-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L13muto14Jc4a9L7tpd/S9qeAUMNYXrnQxwWACJ/2/gOrYsKB3Id+zL1+IYzt/zC Ukdm72Qf6o1mAEsEff/j7g== 0000950134-97-009288.txt : 19971216 0000950134-97-009288.hdr.sgml : 19971216 ACCESSION NUMBER: 0000950134-97-009288 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971212 EFFECTIVENESS DATE: 19971212 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY ENTERPRISES INC CENTRAL INDEX KEY: 0001040441 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 621691861 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-42131 FILM NUMBER: 97737333 BUSINESS ADDRESS: STREET 1: 5111 ROGERS AVE STREET 2: SUITE 40-A CITY: FORT SMITH STATE: AR ZIP: 72903 BUSINESS PHONE: 5014526712 MAIL ADDRESS: STREET 1: 511 ROGERS AVE STREET 2: SUITE 40-A CITY: FORT SMITH STATE: AR ZIP: 72903 FORMER COMPANY: FORMER CONFORMED NAME: NEW BEVERLY HOLDINGS INC DATE OF NAME CHANGE: 19970604 S-8 1 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________________________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ________________________________________________________ BEVERLY ENTERPRISES, INC. (FORMERLY NEW BEVERLY HOLDINGS, INC.) (Exact Name of Registrant as Specified in Its Charter) DELAWARE 5111 ROGERS AVENUE, SUITE 40-A 62-1691861 (State or Other FORT SMITH, ARKANSAS 72919 (I.R.S. Employer Jurisdiction of Identification No.) Incorporation or Organization)
(Address of Principal Executive Offices Including Zip Code) ________________________________________________________ NEW BEVERLY HOLDINGS, INC. NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN (Full Title of the Plan) ________________________________________________________ ROBERT W. POMMERVILLE EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL & SECRETARY BEVERLY ENTERPRISES, INC. 5111 ROGERS AVENUE, SUITE 40-A FORT SMITH, ARKANSAS 72919 (Name and Address of Agent For Service) ________________________________________________________ (501) 452-6712 (Telephone Number, Including Area Code, of Agent For Service) ________________________________________________________ CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------- TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TO BE REGISTERED REGISTERED OFFERING PRICE AGGREGATE REGISTRATION FEE PER SHARE OFFERING PRICE - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCK, PAR 300,000(1) $12.75(2) $3,825,000 $1,129 VALUE $.10 PER SHARE - ----------------------------------------------------------------------------------------------------------------------
(1) This Registration Statement registers the issuance or transfer of 300,000 shares of common stock, par value $.10 per share (the "Shares"), of Beverly Enterprises, Inc., a delaware corporation (the "Company"), presently reserved for issuance under the New Beverly Holdings, Inc. Non-Employee Directors' Stock Option Plan (the "Plan"), (ii) additional Shares that become available under the Plan in connection with certain changes in the number of outstanding Shares because of events such as recapitalizations, stock dividends, and stock splits, and (iii) any other securities with respect to which the outstanding Shares are converted or exchanged. (2) Pursuant to Paragraphs (c) and (h) of Rule 457 under the Securities Act, the Company has determined the proposed maximum offering price per Share to be $12.75. This price is the average of the high and low prices for a Share on December 8, 1997, a date within five business days before the filing of this Registration Statement. ================================================================================ 2 PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The information requested in Part I of this Registration Statement is included in the prospectus for the Plan, which the Company has excluded from this Registration Statement in accordance with the instructions to Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents previously filed with the Commission are hereby incorporated by reference into this Registration Statement: 1. The Company's Registration Statement on Form S-1, filed with the Commission on June 4, 1997, as amended, under which the Company registered Common Stock under the Securities Act of 1933, as amended. 2. The description of the Shares set forth in the Company's Registration Statement on Form 8-A, filed with the Commission on October 15, 1997, under which the Company registered the Shares under Section 12(g) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). 3. The Company's report on Form 10-Q for the quarter ended September 30, 1997, filed with the Commission on December 2, 1997. 