EXHIBIT 4.2
[LETTERHEAD OF VENTAS, INC.]
May 8, 2000
Lawrence B. Stoller
Senior Vice President and General Counsel
Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, NY 10017
RE: Request by Cohen & Steers Capital Management, Inc. for a Waiver of the
Provisions of Article XII of the Certificate of Incorporation of
Ventas, Inc. (the "Company")
Dear Mr. Stoller:
This letter is in response to the request by Cohen & Steers Capital
Management, Inc. ("C&S") for a waiver of the provisions of Article XII of the
Certificate of Incorporation of the Company with respect to C&S as described in
the letter from C&S to the Company dated May 5, 2000, which is attached hereto
(the "Request Letter"). Capitalized terms used but not defined herein shall
have the meaning set forth in the Request Letter.
The Board hereby Waives, on the terms and subject to the conditions
set forth in this letter and the Request Letter, the application of Article XII
to C&S with respect to the provisions thereof limiting Beneficial Ownership of
Common Stock of the Company for the Waiver Period. The breach of any
representation, warranty, covenant or agreement contained in the Request Letter,
or the failure to comply with the covenants and agreements in the Request
Letter, shall cause the Waiver granted in this letter to become retroactively
null and void, and shall retroactively cause any Common Shares owned by C&S in
excess of the otherwise applicable 9.0% Ownership Limit to become designated
Excess Shares under Article XII, in addition to any other remedy available to
the Company.
Notwithstanding the foregoing, the ownership of the Company's Common
Shares by C&S shall remain subject to the otherwise applicable 9.0% Ownership
Limit in the event that such ownership should result in (i) any "individual"
(within the meaning of Section 542(a)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), as modified by Section 856(h) of the Code) owning
(after taking into account the constructive ownership rules of Section 544 of
the Code, as modified by Section 856(h) of the Code) in excess of 9.0% of the
Common Shares or (ii) any 10.0% Company Shareholder, alone or in combination
with other 10.0% Company Shareholders, owning (either directly or by operation
of the attribution rules of Section 318 of the Code, as modified by Section
856(d)(5) of the Code), a 10.0% or greater interest in the stock of Vencor, Inc.
or in the stock, assets, or net profits of any other present or future tenant of
the Company. For purposes of the preceding sentence, the term "10.0% Company
Shareholder" means a person who, but for the 9.0% Ownership Limit, would
beneficially own 10.0% or more of the total combined voting power, total number,
or total value of all of shares of stock of the
Company, either directly or by operation of the attribution rules of Section 318
of the Code, as modified by Section 856(d)(5) of the Code.
If this letter accurately sets forth our understanding, please sign
the letter where indicated below and return a signed copy to me. This letter
shall be of no force and effect, and may be revoked at any point in time prior
to the Company's receipt of a signed copy from C&S.
Very truly yours,
VENTAS, INC.
By: /s/ T. Richard Riney
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Name: T. Richard Riney
Title: Executive Vice President and
General Counsel
ACCEPTED AND AGREED
This 11th day of
May, 2000
COHEN & STEERS CAPITAL MANAGEMENT, INC.
By: /s/ Lawrence B. Stoller
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Name: Lawrence B. Stoller
Title: Senior Vice President
and General Counsel
attachment
[LETTERHEAD OF COHEN & STEERS CAPITAL MANAGEMENT, INC.]
May 5, 2000
Board of Directors
Ventas, Inc.
4360 Brownsboro Rd
Suite 115
Louisville, KY 40207
RE: Request by Cohen & Steers Capital Management, Inc. for a Waiver of
Provisions of Article XII of the Certificate of Incorporation of
Ventas, Inc.
