As filed with the Securities and Exchange Commission on October 15, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MANOR CARE, INC.
(Exact name of issuer as specified in its charter)
Delaware 52-1200376
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
11555 Darnestown Road
Gaithersburg, Maryland 20878
(Address of Principal (Zip Code)
Executive Offices)
MANOR CARE, INC.
NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN
(Full title of the Plan)
James H. Rempe, Esq.
Senior Vice President, General Counsel and Secretary
11555 Darnestown Road
Gaithersburg, MD 20878
(Name and address of agent for service)
(301) 979-4265
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum Amount
Each Class of Amount Offering Aggregate Of
Securities To Be Price Per Offering Registration
To Be Registered Registered Share* Price* Fee*
Common Stock, 40,000 Shs. $40.75 $1,630,000 $493.94
par value of $.10
per share
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(*) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee. Estimate based on the average of the high and low share
prices reported on the New York Stock Exchange for October 11, 1996.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The contents of Registrant's Annual Report and Form 10-K for fiscal
year ended May 31, 1996 containing audited financial statements for the fiscal
year ended May 31, 1996, Form 10-Q for the fiscal quarter ended August 31, 1996,
and the description of the Registrant's common stock appearing in the
Registrant's registration statement on Form 8-A filed pursuant to
Section 12(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on July 30, 1981, are incorporated by reference into this
registration statement.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
filing of a post-effective amendment that indicates that all securities offered
have been sold or that deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
Item 4. Description of Securities. Not Applicable.
Item 5. Interests of Named Experts and Counsel. None.
Item 6. Indemnification of Officers and Directors.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations such as the Registrant are entitled, under certain circumstances,
to be indemnified against all expenses and liabilities (including attorneys'
fees) incurred by them as a result of suits brought against them in their
capacity as a director or officer, if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that despite the
adjudication of liability but
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in view of all the circumstances of the case, they are fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper. Any
such indemnification may be made by the corporation only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct. Article VII of the Registrant's By-Laws entitles
officers, directors and controlling persons of the Registrant to indemnification
to the full extent permitted by Section 145 of DGCL, as the same may be
supplemented or amended from time to time.
Article VII of the Bylaws of Manor Care, Inc. provides:
INDEMNIFICATION OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 1. Action, Other Than by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or trustee of the
Corporation, or that, being or having been such a director, officer, employee or
trustee, he is or was serving at the request of the Corporation as a director,
officer, employee, trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, or any appeal therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding -- whether by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent -- shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Action, by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed judicial action or suit
brought by or in the right of the Corporation to procure a judgement in its
favor by reason of the fact that he is or was an Agent (as defined above)
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense, settlement or appeal of such action or suit
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for
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gross negligence or misconduct in the performance of the duty of the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or other such court shall deem proper.
Section 3. Determination of Right of Indemnification. Any
indemnification under Section 1 or 2 (unless ordered by a court) shall be made
by the Corporation unless a determination is reasonably and promptly made (i) by
the Board by a majority vote or a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without admission of liability, in defense of any proceeding or in
defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against all
expenses incurred in connection therewith.
Section 5. Advances of Expenses. Except as limited by Section 6 of this
Article, expenses incurred in any action, suit, proceeding or investigation or
any appeal therein shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall undertake to repay such amount in
the event that it is ultimately determined, as provided herein, that such person
is not entitled to indemnification. Notwithstanding the foregoing, no advance
shall be made by the Corporation if a determination is reasonably and promptly
made by the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel in a
written opinion, that, based upon the facts known to the Board or counsel at the
time such determination is made, such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interests
of the Corporation, or, with respect to any criminal proceeding, that such
person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Board or independent
legal counsel reasonably determines that such person deliberately breached his
duty to the Corporation or its shareholders.
