-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, rWaeczOhUNmjajO7vOfepdW4S/4ErRxD5xlOdGQnfQLoEiMUe0uSUaVpQI5dqSWE oE+dOu5OgrVkyYLzLl0d0w== 0000950134-94-001126.txt : 19940922 0000950134-94-001126.hdr.sgml : 19940922 ACCESSION NUMBER: 0000950134-94-001126 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19940921 EFFECTIVENESS DATE: 19941010 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY ENTERPRISES INC /DE/ CENTRAL INDEX KEY: 0000812305 STANDARD INDUSTRIAL CLASSIFICATION: 8051 IRS NUMBER: 954100309 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-55571 FILM NUMBER: 94549841 BUSINESS ADDRESS: STREET 1: 1200 S WALDRON RD #155 CITY: FORT SMITH STATE: AR ZIP: 72903 BUSINESS PHONE: 5014526712 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on September 21, 1994 Registration No.33-_____ ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 __________________________________ BEVERLY ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Delaware 95-4100309 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5111 Rogers Avenue, Suite 40-A Fort Smith, Arkansas 72919-1000 (Address of principal executive offices) (Zip Code) __________________________________ BEVERLY ENTERPRISES, INC. NON EMPLOYEE DIRECTORS' STOCK OPTION PLAN; AMERICAN TRANSITIONAL HOSPITALS, INC. 1993 NONQUALIFIED STOCK OPTION PLAN ASSUMED BY BEVERLY ENTERPRISES, INC.; AND STOCK OPTION AGREEMENT BETWEEN BEVERLY ENTERPRISES, INC. AND ROBERT C. CROSBY DATED SEPTEMBER 2, 1994 (Full Titles of the Plans) __________________________________ Robert W. Pommerville, Senior Vice President, General Counsel & Secretary 5111 Rogers Avenue, Suite 40-A Fort Smith, Arkansas 72919-1000 (501) 452-6712 (Name, address and telephone number of agent for service) Copy to: C. J. Giroir, Jr., Esq. Gordon Y. Allison, Esq. Giroir & Gregory, Professional Association 111 Center Street, Suite 1900 Little Rock, Arkansas 72201 (501) 372-3000 __________________________________ CALCULATION OF REGISTRATION FEE
================================================================================================================ Proposed Proposed Maximum Title of Securities Amount to be Maximum Offering Aggregate Offering Amount of to be Registered Registered(1) Price Per Share(2) Price(2) Registration Fee(2) - ---------------------------------------------------------------------------------------------------------------- Common Stock, $.10 par value 353,451 shares $ 13.875 $ 4,904,133 $ 1,691.08 ================================================================================================================
(1) The maximum amount of shares issuable pursuant to the Directors' Plan (as defined) is 200,000 shares of the Registrant's common stock; the maximum amount of shares issuable pursuant to the ATH Plan (as defined) is 114,903 shares of the Registrant's common stock and the maximum amount of shares issuable pursuant to the Crosby Agreement (as defined) is 38,548 shares of the Registrant's common stock. (2) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(c) and (h)(1), based upon the average of the high and low prices of the Registrant's Common Stock on September 14, 1994 as reported on the New York Stock Exchange. ________________________________________________________________________________ 2 PART I GENERAL NOTE This Registration Statement on Form S-8 relates to three different employee benefit plans (the "Plans") of Beverly Enterprises, Inc., a Delaware corporation ("Beverly"): (i) the NonEmployee Directors' Stock Option Plan (the Directors' Plan"); (ii) the American Transitional Hospitals, Inc. 1993 NonQualified Stock Option Plan assumed by Beverly (the "ATH Plan"); and (iii) the Stock Option Agreement between Beverly and Robert C. Crosby dated September 2, 1994 (the "Crosby Agreement"). The Directors' Plan. The Directors' Plan was approved by Beverly's stockholders at its 1994 Annual Meeting of Stockholders. The Directors' Plan has 200,000 shares of Beverly common stock reserved for issuance thereunder. The ATH Plan. On September 2, 1994, pursuant to an agreement and plan of merger dated June 22, 1994, by and among Beverly, ATH Acquisition, Inc., a Delaware corporation ("Acquisition"), and American Transitional Hospitals, Inc., a Delaware corporation ("ATH"), Acquisition was merged with and into ATH, with ATH being the surviving corporation and becoming a subsidiary of Beverly (the "Merger Agreement"). Pursuant to the Merger Agreement, on September 2, 1994 Beverly assumed the ATH Plan, which assumption included modification with respect to the number of shares of Beverly common stock issuable upon exercise of the outstanding options thereunder, as well as modification to the exercise price for shares of Beverly common stock underlying the options. The ATH plan assumed by Beverly has 114,903 shares of Beverly common stock reserved for issuance thereunder. The Crosby Agreement. Pursuant to the Merger Agreement, Beverly assumed an existing Option Agreement dated May 25, 1992 between ATH and Mr. Robert C. Crosby, which assumption resulted in an agreement dated September 2, 1994 between Beverly and Mr. Crosby with the number of shares of Beverly common stock issuable upon exercise of the option being adjusted in accordance with the merger exchange ratio, as well as modification to the exercise price for shares issuable upon exercise of the option in accordance with the merger exchange ratio. The Crosby Agreement has 38,548 shares of Beverly common stock reserved for issuance thereunder. RULE 428(B)(1) The document(s) containing the information specified in Items 1 and 2 of Part I of Form S-8 will be sent or given to plan participants in the Plans as specified in Rule 428(b)(1) and, in accordance with the instructions to Part I, are not filed with the Commission as part of this Registration Statement. 