8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) August 23, 2005

BEVERLY ENTERPRISES, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-9550	62-1691861
(State or Other Jurisdiction of	(Commission	(I.R.S. Employer
Incorporation)	File Number)	Identification No.)

One Thousand Beverly Way
Fort Smith, Arkansas		72919
(Address of Principal Executive Offices)	(Zip Code)

   Registrant’s telephone number including area code                     (479) 201-2000

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

First Amendment to Agreement and Plan of Merger

Press Release

Message from William Floyd

Item 1.01 Entry into a Material Definitive Agreement

On August 23, 2005, Beverly Enterprises, Inc. (the “Company”) entered into a First Amendment to Agreement and Plan of Merger (the “First Amendment”) with North American Senior Care, Inc. (“NASC”), NASC Acquisition Corp., a wholly-owned subsidiary of NASC (“Merger Sub”), and SBEV Property Holdings LLC (“SBEV”), which provides that Merger Sub will be merged with and into the Company (the “Merger”). Upon consummation of the Merger, the separate corporate existence of Merger Sub shall cease to exist and the Company shall continue as a wholly owned subsidiary of NASC.

The Agreement and Plan of Merger among the Company, NASC, Merger Sub and SBEV dated as of August 16, 2005 (the “Original Merger Agreement”), as amended by the First Amendment (together with the Original Merger Agreement, the “Merger Agreement”) contains substantially the same terms as the Original Merger Agreement, except that upon consummation of the Merger, the holders of all outstanding shares of common stock shall be entitled to receive a cash payment equal to $13.00 per share and NASC is entitled to a larger termination fee in certain circumstances where the Merger Agreement is terminated. Both parties’ obligations are subject to other conditions of closing, each as set forth in the Merger Agreement. The foregoing description of the Merger Agreement is qualified in its entirety by reference to the First Amendment, a copy of which is included as Exhibit 2.1 hereto and is incorporated by reference herein.

Item 8.01 Other Events

On August 24, 2005, the Company issued a press release announcing the execution of the First Amendment, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. A message from William Floyd, the Company’s Chairman and Chief Executive Officer, to the Company’s employees concerning the First Amendment is attached hereto as Exhibit 99.2 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

     (a) Exhibits

Exhibit No.	Exhibit
2.1	First Amendment to Agreement and Plan of Merger, dated as of August 23, 2005, among North American Senior Care, Inc., NASC Acquisition Corp., Beverly Enterprises, Inc. and SBEV Property Holdings LLC
99.1	Press release, dated August 24, 2005
99.2	Message from William Floyd to the employees of Beverly Enterprises, Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 24, 2005	BEVERLY ENTERPRISES, INC.
	By:	/s/ Pamela H. Daniels
	Name:	Pamela H. Daniels
	Title:	Senior Vice President, Controller and
		Chief Accounting Officer

EXHIBIT INDEX

Exhibit No.	Exhibit
2.1	First Amendment to Agreement and Plan of Merger, dated as of August 23, 2005, among North American Senior Care, Inc., NASC Acquisition Corp., Beverly Enterprises, Inc. and SBEV Property Holdings LLC
99.1	Press release, dated August 24, 2005
99.2	Message from William Floyd to the employees of Beverly Enterprises, Inc.

EX-2.1

EXHIBIT 2.1

FIRST AMENDMENT

     FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of August 23, 2005 (“First Amendment”), by and among North American Senior Care, Inc., a Delaware corporation (“Parent”), NASC Acquisition Corp., a Delaware corporation and a wholly-owned direct Subsidiary of Parent (“Merger Sub”), Beverly Enterprises, Inc., a Delaware corporation (the “Company”) and, solely for purposes of Article 9 of the Merger Agreement (as hereinafter defined) and Section 3 of this First Amendment, SBEV Property Holdings LLC, a Delaware limited liability company (“SBEV”).