4. The Annual Report on Form 10-K for the year ended December 31, 1996, the report on Form 10-Q for the quarter ended March 31, 1997, the report on Form 10-Q for the quarter ended June 30, 1997, the report on Form 10-Q for the quarter ended September 30, 1997 and the current report on Form 8-K dated April 15, 1997, each filed by Beverly Enterprises, Inc., a Delaware corporation and predecessor of the Company ("Old Beverly"). The Company is incorporating by reference the documents listed in this Item 4 because the Company succeeded to all of the business of Old Beverly, other than its institutional and mail service pharmacy business. All reports and other documents that the Company subsequently files with the Securities and Exchange Commission (the "Commission") pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment indicating that the Company has sold all of the securities offered under this Registration Statement or that deregisters the distribution of all such securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement from the date that the Company files such report or document. Any statement contained in this Registration Statement or any report or document incorporated into this Registration Statement by reference, however, shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in a subsequently dated report or document that is also considered part of this Registration Statement, or in any amendment to this Registration Statement, is inconsistent with such prior statement. The Company's file number with the Commission is 1-9550. 2 3 ITEM 4. DESCRIPTION OF SECURITIES. Inapplicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The validity of the Common Stock has been passed upon for the Registrant by John W. MacKenzie, its Deputy General Counsel and Assistant Secretary. Mr. MacKenzie owns approximately 29,758 shares of Common Stock and options to purchase a number of shares of Common Stock equivalent to those Options previously held by Mr. MacKenzie to purchase 23,000 shares of the former Beverly Enterprises, Inc. Common Stock, as adjusted pursuant to the terms of the Employee Benefit Matters Agreement relating to the Distribution and Merger, as defined and as described in the Proxy Statement issued by the former Beverly Enterprises, Inc. dated October 20, 1997. It is currently anticipated that Mr. MacKenzie will not be eligible to participate in the Plan. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Delaware General Corporation Law, the Company's certificate of incorporation and bylaws, and the Company's indemnification agreements between the Company and its officers and directors provide that the Company will indemnify them to the full extent permitted by the Delaware General Corporation Law for liabilities and expenses that they may incur in their capacities as directors and officers of the Company. Generally, the Company will indemnify its directors and officers with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the Company. With respect to any criminal action or proceeding, the director or officer must also not have had any reasonable cause to believe that his or her actions were unlawful. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Inapplicable. ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION ----------- ----------- 4.1 New Beverly Holdings, Inc. Non-Employee Directors' Stock Option Plan 5.1 Opinion of John W. MacKenzie, Esq. 23.1 Consent of John W. MacKenzie, Esq. (contained in Exhibit 5.1) 23.2 Consent of Ernst & Young LLP, independent auditors
ITEM 9. UNDERTAKINGS. A. RULE 415 OFFERING. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act, (ii) to reflect in the prospectus any facts or events arising after the effective date of the 3 4 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, and (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 clauses (i) and (ii) do not apply if the information required to be included in a post- effective amendment by those clauses is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act 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; and (3) To remove from registration by means of a post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act 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 that time shall be deemed to be the initial bona fide offering thereof. C. REQUEST FOR ACCELERATION OF EFFECTIVE DATE OR FILING OF REGISTRATION STATEMENT ON FORM S-8. 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 Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. [SIGNATURES ON THE NEXT PAGE] 4 5 SIGNATURES Pursuant to the requirements of the Securities Act, 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, thereunto duly authorized, in the City of Fort Smith, State of Arkansas, on this 11th day of December, 1997. BEVERLY ENTERPRISES, INC. By: /s/ David R. Banks --------------------------------------- Name: David R. Banks Title: Chairman of the Board, Chief Executive Officer and Director POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Each of the directors and/or officers of the Registrant whose signature appears below hereby appoints Robert W. Pommerville and John W. MacKenzie, and each of them severally as his or her attorney-in-fact to sign his or her name and on his or her behalf, in any and all capacities stated below, and to file with the Securities and Exchange Commission any and all amendments, including post-effective amendments to this Registration Statement as appropriate, and generally to do all such things in their behalf in their capacities as officers and directors to enable Registrant to comply with the provisions of the Securities Act of 1933, and all requirements of the Securities and Exchange Commission.
