<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Alterra Healthcare Corporation
--------------------------------------------------------------------------------
(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:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(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):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] 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:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
ALTERRA HEALTHCARE CORPORATION
10000 INNOVATION DRIVE
MILWAUKEE, WISCONSIN 53226
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 10, 2000
---------------------
To the Stockholders of Alterra Healthcare Corporation:
Notice is hereby given that the Annual Meeting of Stockholders (together
with any adjournments or postponements thereof, the "Meeting") of Alterra
Healthcare Corporation (the "Company") will be held at the Radisson Hotel
Milwaukee West, 2303 N. Mayfair Road, Wauwatosa, Wisconsin on Tuesday, October
10, 2000 at 8:00 a.m., Milwaukee time, for the purpose of considering and voting
upon the following matters:
(1) To elect a board of nine directors each to serve until the next
annual meeting of the Company, five of whom are to be elected by the
holders of the Company's Common Stock and four of whom are to be elected by
the holders of the Company's Series A 9.75% Cumulative Convertible
Pay-In-Kind Preferred Stock; and
(2) To transact such other business as may properly come before the
Meeting.
These items are more fully described in the accompanying Proxy Statement,
which is hereby made a part of this Notice of Annual Meeting of Stockholders.
The Board of Directors has fixed the close of business on September 1, 2000
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Meeting.
A copy of the Company's Annual Report for the year ended December 31, 1999
is enclosed. The Annual Report is not a part of the proxy soliciting material
enclosed with this Notice.
By Order of the Board of Directors,
/s/ Mark W. Ohlendorf
Mark W. Ohlendorf
Secretary
Milwaukee, Wisconsin
September 5, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE-PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST BRING TO THE MEETING A
LETTER FROM THE BROKER, BANK OR OTHER NOMINEE CONFIRMING YOUR BENEFICIAL
OWNERSHIP OF THE SHARES. ADDITIONALLY, IN ORDER TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS OF
ALTERRA HEALTHCARE CORPORATION
OCTOBER 10, 2000
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
This Proxy Statement (the "Proxy Statement") and the accompanying form of
proxy are being furnished to the stockholders of Alterra Healthcare Corporation
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company (the "Board") from holders of its outstanding common
stock, $.01 par value per share (the "Common Stock") and holders of its
outstanding Series A 9.75% Cumulative Convertible Pay-In-Kind Preferred Stock
(the "Series A Stock"), for use at the Annual Meeting of Stockholders of the
Company (together with any adjournments or postponements thereof, the "Meeting")
to be held at the Radisson Hotel Milwaukee West, 2303 N. Mayfair Road,
Wauwatosa, Wisconsin on Tuesday, October 10, 2000 at 8:00 a.m., Milwaukee time.
This Proxy Statement, the accompanying form of proxy and the Annual Report to
Stockholders are expected to be mailed to stockholders of the Company on or
about September 11, 2000.
SOLICITATION
The expense of this solicitation will be borne by the Company. Solicitation
will be primarily by use of the mails. Executive officers and other employees of
the Company may solicit proxies, without additional compensation, personally and
by telephone and other means of communication. The Company will also reimburse
brokers and other persons holding Common Stock in their names or in the names of
their nominees for their reasonable expenses in forwarding proxies and proxy
materials to beneficial owners.
VOTING RIGHTS AND OUTSTANDING SHARES
Stockholders of record as of the close of business on September 1, 2000
(the "Record Date") will be entitled to vote at the Meeting. Each share of
outstanding Common Stock and each share of outstanding Series A Stock is
entitled to one vote as follows:
1. Holders of Common Stock are entitled to elect five of the nine
directors (the "At-Large Directors") to be elected at the Annual Meeting.
In electing these directors, such holders are entitled to one vote for each
share held.
2. Holders of Series A Stock are entitled to elect four directors (the
"Series A Directors") at the Annual Meeting. In electing these directors,
such holders are entitled to one vote for each share of Series A Stock
held. The Company has been advised that the holders of all of the
outstanding Series A Stock intend to cause all such shares to be voted in
favor of the four nominees identified as the Series A Director nominees in
this Proxy Statement.
3. On all other matters to come before the Annual Meeting, holders of
Common Stock and Series A Stock, voting as a single class, are entitled to
one vote for each share of Common Stock or Series A Stock held.
As of the Record Date, there were 22,098,645 shares of Common Stock
outstanding and entitled to vote and 1,250,000 shares of Series A Stock
outstanding and entitled to vote.
The presence at the Meeting, in person or by proxy, of a majority of the
outstanding shares of Common Stock and of Series A Stock as of the Record Date
will constitute a quorum for transacting business at the
<PAGE> 4
Meeting. Abstentions and broker non-votes are counted towards a quorum. Provided
a quorum is present at the Meeting, directors will be elected by a plurality of
the votes present in person or represented by proxy and entitled to vote at the
Meeting.
All votes will be tabulated by the inspector of elections appointed for the
Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted for purposes of
determining both the presence or absence of a quorum for the transaction of
business and the total number of votes cast with respect to a particular matter.
Broker non-votes will be counted for purposes of determining the presence of
absence of a quorum for the transaction of business but will not be counted for
purposes of determining the votes cast as to any particular proposal on which
the broker has expressly not voted. Broker non-votes with respect to proposals
set forth in this Proxy Statement will therefore not be considered votes cast
and, accordingly, will not affect the determination as to whether a majority of
votes cast has been obtained with respect to such matters.
REVOCABILITY OF PROXIES
The shares of stock represented by proxy will be voted as instructed if
received in time for the Meeting. If no instructions are indicated, such shares
will be voted in favor of (FOR) (i) each nominee for election as a director
specified thereon and (ii) in the discretion of the proxy holder as to any other
matter that may properly come before the Meeting. Any person signing and mailing
the proxy may, nevertheless, revoke it at any time before it is exercised by
written notice to the Company (Attention: Mark W. Ohlendorf, Senior Vice
President, Chief Financial Officer, Treasurer and Secretary) at its headquarters
at 10000 Innovation Drive, Milwaukee, Wisconsin, 53226, or by attending in
person and voting at the Meeting. Attendance at the Meeting, however, will not
itself constitute the revocation of a proxy.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Amended and Restated Bylaws provide that the Board shall
consist of nine members, five of whom shall be elected by the holders of the
Common Stock and four of whom shall be elected by the holders of the Series A
Stock. Nine directors are to be elected at the Meeting, five of whom shall be
At-Large Directors and four of whom shall be Series A Directors and, if elected,
each will serve until the next Annual Meeting of Stockholders and until their
successors have been elected and qualified.
The At-Large Director nominees of the Board and the Series A Director
nominees of the holders of the Series A Stock are set forth below. In the event
any At-Large Director nominee is unable or declines to serve as an At-Large
Director at the time of the Meeting, the proxies will be voted for any nominee
who shall be designated by the present Board to fill the vacancy. In the event
any Series A Director nominee is unable or declines to serve as a Series A
Director at the time of the Meeting, the proxies will be voted for any nominee
who shall be designated by the holders of a majority of the outstanding shares
of Series A Stock as of the Record Date. If additional persons are nominated for
election as directors, then the proxy holders intend to vote all proxies
received by them for the nominees listed below unless instructed otherwise. As
of the date of this Proxy Statement, the Company is not aware of any nominee who
is unable or who will decline to serve as a director, if elected.
<TABLE>
<CAPTION>
AT-LARGE DIRECTOR NOMINEES SERIES A DIRECTOR NOMINEES
-------------------------- --------------------------
<S> <C>
Timothy J. Buchanan William E. Colson
Gene E. Burleson Robert Haveman
William F. Lasky Natalie Townsend
William G. Petty, Jr. Jerry L. Tubergen
Steven L. Vick
</TABLE>
2
<PAGE> 5
NOMINEES FOR ELECTION AS DIRECTORS
Set forth below are the names, ages (at September 1, 2000), positions and
offices held and a brief description of the business experience during the past
five years of each person nominated to serve as a director of the Company.
At-Large Director Nominees:
Timothy J. Buchanan (age 46), a private investor, has served as a director
of the Company since 1997. Mr. Buchanan served as the President of the Company
from October 1997 to August 1998 and served as the Vice Chairman of the Board of
the Company from August 1998 to May 2000. Mr. Buchanan served as the Chairman of
the Board, Chief Executive Officer, and a director of Sterling House Corporation
("Sterling") since he co-founded Sterling with Steven Vick in 1991 until
Sterling's merger with the Company in October 1997.
Gene E. Burleson (age 59) has served as a director of the Company since
July 1995. Mr. Burleson has served as Chairman of the Board of Mariner
Post-Acute Network, Inc. ("Mariner"), a diversified provider of long-term and
specialty health care services, since February 2000. Mr. Burleson served as the
Chief Executive Officer and a director of Vitalink Pharmacy Services, Inc. from
February 1997 to August 1997. He served as Chairman of the Board of GranCare,
Inc. ("GranCare"), a provider of long-term and specialty health care services,
from January 1994 to November 1997 and as Chief Executive Officer of GranCare
from December 1990 to February 1997. Mr. Burleson also currently serves on the
Board of Directors of Mariner, Deckers Outdoor Corporation, a shoe manufacturer,
and THCG, Inc., a specialty investment banking firm.