2 3 PART II Item 3. Incorporation of Documents by Reference. The following documents previously filed with the Securities and Exchange Commission are hereby incorporated by reference: 1. Annual Report on Form 10-K for the year ended December 31, 1993, as amended May 27, 1994 on Form 10-K/A (the "1993 Beverly 10-K"). 2. The portions of the Proxy Statement for the Annual Meeting of Stockholders held May 19, 1994 that have been incorporated by reference in the 1993 Beverly 10-K. 3. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994 and June 30, 1994. 4. Current Report on Form 8-K dated January 4, 1994, as amended January 7, 1994 on Form 8-K/A. 5. Current Report on Form 8-K dated April 7, 1994. 6. Registration Statement on Form 8-A dated August 21, 1990 and any amendment or report filed for the purpose of updating such description. All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the 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 a part hereof from the date of filing of such documents. Any statement contained herein or in the Prospectus covering the securities registered by this Registration Statement shall be deemed to be modified or superseded for purposes of this Registration Statement or the Prospectus to the extent that a statement contained herein or therein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein or therein supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement or the Prospectus. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. Not applicable. Item 6. Indemnification of Directors and Officers. The Registrant's Restated Certificate of Incorporation and Amended Bylaws and indemnification agreements between the Registrant and its officers and directors contain provisions regarding the indemnification of officers and directors. The Registrant's Restated Certificate and Amended Bylaws provide that the Registrant, to the full extent permitted, and in the manner required by the laws of the State of Delaware as in effect at the time of the adoption of the certificate and bylaw provision regarding indemnification or as the same may be amended from time to time, shall (i) indemnify any person (and the heirs and legal representatives of such person) who is made or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether in nature civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, employee or agent of the Registrant or of any constituent corporation absorbed into the Registrant by consolidation or merger or serves or served with another corporation, partnership, joint venture, trust or enterprise, or non-profit entity, including service with respect to employee benefit plans, at the request of the Registrant or of any such constituent II-1 4 corporation against all liability and (ii) provide to any such person (and the heirs and legal representatives of such person) advances for expenses incurred in defending any such action, suit or proceeding, upon receipt of an undertaking by or on behalf of such person (and the heirs and legal representatives of such person) to repay such advances unless it is ultimately determined that he or she is not entitled to indemnification by the Registrant. Section 145 of the Delaware General Corporation Law provides the following: (a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) A corporation shall have power to 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 suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under subsections (a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b). Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) 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 (3) by the stockholders. (e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it is ultimately determined that he is not entitled to be indemnified by the corporation as authorized in this Section. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate. II-2 5 (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholder or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Section. (h) For purposes of this Section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any persons who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this Section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to any employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of any employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. Exhibit 4.1* NonEmployee Directors' Stock Option Plan. Exhibit 4.2* Assumption Agreement that was executed by and between Beverly Enterprises, Inc. and American Transitional Hospitals, Inc. ("ATH") at the time ATH became a subsidiary of Beverly Enterprises, Inc. Exhibit 4.3 American Transitional Hospitals, Inc. 1993 NonQualified Stock Option Plan assumed by Beverly Enterprises, Inc. (Incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-4 (Amendment No. 1) of Beverly Enterprises, Inc. filed on August 5, 1994 (File No. 33-54501)). Exhibit 4.4* Stock Option Agreement between Beverly Enterprises, Inc. and Robert C. Crosby dated September 2, 1994. II-3 6 Exhibit 5.1* Opinion and Consent of Giroir & Gregory, Professional Association, as to the legality of the common stock offered pursuant to the Plans. Exhibit 23.1* Consent of Giroir & Gregory, Professional Association (included in Exhibit 5.1). Exhibit 23.2* Consent of Ernst & Young LLP, Independent Auditors. Exhibit 24.1* The Power of Attorney of officers and directors of the Registrant is found on the signature page hereof. _________________ *Filed herewith. Item 9. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the 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 or Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (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 that time shall be deemed to be the initial bona fide offering thereof. II-4 7 (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "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 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 connected 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. II-5 8 SIGNATURES 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, thereunto duly authorized in the City of Fort Smith, State of Arkansas, on September 20, 1994. BEVERLY ENTERPRISES, INC. By: /s/ DAVID R. BANKS David R. Banks Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL BY THESE PRESENTS, that each of the undersigned hereby constitutes and appoints David R. Banks, Robert W. Pommerville, and John W. MacKenzie, and each or any of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute, and file with the Securities and Exchange Commission and any state securities regulatory board or commission any documents relating to the proposed issuance and registration of the securities offered pursuant to this Registration Statement on Form S-8 under the Securities Act of 1933, as amended, including any and all amendments relating thereto, with all exhibits and any and all documents required to be filed with respect thereto with any regulatory authority, granting unto said attorney, 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 in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated:
Signatures Title Date - ---------- ----- ---- Chairman of the Board, /s/ DAVID R. BANKS President, Chief - ------------------------------------------- Executive Officer and September 20, 1994 David R. Banks Director Executive Vice President, /s/ ROBERT D. WOLTIL Finance and Chief - ------------------------------------------- Financial Officer September 20, 1994 Robert D. Woltil Vice President, /s/ SCOTT M. TABAKIN Controller and Chief - ------------------------------------------- Accounting Officer September 20, 1994 Scott M. Tabakin
II-6 9 /s/ BERYL F. ANTHONY, JR. Director September 20, 1994 - ------------------------------------------- Beryl F. Anthony, Jr. /s/ CURT F. BRADBURY Director September 20, 1994 - ------------------------------------------- Curt F. Bradbury /s/ JAMES R. GREENE Director September 20, 1994 - ------------------------------------------- James R. Greene /s/ JON E. M. JACOBY Director September 20, 1994 - ------------------------------------------- Jon E. M. Jacoby /s/ LOUIS W. MENK Director September 20, 1994 - ------------------------------------------- Louis W. Menk /s/ WILL K. WEINSTEIN Director September 20, 1994 - ------------------------------------------- Will K. Weinstein
II-7 10 INDEX TO EXHIBITS Exhibit - ------- 4.1* NonEmployee Directors' Stock Option Plan. 4.2* Assumption Agreement that was executed by and between Beverly Enterprises, Inc. and American Transitional Hospitals, Inc. ("ATH") at the time ATH became a subsidiary of Beverly Enterprises, Inc. 4.3 American Transitional Hospitals, Inc. 1993 NonQualified Stock Option Plan assumed by Beverly Enterprises, Inc. (Incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-4 (Amendment No. 1) of Beverly Enterprises, Inc. filed on August 5, 1994 (File No. 33-54501)). 4.4* Stock Option Agreement between Beverly Enterprises, Inc. and Robert C. Crosby dated September 2, 1994. 5.1* Opinion and Consent of Giroir & Gregory, Professional Association, as to the legality of the common stock offered pursuant to the Plans. 23.1* Consent of Giroir & Gregory, Professional Association (included in Exhibit 5.1). 23.2* Consent of Ernst & Young LLP, Independent Auditors. 24.1* The Power of Attorney of officers and directors of the Registrant is found on the signature page hereof. _________________ *Filed herewith. EX-4.1 2 EXHIBIT 4.1 NON-EMPLOYEE DIRECTORS' SOP 1 EXHIBIT 4.1 BEVERLY ENTERPRISES, INC. NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN (EFFECTIVE AS OF JUNE 1, 1994) ARTICLE I. ESTABLISHMENT AND PURPOSE 1.1. Establishment of the Plan. Beverly Enterprises, 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 "Beverly Enterprises, Inc. Nonemployee Directors' Stock Option Plan" ("Plan"). 