SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
REGENT ASSISTED LIVING, INC.
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(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Set forth the amount on which
the filing fee is calculated and state how it was determined.
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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<PAGE>
REGENT ASSISTED LIVING, INC.
Bank of America Financial Center
121 S.W. Morrison Street, Suite 1000
Portland, Oregon 97204
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON May 25, 1999
To Our Shareholders:
The Annual Meeting of Shareholders of Regent Assisted Living, Inc. (the
"Company") will be held at 11:00 a.m. on Tuesday, May 25, 1999, at the U.S.
Bancorp Tower, 111 S.W. Fifth Avenue, 30th Floor, Portland, Oregon, for the
following purposes:
1. Electing three directors of the Company for a term of three years; and
2. Transacting such other business as may properly come before the
meeting.
Only holders of the Company's Common and Preferred Stock at the close of
business on Friday, April 2, 1999, are entitled to notice of, and to vote at,
the meeting and any adjournments or postponements thereof. Shareholders may vote
in person or by proxy. A list of shareholders entitled to vote at the meeting
will be available for examination by shareholders at the time and place of the
meeting and, on or after May 2, 1999, at the offices of the Secretary of the
Company, Suite 1000, 121 S.W. Morrison Street, Portland, Oregon.
By Order of the Board of Directors,
DAVID R. GIBSON
David R. Gibson
Secretary
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING
IN PERSON, PLEASE MARK, SIGN, DATE, AND PROMPTLY RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE.
Portland, Oregon
April 27, 1999
<PAGE>
REGENT ASSISTED LIVING, INC.
Bank of America Financial Center
121 S.W. Morrison Street, Suite 1000
Portland, Oregon 97204
-----------------------------------
PROXY STATEMENT
1999 Annual Meeting of Shareholders
-----------------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Regent Assisted Living, Inc. (the "Company") of
proxies to be voted at the 1999 Annual Meeting of Shareholders of the Company to
be held at 11:00 a.m. on Tuesday, May 25, 1999, at the U.S. Bancorp Tower, 111
S.W. Fifth Avenue, 30th Floor, Portland, Oregon, and at any adjournments or
postponements thereof. If proxies in the accompanying form are properly
executed, dated and returned prior to the voting at the meeting, the shares of
Common Stock represented thereby will be voted as instructed on the proxy. If no
instructions are given on a properly executed and returned proxy, the shares of
Common Stock represented thereby will be voted for election of the directors and
in the discretion of the persons named in the proxy on such other business as
may properly come before the meeting or any adjournments or postponements
thereof.
Any proxy may be revoked by a shareholder prior to its exercise upon
written notice to the Secretary of the Company, by delivering a duly executed
proxy bearing a later date, or by the vote of a shareholder cast in person at
the meeting. The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited personally by the
Company's officers and regular employees or by telephone, facsimile transmission
or express mail. The Company will reimburse brokerage houses, banks and other
custodians, nominees and fiduciaries for their reasonable expenses incurred in
forwarding proxies and proxy material to beneficial owners of stock. This Proxy
Statement and the accompanying Notice of Annual Meeting and proxy card are first
being mailed to shareholders on or about April 27, 1999.
VOTING
Holders of record of the Company's Common Stock ("Common Stock") and Series
A Preferred Stock ("Series A Preferred Stock") at the close of business on
Friday, April 2, 1999, will be entitled to notice of the Annual Meeting and to
vote at the Annual Meeting or any adjournments or postponements thereof. As of
that date, there were 4,633,000 shares of Common Stock, and 1,283,785 shares of
Series A Preferred Stock, outstanding and entitled to vote. As of that date,
there were also 382,882 shares of the Company's Series B Preferred Stock
("Series B Preferred Stock") outstanding, which shares are not entitled to vote
on the matters expected to be presented at the Annual Meeting and are entitled
to vote only on specific categories of matters as set forth in the Company's
Restated Articles
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<PAGE>
of Incorporation, as amended (the "Restated Articles"). On those matters on
which the holders of Series B Preferred Stock are entitled to vote, they vote
together with the holders of the Common Stock and the Series A Preferred Stock
as a single class. Pursuant to the Restated Articles, the shares of Common Stock
are each entitled to one vote and the shares of Series A Preferred Stock are
each entitled to 1.0909 votes. The Common Stock and Series A Preferred Stock
vote as a single class on the matters expected to be presented at the Annual
Meeting. A majority of the votes entitled to be cast by the holders of Common
Stock and Series A Preferred Stock, or 3,016,747 votes, will constitute a quorum
to act on the matters expected to be presented at the Annual Meeting.
