar transaction involving Matria or any of its subsidiaries where the stockholders of Matria immediately preceding such transaction or, in the case of a subsidiary, Matria would hold less than 85% of the equity interests in the surviving or resulting entity after such transaction; | |
• | any sale, lease, exchange, transfer, license (other than in the ordinary course of business), acquisition or disposition of any assets of Matria or any of its subsidiaries that generate or constitute 10% or more of the net revenue, net income or assets of Matria and its subsidiaries, taken as a whole; or | |
• | any liquidation, dissolution, recapitalization or other reorganization of Matria or any of its subsidiaries. |
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• | a superior offer is made to Matria and not withdrawn; | |
• | Matria has provided written notice to Inverness that it has received such superior offer, specifying all of the terms and conditions of the superior offer, identifying the person or entity making the superior offer and providing copies of all documentation relating to the superior offer; and | |
• | Inverness has not, within 3 business days of receipt of the notice, made an offer that Matria’s board of directors reasonably determines in good faith (after consultation with its outside financial advisors) to be at least as favorable as the superior offer; | |
• | Matria’s board of directors determines in good faith, after consultation with its outside counsel, that, in light of such superior offer, the action is required in order for the board of directors of Matria to comply with its fiduciary obligations to Matria’s stockholders under applicable law; and | |
• | Matria has not violated any provisions in the merger agreement relating to the solicitation of competing proposals or the obtaining of the approval of Matria’s stockholders. |
• | causing the conditions to the completion of the merger to be satisfied; | |
• | obtaining all necessary actions or nonactions, waivers, consents, approvals, orders and authorizations from governmental entities, making all necessary registrations, declarations and filings, and taking all steps that may be necessary to avoid any suit, claim, action, investigation or proceeding by any governmental entity; | |
• | obtaining all necessary consents from, and providing all necessary notices to, third parties; | |
• | defending any lawsuits or other legal proceedings, whether judicial or administrative, challenging the merger agreement or the consummation of the merger; and | |
• | executing and delivering any additional instruments necessary to consummate the transactions contemplated by the merger agreement. |
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• | the merger must be approved and the merger agreement must be adopted by the holders of a majority of the outstanding shares of Matria common stock; | |
• | the registration statement of which this proxy statement/prospectus is a part must be declared effective by the SEC, no stop order suspending the effectiveness of such registration statement is in effect, and no proceeding initiated for that purpose is pending or threatened in writing; | |
• | no governmental entity has enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order, including under the HSR Act, which is in effect and which has the effect of making the merger illegal or otherwise prohibiting the completion of the merger, and all waiting periods applicable to the merger under the HSR Act have terminated or expired; | |
• | the representations and warranties of the other party must have been true and correct as of the date of the merger agreement and must be true and correct (without giving any effect to any qualification or exception as to materiality or material adverse effect) as of the effective date of the merger as if made at and as of that time, except: |
• | where any failures of such representations and warranties to be true and correct do not constitute, individually or in the aggregate, a material adverse effect on the other party, as described below; however, this exception generally does not apply to the representations and warranties of Matria regarding the following, which representations and warranties must be true and correct in all material respects: |
• | outstanding capitalization, including options; | |
• | authorization to enter into and carry out the obligations contained in the merger agreement; | |
• | board of directors approval; | |
• | brokers and other advisors; and | |
• | the absence of certain changes to Matria and its subsidiaries; |
• | to the extent the representations and warranties of the other party address matters only as of a particular date, they must be true and correct only as of that date; |
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• | the other party must have performed or complied in all material respects with all of its agreements and covenants required by the merger agreement to be performed or complied with before completion of the merger; | |
• | no material adverse effect, as described below, with respect to the other party will have occurred since January 27, 2008 and be continuing; | |
• | such party must have received an officer’s certificate from the other party regarding the satisfaction of certain conditions to the completion of the merger; and | |
• | unless Inverness exercises its right to pay the merger consideration entirely in cash, such party must have received an opinion from Goodwin ProcterLLPor Troutman Sanders LLP, dated as of the effective date of the merger, to the effect that it is more likely than not that the merger and the upstream merger, considered together as a single integrated transaction, will constitute a “reorganization” within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code and that each of Inverness and Matria will be a party to the reorganization. |
• | changes in the market price or trading volume of a party’s common stock or failure by a party to meet revenue, earnings, or other financial performance predictions or forecasts, in each case, during any period for which results are released on or after the date of the merger agreement; | |
• | changes, circumstances or conditions generally affecting any industry in which a party or any of its subsidiaries participates, including changes in applicable law (provided that such changes do not have a materially disproportionate effect on a party and its subsidiaries, taken a whole); |
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• | changes generally affecting the economy or the financial, debt, credit or securities markets in the United States, including as a result of changes in geopolitical conditions (provided that such changes do not have a materially disproportionate effect on a party and its subsidiaries, taken a whole); | |
• | changes resulting from a change in GAAP or the interpretation thereof (provided that such changes do not have a materially disproportionate effect on a party and its subsidiaries, taken a whole); | |
• | changes resulting from any act of war or terrorism (or any escalation thereof) (provided that such changes do not have a materially disproportionate effect on a party and its subsidiaries, taken a whole); | |
• | changes, facts, circumstances or conditions resulting from the announcement or existence of the merger agreement or merger including any stockholder litigation relating thereto or any termination of, reduction in or similar negative impacts on relationships, contractual or otherwise, with any customer, suppliers, distributors, creditors, partners or employees of such party and its subsidiaries; | |
• | in the case of Matria, actions or omissions of Matria taken at Inverness’, Merger Sub’s or Merger LLC’s request; or | |
• | in the case of Inverness, actions or omissions of Inverness taken at Matria’s request; |
• | by mutual written consent of the Inverness and Matria boards of directors; | |
• | by either Inverness or Matria: |
• | if the merger is not consummated by July 31, 2008, for any reason, unless the sole reason for the failure to consummate the merger is that the waiting period (or an extension of the waiting period) under the HSR Act has not expired, then the date will be extended to October 31, 2008, but neither Inverness nor Matria may terminate the merger agreement on this basis if that party has breached its obligations under the merger agreement and such breach has been a principal cause of, or resulted in, the failure of the merger to be consummated on or before that date; | |
• | if a governmental entity in the United States or any foreign jurisdiction has issued a final and nonappealable order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the merger; and | |
• | if the Matria stockholders do not approve the merger and adopt the merger agreement at the later of (i) a stockholders’ meeting convened for that purpose, or (ii) at any adjournment of a stockholder’s meeting called for that purpose, but Matria may not terminate the merger agreement on this basis where the failure to obtain stockholder approval was caused by the action or failure to act of Matria, and such action or failure to act constitutes a material breach of the merger agreement, or by a breach of any voting agreement by any party other than Inverness; |
• | by Inverness (at any time prior to approval of the merger and adoption of the merger agreement by the Matria stockholders) if any of the following events, which we call “Triggering Events,” occurs: |
• | Matria’s board of directors or any committee of the board of directors withholds, withdraws, modifies or amends in a manner adverse to Inverness its recommendation in favor of the approval of the merger and adoption of the merger agreement or failed to call and hold the Matria stockholders meeting in accordance with the merger agreement; | |
• | Matria fails to include in this proxy statement/prospectus the recommendation of Matria’s board of directors in favor of the approval of the merger and adoption of the merger agreement; |
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• | at any time following the public announcement of an acquisition proposal, Matria’s board of directors fails publicly to reaffirm its recommendation of the approval of the merger and adoption of the merger agreement within 5 business days after Inverness requests in writing that such recommendation be reaffirmed; | |
• | Matria’s board of directors or any committee of the board of directors approves or publicly recommends any other acquisition proposal; | |
• | Matria enters into any letter of intent or similar document or any agreement, contract or commitment accepting any other acquisition proposal; | |
• | Matria breaches any of the provisions in the merger agreement relating to the solicitation of competing offers or the obtaining of the approval of Matria’s stockholders and such breach led to or resulted in another acquisition proposal being made; or | |
