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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1997.
REGISTRATION NO. 333-43213
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ATRIA COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT SPECIFIED IN ITS CHARTER)
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DELAWARE 8361 61-1303738
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
515 WEST MARKET STREET, SUITE 200
LOUISVILLE, KENTUCKY 40202
(502) 596-7540
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
AUDRA J. ECKERLE
GENERAL COUNSEL
ATRIA COMMUNITIES, INC.
515 WEST MARKET STREET, SUITE 200
LOUISVILLE, KENTUCKY 40202
(502) 596-7540
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
IVAN M. DIAMOND
GREENEBAUM DOLL & MCDONALD PLLC
3300 NATIONAL CITY TOWER
LOUISVILLE, KY 40202
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THESE SECURITIES TO THE
PUBLIC: From time to time after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILLED WITH +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES UNDER +
+THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
, 1997
200,000 SHARES
ATRIA COMMUNITIES, INC.
COMMON STOCK
(PAR VALUE $.10 PER SHARE)
This Prospectus covers a maximum of 200,000 shares of common stock, par value
$.10 per share ("Common Stock") of Atria Communities, Inc. (the "Company" or
"Atria") to be sold by Andy L. Schoepf (the "Selling Stockholder"). The Selling
Stockholder may from time to time sell all or part of the shares covered by
this Prospectus at prices then prevailing in the market or at negotiated
prices. See "Plan of Distribution." Customary brokerage commissions or
commissions in an amount to be negotiated from time to time may be paid by the
Selling Stockholder. The Company will not receive any proceeds from the sales
of shares by the Selling Stockholder.
The Selling Stockholder acquired the shares offered hereby in a private
transaction exempt from registration under the Securities Act of 1933, as
amended ("Securities Act"). See "Identity of Selling Stockholder." Upon any
sale of the shares offered hereby, the Selling Stockholder, brokers executing
sales orders on behalf of the Selling Stockholder and dealers to whom the
shares may be sold, may, under certain circumstances, be considered
"underwriters" within the meaning of Section 2(11) of the Securities Act.
The Common Stock is traded under the symbol "ATRC." The last reported sale
price of the Common Stock on the Nasdaq National Market on December 22, 1997,
was $16.875 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR CERTAIN CONSIDERATIONS RELEVANT TO
AN INVESTMENT IN THE COMMON STOCK.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements of
the Securities and Exchange Act of 1934 (the "Exchange Act") and, in
accordance therewith, is required to file proxy statements, reports and other
information with the Securities and Exchange Commission (the "Commission").
The Registration Statement, as well as any such report, proxy statement and
other information filed by the Company with the Commission, may be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following regional offices of the SEC: Northeast Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048; and Midwest Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. Such filings may also be obtained from the
Commission through the Internet at http://www.sec.gov.
Statements made in this Prospectus concerning the provisions of any
contract, agreement or other document referred to herein are not necessarily
complete. For each such statement concerning a contract, agreement or other
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission, reference is made to such exhibit or other filing for a
more complete description of the matter involved and each such statement is
qualified in its entirety by such reference.
The Company intends to furnish to its stockholders annual reports containing
financial statements audited by an independent accounting firm. The Company
also intends to furnish such other reports as it may determine or as may be
required by law.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated by reference: The Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996; the Company's Quarterly
Reports for the quarters ended March 31, 1997, June 30, 1997 and September 30,
1997; the Company's Current Reports on Form 8-K dated April 1, 1997 and
October 27, 1997; and the description of the Common Stock contained in the
Company's Registration Statement on Form 8-A, as the same may be amended.
All documents and reports subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering made by this
Prospectus shall be deemed to be incorporated by reference herein. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document that is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE FROM AUDRA J.
ECKERLE, GENERAL COUNSEL, ATRIA COMMUNITIES, INC., 515 WEST MARKET STREET,
SUITE 200, LOUISVILLE, KENTUCKY 40202 (TELEPHONE (502) 596-7540). IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE AT LEAST
FIVE BUSINESS DAYS PRIOR TO THE DATE ON WHICH A FINAL INVESTMENT DECISION IS
TO BE MADE.
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THE COMPANY
Atria is a leading national provider of assisted and independent living
services for the elderly. At September 30, 1997, the Company operated 37
communities in 17 states with a total of 3,890 units. The Company also had 33
assisted living communities under development, including 17 communities under
construction. The Company's communities included 1,878 assisted living units
and 2,012 independent living units. The Company owns 30 of its communities,
holds a majority interest in two communities, leases two communities and
manages three communities.
Assisted living is a rapidly emerging component of the non-acute health care
system for the elderly. The assisted and independent living industries serve
the long-term care needs of the elderly who do not require the more extensive
medical services available in skilled nursing facilities, yet who are either
no longer capable of or desire a totally independent lifestyle. Assisted
living residents typically require assistance with two or more activities of
daily living ("ADLs"), such as eating, grooming and bathing, personal hygiene
and toileting, dressing, transportation, walking and medication supervision.
The independent living industry serves the long-term care needs of the elderly
who require only occasional assistance with ADLs.
According to industry estimates, the assisted living industry represented
approximately $12.0 billion in revenue in 1996. The Company believes that
growth in the demand for assisted and independent living services is being
driven by: the growing elderly population segment; changing societal patterns
that make it difficult for families to provide in-home care for the elderly;
increasing recognition among the elderly and their families that assisted and
independent living facilities afford a cost-effective, independent, secure and
attractive lifestyle; and the limited supply of purpose-built assisted living
facilities currently available.
Atria's objective is to expand its position as a leading national provider
of high-quality assisted living services. Key elements of the Company's
strategy are to continue to: (i) develop or acquire, in geographic clusters,
60 to 85 additional assisted living communities consisting of approximately
5,400 to 7,650 units by the year 2000 (including the 33 communities under
development at September 30, 1997 and the communities developed or acquired
since the Company's initial public offering) to achieve regional density; (ii)
convert at least 750 of its existing independent living units to assisted
living units by the year 2000 (approximately 250 per year); (iii) focus on
private pay, middle-and upper-income residents; (iv) develop network
relationships and strategic alliances with leading national and regional
health care providers; (v) offer a broad range of high-quality services that
meet the individual needs of residents to enable them to "age in place"; and
(vi) develop the Atria prototype model in targeted markets to increase brand
awareness and achieve construction and operational efficiencies.
