<PAGE>
As filed with the Securities and Exchange Commission on April 30, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------
BROOKDALE LIVING COMMUNITIES, INC.
(Exact name of issuer as specified in its charter)
Delaware 36-4103821
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
77 West Wacker Drive
Chicago, Illinois 60601
(Address of Principal Executive Offices) (Zip Code)
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BROOKDALE LIVING COMMUNITIES, INC.
STOCK INCENTIVE PLAN
(Full title of the plan)
--------------------
Copy to:
ROBERT J. RUDNIK, ESQ. BRIAN T. BLACK, ESQ.
General Counsel and Secretary Winston & Strawn
77 West Wacker Drive 35 West Wacker Drive
Chicago, Illinois 60601 Chicago, Illinois 60601
(312) 977-3700 (312) 558-5600
(Name, address, telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
Calculation of Registration Fee
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Amount Proposed maximum Proposed maximum Amount of
Title of securities to be offering price aggregate registration
to be registered registered per share(1) offering price(1) fee
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share 830,000 $26.625 $22,098,750 $6,520
- --------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended, on the
basis of the average of the high and low prices of the Common Stock, par
value $0.01 per share, of Brookdale Living Communities, Inc. on the Nasdaq
National Market as of April 29, 1998.
<PAGE>
PART I -- INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Brookdale Living Communities, Inc. shall deliver the document
containing the information in Part I of this Registration Statement on Form S-8
to each participant in the Brookdale Living Communities, Inc. Stock Incentive
Plan as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended
(the "Securities Act"). Such document is not being filed with or included in
this Registration Statement (by incorporation by reference or otherwise) in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission"). Such document and the documents incorporated by
reference into this Registration Statement pursuant to Item 3 of Part II of this
Registration Statement, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II -- INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Brookdale Living
Communities, Inc., a Delaware corporation (the "Company" or the "Registrant"),
are incorporated, as of their respective dates, into this Registration Statement
by reference:
(a) The Company's Annual Report on Form 10-K (File No. 0-22253) for
the fiscal year ended December 31, 1997, as filed with the
Commission on March 31, 1998 under the Securities Exchange Act of
1934, as amended (the "Exchange Act");
(b) The Company's Current Reports on Form 8-K (File No. 0-22253) dated
December 17, 1997, March 6, 1998 and March 31, 1998, as filed with
the Commission on February 18, 1998, April 14, 1998 and April 15,
1998, respectively; and
(c) The description of the Company's Common Stock, par value $0.01 per
share, contained in Amendment No. 1 to the Company's Registration
Statement on Form 8-A, as filed with the Commission on April 17,
1997 under the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which 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 Registration Statement.
Item 4. Description of Securities.
Not applicable.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Wayne D. Boberg, a director of the Company, is a partner of the law
firm of Winston & Strawn, which has provided, and continues to provide, legal
services to the Company. As of the date of this Registration Statement, Mr.
Boberg beneficially owns 2,500 shares of Common Stock and has options to acquire
an additional 5,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the General Corporation Law of the State of
Delaware ("Section 145"), a corporation may indemnify its directors, officers,
employees and agents and its former directors, officers, employees and agents
and those who serve, at the corporation's request, in such capacities with
another enterprise, against expenses (including attorneys' fees), as well as
judgments, fines and settlements in non-derivative lawsuits, actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding in which they or any of them were or are made parties or are
threatened to be made parties by reason of their serving or having served in
such capacity. Section 145 provides, however, that such person must have acted
in good faith and in a manner he or she reasonably believed to be in (or not
opposed to) the best interests of the corporation, and, in the case of a
criminal action, such person must have had no reasonable cause to believe his or
her conduct was unlawful. In addition, Section 145 does not permit
indemnification in an action or suit by or in the right of the corporation,
where such person has been adjudged liable to the corporation, unless, and only
to the extent that, a court determines that such person fairly and reasonably is
entitled to indemnity for expenses the court deems proper in light of liability
adjudication. Indemnity is mandatory to the extent a claim, issue or matter has
been successfully defended.
The Company's Amended and Restated By-laws (the "By-laws") provide for
mandatory indemnification of directors and officers generally to the same extent
authorized by Section 145. Under the By-laws, the Company shall advance
expenses incurred by an officer or director in defending any such action if the
director or officer undertakes to repay such amount if it is determined that he
or she is not entitled to indemnification.
The Company has also entered into indemnification agreements with each
of the Company's directors and certain of its officers. The indemnification
agreements require, among other things, that the Company indemnify such
directors and officers to the fullest extent permitted by law and advance to
such directors and officers all related expenses, subject to reimbursement if it
is subsequently determined that indemnification is not permitted. The Company
also must indemnify and advance all expenses incurred by such directors and
officers seeking to enforce their rights under the indemnification agreements
and cover such directors and officers under the Company's directors' and
officers' liability insurance.
The Company's Restated Certificate of Incorporation provides that the
Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors, except (a) for any breach of the directors' duty of loyalty
to the Company or its stockholders, (b) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (c) for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the General Corporation Law of the State of Delaware
or (d) for transactions from which directors derive improper personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
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<PAGE>
Item 8. Exhibits.
4.1 Brookdale Living Communities, Inc. Stock Incentive Plan
4.2 Form of Stock Option Agreement (Non-Qualified Option)
4.3 Form of Stock Option Agreement (Incentive Stock Option)
4.4 Form of Stock Option Agreement (Director Option)
5.1 Opinion of Winston & Strawn as to the legality of the securities
being registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Winston & Strawn (included as part of Exhibit 5.1)
24.1 Powers of Attorney (included on the signature page hereof)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in this Registration Statement; and
(ii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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
-3-
<PAGE>
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this 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 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the 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, the 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 Securities Act and will be governed by the final
adjudication of such issue.
-4-
<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
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on the 30th day of April,
1998.
BROOKDALE LIVING COMMUNITIES, INC.
/s/ Mark J. Schulte
-------------------------------------
Mark J. Schulte
President and Chief Executive Officer
---------------------
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark J. Schulte and Robert J. Rudnik, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each said
attorneys-in-fact and agents, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on April 30, 1998 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Michael W. Reschke Chairman of the Board, Director
- ----------------------------------
Michael W. Reschke
/s/ Mark J. Schulte President and Chief Executive Officer
- ---------------------------------- (principal executive officer), Director
Mark J. Schulte
/s/ Craig G. Walczyk Vice President--Chief Financial
- ---------------------------------- Officer (principal financial officer)
Craig G. Walczyk
/s/ Sheryl A. Wolf Controller (principal accounting officer)
- ----------------------------------
Sheryl A. Wolf
/s/ Darryl W. Copeland, Jr Executive Vice President, Director
- ----------------------------------
Darryl W. Copeland, Jr.