To the Board of Directors of Ventas, Inc.:
Cohen & Steers Capital Management, Inc. ("C&S") is an investment
adviser registered under the Investment Advisers Act of 1940. Its clients
(collectively, "Advisory Clients") currently own, in the aggregate, 7,013,700
shares (the "Shares") of the outstanding common stock (the "Common Stock") of
Ventas, Inc. (the "Company") under the management of C&S. Pursuant to contracts
with its Advisory Clients, C&S exercises investment discretion (and in some
cases, voting discretion) over the Shares. C&S acknowledges that the portion of
the Shares which exceed the Ownership Limitation (capitalized terms in this
letter are used as defined in Article XII of the Certificate of Incorporation of
the Company ("Article XII")) is subject to being designated Excess Stock under
Article XII. In order to provide C&S with sufficient time to dispose of the
Shares that exceed the Ownership Limitation (the "Additional Shares"), C&S
requests that the Company waive (the "Waiver") the application of Article XII
during the period (the "Waiver Period") from the date hereof, until the
expiration of a period of three months following the date the plan of
reorganization for Vencor, Inc. becomes effective (the "Waiver Expiration Date")
on the terms and subject to the conditions set forth herein.
In support of its request for the Waiver, C&S makes the following
representations, warranties, covenants and agreements:
1. Sale of Shares; No Increase In Beneficial Ownership. C&S shall
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use its reasonable best efforts to dispose of the Additional Shares in a prompt
and orderly fashion, and in any event on or prior to the Waiver Expiration Date.
During such time as the Waiver is in effect, at no point in time shall C&S
increase its Beneficial Ownership (as defined in Article XII) of Common Stock.
2. Expiration of Waiver. The Waiver shall expire, and the Waiver
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Period shall terminate, on the first to occur of: (a) the Waiver Expiration
Date, (b) such date as C&S Beneficially Owns less than the Ownership Limitation,
or (c) a breach by C&S of any of the representations, warranties, covenants or
agreements contained in this Request Letter. Upon expiration of the Waiver and
the Waiver Period, the Additional Shares shall automatically be
designated as "Excess Shares" under Article XII. Such designation will be
effective as of the close of business on the business day prior to the date of
the relevant event. C&S understands and acknowledges that the "Excess Share"
designation shall be in addition to any other remedy that the Company may have
upon a breach by C&S of any representation, warranty, covenant or agreement
contained herein.
3. Representations and Warranties. C&S represents and warrants to
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the Company as follows:
a) As of the date of this Request Letter, and with respect to
any Common Stock under C&S management, the Advisory Clients Beneficially Owned
in the aggregate 10.32% of the outstanding Common Stock of the Company; however,
neither C&S nor any single Advisory Client Beneficially Owned more than 9% of
the Common Stock of the Company, with respect to Common Stock under C&S
management. C&S is not in a partnership ( as determined for federal income tax
purposes) composed of C&S and one or more Advisory Clients, and C&S' Advisory
Clients do not own more than 9.9% of C&S or any corporation controlled or
managed by C&S.
b) No other person who would constitute, along with C&S, a
"group" as that term is used for purposes of Section 13(d)(3) ("Section 13(d)")
of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") owns
any shares of Common Stock.
4. Covenants Regarding Ownership Attributes of the Additional
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Shares. During the Waiver Period, C&S agrees that it shall not take any of the
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following actions:
a) Solicit proxies from stockholders of the Company, the power
to vote, become a "participant" in any "election contest" (as such terms are
used in Rule 14a-11 of the Exchange Act), with respect to the Company, or make
any communication (other than as required by law) referred to in Rule
14a1(1)(2)(iv) of the Exchange Act in connection with any election contest or
other vote by stockholders of the Company or otherwise that is contrary to or
conflicts with actions taken or omitted or to be omitted by the Board;
b) Seek or vote for the removal of any member of the Board,
except removal "for cause" as such term is used under the Delaware General
Corporation Law;
c) Vote for any individual nominated for election to the Board
thereof other than those individuals nominated by the Board or a Committee
thereof;
d) Call or seek to have called any meeting of the stockholders
of the Company;
e) Otherwise act, alone or in concert with others to (i)
solicit, propose, seek to effect or negotiate with any other person with respect
to (A) any business combination with the Company or (B) any restructuring,
recapitalization or similar transaction of the Company, (ii) solicit, propose,
seek to effect or negotiate with any other person with respect to, or announce
an intent to make, any tender offer or exchange offer for any voting securities
of the Company, or (iii) assist, participate in, facilitate or solicit any
effort or attempt by any persons to do or seek to do any of the foregoing; or
f) Form, join or participate in a "group" (within the meaning
of Section 13(d) of the Exchange Act) with respect to any of the matters
described above.
