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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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[X] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Materials Pursuant to Sec 240.14a-11(c) or Sec 240.14a-12
BEVERLY ENTERPRISES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rule 14a-5(i)(4) and 0-11.
1) Title of each class of securities to which transactions applies:
2) Aggregate number of securities to which transactions applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule-11.
4) Proposed maximum aggregate value of Transaction:
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0- 11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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PRELIMINARY COPIES
BEVERLY ENTERPRISES, INC.
, 1997
To All Holders of Beverly Enterprises, Inc.
9% Senior Notes due 2006
The Board of Directors of Beverly Enterprises, Inc. (the "Company") is
seeking your consent at this time to amend certain provisions of the indenture
(the "Indenture") under which the Company's 9% Senior Notes due 2006 (the
"Securities") were issued. As described in the accompanying Consent Solicitation
Statement, the proposed Indenture amendments, if adopted, would amend the
Indenture to facilitate consummation of the distribution and merger transactions
contemplated by the Agreement and Plan of Distribution dated as of April 15,
1997 (the "Distribution Agreement"), among the Company, New Beverly Holdings,
Inc., a Delaware corporation and wholly owned subsidiary of the Company ("New
Beverly"), and Capstone Pharmacy Services, Inc., a Delaware corporation
("Capstone"), and by the Agreement and Plan of Merger dated as of April 15, 1997
(the "Merger Agreement"), between the Company and Capstone. The Distribution
Agreement and the Merger Agreement contemplate, among other matters: (i) the
transfer by the Company to New Beverly of all of the Company's assets and
properties, other than the capital stock of the Company's Pharmacy Corporation
of America subsidiary ("PCA") and the capital stock of PCA's subsidiaries, in
exchange for all outstanding shares of capital stock of New Beverly; (ii) the
assumption by New Beverly of all of the Company's rights and obligations in
respect of the Securities and the Indenture; (iii) the termination and discharge
of the obligations of the Company, PCA and each of PCA's subsidiaries in respect
of the Securities and the Indenture; (iv) the distribution by the Company to its
stockholders of all of the outstanding capital stock of New Beverly such that,
immediately after such distribution, New Beverly will become an independent,
publicly held corporation (owned directly by the Company's stockholders); and
(v) immediately following consummation of the transactions described above, the
merger of the Company with and into Capstone, with Capstone as the surviving
corporation in such merger (the "Merger").
To further facilitate consummation of the distribution transactions and
the Merger referred to above, the Board is also seeking your consent at this
time to amend the Indenture to permit the Company, if it should so elect, to (i)
redeem all outstanding principal amount of its 7 5/8% Convertible Subordinated
Debentures due 2003, without violating the restricted payment provisions
contained in the Indenture, and (ii) provide the Company with increased
flexibility under the Indenture to refinance its outstanding subordinated
indebtedness, including, without limitation, the Company's 5 1/2% Convertible
Subordinated Debentures due 2018 with new indebtedness having a final maturity
date earlier than that of the
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subordinated indebtedness being refinanced but, in any case, later than the
final maturity date of the Securities (i.e., February 15, 2006).
The purpose, effects and text of the amendments are more fully described
in the accompanying Consent Solicitation Statement and related materials which
you are encouraged to read carefully and in their entirety. In accordance with
the terms and subject to the conditions set forth in the accompanying Consent
Solicitation Statement and the enclosed consent form, the Company will pay to
holders of Securities who consent to the adoption of each of the proposed
Indenture amendments, up to an aggregate of $______ in cash for each $1,000
principal amount of Securities for which a validly executed and timely delivered
consent has been accepted by the Company and not properly revoked by such
holders ($______ of which will be paid at the time the proposed Indenture
amendments are adopted pursuant to the execution and delivery of a supplemental
indenture, and $______ of which will be paid upon consummation of the Merger).
The Company requests that all consents be returned as promptly as possible
and, in any event, prior to 5:00 p.m., Eastern time, on ______ __, 1997.
Your prompt attention to this matter is greatly appreciated.
Sincerely,
BEVERLY ENTERPRISES, INC.
/s/ David R. Banks
Chairman of the Board
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BEVERLY ENTERPRISES, INC.
SOLICITATION OF CONSENTS FROM HOLDERS
OF 9% SENIOR NOTES DUE 2006
($180,000,000 PRINCIPAL AMOUNT OUTSTANDING)
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THE SOLICITATION WILL EXPIRE AT 5:00 P.M., EASTERN TIME,
ON ______ __, 1997, UNLESS EXTENDED. THE COMPANY RESERVES
THE RIGHT TO EXTEND THE SOLICITATION AT ANY TIME AND FROM
TIME TO TIME, INCLUDING ON A DAILY BASIS,
UNTIL 5:00 P.M., EASTERN TIME, ON THE DATE ON WHICH
CONSENTS HAVE BEEN RECEIVED IN RESPECT OF A MAJORITY IN
AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES OUTSTANDING
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The Board of Directors (the "Board") of Beverly Enterprises, Inc., a
Delaware corporation (the "Company"), is hereby soliciting, upon the terms and
subject to the conditions set forth in this Consent Solicitation Statement and
in the related consent form, consents (the "Solicitation") from the registered
holders of the Company's 9% Senior Notes due 2006 (each a "Security" and
collectively the "Securities"), to amend certain provisions of that certain
indenture (the "Indenture") dated as of February 1, 1996 (as amended by
Supplemental Indenture No. 1 thereto dated as of December 16, 1996), among the
Company, certain of the Company's subsidiaries, as guarantors (the
"Guarantors"), and The Chase Manhattan Bank (as successor by merger to Chemical
Bank), as Trustee (the "Trustee"). This Consent Solicitation Statement is first
being mailed, sent or given to Registered Holders (as defined below) of
Securities on or about ______ __, 1997.
Capitalized terms used and not defined in this Consent Solicitation
Statement have the respective meanings assigned to them in the Indenture.
The Board is conducting the Solicitation at this time to obtain the
requisite consents from Registered Holders to amend the Indenture to facilitate
consummation of the distribution and merger transactions contemplated by that
certain Agreement and Plan of Distribution dated as of April 15, 1997 (the
"Distribution Agreement"), among the Company, New Beverly Holdings, Inc., a
Delaware corporation and wholly owned subsidiary of the Company ("New Beverly"),
and Capstone Pharmacy Services, Inc., a Delaware corporation ("Capstone"), and
by that certain Agreement and Plan of Merger dated as of April 15, 1997 (the
"Merger Agreement"), between the Company and Capstone. The Distribution
The Solicitation Agent is:
DONALDSON, LUFKIN & JENRETTE
Securities Corporation
The date of this Consent Solicitation Statement
is __________, 1997
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Agreement and the Merger Agreement contemplate, among other matters: (i) the
transfer by the Company to New Beverly of all of the Company's assets and
properties, other than the capital stock of the Company's Pharmacy Corporation
of America subsidiary ("PCA") and the capital stock of PCA's subsidiaries, in
exchange for all outstanding shares of capital stock of New Beverly; (ii) the
assumption by New Beverly of all of the Company's rights and obligations in
respect of the Securities and the Indenture; (iii) the termination and discharge
of the obligations of the Company, PCA and each of PCA's subsidiaries in respect
of the Securities and the Indenture; (iv) the distribution by the Company to its
stockholders as of the distribution record date of all of the outstanding
capital stock of New Beverly such that, immediately after such distribution, New
Beverly will be an independent, publicly held corporation (owned directly by the
Company's stockholders); and (v) following consummation of the transactions
described in clauses (i) through (iv) above (collectively, the "Distribution"),
the merger of the Company with and into Capstone, with Capstone as the surviving
corporation in such merger (the "Merger", and together with the Distribution,
the "Transactions").
To further facilitate consummation of the Transaction, the Board is also
conducting the Solicitation at this time to obtain the requisite consents from
Registered Holders to amend the Indenture to permit the Company, if it should so
elect, to (i) redeem all outstanding principal amount of its 7 5/8% Convertible
Subordinated Debentures due 2003 (the "7 5/8% Convertible Debentures") without
violating the Restricted Payment provisions of the Indenture and (ii) provide
the Company with increased flexibility under the Indenture to refinance its
outstanding subordinated indebtedness (including, without limitation, the
Company's outstanding 5 1/2% Convertible Subordinated Debentures due 2018 (the
"5 1/2% Convertible Debentures")) with new indebtedness having a final maturity
date earlier than that of the subordinated indebtedness being refinanced but, in
any case, later than the final maturity date of the Securities.
As of the date of this Consent Solicitation Statement, there was issued
and outstanding approximately $212,479,700 aggregate principal amount of such
Subordinated Indebtedness (including approximately $149,999,700 aggregate
principal amount of the 5 1/2% Convertible Debentures and approximately
$62,480,000 aggregate principal amount of the 7 5/8% Convertible Debentures.
If adopted, such amendments would:
(i)(x) amend Sections 5.1, 5.2 and 10.5 of the Indenture with the consent
of the holders of a majority in aggregate principal amount of the Securities
outstanding (the "Majority Holders") to (a) permit (as a sale of substantially
all the assets and properties of the Company) the transfer by the Company to New
Beverly of all the Company's properties and assets, other than the capital stock
of PCA and the capital stock of PCA's subsidiaries,
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notwithstanding that the Consolidated Net Worth of New Beverly, after giving
effect to such transfer, will be less than the Consolidated Net Worth of the
Company, immediately prior to such transfer, and irrespective of whether New
Beverly, after giving effect to such transfer, will have the ability to incur
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
prescribed by Section 4.9 of the Indenture, and (b) provide that upon New
Beverly's assumption of all of the Company's obligations under the Indenture and
the Securities, the Company's obligations thereunder will terminate and be
discharged; and (y) amend Section 1.1 of the Indenture with the consent of the
Majority Holders to (a) modify the definitions of "Spinoff Transaction" and
"Asset Sale" contained therein to include within the scope of such definitions
the transfer by the Company to New Beverly of all of the Company's assets and
properties, other than the capital stock of PCA and the capital stock of PCA's
subsidiaries, in exchange for all outstanding shares of capital stock of New
Beverly, and (b) make certain additional technical and conforming definitional
changes to permit consummation of the Transactions (collectively, the
"Transactions Amendment");
(ii) amend Section 4.7 of the Indenture with the consent of the Majority
Holders to permit the Company, if it should so elect, to redeem (the
"Redemption") all outstanding principal amount of its 7 5/8% Convertible
Debentures, without violating the Restricted Payment provisions contained
therein (the "Redemption Amendment"); and
(iii) amend Section 1.1 of the Indenture with the consent of the Majority
Holders to modify the definition of "Permitted Refinancing Indebtedness"
contained therein to provide that (a) in the case of Permitted Refinancing
Indebtedness that is not Subordinated Indebtedness, such Permitted Refinancing
Indebtedness must have a final maturity date later than the final maturity date
of, and have a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being refinanced, and (b)
in the case of Permitted Refinancing Indebtedness that is Subordinated
Indebtedness, such Permitted Refinancing Indebtedness must have a final maturity
date later than February 15, 2006 (i.e., the final maturity date of the
Securities) (the "Refinancing Indebtedness Amendment" and, together with the
Transactions Amendment and the Redemption Amendment, the "Proposed Amendments").
IRRESPECTIVE OF WHETHER THE PROPOSED AMENDMENTS BECOME EFFECTIVE, THE
SECURITIES WILL CONTINUE TO BE OUTSTANDING IN ACCORDANCE WITH ALL OTHER TERMS OF
THE INDENTURE AND THE SECURITIES.
In accordance with the terms and subject to the conditions set forth in
this Consent Solicitation Statement and in the related consent form, the Company
will accept all properly completed, dated and executed consent forms which are
received by the Trustee at or prior to 5:00 p.m., Eastern time, on ______ __,
1997 (as such time may, from time to time, be extended as provided in this
Consent Solicitation Statement, the "Expiration Date"). Consent
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forms marked to indicate a vote FOR the Proposed Amendments and not properly
revoked before the Expiration Date (a "Consent") will receive a Consent Payment
(as defined below) in the manner and at the times described below, if and only
if (i) Consents in respect of a majority in aggregate principal amount of the
Securities then outstanding and not owned by the Company or any Affiliate (the
"Requisite Consents") have been received by the Trustee on or prior to the
Expiration Date and not properly revoked, and (ii) a supplemental indenture
giving effect to the Proposed Amendments has been executed and delivered by the
Company and the Trustee (the "Supplemental Indenture"). Subject to the
conditions described in the immediately following paragraph, the Company will
pay up to an aggregate of $______ in cash for each $1,000 principal amount of
Securities for which a Consent has been accepted, $______ of which will be
payable at the time of the execution and delivery of the Supplemental Indenture
by the Company and the Trustee, and $______ of which will be payable promptly
following consummation of the Merger (the "Consent Payment"). Without limiting
the generality of the foregoing, the Company reserves the right to delay making
Consent Payments, in whole or in part, to comply with any applicable law.
UNDER NO CIRCUMSTANCES WILL THE COMPANY MAKE ANY CONSENT PAYMENT TO ANY
PERSON WHO DELIVERS A CONSENT FORM WITH THE "DO NOT CONSENT" OR "ABSTAIN" BOX
MARKED THEREON WITH RESPECT TO ANY OF THE TRANSACTIONS AMENDMENT, THE REDEMPTION
AMENDMENT OR THE REFINANCING INDEBTEDNESS AMENDMENT UNLESS, ON OR PRIOR TO THE
EXPIRATION DATE, SUCH PERSON DELIVERS AND DOES NOT PROPERLY REVOKE A
SUBSEQUENTLY DATED CONSENT FORM MARKED TO INDICATE A VOTE FOR THE PROPOSED
AMENDMENTS.
Approval of the Proposed Amendments requires receipt of the Requisite
Consents. As of the date hereof, $180,000,000 aggregate principal amount of
Securities were outstanding. See "Principal Holders and Security Ownership of
Management."
Persons who do not deliver Consents on or prior to the Expiration Date
will not be entitled to receive any Consent Payment. The Expiration Date may be
extended (including on a daily basis) until 5:00 p.m., Eastern time, on the date
on which the Requisite Consents are received, at any time and from time to time
in the discretion of the Company, and the Solicitation may be terminated at any
time (including after the Expiration Date and prior to the execution and
delivery of the Supplemental Indenture by the Company and the Trustee) in the
discretion of the Company, whether or not the Requisite Consents have been
received. IF THE SOLICITATION IS SO TERMINATED BY THE COMPANY, NO CONSENT
PAYMENTS WILL BE MADE, IRRESPECTIVE OF WHETHER THE REQUISITE CONSENTS WERE
RECEIVED.
