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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________________________________________
BEVERLY ENTERPRISES, INC.
(FORMERLY NEW BEVERLY HOLDINGS, INC.)
(Exact Name of Registrant as Specified in Its Charter)
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<S> <C> <C>
DELAWARE 5111 ROGERS AVENUE, SUITE 40-A 62-1691861
(State or Other FORT SMITH, ARKANSAS 72919 (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation or
Organization)
</TABLE>
(Address of Principal Executive Offices Including Zip
Code)
________________________________________________________
BEVERLY ENTERPRISES, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(Full Title of the Plan)
________________________________________________________
ROBERT W. POMMERVILLE
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
BEVERLY ENTERPRISES, INC.
5111 ROGERS AVENUE, SUITE 40-A
FORT SMITH, ARKANSAS 72919
(Name and Address of Agent For Service)
________________________________________________________
(501) 452-6712
(Telephone Number, Including Area Code, of Agent For Service)
________________________________________________________
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
BEVERLY ENTERPRISES, $1,000,000 100% $1,000,000 $295
INC. NON-EMPLOYEE
DIRECTOR DEFERRED
COMPENSATION PLAN
OBLIGATIONS (2)
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COMMON STOCK, PAR (3) -- -- NONE
VALUE $.10 PER SHARE
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit
plan(s) described herein.
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(o).
(2) The Beverly Enterprises, Inc. Non-Employee Director Deferred
Compensation Plan Obligations are unsecured obligations of Beverly
Enterprises, Inc. to pay deferred compensation in the future in
accordance with the terms of the Beverly Enterprises, Inc.
Non-Employee Director Deferred Compensation Plan.
(3) Pursuant to Rule 457(i), such indeterminate number of shares of Common
Stock as may be issuable upon payment of the Beverly Enterprises, Inc.
Non-Employee Director Deferred Compensation Plan Obligations,
including such additional shares as may be issuable as a result of
stock splits, stock dividends or similar transactions.
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INTRODUCTION
This Registration Statement on Form S-8 is filed by Beverly Enterprises,
Inc. (formerly "New Beverly Holdings, Inc."), a Delaware corporation (the
"Registrant"), relating to $1,000,000 of unsecured obligations of the
Registrant to pay deferred compensation in the future (the "Obligations") and
Beverly Enterprises, Inc. Common Stock, par value $0.10 per share, issuable in
satisfaction of the Obligations in accordance with the terms of the Beverly
Enterprises, Inc.'s Non-Employee Director Deferred Compensation Plan (the
"Plan").
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information requested in Part I of this Registration Statement is included
in the prospectus for the Plan, which the Company has excluded from this
Registration Statement in accordance with the instructions to Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Commission
are hereby incorporated by reference into this Registration Statement:
1. The Company's Registration Statement on Form S-1 filed with
the Commission on June 4, 1997, as amended, under which the
Company registered Common Stock under the Securities Act of
1933, as amended.
2. The description of the Shares set forth in the Company's
Registration Statement on Form 8-A, filed with the Commission
on October 15, 1997, under which the Company registered the
Shares under Section 12(g) of the Securities and Exchange Act
of 1934, as amended (the "Exchange Act").
3. The Company's report on Form 10-Q for the quarter ended
September 30, 1997.
4. The Annual Report on Form 10-K for the year ended December 31,
1996, the report on Form 10-Q for the quarter ended March 31,
1997, the report on Form 10-Q for the quarter ended June 30,
1997, the report on Form 10-Q for the quarter ended September
30, 1997 and the current report on Form 8-K dated April 15,
1997, each filed by Beverly Enterprises, Inc., a Delaware
corporation and predecessor of the Company ("Old Beverly").
The Company is incorporating by reference the documents listed
in this Item 4 because the Company succeeded to all of the
business of Old Beverly, other than its institutional and mail
service pharmacy business.
All reports and other documents that the Company subsequently
files with the Securities and Exchange Commission (the "Commission") pursuant
to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment indicating
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that the Company has sold all of the securities offered under this Registration
Statement or that deregisters the distribution of all such securities then
remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement from the date that the Company files such report or
document. Any statement contained in this Registration Statement or any report
or document incorporated into this Registration Statement by reference,
however, shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained in a
subsequently dated report or document that is also considered part of this
Registration Statement, or in any amendment to this Registration Statement, is
inconsistent with such prior statement. The Company's file number with the
Commission is 1-9550.
ITEM 4. DESCRIPTION OF SECURITIES.
The Common Stock of the Registrant is registered under Section 12 of
the Exchange Act.
