<PAGE> 1
As filed with the Securities and Exchange Commission on February 14, 1997
Registration No. 333-
------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Sunrise Assisted Living, Inc.
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
--------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
54-1746596
-----------------------------------------
(I.R.S. employer identification no.)
9401 Lee Highway, Suite 300, Fairfax, VA 22031
----------------------------------------------
(Address of principal executive offices) (Zip code)
1996 Non-Incentive Stock Option Plan
------------------------------------
(Full title of the plan)
Thomas B. Newell, Executive Vice President
and General Counsel
Sunrise Assisted Living, Inc.
9401 Lee Highway, Suite 300, Fairfax, VA 22031
----------------------------------------------
(Name and address of agent for service)
(703) 273-7500
-------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy to:
George P. Barsness, Esq.
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5600
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per share aggregate offering price registration fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 per share 1,100,000 $27.50 (1) $30,250,000 $9,166.67
==================================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(h) under the Securities Act of
1933, as amended, as of February 12, 1997 solely for the purpose of calculating
the registration fee.
Exhibit Index is on page 8
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I will be
sent or given to employees as specified by Rule 428(b)(1). In accordance with
the instructions to Part I of Form S-8, such documents will not be filed with
the Securities and Exchange Commission (the "Commission") either as part of
this registration statement or as prospectuses or prospectus supplements
pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Sunrise Assisted Living, Inc. (the "Registrant") hereby incorporates
by reference into this registration statement the following documents:
(a) The Registrant's prospectus filed with the Commission on October
25, 1996 pursuant to Rule 424(b), which prospectus contains
audited financial information for the year ended December 31,
1995;
(b) All reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 prior to the date hereof;
(c) The description of the Registrant's common stock, par value $.01
per share (the "Common Stock") contained in the Registrant's
Form 8-A filed with the Commission on May 30, 1996; and
(d) All documents filed by the Registrant subsequent to the date
hereof pursuant to Sections 13(a), 13(c), 14, and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities
remaining unsold.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable (the Common Stock is registered under Section 12 of
the Exchange Act).
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
- 2 -
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation Law (the
"Delaware Law"), a corporation may indemnify its directors, officers, employees
and agents and its former directors, officers, employees and agents and those
who serve, at the corporation's request, in such capacities with another
enterprise, against expenses (including attorneys' fees), as well as judgments,
fines and settlements in nonderivative lawsuits, actually and reasonably
incurred in connection with the defense of any action, suit or proceeding in
which they or any of them were or are made parties or are threatened to be made
parties by reason of their serving or having served in such capacity. The
Delaware Law provides, however, that such person must have acted in good faith
and in a manner he or she reasonably believed to be in (or not opposed to) the
best interests of the corporation and, in the case of a criminal action, such
person must have had no reasonable cause to believe his or her conduct was
unlawful. In addition, the Delaware Law does not permit indemnification in an
action or suit by or in the right of the corporation, where such person has
been adjudged liable to the corporation, unless, and only to the extent that, a
court determines that such person fairly and reasonably is entitled to
indemnity for expenses the court deems proper in light of liability
adjudication. Indemnity is mandatory to the extent a claim, issue or matter
has been successfully defended.
The Registrant's Amended and Restated By-laws (the "By-laws") provide
for mandatory indemnification of directors and officers generally to the same
extent authorized by the Delaware Law. Under the By-laws, the Registrant shall
advance expenses incurred by an officer or director in defending any such
action if the director or officer undertakes to repay such amount if it is
determined that he or she is not entitled to indemnification. The Registrant
has obtained directors' and officers' liability insurance.
The Registrant has entered into separate indemnification agreements
with its directors and officers. Each indemnification agreement provides for,
among other things: (i) indemnification against any and all expenses,
liabilities and losses (including attorneys' fees, judgments, fines, taxes,
penalties and amounts paid in settlement) of any claim against an indemnified
party unless it is determined, as provided in the indemnification agreement,
that indemnification is not permitted under applicable law and (ii) prompt
advancement of expenses to any indemnified party in connection with his or her
defense against any claim.
* * * * *
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of the
expenses incurred or paid by a director, officer or controlling person of the
Registrant of the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
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.
- 3 -
<PAGE> 4
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1 (Registration No. 333-13731) filed with the
Commission on October 8, 1996).
4.2 Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2 to the Registrant's
Registration Statement on Form S-1 (Registration No. 333-13731) filed with the Commission on
October 8, 1996).
4.3 Stockholder Rights Agreement (incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1 (Registration No. 333-13731) filed with the
Commission on October 23, 1996).