William F. Lasky (age 46) has served as Chief Executive Officer of the
Company since April 1996 and served as President of the Company from December
1993 to October 1997 and from August 1998 to the present. Mr. Lasky is a member
of the National Governing Board and a former Chairman of The Assisted Living
Federation of America and is a licensed nursing home administrator.
William G. Petty, Jr. (age 54) has served as a director of the Company
since 1993, served as Chairman of the Board of the Company from December 1993 to
May 2000 and served as Chief Executive Officer of the Company from December 1993
to April 1996. He has served as a Managing Director of Beecken, Petty & Company,
the general partner of a private health care investment fund, since September
1996. Mr. Petty served as the Vice Chairman of GranCare from July 1995 to
November 1997. Mr. Petty also currently serves on the Board of Directors of
Mariner.
Steven L. Vick (age 42) has served as the Chief Operating Officer and a
director of the Company since October 1997. He served as the President and a
director of Sterling since he co-founded Sterling with Mr. Buchanan in 1991
until subsequent to Sterling's merger with the Company in October 1997. Mr. Vick
also practiced as a certified public accountant specializing in health care
consulting.
Series A Director Nominees:
William E. Colson (age 59) has served as a director of the Company since
May 2000. Mr. Colson is a founder of Holiday Retirement Corp. and has been its
President and Chief Operating Officer since 1987 and its Chief Executive Officer
since September 1999. Mr. Colson also serves as President and Managing General
Partner of Colson & Colson Construction Co., which develops and constructs
retirement communities and multi-family projects, since 1963. Mr. Colson also
serves as a member of the Executive Board of the American Seniors Housing
Association.
Robert Haveman (age 52) has served as the Vice Chairman of the Board of the
Company since May 2000 and has served as a director of the Company since May
1995. Mr. Haveman has served as Treasurer of EDP Management Corp., a
privately-held investment management firm, since April 1997. Mr. Haveman served
as the Secretary/Treasurer of the Prince Corporation, an automotive interior
trim manufacturer, from 1987 to 1997.
3
<PAGE> 6
Natalie Townsend (age 39) has served as President of TD Capital Group, the
Merchant Banking Division of The Toronto-Dominion Bank, and Vice-Chair of TD
Securities, Inc., the Investment Banking Division of The Toronto-Dominion Bank,
since 1999. She served as managing director of TD Capital Group from 1995 to
1999.
Jerry L. Tubergen (age 46) has served as Chairman of the Board of the
Company since May 2000 and has served as a director of the Company since May
1995. He has served as President and Chief Executive Officer of RDV Corporation,
a private financial management firm, since its formation in 1991. Mr. Tubergen
also currently serves on the Board of Directors of the Orlando Magic, Ltd., an
NBA franchise, and Genmar Holdings, Inc., a manufacturer and marketer of
motorized pleasure boats.
There are no family relationships among any of the executive officers or
directors of the Company. Upon the Company's issuance of 1,250,000 shares of
Series A Stock on May 31, 2000, the holders of the Series A Stock were given the
right to elect four directors to the Company's Board of Directors. On May 31,
2000, Messrs. Robert Haveman, William G. Petty, Jr. and Jerry L. Tubergen
resigned from the Board of Directors (conditional upon their reelection as
Series A Directors), the Board of Directors increased the size of the Board to
nine members and Messrs. William E. Colson, Robert Haveman, William G. Petty,
Jr. and Jerry L. Tubergen were elected as Series A Directors of the Company by
the holders of the Series A Stock to serve until the Company's next annual
meeting of stockholders. The Company has agreed to nominate each of William F.
Lasky and Steven L. Vick to serve as directors of the Company during the term of
their employment by the Company pursuant to their employment agreement with the
Company. See "Compensation of Directors and Executive Officer - Employment
Agreements." No other arrangement or understanding exists between any director
or director nominee and any other person pursuant to which he or she was or is
to be selected as a director or director nominee of the Company.
MANAGEMENT OF THE COMPANY
BOARD OF DIRECTORS
The Board of Directors is currently comprised of Richard W. Boehlke,
Timothy J. Buchanan, Gene E. Burleson, William E. Colson, Robert Haveman,
William F. Lasky, William G. Petty, Jr., Jerry L. Tubergen and Steven L. Vick.
BOARD COMMITTEES AND MEETINGS
During 1999, the Board met eleven times. The Board has established an audit
committee (the "Audit Committee") and a compensation committee (the
"Compensation Committee"). The Board does not have a nominating committee. No
incumbent Board member attended fewer than 75% of the aggregate of (i) the total
number of meetings of the Board which such director was eligible to attend
during 1999 and (ii) the total number of meetings held by any committee of the
Board upon which such director served during 1999.
The Audit Committee is comprised of Messrs. Burleson, Haveman and Tubergen,
with Mr. Tubergen serving as a Chairman. The primary functions of the Audit
Committee are to: (i) recommend an accounting firm to be appointed by the
Company and its independent auditors; (ii) consult with the Company's
independent auditors regarding the audit plan; and (iii) determine that
management placed no restrictions on the scope or implementation of the
independent auditors' examination. The Audit Committee met one time in 1999.
The Compensation Committee is comprised of Messrs. Buchanan, Haveman and
Petty, with Mr. Haveman serving as Chairman. The Compensation Committee: (i)
sets and approves the compensation (including salary, deferred compensation,
bonuses, incentive compensation and all other types of compensation or
remuneration) of the Company's executive officers; and (ii) administers the
Company's 1995 Amended and Restated Incentive Compensation Plan (the "1995
Plan"). The Compensation Committee met one time in 1999.
4
<PAGE> 7
EXECUTIVE OFFICERS
Set forth below are the names, ages (at September 1, 2000), positions and
offices held and a brief description of the business experience during the past
five years of each of the Company's executive officers who are not also
directors.
Anthony R. Geonnotti, Jr. (age 41) has served as Senior Vice President of
the Company since April 2000. From February 1999 to April 2000, Mr. Geonnotti
served as Vice President of Construction and Development. Previously, Mr.
Geonnotti served as Divisional Vice President of Development from September 1996
to February 1999.
G. Faye Godwin (age 59) has served as Executive Vice President of the
Company since October 1997. From April 1996 to October 1997, Ms. Godwin served
as Senior Vice President of the Company and from May 1995 to April 1996, Ms.
Godwin served as the Vice President of Operations of the Company.
Mark W. Ohlendorf (age 40) has served as Senior Vice President of the
Company since October 1997, as Chief Financial Officer and Treasurer since
November 1999 and as Secretary since July 2000. He served as the Chief Financial
Officer of Sterling from April 1997 to October 1997. Mr. Ohlendorf served as
Vice President, Chief Financial Officer and Treasurer of Vitas Healthcare
Corporation from December 1990 to April 1997. Mr. Ohlendorf is a Certified
Public Accountant.
Paul C. Pebley (age 41) has served as Senior Vice President, Sales &
Marketing since November 1999 and served as Vice President of the Company from
August 1998 to November 1999. Prior to joining Alterra, Mr. Pebley served as
Regional Director of Sales and Marketing of Hilton Hotels Corporation since
1991.
John D. Peterson (age 34) has served as a Vice President of Alterra since
joining the Company in May of 1997. He also served as Alterra's Corporate
Controller from May 1997 through August 2000. Prior to joining the Company, Mr.
Peterson worked as a consultant with Berkshire Consulting, a healthcare
consulting firm, from January 1997 to May 1997. Mr. Peterson served as Corporate
Controller of MedRehab, Inc., a private rehabilitation company, from September
1995 through December 1996. From September 1988 to September 1995, Mr. Peterson
was an accountant at Arthur Andersen, LLP, last serving as a manager in the
audit division.
Subject to the terms of employment agreements, executive officers of the
Company are elected or appointed by the Board and hold office until their
successors are elected or until their death, resignation or removal.
5
<PAGE> 8
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's voting securities as of the Record Date
by: (i) each person known by the Company to own more than 5% of the outstanding
shares of voting securities, by class; (ii) each of the Company's directors and
director nominees; (iii) each of the Company's executive officers included in
the Summary Compensation Table included elsewhere herein; and (iv) all of the
Company's directors and executive officers as a group. Except as otherwise
noted, the person or entity named has sole voting and investment power over the
shares indicated.