Only those persons ("Registered Holders") in whose name Securities were
registered in the register maintained by the Trustee as of ______ __, 1997 (the
"Record Date"), or any other person who has obtained a proxy (in substantially
the form included with the consent form) authorizing such person (or any other
person claiming title by or through such person)
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to complete and deliver a consent form and vote the related Securities on behalf
of a Registered Holder, will be eligible to deliver a consent form and vote with
respect to the Proposed Amendments and, upon the terms and subject to the
conditions set forth in this Consent Solicitation Statement and in the related
consent form, receive a Consent Payment.
The transfer of Securities after the Record Date will NOT have the effect
of revoking the election made in any consent form theretofore validly delivered,
and each properly completed and timely furnished consent form will be counted
notwithstanding any transfer of the Securities to which the consent form
relates, unless the procedure for revoking Consents described in this Consent
Solicitation Statement has been complied with. A Consent received by the Trustee
on or prior to the Expiration Date relating to any Securities will be deemed to
revoke any consent form in respect of such Securities having an earlier date
that has the "DO NOT CONSENT" or "ABSTAIN" box marked thereon.
With respect to Securities registered in the name of CEDE & Co., which is
the nominee of The Depository Trust Company ("DTC"), the "DTC Participants"
(i.e., brokers, banks and other financial institutions that are participants in
DTC), rather than DTC, must execute and deliver the consent form. Participants
in The Midwest Depository Trust Company and Philadelphia Depository Trust
Company should inquire of such institutions regarding the procedure for
executing consent forms in respect of Securities registered in the name of their
respective nominees.
THE COMPANY WILL NOT BE DEEMED TO HAVE ACCEPTED ANY CONSENTS UNLESS AND
UNTIL THE SUPPLEMENTAL INDENTURE IS EXECUTED AND DELIVERED BY THE COMPANY AND
THE TRUSTEE. IF THE COMPANY AND THE TRUSTEE EXECUTE AND DELIVER THE SUPPLEMENTAL
INDENTURE, THE PROPOSED AMENDMENTS WILL BE BINDING UPON ALL HOLDERS OF
SECURITIES, WHETHER OR NOT SUCH HOLDERS HAVE DELIVERED CONSENTS.
If, in accordance with the terms and subject to the conditions set forth
in this Consent Solicitation Statement and in the related consent form, the
Requisite Consents are received and the Supplemental Indenture is executed and
delivered by the Company and the Trustee, non-consenting holders (whether or not
they deliver a consent form or otherwise affirmatively vote against the Proposed
Amendments) will not be entitled to any rights of appraisal or similar rights of
dissenters (whether pursuant to the Indenture, the Company's organizational
instruments or applicable provisions of Delaware law) with respect to adoption
of the Proposed Amendments.
CONSENTS CAN BE REVOKED ONLY IN ACCORDANCE WITH THE PROCEDURES THEREFOR
SET FORTH IN THIS CONSENT SOLICITATION STATEMENT AT ANY TIME UP TO, AND WILL
BECOME IRREVOCABLE UPON, THE LATER OF THE EXPIRATION DATE AND THE RECEIPT BY THE
TRUSTEE
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FROM THE COMPANY OF AN OFFICER'S CERTIFICATE IN ACCORDANCE WITH THE PROVISIONS
OF THE INDENTURE CERTIFYING THAT THE REQUISITE CONSENTS HAVE BEEN RECEIVED. ONLY
HOLDERS WHO PROPERLY DELIVER THEIR CONSENTS ON OR PRIOR TO THE EXPIRATION DATE
AND DO NOT PROPERLY REVOKE SUCH CONSENTS WILL, IN ACCORDANCE WITH THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH IN THIS CONSENT SOLICITATION STATEMENT AND
IN THE RELATED CONSENT FORM, BE ENTITLED TO RECEIVE ANY CONSENT PAYMENTS.
IF ANY PERSON DELIVERS AN EXECUTED CONSENT FORM WITHOUT INDICATING A VOTE
IN RESPECT OF THE PROPOSED AMENDMENTS, SUCH DELIVERY WILL BE DEEMED TO
CONSTITUTE A VOTE FOR ADOPTION OF THE PROPOSED AMENDMENTS.
UNDER NO CIRCUMSTANCES SHOULD ANY PERSON TENDER OR DELIVER TO THE COMPANY,
THE TRUSTEE OR THE SOLICITATION AGENT ANY SECURITIES WITH THEIR CONSENT FORMS,
OR OTHERWISE.
AVAILABLE INFORMATION
The Company (File No. 1-9550) and Capstone (File No. 0-20606) are subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and in accordance therewith file reports and other
information with the Securities and Exchange Commission (the "Commission")
relating to their business, properties, management, financial position, results
of operations and other matters. Such reports, proxy statements and other
information can be inspected and copied at the Public Reference Section
maintained by the Commission at Judiciary Plaza, 450 Fifth Street N.W.,
Washington, D.C. 20549 and at its Regional Offices located at The Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2551, and 7
World Trade Center, New York, New York 10048. Copies of such material also can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The common stock,
$0.10 par value, of the Company (the "Company Common Stock") is listed on the
New York Stock Exchange, Inc. ("NYSE") and the Pacific Stock Exchange ("PSE")
under the symbol "BEV". The common stock, $.01 par value, of Capstone (the
"Capstone Common Stock"), is included for quotation on the National Association
of Securities Dealers, Inc. Automated Quotation (National Market) System (the
"Nasdaq Stock Market") under the symbol "DOSE". Such reports, proxy statements
and other information also can be inspected at the offices of the NYSE located
at 20 Broad Street, New York, New York 10005 or at the offices of the PSE
located at 301 Pine Street, San Francisco, California 94104 (with respect to the
Company), and at the offices of the Nasdaq Stock Market located at 1735 K
Street, N.W., Washington, D.C. 20006 (with
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respect to Capstone). In addition, such reports, proxy statements and other
information can be reviewed through the Commission's Electronic Data Gathering
Analysis and Retrieval System (a/k/a EDGAR), which is publicly available through
the Commissions' Web site (http://www.sec.gov).
New Beverly has filed with the Commission its Registration Statement (No.
333-28521) on Form S-1 (together with all amendments thereto, the "New Beverly
Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the common stock, $0.10 par value, of New
Beverly (the "New Beverly Common Stock") to be distributed (pursuant to the
Distribution) to holders of the Company Common Stock. The prospectus contained
in the New Beverly Registration Statement (the "New Beverly Prospectus") does
not contain all of the information set forth in the New Beverly Registration
Statement, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. Statements made in the New Beverly Prospectus
as to the contents of any contract, agreement or other document referred to are
not necessarily complete and with respect to each such contract, agreement or
other document filed as an exhibit to the New Beverly Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement is deemed qualified in its entirety by such
reference.
In addition, Capstone has filed with the Commission a Registration
Statement (No. 333-28517) on Form S-4 (together with all amendments thereto, the
"Capstone Registration Statement") under the Securities Act with respect to the
Capstone Common Stock being issued to holders of Company Common Stock in the
Merger. The Joint Proxy Statement (of the Company and Capstone) and Prospectus
(of Capstone) (the "Joint Proxy Statement/ Prospectus") contained in the
Capstone Registration Statement does not contain all of the information set
forth in the Capstone Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission.
Statements made in the Joint Proxy Statement/Prospectus as to the contents of
any contract, agreement or other document referred to are not necessarily
complete and, with respect to each such contract, agreement or other document
filed as an exhibit to the Capstone Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved, and each
such statement is deemed qualified in its entirety by such reference.
Copies of the Indenture, the Distribution Agreement, the Merger Agreement,
the New Beverly Prospectus and the Joint Proxy Statement/Prospectus will be
provided, without charge, by first class mail, to each person to whom this
Consent Solicitation Statement is delivered, within one business day of oral or
written request, to the Company's principal executive offices: Beverly
Enterprises, Inc., 5111 Rogers Avenue, Suite 40-A, Fort Smith, Arkansas 72919,
Attention: Robert W. Pommerville, Secretary, telephone no.:
(501) 452-6712.
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SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION CONTAINED ELSEWHERE IN THIS CONSENT SOLICITATION STATEMENT.
CAPITALIZED TERMS USED AND NOT DEFINED HEREIN HAVE THE RESPECTIVE MEANINGS
ASSIGNED TO THEM ELSEWHERE IN THIS CONSENT SOLICITATION STATEMENT OR IN THE
INDENTURE.
The Solicitation................. The Board is conducting the Solicitation at
this time to obtain the Requisite Consents
to adopt the Transactions Amendment and
facilitate consummation of the Transactions.
The Distribution Agreement and the Merger
Agreement contemplate, among other matters:
(i) the transfer by the Company to New
Beverly of all of the Company's assets and
properties, other than the capital stock of
PCA and the capital stock of PCA's
subsidiaries, in exchange for all
outstanding shares of capital stock of New
Beverly; (ii) the assumption by New Beverly
of all of the Company's rights and
obligations in respect of the Securities and
the Indenture; (iii) the termination and
discharge of the obligations of the Company,
PCA and each of PCA's subsidiaries in
respect of the Securities and the Indenture;
(iv) the distribution by the Company to its
stockholders of all of the outstanding
capital stock of New Beverly such that,
immediately after such distribution, New
Beverly will become an independent, publicly
held corporation (owned directly by the
Company's stockholders); and (v) (following
consummation of the Distribution), the
Merger.
In addition, to further facilitate
consummation of the Transactions, the Board
is conducting the Solicitation at this time
to obtain the Requisite Consents to adopt
the (i) Redemption Amendment and, if the
Company should so elect, to effect the
Redemption and (ii) Refinancing Indebtedness
Amendment. As of the date of the Consent
Solicitation
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Statement, there was issued and outstanding
approximately $212,479,700 aggregate
principal amount of such Subordinated
Indebtedness (including approximately
$149,999,700 aggregate principal amount of
the 5 1/2% Convertible Debentures and
approximately $62,480,000 aggregate
principal amount of the 7 5/8% Convertible
Debentures).
Consent Payments................. Upon the terms and subject to the conditions
set forth in this Consent Solicitation
Statement and in the related consent form,
the Company will pay up to an aggregate of
$______ in cash for each $1,000 principal
amount of Securities for which a Consent has
been accepted, $______ of which will be
payable at the time the Supplemental
Indenture is executed and delivered by the
Company and the Trustee, and $______ of
which will be payable promptly following
consummation of the Merger. Each Consent
Payment to be made to a consenting holder
will be made by check and delivered by first
class mail to the address specified on the
consent form. Without limiting the
generality of the foregoing, the Company
reserves the right to delay making Consent
Payments, in whole or in part, to comply
with any applicable law. Moreover, if the
Solicitation is terminated by the Company as
described in "-Expiration Date; Termination"
below, no Consent Payments will be made,
irrespective of whether the Requisite
Consents were received.
Under no circumstances will the Company make
any Consent Payment to any person who
delivers a consent form with the "DO NOT
CONSENT" or "ABSTAIN" box marked thereon
with respect to any of the Transactions
Amendment, the Redemption Amendment or the
Refinancing Indebtedness Amendment unless,
on or prior to the Expiration Date, such
person delivers and does not properly
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revoke a subsequently dated consent form
marked to indicate a vote FOR the Proposed
Amendments. See "The Solicitation-Terms of
the Solicitation; Consent Payments" and
"Certain United States Federal Income Tax
Consequences."
Expiration Date; Termination..... The Expiration Date is 5:00 p.m., Eastern
time, on ______ __, 1997, unless the
Solicitation is extended, in which case the
term "Expiration Date" means the latest date
and time to which the Solicitation is
extended. The Company may extend the
Solicitation at any time and from time to
time in its discretion, including on a daily
basis, until 5:00 p.m., Eastern time, on the
date on which the Requisite Consents are
received, and the Solicitation may be
terminated at any time (including after the
Expiration Date and prior to the execution
and delivery of the Supplemental Indenture
by the Company and the Trustee) in the
discretion of the Company, whether or not
the Requisite Consents have been received.
Any extension, termination or amendment of
the Solicitation, or delay in making any
Consent Payments, will be followed as
promptly as practicable either by notice
delivered to Registered Holders or by public
announcement thereof. Without limiting the
generality of the foregoing, the Company, in
the case of any public announcement, will
have no obligation to publish, advertise or
otherwise disseminate any information in
respect of the Solicitation other than by
means of issuing a release through the Dow
Jones News Service.
Conditions to Proposed
Amendments; Effectiveness........ The effectiveness of the Proposed Amendments
is conditioned upon the receipt of the
Requisite Consents, acceptance thereof by
the Company, and the execution and delivery
of the Supplemental Indenture by the Company
and
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the Trustee. The Company will not be deemed
to accept any Consents unless and until the
Supplemental Indenture is executed and
delivered by the Company and the Trustee.
If the Company and the Trustee execute and
deliver the Supplemental Indenture, the
Proposed Amendments will be binding upon all
holders of Securities, whether or not such
holders have delivered Consents.
Irrespective of whether the Proposed
Amendments become effective, the Securities
will continue to be outstanding in
accordance with all other terms of the
Indenture and the Securities.
Registered Holders............... The term "Registered Holder," when used with
respect to the Solicitation, means any
person in whose name a Security was
registered in the register maintained by the
Trustee as of the Record Date.
Consent Procedures .............. Only (i) Registered Holders or (ii) any
other person who has obtained a proxy (in
substantially the form included with the
consent form) which authorizes such person
(or any other person claiming title by or
through such person) to complete and deliver
a consent form and vote the related
Securities on behalf of such Registered
Holder, may execute and deliver a consent
form and so vote with respect to the
Proposed Amendments and, upon the terms and
subject to the conditions set forth in this
Consent Solicitation Statement and in the
related consent form, receive Consent
Payments. A beneficial owner who is not the
Registered Holder of Securities but who
desires to deliver a consent form should
either: (i) complete and sign the consent
form, or a facsimile thereof, have the
signature thereon (and on any proxy
delivered therewith) guaranteed or
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<PAGE>
notarized (unless such consent form or
proxy, as the case may be, is furnished by
or for the account of an Eligible
Institution) and mail or otherwise deliver
the consent form, or such facsimile
(together with a duly executed proxy in
substantially the form included with the
consent form, authorizing such beneficial
owner to complete and deliver the consent
form and vote such Securities on behalf of
the Registered Holder) to the Trustee at its
address set forth below; or (ii) request the
Registered Holder of such Securities to
effect the transaction for such beneficial
owner. See "The Solicitation-Consent
Procedure."