NAME AND SIGNATURE TITLE DATE ------------------ ----- ---- /s/ David R. Banks Chairman of the Board, Chief December 11, 1997 - ------------------------------- Executive Officer and Director David R. Banks /s/ Boyd W. Hendrickson President, Chief Operating December 11, 1997 - ------------------------------- Officer and Director Boyd W. Hendrickson /s/ Scott M. Tabakin Executive Vice President and December 11, 1997 - ------------------------------- Chief Financial Officer Scott M. Tabakin /s/ Pamela H. Daniels Vice President, Controller, and December 11, 1997 - ------------------------------- Chief Accounting Officer Pamela H. Daniels
5 6 /s/ Beryl F. Anthony, Jr. Director December 11, 1997 - -------------------------------- Beryl F. Anthony, Jr. /s/ James R. Greene Director December 11, 1997 - -------------------------------- James R. Greene /s/ Edith E. Holiday Director December 11, 1997 - -------------------------------- Edith E. Holiday /s/ Jon E. M. Jacoby Director December 11, 1997 - -------------------------------- Jon E. M. Jacoby /s/ Risa J. Lavizzo-Mourey, M.D. Director December 11, 1997 - -------------------------------- Risa J. Lavizzo-Mourey, M.D. /s/ Marilyn R. Seymann Director December 11, 1997 - -------------------------------- Marilyn R. Seymann
6 7 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO. ---------- ----------- ------- 4.1 New Beverly Holdings, Inc. Non-Employee Directors' Stock Option Plan 5.1 Opinion of John W. MacKenzie, Esq. 23.1 Consent of John W. MacKenzie, Esq. (included in Exhibit 5.1) 23.2 Consent of Ernst & Young LLP, independent auditors
7 EX-4.1 2 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN 1 EXHIBIT 4.1 NEW BEVERLY HOLDINGS, INC. NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN ARTICLE I. ESTABLISHMENT AND PURPOSE 1.1 Establishment of the Plan. New Beverly Holdings, Inc., a Delaware corporation ("Company") hereby establishes a stock option plan as set forth in this document, which plan as amended from time to time shall be known as the "New Beverly Non-Employee Directors' Stock Option Plan" ("Plan"). 1.2 Purpose. The purpose of the Plan is to build a proprietary interest among the Company's Non-Employee Directors and thereby secure for the Company's shareholders the benefits associated with common stock ownership by those who will oversee the Company's future growth and success. 1.3 Applicability of the Plan. The provisions of this Plan are applicable only to individuals who are Non-Employee Directors as of the Effective Time of the Distribution of the Common Stock of the Company to the stockholders of Beverly Enterprises, Inc. ("BEI"), pursuant to the Agreement and Plan of Distribution by and between BEI, Capstone Pharmacy Services, Inc. ("Capstone") and the Company dated as of April 15, 1997 (the "Distribution Date"), or becomes a Non-Employee Director thereafter. 1.4 Effective Date. This Plan shall be effective as of the Distribution Date, subject to the approval of this Plan by the Board of Directors and the Company's shareholders, as provided in this Section 1.4. To become effective, this Plan must be approved by the Board of Directors and by the affirmative vote of the holders of a majority of shares of Common Stock present, or represented, and entitled to vote at a meeting of the Company's stockholders called for such purpose. Absent such approvals prior to June 1, 1998, this Plan shall terminate and cease to be of any further force or effect and all grants of Options hereunder shall be null and void. ARTICLE II. DEFINITIONS AND CONSTRUCTION 2.1 Definitions. Whenever used as a capitalized term in the Plan, the following terms shall have the respective meanings set forth below, unless otherwise expressly provided: (a) "Affiliate" means "affiliate" as defined in Rule 12b-2 under the Exchange Act. (b) "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act. (c) "Board" or "Board of Directors" means the Board of Directors of the Company. (d) "Change in Control" shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: 2 (1) Any Person, corporation or other entity or group becomes the Beneficial Owner of shares of the Company having 30 percent or more of the total number of votes that may be cast for the election of members of the Board; or (2) As the result of, or in connection with, any tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing (a "Transaction"), the persons who were members of the Board before the Transaction shall cease to constitute a majority of the Board of Directors of the Company or any successor to the Company or its assets; or (3) If at any time (A) the Company shall consolidate with, or merge with, any other Person and the Company shall not be the continuing or surviving corporation, (B) any Person shall consolidate with, or merge with, the Company, and the Company shall be the continuing or surviving corporation and in connection therewith, all or part of the outstanding Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, (C) the Company shall be a party to a statutory share exchange with any other Person after which the Company is a Subsidiary of any other Person, or (D) the Company shall sell or otherwise transfer 50 percent or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons; provided, however, that notwithstanding anything to the contrary set forth in such plan a Change in Control shall not include either (a) the