4.4 A copy of the specimen certificate for shares of Registrant Common Stock (incorporated by
reference to Exhibit 4.1 to Amendment No. 2 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-2582) filed with the Commission on May 28, 1996).
4.5 Sunrise Assisted Living, Inc. 1996 Non-Incentive Stock Option Plan.
5 Opinion of Hogan & Hartson L.L.P. regarding the legality of the shares being registered.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hoffman, Morrison & Fitzgerald P.C.
23.3 Consent of Hogan & Hartson L.L.P.
(See Exhibit 5)
</TABLE>
- 4 -
<PAGE> 5
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 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.
(c) The undertaking concerning indemnification is set forth under
the response to Item 6.
- 5 -
<PAGE> 6
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 Fairfax, Commonwealth of Virginia, on this 14th
day of February, 1997.
SUNRISE ASSISTED LIVING, INC.
By: /s/ PAUL J. KLAASSEN
------------------------------------------
Paul J. Klaassen
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ PAUL J. KLAASSEN
- -------------------------------
Paul J. Klaassen Chairman of the Board, 2/14/97
President and -------------------------
Chief Executive Officer
(Principal Executive Officer)
/s/ TERESA M. KLAASSEN
- -------------------------------
Teresa M. Klaassen Executive Vice President 2/14/97
and Director -------------------------
/s/ DAVID W. FAEDER
- -------------------------------
David W. Faeder Executive Vice President, 2/14/97
Chief Financial Officer, -------------------------
and Director (Principal
Financial Officer)
</TABLE>
- 6 -
<PAGE> 7
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ LARRY E. HULSE
- ----------------------------------
Larry E. Hulse Controller 2/14/97
(Principal Accounting Officer) -------------------------
/s/ RONALD V. APRAHAMIAN
- ----------------------------------
Ronald V. Aprahamian Director 2/14/97
-------------------------
/s/ THOMAS J. DONOHUE
- ----------------------------------
Thomas J. Donohue Director 2/12/97
-------------------------
/s/ RICHARD A. DOPPELT
- ----------------------------------
Richard A. Doppelt Director 2/10/97
-------------------------
/s/ SCOTT F. MEADOW
- ----------------------------------
Scott F. Meadow Director 2/14/97
-------------------------
/s/ DARCY J. MOORE
- ----------------------------------
Darcy J. Moore Director 2/14/97
-------------------------
/s/ TIMOTHY S. SMICK
- ----------------------------------
Timothy S. Smick Executive Vice President, 2/14/97
Chief Operating -------------------------
Officer and Director
</TABLE>
- 7 -
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------ ----------- ----
<S> <C>
4.1 Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1 (Registration No. 333-13731)
filed with the Commission on October 8, 1996).
4.2 Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2 to the Registrant's
Registration Statement on Form S-1 (Registration No. 333-13731) filed with the Commission
on October 8, 1996).
4.3 Stockholder Rights Agreement (incorporated by reference to Exhibit 4.2 to Amendment No. 1
to the Registrant's Registration Statement on Form S-1 (Registration No. 333-13731)
filed with the Commission on October 23, 1996).
4.4 A copy of the specimen certificate for shares of Registrant Common Stock (incorporated
by reference to Exhibit 4.1 to Amendment No. 2 to the Registrant's Registration Statement
on Form S-1 (Registration No. 333-2582) filed with the Commission on May 28, 1996).
4.5 Sunrise Assisted Living, Inc. 1996 Non-Incentive Stock Option Plan. 9
5 Opinion of Hogan & Hartson L.L.P. regarding the legality of the shares being registered. 21
23.1 Consent of Ernst & Young LLP 24
23.2 Consent of Hoffman, Morrison & Fitzgerald P.C. 26
23.3 Consent of Hogan & Hartson L.L.P.
(See Exhibit 5)
</TABLE>
- 8 -
<PAGE> 1
SUNRISE ASSISTED LIVING, INC.
1996 NON-INCENTIVE STOCK OPTION PLAN
SUNRISE ASSISTED LIVING, INC., a Delaware corporation (the
"Corporation"), sets forth herein the terms of this 1996 Non-Incentive Stock
Option Plan, (the "Plan") as follows:
1. PURPOSE
The Plan is intended to advance the interests of the Corporation
and any subsidiary thereof within the meaning of Rule 405 of Regulation C under
the Securities Act of 1933, as amended (with the term "person" as used in such
Rule 405 being defined as in Section 2(2) of such Act) (a "Subsidiary"), by
providing eligible individuals (as designated pursuant to Section 4 below) with
incentives to improve business results, by providing an opportunity to acquire
or increase a proprietary interest in the Corporation, which thereby will
create a stronger incentive to expend maximum effort for the growth and success
of the Corporation and its Subsidiaries, and will encourage such eligible
individuals to continue to serve the Corporation and its Subsidiaries, whether
as an employee, as a director, as a consultant or advisor or in some other
capacity. To this end, the Plan provides for the grant of stock options, as
set out herein.