/s/ Wayne D. Boberg Director
- ----------------------------------
Wayne D. Boberg
/s/ Bruce L. Gewertz Director
- ----------------------------------
Bruce L. Gewertz
/s/ Darryl W. Hartley-Leonard Director
- ----------------------------------
Darryl W. Hartley-Leonard
/s/ Daniel J. Hennessy Director
- ----------------------------------
Daniel J. Hennessy
</TABLE>
<PAGE>
EXHIBIT 4.1
STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<C> <S> <C>
1. PURPOSE OF PLAN............................................................ 1
2. DEFINITIONS................................................................ 1
3. STOCK SUBJECT TO PLAN...................................................... 4
3.1 Stock Subject to Plan............................................... 4
3.2 Unexercised Options................................................. 4
3.3 Changes in Company Capitalization................................... 4
4. GRANTING OF OPTIONS........................................................ 4
4.1 Eligibility......................................................... 4
4.2 Incentive Stock Options............................................. 4
4.3 Granting of Options................................................. 5
4.4 Administration Of the Plan.......................................... 5
5. TERMS OF OPTIONS........................................................... 6
5.1 Option Agreement.................................................... 6
5.2 Vesting of Options.................................................. 7
5.3 Option Exercise Price............................................... 7
5.4 Exercise Periods.................................................... 7
5.5 Requirement of Continued Employment................................. 8
5.6 Adjustments in Outstanding Options.................................. 9
5.7 Merger, Consolidation, Acquisition, Liquidation or Dissolution...... 9
5.8 No Right to Continued Employment.................................... 9
6. EXERCISE OF OPTIONS....................................................... 10
6.1 Person Eligible to Exercise........................................ 10
6.2 Partial Exercise................................................... 10
6.3 Manner of Exercise................................................. 10
6.4 Conditions to Issuance of Stock Certificates....................... 11
6.5 Rights as Stockholders............................................. 12
6.6 Transfer Restrictions.............................................. 12
7. ADDITIONAL PROVISIONS..................................................... 12
7.1 Approval of Plan by Stockholders................................... 12
7.2 Nontransferability................................................. 12
7.3 Death or Disability of Optionee.................................... 12
7.4 Securities Act..................................................... 13
</TABLE>
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<TABLE>
<CAPTION>
Section Page
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<C> <S> <C>
7.5 Withholding of Tax................................................. 13
7.6 Termination and Amendment of Plan.................................. 13
7.7 Duties of the Company.............................................. 13
8. GENERAL PROVISIONS........................................................ 14
</TABLE>
ii
<PAGE>
SECTION 1. PURPOSE OF PLAN
The purpose of the Brookdale Living Communities, Inc. Stock Incentive Plan
(the "Plan") is to provide a means by which Brookdale Living Communities, Inc.
(the "Company") may attract and retain directors, executive officers and other
key employees with outstanding qualifications and consultants and advisers who
provide substantial and important services to the Company, by affording those
individuals with incentives to exert maximum efforts for the success of the
Company through opportunities to participate in the growth, development and
financial success of the Company.
SECTION 2. DEFINITIONS
Wherever the following capitalized terms are used in the Plan, they shall
have the following respective meanings:
2.1 "Board of Directors" means the Board of Directors of the Company.
2.2 "Change in Control" shall be deemed to have occurred if
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, a corporation
owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the Common Stock,
Michael W. Reschke or The Prime Group, Inc. or any of their respective
affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the
Company's then outstanding securities which vote generally in the election
of directors (referred to herein as "Voting Securities");
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors and any new
directors whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority of the Board of Directors;
(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) more than 50% of the total voting power represented by
the Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
<PAGE>
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company (in one transaction or a series of transactions) of all or
substantially all of the Company's assets.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means as specified in Section 4.4.
2.5 "Common Stock" means the Common Stock of the Company, par value $0.01
per share.
2.6 "Company" means Brookdale Living Communities, Inc., a Delaware
corporation. In addition, "Company" shall mean any corporation assuming, or
issuing new employee stock options in substitution for, Incentive Stock Options
outstanding under the Plan, in a transaction to which Section 424(a) of the Code
applies.
2.7 "Date of Grant" means the date as of which an Option has been granted
pursuant to the Plan.
2.8 "Disability" means, with respect to an individual, a physical or
mental condition resulting from any medically determinable physical or mental
impairment that renders such individual incapable of engaging in any substantial
gainful employment and that can be expected to result in death or that has
lasted or can be expected to last for a continuous period of not less than four
consecutive months.
2.9 "Eligible Individual" means (i) any director, officer or key employee
of the Company or a Subsidiary, (ii) any officer or key employee of a
partnership in which the Company owns directly or indirectly at least 50% of the
capital or profits interest or (iii) any consultant or adviser whom the
Committee determines provides substantial and important service to the Company.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.11 "Fair Market Value" means the per share value of the Common Stock as
of a given date, determined as follows:
(a) If the Common Stock is listed or admitted for trading on the New
York Stock Exchange (or if not, on another national securities exchange
upon which the Common Stock is listed), the Fair Market Value of the Common
Stock is the closing quotation for such stock based on composite
transactions for the New York Stock Exchange (or if not listed on it, such
other national securities exchange) on the last trading day for such stock
prior to such given date.
(b) If the Common Stock is not traded on any national securities
exchange, but is quoted on the National Association of Securities Dealers,
Inc. Automated Quotation
2
<PAGE>
System (NASDAQ System) or any similar system of automated dissemination of
quotations of prices in common use, the Fair Market Value of the Common
Stock is the average of the last sales price (if the stock is then listed
as a national market issue under the NASDAQ System) or the mean between the
closing representative bid and asked prices (in all other cases) for the
stock on the last 5 trading days for such stock preceding such given date
as reported by the NASDAQ System (or such similar quotation system).
(c) If neither clause (a) nor clause (b) of this Section 2.12 is
applicable, the Fair Market Value of the Common Stock is the fair market
value per share as of such valuation date, as determined by the Board of
Directors in good faith and in accordance with uniform principles
consistently applied.