<TABLE>
<CAPTION>
COMMON STOCK SERIES A STOCK
----------------------- ----------------------
PERCENT OF PERCENT OF
NAME NUMBER CLASS NUMBER CLASS
---- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Jerry L. Tubergen(2)(3)+............................. 12,778,634 37.6%
Richard M. DeVos, Jr.(2)(3).......................... 12,649,624 37.0
Robert Haveman(2)(4)+................................ 10,452,052 32.7
Elsa D. Prince(2)(4)................................. 10,371,591 32.4
The Toronto-Dominion Bank(5)......................... 9,976,000 31.1
RDVEPCO, L.L.C.(2)(6)................................ 9,650,250 30.4 1,140,000 91.2%
HBK Investments L.P.(7).............................. 9,333,000 29.7
AR Investments, Ltd.(8).............................. 2,167,900 9.8
Dimensional Fund Advisors(9)......................... 1,915,900 8.7
Warburg Pincus Asset Management, Inc.(10)............ 1,263,100 5.7
Transamerica Corporation and Transamerica Investment
Services, Inc.(11)................................. 1,149,900 5.2
Timothy J. Buchanan(12)+............................. 811,934 3.7
Steven L. Vick(13)+++................................ 746,573 3.4
William F. Lasky(14)+++.............................. 606,100 2.7
Holiday Retirement 2000, LLC(2)(15).................. 554,500 2.4 110,000 8.8
Richard W. Boehlke(16)+.............................. 435,711 2.0
William G. Petty, Jr.(17)+........................... 137,658 *
Mark W. Ohlendorf(18)++.............................. 133,766 *
G. Faye Godwin(19)++................................. 62,637 *
Gene E. Burleson(20)+................................ 48,167 *
Thomas E. Komula(21)**............................... 58,389 *
William E. Colson(15)+............................... 2,500 *
Natalie Townsend(22)+................................ 0 *
All Executive Officers and Directors as a Group (14
Persons)(23)....................................... 15,949,321 46.1
</TABLE>
---------------
+ Director or director nominee of the Company.
++ Executive officer of the Company. See "Management of the Company."
* Less than 1%.
** Mr. Komula resigned his position as an executive officer of the Company
effective May 15, 2000.
(1) Information as to the beneficial ownership of Common Stock has either been
furnished to the Company by or on behalf of the indicated persons or is
taken from reports on file with the Securities and Exchange Commission.
(2) On May 31, 2000, Alterra completed a financing transaction in which it
issued $173 million of convertible debentures and convertible preferred
shares to certain investors, including RDVEPCO, L.L.C., a Michigan limited
liability company ("RDVEPCO"), the Elsa D. Prince Living Trust (the "Prince
Trust"), RDV Manor Care, LLC, a Michigan limited liability company
("RDVMC"), Holiday Retirement 2000, LLC, a Washington limited liability
company ("Holiday"), Group One Investors, L.L.C., a Michigan limited
liability company ("Group One") and HBK Master Fund L.P., a Cayman
6
<PAGE> 9
Islands limited partnership (the "Equity Transaction"). The securities
issued in the Equity Transaction included: (i) $168 million of the
Company's Series A, Series B and Series C 9.75% Convertible Pay-In-Kind
Debentures due 2007 (collectively, the "Debentures") with a conversion
price of $4.00 per share, a 9.75% semi-annual payment-in-kind ("PIK")
coupon and a seven year maturity and (ii) $5 million of shares of the
Company's Series A 9.75% Cumulative Convertible Pay-In-Kind Preferred Stock
(the "Series A Stock") with a conversion price of $4.00 per share, a 9.75%
semi-annual, cumulative PIK dividend and a mandatory redemption in seven
years. The Series A and the Series C Debentures and the Series A Stock are
convertible at any time at the applicable holder's option into shares of
Common Stock of the Company. The Series B Debentures are convertible at any
time at the applicable holder's option into shares of the Company's Series
B Non-Voting Participating Preferred Stock (the "Series B Stock") having
rights (other than voting rights) substantially similar to the Company's
Common Stock. Additional information regarding the Equity Transaction is
included in "Certain Relationships and Related Transactions."
As a part of the Equity Transaction, the Company had the option to issue to
approved parties, and the investors had the option to purchase, up to an
additional $29.9 million of Series B or C Debentures within 120 days of May
31, 2000. On August 10, 2000, the Company issued an additional $29.9
million of Series B Debentures to The Toronto-Dominion Bank
("Toronto-Dominion") pursuant to this option provision. Accordingly, the
aggregate transaction amount of the Equity Transaction was approximately
$203 million. As further described in the notes below, beneficial ownership
information reflected in this table includes shares of Common Stock
issuable upon the conversion of Series A and C Debentures and Series A
Stock issued in the Equity Transaction.
(3) Based upon a Schedule 13D filed on June 12, 2000, by RDV ALTCO, L.L.C., a
Michigan limited liability company, RDV Corporation, a Michigan
corporation, Richard M. DeVos, Jr., Daniel G. DeVos, Suzanne C. DeVos
VanderWeide, Douglas L. DeVos, Jerry L. Tubergen, Elisabeth D. DeVos, Helen
J. DeVos, The Richard M. and Helen J. DeVos Foundation, The Dick and Betsy
DeVos Foundation, The Douglas and Maria DeVos Foundation, The Jerry L. and
Marcia D. Tubergen Foundation, Windquest Group, Inc., a Michigan
corporation, Buttonwood Capital, Inc., a Michigan corporation and RDV
Capital Management L.P., a Delaware limited partnership (collectively, the
"RDV Reporting Persons"), the RDV Reporting Persons may be deemed to
beneficially own an aggregate of 12,995,576 shares of Common Stock,
including 12,649,624 shares and 12,778,634 shares reflected as beneficially
owned by Richard M. DeVos, Jr. and Jerry L. Tubergen, respectively. Based
upon their Schedule 13D, the RDV Reporting Persons as a group have sole
power to vote or to direct the vote and sole power to dispose or direct the
disposition of 3,200,052 shares of Common Stock. Based upon their Schedule
13D, the RDV Reporting Persons, as a group may be deemed to beneficially
own (i) 1,140,000 shares of Series A Stock; (ii) $40,722,000 Series A
Debentures of the Company; (iii) $4,450,000 of the Company's 7.0%
convertible subordinated debentures, due 2004 (the "7% Debentures"); and
(iv) $16,000,000 of the Company's 5.25% convertible subordinated
debentures, due 2002 (the "5.25% Debentures"), all of which are convertible
at any time at the holders' option into 1,140,000, 10,180,500, 219,753 and
556,522 shares of the Company's Common Stock, respectively. Assuming
conversion of the securities described above, the RDV Reporting Persons
will have sole voting and dispositive power with respect to 3,200,052
shares of the Company's Common Stock. Certain shares reported as
beneficially owned by the RDV Reporting Persons are also reported as
beneficially owned by RDVEPCO and the Prince Reporting Persons (as defined
below). For further information regarding the RDV Reporting Persons'
beneficial ownership of the Company's Common Stock, please see the Schedule
13D referenced in this note. The principal business address of Richard M.
DeVos, Jr. is 7575 Fulton Street East, Ada, Michigan 49355. Mr. Tubergen's
principal business address is 500 Grand Bank Building, 126 Ottawa, N.W.
Grand Rapids, Michigan 49503.
(4) Based upon a Schedule 13D filed on June 12, 2000, by EDP Assisted Living
Properties, L.L.C., a Michigan limited liability company, Elsa D. Prince
and Robert Haveman (collectively the "Prince Reporting Persons"), the
Prince Reporting Persons may be deemed to beneficially own an aggregate of
10,674,583 shares of Common Stock, including 10,371,591 shares and
10,452,052 shares reflected as
7
<PAGE> 10
beneficially owned by Elsa D. Prince and Robert Haveman, respectively.
Based upon their Schedule 13D, the Prince Reporting Persons as a group have
sole power to vote or to direct the vote and sole power to dispose or
direct the disposition of 525,523 shares of Common Stock. Based upon their
Schedule 13D, the Prince Reporting Persons, as a group may be deemed to
beneficially own (i) 1,140,000 shares of Series A Stock; (ii) $34,041,000
Series A Debentures of the Company; and (iii) $6,950,000 of 7.0%
Debentures, all of which are convertible at any time at the holders' option
into 1,140,000, 8,510,250, and 343,209 shares of the Company's Common
Stock, respectively. Assuming conversion of the securities described above,
the Prince Reporting Persons will have sole voting and dispositive power
with respect to 525,523 shares of the Company's Common Stock. Certain
shares reported as beneficially owned by the Prince Reporting Persons are
also reported as beneficially owned by RDVEPCO and the RDV Reporting
Persons. For further information regarding the Prince Reporting Persons'
beneficial ownership of the Company's Common Stock, please see the Schedule
13D referenced in this note. The Prince Reporting Persons' principal
business address is 190 S. River Avenue, Suite 300, Holland, Michigan
49423.
(5) Pursuant to the Equity Transaction, as of August 10, 2000, Toronto-Dominion
acquired $29,904,000 of Series B Debentures from the Company and
$10,000,000 of Series B Debentures from other debenture holders. Pursuant
to an agreement with the Company, Toronto-Dominion has the right to
exchange its Series B Debentures for Series C Debentures, which are
convertible into Common Stock, subject to compliance by Toronto-Dominion
and its affiliates with applicable laws and regulations that restrict their
holdings of voting securities. This table reflects Toronto-Dominion's
beneficial ownership assuming that it exchanges all of its Series B
Debentures for Series C Debentures and converts all of such Series C
Debentures into shares of Common Stock. The Company understands, however,
that under currently applicable regulatory provisions Toronto-Dominion is
prohibited from holding in excess of five percent of the outstanding Common
Stock. The Merchant Banking Division of Toronto-Dominion, TD Capital Group,
manages Toronto-Dominion's investment in the Company. The principal
business address of Toronto-Dominion and TD Capital Group is P.O. Box 1, TD
Tower, Toronto, Ontario M5K 1A2, Canada.