     WHEREAS, Parent, Merger Sub, the Company and SBEV are parties to an Agreement and Plan of Merger dated as of August 16, 2005 (the “Merger Agreement”) (capitalized terms used but not defined herein shall have the definitions given to them in the Merger Agreement);

     WHEREAS, subsequent to the Merger Agreement, the Company received a Takeover Proposal that the Company’s Board of Directors concluded was a Superior Proposal (the “Formation Offer”);

     WHEREAS, Parent and Merger Sub have offered to amend the terms of the Merger Agreement set forth herein, and the Company’s Board of Directors has concluded that the Merger Agreement as amended hereby is superior to the Formation Offer;

     WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the Company have approved and declared advisable the Merger upon the terms and subject to the conditions of the Merger Agreement as amended hereby and in accordance with the DGCL;

     WHEREAS, the respective Boards of Directors of Parent and the Company have determined that the Merger as so amended (as amended, the “Merger”) is in furtherance of, and consistent with, their respective business strategies and is in the best interest of their respective stockholders, and Parent has approved this First Amendment and the Merger as the sole stockholder of Merger Sub, and the Company Board has approved the Merger; and

     WHEREAS, Parent, Merger Sub and the Company wish to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

     NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this First Amendment and intending to be legally bound hereby, the Parties agree as follows:

Article 1

Representations and Warranties

     Section 1.1 The Company represents and warrants to Parent and Merger Sub as follows:

     (a) The Company has all necessary corporate power and authority to execute and deliver this First Amendment, to perform its obligations hereunder and to consummate the transactions contemplated by the Merger Agreement as amended by this First Amendment. The execution and delivery of this First Amendment by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company and no stockholder votes are necessary to authorize this First Amendment or to consummate the transactions contemplated hereby

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other than, with respect to the Merger, the Stockholder Approval. This First Amendment has been duly authorized and validly executed and delivered by the Company and, assuming this First Amendment and the Merger Agreement are valid and binding obligations of Parent and Merger Sub, the Merger Agreement as amended by this First Amendment constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Bankruptcy and Equity Exception.

     (b) The Company has complied in all material respects with Section 6.4 of the Merger Agreement.

     Section 1.2 Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

     Each of Parent and Merger Sub has all necessary corporate power and authority to execute and deliver this First Amendment, to perform its obligations hereunder and to consummate the transactions contemplated by the Merger Agreement as amended by this First Amendment. The execution and delivery of this First Amendment by the Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Parent and Merger Sub and no stockholder votes are necessary to authorize this First Amendment or to consummate the transactions contemplated hereby. This First Amendment has been duly authorized and validly executed and delivered by the Parent and Merger Sub and, assuming this First Amendment and the Merger Agreement are valid and binding obligations of the Company, the Merger Agreement as amended by this First Amendment constitutes a legal, valid and

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binding obligation of Parent and Merger Sub, enforceable against each of them in accordance with its terms, subject to the Bankruptcy and Equity Exception.

Article 2

Amendments to Merger Agreement

     Section 2.1 The Merger Consideration provided for in Section 3.1.1 of the Merger Agreement is increased from $12.80 to $13.00.

     Section 2.2 Section 6.1(j) of the Merger Agreement is amended in its entirety to read as follows:

(j) (i) open any new Company Health Care Facility or engage in any substantial renovation of any existing Company Health Care Facility (except as permitted pursuant to Section 6.1(i)), or (ii) enter into any new line of business outside of its existing business segments;

     Section 2.3 The third sentence of Section 6.4.2 of the Merger Agreement is amended in its entirety to read as follows:

Any Takeover Proposals, bids, offers or other proposals already received by the Company, any Company Subsidiary or any Company Representatives on or prior to August 23, 2005 and/or during the bid process shall be deemed not to be Superior Proposals or reasonably likely to constitute a Superior Proposal.

     Section 2.4 The following language is added at the end of Section 6.4.4 of the Merger Agreement after the words “Section 6.4.2” and immediately prior to the full stop:

or the Parent’s termination rights and rights to receive a Termination Fee in accordance with Article VIII

     Section 2.5 The second sentence of Section 6.5.2 of the Merger Agreement is amended in its entirety to read as follows:

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On or before October 7, 2005, Parent shall, and shall cause each other member of the Parent Group, if applicable, to, submit all applications or other materials, if any, required to commence the process of obtaining such Government Consents, including payment of all required fees related thereto.

     Section 2.6 The first sentence of Section 6.13 of the Merger Agreement is amended in its entirety to read as follows:

Not later than September 22, 2005, Parent shall cause to be delivered to the Company an opinion from Houlihan, Lokey, Howard & Zukin, or such other nationally recognized accounting or investment banking firm as the Company may reasonably approve, valuing the Company as a going-concern (including goodwill), on a pro forma basis, immediately after and giving effect to the transactions contemplated hereby and by the Commitments, and opining that, assuming, in each case, the transactions contemplated hereby and by the Commitments had been consummated as proposed, immediately after and giving effect to such transactions on a pro forma basis, (i) the fair value and present fair saleable value to the Company’s assets would exceed the Company’s stated liabilities and identified contingent liabilities; (ii) the Company should be able to pay its debts as they become absolute and mature; and (iii) the capital remaining in the Company after the transactions contemplated hereby would not be unreasonably small for the business in which the Company is engaged, as management has indicated it is now conducted and is proposed to be conducted by Parent following the consummation of such transactions, and otherwise in form and substance reasonably satisfactory to the Company, addressed to the Company Board and to Parent, supporting the conclusion that, after giving effect to all of the transactions contemplated by this Agreement, each of Parent and the Surviving Corporation will be solvent (or the equivalent thereof, as determined in the reasonable discretion of the Company) (such opinion, the “Solvency Opinion”).

     Section 2.7 (a) The first sentence of Section 6.18 of the Merger Agreement is amended in its entirety to read as follows:

In consideration for the Company entering into, and as an inducement and condition to the willingness of the Company to enter into, this Agreement, Parent has transferred to the Company $7,000,000 in immediately available funds as a good faith deposit (the “Initial BIF Deposit”).

     (b) The second sentence of Section 6.18 of the Merger Agreement is amended in its entirety to read as follows:

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No later than 5:00 P.M. New York City time on September 22, 2005, Parent shall (A) either (i) make an additional $53,000,000 good faith deposit (the “Subsequent BIF Deposit” and, together with the Initial BIF Deposit, the “BIF Deposit”) by wire transfer of immediately available funds to an account specified in writing by the Company or (ii) deliver to the Company an irrevocable letter of credit duly executed by HSBC USA, N.A., or another financial institution reasonably acceptable to the Company, substantially in the form of Exhibit B hereto (including any substitute letter of credit as provided below, the “Letter of Credit”), and (B) provide an updated Equity Commitment Letter in substantially the form attached hereto as Annex 1 and otherwise reasonably satisfactory in form and substance to the Company.

     (c) The sixth sentence of Section 6.18 of the Merger Agreement is amended in its entirety to read as follows:

The Company and Parent further agree that if Parent fails to (i) make the Subsequent BIF Deposit or deliver the Letter of Credit or (ii) deliver the updated firm Equity Commitment Letter described above in form and substance reasonably satisfactory to the Company, in each case on or before 5:00 P.M. New York City time on September 22, 2005, the Company shall thereupon be entitled to terminate this Agreement pursuant to Section 8.1(c)(iii), and the Company shall have the right to retain the Initial BIF Deposit as the Business Interruption Fee and withdraw it from the separate account described above, it being understood that, notwithstanding anything herein to the contrary, the right of the Company to terminate this Agreement pursuant to Section 8.1(c)(iii) and retain the Initial BIF Deposit (and accrued interest thereon) as a Business Interruption Fee shall be the Company’s sole remedy for failure to make the Subsequent BIF Deposit or deliver the Letter of Credit.

     Section 2.8 Section 8.1(c)(i) of the Merger Agreement is amended in its entirety to read as follows:

if (x) Parent or Merger Sub shall have breached any of the covenants or agreements contained in this Agreement to be complied with by Parent or Merger Sub such that the closing condition set forth in Section 7.3.2 would not be satisfied, (y) there exists a breach of any representation or warranty of Parent or Merger Sub contained in this Agreement such that the closing condition set forth in Section 7.3.1 would not be satisfied or (z) the obligor under the Equity Commitment Letter shall have breached the Equity Commitment Letter or there shall have been a breach of Section 6.14, and, in the case of (x), (y) or (z), such breach is incapable of being cured by the Termination Date or is not cured within twenty (20) Business Days

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(or, in the case of clause (z), ten (10) Business Days) after Parent or Merger Sub receives written notice of such breach from the Company;

     Section 2.9 Section 8.1(c)(iii) of the Merger Agreement is amended in its entirety to read as follows:

if Parent fails (i) to provide the Subsequent BIF Deposit or deliver the Letter of Credit, or (ii) to provide the Solvency Opinion or (iii) to provide the firm Equity Commitment Letter referred to in Section 6.18, in each case on or before 5:00 P.M. New York City time on September 22, 2005.

     Section 2.10 Section 8.1(d)(iv) of the Merger Agreement is deleted in its entirety.

