SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): March 4, 1998
SHERIDAN HEALTHCARE, INC.
(Exact name of Registrant as specified in charter)
Delaware 000-26260 04-3252967
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
4651 Sheridan Street, Suite 400, Hollywood, Florida 33021
(Address of principal executive offices) (Zip Code)
(954) 987-5822
(Registrant's telephone number, including area code)
Item 2. Acquisition of Assets.
On March 5, 1998, Sheridan Healthcorp, Inc., a wholly-owned subsidiary of
Sheridan Healthcare, Inc., entered into a long-term Management Services
Agreement (the "Management Agreement") with Michael Cavenee, M.D., P.A.
("Cavenee P.A."), Kenneth Trimmer, M.D., P.A. ("Trimmer P.A." and, together with
Cavenee P.A., "Perinatology"), and Michael R. Cavenee, M.D. and Kenneth J.
Trimmer, M.D., the sole stockholders of Cavenee P.A. and Trimmer P.A.,
respectively. In addition, pursuant to the terms of separate Purchase Option
Agreements, each dated March 4, 1998, between Sheridan Healthcare, Inc. (the
"Company") and each of (i) Cavenee P.A. and Dr. Cavenee and (ii) Trimmer P.A.
and Dr. Trimmer (together, the "Purchase Option Agreements"), the Company
acquired options for it or its legally qualified designee or designees to
purchase at any time the stock of Cavenee P.A. and Trimmer P.A., respectively,
each for an exercise price of $100.00. Copies of the Management Agreement and
the Purchase Option Agreements are attached as exhibits hereto and are expressly
incorporated by reference herein.
In addition, on March 4, 1998, the Company and its legally qualified
designated trustee entered into separate Voting Trust Agreements (the "Voting
Trust Agreements") with each of (i) Cavenee P.A. and Dr. Cavenee and (ii)
Trimmer P.A. and Dr. Trimmer, pursuant to which the Company's legally qualified
designated trustee was granted the sole right to vote all of the capital stock
of Cavenee P.A. and Trimmer P.A, respectively. Copies of the Voting Trust
Agreements are also attached as exhibits hereto and are expressly incorporated
by reference herein.
Perinatology is a hospital-based perinatology practice which provides
services to high-risk obstetric patients in Dallas and the surrounding north
Texas area. Also on March 4, 1998, Cavenee P.A. and Trimmer P.A. entered into
employment agreements with Drs. Cavenee and Trimmer, respectively, with initial
terms of employment of five years and non-competition periods running for two
years subsequent to the termination of employment.
The amount and type of consideration paid by the Company was determined
through arm's length negotiations between the parties. The consideration paid to
Dr. Cavenee included (i) approximately $1.8 million in cash and (ii) 403,560
shares (the "Cavenee Shares") of the common stock, par value $.01 per share, of
the Company (the "Common Stock"). In addition, the Purchase Option Agreement
between the Company, Cavenee P.A. and Dr. Cavenee provides that in the event
that by March 4, 1999, Dr. Cavenee shall not have received an aggregate of
approximately $4.6 million from the sale of all or part of the Cavenee Shares
(and/or, at the Company's option, additional issued shares of Common Stock),
then the Company shall pay cash to Dr. Cavenee in the amount of any deficit. The
Purchase Option Agreement between the Company, Cavenee P.A. and Dr. Cavenee
further provides that in the event the sum of the amount of cash received upon
the sale of shares of Common Stock (as described above) plus the fair market
value (determined based on the average per share closing price of Common Stock
on the Nasdaq National Market during the fifteen trading days immediately
preceding March 4, 1999) of any Cavenee Shares still held by Dr. Cavenee on
March 4, 1999 is less than approximately $9.2 million, the Company will issue to
Dr. Cavenee, by March 19, 1999, additional shares of Common Stock such that the
total value of cash received and shares of Common Stock held by Dr. Cavenee as
of March 4, 1999 is equal to approximately $9.2 million.
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The consideration paid to Dr. Trimmer included (i) approximately $2.0
million in cash and (ii) 446,040 shares (the "Trimmer Shares") of Common Stock.
In addition, the Purchase Option Agreement between the Company, Trimmer P.A. and
Dr. Trimmer provides that in the event that by March 4, 1999, Dr. Trimmer shall
not have received an aggregate of approximately $5.1 million from the sale of
all or part of the Trimmer Shares (and/or, at the Company's option, additional
issued shares of Common Stock), then the Company shall pay cash to Dr. Trimmer
in the amount of any deficit. The Purchase Option Agreement between the Company,
Trimmer P.A. and Dr. Trimmer further provides that in the event the sum of the
amount of cash received upon the sale of shares of Common Stock (as described
above) plus the fair market value of any Trimmer Shares still held by Dr.
Trimmer on March 4, 1999 is less than approximately $10.2 million, the Company
will issue to Dr. Trimmer, by March 19, 1999, additional shares of Common Stock
such that the total value of cash received and shares of Common Stock held by
Dr. Trimmer as of March 4, 1999 is equal to approximately $10.2 million.
The Company obtained substantially all of the cash portion of the
consideration for the Perinatology acquisition from borrowings under its
revolving credit facility with NationsBank, National Association.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The Financial Statements of Perinatology required by this Item will be
filed by the Company by amendment of this Current Report on Form 8-K no later
than May 18, 1998.
(b) Pro Forma Financial Information.
The Pro Forma Financial Information required by this Item will be
filed by the Company by amendment of this Current Report on Form 8-K no later
than May 18, 1998.
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Item 7. (cont'd)
(c) Exhibits
2.1Management Services Agreement, dated as of March 5, 1998, by and
among Sheridan Healthcorp, Inc., Michael Cavenee, M.D., P.A., Kenneth Trimmer,
M.D., P.A., Michael R. Cavenee, M.D. and Kenneth J. Trimmer, M.D.
2.2Purchase Option Agreement, dated as of March 4, 1998, by and
among Sheridan Healthcare, Inc., Michael Cavenee, M.D., P.A. and Michael R.
Cavenee, M.D.
2.3Purchase Option Agreement, dated as of March 4, 1998, by and
among Sheridan Healthcare, Inc., Kenneth Trimmer, M.D., P.A. and Kenneth J.
Trimmer, M.D.
4.1Investment and Stockholders' Agreement, dated as of March 4, 1998,
by and among Sheridan Healthcare, Inc., Michael R. Cavenee, M.D., and Kenneth J.
Trimmer, M.D.
99.1Physician Employment Agreement, dated as of March 4, 1998, by and among
Michael R. Cavenee, M.D., and Michael Cavenee, M.D., P.A.
99.2Physician Employment Agreement, dated as of March 4, 1998, by and among
Kenneth J. Trimmer, M.D., and Kenneth Trimmer, M.D., P.A.
99.3Voting Trust Agreement, dated as of March 4, 1998, by and among
Sheridan Healthcare, Inc., Michael Cavenee, M.D., P.A., Michael R. Cavenee,
M.D. and Gilbert Drozdow, M.D. as Trustee.
99.4Voting Trust Agreement, dated as of March 4, 1998, by and among
Sheridan Healthcare, Inc., Kenneth Trimmer, M.D., P.A., Kenneth J. Trimmer,
M.D. and Gilbert Drozdow, M.D. as Trustee.
99.5Press release, dated March 6, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
SHERIDAN HEALTHCARE, INC.
Dated: March 4, 1998 By: /s/ Michael
Schundler
Michael Schundler
Chief Financial Officer