(6) Based upon a Schedule 13D filed by RDVEPCO on June 12, 2000, RDVEPCO may be
deemed to beneficially own an aggregate of 9,650,250 shares of Common Stock.
RDVEPCO was organized in December 1999 for the principal purpose of
investing in or engaging in other financial transactions with Alterra. The
principal business address of RDVEPCO is 500 Grand Bank Building, 126 Ottawa
Avenue, N.W., Grand Rapids, Michigan 49503. RDVEPCO is managed by its two
members, RDV ALTCO, L.L.C. and EDP Assisted Living Properties, L.L.C. For
additional information regarding RDV ALTCO, L.L.C. and EDP Assisted Living
Properties, L.L.C., see notes (3) and (4) hereto. RDVEPCO has sole power to
vote or direct the vote and sole power to dispose or to direct the
disposition of the 9,650,250 shares of Common Stock. Based upon its Schedule
13D, RDVEPCO owns (i) 1,140,000 shares of Series A Stock; and (ii)
$34,041,000 Series A Debentures of the Company, all of which are convertible
at any time at RDVEPCO's option into 1,140,000 and 8,510,250 shares of the
Company's Common Stock, respectively. Assuming conversion of such Series A
Stock and Series A Debentures, RDVEPCO will have sole voting and dispositive
power with respect to 9,650,250 shares of the Company's Common Stock.
Certain shares reported as beneficially owned by RDVEPCO are also reported
as beneficially owned by the RDV Reporting Persons and the Prince Reporting
Persons. For further information regarding RDVEPCO's beneficial ownership of
the Company's Common Stock, please see the Schedule 13D referenced in this
note.
(7) HBK Master Fund L.P. ("HBK Master Fund") owns $35,096,000 in face amount of
the Series C Debentures of the Company, which are convertible into shares
of the Company's Common Stock. Assuming conversion of such Series C
Debentures, HBK Investments L.P. ("Investments") (pursuant to Investment
Management Agreements among the parties) will have sole voting power and
sole dispositive power with respect to the 8,774,000 shares of the
Company's Common Stock issuable to HBK Master Fund. In addition, HBK Master
Fund owns 1,100 shares of Common Stock and $11,370,000 in face amount of
the 6.75% convertible subordinated debentures of the Company due 2006
8
<PAGE> 11
(the "6.75% Debentures"), which are convertible into shares of the
Company's Common Stock. Assuming conversion of such 6.75% Debentures,
Investments (pursuant to Investment Management Agreements among the
parties) will have sole voting power and sole dispositive power with
respect to the 557,900 shares of the Company's Common Stock issuable to HBK
Master Fund.
The principal place of business of HBK Master Fund and Investments is 777
Main Street, Suite 2750, Fort Worth, Texas 76102.
(8) Based upon a Schedule 13D filed on January 18, 2000, as amended on January
26, 2000 and February 25, 2000, by AR Investments Limited, a Cayman Islands
corporation ("AR Investments"), RH Investments Limited, a Cayman Islands
corporation ("RH Investments"), VXM Investments Limited, a Cayman Islands
corporation ("VXM Investments"), LXB Investments Limited, a Cayman Islands
corporation ("LXB Investments"), HR Investments Limited, a Cayman Islands
corporation ("HR Investments"), Barry Trust, a Guernsey, Channel Islands
trust, Rachel Trust, a Guernsey, Channel Islands trust, Vivian Trust, a
Guernsey, Channel Islands trust, Lillian Trust, a Guernsey, Channel Islands
trust, Henry Trust, a Guernsey, Channel Islands trust, The Monument Trust
Company Limited, a Guernsey, Channel Islands corporation, IPC Advisors
S.A.R.L., a Luxemburg corporation, LMR Investments Limited, a Cayman
Islands corporation, The LMR Family Trust, a Cayman Islands Trust and
Caledonian Bank & Trust Limited, a Cayman Islands corporation
(collectively, the "Reporting Persons"), AR Investments, RH Investments,
VXM Investments, LXB Investments, and HR Investments own an aggregate of
2,167,900 shares of Common Stock. According to the Schedule 13D, each
Reporting Person may be deemed to be a beneficial owner of all 2,167,900
shares of Common Stock held by the Reporting Persons. The Reporting Persons
as a group have sole power to vote or to direct the vote and sole power to
dispose or to direct the disposition of the 2,167,900 shares of Common
Stock. The principal place of business of the Reporting Persons is c/o
Unsworth & Associates, Herengracht 483, 1017 BT, Amsterdam, The
Netherlands.
(9) Based upon its Schedule 13G filed on February 12, 1999, as amended February
3, 2000, Dimensional Fund Advisors Inc. is an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940. Its principal
place of business is 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
Dimensional Fund Advisors Inc. has sole voting power with respect to all of
the share of the Company's Common Stock held by it.
(10) Based upon its Schedule 13G filed on January 13, 1999, Warburg Pincus Asset
Management, Inc. ("Warburg Pincus") is an investment adviser registered
under Section 203 of the Investment Advisers Act of 1940. Its principal
place of business is 466 Lexington Avenue, New York, New York 10017. Of the
total shares of the Company's Common Stock held by Warburg Pincus, it has
sole voting power with respect to only 1,034,000 of such shares.
(11) Based upon their Schedule 13G filed on February 16, 1999, as amended
January 22, 2000, Transamerica Investment Services, Inc. ("TIS") is an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940 and is a subsidiary of Transamerica Corporation
("Transamerica"). Transamerica's principal place of business is 600
Montgomery Street, San Francisco, California 94111, and TIS' principal
place of business is 1150 Olive Street, Los Angeles, California 90015.
Transamerica may be deemed to be the beneficial owner of 1,149,900 shares
of the Company's Common Stock, of which 125,000 shares are owned directly
by Transamerica. The remaining 1,024,900 shares of the Company's Common
Stock, including 744,500 of such shares, are beneficially owned by direct
and indirect subsidiaries of Transamerica. TIS is deemed to be the
beneficial owner of 1,149,000 shares of the Company's Common Stock pursuant
to separate arrangements whereby TIS acts as investment adviser to certain
individuals and entities, including two insurance company subsidiaries of
Transamerica. Each of the individuals and entities for which TIS acts as
investment adviser has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the securities
held or purchased pursuant to such arrangements.
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<PAGE> 12
(12) Includes (i) 154,600 shares owned beneficially by Mr. Buchanan's spouse,
Meredith Gail Buchanan; (ii) 50,000 shares owned jointly with Mr.
Buchanan's spouse, Meredith Gail Buchanan (iii) 22,000 shares held in trust
for Mr. Buchanan's children for which trusts Mr. Buchanan is sole trustee;
(iv) 11,000 shares beneficially owned by The Buchanan Family Foundation of
which Mr. Buchanan is the sole trustee; and (v) 39,027 shares issuable upon
the exercise of options that are exercisable on or within 60 days of the
Record Date.
(13) Includes (i) 674,495 shares owned jointly with Mr. Vick's spouse, Susan C.
Vick; (ii) 22,000 shares held in trust for Mr. Vick's children for which
trusts Mr. Vick is the sole trustee; (iii) 5,700 shares beneficially owned
by The Vick Foundation of which Mr. Vick is the sole trustee; and (iv)
44,378 shares issuable upon the exercise of options that are exercisable on
or within 60 days of the Record Date.
(14) Mr. Lasky's beneficial ownership includes options to acquire 261,581 shares
exercisable within 60 days of the Record Date.
(15) Holiday, a limited liability company organized for the principal purpose of
participating in the Equity Transaction with Alterra, acquired 110,000
shares of Series A Stock, $1,778,000 of Series A Debentures and $3,782,000
of Series B Debentures in the Equity Transaction. The principal place of
business of Holiday is 3131 Elliott Avenue, Suite 500, Seattle, Washington
98121. Holiday is managed by Daniel R. Baty, who may be deemed to
beneficially own the shares of Common Stock and Series A Stock beneficially
owned by Holiday. William E. Colson holds member interests in Holiday, but
disclaims beneficial ownership of these shares.
(16) Includes options to acquire 4,000 shares exercisable within 60 days of the
Record Date.
(17) Includes options to acquire 94,628 shares exercisable within 60 days of the
Record Date.
(18) Represents options to acquire 133,766 shares exercisable within 60 days of
the Record Date.
(19) Includes (i) 1,000 shares held jointly with Ms. Godwin's spouse, Roy Godwin
and (ii) options to acquire 61,637 shares exercisable within 60 days of the
Record Date.
(20) Includes options to acquire 8,141 shares exercisable within 60 days of the
Record Date.
(21) Includes options to acquire 54,389 shares exercisable within 60 days of the
Record Date.
(22) Ms. Townsend serves as President of TD Capital Group, the Merchant Banking
Division of Toronto-Dominion. However, Ms. Townsend disclaims beneficial
ownership of any shares of the Company's capital stock beneficially owned
by Toronto-Dominion. See note (5) above with respect to shares beneficially
owned by Toronto-Dominion.
