<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
BEVERLY ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 62-1691861
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>
ONE THOUSAND BEVERLY WAY
FORT SMITH, ARKANSAS 72919
(501) 201-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------
DOUGLAS J. BABB
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
ONE THOUSAND BEVERLY WAY
FORT SMITH, ARKANSAS 72919
(501) 201-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-------------------------
THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
GARY OLSON, ESQ.
LATHAM & WATKINS
633 WEST FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071
(213) 485-1234
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
as determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the Securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement from the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
from the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
-------------------------
(Continued on following page)
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CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(1) PER UNIT(2) PRICE(2)(3)(4) FEE(5)
-----------------------------------------------------------------------------------------------------------------------
Debt Securities(6)................. -- (9) -- --
Preferred Stock ($1 Par
Value)(7)........................ -- (9) -- --
Common Stock ($.10 Par Value)(8)... -- (9) -- --
Warrants........................... -- (9) -- --
Total.................... $300,000,000 (9) $300,000,000 $75,000
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</TABLE>
(1) Subject to Footnote (3), there are being registered hereby (i) an
indeterminate amount of Common Stock, Preferred Stock, Debt Securities and
Warrants issuable in primary offerings, (ii) an indeterminate amount of
Common Stock and Preferred Stock issuable upon conversion of Debt Securities
and Preferred Stock registered hereby, and (iii) an indeterminate amount of
Common Stock, Preferred Stock and Debt Securities issuable upon exercise of
Warrants registered hereby.
(2) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or composite currencies. The proposed maximum offering price per unit will
be determined from time to time by the registrant in connection with the
issuance of the securities registered hereby.
(3) Estimated solely for the purpose of calculating the registration fee. In no
event will the aggregate maximum offering price of all securities issued
under this registration statement exceed $300,000,000 or the equivalent
thereof in one or more foreign currencies or composite currencies or, if any
Debt Securities are issued with original issue discount, such greater amount
as shall result in proceeds of $300,000,000 to the registrant.
(4) With respect to Debt Securities, excluding accrued interest and accrued
amortization of discount, if any, to the date of delivery.
(5) The registration fee has been calculated in accordance with Rule 457(o) and
Section 6(b) of the Securities Act.
(6) Debt Securities may be issued in primary offerings and/or upon exercise of
Warrants registered hereby.
(7) Shares of Preferred Stock may be issued in primary offerings, upon
conversion of Debt Securities registered hereby, and/or upon exercise of
Warrants registered hereby.
(8) Shares of Common Stock may be issued in primary offerings, upon conversion
of Debt Securities and/or Preferred Stock registered hereby, and/or upon
exercise of Warrants registered hereby.
(9) Omitted pursuant to General Instruction II(D) of Form S-3 under the
Securities Act.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 2000
PROSPECTUS
$300,000,000
BEVERLY ENTERPRISES, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
-------------------------
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. This
means:
- we may issue the debt securities, preferred stock, common stock and
warrants covered by this prospectus in one or more classes or series from
time to time;
- we will provide a prospectus supplement each time we issue the
securities;
- the prospectus supplement will provide specific information about the
terms of that offering, including the price and amount of the securities,
and also may add, update or change information contained in this
prospectus.
Our common stock is listed and traded on the New York Stock Exchange under
the symbol "BEV."
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 4 OF THIS
PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved these securities or determined that this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
This prospectus is dated December , 2000.
<PAGE> 4
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF THE DATES ON THEIR COVERS. WHEN WE DELIVER THIS
PROSPECTUS OR A PROSPECTUS SUPPLEMENT OR MAKE A SALE PURSUANT TO THIS
PROSPECTUS, WE ARE NOT IMPLYING THAT THE INFORMATION IS CURRENT AS OF THE DATE
OF THE DELIVERY OR SALE.
TABLE OF CONTENTS
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PAGE
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Summary..................................................... 1
Where You Can Find More Information......................... 2
Incorporation Of Certain Documents By Reference............. 2
Disclosure Regarding Forward-Looking Statements............. 3
Risk Factors................................................ 4
Ratio Of Earnings To Fixed Charges.......................... 6
Use Of Proceeds............................................. 7
Description Of Debt Securities.............................. 7
Description Of Capital Stock................................ 15
Description Of Warrants..................................... 16
Plan Of Distribution........................................ 17
Legal Matters............................................... 18
Experts..................................................... 18
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SUMMARY
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission using a "shelf" registration
process. Under this shelf registration process, we may sell any combination of
securities described in this prospectus in one or more offerings up to an
aggregate initial offering price of $300,000,000. This prospectus provides you
with a general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described below under the heading "Where You Can Find More
Information."
BEVERLY ENTERPRISES
We are one of the largest operators of nursing facilities in the United
States. At October 31, 2000, we operated 537 nursing facilities with 60,063
licensed beds. These nursing facilities are located in 29 states and the
District of Columbia and range in capacity from 20 to 355 beds. At October 31,
2000, we also operated 35 assisted living centers containing 1,129 units, 178
outpatient therapy clinics and 58 home care centers.
We were incorporated in Delaware on April 15, 1997 as New Beverly Holdings,
Inc. We are the successor to the former Beverly Enterprises, Inc. as the result
of a reorganization completed in December 1997. Our principal executive office
is located at One Thousand Beverly Way, Fort Smith, Arkansas 72919, and our
telephone number is (501) 201-2000. Our web site is www.beverlynet.com. This
reference to our web site is not an active hyperlink and the information found
on our web site does not constitute a part of this prospectus. The terms "we"
and "our" are used in this document for purposes of convenience and are intended
to refer to Beverly Enterprises, Inc. and/or its subsidiaries, either
individually or collectively, as the context may require. We do not intend these
references to suggest that the various companies referred to are not independent
corporate entities having separate corporate identities and management.
THE SECURITIES WE MAY OFFER
We may offer up to $300,000,000 aggregate initial offering price of any of
the following securities: debt securities, preferred stock, common stock and
warrants. The prospectus supplement will describe the specific amounts, prices
and terms of these securities.
DEBT SECURITIES
We may offer senior or subordinated debt securities. The senior debt
securities and the subordinated debt securities are together referred to in this
prospectus as the "debt securities." The senior debt securities will have the
same rank as all of our other unsecured, unsubordinated debt. The subordinated
debt securities will be subordinate in right of payment to our senior
indebtedness. We are a holding company and conduct substantially all of our
operations through our subsidiaries. As a result, the debt securities will be
effectively subordinated to indebtedness and other liabilities of our
subsidiaries. The senior and subordinated debt securities will be issued under
separate indentures. We have summarized the general features of the debt
securities under "Description of Debt Securities." We encourage you to read the
indentures which are exhibits to our registration statement.
PREFERRED STOCK
We may issue preferred stock in one or more series and will determine the
dividend, voting and conversion rights, and other provisions at the time of
sale.
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COMMON STOCK
Common stock holders are entitled to receive dividends declared by our
board of directors, subject to the rights of preferred stock holders. Each
holder of common stock is entitled to one vote per share. The holders of common
stock have no preemptive rights or cumulative voting rights.