The term "Eligible Institution" means a firm
that is a member of a registered national
securities exchange or the National
Association of Securities Dealers, Inc.
("NASD"), or a commercial bank or trust
company having an office or correspondent in
the United States. IF ANY HOLDER DELIVERS AN
EXECUTED CONSENT FORM WITHOUT INDICATING A
VOTE WITH RESPECT TO THE PROPOSED
AMENDMENTS, SUCH DELIVERY WILL BE DEEMED TO
CONSTITUTE A VOTE FOR THE PROPOSED ---
AMENDMENTS.
With respect to Securities registered in the
name of CEDE & Co., which is the nominee of
DTC, the "DTC Participants" (i.e., brokers,
banks and other financial institutions that
are participants in DTC) rather than DTC,
must execute and deliver the consent form.
Participants in The Midwest Depository Trust
Company and Philadelphia Depository Trust
Company should inquire of such institutions
regarding the procedure for executing
consent forms in respect of Securities
registered in the name of their respective
nominees.
Revocation of Consents........... Consents can be revoked only by delivering a
written notice of revocation to the Trustee
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prior to the later of the Expiration Date
and receipt by the Trustee from the Company
of an officer's certificate in accordance
with the Indenture certifying receipt of the
Requisite Consents. Any person who properly
revokes a Consent will not receive a Consent
Payment, unless and until such person
redelivers a Consent in accordance with the
procedures therefor described under "The
Solicitation-Consent Procedure." The
transfer of Securities after the Record Date
will NOT have the effect of revoking the
elections made in any consent form
theretofore validly delivered and each
properly completed and timely furnished
consent form will be counted notwithstanding
any transfer of the Securities to which such
consent form relates, unless the procedure
for revoking consents described in this
Consent Solicitation Statement has been
complied with. Consent received by the
Trustee on or prior to the Expiration Date
relating to any Securities will be deemed to
revoke any consent form in respect of such
Securities having an earlier date that has
the "DO NOT CONSENT" or "ABSTAIN" box marked
thereon. See "The Solicitation Revocation of
Consents."
UNDER NO CIRCUMSTANCES SHOULD ANY PERSON
TENDER OR DELIVER TO THE COMPANY, THE
TRUSTEE OR THE SOLICITATION AGENT ANY
SECURITIES WITH THEIR CONSENT FORMS OR
OTHERWISE.
Certain Tax Considerations....... In the opinion of the Company, the only U.S.
federal income tax consequence of adoption
of the Proposed Amendments to holders of
Securities will be that the full amount of
the Consent Payments would be subject to
taxation as ordinary income to those holders
who receive it. See "Certain United States
Federal Income Tax Consequences."
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<PAGE>
No Dissenter's Rights............ If, in accordance with the terms and subject
to the conditions set forth in this Consent
Solicitation Statement and in the related
consent form, the Requisite Consents are
received and the Supplemental Indenture is
executed and delivered by the Company and
the Trustee, non-consenting holders (whether
or not they deliver a consent form or
otherwise affirmatively vote against the
Proposed Amendments) will not be entitled to
any rights of appraisal or similar rights of
dissenters (whether pursuant to the
Indenture, the Company's organizational
instruments or applicable provisions of
Delaware law) with respect to adoption of
the Proposed Amendments.
Information; Assistance;
Additional Materials........... Questions regarding the Solicitation
relating to the procedure for consenting as
well as requests for assistance or for
additional copies of this Consent
Solicitation Statement or the consent form
should be directed to the Solicitation
Agent, as follows:
Donaldson, Lufkin & Jenrette Securities
Corporation
277 Park Avenue
New York, New York 10172
Attention: Mr. Joe Muratore
Telephone: (212) 892-4753
Telecopier: (212) 892-4057
Delivery of Consent Forms ....... Each consent form should be delivered to the
Trustee (and not the Company or the
Solicitation Agent) on or prior to the
Expiration Date as follows:
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<PAGE>
The Chase Manhattan Bank
c/o Texas Commerce Bank
Corporate Trust Services - Dallas
1201 Main Street
Dallas, Texas 75202
Attention: Mr. Frank Ivins
Telephone: (214) 672-5678
Telecopier: (214) 672-5746
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<PAGE>
BACKGROUND AND PURPOSE OF THE SOLICITATION
The Transactions Amendment
Prior to the Distribution Record Date (as defined below), the Company will
complete an internal restructuring pursuant to which all the assets and
liabilities relating to the Company's nursing facilities, acute long-term
transitional hospitals, rehabilitation therapy services, outpatient therapy
clinics, assisted living centers, hospices, home healthcare centers and other
healthcare and related services and businesses (collectively, the "Remaining
Healthcare Business") will be transferred or contributed to New Beverly in one
or more transactions as to which the Company expects to receive tax-free
treatment. Upon completion of such restructuring, the Remaining Healthcare
Business will be conducted by New Beverly and the Company's institutional
pharmacy business, presently conducted by PCA and its subsidiaries, will remain
with the Company.
Pursuant to the terms of the Merger Agreement, the Distribution will be
effected immediately prior to consummation of the Merger. The Distribution
Agreement contemplates the transfer by the Company of all of the outstanding
shares of New Beverly Common Stock to holders of the Company Common Stock as of
the record date therefor selected by the Company (the "Distribution Record
Date"); i.e., each holder of Company Common Stock as of the Distribution Record
Date will receive one share of New Beverly Common Stock for each share of the
Company Common Stock held as of the Distribution Record Date. The Distribution
will not occur unless all of the conditions to consummation of the Merger (other
than the completion of the Distribution) have been satisfied (or waived to the
extent permitted under the Merger Agreement). Immediately following consummation
of the Distribution, New Beverly will become an independent, publicly held
company (owned directly by the Company's stockholders), and it is contemplated
that the shares of New Beverly Common Stock will be listed on the NYSE and PSE
under the symbol "BEV".
Following adoption of the Merger Agreement by the requisite holders of
Company Common Stock and Capstone Common Stock and the satisfaction (or waiver,
to the extent permitted by the Merger Agreement) of the other conditions to the
Merger, the Company will be merged with and into Capstone, with Capstone as the
surviving corporation in the Merger.
Pursuant to the Merger Agreement, the obligations of the Company and
Capstone to effect the Merger are subject to, among other things, the
satisfaction (or waiver) of the following conditions: (i) the effectiveness of
the Capstone Registration Statement and the New Beverly Registration Statement
under the Securities Act; (ii) the approval of the Merger by the requisite vote
of the holders of Capstone Common Stock and Company Common Stock; (iii)
consummation of the Distribution; (iv) the receipt of all requisite regulatory
consents and approvals; (v) the restructuring, modification, amendment or
termination of the Company's indebtedness such that it will neither be assumed
by nor otherwise become
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<PAGE>
obligations of Capstone pursuant to the Merger; (vi) receipt of either a
favorable letter ruling from the Internal Revenue Service or, at the Company's
election, an opinion of counsel regarding the tax-free treatment of the
Transactions; and (vii) other customary conditions to closing.
The Board is seeking the Requisite Consents at this time to adopt the
Transactions Amendment and facilitate consummation of the Transactions.
The Redemption Amendment
In order to satisfy a condition precedent to the Merger, the Company may
seek to restructure, amend, modify or terminate its indebtedness. To provide the
Company with increased flexibility in satisfying such condition precedent, the
Company desires to amend the Indenture to permit, if it should so elect, the
redemption of all of the Company's outstanding 7 5/8% Convertible Subordinated
Debentures without violating the Restricted Payment
provisions contained in the Indenture.
The Board is seeking the Requisite Consents at this time to adopt the
Redemption Amendment to effect, should it so elect, the Redemption.
The Refinancing Indebtedness Amendment
To provide the Company with increased flexibility under the Indenture to
refinance its outstanding Subordinated Indebtedness, the Company desires to
amend Section 1.1 of the Indenture to modify the definition of "Permitted
Refinancing Indebtedness" contained therein to provide that (i) in the case of
Permitted Refinancing Indebtedness that is not Subordinated Indebtedness the
Permitted Refinancing Indebtedness must have a final maturity date later than
the final maturity date of, and have a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of, the Indebtedness
being refinanced, and (ii) in the case of Permitted Refinancing Indebtedness
that is Subordinated Indebtedness, such Permitted Refinancing Indebtedness must
have a final maturity date later than February 15, 2006 (i.e., the final
maturity date of the Securities).
The Board is seeking the Requisite Consents at this time to adopt the
Refinancing Indebtedness Amendment.
THE PROPOSED AMENDMENTS
SET FORTH BELOW IS A DESCRIPTION OF THE PROPOSED AMENDMENTS FOR WHICH THE
CONSENTS OF THE REGISTERED HOLDERS OF SECURITIES ARE BEING SOLICITED. SUCH
DESCRIPTION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL PROVISIONS OF
THE INDENTURE AND THE FORM OF SUPPLEMENTAL INDENTURE SET FORTH IN ANNEX A
HERETO.
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<PAGE>
If the Requisite Consents are received and the Supplemental Indenture is
executed and delivered by the Company and the Trustee:
(i) (x) Sections 5.1, 5.2 and 10.5 of the Indenture will be amended to (a)
permit (as a sale of substantially all the assets and properties of the Company)
the transfer by the Company to New Beverly of all the Company's properties and
assets, other than the capital stock of PCA and the capital stock of PCA's
subsidiaries, notwithstanding that the Consolidated Net Worth of New Beverly,
after giving effect to such transfer, will be less than the Consolidated Net
Worth of the Company, immediately prior to such transfer, and irrespective of
whether New Beverly, after giving effect to such transfer, will have the ability
to incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio prescribed by Section 4.9 of the Indenture; and (b) provide that upon New
Beverly's assumption of all of the obligations of the Company under the
Indenture and the Securities, the Company's obligations thereunder will
terminate and be discharged; and (y) amend Section 1.1 of the Indenture with the
consent of the Majority Holders to (a) modify the definitions of "Spinoff
Transaction" and "Asset Sale" contained therein to include within the scope of
such definitions the Distribution, and (b) make certain additional technical and
conforming definitional changes to permit consummation of the Transactions;
(ii) Section 4.7 of the Indenture will be amended to permit the Company,
if it should so elect, to effect the Redemption, without violating the
Restricted Payment provisions contained therein; and
(iii) Section 1.1 of the Indenture will be amended to modify the
definition of "Permitted Refinancing Indebtedness" contained therein to provide
that (i) in the case of Permitted Refinancing Indebtedness that is not
Subordinated Indebtedness, the Permitted Refinancing Indebtedness must have a
final maturity date later than the final maturity date of, and have a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being refinanced, and (ii) in the case of
Permitted Refinancing Indebtedness that is Subordinated Indebtedness, such
Permitted Refinancing Indebtedness must have a final maturity date later than
February 15, 2006 (i.e., the final maturity date of the Securities).
PURPOSE AND EFFECTS OF THE PROPOSED AMENDMENTS
The Transactions Amendment
Change of Control Definition.
Section 4.13 of the Indenture provides in relevant part that upon the
occurrence of a Change of Control, each holder of Securities has the right to
require the Company to repurchase all or any part (equal to $1,000 principal
amount or an integral multiple thereof) of such holder's Securities (pursuant to
a Change of Control Offer) at an offer price in cash
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<PAGE>
equal to 101% of the aggregate principal amount of such holder's Securities,
plus any accrued and unpaid interest thereon to the date of purchase, with such
payment to be made on a date not later than 90 days next following the
occurrence of such Change of Control.
Generally, Change of Control is defined in the Indenture to include the
(i) transfer or sale of all or substantially all of the assets of the Company
and its Subsidiaries to any Person or group who prior to such sale or transfer
did not own a majority of the Company's voting stock, (ii) acquisition by any
Person or group of more than 50% of the Company's voting stock by means of
merger, consolidation or otherwise, or (iii) any change in composition of the
Board such that the Board is no longer comprised of members the majority of whom
were in office on February 14, 1996 or who are otherwise Continuing Directors.
Proposed Amendment
The definition of Change of Control contained in Section 1.1 would be
amended to provide that consummation of the Transactions will not constitute a
Change of Control.
Spinoff Transaction Definition; Asset Sale Definition.
Section 4.10 of the Indenture provides in relevant part that the Company
will not, and will not permit any of its Subsidiaries to, consummate an Asset
Sale unless: (i) the Company (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued, sold or otherwise disposed of
and (ii) at least 75% of the consideration received therefor by the Company or
such Subsidiary is in the form of cash or Cash Equivalents.
The foregoing provision does not apply to a Spinoff Transaction, as set
forth in the second paragraph of Section 4.10, if, after giving effect thereto
(including the application by the Company of the net proceeds therefrom, if any)
as if such transaction had occurred at the beginning of the Reference Period
immediately preceding the date on which such transaction occurs: (i) the Company
would have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test; (ii) the Company's Fixed
Charge Coverage Ratio would not be reduced by 15% or more from the Company's
actual Fixed Charge Coverage Ratio for such Reference Period; (iii) the
Company's Debt to Consolidated Cash Flow Ratio as of the date such transaction
occurs would not be increased by 15% or more from the Company's actual Debt to
Consolidated Cash Flow Ratio as of such date; (iv) all Indebtedness of PCA and
its Subsidiaries to the Company and its Subsidiaries is paid or otherwise
satisfied in full; and (v) no Default or Event of Default would exist. If a
Spinoff Transaction (including the Company's proposed application of the net
proceeds thereof, if any) satisfies the foregoing requirements, the Indenture
permits the Company to consummate such Spinoff Transaction and use up to $100
million of the Net Proceeds therefrom to fund Restricted Payments or for any
other purpose not prohibited by the Indenture.
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<PAGE>
Proposed Amendment
No change would be made to the provisions of Section 4.10 directly;
however, the definition of "Spinoff Transaction" contained in Section 1.1 of the
Indenture would be amended to expressly include the Distribution within the
scope of such definition. Moreover, the definition of "Asset Sale" contained in
Section 1.1 of the Indenture would be amended to make clear that if the
Distribution (including the application of proceeds therefrom) complies with the
financial tests set forth in the second paragraph of Section 4.10 of the
Indenture, up to $100 million of proceeds therefrom may be used to fund
Restricted Payments and that the distribution of capital stock of New Beverly to
the stockholders of the Company will not constitute an Asset Sale. The Company
anticipates that the Distribution will meet the financial tests set forth in the
second paragraph of Section 4.10.
Merger, Consolidation or Sale of Assets Covenant.