Section 6. Right of Agent to Indemnification Upon Application;
Procedure Upon Application. Any indemnification under Sections 1, 2, and 4, or
advance under Section 5 of
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this Article, shall be made promptly, and in any event within ninety days, upon
the written request of the Agent, unless with respect to applications under
Sections 1, 2, and 5, a determination is reasonably and promptly made by the
Board of Directors by a majority vote of a quorum of disinterested directors
that such Agent acted in a manner set forth in such Sections as to justify the
Corporation's not indemnifying or making an advance to the Agent. In the event
no quorum of disinterested directors is obtainable, the Board of Directors shall
promptly direct that independent legal counsel shall decide whether the Agent
acted in the manner set forth in such Sections as to justify the Corporation's
not indemnifying or making an advance to the Agent. The right to indemnification
or advances as granted by this Article shall be enforceable by the Agent in any
court of competent jurisdiction, if the Board or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety days. The Agent's expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such proceeding shall also be indemnified by the Corporation.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Article is held by a court of competent jurisdiction to be unavailable to an
indemnitee in whole or in part, the Corporation shall, in such an event, after
taking into account, among other things, contributions by other directors and
officers of the Corporation pursuant to indemnification agreements or otherwise,
and in the absence of personal enrichment, acts of intentional fraud or
dishonesty or criminal conduct on the part of the agent, contribute to the
payment of Agent's losses to the extent that, after other contributions are
taken into account, such losses exceed: (i) in the case of a director of the
Corporation or any of its subsidiaries who is not an officer of the Corporation
or any of such subsidiaries, the amount of fees paid to him for serving as a
director during the 12 months preceding the commencement of the suit, proceeding
or investigation; or (ii) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (i) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement of the suit, proceeding or investigation; or
(iii) in the case of an officer of the Corporation or any of the subsidiaries,
5% of the aggregate cash compensation paid to such officer for service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
Section 8. Other Rights and Remedies. The indemnification provided by
this Article shall not be deemed exclusive of, and shall not affect, any other
rights to which an Agent seeking indemnification may be entitled under any
Bylaws, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be an Agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation and
the Agent who serves in such capacity at any time while these bylaws and other
relevant provisions of the general
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corporation law and other modification thereof shall not affect any rights or
obligations then existing.
Section 9. Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was an Agent against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article. The Corporation may create a trust fund, grant a
security interest or use other means (including, without limitation, a letter of
credit) to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporations. For the purposes of this
Article, references to "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation, so that any person who is or was a director, officer, employees, or
trustee of such a constituent corporation or who, being or having been such a
director, officer employee or trustee, is or was serving at the request of such
constituent corporation as a director, officer, employee, trustee of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving corporation as he would if he had served the resulting or
surviving corporation in the same capacity.
Section 11. Other Enterprises, Fines, and Serving at Corporation's
Request. For purposes of this Article, references to "other enterprises" in
Sections 1 and 7 shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
Section 12. Savings Clause. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent as to expenses
(including attorneys' fees), judgements, fines and amounts paid in settlement
with respect to any action, suit, appeal, proceeding or investigation, whether
civil, criminal or administrative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated, or by any other applicable law.
The Registrant has entered into separate indemnification agreements
with directors and officers of the Registrant, pursuant to which the Registrant
will indemnify such directors
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and officers to the fullest extent permitted by Delaware law, as the same may be
amended from time to time.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is therefore unenforceable.
Item 7. Exemptions from Registration Claimed. Not Applicable.
Item 8. Exhibits.
4 Manor Care, Inc. Non-Employee Director Stock Compensation Plan
5 Opinion regarding legality of shares to be offered.
23(i) Consent of Arthur Andersen LLP.
23(ii) Consent of James H. Rempe, Esq. (included in Exhibit 5)
24 Powers of Attorney authorizing execution of registration statement of
Form S- 8 on behalf of certain directors of Registrant.
Item 9. Undertaking.
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;
(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) that, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
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(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 by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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) Filings incorporating subsequent Exchange Act documents by
reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13 (a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Request for acceleration of effectiveness or filing of
registration statement on Form S-8.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Gaithersburg, State of Maryland, on this 15th day of October 1996.
MANOR CARE, INC.
By: /s/James H. Rempe
----------------------------
James H. Rempe
Secretary
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
Signature Title Date
* Chairman, President, October 15, 1996
- -------------------------------- Chief Executive Officer
Stewart Bainum, Jr. and Director
* Vice Chairman and October 15, 1996
- -------------------------------- Director
Stewart Bainum
* Director October 15, 1996
- --------------------------------
Kennett L. Simmons
* Director October 15, 1996
- --------------------------------
Regina E. Herzlinger
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* Director October 15, 1996
- --------------------------------
William H. Longfield
* Director October 15, 1996
- --------------------------------
Frederick V. Malek
* Director October 15, 1996
- --------------------------------
Jerry E. Robertson
* Senior Vice President, October 15, 1996
- --------------------------------- Chief Financial Officer
James A. MacCutcheon and Treasurer (Principal
Financial Officer)
* Vice President and October 15, 1996
- --------------------------------- Controller
Margarita A. Schoendorfer (Principal Accounting
Officer)
* By:/s/James H. Rempe
--------------------------
James H. Rempe
Attorney-in-fact
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EXHIBIT 4
MANOR CARE, INC.