Distribution or Merger, or (b) any transfer to a consolidated subsidiary, reorganization, spin-off, split-up, distribution, or other similar or related transaction(s) or any combination of the foregoing in which the core business and assets of the Company and its subsidiaries (taken as a whole) are transferred to another entity ("Controlled") with respect to which (1) the majority of the Board of Directors of the Company (as constituted immediately prior to such transaction(s)) also serve as directors of Controlled and immediately after such transaction(s) constitute a majority of Controlled's board of directors, and (2) more than 70% of the shareholders of the Company (immediately prior to such transaction(s)) become shareholders or other owners of Controlled and immediately after the transaction(s) control more than 70% of the ownership and voting rights of Controlled. (e) "Code" means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder, as the same may be amended from time to time. (f) "Common Stock" means the common stock of the Company. (g) "Company" means New Beverly Holdings, Inc., or any successor thereto. (h) "Effective Date" means the Distribution Date, subject to the approvals as described in Section 1.4. (i) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. (j) "Fair Market Value" means, on any given date, the closing price of Common Stock as reported on the New York Stock Exchange composite tape on such day or, if no shares of Common Stock were traded on such Exchange, all as reported by such source as the Board may select. As to Options granted to Participants in connection with the assumption of Options previously granted by Beverly Enterprises, Inc. (BEI) pursuant to the Employee Benefit Matters Agreement dated April 15, 1997 among BEI, the Company and Capstone, Fair Market Value shall have the definition contained therein. 3 (k) "Grant Date" means June 1 of each calendar year during the period this Plan remains in effect. The first "Grant Date" under the Plan is June 1, 1998. (l) "Non-Employee Director" means an individual who is a member of the Board and who is not an employee of the Company or any Subsidiary or Affiliate thereof. (m) "Option" means an option granted under this Plan to purchase a share or shares of Common Stock. (n) "Participant" means a Non-Employee Director to whom an Option has been granted under this Plan. (o) "Person" means "person" as deemed in Section 3(a)(9) of the Exchange Act and as used in 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d)(3) of the Exchange Act. (p) "Plan" means the "New Beverly Holdings, Inc. Non-Employee Directors' Stock Option Plan" as set forth in this document, and as the same may be amended from time to time. (q) "Subsidiary" means a corporation at least 50 percent of the combined voting power of all classes of stock of which is owned by the Company, either directly or through one or more of its Subsidiaries. (r) "Vesting Date" means, with respect to any Options granted as of a particular Grant Date, the next June 1 following such Grant Date. The first Vesting Date under the Plan is June 1, 1999. 2.2 Gender and Number; Headings. Except when otherwise indicated by the context, any masculine terminology when used in this Plan shall also include the feminine gender, and the definition of any term in the singular shall also include the plural, Headings of Articles and Sections herein are included solely for convenience, and if there is any conflict between such headings and the text of the Plan, the text shall control. ARTICLE III ELIGIBILITY AND PARTICIPATION 3.1 Eligibility; Participation. Each Non-Employee Director shall be eligible to participate under this Plan and to receive a grant of an Option in accordance with the provisions of this Plan. 3.2 Grant of Stock Options. Each Non-Employee Director as of the first Grant Date shall automatically be granted an Option to Purchase 3,375 shares of Common Stock, and shall automatically be granted an Option to purchase an additional 3,375 shares of Common Stock as of each Grant Date subsequent to the initial Grant Date applicable to such Non-Employee Director and during the term of this Plan, with each such subsequent grant being effective as of the applicable Grant Date. To be eligible to receive such an Option grant with respect to any such Grant Date, the Non-Employee Director must be a Non-Employee Director on such Grant Date. All Options granted under this Section 3.2 shall be subject to the Common Stock availability provisions of Section 4.1. Each individual who first becomes a Non-Employee Director after the Effective Date shall automatically be granted an Option to purchase 3,375 shares of Common 3 4 Stock, effective as of the Grant Date which is coincident with or next following the date on which such individual becomes a Non-Employee Director. ARTICLE IV COMMON STOCK AVAILABLE 4.1 In General. Subject to adjustment as provided in Section 4.2, an aggregate of 300,000 shares of Common Stock shall be available for grant and issuance pursuant to the provisions of this Plan. Such shares may be authorized and unissued shares or may be shares issued and thereafter acquired by the Company. If an Option shall expire or terminate for any reason without having been exercised in whole or in part, the unpurchased shares of Common Stock subject to such Option shall again be available for subsequent