$1,000,000 of Plan Obligations are being registered under this
Registration Statement to be offered to certain non-employee directors of the
Registrant pursuant to the Plan. The Obligations are general unsecured
obligations of the Registrant to pay deferred compensation in accordance with
the terms of the Plan from the general assets of the Registrant and rank pari
passu with other unsecured and unsubordinated indebtedness of the Registrant
from time to time outstanding. The amount of compensation deferred by each
Participant under the Plan is determined in accordance with the Plan based upon
elections by each Participant. Participants may elect to defer up to 100% of
such Participant's annual compensation, in increments of 25%.
Three types of contributions are available under the Plan. First,
Participants will be able to defer receipt of all or part of annual meeting and
retainer fees to a pre-tax deferred compensation account with two investment
options. The first investment option is a Deferred Cash Account, which will be
credited with interest at a variable rate equal to the prime rate of interest
as established by a major New York bank. Interest equivalents on amounts
deferred under this option will be calculated annually as of December 31 of
each year. The second investment option will be a Deferred Share Unit Account,
with each unit having a value equivalent to one share of the Registrant's
Common Stock. Although the Plan is not actually funded and amounts deferred
under the Plan will not necessarily be invested in the Registrant's Common
Stock, a Participant's Deferred Share Unit Account will fluctuate in value as
if it had been invested in the Registrant's Common Stock.
Second, upon a deferral of compensation by a Participant into such
Participant's Deferred Share Unit Account, the Registrant will credit that
Participant's Deferred Share Unit Account with an additional number of Deferred
Share Units equal to 25% of the number of Deferred Share Units credited by
virtue of such Participant's deferral. To the extent dividends on any of the
Registrant's Common Stock are paid, dividend equivalents and fractions thereof
will be calculated with respect to balances of Deferred Share Units in a
Participant's Deferred Share Unit Account, converted to additional equivalents
of the Registrant's Common Stock and credited to the Participant's Deferred
Share Unit Account as of the dividend payment date.
Third, each Participant will receive an award of 500 Deferred Share
Units during the initial 1997 Plan Year. Thereafter, beginning with the year
1998, and continuing each year thereafter, each Participant will receive an
award of 500 Deferred Share Units, which will be credited to such Participant's
Deferred Share Unit Account as of the last day of the Registrant's stock's
trading in the month of January of the respective Plan year. The annual award
of 500 Deferred Share Units will not be subject to the 25% matching
contribution described in the preceding paragraph.
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The Beverly Enterprises, Inc. Non-Employee Director Deferred
Compensation Plan was originally adopted by Beverly Enterprises, Inc. prior to
the Distribution and Merger which is described in the proxy statement issued by
Beverly Enterprises, Inc. ("Old Beverly") dated October 20, 1997 ("Proxy
Statement"). The Plan was subsequently amended to provide for its adoption by
the Registrant contemporaneous with the Distribution and Merger. Such
amendment also provides that, as of the date of the Distribution and Merger,
each Participant's Accounts under the Plan, as expressed as a number of
Deferred Share Units will be adjusted by dividing the number of Deferred Share
Units by the Distributed Stock Fraction, as that term is defined in the Proxy
Statement. Subsequent to the Distribution and Merger, all subsequent additions
to the Plan shall be deemed invested in Common Stock of the Registrant.
Furthermore, the annual award of 500 Deferred Share Units shall be made in
terms of Common Stock of the Registrant.
Participants are at all times 100% vested in both of their Deferral
Accounts. The vested accrued balances in the Participant's Deferral Accounts
shall be paid to the Participant upon such Participant's retirement,
termination or disability. In the case of any Participant's death prior to
retirement from the Board, the vested accrued balance in such Participant's
Deferral Accounts will be paid to the Participant's designated
beneficiary(ies). Earlier distributions are available only in the event of an
unforeseeable emergency resulting in an extreme financial hardship for the
Participant and only if approved by the Board of Directors of the Registrant.
Distributions will ordinarily be made in shares of the Registrant's Common
Stock. With prior Board approval, however, a Participant may elect to be paid
in cash. Distributions will be in the form of either (a) one lump sum, or (b)
over a period of two to ten years commencing as soon as it is administratively
feasible after the Participant's retirement, termination, death or disability.
Such election of distribution method shall be made at the time of deferral and
may be changed at any time with Board approval prior to the Participant's
retirement, termination, death or disability as long as it is made at least
twenty-four (24) months prior to the Participant's retirement, termination,
death or disability.