WARRANTS
We may issue warrants for the purchase of common stock, preferred stock or
debt securities. Warrants may be issued independently or together with any
securities offered by any prospectus supplement.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities and
Exchange Act of 1934 and file annual, quarterly and special reports, proxy
statements and other information with the Commission. You may read and copy any
reports, proxy statements and other information we file at the Commission's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Commission's regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Please call the Commission at 1-800-SEC-0300 for
further information on the public reference rooms. You may also access filed
documents at the Commission's web site at http://www.sec.gov. In addition, our
common stock is listed on the New York and Pacific Stock Exchanges and you may
inspect reports and other information we file at the offices of the New York and
Pacific Stock Exchanges.
We have filed a registration statement on Form S-3 and related exhibits
with the Commission under the Securities Act of 1933. The registration statement
contains additional information about us and the securities. You may inspect the
registration statement and exhibits without charge and obtain copies from the
Commission at prescribed rates at the locations set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
Commission will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the Commission:
- Annual Report on Form 10-K for the year ended December 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
- Quarterly Report on Form 10-Q for the quarter ended June 30, 2000;
- Quarterly Report on Form 10-Q for the quarter ended September 30, 2000;
- The description of our common stock contained in our registration
statement on Form 8-A filed with the Commission on October 15, 1997, and
any amendment or report filed for the purpose of updating such
description; and
- All documents filed by us with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
and before the termination of the offering.
2
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You may request a free copy of any of the documents incorporated by
reference in this prospectus (other than exhibits, unless they are specifically
incorporated by reference in the documents) by writing or telephoning us at the
following address:
Douglas J. Babb
Executive Vice President,
General Counsel and Secretary
Beverly Enterprises, Inc.
One Thousand Beverly Way
Forth Smith, Arkansas 72919
(501) 201-2000
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate by reference,
contains "forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Such statements are
indicated by words or phrases such as "anticipates," "estimates," "plans,"
"projects," "continuing," "ongoing," "expects," "management believes," "we
believe," "we intend" and similar words or phrases. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about us and our subsidiaries, including, among
other things, factors discussed in our filings with the Commission and the
following:
- national and local economic conditions, including their effect on the
availability and cost of labor and materials;
- the effect of government regulations, interpretation of regulations and
changes in regulations governing the healthcare industry;
- changes in Medicare and Medicaid payment levels and methodologies and the
application of such methodologies by the government and its fiscal
intermediaries;
- liabilities and other claims asserted against us, including patient care
liabilities, as well as the resolution of class action and derivative
lawsuits;
- the ability to predict future patient care liability costs;
- the ability to attract and retain qualified personnel;
- the availability and terms of capital to fund acquisitions and capital
improvements;
- the competitive environment in which we operate;
- the ability to maintain and increase census levels; and
- demographic changes.
Consequently, actual events and results may vary significantly from those
included in, or contemplated or implied by, such statements.
3
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RISK FACTORS
In addition to other information contained or incorporated by reference in
this prospectus or any prospectus supplement, including, but not limited to,
information under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in our Form 10-Ks and Form 10-Qs, you should
carefully consider the following risk factors before investing in our
securities.
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
We have a significant amount of indebtedness. At September 30, 2000, we had
approximately $779,641,000 of outstanding indebtedness and approximately
$630,633,000 of stockholders' equity. This outstanding indebtedness does not
include the amount we owe under a settlement agreement we entered into with the
Federal government in February 2000. Our substantial indebtedness could:
- require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures and other general corporate activities;
- limit our flexibility in planning for, or reacting to, changes in our
business and industry;
- place us at a competitive disadvantage compared to other less leveraged
competitors;
- increase our vulnerability to general adverse economic and industry
conditions; and
- limit our ability to pursue business opportunities that may be in our
interest.
If we add new indebtedness to our existing debt levels, it could increase
the related risks that we face.
OUR BUSINESS AND FINANCIAL RESULTS DEPEND ON OUR ABILITY TO GENERATE SUFFICIENT
CASH FLOWS TO SERVICE OUR INDEBTEDNESS OR REFINANCE OUR INDEBTEDNESS ON
COMMERCIALLY REASONABLE TERMS.
Our ability to make payments on and to refinance our indebtedness and to
fund planned expenditures depends on our ability to generate cash flow in the
future. This, to some extent, is subject to general economic, financial,
competitive, legislative and regulatory factors and other factors that are
beyond our control. In addition, our ability to borrow funds under our
$375,000,000 secured revolving credit facility, which expires on December 31,
2001, will depend on our satisfying various covenants. These covenants, among
other things:
- limit our ability and the ability of our subsidiaries to borrow and to
place liens on our assets or their assets;
- require us to comply with a coverage ratio test;
- require us to maintain a minimum consolidated net worth;
- limit our ability to merge with other parties or sell all or
substantially all of our assets; and
- limit our and our subsidiaries' ability to make investments.
We cannot assure you that our business will generate cash flows from
operations or that future borrowings will be available to us under our credit
facility in an amount sufficient to enable us to pay our indebtedness or to fund
our other liquidity needs. Our revolving credit facility terminates on December
31, 2001 and we will be required to renegotiate and extend or refinance this
facility in 2001. We cannot assure you that we will be able to refinance our
credit facility, or any other outstanding indebtedness, on commercially
reasonable terms or at all. Refinancing our credit facility could result in:
- an increase in the interest rate over the rate we currently pay;
- additional or more restrictive covenants than those outlined above; and
- our granting of a security interest in additional collateral.
4
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Our inability to generate sufficient cash flow to service our indebtedness
or refinance our indebtedness on commercially reasonable terms would have a
material adverse effect on our business and results of operations.
WE RELY ON REIMBURSEMENT FROM GOVERNMENTAL PROGRAMS FOR A MAJORITY OF OUR
REVENUES.
In 1999, we derived approximately 72% of our net operating revenues from
the Medicaid and Medicare programs. These programs are increasingly seeking to
control healthcare costs and to reduce or limit increases in reimbursement rates
for healthcare services. In the recent past, we have experienced a decrease in
Medicare revenues primarily attributable to declines in government reimbursement
as a result of the Balanced Budget Act of 1997. In 1999, our net operating
revenues decreased approximately $114,000,000 as compared to 1998 because of the
Balanced Budget Act of 1997. In December 1999, the Balanced Budget Refinement
Act of 1999, or BBRA 1999, became law. This legislation served to restore a
portion of the funding reductions created by the Balanced Budget Act of 1997.
Similarly, the Medicare, Medicaid and SCHIP Benefits Improvement and Protection
Act of 2000, or BBRA 2000, which was passed by Congress and became law in
December, 2000, will further restore the payment reductions resulting from the
Balanced Budget Act of 1997. For skilled nursing facilities, the payment
restoration would be in the form of add-ons and/or adjustments to the federal
portion of the rates paid under the Prospective Payment System, introduced as
part of the Balanced Budget Act of 1997.
Under the Prospective Payment System, as adjusted by BBRA 1999 and BBRA
2000, the specific payment rates for any individual patient can be determined
using the Resource Utilization Grouping-III system, or RUGS-III. However, we
cannot give any assurance as to what the actual impact of BBRA 1999 or BBRA 2000
will be on our consolidated financial position or results of operations because
of the difficulty in predicting our overall Medicare census and the number of
patients in each RUGS-III category.