• | a tender or exchange offer relating to securities of Matria is commenced by a person unaffiliated with Inverness, and Matria does not send to its security holders, within 10 business days after such tender or exchange offer is first published, sent or given, a statement disclosing that Matria recommends rejection of such tender or exchange offer; |
• | by Matria (at any time prior to approval of the merger and adoption of the merger agreement by the Matria stockholders), upon a change of recommendation in connection with a superior offer, but only if contemporaneously with the termination of the merger agreement, Matria pays Inverness the termination fee discussed below and Matria enters into a definitive agreement to effect such superior offer; | |
• | by Matria, upon a breach of any covenant or agreement on the part of Inverness set forth in the merger agreement, or if there is any continuing inaccuracy in the representations and warranties of Inverness set forth in the merger agreement, in either case, such that the conditions to Matria’s obligation to effect the merger would fail to be satisfied at the time of such termination and such inaccuracy or breach is not cured by Inverness within 30 days after delivery of written notice to Inverness; or | |
• | by Inverness, upon a breach of any covenant or agreement on the part of Matria set forth in the merger agreement, or if there is any continuing inaccuracy in the representations and warranties of Matria set forth in the merger agreement, in either case, such that the conditions to Inverness’ obligation to effect the merger would fail to be satisfied at the time of such termination and such inaccuracy or breach is not cured by Matria within 30 days after delivery of written notice to Matria. |
• | the following three events have occurred: |
• | the merger agreement is properly terminated by either party because the merger is not consummated by July 31, 2008, unless the sole reason for the failure to consummate the merger is that the waiting period (or an extension of the waiting period) under the HSR Act has not expired, in which case the date will be extended to October 31, 2008 or because the Matria stockholders do not approve the merger and adopt the merger agreement; | |
• | prior to the termination of the merger agreement, a person has publicly announced an acquisition proposal; and | |
• | within 12 months after termination of the merger agreement, Matria enters into a binding agreement to consummate, or consummates, a “company acquisition,” as defined below; |
• | the merger agreement is terminated by Inverness because any Triggering Event has occurred; or |
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• | the merger agreement is terminated by Matria upon a change of recommendation in connection with a superior offer. |
• | a merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving Matria or any of its subsidiaries where the stockholders of Matria immediately preceding such transaction hold or, in the case of a subsidiary, Matria holds, less than 50% of the aggregate equity interests in the surviving, resulting or parent entity of such transaction; | |
• | a sale or other disposition by Matria or any of its subsidiaries of assets representing in excess of 50% of the aggregate fair market value of Matria’s consolidated business immediately prior to such sale; or | |
• | the acquisition by any person or group (including by way of a tender offer or an exchange offer or issuance by Matria or any of its subsidiaries), directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of shares representing in excess of 50% of the voting power of the then outstanding shares of capital stock of Matria or any of its subsidiaries. |
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• | in favor of the approval of the merger and adoption of the merger agreement; | |
• | against any acquisition proposal or superior offer (each as defined in the merger agreement); and | |
• | against any proposal or transaction that could prevent or delay the merger. |
• | permit any covered shares to become subject to any pledge or encumbrance; | |
• | grant any proxy or power of attorney; or | |
• | enter into any voting agreement, voting trust or other voting arrangement with respect to any of the covered shares. |
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PRINCIPAL STOCKHOLDERS
Amount and Nature of | Percent | |||||||
Name of Beneficial Owner | Beneficial Ownership(1) | of Class(2) | ||||||
Wellington Management Company, LLP(3) | 1,932,114 | 8.8 | % | |||||
EARNEST Partners, LLC(4) | 2,376,295 | 10.8 | % | |||||
TimesSquare Capital Management, LLC(5) | 1,198,500 | 5.4 | % | |||||
UBS Global Asset Management (Americas) Inc.(6) | 1,073,591 | 4.9 | % | |||||
HWP Capital Partners II, L.P.(7) | 1,380,388 | 6.3 | % | |||||
T. Rowe Price Associates, Inc.(8) | 2,772,282 | 12.6 | % | |||||
Parker H. Petit(9) | 1,761,210 | 8.0 | % | |||||
Richard M. Hassett, M.D.(10) | 200,160 | — | ||||||
Jeffrey L. Hinton(11) | 22,020 | — | ||||||
Roberta L. McCaw(12) | 64,523 | — | ||||||
Yvonne V. Scoggins(13) | 63,916 | — | ||||||
Joseph G. Bleser(14) | 16,007 | — | ||||||
J. Terry Dewberry(15) | 11,000 | — | ||||||
Donald J. Lothrop(16) | 10,000 | — | ||||||
Myldred H. Mangum(17) | 6,000 | — | ||||||
Guy W. Millner(18) | 37,375 | — | ||||||
Kaaren J. Street(19) | 16,000 | — | ||||||
Thomas S. Stribling(20) | 46,780 | — | ||||||
Wayne P. Yetter(21) | 22,000 | — | ||||||
All executive officers and directors as a group (14 persons)(22) | 2,358,400 | 10.7 | % | |||||
— Less than 1% |
(1) | Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if he or she has or shares the power to vote or to direct the voting of such security (“voting power”) or the power to dispose or to direct the disposition of such security (“investment power”). A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days as well as any securities owned by such person’s spouse, children or relatives living in the same house. Accordingly, more than one person may be deemed to be a beneficial owner of the same securities. | |
(2) | Based on 22,052,520 shares of Matria common stock outstanding on February 1, 2008. With respect to each person or group in the table, assumes that such person or group has exercised all options, warrants and other rights to purchase Matria common stock which he or she beneficially owns and which are exercisable within 60 days and that no other person has exercised any such rights. |
(3) | The number of shares owned is based on information contained in a report on Schedule 13G/A (Amendment No. 10) filed with the SEC on February 14, 2008. The address of Wellington Management Company, LLP (“WMC”) is 75 State Street, Boston, Massachusetts 02109. According to its Schedule 13G, WMC, in its capacity as investment adviser, may be deemed to beneficially own 1,932,114 shares of Matria common stock, which shares are held of record by clients of WMC. WMC reports that it has no power to vote or direct the vote of such shares and shared power to dispose or direct the disposition of such shares, while its clients have the right to receive, or direct the receipt of, dividends from, or proceeds from the sale of, such shares. |
(4) | The number of shares owned is based on information contained in a report on Schedule 13G/A (Amendment No. 5) filed with the SEC on January 31, 2008. The address of EARNEST Partners, LLC (“EARNEST”) is 75 14th Street, Suite 2300, Atlanta, Georgia 30309. According to its Schedule 13G/A, |
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EARNEST, in its capacity as investment advisor, may be deemed to beneficially own 2,376,295 shares of Matria common stock. | ||
(5) | The number of shares is based on information contained in a report on Schedule 13G filed with the SEC on February 9, 2007. The address of TimesSquare Capital Management, LLC (“TimesSquare”) is 1177 Avenue of the Americas, 39th Floor, New York, New York 10036. According to its Schedule 13G, TimesSquare, in its capacity as investment advisor, may be deemed to beneficially own 1,198,500 shares of Matria common stock. | |
(6) | The number of shares is based on information contained in a report on Schedule 13G/A (Amendment No. 1) filed with the SEC on February 20, 2007. The address of UBS Global Asset Management (Americas) Inc. (“UBS”) is One North Wacker, Chicago, Illinois 60606. According to its Schedule 13G Amendment No. 1, UBS, in its capacity as investment advisor, may be deemed to beneficially own 1,073,591 shares of Matria common stock. | |
(7) | The number of shares is based on information contained in a report on Schedule 13G filed with the SEC on August 3, 2007. The address of HWP Capital Partners II, L.P. isc/o Haas Wheat & Partners, L.P., 300 Crescent Court, Suite 1700, Dallas, Texas 75201. According to its Schedule 13G, HWP Capital Partners II, L.P., in its capacity as investment advisor, may be deemed to beneficially own 1,380,388 shares of Matria common stock. | |
(8) | The number of shares is based on information contained in a report on Schedule 13G/A (Amendment No. 1) filed with the SEC on February 13, 2008. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202. According to its Schedule 13G/A (Amendment No. 1) T. Rowe Price Associates, Inc., in its capacity as investment advisor, may be deemed to beneficially own 2,772,282 shares of Matria common stock, 1,317,756 shares of which are held by T. Rowe Price New Horizons Fund, Inc. | |
(9) | Represents 778,881 shares owned by Mr. Petit, 81,300 shares of restricted stock, 73,832 shares held by Petit Investments Limited Partnership, 90,000 shares held by Cox Road Partners LLLP, 3,750 shares held by Petit Grantor Trust, 6,720 shares owned by his spouse, and 726,727 shares which are subject to purchase upon exercise of options exercisable within 60 days. Mr. Petit’s address is 1850 Parkway Place, Marietta, Georgia 30067. | |
(10) | Represents 6,663 shares owned by Dr. Hassett, 40,500 shares of restricted stock, and 152,997 shares which are subject to purchase upon exercise of options exercisable within 60 days. Dr. Hassett resigned as President and Chief Operating Officer effective January 29, 2008. | |
(11) | Represents 4,019 shares owned by Mr. Hinton, 16,334 shares of restricted stock, and 1,667 shares subject to purchase upon exercise of options. | |
(12) | Represents 16,046 shares owned by Ms. McCaw, 14,000 shares of restricted stock, and 34,477 shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(13) | Represents 14,000 shares of restricted stock and 49,916 shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(14) | Represents 7 shares owned by Mr. Bleser and 16,000 shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(15) | Represents 1,000 shares owned by Mr. Dewberry and 10,000 shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(16) | Represents shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(17) | Represents shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(18) | Represents 11,250 shares owned by Mr. Millner and 26,125 shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(19) | Represents shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(20) | Represents 1,905 shares owned by Mr. Stribling and 44,875 shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(21) | Represents shares which are subject to purchase upon exercise of options exercisable within 60 days. | |