A Participant's Obligations cannot be alienated, sold, transferred,
assigned, pledged, attached or otherwise encumbered by the Participant, and
pass only to a survivor beneficiary under the Plan, or by will or the laws of
descent and distribution, or pursuant to a qualified domestic relations order
which recognizes the rights of a spouse or former spouse to share in such
Obligations.
The Obligations are not subject to redemption, in whole or in part,
prior to the payout to the Participant. However, the Registrant reserves the
right to amend or terminate the Plan at any time, except that no such amendment
or termination shall adversely affect a Participant's right to Obligations in
the amount of the Participant's vested Deferral Accounts as of the date of such
amendment or termination.
The Obligations are not convertible into any other security of
the Registrant. The Obligations will not have the benefit of a negative pledge
or any other affirmative or negative covenant on the part of the Registrant.
Except with respect to a "grantor trust," which the Registrant may establish
pursuant to the Plan, no trustee will be appointed having the authority to take
action with respect to the Obligations, and each Participant will be
responsible for acting independently with respect to, among other things, the
giving of notices, responding to any requests for consents, waivers or
amendments pertaining to the Obligations, and taking action upon a default.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the Common Stock has been passed upon for the
Registrant by John W. MacKenzie, its Deputy General Counsel and Assistant
Secretary. Mr. MacKenzie owns approximately 29,758 shares of Common Stock and
options to purchase a number of
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shares of Common Stock equivalent to those Options previously held by Mr.
MacKenzie to purchase 23,000 shares of the former Beverly Enterprises, Inc.
Common Stock, as adjusted pursuant to the terms of the Employee Benefit Matters
Agreement relating to the Distribution and Merger, as defined and as described
in the Proxy Statement issued by the former Beverly Enterprises, Inc. dated
October 20, 1997. It is currently anticipated that Mr. MacKenzie will not be
eligible to participate in the Plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law, the Company's
certificate of incorporation and bylaws, and the Company's indemnification
agreements between the Company and its officers and directors provide that the
Company will indemnify them to the full extent permitted by the Delaware
General Corporation Law for liabilities and expenses that they may incur in
their capacities as directors and officers of the Company. Generally, the
Company will indemnify its directors and officers with respect to actions taken
in good faith in a manner reasonably believed to be in, or not opposed to, the
best interests of the Company. With respect to any criminal action or
proceeding, the director or officer must also not have had any reasonable cause
to believe that his or her actions were unlawful.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Inapplicable.
ITEM 8. EXHIBITS.
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EXHIBIT NO. DESCRIPTION
<S> <C>
4.1 Beverly Enterprises, Inc. Non-Employee Director Deferred Compensation Plan
5.1 Opinion of John W. MacKenzie, Esq.
23.1 Consent of John W. MacKenzie, Esq. (contained in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
</TABLE>
ITEM 9. UNDERTAKINGS.
A. RULE 415 OFFERING. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement: (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act, (ii) to reflect in
the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the Registration Statement, and (iii)
to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement, provided, however, that clauses (i)
and (ii) do not apply if the information required to be
included in a post-effective amendment by those clauses is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or
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15(d) of the Exchange Act that are incorporated by reference
in the Registration Statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. REQUEST FOR ACCELERATION OF EFFECTIVE DATE OR FILING
OF REGISTRATION STATEMENT ON FORM S-8. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion
of the Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
[SIGNATURES ON THE NEXT PAGE]
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SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fort Smith, State of Arkansas, on this 5th day
of December, 1997.
BEVERLY ENTERPRISES, INC.
By: /s/ David R. Banks
-----------------------------------------
Name: David R. Banks
Title: Chairman of the Board,
Chief Executive Officer and Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the directors and/or officers of
the Registrant whose signature appears below hereby appoints Robert W.
Pommerville and John W. MacKenzie, and each of them severally as his or her
attorney-in-fact to sign his or her name and on his or her behalf, in any and
all capacities stated below, and to file with the Securities and Exchange
Commission any and all amendments, including post-effective amendments to this
Registration Statement as appropriate, and generally to do all such things in
their behalf in their capacities as officers and directors to enable Registrant
to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.
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NAME AND SIGNATURE TITLE DATE
<S> <C> <C>
/s/ David R. Banks Chairman of the Board, Chief December 5, 1997
------------------------------------------ Executive Officer and Director
David R. Banks
/s/ Boyd W. Hendrickson President, Chief Operating Officer December 5, 1997
-------------------------------------------- and Director
Boyd W. Hendrickson
/s/ Scott M. Tabakin Executive Vice President and Chief December 5, 1997
------------------------------------------ Financial Officer
Scott M. Tabakin
/s/ Pamela H. Daniels Vice President, Controller, and December 5, 1997
------------------------------------------ Chief Accounting Officer
Pamela H. Daniels
</TABLE>
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<TABLE>
<S> <C> <C> <C>
/s/ Beryl F. Anthony, Jr. Director December 5, 1997
------------------------------------------
Beryl F. Anthony, Jr.