1.2 Purpose. The purpose of the Plan is to build a proprietary interest among the Company's Nonemployee 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, on or after June 1, 1994, are Nonemployee Directors. 1.4 Effective Date. This Plan shall be effective as of June 1, 1994, 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 January 1, 1995, 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: (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 1 2 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. (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 Beverly Enterprises, Inc., or any successor thereto. (h) "Effective Date" means June 1, 1994, 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 the New York StoCk Exchange on such day, then on the next preceding day that Common Stock was traded on such Exchange, all as reported by such source as the Board may select. (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, 1994. (l) "Nonemployee 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 Nonemployee Director to whom an Option has been granted under this Plan. (o) "Person" means "person" as defined in Section 3(a) (9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d)(3) of the Exchange Act. (p) "Plan" means the "Beverly Enterprises, Inc. Nonemployee 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, 1995. 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 Nonemployee 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 Initial Grant of Stock Options. Each Nonemployee Director as of the Effective Date shall automatically be granted an Option to purchase 2,500 shares of Common Stock, effective as of the Effective 2 3 Date. Each individual who first becomes a Nonemployee Director after the Effective Date shall automatically be granted an Option to purchase 2,500 shares of Common Stock, effective as of the Grant Date which is coincident with or next following the date on which such individual becomes a Nonemployee Director. All Options granted under this Section 3.2 shall be subject to the Common Stock availability provisions of Section 4.1. 3.3 Subsequent Grants of Stock Options. Each Nonemployee Director who has received an initial grant of an Option, as described in Section 3.2, shall automatically be granted an Option to purchase an additional 2,500 shares of Common Stock as of each Grant Date subsequent to the initial Grant Date applicable to such Nonemployee 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 Nonemployee Director must be a Nonemployee Director on such Grant Date. All Options granted under this Section 3.3 shall be subject to the Common Stock availability provisions of Section 4.1. ARTICLE IV. COMMON STOCK AVAILABLE 4.1 In General. Subject to adjustment as provided in Section 4.2, an aggregate of 200,000 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 Nonemployee 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 4 (3) Change in Control. (c) Holding Periods. Any Option may not be exercised for at least six months after the grant thereof. Should this Section 5.1(c) require modification or be unnecessary to comply with the requirements of Section 16 of and Rule 16b-3 under the Exchange Act, the Board may waive such provision and/or amend this Plan to add to or modify the provisions hereof accordingly. (d) Termination Other Than Death or Disability. In the event the Participant ceases to be a Nonemployee Director of the Company for any reason other than death or 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 Nonemployee 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. 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 of Participant. In the event a Participant ceases to be a Nonemployee Director of the Company by reason of death, 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 -- (2) the remainder of the period in which such Participant could have exercised the Option had the Participant not died. 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 be no such exercise at any one time as to fewer than 100 shares or all of the remaining shares then purchasable by the person or persons exercising the Option, if fewer than 100 shares. (b) Payment Methods. An Option may 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 laws, or (3) by any combination of such methods of payment. 4 5 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" 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, 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 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 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. 6.2 Amendments for Compliance. Sections 2.1(l), 2.1(n), 3.1, 3.2 and 3.3 shall not be amended more than once every six months, other than to comport with changes in the Code or other applicable Federal or state law. Should any provision of this Section 6.2 require modification or be unnecessary to comply with the requirements of Section 16 of and Rule 16b-3 under the Exchange Act, the Board may waive such provision and/or amend this Plan to add to or modify the provision hereof accordingly. 