(22) | Includes 1,171,254 shares which are subject to purchase upon exercise of options exercisable within 60 days. |
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EXECUTIVE OFFICERS
Name | Age | Position | ||||
Ron Zwanziger | 54 | Chairman of the Inverness’ Board of Directors, Chief Executive Officer and President | ||||
David Scott, Ph.D. | 51 | Director, Chief Scientific Officer | ||||
Jerry McAleer, Ph.D. | 52 | Director, Vice President, Research and Development and Vice President, Cardiology | ||||
Hilde Eylenbosch, M.D. | 44 | CEO, SPD Swiss Precision Diagnostics and President, Consumer Diagnostics | ||||
David Toohey | 51 | President, Europe/Middle East | ||||
John Yonkin | 48 | President, Inverness Medical America, and President, Nutritionals | ||||
Geoffrey Jenkins | 56 | Vice President, Worldwide Operations | ||||
John Bridgen, Ph.D. | 61 | Vice President, Strategic Business Development | ||||
David Teitel | 44 | Chief Financial Officer | ||||
Jon Russell | 43 | Vice President, Finance | ||||
Michael K. Bresson | 50 | Vice President, Mergers & Acquisitions | ||||
Paul T. Hempel | 59 | Senior Vice President, Leadership Development & Special Counsel and Secretary | ||||
Ellen Chiniara | 49 | General Counsel and Assistant Secretary | ||||
Ron Geraty | 61 | Chief Executive Officer, Alere Medical, Inc. | ||||
Emanuel Hart | 58 | Chief Executive Officer and President, Orgenics Ltd. (Israel) | ||||
David Walton | 54 | Vice President, Asia Pacific | ||||
Carol R. Goldberg | 77 | Director | ||||
Robert P. Khederian | 56 | Director | ||||
John F. Levy | 61 | Director | ||||
John A. Quelch | 56 | Director | ||||
Peter Townsend | 73 | Director |
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COMPENSATION OF
INVERNESS DIRECTORS AND EXECUTIVE OFFICERS
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• | Beckman Coulter, Inc. |
• | Bio-Rad Laboratories, Inc. |
• | Biosite, Inc. |
• | Cytyc Corporation |
• | Digene Corporation |
• | Gen-Probe, Inc. |
• | Hologic, Inc. |
• | Meridien Bioscience, Inc. |
• | Polymedica Corporation |
• | Ventana Medical System, Inc. |
• | The individual’s particular background and circumstances, including prior relevant work experience; |
• | The demand for individuals with the executive’s specific expertise and experience; |
• | The individual’s role with Inverness and the compensation paid to similar persons determined through benchmark studies; |
• | The individual’s performance and contribution to Inverness’ achievement of its goals and objectives; and |
• | Comparison to other executives within Inverness. |
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• | Options to purchase shares of Inverness common stock shall be granted effective as of the last calendar day of the following months: February, April, June, August, October and December, we refer to each such date as the “Grant Date” throughout this proxy statement/prospectus. |
• | For each employee (or prospective employee) that is not (or, upon hire, will not be) subject to Section 16 of the Exchange Act, the CEO shall have the authority to grant, in his sole discretion, an option or options to purchase up to an aggregate of 5,000 shares of Inverness common stock (on an annual basis); provided, however, that total number of shares of Inverness common stock underlying such options grants shall not exceed 150,000 per calendar year. |
• | The Compensation Committee must approve all other stock option grants. Grants by the Compensation Committee must be approved only at a meeting of the Compensation Committee and not by written consent. |
• | Grants of options approved for existing employees, shall be effective as of, and the grant date thereof shall for all purposes be deemed to be, the Grant Date following the date of approval (except that any grants subject to stockholder approval shall be effective as of the date of stockholder approval). |
• | Options approved for new hires, including those hired through acquisitions, shall be effective as of, and the grant date thereof shall for all purposes be deemed to be, the Grant Date following the later of (i) the date of such approval or (ii) the date on which the new hire’s employment commences. |
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Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Non-Qualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($) | ($)(2) | ($) | ($) | ($)(3) | ($) | |||||||||||||||||||||||||||
Ron Zwanziger Chairman, Chief Executive Officer and President | 2007 | $ | 750,000 | — | — | $ | 940,090 | — | — | $ | 990 | $ | 1,691,080 | |||||||||||||||||||||||
2006 | $ | 550,000 | $ | 550,000 | — | — | — | — | $ | 990 | $ | 1,100,990 | ||||||||||||||||||||||||
David Teitel(4) Chief Financial Officer | 2007 | $ | 241,250 | — | — | $ | 209,276 | — | — | $ | 7,601 | $ | 458,127 | |||||||||||||||||||||||
2006 | $ | 192,885 | $ | 5,000 | — | $ | 63,322 | — | — | $ | 6,327 | $ | 267,534 | |||||||||||||||||||||||
David Scott, Ph.D.(5) Chief Scientific Officer | 2007 | $ | 648,626 | — | — | $ | 470,045 | — | — | — | $ | 1,118,671 | ||||||||||||||||||||||||
2006 | $ | 431,177 | $ | 125,000 | — | — | — | — | — | $ | 556,117 | |||||||||||||||||||||||||
David Toohey(6) President, Europe/Middle East | 2007 | $ | 481,469 | — | — | $ | 135,153 | — | — | $ | 72,220 | $ | 688,842 | |||||||||||||||||||||||
2006 | $ | 426,924 | — | — | $ | 68,310 | — | — | $ | 63,824 | $ | 559,058 | ||||||||||||||||||||||||
Jerry McAleer, Ph. D.(5) Vice President, Research & Development and Vice President, Cardiology | 2007 | $ | 540,521 | — | — | $ | 391,704 | — | — | — | $ | 932,225 | ||||||||||||||||||||||||
2006 | $ | 364,111 | $ | 120,000 | — | — | — | — | — | $ | 484,111 |
(1) | Except with respect to David Teitel, the 2006 amounts in this column reflect bonuses paid as part of the shareholder-approved 2001 compensation packages described in the “Compensation Discussion and Analysis” section beginning on page 115 of this proxy statement/prospectus. The 2001 compensation packages, which were awarded in anticipation of Inverness’ spin off from Inverness Medical Technology, provided in part for fixed cash bonuses to be paid through 2006, the final year of the 2001 compensation packages. |
(2) | The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the applicable fiscal in accordance with FAS 123(R) and thus may include amounts from awards granted in and prior to such fiscal year. Assumptions used in the calculation of these amounts are included in Note 16 in the notes to Inverness’ audited consolidated financial statements for the fiscal year ended December 31, 2007 included in Inverness’ Annual Report onForm 10-K filed with the SEC on February 29, 2008. |
(3) | The amounts in this column include for 2007: (a) matching contributions made by Inverness to its defined contribution plans in the amount of $6,750 and $72,220 on behalf of Mr. Teitel and Mr. Toohey, respectively, and (b) life insurance premiums paid by Inverness in the amount of $990 and $851 on behalf of Mr. Zwanziger and Mr. Teitel, respectively. The amounts in this column include for 2006: (a) matching contributions made by Inverness to its defined contribution plans in the amount of $5,654 and $63,824 on behalf of Mr. Teitel and Mr. Toohey, respectively, and (b) life insurance premiums paid by Inverness in the amount of $990 and $673 on behalf of Mr. Zwanziger and Mr. Teitel, respectively. |
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(4) | Mr. Teitel was appointed as Chief Financial Officer on December 8, 2006. |
(5) | Salary and other compensation paid in British pounds and converted to U.S. dollars using the average exchange rate for the year reported. Salary represents $600,000 and $500,000 for Dr. Scott and Dr. McAleer respectively, as approved by the Compensation Committee and converted into British pounds at then prevailing exchange rates. |
(6) | Salary and other compensation paid in Euros and converted to U.S. dollars using the average exchange rate for the year reported. Salary represents $459,722, as approved by the Compensation Committee and converted into Euros at then prevailing exchange rates. |
Estimated Future Payouts | All Other | All Other | Grant | |||||||||||||||||||||||||||||||||||||||||||||||||
Under | Estimated Future Payouts | Stock | Option | Date | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-Equity | Under Equity | Awards: | Awards: | Exercise | Fair | |||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plan Awards | Incentive Plan Awards | Number of | Number of | or | Value | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation | Shares of | Securities | Base Price | of Stock | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective | Committee | Stock or | Underlying | of Option | and | |||||||||||||||||||||||||||||||||||||||||||||||
Grant Date | Approval Date | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | Awards | Option | |||||||||||||||||||||||||||||||||||||||||
Name | (1) | (1) | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#)(2)(5) | ($ / Sh)(3) | Awards(4) | ||||||||||||||||||||||||||||||||||||||||
Ron Zwanziger | 5/17/07 | — | — | — | — | — | — | — | 300,000 | $ | 39.72 | $ | 6,024,000.00 | |||||||||||||||||||||||||||||||||||||||
David Teitel | 8/31/07 | 20,000 | $ | 48.14 | $ | 477,408.00 | ||||||||||||||||||||||||||||||||||||||||||||||
David Scott, Ph.D. | 5/17/07 | — | — | — | — | — | — | — | 150,000 | $ | 39.72 | $ | 3,012,000.00 | |||||||||||||||||||||||||||||||||||||||
David Toohey | 2/28/07 | — | — | — | — | — | — | — | 15,000 | $ | 42.26 | $ | 319,141.50 | |||||||||||||||||||||||||||||||||||||||
12/31/07 | 40,000 | $ | 56.18 | $ | 1,056,528.00 | |||||||||||||||||||||||||||||||||||||||||||||||
Jerry McAleer, Ph.D. | 5/17/07 | — | — | — | — | — | — | — | 125,000 | $ | 39.72 | $ | 2,510,000.00 |
(1) | In accordance with Inverness’ stock option granting policy, grants of options approved by the Compensation Committee for existing employees shall be effective as of the next Grant Date following the date of approval (except that any grants subject to stockholder approval shall be effective as of the date of stockholder approval). The option grants to Mr. Zwanziger, Dr. McAleer and Dr. Scott were submitted to, and approved by, Inverness’ stockholders at the 2007 annual meeting held on May 17, 2007. |
(2) | All stock option awards were made under Inverness’ 2001 Stock Option and Incentive Plan. |
(3) | The exercise price of the stock option awards is equal to the closing price of Inverness common stock on the effective grant date as reported by AMEX. |