/s/ James R. Greene Director December 5, 1997
------------------------------------------
James R. Greene
/s/ Edith E. Holiday Director December 5, 1997
------------------------------------------
Edith E. Holiday
/s/ Jon E. M. Jacoby Director December 5, 1997
------------------------------------------
Jon E. M. Jacoby
/s/ Risa J. Lavizzo-Mourey, M.D. Director December 5, 1997
------------------------------------------
Risa J. Lavizzo-Mourey, M.D.
/s/ Louis W. Menk Director December 5, 1997
------------------------------------------
Louis W. Menk
/s/ Marilyn R. Seymann Director December 5, 1997
-------------------------------------------
Marilyn R. Seymann
</TABLE>
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EXHIBIT INDEX
<TABLE>
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EXHIBIT NO. DESCRIPTION
<S> <C>
4.1 Beverly Enterprises, Inc. Non-Employee Director Deferred Compensation Plan
5.1 Opinion of John W. MacKenzie, Esq.
23.1 Consent of John W. MacKenzie, Esq. (included in
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
</TABLE>
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EXHIBIT 4.1
BEVERLY ENTERPRISES, INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
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EXHIBIT A
BEVERLY ENTERPRISES, INC.
NON-EMPLOYEE DIRECTOR
DEFERRED
COMPENSATION PLAN
(Effective May 29, 1997)
* * * * *
SECTION 1. Purpose. The purpose of the Plan is for the Company to
provide Directors of the Company with an opportunity to receive awards
equivalent to Company Stock (referred to as "Deferred Share Units") and defer
receipt of compensation for services rendered to the Company in the form of
annual retainer and meeting fees. It is intended that the Plan shall aid the
Company in retaining and attracting Directors whose abilities, experience and
judgment can contribute to the continued progress of the Company.
SECTION 2. Definitions. (a) "Beneficiary" means the person or
persons (including legal entities) who have been designated in accordance with
Section 18 hereof to receive benefits under this Plan following a Director's
death.
(b) "Board" means the Board of Directors of the Company.
(c) "Company Matching Contribution" means the Deferred Share Units
credited to the Deferred Share Unit Account pursuant to Section 8(b).
(d) "Company" means Beverly Enterprises, Inc.
(e) "Compensation" means a Director's Meeting Fees and Retainer.
(f) "Date of Crediting" means, with respect to any compensation
deferred pursuant to the Plan, the first business day of the month following
the date when such compensation would otherwise be paid to a Director.
(g) "Deferred Compensation" means all or any part of any cash, or
other consideration to be paid to a Director by the Company as Director's fees
or retainers that are subject to an elective deferral under Section 7.
(h) "Deferral Account" means the bookkeeping account established
for a Director under the Plan and to which Deferred Compensation amounts,
Company Matching Contributions and annual grants of Deferred Share Units with
respect to such Director are credited from time to time, as adjusted from time
to time as provided in the Plan. The Deferral Account may be credited with
Deferred Share Units (a "Deferred Share Unit Account") as defined in Section 8
or may be credited with the Variable Interest Option (a "Deferred Cash
Account") as defined in Section 9.
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(i) "Deferred Compensation Election Form" means the form pursuant
to which Directors elect to become participants in the Plan and defer
Compensation thereunder, in such form as the Board determines from time to time
in its sole discretion.
(j) "Deferred Share Unit" means a bookkeeping entry having a unit
of value equal to one (1) share of Stock as set forth in Section 8 of the Plan.
(k) "Director" means any non-employee member of the Board of
Directors of the Company.
(1) "Disability" means the inability of a Director, as determined
by the Board in its sole discretion, substantially to perform such Director's
regular duties and responsibilities due to a medically determinable physical or
mental illness which has lasted (or can reasonably be expected to last) for a
period of three (3) consecutive months.
(m) "Fair Market Value" means the closing sales price of the Stock
for such day, or if no such sale is made on such day, the average of the
closing bid and asked prices of the Stock for such day, in each case as
officially reported on the New York Stock Exchange (or, if the Stock is not
then listed or admitted to trading on the New York Stock Exchange, the
principal national stock exchange or stock market on which the Stock is then
listed or admitted to trading.)