5. Additional Covenants Regarding Ownership of Common Stock: During
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the Waiver Period:
a) C&S shall limit the aggregate Beneficial Ownership by it,
any Advisory Client and any Person who would constitute, along with C&S or C&S
with any such Person or Advisory Client, a "group", as that term is used for
purposes of Section 13(d) of the Exchange Act, of the Company's Common Stock to
no more than 10.32% of the shares of Common Stock outstanding.
b) Neither C&S nor any of its Advisory Clients, taken
separately or taken together in any combination with C&S, have been during 1999
or 2000, are, and shall not in the future be, partners in any partnership
between or among C&S and any one or more of them as determined for federal
income tax purposes which partnership Beneficially Owns any of the Company's
Common Stock. No single Advisory Client or combination of Advisory Clients with
a mutual 10.0% or greater owner, Beneficially Owns or will Beneficially Own more
than 9.0% of the Company's Common Stock outstanding under Management by C&S.
Neither C&S nor any Advisory Client currently Beneficially Owns, and will not
Beneficially Own, more than 9.0% of the Company's Common Stock outstanding, with
respect to Common Stock under management by C&S (excluding for this purpose
Beneficial Ownership of Common Stock in excess of such amounts to the extent
such Beneficial Ownership results solely from it being treated, along with the
Advisory Clients, as a "group" under Section 13(d) of the Exchange Act).
c) C&S, its Advisory Clients and any Person who would
constitute, along with C&S or any Advisory Client, a "group" under Section 13(d)
of the Exchange Act, shall comply with the terms of Article XII, except as
expressly waived by the Board.
d) C&S, its Advisory Clients, or any other person who would,
along with C&S, either constitute a "group" under Section 13(d)(3) or a
partnership for federal income tax purposes, or a 10% or greater Beneficial
Owner of any of the foregoing have not Beneficially Owned at any time during
1999 or 2000, do not currently Beneficially Own and during the Waiver Period
shall not, singly or taken together in any combination, Beneficially Own any
stock, warrants, options, convertible debt or any other rights to acquire the
stock of Vencor, Inc. or any other tenant of the Company.
e) Notwithstanding any other provision of this letter or the
related waiver, if any 10.0% or greater Beneficial Owners of C&S, C&S, its
Advisory Clients, or any other person who would, along with C&S or any of them,
either constitute a "group" under Section 13(d)(3) or a partnership for federal
income tax purposes, Beneficially Owns (excluding for this purpose Beneficial
Ownership of Common Stock that results solely from being treated as part of a
"group" under Section 13(d)) more than 9.0% of the stock of the Company while
Beneficially Owning, singly or taken together in any combination, more than 9.0%
of the stock, warrants, options, convertible debt or any other rights to acquire
the stock of Vencor, Inc. or any other tenant of the Company, the Additional
Shares owned will be automatically designated as "Excess Shares" under Article
XII. Such designation will be effective as of the close of business on the
business day prior to the date of the relevant event.
6. Amendment of Rights Agreement. The Waiver shall be
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conditioned on and shall not be effective (and the Waiver Period shall not
commence) until such time as the Company shall have entered into an amendment to
the Company's Rights Agreement required or necessary as a result of the Waiver
to prevent the triggering of the Rights Agreement.
7. Breach of Representations and Warranties. C&S understands
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that the breach of any representation, warranty or covenant contained herein or
the failure to comply with its covenants and undertakings in this letter, in
addition to any other remedy available to the Company, subjects the Additional
Shares to being designated as "Excess Shares" under Article XII. In such event,
any waiver granted by the Board shall terminate and the Company may proceed in
any manner permitted under Article XII.
8. Fees and Expenses. C&S agrees to pay all of the reasonable
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fees and expenses incurred by the Company in connection with the Wavier
requested hereunder and the corresponding amendment to the Company's Rights
Agreement, including without limitation the legal fees of Willkie Farr &
Gallagher to issue an opinion that the structure contemplated hereunder will not
jeopardize the qualification of the Company to be taxed as a real estate
investment trust.
Very truly yours,
COHEN & STEERS CAPITAL MANAGEMENT, INC.
By: /s/ Lawrence B. Stoller
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Name: Lawrence B. Stoller
Title: Senior Vice President and
General Counsel