     Section 2.11 Section 8.4.1 of the Merger Agreement is amended in its entirety to read as follows:

If this Agreement is terminated pursuant to Section 8.1(b)(i) in the event no Third Party shall have publicly made, proposed, communicated or disclosed an intention to make a bona fide Takeover Proposal after the date hereof and prior to the date of termination (or such a Takeover Proposal shall have become publicly disclosed) and neither Parent, Merger Sub nor SBEV is in material default of this Agreement at the time of such Termination, then the Company shall pay Parent the Parent Expenses, not to exceed $30,000,000. If this Agreement is terminated pursuant to Section 8.1(c)(ii) and neither Parent, Merger Sub nor SBEV is in material default of this Agreement at the time of such termination, then the Company shall pay Parent (i) $40,000,000 if such termination occurs prior to Parent’s performance of its obligations pursuant to Section 6.18 hereof to (w) make the Subsequent BIF Deposit or deliver the Letter of Credit and (x) deliver the updated Equity Commitment Letter, or (ii) $60,000,000 in the event of such termination at any time following Parent’s compliance with such obligation, in any case not later than the day of such termination. If this Agreement is terminated pursuant to Section 8.1(b)(i) or Section 8.1(d)(i) and neither Parent, Merger Sub nor SBEV is in material default of this Agreement at the time of such termination, then, in the event that, (i) after the date hereof and prior to such termination, any Third Party shall have made, proposed, communicated or disclosed an intention to make a bona fide Takeover Proposal and (ii) within nine (9) months of the termination of this Agreement the Company enters into a definitive agreement with any Third Party with respect to a Takeover Proposal (with all percentages in the definition of Takeover Proposal increased to fifty (50) percent) or any Takeover Proposal is consummated by a Third Party (with all percentages in the definition of Takeover Proposal increased to fifty (50) percent), then the Company shall pay, or cause to be paid to, Parent (A) $40,000,000, in the event of such termination prior to

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Parent’s performance of its obligations pursuant to Section 6.18 hereof to (w) make the Subsequent BIF Deposit or deliver the Letter of Credit and (x) deliver the updated Equity Commitment Letter, or (B) $60,000,000 in the event of such termination at any time following Parent’s compliance with such obligation, in either case upon consummation of such Takeover Proposal. If this Agreement is terminated pursuant to Section 8.1(d)(ii) in circumstances unrelated to a Takeover Proposal and neither Parent, Merger Sub nor SBEV is in material default of this Agreement at the time of such termination, the Company shall pay Parent an amount equal to the Parent Expenses, not to exceed the lesser of (x) the BIF Deposit at the time of such termination (including funds available under the Letter of Credit), and (y) $30,000,000. If this Agreement is terminated pursuant to Section 8.1.(d)(ii) in circumstances related to a Takeover Proposal and neither Parent, Merger Sub nor SBEV is in material default of this Agreement at the time of such termination, the Company shall pay Parent (i) $40,000,000 if such termination occurs prior to Parent’s performance of its obligations pursuant to Section 6.18 hereof to (w) make the Subsequent BIF Deposit or deliver the Letter of Credit and (x) deliver the updated Equity Commitment Letter, or (ii) $60,000,000 in the event of such termination at any time following Parent’s compliance with such obligation. Any amount paid pursuant to this Section 8.4.1, whether characterized as Parent Expenses or otherwise, the “Termination Fee”. The Termination Fee (including any Parent Expenses) shall be paid by wire transfer of immediately available funds to an account designated in writing to the Company by Parent. For the avoidance of doubt, in no event shall the Company be obligated to pay, or cause to paid, the Termination Fee (including any Parent Expenses) on more than one occasion.

     Section 2.12 The final sentence of Section 8.6 of the Merger Agreement is amended in its entirety to read as follows:

The failure of any Party to assert any of its rights under this Agreement (including, without limitation, any right of termination pursuant to Section 8.1 hereof, regardless of when such right arises) or otherwise shall not constitute a waiver of those rights.

     Section 2.13 Section 9.6 of the Merger Agreement is amended in its entirety to read as follows:

This Agreement, as amended by that certain First Amendment dated as of August 23, 2005 by and among Parent, Merger Sub, the Company and, solely for purposes of Article 3 thereof, SBEV (the “First Amendment”), (together with the Exhibits, Parent Disclosure Schedule, Company Disclosure Schedule and the other documents delivered pursuant hereto), the Commitments and the Confidentiality

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Agreement constitute the entire agreement of the Parties and supersede all prior agreements and undertakings, both written and oral, between the Parties, or any of them, with respect to the subject matter hereof and thereof and, except as otherwise expressly provided herein, are not (other than in the case of Sections 3.5, 6.8, 6.9 and 6.13) intended to confer upon any other Person any rights or remedies hereunder. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, THE FIRST AMENDMENT AND THE DISCLOSURE SCHEDULES, NONE OF PARENT, MERGER SUB AND THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE FIRST AMENDMENT OR THE MERGER, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER’S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.

