EXHIBIT 99.3
FIRST AMENDMENT TO SHAREHOLDER PROTECTION RIGHTS AGREEMENT
FIRST AMENDMENT TO SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of the 24th day of February 1998, by
and between Atria Communities, Inc., a Delaware corporation (the "Company"), and
National City Bank, as Rights Agent (the "Rights Agent"), constitutes the First
Amendment to the Shareholder Protection Rights Agreement dated February 15, 1998
by and between the Company and the Rights Agent (the "Rights Agreement").
W I T N E S S E T H:
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WHEREAS, the parties hereto desire to amend the Rights Agreement in certain
respects on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. The Rights Agreement is hereby amended by deleting the definition of
"Acquiring Person" in Section 1.1 thereof in its entirety and substituting in
lieu thereof the following new definition:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of 15%
or more of the outstanding shares of Common Stock; provided, however, that
the term "Acquiring Person" shall not include any Person (i) who is not a
Beneficial Owner of any shares of Common Stock, but becomes a Beneficial
Owner of Common Stock after the date of this Agreement solely as a result
of acquiring or agreeing to acquire not more than 10,000,000 shares of
Common Stock from Vencor, Inc. or any transferee of Vencor, Inc., until
such time thereafter as such Person shall become the Beneficial Owner
(other than by means of a stock divided or stock split) of any additional
shares of Common Stock, (ii) who is the Beneficial Owner of 15% or more of
the outstanding shares of Common Stock on the date of this Agreement or who
shall become the Beneficial Owner of 15% or more of the outstanding shares
of Common Stock solely as a result of an acquisition by the Company of
shares of Common Stock, until such time hereafter or thereafter as such
Person shall become the Beneficial Owner (other than by means of a stock
dividend or stock split) of any additional shares of Common Stock (unless
such Person became the Beneficial Owner of such additional shares of Common
Stock without any plan or intention to seek or affect control of the
Company and such Person promptly enters into an irrevocable commitment
promptly to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting power, with respect to such shares),
all of such additional shares), (iii) who is the Beneficial Owner of 15%,
or more of the outstanding shares of Common Stock but who acquired
Beneficial Ownership of shares of Common Stock without any plan or
intention to seek or affect control of the Company, if such Person promptly
enters into an irrevocable commitment promptly to divest, and thereafter
promptly divests (without exercising or retaining any power, including
voting power, with respect to such shares), sufficient shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock or (iv) who Beneficially
Owns shares of Common Stock consisting solely of one or more of (A) shares
of Common Stock Beneficially Owned pursuant to the grant or exercise of an
option granted to such Person by the Company in connection with an
agreement to merge with, or acquire, the Company entered into prior to a
Flip-In Date, (B) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock),
Beneficially Owned by such Person or its Affiliates or Associates at the
time of grant of such option or (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock)
acquired by Affiliates or Associates of such Person after the time of such
grant which, in the aggregate, amount to less than 1% of the outstanding
shares of Common Stock. In addition, notwithstanding anything herein to the
contrary, neither Vencor, Inc. nor any Affiliate or Associate of Vencor,
Inc. shall be deemed to be an Acquiring Person solely because one or more
Affiliates or Associates of Vencor, Inc. hereafter acquire Beneficial
Ownership, collectively, of not more than 10,000 shares of Common Stock,
provided that such Persons acquired such Beneficial Ownership without any
plan or intention to seek or affect control of the Company. In addition,
the Company, any wholly owned Subsidiary of the Company and any employee
stock ownership or other employee benefit plan of the Company or a wholly
owned Subsidiary of the Company shall not be an Acquiring Person.
2. All terms defined in the Rights Agreement which are used herein shall
have the meanings defined in the Rights Agreement, unless specifically defined
otherwise herein.
3. The term "Agreement" as used in the Rights Agreement shall mean the
Rights Agreement, as amended by this Agreement, or as it may from time to time
be amended in the future by one or more other written amendment or modification
agreements entered into pursuant to the applicable provisions of the Rights
Agreement.
4. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
5. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
6. Except as expressly herein amended, the terms and conditions of the
Rights Agreement shall remain in full force and effect.
7. This Agreement is not intended to be, nor shall it be construed to be,
a novation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ATRIA COMMUNITIES, INC.
By: /s/ W. Patrick Mulloy, II
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W. Patrick Mulloy, II
President and Chief Executive Officer
NATIONAL CITY BANK
By: /s/ Sherry L. Damore
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Sherry L. Damore
Vice President
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