This Plan provides for the grant of stock options (each of which
is an "Option") in accordance with the terms of the Plan. An Option will be a
non-incentive stock option (an "NSO"). Each Option shall be evidenced by a
written agreement between the Corporation and the recipient individual that
sets out the terms and conditions of the grant as further described in Section
8.
2. ADMINISTRATION
(a) BOARD
The Plan shall be administered by the Board of Directors of the
Corporation (the "Board"), which shall have the full power and authority to
take all actions and to make all determinations required or provided for under
the Plan or any Option granted or Option Agreement (as defined in Section 8
below) entered into hereunder and all such other actions and determinations not
inconsistent with the specific terms and provisions of the Plan deemed by the
Board to be necessary or appropriate to the administration of the Plan or any
Option granted or Option Agreement entered into hereunder. The interpretation
and construction by the Board of any provision of the Plan or of any Option
granted or Option Agreement entered into hereunder shall be final, binding and
conclusive.
<PAGE> 2
(b) ACTION BY COMMITTEE
The Board from time to time may appoint a Stock Option Committee
consisting of two or more members of the Board of Directors who, in the sole
discretion of the Board, may be the same Directors who serve on the
Compensation Committee, or may appoint the Compensation Committee to serve as
the Stock Option Committee (the "Committee"). The Board, in its sole
discretion, may provide that the role of the Committee shall be limited to
making recommendations to the Board concerning any determinations to be made
and actions to be taken by the Board pursuant to or with respect to the Plan,
or the Board may delegate to the Committee such powers and authorities related
to the administration of the Plan, as set forth in Section 2(a) above, as the
Board shall determine, consistent with the Restated Certificate of
Incorporation and By-Laws of the Corporation and applicable law. In the event
that the Plan or any Option granted or Option Agreement entered into hereunder
provides for any action to be taken by or determination to be made by the
Board, such action may be taken by or such determination may be made by the
Committee if the power and authority to do so has been delegated to the
Committee by the Board as provided for in this Section. Unless otherwise
expressly determined by the Board, any such action or determination by the
Committee shall be final and conclusive.
(c) NO LIABILITY
No member of the Board or of the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted or Option Agreement entered into hereunder.
3. STOCK
The stock that may be issued pursuant to Options under the Plan
shall be shares of common stock, par value $.01 per share, of the Corporation
(the "Stock"), which shares may be treasury shares or authorized but unissued
shares. The number of shares of Stock that may be issued pursuant to Options
under the Plan shall not exceed, in the aggregate, one million one hundred
thousand (1,100,000) shares. If any Option expires, terminates, or is
terminated or canceled for any reason prior to exercise, the shares of Stock
that were subject to the unexercised, forfeited, terminated or canceled
portion of such Option shall be available immediately for future grants of
Options under the Plan.
4. ELIGIBILITY
(a) DESIGNATED RECIPIENTS
Options may be granted under the Plan to (i) any employee of the
Corporation or any Subsidiary (including any such individual who is an officer
or director of the Corporation or any Subsidiary) as the Board shall determine
and designate from time to time or (ii) any consultant or advisor providing
bona fide services to the Corporation or any Subsidiary (provided that such
services must not be in connection with the offer or sale of
- 2 -
<PAGE> 3
securities in a capital-raising transaction) whose participation in the Plan is
determined by the Board to be in the best interests of the Corporation and is
so designated by the Board.
(b) SUCCESSIVE GRANTS
An individual may hold more than one Option, subject to such
restrictions as are provided herein.
5. EFFECTIVE DATE AND TERM OF THE PLAN
(a) EFFECTIVE DATE
The Plan shall be effective as of the date of adoption by the
Board.
(b) TERM
The Plan shall have no termination date.
6. GRANT OF OPTIONS
(a) GENERAL
Subject to the terms and conditions of the Plan, the Board may,
at any time and from time to time, grant to such eligible individuals as the
Board may determine (each of the whom is an "Optionee"), Options to purchase
such number of shares of Stock on such terms and conditions as the Board may
determine. Such authority specifically includes the authority, in order to
effectuate the purposes of the Plan but without amending the Plan, to modify
grants to eligible individuals who are foreign nationals or are individuals who
are employed outside the United States to recognize differences in local law,
tax policy, or custom.