Prior to completion of the Company's initial public offering in August 1996
(the "IPO"), certain of the Company's assisted and independent living
communities had been operated by Vencor, Inc. ("Vencor") and its predecessors
for over a decade. Vencor operates an integrated network of health care
services primarily focusing on the needs of the elderly. In July 1997, the
Company completed a public offering of 6.9 million primary shares of Common
Stock (the "Secondary Offering"). In the fourth quarter of 1997, the Company
sold $143.75 million of 5.0% Convertible Subordinated Notes due 2002 (the
"Notes") in an offering exempt from registration under the Securities Act
pursuant to Rule 144A (the "Note Offering"). At September 30, 1997, Vencor
owned 42.8% of the Company's outstanding Common Stock.
The Company's executive offices are located at 515 West Market Street, Suite
200, Louisville, Kentucky 40202, and its telephone number is (502) 596-7540.
RECENT DEVELOPMENTS
In April 1997, the Company acquired American ElderServe Corporation
("American ElderServe"), an Atlanta-based operator of assisted living
communities, for approximately $30.5 million in cash, stock and
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assumption of debt. At the time of the acquisition, American ElderServe
operated 12 assisted living communities consisting of 503 units (six of the
communities were owned; one was leased; and five were managed under contract).
The Company terminated the management contracts on four of the five managed
communities during July 1997. At the time of the acquisition, American
ElderServe had six additional communities under construction, one of which
opened in April 1997, and the remainder of which are scheduled to open by the
end of 1997. In connection with the acquisition, Andy L. Schoepf, the former
President and Chief Executive Officer and principal shareholder of American
ElderServe, joined the Company as its Chief Operating Officer, received
636,487 shares of Common Stock (including certain demand and incidental
registration rights with respect thereto) and was subsequently elected a
director of the Company.
In connection with the American ElderServe acquisition, the Company entered
into a development agreement with Elder HealthCare Developers, LLC ("Elder
HealthCare"), a Georgia limited liability company owned 10% by Atria and 90%
by Assisted Care Developers, LLC ("Assisted Care Developers"). Assisted Care
Developers is wholly-owned by George A. Schoepf, former Executive Vice
President of American ElderServe and the brother of Andy L. Schoepf. Elder
HealthCare has the exclusive right to develop assisted living communities for
the Company in nine southeastern states. The Company has agreed that Elder
HealthCare will develop at least 15 communities in this southeast region over
the next three years; nine of those communities are currently under
development. The Company will have the first option to purchase any such
development community at the lesser of its fair market value or the cost to
develop and operate such community through the time of purchase plus $666,666.
The Company may exercise its option to purchase a community only after the
community's operations become profitable as defined in the development
agreement. Under the terms of the Operating Agreement of Elder HealthCare, as
amended, Elder HealthCare will fund the development, construction and working
capital needs of its communities by use of third party financing. If such
financing is unavailable or insufficient to cover all of the construction and
start-up costs associated with any of such communities, Atria will extend the
necessary funds or guarantees to Elder HealthCare. Assisted Care Developers
has agreed to indemnify the Company for up to 90.0% of any loss suffered by
Atria as a result of the default of Elder HealthCare on any loan either
extended or guaranteed by Atria. The Company will manage communities developed
by Elder HealthCare from the day they commence operations. See "Risk Factors--
Increased Leverage and Risks of Indebtedness."
The Company is in the process of completing the acquisition from The Carra
Company, LLC ("Carra") of five assisted living community development sites
located in Tennessee, Texas and Alabama. Carra will complete the development
of these communities pursuant to development agreements with the Company. The
total cost to acquire and complete the development of these communities will
be approximately $24.4 million. One of these communities, with 92 units
located in Memphis, Tennessee, was acquired in August 1997. A second 84-unit
community located in Memphis was acquired in October 1997. Communities to be
developed at the remaining three sites are scheduled to open from late 1997
through early 1998.
In June 1997, the Company and MedGroup Management, Inc. ("MedGroup"), a
wholly-owned for-profit subsidiary of Jewish Hospital HealthCare Services,
Inc. ("Jewish HealthCare") reached an agreement regarding the development of
assisted living communities within the market areas of Jewish HealthCare
facilities. MedGroup has an exclusive right of first refusal to be the sole
participant with Atria in the development of assisted living communities in
southern Indiana and central Kentucky. Three communities are currently under
development in the greater Louisville area. Jewish HealthCare is one of the
largest operators of health care facilities in Kentucky and southern Indiana,
with a network of 36 health care facilities.
In February 1997, the Company acquired a 102-unit assisted living community
and a 48 bed, 27-unit memory impairment and dementia care community. Both of
these communities are located in Knoxville, Tennessee. In September 1997, the
Company opened a 48-unit assisted living community in Memphis, Tennessee.
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In July 1997, the Company completed the Secondary Offering. The Company
intends to use the net proceeds from the Secondary Offering, approximately
$91.0 million, to finance the development and acquisition of assisted living
communities and for general corporate purposes.
In October 1997, the Company completed the Note Offering. The Notes will be
convertible into shares of Common Stock commencing on January 14, 1998, unless
previously redeemed or repurchased, at a conversion price of $20.86 per share,
subject to certain adjustments. The net proceeds of the Note Offering will be
used by the Company to finance the development and acquisition of additional
assisted living communities and for working capital and other general
corporate purposes.
Additionally, in October 1997, the Company purchased the assets of a
retirement community in Stamford, Connecticut for approximately $14.0 million.
This community was previously owned by Vencor and has been managed by the
Company since April 1997.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
The statements contained or incorporated by reference in this Prospectus
that are not historical facts constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of the Company to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things: (i) the successful and timely
implementation of the Company's acquisition and development strategy; (ii) the
Company's ability to obtain financing on acceptable terms to finance its
growth strategy and to operate within the limitations imposed by financing
arrangements; (iii) the cost of implementing the Company's acquisition and
development strategies; and (iv) other factors referenced in this Prospectus.
See "Risk Factors." The Company does not undertake to update any forward-
looking statement that may be made from time to time by, or on behalf of, the
Company.
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
shares of Common Stock offered by this Prospectus.