(4) | The amounts in this column reflect the Grant Date fair value of each option award computed in accordance with FAS 123(R). Assumptions used in the calculation of these amounts are included in Note 16 of the notes to Inverness’ audited consolidated financial statements for the fiscal year ended December 31, 2007 included in Inverness’ Annual Report onForm 10-K filed with the SEC on February 29, 2008. |
(5) | The terms of these options provide for vesting in four equal annual installments, commencing on the first anniversary of the date of grant. The options will expire on the tenth anniversary of the grant date. |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Incentive | |||||||||||||||||||||||||||||||||||
Equity | Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||
Incentive | Plan Awards: | Market or | ||||||||||||||||||||||||||||||||||
Plan Awards: | Market | Number of | Payout Value | |||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Value of | Unearned | of Unearned | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares or | Shares or | Shares, Units | Shares, Units | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Units of | Units of | or Other | or Other | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Stock That | Stock That | Rights That | Rights That | |||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | Have Not | Have Not | Have Not | Have Not | ||||||||||||||||||||||||||||
(#) | (#)(1) | Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date(2) | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
Ron Zwanziger | 30,000 | — | — | $ | 14.92 | 2-12-2011 | — | — | — | — | ||||||||||||||||||||||||||
65,000 | — | — | $ | 17.15 | 12-20-2011 | |||||||||||||||||||||||||||||||
5,065 | — | — | $ | 15.55 | 8-23-2012 | |||||||||||||||||||||||||||||||
7,576 | — | — | $ | 21.78 | 12-31-2013 | |||||||||||||||||||||||||||||||
300,000 | — | $ | 39.72 | 5-17-2017 | ||||||||||||||||||||||||||||||||
David Teitel | 10,000 | — | $ | 21.38 | 12-11-2013 | — | — | — | — | |||||||||||||||||||||||||||
7,500 | 2,500 | — | $ | 24.25 | 12-17-2014 | |||||||||||||||||||||||||||||||
1,250 | 3,750 | — | $ | 34.40 | 10-4-2016 | |||||||||||||||||||||||||||||||
5,000 | 15,000 | — | $ | 38.10 | 12-15-2016 | |||||||||||||||||||||||||||||||
20,000 | $ | 48.14 | 8-31-2017 | |||||||||||||||||||||||||||||||||
David Scott, Ph.D. | 14,000 | — | — | $ | 1.71 | 10-13-2008 | — | — | — | — | ||||||||||||||||||||||||||
50,000 | — | — | $ | 2.44 | 8-16-2009 | |||||||||||||||||||||||||||||||
24,000 | — | — | $ | 14.92 | 2-12-2011 | |||||||||||||||||||||||||||||||
199,691 | — | — | $ | 15.47 | 11-30-2011 | |||||||||||||||||||||||||||||||
2,284 | — | — | $ | 15.60 | 9-3-2012 | |||||||||||||||||||||||||||||||
5,252 | — | — | $ | 21.78 | 12-31-2013 | |||||||||||||||||||||||||||||||
150,000 | $ | 39.72 | 5-17-2017 | |||||||||||||||||||||||||||||||||
David Toohey | 75,000 | — | — | $ | 15.47 | 11-30-2011 | — | — | — | — | ||||||||||||||||||||||||||
151 | — | — | $ | 15.55 | 8-23-2012 | |||||||||||||||||||||||||||||||
18,750 | 6,250 | — | $ | 24.25 | 12-17-2014 | |||||||||||||||||||||||||||||||
15,000 | $ | 42.26 | 2-28-2017 | |||||||||||||||||||||||||||||||||
40,000 | $ | 56.18 | 12-31-2017 | |||||||||||||||||||||||||||||||||
Jerry McAleer, Ph. D | 14,000 | — | — | $ | 1.71 | 10-13-2008 | ||||||||||||||||||||||||||||||
40,000 | — | — | $ | 2.44 | 8-16-2009 | — | — | — | — | |||||||||||||||||||||||||||
16,000 | — | — | $ | 14.92 | 2-12-2011 | |||||||||||||||||||||||||||||||
189,706 | — | — | $ | 15.47 | 11-30-2011 | |||||||||||||||||||||||||||||||
129,413 | — | — | $ | 16.76 | 12-3-2011 | |||||||||||||||||||||||||||||||
1,805 | — | — | $ | 15.60 | 9-3-2012 | |||||||||||||||||||||||||||||||
4,656 | — | — | $ | 21.78 | 12-31-2013 | |||||||||||||||||||||||||||||||
125,000 | $ | 39.72 | 5-17-2017 |
(1) | Unless otherwise noted, options become exercisable in four equal annual installments beginning on the first anniversary of the date of grant. |
(2) | Unless otherwise noted, the expiration date of each option occurs ten years after the date of grant of such option. |
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Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||||
Acquired on Exercise | on Exercise | Acquired on Vesting | on Vesting | |||||||||||||
Name | (#) | ($)(1) | (#) | ($) | ||||||||||||
Ron Zwanziger | — | — | — | — | ||||||||||||
David Teitel | — | — | — | — | ||||||||||||
David Scott, Ph.D. | — | — | — | — | ||||||||||||
David Toohey | 13,480 | $ | 656,771 | — | — | |||||||||||
Jerry McAleer, Ph.D. | — | — | — | — |
(1) | Represents the difference between the exercise price and the fair market value of Inverness common stock on the date of exercise. |
Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||
Contributions in | Contributions in | Earnings in | Withdrawals / | Balance at | ||||||||||||||||
Last Fiscal Year | Last Fiscal Year | Last Fiscal Year | Distributions | Last Fiscal Year-End | ||||||||||||||||
Name | ($) | ($)(1) | ($) | ($) | ($) | |||||||||||||||
David Toohey(2) | $ | 72,220 | $ | 72,220 | $ | 62,795 | — | $ | 1,080,302 |
(1) | This amount is also reported in the “All Other Compensation” column of the Summary Compensation Table above. |
(2) | Amounts reported were converted from Euros to U.S. dollars using the average exchange rate for the year reported. |
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Change | ||||||||||||||||||||||||||||
in Pension | ||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||
Non-Qualified | ||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||
Fees Earned or | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||
Paid in Cash | Stock Awards | Option Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
Name(1) | ($) | ($) | ($)(2) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Carol R. Goldberg | — | — | $ | 129,588 | — | — | — | — | ||||||||||||||||||||
Robert P. Khederian | — | — | $ | 145,518 | — | — | — | — | ||||||||||||||||||||
John F. Levy | — | — | $ | 146,094 | — | — | — | — | ||||||||||||||||||||
John A. Quelch | — | — | $ | 141,933 | — | — | — | — | ||||||||||||||||||||
Peter Townsend | — | — | $ | 129,588 | — | — | — | — | ||||||||||||||||||||
Alfred M. Zeien(3) | — | — | $ | 104,006 | — | — | — | — |
(1) | Ron Zwanziger, Jerry McAleer and David Scott are not included in this table as they are employees of Inverness and accordingly receive no compensation for their services as directors. The compensation received by Mr. Zwanziger, Dr. McAleer and Dr. Scott as employees of Inverness are shown in the Summary Compensation Table above. |
(2) | The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2007, in accordance with FAS 123(R) from awards granted in 2007 and 2005, as no options were granted in 2004 or 2006. Assumptions used in the calculation of these amounts are included in Note 16 of the notes to Inverness’ audited consolidated financial statements for the fiscal year ended December 31, 2007 included in Inverness’ Annual Report onForm 10-K filed with the SEC on February 29, 2008. The grant date fair value of the options granted during 2007 was as follows for each of the directors: Carol R. Goldberg: $461,997; Robert P. Khederian: $748,213; John F. Levy: $758,553; John A. Quelch: $683,799; Peter Townsend: $461,997; and Alfred M. Zeien: $0. As of December 31, 2007, each director had the following number of options outstanding: Carol R. Goldberg: 66,353; Robert P. Khederian: 76,484; John F. Levy: 82,034; John A. Quelch: 74,204; Peter Townsend: 24,686 and Alfred M. Zeien: 41,667. |
(3) | Mr. Zeien resigned from Inverness’ Board of Directors on September 27, 2007. |
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• | senior to all classes of Inverness common stock and each other class of capital stock or series of preferred stock established after the original issue date of the Series B preferred stock (which we refer to as the “Issue Date”), the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B preferred stock as to dividend rights or rights upon Inverness’ liquidation,winding-up or dissolution (which we refer to collectively as “Junior Stock”); | |
• | on a parity, in all respects, with any class of capital stock or series of preferred stock established after the Issue Date, the terms of which expressly provide that such class or series will rank on a parity with the Series B preferred stock as to dividend rights or rights upon Inverness’ liquidation,winding-up or dissolution (which we refer to collectively as “Parity Stock”); and | |
• | junior to each class of capital stock or series of preferred stock established after the Issue Date, the terms of which expressly provide that such class or series will rank senior to the Series B preferred stock as to dividend rights or rights upon Inverness’ liquidation,winding-up or dissolution (which we refer to collectively as “Senior Stock”). |
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• | in cash; | |
• | by delivery of shares of its common stock; | |
• | if the Dividend Payment Date is on or before June 4, 2015, by delivery of shares of Series B preferred stock (or convertible preferred stock having substantially the same terms as the Series B preferred stock); or |
• | through any combination of cash, common stock and, if the Dividend Payment Date is on or before June 4, 2015, Series B preferred stock (or convertible preferred stock having substantially the same terms as the Series B preferred stock). |
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• | during any calendar quarter beginning with the second calendar quarter after the Issue Date, the Closing Sale Price (as defined below under “— Forced Conversion”) of Inverness common stock for each of 20 or more Trading Days in a period of 30 consecutive Trading Days ending on the last Trading Day of |
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the immediately preceding calendar quarter exceeds 130% of the Conversion Price in effect on the last Trading Day of the immediately preceding calendar quarter; |
• | during the 5 consecutive business days immediately after any 5 consecutive Trading Day period in which the Average Trading Price (as defined below) per share of Series B preferred stock was equal to or less than 97% of the average Conversion Value during such 5 consecutive Trading Day period; | |
• | upon the occurrence of a Fundamental Change (as defined under “— Additional Conversion Right Upon a Fundamental Change”); or |
• | if Inverness is party to a consolidation, amalgamation, statutory arrangement, merger or binding share exchange pursuant to which Inverness common stock will be converted into or exchanged for, or would constitute, cash, securities or other property. |
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• | the Forced Conversion Date; | |
• | the number of shares of common stock to be issued upon conversion of each share of Series B preferred stock; | |
• | the number of shares of Series B preferred stock to be converted; | |
• | that dividends on the Series B preferred stock to be converted will cease to accrue on the Forced Conversion Date; and | |