(n) "Meeting Fees" means Compensation paid by the Company to
Directors for attendance at Board and committee meetings as well as fees paid
for a telephonic Board or committee meeting.
(o) "Plan" means the Beverly Enterprises. Inc. Non-Employee
Director Deferred Compensation Plan, as set forth herein and as amended from
time to time.
(p) "Plan Year" means the calendar year.
(q) "Retainer" means the annual fixed payment awarded by the
Company to a Director for services on the Board.
(r) "Stock" means the common stock of the Company, par value $.10
per share.
(s) "Unforeseeable Emergency" means a severe financial hardship to
the Director resulting from a sudden and unexpected illness or accident of the
Director, loss of the Director's property due to casualty, or other similar
extraordinary unforeseeable circumstances arising as a result of events beyond
the control of the Director. The circumstances that will constitute an
"Unforeseeable Emergency" would depend on the facts of each case, but, in any
case, payment may not be made in the event that such hardship is or may be
relieved:
(1) through reimbursement or compensation by insurance or
otherwise, or
(2) by liquidation of the Director's assets, to the extent that
liquidation of such assets would not itself cause severe financial hardship.
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SECTION 3. Eligibility. Individuals eligible to participate in the
Plan shall be limited solely to the Directors of the Company.
SECTION 4. Administration. (a) The Plan shall be administered by
the Board. The Board has complete fiduciary discretion and authority to
construe and interpret the Plan; promulgate. amend and rescind rules and
regulations relating to the implementation, administration and maintenance of
the Plan; decide all questions of eligibility and benefits (including
underlying factual determinations); and adjudicate all claims and appeals. The
Board may designate persons other than members of the Board to carry out the
day-to-day ministerial administration of the Plan under such conditions and
limitations as it may prescribe; provided, however, the Board shall not
delegate its authority to the extent that actual Board action may be required
under Section 16 of the Securities Exchange Act of 1934 or other applicable
law. Any action by the Board in connection with the construction,
interpretation, administration, implementation or maintenance of the Plan shall
be final, conclusive and binding upon all Directors and any person(s) claiming
under or through any Directors.
(b) The Company will indemnify and hold harmless the Board and
each member thereof against any cost or expense (including, without limitation,
attorney's fees) or liability (including, without limitation, any sum paid in
settlement of a claim with the approval of the Company) arising out of any act
in connection with administration of the Plan, or omission to so act, except in
the case of willful gross misconduct or gross negligence.
SECTION 5. Annual Deferred Share Unit Grants. 500 Deferred Share
Units shall be credited by the Company to each Director as of May 29, 1997.
Beginning with the year 1998 and each year thereafter, each Director will
receive a grant of 500 Deferred Share Units, credited as of the last day of the
Stock's active trading in the month of January of the respective Plan Year. The
awards will be credited to the Director's Deferred Share Unit Account.
SECTION 6. Payment of Deferral Accounts. The balance in the Deferral
Accounts shall be paid to a Director, or, in the case of any Director's death
prior to retirement from the Board, the Director's designated Beneficiary(ies),
in stock (or, with Board approval, in cash) in either a) one (1) lump sum or,
b) over a period of two (2) to ten (10) years commencing as soon as it is
administratively feasible the month after the Director's retirement, death or
disability pursuant to the Director's advanced written election received at
least twenty four (24) months prior to said retirement, death or disability.
Such election of distribution method shall be made at the time of deferral and
may be changed at any time with Board approval prior to the Director's.
retirement, death or disability as long as it is made at least twenty four (24)
months prior to the Director's retirement, death or disability.
SECTION 7. Participation: Elective Deferrals. (a) To elect to
participate in the Plan for a particular Plan Year, a Director must execute a
Deferred Compensation Election Form and file such form with the Board (or its
designee) before the commencement of such Plan Year. To participate in the
Plan during the year in which the Plan is first implemented, the Director must
make an election to defer Compensation for services to be performed subsequent
to the election within 30 days after the effective date of the Plan. To
participate in the Plan during the first year in which a Director becomes
eligible to participate in the Plan, the new Director must make an
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<PAGE> 5
election to defer Compensation for services to be performed subsequent to the
election within 30 days after the date the new Director becomes eligible. Such
election shall:
(i) contain a statement that the Director elects to defer
a portion of the Director's Compensation (up to 100% thereof, in
increments of 25%) for a specified Plan Year that becomes payable to
the Director after the filing of such election;
(ii) apply only to the Compensation otherwise payable to
the Director during the Plan Year for which such election is made; and
(iii) be irrevocable with respect to the Plan Year to which
it applies. The Director may elect to have the Deferred Compensation
credited to the Deferred Share Unit Account, the Deferred Cash Account
or any combination thereof. Any such investment election shall be
irrevocable for the Deferred Compensation or other contribution to
which it relates. Upon receipt of a Director's Deferred Compensation
Election Form, the Company shall establish as an accounting entry an
individual Deferral Account for such Director and such Director shall
become a participant under the Plan.