Financial Risks Associated with Expansion Program. During the first 12
months of operations, a newly developed assisted living community containing
90 units is expected to incur operating losses of between $150,000 and
$250,000. Once opened, the Company estimates that it will take an average of
12 months for a community to achieve targeted occupancy levels. The Company
may incur additional operating losses if it fails to achieve expected
occupancy rates at newly developed communities or if expenses related to the
development, acquisition or operation of new communities exceed expectations.
The risks associated with the Company's development of additional assisted
living communities and uncertainties regarding the profitability of such
operations could have a material adverse effect on the Company's business,
financial condition and results of operations.
Development and Construction Risks. The Company intends to develop or
acquire 60 to 85 additional assisted living communities consisting of
approximately 5,400 to 7,650 units by the year 2000 (including the 33
communities being developed at September 30, 1997 and the communities
developed and acquired since the Company's IPO). The Company's ability to
expand at this pace will depend upon a number of factors, including, but not
limited to, the Company's ability to acquire suitable properties at reasonable
prices; the Company's success in obtaining necessary zoning, land use,
building, occupancy, licensing and other required governmental permits and
authorizations; and the Company's ability to control construction and
renovation costs and project completion schedules. In addition, the Company's
development plan is subject to numerous factors outside its
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control, including competition for site acquisitions, shortages of, or
inability to obtain, labor or materials, changes in applicable laws or
regulations or in the method of applying such laws and regulations, the
failure of general contractors or subcontractors to perform under their
contracts, strikes and adverse weather. The Company's business, financial
condition and results of operations could be materially and adversely affected
if the Company is unable to achieve its development plan.
The Company does not currently have a substantial internal development
staff, but it has retained third parties to locate suitable sites for new
assisted living communities and to handle other aspects of the development
process on a contractual basis. Final approval of all development sites is
made by officers of the Company. If the Company is unable to expand its
development staff or continue to retain third-party sources to assist in the
development process, the Company's ability to execute its development and
growth plans and the Company's business, financial condition and results of
operations could be materially and adversely affected.
Increased Leverage and Risks of Indebtedness. In connection with the sale of
the Notes, the Company incurred $143.7 million in additional indebtedness and
increased the ratio of its long-term debt to its total capitalization to 56.9%
at September 30, 1997 (after giving effect to the net proceeds of the Note
Offering, including the exercise of the related over-allotment option and the
application of the net proceeds therefrom). As a result of this increased
leverage, the Company's principal and interest obligations increased
substantially. The degree to which the Company is leveraged could adversely
affect the Company's ability to obtain additional financing for working
capital, acquisitions or other purposes and could make it more vulnerable to
economic downturns and competitive pressures. The Company's increased leverage
could also adversely affect its liquidity, as a substantial portion of
available cash from operations may have to be applied to meet debt service
requirements and, in the event of a cash shortfall, the Company could be
forced to reduce other expenditures and forego potential acquisitions to be
able to meet such requirements.
The amount of debt and debt-related payments is expected to increase
substantially as the Company pursues its growth strategy. As a result, an
increasing portion of the Company's cash flow will be devoted to debt service
and related payments and the Company will be subject to risks normally
associated with increased financial leverage. There can be no assurance that
the Company will generate sufficient cash flows from operations to cover
required interest, principal and any operating lease payments.
In August 1996, Atria entered into a $200.0 million bank credit facility
(the "Credit Facility") which has a maturity of four years and may be extended
at the option of the banks for one additional year. The obligations under the
Credit Facility are secured by substantially all of Atria's property, the
capital stock of its present and future principal subsidiaries and all
intercompany indebtedness owed to Atria by its subsidiaries. The Credit
Facility contains certain customary financial covenants and other
restrictions.
Under the terms of the Operating Agreement of Elder HealthCare, as amended,
Elder HealthCare will fund the development, construction and working capital
needs of its communities by use of third party financing. If such financing is
unavailable or insufficient to cover all of the construction and start-up
costs associated with any of such communities, Atria will extend the necessary
funds or guarantees to Elder HealthCare. Assisted Care Developers has agreed
to indemnify the Company for up to 90.0% of any loss suffered by Atria as a
result of the default of Elder HealthCare on any loan either extended or
guaranteed by Atria. The Company will manage communities developed by Elder
HealthCare from the day they commence operations. The Company may exercise its
option to purchase a community only after the community's operations become
profitable. If the Company fails to exercise its option, Elder HealthCare will
not be obligated to obtain new financing to replace the financing provided by
Atria.
Risk of Rising Interest Rates. At September 30, 1997, $61.3 million in
principal amount of the Company's indebtedness bore interest at floating
rates. In addition, other indebtedness that the Company may incur in the
future may also bear interest at a floating rate. Therefore, increases in
prevailing interest rates could increase the Company's interest payment
obligations and could have a material adverse effect on the Company's
business, financial condition and results of operations.
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Restrictions Associated with Bond and HUD Financing. At September 30, 1997,
ten of the Company's assisted living and independent living communities
(containing 1,149 units) have been financed in whole or in part by industrial
revenue bonds or HUD financing. Under the terms of the HUD financing, the
Company is required to obtain HUD approval prior to taking certain actions,
including raising prices. In addition, under the terms of the bonds, the
Company is required to rent approximately 250 assisted and independent living
units to individuals who have incomes which are 80.0% or less of the average
income levels in a designated market. In certain cases, the Company's ability
to increase prices in communities with such bond financing (in response to
higher operating costs or other inflationary factors) could be limited if it
affects the ability of the Company to attract and retain residents with
qualifying incomes. Failure to satisfy these requirements constitutes an event
of default and could accelerate the maturity dates of these financings. At
September 30, 1997, outstanding amounts under both types of financing totaled
$69.4 million. The Company does not presently expect to seek additional
industrial revenue bond or HUD financing. However, the Company may assume
financings of these types pursuant to acquisitions of additional communities.
Consequences of Default. There can be no assurance that the Company will
generate sufficient cash flows from operations to cover required interest,
principal and operating lease payments. Any payment or other default could
cause the lender to foreclose upon the communities securing such indebtedness
with a consequent loss of income and asset value to the Company. In certain
cases, indebtedness secured by a community is also secured by a pledge of the
Company's interests in the community. In the event of a default with respect
to any such indebtedness, the lender could avoid the judicial procedures
required to foreclose on real property by foreclosing on the pledge instead,
thus accelerating the lender's acquisition of the community. Further, because
most of the Company's mortgages contain cross-default and cross-
collateralization provisions, a default by the Company on one of its payment
obligations could adversely affect a significant number of the Company's other
communities.
