Exhibit (c)(3)
Amendment No. 1 to Agreement and Plan of Merger
AMENDMENT NO. 1, dated as of February 28, 1997 (this "Amendment"), to
the Agreement and Plan of Merger, dated as of February 9, 1997 (the "Merger
Agreement"), by and between TheraTx, Incorporated, a Delaware corporation (the
"Company"), Vencor, Inc., a Delaware corporation ("Purchaser") and Peach
Acquisition Corp, a Delaware corporation and a wholly-owned subsidiary of
Purchaser ("Merger Sub").
W I T N E S S E T H:
WHEREAS, the Company, Purchaser and Merger Sub desire to amend the
Merger Agreement as set forth herein; and
WHEREAS, Section 10.3 of the Merger Agreement provides that, at any
time prior to the Effective Time, the Company, Purchaser and Merger Sub may
amend the Merger Agreement, by written agreement executed and delivered by duly
authorized officers of the Company, Purchaser and Merger Sub, respectively;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
ARTICLE I
Amendment to the Merger Agreement
1.1 Stock Plans and Options. Section 7.8 of the Merger Agreement is
hereby amended by deleting the current text thereof in its entirety and
inserting in lieu thereof the following:
7.8. Stock Plans and Options. (a) Except as provided in
Section 7.8(b), at the Effective Time, each outstanding option to
purchase Shares under the Stock Plans, other than any option granted
under the Company's Employee Stock Purchase Plan (collectively, the
"Options"), whether vested or unvested, shall be converted into an
option to acquire, on the same terms and conditions as were applicable
under such Option, the number of shares of Common Stock, par value
$0.25 per share of Purchaser (the "Purchaser Common Stock") equal to
(a) the number of Shares subject to the Option, multiplied by (b) (i)
the Merger Consideration, divided by (ii) the average of the high and
low price of Purchaser Common Stock on the trading day immediately
preceding the date of the Effective Time as reported in the New York
City edition of The Wall Street Journal (rounded down to the nearest
whole number) (a "Replacement Option"), at an exercise price per share
(rounded up to the nearest whole cent) equal to (y) the aggregate
exercise price for the Shares which were purchasable pursuant to such
Option divided by (z) the number of full shares of Purchaser Common
Stock subject to such Replacement Option in accordance with the
foregoing. At or prior to the Effective Time, the Company shall take
all action necessary with respect to the Stock Plans to permit the
replacement of the outstanding Options by Purchaser pursuant to this
Section 7.8(a) and as soon as practicable after the Effective Time
Purchaser shall use its reasonable best efforts to register under the
Securities Act on Form S-8 or other appropriate form (and use its
reasonable best efforts to maintain the effectiveness thereof) shares
of Purchaser Common Stock issuable pursuant to all Replacement Options.
The Company shall take all action necessary, including obtaining any
required consents from optionees, to provide that following the
Effective Time no participant in any Stock Plan or other plans,
programs or arrangements shall have any right thereunder to acquire
equity securities of the Company, the Surviving Corporation or any
subsidiary thereof and to permit Purchaser to assume the Stock Plans
(other than the Company's Employee Stock Purchase Plan, with respect to
which the Company shall take all action necessary to terminate such
plan immediately prior to the Effective Time). The Company shall
further take all action necessary to amend the Stock Plans, to
eliminate automatic grants or awards thereunder following the Effective
Time. At the Effective Time, Purchaser shall assume the Stock Plans
(other than the Company's Employee Stock Purchase Plan); provided, that
such assumption shall be only in respect of the Replacement Options and
that Purchaser shall have no obligation with respect to any awards
under the Stock Plans other than the Replacement Options or to make any
additional grants or awards under such assumed Stock Plans.
(b) At the Effective Time, each then outstanding Option held
by (i) ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, III, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
and B. ▇▇▇▇▇ ▇▇▇▇▇, (ii) any individual in respect of whom the total
number of Shares subject to all Options held by such individual does
not exceed 1,500 as of the Effective Time, or (iii) any other
individuals who the Company and Purchaser mutually agree shall have
their Options treated in accordance with the terms of this Section
7.8(b), whether vested or unvested, shall be cancelled and the holder
thereof shall be entitled to receive an amount of cash equal to the
product of (x) the amount, if any, by which the Merger Consideration
exceeds the exercise price per Share subject to such Option (whether
vested or unvested) and (y) the number of Shares issuable pursuant to
the unexercised portion of such Option, less any required withholding
of taxes (such amount being hereinafter referred to as the "Option
Consideration"). The Option Consideration shall be paid as soon as
practicable following the Effective Time, but in any event within five
(5) days following the Effective Time. Prior to the Effective Time, the
Company shall take such actions as may be necessary to effectuate the
foregoing, including without limitation obtaining all applicable
consents. The cancellation of an Option in exchange for the Option
Consideration shall be deemed a release of any and all rights the
holder had or may have had in respect of such Option, and any required
consents received from Option holders shall so provide.
ARTICLE II
Miscellaneous
2.1 Definitions. Capitalized terms used in this Amendment and not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2.2 Entire Agreement; Restatement. Other than as amended by Section
1.1 above, the Merger Agreement shall remain in full force and effect unaffected
hereby. The Merger Agreement, as amended by this Amendment, is hereinafter
referred to as the "Merger Agreement", and the parties hereto hereby agree that
the Merger Agreement may be restated to reflect the amendments provided for in
this Amendment.
2.3 Governing Law. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
2.4 Counterparts. For the convenience of the parties hereto, this
Amendment may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument and all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Amendment to be executed as of the date first written above.
THERATX, INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & CEO
VENCOR, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
PEACH ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