Future federal budget legislation and federal and state regulatory changes,
including refinements to RUGS-III, may result in decreased revenues. If
third-party payors reduce or limit increases in reimbursement rates for
healthcare services, our revenues may decrease.
OUR INDUSTRY IS HEAVILY REGULATED BY THE GOVERNMENT, WHICH REQUIRES OUR
COMPLIANCE WITH A VARIETY OF LAWS.
The operation of our facilities and the services we provide are subject to
periodic inspection by governmental authorities to ensure compliance with
various standards established for continued licensure under state law and
certification for participation under the Medicare and Medicaid programs.
Additionally, in certain states, certificates of need or other similar approvals
are required for expansion of our operations. We could be adversely affected if
we cannot obtain these approvals, if the standards applicable to approvals or
the interpretation of those standards change, and by possible delays and
expenses associated with obtaining approvals. Our failure to obtain, retain or
renew any required regulatory approvals, licenses or certificates could prevent
us from being reimbursed for our services.
Our business is subject to extensive Federal and state regulation with
respect to financial relationships among healthcare providers and other fraud
and abuse issues. Penalties for violation of Federal and state laws and
regulations include exclusion from participation in the Medicare and Medicaid
programs, civil penalties and criminal penalties, any of which could have a
material adverse affect on our consolidated financial position, results of
operations and cash flows.
In February 2000, as part of the settlement of an investigation by the
Federal government into our allocation of certain costs to the Medicare program,
we entered into a Corporate Integrity Agreement with the Office of Inspector
General of the Department of Health and Human Services, which sets forth our
obligations to ensure compliance with Federal regulations outlined above and
provides for extensive third-party monitoring and reporting by us to the Federal
government.
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WE ARE SUBJECT TO INCREASINGLY EXPENSIVE AND UNPREDICTABLE PATIENT CARE
LIABILITY COSTS.
We, along with the rest of the long-term care industry, are experiencing
substantial increases in both the number and size of patient care claims. This
trend is most evident in Florida, where plaintiffs' attorneys are increasingly
seeking and obtaining punitive damages and attorneys' fees for any proven
violation of patient rights. As a result, our general and professional liability
costs, particularly in the State of Florida, have become increasingly expensive
and unpredictable. We are taking an active role in lobbying efforts to reform
the relevant tort laws in Florida. However, our lobbying efforts may not be
successful. If patient care claims continue to increase in number and size, our
future financial condition and operating results may be adversely affected.
FAILURE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL COULD HARM OUR BUSINESS.
Due to nationwide low unemployment rates, we are currently experiencing
difficulty attracting and retaining nursing assistants, nurses' aides and other
facility-based personnel, for whom we compete with other service industries. Our
weighted average wage rate and use of registry or contract personnel has
increased, indicating the difficulty our facilities are having in attracting
these personnel. We are addressing this problem through recruiting and retention
programs and training initiatives. These programs and initiatives may not
stabilize or improve our ability to attract and retain these personnel. Our
inability to control labor availability and cost could have a material adverse
affect on future operating results.
CERTAIN TRENDS ARE PUTTING PRESSURE ON OUR ABILITY TO MAINTAIN NURSING FACILITY
CENSUS.
Over the past decade a number of trends have developed that have impacted
our census. These trends include:
- Overbuilding of nursing facilities in states that have eliminated the
certificate of need process for new construction;
- Creation of nursing facilities by acute care hospitals to keep discharged
patients within their complex;
- Rapid growth of assisted living facilities, which sometimes are more
attractive to less medically complex patients; and
- The development of the scope and availability of health services
delivered to the home.
The impact of these trends on nursing facility census varies from facility
to facility, community to community and state to state.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges are as follows for the periods
indicated:
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NINE MONTHS
ENDED
SEPTEMBER 30, FISCAL YEARS ENDED DECEMBER 31,
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2000 1999 1999 1998 1997 1996 1995
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Ratio of earnings to fixed charges......... (1) (1) (1) (1) 1.87 1.97 (1)
</TABLE>
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(1) Earnings were inadequate to cover fixed charges by $11,794,000 and
$163,255,000 for the nine months ended September 30, 2000 and 1999,
respectively, and $215,381,000, $52,247,000 and $9,726,000 for the years
ended December 31, 1999, 1998 and 1995, respectively.
We have computed the ratio of earnings to fixed charges by dividing income
(loss) before income taxes plus fixed charges (excluding capitalized interest)
by fixed charge. Fixed charges include interest costs, whether expensed or
capitalized, the interest component of rental expense and amortization of debt
discounts and issue costs.
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USE OF PROCEEDS
We currently have no specific plans for the use of the net proceeds from
the sale of securities. However, we currently anticipate that the net proceeds
from the sale of securities will be used for general corporate purposes, which
may include working capital, capital expenditures, repayment of indebtedness and
acquisitions. The prospectus supplement relating to any securities will set
forth our intended use for the net proceeds received from the sale of those
securities. Pending the application of the net proceeds, we may invest such
proceeds in short-term, interest-bearing instruments or other securities.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes the general terms and provisions of our debt
securities. When we offer to sell a particular series of debt securities, we
will describe the specific terms of the series in a supplement to this
prospectus. Accordingly, for a description of the terms of any series of debt
securities, you must refer to both the prospectus supplement relating to that
series and the description of the debt securities set forth in this prospectus.
A prospectus supplement may change any of the terms of the debt securities
described in this prospectus.
We may offer under this prospectus up to $300,000,000 aggregate principal
amount of debt securities, or if debt securities are issued at a discount, or in
a foreign currency or composite currency, such principal amount as may be sold
for an initial public offering price of up to $300,000,000.
We will issue the debt securities under one or more separate indentures
between us and a trustee chosen by us. We will issue senior debt securities
under a senior indenture and subordinated debt securities under a subordinated
indenture. We refer to the senior indenture and the subordinated indenture
collectively as the "indenture," unless the context requires otherwise. We have
summarized select portions of the indenture below. The summary does not restate
the indenture in its entirety. The form of the indenture, which is subject to
such amendments or supplements as may be adopted from time to time, has been
filed as an exhibit to the registration statement. We urge you to read the
indenture because it, and not this description, defines your rights as holders
of debt securities issued under the indenture. Capitalized terms used in the
summary have the meaning specified in the indenture. References in this
"Description of Debt Securities" section to "our," "we" and "us" refer
exclusively to Beverly Enterprises, Inc. and not to any of our subsidiaries.
GENERAL
The debt securities will be our direct, exclusive obligations. We may issue
an unlimited amount of debt securities, in one or more series, under the
indenture. The amount of debt securities we offer by this prospectus will be
limited to the amount on the cover of the accompanying prospectus supplement.
We are a holding company that conducts all of our operations through our
subsidiaries. Our ability to service debt, including the debt securities, is
dependent upon the earnings and cash flow of our subsidiaries and the
distribution of those earnings to us, or upon loans or other payments of funds
by the subsidiaries to us. The subsidiaries are separate and distinct legal
entities and have no obligation, contingent or otherwise, to pay any amounts due
under the debt securities or to make any funds available for the debt
securities, whether by dividends, loans or other payments. In addition, the
payment of dividends and any loans and advances to us by the subsidiaries may be
subject to statutory or contractual restrictions, is contingent upon the
earnings of the subsidiaries and is subject to various business considerations.