1996 NON-EMPLOYEE DIRECTOR
STOCK COMPENSATION PLAN
Manor Care, Inc. has adopted and established a stock compensation plan
for Non-Employee Directors in accordance with the following terms and
conditions.
SECTION ONE
DESIGNATION AND PURPOSE OF THE PLAN
A. Designation. This Plan is designated the "Manor Care, Inc. Non-
Employee Director Stock Compensation Plan."
B. Purpose. The purpose of this Plan is to increase the stock-based
component of Non-Employee Director compensation so as to encourage stock
ownership by Non-Employee Directors and to further align the interest of Non-
Employee Directors and stockholders.
SECTION TWO
DEFINITIONS
As used in the Plan, the following terms mean:
A. "Award" means restricted stock granted hereunder.
B. "Board" means the Board of Directors of the Company.
C. "Company" means Manor Care, Inc.
D. "Custodial Account" means the account described in Section 7(A)
herein.
E. "Disability" means a permanent and total disability within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986 as amended.
F. "Non-Employee Director" means a member of the Board of the Company
who is not an employee of the Company or any of its subsidiaries.
G. "Participant" means any Non-Employee Director who is granted an
Award as provided in this Plan.
H. "Plan" means this Non-Employee Director Stock Compensation Plan.
I. "Retirement" means termination of service as a Director for either
of the following reasons: (i) after attaining 65 years of age or (ii) failure to
be re-elected as a Director by the shareholders of the Company at the Annual
Meeting of Stockholders.
J. "Stock" means the common stock of Manor Care, Inc.
SECTION THREE
EFFECTIVE DATE, DURATION AND STOCKHOLDER APPROVAL
The Plan shall be effective upon the approval of the Plan by a
majority of the outstanding shares of Stock voted at the 1996 Annual Meeting of
Stockholders ("Stockholder Approval").
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SECTION FOUR
ADMINISTRATION OF THIS PLAN
This Plan shall be administered by the Board. The Board shall have all
the powers vested in it by the terms of this Plan, such powers to include
authority (within the limitation described herein) to prescribe the form of the
agreement embodying Awards made under this Plan. Subject to the provisions of
this Plan, the Board shall have the power to construe this Plan, to determine
all questions arising thereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. Any
decision of the Board in the administration of this Plan, as described herein,
shall be final and conclusive. The Board may act only by a majority of its
members in office, except that the members thereof may authorize any one or more
of their number or the Secretary or any other officer of the Company to execute
and deliver documents on behalf of the Board.
SECTION FIVE
GRANT OF AWARDS AND LIMITATION OF
NUMBER OF SHARES SUBJECT TO AWARD
A. Compensation in Common Stock. Subject to stockholder approval,
effective as of the 1996 Annual Meeting of Stockholders and as of each annual
meeting thereafter, upon election as a Non-Employee Director at each such
meeting, each Non-Employee Director shall be granted a number of shares equal to
$30,000 fair market value (as determined in accordance with Section 5(B) below)
of Stock on the date of each annual meeting. Such Award shall be in lieu of all
Board retainer and Board attendance fees.
B. Determination of Fair Market Value. The fair market value of the
Stock on the date of granting an Award shall be the mean of the high and low
prices at which the Stock was sold on the market on such date. In the event no
such sales of Stock occurred on such date, the fair market value of the Stock
shall be determined by the mean of the high and low prices at which the Stock
was sold on the market on the next preceding date for which the Stock was so
sold.
C. Fractions of Shares. Whenever under the terms of the Plan
fractional shares would be required to be issued, the fractional shares shall be
rounded up to the next full share.
D. Total Number of Shares. Subject to any adjustment pursuant to
Section 8, the total number of shares of Stock which may be awarded under this
Plan is 40,000 shares. The maximum number of shares authorized may be increased
from time to time by approval of the Board and, if required pursuant to Rule
16-3 of the Securities and Exchange Commission or its successors or the
applicable rules of any stock exchange, the stockholders of the Company.
