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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 13)*
GREENBRIAR CORPORATION
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
393648-10-0
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(CUSIP Number)
JAMES R. GILLEY, 4265 KELLWAY CIRCLE, ADDISON, TEXAS 75244 (214) 407-8400
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
DECEMBER 31, 1996
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(Date of Event which Requires Filing of this Settlement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [_]
Check the following box if a fee is being paid with the statement. [_] (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP No. 393648-10-0 PAGE 2 OF 4 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James R. Gilley (SS# ###-##-####)
JRG Investments Co., Inc. and one revocable grantor trust
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States, Nevada
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Number of 7 SOLE VOTING POWER
Shares 1,511,563
Beneficially ----------------------------------------------------------------
Owned by 8 SHARED VOTING POWER
Each 2,019,563
Reporting ----------------------------------------------------------------
Person 9 SOLE DISPOSITIVE POWER
With 1,511,563
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10 SHARED DISPOSITIVE POWER
2,019,563
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
400,000 - James R. Gilley
1,111,563 - JRG Investments
508,000 - Grantor trust
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.6%
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14 TYPE OF REPORTING PERSON*
IN, CO
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INTRODUCTION
This statement is filed with respect to the acquisition of 200,000
unregistered shares of Issuer's common stock, the disposition of 98,437 shares
of common stock, the extension of a certain promissory note, the setting of an
exercise price of a certain Stock Purchase Warrant and to the beneficial
ownership of 2,019,563 Shares of Common Stock of the Issuer, of which 400,000
Shares are issuable upon the exercise of stock options by James R. Gilley,
individually, 1,111,563 Shares are held by JRG Investments and 400,000 are held
of record and beneficially by The April Trust, a grantor trust established June
15, 1993 (the "Trust", and 108,000 Shares are subject to the Stock Purchase
Warrant held by the Trust. As to the Trust, James R. Gilley is the trustee, and
James R. Gilley and Sylvia M. Gilley are the beneficiaries.
ITEM 1. SECURITY AND ISSUER.
This statement relates to common stock, $.01 par value per share (the
"Shares"), of Greenbriar Corporation, a Nevada corporation) (the "Issuer"). The
Issuer's principal executive offices are located at 4265 Kellway Circle,
Addison, Texas 75244.
ITEM 2. IDENTITY AND BACKGROUND.
In accordance with the instructions to this Item 2, the following
information is hereby provided with respect to Mr. Gilley: There is no change in
the response to Item 2(a) through (f).
ITEM 3. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
The shares underlying the two options will be exercisable for cash in the
amount of $10.75 per share for 200,000 shares (total of $2,150,000) and $13.275
per share for 200,000 shares (total of $2,655,000). Mr. Gilley does not know
the source of funds that will be used to acquire the shares.
ITEM 4. PURPOSE OF TRANSACTION.
1. The Compensation Committee of the Board of Directors, and the Board of
Directors with James R. Gilley absent and not voting, approved the grant
(effective December 31, 1996) of a non-qualified stock option to Mr. Gilley to
purchase 200,000 shares of Common Stock at an exercise price of $13.275 per
share, which was the average closing price of the Company's Common Stock on the
ten trading days prior to the date of grant of such option, conditioned upon
listing of the shares on the American Stock Exchange. The option was granted to
Mr. Gilley in recognition of his performance on behalf of the Company during
1996 and may be exercised by him in whole or in part at any time prior to the
expiration of ten years.
2. In January 1997, JRG exercised a right in its note payable to MS Holding
Corp. (now known as Institutional Capital Corporation ("ICC")), to pay interest
on the note using shares of the stock pledged as collateral for the note.
Pursuant to an agreement between JRG and ICC, interest was prepaid through
December 31, 1997 and the maturity date of the note extended from May 23, 1997
to December 31, 1997, in consideration of 98,437 shares of Common Stock, valued
at $13.99375 per share.
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3. The Trust is indebted on a $2,250,000 promissory note issued in
connection with the acquisition of 200,000 shares of Common Stock of the Issuer
in November 1993. Such note was originally made payable on November 18, 2003. In
December 1996, the Compensation Committee of the Board of Directors agreed to
extend the maturity date of such note until November 19, 2008.
4. The Trust is also the holder of a Stock Purchase Warrant to purchase
108,000 shares of Common Stock for a stated exercise price of $12.98 per share.
The Stock Purchase Warrant contains anti-dilution clauses which require the
exercise price to be reduced in proportion to any issuance of Company stock at a
price less than the exercise price. Issuances at less than the exercise price
have occurred and were about to occur in connection with the American Care
Communities, Inc. merger on December 31, 1996. The Company and the Trust
desired to eliminate the prospect of further changes in the exercise price and
eliminate thereby the conflict of interest in negotiating the discrepancies in
the exercise price. Therefore, the Compensation Committee determined that the
Warrant Agreement with the Trust should be amended to correct all share amounts
resulting from stock splits, names of the parties, to fix the exercise price at
$10.00, which will be unaffected by any issuance of Company securities at a
lesser price, and to extend the exercise termination date until October 1,2006.