Acquisition Risks; Difficulties of Integration. In addition to developing
additional assisted living communities, the Company currently plans to acquire
additional assisted living facilities or other properties that can be
repositioned as assisted living communities. The Company recently acquired (i)
American ElderServe, an operator of 12 assisted living communities with 503
units, and (ii) two assisted living communities with a total of 129 units in
Knoxville, Tennessee. There can be no assurance that the Company will be able
to integrate successfully the operations of these communities or institute
Company-wide systems and procedures to operate successfully the combined
enterprises. There can be no assurance that the Company's acquisition of
assisted living facilities will be completed at the rate currently expected,
if at all. The success of the Company's acquisitions will be determined by
numerous factors, including the Company's ability to identify suitable
acquisition candidates, competition for such acquisitions, purchase price,
financial performance of the communities after acquisition and ability of the
Company to integrate effectively the operations of acquired communities. A
strategy of growth by acquisition also involves the risk of assuming unknown
or contingent liabilities of the acquired businesses, which could be material,
individually or in the aggregate. Any failure by the Company to identify
suitable candidates for acquisition, to integrate or operate acquired
communities effectively or to insulate itself from unwanted liabilities of
acquired businesses may have a material adverse effect on the Company's
business, financial condition and results of operations.
Limited History as a Stand-alone Company. Although the Company's
predecessors have operated assisted and independent living communities for
over a decade, the Company itself has only operated as a stand-alone company
since August 1996. Prior to August 1997, the Company received certain
administrative services from Vencor, including finance and accounting, human
resources, risk management, legal, marketing and information systems support,
pursuant to an administrative services agreement dated August 19, 1996 (the
"1996 Administrative Services Agreement"). Upon the expiration of this
agreement in August 1997, the Company and Vencor entered into an
administrative services agreement (the "New Administrative Services
Agreement") with respect to marketing, human resources and information systems
support. The New Administrative Services Agreement will expire on December 31,
1997, unless the Company requests Vencor to provide information systems
support for an additional 90 days. Although there can be no assurance that
upon termination of this agreement the Company will have adequate staffing to
perform the functions Vencor currently performs for the
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Company, the Company is currently implementing plans to insource most of these
services or contract with third parties for the provision of these services.
The costs associated with securing these services from third parties or
insourcing these services may exceed the costs associated with the provision
of these services by Vencor.
Principal Stockholder. At September 30, 1997, Vencor held 42.8% of the
outstanding Common Stock and, accordingly, is in a position to influence
significantly the management and operations of the Company. Three of the eight
Company directors are officers or directors of Vencor and only three directors
of the Company are independent directors who are not Vencor affiliates or
employees of the Company. Vencor has entered into a Voting Agreement pursuant
to which it has agreed to vote all of its shares of Common Stock at any
meeting at which directors are elected in favor of the election of independent
directors so that after such election, if such persons are elected, there will
be at least two independent directors. The Voting Agreement continues in
effect until August 2001 so long as Vencor beneficially owns 30.0% or more of
the Common Stock. The concentration of ownership in Vencor may have a limiting
effect on the price and trading volume of the Common Stock and may inhibit
changes in control of the Company.
Relationship with Vencor; Conflicts of Interest. Certain directors and
officers of Vencor who are also directors of the Company, and Vencor, as the
Company's principal stockholder, have conflicts of interest with respect to
certain transactions concerning the Company. When the interests of Vencor and
the Company diverge, Vencor may exercise its influence in its own best
interests. The Company anticipates resolving potential conflicts of interest
on a case-by-case basis, which may include the use of committees comprised of
disinterested members of the Board of Directors and the retention of
independent financial and other advisors. Transactions between the Company and
its officers, directors, principal stockholders and their affiliates will be
on terms no less favorable to the Company than could be obtained from
unrelated third parties and any such transactions will be subject to approval
by a majority of the disinterested members of the Board of Directors.
The Company and Vencor have entered into certain agreements, including an
Incorporation Agreement, a Tax Sharing Agreement, a Registration Rights
Agreement, a Guaranty Fee Agreement and certain Services Agreements (the
"Vencor Agreements"), in connection with Vencor's contribution of assisted and
independent living communities to Atria in exchange for 10,000,000 shares of
Common Stock and the Company's assumption of certain liabilities related to
such communities. These agreements specify certain services to be provided to
the Company by Vencor. For example, prior to 1997, Vencor provided certain
administrative services to the Company, including finance and accounting,
human resources, risk management, legal, marketing and information systems
support for an annual fee approximating $458,000. Pursuant to the
Incorporation Agreement, the Company paid Vencor $150,000 for its assistance
in connection with the IPO. The maximum guaranty fee that the Company intends
to pay Vencor in connection with the Guaranty Fee Agreement is $1,125,000 per
year. Except for the New Administrative Services Agreement, these agreements
were negotiated by officers of Vencor and the Company while the Company was a
wholly-owned subsidiary of Vencor. Accordingly, there is no assurance that (i)
the terms and conditions of these arrangements are as favorable to the Company
as those the Company could have obtained from unaffiliated third parties; or
(ii) such arrangements will not be terminated or modified in the future.
Although Vencor has advised the Company that it does not intend to compete
with the Company, the Vencor Agreements do not contain any covenant not to
complete or similar restrictions prohibiting Vencor from developing, acquiring
or operating its own assisted or independent living facilities.
Need for Additional Financing. To achieve its growth objectives, the Company
will need to obtain substantial additional financing to fund its development,
construction and acquisition activities. The Company currently estimates that
the net proceeds from the Note Offering, together with existing capital
resources and financing commitments, will be sufficient to fund its
development and acquisition program through mid-1999. There can be no
assurance, however, that the Company will not be required to obtain additional
capital at an earlier date. The Company may from time to time seek additional
financing through public or private financing sources, including equity or
debt financing. If additional funds are raised by issuing equity securities,
the Company's stockholders may experience dilution. There can be no assurance
that adequate funding will be available as needed or on terms acceptable to
the Company. Insufficient financial resources may require the Company to delay
or eliminate all or some of its development projects and acquisition plans,
which could have a material adverse effect on the Company's business,
financial condition and results of operations.