SECTION 8. Deferred Share Unit Account; Matching Contributions. (a)
"Deferred Share Unit" - Upon initial participation in the Plan, a "Deferred
Share Unit Account" shall be established in the Director's name. Deferred Share
Units and fractions thereof shall be credited to such Deferred Share Unit
Account in an amount determined by dividing the amount of Compensation to be
deferred into such account by the Fair Market Value on the Date of Crediting.
Upon the occurrence of any stock split, stock dividend, combination or
reclassification with respect to any outstanding series or class of stock, or
consolidation, merger or sale of all or substantially all of the assets of the
Company, the number of Deferred Share Units in each Deferred Share Unit Account
shall, to the extent deemed appropriate by the Board, be adjusted accordingly.
(b) "Company Matching Contributions" -- Upon a deferral of
Deferred Compensation into the Deferred Share Unit Account (but not the
Deferred Cash Account) and the associated crediting of Deferred Share Units,
the Company shall credit each such Deferred Share Unit Account, as of the same
Date of Crediting, with an additional number of Deferred Share Units equal to
25% of the number of Deferred Share Units credited by virtue of such Deferred
Compensation. Such additionally credited Deferred Share Units, and all dividend
equivalents associated therewith, are hereinafter referred to as "Company
Matching Deferrals". No Company Matching Contributions shall be made with
respect to the Annual Deferred Share Unit grant described in Section 5.
(c) "Dividend Equivalents" -- To the extent dividends on any
outstanding Stock are paid, dividend equivalents and fractions thereof shall be
calculated with respect to balances of such Deferred Share Units in any
Deferred Share Unit Account, converted to additional equivalents of such Stock
and credited to the appropriate Deferred Share Unit Account as of the dividend
payment dates. The number of Deferred Share Units to be credited as of each
such date shall be determined by dividing the amount of the dividend equivalent
by the Fair Market Value on the dividend payment date. The Director's Deferred
Share Unit Account shall continue to earn such dividend equivalents until fully
distributed.
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SECTION 9. Deferred Cash Account. (a) "Interest Equivalents" -- Upon
approval of a deferral under the variable interest option, a "Deferred Cash
Account" shall be established in the Director's name. The amount of
Compensation being deferred under this option will be credited to this account
as of the Date of Crediting. Interest equivalents on amounts deferred under
this option shall be calculated annually as of December 31 of each year. Such
equivalents shall be based on the prime rate, as established by a major New
York bank, in effect on the first business day of the year (and shall be
calculated, with respect to amounts credited prior to such year. for the entire
year, or with respect to amounts credited during such year, for the number of
days from the Date of Crediting). At distribution, interest equivalents shall
be similarly calculated on amounts in the Deferred Cash Account based on prime
rates from the preceding January 1, or, if later, the Date of Crediting,
through the date prior to the date of distribution, and added to the total to
be distributed. The crediting of interest equivalents to the Director's
Deferred Cash Account shall continue until the balance in such account is fully
distributed. Notwithstanding anything to the contrary in this Section 9(a),
all payments will be made in accordance with Section 6.
(b) "Time of Crediting" -- The interest equivalents calculated
each December 31 shall be credited to a Director's Deferred Cash Account as of
January 1 of the next year.
SECTION 10. Transfer of Liabilities of Retirement Plan for Directors.
Effective May 29, 1997, The Retirement Plan for Non-Employee Directors
("Retirement Plan") shall be terminated and Directors shall be credited with an
amount equal to the present value of retirement benefits accrued by them as of
that date under the Retirement Plan, with such present value to be determined
based on the assumptions that each Director will retire on his or her 70th
birthday or, if greater, at the age attained as of May 29, 1997. Amounts shall
be converted, as of May 29, 1997, into Deferred Share Units and credited on
that date to each Director's Deferred Share Unit Account. No Company Matching
Contributions shall be credited in connection with these amounts.
SECTION 11. Distribution in Cases of Hardship. The Board in its sole
discretion may make distributions to a Director from the balances in such
Director's Deferral Account upon a showing by such Director that an
Unforeseeable Emergency has occurred. Such distributions shall be limited to
the amount shown to be necessary to meet the Unforeseeable Emergency.
