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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BEVERLY ENTERPRISES, INC.
(FORMERLY NEW BEVERLY HOLDINGS, INC.)
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<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)
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BEVERLY ENTERPRISES, INC.
EXECUTIVE 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)
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(501) 452-6712
(Telephone Number, Including Area Code, of Agent For Service)
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BEVERLY ENTERPRISES, $14,000,000 100% $14,000,000 $4,130
INC. EXECUTIVE
DEFERRED COMPENSATION
PLAN OBLIGATIONS (2)
- ---------------------------------------------------------------------------------------------------------------------
BEVERLY ENTERPRISES, (3) -- -- NONE
INC. COMMON STOCK, PAR
VALUE $.10 PER SHARE
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(o).
(2) The Beverly Enterprises, Inc. Executive 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. Executive 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.
Executive 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 $14,000,000 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 ("Common
Stock"), issuable in satisfaction of the Obligations in accordance with the
terms of the Registrant's Executive Deferred Compensation Plan (the "Plan").
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information required 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.
$14,000,000 of Plan Obligations are being registered under this
Registration Statement to be offered to certain eligible employees of the
Registrant pursuant to the Plan. The Obligations are general unsecured
obligations of the Registrant to pay deferred compensation in the future 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
("Participant") in the Plan is determined in accordance with the Plan based
upon elections by each Participant. Obligations will consist of an amount
equal to each Participant's deferral account under the Plan, consisting of
deferred salary (up to 25% per year) and bonus amounts (up to 100% per year)
and any appreciation or depreciation in value thereon. In addition, the
Registrant shall generally, as of the first day of any month in which the
Participant is employed and during the preceding month had deferred salary or
bonus amounts, credit matching contributions to a matching contributions
account in an amount equal to 25% of the first 6% of salary and bonus actually
deferred in the preceding month under the Plan by the Participant. The
Registrant may also, in its sole discretion, credit supplemental matching
contributions to a supplemental contributions account in such amounts as the
Registrant shall determine in its sole discretion.
The vested accrued balances in a Participant's Account under the Plan
shall be paid in shares of Common Stock in one lump sum commencing as soon as
administratively feasible after the month in which termination of Participant's
employment occurs. If a Participant's employment ends due to the Participant's
retirement, however, payment will be made or commence within the first 15 days
of the following calendar year, in the form of either (i) a single lump sum of
shares of Common Stock, or (ii) in annual installments, up to 15 years, of
shares of Common Stock, pursuant to a Participant's advance written election
received at least 24 months prior to such Participant's retirement. With the
consent of the Committee, those Participants who elect to receive their
interest in installments may receive payment in cash. Furthermore, to the
extent a Participant maintained a balance in the Plan as of the closing date of
the Transaction as described in the proxy statement issued by Beverly
Enterprises, Inc. dated October 20, 1997, payment of his Accounts will also be
partially in the form of shares of Common Stock, par value $.01 per share, of
Capstone Pharmacy Services, Inc., a Delaware corporation.
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
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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 Plan Account 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 so-called "rabbi 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 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 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.
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ITEM 8. EXHIBITS.
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<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
4.1 Beverly Enterprises, Inc. Executive 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 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
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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
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<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>
/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>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
4.1 Beverly Enterprises, Inc. Executive 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>
<PAGE> 1
EXHIBIT 4.1
BEVERLY ENTERPRISES, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 2
Beverly Enterprises, Inc.
Executive Deferred Compensation Plan
Effective January 1, 1997
* * * * *
Section 1. Purpose. The purpose of the Plan is for the Company to
provide certain select executives of the Company with an opportunity to defer
receipt of compensation for services rendered to the Company. It is intended
that the Plan shall aid the Company in retaining and attracting employees
whose abilities, experience and judgment can contribute to the continued
progress of the Company. The Plan is intended to be a so-called "top hat plan"
under ERISA, i.e., an unfunded plan of deferred compensation for the benefit of
a select group of highly compensated or management employees. The Plan is also
a nonqualified deferred compensation arrangement under Internal Revenue Code
Section 3121(v).
Section 2. Definitions.
(a) "Account(s)" means the Deferral Account, the Supplemental
Contributions Account and/or the Matching Contributions Account, as the context
requires.
(b) "Bonus" means any special and/or discretionary cash
compensation amounts in excess of Salary, determined by the Company to be
payable to a Participant with respect to services rendered.