8
<PAGE>
Variations in Operating Results. Although the Company has been profitable,
there can be no assurance that revenue growth or profitability will not
fluctuate on a quarterly or annual basis in the future. The Company may
experience variations in quarterly and annual operating results. Quarterly or
annual variations may result from the timing of opening new communities and
the rate at which certain occupancy levels are achieved. The Company's
operating results for any particular quarter or year may not be indicative of
results for future periods.
Management of Planned Rapid Growth. The Company's success will depend, in
part, on its ability to manage its planned rapid growth. The Company does not
presently have adequate staff to manage its planned growth and relies on
Vencor to provide certain internal management functions. The Company will need
to expand its operational, financial and management information systems and
continue to attract, motivate and retain key employees. If the Company does
not manage its growth effectively, its business, financial condition and
results of operations could be materially and adversely affected. See "Risk
Factors--Limited History as a Stand-alone Company," and "--Relationship with
Vencor; Conflicts of Interest."
Dependence on Private Pay Residents. The Company currently relies, and in
the foreseeable future expects to rely, primarily on the ability of residents
to pay for the Company's services from their own financial resources. In the
event that managed care becomes a significant factor in the assisted living
industry, the amount the Company receives for its services could be adversely
affected. In addition, inflation or other circumstances that adversely affect
the ability of the elderly to pay for the Company's services could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Competition. The assisted living industry is highly competitive. The Company
faces competition from numerous local, regional and national providers of
assisted and independent living and long-term care services. The Company also
competes with companies providing home-based health care. Some of the
Company's competitors operate on a not-for-profit basis or as charitable
organizations. Also, many of the Company's competitors are significantly
larger and have greater financial resources than the Company. The Company
believes that the assisted living industry will become even more competitive
in the future. Regulatory barriers to entry into the assisted living industry
are generally not substantial. If the development of new assisted living
facilities surpasses the demand for such facilities in particular markets,
such markets may become saturated. The Company also expects to compete for
acquisitions of additional assisted living facilities and properties. There
can be no assurance that competition will not limit the Company's ability to
attract residents or expand its business or have a material adverse effect on
the Company's business, financial condition or results of operations.
Government Regulation. The health care industry is subject to extensive
regulation and frequent regulatory change. At this time, no federal laws or
regulations specifically regulate assisted or independent living facilities.
While a number of states have not yet enacted specific assisted living
regulations, the Company's communities are subject to regulation, licensing,
certificate of need requirements and permitting by state and local health and
social service agencies and other regulatory authorities. Requirements vary
from state to state. Changes in existing laws and regulations, adoption of new
laws and regulations and new interpretations of existing laws and regulations
could have an adverse impact on the Company's operations. The Company believes
that such regulation will increase in the future. In addition, health care
providers are receiving increased scrutiny under anti-trust laws as the
integration and consolidation of health care delivery increases and affects
competition. Regulation of the assisted living industry is evolving. The
Company is unable to predict the content of new regulations and their effect
on its business. There can be no assurance that the Company's operations will
not be adversely affected by regulatory developments. Failure by the Company
to comply with applicable regulatory requirements could have a material
adverse effect on the Company's business, financial condition and results of
operations.
Federal and state fraud and abuse or anti-self referral statutes and
regulations, such as Medicare/Medicaid anti-kickback laws, Stark I and II,
certain provisions of the Health Insurance Portability and Accountability Act
of 1997 and the Balanced Budget Act of 1997, govern certain financial
arrangements among health care providers and others who may be in a position
to refer or recommend patients to such providers. These laws prohibit, among
other things, certain direct and indirect payments that are intended to induce
the referral of patients to,
9
<PAGE>
the arranging for services by or the recommending of a particular provider of
health care items or services. Vencor and other health care providers offer
certain services to residents of the Company's communities. Fraud and abuse
oversight is increasing and the application of these laws has been expanded to
include payors beyond Medicare and Medicaid, such as indemnity insurers,
managed care organizations and other private payors. These laws have been
broadly interpreted to apply to certain relationships between health care
providers and sources of patient referral. These laws and regulations are
extremely complex and have been the subject of little judicial or regulatory
interpretation. Similarly, state laws vary, are sometimes vague and have
seldom been interpreted by courts or regulatory agencies. Violation of these
laws can result in loss of licensure, civil and criminal penalties and
exclusion of health care providers or suppliers from participation in the
Medicare and Medicaid programs. There can be no assurance that such laws will
be interpreted in a manner consistent with the practices of the Company.
Under the Americans with Disabilities Act of 1990, all places of public
accommodation are required to meet certain federal requirements related to
access and use by disabled persons. A number of additional federal, state and
local laws exist that also may require modifications to existing and planned
communities to create access to the properties by disabled persons. While the
Company believes that its properties are substantially in compliance with
present requirements or are exempt therefrom, if required changes involve a
greater expenditure than anticipated or must be made on a more accelerated
basis than anticipated, additional costs would be incurred by the Company.
Further legislation may impose additional burdens or restrictions with respect
to access by disabled persons, the costs of compliance with which could be
substantial.
Labor Costs. The Company competes with various health care providers and
other employers for qualified and skilled personnel. The Company's labor costs
will increase over time. The Company's business, financial condition and
results of operations could be adversely affected if the Company is unable to
control its labor costs.
Environmental Risks. Under various federal, state and local environmental
laws, ordinances and regulations, a current or previous owner or operator of
real property may be held liable for the cost of removal or remediation of
certain hazardous or toxic substances that may be located on, in or under the
property. These laws and regulations may impose liability regardless of the
owner's or operator's responsiblity or knowledge of the presence of the
hazardous or toxic substances. The liability of the owner or operator and the
cost of any required remediation or removal of hazardous or toxic substances
could exceed the property's value. In connection with the ownership or
operation of its communities, the Company could be liable for these costs. As
a result, the presence of hazardous or toxic substances at any property
currently held or operated by the Company or acquired or operated by the
Company in the future, could have a material adverse effect on the Company's
business, financial condition and results of operations.