2.12 "Incentive Stock Option" means an Option which qualifies under
Section 422 of the Code and which is designated as an Incentive Stock Option by
the Company or the Committee.
2.13 "Non-Qualified Option" means an Option which is not an Incentive
Stock Option and which is designated as a Non-Qualified Option by the Company or
the Committee.
2.14 "Option" means any Incentive Stock Option or Non-Qualified Option
granted under this Plan.
2.15 "Optionee" means an Eligible Individual to whom an Option is granted
under this Plan.
2.16 "Plan" means the Brookdale Living Communities, Inc. Stock Incentive
Plan, as it may be amended from time to time.
2.17 "Secretary" means the Secretary of the Company.
2.18 "Securities Act" means the Securities Act of 1933, as amended.
2.19 "Severance Date" means (i) as to an Eligible Individual who is an
employee of the Company, a Subsidiary or a Company-owned partnership, the date
the individual ceases to be so employed, (ii) as to an Eligible Individual who
is a director of the Company or a Subsidiary but not an employee described in
(i) next above, the date the individual ceases to be such a director, or (iii)
as to an Eligible Individual who is not included in (i) or (ii) above, the date
specified in the applicable Stock Option Agreement.
2.20 "Stock Option Agreement" means the agreement reflecting the terms and
conditions of an Option pursuant to Section 5.1.
2.21 "Subsidiary" means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
3
<PAGE>
SECTION 3. STOCK SUBJECT TO PLAN
3.1 Stock Subject to Plan
The stock subject to an Option shall be shares of the Company's Common
Stock. The aggregate number of such shares which may be issued upon exercise of
Options granted under Section 4 of the Plan shall not exceed 830,000, unless and
until a larger number shall have been approved by the Company's stockholders
pursuant to Section 7.6.
3.2 Unexercised Options
If any Option expires or is cancelled without having been fully
exercised, a new Option or Options for the number of shares of Common Stock that
would have been issued upon exercise of the unexercised portion of such Option
may be granted under this Plan, subject to the limitations of Section 3.1.
3.3 Changes in Company Capitalization
In the event that the outstanding shares of Common Stock are hereafter
changed into or exchanged for a different number or kind of shares or other
securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, or
the number of shares is increased or decreased by reason of a stock split, stock
dividend, combination of shares or any other increase or decrease in the number
of such shares of Common Stock effected without receipt of consideration by the
Company (provided, however, that conversion or exchange of any convertible or
exchangeable securities of the Company shall not be deemed to have been
"effected without receipt of consideration"), the Committee shall make
appropriate adjustments in the number and kind of shares for the purchase of
which Options may be granted, including adjustments of the limitations in
Section 3.1 and Section 4.1.
SECTION 4. GRANTING OF OPTIONS
4.1 Eligibility
The maximum number of shares of Common Stock that may be subject to
Options granted during any calendar year to any one Optionee shall not exceed
250,000. Options granted to an Eligible Individual who is an employee of the
Company or a Subsidiary may be either Incentive Stock Options or Non-Qualified
Options. Options granted to any other Eligible Individual may only be Non-
Qualified Options.
4.2 Incentive Stock Options
No Incentive Stock Option shall be granted unless it qualifies as an
"incentive stock option" under Section 422 of the Code on the Date of Grant.
4
<PAGE>
4.3 Granting of Options
(a) Subject to the availability of shares as provided under Sections
3.1 and 7.6, the Committee shall from time to time, in its absolute
discretion:
(i) Determine who are the Eligible Individuals and select from
among them those to be granted Options;
(ii) Determine the number of shares to be subject to such Options
granted to such selected individuals, and to the extent permitted by
the Code, determine whether such Options are to be Incentive Stock
Options or Non-Qualified Options; and
(iii) Determine the terms and conditions of such Options,
consistent with the Plan.
(b) Upon the selection of an individual to be granted an Option, the
Committee shall instruct the Secretary to issue such Option and may impose
such conditions on the grant of such Option as it deems appropriate.
Without limiting the generality of the preceding sentence, the Committee
may, in its discretion and on such terms as it deems appropriate, require
as a condition on the grant of an Option to an individual that the
individual surrender for cancellation some or all of the unexercised
Options which have been previously granted to him. An Option the grant of
which is conditioned upon such surrender may have an Option price lower (or
higher) than the Option price of the surrendered Option, may cover the same
(or a lesser or greater) number of shares as the surrendered Option, may
contain such other terms as the Committee deems appropriate and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, Option period or any other term or condition of the
surrendered Option.
4.4 Administration Of the Plan
(a) The Plan shall be administered by the Compensation Committee of
the Board, or by any other Committee appointed by the Board, which
Committee (unless otherwise determined by the Board) shall satisfy the
"nonemployee director" requirements of Rule 16b-3 under the Exchange Act
and the regulations of Rule 16b-3 under the Exchange Act and the "outside
director" provisions of Code Section 162(m), or any successor regulations
or provisions. The members of the Committee shall be appointed from time
to time by, and shall serve at the discretion of, the Board of Directors.
Committee members may resign by delivering written notice to the Secretary.
(b) Except as otherwise provided in the Plan and except as otherwise
expressly stated to the contrary in the Company's Articles of
Incorporation, Bylaws, or elsewhere, the Committee shall have the sole
discretionary authority (i) to select the Eligible Individuals who are to
be granted Options under the Plan, (ii) to determine the number of Options
to be granted to any Eligible Individual at any time, (iii) to authorize
the granting of Options, (iv) to impose such conditions and restrictions on
Options as it determines appropriate, (v) to
5
<PAGE>
interpret the Plan, (vi) to prescribe, amend and rescind rules and
regulations relating to the Plan, and (vii) to take any other actions in
connection with the Plan as it may deem necessary or advisable for the
administration of the Plan. The determinations of the Committee on the
matters referred to in this Section 4 shall be conclusive.
(c) A majority of the members of the Committee shall constitute a
quorum. All determinations of the Committee shall be made by a majority of
its members. Any decision or determination reduced to writing and signed
by all of the members of the Committee shall be fully effective as if it
had been made by a majority vote at a meeting duly called and held.
(d) The Committee may delegate to one or more persons any of its
powers, other than its power to authorize the granting of Options, or
designate one or more persons to do or perform those matters to be done or
performed by the Committee, including administration of the Plan. Any
person or persons delegated or designated by the Committee shall be subject
to the same obligations and requirements imposed on the Committee and its
members under the Plan.
