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December 26, 1994 Exhibit 10-21
Bertram T. Martin, Jr.
2805 Parkland Boulevard
Tampa, FL 33629
Re: Restricted Stock Option Agreement
Dear Bert:
This letter confirms your agreement to amend in the manner described
in this letter the Restricted Stock Option Agreement dated June 14, 1993 (the
"Option Agreement"), pursuant to which Pharmacy Management Services, Inc. (the
"Company") granted to you nonqualified options to purchase up to 130,000 shares
of the Company's common stock. You are agreeing to amend the Option Agreement
in connection with the execution of the Agreement and Plan of Merger dated
December 26, 1994, among the Company, Beverly Enterprises, Inc. and Beverly
Acquisition Corporation (the "Acquisition Agreement"). Accordingly, the
amendments are contingent on the execution of the Acquisition Agreement by all
the parties to it and the closing of the merger contemplated by the Acquisition
Agreement. If the Acquisition Agreement is terminated for any reason, or if
that merger does not occur before June 30, 1995, the amendments to the Option
Agreement set forth in this letter will be void and of no effect.
Subject to the foregoing, you and the Company agree that, as of the
"Effective Time" (as defined in the Acquisition Agreement), the Option
Agreement will be amended as follows:
1. The definition of "Control Value" in section 1.2 of the Option
Agreement is deleted in its entirety:
2. The definition of "Expiration Date" in section 1.2 of the
Option Agreement is amended to delete clause (d) and to revise clause (b)
entirely to read:
(b) the 90th day after you cease to be an Employee (other
than as a result of your death or disability or a termination of your
employment within 60 days after a Change in Control):
3. The first two sentences of section 3.4 are amended entirely to
read as follows:
Except as otherwise provided below, you may exercise the Stock Option
only if you have continuously been an Employee of the Company (or any
successor in interest) during the period beginning on the Date of
Grant and ending on the 90th day before the Exercise Date of the Stock
Option. If your employment with the
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Bertram T. Martin, Jr.
December 26, 1994
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Company or a Subsidiary (or any successor in interest to the Company
or a Subsidiary) is terminated (voluntarily or involuntarily) at a
time when the Stock Option is exercisable, you may exercise the Stock
Option within 90 days following the effective date of termination,
unless the termination occurs within 60 days after a Change in
Control, in which case you may exercise the Stock Option as follows:
Period of time following No. of days option
Change in Control remains exercisable
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first 30 days 150 days
31-60 days 120 days
61 days or more 90 days
: and
4. Section 3.10 of the Option Agreement is amended in its
entirety as follows:
3.10 Change in Control. If a Change in Control occurs or if a merger,
consolidation, or other reorganization occurs in which the Company is
the surviving corporation, the Stock Option will continue to be
exercisable, and you will be entitled to receive (upon exercise of the
Stock Option) the Option Shares or any cash, securities, or other
property into which the Shares were converted as a result of the
merger, consolidation, or reorganization.
Please acknowledge your agreement to amend the Option Agreement in the
foregoing manner by signing and dating this letter and returning it to me.
Please retain a copy of the executed letter for your records.
Very truly yours,
PHARMACY MANAGEMENT SERVICES, INC.
By: /s/ Cecil S. Harrell
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Cecil S. Harrell
Chief Executive Officer and
Chairman of the Board
Accepted and agreed on
December 26, 1994
By: /s/ Bertram T. Martin, Jr.
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Bertram T. Martin, Jr.
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