• | the amounts of any of the following payments: (i) a payment equal to the amount of any unpaid dividends that such holder was entitled to through the Forced Conversion Date and (ii) a redemption premium equal to the amount of any dividends that such holder would have received from the Forced |
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• | the then applicable Conversion Rate in effect on such Trading Day, and | |
• | the daily Volume-Weighted Average Price of a share of Inverness common stock on that Trading Day. |
• | pay an amount of cash equal to: |
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• | issue that number of shares of common stock equal to: |
• | any payment of a dividend (or other distribution) to all holders of Inverness common stock that is payable in shares of common stock; | |
• | any issuance to all holders of shares of common stock of rights, options or warrants entitling them to subscribe for or purchase shares of common stock or securities convertible into or exchangeable for shares of common stock for a period expiring within 60 days from the date of issuance at less than the Market Value (as defined below);provided, however,that if such rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Rate will not be adjusted until such triggering events occur; | |
• | any subdivision, split, combination or reclassification of the common stock; |
• | any distribution by Inverness consisting exclusively of cash to all holders of Inverness common stock; in which event the Conversion Rate will be adjusted by multiplying: |
(1) | the Conversion Rate by: | |
(2) | a fraction, the numerator of which will be the Market Value (as defined below) of a share of Inverness common stock and the denominator of which will be such Market Value of a share of Inverness common stock minus the amount per share of such dividend or distribution; |
(3) | Notwithstanding the foregoing, in no event will the Conversion Rate be adjusted pursuant to this bullet point to an amount that is more than 7.5014, subject to adjustment in accordance with the first, second, third, fifth or sixth bullet point under this caption “Conversion Rate Adjustment;” |
• | the completion of a tender or exchange offer made by Inverness or any of its subsidiaries for shares of its common stock to the extent that the cash and the value of any other consideration included in the payment per share of its common stock exceeds the Closing Sale Price of its common stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer; or | |
• | any distribution to all holders of shares of Inverness common stock of evidences of indebtedness, shares of capital stock (other than common stock), securities, or other assets (excluding any dividend or distribution referred to in the first or third bullet points above, any rights or warrants referred to in the second bullet point above, any dividend or distribution paid exclusively in cash, and any consideration payable in connection with a tender or exchange offer made by Inverness or any of its subsidiaries). |
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• | if such conversion occurs on or prior to the date for the distribution to the holders of rights or warrants of separate certificates evidencing such rights or warrants (which we refer to as the “Distribution Date”), the same number of rights or warrants to which a holder of a number of shares of common stock equal to the number of Conversion Shares is entitled at the time of such conversion in accordance with the terms and provisions applicable to the rights or warrants; and | |
• | if such conversion occurs after such Distribution Date, the same number of rights or warrants to which a holder of the number of shares of common stock into which such Series B preferred stock was convertible (assuming Inverness elects to satisfy its conversion obligation solely in shares of its common stock) immediately prior to such Distribution Date would have been entitled on such Distribution Date had such Series B preferred stock been converted immediately prior to such Distribution Date in accordance with the terms and provisions applicable to the rights or warrants. |
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• | the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Inverness’ assets (determined on a consolidated basis) to any person or group (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); | |
• | the adoption of a plan the consummation of which would result in Inverness’ liquidation or dissolution; |
• | the consummation of any share exchange, consolidation or merger of Inverness (other than such a transaction solely for the purpose of changing its jurisdiction of incorporation) pursuant to which Inverness common stock will be converted into cash, securities or other property, to or with any person other than one of Inverness’ subsidiaries;provided,however, that a transaction where the holders of more than 50% of all classes of Inverness’ common equity immediately prior to the transaction own, directly or indirectly, more than 50% of all classes of Inverness’ common equity of the continuing or surviving corporation immediately after the event shall not be a Fundamental Change; |
• | the acquisition, directly or indirectly, by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act), of beneficial ownership (as defined inRule 13d-3 under the Exchange Act) of more than 50% of the aggregate voting power of Inverness’ voting stock; |
• | during any period of two consecutive years, individuals who at the beginning of such period comprised Inverness’ board of directors (together with any new directors whose election by such board of directors or whose nomination for election by Inverness’ stockholders was approved by a vote of a majority of Inverness’ directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of Inverness’ board of directors then in office; or | |
• | Inverness common stock ceases to be listed on AMEX or another national securities exchange or quoted on an over-the-counter market in the United States. |
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• | a sale, transfer, lease, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of Inverness’ property or assets to any “person” or “group” (as those terms are used in Sections 13(d) of the Exchange Act), including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning ofRule 13d-5(b)(1) under the Exchange Act (we refer to such a transaction as an “Asset Sale Make-Whole Fundamental Change”); or |
• | any transaction or series of related transactions in connection with which (whether by means of an exchange offer, liquidation, tender offer, consolidation, amalgamation, statutory arrangement, merger, combination, reclassification, recapitalization, asset sale, lease or assets or otherwise) Inverness common stock is exchanged for, converted into, acquired for or constitutes solely the right to receive other securities, other property, assets or cash (we refer to such a transaction as a “Common Stock Make-Whole Fundamental Change”); |
• | the excess, if any, of (1) the Average Trading Price per share of Series B preferred stock for the five consecutive Trading Days immediately preceding the public announcement of the Make-Whole Fundamental Change, over (2) the product of (a) the Market Value per share of Inverness common stock for the five consecutive Trading Days immediately preceding the public announcement of the Make-Whole Fundamental Change, and (b) the Conversion Rate then in effect; divided by | |
• | the Applicable Price (as defined below). |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Authorized Capital Stock | 100,000,000 shares, consisting of 50,000,000 shares of common stock, par value $0.01 per share, and 50,000,000 shares of preferred stock, par value $0.01 per share. As of March 24, 2008, 22,106,398 shares of common stock and no shares of preferred stock were issued and outstanding. | As of the effective time of the merger, Inverness expects to issue approximately shares of Series B preferred stock and such shares will be issued and outstanding. | 105,000,000 shares, consisting of 100,000,000 shares of common stock, par value $0.001 per share, 2,666,667 shares of series A convertible preferred stock, par value $0.001 per share, and 2,333,333 shares of undesignated preferred stock, par value $0.001 per share. As of March 24, 2008, 77,453,860 shares of common stock and no shares of preferred stock were issued and outstanding. | |||
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Dividends | Under Section 170 of the Delaware General Corporation Law, the directors of a corporation may declare and pay dividends upon the shares of its capital stock either: • out of its surplus, as defined in and computed in accordance with Sections 154 and 244 of the Delaware General Corporation Law; or • if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. | |||||
The Matria bylaws state that dividends may be declared by the board of directors and may be paid in cash, property or shares of capital stock. | The Inverness certificate of designations states that dividends on the Series B preferred stock will accumulate from the issuance date at the rate of $12.00 per share, representing 3% of the stated liquidation preference of $400. Dividends will be payable in cash, shares of Inverness common stock, shares of Series B preferred stock or an equivalent preferred stock (through June 4, 2015) or a combination thereof when, as and if declared by Inverness’ board of directors out of funds legally available therefor. | The Inverness certificate of incorporation states that dividends may be declared and paid or set apart for payment upon the common stock out of any assets or funds legally available for the payment of dividends when and as declared by the board of directors or an authorized committee thereof. |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Number of Directors | The Matria certificate of incorporation and bylaws provide that the number of directors is fixed or altered exclusively by resolution adopted by the board of directors. The board of directors is currently fixed at ten members. | The Inverness certificate of designations states that if dividends payable on the Series B preferred stock are not paid for six or more quarterly periods, whether or not consecutive, the holders of the Series B preferred stock, voting as a single class with the shares of any other preferred stock or preference securities having similar voting rights (including the existing preferred stock), will be entitled at the next regular or special meeting of Inverness’ stockholders to elect two directors and the number of directors that comprise Inverness’ board will be increased by the number of directors so elected. These voting rights and the terms of the directors so elected will continue until such time as the dividend arrearage on the Series B preferred stock has been paid in full. | The Inverness certificate of incorporation and bylaws provide that the number of directors is fixed by the board of directors in its sole discretion. The board of directors currently is fixed at ten members. | |||