(e) Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board of Directors. All
expenses and liabilities incurred by members of the Committee in connection
with the administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Company and the Board of
Directors shall be entitled to rely upon the advice, opinions or valuations
of any such persons. All elections taken and all interpretations and
determinations made by the Committee in good faith shall be final and
binding upon all Optionees, the Company and all other interested persons.
No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the
Plan. Members of the Committee and each person or persons designated or
delegated by the Committee shall be entitled to indemnification by the
Company for any action or any failure to act in connection with services
performed by or on behalf of the Committee for the benefit of the Company
to the fullest extent provided or permitted by the Company's Articles of
Incorporation, Bylaws, any insurance policy or other agreement intended for
the benefit of the Committee, or by any applicable law.
SECTION 5. TERMS OF OPTIONS
5.1 Option Agreement
Each Option shall be evidenced by a written Stock Option Agreement,
which shall be executed by the Optionee and an authorized officer of the Company
and which shall indicate the Date of the Grant and contain such terms and
conditions as the Committee shall determine with respect to such Option,
consistent with the Plan. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to qualify
such Options as "incentive stock options" under Section 422 of the Code.
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5.2 Vesting of Options
(a) Options granted under the Plan shall vest as determined by the
Committee and set forth in the respective Stock Option Agreement.
(b) Unless otherwise provided in the Stock Option Agreement, in the
event of a Change in Control on or before the Optionee's Severance Date,
each outstanding Option held by such Optionee to the extent not theretofore
vested shall fully vest as of the date of such Change in Control.
(c) Subject to the provisions of Section 7.3, Options which have been
granted but not yet vested under this Section 5.2 as of an Optionee's
Severance Date shall be forfeited unless otherwise provided in the Stock
Option Agreement.
5.3 Option Exercise Price
The exercise price per share for Options granted under the Plan shall
be set by the Committee; provided, however, that the price per share shall be
not less than 100% of the Fair Market Value of such share on the Date of Grant;
provided, further, that, in the case of an Incentive Stock Option, the price per
share shall not be less than 110% of the Fair Market Value of such share on the
Date of Grant in the case of an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary.
5.4 Exercise Periods
(a) No Option may be exercised in whole or in part until it has
vested, except as may be provided in Section 5.7.
(b) Subject to the provisions of Sections 5.4(c), 5.7 and 7.3, Options
shall become exercisable at such times and in such installments (which may
be cumulative) as the Committee shall provide in the terms of each
individual Stock Option Agreement; provided, however, that, by resolution
adopted after an Option is granted, the Committee may, on such terms and
conditions as it may determine to be appropriate and subject to Sections
5.4(c), 5.7 and 7.3, accelerate the time at which such Option or any
portion thereof may be exercised.
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which Incentive Stock Options (within the meaning of Section 422
of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year
(under the Plan and all other incentive stock option plans of the Company)
exceeds $100,000, such Options shall be treated as Non-Qualified Options.
The rule set forth in the preceding sentence shall be applied by taking
Options into account in the order in which they were granted. For purposes
of this Section 5.4(c), the Fair Market Value of Common Stock shall be
determined as of the time the Option with respect to such Common Stock is
granted.
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(d) No Option may be exercised to any extent by anyone after the first
to occur of the following events:
(i) In the case of an Incentive Stock Option,
(A) the expiration of ten years from the Date of Grant; or
(B) in the case of an Optionee owning (within the meaning of
Section 424(d) of the Code), at the Date of Grant, more than 10%
of the total combined voting power of all classes of stock of the
Company or any subsidiary of the Company, the expiration of five
years from the Date of Grant; or
(C) except in the case of any Optionee who is disabled
(within the meaning of Section 22(e)(3) of the Code), the
expiration of three months from the Optionee's Severance Date
unless either such Severance Date occurs due to such Optionee's
death or the Optionee dies within said three-month period; or
(D) in the case of an Optionee who is disabled (within the
meaning of Section 22(e)(3) of the Code), the expiration of one
year from the Optionee's Severance Date unless either such
Severance Date occurs due to such Optionee's death or the
Optionee dies within said one-year period; or
(E) the expiration of one year from the date of the
Optionee's death.
(ii) In the case of a Non-Qualified Option,
(A) the expiration of ten years from the Date of Grant; or
(B) the expiration of one year from the Optionee's Severance
Date unless the Optionee dies within said one-year period; or
(C) the expiration of one year from the date of the
Optionee's death.
(e) Subject to the provisions of Section 5.4(d), the Committee shall
provide, in the terms of each individual Stock Option Agreement, when such
Option expires and becomes unexercisable.
5.5 Requirement of Continued Employment
An Option shall be forfeited if the Optionee's Severance Date occurs
within one year from the Date of Grant unless such Severance Date occurs due to
a Change in Control.
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5.6 Adjustments in Outstanding Options
In the event that the outstanding shares of Common Stock subject to
Options are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, or the number of shares is
increased or decreased by reason of a stock split-up, stock dividend,
combination of shares or any other increase or decrease in the number of such
shares of Common Stock effected without receipt of consideration by the Company
(provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration"),
the Committee shall make appropriate adjustments in the number and kind of
shares as to which all outstanding Options, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the
Optionee's proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in an outstanding Option shall be made without
change in the total price applicable to the Option or the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary corresponding
adjustment in Option price per share; provided, however, that, in the case of
Incentive Stock Options, each such adjustment shall be made in such manner as
not to constitute a "modification" within the meaning of Section 424(h)(3) of
the Code. Any such adjustment made by the Committee shall be final and binding
upon all Optionees, the Company and all other interested persons.
5.7 Merger, Consolidation, Acquisition, Liquidation or Dissolution
Notwithstanding the provisions of Section 5.6, in its absolute
discretion, and on such terms and condition as it deems appropriate, the
Committee may provide by the terms of any Option that such Option cannot be
exercised after the merger or consolidation of the Company with or into another
corporation, the acquisition by another corporation or person (excluding any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company) of all or substantially all of the Company's assets or more than
50% of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company; and if the Committee so provides, it may, in its
absolute discretion and on such terms and conditions as it deems appropriate,
also provide, either by the terms of such Option or by a resolution adopted
prior to the occurrence of such merger, consolidation, acquisition, liquidation
or dissolution, that, for some period of time prior to such event, such Option
shall be exercisable to all shares covered thereby, notwithstanding anything to
the contrary in Section 5.4(a), Section 5.4(b) and/or any installment provisions
of such Option.
