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As filed with the Securities and Exchange Commission on November 4, 1997
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PARAGON HEALTH NETWORK, INC.
(FORMERLY LIVING CENTERS OF AMERICA, INC.)
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 74-2012902
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
ONE RAVINIA DRIVE
SUITE 1500
ATLANTA, GEORGIA 30346
(Address of Principal Executive Offices)(Zip Code)
PARAGON HEALTH NETWORK, INC. LONG-TERM INCENTIVE PLAN
GRANCARE, INC. 401(K) SAVINGS PLAN
GRANCARE, INC. 1996 STOCK INCENTIVE PLAN
GRANCARE, INC. 1996 REPLACEMENT STOCK OPTION PLAN
GRANCARE, INC. OUTSIDE DIRECTORS' STOCK INCENTIVE PLAN
(Full Title of the Plan)
SUSAN THOMAS WHITTLE
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
PARAGON HEALTH NETWORK, INC.
ONE RAVINIA DRIVE
SUITE 1500
ATLANTA, GA 30346
(Name and Address of Agent for Service)
(713) 578-4700
(Telephone Number, Including Area Code, of Agent for Service)
COPIES OF COMMUNICATIONS TO:
SUSAN THOMAS WHITTLE RICHARD H. MILLER, ESQ.
VICE PRESIDENT, GENERAL COUNSEL POWELL,GOLDSTEIN, FRAZER & MURPHY LLP
AND SECRETARY SIXTEENTH FLOOR
PARAGON HEALTH NETWORK, INC. 191 PEACHTREE STREET, N.E.
ONE RAVINIA DRIVE ATLANTA, GEORGIA 30303
SUITE 1500
ATLANTA, GA 30346
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Title of Securities Amount To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered(1) Offering Price Aggregate Offering Registration Fee
Per Share(2) Price(2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01
per share....................... 3,068,662 $40.3125 $123,705,436 $37,486
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes: (i) 2,000,000 shares to be issued under the Paragon Health
Network, Inc. 1997 Long-Term Incentive Plan; (ii) 117,300 shares to be
issued under the GranCare, Inc. 401(k) Savings Plan; (iii) 351,900 shares to
be issued under the GranCare, Inc. 1996 Stock Incentive Plan; (iv) 552,542
shares to be issued under the GranCare, Inc. 1996 Replacement Stock Option
Plan; and (v) 46,920 shares to be issued under the GranCare, Inc. Outside
Directors' Stock Option Plan. As a result of the November 4, 1997 merger of
GranCare, Inc. with a wholly owned subsidiary of the Registrant, with
GranCare, Inc. surviving the merger as a wholly owned subsidiary of the
Registrant, the Registrant will issue shares of its Common Stock in lieu of
shares of GranCare, Inc. common stock under the plans listed in clauses
(ii)-(v) above. This Registration Statement also covers an indeterminate
number of plan interests issuable under the GranCare, Inc. 401(k) Savings
Plan and such additional shares as may be issued by the Registrant under any
of the plans listed above pursuant to a stock split, stock dividend,
recapitalization or similar event involving the Registrant's Common Stock.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(h)(1) under the Securities Act of 1933, as amended (the
"Securities Act") and based on the average of the high and low sales prices
of the Common Stock reported on the New York Stock Exchange Composite Tape
on October 31, 1997.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information required to be set forth in the
Section 10(a) prospectus will be sent or given to plan participants as specified
by Rule 428(b)(1) of the Securities Act.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the Registrant under its former name, Living Centers of
America, Inc. (File No. 1-10968), are incorporated herein by reference:
(1) Annual Report on Form 10-K/A for the fiscal year ended September 30,
1996;
(2) Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 1996;
(3) Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1997;
(4) Quarterly Report on Form 10-Q for the quarterly period ended June
30, 1997;
(5) Current Report on Form 8-K filed with the Commission on May 8, 1997;
and
(6) The description of Common Stock contained in the Registration
Statement on Form 8-A, as filed with the Commission on December 23,
1991.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities and Exchange Act of 1934, as amended,
prior to filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part thereof from the date of filing such
documents.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is a Delaware corporation. Reference is made to Section 145 of
the Delaware General Corporation Law (the "DGCL"), which provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation, by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, or is or
was serving at its request in such capacity of another corporation or business
organization against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that such person's conduct was
unlawful. A Delaware corporation may indemnify officers and directors in an
action by or in the right of a corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses that he or she actually and reasonably incurred.