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(c) A "Change of Control" shall be deemed to have taken place if:
(i) any person, corporation, or other entity or group, including any "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, other than
any employee benefit plan then maintained by the Company, becomes the
beneficial owner of shares of the Company having 30 percent or more of the
total number of votes that may be cast for the election of Directors of the
Company; (ii) as the result of, or in connection with, any contested election
for the Board of Directors of the Company, or any tender or exchange offer,
merger or other business combination or sale of assets, or any combination of
the foregoing (a "Transaction"), the persons who were Directors of the Company
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company or its assets, or
(iii) at any time (a) the Company shall consolidate or merge with any other
Person and the Company shall not be the continuing or surviving corporation,
(b) any Person shall consolidate or merge with the Company, and the Company
shall be the continuing or surviving corporation and in connection therewith,
all or part of the outstanding Company stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other
property, (c) the Company shall be a party to a statutory share exchange with
any other Person after which the Company is a subsidiary of any other Person,
or (d) the Company shall sell or otherwise transfer fifty percent (50%) or more
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) to any Person or Persons.
(d) "Committee" means the Compensation Committee of the Company's
Board of Directors.
(e) "Company"' means Beverly Enterprises, Inc.
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(f) "Continuous Service" means a Participant's uninterrupted
services with the Company or any affiliate. Service shall not be deemed
interrupted by a leave of absence authorized by the Committee, an absence due
to mandatory military service or an absence due to disability while the
Participant is receiving benefits under any short-term or long-term disability
plan or arrangement maintained or sponsored by the Company.
(g) "Deferred Compensation" means the sum of Salary and Bonus that
are the subject of an elective deferral under Section 5.
(h) "Deferred Compensation Plan" means the Beverly Enterprises,
Inc. Deferred Compensation Plan that was amended and restated effective July
17, 1991.
(i) "Deferral Account" means the bookkeeping account established
for a Participant under the Plan and to which Deferred Compensation amounts
with respect to such Participant are credited from time to time, as adjusted
from time to time as provided in the Plan.
(j) "Deferred Compensation Election Form" means the form pursuant
to which Eligible Executives elect to become Participants in the Plan and defer
compensation thereunder, in such form as the Committee determines from time to
time in its sole discretion.
(k) "Disability" means total and permanent mental or physical
disability as determined by the Committee in its sole discretion in accordance
with standards and procedures similar to those under the Company's broad-based
regular long-term disability plan, if any. At any time that the Company does
not maintain such a long-term disability plan, Disability shall mean the
inability of a Participant, as determined by the Committee in its sole
discretion, substantially to perform such Participant'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.
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(l) "Eligible Executive" means any employee of the Company who is
selected for participation by the Committee.
(m) "Matching Contributions Account" means the bookkeeping account
established for a Participant under the Plan and to which the Company's
matching contributions under Section 5(b) of the Plan are credited from time to
time, as adjusted from time to time under the Plan.
(n) "Participant" means an Eligible Executive who has elected to
defer Salary and/or Bonus amounts pursuant to the Plan.
(o) "Person" shall have the meaning ascribed to such term in
section 3(a)(9) of the Securities Exchange Act of 1934 and used in Sections
13(d) and 14(d) thereof, including a "group" as defined in Section 13(d).
(p) "Plan" means the Beverly Enterprises, Inc. Executive Deferred
Compensation Plan, as set forth herein and as amended from time to time.
(q) "Plan Year"' means the calendar year.
(r) "Retirement" means attainment of sixty (60) years of age and
termination of employment.
(s) "Rollover Account" means the bookkeeping account established
for a Participant under the Plan and to which the Deferred Compensation Plan
balance is credited under Section 12.
(t) "Salary"' means the regular base compensation paid by the
Company to an employee (without regard to any reduction thereof pursuant to the
Plan or any other elective salary deferral arrangement under any other plan
(e.g., Pre-Tax Premium Plan, Dependent Care Assistance Plan, Health Care
Spending Account) maintained by the Company), exclusive of Bonus payments and
any other incentive payments made by the Company to such employee.
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(u) "Supplemental Contributions Account" means the bookkeeping
account established for the Participant under the Plan and to which the
Company's supplemental contributions under Section 5(c) of the Plan are
credited from time to time, as adjusted from time to time under the Plan.