(23) Includes options to acquire 695,747 shares exercisable within 60 days of
the Record Date. See notes (2), (3) and (4) above with respect to shares
beneficially owned by Messrs. Haveman and Tubergen.
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<PAGE> 13
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
Directors of the Company who are not parties to services agreements with
the Company and are not employees of the Company are entitled to an annual
retainer of $12,000, payable in quarterly installments. In lieu of their annual
retainer for the 36 month period commencing June 1, 1996, each of Messrs.
Burleson, Haveman, and Tubergen were granted a non-qualified stock option
pursuant to the 1995 Plan to purchase up to 12,420 shares of the Common Stock at
an exercise price of $8.69 per share, such options vesting one-third on June 1,
1997, one-third on June 1, 1998 and one-third on June 1, 1999, and expiring on
May 8, 2006. In October 1998, each of Messrs. Boehlke, Burleson, Haveman, Petty
and Tubergen, constituting all of the non-employee directors, were granted a
non-qualified stock option pursuant to the 1995 Plan to purchase 8,000 shares of
the Common Stock at an exercise price of $19.81 per share, which options shall
vest 25% per year on each of the first, second, third and fourth anniversaries
of the date of grant, subject to accelerated vesting in the event of a change in
control. Directors are also entitled to reimbursement of reasonable
out-of-pocket expenses incurred by them in attending meetings of the Board of
Directors. See also "--Employment Agreement."
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation awarded
or paid by the Company for services rendered during each of the years in the
three-year period ended December 31, 1999 to its Chief Executive Officer and to
its four most highly compensated executive officers other than the Chief
Executive Officer ("Named Executives").
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS(1)
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION OPTIONS(#)
--------------------------- ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
William F. Lasky(2)......................... 1999 $442,920 -- -- --
President and Chief Executive Officer 1998 360,469 -- -- 227,027
1997 282,185 $92,750 -- 72,381
Timothy J. Buchanan(3)...................... 1999 170,734 -- -- --
Former Vice Chairman 1998 262,077 -- -- 34,054
1997 32,428 63,740 -- --
Steven L. Vick(4)........................... 1999 273,367 -- -- --
Chief Operating Officer 1998 229,327 -- -- 44,757
1997 28,351 46,890 -- --
Thomas E. Komula(5)......................... 1999 272,643 -- -- --
Former Chief Administrative Officer 1998 207,200 -- -- 42,432
1997 180,000 45,000 -- 5,000
G. Faye Godwin.............................. 1999 214,685 -- -- --
Executive Vice President 1998 182,200 -- -- 28,378
1997 155,000 38,750 -- 1,625
Mark W. Ohlendorf(6)........................ 1999 221,743 -- -- --
Senior Vice President 1998 200,254 -- -- 30,811
1997 24,403 53,363 -- 11,149
</TABLE>
---------------
(1) Represents options granted under the 1995 Plan. Generally, subject to
accelerated vesting upon a change in control, one-fourth of the options
become exercisable on each of the first through fourth anniversaries
11
<PAGE> 14
of the grant date, except with respect to (i) options granted to these
individuals in 1998 which became exercisable 50% on the second anniversary
of the grant date, 75% on the third anniversary of the grant date and 100%
on the fourth anniversary of the grant date and (ii) options granted to Mr.
Lasky in 1997 which become exercisable on January 30, 2001.
(2) Mr. Lasky has served as the Company's President from December 1983 to
October 1997 and from August 1998 to present and became the Company's Chief
Executive Officer in April 1996.
(3) Mr. Buchanan joined the Company as an executive officer in October 1997, has
served as Vice Chairman from August 1998 to May 2000, and served as
President of the Company from October 1997 to August 1998.
(4) Mr. Vick joined the Company as an executive officer in October 1997.
(5) Mr. Komula resigned his position with the Company effective May 15, 2000.
(6) Mr. Ohlendorf joined the Company as an executive officer in October 1997.
OPTION GRANTS IN LAST FISCAL YEAR
There were no options granted during 1999 to the Named Executives.
1999 AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information concerning the value of options
exercised by the Named Executives during 1999 and the value at December 31, 1999
of unexercised options held by each such officer.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY(1)
NUMBER OF OPTIONS OPTIONS AT
SHARES AT 12-31-99 12-31-99
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- --------------- ---------------
<S> <C> <C> <C> <C>
William F. Lasky............................ -- -- 148,068/299,408 $515,706/--
Timothy J. Buchanan......................... -- -- 22,000/34,054 --/--
Steven L. Vick.............................. -- -- 22,000/44,757 --/--
Thomas E. Komula............................ -- -- 27,067/49,788 --/--
G. Faye Godwin.............................. -- -- 39,925/36,308 57,845/--
Mark W. Ohlendorf........................... -- -- 115,574/36,386 --/--
</TABLE>
---------------
(1) Calculated on the basis of the fair market value of the underlying
securities on December 31, 1999 ($7.9065 per share) minus the exercise
price. On September 1, 2000, the market price of the Common Stock, as
reported on the American Stock Exchange, was $2.38 per share.
EMPLOYMENT AGREEMENTS
Employment Agreement with William F. Lasky. The Company has entered into
an employment agreement with Mr. Lasky with a term that expires on December 31,
2001, unless earlier terminated pursuant to the terms thereof. The agreement is
automatically renewed for additional consecutive one-year terms unless timely
notice of nonrenewal is given by either the Company or Mr. Lasky. The employment
agreement provides that Mr. Lasky shall receive a base salary in an amount
determined by the Board; provided, however, that in no event may such base
salary be less than $400,000. Pursuant to the employment agreement, Mr. Lasky is
entitled to receive incentive bonuses for up to 50% of his base salary payable,
at the sole discretion of the Board, if certain objectives are achieved. The
employment agreement also provides for the granting of stock options and certain
other benefits typical in employment agreements with a senior executive officer.
Upon a change in control of the Company, Mr. Lasky will be entitled to a payment
equal to 300% of his base salary and annual bonus for the preceding year if
within two years following such change in control his employment is terminated
by the Company without "cause" or by him for "good reason." Absent a change in
control, if Mr. Lasky's employment is terminated by the Company "without cause"
or by him for "good reason," then (a) he is entitled to continue to receive his
base salary (together with any applicable bonus
12
<PAGE> 15
payments) and employee benefits for 18 months following his termination; and (b)
all outstanding options previously granted to Mr. Lasky that are not then vested
shall vest and be exercisable for a period of one year. During the term of his
employment by the Company pursuant to this agreement, the Company has agreed to
nominate Mr. Lasky to serve as a director of the Company. Finally, the
employment agreement provides that Mr. Lasky will not disclose certain
proprietary information belonging to the Company or otherwise compete with the
Company for a period of eighteen months following his termination of employment
except where such termination is by the Company without "cause."
Employment Agreement with Timothy J. Buchanan. The Company has entered
into an employment agreement with Mr. Buchanan with a term that expires on
October 23, 2000, unless earlier terminated pursuant to the terms thereof. The
employment agreement provides that Mr. Buchanan shall receive a base salary in
an amount determined by the Board; provided, however, that in no event may such
base salary be less than $165,000. Pursuant to the employment agreement, Mr.
Buchanan is entitled to receive incentive bonuses payable, at the sole
discretion of the Board, if certain objectives are achieved. The employment
agreement also provides for the granting of stock options at the same time and
on the same terms as grants to the Company's other senior executives and certain
other benefits typical in employment agreements with a senior executive officer.
Mr. Buchanan is also entitled to a payment equal to 300% of his base salary upon
a "change of control" of the Company if his employment is thereafter terminated
by the Company without "cause" or by him for "good reason." Absent a change of
control, if Mr. Buchanan's employment is terminated by the Company "without
cause" or by him for "good reason," then he is entitled to continue to receive
his base salary (together with any applicable bonus ) and employee benefits for
the greater of the remainder of the term of the agreement or 12 months following
his termination. Finally, the employment agreement provides that Mr. Buchanan
will not disclose certain proprietary information belonging to the Company or
otherwise compete with the Company for a period of 18 months following his
termination of employment except where such termination is by the Company
without "cause."
Employment Agreement with Steven L. Vick. The Company has entered into an
employment agreement with Mr. Vick with a term that expires on October 23, 2001,
unless earlier terminated pursuant to the terms thereof. Pursuant to the
employment agreement, Mr. Vick serves the Company as Chief Operating Officer.
The agreement is automatically renewed for additional consecutive one-year terms
unless timely notice of nonrenewal is given by either the Company or Mr. Vick.
The employment agreement provides that Mr. Vick shall receive a base salary in
an amount determined by the Board; provided, however, that in no event may such
base salary be less than $225,000. Pursuant to the employment agreement, Mr.
Vick is entitled to receive incentive bonuses payable, at the sole discretion of
the Board, if certain objectives are achieved. The employment agreement also
provides for the granting of stock options at the same time and on the same
terms as grants to the Company's other senior executives and certain other
benefits typical in employment agreements with a senior executive officer. Mr.