(b) LIMITATION ON GRANTS OF OPTIONS
The maximum number of shares subject to Options that can be
granted under the Plan to any executive officer of the Company or a Subsidiary,
or to any other person eligible for a grant of an Option under Section 4, is
250,000 shares during the first ten years after the effective date of the Plan
and 50,000 shares per year thereafter (in each case, subject to adjustment as
provided in Section 16(a) hereof and reduced by the number of shares subject to
options that have been granted to such executive officer under the Sunrise
Assisted Living, Inc. 1996 Stock Option Plan during the relevant period.)
7. PARACHUTE LIMITATIONS
Notwithstanding any other provision of this Plan or of any
other agreement, contract, or understanding heretofore or hereafter entered
into by the Optionee with the Corporation, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes
application of this paragraph (an "Other Agreement"), and notwithstanding any
formal or informal plan or other arrangement for the direct or indirect
provision of compensation to the Optionee (including groups or classes of
participants or beneficiaries of which the Optionee is a member), whether or
not such compensation is deferred, is in cash, or is in the form of a benefit
to or for the Optionee (a "Benefit Arrangement"), if the Optionee is a
"disqualified individual," as defined in Section 280G(c) of the Internal
Revenue Code of 1986, as amended (the "Code"), any Option held by that Optionee
and any right to receive any payment or other benefit under this Plan shall not
become exercisable or vested (i) to the extent that such right to exercise,
vesting, payment, or benefit, taking into account all other rights, payments,
or benefits to or for the Optionee under this Plan, all Other Agreements, and
all Benefit Arrangements, would cause any payment or benefit to the Optionee
under this Plan to be considered a "parachute payment"
- 3 -
<PAGE> 4
within the meaning of Section 280G(b)(2) of the Code as then in effect (a
"Parachute Payment") and (ii) if, as a result of receiving a Parachute Payment,
the aggregate after-tax amounts received by the Optionee from the Corporation
under this Plan, all Other Agreements, and all Benefit Arrangements would be
less than the maximum after-tax amount that could be received by him without
causing any such payment or benefit to be considered a Parachute Payment. In
the event that the receipt of any such right to exercise, vesting, payment, or
benefit under this Plan, in conjunction with all other rights, payments, or
benefits to or for the Optionee under any Other Agreement or any Benefit
Arrangement would cause the Optionee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing the
after-tax amount received by the Optionee as described in clause (ii) of the
preceding sentence, then the Optionee shall have the right, in the Optionee's
sole discretion, to designate those rights, payments, or benefits under this
Plan, any Other Agreements, and any Benefit Arrangements that should be reduced
or eliminated so as to avoid having the payment or benefit to the Optionee
under this Plan be deemed to be a Parachute Payment.
8. OPTION AGREEMENTS
All Options granted pursuant to the Plan shall be evidenced by
agreements ("Option Agreements"), to be executed by the Corporation and by the
Optionee, in such form or forms as the Board shall from time to time determine.
Option Agreements covering Options granted from time to time or at the same
time need not contain similar provisions; provided, however, that all such
Option Agreements shall comply with all terms of the Plan.
9. OPTION PRICE
The purchase price of each share of the Stock subject to an
Option (the "Option Price") shall be fixed by the Board and stated in each
Option Agreement but in no event less than par value.
10. TERM AND EXERCISE OF OPTIONS
(a) OPTION PERIOD AND LIMITATIONS ON EXERCISE
Each Option granted under the Plan shall be exercisable, in
whole or in part, at any time and from time to time, over a period commencing
on or after the date of grant and, to the extent that the Board determines and
sets forth a termination date for such Option in the Option Agreement
(including any amendment thereto), ending upon the stated expiration or
termination date. The Board in its sole discretion may specify events or
circumstances, including the giving of notice, which will cause an Option to
terminate as set forth in the Option Agreement or in this Plan. No Option
granted to a person who is required to file reports under Section 16(a) of the
Securities Exchange Act of 1934 (as now in effect or as hereafter amended)
shall be exercisable during the first six months after the date of grant.
Without limiting the foregoing but subject to the terms and conditions of the
Plan, the Board may in its sole discretion provide that an Option may not be
exercised in whole or in part for any period or periods of time during which
such Option is outstanding and may condition
- 4 -
<PAGE> 5
exercisability (or vesting) of an Option upon the attainment of performance
objectives, upon continued service, upon certain events or transactions, or a
combination of one or more of such factors, or otherwise, as set forth in the
Option Agreement. Subject to the parachute payment restrictions under Section
7, however, the Board, in its sole discretion, may rescind, modify, or waive
any such limitation or condition on the exercise of an Option contained in any
Option Agreement, so as to accelerate the time at which the Option may be
exercised or extend the period during which the Option may be exercised.