Shareholders are not entitled to cumulative voting in the election of
directors or on any other matter submitted to the shareholders for approval.
Abstentions and broker non-votes will be counted in determining whether a quorum
is present, but otherwise will have no effect on the outcome of any proposal
considered at the meeting. Walter C. Bowen, Chairman of the Board, President and
Chief Executive Officer of the Company, owns 3,179,000 shares of the Company's
Common Stock, representing 52.7 percent of the votes entitled to be cast at the
meeting, and he has indicated that he intends to be present at the meeting and
to vote in favor of each of the nominees for director. Accordingly, the Company
believes that the election of each of the nominees for director set forth below
is assured.
PROPOSAL 1. Election of three directors of the Company for a term of three
years.
The Board of Directors is comprised of eight directors pursuant to the
Company's Bylaws. The directors are divided into three classes: Class I which is
comprised of two directors; Class II which is comprised of three directors; and
Class III which is comprised of three directors. Three directors are to be
elected at the upcoming Annual Meeting of Shareholders to fill all of the
directorships in Class III. Thereafter, the term of office of Class III will
expire at the 2002 annual meeting of shareholders. The term of office of Class I
will expire at the 2000 annual meeting of shareholders and the term of office of
Class II will expire at the 2001 annual meeting of shareholders.
Under Oregon law, if a quorum of shareholders is present at the 1999 Annual
Meeting, the three nominees for election of directors who receive the greatest
number of votes cast at the meeting will be elected directors. Abstentions and
broker non-votes will have no effect on the results of the vote. Unless marked
otherwise, proxies received will be voted FOR the election of each of the
nominees named below.
If any nominee is unable or unwilling to stand for election, the proxies
may be voted for a substitute nominee, designated by the proxy holders or by the
present Board of Directors to fill such vacancy, or for another nominee named
without nomination of a substitute, or the number of directors may be reduced
accordingly. The Board of Directors has no reason to believe that any of the
nominees will be unwilling or unable to serve if elected as a director.
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The Board of Directors recommends a vote FOR each of the nominees named below.
Walter C. Bowen has served as Chairman of the Board, Chief Executive
Officer and President and a director of the Company since its formation in
March 1995. Mr. Bowen has been involved in the development, ownership, and
management of assisted living facilities since 1986, and has devoted a
majority of his time to the ownership and operation of those facilities
over the past five years. Mr. Bowen continues to serve as the Chief
Executive Officer of a group of companies and businesses he owns or
controls (the "Bowen Companies"), which group included the predecessor of
the Company.
Marvin S. Hausman, M.D. has served as a director of the Company since
March 1996. Dr. Hausman is a founder and is President and Chief Executive
Officer of Axonyx Inc., a biotechnology company engaged in the development
and acquisition of pharmaceutical compounds and technologies useful for the
treatment of cognitive disorders including Alzheimer's disease. Since 1992,
Dr. Hausman has served as a consultant to the pharmaceutical industry and
since 1995 he has also served as President of Northwest Medical Research
Partners, Inc., a company engaged in evaluating biopharmaceutical
technologies and medical devices. Dr. Hausman was a co-founder and past
director of Medco Research, Inc., a pharmaceutical research and development
company.
Gary R. Maffei has served as a director of the Company since December
1995. Mr. Maffei is currently a Vice President of the Merlo Corporation, a
private investment company, and the Harry Merlo Foundation, Inc., a
charitable organization. From 1973 until joining these companies in 1996,
Mr. Maffei was the Director of Human Resources for Louisiana Pacific
Corporation, a forest products company.
The following table sets forth certain information about each of the
Company's Directors, including the three nominees.