5.8 No Right to Continued Employment
Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Optionee any right to continued employment or retention in
service or shall interfere with or restrict in any way the rights of the
Company, a Subsidiary or any other person to terminate or discharge any Optionee
at any time for any reason whatsoever.
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SECTION 6. EXERCISE OF OPTIONS
6.1 Person Eligible to Exercise
During the lifetime of the Optionee, only such Optionee may exercise
an Option (or any portion thereof) granted to such Optionee. After the death of
the Optionee, any exercisable portion of an Option may, prior to the time when
such portion becomes unexercisable under the Plan or the applicable Stock Option
Agreement, be exercised by the personal representative of such Optionee or by
any person empowered to do so under the deceased Optionee's will or under the
then applicable laws of descent and distribution.
6.2 Partial Exercise
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
the Plan or the applicable Stock Option Agreement, such Option or portion
thereof may be exercised in whole or in part; provided, however, that the
Company shall not be required to issue fractional shares and the Committee may,
by the terms of the Stock Option Agreement, require any partial exercise to be
with respect to a specified minimum number of shares.
6.3 Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:
(a) notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) full payment (in cash or by check) for the shares with respect
to which such Option or portion is thereby exercised; or
(ii) if permitted under the terms of an Optionee's Stock Option
Agreement or with the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed for
transfer to the Company, or (B) shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option, with a Fair
Market Value on the date of Option exercise equal to the aggregate
Option price of the shares with respect to which such Option or
portion is thereby exercised; or
(iii) with the consent of the Committee, a full recourse
promissory note bearing interest (at least such rate as shall then
preclude the imputation of interest under the Code or any successor
provision) and payable upon such terms as may be prescribed by the
Committee. The Committee may also prescribe the form of such note and
the security to be given for such note. No Option may, however, be
exercised by
10
<PAGE>
delivery of a promissory note or by a loan from the Company when or
where such loan or other extension of credit is prohibited by law; or
(iv) with the consent of the Committee, any combination of the
consideration provided in the foregoing subsections (i), (ii) and
(iii); and
(c) the payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the exercise
of the Option; provided that, with the consent of the Committee, (i) shares
of the Company's Common Stock owned by the Optionee duly endorsed for
transfer, or (ii) shares of the Company's Common Stock issuable to the
Optionee upon exercise of the Option, valued at Fair Market Value as of the
date of Option exercise, may be used to make all or part of such payment;
and
(d) such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other federal or
state securities laws or regulations, including the representation that the
shares of the Common Stock are being acquired for investment and not
resale. The Committee may, in its absolute discretion, also take whatever
additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and
issuing stop-transfer orders to transfer agents and registrars; and
(e) in the event that the Option or portion thereof shall be exercised
pursuant to Section 6.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.
6.4 Conditions to Issuance of Stock Certificates
The shares of Common Stock issuable and deliverable upon the exercise
of an Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the Company.
The Company shall not be required to issue or deliver any certificate or
certificates for shares of Common Stock purchased upon the exercise of any
Option or portion thereof prior to fulfillment of all of the following
conditions:
(a) the satisfaction of all requirements set forth in Section 6.3,
including payment of the exercise price; and
(b) the obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(c) the lapse of such reasonable period of time following the exercise
of the Option as the Committee may establish from time to time for reasons
of administrative convenience.
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6.5 Rights as Stockholders
The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect to any shares purchasable
upon the exercise of any part of an Option unless and until the Option is
exercised, the Option price has been paid to the Company and certificates
representing such shares have been issued by the Company to such holders.
6.6 Transfer Restrictions
The Committee, in its absolute discretion, may impose such
restrictions on the transferability of the shares purchasable upon the exercise
of an Option as it deems appropriate. Any such restriction shall be set forth in
the respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Committee may require any Optionee to give the
Company prompt notice of any disposition of shares of stock acquired by exercise
of an Incentive Stock Option, within two years from the Date of Grant of such
Option or one year after the acquisition of such shares by such Optionee. The
Committee may direct that the certificates evidencing shares acquired by
exercise of an Option refer to such requirement to give prompt notice of
disposition.
SECTION 7. ADDITIONAL PROVISIONS
7.1 Approval of Plan by Stockholders
This Plan will be submitted for the approval of the Company's
stockholders within twelve months before or after the date of the Board of
Directors' initial adoption of the Plan. Options may be granted prior to such
stockholder approval; provided, however, that such Options shall not be
exercisable prior to the time when the Plan is approved by the stockholders;
provided, further, that if such approval has not been obtained at the end of
said twelve-month period, all Options previously granted under the Plan shall
thereupon be cancelled and become null and void.
7.2 Nontransferability
No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or any successors in
interest to the Optionee or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that nothing in this
Section 7.2 shall prevent transfers by will or by the applicable laws of descent
and distribution.
7.3 Death or Disability of Optionee
If an Optionee dies or incurs a Severance Date due to Disability, any
Option of such Optionee which has been outstanding for at least one year shall
fully and immediately be vested. In the event of an Optionee's death the
executor, administrator or other personal representative of
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<PAGE>
the Optionee's estate, or any heir, successor, assign or other transferee of the
Optionee receiving such Options by will or by the laws of descent and
distribution, shall have the right, subject to the restrictions hereof, to
exercise all vested Options to acquire shares of Common Stock subject to such
Options at any time within one year after the date of the Optionee's death.
7.4 Securities Act
No shares of Common Stock of the Company shall be required to be
distributed until the Company shall have taken such action, if any, as is then
required to comply with the provisions of the Securities Act or any other then
applicable securities law. The Company reserves the right to place a legend on
any stock certificate issued pursuant to the Plan to assure compliance with this
Section and with the vesting requirements of Section 5.2.
7.5 Withholding of Tax
The Company shall have the right to deduct from compensation otherwise
payable to an Optionee any federal, state or local income or other taxes
required by law to be withheld with respect to any distributions under the Plan.
7.6 Termination and Amendment of Plan
The Committee may at any time suspend or terminate the Plan, or make
such modifications of the Plan as it shall deem advisable, provided that the
Plan shall not be so changed to increase the cost of the Plan to the Company.