Removal of Directors | Matria’s certificate of incorporation and bylaws do not limit the ability of the stockholders to remove a director. Matria’s board of directors is divided into three classes which each hold office for a term of three years. Under Delaware General Corporation Law, a director on a staggered board may only be removed for cause by the holders of a majority of the shares entitled to vote at an election of directors. | Any director elected by the Series B preferred stockholders may only be removed by the vote of the holders of record of the outstanding Series B preferred stock at a meeting of stockholders called for that purpose and any vacancy created by the removal of any such director may be filled only by the vote of the holders of record of the outstanding Series B preferred stock. | The Inverness certificate of incorporation provides that, subject to the rights, if any, of any series of preferred stock to elect or remove any director whom the holders of preferred stock have a right to elect, any director may be removed from office only for cause and upon the affirmative vote of holders of at least 75% of the shares entitled to vote at an election of directors. |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Special Meetings of Stockholders | The Matria bylaws state that the board of directors, or a committee of the board that has been designated by the board and has the power and authority, as provided in a resolution of the board or in Matria’s bylaws, to call such meetings, may call a special meeting of the stockholders. Special meetings of the stockholders may also be called by the president or secretary at the request in writing of a majority of the board, or at the request in writing of stockholders owning 75% of Matria’s capital stock. | The Inverness certificate of designations does not permit holders of Series B preferred stock to call a special meeting of stockholders. | The Inverness certificate of incorporation states that, subject to the rights of holders of preferred stock, if any, only the board of directors, acting pursuant to a resolution approved by the majority of the board of directors then in office, may call a special meeting of the stockholders. | |||
Notice Requirements for Stockholder Proposals, including Director Nominations | Nominees for the board of directors may be made, and any other business to be considered at an annual meeting may be brought, by any stockholder present, either in person or by proxy, and entitled to vote at such meeting by delivering timely notice to the Secretary of Matria. Notice is generally considered timely if delivered not later than the close of business on the 120th day prior to the first anniversary of the date on which Matria first sent its proxy statement to stockholders in connection with the preceding year’s annual meeting. | The Inverness certificate of designations does not permit stockholder proposals or director nominations by the holders of Series B preferred stock. | Nominees for the board of directors may be made, and any other business to be considered at an annual meeting may be brought, by any stockholder present, either in person or by proxy, and entitled to vote at such meeting by delivering timely notice to the Secretary of Inverness. Notice is generally considered timely if delivered not later than the close of business on 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Limitation of Personal Liability of Directors | No director is personally liable to Matria or its stockholders for monetary damages arising from a breach of fiduciary duty except for breach of the duty of loyalty, for acts or omissions not in good faith or which involve intentional misconduct, for a knowing violation of the law, for improper dividends or distributions with respect to, or repurchases or redemptions of, Matria capital stock, or for self-dealing. | No director is personally liable to Inverness or its stockholders for monetary damages arising from a breach of fiduciary duty except for breach of the duty of loyalty, for acts or omissions not in good faith or which involve intentional misconduct, for a knowing violation of the law, for improper dividends or distributions with respect to, or repurchases or redemptions of, Inverness capital stock, or forself-dealing. | No director is personally liable to Inverness or its stockholders for monetary damages arising from a breach of fiduciary duty except for breach of the duty of loyalty, for acts or omissions not in good faith or which involve intentional misconduct, for a knowing violation of the law, for improper dividends or distributions with respect to, or repurchases or redemptions of, Inverness capital stock, or forself-dealing. |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Indemnification | The Matria certificate of incorporation and bylaws provide that Matria shall, to the fullest extent permitted by the Delaware General Corporation Law, indemnify its directors and officers against liabilities, losses, and related expenses which they may incur by reason of serving or having served as directors or officers of Matria or serving or having served at the request of Matria as directors, officers, trustee, partners, employees or agents of an entity in which Matria has an interest. The Matria bylaws provide that Matria may, by action of the board of directors, provide indemnification to employees and agents against liabilities, losses, and related expenses which they may incur by reason of serving or having served as employees or agents of Matria or having serving or having served at the request of Matria as directors, officers, trustee, partners, employees or agents of an entity in which Matria has an interest. Under Section 145 of the Delaware General Corporation Law, in order to be eligible for indemnification, an officer, director, employee or agent of a corporation must have acted in good faith in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation. | The Inverness bylaws provide that Inverness will, to the fullest extent authorized by the Delaware General Corporation Law, indemnify each of its directors and officers against expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred in connection with any proceeding arising by reason of the fact that such person is or was a director or officer of Inverness or who serves or served at the request of Inverness, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Inverness. The Inverness bylaws provide that Inverness may, in the discretion of its board of directors, indemnify its non-officer employees and agents, against expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred in connection with any proceeding arising by reason of the fact that such person serves or has served as an employee or agent of Inverness, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Inverness. Under Section 145 of the Delaware General Corporation Law, in order to be eligible for indemnification, an officer, director, employee or agent of a corporation must have acted in good faith in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation. | The Inverness bylaws provide that Inverness will, to the fullest extent authorized by the Delaware General Corporation Law, indemnify each of its directors and officers against expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred in connection with any proceeding arising by reason of the fact that such person is or was a director or officer of Inverness or who serves or served at the request of Inverness, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Inverness. The Inverness bylaws provide that Inverness may, in the discretion of its board of directors, indemnify its non-officer employees and agents, against expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred in connection with any proceeding arising by reason of the fact that such person serves or has served as an employee or agent of Inverness, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Inverness. Under Section 145 of the Delaware General Corporation Law, in order to be eligible for indemnification, an officer, director, employee or agent of a corporation must have acted in good faith in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation. |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Amendment of Certificate of Incorporation | The Matria certificate of incorporation does not limit the ability of the stockholders to amend Matria’s certificate of incorporation. Under Delaware General Corporation Law, the affirmative vote of at least a majority of that outstanding shares of stock entitled to vote is required for amendment. | The Inverness certificate of designations will become a part of Inverness’ certificate of incorporation upon filing. Any amendment thereto may only be made in accordance with applicable law and the certificate of incorporation and, to the extent that such amendment adversely affects the rights, powers, and privileges of Series B preferred stock, only with the approval of holders of a majority of the outstanding Series B preferred stock. | The Inverness certificate of incorporation provides that Inverness reserves the right to amend or repeal any provision contained in the Inverness certificate of incorporation. Generally, the affirmative vote of holders of at least 75% of the outstanding shares of stock entitled to vote is required for amendment. | |||
Amendment of Bylaws | The Matria bylaws may be amended or repealed, or new bylaws may be adopted by the affirmative vote of the holders of at least a majority of the outstanding common stock of Matria, or by the board of directors at any regular or special meeting. Any bylaws adopted or amended by the stockholders may be amended or repealed by the board of directors or the stockholders. | The Inverness bylaws may be amended or repealed by the affirmative vote of a majority of the board of directors. The bylaws may be amended or repealed by the stockholders at any annual meeting, or special meeting called for such purpose, by the affirmative vote of at least 75% of the outstanding shares entitled to vote on such amendment or repeal (unless the board of directors has recommended that stockholders approve such amendment or repeal, in which case only a majority vote is required). However, to the extent that such amendment is adverse to the holders of Series B preferred stock, the amendment will require the approval of holders of a majority of outstanding shares of Series B preferred stock. | The Inverness bylaws may be amended or repealed by the affirmative vote of a majority of the board of directors. The bylaws may be amended or repealed by the stockholders at any annual meeting, or special meeting called for such purpose, by the affirmative vote of at least 75% of the outstanding shares entitled to vote on such amendment or repeal (unless the board of directors has recommended that stockholders approve such amendment or repeal, in which case only a majority vote is required). |