Section 5.1(iv) of the Indenture provides that the Company may not
consolidate or merge with or into (whether or not the Company is the surviving
or resulting corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions, to another Person unless the Company or the Person formed
by or surviving any such consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) shall have a Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction (the "Consolidated Net Worth
Test") and (B) shall at the time of such transaction and after giving effect
thereto as if such transaction had occurred at the beginning of the Reference
Period, be permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.9 of the Indenture.
Proposed Amendment
Section 5.1(iv) of the Indenture would be amended to expressly permit the
Transactions, irrespective of whether the Consolidated Net Worth Test or Fixed
Charge Coverage Test would be satisfied.
Successor Corporation or Person Substituted; Release of Guarantors.
Section 10.5 of the Indenture provides that upon the sale or disposition
(whether by merger, stock purchase, asset sale or otherwise) of a Guarantor (or
all of its assets) to an entity which is not a Subsidiary of the Company, or
upon the dissolution of any Guarantor, such Guarantor is released from its
obligations under its Guarantee of the Securities provided that the sale,
disposition or dissolution otherwise is in compliance with the Indenture.
Notwithstanding the foregoing, the Indenture provides that if upon consummation
of the
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Spinoff Transaction (as presently defined in the Indenture), PCA ceases to be a
Subsidiary of the Company PCA would be deemed released from its Guarantee of the
Senior Notes.
Proposed Amendments
Section 10.5 of the Indenture would be amended to provide that although
PCA will continue to be owned by the Company, upon the assumption by New Beverly
of all the Company's rights and obligations under the Indenture and the
Securities as contemplated by the Transactions, PCA and each of PCA's
Subsidiaries will be unconditionally released from its Guarantee of the
Securities and shall have no further duties or obligations under the Indenture
or the Securities. Section 5.2 of the Indenture would also be amended to clarify
that upon the assignment of all of the Company's rights and obligations under
the Indenture and the Securities, and the assumption thereof by the successor
corporation or Person, the Company will be unconditionally released from any and
all further liability under the Indenture and the Securities.
The Redemption Amendment
Restricted Payments Covenant.
Section 4.7 of the Indenture provides that the Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly: (i) declare
or pay any dividend or make any distribution on account of the Equity Interests
of the Company or any of its Subsidiaries (other than (x) dividends or
distributions payable in Qualified Equity Interests of the Company, (y)
dividends or distributions payable to the Company or any Subsidiary of the
Company, and (z) dividends or distributions by any Subsidiary of the Company
payable to all holders of a class of Equity Interests of such Subsidiary on a
pro rata basis); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any of its Subsidiaries; (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Subordinated Indebtedness, except at the original final
maturity date thereof; or (iv) make any Restricted Investment (all such payments
and other actions set forth in clauses (i) through (iv) above being hereafter
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment (the amount of any such
Restricted Payment, if other than cash or Cash Equivalents, shall be the fair
market value (as conclusively evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee within
60 days prior to the date of such Restricted Payment of the asset(s) proposed to
be transferred by the Company or such Subsidiary, as the case may be, pursuant
to such Restricted Payment):
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
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(b) the Company, at the time of such Restricted Payment and after giving
effect thereto as if such Restricted Payment had been made at the beginning of
the Reference Period immediately preceding the date of such Restricted Payment,
would have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.9 of the Indenture; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Subsidiaries after December 31,
1995 (excluding Restricted Payments permitted by clauses (ii), (iii), (iv) and
(v) of the next succeeding paragraph), is less than the sum (without
duplication) of (1) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the first fiscal
quarter commencing after December 31, 1995 to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus, (2) 100%
of the aggregate net cash proceeds received by the Company from the issuance or
sale (other than to a subsidiary of the Company) since December 31, 1995 of
Qualified Equity Interests of the Company or of debt securities of the Company
or any of its Subsidiaries that have been converted into or exchanged for such
Qualified Equity Interests of the Company; plus (3) to the extent that any
Restricted Investment that was made after the date of the Indenture is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (net of taxes and
the cost of disposition, if any) or (B) the initial amount of such Restricted
Investment, plus (4) $20 million.
The foregoing provisions do not prohibit the following Restricted
Payments:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
otherwise complied with the provisions of Section 4.7;
(ii) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of the Company or any Subsidiary in exchange for, or out of the
net cash proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of Qualified Equity Interests of the Company;
provided that the amount of such net cash proceeds that are utilized for any
such redemption, repurchase retirement or other acquisition shall be excluded
from clause (c)(2) above;
(iii) the defeasance, redemption or repurchase of Subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or in exchange for or out of the net cash proceeds form
the substantially concurrent sale (other than to a Subsidiary of the Company of
Qualified Equity Interests of the Company; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(2) above;
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(iv) any purchase or defeasance of Subordinated Indebtedness to the extent
required upon a change of control or asset sale (as defined therein) by the
indenture or other agreement or instrument pursuant to which such Subordinated
Indebtedness was issued, but only if the Company (1) in the case of a Change of
Control, has complied with its obligations under Section 4.13 of the Indenture
("Change of Control") or (2) in the case of an Asset Sale, has applied the Net
Proceeds from such Asset Sale in accordance with the provisions of Sections 2.15
("Offer to Purchase by Application of Excess Proceeds") and 4.10 ("Asset Sales")
of the Indenture; and
(v) any Restricted Payment permitted in accordance with the provisions of
the second paragraph of Section 4.10 of this Indenture; provided, however, in
the case of each of clauses (ii), (iii), (iv) and (v) of this paragraph, no
Default or Event of Default shall have occurred or be continuing at the time of
such Restricted Payment or would occur as a consequence thereof.
Proposed Amendment
Section 4.7 of the Indenture would be amended to expressly permit the
Redemption, if and to the extent the Company should elect to effect such
transaction, so long as no Default or Event of Default shall have occurred and
be continuing at the time of such Restricted Payment or would occur as a
consequence thereof.
The Refinancing Indebtedness Amendment
Section 1.1 of the Indenture defines "Permitted Refinancing Indebtedness"
as any Indebtedness of the Company or any of its Subsidiaries issued in exchange
for, or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Subsidiaries; provided that: (i) the principal amount of such Permitted
Refinancing Indebtedness does not exceed the principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of any premiums paid and reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is Subordinated Indebtedness, such Permitted
Refinancing Indebtedness has a final maturity date of, and is subordinated in
right of payment to, the Securities on terms at least as favorable to the
Holders of Securities as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) if the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is a Subsidiary that is not
a Guarantor, such Permitted Refinancing Indebtedness shall only be incurred by
such Subsidiary.
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Proposed Amendment
The definition of "Permitted Refinancing Indebtedness" contained in
Section 1.1 would be amended to (i) insert at the beginning of subclause (ii)
thereof the phrase: "if such Permitted Refinancing Indebtedness is not
Subordinated Indebtedness then" and (ii) insert in subclause (iii) thereof after
the words "final maturity date" in replacement of the word "of" the phrase:
"later than February 15, 2006".
Accordingly, such amendment will provide the Company with increased
flexibility under the Indenture to refinance its outstanding Subordinated
Indebtedness, including, without limitation, the Company's 5 1/2% Convertible
Debentures, with Permitted Refinancing Indebtedness having a final maturity date
earlier than that of the Subordinated Indebtedness being refinanced but, in any
case, later than February 15, 2006 (i.e., the final maturity date of the
Securities).
THE SOLICITATION
Terms of the Solicitation; Consent Payments
In accordance with the terms and subject to the conditions set forth in
this Consent Solicitation Statement and in the related consent form, the Company
will pay a Consent Payment of up to an aggregate of $______ for each $1,000
principal amount of Securities in respect of which a valid Consent is (i)
received by the Trustee on or prior to the Expiration Date, (ii) not properly
revoked (as provided in this Consent Solicitation Statement) prior to the later
of the Expiration Date and receipt by the Trustee from the Company of an
officer's certificate in accordance with the provisions of the Indenture
certifying the receipt of the Requisite Consents, and (iii) accepted by the
Company as provided in this Consent Solicitation Statement $______ of which
Consent Payment will be paid at the time the Proposed Amendments are adopted
pursuant to the execution and delivery by the Company and the Trustee of a
Supplemental Indenture, and $______ of which Consent Payment will be paid
promptly following consummation of the Merger). Such payments will be made to
consenting holders by check delivered by first class mail to the address
specified in the consent form. Without limiting the generality of the foregoing,
the Company reserves the right, in its discretion, to delay making any Consent
Payment, in whole or in part, to comply with any applicable law.
CONSENT PAYMENTS WILL BE MADE ONLY TO PERSONS WHO, ON OR PRIOR TO THE
EXPIRATION DATE, HAVE DELIVERED VALID AND TIMELY CONSENTS TO THE PROPOSED
AMENDMENTS. ANY BENEFICIAL OWNER OF SECURITIES WHO IS NOT THE REGISTERED HOLDER
THEREOF BUT WHO DESIRES TO DELIVER A CONSENT AND RECEIVE A CONSENT PAYMENT MUST
OBTAIN A PROXY (IN SUBSTANTIALLY THE FORM INCLUDED WITH
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THE CONSENT FORM) FROM THE REGISTERED HOLDER OF SUCH SECURITIES THAT AUTHORIZES
SUCH BENEFICIAL OWNER TO DELIVER A CONSENT FORM AND VOTE THE RELATED SECURITIES
ON BEHALF OF SUCH REGISTERED HOLDER IN THE MANNER DESCRIBED BELOW, OR REQUEST
THE REGISTERED HOLDER OF SUCH SECURITIES TO EFFECT THE TRANSACTION FOR SUCH
BENEFICIAL OWNER.
UNDER NO CIRCUMSTANCES WILL THE COMPANY MAKE ANY CONSENT PAYMENT TO ANY
PERSON WHO DELIVERS A CONSENT FORM WITH THE "DO NOT CONSENT" OR "ABSTAIN" BOX
MARKED THEREON WITH RESPECT TO ANY OF THE TRANSACTIONS AMENDMENT, THE REDEMPTION
AMENDMENT OR THE REFINANCING INDEBTEDNESS AMENDMENT UNLESS, ON OR PRIOR TO THE
EXPIRATION DATE, SUCH PERSON DELIVERS AND DOES NOT PROPERLY REVOKE A
SUBSEQUENTLY DATED CONSENT FORM MARKED TO INDICATE A VOTE FOR THE PROPOSED
AMENDMENTS.
The Consents will become irrevocable on the later of the Expiration Date
and the date on which the Trustee receives from the Company an officer's
certificate in accordance with the provisions of the Indenture certifying that
the Requisite Consents have been received. Following such delivery, the Trustee
and the Company intend to execute and deliver the Supplemental Indenture. The
Proposed Amendments will be adopted and become effective only upon execution and
delivery of the Supplemental Indenture. AFTER EXECUTION AND DELIVERY OF THE
SUPPLEMENTAL INDENTURE, ALL HOLDERS OF SECURITIES, INCLUDING NONCONSENTING
HOLDERS AND ALL SUBSEQUENT HOLDERS OF THE SECURITIES, WILL BE BOUND BY THE
PROPOSED AMENDMENTS. IF, IN ACCORDANCE WITH THE TERMS AND SUBJECT TO THE
CONDITIONS SET FORTH IN THIS CONSENT SOLICITATION STATEMENT AND IN THE RELATED
CONSENT FORM, THE REQUISITE CONSENTS ARE RECEIVED AND THE SUPPLEMENTAL INDENTURE
IS EXECUTED AND DELIVERED BY THE TRUSTEE, NON-CONSENTING HOLDERS (WHETHER OR NOT
THEY DELIVER A CONSENT FORM OR OTHERWISE AFFIRMATIVELY VOTE AGAINST THE PROPOSED
AMENDMENTS) WILL NOT BE ENTITLED TO ANY RIGHTS OF APPRAISAL OR SIMILAR RIGHTS OF
DISSENTERS (WHETHER PURSUANT TO THE INDENTURE, THE COMPANY'S ORGANIZATIONAL
INSTRUMENTS OR APPLICABLE PROVISIONS OF DELAWARE LAW) WITH RESPECT TO ADOPTION
OF THE PROPOSED AMENDMENTS.
The term "Expiration Date" means 5:00 p.m., Eastern time, on ______ __,
1997, unless the Company, in its discretion, extends the period during which the
Solicitation is open, in which event the term "Expiration Date" shall mean the
latest time and date on which the Solicitation, as so extended by the Company,
expires. The Company reserves the right to extend the Solicitation at any time
and from time to time, in its sole discretion, including on a daily basis, until
5:00 p.m., Eastern time, on the date on which the Requisite Consents are
received.
The Company expressly reserves the right in its discretion (i) to
terminate the Solicitation at any time (including after the Expiration Date)
prior to the execution and delivery of the Supplemental Indenture by the Company
and the Trustee (whether or not the Requisite Consents have been received) by
giving oral or written notice of such termination
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to the Trustee, (ii) not to extend the Solicitation beyond the Expiration Date,
and (iii) to amend, at any time or from time to time, the terms of the
Solicitation. IF THE SOLICITATION IS SO TERMINATED, NO CONSENT PAYMENTS WILL BE
MADE, IRRESPECTIVE OF WHETHER THE REQUISITE CONSENTS WERE RECEIVED.
Subject to the foregoing, if the Requisite Consents are received (and not
properly revoked) as of the Expiration Date, the Company presently intends to
deliver to the Trustee an officer's certificate in accordance with the
provisions of the Indenture certifying such receipt and promptly thereafter to
execute and deliver the Supplemental Indenture. Consents will be deemed to be
accepted only when the Supplemental Indenture has been executed and delivered by
the Company and the Trustee.
ANY EXTENSION, TERMINATION OR AMENDMENT OF THE SOLICITATION, OR DELAY IN
MAKING ANY CONSENT PAYMENTS WILL BE FOLLOWED AS PROMPTLY AS PRACTICABLE EITHER
BY NOTICE DELIVERED TO REGISTERED HOLDERS OR BY PUBLIC ANNOUNCEMENT THEREOF.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE COMPANY, IN THE CASE OF
ANY PUBLIC ANNOUNCEMENT WILL HAVE NO OBLIGATION TO PUBLISH, ADVERTISE OR
OTHERWISE DISSEMINATE ANY INFORMATION IN RESPECT OF THE SOLICITATION OTHER THAN
BY MEANS OF ISSUING A RELEASE THROUGH THE DOW JONES NEWS SERVICE.
Consent Procedure
This Consent Solicitation Statement is first being mailed, sent or given
to Registered Holders of Securities on or about __________, 1997. The Company
has established ______ __, 1997 as the Record Date for the Solicitation.