However, without approval of the Company's stockholders given within twelve
months before or after the action by the Committee, no action of the Committee
may, except as provided in Section 3.3, increase any limit imposed in Section
3.1 on the maximum number of shares which may be issued upon exercise of
Options, materially modify the eligibility requirements of Section 4.1, reduce
the minimum Option price requirements of Section 5.3, or extend the limit
imposed in this Section 7.6 on the period during which Options may be granted.
No Option may be granted during any period of suspension nor after termination
of the Plan, and in no event may any Option be granted under this Plan after the
first to occur of the following events:
(a) the expiration of ten years from the date the Plan is adopted by
the Board of Directors; or
(b) the expiration of ten years from the date the Plan is approved by
the Company's stockholders under Section 7.1.
7.7 Duties of the Company
The Company shall, at all times during the term of each Option,
reserve and keep available for issuance or delivery such number of shares of
Common Stock as will be sufficient to satisfy the requirements of all Options at
the time outstanding, shall pay all original issue taxes with respect to the
issuance or delivery of shares pursuant to the exercise of such Option and all
other fees and expenses necessarily incurred by the Company in connection
therewith.
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<PAGE>
SECTION 8. GENERAL PROVISIONS
(a) No individual shall have any claim or right to be granted Options
under the Plan. Neither the adoption and maintenance of the Plan nor the
granting of Options pursuant to the Plan shall be deemed to constitute a
contract of employment between the Company and any individual or to be a
condition of the employment of any person.
(b) The Company shall pay all costs and expenses of administering the
Plan.
(c) The granting of Options and the issuance of shares of Common Stock
under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required. The provisions of this Plan shall
be interpreted so as to comply with the conditions or requirements of the
Securities Act, the Exchange Act, and rules and regulations issued
thereunder unless a contrary interpretation of any such provision is
otherwise required by applicable law.
(d) The granting of an Option shall impose no obligation upon the
Optionee to exercise such option.
(e) Whenever the context so indicates, the singular or plural number,
and the masculine, feminine or neuter gender shall each be deemed to
include the other.
(f) This Plan and all Option agreements entered into pursuant thereto
shall be construed and enforced in accordance with, and governed by, the
laws of the State of Delaware, determined without regard to its conflict of
interest rules.
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EXHIBIT 4.2
FORM OF
BROOKDALE LIVING COMMUNITIES, INC.
STOCK OPTION AGREEMENT
(Non-Qualified Option)
This Stock Option Agreement dated as of ____________, _____ (the "Date
of Grant"), by and between ____________, an individual (the "Optionee"), and
Brookdale Living Communities, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
-------------------
WHEREAS, as used herein the term "Shares" shall mean shares of the
Company's common stock, par value $0.01 per share (the "Common Stock");
WHEREAS, the Optionee is a key employee of the Company;
WHEREAS, the Company desires to grant to the Optionee an option to
purchase from the Company ____________ Shares for a purchase price per share of
$______, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree as follows:
1. Option. In accordance with the provisions of the Brookdale
Living Communities, Inc. Stock Incentive Plan (the "Plan"), the Company hereby
grants to the Optionee the right to purchase (the "Option"), subject to the
terms, conditions and restrictions stated herein, from the Company __________
Shares (the "Option Shares") at a price per share of $_______.
2. Vesting. Except as may otherwise be provided in the Plan or this
Stock Option Agreement, this Option shall vest only on the dates and to the
extent hereinafter set forth; provided, however, that the Optionee continuously
remains a full-time employee of Company through each such date:
(i) no part of the Option shall vest prior to the first anniversary
of the Date of Grant;
(ii) on the first anniversary of the Date of Grant, the right to
purchase one-fourth of the Option Shares shall vest;
(iii) on the second anniversary of the Date of Grant, the right to
purchase an additional one-fourth of the Option Shares shall
vest;
(iv) on the third anniversary of the Date of Grant, the right to
purchase an additional one-fourth of the Option Shares shall
vest; and
<PAGE>
(v) on the fourth anniversary of the Date of Grant, the right to
purchase the remaining one-fourth of the Option Shares shall
vest.
Notwithstanding clauses (i) through (v) above, in the event of a "Change in
Control" of the Company (as that term is defined in the Plan) on or before the
date the Optionee ceases to be a full-time employee of the Company, all rights
to purchase Option Shares not theretofore vested shall immediately vest on the
date of such event. If the Optionee ceases to be a full-time employee of the
Company prior to such a Change in Control, all rights to purchase Option Shares
not theretofore vested shall be forfeited as of the date the Optionee ceases to
be so employed.
3. Exercise Period. The Optionee (or in the event of the death of
the Optionee, the Optionee's successor in interest) may exercise the Option as
to those Option Shares which have theretofore vested as herein provided at any
time prior to the first to occur of the following events:
(i) the expiration of ten years from the Date of Grant;
(ii) the expiration of one year from the date the Optionee ceases to
be an employee of the Company, unless the Optionee dies within
said one-year period; or
(iii) the expiration of one year from the date of the Optionee's
death.
4. Manner of Exercise. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary of the
Company or the Secretary's office of all of the following prior to the time as
of which such Option ceases to be exercisable:
(a) notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that
such Option or portion is exercised, such notice complying with
all applicable rules set forth in the Plan or otherwise
established by the committee appointed to administer the Plan
(the "Committee");
(b) (i) full payment (in cash or by check) for the Option Shares
with respect to which such Option is thereby exercised; or
(ii) with the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed
for transfer to the Company, or (B) shares of the Company's
Common Stock issuable to the Optionee upon exercise of the
Option, with a "Fair Market Value" (as that term is defined
in the Plan) on the date of Option exercise equal to the
aggregate Option price of the Option Shares with respect to
which this Option or portion is thereby exercised; or
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<PAGE>
(iii) with the consent of the Committee, a full recourse
promissory note bearing interest and payable upon such
terms as are prescribed by the Committee; or
(iv) with the consent of the Committee, any combination of the
consideration provided in the foregoing subsections (i),
(ii) and (iii);
(c) the payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the
exercise of the Option; provided that, with the consent of the
Committee, (i) shares of the Company's Common Stock owned by the
Optionee duly endorsed for transfer, or (ii) shares of the
Company's Common Stock issuable to the Optionee upon exercise of
the Option, valued at Fair Market Value as of the date of Option
exercise, may be used to make all or part of such payment;
(d) such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act
of 1933 and any other federal or state securities laws or
regulations; and
(e) in the event that the Option or a portion thereof shall be
exercised by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
5. Transferability. This Option is personal to the Optionee and the
same may not in any manner or in any respect be assigned or transferred, other
than by will or the laws of descent and distribution.