(b) METHOD OF EXERCISE
An Option that is exercisable hereunder may be exercised by
delivery to the Corporation on any business day, at the Corporation's principal
office, addressed to the attention of the President, of written notice of
exercise, which notice shall specify the number of shares with respect to which
the Option is being exercised and shall be accompanied by payment in full of
the Option Price of the shares for which the Option is being exercised. The
minimum number of shares of Stock with respect to which an Option may be
exercised, in whole or in part, at any time shall be the lesser of (i) 100
shares or such lesser number set forth in the applicable Option Agreement and
(ii) the maximum number of shares available for purchase under the Option at
the time of exercise. Payment of the Option Price for the shares of Stock
purchased pursuant to the exercise of an Option shall be made (i) in cash or in
cash equivalents; (ii) to the extent permitted by applicable law and under the
terms of the Option Agreement with respect to such Option, through the tender
to the Corporation of shares of Stock, which shares shall be valued, for
purposes of determining the extent to which the Option Price has been paid
thereby, at their fair market value on the date of exercise; (iii) to the
extent permitted by applicable law and under the terms of the Option Agreement
with respect to such Option, by the delivery of a promissory note of the person
exercising the Option to the Corporation on such terms as shall be set out in
such Option Agreement; (iv) to the extent permitted by applicable law and under
the terms of the Option Agreement with respect to such Option, by causing the
Corporation to withhold shares of Stock otherwise issuable pursuant to the
exercise of an Option equal in value to the Option Price or portion thereof to
be satisfied pursuant to this clause (iv); or (v) by a combination of the
methods described in (i), (ii), (iii), and (iv). An attempt to exercise any
Option granted hereunder other than as set forth above shall be invalid and of
no force and effect. Payment in full of the Option Price need not accompany
the written notice of exercise provided the notice directs that the Stock
certificate or certificates for the shares for which the Option is exercised be
delivered to a licensed broker acceptable to the Corporation as the agent for
the individual exercising the Option and, at the time such Stock certificate or
certificates are delivered, the broker tenders to the Corporation cash (or cash
equivalents acceptable to the Corporation) equal to the Option Price. Promptly
after the exercise of an Option and the payment in full of the Option Price of
the shares of Stock covered thereby, the individual exercising the Option shall
be entitled to the issuance of a Stock certificate or Stock certificates
evidencing his ownership of such shares. Unless otherwise stated in the
applicable Option Agreement, an individual holding or exercising an Option
shall have none of the rights of a stockholder (for example, the right to
receive cash or stock dividend payments attributable to the subject shares or
to direct the voting of the subject shares) until the shares of Stock covered
thereby are fully paid and issued to him.
- 5 -
<PAGE> 6
Except as provided in Section 16 below, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date of
such issuance.
(c) DATE OF GRANT
The date of grant of an Option under this Plan shall be the date
as of which the Board approves the grant.
11. TRANSFERABILITY OF OPTIONS
During the lifetime of an Optionee, only such Optionee (or, in
the event of legal incapacity or incompetency, the guardian or legal
representative of the Optionee) may exercise the Option, except as otherwise
specifically permitted by this Section 11. No Option shall be assignable or
transferable other than by will or in accordance with the laws of descent and
distribution; provided, however, subject to the terms of the applicable Option
Agreement, and to the extent the transfer is in compliance with any applicable
restrictions on transfers, an Optionee may transfer an Option to a family
member of the Optionee (defined as an individual who is related to the Optionee
by blood or adoption) or to a trust established and maintained for the benefit
of the Optionee or a family member of the Optionee (as determined under
applicable state law and the Code).
12. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP OF OPTIONEE
In the Board's sole discretion, the Board may include language
in an Option Agreement providing for the termination of any unexercised Option
in whole or in part upon or at any time after the termination of employment or
other relationship of the Optionee with the Corporation or a Subsidiary
(whether as an employee, a director, a consultant or advisor providing bona
fide services to the Corporation or a Subsidiary, or otherwise). Whether a
leave of absence or leave on military or government service shall constitute a
termination of employment or other relationship of the Optionee with the
Corporation or a Subsidiary for purposes of the Plan shall be determined by the
Board, which determination shall be final and conclusive.
13. USE OF PROCEEDS
The proceeds received by the Corporation from the sale of Stock
pursuant to the exercise of Options granted under the Plan shall constitute
general funds of the Corporation.