To the extent that an Award lapses or the rights of the Participant to
whom it was granted terminate, expire or are cancelled for any other reason, in
whole or in part, shares of Stock (or remaining shares) subject to such Award
shall again be available for the grant of an Award under the Plan. Shares
delivered by the Company under the Plan may be authorized and unissued Stock,
Stock held in the treasury of the Company or Stock purchased on the open market
(including private purchases) in accordance with applicable securities laws.
E. Insufficient Number of Shares. In the event that the number of
shares of Stock available for future Awards under this Plan is insufficient to
make all Awards required to be made on any date, then all Participants entitled
to an Award on such date shall share ratably in the number of shares of Stock
which may be included in Awards granted to Participants under this Plan.
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SECTION SIX
ELIGIBILITY
Each Non-Employee Director shall be eligible to receive an Award in
accordance with Section Five. Each Award granted under this Plan shall be
evidenced by an agreement in such form as the Board shall prescribe from time to
time in accordance with this Plan and shall comply with the terms and conditions
set forth in Section 7. Such an agreement shall incorporate the provisions of
this Plan by reference.
SECTION SEVEN
RESTRICTIONS ON SHARES
A. Custodial Account. The shares shall be held by the Company in a
Custodial Account on behalf of the Participant until such time as the shares
have vested pursuant to the terms of Section 7(B) of this Plan.
B. Vesting. The shares held by the Company shall remain in the
Custodial Account until vesting which shall occur (a) to the extent of one-third
of the total number of shares, subject to an Award following the expiration of
one year from the date of the Award, (b) to the extent of an additional
one-third following the expiration of two years from the date of the Award, and
(c) to the extent of an additional one-third following the expiration of three
years from the date of the Award.
Upon vesting, the shares shall be distributed to the Participant
within a reasonable period of time not to exceed ninety (90) days from the date
of vesting and the Custodial Account shall be terminated as to such shares.
C. Forfeiture. Subject to Section 7(E) below, if the Participant
ceases to be a Non-Employee Director for any reason prior to vesting, the
Participant shall forfeit the shares, and the Custodial Account shall be
terminated. Ownership of the forfeited shares shall revert back to the Company.
D. No Assignment. The shares granted under the Plan, while held by the
Company pursuant to the Custodial Account, 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. Upon any
attempt to so transfer, assign, pledge, hypothecate, or otherwise dispose of the
shares, or of any right or privilege conferred thereby, contrary to the
provisions hereof, or upon the levy of any attachment or similar process upon
such rights and privileges, the Participant shall forfeit the shares and
ownership of the forfeited shares shall revert back to the Company.
E. Death, Disability and Board Retirement. A Participant who ceases to
serve on the Board by reason of (i) death, (ii) Disability, or (iii) Retirement,
shall be vested in his or her entire Award notwithstanding the limitation of
Section 7(B) above.
SECTION EIGHT
CHANGES IN CAPITAL STRUCTURE
In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, or extraordinary dividend or divestiture
(including a spin-off), or any other change in the capital structure or shares
of the Company, the Board shall make adjustments, determined by the Board in its
discretion to be appropriate, as to the number and kind of securities subject to
this Plan and specified in Section 5 of this Plan and as to the number and kind
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of securities covered by each outstanding Award and, where applicable, the price
per share thereunder.
SECTION NINE
RIGHTS AS A STOCKHOLDER
The Participant shall be entitled to vote the shares held by the
Company in the Custodial Account. Any cash or non-cash dividend payable with
respect to shares held in the Custodial Account will remain in the Custodial
Account subject to risk of forfeiture until such time as the shares with respect
to which such cash or non-cash dividend, as the case may be, was declared is
either distributed to the Participant or forfeited by the Participant.
Notwithstanding anything to the contrary contained herein, no Stock or
cash dividends shall be transferred by the Company to a Custodial Account prior
to the date of Stockholder Approval, and no Non-Employee Director shall be
entitled to any rights as a stockholder with respect to any Stock granted
hereunder, including, without limitation voting rights until such Stock has been
transferred to a Custodial Account.
SECTION TEN
TITLE
Subject to Section 13 herein, the shares held by the Company in a
Custodial Account shall be held in the name of the Participant, is either
distributed to the Participant or forfeited by the Participant.