ONLY (I) REGISTERED HOLDERS OR (II) ANY OTHER PERSON WHO HAS OBTAINED A
PROXY (IN SUBSTANTIALLY THE FORM INCLUDED WITH THE CONSENT FORM) WHICH
AUTHORIZES SUCH PERSON (OR ANY OTHER PERSON CLAIMING TITLE BY OR THROUGH SUCH
PERSON) TO DELIVER A CONSENT FORM AND VOTE THE RELATED SECURITIES ON BEHALF OF
SUCH REGISTERED HOLDER MAY EXECUTE AND DELIVER A CONSENT FORM AND SO VOTE WITH
RESPECT TO THE PROPOSED AMENDMENTS AND, UPON THE TERMS AND SUBJECT TO THE
CONDITIONS SET FORTH IN THIS CONSENT SOLICITATION STATEMENT AND IN THE RELATED
CONSENT FORM, RECEIVE CONSENT PAYMENTS. A beneficial owner of Securities who is
not the Registered Holder of such Securities (e.g., a holder whose Securities
are registered in the name of a nominee such as a brokerage firm) must either
(i) arrange with the Registered Holder to execute and deliver a consent form on
such beneficial owner's behalf or (ii) obtain a proxy (in substantially the form
included with the consent form) from the Registered Holder authorizing such
beneficial owner to deliver a consent form and vote the related securities on
behalf of the Registered Holder.
With respect to Securities registered in the name of CEDE & Co., which is
the nominee of DTC, DTC Participants, rather than DTC, must execute and deliver
the consent form. Participants in The Midwest Depository Trust Company and
Philadelphia Depository
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Trust Company should inquire of such institutions regarding the procedure for
executing consent forms in respect of Securities registered in the name of their
respective nominees.
Each Consent is a continuing Consent notwithstanding that registered
ownership of the Securities to which the Consent relates has been transferred
subsequent to the Record Date, unless such Consent is properly revoked in
accordance with the procedures therefor described in this Consent Solicitation
Statement.
A Consent received by the Trustee on or prior to the Expiration Date
relating to any Securities will be deemed to revoke any consent form in respect
of such Securities having an earlier date that has the "DO NOT CONSENT" or
"ABSTAIN" box marked thereon. Any person who delivers a consent form with the
"DO NOT CONSENT" or "ABSTAIN" box marked thereon with respect to any of the
Transactions Amendment, the Redemption Amendment or the Refinancing Indebtedness
Amendment will not be entitled to receive any Consent Payment in respect of the
Securities to which such consent form relates unless, on or prior to the
Expiration Date, such person delivers and does not properly revoke a
subsequently dated consent form marked to indicate a vote FOR the Proposed
Amendments.
The consent form accompanies this Consent Solicitation Statement. A
consent form (or, if the Holder signing such consent form is not the Registered
Holder, the accompanying irrevocable proxy in substantially the form included
with the consent form), to be effective, must be executed by the Registered
Holder of the Securities to which such consent form (or such irrevocable proxy)
relates in the same manner as the name of the Registered Holder appears on the
certificate(s) evidencing such Securities. If any certificate(s) evidencing such
Securities are held of record as of the Record Date by two or more Registered
Holders, all such Registered Holders must sign the consent form (or such
irrevocable proxy). If such Securities are registered in different names as of
the Record Date, separate consent forms (or irrevocable proxies) must be
executed covering each form of registration. If a consent form is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation, or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing and must submit with the consent form
appropriate evidence of authority to execute the consent form. In addition, (i)
if a consent form relates to less than the aggregate principal amount of
Securities registered in the name of the Registered Holder or (ii) if a person
is not a Registered Holder and is consenting pursuant to a proxy given by a
Registered Holder and the consent form relates to less than the total principal
amount of Securities to which such proxy relates, such consent form must
indicate the certificate numbers and aggregate principal amount of Securities to
which the consent form relates. Otherwise, the consent form will be deemed to
relate to the entire principal amount of Securities registered in the name of
such Registered Holder or to which such proxy relates, as the case may be.
The ownership of Securities shall be proven by the Trustee, as registrar
of the Securities, in accordance with the provisions therefor contained in the
Indenture. All
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<PAGE>
questions as to the validity, form, eligibility (including time and receipt) and
the acceptance of consent forms and revocations of elections made on consent
forms with respect to Securities will be resolved in the first instance by the
Company, whose determination shall be binding, subject only to final review as
may be prescribed by the Trustee in accordance with the Indenture concerning
proof of execution and ownership. The Company reserves the absolute right to
reject any or all consent forms and revocations that are not in proper form or
the acceptance of which could, in the judgment of the Company's counsel, be
unlawful. The Company also reserves the right, subject to final review as the
Trustee may prescribe in accordance with the provisions of the Indenture for
proof of execution and ownership, to waive any irregularities or conditions of
delivery as to particular consent forms or revocations of Consents. Unless
waived, any irregularities in connection with the deliveries must be cured
within such time as the Company determines. Neither the Company, the Trustee, or
any other person shall be under any duty to provide notification of any such
irregularities or waiver, nor shall any of the Company, the Trustee or any other
person incur any liability for failure to give notification. Deliveries of such
consent forms or notices of revocation will not be deemed to have been made
until such irregularities have been cured or waived. The Company's
interpretation of the terms and conditions of the Solicitation shall be final
and binding.
Consents to the Proposed Amendments, to be effective, must be properly
executed and received by the Trustee on or prior to the Expiration Date. Each
person desiring to furnish a consent form in respect of the Proposed Amendments
must complete, sign and date the accompanying consent form (or a facsimile
thereof) in accordance with the instructions set forth in this Consent
Solicitation Statement and in the consent form, have the signatures thereon (and
on any proxy delivered therewith) notarized or guaranteed and mail, hand deliver
or send by overnight courier, or telecopy the consent form and any other
required documents to the Trustee. The method of delivery of all documents,
including fully executed consent forms, is at the election and risk of the
person delivering the consent form. Such delivery will be deemed made only when
actually received by the Trustee. A signature guarantee must be by a firm that
is a member of a registered national securities exchange or a member of the
NASD, or by a commercial bank or trust company having an office or correspondent
in the United States.
IF ANY HOLDER SUBMITS AN EXECUTED CONSENT FORM WITHOUT INDICATING A VOTE
WITH RESPECT TO THE PROPOSED AMENDMENTS, SUCH SUBMISSION WILL BE DEEMED TO
CONSTITUTE A VOTE FOR THE PROPOSED AMENDMENTS.
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<PAGE>
Each consent form should be sent to the Trustee, as follows:
The Chase Manhattan Bank
c/o Texas Commerce Bank
Corporate Trust Services - Dallas
1201 Main Street
Dallas, Texas 75202
Attention: Mr. Frank Ivins
Telephone: (214) 672-5678
Telecopier: (214) 672-5746
PERSONS WHO DESIRE TO FURNISH THEIR CONSENT SHOULD MAIL, HAND DELIVER,
SEND BY OVERNIGHT COURIER, OR TELECOPY THEIR PROPERLY COMPLETED AND EXECUTED
CONSENT FORMS TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS TO THE TRUSTEE IN
ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND THEREIN.
IN NO EVENT SHOULD A HOLDER TENDER OR DELIVER ANY SECURITIES TO THE
COMPANY, THE TRUSTEE OR THE SOLICITATION AGENT WITH THEIR CONSENT FORMS OR
OTHERWISE.
Revocation of Consents
Any person who furnished a Consent can revoke any such Consent as to the
Securities or any portion of the Securities (in integral multiples of $1,000) to
which the consent form relates only by filing a written notice of revocation
with the Trustee (at the address indicated above), prior to the later of the
Expiration Date and the time that the Trustee receives from the Company an
officer's certificate in accordance with the provisions of the Indenture
certifying receipt of the Requisite Consents. The transfer of Securities after
the Record Date will not have the effect of revoking the election made in any
consent form theretofore validly given, and each Consent will be counted
notwithstanding any transfer of the Securities to which the Consent relates,
unless the procedure for revoking Consents described below has been complied
with. A Consent received by the Trustee on or prior to the Expiration Date in
respect of any Securities will be deemed to revoke any consent form in respect
of such Securities having an earlier date that has the "DO NOT CONSENT" or
"ABSTAIN" box marked thereon. A holder who delivers a consent form with the "DO
NOT CONSENT" or "ABSTAIN" box marked thereon will not be entitled to receive a
Consent Payment in respect of the Securities to which such consent form relates
unless, on or prior to the Expiration Date, such person delivers and does not
properly revoke a subsequently dated consent form marked to indicate a vote FOR
the Proposed Amendments.
A written notice of revocation, to be effective, must (i) contain the name
of the Registered Holder, the certificate numbers of the Securities to which
such revocation relates,
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the aggregate principal amount of Securities to which such revocation relates
and the signature of the person furnishing the revocation (with such signature,
and the signatures in any accompanying proxy, notarized or guaranteed as
described above) and (ii) be accompanied by a properly completed irrevocable
proxy (in substantially the form included with the consent form) if the person
furnishing the revocation is not the Registered Holder of such Securities.
The revocation (or, if the person furnishing the revocation is not the
Registered Holder, the accompanying irrevocable proxy), to be effective, must be
executed by the Registered Holder of such Securities in the same manner as the
name of the Registered Holder appears on the Securities to which the revocation
relates. If a revocation is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation, or other person acting in
a fiduciary or representative capacity, such person must so indicate when
signing and must submit with the revocation appropriate evidence of authority to
execute the revocation. A revocation of the Consent shall be effective only as
to the Securities listed on the revocation and only if such revocation complies
with the revocation procedures set forth in this Consent Solicitation Statement.
A beneficial owner of Securities who is not the Registered Holder must arrange
with the Registered Holder to execute and deliver on his, her or its behalf a
revocation of any Consent already given with respect to such Securities, or
obtain an irrevocable proxy (in substantially the form included with the consent
form) from the Registered Holder authorizing such beneficial holder to revoke
such Consent in accordance with the procedures described in this Consent
Solicitation Statement. A PURPORTED NOTICE OF REVOCATION THAT IS NOT RECEIVED BY
THE TRUSTEE IN A TIMELY FASHION AND ACCEPTED AS A VALID REVOCATION WILL NOT BE
EFFECTIVE TO REVOKE A PREVIOUSLY FURNISHED CONSENT.
A revocation of a Consent previously furnished may only be rescinded by
the execution and delivery of a properly completed and timely consent form. A
person who has delivered a revocation may thereafter deliver a new Consent by
following one of the described procedures therefor (see "The
Solicitation-Consent Procedures") at any time on or prior to the Expiration
Date.
Prior to the execution and delivery of the Supplemental Indenture, the
Company intends to consult with the Trustee to determine whether it has received
any revocations of Consents. The Company reserves the right to contest the
validity of any such revocations.
Information; Assistance; Additional Materials
Questions relating to the procedure for delivering consent forms or the
Solicitation, as well as requests for assistance or for additional copies of
this Consent Solicitation Statement or the consent form, should be directed to
the Solicitation Agent, as follows:
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Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Mr. Joe Muratore
Telephone: (212) 892-4753
Telecopy: (212) 892-4057
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A SUMMARY DISCUSSION OF CERTAIN OF THE ANTICIPATED U.S.
FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED AMENDMENTS AND THE CONSENT
PAYMENTS. THIS SUMMARY IS BASED UPON THE RELEVANT PROVISIONS OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND RELATED REGULATIONS, REVENUE
RULINGS AND DECISIONS NOW IN EFFECT, ALL OF WHICH ARE SUBJECT TO CHANGE. THE
SUMMARY DOES NOT ATTEMPT TO ADDRESS THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF
ALL CATEGORIES OF HOLDERS OF SECURITIES, SOME OF WHICH MAY BE SUBJECT TO SPECIAL
RULES (E.G., LIFE INSURANCE COMPANIES, TAX-EXEMPT ENTITIES AND FOREIGN
TAXPAYERS.) NO RULING HAS BEEN OR WILL BE SOUGHT FROM THE INTERNAL REVENUE
SERVICE (THE "SERVICE") REGARDING ANY MATTER DISCUSSED BELOW. ACCORDINGLY, NO
ASSURANCE CAN BE GIVEN THAT THE SERVICE WILL NOT CHALLENGE ANY OF THE FEDERAL
INCOME TAX CONSEQUENCES DESCRIBED BELOW OR THAT ANY SUCH CHALLENGE, IF MADE,
WOULD NOT BE SUSTAINED BY A COURT. ALL HOLDERS OF SECURITIES ARE URGED TO
CONSULT WITH THEIR OWN TAX ADVISERS IN DETERMINING THE FEDERAL, STATE, LOCAL AND
ANY OTHER TAX CONSEQUENCES OF THE PROPOSED AMENDMENTS AND THE CONSENT PAYMENTS.
The Proposed Amendments and the Consent Payments
The Company believes that the only federal income tax consequence of
the adoption of the Proposed Amendments to holders of Securities will be that
the full amount of the Consent Payment will be subject to tax as ordinary income
to those holders who receive it. This conclusion is based upon the view that
such adoption will not be treated as a constructive exchange of the Securities
for new Securities because of the Company's belief that (i) the transfer of
assets by the Company to New Beverly will be a transfer of substantially all of
the assets of the Company, (ii) there will not be a change in payment
expectations with respect to the Securities and (iii) the transaction does not
result in a significant alteration of the Securities. Alternatively, even if the
adoption of the Proposed Amendments were treated as an exchange by the Service,
any such exchange may be a tax free exchange under Section 355 of the Code.
If the adoption of the Proposed Amendments were considered to be a
constructive exchange of the Securities for new securities for federal income
tax purposes and such exchange did not qualify for tax-free treatment under
section 355 of the Code, holders would recognize gain or loss upon such deemed
exchange, equal to the difference between (i) the issue price of the Securities
deemed received in exchange for the old securities (or possibly the sum of such
issue price and the amount of the Consent Payment received) and (ii) the
adjusted basis of the Securities deemed surrendered. Any gain or loss recognized
on the exchange would generally be capital gain or loss if the Securities were
held by a holder as a capital asset (and long-term capital loss if the holder of
the Securities held the Securities for more than one year at the time of such
deemed exchange) except to the extent of any accrued but unrecognized market
discount, which would be treated as
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ordinary income to the extent of any gain. If the issue price of the new
Securities is less than the principal amount thereof, then such new Securities
may be treated as issued with original issue discount, which the holder would
generally include in income as it accrues on a constant yield basis over the
remaining term of the new Securities.