<TABLE>
<CAPTION>
Name Age Class and Term Director Since
---- --- -------------- --------------
<S> <C> <C> <C>
Nominees:
Walter C. Bowen(1)(2) 56 (Class III, 1999) March 1995
Marvin S. Hausman, MD 57 (Class III, 1999) March 1996
Gary R. Maffei (2)(4) 54 (Class III, 1999) December 1995
3
<PAGE>
Directors whose terms continue:
Dana J. O'Brien (1)(2)(4) 43 (Class I, 2000) December 1996
Steven L. Gish (3) 40 (Class I, 2000) August 1995
Wayne C. Rembold (3) 57 (Class II, 2001) March 1999
Stephen A. Gregg (1)(4) 54 (Class II, 2001) December 1996
Martha L. Robinson (1)(3)(4) 43 (Class II, 2001) December 1996
(1) Member of Executive Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee
(4) Member of Conflicts Committee
</TABLE>
Directors whose terms continue:
Class I:
Steven L. Gish has served as Chief Financial Officer, Treasurer, Secretary,
and Assistant Secretary in addition to serving as a Director of the
Company, since August 1995. In 1991 Mr. Gish became the Controller of the
Bowen Companies. Prior to that time, Mr. Gish served as Treasurer and
Controller of McCormick and Baxter Creosoting Company, an industrial wood
preserving company.
Dana J. O'Brien is a Senior Managing Director of Cornerstone Equity
Investors, L.L.C., a New York based investment firm formed in December 1996
to provide investment management services to several investment funds.
Cornerstone is the investment advisor to Prudential Private Equity
Investors III, L.P., the holder of all of the Company's issued and
outstanding Series A and Series B Preferred Stock. During the five year
period preceding December 1996, Mr. O'Brien served as Executive Vice
President of Prudential Equity Investors, Inc., an investment management
firm. Mr. O'Brien currently serves on the Board of Directors of several
private companies, including Specialty Hospitals of America, Inc. and
Guardian Care, Inc. Mr. O'Brien became a director of the Company in
December 1996.
Class II:
Stephen A. Gregg is a former hospital administrator and began serving
as a director of the Company on December 16, 1996. Mr. Gregg was the
founder and chief executive officer of The Ethix Corporation, a managed
care company serving approximately 5,000,000 members nationwide, prior to
its sale in 1994. Mr. Gregg currently manages personal investments.
Wayne C. Rembold was elected a director of the Company effective March
17, 1999. For the past 30 years Mr. Rembold has been involved in numerous
types of real estate development ventures and business activities. Since
1994 Mr. Rembold has served as the President and Chief Executive Officer of
the Rembold
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<PAGE>
Companies, which are engaged in the development of retail and warehouse
facilities in addition to manufactured home parks and multi-family housing
projects.
Martha L. Robinson is a Managing Director of Cornerstone Equity
Investors, L.L.C., a New York based investment firm formed in December 1996
to provide investment management services to several investment funds.
Cornerstone is the investment advisor to Prudential Private Equity
Investors III, L.P., the holder of all of the Company's issued and
outstanding Series A and Series B Preferred Stock. During the five-year
period preceding December 1996, Ms. Robinson served as Vice President of
Prudential Equity Investors, Inc. Ms. Robinson formerly served on the Board
of Directors of Coventry Corporation, Total Pharmaceutical Care, and Earth
Technology Corporation and currently serves on the Board of Directors of
several private companies, including Specialty Hospitals of America, Inc.
and Guardian Care, Inc. Ms. Robinson became a director of the Company in
December 1996.
INFORMATION ON COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
During 1998, there were five meetings of the Board of Directors, and all
Board members attended at least 75 percent of the meetings of the Board of
Directors and each committee of which he or she was a member. The Board of
Directors also took action by unanimous written consent, in accordance with the
Company's Bylaws, on three occasions in 1998.
The Company's Board of Directors has established an Executive Committee,
Audit Committee, Compensation Committee, and Conflicts Committee. The Company
has no Nominating Committee and the full Board of Directors selects nominees for
election as directors.
The Executive Committee acts on all matters requiring consideration by the
Board in the interim period between regular and special Board meetings. The
Executive Committee currently consists of Ms. Robinson and Messrs. Bowen, Gregg,
and O'Brien. In 1998 the Executive Committee took action by written consent on
two occasions.