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Matria Common | Inverness Preferred | Inverness Common | ||||
Stockholders | Stockholders | Stockholders | ||||
Action at a meeting | The Matria bylaws provide that in all matters (other than the election of directors) the vote of the holders of a majority of the shares of capital stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall decide any question brought before such meeting. | The certificate of designations provides that actions to be taken by the Series B preferred stock shall be decided by holders of a majority of the outstanding Series B preferred stock. | The Inverness bylaws provide that any matter (other than the election of directors) brought before a meeting of the stockholders shall be decided by a majority of the votes properly cast for and against such matter except where a larger vote is required by law, the Inverness Certificate of Incorporation or the Inverness By-Laws. |
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• | You must deliver to Matria a written demand for appraisal of your shares before the vote with respect to the merger is taken. This written demand for appraisal must be in addition to and separate from any proxy or vote abstaining from or voting against the adoption of the merger agreement. Voting against or failing to vote for the adoption of the merger agreement by itself does not constitute a demand for appraisal within the meaning of Section 262. | |
• | You must not vote in favor of the adoption of the merger agreement. A vote in favor of the adoption of the merger agreement, by proxy, by Internet, by telephone or in person, will constitute a waiver of your appraisal rights in respect of the shares so voted and will nullify any previously filed written demands for appraisal. A proxy card which is signed and does not contain voting instructions will, unless revoked, be voted “FOR” the adoption of the merger agreement and will nullify any previous written demand for appraisal. | |
• | If you fail to comply with either of these conditions and the merger is completed, you will be entitled to receive the merger consideration for your shares of Matria common stock as provided for in the merger agreement, but you will have no appraisal rights with respect to your shares of Matria common stock. |
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• | Inverness’ annual report onForm 10-K for the fiscal year ended December 31, 2007, filed with the SEC on February 29, 2008. |
• | Inverness’ current report onForm 8-K dated July 20, 2007, filed with the SEC on July 20, 2007. |
• | Inverness’ current report onForm 8-K dated January 28, 2008, filed with the SEC on January 28, 2008. |
• | Inverness’ current report onForm 8-K dated January 28, 2008, filed with the SEC on January 28, 2008. | |
• | Inverness’ current report onForm 8-K dated January 28, 2008, filed with the SEC on January 31, 2008. | |
• | Inverness’ current report onForm 8-K dated February 4, 2008, filed with the SEC on February 4, 2008. |
• | Inverness’ current report onForm 8-K dated February 14, 2008, filed with the SEC on February 14, 2008, as amended on March 25, 2008. |
• | Inverness’ current report onForm 8-K dated February 20, 2008, filed with the SEC on February 20, 2008. |
• | Inverness current report on Form 8-K dated February 27, 2008, filed with the SEC on March 4, 2008. |
• | Matria’s annual report on Form 10-K for the fiscal year ended December 31, 2007, filed with the SEC on March 3, 2008; |
• | Matria’s current report onForm 8-K dated January 27, 2008, filed with the SEC on January 28, 2008; |
• | Matria’s current report onForm 8-K dated January 23, 2008, filed with the SEC on January 29, 2008; |
• | Matria’s current report onForm 8-K dated January 29, 2008, filed with the SEC on February 4, 2008. |
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• | Matria’s current report onForm 8-K dated February 23, 2008, filed with the SEC on February 28, 2008; |
• | Matria’s current report onForm 8-K dated February 26, 2008, filed with the SEC on March 3, 2008 and |
• | Matria’s current report onForm 8-K dated March 17, 2008, filed with the SEC on March 18, 2008. |
Inverness Medical Innovations, Inc. 51 Sawyer Road, Suite 200 Waltham, Massachusetts 02453 Attention: Doug Guarino | Matria Healthcare, Inc. 1850 Parkway Place, Suite 1200 Marietta, Georgia 30067 Attention: Corporate Secretary |
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BY AND AMONG
INVERNESS MEDICAL INNOVATIONS, INC.,
MILANO MH ACQUISITION CORP.,
MILANO MH ACQUISITION LLC,
AND
MATRIA HEALTHCARE, INC.
Dated as of January 27, 2008
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ARTICLE 1 THE MERGER | A-5 | |||||||
1 | .1 | The Merger | A-5 | |||||
1 | .2 | Effective Time; Closing | A-5 | |||||
1 | .3 | Effect of the Merger | A-6 | |||||
1 | .4 | Certificate of Incorporation; Bylaws | A-6 | |||||
1 | .5 | Directors and Officers | A-6 | |||||
1 | .6 | Effect on Capital Stock | A-6 | |||||
1 | .7 | Exchange of Certificates | A-8 | |||||
1 | .8 | No Further Ownership Rights in Company Common Stock | A-9 | |||||
1 | .9 | Restricted Stock | A-10 | |||||
1 | .10 | Appraisal Rights | A-10 | |||||
1 | .11 | Taking of Necessary Action; Further Action | A-10 | |||||
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-10 | |||||||
2 | .1 | Corporate Existence and Power | A-10 | |||||
2 | .2 | Corporate Authorization | A-11 | |||||
2 | .3 | Governmental Authorization | A-11 | |||||
2 | .4 | Non-Contravention | A-11 | |||||
2 | .5 | Capitalization | A-12 | |||||
2 | .6 | Subsidiaries | A-13 | |||||
2 | .7 | SEC Filings and the Sarbanes-Oxley Act | A-14 | |||||
2 | .8 | Financial Statements | A-15 | |||||
2 | .9 | Absence of Certain Changes | A-15 | |||||
2 | .10 | No Undisclosed Material Liabilities | A-15 | |||||
2 | .11 | Compliance with Applicable Laws and Court Orders | A-16 | |||||
2 | .12 | Regulatory Compliance | A-16 | |||||
2 | .13 | Insurance | A-18 | |||||
2 | .14 | Properties | A-18 | |||||
2 | .15 | Intellectual Property | A-19 | |||||
2 | .16 | Contracts | A-20 | |||||
2 | .17 | Litigation; Investigation | A-21 | |||||
2 | .18 | Brokers and Other Advisors | A-22 | |||||
2 | .19 | Opinions of Financial Advisors | A-22 | |||||
2 | .20 | Taxes | A-22 | |||||
2 | .21 | Employee Benefit Plans and Labor Matters | A-24 | |||||
2 | .22 | Environmental Matters | A-27 | |||||
2 | .23 | Antitakeover Statutes | A-27 | |||||
2 | .24 | Related Party Transactions | A-27 | |||||
2 | .25 | Information Supplied | A-27 | |||||
2 | .26 | Customers | A-28 |
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB AND MERGER LLC | A-28 | |||||||
3 | .1 | Organization of Parent , Merger Sub, and Merger LLC | A-28 | |||||
3 | .2 | Parent, Merger Sub and Merger LLC Capitalization | A-28 | |||||
3 | .3 | Subsidiaries | A-29 | |||||
3 | .4 | Authority; Non-Contravention | A-30 | |||||
3 | .5 | SEC Filings; Parent Financial Statements | A-31 | |||||
3 | .6 | Absence of Certain Changes or Events | A-31 | |||||
3 | .7 | Undisclosed Liabilities | A-32 | |||||
3 | .8 | Compliance with Laws | A-32 | |||||
3 | .9 | Litigation | A-32 | |||||
3 | .10 | Disclosure | A-32 | |||||
3 | .11 | Brokers’ and Finders’ Fees | A-33 | |||||
3 | .12 | Accounting System | A-33 | |||||
3 | .13 | Ownership of Shares | A-33 | |||||
3 | .14 | Certain Agreements | A-33 | |||||
3 | .15 | Vote/Approval Required | A-33 | |||||
ARTICLE 4 CONDUCT PRIOR TO THE EFFECTIVE TIME | A-34 | |||||||
4 | .1 | Conduct of Business by the Company | A-34 | |||||
ARTICLE 5 ADDITIONAL AGREEMENTS | A-36 | |||||||
5 | .1 | Proxy Statement/Prospectus; Registration Statement; Antitrust and Other Filings | A-36 | |||||
5 | .2 | Meeting of Company Shareholders | A-37 | |||||
5 | .3 | Confidentiality; Access to Information | A-39 | |||||
5 | .4 | No Solicitation | A-39 | |||||
5 | .5 | Public Disclosure | A-40 | |||||
5 | .6 | Reasonable Best Efforts; Notification | A-41 | |||||
5 | .7 | Third Party Consents | A-41 | |||||
5 | .8 | Stock Options | A-41 | |||||
5 | .9 | Form S-8 | A-42 | |||||
5 | .10 | Indemnification and Insurance | A-42 | |||||
5 | .11 | Stock Exchange Listing | A-43 | |||||
5 | .12 | Takeover Statutes | A-43 | |||||
5 | .13 | Certain Employee Benefits | A-43 | |||||
5 | .14 | Section 16 Matters | A-44 | |||||
5 | .15 | Qualification as a Reorganization | A-44 | |||||
5 | .16 | Merger Sub Compliance | A-44 | |||||
5 | .17 | Resignations | A-44 | |||||
5 | .18 | Payoff Letters | A-44 | |||||
5 | .19 | Upstream Merger | A-44 | |||||
5 | .20 | Certificate of Designation | A-45 |
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ARTICLE 6 CONDITIONS TO THE MERGER | A-45 | |||||||
6 | .1 | Conditions to Obligations of Each Party to Effect the Merger | A-45 | |||||
6 | .2 | Additional Conditions to Obligations of the Company | A-45 | |||||
6 | .3 | Additional Conditions to the Obligations of Parent, Merger Sub and Merger LLC | A-46 | |||||
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER | A-47 | |||||||
7 | .1 | Termination | A-47 | |||||
7 | .2 | Notice of Termination; Effect of Termination | A-48 | |||||
7 | .3 | Fees and Expenses | A-49 | |||||
7 | .4 | Amendment | A-50 | |||||
7 | .5 | Extension; Waiver | A-50 | |||||
ARTICLE 8 GENERAL PROVISIONS | A-50 | |||||||
8 | .1 | Non-Survival of Representations and Warranties | A-50 | |||||
8 | .2 | Notices | A-50 | |||||
8 | .3 | Interpretation; Certain Defined Terms | A-51 | |||||
8 | .4 | Counterparts | A-53 | |||||
8 | .5 | Entire Agreement; Third-Party Beneficiaries | A-53 | |||||
8 | .6 | Severability | A-53 | |||||
8 | .7 | Other Remedies; Specific Performance; Fees | A-53 | |||||
8 | .8 | Governing Law; Submission to Jurisdiction | A-54 | |||||
8 | .9 | Rules of Construction | A-54 | |||||
8 | .10 | Assignment | A-54 | |||||
8 | .11 | Waiver of Jury Trial | A-54 |
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51 Sawyer Road, Suite 200
Waltham, Massachusetts 02453
Facsimile:(781) 647-3939
Attention: Chairman, Chief Executive Officer and President and
General Counsel
Exchange Place
Boston, Massachusetts 02109
Facsimile:(617) 523-1231
Attention: Scott F. Duggan
1850 Parkway Place, Suite 1200
Marietta, Georgia 30067
Facsimile:(770) 767-7769
Attention: General Counsel
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600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Facsimile:404-962-6599
Attention: | James L. Smith III David W. Ghegan |
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By: | /s/ David Teitel |
Title: | Chief Financial Officer |
By: | /s/ David Teitel |
Title: | Vice President |
By: | /s/ David Teitel |
Title: | Vice President |
By: | /s/ Parker H. Petit |
Title: | Chairman and Chief Executive Officer |
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CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES B CONVERTIBLE PERPETUAL PREFERRED STOCK
OF
INVERNESS MEDICAL INNOVATIONS, INC.