(v) "Unforeseeable Emergency" means a severe financial hardship to
the Participant resulting from a sudden and unexpected illness or accident of
the Participant or a dependent of the Participant, loss of the Participant's
property due to casualty, or other similar extraordinary unforeseeable
circumstances arising as a result of events beyond the control of the
Participant. 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,
(2) by liquidation of the Participant's assets, to the
extent that liquidation of such assets would not
itself cause severe financial hardship, or
(3) by cessation of Deferred Compensation under the Plan
(or cessation of elective deferrals under any other
Company Retirement or Savings Plan). The need to
send a Participant's child to college or the desire
to purchase a home shall not be an Unforesseable
Emergency.
Section 3. Eligibility. Individuals eligible to
participate in the Plan shall consist of the Eligible Executives of the
Company, as determined from time to time by the Committee. The Committee may
terminate an individual's designation as an Eligible Executive at any time.
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Section 4. Administration.
(a) The Plan shall be administered by the Committee. The
Committee 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 Committee may
designate persons other than members of the Committee to carry out the
day-to-day ministerial administration of the Plan under such conditions and
limitations as it may prescribe; provided, however, that the Committee shall
not delegate its authority with regard to the determination of Eligible
Employees. The Committee's determinations under the Plan need not be uniform
and may be made selectively among Participants, whether or not such
Participants are similarly situated. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration, implementation or maintenance of the Plan shall be final,
conclusive and binding upon all Participants and any person(s) claiming under
or through any Participants.
(b) The Company will indemnify and hold harmless the Committee 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
or omission to act, except in the case of willful misconduct or gross
negligence.
Section 5. Participation; Elective Deferrals: Matching
Contributions.
(a) To elect to participate in the Plan for a particular Plan
Year, an Eligible Executive must execute a Deferred Compensation Election Form
and file such form with the Committee (or its designee) before the Commencement
of such Plan Year. To participate in the Plan during the
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year in which the Plan is first implemented, the Eligible Executive must make
an election to defer Salary compensation for services to be performed
subsequent to the election and/or to defer Bonus compensation, in each case,
within 30 days after the effective date of the Plan. To participate in the
Plan during the first year in which an individual becomes eligible to
participate in the Plan, the new Eligible Executive must make an election to
defer Salary compensation for services to be performed subsequent to the
election and/or to defer Bonus compensation, in each case, within 30 days after
the date the new Eligible Executive becomes eligible. Such election shall:
(i) contain a statement that the Eligible Executive
elects to defer a portion of the Eligible Executive's Salary (up to
25% thereof, in increments of 1% or in fixed dollar amounts per pay
period) and/or Bonus (up to 100% thereof, in increments of 1% or a
fixed dollar amount) for a specified Plan Year that becomes payable to
the Eligible Executive after the filing of such election;
(ii) apply only to the Salary otherwise payable to the
Eligible Executive during the Plan Year for which such election is
made and to any Bonus payment that is attributable to the Eligible
Executive's services rendered to the Company during the Plan Year for
which such election is made (whether or not actually payable in such
Plan Year); and
(iii) be irrevocable with respect to the Plan Year to which
it applies. Upon receipt of an Eligible Executive's deferral
election, the Company shall establish as an accounting entry an
individual Deferral Account for such Eligible Executive and such
Eligible Executive shall become a Participant under the Plan.
Thereafter, the Company shall credit the Executive's Deferral Account
with all Deferred Compensation which would
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otherwise have been payable to the Eligible Executive in the absence
of an election under the Plan. The Deferral Account shall be credited
monthly in an amount equal to the sum of the Deferred Compensation
that would otherwise have been paid by the Company in accordance with
the Company's normal payroll practices for the immediately preceding
month as soon as is administratively feasible.
(b) the Company shall, if on the first day of any such month the
Participant is employed by the Company, credit matching contributions to the
Participant's Matching Contributions Account in an amount equal to 25% of the
first 6% of Salary and Bonus actually deferred under the Plan by the
Participant in respect to the preceding month as soon as is administratively
feasible.
(c) From time to time, the Company may, in its sole discretion,
credit supplemental contributions to the Participant's Supplemental and
Matching Contributions Account in such amounts as the Company shall determine
in its sole discretion.