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 decision 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 be done other than by such member's own willful misconduct or as expressly provided by statute. 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 5 6 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, 3.2 and 3.3, (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 May 31, 2004; 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 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 Nonemployee Director for reelection by the Company's shareholders, nor confer upon any Nonemployee Director the right to remain a member of the Board for any period of time, or at any particular rate of compensation. 9.3 Withholding. It shall be a condition to the obligation of the Company to issue shares of Common Stock upon exercise of an Option, that the optionee (or any beneficiary or person entitled to act under Section 5.1(b)) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold Federal, state, local, or foreign income or other taxes. Such amount may be paid by the Participant by cash or check or by authorizing the Company to withhold shares of Common Stock with a Fair Market Value equal to such Participant's withholding obligation. If the amount requested is not paid, the Company may refuse to issue shares of Common Stock. 6 7 9.4 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. 9.5 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. 9.6 Applicable Law. The Plan shall be governed by, construed, and administered in accordance with the laws of the State of Arkansas, except to the extent such laws are preempted by the laws of the United States. 7 EX-4.2 3 EXHIBIT 4.2 ASSUMPTION AGREEMENT 1 EXHIBIT 4.2 ASSUMPTION AGREEMENT THIS ASSUMPTION AGREEMENT (this "Agreement"), dated as of September 2, 1994, between Beverly Enterprises, Inc., a Delaware corporation (the "Company") and American Transitional Hospitals, Inc., a Delaware corporation ("ATH"). W I T N E S S E T H: WHEREAS, ATH Acquisition, Inc., previously a Delaware corporation and wholly-owned subsidiary of the Company ("Acquisition") was merged with and into ATH on the date hereof (the "Merger"), with ATH being the surviving corporation and becoming a wholly-owned subsidiary of the Company pursuant to an Agreement and Plan of Merger dated June 22, 1994 (the "Merger Agreement"); WHEREAS, the Company agreed to assume the ATH 1993 Non Qualified Stock Option Plan (the "Plan") attached hereto and any options (the "Options") that had been granted by ATH thereto pursuant to the Merger Agreement following the Merger; NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company hereby assumes all of the obligations of ATH pursuant to the Plan and the Options, except that (i) the Plan shall be administered by the Company's Compensation Committee; (ii) the Options shall be solely exercisable for an aggregate of 114,903 shares of common stock of the Company; (iii) the number of shares issuable upon exercise of the Options shall be modified in accordance with the Merger Agreement; (iv) the exercise price for the Options shall be modified in accordance with the Merger Agreement; and (v) stock option agreements reflecting items (i) through (iv) herein will be delivered to holders of the Options on or after the date hereof, with option agreements that were issued by ATH to holders of the Options prior to consummation of the Merger Agreement, being superseded and canceled concurrently herewith. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly exercised as of the date first above written. BEVERLY ENTERPRISES, INC., a Delaware corporation By: /s/ SCOTT M. TABAKIN Title: Vice President, Controller and Chief Accounting Officer AMERICAN TRANSITIONAL HOSPITALS, INC., a Delaware corporation By: /s/ ROBERT C. CROSBY Title: President EX-4.4 4 EXHIBIT 4.4 STOCK OPTION AGREEMENT 1 EXHIBIT 4.4 STOCK OPTION AGREEMENT TO BE EXECUTED BETWEEN BEVERLY ENTERPRISES, INC. AND ROBERT C. CROSBY This Agreement between Beverly Enterprises, Inc., a Delaware corporation (the "Company") and Robert C. Crosby, an individual and resident of the State of Tennessee (the "Optionee") dated September 2, 1994 (the "Effective Time") relates to an agreement dated May 25, 1992 (the "Old Option Agreement") by and between American Transitional Hospitals, Inc., a Delaware corporation ("ATH") and the Optionee. In accordance with an agreement and plan of merger, dated June 22, 1994 (the "Merger Agreement") by and among the Company, ATH Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of Beverly ("Acquisition") and ATH on the Effective Time, Acquisition was merged with and into ATH, whereupon ATH as the surviving corporation, became a wholly-owned subsidiary of the Company (the "Merger"). Pursuant to the Merger Agreement and as part of the Merger, the Company assumed and modified the option granted pursuant to the Old Option Agreement, such that the Optionee may only receive shares of the Company's common stock upon exercise of the option. The number of shares of common stock issuable upon the exercise of the option under the Old Option Agreement and the exercise price therefor have been modified in accordance with the Merger Agreement and are equal to the respective amounts described in Section 1 below. 