6. Miscellaneous.
(a) The rights herein granted are in all respects subject to the
provisions set forth in the Plan to the same extent and with the same effect as
if set forth fully herein.
(b) The granting of this Option shall not be construed as giving to
the Optionee any right to be retained in the employ of the Company. For the
purposes of this Stock Option Agreement, employment with a "Subsidiary" of the
Company (as that term is defined in the Plan) shall be considered employment
with the Company.
(c) This Option shall not be treated as an incentive stock option
under the Internal Revenue Code of 1986, as amended.
(d) The validity, interpretation and effect of this Stock Option
Agreement shall be governed by the laws of the State of Delaware, excluding the
"conflicts of laws" rules thereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Option Agreement on the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
__________________________________________
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<PAGE>
EXHIBIT 4.3
FORM OF
BROOKDALE LIVING COMMUNITIES, INC.
STOCK OPTION AGREEMENT
(Incentive Stock Option)
This Stock Option Agreement dated as of ___________, ______ (the "Date
of Grant"), by and between _______________, an individual (the "Optionee"), and
Brookdale Living Communities, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
-------------------
WHEREAS, as used herein the term "Shares" shall mean shares of the
Company's common stock, par value $0.01 per share (the "Common Stock");
WHEREAS, the Optionee is a key employee of the Company;
WHEREAS, the Company desires to grant to the Optionee an option to
purchase from the Company ________ Shares for a purchase price per share of
$_____, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree as follows:
1. Option. In accordance with the provisions of the Brookdale
Living Communities, Inc. Stock Incentive Plan (the "Plan"), the Company hereby
grants to the Optionee the right to purchase (the "Option"), subject to the
terms, conditions and restrictions stated herein, from the Company ________
Shares (the "Option Shares") at a price per share of $_____.
2. Vesting. Except as may otherwise be provided in the Plan or this
Stock Option Agreement, this Option shall vest only on the dates and to the
extent hereinafter set forth; provided, however, that the Optionee continuously
remains a full-time employee of Company through each such date:
(i) no part of the Option shall vest prior to the first anniversary
of the Date of Grant;
(ii) on the first anniversary of the Date of Grant, the right to
purchase one-fourth of the Option Shares shall vest;
(iii) on the second anniversary of the Date of Grant, the right to
purchase an additional one-fourth of the Option Shares shall
vest;
(iv) on the third anniversary of the Date of Grant, the right to
purchase an additional one-fourth of the Option Shares shall
vest; and
<PAGE>
(v) on the fourth anniversary of the Date of Grant, the right to
purchase the remaining one-fourth of the Option Shares shall
vest.
Notwithstanding clauses (i) through (v) above, in the event of a "Change in
Control" of the Company (as that term is defined in the Plan) on or before the
date the Optionee ceases to be a full-time employee of the Company, all rights
to purchase Option Shares not theretofore vested shall immediately vest on the
date of such event. If the Optionee ceases to be a full-time employee of the
Company prior to such a Change in Control, all rights to purchase Option Shares
not theretofore vested shall be forfeited as of the date the Optionee ceases to
be so employed.
3. Exercise Period. The Optionee (or in the event of the death of
the Optionee, the Optionee's successor in interest) may exercise the Option as
to those Option Shares which have theretofore vested as herein provided at any
time prior to the first to occur of the following events:
(i) the expiration of ten years from the Date of Grant,
(ii) except in the case of any Optionee who is disabled (within the
meaning of Section 22(e)(3) of the Internal Revenue Code of
1986, as amended (the "Code")), the expiration of three months
from the date as of which the Optionee ceases to be an employee
of the Company for any reason other than such Optionee's death
unless the Optionee dies within said three-month period;
(iii) in the case of an Optionee who is disabled (within the
meaning of Section 22(e)(3) of the Code), the expiration of one
year from the date as of which the Optionee ceases to be an
employee of the Company for any reason other than such
Optionee's death unless the Optionee dies within said one-year
period; or
(iv) the expiration of one year from the date of the Optionee's
death.
4. Manner of Exercise. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary of the
Company or the Secretary's office of all of the following prior to the time as
of which such Option ceases to be exercisable:
(a) notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that
such Option or portion is exercised, such notice complying with
all applicable rules set forth in the Plan or otherwise
established by the committee appointed to administer the Plan
(the "Committee");
(b) (i) full payment (in cash or by check) for the Option Shares
with respect to which such Option is thereby exercised; or
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<PAGE>
(ii) with the consent of the Committee, shares of the Company's
Common Stock owned by the Optionee duly endorsed for
transfer to the Company, with a "Fair Market Value" (as
that term is defined in the Plan) on the date of Option
exercise equal to the aggregate Option price of the Option
Shares with respect to which this Option or portion is
thereby exercised; or
(iii) with the consent of the Committee, a full recourse
promissory note bearing interest and payable upon such
terms as are prescribed by the Committee; or
(iv) with the consent of the Committee, any combination of the
consideration provided in the foregoing subsections (i),
(ii) and (iii);
(c) such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act
of 1933 and any other federal or state securities laws or
regulations; and
(d) in the event that the Option or a portion thereof shall be
exercised by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
5. Transferability. This Option is personal to the Optionee and the
same may not in any manner or in any respect be assigned or transferred, other
than by will or the laws of descent and distribution.
6. Miscellaneous.
(a) The rights herein granted are in all respects subject to the
provisions set forth in the Plan to the same extent and with the same effect as
if set forth fully herein.
(b) The granting of this Option shall not be construed as giving to
the Optionee any right to be retained in the employ of the Company. For the
purposes of this Stock Option Agreement, employment with a "Subsidiary" of the
Company (as that term is defined in the Plan) shall be considered employment
with the Company.
(c) This Option shall be treated as an incentive stock option under
the Code.
(d) The validity, interpretation and effect of this Stock Option
Agreement shall be governed by the laws of the State of Delaware, excluding the
"conflicts of laws" rules thereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Option Agreement on the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
__________________________________________
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<PAGE>
EXHIBIT 4.4
FORM OF
BROOKDALE LIVING COMMUNITIES, INC.