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By: | Name: Title: |
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51 Sawyer Road, Suite 200
Waltham, Massachusetts 02453
Facsimile:(781) 647-3939
Attention: Chairman, Chief Executive Officer and President and General Counsel
Exchange Place
Boston, Massachusetts 02109
Facsimile:(617) 523-1231
Attention: Scott F. Duggan
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1850 Parkway Place
Marietta, Georgia 30067
Facsimile:
Attention: Parker H. Petit
Troutman Sanders LLP 600 Peachtree Street, N.E. Atlanta, Georgia 30308 Facsimile:404-962-6599 Attention: | James L. Smith III David W. Ghegan |
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By: | /s/ David Teitel |
Title: | Chief Financial Officer |
1850 Parkway Place
Marietta, Georgia 30067
Attention: Parker H. Petit
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OF VOTING AGREEMENT
By: | /s/ David Teitel |
Title: | Chief Financial Officer |
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SHAREHOLDER: |
/s/ Parker H. Petit |
/s/ Parker H. Petit |
/s/ Parker H. Petit |
/s/ Parker H. Petit |
/s/ Janet L. Petit |
1850 Parkway Place
Marietta, Georgia 30067
Attention: Parker H. Petit
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Options, | ||||||||||||||||
Warrants or | ||||||||||||||||
Rights to | ||||||||||||||||
purchase | ||||||||||||||||
Company | ||||||||||||||||
Shares Over Which | Common Stock | |||||||||||||||
Shares Over Which | Shareholder Has | Beneficially | Total # Shares | |||||||||||||
Shareholder Has | Shared Voting | Owned by | Beneficially | |||||||||||||
Shareholder | Sole Voting Power | Power | Shareholder | Owned | ||||||||||||
Mr. Parker H. Petit | 1,586,908 | 174,302 | 726,727 | 1,761,210 | ||||||||||||
Petit Investments Limited Partnership | — | 73,832 | — | 73,832 | ||||||||||||
Cox Road Partners LLLP | — | 90,000 | — | 90,000 | ||||||||||||
Petit Grantor Trust | — | 3,750 | — | 3,750 | ||||||||||||
Janet L. Petit | — | 6,720 | — | 6,720 |
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![(SUNTRUST LOGO)](https://capedge.com/proxy/S-4A/0000950135-08-001960/b68361b1b6836101.gif)
• | Liquidation value of $32.50 per Company share; | |
• | 3.0% dividend; | |
• | 30.0% conversion premium; and | |
• | Perpetual maturity. |
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By: | /s/ M. Duncan Dashiff |
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Item 21. | Exhibits and Financial Statement Schedules |
Exhibit | ||||
Number | Exhibit Description | |||
2 | .1 | Agreement and Plan of Merger, dated as of January 27, 2007, by and among Inverness Medical Innovations, Inc., Milano MH Acquisition Corp., Milano MH Acquisition LLC and Matria Healthcare, Inc. (included as Annex A to the proxy statement/prospectus forming a part of this registration statement). | ||
4 | .1 | Form of Certificate of Designations, Preferences, and Rights of Series B Convertible Perpetual Preferred Stock of Inverness Medical Innovations, Inc. (included as Annex B to the proxy statement/prospectus forming a part of this registration statement). | ||
5 | .1 | Form of Opinion of Jay McNamara, Esq., Senior Counsel, Corporate & Finance, of Inverness Medical Innovations, Inc., regarding the legality of the securities being issued. | ||
8 | .1 | Form of Opinion of Goodwin Procter LLP relating to tax matters. | ||
8 | .2 | Form of Opinion of Troutman Sanders LLP relating to tax matters.* | ||
12 | Statement relating to computation of ratios of earning to fixed charges. | |||
23 | .1 | Consent of BDO Seidman, LLP (related to Inverness’ financial statements). | ||
23 | .2 | Consent of KPMG LLP, Independent Registered Public Accounting Firm (related to Matria’s financial statements). | ||
23 | .3 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (related to Cholestech’s financial statements). | ||
23 | .4 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (related to Biosite’s financial statements). | ||
23 | .5 | Consent of Colby & Company, PLC (related to Instant’s financial statements). | ||
23 | .6 | Consent of Jay McNamara, Esq., Senior Counsel, Corporate & Finance, of Inverness Medical Innovations, Inc. (included in Exhibit 5.1). | ||
23 | .7 | Consent of Goodwin Procter LLP (included in Exhibit 8.1). | ||
23 | .8 | Consent of Troutman Sanders LLP (included in Exhibit 8.2). | ||
24 | .1 | Power of Attorney.* | ||
99 | .1 | Form of Voting Agreement, dated as of January 27, 2008, as amended, by and among Inverness Medical Innovations, Inc. and Parker H. Petit (included as Annex C to the proxy statement/prospectus forming a part of this registration statement). | ||
99 | .3 | Consent of SunTrust Robinson Humphrey. | ||
99 | .4 | Form of Proxy of Matria Healthcare, Inc.* |
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Item 22. | Undertakings |
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By: | /s/ Ron Zwanziger |
Signature | Title | Date | ||||
/s/ Ron Zwanziger | Chief Executive Officer, President and Director (Principal Executive Officer) | March 25, 2008 | ||||
/s/ David Teitel | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
* | Director | March 25, 2008 | ||||
By: | /s/ Ron Zwanziger Ron Zwanziger as Attorney-in-Fact |
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Exhibit | ||||
Number | Exhibit Description | |||
2 | .1 | Agreement and Plan of Merger, dated as of January 27, 2007, by and among Inverness Medical Innovations, Inc., Milano MH Acquisition Corp., Milano MH Acquisition LLC and Matria Healthcare, Inc. (included as Annex A to the proxy statement/prospectus forming a part of this registration statement). | ||
4 | .1 | Form of Certificate of Designations, Preferences, and Rights of Series B Convertible Perpetual Preferred Stock of Inverness Medical Innovations, Inc. (included as Annex B to the proxy statement/prospectus forming a part of this registration statement). | ||
5 | .1 | Form of Opinion of Jay McNamara, Esq., Senior Counsel, Corporate & Finance, of Inverness Medical Innovations, Inc., regarding the legality of the securities being issued. | ||
8 | .1 | Form of Opinion of Goodwin Procter LLP relating to tax matters. | ||
8 | .2 | Form of Opinion of Troutman Sanders LLP relating to tax matters.* | ||
12 | Statement relating to computation of ratios of earning to fixed charges. | |||
23 | .1 | Consent of BDO Seidman, LLP (related to Inverness’ financial statements). | ||
23 | .2 | Consent of KPMG LLP, Independent Registered Public Accounting Firm (related to Matria’s financial statements). | ||
23 | .3 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (related to Cholestech’s financial statements). | ||
23 | .4 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (related to Biosite’s financial statements). | ||
23 | .5 | Consent of Colby & Company, PLC (related to Instant’s financial statements). | ||
23 | .6 | Consent of Jay McNamara, Esq., Senior Counsel, Corporate & Finance, of Inverness Medical Innovations, Inc. (included in Exhibit 5.1). | ||
23 | .7 | Consent of Goodwin Procter LLP (included in Exhibit 8.1). | ||
23 | .8 | Consent of Troutman Sanders LLP (included in Exhibit 8.2). | ||
24 | .1 | Power of Attorney* | ||
99 | .1 | Form of Voting Agreement, dated as of January 27, 2008, as amended, by and among Inverness Medical Innovations, Inc. and Parker H. Petit (included as Annex C to the proxy statement/prospectus forming a part of this registration statement). | ||
99 | .3 | Consent of SunTrust Robinson Humphrey. | ||
99 | .4 | Form of Proxy of Matria Healthcare, Inc.* |
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