Section 6. Payment of Deferred Compensation. The vested accrued
balances in a Participant's Accounts shall be paid to a Participant, or, in the
case of any Participant's death prior to payment, the Participant's designated
beneficiary(ies), in stock in one lump sum commencing as soon as it is
administratively feasible after the month in which the termination of the
Participant's employment occurs. However, if employment ends due to the
Participant's Retirement, then payment will be made or commence within the
first fifteen (15) days of the following calendar year, in the form of either a
single lump sum of company stock or in annual installments of company stock or
with the Committee's consent in cash, up to fifteen (15) years, pursuant to the
participant's advance written election received at least twenty four (24)
months prior to said Retirement. Such election of distribution method shall be
made at the time of deferral and may be
8
<PAGE> 10
changed at any time prior to the Participant's Retirement as long as it is made
at least twenty four (24) months prior to the Participant's Retirement.
Section 7. Investment of Account Balances. During and for each
Plan Year, the accrued balances in each Deferral Account, Supplemental
Contributions Account and Matching Contributions Account will be deemed to be
invested, as soon as is administratively feasible during the month following
the month in which elective deferrals, supplemental contributions and matching
contributions are credited to their respective Accounts under the Plan, in the
Company's Common stock, including dividends. At the end of each Plan Year, the
Accounts shall be adjusted and increased or decreased by the results of such
deemed investment for such Plan Year pursuant to Section 8. If a Participant
elects to defer the distribution of his or her Account balance under the Plan
pursuant the installment distribution election, the undistributed vested
portion of the Participant's Account will continue to be credited with
investment gains or losses as described under this Section 7 unless the
Participant elects to have the undistributed vested Account balances deemed
invested at a fixed rate of interest as determined by the Committee. Such an
investment election must be made in the same manner, and subject to the same
restrictions, as the Participants Distribution Election described in Section 6.
Section 8. Valuation. At the end of each Plan Year, the vested
and unvested balances in the Deferral Account, Supplemental Contributions
Account and the Matching Contributions Account of each Participant shall be
determined by the Company, taking into account any increase or decrease therein
for such Plan Year under Section 7, including dividends. The balance
determined, as of the end of each Plan Year, shall be communicated in writing
to each Participant as soon as practicable after the end of the Plan Year. In
the case of any termination under Section 6 above, the vested and unvested
balances in the Deferral Account, Supplemental Contributions Account and the
Matching Contributions Account of any affected Participant shall be determined
by the Company as of the date of any such termination.
9
<PAGE> 11
Section 9. Distribution In Cases of Hardship. The Committee may
make distributions to a Participant from the vested balances in such
Participant's Deferral Account, Supplemental Contributions Account or Matching
Contributions Account upon a showing by such Participant that an Unforeseeable
Emergency has occurred. Such distributions shall be limited to the amount
shown to be necessary to meet the Unforeseeable Emergency.
Section 10. Vesting. Notwithstanding anything contained herein
to the contrary, a Participant's accrued balance in such Participant's Deferral
Account (and the amounts payable with respect thereto) shall be fully vested at
all times. A Participant's accrued balance in such Participant's Matching
Contributions Account (and the amounts payable with respect thereto) and in
such Participant's Supplemental Contributions Account (and the amounts payable
with respect thereto) shall, in each case, become 100% vested after a
Participant completes five years of continuous service with the Company.
Notwithstanding the immediately preceding sentence, if (a) the Participant
dies, (b) the Participant's employment with the Company is terminated due to
Disability or (c) a Change of Control occurs, such Participant's accrued
balance in the Matching Contributions Account and Supplemental Contributions
Account shall be fully vested as of the date of death, the date of such
termination or the date of any such Change of Control, as the case may be.
Section 11. Forfeiture. If a Participant's employment with the
Company is terminated for any reason (other than death) prior to such
Participant's vesting under Section 10, such unvested Participant's accrued
balance in such Participant's Matching Contributions Accounts (and the amounts
payable with respect thereto) and in such Participant's Supplemental
Contributions Account
10
<PAGE> 12
(and the amounts payable with respect thereto) shall, in each case, be
forfeited by such Participant.
Section 12. Roll Over of Deferred Compensation Plan Balances.
Those Participants in this Plan who also have balances in the Deferred
Compensation Plan can elect to have the value of their Deferred Compensation
Plan credited to this Plan at any time. The amount credited will not be
eligible for the Matching Contributions under section 5 (b). The balance of
the Participant's Deferred Compensation Plan will be credited to the
Participants Rollover Account as soon as is administratively feasible during
the month following the month in which the election to roll over the balance is
made, at the same time as other contributions are credited pursuant to Section
7.