14. REQUIREMENTS OF LAW
The Corporation shall not be required to sell or issue any
shares of Stock under any Option if the sale or issuance of such shares would
constitute a violation by the Optionee, the individual exercising the Option,
or the Corporation of any provisions of any law or regulation of any
governmental authority, including without limitation any federal or
- 6 -
<PAGE> 7
state securities laws or regulations. If at any time the Corporation shall
determine, in its discretion, that the listing, registration, or qualification
of any shares subject to the Option upon any securities exchange or under any
state or federal law, or the consent or approval of any government regulatory
or self-regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares, the Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any
conditions not acceptable to the Corporation, and any delay caused thereby
shall in no way affect the date of termination of the Option. Specifically in
connection with the Securities Act of 1933 (as now in effect or as hereafter
amended), upon the exercise of any Option, unless a registration statement
under such Act is in effect with respect to the shares of Stock covered
thereby, the Corporation shall not be required to sell or issue such shares
unless the Board has received evidence satisfactory to it that the holder of
such Option may acquire such shares pursuant to an exemption from registration
under such Act. Any determination in this connection by the Board shall be
final, binding, and conclusive. The Corporation may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act of 1933 (as now in effect or as hereafter amended). The Corporation shall
not be obligated to take any affirmative action in order to cause the
exercisability or vesting of an Option or to cause the exercise of an Option or
the issuance of shares pursuant thereto to comply with any law or regulation of
any governmental authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable unless and until the shares
of Stock covered by such Option are registered or are subject to an available
exemption from registration, the exercise of such Option (under circumstances
in which the laws of such jurisdiction apply) shall be deemed conditioned upon
the effectiveness of such registration or the availability of such an
exemption.
15. AMENDMENT AND TERMINATION OF THE PLAN
The Board may, at any time and from time to time, amend,
suspend, or terminate the Plan as to any shares of Stock as to which Options
have not been granted. The Corporation may also retain the right in an Option
Agreement to cause a forfeiture of the shares of Stock or gain realized by a
holder of an Option (a) if the holder violates any agreement covering
non-competition with the Corporation or any Subsidiary or nondisclosure of
confidential information of the Corporation or any Subsidiary, (b) if the
holder's employment is terminated for cause or (c) if the Board determines that
the holder committed acts or omissions which would have been the basis for a
termination of holder's employment for cause had such acts or omissions been
discovered prior to termination of holder's employment. Furthermore, the
Corporation may, in the Option Agreement, retain the right to annul the grant
of an Option, if the holder of such grant was an employee of the Corporation or
a Subsidiary and the holder's employment is terminated for cause, as defined in
the applicable Option Agreement. Except as permitted under this Section 15 or
Section 16 hereof, no amendment, suspension, or termination of the Plan shall,
without the consent of the holder of the Option, alter or impair rights or
obligations under any Option theretofore granted under the Plan.
- 7 -
<PAGE> 8
16. EFFECT OF CHANGES IN CAPITALIZATION
(a) CHANGES IN STOCK
If the number of outstanding shares of Stock is increased or
decreased or the shares of Stock are changed into or exchanged for a
different number or kind of shares or other securities of the Corporation on
account of any recapitalization, reclassification, stock split-up, combination
of shares, exchange of shares, stock dividend or other distribution payable in
capital stock, or other increase or decrease in such shares effected without
receipt of consideration by the Corporation, occurring after the effective date
of the Plan, the number and kind of shares for the acquisition of which Options
may be granted under the Plan, and the limitations on the maximum number of
shares subject to Options that can be granted to any individual under the Plan
as set forth in Section 6(b) hereof, shall be adjusted proportionately and
accordingly by the Corporation. In addition, the number and kind of shares for
which Options are outstanding shall be adjusted proportionately and accordingly
so that the proportionate interest of the holder of the Option immediately
following such event shall, to the extent practicable, be the same as
immediately before such event. Any such adjustment in outstanding Options
shall not change the aggregate Option Price payable with respect to shares that
are subject to the unexercised portion of the Option outstanding but shall
include a corresponding proportionate adjustment in the Option Price per share.
(b) REORGANIZATION IN WHICH THE CORPORATION IS THE
SURVIVING CORPORATION
Subject to Subsection (c)(iv) hereof, if the Corporation shall
be the surviving corporation in any reorganization, merger, or consolidation of
the Corporation with one or more other corporations, any Option theretofore
granted pursuant to the Plan shall pertain to and apply to the securities to
which a holder of the number of shares of Stock subject to such Option would
have been entitled immediately following such reorganization, merger, or
consolidation, with a corresponding proportionate adjustment of the Option
Price per share so that the aggregate Option Price thereafter shall be the same
as the aggregate Option Price of the shares remaining subject to the Option
immediately prior to such reorganization, merger, or consolidation.
(c) DISSOLUTION, LIQUIDATION, SALE OF ASSETS,
REORGANIZATION IN WHICH THE CORPORATION IS NOT THE SURVIVING
CORPORATION, ETC.