Liability and Insurance. In recent years, the long-term care industry has
experienced an increase in the number of lawsuits alleging negligence and
other legal theories, many of which involve significant costs and substantial
claims. The Company maintains insurance policies in amounts and with such
coverage as it deems appropriate for its operations. There can be no
assurance, however, that the Company will be able to continue to obtain
sufficient liability insurance coverage in the future or that such coverage
will be available on acceptable terms. A successful claim in excess of the
Company's coverage or not covered by the Company's insurance could have a
material adverse effect on the Company's business, financial condition and
results of operations. Claims against the Company, regardless of their merit
or outcome, may involve significant legal costs and require management to
devote considerable time that would otherwise be utilized in the operation of
the Company.
Anti-takeover Provisions. The Company's Restated Certificate of
Incorporation and Amended and Restated By-laws, as well as Delaware corporate
law, contain certain provisions that could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire or take control of, the Company. These provisions could
limit the price that certain investors might be willing to pay for shares of
Common Stock. Certain of these provisions allow the Company to issue, without
stockholder approval, preferred stock having voting rights senior to those of
the Common Stock. Other provisions impose various procedural and other
requirements that could make it more difficult for stockholders to effect
certain corporate
10
<PAGE>
actions. In addition, the Company's Board of Directors is divided into three
classes, each of which serves for a staggered three-year term, which may make
it more difficult for a third party to gain control of the Board of Directors.
As a Delaware corporation, the Company is subject to Section 203 of the
Delaware General Corporation Law which, in general, prevents an "interested
stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock) from engaging in a "business
combination" for three years following the date such person became an
interested stockholder unless certain conditions are satisfied. As a result,
third parties may be discouraged from attempting to acquire or take control of
the Company. See "Risk Factors--Principal Stockholder."
Possible Volatility of Stock Price. The Company's Common Stock has been
quoted on the Nasdaq National Market since August 1996. The stock market in
recent years has experienced broad price and volume fluctuations that have
frequently been unrelated to the performance of particular companies. Such
market fluctuations may materially and adversely affect the market price of
the Common Stock.
IDENTITY OF SELLING STOCKHOLDER
The Selling Stockholder is Andy L. Schoepf, the Chief Operating Officer and
a director of the Company. Mr. Schoepf's address is 515 West Market Street,
Suite 200, Louisville, Kentucky 40202. Pursuant to an Agreement and Plan of
Merger dated March 3, 1997, between the Company and the Selling Stockholder,
the Selling Stockholder acquired 636,487 shares of Common Stock in exchange
for his interest in the American ElderServe Corporation. Prior to this
offering the Selling Stockholder owns 636,487 shares or 2.7% of the shares of
Common Stock outstanding at December 22, 1997. After this offering the Selling
Stockholder will own 436,487 shares or 1.9% of the shares of Common Stock
outstanding at December 22, 1997.
PLAN OF DISTRIBUTION
The Selling Stockholder has advised the Company that sales of the shares
offered hereby will be effected from time to time in transactions (which may
include block transactions) on the Nasdaq National Market System, in the over-
the-counter market, in negotiated transactions or otherwise, at prices then
prevailing or at negotiated prices. The Selling Stockholder may effect such
transactions by selling the shares directly to purchasers or to or through
broker-dealers who may act as agents or principals. Such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholder, or from the purchasers of the shares for whom such
broker-dealers may act as agents or to whom they sell as principal, or both.
The Selling Stockholder and any persons who act as broker-dealers in
connection with the sale of the shares offered hereby might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and
any commission received by them, and any profit on the resale of the shares as
principal, may under certain circumstances be deemed to be underwriting
discounts and commissions under the Securities Act.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Greenebaum Doll & McDonald PLLC, Louisville, Kentucky. William C.
Ballard Jr., a director of the Company, is of counsel to Greenebaum Doll &
McDonald PLLC, and as of the date of this Prospectus he beneficially owns
23,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of Atria Communities, Inc. appearing
in the Atria Communities, Inc. Annual Report on Form 10-K for the year ended
December 31, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon, included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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<PAGE>
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE
IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents By Reference............................ 2
The Company................................................................ 3
Risk Factors............................................................... 5
Identity of Selling Stockholder............................................ 11
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
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200,000 SHARES
ATRIA COMMUNITIES, INC.
COMMON STOCK
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PROSPECTUS
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1997
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of all expenses to be
borne by the Company in its registration of the shares registered hereunder.
The Selling Stockholder will be responsible for any and all underwriting
discounts, selling commissions and similar brokerage charges in connection
with the sale of the shares registered hereunder. All amounts are estimated,
except for the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee............................................. $ 1,031
Legal Fees and Expenses.......................................... 11,000
Accounting Fees and Expenses..................................... 3,500
Miscellaneous.................................................... 1,469
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Total........................................................ $17,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
A. Elimination of Certain Liability. Pursuant to Article IX of the
Registrant's Certificate of Incorporation ("Article IX"), a director of the
Registrant shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability: (i) for any breach of the director's duty of loyalty to
the Registrant or its stockholders; (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the General Corporation Law of the State of
Delaware; or (iv) for any transaction from which the director derived an
improper personal benefit. If the General Corporation Law of the State of
Delaware is hereafter amended to permit further elimination or limitation of
the personal liability of directors, then the liability of a director of the
Registrant shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of the State of Delaware, as so amended. Any
repeal or modification of Section A of Article IX shall not adversely effect
any right or protection of a director of the Registrant existing at the time
of such repeal or modification.
B. Right to Indemnification. Subject to Section C of Article IX of the
Registrant's Certificate of Incorporation, each person who was or is made a
party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that such person, or a
person of whom such person is the legal representative, is or was a director
or officer of the Registrant or is or was serving at the request of the
Registrant as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding
is alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Registrant to the
fullest extent authorized by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the
Registrant to provide broader indemnification rights than said law permitted
the Registrant to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, excise taxes
under the Employee Retirement Income Security Act of 1974, as in effect from
time to time ("ERISA"), penalties and amounts to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith. The
Registrant may, by action of its Board of Directors, provide indemnification
to other employees or agents of the Registrant with the same scope and effect
as the indemnification of directors and officers pursuant to Article IX.