1. The Option. The Optionee may, at his option, purchase all or any part of an aggregate of 38,548 shares of the common stock, $.10 par value per share, of the Company (the "Optioned Shares"), at the exercise price of $.83 per share (the "Option Price"), on the terms and conditions set forth herein (the "Option"). 2. Exercise and Term. From and after the Effective Time and subject to the limitations imposed by Section 4 hereof, the Option shall be fully vested and be exercisable for the Optioned Shares provided, however, that the Option shall expire and terminate on May 25, 2002. 3. Representations of Optionee. The Optionee hereby expressly acknowledges, represents and agrees as follows: (a) Optionee is acquiring the Option and the Optioned Shares for investment for his own account and not with a view to the distribution thereof, within the meaning of such term as used in the Securities Act of 1933, as amended (the "Act"), or any rule or regulation thereunder, in violation of the Act or any such rules. 2 (b) Optionee has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and economic risks of an investment in the Optioned Shares. (c) Optionee is able to bear the economic risks of an investment in the Optioned Shares for an indefinite period of time and to bear a complete loss of the investment. Optionee is aware that the Option has not been and the Optioned Shares have not been registered under the Act or any state securities laws, that the Optioned Shares must be held indefinitely unless they are subsequently registered or sold pursuant to Rule 144 or another available exemption from registration. (d) Optionee understands and acknowledges that a stop order may be placed against the transfer of the Optioned Shares with the Company's transfer agent, subject to compliance with the Act and the applicable rules thereunder. Optionee understands that each certificate representing the Optioned Shares will bear a legend prohibiting the sale or transfer of the Optioned Shares except in a transaction in compliance with the registration provisions of the Act, pursuant to Rule 144 or pursuant to another applicable exemption form such registration provisions and upon compliance with applicable state securities laws. 4. Representation and Warranties. As a condition to the exercise of any portion of the Option, the Company may require the Optionee to make any representation and/or warranty to the Company as may, in the judgment of counsel to the Company, be required under any applicable law or regulation. The Optionee understands and agrees that he shall not have any of the rights of a stockholder with respect to the Optioned Shares until he has exercised the Option, paid the Option Price, and been issued a stock certificate for the purchased shares. 5. Options Not Transferrable. The Option may be exercised during the lifetime of the Optionee only by the Optionee. The Optionee's rights and interest under this Agreement and in and to the Option may not be sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred in any manner, either voluntarily or involuntarily by operation of law, except by Will or the laws of descent or distribution. 6. Manner of Exercise. Subject to the terms and conditions hereof, Optionee may exercise the Option assumed hereby as to all or any portion of the Optioned Shares at any time, and from time to time, pursuant to Section 2 hereof, by giving written notice to the Company and tendering to the Company the Option Price in 2 3 cash or stock of the Company. The Optionee shall not be deemed to be a holder of any shares covered by the Option assumed hereby unless and until written notice is given in the proper manner, the Option Price is paid in full, any and all documents pertaining to restrictions of the Optioned Shares are signed by Optionee, and the certificates representing such Optioned Shares are transferred to Optionee. 7. Termination of Employment. In the event that Optionee shall cease to be in the employ of the Company for any reason other than Optionee's disability, death, or retirement, the unexpired and unexercised portion of the Option granted to such Optionee shall terminate sixty (60) days from and after the actual date of termination of employment, unless the Option expires by its terms on an earlier date. 8. Disability. In the event that Optionee shall cease to be in the employ of the Company by reason of Optionee's disability, the unexercised portion of the Option granted to the Optionee pursuant to Section 2 hereof shall terminate on the date that is six (6) months from and after the date that Optionee's employment with the Company was terminated by reason of his disability. For this purpose, Optionee shall be deemed disabled if he is unable to engage in any gainful activity by reason of any medically determinable physical or mental impairment which has lasted or can be expected to last for a continuous period of not less than 12 