The debt securities will be effectively subordinated to all indebtedness and
other liabilities and commitments, including trade payables and lease
obligations, of our subsidiaries.
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We will set forth in a prospectus supplement, including any pricing
supplement, relating to any series of debt securities being offered, the
aggregate principal amount and the following terms of the debt securities:
- the title of the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- the date or dates on which the principal of the debt securities is
payable;
- the rate or rates per annum at which the debt securities will bear
interest, if any, or the formula or provision pursuant to which the rate
or rates are determined and the date from which the interest, if any,
will accrue;
- the person to whom any interest on a debt security of the series shall be
payable, if other than the person in whose name that debt security is
registered at the close of business on the regular record date for that
interest;
- the place or places where we will pay the principal of and premium, if
any, and interest on the debt securities;
- the dates on which interest, if any, on the debt securities will be
payable and the regular record dates for the interest payment dates;
- any mandatory or optional sinking fund or analogous provisions;
- the date, if any, after which and the price or prices at which the debt
securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed and the other detailed terms and provisions of
the optional or mandatory redemption provisions;
- the denominations in which any of the debt securities will be issuable,
if other than denominations of $1,000 and any integral multiple thereof;
- if the amount of principal of or premium, if any, or interest on any of
the debt securities may be determined with reference to an index or under
a formula, the manner in which those amounts will be determined;
- the currency in which we will pay principal of or premium, if any, or
interest on the debt securities;
- if the principal of or premium, if any, or interest on any of the debt
securities is to be payable, at the holder's or our election, in one or
more currencies or currency units other than those in which the debt
securities are stated to be payable, any currency or currency units in
which payment will be payable, the periods within which and the terms and
conditions upon which the election is to be made and the amount so
payable (or the manner in which that amount is to be determined);
- if other than the entire principal amount thereof, the portion of the
principal amount of any of such debt securities which will be payable
upon declaration of acceleration of the maturity thereof;
- if the principal amount payable at stated maturity will not be
determinable as of any date prior to stated maturity, the amount which
will be deemed to be the principal amount, or the manner in which the
principal amount is to be determined;
- provisions, if any, for the defeasance or discharge of our obligations
with respect to the debt securities;
- whether we will issue the debt securities in the form of global
securities or in bearer or fully registered form and terms related to
global securities;
- any change in the right of the trustee or the holders to declare the
principal amount of any of the debt securities due and payable;
- any exchange or conversion provisions;
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- any addition to or change in the covenants or events of default in the
indenture applicable to any of the debt securities; and
- any other terms of the series of debt securities.
We may issue debt securities at a substantial discount below their
principal amount. Even if we do not issue the debt securities below their stated
principal amount, for Federal income tax purposes, the debt securities may be
deemed to have been issued with a discount because of certain interest payment
characteristics. We will set forth in a prospectus supplement the Federal income
tax considerations applicable to debt securities issued at a discount or deemed
to be issued at a discount.
FORM, EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement, we will
issue the debt securities only in fully registered form and in denominations of
$1,000 and integral multiples thereof. You may transfer or exchange debt
securities at any office we maintain for this purpose in accordance with the
terms of the prospectus supplement. We will not charge a service fee for any
transfer or exchange of debt securities, but we may require payment of a sum
sufficient to cover any tax or other governmental charge we are required to pay
in connection with a transfer or exchange.
Unless otherwise provided in the applicable prospectus supplement,
principal of and premium, if any, and interest on debt securities will be
payable, and the transfer of debt securities will be registrable, at the office
of the trustee. However, at our option, we may pay interest by mailing a check
to the address of the person entitled thereto as that address appears on the
security register.
DEFAULTS AND CERTAIN RIGHTS ON DEFAULT
Each of the following is an Event of Default with respect to a series of
debt securities:
- default for 30 days in the payment of any interest on any debt securities
of that series;
- default in the payment of principal of or premium, if any, on any debt
securities of that series at maturity;
- default for 30 days in the payment of principal of or premium, if any, on
any debt securities of that series upon redemption or purchase by us at
the option of the holder;
- default in the deposit of any sinking fund payment, when and as due by
the terms of a security of that series;
- default in the performance or breach by us of any other covenant or
warranty in the indenture (other than a covenant or warranty that has
been included in the indenture solely for the benefit of a series of debt
securities other than that series), which default continues uncured for a
period of 60 days after we receive written notice from the trustee or we
and the trustee receive written notice from the holders of at least 25%
in principal amount of the outstanding debt securities of that series as
provided in the indenture;
- our bankruptcy, insolvency or reorganization; and
- any other Event of Default as may be specified with respect to debt
securities of such series.
If an Event of Default occurs and is continuing with respect to the debt
securities of any series, then the trustee or the holders of 25% in principal
amount of the debt securities of that series then outstanding may declare the
principal amount (or, if the debt securities of that series are original issue
discount notes, that portion of the principal amount as may be specified in the
terms of that series) of all the debt securities of that series to be due and
payable immediately. Upon certain conditions, that declaration may be annulled
and past defaults (except, unless cured, a default in payment of principal of or
premium, if any, or interest on the debt securities of that series) may be
waived by the holders of a majority in principal amount of the debt securities
of that series then outstanding.
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SUBORDINATION TERMS
The payment of the principal of and premium, if any, and interest on any
series of subordinated debt securities will, to the extent set forth in the
subordinated indenture, be subordinated in right of payment to the prior payment
in full of all of our senior indebtedness, as defined below. By reason of that
subordination, in the event of a distribution of assets upon insolvency, some of
our general creditors may recover more, ratably, than the holders of the
subordinated debt securities. There are no restrictions in the subordinated
indenture on the amount of senior indebtedness or any other indebtedness that we
may issue. No payment on account of principal of or premium, if any, or interest
on the subordinated debt securities may be made:
- unless all amounts then due for principal of or premium, if any, sinking
fund requirements or interest on any designated senior indebtedness have
been paid or duly provided for; and
- if there shall exist at the time of payment or immediately after giving
effect to the payment, any Event of Default with respect to any
designated senior indebtedness permitting acceleration of maturity of
that designated senior indebtedness, except redemption payments if the
mailing of a notice of redemption was made prior to the default.
We may and shall resume payments on the subordinated debt securities when
the default is cured or waived.
Upon any distribution of our assets upon our dissolution, winding up,
liquidation, or reorganization, the holders of senior indebtedness will be
entitled to receive payment in full before holders of the subordinated debt
securities are entitled to receive any payment.
Designated senior indebtedness is defined in the subordinated indenture as
our existing credit facility, our senior notes due 2006 and any other senior
indebtedness that expressly provides that it is designated senior indebtedness.
Senior indebtedness is defined in the subordinated indenture as the
principal of and premium, if any, and unpaid interest on:
- indebtedness for borrowed money for the payment of which we are
responsible or liable or the payment of which we have guaranteed, whether
that indebtedness is outstanding as of the date of the subordinated
indenture or thereafter created, incurred, assumed or guaranteed by us,
unless in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is specifically provided that such
indebtedness is not superior in right of payment to the subordinated debt
securities;
- capital lease obligations determined in accordance with generally
accepted accounting principles; and
- any obligation of ours to reimburse banks pursuant to letters of credit
extended by those banks, advances made by those banks and other credit
arrangements entered into with those banks in connection with tax exempt
obligations issued for our benefit.