Vick is also entitled to a payment equal to 300% of his base salary upon a
"change of control" of the Company if his employment is thereafter terminated by
the Company without "cause" or by him for "good reason." Absent a change of
control, if Mr. Vick's employment is terminated by the Company "without cause"
or by him for "good reason," then he is entitled to continue to receive his base
salary (together with any applicable bonus ) and employee benefits for the
greater of the remainder of the term of the agreement or 12 months following his
termination. During the term of his employment by the Company pursuant to this
agreement, the Company has agreed to nominate Mr. Vick to serve as a director of
the Company. Finally, the employment agreement provides that Mr. Vick will not
disclose certain proprietary information belonging to the Company or otherwise
compete with the Company for a period of 18 months following his termination of
employment except where such termination is by the Company without "cause."
Employment Agreement G. Faye Godwin. The Company has entered into an
employment agreement with Ms. Godwin, which agreement is an annual agreement
that automatically renews for consecutive one-year terms unless timely notice of
nonrenewal is given either by the Company or Ms. Godwin. The employment
agreement provides that Ms. Godwin shall receive a base salary in an amount
determined by the Board; provided, however, that in no event may such base
salary be less than $110,000. Pursuant to the employment agreement, Ms. Godwin
is entitled to receive incentive bonuses payable, at the sole discretion of
13
<PAGE> 16
the Board, if certain objectives are achieved. The employment agreement also
provides for the granting of certain stock options and certain other benefits
typical in employment agreements with senior executive officers. Pursuant to the
employment agreement, Ms. Godwin has agreed not to disclose certain proprietary
information belonging to the Company or otherwise to compete with the Company
for a period of 12 months following her termination of employment, except where
such termination is by the Company without "cause."
Employment Agreement with Mark W. Ohlendorf. The Company has entered into
an employment agreement with Mark W. Ohlendorf with a term that expires on
October 23, 2001, unless earlier terminated. The agreement is automatically
renewed for consecutive one year terms unless timely notice of nonrenewal is
given by either the Company or Mr. Ohlendorf. The agreement provides that Mr.
Ohlendorf shall receive a base salary in an amount determined by the Board;
provided, however, that in no event may such base salary be less than $190,000.
Pursuant to the agreement, Mr. Ohlendorf is entitled to receive incentive
bonuses payable, at the sole discretion of the Board, if certain objectives are
achieved. The employment agreement also provides for the granting of certain
stock options and certain other benefits typical in employment agreements with
senior executive officers. Pursuant to the employment agreement, Mr. Ohlendorf
has agreed not to disclose certain proprietary information belonging to the
Company or otherwise to compete with the Company for a period of 12 months
following his termination of employment, except where such termination is by the
Company without "cause."
1995 INCENTIVE COMPENSATION PLAN
The 1995 Plan provides key employees (who may also be directors) of the
Company and its subsidiaries performance incentives and also provides a means of
encouraging stock ownership in the Company by such persons. Under the 1995 Plan,
key employees of the Company or its affiliates are eligible to receive stock
options to purchase shares of the Company's Common Stock. The 1995 Plan
currently allows a maximum number of shares to be subject to options of
2,500,000. Options are granted under the 1995 Plan on the basis of the
optionee's contribution to the Company, and no option may exceed a term of ten
years. Options granted under the 1995 Plan may be either incentive stock options
or options that do not qualify as incentive stock options. The Company's
Compensation Committee is authorized to designate the recipients of options, the
dates of grants, the number of shares subject to options, the option price, the
terms of payment on exercise of the options, the vesting provisions and the time
during which the options may be exercised. The price of incentive stock options
granted under the 1995 Plan cannot be less than the fair market value of the
shares at the time the options are granted.
In addition, in connection with the Sterling merger, the Company assumed
options to acquire shares of the common stock of Sterling (the "Assumed
Options"), and (as of the Record Date) the Assumed Options represented options
to acquire an aggregate of 231,609 shares of Common Stock.
Including the Assumed Options and non-plan options, as of the Record Date,
options to purchase an aggregate of 1,678,591 shares of Common Stock were
granted and outstanding at a weighted average exercise price of $17.69 per
share, of which options to purchase 1,104,117 shares were exercisable at such
date.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee as it was comprised during 1999, has furnished
the following report on the Company's executive compensation program. The report
describes the Compensation Committee's compensation policies applicable to the
Company's executive officers and the basis on which compensation is determined
for the Company's Chief Executive Officer and the other executive officers.
COMPENSATION PHILOSOPHY
In general, the compensation policies adopted by the Compensation Committee
are designed to (i) attract and retain executives capable of leading the Company
to meet its business objections and (ii) motivate the Company's executives to
enhance long-term stockholder value. Each year, the Compensation Committee
reviews the performance of the Company and compares such performance to
specified
14
<PAGE> 17
internal and external performance standards. The Compensation Committee has
developed the following compensation guidelines as the principles upon which
compensation decisions are made:
- Provide incentives to increase corporate performance and stockholder
value relative to those of other companies in the industry; and
- Provide a competitive total compensation package that enables the Company
to attract, motivate and retain key executives. In general, the Committee
seeks to maintain compensation at least at the median compensation
provided by its peer group competitors.
EXECUTIVE COMPENSATION COMPONENTS
The Company's executive compensation program is comprised of fixed and
performance-based compensation. The fixed component is the executive officer's
base salary, and the performance-based component is comprised of awards of stock
options and incentive bonuses.
Base Salary. Subject to the terms of the employment agreements, base
salaries for the Company's executive officers are approved annually with the
objective that the salaries be generally consistent with median salary rates for
comparable positions in companies of similar size within the healthcare and/or
assisted living industries. The companies included in the peer index in the
stock performance graph below generally are included in this salary survey data.
In determining competitive compensation levels, the Compensation Committee
obtains information such as compensation data from independent sources. An
evaluation of competitive base salary levels must take into account the extent
to which compensation paid by various companies is weighted between base salary
and incentive compensation. Individual performance over time is also taken into
account in determining base salaries. The base salary rate of the Company's
executive officers (other than the Chief Executive Officer) are reviewed and
approved by the Compensation Committee based on recommendations made by the
Chief Executive Officer and on industry salary information.
Incentive Bonuses. To date, the Company has not adopted a formal incentive
bonus plan, but the Compensation Committee has recommended that the Company's
executive officers receive cash bonuses in prior years based on the Company's
overall performance, with the amount awarded to each executive based on the
Compensation Committee's evaluation of each such executive's performance and
relative contribution. In addition, those executive officers subject to
employment agreements with the Company receive bonuses pursuant to the terms of
such agreements, most of which provide for the payment of bonuses at the
discretion of the Board if certain targeted earnings are achieved. Based on the
Company's performance, the Compensation Committee recommends to the Board the
payment of bonuses to such executives consistent with such agreements. The
Compensation Committee has elected to not award any incentive bonuses to the
Named Executives relating to 1999 performance.
Stock Options. The Compensation Committee periodically grants the Chief
Executive Officer and the executive officers stock options under the 1995 Plan.
The options are granted based on the optionee's contribution to the Company. The
Compensation Committee has not elected to award any option grants to the Named
Executives relating to 1999 performance.
15
<PAGE> 18
CHIEF EXECUTIVE OFFICER COMPENSATION
The Company's Chief Executive Officer compensation is paid pursuant to the
terms of his employment agreement which was originally entered into as of
January 1, 1999. This agreement provides that Mr. Lasky's base salary shall not
be less than $400,000 and that he is entitled to an incentive bonus in an amount
up to 50% of his base salary if certain objectives are achieved.
Submitted by the Compensation
Committee
(as it was comprised during 1999)
William G. Petty, Jr., Chairman
Richard W. Boehlke
Pursuant to Securities and Exchange Commission ("SEC") regulations, this
report is not "soliciting material," is not deemed filed with the SEC and is not
to be incorporated by reference in any filing of the Company under the
Securities Act of 1933 (the "Securities Act") or the Securities Exchange Act of
1934 (the "Exchange Act").
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999 the Compensation Committee of the Company consisted of William
G. Petty, Jr. and Richard W. Boehlke. Mr. Petty served as Chairman of the Board
of the Company from December 1993 to May 2000 and as Chief Executive Officer of
the Company from December 1993 to April 1996. There are no Compensation
Committee Interlocks.
Until it expired in April 1998, the Company was party to a services
agreement with Petty, Kneen & Company ("PK & Co."), a limited liability company
controlled by William G. Petty, Jr. and John W. Kneen. Pursuant to the services
agreement, PK & Co. provided management, financial and strategic planning
services to the Company on a fee basis, including without limitation, the
services of Mr. Petty as Chairman of the Board. The Company paid fees of $50,000
to PK & Co. in 1999 and has paid $200,000 of fees to PK & Co. in 2000 relating
to services rendered by PK & Co. and its affiliates in 1999 and 2000. In the
future, the Company intends to continue to utilize PK & Co. and its affiliates
to provide similar services on a project by project basis.
The Company leases an assisted living residence (in Tacoma, Washington)
from the 2010 Union L.P., of which Richard W. Boehlke is the 99% general
partner. Lease payments by the Company to this partnership aggregated $673,122
in 1999.