SECTION 12. Amendment. The Plan may be amended, modified or
terminated at any time, for any reason, without notice, by the Board except
that no such amendment, modification or termination shall have a material
adverse effect on the accrued balance of any Director's Deferral Account as of
the effective date of any such amendment, modification or termination (without
the consent of the Director (or, if the Director is deceased, his or her
beneficiary(ies))).
SECTION 13. Company's Obligations Unfunded. All benefits due a
Director or a Beneficiary under this Plan are unfunded and unsecured and are
payable solely out of the general funds of the Company. The Company, in its
sole and absolute discretion, may establish a "grantor trust" for the payment
of benefits and obligations hereunder, the assets of which shall be at all
times subject to the claims of creditors of the Company as provided for in such
trust, provided that such trust does not alter the characterization of the Plan
as an "unfunded plan" for purposes
5
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of the Internal Revenue Code. Such trust shall make distributions in
accordance with the terms of the Plan.
SECTION 14. Stock Subject to the Plan. Pursuant to the payment
option available under the Plan as specified in Section 6, the Company has the
right to reserve the appropriate number of shares as may be necessary to fund
distributions hereunder. The shares to be delivered under the Plan may consist
of authorized but unissued Stock or Stock reacquired by the Company, including
shares purchased in the open market.
SECTION 15. Restrictions on Alienation. No amount deferred or
credited to any account under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, levy
or charge. Any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber, levy or charge the same shall be void; nor shall any amount
be in any manner subject to any claims for the debts, contracts, liabilities,
engagements or torts of the Director (or the Director's beneficiary or personal
representative) entitled to such benefit. No Director shall be entitled to
borrow at any time any portion of the Director's account balances under the
Plan.
SECTION 16. Withholding. There shall be deducted from all payments
under the Plan the amount of any taxes required to be withheld by any Federal,
state or local taxing authority. The Directors, their beneficiaries and
personal representatives shall bear any and all Federal, foreign, state or
local income or any other tax imposed on amounts paid under the Plan.
SECTION 17. Directors Bound by Terms of the Plan. By electing to
become a Director, each Director shall be deemed conclusively to have accepted
and consented to all terms of the Plan and all actions or decisions made by the
Company with regard to the Plan. Such terms and consent shall also apply to
and be binding upon the beneficiaries, personal representatives and other
successors in interest of each Director. Each Director shall receive a copy of
the Plan.
SECTION 18. Designation of Beneficiary(ies). Each Director under the
Plan may designate a beneficiary or beneficiaries to receive any payment which
under the terms of the Plan becomes payable on, after or as a result of the
Director's death. At any time, and from time to time, any such designation may
be changed or canceled by the Director without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Board and shall not be effective until
received by the Board. If no beneficiary has been designated by a deceased
Director, the beneficiary shall be the Director's estate. If the Director
designates more than one beneficiary, any payments under the Plan to such
beneficiaries shall be made in equal allocations unless the Director has
expressly designated otherwise, in which case the payments shall be made in the
allocations designated by the Director.
SECTION 19. Severability of Provisions. In the event any provision
of the Plan would serve to invalidate the Plan, that provision shall be deemed
to be null and void, and the Plan shall be construed as if it did not contain
the particular provision that would make it invalid. The Plan shall be binding
upon and inure to the benefit of (a) the Company and its respective successors
and assigns, and (b) each Director, his or her designees and estate. Nothing
in the Plan shall preclude the Company from consolidating or merging into or
with, or transferring all or
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substantially all of its assets to, another corporation, or engaging in any
other corporate transaction.
SECTION 20. Governing Laws and Interpretation. The Plan shall be
construed and enforced in accordance with, and the rights of the parties hereto
shall be governed by, the laws of the State of Delaware. This Plan shall not
be interpreted as either an employment or trust agreement.
SECTION 21. ARBITRATION. Except as otherwise provided in this Plan,
any controversy between the parties arising out of this Plan shall be submitted
to the American Arbitration Association under its Commercial Arbitration Rules
for binding arbitration. The arbitration shall be held in Fort Smith, Arkansas
or such other location where the Company may have its corporate headquarters,
using a single arbitrator. The costs of the arbitration, including any
American Arbitration Association administration fee, the arbitrator's fee, and
costs for the use of facilities during the hearings, shall be borne equally by
the parties to the arbitration. Each side shall bear its own attorney fees.