The Compensation Committee establishes salaries, incentives and other forms
of compensation for directors, officers and other key employees of the Company,
administers the 1995 Stock Incentive Plan, and recommends policies relating to
benefit plans. The Compensation Committee currently consists of Mr. Bowen and
two independent directors, Messrs. O'Brien and Maffei. In 1998, the Compensation
Committee twice took action by written consent.
The Audit Committee makes recommendations concerning the engagement of
independent public accountants, reviews with the independent public accountants
the scope and results of the audit, reviews management's evaluation of the
Company's system of internal controls, and reviews non-audit professional
services provided by the independent
5
<PAGE>
accountants and the range of audit and non-audit fees. The Audit Committee will
also review at least annually reimbursement of costs by the Company and the
other Bowen Companies pursuant to the Administrative Services Agreement. See
"Certain Relationships and Related Party Transactions." The Audit Committee
currently consists of Mr. Gish and two independent directors, Ms. Robinson and
Mr. Rembold. Peter Brix, a former independent Director of the Company, served on
the Committee during 1998. The Audit Committee met once in 1998.
The Conflicts Committee, consisting of four independent directors, is
responsible for considering for approval on behalf of the Board of Directors all
transactions between the Company and any officer or director of the Company or
any entity in which such officer or director has an equitable or beneficial
interest. The Conflicts Committee currently consists of Ms. Robinson and Messrs.
O'Brien, Gregg, and Maffei. The Conflicts Committee met once in 1998.
COMPENSATION OF DIRECTORS
The Company pays each non-employee director $500 for attendance in person
at each regular meeting of the Board of Directors. In addition, the Company will
reimburse the directors for travel expenses incurred in connection with their
activities on behalf of the Company.
Each non-employee member of the Board of Directors of the Company is
automatically granted an option to purchase 2,000 shares of Common Stock when
that person becomes a director. Each non-employee director is also automatically
granted an option to purchase 2,000 additional shares of Common Stock in each
subsequent calendar year that the director continues to serve in that capacity.
The exercise price for all automatic grants to non-employee directors will be
the closing sales price of the Common Stock on the business day immediately
preceding the date of grant.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Mr. Bowen holds a 99 percent general partnership interest in the Regency
Park Apartments Limited Partnership ("Regency Partnership"), an Oregon limited
partnership from which the Company leases its Regency Park community located in
Portland, Oregon. Mr. Bowen also holds a 99 percent ownership interest in
Sterling Park, L.L.C., a Washington limited liability company from which the
Company leases its Sterling Park community located in Redmond, Washington. Mr.
Bowen's minor children hold the remaining one percent interest in the Regency
Partnership and Sterling Park, L.L.C. As a result, Mr. Bowen may be deemed to
receive the portion of the lease payments remaining after service of the debt to
which the properties are subject. For 1998, these lease payments were $1,312,400
for Regency Park and $1,486,250 for Sterling Park. For 1997, these lease
payments were $1,290,000 for Regency Park and $1,486,248 for Sterling Park.
6
<PAGE>
During the first four months of 1998 the Company managed Park Place, an
assisted living facility owned by Northwest Retirement Housing Income Fund III,
an Oregon limited partnership ("Northwest III"), at which time the Company
completed a lease-acquisition of the community. Mr. Bowen and Bowen Financial
Services Corp. ("Bowen Financial"), an Oregon corporation wholly owned by Mr.
Bowen, were the general partners of and together owned a 1.85 percent interest
in Northwest III. The Company received a management fee from Northwest III equal
to five percent of its gross revenues related to Park Place, which amount was
$53,255 for the first four months of 1998. The management fee for 1997 was
$151,793.