Article 3

General Provisions

     Section 3.1 The Company Disclosure Schedules, as delivered to Parent and Merger Sub on the date hereof, shall replace the Company Disclosure Schedules attached to the Merger Agreement in their entirety.

     Section 3.2 Except as expressly amended hereby, the Merger Agreement shall remain in full force and effect.

     Section 3.3 The provisions of Article 9 of the Merger Agreement shall apply to this First Amendment as if set forth herein in their entirety.

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     IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

NORTH AMERICAN SENIOR CARE, INC.
By:	/s/ Mark Goldsmith
	Name: Mark Goldsmith
	Title:   President
NASC ACQUISITION CORP.
By:	/s/ Mark Goldsmith
	Name: Mark Goldsmith
	Title:   President
BEVERLY ENTERPRISES, INC.
By:	/s/ William R. Floyd
	Name: William R. Floyd
	Title:   Chairman, President and Chief Executive Officer
SBEV PROPERTY HOLDINGS LLC
By:	/s/ Leonard Grunstein
	Name: Leonard Grunstein
	Title:   Manager

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EX-99.1

EXHIBIT 99.1

NEWS RELEASE

Investor	James M. Griffith	News Media	Blair C. Jackson
Contact:	Senior Vice President	Contact:	Vice President
	Investor Relations		Corporate Communications
	(479) 201-5514		(479) 201-5263

Beverly Enterprises Agrees to Increase
in Merger Price to $13.00 Per Share

FORT SMITH, Ark., Aug. 24, 2005 — Beverly Enterprises, Inc. (“BEI”) (NYSE: BEV) announced today that it has entered into an amendment to the merger agreement with North American Senior Care (NASC), Inc., in which NASC agreed to increase its purchase price for BEI from $12.80 per share to $13.00 per share, in cash. On a fully diluted basis, the transaction is valued at more than $1.9 billion.

Consistent with its fiduciary obligations to shareholders, and after review and negotiations conducted by its independent financial and legal advisors with both NASC and the Formation Capital Consortium, BEI’s Board of Directors voted to accept NASC’s increased purchase price. The Board’s decision was based on its conclusion that the increased price, modified terms and likelihood of completion of this agreement are in the best interests of BEI shareholders.

William R. Floyd, BEI Chairman and Chief Executive Officer said, “This has been a lengthy and very comprehensive process, involving detailed financial and legal analyses that the Board of Directors has conducted in close consultation with its independent advisors. It is not uncommon in auction situations for proposals and counter-proposals to be received, but from the outset the Board has been guided by the paramount goal of selecting the bidder that offers stockholders the best combination of price, terms and conditions. Based on these criteria, the Board concluded that the increased offer from NASC was in the best interests of BEI shareholders. As a result, BEI has entered into an amendment to the original merger agreement with North American Senior Care.”

The amended agreement contemplates that the financing of the transaction will consist of approximately $330 million in equity provided by a private investor group, together with approximately $1.325 billion in debt financing from Wachovia Bank and $550 million in operating loans from CapitalSource Financing LLC.

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The merger is subject to the approval of BEI’s shareholders, as well as customary legal conditions, including receipt of certain regulatory, governmental and licensing approvals.

Also under the amended agreement, in certain circumstances NASC would be entitled to a termination fee of $40 million, which is subject to increase upon the provision of additional security by NASC. The amendment to the agreement for this transaction is being filed by BEI today on Form 8-K with the Securities and Exchange Commission, and will be publicly available for review.

IMPORTANT INFORMATION
In connection with the merger with North American Senior Care, Inc. (“NASC”), Beverly Enterprises, Inc. (“BEI”) will file a proxy statement and other materials with the Securities and Exchange Commission. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. BEI and its officers and directors may be deemed to be participants in the solicitation of proxies with respect to any proposed transaction. Information regarding such individuals is included in the Company’s proxy statements and Annual Reports on Form 10K previously filed with the Securities and Exchange Commission and will be included in the proxy statement relating to the proposed transaction when it becomes available. You may obtain BEI’s proxy statement, when it becomes available, any amendments or supplements to the proxy statement and other relevant documents free of charge at www.sec.gov. You may also obtain a free copy of BEI’s proxy statement, when it becomes available, any amendments and supplements to the proxy statement and other relevant documents by writing to BEI at 1000 Beverly Way, Fort Smith, Arkansas 72919, Attn: Investor Relations or at www.beverlycorp.com under the tab “Investor Information” and then under the heading “SEC Filings.”