Backup Withholding
Under the U.S. federal income tax laws, a holder of Securities may, under
certain circumstances, be subject to backup withholding at the rate of 31% with
respect to the Consent Payment, unless such holder (i) is a corporation or is
otherwise exempt and, when required, demonstrates this fact or (ii) provides a
correct taxpayer identification number, certifies as to no loss of exemption
from backup withholding and otherwise complies with applicable requirements of
the backup withholding rules. See the instructions with respect to backup
withholding contained in the accompanying consent form.
Other Tax Considerations
There may be other U.S. federal, state, local or foreign tax
considerations applicable to the circumstances of a holder of a Security.
Accordingly, all holders of Securities should consult with their own tax
advisers as to any particular tax consequences to them of the Proposed
Amendments and the Consent Payment.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY, AND DOES NOT CONSTITUTE AND IS
NOT A SUBSTITUTE FOR PROFESSIONAL TAX ADVICE. EACH HOLDER OF A SECURITY SHOULD
CONSULT HIS, HER OR ITS OWN TAX ADVISOR AS TO THE U.S. FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES TO HIM, HER OR IT OF THE SOLICITATION.
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PRINCIPAL HOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
THE FOLLOWING TABLE SETS FORTH THE NAMES AND ADDRESSES OF (I) THOSE
PERSONS WHO ARE KNOWN BY THE COMPANY TO BE THE RECORD OWNERS OF MORE THAN 5% IN
AGGREGATE PRINCIPAL AMOUNT OF THE SECURITIES OUTSTANDING AS OF THE RECORD DATE,
BASED ON INFORMATION SUPPLIED TO THE COMPANY BY THE TRUSTEE AND INFORMATION
PUBLISHED IN SECURITY POSITION LISTINGS OBTAINED FROM DTC AND (II) ALL EXECUTIVE
OFFICERS AND DIRECTORS OF THE COMPANY WHO, AS OF THE DATE OF THIS CONSENT
SOLICITATION STATEMENT, OWN SECURITIES, AND AS TO EACH SUCH 5% OWNER, EXECUTIVE
OFFICER AND DIRECTOR, THE PRINCIPAL AMOUNT AND THE PERCENTAGE OF THE TOTAL
SECURITIES WHICH ARE SO OWNED. WITH RESPECT TO SUCH PERSONS WHO ARE NOT
EXECUTIVE OFFICERS OR DIRECTORS OF THE COMPANY, SUCH INFORMATION REPRESENTS
RECORD OWNERSHIP OF SECURITIES, BECAUSE THE COMPANY LACKS THE INFORMATION
NECESSARY TO DETERMINE WHETHER, OR BY WHOM, SUCH SECURITIES ARE OWNED
BENEFICIALLY AND OBTAINING SUCH INFORMATION, WOULD INVOLVE CONSIDERABLE DELAY
AND EXPENSE. THE COMPANY DOES NOT PRESENTLY KNOW WHETHER SUCH 5% HOLDERS WILL
FURNISH CONSENTS TO THE PROPOSED AMENDMENTS.
Principal Amount Percentage
Name and Address Held of Record as of Securities
of Registered Holder of the Record Date Outstanding
- -------------------- ------------------ -----------
SSB - Custodian $65,700,000 36.5%
Global Proxy Unit, ASNW
P.O. Box 1631
Boston, Massachusetts 02105-1831
Attention: Michael L. Cuneo
The Bank of New York $25,880,000 14.4%
825 Patterson Plank Road
Seacaucus, New Jersey 07084
Attention: Cecile Lamaroo
Chase Manhattan Bank $12,450,000 11.9%
Two Chase Manhattan Plaza
5th Floor
New York, New York 10081
Attention: Orma Trim
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<PAGE>
Bankers Trust Company $9,485,000 5.3%
c/o BT Services Tennessee Inc.
Pereion Trust Services
648 Grassmere Park Drive
Nashville, Tennessee 37211
Attention: John Laster
Texas Commerce Bank, N.A. $9,021,000 5.0%
Corporate Action Unit
P.O. Box 2558, 12-HCB-06
Houston, Texas 77252
Attention: Barbara Myrck
Scott Tabakin $127,000 *
(Executive Vice President
and Chief Financial Officer of
the Company)
2301 Ramsgate Way
Fort Smith, Arkansas 72903
Pamela Daniels $10,000 *
(Vice President, Comptroller
and Chief Accounting Officer of)
the Company
3416 Sturbridge Place
Fort Smith, Arkansas 72903
- -------------------
* Less than one percent
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THE SOLICITATION AGENT
Donaldson, Lufkin & Jenrette Securities Corporation has agreed to act as
exclusive financial advisor and Solicitation Agent (the "Solicitation Agent")
for the Company in respect of the Solicitation. Fees payable to the Solicitation
Agent are based upon, and will vary according to, the number of Consents
received and accepted by the Trustee and the aggregate amount of Consent
Payments made with respect thereto. If Consents from the holders of 100% of the
outstanding Securities are received by the Trustee and accepted by the Company
and the Consent Payments therefor (in the aggregate amount of $______ for each
$1,000 principal amount of Securities covered by such Consents) are paid, the
Solicitation Agent will be entitled to receive $________. The Company has
further agreed to reimburse the Solicitation Agent for its reasonable
out-of-pocket expenses and to indemnify it against certain liabilities in
connection with its performance of services for the Consent Solicitation.
Questions, requests for assistance and additional copies of this Consent
Solicitation Statement and the consent form should be addressed to the
Solicitation Agent at the address set forth below. The Solicitation Agent may be
contacted at the following address:
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Mr. Joe Muratore
Telephone: (212) 892-4753
Telecopy: (212) 892-4057
EXPENSES OF SOLICITATION
The Company will bear the costs of the Solicitation. The Company will
reimburse the Trustee for expenses that it incurs in connection with the
Solicitation. The Company will also reimburse banks, trust companies, securities
dealers, nominees, custodians and fiduciaries for their reasonable out-of-pocket
expenses in forwarding consent forms and other materials to beneficial owners of
Securities. In addition to the solicitation of consents by mail, employees of
the Company may solicit consents by personal interviews, by telephone, facsimile
transmission, or by telegraph. Employees of the Company will not be specially
compensated for soliciting consents. If such personal interviews or telephone
conversations are used to solicit consents, this Consent Solicitation Statement
and the appropriate consent forms will precede the interview or telephone
conversation. If as a result of the interview or conversation additional consent
forms are required, they will be forwarded to the Registered Holder.
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INCORPORATION BY REFERENCE
Pursuant to Items 13(a)(1) and 13(a)(3), respectively, of Schedule
14A under the Exchange Act, the Company hereby incorporates by reference in this
Consent Solicitation Statement, the following information:
1. The information set forth under the captions titled: "Pro Forma
Condensed Consolidated Statements of Income" and "Pro Forma Condensed
Consolidated Balance Sheet", in each case together with the related notes
thereto;
2. The Company's: (i) Condensed Consolidated Balance Sheets at March
31, 1997 and December 31, 1996, (ii) Condensed Consolidated Statements of
Income for the three months ended March 31, 1997 and 1996, and (iii)
Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 1997 and 1996, in each case together with the related notes
thereto;
3. The Company's: (i) Consolidated Balance Sheets at December 31,
1996 and December 31, 1995, (ii) Consolidated Statements of Operations for
the years ended December 31, 1996, 1995 and 1994, (iii) Consolidated
Statements of Stockholders' Equity for the years ended December 31, 1996,
1995 and 1994, and (iv) Consolidated Statements of Cash Flows for the
years ended December 31, 1996, 1995 and 1994, in each case together with
the related notes thereto and the Report of Ernst & Young LLP thereon;
4. New Beverly's Balance Sheet at May 31, 1997, together with the
related notes thereto and the Report of Ernst & Young LLP thereon; and
5. The information set forth under the captions titled: "Information
Concerning Beverly -- Selected Historical Consolidated Financial Data;
Management's Discussion and Analysis of Financial Condition and Results of
Operations"
; in all cases contained in the New Beverly Prospectus constituting part of the
New Beverly Registration Statement (No. 333-28521) filed with the Commission on
June 4, 1997, as amended, and
6. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, and the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1997.
Any statement contained in any document incorporated or deemed to be
incorporated by reference in this Consent Solicitation Statement shall be deemed
to be modified or superseded for purposes of this Consent Solicitation
Statement, to the extent that a statement contained in
-37-
<PAGE>
this Consent Solicitation Statement or in any other subsequently filed document
that also is or is deemed to be incorporated by reference modifies or replaces
such statement.
The Company hereby undertakes to provide, without charge, by first
class mail to each person to whom this Consent Solicitation Statement is
delivered, within one business day of written or oral request to the Company's
principal executive offices: Beverly Enterprises, Inc., 5111 Rogers Avenue,
Suite 40-A, Fort Smith, Arkansas 72919, Attention: Robert W. Pommerville,
Secretary, telephone no.: (501) 452-6712, copies of all of the foregoing
information incorporated by reference in this Consent Solicitation Statement
(not including, however, any of the exhibits to such information unless, to the
extent indicated above, such exhibits have been specifically incorporated by
reference into the information which has been incorporated by reference in this
Consent Solicitation Statement. This undertaking includes all information
contained in documents filed with the Commission subsequent to the date on which
this Consent Solicitation Statement has first been mailed, sent or given to
holders of Securities up to the date of responding to the aforementioned
request.
YOUR CONSENT TO THE PROPOSED AMENDMENTS IS HEREBY REQUESTED.
By order of the Board of Directors
of Beverly Enterprises, Inc.
/s/ David R. Banks
Chairman of the Board
______ __, 1997
Fort Smith, Arkansas
-38-
<PAGE>
ANNEX A
BEVERLY ENTERPRISES, INC.
9% Senior Notes due 2006
------------------------
FORM OF
SUPPLEMENTAL INDENTURE NO. 2
Dated as of , 1997
------------------------
The Chase Manhattan Bank,
as Trustee
<PAGE>
FORM OF
SUPPLEMENTAL INDENTURE NO. 2
SUPPLEMENTAL INDENTURE NO. 2 dated as of , 1997 among BEVERLY
ENTERPRISES, INC., a Delaware corporation (the "Company"), the corporations
listed on the signature pages hereto in their capacity as guarantors (each a
"Guarantor" and collectively, the "Guarantors") and THE CHASE MANHATTAN BANK
(successor by merger to Chemical Bank), as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Company, certain of its subsidiaries and the Trustee
have heretofore entered into an Indenture dated as of February 1, 1996 (the
"Original Indenture", as supplemented by Supplemental Indenture No. 1, dated as
of December 16, 1996 and as supplemented hereby, the "Indenture");
WHEREAS, the Company desires and has requested the Trustee to join
with it in the execution and delivery of this Supplemental Indenture No. 2 and
the Holders of a majority in principal amount of the Securities outstanding have
consented to such execution and delivery;
WHEREAS, the Company has entered into an agreement and plan of
distribution dated as of April 15, 1997, with New Beverly Holdings, Inc., a
Delaware corporation ("New Beverly") and Capstone Pharmacy Services, Inc., a
Delaware corporation ("Capstone"), pursuant to which, among other things, (i)
the Company will transfer all of its assets and properties to New Beverly other
than the stock of Pharmacy Corporation of America, a Delaware corporation
("PCA") and the Subsidiaries of PCA; (ii) New Beverly will assume all of the
Company's rights and obligations under the Indenture and the Securities; (iii)
the Company, PCA and each of PCA's Subsidiaries shall be released from all
obligations under the Indenture and the Securities; (iv) the Company will
distribute all of the issued and outstanding capital stock of New Beverly to the
stockholders of the Company; and (v) thereafter the Company will merge with and
into Capstone with Capstone as the surviving corporation in such merger (the
"Merger") pursuant to an Agreement and Plan of Merger dated as of April 15,
1997, between the Company and Capstone (all of the foregoing being collectively
called the "New Beverly Transaction");
WHEREAS, Article 5 of the Indenture permits the Company to transfer
all or substantially all of its assets and properties to another Person if
certain conditions set forth in Section 5.1 of the Indenture have been met,
which conditions require modification as herein provided to facilitate the New
Beverly Transaction;
WHEREAS, prior to consummation of the New Beverly Transaction the
Company desires to prepay all its 7-5/8% Convertible Subordinated Debentures due
2003 regardless of any limitation on Restricted Payments under Section 4.7 of
the Indenture; and
<PAGE>
WHEREAS, the Company has represented to the Trustee that all
conditions precedent to the execution and delivery of this Supplemental
Indenture No. 2 have been satisfied;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
SECTION 1. Definitions; References. All capitalized terms used and
not defined herein have the respective meaning assigned to them in the
Indenture. Each reference to "hereof", "hereunder", "herein" and "hereby" and
each other similar reference contained in the Indenture or in any Security shall
from and after the date hereof refer to the Indenture, as amended hereby.
SECTION 2. Amendment of Indenture. Effective as of the date hereof
the Indenture is hereby amended as follows:
a. The definitions contained in Section 1.1 of the Indenture are
amended to add the following new definitions in their correct alphabetical
sequence:
"New Beverly" means New Beverly Holdings, Inc., a Delaware
corporation (to be renamed Beverly Enterprises, Inc., upon consummation of
the New Beverly Transaction) and, prior to the distribution referred to in
clause (iv) of the definition of New Beverly Transaction, a wholly-owned
Subsidiary of the Company.
"New Beverly Transaction" means the transactions contemplated by
that certain Agreement and Plan of Distribution dated as of April 15,
1997, among the Company, New Beverly and Capstone Pharmacy Services, Inc.
("Capstone"), pursuant to which (i) the Company will transfer all of its
assets and properties to New Beverly other than the stock of PCA and the
Subsidiaries of PCA; (ii) New Beverly will assume all of the rights and
obligations of the Company under the Indenture and the Securities; (iii)
the Company, PCA and each of PCA's Subsidiaries shall be released from all
obligations under the Indenture and the Securities; (iv) the Company will
distribute all of the issued and outstanding capital stock of New Beverly
to the stockholders of the Company; and (v) the Company will merge with
and into Capstone pursuant to that certain Agreement and Plan of Merger
dated as of April 15, 1997, between the Company and Capstone, with
Capstone as the surviving corporation in such merger.
b. The definition of "Asset Sale" contained in Section 1.1 is
amended to add the following at the end of the first sentence thereof
immediately preceding the period:
"; provided that the second paragraph of Section 4.10 shall apply to the
New Beverly Transaction and the disposition of all the capital stock of
New Beverly to the
A-2
<PAGE>
stockholders of the Company as described in subclause (iv) of the
definition of New Beverly Transaction shall not constitute an Asset Sale."
c. The definition of "Change of Control" contained in Section 1.1 is
amended to add the following at the end thereof immediately preceding the
period:
";provided that the New Beverly Transaction shall not constitute a Change
of Control."
d. The definition of "Permitted Refinancing Indebtedness" contained
in Section 1.1 is amended to insert at the beginning of subclause (ii) thereof
the words "if such Permitted Refinancing Indebtedness is not Subordinated
Indebtedness then" and to insert in subclause (iii) thereof after the words
"final maturity date" in replacement of the word "of" the words "later than
February 15, 2006".
e. The definition of "Spinoff Transaction" contained in Section 1.1
is amended by adding at the end thereof the following proviso:
"provided, however, that such term shall also be deemed to mean and
include the New Beverly Transaction."
f. Section 4.7 of the Indenture is amended to delete the word "and"
at the end of subclause (iv) following Section 4.7(c), to insert "; and" in
place of the period after subclause (v) following Section 4.7(c) and to delete
the proviso immediately after subclause (v) following Section 4.7(c) and to add
a new subclause (vi) and the paragraph appearing below in replacement thereof:
"(vi) the redemption of all of the Company's 7-5/8% Convertible
Subordinated Debentures due 2003."