C. Procedure for Indemnification. Any indemnification under Article IX
(unless ordered by a court) shall be made by the Registrant only as authorized
in the specific case upon a determination that indemnification is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the
II-1
<PAGE>
General Corporation Law of the State of Delaware, as the same exists or
hereafter may be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Registrant to provide broader
indemnification rights than said law permitted the Registrant to provide prior
to such amendment). Such determination shall be made (i) by the Board of
Directors by a majority vote of a quorum consisting of directors who are not
parties to such action, suit or proceeding (the "Disinterested Directors");
(ii) if such a quorum of Disinterested Directors is not obtainable, or, even
if obtainable, a quorum of Disinterested Directors so directs, by independent
legal counsel and a written opinion; or (iii) by the stockholders. The
majority of Disinterested Directors may, as they deem appropriate, elect to
have the Registrant indemnify any other employee, agent or other person acting
for or on behalf of the Registrant.
D. Advances for Expenses. Costs, charges and expenses (including attorneys'
fees) incurred by a director or officer of the Registrant, or such other
person acting on behalf of the Registrant as determined in accordance with
Section C of Article IX, in defending a civil or criminal action, suit or
proceeding shall be paid by the Registrant in advance of the final disposition
of such action, suit or proceeding upon receipt of a undertaking by or on
behalf of the director, officer or other person to repay all amounts so
advanced in the event that it shall ultimately be determined that such
director, officer or other person is not entitled to be indemnified by the
Registrant as authorized in Article IX or otherwise.
E. Right of Claimant to Bring Suit. If a claim under Sections B or D of
Article IX is not paid in full by the Registrant within 30 days after a
written claim has been received by the Registrant, the claimant may at any
time thereafter bring suit against the Registrant to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Registrant) that the claimant has not met the standard of
conduct that makes it permissible under the General Corporation Law of the
State of Delaware for the Registrant to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Registrant.
Neither the failure of the Registrant (including its Board of Directors, legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because the claimant has met the applicable standards of
conduct set forth in the General Corporation Law of the State of Delaware, nor
an actual determination by the Registrant (including its Board of Directors,
legal counsel or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
F. Other Rights; Continuation of Right to Indemnification. The
indemnification and advancement of expenses provided by Article IX shall not
be deemed exclusive of any other rights to which a claimant may be entitled
under any law (common or statutory) by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his or her official
capacity and as to any action in another capacity while holding office or
while employed by or acting as agent for the Registrant, and shall inure to
the benefit of the estate, heirs, executors and administrators of such person.
All rights to indemnification under Article IX shall be deemed to be a
contract between the Registrant and each director and officer of the
Registrant who serves or served in such capacity at any time while Article IX
is in effect. Any repeal or modification of Article IX or any repeal or
modification of relevant provisions of the General Corporation Law of the
State of Delaware or any other applicable law shall not in any way diminish
any rights to indemnification of such director, officer or the obligations of
the Registrant arising hereunder with respect to any action, suit or
proceeding arising out of, or relating to, any actions, transactions or facts
occurring prior to the final adoption of such modification or repeal. For the
purposes of Article IX, references to "the Registrant" include all constituent
corporations absorbed in a consolidation or merger as well as the resulting or
surviving corporation, so that any person who is or was a director or officer
of such a constituent corporation or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article IX of the
Registrant's Articles of Incorporation, with respect to the resulting or
surviving corporation, as such person would if such person had served the
resulting or surviving corporation in the same capacity.
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<PAGE>
G. Insurance. The Registrant may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Registrant
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, even if the Registrant would not
have the power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
H. Severability. If any provision or provisions of Article IX shall be held
to be invalid, illegal or unenforceable for any reason whatsoever: (1) the
validity, legality and enforceability of the remaining provisions of Article
IX (including, without limitation, each portion of any paragraph of Article IX
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself held to be invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (2) to the fullest extent
possible, the provisions of Article IX of the Registrant's Certificate of
Incorporation (including, without limitation, each such portion of any
paragraph of Article IX containing any such provision held to be invalid,
illegal or unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable.
ITEM 16 EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
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<C> <S> <C>
2 Agreement and Plan of Merger among Atria Communities,
Inc., Atria Communities Southeast, Inc., American
ElderServe Corporation, Andy L. Schoepf, Elizabeth A.
Schoepf, and Evely C. Schoepf, dated as of March 3, 1997.
Exhibit 2.1 to the Company's Current Report on Form 8-K
dated April 1, 1997 (Comm. File No. 0-21159) is hereby in-
corporated by reference
4.1 Restated Certificate of Incorporation. Exhibit 3.1 to the
Company's Registration Statement on Form S-1 (Comm. File
333-06907) is hereby incorporated by reference
4.2 Amended and Restated Bylaws. Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (Comm. File No. 333-
06907) is hereby incorporated by reference
4.3 Specimen Common Stock Certificate. Exhibit 4 to the
Company's Registration Statement on Form S-1 (Comm. File
No. 333-06907) is hereby incorporated by reference
4.4 Credit Agreement dated as of August 15, 1996, among (a)
Atria Communities, Inc., as Borrower; (b) the lending in-
stitutions listed in Annex I to the Credit Agreement, as
Lenders; (c) PNC Bank, National Association, as Adminis-
trative Agent; (d) PNC Bank, Kentucky, Inc., as Managing
Agent; (e) National City Bank of Kentucky, as Documenta-
tion Agent, and (f) PNC Bank, National Association, Na-
tional City Bank of Kentucky, and the Toronto-Dominion
Bank, New York Agency, as Syndication Agent Exhibit 1 to
the Company's Current Report on Form 8-K dated August 26,
1996 (Comm. File No. 0-21159) is hereby incorporated by
reference
4.5 Amendment No. 1 to Credit Agreement dated as of January
14, 1997 among Atria Communities, Inc., as borrower, the
lending institutions named therein, PNC Bank, National As-
sociation, as Administrative Agent, PNC Bank, Kentucky,
Inc., as Managing Agent, and National City Bank of Ken-
tucky, as Documentation Agent. Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1997 (Comm. File
No. 0-21159) is hereby incorporated by reference
4.6 Amendment No. 2 to Credit Agreement dated as of March 27,
1997 among Atria Communities, Inc., as borrower, the lend-
ing institutions named therein, PNC Bank, National Associ-
ation, as Administrative Agent, PNC Bank Kentucky, Inc.,
as Managing Agent, and National City Bank of Kentucky, as
Documentation Agent. Exhibit 4.2 to the Company's Quar-
terly Report on Form 10-Q for the period ended March 31,
1997 (Comm. File
No. 0-21159) is hereby incorporated by reference
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
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<C> <S> <C>
4.7 Amendment No. 3 to Credit Agreement dated as of May 27,
1997 among Atria Communities, Inc., as borrower, the lend-
ing institutions named therein, PNC Bank, National Associ-
ation as Administrative Agent, PNC Bank Kentucky, Inc. as
Managing Agent, and National City Bank of Kentucky, as
Documenting Agent. Exhibit 4.6 to the Company's Registra-
tion Statement on Form S-3 (Comm. File No. 333-28577)
4.8 Amendment No. 4 to Credit Agreement dated as of September
29, 1997 among Atria Communities, Inc., as borrower, the
lending institutions named therein, PNC Bank, National As-
sociation as Administrative Agent, and National City Bank
of Kentucky, as Documentation Agent. Exhibit 4.1 to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1997 (Comm. File No. 0-21159) is
hereby incorporated by reference
4.9 Form of 5.0% Convertible Subordinated Notes Due 2002 (in-
cluded in Exhibit 4.9)
4.10 Indenture dated as of October 16, 1997, by and among Atria
Communities, Inc., BT Alex. Brown Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation, Morgan Stanley &
Co. Incorporated, Smith Barney Inc. and J.C. Bradford &
Co. (Exhibit 4.2 to the Company's Current Report on Form
8-K dated October 16, 1997 (Comm. File No. 0-21159) is
hereby incorporated by reference
5 Opinion of Greenebaum Doll & McDonald PLLC as to legality
of the securities being registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Greenebaum Doll & McDonald PLLC (included in
Exhibit 5)
24 Power of Attorney (included on signature Page of the Reg-
istration Statement)
27 Financial Data Schedule (included only in filings under
the Electronic Data Gathering, Analysis, and Retrieval
System)
</TABLE>
(b) FINANCIAL STATEMENT SCHEDULES
Not applicable.