CONVERSION RIGHTS
We will set forth in the applicable prospectus supplement the terms and
conditions, if any, upon which the debt securities are convertible into common
stock or preferred stock. The right to convert debt securities called for
redemption will terminate at the close of business on the business day
immediately preceding the date fixed for redemption, unless we default in making
the payment due upon redemption, and will be lost if not exercised prior to that
time. The conversion price will be subject to adjustment in the case of certain
events, including:
- the subdivision, combination or reclassification of our outstanding
common stock;
- the issuance of common stock as a dividend or distribution on common
stock;
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- the issuance of rights or warrants (expiring within 45 days after the
record date) to all holders of common stock entitling them to acquire
shares of common stock, or securities convertible into or exchangeable
for common stock, at less than the then current market price of the
common stock;
- the distribution to all holders of common stock of shares of any class
other than common stock, or debt securities or assets (excluding regular
quarterly cash dividends or distributions) or rights or warrants to
purchase our assets or securities, other than those referred to above;
- the issuance, with certain exceptions, of common stock or securities
convertible into, or exchangeable for, common stock at less than the
current market price of the common stock; or
- our merger, consolidation or sale of our assets substantially as an
entirety.
There will be no upward adjustment in the conversion price except in the
event of a reverse stock split.
In the event we are a party to a transaction, excluding those referred to
above, such as a merger or consolidation in which our common stock is
reclassified, the holder of each outstanding debt security shall have the right
to convert that debt security into the kind and amount of securities, cash or
other assets receivable by a holder of the number of shares of common stock into
which the debt securities might have been converted immediately prior to the
transaction.
MODIFICATION OF INDENTURE
With the consent of the holders of at least a majority in aggregate
principal amount of the outstanding debt securities of each series affected,
together with the trustee, we may execute a supplemental indenture or indentures
to add provisions to, change in any manner or eliminate any provisions of the
indenture or modify in any manner the rights of the holders of the debt
securities. However, without the consent of the holder of each outstanding debt
security affected, no supplemental indenture shall:
- reduce the rate of or extend the time for payment of interest, including
default interest, on any debt security;
- reduce the principal or premium, if any, or change the stated maturity of
any debt security, or reduce the amount of, or postpone the date fixed
for, the payment of any sinking fund or analogous obligation;
- waive an Event of Default in the payment of the principal of or interest
on any debt security, except a rescission of acceleration of the debt
securities of any series by the holders of at least a majority in
aggregate principal amount of the then outstanding securities of that
series and a waiver of the payment default that resulted from the
acceleration;
- make the debt security payable in currency other than that stated in the
debt security;
- make any change to the indenture provisions relating to the payment of
principal of and interest on any debt security, waivers of past defaults,
amendments or supplements to the indenture, debt securities issued in a
foreign currency or the rate of exchange used to determine the judgment
currency;
- waive a redemption payment with respect to any debt security or change
any of the indenture provisions with respect to the redemption of any
debt securities;
- reduce the percentage of debt securities of any series the holders of
which are required to consent to any supplemental indenture; or
- make any change that adversely affects the right to convert or the
conversion price for any debt security.
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CONSOLIDATION, MERGER AND SALE OF ASSETS
We may consolidate or merge with or into, or transfer our assets
substantially as an entirety to, any corporation organized under the laws of any
domestic jurisdiction without the consent of the holders of any of the
outstanding debt securities under the indenture, provided that:
- the successor corporation assumes our obligations on the debt securities
and under the indenture; and
- after giving effect to the transaction, no Event of Default, and no event
which, after notice or lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
GLOBAL SECURITIES
The debt securities of any series may be represented, in whole or in part,
by one or more global securities. Each global security will:
- be registered in the name of a depositary or nominee thereof that we will
identify in the applicable prospectus supplement;
- be deposited with the depositary or nominee or custodian; and
- bear any required legends.
No global security may be exchanged in whole or in part for debt securities
registered in the name of any person other than the depositary or any nominee
unless:
- the depositary has notified us that it is unwilling or unable to continue
as depositary or has ceased to be qualified to act as depositary;
- we execute and deliver to the trustee an officers' certificate to the
effect that the global security shall be exchangeable;
- an Event of Default occurs and is continuing; or
- any other circumstances described in the applicable prospectus supplement
occur.
As long as the depositary, or its nominee, is the registered holder of a
global security, the depositary or nominee will be considered the sole owner and
holder of the debt securities represented by the global security for all
purposes under the debt securities and the indenture. Except in the above
limited circumstances, owners of beneficial interests in a global security:
- will not be entitled to have the debt securities registered in their
names;
- will not be entitled to physical delivery of certificated debt
securities; and
- will not be considered to be holders of those debt securities under the
debt securities or the indenture.
Payments on a global security will be made to the depositary or its nominee
as the holder of the global security. Some jurisdictions have laws that require
that certain purchasers of securities take physical delivery of the securities
in definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Institutions that have accounts with the depositary or its nominee are
referred to as "participants." Ownership of beneficial interests in a global
security will be limited to participants and to persons that may hold beneficial
interests through participants. The depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of debt
securities represented by the global security to the accounts of its
participants.
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Ownership of beneficial interests in a global security will be shown on and
effected through records maintained by the depositary, with respect to
participants' interests, or any participant, with respect to interests of
persons held by participants on their behalf.
Payments, transfers, exchanges and other matters relating to beneficial
interests in a global security will be subject to policies and procedures of the
depositary. The depositary policies and procedures may change from time to time.
Neither we nor the trustee will have any responsibility or liability for the
depositary's or any participant's records with respect to beneficial interests
in a global security.
PAYMENT AND PAYING AGENTS
The provisions of this paragraph will apply to the debt securities unless
otherwise indicated in the applicable prospectus supplement. Payment of interest
on a debt security on any interest payment date will be made to the person in
whose name the debt security is registered at the close of business on the
regular record date. Principal of and premium, if any, and interest on the debt
securities of a particular series will be payable at the office of the paying
agent or paying agents designated by us. However, at our option, we may pay
interest by mailing a check to the record holder. The corporate trust office of
the trustee in the city of New York will be designated as our sole paying agent.
We may also name any other paying agents in the applicable prospectus
supplement.
DEFEASANCE AND COVENANT DEFEASANCE
LEGAL DEFEASANCE. We may be discharged from any and all obligations in
respect of the debt securities of any series except for certain obligations:
- to pay the principal of, including any mandatory sinking fund payments,
or premium, if any, or interest on the outstanding debt securities of the
series on the stated maturity of those payments ;
- to register the transfer or exchange of debt securities of the series;
- to replace stolen, lost or mutilated debt securities of the series;
- to maintain paying agencies; and
- to hold money in trust for payment.
We will be discharged upon our deposit with the trustee, in trust, of money
and/or government obligations that will provide funds in an amount sufficient to
pay and discharge each installment of principal of, including sinking fund
requirements, and premium, if any, and interest on the debt securities of that
series on the stated maturity of those payments.