Section 13. Amendment. The Plan may be amended, modified or
terminated at any time, for any reason, without notice, by the Committee except
that no such amendment, modification or termination shall have a material
adverse effect on the vested accrued balance of any Participant's Deferral
Account, Supplemental Contributions Account and/or Matching Contributions
Account as of the effective date of any such amendment, modification or
termination (without the consent of the Participant (or, if the Participant is
dead, his or her beneficiary(ies))).
Section 14. Participant's Right Unsecured: No Duty to Invest.
The right of a Participant to receive any distribution hereunder shall be an
unsecured claim against the general assets of the Company. No Company assets
shall in any way be subject to any prior claim by any Participant. The Company
shall have no duty whatsoever to set aside or invest any amounts credited to
any Deferral Account, Supplemental Contributions Account or Matching
11
<PAGE> 13
Contributions Account established under the Plan. Nothing in the Plan shall
confer upon any employee of the Company any right to continued employment with
the Company, nor shall it interfere in any way with the right of the Company to
terminate the employment of any employee at any time for any reason. A
Participant shall have no right, title, or interest whatsoever in or to any
specific assets of the Company, nor any investments, if any, which the Company
may make to aid it in meeting its obligations hereunder. Nothing contained in
this Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship, between
the Company and any Participant or any other person. The Company will maintain
a "rabbi" trust agreement to provide for a source of funds out of which all or
any portion of the benefits under the Plan may be satisfied.
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
in any manner be subject to any claims for the debts, contracts, liabilities,
engagements or torts of the Participant (or the Participant's beneficiary or
personal representative) entitled to such benefit. No Participant shall be
entitled to borrow at any time any portion of the Participant'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 Participants, 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.
12
<PAGE> 14
Employment taxes on amounts allocated to Participant's Accounts will be
withheld when services are rendered or later, when such amounts vest.
Section 17. Participants Bound by Terms of the Plan. By electing
to become a Participant, each Eligible Executive 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 Participant. Each
Participant shall receive a copy of the Plan.
Section 18. Designation of Beneficiary(ies). Each Participant
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 Participant's death. At any time, and from time to time, any
such designation may be changed or canceled by the Participant without the
consent of any such beneficiary. Any such designation, change or cancellation
must be on a form provided for that purpose by the Committee and shall not be
effective until received by the Committee. If no beneficiary has been
designated by a deceased Participant, the beneficiary shall be the
Participant's estate. If the Participant designates more than one beneficiary,
any payments under the Plan to such beneficiaries shall be made in equal shares
unless the Participant has expressly designated otherwise, in which case the
payments shall be made in the shares designated by the Participant.
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
13
<PAGE> 15
and assigns, and (b) each Participant, 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 substantially all of its assets to,
another corporation, or engaging in any other corporate transaction.
Section 20. Governing Law 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. Other Company Benefit and Compensation Programs.
Payments and other benefits received by a Participant under the Plan shall not
be deemed a part of a Participant's compensation for purposes of the
determination of benefits under any other employee benefit plans or
arrangements, if any, provided by the Company or any affiliate of the Company.
The existence of the Plan notwithstanding, the Company may adopt such other
compensation plans or programs and additional compensation arrangements as it
deems necessary to attract, retain and motivate employees. The Committee is
authorized to cause to be established a trust agreement or several trust
agreements or similar arrangements from which the Committee may make payments
of amounts due or to become due to any Participants under the Plan.
Section 22. 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
14
<PAGE> 16
during the hearings, shall be borne equally by the parties to the arbitration.
Each side shall bear its own attorney's 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, on 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 23. Effective Date of the Plan. The Plan shall be
effective as of January 1, 1997 upon its adoption by the Company.
IN WITNESS WHEREOF, the Plan is hereby adopted by the Company on this
12th day of December, 1996.
Beverly Enterprises, Inc.
By:
----------------------------------
Title:
-------------------------------
15
<PAGE> 17
EXCERPTS FROM THE MINUTES OF BEVERLY ENTERPRISES, INC.
COMPENSATION COMMITTEE MEETING
HELD ON THE ______ DAY OF NOVEMBER, 1997
At a meeting of the Compensation Committee of the Board of Directors
("Committee") of Beverly Enterprises, Inc., a Delaware corporation,
(hereinafter referred to as the "Corporation"), held on the _____ day of
November, 1997, the following resolutions were unanimously adopted:
WHEREAS, the Corporation's healthcare business is to be transferred to
a wholly-owned subsidiary of the Corporation, New Beverly Holdings, Inc.