Option grants under the Plan. 4.2 Adjustment in Event of Changes in Capitalization. In the event of a stock dividend, stock split, or combination of shares, recapitalization or other change in the Company's capitalization, or other distribution with respect to holders of the Company's Common Stock other than normal cash dividends, an automatic adjustment shall be made in the number and kind of shares as to which outstanding Options or portions thereof then unexercised shall be exercisable and in the available shares set forth in Section 4.1, to the end that the proportionate interest of the Participant or eligible Non- Employee Director shall be maintained as before the occurrence of such event. Such adjustment in outstanding Options shall be made without change in the total price applicable to the unexercised portion of such Options and with a corresponding adjustment in the Option price per share. Automatic adjustment shall also be made in the number and kind of shares subject to Options subsequently granted under Article III of the Plan. ARTICLE V. TERMS AND CONDITIONS OF STOCK OPTIONS 5.1 Exercise of Stock Options. (a) Option Exercisability. Each Option granted as of a particular Grant Date shall be exercisable on or after the Vesting Date with respect to such Grant Date, subject to the provisions of Section 5.1(b) and (c). (b) Immediate Vesting for Death, Disability, and Change of Control. Notwithstanding the provisions of Section 5.1(a), an Option granted to any Participant shall become immediately exercisable in full upon the first to occur of -- (1) The death of the Participant, in which case the Option may be exercised by the Participant's executor or administrator, or if not so exercised, by the legatees or distributees of his or her estate or by such other person or persons to whom the Participant's rights under the Option shall pass by will or by the applicable laws of descent and distribution; (2) Such time as the Participant ceases to be a member of the Board by reason of his or her disability; and (3) Change in Control. (c) Termination Other than Death or Disability. In the event the Participant ceases to be a Non-Employee Director of the Company for any reason other than death or 4 5 disability when no Change of Control has occurred, and such termination occurs prior to the time an Option granted to such Participant has become exercisable, such Option shall terminate with respect to the shares as to which the Option is not then exercisable and all rights of the Participant to such shares shall terminate without further obligation on the part of the Company. As regards any Option which is exercisable by the Participant at such time, such Participant must exercise such Option within 90 days following the date the Participant so ceased to be a Non-Employee Director, and, any such Option remaining unexercised as of the close of such period shall expire. 5.2 Exercise Price. The exercise price of an Option for a share of Common Stock shall be 100 percent of the Fair Market Value of such Common Stock on the Grant Date relating to such Option. However, Options granted on the assumption of, or in substitution for, options of another company with which the Company participates in an acquisition, separation or similar corporate transaction may be issued at an exercise price less than 100% of Fair Market Value. 5.3 Expiration of Options. (a) In General. An Option shall expire ten years from the Grant Date relating to such Option, unless terminated earlier in accordance with the Plan. (b) Death or Disability of Participant. In the event a Participant ceases to be a Non-Employee Director of the Company by reason of death or disability, including without limitation in the event that a Participant dies after ceasing to be a member of the Board by reason of disability, any Option granted to such Participant hereunder that has not been fully exercised at the time of the Participant's death may be exercised at any time within the greater of (1) one year after the date of death or disability, or-- (2) in the event any Option is exercised by the executors, administrators, legatees, or distributees of the estate of a deceased Participant, the Company shall be under no obligation to issue Common Stock thereunder unless and until the Company is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof. 5.4 Exercise and Payment of Exercise Price. (a) Number of Shares. Subject to the terms and conditions of the Plan, an Option shall, to the extent then exercisable, be exercisable in whole or in part by giving written notice to the Company stating the number of shares with respect to which the Option is being exercised, accompanied by payment in full for such shares; provided, however, that there shall he no such exercise at any one to as time fewer than 100 shares or all or the remaining shares then purchasable by the person or persons exercising the Option, if fewer than 100 shares. (b) Payment Methods. An Option way be paid for by -- (1) delivery of cash or a check payable to the order of the Company in an amount equal to the exercise price of such Option, or (2) by delivery to the Company of shares of Common Stock of the Company already owned by the Participant for more than six months and having a Fair Market Value equal in amount to the exercise price of the Option being exercised, provided that such method is consistent with applicable tax and securities laws and is not contrary to any restriction on the Company's purchase of its own shares, or 5 6 (3) by any combination of such methods of payment. 