We may be discharged only if, among other things, we have delivered to the
trustee an opinion of counsel stating that we have received from, or there has
been published by, the Internal Revenue Service a ruling or, since the date of
execution of the indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, the holders of the debt
securities of that series will not recognize income, gain or loss for Federal
income tax purposes as a result of the deposit, defeasance and discharge.
DEFEASANCE OF CERTAIN COVENANTS. Upon compliance with certain conditions,
we may omit to comply with many of the restrictive covenants contained in the
indenture and provided with respect to a series of debt securities and any
omission to comply with the obligations will not constitute an Event of Default
with respect to such debt securities. The conditions include, among others:
- depositing with the trustee money and/or government obligations that,
through the payment of interest and principal in accordance with their
terms, will provide funds in an amount sufficient to pay principal of and
premium, if any, and interest on the debt securities of that series on
the date those payments are due; and
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- delivering to the trustee an opinion of counsel to the effect that the
holders of the debt securities of the series will not recognize income,
gain or loss for Federal income tax purposes as a result of the deposit
and related covenant defeasance.
REGARDING THE TRUSTEE
We must file annually with the trustee a certificate either stating the
absence of any default or specifying any default that exists. The trustee shall,
within 90 days after the occurrence of a default, give to the holders of the
debt securities of any series notice of all uncured defaults known to it.
However, the trustee shall be protected in withholding that notice if the
trustee in good faith determines that the withholding of that notice is in the
interest of the holders of the debt securities, except in the case of default in
the payment of principal of or premium, if any, or interest on any of the debt
securities. The term "default" for the purpose of this provision only shall mean
the happening of any of the Events of Default excluding any grace periods.
The trustee is entitled to be indemnified by the holders of the debt
securities of any series before proceeding to exercise any right or power under
the indenture at the request of those holders, subject to the duty of the
trustee during default to act with the required standard of care. The holders of
a majority in principal amount of the outstanding debt securities of any series
may direct the time, method and place of conducting any proceeding for any
remedy available to the trustee, or exercising any trust or power conferred on
the trustee. The trustee may decline to act if such direction is contrary to law
or if:
- the trustee determines in good faith that the proceeding so directed
would be illegal;
- it would involve it in personal liability; or
- it would be unjustly prejudicial to the non-consenting holders of the
debt securities of that series.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
This prospectus describes the general terms of our capital stock. For a
more detailed description of these securities, we refer you to our Restated
Certificate of Incorporation. When we offer to sell a particular series of these
securities, we will describe the specific terms of the series in a supplement to
this prospectus. Accordingly, for a description of the terms of any series of
securities, you must refer to both the prospectus supplement relating to that
series and the description of the securities set forth in this prospectus. A
prospectus supplement may change any of the terms of the securities described in
this prospectus.
Pursuant to our Restated Certificate of Incorporation, our authorized
capital stock currently consists of 300,000,000 shares of common stock, par
value $0.10 per share, and 25,000,000 shares of preferred stock, par value $1.00
per share. At October 30, 2000, we had outstanding 103,696,621 shares of common
stock and no shares of preferred stock.
COMMON STOCK
Holders of common stock are entitled to receive dividends that are declared
by our board of directors, subject to the preference of any outstanding series
of preferred stock and to certain restrictions under our 9% Senior Notes due
2006 and under our banking arrangements. Each holder is entitled to one vote per
share on all matters voted upon by stockholders. There is no cumulative voting
for the election of directors and the common stock does not have any preemptive
rights. In the event of our liquidation, dissolution or winding up, holders of
common stock are entitled to share equally and ratably in any assets available
for distribution to them, after payment or provision for liabilities and amounts
owing with respect to any outstanding series of preferred stock.
Our registrar and transfer agent is The Bank of New York.
PREFERRED STOCK
Under our Restated Certificate of Incorporation, our board of directors
may, from time to time, establish and issue one or more additional series of
preferred stock and fix the designations, powers, preferences and rights of the
shares of that series and the qualification, limitations or restrictions
thereon, including, but not limited to, the following:
- dividend rights;
- dividend rate or rates;
- conversion rights;
- voting rights;
- rights and terms of redemption, including sinking fund provisions;
- redemption price or prices; and
- liquidation preferences.
Any series of preferred stock may rank junior to, on a parity with or
senior to any other then existing series of preferred stock with respect to
dividends, distributions and liquidation, and any such series may have greater
or lesser voting rights than any other series of preferred stock.
Because we are a holding company, our rights and the rights of our
creditors and of our stockholders, including the holders of the shares of the
preferred stock, to participate in any distribution of the assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject to
the prior claims of the subsidiary's creditors, except to the extent that we may
be a creditor with recognized claims against the subsidiary. We derive the
principal sources of our revenues from our operating subsidiaries. The
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subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts or to make any funds available to
us, whether by dividends, loans or other payments. In addition, the payment of
dividends and certain loans and advances to us by the subsidiaries may be
subject to statutory or contractual restrictions, are contingent upon the
earnings of the subsidiaries and are subject to various business considerations.
We will set forth in a prospectus supplement relating to the class or
series of preferred stock being offered the following terms:
- The title and stated value of the preferred stock;
- The number of shares of the preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock;
- The annual dividend rate, if any, the dividend payment dates and whether
dividends will be cumulative;
- The procedures for any auction and remarketing, if any, for the preferred
stock;
- The provisions for a sinking fund, if any, for the preferred stock;
- The provisions for redemption, if applicable, of the preferred stock;
- Any listing of the preferred stock on any securities exchange;
- The terms and conditions, if applicable, upon which the preferred stock
will be convertible into common stock, including the conversion price (or
manner of calculation) and conversion period;
- Voting rights, if any, of the preferred stock;
- Whether interests in the preferred stock will be represented by
depositary shares;
- A discussion of any material and/or special Federal income tax
considerations applicable to the preferred stock;
- The relative ranking and preferences of the preferred stock as to
dividend rights and rights upon the liquidation, dissolution or winding
up of our affairs;
- Any limitations on issuance of any class or series of preferred stock
ranking senior to or on a parity with the class or series of preferred
stock as to dividend rights and rights upon liquidation, dissolution or
winding up of our affairs; and
- Any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, preferred stock
or common stock. Warrants may be issued independently or together with any
securities offered by any prospectus supplement and may be attached to or
separate from the securities. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a warrant agent.
The warrant agent will act solely as our agent in connection with the warrants
of that series and will not assume any obligation or relationship of agency or
trust for or with any holders or beneficial owners of warrants. The following
sets forth certain general terms and provisions of the warrants offered hereby.
Further terms of the warrants and the applicable warrant agreements are set
forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the terms of the
warrants in respect of which this prospectus is being delivered, including,
where applicable, the following:
- the title of the warrants;
- the aggregate number of the warrants;
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- the price or prices at which the warrants will be issued;
- the number of debt securities or shares of preferred stock or common
stock purchasable upon exercise of the warrants;
- the designation and terms of the securities with which the warrants are
issued and the number of warrants issued with each security;
- if applicable, the date on and after which the warrants and the related
securities will be separately transferable;
- the price at which the debt securities, preferred stock or common stock
purchasable upon exercise of the warrants may be purchased;
- the date on which the right to exercise the warrants shall commence and
the date on which that right shall expire;
- the minimum or maximum amount of the warrants which may be exercised at
any one time;
- information with respect to book-entry procedures, if any;
- a discussion of certain Federal income tax considerations; and
- any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
PLAN OF DISTRIBUTION
We may sell the securities:
- directly to purchasers;
- through agents;
- through dealers;
- through underwriters; or
- through a combination of any of the foregoing methods of sale.