Bowen Development Company, which is wholly owned by Mr. Bowen, completed
construction of nine of the Company's new communities in 1998. Additionally,
Bowen Development Company has contracts to complete two more communities during
1999 and 2000. Pursuant to the construction contracts for eight of the
communities completed during 1998, Bowen Development Company was entitled to
"contractor's profit and overhead" on each of these projects on a
percentage-of-completion basis, as well as the reimbursement of expenses
directly incurred by Bowen Development Company in connection with the
construction of these communities. Total "contractor's profit and overhead" to
be paid to Bowen Development Company on these contracts is five percent of the
direct construction costs for one project and three percent of the direct
construction costs for the next seven projects. Bowen Development Company earned
approximately $1,430,000 for contractor's profit and overhead in 1998 on these
eight projects. Bowen Development Company earned approximately $1,058,000 for
contractor's profit and overhead in 1997 related to 13 projects. Bowen
Development Company also contracted to build one of the Company's 1998
communities and the 1999 and 2000 communities for a fixed price. The Company's
Conflicts Committee or independent directors approved these three contracts
after solicitation and review of competitive bids from unaffiliated general
contractors.
The Company believes that each of the foregoing transactions was on terms
no less favorable to the Company than could have been obtained from unaffiliated
parties in arm's-length transactions; however, there can be no assurance that
such is the case.
The Company and the Bowen Companies are all controlled by Mr. Bowen.
Certain executive officers of the Company, including Messrs. Bowen and Gish, and
David R. Gibson, the Company's Vice President for Corporate Affairs, General
Counsel and Secretary, fulfill similar executive functions for other Bowen
Companies and spend significant amounts of time on the business of other Bowen
Companies. The Company provides management and administrative services to, and
from time to time may obtain services or the use of certain equipment from,
certain of the Bowen Companies pursuant to an Administrative Services Agreement.
Under that agreement, the Bowen Companies and the Company reimburse each other
for the actual cost of services received under the Administrative Services
Agreement. The Company believes that the sharing of executive management and
other resources (such as data processing, accounting, legal, financial, tax,
treasury, risk management and human resources) provides benefits to the Company
by giving it access to a level of experience and expertise that can only be
supported by a larger organization. The Administrative Services Agreement is
cancelable by any party, including
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<PAGE>
the Company, on 60 days' notice. Pursuant to the terms of the Administrative
Services Agreement, reimbursement of costs will be reviewed at least annually by
the Audit Committee of the Board of Directors.
The Administrative Services Agreement requires the Bowen Companies to offer
first to the Company any opportunities received by or originated with the Bowen
Companies relating to the assisted living business. The Administrative Services
Agreement also requires all transactions between the Company and the Bowen
Companies to be on an arm's length basis containing terms no less favorable to
the Company than could have been obtained from an unrelated third party and
requires any such transaction to be approved by a majority of the Company's
directors unaffiliated with the Bowen Companies. In 1998, Regent charged the
Bowen Companies $145,000 under the Administrative Services Agreement. In 1997,
Regent charged the Bowen Companies $351,000 under the Administrative Services
Agreement.
As of April 9, 1999, the Company has entered into construction loan
agreements in an aggregate amount of $35,922,500 for the construction of its
Kenmore, Bakersfield, Vacaville, Scottsdale, Kent, and Modesto communities.
Repayment of each of these loans and performance of the covenants set forth in
each loan is personally guaranteed by Mr. Bowen. The Conflicts Committee or the
independent directors of the Company has approved the payment of fees to Mr.
Bowen in the aggregate amount of $75,000 in exchange for his personal guaranty
of the payment and performance relative to these loans.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth, for the fiscal
years ended December 31, 1998, 1997, and 1996 compensation information with
respect to the Company's chief executive officer and each of its executive
officers whose compensation from the Company exceeded $100,000 during the
relevant fiscal year.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Other Annual
Name and Principal Position Year Salary Bonus Compensation(1)
- --------------------------- ---- -- ------ -------- ---------------
<S> <C> <C> <C> <C>
Walter C. Bowen 1998 $ 250,000 $ -0- $ 2,384
Chairman of the Board 1997(2) $ 200,000 $ 25,000 $ 3,000
Chief Executive Officer 1996(2) $ 200,000 $ -0- $ 3,000
and President
James W. Ekberg 1998(3) $ 150,000 $ -0- $ 2,384
Senior Vice President 1997(2)(3) $ 130,000 $ -0- $ 3,300
of Finance and 1996(2)(3) $ 100,000 $ 10,000 $ 3,300
Development
Eric W. Jacobsen(4) 1998 $ 135,000 $ -0- $ 2,384
Chief Operating Officer 1997 $ 115,000 $ -0- $ 3,750
1996 $ 100,000 $ 10,000 $ 3,000
(1) Represents the amount of a contribution by the Company to the officer's
401(k) plan account.