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<PAGE> 19
PERFORMANCE GRAPH
The following graph compares the cumulative total return from August 6,
1996 (the date the Company's Common Stock began trading on the American Stock
Exchange) through December 31, 1999 with the cumulative total return of the
Standard and Poor's 500 Stock Index and a self-constructed Peer Group (as
defined below**). The return assumes reinvestment of dividends. The graph
assumes an investment of $100 on August 6, 1996 in the common stock of each of
the subject companies. The initial public offering price of the Company's Common
Stock was $13.00 per share.
COMPARISON OF 41 MONTH CUMULATIVE TOTAL RETURN*
AMONG ALTERRA HEALTHCARE CORPORATION,
THE S&P 500 INDEX AND A PEER GROUP
LOGO
<TABLE>
<CAPTION>
8/6/96 9/96 12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98 3/99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alterra Healthcare Corp. (ALI) 100.00 108.00 111.00 125.00 173.00 187.00 227.00 255.00 208.00 206.00 262.00 154.00
Peer Group 100.00 108.00 94.00 105.00 133.00 140.00 164.00 170.00 141.00 126.00 168.00 122.00
S&P 500 100.00 104.00 113.00 116.00 136.00 146.00 150.00 171.00 177.00 159.00 193.00 203.00
<CAPTION>
6/99 9/99 12/99
<S> <C> <C> <C>
Alterra Healthcare Corp. (ALI) 106.00 68.00 64.00
Peer Group 94.00 65.00 34.00
S&P 500 217.00 204.00 234.00
</TABLE>
* $100 invested on August 6, 1996 in stock or index -- including reinvestment
of dividends.
** The Peer Group is comprised of assisted living companies selected by the
Company, consisting of: ARV Assisted Living, Inc., Assisted Living Concepts,
Inc., CareMatrix Corporation, Emeritus Corporation, and Sunrise Assisted
Living, Inc.
Pursuant to SEC regulations, this performance graph is not "soliciting
material," is not deemed filed with the SEC and is not to be incorporated by
reference in any filing of the Company under the Securities Act or the Exchange
Act.
17
<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company provides payroll processing and financial statement preparation
services to six assisted living residences in Wisconsin for a partnership that
is 50% owned and controlled by Mr. Lasky, the Company's President and Chief
Executive Officer. Pursuant to this arrangement, the Company charges an annual
fee of $10,000. Accrued fees owing to the Company by this partnership for
previously provided management services were $715,000 and $581,000 at December
31, 1999 and 1998, respectively.
Until it expired in April 1998, the Company was party to a services
agreement with PK & Co., a limited liability company controlled by William G.
Petty, Jr. and John W. Kneen. Pursuant to the services agreement, PK & Co.
provided management, financial and strategic planning services to the Company on
a fee basis, including without limitation, the services of Mr. Petty as Chairman
of the Board. The Company paid fees of $50,000 to PK & Co. in 1999 and has paid
$200,000 of fees to PK & Co. in 2000 relating to services rendered by PK & Co.
and its affiliates in 1999 and 2000. In the future, the Company intends to
continue to utilize PK & Co. and its affiliates to provide similar services on a
project by project basis.
The Company leases an assisted living residence (in Tacoma, Washington)
from the 2010 Union L.P., of which Richard W. Boehlke, a director of the
Company, is the 99% general partner. Lease payments by the Company to this
partnership aggregated $673,122 in 1999.
The Company has retained a construction management/development firm active
in the Pennsylvania, New Jersey and Delaware markets to assist the Company in
developing new residences in these markets. Anthony R. Geonnotti, Jr., a Senior
Vice President of the Company, owns approximately 5% of this firm and Mr.
Geonnotti's wife owns approximately 30% of this firm. Development and
construction expenditures, including construction management fees paid by the
Company to this firm during 1999 were $26,288,439.
In December 1999, the Company entered into a bridge loan arrangement with
RDVEPCO (the "Bridge Lender"), an investment entity owned and controlled by
certain affiliates of the Company (see notes (2), (3), (4) and (6) to the table
under the caption "Security Ownership of Management and Certain Beneficial
Owners"), in connection with the Company's repurchase of 19 Alterra residences
then leased from a health care REIT (the "REIT Residences"). Pursuant to this
arrangement, the Company borrowed $14.0 million (the "Tranche A Loan") for
working capital purposes and $30.0 million ("Tranche B Loan") as bridge
financing for its initial purchase of seven REIT Residences in December 1999.
The Tranche A Loan had a term of up to 12 months and bore interest at an initial
annual rate of 8% for the first three months, 9% for the next three months and
increasing thereafter by 0.5% per month. The Tranche A Loan was secured by
mortgages on certain land and a stock pledge of a subsidiary corporation (the
"Holding Subsidiary") formed to serve as the holding company for the subsidiary
formed to acquire the REIT Residences. The Tranche B Loan had a term of up to
six months, bore interest at an annual rate of 10% for the first three months
and at a rate escalating by 0.5% per month thereafter. The Tranche B Loan was
secured by mortgages on the seven REIT Residences acquired with the proceeds
from the Tranche B Loan.
In connection with this bridge loan arrangement, the Bridge Lender was paid
commitment and loan fees aggregating $820,000, acquired a $1.0 million
redeemable, convertible preferred stock interest in the Holding Subsidiary and
was given the right to co-invest in certain future Alterra equity transactions
by converting its Tranche A Loan receivable into an equity investment in
Alterra. The Holding Subsidiary preferred stock acquired by the Bridge Lender
accrued dividends at 8% per annum, was convertible at any time after December
31, 2000 into common shares of the Holding Subsidiary representing approximately
35% of the outstanding common stock of the Holding Subsidiary and could be
redeemed by Holding Subsidiary at any time for an amount equal to the fair
market value of the Holding Subsidiary preferred stock at that time provided
that such fair market value shall in no event exceed the sum of (i) its stated
value of $1.0 million (ii) the accrued and unpaid dividends thereon and (iii) a
redemption premium of $1.5 million if redeemed on or before March 31, 2000,
increasing by $300,000 per month thereafter.
In February 2000, the Company borrowed an additional $20.0 million from the
Bridge Lender by amending and increasing the amount borrowed under its Tranche A
Loan. Upon amending the Tranche A Loan, the interest rate on this loan increased
to 10% per annum. As additional security for the Tranche A
18
<PAGE> 21
Loan, the Company granted the Bridge Lender mortgages on six residences. Of the
$20.0 million additional advance on the Tranche A Bridge Loan, $4.1 million was
placed in escrow to facilitate the funding of the remaining construction costs
with respect to the mortgaged residences. A facility fee of $800,000 was paid to
the Bridge Lender upon the closing of the amended Tranche A Bridge Loan.
In February 2000, the Company acquired the remaining 12 REIT Residences. In
connection therewith, the Company obtained $60.0 million of mortgage financing
from one of its bank lenders, and utilized $30.0 million of the proceeds to
purchase the 12 REIT Residences and $30.0 million to repay the Tranche B Loan.
Pursuant to the Equity Transaction, on May 31, 2000, the Company (i) issued
1,140,000 shares of Series A Stock, $34,041,000 in face amount of Series A
Debentures and $6,617,000 of Series B Debentures to the Bridge Lender as payment
in full of principal and accrued interest on the Tranche A Loan and (ii) issued
$3,137,000 in face amount of Series B Debentures to purchase the Holding Company
preferred stock held by the Bridge Lender based on the redemption price of such
preferred stock.
Pursuant to the Equity Transaction consummated on May 31, 2000, the Company
issued Series A Stock and Series A, B and C Debentures to affiliates of certain
directors and principal stockholders and debenture holders of the Company. See
"Security Ownership of Management and Certain Beneficial Owners." The parties
participating in the Equity Transaction consummated on May 31, 2000, and the
consideration paid by such parties for securities issued to them by the Company,
are summarized below:
- As described above, RDVEPCO acquired shares of Series A Stock and Series
A and B Debentures in full satisfaction of amounts due RDVEPCO pursuant
to the Tranche A Loan and in exchange for the Holding Company preferred
stock.
- The Company issued $20,896,000 in face amount of Series A and B
Debentures to Group One, an investment entity formed to develop and own a
portfolio of 14 assisted living residences managed by the Company. By
acquiring Group One's equity interest in this portfolio, the Company
acquired 100% ownership of this 14 residence portfolio. Group One's
interest in this portfolio was valued at an amount equal to Group One's
funded equity investment in this portfolio. Upon the subsequent
liquidation of Group One, RDV Assisted Living, L.L.C., and the Prince
Trust received $9,110,500 and $4,179,000, respectively, of face amount of
Series A and B Debentures issued to Group One.
- The Company issued $9,793,500 and $4,878,000 in face amount of Series B
debentures to the Prince Trust and RDVMC in exchange for the transfer to
the Company of their respective equity interests in an investment entity
formed to invest in joint ventures operating a portfolio of 26 residences
managed by the Company (the "TPI-HCR Joint Venture"). These equity
interests were valued, for the purpose of this exchange, at an amount
intended to be equivalent to the allocable proceeds that would have been
payable to these parties had the Company exercised its call option for
the TPI-HCR Joint Venture and the investment entity were liquidated. This
call option provision provided for a return of such parties' capital
contribution to the TPI-HCR Joint Venture plus a 25% compounded annual
rate of return.
