Page 9 of 13 – SEC Filing
Explanatory Note
This Amendment No. 2 (“Amendment
No. 2”) relates to the common stock, par value $0.25 per share (the “Common Stock”), of Kindred Healthcare, Inc.
(the “Issuer”). This Amendment amends and supplements the Statement on Schedule 13D filed with the Securities and Exchange
Commission (the “SEC”) on December 27, 2017 (the “initial Schedule 13D”), as amended and supplemented by Amendment
No. 1, filed February 1, 2018 (“Amendment No. 1”). The initial Schedule 13D, as amended and supplemented by Amendment
No. 1 and this Amendment No. 2, is referred to herein as the “Schedule 13D.” Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to such terms in the Schedule 13D. Except as otherwise provided herein, each Item
of the Schedule 13D remains unchanged.
Item 3. Source and Amount of Funds
or Other Consideration
Item 3 of the Schedule 13D is hereby
amended by adding the following:
EQTY used approximately $217,800 (excluding
brokerage commissions) of the working capital of EQTY to purchase the shares of Common Stock reported in this Amendment.
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby
amended by adding the following after the sixth paragraph thereof:
For many of the same reasons outlined
in the Letter, on March 8, 2018, LCS, EQTY and DSTR (the “Brigade Funds”) filed a shareholder action (the “Action”)
against the Issuer’s Board and certain other parties in the Delaware Court of Chancery alleging breach of fiduciary duty
and related causes of action. Contemporaneously therewith, the Brigade Funds filed a Motion for Expedited Proceedings. The Action
seeks to preliminarily and permanently enjoin the proposed acquisition of the Issuer by the Consortium. The Brigade Funds intend
to vigorously prosecute the Action to protect their investors from the consequences of the Board’s breach of fiduciary duties if
the Merger is allowed to close.
Item 5. Interest in Securities of
the Issuer
Item 5 of the Schedule 13D is hereby
amended by deleting it in its entirety and substituting the following in lieu thereof:
(a) As of the Filing Date, Brigade beneficially
owns 4,114,306 shares of Common Stock (excluding the shares of Common Stock subject to the Listed Equity Call Option and the 2018
OTC Equity Call Option, as defined below), of which 3,531,735 shares of Common Stock are owned by LCS, 510,571 shares of Common
Stock are owned by DSTR and 72,000 shares of Common Stock are owned by EQTY.
On November 6, 2017, LCS entered into
a call option agreement (the “Listed Equity Call Option Agreement”) with Credit Suisse pursuant to which LCS acquired
a call option that gives LCS the right to purchase 500,000 shares of Common Stock for an exercise price of $7.50 per share (the
“Listed Equity Call Option”). The Listed Equity Call Option will expire and terminate on May 18, 2018, and is exercisable
at LCS’s election any time on or prior to its expiration.
In January, 2018, LCS entered into a
series of call option agreements (collectively, the “2018 OTC Equity Call Option Agreement”) with Nomura Securities International
Inc. pursuant to which LCS acquired call options that give LCS the right to purchase up to 600,000 shares of Common Stock in the
aggregate at an exercise price of $7.50 per share (the “2018 OTC Equity Call Option”). The 2018 OTC Equity Call Option
will expire and terminate on May 18, 2018, and is exercisable at LCS’s election any time on or prior to its expiration.
Together with the shares of Common Stock
subject to the Listed Equity Call Option and 2018 OTC Equity Call Option, the Reporting Persons are therefore deemed to beneficially
own 5,214,306 shares of Common Stock in the aggregate, 4,631,735 shares of Common Stock by LCS, 510,571 shares of Common Stock
by DSTR and 72,000 shares of Common Stock by EQTY, representing approximately 5.70% in the aggregate, and 5.07%, 0.56% and 0.08%
by LCS, DSTR and EQTY, respectively, of the issued and outstanding shares of the Common Stock of the Issuer as of January 31, 2018,
as set forth in the Issuer’s most recent Form 10-K filed March 1, 2018.