STOCK OPTION AGREEMENT
(Director Option)
This Stock Option Agreement dated as of _________, _____ (the "Date of
Grant"), by and between _____________, an individual (the "Optionee"), and
Brookdale Living Communities, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
-------------------
WHEREAS, as used herein the term "Shares" shall mean shares of the
Company's common stock, par value $0.01 per share (the "Common Stock");
WHEREAS, the Optionee is a member of the Company's Board of Directors;
WHEREAS, the Company desires to grant to the Optionee an option to
purchase from the Company ________ Shares for a purchase price per share of
$_____, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree as follows:
1. Option. In accordance with the provisions of the Brookdale
Living Communities, Inc. Stock Incentive Plan (the "Plan"), the Company hereby
grants to the Optionee the right to purchase (the "Option"), subject to the
terms, conditions and restrictions stated herein, from the Company _______
Shares (the "Option Shares") at a price per share of $_____.
2. Vesting. Except as may otherwise be provided in the Plan or this
Stock Option Agreement, this Option shall vest only on the dates and to the
extent hereinafter set forth; provided, however, that the Optionee continuously
remains a director of Company through each such date:
(i) no part of the Option shall vest prior to the first anniversary
of the Date of Grant;
(ii) on the first anniversary of the Date of Grant, the right to
purchase one-third of the Option Shares shall vest;
(iii) on the second anniversary of the Date of Grant, the right to
purchase an additional one-third of the Option Shares shall
vest; and
(iv) on the third anniversary of the Date of Grant, the right to
purchase the remaining one-third of the Option Shares shall
vest.
<PAGE>
Notwithstanding clauses (i) through (iv) above, in the event of a "Change in
Control" of the Company (as that term is defined in the Plan) on or before the
date the Optionee ceases to be a director of the Company, all rights to purchase
Option Shares not theretofore vested shall immediately vest on the date of such
event. If the Optionee ceases to be a director of the Company prior to such a
Change in Control, all rights to purchase Option Shares not theretofore vested
shall be forfeited as of the date the Optionee ceases to be such a director.
3. Exercise Period. The Optionee (or in the event of the death of
the Optionee, the Optionee's successor in interest) may exercise the Option as
to those Option Shares which have theretofore vested as herein provided at any
time prior to the first to occur of the following events:
(i) the expiration of ten years from the Date of Grant;
(ii) the expiration of one year from the date the Optionee ceases to
be a director of the Company, unless the Optionee dies within
said one-year period; or
(iii) the expiration of one year from the date of the Optionee's
death.
4. Manner of Exercise. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary of the
Company or the Secretary's office of all of the following prior to the time as
of which such Option ceases to be exercisable:
(a) notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that
such Option or portion is exercised, such notice complying with
all applicable rules set forth in the Plan or otherwise
established by the committee appointed to administer the Plan
(the "Committee");
(b) (i) full payment (in cash or by check) for the Option Shares
with respect to which such Option is thereby exercised; or
(ii) with the consent of the Committee, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed
for transfer to the Company, or (B) shares of the Company's
Common Stock issuable to the Optionee upon exercise of the
Option, with a "Fair Market Value" (as that term is defined
in the Plan) on the date of Option exercise equal to the
aggregate Option price of the Option Shares with respect to
which this Option or portion is thereby exercised; or
(iii) with the consent of the Committee, a full recourse
promissory note bearing interest and payable upon such
terms as are prescribed by the Committee; or
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<PAGE>
(iv) with the consent of the Committee, any combination of the
consideration provided in the foregoing subsections (i),
(ii) and (iii);
(c) such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act
of 1933 and any other federal or state securities laws or
regulations; and
(d) in the event that the Option or a portion thereof shall be
exercised by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
5. Transferability. This Option is personal to the Optionee and the
same may not in any manner or in any respect be assigned or transferred, other
than by will or the laws of descent and distribution.
6. Miscellaneous.
(a) The rights herein granted are in all respects subject to the
provisions set forth in the Plan to the same extent and with the same effect as
if set forth fully herein.
(b) The granting of this Option shall not be construed as giving to
the Optionee any right to be retained as a member of the Company's Board of
Directors.
(c) This Option shall not be treated as an incentive stock option
under the Internal Revenue Code of 1986, as amended.
(d) The validity, interpretation and effect of this Stock Option
Agreement shall be governed by the laws of the State of Delaware, excluding the
"conflicts of laws" rules thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Option Agreement on the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
__________________________________________
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<PAGE>
EXHIBIT 5.1
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
April 30, 1998
Brookdale Living Communities, Inc.
77 West Wacker Drive
Chicago, Illinois 60601
Ladies and Gentlemen:
We have acted as special counsel to Brookdale Living Communities,
Inc., a Delaware corporation (the "Company"), in connection with the
registration statement on Form S-8 (the "Registration Statement") relating to
the registration of 830,000 shares (the "Shares") of the Company's common stock,
par value $0.01 per share ("Common Stock"), issuable upon the exercise of
certain stock options ("Options") that may be issued pursuant to the Brookdale
Living Communities, Inc. Stock Incentive Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Act").
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our satisfaction,
of: (i) the Registration Statement, as filed with the Securities and Exchange
Commission (the "Commission") under the Act; (ii) the Restated Certificate of
Incorporation of the Company, as currently in effect; (iii) the Amended and
Restated By-laws of the Company, as currently in effect; (iv) the Plan; and (v)
resolutions of the Board of Directors of the Company relating to, among other
things, the reservation for issuance of the Common Stock, the filing of the
Registration Statement and the approval of the Plan. We have also examined such
other documents as we have deemed necessary or appropriate as a basis for the
opinion set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents. We have also assumed that the Company's
Board of Directors, or a duly authorized committee thereof, will have approved
the issuance of each Option prior to the issuance thereof.
<PAGE>
Brookdale Living Communities, Inc.
April 30, 1998
Page 2
As to any facts material to this opinion which we did not independently
establish or verify, we have relied upon oral or written statements and
representations of officers and other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that
all Shares issued pursuant to the Plan will be, upon payment of the specified
exercise price therefor, legally issued, fully paid and non-assessable shares of
Common Stock of the Company.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. In giving such consent, we do not
concede that we are experts within the meaning of the Act or the rules and
regulations thereunder or that this consent is required by Section 7 of the Act.
Very truly yours,
/s/ Winston & Strawn
Winston & Strawn
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Stock Incentive Plan of Brookdale Living Communities,
Inc. of our report dated March 26, 1998, with respect to the consolidated
financial statements of Brookdale Living Communities, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
April 27, 1998