We may distribute the securities from time to time in one or more
transactions at:
- a fixed price or prices, which may be changed;
- market prices prevailing at the time of sale;
- prices related to the prevailing market prices; or
- negotiated prices.
We may directly solicit offers to purchase the securities being offered
under this prospectus. We may also designate agents to solicit offers to
purchase the securities from time to time. We will name in a prospectus
supplement any agent involved in the offer or sale of our securities.
If we utilize a dealer in the sale of the securities being offered under
this prospectus, we will sell the securities to the dealer, as principal. The
dealer may then resell the securities to the public at varying prices to be
determined by the dealer at the time of resale.
If we utilize an underwriter in the sale of the securities being offered
under this prospectus, we will execute an underwriting agreement with the
underwriter at the time of sale and we will set forth the name of any
underwriter in the prospectus supplement which the underwriter will use to make
resales of the securities to the public. In connection with the sale of the
securities, we, or the purchasers of securities for whom the underwriter may act
as agent, may compensate the underwriter in the form of underwriting
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discounts or commissions. The underwriter may sell the securities to or through
dealers, and the underwriter may compensate those dealers in the form of
discounts, concessions or commissions.
We will describe in the applicable prospectus supplement any compensation
we pay to underwriters, dealers or agents in connection with the offering of the
securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers. Dealers and agents participating in the
distribution of the securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the debt securities may be deemed to be underwriting discounts and
commissions. We may enter into agreements to indemnify underwriters, dealers and
agents against certain civil liabilities, including liabilities under the
Securities Act, or to contribute to payments they may be required to make in
respect thereof.
If we so specify in the applicable prospectus supplement, we will authorize
underwriters, dealers and agents to solicit offers by certain institutions to
purchase the securities under contracts providing for payment and delivery on
future dates. The institutions with which the contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others. The purchaser's
obligations under the contracts will not be subject to any conditions except
that:
- the purchase of the securities will not at the time of delivery be
prohibited under the laws of the jurisdiction to which the purchaser is
subject; and
- if the securities are also being sold to underwriters, we will have sold
to the underwriters the securities not sold for delayed delivery.
The underwriters, dealers and agents will not be responsible for the
validity, or performance of the contracts. We will set forth in the prospectus
supplement relating to the contracts, the price to be paid for the securities,
the commissions payable for solicitation of the contracts and the date in the
future for delivery of the securities.
The underwriters, dealers and agents may engage in transactions with us, or
perform services for us, in the ordinary course of business.
LEGAL MATTERS
Latham & Watkins, Los Angeles, California, will pass upon the validity of
the securities being offered under this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedule are incorporated by reference
in reliance on Ernst & Young LLP's report given on their authority as experts in
accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting discount, are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 75,000
National Association of Securities Dealers, Inc. filing
fee....................................................... 30,500
Rating Agency fees.......................................... 50,000
Printing and engraving expenses............................. 200,000
Legal fees and expenses..................................... 200,000
Accounting fees and expenses................................ 100,000
Blue Sky fees and expenses.................................. 30,000
Trustees' fees and expenses................................. 40,000
Miscellaneous............................................... 24,500
--------
Total..................................................... $750,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers
Beverly to indemnify, subject to the standards set forth therein, any person who
is a party to any action in connection with any action, suit or proceeding
brought or threatened by reason of the fact that the person was a director,
officer, employee or agent of Beverly or is or was serving as such with respect
to another entity at the request of Beverly. The DGCL also provides that Beverly
may purchase insurance on behalf of any such director, officer, employee or
agent.
The Restated Certificate of Incorporation and the Amended By-Laws of
Beverly and the indemnification agreements between the registrant and its
officers and directors (the "Indemnification Agreements") contain provisions
regarding the indemnification of officers and directors. The Restated
Certificate of Incorporation of the registrant ("Beverly" or the "Corporation")
states:
ARTICLE XIII
The Corporation shall indemnify to the full extent permitted by law (such
as it presently exists or may hereafter be amended) any person made, or
threatened to be made, a defendant or witness to any action, suit or proceeding
(whether civil, criminal, administrative or investigative), by reason of the
fact that such person is or was a director or officer of the Corporation or by
reason of the fact that such director or officer, at the request of the
Corporation, is or was serving any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, in any capacity.
Any amendment, repeal, or modification of the foregoing paragraph shall not
adversely affect any right or protection of such person existing hereunder with
respect to any act or omission occurring prior to such amendment, repeal, or
modification.
The Amended By-Laws of Beverly state:
ARTICLE VI
INDEMNIFICATION
SECTION 1. Right to Indemnification. The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact
II-1
<PAGE> 24
that he or she, or a person for whom he or she is the legal representative, is
or was a Director or Officer of the Corporation (or a Director or Officer of
Beverly Enterprises, a California corporation ("Beverly California"), prior to
the merger of Beverly Merger, Inc., a subsidiary of the Corporation organized
under California law, into Beverly California) or is or was serving at the
request of the Corporation as a Director, Officer, employee, fiduciary or agent
of another corporation or of a partnership, joint venture, trust, enterprise, or
nonprofit entity, including service with respect to employee benefit plans,
against all liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a proceeding
initiated by such person only if the proceeding was authorized by the Board of
Directors of the Corporation.
SECTION 2. Prepayment of Expenses. The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
Officer in his or her capacity as a Director or Officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an undertaking
by the Director or Officer to repay all amounts advanced if it should be
ultimately determined that the Director or Officer is not entitled to be
indemnified under this Article or otherwise.
SECTION 3. Claims. If a claim for indemnification or payment of expenses
under this Article VI is not paid in full within ninety (90) days after a
written claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification or payment of
expenses under applicable law.
SECTION 4. Nonexclusivity of Rights. The rights conferred on any person by
this Article VI shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Restated
Certificate of Incorporation of the Corporation, these Amended By-Laws,
agreement, vote of stockholders or disinterested directors or otherwise.
SECTION 5. Contracts and Arrangements. The Corporation may enter into
contracts providing indemnification to the full extent authorized or permitted
by the General Corporation Law of the State of Delaware and may create a trust
fund, grant a security interest and/or use other means (including, without
limitation, letters of credit, surety bonds and other similar arrangements) to
ensure the payment of such amounts as may become necessary to effect
indemnification pursuant to such contracts or otherwise.
SECTION 6. Amendment or Repeal. Any repeal or modification of the foregoing
provisions of this Article VI shall not adversely affect any right or protection
of any person in respect of any act or omission occurring prior to the time of
such repeal or modification.