Other than as set out herein, Mr. Gilley has no current plans or proposals
which relate or would result in any of the matters listed in Items 4(a) through
4(j), inclusive, of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Mr. Gilley, JRG and the Trust beneficially own, in the aggregate of
2,019,563 Shares (approximately 28.6% of the Shares). All such shares
are issuable upon exercise of warrants and options or are owned of
record by JRG, Mr. Gilley and the Trust.
(b) Mr. Gilley has the sole power to vote or to direct the vote and to
dispose or to direct the disposition of 1,511,563 Shares which are
outstanding and owned of record by JRG and the Trust.
(c) None.
(d) No person other than Mr. Gilley, JRG or the Trust has the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, any of the Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
No change.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Stock Option Agreement
Memorandum of agreement with ICC
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 7, 1996 /s/ James R. Gilley
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James R. Gilley, Individually,
on behalf of JRG Investments and
as trustee
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
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GREENBRIAR CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
Optionee: James R. Gilley
Number of Shares: 200,000
Option Exercise Price: $13.275
Date of Grant: December 31, 1996,
1. Grant of Options. Greenbriar Corporation ("Company") hereby grants to
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the above-named optionee ("Optionee"), Non-Qualified Stock Options
(collectively, "Options") to purchase at the Option Exercise Price (set forth
above) per share and on the terms and conditions set forth in this agreement
("Agreement") that number of shares, as adjusted as herein provided (as so
adjusted, "Option Shares"), of its common stock, $.01 par value per share
("Common Stock"), as is set forth above. The exercise price is the fair market
value per share of the Common Stock as reflected by the closing price of the
Common Stock on the American Stock Exchange for the ten trading days ended
December 31, 1996, pursuant to a grant by the Compensation Committee of the
Company that was approved by the Board of Directors.
2. Term of Options and Limitations on Right to Exercise. The Options
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shall become exercisable in full on the date hereof and listing of the shares of
Common Stock on the American Stock Exchange, and shall expire at 5:00 p.m.,
Dallas, Texas time, on December 31, 2006, unless sooner terminated pursuant
hereto.
3. Exercise of Options. Other terms, times and conditions of exercise of
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the Options are as follows:
a. Prior to the Expiration Date, the Options shall be fully exercisable in
whole or in part for a number of shares up to the aggregate number of
all of the Option Shares.
b. Upon the death or Disability of the Optionee, the Optionee or the
personal representative of the Optionee, as applicable, may exercise
the Options to the extent not previously exercised (and, in the case of
death, to the extent the Options could have been exercised by the
Optionee on the date of death) subject to the terms set forth in this
Agreement, until their termination as provided by Section 2 hereof.
c. The Options shall be exercised by written notice directed to the
Secretary of the Company. Such written notice shall be accompanied by
full payment in cash for the number of Option Shares specified in such
written notice.
d. If the Optionee is subject to restrictions regarding the Optionee's
right to sell shares of Common Stock under applicable securities laws
and as a
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consequence exercise of the Options would not be taxable under the
provisions of Section 83(c) of the Code, the Optionee, upon exercise of
the Options, shall be authorized to make an election to be taxed upon
exercise of the Options under Section 83(b) of the Code. To effect such
election, the Optionee may file an appropriate election with the
Internal Revenue Service within thirty (30) days after exercise of the
Options and otherwise in accordance with applicable Treasury
Regulations.
e. The Optionee recognizes that the Committee may make such provisions and
take such steps as it may deem necessary or appropriate for the
withholding of any taxes that the Company or any subsidiary of the
Company is required by any law or regulation or any governmental
authority, whether federal, state or local, domestic or foreign, to
make in connection with the Optionee's exercise of the Options.
f. Subject to the terms of this Agreement, the Options may be exercised at
any time and without regard to any other option to purchase stock of
the Company held by the Optionee.
g. In the event the outstanding shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind
of shares or other securities of the Company or of any other
corporation by reason of any merger, sale of stock, consolidation,
liquidation, recapitalization, reclassification, stock split up,
combination of shares, stock dividend, or transaction having similar
effect, the total number of shares subject to this Option shall be
proportionately and appropriately adjusted. Following a transaction
described above, if the Company continues in existence, the number and
kind of shares that are subject to any Option and the option price per
share shall be proportionately and appropriately adjusted without any
change in the aggregate price to be paid therefor upon exercise of the
Option. If the Company will not remain in existence or substantially
all of its voting Common Stock and Common Stock will be purchased by a
single purchaser or group of purchasers acting together, then the
Company may (i) declare that all Options shall terminate 30 days after
the Committee gives written notice to all Optionee's of their immediate
right to exercise all Options then outstanding (without regard to
limitations on exercise otherwise contained in the Options), or (ii)
notify the Optionee that the Options shall apply with appropriate
adjustments as determined by the Company to the securities of the
successor corporation to the Optionee would have been entitled, or
(iii) take action that is some combination of aspects of (i) and (ii).