5.5 Rights as a Shareholder. Except as specifically provided by the Plan, the grant of an Option shall not give a Participant rights as a shareholder; and the Participant will obtain such rights only upon actual receipt of Common Stock. 5.6 Documentation of Option Grants. Option grants shall be evidenced by written instruments prescribed by the Board from time to time. The instruments may be in the form of agreements to be executed by both the Participant and the Company or certificates, letters or similar instruments, which need not be executed by the Participant, but acceptance of which will evidence agreement to the terms of the grant. 5.7 Nontransferability of Options. No Option granted under the Plan shall be assignable or transferable by the Participant to whom it is granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or pursuant to a "qualified domestic relations order" ("QDRO") as defined under Section 414(p) of the Code. Any such attempted assignment or transfer in violation of this Section 5.7 shall be null and void. During the life of the Participant, the Option shall be exercisable only by such person or an alternate payee under a QDRO, or, in the event of incapacity, by the person or person properly appointed to act on his or her behalf. ARTICLE VI. REGULATORY COMPLIANCE 6.1 Issuance or Delivery of Shares. The issuance or delivery of any shares of Common Stock subject to exercisable Options may be postponed by the Board for such period as may be required to comply with any applicable requirements under the Federal or applicable state securities laws, any applicable listing requirements of any national securities exchange, or any requirements under any law or regulation applicable to the issuance or delivery of such shares. The Company shall not be obligated to issue or deliver any such shares if, in the opinion of Company's counsel, the issuance or delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority or any national securities exchange. ARTICLE VII. ADMINISTRATION 7.1 Plan Administration. The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority within the limitations described herein to prescribe the form of the agreement embodying grants of Options. The Board shall have the power to construe the Plan, to determine all questions arising thereunder, and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decisions of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Board may from time to time delegate certain of its administrative responsibilities under the Plan to Company personnel or to a committee. The Board may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or any officer of the Company to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to he done other than by such member's own willful misconduct or as expressly provided by statute. 6 7 7.2 Indemnification and Exculpation. The members of the Board, its agents, and officers and employees of the Company shall be indemnified and held harmless by the Company against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by them in connection with or resulting from any claim, action, suit, or proceeding to which they may be a party or in which they may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by them in settlement (with the Company's written approval) or paid by them in satisfaction of a judgment in any such action, suit, or proceeding. The foregoing provision shall not be applicable to any person if the loss, cost, liability, or expense is due to such person's gross negligence or willful misconduct ARTICLE VIII. AMENDMENT AND TERMINATION 8.1 Amendment. Except as provided in Section 6.2, the Board shall have the right to amend or modify the Plan in full or in part at any time and from time to time; provided, however, that unless required by law, no such amendment or modification shall -- (a) affect any right or obligation with respect to any Option grant theretofore made, (b) in any manner affect the restrictions set forth in Section 6.2, or (c) unless previously approved by the shareholders of the Company, where such approval is necessary to satisfy then applicable requirements of Federal securities laws, the Code, or rules of any stock exchange on which the Company's Common Stock is listed - (1) in any manner materially affect the eligibility requirements set forth in Sections 3.1 and 3.2, (2) materially increase the number of shares of Common Stock available for or subject to Options, or (3) materially increase the benefits to Participants under the Plan. 8.2 Termination. (a) In General. The Board shall have the right to terminate the Plan at any time; provided, however, that Options which are granted on or before the termination date shall remain exercisable in accordance with their respective terms after the termination of the Plan. (b) Termination Date. Unless terminated earlier by the Board, the Plan shall terminate on December 31, 2007; provided, however, that Options which are granted on or before such date shall remain exercisable in accordance with their respective terms after the termination of the Plan. ARTICLE IX. MISCELLANEOUS 9.1 Shareholder Approval. The effectiveness of the Plan and of the grant of all Options under the Plan are subject to shareholder approval as provided in Section 1.4. The 7 8 Company's obligation to issue and deliver shares of Common Stock under the Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance, or delivery of Common Stock. 