Notwithstanding anything to the contrary contained herein, no Stock or
cash dividends shall be transferred by the Company to a Custodial Account prior
to the date of Stockholder Approval, and no Non-Employee Director shall be
entitled to any rights as a stockholder with respect to any Stock granted
hereunder, including, without limitation voting rights until such Stock has been
transferred to a Custodial Account.
SECTION TEN
TITLE
Subject to Section 13 herein, the shares held by the Company shall be
held in the name of the Participant. Such shares shall at all times remain in
the Company Custodial Account until they have been (i) forfeited by the
Participant, (ii) distributed to the Participant, or (iii) transferred to a
grantor "Rabbi Trust" in accordance with the provisions of Section 13.
SECTION ELEVEN
RISK OF LOSS
The Participant agrees to assume all risks in connection with any
decrease in the value of the shares granted to the Participant placed into the
Custodial Account for the benefit of the Participant.
SECTION TWELVE
NOTICE TO COMPANY
The Participant shall notify the Company immediately if he or she
elects to make an election under Section 83(b) of the Internal Revenue Code or
upon the occurrence of any other event resulting in the value of the shares
being included in the Participant's gross income prior to vesting.
<PAGE>
-5-
SECTION THIRTEEN
DEFERRAL
Participant, provided he or she has not made the election referred to
in Section 12 herein, may elect by written notice to defer payment on all or a
portion of the shares held in the Custodial Account prior to any vesting,
subject to the following conditions:
A. Such election shall be irrevocable. An election to defer payment
shall be made at least sixty (60) days prior to any vesting for which the
election to defer payment is made. Participant may elect to defer the receipt of
the shares held in the Custodial Account prior to any vesting for a period of
time which ends no sooner than the earlier of (i) a date at least twenty-four
(24) months from the date of any such vesting or (ii) cessation of service as a
Non-Employee Director. During such deferral period, Participant shall not be
entitled to (i) vote the shares granted to him or her for which a deferral has
been elected, and (ii) currently receive cash dividends or non-cash dividends.
B. The Company shall establish a grantor "Rabbi Trust" and shall
establish thereunder on behalf of the Participant upon a deferral election a
liability account (the "Deferred Compensation Account") which shall be credited
with any shares, cash dividends, and non-cash dividends subject to such deferral
election. Any shares transferred from the Custodial Account to the Deferred
Compensation Account shall be retitled and held in the name of the trustee of
the grantor "Rabbi Trust".
C. There shall be credited to the Deferred Compensation Account an
additional amount with respect to the cash dividends (i.e., in addition to the
items credited pursuant to paragraph (B) hereof) equal to the earnings generated
through the investment of the cash dividends by the trustee of the grantor
trust.
D. The Company will provide an annual statement of the Deferred
Compensation Account to the Participant showing amounts credited to his or her
account in accordance with paragraph (C).
E. Nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or be construed to create a trust of any
kind other than a grantor "Rabbi Trust", or a fiduciary relationship between the
Company and the Participant, his or her designated beneficiary or any other
person. Any amounts deferred under the provisions of this Plan shall continue
for all purposes to be a part of the general assets of the Company. To the
extent that Participant acquires a right to receive payment from the Company
under this Plan, such right shall be no greater than the right of any unsecured
general creditor of the Company.
F. The right of the Company or any other person to the payment of
deferred compensation or other benefits under this Plan shall not be assigned,
transferred, pledged, or encumbered except by will or by the laws of descent and
distribution.
SECTION FOURTEEN
GENDER
Where applicable, words in the feminine shall include the masculine,
words in the neuter shall include the masculine and feminine, and words in the
singular shall include the plural, and vice versa.
<PAGE>
-6-
SECTION FIFTEEN
SUCCESSORS
This Plan shall be binding upon and inure to the benefit of the
Company and its subsidiaries, its successors and assigns and the Participant and
his or her heirs, executors, administrators and legal representatives.
SECTION SIXTEEN
NO RIGHT TO CONTINUE AS A DIRECTOR
Neither the Plan, nor the granting of an Award, nor any other action
taken pursuant to Plan, shall constitute or be evidence of any agreement or
understanding, express or implied, that the Company will retain a Non-Employee
Director for any period of time, or at any particular rate of compensation.
Nothing in this Plan shall in any way limit or affect the right of the Board or
the stockholders of the Company to remove any Non-Employee Director or otherwise
terminate his or her service as a director of the Company.