The Plan and all Options outstanding hereunder shall terminate
(i) upon the dissolution or liquidation of the Corporation, or (ii) upon a
merger, consolidation, or reorganization of the Corporation with one or more
other corporations in which the Corporation is not the surviving corporation,
or (iii) upon a sale of substantially all of the assets of the Corporation to
another person or entity, or (iv) upon a merger, consolidation or
reorganization (or other transaction if so determined by the Board in its sole
discretion) in which the Corporation is the surviving corporation, that is
approved by the Board and that results in any person or entity (other than
persons who are holders of Stock of the Corporation at the time the Plan is
approved by the stockholders and other than an Affiliate) owning 80 percent or
more of the combined voting power of all classes of stock of the Corporation,
except to the extent provision is made in writing in connection with any such
- 8 -
<PAGE> 9
transaction covered by clauses (i) through (iv) for the continuation of the
Plan or the assumption of such Options theretofore granted, or for the
substitution for such Options of new options covering the stock of a successor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and exercise prices, in which event the Plan
and Options theretofore granted shall continue in the manner and under the
terms so provided. In the event of any such termination of the Plan, each
individual holding an Option shall have the right (subject to the general
limitations on exercise set forth in Section 10(a) above), during such period
occurring before such termination as the Board in its sole discretion shall
determine and designate, and in any event immediately before the occurrence of
such termination, to exercise such Option in whole or in part, to the extent
that such Option was otherwise exercisable at the time such termination occurs,
except that, by inclusion of appropriate language in an Option Agreement, the
Board may provide that the Option may be exercised before termination without
regard to any installment limitation or other condition on exercise imposed
pursuant to Section 10(a) above. The Corporation shall send written notice of
a transaction or event that will result in such a termination to all
individuals who hold Options not later than the time at which the Corporation
gives notice thereof to its stockholders.
(d) ADJUSTMENTS
Adjustments under this Section 16 related to stock or securities
of the Corporation shall be made by the Board, whose determination in that
respect shall be final, binding, and conclusive. No fractional shares of Stock
or units of other securities shall be issued pursuant to any such adjustment,
and any fractions resulting from any such adjustment shall be eliminated in
each case by rounding downward to the nearest whole share or unit.
(e) NO LIMITATIONS ON CORPORATION
The grant of an Option pursuant to the Plan shall not affect or
limit in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure or to merge, consolidate, dissolve, or liquidate, or to sell or
transfer all or any part of its business or assets.
17. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Option granted or Option
Agreement entered into pursuant to the Plan shall be construed to confer upon
any individual the right to remain in the employ or service of or to maintain a
relationship with the Corporation or any Subsidiary, or to interfere in any way
with any contractual or other right or authority of the Corporation or any
Subsidiary either to increase or decrease the compensation or other payments to
any individual at any time, or to terminate any employment or other
relationship between any individual and the Corporation or any Subsidiary. The
obligation of the Corporation to pay any benefits pursuant to this Plan shall
be interpreted as a contractual obligation to pay only those amounts described
herein, in the manner and under the conditions prescribed herein. The Plan
shall in no way be interpreted to require the
- 9 -
<PAGE> 10
Corporation to transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any participant or beneficiary
under the terms of the Plan.
18. NONEXCLUSIVITY OF THE PLAN
The adoption of the Plan shall not be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or specifically to a
particular individual or particular individuals) as the Board in its discretion
determines desirable, including, without limitation, the granting of stock
options otherwise than under the Plan.
19. CAPTIONS
The use of captions in this Plan or any Option Agreement is for
the convenience of reference only and shall not affect the meaning of any
provision of the Plan or such Option Agreement.
20. WITHHOLDING TAXES
The Corporation shall have the right to deduct from payments
of any kind otherwise due to an Optionee any Federal, state, or local taxes of
any kind required by law to be withheld with respect to any shares issued upon
the exercise of an Option under the Plan or in connection with the purchase of
an Option by the Corporation. At the time of exercise, the Optionee shall pay
to the Corporation any amount that the Corporation may reasonably determine to
be necessary to satisfy such withholding obligation. The Board in its sole
discretion may provide in the Option Agreement that, subject to the prior
approval of the Corporation, which may be withheld by the Corporation in its
sole discretion, the Optionee may elect to satisfy such obligations, in whole
or in part, (i) by causing the Corporation to withhold shares of Stock
otherwise issuable pursuant to the exercise of an Option or (ii) by delivering
to the Corporation shares of Stock already owned by the Optionee. The shares
so delivered or withheld shall have a fair market value equal to such
withholding obligations. The fair market value of the shares used to satisfy
such withholding obligation shall be determined by the Corporation as of the
date that the amount of tax to be withheld is to be determined. An Optionee
who has made an election pursuant to this Section 20 may only satisfy his or
her withholding obligation with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar requirements.