(2) Certain executive officers of the Company fulfill similar executive
functions for certain of the Bowen Companies. A portion of the salary
expense for these officers is reimbursed to the Company pursuant to the
Administrative Services Agreement. The disclosed salary amount represents
the net compensation paid by the Company to the officer for the indicated
period after reimbursement by the Bowen Companies for time spent by the
officer on Bowen Companies business.
(3) In 1998 Mr. Ekberg served as Executive Vice President of the Company and in
1997 and 1996 served as Executive Vice President of Acquisitions and
Development.
(4) Effective April 12, 1999, Louis Swart became the Company's Chief Operating
Officer and Eric Jacobsen resigned as an officer of the Company effective
that date. The Company will continue to employ Mr. Jacobsen through June
30, 1999.
</TABLE>
9
<PAGE>
Stock Option Grants in Fiscal 1998. There were no grants of stock options
made by the Company during fiscal 1998 to the officers of the Company named in
the Summary Compensation Table.
Option Exercises in 1998 and Fiscal Year-End Option Values. The following
table sets forth information (on an aggregated basis) concerning the fiscal
year-end value of unexercised options held by each of the officers of the
Company named in the Summary Compensation Table. None of the officers named
below exercised any stock options during fiscal 1998.
<TABLE>
<CAPTION>
Fiscal Year-End Option Values
Value of Unexercised
Number of Unexercised In-the-Money
Acquired Options at Year-End Options at Year-End(1)
on Value ---------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Walter C. Bowen -- -- -- -- -- --
James W. Ekberg -- -- 65,000(2) 60,000 $ 91,250 $ 61,875
Eric W. Jacobsen -- -- 55,000(3) 45,000 $ 100,000 $ 75,000
- --------------
(1) Options are "in-the money" if the fair market value of the underlying
securities on that date exceeds the exercise price of the option. The
amount set forth represents the difference between the fair market value of
the securities underlying the options on December 31, 1998, based on the
last sale price of $5.00 per share of Common Stock on the date (as reported
on the Nasdaq National Market) and the exercise price of the options,
multiplied by the applicable number of options.
(2) Does not include an option to purchase 50,000 shares of Common Stock, which
is immediately exercisable at an exercise price of $6.00 a share, granted
to Mr. Ekberg by Mr. Bowen in 1995.
(3) Does not include an option to purchase 85,000 shares of Common Stock, which
is immediately exercisable at an exercise price of $6.00 a share, granted
to Mr. Jacobsen by Mr. Bowen in 1995.
</TABLE>
Employment Agreements. Each officer of the Company has entered into an
employment agreement with the Company. The employment agreements for Messrs.
Bowen, Ekberg and Steven L. Gish, the Company's Chief Financial Officer and
Treasurer, expire in December 2000. Mr. Jacobsen's employment agreement expires
June 30, 1999. Mr. Gibson's employment agreement expires in March 2001. Louis
Swart joined the Company on April 12, 1999, as the new Chief Operating Officer
and has an employment agreement through March 2004. The agreements generally
entitle the officer to benefits customarily provided by the Company and provide
for a base salary and eligibility for a bonus. The Company may terminate any
officer without cause by making to such officer a
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cash payment equal to one year's base salary at the rate in effect at the time
of termination. Any officer may terminate his employment upon 60 days' prior
written notice. In addition, each officer has entered into a restrictive
covenant agreement containing noncompetition and nondisclosure provisions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 1, 1999, with
respect to the beneficial ownership of the Company's Common Stock by each
director or nominee for director, by each executive officer of the Company named
in the Summary Compensation Table, by all directors and executive officers as a
group, and by each person who is known to the Company to be the beneficial owner
of more than five percent of the Company's outstanding Common Stock. Unless
otherwise indicated in the Table, each person has sole voting power and sole
investment power with respect to all outstanding shares of Common Stock shown as
beneficially owned by them.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner(1) Ownership Class(2)
- ------------------- ----------------- ----------
<S> <C> <C>
Walter C. Bowen.......................... 3,179,000(3) 68.6%
Eric W. Jacobsen......................... 140,000(4) 2.9%
James W. Ekberg.......................... 121,000(4) 2.5%
Steven L. Gish........................... 56,000(4) 1.2%
Stephen A. Gregg......................... 34,200(6) *
Marvin S. Hausman, MD.................... 34,000(6)(7) *
Gary R. Maffei........................... 19,000(5) *
Dana J. O'Brien.......................... 6,000(6)(8) *
Wayne C. Rembold ........................ 2,000(9) *
Martha L. Robinson....................... 6,000(6)(8) *
Astoria Capital Partners, L.P.