("NBHI"), which will then be spun-off to the shareholders of the Corporation,
all pursuant to the Agreement and Plan of Distribution by and between the
Corporation, NBHI and Capstone Pharmacy Services, Inc. ("Capstone") dated as of
April 15, 1997; and
WHEREAS, immediately following such spin-off, the Corporation will
merge with and into Capstone, with Capstone as the surviving corporation, all
pursuant to the Distribution Agreement and Plan of Merger by and between the
Corporation and Capstone dated as of April 15, 1997 (all the aforementioned
transactions to be referred to herein collectively as the "Transaction"); and
WHEREAS, the Corporation is the sponsor of the Beverly Enterprises,
Inc. Executive Deferred Compensation Plan effective January 1, 1997 (the
"Plan");
WHEREAS, the Corporation desires, in light of the Transaction, to
amend the Plan to reflect adjustments to the deemed investment credits under
Section 7 of the Plan; and
WHEREAS, Section 13 of the Plan provides that it may be amended,
modified or terminated at any time by the Committee;
NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended as
follows, effective as of the closing date of the Transaction:
1. Section 2(e) of the Plan is amended to read as follows:
"Company" means Beverly Enterprises, Inc. prior to the date
of the Transaction, and shall mean New Beverly Holdings,
Inc. (which shall be changing its name to Beverly
Enterprises, Inc.) subsequent to said date.
2. The Plan is amended by adding a new Section 2(w) to read as
follows:
"Transaction" means, collectively, those transactions which
are described in the Agreement and Plan of Distribution by
and between the Corporation, New Beverly Holdings, Inc. and
Capstone Pharmacy Services, Inc., dated as of April 15,
1997, and the Agreement and Plan of Merger by and between
the Corporation and Capstone Pharmacy Services, Inc. dated
as of April 15, 1997.
<PAGE> 18
3. The Plan is amended to add a new Section 2(x) to read as follows:
"Capstone Stock" means the common stock, par value $0.01 per
share, of Capstone Pharmacy Services, Inc., a Delaware
corporation, (which is changing its name to PhaRmerica
Corporation).
4. Section 6 of the Plan is amended by adding the following
sentence at the end thereof:
Notwithstanding the foregoing, that portion of a
Participant's account balance which is deemed invested in
Capstone Stock will be payable pursuant to the terms of this
Section 6 in either cash or Capstone Stock, within the
complete discretion of the Committee.
5. Section 7 of the Plan is amended by adding the following new
paragraphs as follows:
Notwithstanding the foregoing, as of the date of the
Transaction, the balances of each Participant's Deferral
Account, Rollover Account, Supplemental Contributions
Account and Matching Account shall be deemed invested in
shares of New Beverly Holdings, Inc. ("NBHI") and Capstone
Pharmacy Services, Inc. ("Capstone") common stock in the
ratio of .44 shares of Capstone common stock and one (1)
share of NBHI common stock for each share of Company Common
Stock in which said Accounts were previously deemed invested
under this Section 7. Such adjusted Account balances shall
be further adjusted based upon the fluctuations in value of
NBHI and Capstone Stock until distributed to the Participant
pursuant to the terms of the Plan.
Subsequent to the date of the Transaction, all further
additions to a Participant's Deferral Account, Supplemental
Contributions Account, Rollover Account, and Matching
Account shall be deemed invested solely in shares of NBHI
common stock, in accordance with the terms of this Section
7. Therefore, at the end of each Plan Year, each
Participant's total account value shall be the sum of (i)
the value of each of his accounts as of the date of the
Transaction, as adjusted for the performance of NBHI and
Capstone common stock, plus (ii) the value of all
contributions made subsequent to the date of the
Transaction, as adjusted for the change in the value of NBHI
common stock.
* * * * * * * *
2
<PAGE> 19
I, Robert W. Pommerville, Executive Vice President, General Counsel
and Secretary, hereby certify that the foregoing is a true and exact copy of
the Resolutions adopted by the Compensation Committee of the Board of Directors
of the Corporation at a meeting of the said Committee held on the _____ day of
November, 1997, and entered upon the regular Minute Book of said Corporation
and is now in full force and effect. I further certify that the Compensation
Committee of the Corporation at the time of adoption of said Resolution had
full powers and lawful authority to adopt said Resolutions.
ATTEST: (SEAL) BEVERLY ENTERPRISES, INC.
By:
- --------------------------------- -------------------------------
Secretary, Board of Directors
3
<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)
$14,000,000 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. Executive Deferred Compensation
Plan (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
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
<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.
Executive 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