"provided, however, in the case of each of clauses (ii), (iii), (iv), (v)
and (vi) of this paragraph, no Default or Event of Default shall have
occurred and be continuing at the time of such Restricted Payment or would
occur as a consequence thereof."
g. Section 5.1(iv) of the Indenture is amended by inserting at the
end thereof immediately preceding the period the following:
"; provided, however, that this Section 5.1(iv) shall not apply to the New
Beverly Transaction and the New Beverly Transaction shall be deemed to
satisfy this Section 5.1(iv)."
h. Section 5.2 of the Indenture is hereby amended by inserting at
the end thereof immediately preceding the period the following:
A-3
<PAGE>
"and upon such assignment of all of the Company's rights and obligations
under this Indenture and the Securities, and the assumption thereof by the
successor corporation or Person, the Company shall be unconditionally
released from any and all further liability under this Indenture and the
Securities."
i. Section 10.5 of the Indenture is amended to insert at the end of
the first paragraph thereof immediately preceding the period, the following:
"provided that upon the assumption by New Beverly of all the Company's
rights and obligations under the Indenture and the Securities as
contemplated by subclause (ii) of the definition of New Beverly
Transaction, PCA and each of PCA's Subsidiaries shall be unconditionally
released from its Guarantee of the Securities and shall have no obligation
under the Indenture or the Securities."
SECTION 3. Release and Discharge. The Trustee is hereby authorized
to evidence the release and discharge of the Company, PCA and each Subsidiary of
PCA from all of their rights and obligations hereunder upon the assumption by
New Beverly of all the Company's rights and obligations under the Indenture and
the Securities referred to in subclause (ii) of the definition of New Beverly
Transaction by executing and delivering a release and discharge confirmation in
the form of Exhibit A hereto.
SECTION 4. Governing Law. This Supplemental Indenture No. 2 shall be
governed by and construed in accordance with the laws of the State of New York,
applicable to instruments made and performed entirely in such state.
SECTION 5. Counterparts; Effectiveness. This Supplemental Indenture
No. 2 may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
A-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this SUPPLEMENTAL
INDENTURE NO. 2 to be duly executed as of the date hereof.
BEVERLY ENTERPRISES, INC.
By____________________________
Title:
GUARANTORS
----------
A.B.C. HEALTH CARE EQUIPMENT CORP.
A-1 HOME HEALTH SERVICES, INC.
ADVINET, INC.
AGI-CAMELOT, INC.
AGI-MCDONALD COUNTY HEALTH CARE, INC.
ALLIANCE HEALTH SERVICES, INC.
ALLIANCE HOME HEALTH CARE, INC.
AMCO MEDICAL SERVICE, INC.
AMERICAN TRANSITIONAL CARE CENTERS OF
TEXAS, INC.
AMERICAN TRANSITIONAL CARE DALLAS - -
FT. WORTH, INC.
AMERICAN TRANSITIONAL HEALTH CARE, INC.
AMERICAN TRANSITIONAL HOSPITALS, INC.
AMERICAN TRANSITIONAL HOSPITALS OF
INDIANA, INC.
AMERICAN TRANSITIONAL HOSPITALS OF
OKLAHOMA, INC.
AMERICAN TRANSITIONAL HOSPITALS OF
TENNESSEE, INC.
AMERICAN TRANSITIONAL HOSPITALS-
TEXAS MEDICAL CENTER, INC.
ATH-CLEAR LAKE, IN.C
ATH COLUMBUS, INC.
ATH DEL ORO, INC.
ATH HEIGHTS, INC.
ATH OKLAHOMA CITY, INC.
ATH TUCSON, INC.
BEVERLY ACQUISITION CORPORATION
BEVERLY ASSISTED LIVING, INC.
BEVERLY BELLA VISTA HOLDING, INC.
A-5
<PAGE>
BEVERLY HEALTH AND REHABILITATION
SERVICES, INC.
BEVERLY ENTERPRISES-ALABAMA, INC.
BEVERLY ENTERPRISES-ARIZONA, INC.
BEVERLY ENTERPRISES-ARKANSAS, INC.
BEVERLY ENTERPRISES-CALIFORNIA, INC.
BEVERLY ENTERPRISES-COLORADO, INC.
BEVERLY ENTERPRISES-CONNECTICUT, INC.
BEVERLY ENTERPRISES-DELAWARE, INC.
BEVERLY ENTERPRISES-DISTRIBUTION
SERVICES, INC.
BEVERLY ENTERPRISES-DISTRICT OF
COLUMBIA, INC.
BEVERLY ENTERPRISES-FLORIDA, INC.
BEVERLY ENTERPRISES-GARDEN TERRACE, INC.
BEVERLY ENTERPRISES-GEORGIA, INC.
BEVERLY ENTERPRISES-HAWAII, INC.
BEVERLY ENTERPRISES-IDAHO, INC.
BEVERLY ENTERPRISES-ILLINOIS, INC.
BEVERLY ENTERPRISES-INDIANA, INC.
BEVERLY ENTERPRISES-IOWA, INC.
BEVERLY ENTERPRISES-KANSAS, INC.
BEVERLY ENTERPRISES-KENTUCKY, INC.
BEVERLY ENTERPRISES-LOUISIANA, INC.
BEVERLY ENTERPRISES-MAINE, INC.
BEVERLY ENTERPRISES-MARYLAND, INC.
BEVERLY ENTERPRISES-MASSACHUSETTS, INC.
BEVERLY ENTERPRISES-MICHIGAN, INC.
BEVERLY ENTERPRISES-MINNESOTA, INC.
BEVERLY ENTERPRISES-MISSISSIPPI, INC.
BEVERLY ENTERPRISES-MISSOURI, INC.
BEVERLY ENTERPRISES-MONTANA, INC.
BEVERLY ENTERPRISES-NEBRASKA, INC.
BEVERLY ENTERPRISES-NEVADA, INC.
BEVERLY ENTERPRISES-NEW HAMPSHIRE, INC.
BEVERLY ENTERPRISES-NEW JERSEY, INC.
BEVERLY ENTERPRISES-NEW MEXICO, INC.
BEVERLY ENTERPRISES-NORTH CAROLINA, INC.
BEVERLY ENTERPRISES-NORTH DAKOTA, INC.
BEVERLY ENTERPRISES-OHIO, INC.
BEVERLY ENTERPRISES-OKLAHOMA, INC.
BEVERLY ENTERPRISES-OREGON, INC.
BEVERLY ENTERPRISES-PENNSYLVANIA, INC.
BEVERLY ENTERPRISES-RHODE ISLAND, INC.
A-6
<PAGE>
BEVERLY ENTERPRISES-SOUTH CAROLINA, INC.
BEVERLY ENTERPRISES-TENNESSEE, INC.
BEVERLY ENTERPRISES-TEXAS, INC.
BEVERLY ENTERPRISES-UTAH, INC.
BEVERLY ENTERPRISES-VERMONT, INC.
BEVERLY ENTERPRISES-VIRGINIA, INC.
BEVERLY ENTERPRISES-WASHINGTON, INC.
BEVERLY ENTERPRISES-WEST VIRGINIA, INC.
BEVERLY ENTERPRISES-WISCONSIN, INC.
BEVERLY ENTERPRISES-WYOMING, INC.
BEVERLY ENTERPRISES JAPAN LIMITED
BEVERLY ENTERPRISES MEDICAL EQUIPMENT
CORPORATION
BEVERLY ENTERPRISES REHABILITATION
CORPORATION
BEVERLY HOLDINGS I, INC.
BEVERLY INDEMNITY, LTD.
BEVERLY MANOR INC. OF HAWAII
BEVERLY MISSOURI VALLEY HOLDING, INC.
BEVERLY RAPID CITY HOLDING, INC.
BEVERLY REAL ESTATE HOLDINGS, INC.
BEVERLY REMIC DEPOSITOR, INC.
BEVERLY SAVANA CAY MANOR, INC.
BROWNSTONE PHARMACY, INC.
COLUMBIA-VALLEY NURSING HOME, INC.
COMMERCIAL MANAGEMENT, INC.
COMPUTRAN SYSTEMS, INC.
CONTINENTAL CARE CENTERS OF COUNCIL
BLUFFS, INC.
DD WHOLESALE, INC.
DUNNINGTON DRUG, INC.
DUNNINGTON RX SERVICES OF RHODE ISLAND,
INC.
DUNNINGTON RX SERVICES OF MASSACHUSETTS,
INC.
FOREST CITY BUILDING LTD.
HALLMARK CONVALESCENT HOMES, INC.
HEALTHCARE PRESCRIPTION SERVICES, INC.
HOME MEDICAL SYSTEMS, INC.
HOSPICE PREFERRED CHOICE, INC.
HOSPITAL FACILITIES CORPORATION
INSTA-CARE HOLDINGS, INC.
INSTA-CARE PHARMACY SERVICES CORPORATION
INSURANCE SOFTWARE PACKAGES, INC.
A-7
<PAGE>
KENWOOD VIEW NURSING HOME, INC.
LIBERTY NURSING HOMES, INCORPORATED
MEDICAL ARTS HEALTH FACILITY OF
LAWRENCEVILLE, INC.
MODERNCARE OF LUMBERTON, INC.
NEBRASKA CITY S-C-H, INC.
NURSING HOME OPERATORS, INC.
OMNI MED B, INC.
PETEREN HEALTH CARE, INC.
PHARMACY CORPORATION OF AMERICA
PHARMACY CORPORATION OF AMERICA-
MASSACHUSETTS, INC.
PHARMACY DYNAMICS GROUP, INC.
PHYMEDSCO, INC.
RESOURCE OPPORTUNITIES, INC.
SALEM NO. 1, INC.
SOUTH ALABAMA NURSING HOME, INC.
SOUTH DAKOTA-BEVERLY ENTERPRISES, INC.
SPECTRA REHAB ALLIANCE, INC.
SYNERGOS-NORTH HOLLYWOOD, INC.
SYNERGOS-PLEASANT HILL, INC.
SYNERGOS-SCOTTSDALE, INC.
TAYLOR COUNTY HEALTH FACILITY, INC.
TMD DISPOSITION COMPANY
VANTAGE HEALTHCARE CORPORATION
By____________________________
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By___________________________
Title:
A-8
<PAGE>
CONSENT SOLICITATION BY THE BOARD OF DIRECTORS
OF
BEVERLY ENTERPRISES, INC.
9% Senior Notes due 2006
CONSENT FORM
for Consent to the Proposed Amendments
Pursuant to the Consent Solicitation Statement
Dated July, 1997
TO: The Chase Manhattan Bank
c/o Texas Commerce Bank
Corporate Trust Services - Dallas
1201 Main Street
Dallas, Texas 75202
Attention: Frank Ivins
Telephone: (214) 672-5678
Telecopier: (214) 672-5746
The Solicitation is being made by the Board of Directors of Beverly
Enterprises Inc., a Delaware corporation (the "Company") to solicit consents
from the Registered Holders of the Company's 9% Senior Notes due 2006 (the
"Securities") as described in the accompanying Consent Solicitation Statement
dated ____ __, 1997 (the "Consent Solicitation Statement"). The term "Registered
Holder" as used herein means any person in whose name Securities were registered
in the register maintained by The Chase Manhattan Bank, as Trustee and Registrar
under the Indenture (the "Trustee"), as of ______ __, 1997 (the "Record Date").
All capitalized terms used and not defined in this consent form have the
respective meanings assigned to them in the Consent Solicitation Statement.
CONSENT FORMS SHOULD NOT BE DELIVERED TO ANY PERSON OTHER THAN THE
TRUSTEE. UNDER NO CIRCUMSTANCE SHOULD ANY PERSON DELIVER ANY SECURITIES WITH
THEIR CONSENT FORMS OR OTHERWISE.
ANY BENEFICIAL OWNER OF SECURITIES WHO IS NOT THE REGISTERED HOLDER AS OF
THE RECORD DATE BUT WHO DESIRES TO FURNISH A CONSENT AND RECEIVE A CONSENT
PAYMENT IN ACCORDANCE WITH THE TERMS AND SUBJECT TO THE CONDITIONS DESCRIBED IN
THE ACCOMPANYING CONSENT SOLICITATION STATEMENT MUST OBTAIN A PROXY (IN
SUBSTANTIALLY THE FORM INCLUDED WITH THIS CONSENT FORM) FROM THE REGISTERED
HOLDER OF SUCH SECURITIES AND DELIVER SUCH PROXY TO THE TRUSTEE WITH THE
EXECUTED CONSENT FORM.
<PAGE>
IF ANY HOLDER SUBMITS THIS CONSENT FORM WITHOUT INDICATING A VOTE WITH RESPECT
TO THE PROPOSED AMENDMENTS, SUCH SUBMISSION WILL BE DEEMED TO CONSTITUTE A VOTE
FOR THE PROPOSED AMENDMENTS.
UNDER NO CIRCUMSTANCES WILL THE COMPANY MAKE ANY CONSENT PAYMENT TO ANY PERSON
WHO DELIVERS THIS CONSENT FORM WITH THE "DO NOT CONSENT" OR "ABSTAIN" BOX MARKED
HEREON WITH RESPECT TO ANY OF THE TRANSACTIONS AMENDMENT, THE REDEMPTION
AMENDMENT OR THE REFINANCING INDEBTEDNESS AMENDMENT UNLESS, ON OR PRIOR TO THE
EXPIRATION DATE, SUCH PERSON DELIVERS AND DOES NOT PROPERLY REVOKE A
SUBSEQUENTLY DATED CONSENT FORM MARKED TO INDICATE A VOTE FOR THE PROPOSED
AMENDMENTS.