Reference is also made to Section 102(b)(7) of the DGCL, which permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of the director's fiduciary duty as
a director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (i) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which
the director derived an improper personal benefit.
Article Seventh of the Amended and Restated Certificate of Incorporation of
the Registrant provides for the elimination of personal liability of a director
for breach of fiduciary duty as permitted by Section 102(b)(7) of the DGCL, as
it may be amended from time to time. Article Eighth of the Amended and Restated
Certificate of Incorporation provides that the Registrant shall indemnify its
directors and officers to the fullest extent permitted by Section 145 of the
DGCL, as it may be amended from time to time. In addition, Article VII of the
Amended and Restated Bylaws of the Registrant requires that the Registrant
indemnify any person who was or is an authorized representative of the
Registrant and who was, is or is threatened to be made a party to any third
party proceeding by reason of the fact that such person was or is an authorized
representative of the Registrant against expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection
with such proceeding if the person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interest of the
Registrant and, with respect to any criminal third party proceeding, had no
reasonable cause to believe such conduct was unlawful. In a corporate
proceeding, the Registrant is required to indemnify any person who was or is an
authorized representative of the Registrant and who was, is or is threatened to
be made a party to any corporate proceeding by reason of the fact that such
person was or is an authorized representative of the Registrant against expenses
actually and reasonably incurred by such person in connection with the defense
or settlement of the proceeding if such person acted in good faith and in a
manner reasonably believed to be in, or not opposed to, the best interest of the
Registrant, except that no indemnification shall be made in respect of any
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claim, issue or matter as to which such person shall have been adjudged to be
liable to the Registrant unless and only to the extent that the Court of
Chancery or the court in which such corporate proceeding is brought shall
determine upon application that the authorized representative is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper. To the extent that an authorized representative of the Registrant has
been successful on the merits or otherwise in the defense of any third party or
corporate proceeding or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses actually and reasonably incurred by
such person in connection therewith. Any indemnification shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification is proper under the circumstances because the authorized
representative has either met the applicable standard of conduct or has been
successful on the merits or otherwise and that the amount requested has been
actually and reasonably incurred. Such determination shall be made (i) by the
Board of Directors by a majority of a quorum consisting of directors who were
not parties to the proceeding; (ii) if such a quorum is not obtainable or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or (iii) by the stockholders of the
Registrant. Expenses actually and reasonably incurred by an officer or director
in defending any third party or corporate proceeding shall be paid on his or her
behalf by the Registrant in advance of the final disposition of the proceeding
upon receipt of an undertaking by or on behalf of such officer or director to
repay such amount if it is ultimately determined that he or she is not entitled
to be indemnified by the Registrant. In the case of an authorized representative
other than an officer or director, the Registrant shall advance expenses
actually and reasonably incurred in defending any third party or corporate
proceeding in advance of the final disposition of the proceeding as authorized
by the Board of Directors upon receipt of the undertaking described above.
The Registrant maintains at its expense a policy of insurance that insures its
directors and officers, subject to certain exclusions and deductions as are
usual in such insurance policies, against certain liabilities which may be
incurred in those capacities.
ITEM 8. EXHIBITS.
The following items are filed as exhibits to this Registration Statement:
Exhibit No.: Description
----------- -----------
5.1 Opinion of Powell, Goldstein, Frazer & Murphy LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of Powell, Goldstein, Frazer & Murphy LLP (contained in
its exhibit filed as Exhibit 5.1)
24.0 Power of Attorney (included in the signature page in Part II
of the Registration Statement)
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
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(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the law or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's Annual Report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
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(h) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
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Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the City of Atlanta, State of Georgia, on this 4th day of
November, 1997.
PARAGON HEALTH NETWORK, INC.