FORWARD LOOKING STATEMENTS
The statements in this document relating to matters that are not historical facts are forward-looking statements based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, including the risks and uncertainties detailed from time to time in BEI’s filings with the Securities and Exchange Commission. In particular, statements regarding the consummation of the merger with North American Senior Care are subject to risks that the conditions to the transaction will not be satisfied, including the risk that regulatory approvals will not be obtained.

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In addition, our results of operations, financial condition and cash flows may be adversely impacted by the recently concluded auction process, the announcement of the proposed transaction with North American Senior Care and the announcement of the recent proposal by the Formation Capital Consortium. All of these events may impact our ability to attract and retain customers, management and employees. We have incurred and will continue to incur significant advisory fees and other expenses relating to the auction process, the transaction with North American Senior Care and the recent proposal by the Formation Capital Consortium. Although BEI believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. BEI assumes no duty to publicly update or revise such statements, whether as a result of new information, future events or otherwise.

# # #

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EX-99.2

EXHIBIT 99.2

MESSAGE FROM BILL FLOYD TO BEI ASSOCIATES

To All Associates:

I want to inform you of an important development in the sale process of our company. This morning we announced that BEI has entered into an amended merger agreement with North American Senior Care, Inc. (NASC), in which NASC agreed to increase its purchase price for BEI from $12.80 per share to $13.00 per share in cash. That puts the value of the transaction at more than $1.9 billion.

As I have mentioned before, our Board of Directors has the obligation to select the bidder that offers stockholders the best combination of price, terms and conditions. Based on these criteria — and after review and negotiations conducted by the Board’s independent financial and legal advisors with both NASC and the Formation Capital Consortium — the Board concluded that the increased price, modified terms, and likelihood of completion of the amended NASC agreement are in the best interests of BEI stockholders.

I want to remind you that the merger is subject to the approval of BEI’s stockholders, as well as certain regulatory, governmental and licensing approvals. In addition, the amended merger agreement with NASC does not prevent another party from submitting a higher bid. However, another party not only would have to submit an improved bid, but also would have to pay a termination fee of $40 million to NASC — which is subject to increase upon the provision of additional security by NASC — per the terms of the amended merger agreement.

We’ll continue to keep you posted as more information becomes available.

Bill

*******************************

IMPORTANT INFORMATION

In connection with the merger with North American Senior Care, Inc. (“NASC”), Beverly Enterprises, Inc. (“BEI”) will file a proxy statement and other materials with the Securities and Exchange Commission. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT

INFORMATION. BEI and its officers and directors may be deemed to be participants in the solicitation of proxies with respect to any proposed transaction. Information regarding such individuals is included in the Company’s proxy statements and Annual Reports on Form 10K previously filed with the Securities and Exchange Commission and will be included in the proxy statement relating to the proposed transaction when it becomes available. You may obtain BEI’s proxy statement, when it becomes available, any amendments or supplements to the proxy statement and other relevant documents free of charge at www.sec.gov. You may also obtain a free copy of BEI’s proxy statement, when it becomes available, any amendments and supplements to the proxy statement and other relevant documents by writing to BEI at 1000 Beverly Way, Fort Smith, Arkansas 72919, Attn: Investor Relations or at www.beverlycorp.com under the tab “Investor Information” and then under the heading “SEC Filings.”

FORWARD LOOKING STATEMENTS

The statements in this document relating to matters that are not historical facts are forward-looking statements based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, including the risks and uncertainties detailed from time to time in BEI’s filings with the Securities and Exchange Commission. In particular, statements regarding the consummation of the merger with North American Senior Care are subject to risks that the conditions to the transaction will not be satisfied, including the risk that regulatory approvals will not be obtained.

In addition, our results of operations, financial condition and cash flows may be adversely impacted by the recently concluded auction process, the announcement of the proposed transaction with North American Senior Care and the announcement of the recent proposal by the Formation Capital Consortium. All of these events may impact our ability to attract and retain customers, management and employees. We have incurred and will continue to incur significant advisory fees and other expenses relating to the auction process, the transaction with North American Senior Care and the recent proposal by the Formation Capital Consortium. Although BEI believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. BEI assumes no duty to publicly update or revise such statements, whether as a result of new information, future events or otherwise.