ITEM 22 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) that, 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 the post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
II-4
<PAGE>
(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
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) 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, Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant in
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, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
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 THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, IN THE
CITY OF LOUISVILLE, COMMONWEALTH OF KENTUCKY, ON DECEMBER 24, 1997.
Atria Communities, Inc.
/s/ W. Patrick Mulloy, II
By: _________________________________
W. Patrick Mulloy, II
Chief Executive Officer and
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board December 24, 1997
____________________________________
W. Bruce Lunsford
/s/ W. Patrick Mulloy, II Chief Executive Officer, December 24, 1997
____________________________________ President and Director
W. Patrick Mulloy, II
* Chief Operating Officer and December 24, 1997
____________________________________ Director
Andy L. Schoepf
/s/ J. Timothy Wesley Chief Financial Officer, December 24, 1997
____________________________________ Vice President of
J. Timothy Wesley Development and Secretary
(Chief Financial and
Accounting Officer)
* Director December 24, 1997
____________________________________
Sandra Harden Austin
* Director December 24, 1997
____________________________________
William C. Ballard Jr.
* Director December 24, 1997
____________________________________
Peter J. Grua
* Director December 24, 1997
____________________________________
Thomas T. Ladt
* Director December 24, 1997
____________________________________
R. Gene Smith
</TABLE>
/s/ W. Patrick Mulloy
*By: _____________________
Attorney-in-fact
II-6
<PAGE>
GREENEBAUM DOLL & MCDONALD PLLC
3300 NATIONAL CITY TOWER
101 SOUTH FIFTH STREET
LOUISVILLE, KENTUCKY 40202-3197
502/589-4200
FAX 502/587-3695
December 24, 1997
Atria Communities, Inc.
515 West Market Street
Louisville, KY 40202
Ladies and Gentlemen:
We have acted as legal counsel in connection with the preparation of a
Registration Statement on Form S-3 under the Securities Act of 1933, as amended
(the "Registration Statement"), covering an aggregate of 200,000 shares of
Common Stock, par value $.10 per share (the "Common Stock"), of Atria
Communities, Inc., a Delaware corporation (the "Company") to be sold by Andy L.
Schoepf (the "Selling Stockholder"). The Selling Stockholder may from time to
time sell all or a part of the shares covered by the Registration Statement at
prices then prevailing in the market or at negotiated prices.
We have examined and are familiar with the Restated Certificate of
Incorporation and Amended and Restated By-Laws of the Company, and the various
corporate records and proceedings relating to the organization of the Company
and the issuance of the Common Stock. We have also examined such other documents
and proceedings as we have considered necessary for the purpose of this opinion.
Based on the foregoing, it is our opinion that the Common Stock has been
duly authorized, validly issued, fully paid and non-assessable.
We hereby consent to the filing of this Opinion as an exhibit to the
Registration Statement, and with such state securities administrators as may
require such opinion of counsel for the registration of the Common Stock. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the Rules and Regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Greenebaum Doll & McDonald PLLC
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Atria Communities,
Inc. for the registration of 200,000 shares of its common stock and to the
incorporation by reference therein of our report dated February 1, 1997 (except
for Note 11 as to which the date is March 3, 1997) with respect the consolidated
financial statements of Atria Communities, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1996, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Louisville, Kentucky
December 22, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Atria Communities,
Inc.'s condensed consolidated financial statements for the nine months ended
September 30, 1997 and is qualified in its entirety by reference to such
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 79,617
<SECURITIES> 0
<RECEIVABLES> 755
<ALLOWANCES> (157)
<INVENTORY> 138
<CURRENT-ASSETS> 82,495
<PP&E> 243,237
<DEPRECIATION> (31,568)
<TOTAL-ASSETS> 315,493
<CURRENT-LIABILITIES> 8,533
<BONDS> 107,207
0
0
<COMMON> 2,337
<OTHER-SE> 181,488
<TOTAL-LIABILITY-AND-EQUITY> 315,493
<SALES> 0
<TOTAL-REVENUES> 48,930
<CGS> 0
<TOTAL-COSTS> 24,719
<OTHER-EXPENSES> 9,660
<LOSS-PROVISION> 35
<INTEREST-EXPENSE> 3,272
<INCOME-PRETAX> 8,495
<INCOME-TAX> 3,390
<INCOME-CONTINUING> 5,105
<DISCONTINUED> 0
<EXTRAORDINARY> (199)
<CHANGES> 0
<NET-INCOME> 4,906
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