By: /s/ Keith B. Pitts
--------------------------------
Keith B. Pitts
Chairman of the Board, Chief Executive
Officer and President
POWER OF ATTORNEY
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KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Keith B. Pitts, Charles B. Carden and Susan T. Whittle,
or any of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any or all amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each of said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities on November
4, 1997.
Signature TITLE
--------- -----
/s/ Keith B. Pitts Chairman of the Board, Chief
- ------------------------- Executive Officer and President
Keith B. Pitts (Principal Executive Officer)
/s/ Laurence M. Berg Director
- -------------------------
Laurence M. Berg
/s/ Peter P. Copses Director
- -------------------------
Peter P. Copses
/s/ John H. Kissick Director
- -------------------------
John H. Kissick
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/s/ William G. Petty, Jr. Director
- -------------------------
William G. Petty, Jr.
/s/ Robert L. Rosen Director
- -------------------------
Robert L. Rosen
Director
- -------------------------
Gene E. Burleson
Director
- -------------------------
Donald C. Beaver
/s/ Joel S. Kanter Director
- -------------------------
Joel S. Kanter
/s/ Charles B. Carden Executive Vice President
- ------------------------- and Chief Financial Officer
Charles B. Carden (Principal Financial and
Accounting Officer)
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INDEX TO EXHIBITS
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Exhibit No.: Description
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5.1 Opinion of Powell, Goldstein, Frazer & Murphy LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of Powell, Goldstein, Frazer & Murphy LLP (contained
in its exhibit filed as Exhibit 5.1)
24.0 Power of Attorney (included in the signature page in Part II
of the Registration Statement)
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EXHIBIT 5.1
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POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
191 Peachtree Street N.E.
Suite 1600
Atlanta, Georgia 30303
(404) 572-6600
November 4, 1997
Paragon Health Network, Inc.
One Ravinia Drive
Suite 1500
Atlanta, GA 30346
Re: Registration Statement on Form S-8
Paragon Health Network, Inc. 1997 Long-Term Incentive Plan; GranCare,
Inc. 401(k) Savings Plan; GranCare, Inc. 1996 Stock Incentive Plan;
GranCare, Inc. 1996 Replacement Stock Option Plan; and GranCare, Inc.
Outside Directors' Stock Incentive Plan (collectively, the "Plans")
Ladies and Gentlemen:
We have served as counsel for Paragon Health Network, Inc, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, pursuant to a Registration Statement on Form
S-8 (the "Registration Statement"), of an aggregate of 3,068,662 shares (the
"Shares") of common stock, $.01 par value, of the Company, to be offered and
sold by the Company pursuant to the Plans.
We have examined and are familiar with originals or copies (certified,
photostatic or otherwise identified to our satisfaction) of such documents,
corporate records and other instruments relating to the incorporation of the
Company and the authorization of the shares to be issued pursuant to the Plans
as we have deemed necessary and advisable. In such examinations, we have
assumed the genuineness of all signatures on all originals and copies of
documents we have examined, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all certified, conformed
or photostatic copies. As to questions of fact material and relevant to our
opinion, we have relied upon certificates or representations of Company
officials and of appropriate governmental officials.
We express no opinion as to matters under or involving the laws of any
jurisdiction other than the corporate law of the State of Delaware.
<PAGE>
Paragon Health Network, Inc.
November 4, 1997
Page 2
Based upon and subject to the foregoing and having regard for such legal
considerations as we have deemed relevant, it is our opinion that the Shares
have been duly authorized and that upon the issuance and delivery of the Shares
and payment therefor as provided in the Plans and as contemplated by the
Registration Statement, such Shares will be legally and validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
<PAGE>
EXHIBIT 23.1
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) dated November 4, 1997 pertaining to the Paragon Health Network, Inc.
Long-Term Incentive Plan; Grancare, Inc. 401(K) Savings Plan; Grancare, Inc.
1996 Stock Incentive Plan; Grancare, Inc. 1996, Replacement Stock Option Plan;
and Grancare, Inc. Outside Directors' Stock Incentive Plan of our report dated
November 25, 1996, with respect to the consolidated financial statements and
schedule of Living Centers of America, Inc. included in its Annual Report (Form
10-K/A) for the year ended September 30, 1996, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
-----------------------
Houston, Texas
November 4, 1997