The arbitrator shall not have any power to alter, amend, modify or change any
of the terms of this Plan nor to grant punitive, special, extracontractual or
consequential damages or any other remedy which is either prohibited by the
terms of this Plan, or not available in a court of law. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
SECTION 22. Effective Date of the Plan. The Plan shall be effective
as of May 29, 1997 upon its adoption by the Company and approval by the
stockholders of the Company.
IN WITNESS WHEREOF, the Plan is hereby adopted by the Company on this
____ day of _________________, 1997
BEVERLY ENTERPRISES, INC.
By:
-------------------------------
Title:
----------------------------
7
<PAGE> 1
EXHIBIT 5.1
OPINION OF JOHN W. MACKENZIE, ESQ.
<PAGE> 2
December 5, 1997
Beverly Enterprises, Inc.
5111 Rogers Avenue, Suite 40-A
Fort Smith, Arkansas 72919
Ladies and Gentlemen:
I am the Deputy General Counsel of Beverly Enterprises, Inc. (formerly
"New Beverly Holdings, Inc."), a Delaware corporation (the "Company"), and have
acted as counsel for the Company in connection with the proposed filing with
the Securities and Exchange Commission expected to be made on or about December
5, 1997 under the Securities Act of 1933, as amended, of a Registration
Statement on Form S-8 (the "Registration Statement") for the purpose of
registering (i) $1,000,000 of obligations which represent unsecured obligations
of the Company to pay deferred compensation in the future (the "Obligations")
in accordance with the terms of the Beverly Enterprises, Inc. Non-Employee
Director Deferred Compensation Plan for a select group of non-employee
directors (the "Plan") and (ii) an indeterminate number of shares of Common
Stock of the Company as may be issuable upon payment of the Obligations,
including such shares as may be issuable as a result of stock splits, stock
dividends or similar transactions. In such capacity, I have examined the
Certificate of Incorporation and By-Laws of the Company (as amended), the Plan,
and such other documents of the Company as I have deemed necessary or
appropriate for the purposes of the opinions expressed herein.
Based upon the foregoing, I advise you that, in my opinion, when
issued in accordance with the provisions of the Plan, (i) the Obligations will
be valid and binding obligations of the Company, enforceable in accordance with
their terms and (ii) the shares of Common Stock issuable under the Plan, when
delivered and paid for in accordance with the Plan, will be validly issued,
fully paid, and nonassessable. With respect to clause (i) of the preceding
sentence, the enforceability of the Obligations is limited by and subject to
(a) general principles of equity (regardless of whether considered and applied
in a proceeding in equity or at law) and (b) applicable bankruptcy, insolvency,
liquidation, moratorium, conservatorship, receivership, reorganization, or
similar laws (including without limitation statutory or other laws regarding
fraudulent transfers or conveyances or preferential transfers), and court
decisions of general application affecting the rights of creditors generally.
I am licensed to practice law in the Commonwealth of Kentucky. As I
am generally familiar with the Delaware General Corporation Law, however, I did
not consider obtaining special Delaware counsel to be necessary to render the
opinions expressed herein. Accordingly, this opinion letter is based on my
general knowledge and experience and not based on the advice or opinion of
counsel licensed to practice law in the State of Delaware. This opinion letter
is
<PAGE> 3
limited to the effect of the Delaware General Corporation Law and present
federal laws of the United States.
This opinion letter and the matters addressed in this letter are as of
the date of this letter. I hereby disclaim any obligation to advise you of any
change in any matter set forth in this letter occurring after such date. This
opinion letter is limited to the matters stated in this letter and no opinion
is implied or may be inferred beyond the opinions expressly stated herein.
This opinion letter is solely for your benefit and no other person may
rely upon the opinions expressed herein. Without my prior written consent,
this letter may not be quoted in whole or in part or otherwise referred to in
any document and may not be furnished to any other person. I hereby consent to
the inclusion of this letter as an exhibit to the Registration Statement.
Very truly yours,
John W. MacKenzie
Deputy General Counsel and
Assistant Secretary
2
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EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP
<PAGE> 2
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-________) pertaining to the Beverly Enterprises,
Inc. Non-Employee Director Deferred Compensation Plan of our report dated
February 7, 1997, except for Note 2, paragraph 3, as to which the date is March
13, 1997, with respect to the consolidated financial statements and schedule of
Beverly Enterprises, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange Commission
and to the incorporation by reference of our report dated April 18, 1997, with
respect to the consolidated financial statements and schedule of Pharmacy
Corporation of America and to the incorporation by reference of our report
dated June 2, 1997, with respect to the balance sheet of New Beverly Holdings,
Inc.
ERNST & YOUNG LLP
December 1, 1997
Little Rock, Arkansas