21. OTHER PROVISIONS
Each Option granted under the Plan may be subject to, and the
Option Agreement relating to such Option may contain, such other terms and
conditions not inconsistent with the Plan as may be determined by the Board, in
its sole discretion.
- 10 -
<PAGE> 11
22. NUMBER AND GENDER
With respect to words used in this Plan, the singular form shall
include the plural form, the masculine gender shall include the feminine
gender, etc., as the context requires.
23. SEVERABILITY
If any provision of the Plan or any Option Agreement shall be
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable
and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
24. GOVERNING LAW
The validity and construction of this Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of Delaware (excluding its choice of law rules).
* * *
- 11 -
<PAGE> 1
EXHIBIT 5
[Hogan & Hartson L.L.P. Letterhead]
February 14, 1997
Board of Directors
Sunrise Assisted Living, Inc.
9401 Lee Highway, Suite 300
Fairfax, Virginia 22031
Ladies and Gentlemen:
We are acting as counsel to Sunrise Assisted Living Inc., a
Delaware corporation (the "Company"), in connection with its registration
statement on Form S-8 (the "Registration Statement"), filed with the Securities
and Exchange Commission relating to 1,100,000 shares of the Company's common
stock, par value $.01 per share (the "Shares"), issuable in connection with the
Company's 1996 Non-Incentive Stock Option Plan (the "1996 Option Plan"). This
opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section
229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies
of the following documents:
1. An executed copy of the Registration Statement.
2. The Restated Certificate of Incorporation of the
Company, as certified by the General Counsel and
Assistant Secretary of the Company on the date hereof
as then being complete, accurate and in effect.
3. The Amended and Restated Bylaws of the Company, as
certified by the General Counsel and Assistant
Secretary of the Company on the date hereof as then
being complete, accurate and in effect.
4. Resolutions of the Board of Directors of the Company
adopted on December 13, 1996, as certified by the
General Counsel and Assistant Secretary of the
Company on the date hereof as being
<PAGE> 2
Board of Directors
Sunrise Assisted Living, Inc.
February 14, 1997
Page 2
complete, accurate and in effect, approving and
adopting the Company's 1996 Option Plan.
In our examination of the aforesaid documents, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, the
authenticity of all original documents and the conformity to authentic original
documents of all documents submitted to us as copies (including telecopies).
This opinion letter is given, and all statements herein are made, in the
context of the foregoing.
This opinion letter is based as to matters of law solely on
the General Corporation Law of the State of Delaware. We express no opinion
herein as to any other laws, statutes, regulations, or ordinances.
Based upon, subject to and limited by the foregoing, we are of
the opinion that, when issued in accordance with the terms of the 1996 Option
Plan, the Shares will be validly issued, fully paid and nonassessable under the
General Corporation Law of the State of Delaware.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion
letter has been prepared solely for your use in connection with the filing of
the Registration Statement on the date of this opinion letter and should not be
quoted in whole or in part or otherwise be referred to, nor filed with or
furnished to any governmental agency or other person or entity, without the
prior written consent of this firm.
We hereby consent to the filing of this opinion letter as
Exhibit 5 to the Registration Statement. In giving this consent, we do not
thereby admit that we are an "expert" within the meaning of the Securities Act
of 1933, as amended.
Very truly yours,
/s/Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-00000) pertaining to the Sunrise Assisted Living, Inc. 1996
Non-Incentive Stock Option Plan, of our report dated February 15, 1996 (except
for notes 10 and 16 as to which the date is June 5, 1996) with respect to the
consolidated financial statements of Sunrise Assisted Living, Inc. as of and for
the year ended December 31, 1995 and the combined financial statements of
Sunrise Entities as of and for the year ended December 31, 1994 included in its
Registration Statement (Form S-1 No. 333-13731) filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Washington, D.C.
February 11, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-00000) pertaining to the Sunrise Assisted Living, Inc. 1996
Non-Incentive Stock Option Plan, of our reports dated March 13, 1996 on the
combined financial statements of Sunrise Entities for the year ended December
31, 1993 (not presented separately in the Form S-1 Registration Statement) and
the combined financial statements of Acquired Entities of Sunrise for the year
ended December 31, 1993 included in the Company's Registration Statement (Form
S-1 No. 333-13731) filed with the Securities and Exchange Commission.
/s/ HOFFMAN, MORRISON & FITZGERALD, P.C.
McLean, Virginia
February 11, 1997