SECTION SEVENTEEN
MISCELLANEOUS PROVISIONS
A. Government and Other Regulations. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any government agencies
as may be required. The Company shall be under no obligation to register under
the Securities Act of 1933, as amended ("Act"), any of the shares of Stock
issued, delivered or paid in settlement under the Plan. If Stock awarded under
the Plan may in certain circumstances be exempt from registration under the Act,
the Company may restrict its transfer in such manner as it deems advisable to
ensure such exempt status.
B. Governing Law. All matters relating to the Plan or to Awards
granted hereunder shall be governed by the laws of the State of Maryland,
without regard to its principles of conflict of laws.
C. Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles and headings, shall control.
SECTION EIGHTEEN
AMENDMENT AND TERMINATION
This Plan may be terminated or amended at any time and from time to
time by the Board as the Board shall deem advisable provided, however, that (a)
no such amendment shall be effective without approval of the stockholders of the
Company, if stockholder approval of the amendment is then required pursuant to
Rule 16b-3 under the Securities Exchange Act of 1934 or its successors, or the
applicable rules of any securities exchange, and (b) to the extent prohibited by
such Rule 16b-3 or its successors, the Plan may not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code of 1986, as amended, or the regulations thereunder, or the Employee
Retirement Income Security Act of 1974, as amended, or the regulations
thereunder. No modification or amendment of this Plan shall, without the written
consent of the Participant, materially and adversely affect his or her rights
under this Plan.
EXHIBIT 5
October 15, 1996
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
RE: Manor Care, Inc.
Registration Statement on Form S-8
Gentlemen:
I am General Counsel of Manor Care, Inc. (the "Company") and have
acted for the Company in connection with the preparation of the Company's
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended. The
Registration Statement covers shares of the Company's Common Stock, $.10 par
value, offered under the Company's Non-Employee Director Stock Compansation Plan
(the "Plan").
In connection with the rendering of the opinion set forth below, I
have reviewed the records of the Company, the minutes of the meetings of the
stockholders and directors of the Company and such other records and documents
as was necessary in my judgment to so render the following opinion.
Based on the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated and existing under
the laws of the State of Delaware; and
2. The shares of Common Stock of the Company offered to the holders
under the exercise of options under the Plan, have been or will be legally
issued, fully paid and nonassessable.
I hereby consent to the filing of a copy of this opinion with the
Commission as an exhibit to the Registration Statement referred to above.
Very truly yours,
/s/ James H. Rempe
------------------------------
James H. Rempe
Senior Vice President
and General Counsel
EXHIBIT 23(i)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated June 28, 1996
included and incorporated by reference in Manor Care, Inc.'s Form 10-K for the
year ended May 31, 1996 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
------------------------------
ARTHUR ANDERSEN LLP
Washington, D.C.
October 15, 1996
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996.
/s/Stewart Bainum, Jr.
----------------------------
Stewart Bainum, Jr.
Chairman, President,
Chief Executive Officer and
Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc.(the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996
/s/Stewart Bainum
--------------------------
Stewart Bainum
Vice Chairman and Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996
/s/Kennett L. Simmons
-------------------------
Kennett L. Simmons
Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for her and in her name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Purchase Plan and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and purposes
as she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or her substitute may lawfully do or cause to be
done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 15th
day of October, 1996.
/s/Regina E. Herzlinger
--------------------------
Regina E. Herzlinger
Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996.
/s/William H. Longfield
--------------------------
William H. Longfield
Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996.
/s/Frederick V. Malek
--------------------------
Frederick V. Malek
Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996.
/s/Jerry E. Robertson
-------------------------
Jerry E. Robertson
Director
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
15th day of October, 1996.
/s/James A. MacCutcheon
------------------------------
James A. MacCutcheon
Senior Vice President, Chief
Financial Officer, and Treasurer
(Principal Financial Officer)
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints JAMES H. REMPE her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for her and in her name, place
and stead, in any and all capacities, to sign Registration Statements or
amendments (including post-effective amendments) thereto with respect to the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock, $.10 par value, of Manor Care, Inc. (the "Company") delivered pursuant to
the Company's Non-Employee Director Stock Compensation Plan and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
purposes as she might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or her substitute may lawfully do or cause
to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this
15th day of October, 1996.
/s/Margarita Schoendorfer
-------------------------------
Margarita Schoendorfer
Vice President, Controller
(Principal Accounting Officer)