- The Company issued $28,096,000 in face amount of Series C Debentures to
the HBK Master Fund in consideration of the transfer to the Company of
$31,706,000 in face amount of the Company's 5.25% Debentures due December
15, 2002 and $9,645,000 in face amount of the Company's 7.0% Debentures
due June 1, 2004.
- In consideration of a cash investment by these parties, the Company
issued (i) 110,000 shares of Series A Stock and $5,560,000 in face amount
of Series A and B Debentures to Holiday, (ii) $7,000,000 in face amount
of Series C Debentures to HBK Master Fund and (iii) $48,003,000 in face
amount of Series B Debentures to RDVEPCO.
In August 2000, the Company issued $29.9 million of Series B Debentures to
Toronto-Dominion in consideration of a $29.9 million cash investment, which
resulted in the Equity Transaction having an aggregate transaction amount of
$203 million. The Company paid commitment fees of $2,739,000 and $261,000 to
RDVEPCO and Holiday, respectively, in connection with the Equity Transaction.
19
<PAGE> 22
The Company believes that each of the foregoing transactions, taken as a
whole, was on terms substantially similar to those that it could have obtained
from unaffiliated third parties. In the case of related party transactions, it
is the Company's policy to enter into such agreements on terms which, in the
opinion of the Company, are substantially similar to those that could otherwise
be obtained from unrelated third parties, and that all such transactions be
approved by a majority of the disinterested members of the Board.
ACCOUNTANTS
The Board currently plans to appoint KPMG LLP as independent auditors for
the Company for the fiscal year ending December 31, 2000. KPMG LLP has examined
the Company's financial statements since 1993 and has no relationship with the
Company other than that arising from its appointment as independent auditors.
Representatives of KPMG LLP are expected to be present at the Meeting, will have
an opportunity to make a statement if they desire to do so and will be available
to respond to appropriate questions from stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers, and persons who own beneficially more than 10% of a
registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of such
securities of the Company. Directors, executive officers and greater than 10%
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) reports they file.
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and representations that no other reports
were required, all Section 16(a) filing requirements applicable to its
directors, executive officers and greater than 10% beneficial owners were
complied with during 1999, except that Mr. Burleson did not report his
acquisition of 5,000 shares of Common Stock in February 1999, his exercise of
options to acquire 16,026 shares of Common Stock in April 1999 and his
acquisition of 5,000 shares of Common Stock in May 1999 until he filed his Form
4 on June 11, 1999; Ms. Godwin did not report the acquisition of 1,000 shares of
Common Stock in May 1999 by her spouse until she filed her Form 4 on June 11,
1999; Mr. Haveman did not report the acquisition of 75,000 shares of Common
Stock in May 1999 until he filed his Form 4 on June 11, 1999; Mr. Peterson did
not report the acquisition of 500 shares of Common Stock in May 1999 until he
filed his Form 4 on June 11, 1999 and Mr. Tubergen did not report the
acquisition (through indirect ownership) of 2,000 shares of Common Stock in May
1999 until he filed his Form 4 on June 11, 1999.
ANNUAL REPORT
The Company's 1999 Annual Report to Shareholders is enclosed with this
Proxy Statement. The Annual Report is not a part of the proxy soliciting
material. Additional copies of such Annual Report along with copies of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, as filed with the Securities and Exchange Commission (exclusive of
documents incorporated by reference), are available without charge to
stockholders upon written request to the Company, Attention: Mark W. Ohlendorf,
10000 Innovation Drive, Milwaukee, Wisconsin 53226.
OTHER MATTERS
The Board does not know of any other matters which may come before the
Meeting. If any other matters are properly presented to the Meeting, it is the
intention of the persons named in the accompanying proxy to vote, or otherwise
to act, in accordance with their best judgment on such matters.
20
<PAGE> 23
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Company's 2001
Annual Meeting of Stockholders must be received by the Company no later than
March 1, 2001, in order to be included in the proxy statement and proxy relating
to that annual meeting.
Whether or not you plan to attend, you are urged to complete, sign and
return the enclosed proxy in the accompanying envelope. A prompt response will
greatly facilitate arrangements for the Meeting, and your cooperation will be
appreciated. Stockholders who attend the Meeting may vote their shares
personally even though they have sent in their proxies.
By Order of the Board of Directors,
/s/ Mark W. Ohlendorf
Mark W. Ohlendorf
Secretary
Milwaukee, Wisconsin
September 5, 2000
21
<PAGE> 24
Proxy for Holders of Common Stock
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 10, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ALTERRA HEALTHCARE CORPORATION
The undersigned appoints William F. Lasky, Steven L. Vick and Mark W.
Ohlendorf, and each of them, with full power of substitution, the proxies and
attorneys of the undersigned, to vote as specified hereon at the Annual Meeting
of Stockholders (the "Annual Meeting") of Alterra Healthcare Corporation (the
"Company") to be held at the Radisson Hotel Milwaukee West, 2303 N. Mayfair
Road, Wauwatosa, Wisconsin on Tuesday, October 10, 2000 at 8:00 a.m., Milwaukee
time, and at any adjournments or postponements thereof, with all powers (other
than the power to revoke the proxy or vote the proxy in a manner not authorized
by the executed form of proxy) that the undersigned would have if personally
present at the Annual Meeting, to act in their discretion upon any other matter
or matters that may properly be brought before the Annual Meeting and to appear
and vote all the shares of Common Stock of the Company that the undersigned
may be entitled to vote. The undersigned hereby acknowledges receipt of the
accompanying Proxy Statement and Annual Report to Stockholders, and hereby
revokes any proxy or proxies heretofore given by the undersigned relating to
the Annual Meeting.
This proxy may be revoked at any time prior to the voting thereof.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED AS IF MARKED FOR THE
PROPOSAL ABOVE.
The Board of Directors recommends a vote FOR the following proposal:
1. To elect the following nominees as the five At-Large Directors of the Board
of Directors of Alterra Healthcare Corporation.
[ ] FOR all nominees [ ] WITHHOLD authority
(except as marked below) to vote for all nominees
NOMINEES: Timothy J. Buchanan, Gene E. Burleson, William F. Lasky, William G.
Petty, Jr. and Steven L. Vick
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that name in the space provided below.
---------------------------------------
Signature
---------------------------------
Signature if
jointly held
------------------------------
Dated:
------------------------------, 2000
PLEASE DATE AND SIGN AS NAME APPEARS
HEREON. WHEN SIGNING AS EXECUTOR,
ADMINISTRATOR, TRUSTEE, GUARDIAN OR
ATTORNEY, PLEASE GIVE FULL TITLE AS SUCH.
IF A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED CORPORATE OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON. JOINT OWNERS
SHOULD EACH SIGN.
<PAGE> 25
Proxy for Holders of Series A Stock
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 10, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ALTERRA HEALTHCARE CORPORATION
The undersigned appoints William F. Lasky, Steven L. Vick and Mark W.
Ohlendorf, and each of them, with full power of substitution, the proxies and
attorneys of the undersigned, to vote as specified hereon at the Annual Meeting
of Stockholders (the "Annual Meeting") of Alterra Healthcare Corporation (the
"Company") to be held at the Radisson Hotel Milwaukee West, 2303 N. Mayfair
Road, Wauwatosa, Wisconsin on Tuesday, October 10, 2000 at 8:00 a.m., Milwaukee
time, and at any adjournments or postponements thereof, with all powers (other
than the power to revoke the proxy or vote the proxy in a manner not authorized
by the executed form of proxy) that the undersigned would have if personally
present at the Annual Meeting, to act in their discretion upon any other matter
or matters that may properly be brought before the Annual Meeting and to appear
and vote all the shares of Series A Stock of the Company that the undersigned
may be entitled to vote. The undersigned hereby acknowledges receipt of the
accompanying Proxy Statement and Annual Report to Stockholders, and hereby
revokes any proxy or proxies heretofore given by the undersigned relating to
the Annual Meeting.
This proxy may be revoked at any time prior to the voting thereof.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED AS IF MARKED FOR THE
PROPOSALS ABOVE.
The Board of Directors recommends a vote FOR the following proposal:
1. To elect the following nominees as the four Series A Directors of the Board
of Directors of Alterra Healthcare Corporation.
[ ] FOR all nominees [ ] WITHHOLD authority
(except as marked below) to vote for all nominees
NOMINEES: William E. Colson, Robert Haveman, Natalie Townsend and Jerry L.
Tubergen
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that name in the space provided below.
---------------------------------------
Signature
---------------------------------
Signature if
jointly held
------------------------------
Dated:
------------------------------, 2000
Please date and sign as name appears
hereon. When signing as executor,
administrator, trustee, guardian or
attorney, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized corporate officer. If a
partnership, please sign in partnership
name by authorized person. Joint owners
should each sign.