6600 SW 92nd Avenue.
Portland, Oregon 97223.................. 389,000(10) 8.4%
Prudential Private Equity
Investors III, L. P.
717 Fifth Avenue, Suite 1100
New York, New York 10022................ 1,400,493(11) 23.2%
LTC Healthcare, Inc.
300 Esplanade Drive, Suite 1860
Oxnard, California 93030................ 1,133,333(12) 19.7%
All directors and executive officers
as a group (11 persons)............... 3,437,200(3) 71.3%
11
<PAGE>
* Less than one percent.
(1) Unless otherwise indicated, the address of each person named is c/o Regent
Assisted Living, Inc., 121 S. W. Morrison Street, Suite 1000, Portland,
Oregon 97204.
(2) Assumes the exercise of solely that individual's options, or conversion of
solely that party's underlying instruments, and issuance by the Company of
the related number of shares of Common Stock.
(3) Includes 170,000 shares held of record by Mr. Bowen that may be purchased
within sixty days by certain officers and one other individual pursuant to
options granted by Mr. Bowen. Mr. Bowen has granted options to purchase a
portion of his shares to the following officers: Messrs. Jacobsen (85,000
shares), Ekberg (50,000 shares), Gish (25,000 shares), and Gregory
Roderick, Vice President of Operations (5,000 shares).
(4) Includes shares that may be acquired within 60 days pursuant to options
granted by Mr. Bowen to purchase a portion of his shares and those shares
that may be purchased pursuant to options granted under the Company's 1995
Stock Incentive Plan.
(5) Includes 8,000 shares that may be acquired within 60 days pursuant to
options granted under the Company's 1995 Stock Incentive Plan.
(6) Includes 6,000 shares that may be acquired within 60 days pursuant to
options granted under the Company's 1995 Stock Incentive Plan.
(7) Includes 25,000 shares that may be acquired within 60 days pursuant to
options granted under the Company's 1995 Stock Incentive Plan.
(8) Does not include shares of Series A or Series B Preferred Stock owned by
Prudential Private Equity Investors III, L.P. ("PPEI"), an investment fund
managed by Cornerstone Equity Investors, L.L.C., the employer of Mr.
O'Brien and Ms. Robinson.
(9) Includes 2,000 shares that may be acquired within 60 days pursuant to
options granted under the Company's 1995 Stock Incentive Plan.
(10) Represents figures based upon SEC Schedule 13G filed by Astoria Capital
Partners, L.P. with the Securities and Exchange Commission in which Astoria
reported ownership of the Company's Common Stock as of February 9, 1999.
(11) Represents the number of shares that may be acquired within 60 days
pursuant to the holder's right to convert its Series A Preferred Stock into
shares of Common Stock. PPEI also owns 382,882 shares of Series B Preferred
stock, each share of which can
12
<PAGE>
be converted into one share of Series A Preferred Stock or into a total of
417,690 shares of Common Stock upon the occurrence of specified conversion
events.
(12) This number comprises the 1,133,333 shares that may be acquired by LTC
Healthcare, Inc. within sixty (60) days pursuant to its right to convert
its currently outstanding subordinated convertible notes into shares of the
Company's Common Stock at a rate of $7.50 per share.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and persons who own more than ten percent of the
outstanding Common Stock of the Company to file reports of ownership and changes
in ownership of the Common Stock with the Securities and Exchange Commission
(the "Commission"). Executive officers, directors and greater than ten percent
shareholders are also required by Commission regulations to furnish the Company
with copies of all forms they file pursuant to Section 16(a). Based solely on
review of the copies of such reports furnished to the Company and written
representations from reporting persons, to the Company's knowledge all of the
Section 16(a) filing requirements applicable to such persons during fiscal year
1998 were complied with on a timely basis.