months, or which can be expected to result in death, unless the Option expires by its terms on an earlier date. 9. Retirement. In the event that Optionee terminates his employment by reason of Optionee's retirement, the unexercised portion of the Option granted to the Optionee pursuant to Section 2 hereof shall terminate on the date that is six (6) months from the date such Optionee's employment with the Company was terminated by reason of Optionee's retirement, unless the Option expires by its terms on an earlier date. 10. Death. In the event that Optionee dies while in the employ of the Company, the unexercised portion of the Option granted to the Optionee hereunder and exercisable pursuant to Section 2 hereof shall be exercisable within the six (6) month period commencing on the date of Optionee's death, unless the Option expires sooner under this term, and then only (i) by the person or persons to whom the Optionee's rights under the Option shall pass by the Optionee's Will or the laws of descent and distribution, and (ii) if and to the extent that Optionee was entitled to exercise the Option on the date of Optionee's death. The Option, to the extent not exercised within the above period after the date of Optionee's death, shall terminate upon expiration of the period. 3 4 11. Adjustments Upon Chances in Capitalization and Reorganization. (a) If the Option is exercised subsequent to any stock dividend, split-up, recapitalization, combination or exchange of share, merger, consolidation, acquisition of property or stock, separation, reorganization, or liquidation, as a result of which shares of any class shall be issued in respect of outstanding shares of Common Stock, or shares of Common Stock shall be changed into the same or a different number of shares of the same or another class or classes, without compensation therefor in money, resources or property, the remaining shares subject to the Option assumed hereby and the Option Price attributable thereto shall be appropriately adjusted to reflect the applicable changes. (b) If the Company is merged into or consolidated with another corporation under circumstances where the Company is not the surviving corporation, or if the Company is liquidated, or sells or otherwise disposes of substantially all of its assets to another corporation while the Option assumed remains outstanding (i) subject to the provisions of clause (ii) below, after the effective date of such merger, consolidation or sale, as the case may be, Optionee shall be so entitled, upon exercise of the Option assumed hereby, to receive, in lieu of shares of Common Stock of the Company, shares of such stock or other securities as the holders of shares of Common Stock of the Company received pursuant to the terms of the merger, consolidation or sale, or (ii) the Option assumed hereby may be canceled by the Board of Directors of the Company as of the effective date of any such merger, consolidation, liquidation or sale provided that (1) notice of such cancellation shall be given to Optionee and (2) Optionee shall have the right to exercise the Option with respect to the Optioned Shares to which the Optionee is entitled pursuant to Section 2 hereof during a thirty (30) day period preceding the effective date of such merger, consolidation, liquidation, sale or acquisition. 12. No Enlargement of Employee Rights. Nothing in this Agreement shall be construed to confer upon the Optionee any right to continued employment with the Company, or to restrict in any way the right of the Company to terminate Optionee's employment. 13. Withholding of Taxes. Optionee authorizes the Company to withhold, in accordance with any applicable law, from any compensation payable to Optionee any taxes required to be withheld by federal, state or local law as a result of the issuance of stock pursuant to the exercise of the Option. 14. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware. 4 5 15. Agreement Binding on Successors. The terms of this Agreement shall be binding upon the executors, administrators, heirs and successors of the Optionee. 16. Cost of Litigation. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party to such litigation, as determined by the court in a final judgment or decree shall pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys' fees shall be included as part of the judgment. 17. Necessary Acts. The Optionee agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities law. 18. Notice. Any notice, demand or communication required, permitted or desired to be given hereunder shall be deemed effectively given when personally delivered or mailed by prepaid certified mail, return receipt requested, addressed as follows: Company: Beverly Enterprises, Inc. 5111 Rogers Avenue, Suite 40-A Fort Smith, Arkansas 72919-1000 Attention: David R. Banks, Chairman, President and Chief Executive Officer Optionee: Robert C. Crosby 211 Lewisburg Avenue Franklin, Tennessee 37064 or to such other address as either party may designate in writing to the other. 19. Counterparts. For convenience, this Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself, and may be introduced in evidence or used for any other purpose without the production of any other counterparts. 