The determination by the Company as to the terms of any of the
foregoing adjustments shall be conclusive and binding. Any fractional
shares resulting from any of the foregoing adjustments under this
section shall be disregarded and eliminated.
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4. Nontransferability. The Options are not transferable except by will
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or by the laws of descent and distribution and are subject to the provisions of
Section 7 hereof. The Options may be exercised during the lifetime of the
Optionee only by the Optionee.
5. Limitation of Rights. The Optionee shall have no rights as a
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stockholder with respect to the Option Shares until the Optionee shall become
the holder of record of such Option Shares. Neither the Plan, the granting of
the Options nor this Agreement shall impose any obligation on the Company or any
subsidiary of the Company to continue the employment of the Optionee.
6. Optionee's Best Efforts Covenant. The Optionee hereby agrees to use
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the Optionee's best efforts to provide services to the Company in a workmanlike
manner and to promote the Company's interests.
7. Restrictions on Transfer and Pledge. Except as otherwise provided
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herein, the Options and all rights and privileges granted hereunder shall not be
transferred, assigned, pledged or hypothecated in any way, whether by operation
of law or otherwise, and shall not be subject to execution, attachment or
similar process.
8. Restrictions on Issuance of Option Shares. If at any time the Board
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of Directors or the Committee determines, in its discretion, that listing,
registration or qualification of the Option Shares covered by the Options upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to the exercise of the Options, the Options may not be exercised in
whole or in part unless and until such listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions not
acceptable to the Board of Directors or the Committee. The Board or Committee,
as the case may be, shall make such a determination, and notify the Optionee of
its determination, within two (2) days after receiving the Optionee's written
notice of exercise of his Options. In the event of any such determination by
the Board or the Committee, the Company shall use its best efforts to effect or
obtain such listing, registration, qualification, consent or approval.
9. Successors. This Agreement shall be binding upon any successor of the
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Company, in accordance with the terms of this Agreement and the Plan.
10. Stock Reserve. The Company shall at all times during the term of this
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Agreement reserve and keep available such number of shares of Common Stock as
shall be sufficient to satisfy the requirements of this Agreement. The Company
shall pay all original issue taxes (if any) on the exercise of the Options, and
all other fees and expenses necessarily incurred by the Company in connection
therewith.
11. Stockholder Approval. This Agreement shall be subject to the receipt
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of approval by the Stockholders of the Company if required by the rules of the
American Stock Exchange, and to the listing of the shares underlying the options
on the American Stock Exchange.
12. Investment Intent. The Optionee hereby represents and warrants as
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follows:
a. The Shares will be acquired for the Optionee's own account without
the participation of any other person, with the intent of holding the
Shares for
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investment and without the intent of participating, directly or indirectly,
in a distribution of the Shares and not with a view to, or for resale in
connection with, any distribution of the Shares or any portion thereof.
b. The Optionee, through the Optionee's position with the Company,
has access to all material information with regard to the Company.
c. The Optionee will not acquire the Shares based upon any
representation, oral or written, by any person with respect to the future
value of or income from the Shares but rather upon an independent
examination and judgment as to the prospects of the Company.
d. The Shares were not offered to the Optionee by means of publicly
disseminated advertisements or sales literature, nor is the Optionee aware
of any offers made to other persons by such means.
e. The Optionee acknowledges that the Optionee must continue to bear
the economic risk of the investment in the Shares for an indefinite period
and recognizes that the Shares will be: (i) transferred without
registration under any state or federal law relating to the registration of
securities for sale; and (ii) issued and transferred in reliance on the
exemption from registration provided by Section 4(2) of the United States
Securities Act of 1933, as amended (the "1933 Act").
IN WITNESS WHEREOF, Greenbriar Corporation acting by and through its duly
authorized officers, has caused this Agreement to be executed, and the Optionee
has executed this Agreement, effective this 9th day of January, 1997.
GREENBRIAR CORPORATION
By: /s/ Gene S. Bertcher
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Name: Gene S. Bertcher
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Title: Executive Vice President
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/s/ James R. Gilley
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OPTIONEE - James R. Gilley
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EXHIBIT B
INSTITUTIONAL CAPITAL CORPORATION
(Formerly MS HOLDING CORP.)
10670 N. Central Expressway
Suite 501
Dallas, TX 75231
214/750-5800
214/361-0964 FAX
M E M O
DATE: December 23, 1996 VIA FAX 972/407-8426
TO: Mark Bennett
FROM: Terry Shumate
RE: Interest due on the JRG Note Through 12/31/97
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Interest will have accrued on the note in the amount of $1,337,505.21 by
12/31/97. It is my understanding that JRG wishes to prepay that amount with
common stock of the Greenbriar Corporation. The loan provides for a stock price
to be used in this calculation which, in this case, works out to be $13.99375
per common share.
At this price per share JRG would immediately transfer 98,437 shares of
Greenbriar to Institutional Capital.
If you want to discuss this further, or if I can assist you, please call.