DISCRETIONARY AUTHORITY
Although the Notice of Annual Meeting of Shareholders provides for
transaction of any other business that properly comes before the meeting, the
Board of Directors has no knowledge of any matters to be presented at the
meeting other than the matters described in this proxy statement. The enclosed
proxy, however, gives discretionary authority to the proxy holders to vote in
accordance with their judgement if any other matters are presented.
According to the rules of the Securities and Exchange Commission, for the
1999 Annual Meeting, if notice of a shareholder proposal to be raised at the
Annual Meeting is received at the principal executive offices of the Company
after March 16, 1999, proxy voting on that proposal when and if raised at the
Annual Meeting will be subject to the discretionary voting authority of the
designated proxy holders. For the 2000 annual meeting of shareholders, if notice
of a shareholder proposal to be raised at the meeting is received at the
principal executive offices of the Company after March 13, 2000, proxy voting on
that proposal when and if raised at that annual meeting will be subject to the
discretionary voting authority of the designated proxy holders.
13
<PAGE>
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP audited the Company's financial statements for
the year ended December 31, 1998. Representatives of PricewaterhouseCoopers LLP
will be present at the Annual Meeting of Shareholders and will be available to
respond to appropriate questions. They do not expect to make any statement but
will have the opportunity to make a statement if they wish.
SHAREHOLDER PROPOSALS
Any shareholder proposals to be considered for inclusion in proxy material
for the Company's next annual meeting in May 2000 must be received at the
principal executive office of the Company no later than December 31, 1999.
A COPY OF REGENT'S 1998 ANNUAL REPORT ON FORM 10-KSB WILL BE AVAILABLE TO
SHAREHOLDERS WITHOUT CHARGE UPON REQUEST TO: CHIEF FINANCIAL OFFICER, REGENT
ASSISTED LIVING, INC., 121 S. W. MORRISON STREET, SUITE 1000, PORTLAND, OREGON
97204.
By order of the Board of Directors,
DAVID R. GIBSON
David R. Gibson
Secretary
April 27, 1999
14
<PAGE>
REGENT ASSISTED LIVING, INC.
Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting on May 25, 1999
The undersigned hereby names Walter C. Bowen and Steven L. Gish, or
either of them acting in the absence of the other, with full power of
P substitution, my true and lawful attorneys and proxies for me in my place
R and stead to attend the Annual Meeting of Shareholders of Regent Assisted
O Living, Inc. to be held on May 25, 1999, at 11:00 a.m., and any
X adjournments thereof, and to vote all of the shares held in the name of the
Y undersigned on April 2, 1999, with all the powers that the undersigned
would possess if personally present.
-----------
SEE REVERSE
SIDE
-----------
FOLD AND DETACH HERE
<PAGE>
[ X ] Please mark your
votes as in this
example
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED BELOW, BUT IF NO
SPECIFICATION IS MADE, WILL BE VOTED FOR EACH OF THE NOMINEES NAMED IN
PROPOSAL 1.
- --------------------------------------------------------------------------------
The Board of Directors unanimously recommends a vote FOR each
of the nominees listed below.
- --------------------------------------------------------------------------------
FOR [ ] WITHHELD [ ]
1. Election of Directors Nominees:
(Check only one box) Class III -- Term Expiring in 2002
----------------------------------
For all nominees (except Walter C. Bowen
as shareholder may Marvin S. Hausman
indicate below) Gary R. Maffei
-----------------------
2. In their discretion, the Proxies are authorized to consider and act upon
any other matter which may properly come before the meeting or any
adjournment thereof.
- --------------------------------------------------------------------------------
SIGNATURE(S) _________________________________________ DATE ____________________
NOTE: Please sign exactly as name appears above. Joint owners should each
sign. Fiduciaries should add their full title to their signature.
Corporations should sign in full corporate name by an authorized officer.
Partnerships should sign in partnership name by an authorized person.
FOLD AND DETACH HERE