20. Invalid Provisions. In the event that any provision of this Agreement is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein invalid or unenforceable, and all such other provisions were not contained herein. 5 6 21. Word Usage. Words used in the masculine shall apply to the feminine where applicable, and wherever the context of the Agreement dictates, the plural shall be read as the singular and the singular as the plural. IN WITNESS WHEREOF, the Company and the Optionee have executed this Agreement effective as of the date first written hereinabove. COMPANY: BEVERLY ENTERPRISES, INC. By: /s/ SCOTT M. TABAKIN, Scott M. Tabakin, Vice President, Controller and Chief Accounting Officer OPTIONEE: /s/ ROBERT C. CROSBY Robert C. Crosby, an individual and resident of the State of Tennessee 6 EX-5.1 5 EXHIBIT 5.1 OPINION & CONSENT OF GIROIR & GREGORY 1 EXHIBIT 5.1 GIROIR & GREGORY PROFESSIONAL ASSOCIATION ATTORNEYS AT LAW SUITE 1900 111 CENTER STREET LITTLE ROCK, ARKANSAS 72201 TELEPHONE TELECOPIER (501) 372-3000 (501) 374-2380 (501) 372-2475 September 20, 1994 Beverly Enterprises, Inc. 5111 Rogers Avenue, Suite 40-A Fort Smith, Arkansas 72919-1000 RE: Beverly Enterprises, Inc. - Registration Statement on Form S-8 Gentlemen: We have acted as securities counsel for Beverly Enterprises, Inc. (the "Company") in connection with the preparation of a registration statement on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended, to be filed with the Securities and Exchange Commission (the "Commission") on September 21, 1994, in connection with the registration of 353,451 shares of Common Stock, $.10 par value (the "Shares"), issuable from time to time as a result of the exercise of stock options with respect to three different employee benefit plans of the Company: (i) the NonEmployee Directors' Stock Option Plan; (ii) the American Transitional Hospitals, Inc. 1993 NonQualified Stock Option Plan assumed by Beverly; and (iii) the Stock Option Agreement between Beverly and Robert C. Crosby dated September 2, 1994 (collectively, the "Plans"). In connection with the preparation of the Registration Statement and the proposed issuance and sale of Shares in accordance with the Plans and the Form S-8 prospectus to be delivered to participants in the Plans, we have made certain legal and factual examinations and inquiries and examined, among other things, such documents, records, instruments, agreements, certificates and matters as we have considered appropriate and necessary for the rendering of this opinion. We have assumed for the purpose of this opinion the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies, and the genuineness of the signatures thereon. As to various questions of fact material to this opinion, we have, when relevant facts were not independently established, relied, to the extent deemed proper by us, upon certificates and statements of officers and representatives of the Company. Based on the foregoing and in reliance thereon, it is our opinion that the Shares have been duly authorized and, after the Registration Statement becomes effective and after any post-effective amendment required by law is duly completed, filed and becomes effective, and when the applicable provisions of "Blue 2 Beverly Enterprises, Inc. September 20, 1994 Page 2 Sky" and other state securities laws shall have been complied with, and when the Shares are issued and sold in accordance with the Plans and the Form S-8 prospectus to be delivered to participants in the Plans, the Shares will be legally issued, fully paid and nonassessable. We hereby consent to the inclusion of our opinion as Exhibit 5.1 to the Registration Statement and further consent to the reference to this firm in the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Commission thereunder. This opinion is rendered solely for your benefit in accordance with the subject transaction and is not to be otherwise used, circulated, quoted or referred to without our prior written consent. We are opining herein as to the effect on the subject transaction only of United States federal law and the internal laws of the State of Delaware, without regard for choice of law principles, and we assume no responsibility as to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction. Very truly yours, /s/ GIROIR & GREGORY, Professional Association EX-23.2 6 EXHIBIT 23.2 CONSENT OF ERNST & YOUNG 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Beverly Enterprises, Inc. Non Employee Directors' Stock Option Plan; American Transitional Hospitals, Inc. 1993 Nonqualified Stock Option Plan assumed by Beverly Enterprises, Inc.; and Stock Option Agreement between Beverly Enterprises, Inc. and Robert C. Crosby dated September 2, 1994 of our report dated February 4, 1994, with respect to the consolidated financial statements and schedules of Beverly Enterprises, Inc. included in its Annual Report on Form 10-K, as amended, for the year ended December 31, 1993, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP Little Rock, Arkansas September 20, 1994 -----END PRIVACY-ENHANCED MESSAGE-----