9.2 No Right to Reelection. Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any Non-Employee Director for reelection by the Company's shareholders, nor confer upon any Non- Employee Director the right to remain a member of the Board for any period of time, or at any particular rate of compensation. 9.3 Severability. In the event any provision of this Plan shall be held invalid or illegal for any reason, any illegality or invalidity shall not affect the remaining parts of this Plan, but this Plan shall be construed and enforced as if the illegal or invalid provision had never been inserted, and the Company shall have the privilege and opportunity to correct and remedy such questions of illegality or invalidity by amendment as provided in this Plan. 9.4 Status Under ERISA. This Plan is not maintained as and is not intended to be an "employee benefit plan" under the Employee Retirement Income Security Act of 1974, as amended. 9.5 Applicable Law. The Plan shall be governed by, construed, and administered in accordance with the laws of the State of Delaware, except to the extent such laws are preempted by the laws of the United States. 8 EX-5.1 3 OPINION OF JOHN W. MACKENZIE, ESQ. 1 EXHIBIT 5.1 December 11, 1997 Beverly Enterprises, Inc. 5111 Rogers Avenue, Suite 40-A Fort Smith, Arkansas 72919 Ladies and Gentlemen: I am the Deputy General Counsel of Beverly Enterprises, Inc. (formerly "New Beverly Holdings, Inc."), a Delaware corporation (the "Company"), and have acted as counsel for the Company in connection with the proposed filing with the Securities and Exchange Commission expected to be made on or about December 5, 1997 under the Securities Act of 1933, as mended, of a Registration Statement on Form S-8 (the "Registration Statement") for the purpose of registering (i) 300,000 shares of Common Stock, par value $.10 per share (the "Shares") of the Company, presently reserved for issuance under the New Beverly Holdings, Inc. Non-Employee Directors' Stock Option Plan (the "Plan"), (ii) additional Shares that become available under the Plan in connection with certain changes in the number of outstanding Shares because of events such as recapitalization, stock dividends and stock splits, and (iii) any other securities with respect to which the outstanding Shares are converted or exchanged. In such capacity, I have examined the Certificate of Incorporation and By-Laws of the Company (as amended), the Plan, and such other documents of the Company as I have deemed necessary or appropriate for the purposes of the opinions expressed herein. Based upon the foregoing, I advise you that, in my opinion, when issued in accordance with the provisions of the Plan, the Shares issuable under the Plan, when delivered and paid for in accordance with the Plan, will be validly issued, fully paid, and nonassessable. I am licensed to practice law in the Commonwealth of Kentucky. As I am generally familiar with the Delaware General Corporation Law, however, I did not consider obtaining special Delaware counsel to be necessary to render the opinions expressed herein. Accordingly, this opinion letter is based on my general knowledge and experience and not based on the advice or opinion of counsel licensed to practice law in the State of Delaware. This opinion letter is limited to the effect of the Delaware General Corporation Law and present federal laws of the United States. This opinion letter and the matters addressed in this letter are as of the date of this letter. I hereby disclaim any obligation to advise you of any change in any matter set forth in this letter occurring after such date. This opinion letter is limited to the matters stated in this letter and no opinion is implied or may be inferred beyond the opinions expressly stated herein. 2 This opinion letter is solely for your benefit and no other person may rely upon the opinions expressed herein. Without my prior written consent, this letter may not be quoted in whole or in part or otherwise referred to in any document and may not be furnished to any other person. I hereby consent to the inclusion of this letter as an exhibit to the Registration Statement. Very truly yours, /s/ John W. MacKenzie -------------------------------- John W. MacKenzie Deputy General Counsel and Assistant Secretary 2 EX-23.2 4 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-________) pertaining to the New Beverly Holdings, Inc. Non-Employee Directors' Stock Option Plan of our report dated February 7, 1997, except for Note 2, paragraph 3, as to which the date is March 13, 1997, with respect to the consolidated financial statements and schedule of Beverly Enterprises, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1996, filed with the Securities and Exchange Commission and to the incorporation by reference of our report dated April 18, 1997, with respect to the consolidated financial statements and schedule of Pharmacy Corporation of America and to the incorporation by reference of our report dated June 2, 1997, with respect to the balance sheet of New Beverly Holdings, Inc. ERNST & YOUNG LLP December 10, 1997 Little Rock, Arkansas -----END PRIVACY-ENHANCED MESSAGE-----