THE COMPANY WILL NOT BE DEEMED TO HAVE ACCEPTED ANY CONSENTS UNLESS AND UNTIL
THE SUPPLEMENTAL INDENTURE IS EXECUTED AND DELIVERED BY THE COMPANY AND THE
TRUSTEE. IF THE COMPANY AND THE TRUSTEE EXECUTE AND DELIVER THE SUPPLEMENTAL
INDENTURE, THE PROPOSED AMENDMENTS WILL BE BINDING UPON ALL HOLDERS OF
SECURITIES, WHETHER OR NOT SUCH HOLDERS HAVE DELIVERED CONSENTS.
IF THIS CONSENT FORM IS VALIDLY DELIVERED, PROPERLY COMPLETED AND TIMELY
FURNISHED (IN THE MANNER DESCRIBED IN THE ACCOMPANYING CONSENT SOLICITATION
STATEMENT), THIS CONSENT FORM (AND THE VOTES CAST HEREBY IN RESPECT OF THE
PROPOSED AMENDMENTS) WILL BE COUNTED NOTWITHSTANDING ANY TRANSFER OF THE
SECURITIES TO WHICH THIS CONSENT FORM RELATES, UNLESS THE PROCEDURE FOR REVOKING
THIS CONSENT FORM (DESCRIBED IN THE CONSENT SOLICITATION STATEMENT) IS COMPLIED
WITH.
IRRESPECTIVE OF WHETHER THE PROPOSED AMENDMENTS BECOME EFFECTIVE, THE SECURITIES
WILL CONTINUE TO BE OUTSTANDING IN ACCORDANCE WITH ALL OTHER TERMS OF THE
INDENTURE AND THE SECURITIES.
B-2
<PAGE>
CONSENT
By execution hereof, the undersigned acknowledges receipt of the Consent
Solicitation Statement and all other information it deems necessary to make an
informed investment decision with respect to the Solicitation and the furnishing
of this consent form. The undersigned hereby represents and warrants that the
undersigned is a holder of the Securities indicated below and has full power and
authority to take the action indicated below in respect of such Securities. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Company to be necessary or desirable to perfect the undersigned's
consent.
The undersigned acknowledges that it must comply with the provisions of
this consent form, and complete the information required herein, to validly
consent to adoption of the Proposed Amendments.
The undersigned further acknowledges that, if adopted, the Proposed
Amendments would amend the Indenture to facilitate the Transactions contemplated
by the Distribution Agreement and Merger Agreement. The Distribution Agreement
and the Merger Agreement contemplate, among other matters, (i) the transfer by
the Company to New Beverly of all of the Company's assets and properties, other
than the capital stock of PCA and the capital stock of PCA's subsidiaries, in
exchange for all outstanding shares of capital stock of New Beverly; (ii) the
assumption by New Beverly of all of the Company's rights and obligations in
respect of the Securities and the Indenture; (iii) the release of the
obligations of the Company, PCA and each of PCA's subsidiaries in respect of the
Securities and the Indenture; (iv) the distribution by the Company to its
stockholders of all of the outstanding capital stock of New Beverly such that,
immediately after such distribution, New Beverly will be an independent
publicly-traded corporation owned directly by the Company's stockholders; and
(v) following consummation of the transactions described in clauses (i) through
(iv) above, the Merger.
The Proposed Amendments, if adopted, would also amend the Indenture to (i)
permit the Company, if it should so elect, to redeem all outstanding principal
amount of its 7 5/8% Convertible Debentures due 2003 without violating the
Restricted Payment provisions of the Indenture and (ii) provide the Company with
increased flexibility under the Indenture to refinance its outstanding
subordinated indebtedness (including, without limitation, its 5 1/2% Convertible
Subordinated Debentures due 2018).
Please indicate by marking the appropriate box below whether you wish (i)
to consent to the Proposed Amendments, (ii) not to consent to the Proposed
Amendments, or (iii) to abstain from taking any action with respect to the
Proposed Amendments. The undersigned acknowledges that Consents delivered
pursuant to any one of the procedures described under the heading "The
Solicitation - Consent Procedures" in the accompanying Consent Solicitation
Statement and in the instructions hereto will constitute a binding agreement
between the undersigned and the Company upon the terms and subject to the
conditions of
B-3
<PAGE>
the Solicitation. The undersigned further understands that (i) if no box is
checked but this Consent form is executed, dated and delivered to the
Solicitation Agent, the undersigned will be deemed to have consented to the
Proposed Amendments and (ii) if either the "DO NOT CONSENT" or "ABSTAIN" box
below is checked, the undersigned will be deemed not to have consented to the
Proposed Amendments and will not be entitled to receive any Consent Payment
unless, on or prior to the Expiration Date, such person delivers and does not
properly revoke a subsequently dated consent form marked to indicate a vote FOR
the Proposed Amendments.
PROPOSAL NO. 1. THE TRANSACTIONS AMENDMENT:
CONSENT DO NOT CONSENT ABSTAIN
| | | | | |
PROPOSAL NO. 2. THE REDEMPTION AMENDMENT:
CONSENT DO NOT CONSENT ABSTAIN
| | | | | |
PROPOSAL NO. 3. THE REFINANCING INDEBTEDNESS AMENDMENT:
CONSENT DO NOT CONSENT ABSTAIN
| | | | | |
Unless otherwise specified in the table below, this consent form relates
to (i) the aggregate principal amount of Securities held of record by the
undersigned at the close of business on the Record Date or (ii) if the
undersigned is not a Registered Holder and this consent form relates to
Securities in respect of which the undersigned is acting pursuant to an
irrevocable proxy furnished by the Registered Holder, the total principal amount
of securities to which such irrevocable proxy relates. If this consent form
relates to less than the total
B-4
<PAGE>
principal amount of Securities so registered in the name of the undersigned or
to which such a proxy relates, the undersigned has listed on the table below the
serial numbers and principal amount of Securities for which this consent form is
furnished. If the space provided below is inadequate, please list the
certificate numbers and principal amounts on a separate signed schedule and
affix the list to this consent form.
DESCRIPTION OF SECURITIES AS TO WHICH THIS CONSENT FORM RELATES
Aggregate Principal Amount
Principal With Respect to
Name(s) and Address(es) Certificate Amount of Which this Consent
of Registered Holder(s) Number(s)* Certificate(s)** Form Relates**
Aggregate Principal Amount
With Respect to
Which this Consent
Form Relates $
- ------------------------
* Need not be completed by persons whose Securities are held of record by
depositories.
** Unless otherwise indicated in the column labeled "Principal Amount with
Respect to which an Election is Being Made," the person executing this
consent form will be deemed to have taken the action indicated above in
respect of (i) if such person is the Registered Holder of the total principal
amount of Securities registered in the name of such Registered Holder as of
the Record Date and (ii) if such person is not a Registered Holder and is
executing this consent form pursuant to a proxy given by a Registered Holder
and delivered with this consent form, the total principal amount of
Securities to which such proxy relates.
B-5
<PAGE>
IMPORTANT - READ CAREFULLY
This consent form (or, if the person signing this consent form is not the
Registered Holder, the accompanying irrevocable proxy), to be effective, must be
executed by the Registered Holder(s) of the Securities to which this consent
form relates in the same manner as the name of the Registered Holder(s) appears
on such Securities. If such Securities are held of record as of the Record Date
by two or more Registered Holders, all such Registered Holders must sign this
consent form (or such irrevocable proxy). If such Securities are registered in
different names as of the Record Date, separate consent forms must be executed
covering each form of registration. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and must submit proper evidence satisfactory to the
Company of such person's authority to so act. Except as provided in Instruction
4, signatures on this consent form (and any such irrevocable proxy) must be
either (1) guaranteed by a firm that is a member of the National Association of
Securities Dealers, Inc., or a member of a registered national securities
exchange or by a commercial bank or trust company having an office or
correspondent in the United States, or (2) notarized.
SIGN HERE
..............................................................................
..............................................................................
Signature(s) of Holder(s)
Dated:.............................., 1997
Name(s):......................................................................
..............................................................................
(Please Print)
Capacity:.....................................................................
Address:......................................................................
..............................................................................
(Include Zip Code)
Area Code and Telephone No. ( ).............................................
Tax Identification or
Social Security No............................................................
B-6
<PAGE>
GUARANTEE OF SIGNATURE(S)
Authorized Signature..........................................................
Name and Title................................................................
(Please Print)
Dated:........................................................................
Name of Firm..................................................................
* * * * * OR * * * * *
STATE OF )
) ss.
COUNTY OF )
Before me, a Notary Public in and for said County and State, personally
appeared who acknowledged before me that (s)he signed the foregoing Consent and
that facts contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of
, 19 .
..............................................................................
Notary Public
My commission expires:........................................................
B-7
<PAGE>
IMPORTANT TAX INFORMATION
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR
GENERAL INFORMATION ONLY. EACH HOLDER IS URGED TO CONSULT HIS, HER OR ITS OWN
PROFESSIONAL TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH
HOLDER (INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL STATE, LOCAL AND
OTHER TAX LAWS) OF THE CONSENTS PURSUANT TO THE SOLICITATION, CERTAIN HOLDERS
(INCLUDING INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, FINANCIAL
INSTITUTIONS, DEALERS IN SECURITIES AND FOREIGN PERSONS OR ENTITIES) MAY BE
SUBJECT TO SPECIAL RULES NOT DISCUSSED BELOW. THE DISCUSSION DOES NOT CONSIDER
THE EFFECT OF ANY APPLICABLE FOREIGN, STATE, LOCAL OR OTHER TAX LAWS.
Substitute Form W-9
Under the Federal income tax laws, the Company may be required to withhold
31% of the amount of any payment made to certain holders pursuant to the
Solicitation. In order to avoid such backup withholding, each holder must
provide the correct taxpayer identification number ("TIN") by completing the
Substitute Form W-9 set forth below. In general, if a holder is an individual,
the TIN is the Social Security number of such individual. If the Correct TIN is
not provided, the holder may be subject to a $50 penalty imposed by the Internal
Revenue Service. Certain holders (including, among others, all corporations) are
not subject to these backup withholding and reporting requirements. These
holders should enter the correct TIN in Part 1 of the Substitute Form W-9, write
"Exempt" in Part 2 of the Substitute Form W-9, sign under the certification and
date the form. For further information regarding backup withholding and
instructions for completing the Substitute Form W-9 (including how to obtain a
TIN if you do not have one and how to complete the Substitute Form W-9 if
Securities are held in more than one name), consult the Guidelines for
Certification of Taxpayer Identification Number.
Consequences of Failure to File Substitute Form W-9
Failure to complete Substitute Form W-9 may require the Company to
withhold 31% of the amount of any Consent Payments made pursuant to the
Solicitation. Backup withholding is not an additional Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, the holder may claim a refund from the
Internal Revenue Service.
B-8
<PAGE>
PAYER'S NAME
<TABLE>
<S> <C> <C>
SUBSTITUTE Part I - PLEASE PROVIDE YOUR TIN Part 2 - Check the box if you
IN THIS BOX AND CERTIFY BY SIGNING are not subject to backup
AND DATING BELOW withholding either because
Form W-9 (1) you have not been
Social Security Number OR notified that you are subject
Department of Employee Identification Number to backup withholding as a
the Treasury result of failure to report all
Internal interest or dividends or (2)
Revenue the Internal Revenue Service
Service has notified you that you are
no longer subject to backup
withholding.
</TABLE>
Payer's CERTIFICATION: UNDER
Request for PENALTIES OF PERJURY, I
Taxpayer CERTIFY THAT THE INFORMATION Part 3
Identification PROVIDED ON THIS FORM IS Awaiting TIN
Number (TIN) TRUE, CORRECT AND COMPLETE.
Name.................................
(Please Print)
Address..............................
.....................................
(Include Zip Code)
SIGNATURE . . . . . . . . .DATE . . . .
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE
SOLICITATION. PLEASE REVIEW THE "GUIDELINES" FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER" FOR ADDITIONAL DETAILS.
B-9
<PAGE>
YOU MUST COMPLETE
THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to obtain a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within sixty days of the date hereof,
31% of all reportable payments due to me will be withheld until I provide a
number.
Signature ......................................... Date ....................
B-10
<PAGE>
Irrevocable Proxy with Respect to
the Consent Solicitation
Related to
9% Senior Notes due 2006
of
Beverly Enterprises, Inc.
The undersigned hereby irrevocably appoints as attorney-in-fact and
proxy of the undersigned, with full power of substitution, to execute consent
forms and notices of revocation of consents in respect of the Proposed
Amendments to the Indenture governing the 9% Senior Notes due 2006
("Securities") of Beverly Enterprises, Inc., a Delaware corporation (the
"Company"), pursuant to the Solicitation whereby the Company is soliciting the
consent of Registered Holders of Securities as of ______ __, 1997 (the "Record
Date") to the Proposed Amendments to the Indenture, with all the power the
undersigned would possess if executing such consent forms or revocation notices
personally. THIS PROXY IS IRREVOCABLE AND IS COUPLED WITH AN INTEREST. The
aggregate principal amount of Securities as to which this Proxy is furnished is
set forth below. The undersigned represents and agrees that (i) the undersigned
was the registered holder of the Securities set forth below on the Record Date
and (ii) the undersigned has not consented, and will not consent or revoke a
Consent, with respect to the Proposed Amendments.
Aggregate Principal
Amount of Certificate(s) Certificate Number(s)
If the Securities are owned as of the Record Date by two or more persons, each
should sign. Executors, administrators, trustees, guardians and
attorneys-in-fact should add their titles. If signer is a corporation, please
give full corporate name and have a duly authorized officer sign, stating title.
If signer is a partnership, please sign in partnership name by a duly authorized
person.
..............................................................................
..............................................................................
Signature(s) of Registered Holder(s)
Dated: ........................................................
Name(s): .....................................................................
..............................................................................
(Please Print)
Capacity:.....................................................................
Address: .....................................................................
..............................................................................
(include Zip Code)
Area Code and Telephone No. (. . .)...........................................
Tax Identification or Social Security No. ....................................
B-11
<PAGE>
GUARANTEE OF SIGNATURES
Authorized Signature .........................................................
Name and Title ...............................................................
(Please Print)
Dated: .......................................................................
Name of Firm: ................................................................
* * * * * OR * * * * *
STATE OF )
) ss.
COUNTY OF )
Before me, a Notary Public in and for said County and State, personally
appeared who acknowledged before me that (s)he signed the foregoing Proxy and
that the facts contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 19
.
....................................
Notary Public
My Commission expires: ..................................
B-12