The Indemnification Agreements provide (a) for indemnification to the
fullest extent permitted by law against any and all expenses (including
attorneys' fees and all other costs and obligations of any nature whatever),
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection therewith)
of any claim, unless a person or body appointed by the Board of Directors of
Beverly, (or, under certain circumstances discussed below, Independent Legal
Counsel) determines that such indemnification is not permitted under applicable
law; (b) for the prompt advancement of expenses to the director or officer,
including attorneys' fees and all other costs, fees, expenses and obligations
paid or incurred in connection with investigating, defending, being a witness or
participating in, or preparing to defend, be a witness in or participate in any
threatened, pending or completed action, suit or proceeding, alternate dispute
resolution mechanism or any inquiry, hearing or investigation related to the
fact that such director or officer is or was a director, officer, employee,
agent or fiduciary of Beverly or is or was serving at the request of Beverly as
a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, and for repayment to Beverly if it is found that such director or
officer is not entitled to such indemnification under applicable law; (c) a
mechanism through which the director or officer may seek court relief in the
event the Board of Directors of Beverly (or other person or body appointed by
such Board) determines that the director or officer would not be permitted to be
indemnified
II-2
<PAGE> 25
under applicable law (and therefore is not entitled to indemnification under the
Indemnification Agreement); (d) indemnification against expenses (including
attorneys' fees) incurred in seeking to collect from Beverly an indemnity claim
or advancement of expenses to the extent successful; (e) that after a change in
control of Beverly all determinations by Beverly regarding a right to indemnity
and the right to advancement of expenses shall be made by Independent Legal
Counsel (as defined in the Indemnification Agreements) to be selected by the
director or officer and approved by the Board (which approval cannot be
unreasonably withheld); and (f) Beverly may create a trust fund, grant a
security interest and/or use other means (including, without limitation, letters
of credit, surety bonds and other similar agreements) to ensure payment of
indemnifiable amounts.
Among other things, the Indemnification Agreements provide the indemnified
directors and officers with a specific contractual assurance that the rights to
indemnification currently provided to them will remain available, regardless of,
among other things, any amendment to or revocation of the indemnification
provisions in the Restated Certificate of Incorporation or the Amended By-Laws
or any change in composition or philosophy of the Board of Directors of Beverly
such as might occur following an acquisition or change in control of Beverly.
The Indemnification Agreements ensure, in the event of a change in control, that
a determination of whether a director or officer is entitled to indemnification
and advancement of expenses will not be made by a possibly hostile board. If
court assistance to obtain such indemnity is required, the director or officer
can receive indemnity against costs incurred in pursuing his or her rights to
indemnification. In addition, the Indemnification Agreements guarantee to
directors and officers that they will realize the benefit of any subsequent
changes in Delaware law relating to indemnification.
The Indemnification Agreements impose upon Beverly, if a change in control
has occurred, the burden of proving that the director or officer is not entitled
to indemnification in any particular case, and the Indemnification Agreements
negate certain presumptions which might otherwise be drawn against a director or
officer in connection with the termination of actions in certain circumstances.
The Indemnification Agreements also provide that a director's or officer's
rights thereunder are not exclusive of any other rights he or she may have under
Delaware law, directors' and officers' insurance, the Restated Certificate of
Incorporation, the Amended By-Laws or otherwise; however, the Indemnification
Agreements do prevent double payment. Notwithstanding the above discussion, all
terms and rights under the Indemnification Agreements exist only to the extent
permitted by applicable law.
Beverly has in force directors' and officers' liability and company
reimbursement insurance covering liability for error, misstatement, misleading
statement, act or omission, and neglect or breach of duty claimed against them
solely by reason of their being directors or officers of Beverly.
ITEM 16. EXHIBITS
See Exhibit Index.
ITEM 17. UNDERTAKINGS
(a) 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 of 1933, as amended (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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range
II-3
<PAGE> 26
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
and Exchange Act of 1934, as amended (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.
(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) 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 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to 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) 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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-4
<PAGE> 27
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-3 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 December 22, 2000.
BEVERLY ENTERPRISES, INC.
By: /s/ DAVID R. BANKS
------------------------------------
David R. Banks
Chairman of the Board
and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Douglas J. Babb and John W.
MacKenzie, and each of them, with full power of substitution and full power to
act without the other, his true and lawful attorney-in-fact and agents to act
for him in his name, place and stead, in any and all capacities, to sign a
registration statement on Form S-3 and any or all amendments thereto (including
without limitation any post-effective amendments thereto), and any registration
statement for the same offering that is to be effective under Rule 462(b) of the
Securities Act, and to file each of the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully, to all intents and purposes, as they or he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ DAVID R. BANKS Chairman of the Board, Chief December 22, 2000
----------------------------------------------------- Executive Officer and
David R. Banks Director
/s/ PAMELA H. DANIELS Senior Vice President, December 22, 2000
----------------------------------------------------- Controller and Chief
Pamela H. Daniels Accounting Officer
/s/ SCOTT M. TABAKIN Executive Vice President and December 22, 2000
----------------------------------------------------- Chief Financial Officer
Scott M. Tabakin
/s/ BERYL F. ANTHONY, JR. Director December 22, 2000
-----------------------------------------------------
Beryl F. Anthony, Jr.
Director
-----------------------------------------------------
Carolyne K. Davis
/s/ WILLIAM R. FLOYD President, Chief Operating December 22, 2000
----------------------------------------------------- Officer and Director
William R. Floyd
</TABLE>
II-5
<PAGE> 28
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ JAMES R. GREENE Director December 22, 2000
-----------------------------------------------------
James R. Greene
/s/ EDITH E. HOLIDAY Director December 22, 2000
-----------------------------------------------------
Edith E. Holiday
Director
-----------------------------------------------------
Jon E. M. Jacoby
/s/ RISA J. LAVIZZO-MOUREY Director December 22, 2000
-----------------------------------------------------
Risa J. Lavizzo-Mourey
/s/ JAMES W. MCLANE Director December 22, 2000
-----------------------------------------------------
James W. McLane
/s/ MARILYN R. SEYMANN Director December 22, 2000
-----------------------------------------------------
Marilyn R. Seymann
</TABLE>
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<PAGE> 29
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
*1.1 Form of Underwriting Agreement..............................
4.1 Form of Senior Indenture....................................
4.2 Form of Subordinated Indenture..............................
4.3 Form of Specimen Senior Debt Security (included in Exhibit
4.1)........................................................
4.4 Form of Specimen of Subordinated Debt Security (included in
Exhibit 4.2)................................................
*4.5 Form of Warrant Agreement...................................
*4.6 Form of Common Stock Certificate............................
*4.7 Form of Preferred Stock Certificate.........................
*4.8 Form of Warrant (included in Exhibit 4.5)...................
5.1 Opinion of Latham & Watkins as to validity of Offered
Securities..................................................
12.1 Computation of Ratio of Earnings to Fixed Charges...........
23.1 Consent of Ernst & Young LLP................................
23.2 Consent of Latham & Watkins (included in its opinion filed
as Exhibit 5.1).............................................
24.1 Power of Attorney of Registrant's Directors and Officers
(incorporated in the signature page on page II-6 of this
Registration Statement).....................................
**25.1 Statement of Eligibility of Trustee on Form T-1 with respect
to Senior Indenture.........................................
**25.2 Statement of Eligibility of Trustee on Form T-1 with respect
to Subordinated Indenture...................................
</TABLE>
-------------------------
* To be filed by amendment or incorporated by reference in connection with the
offering of any Offered Securities.
** To be filed pursuant to Section 305(b)(2) of the TIA.
