As filed with the Securities and Exchange Commission on December 3, 1999
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------------------
CAPITAL SENIOR LIVING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2678809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14160 DALLAS PARKWAY
SUITE 300
DALLAS, TEXAS 75240
(Address of principal executive offices) (Zip Code)
-----------------------------------
1997 OMNIBUS STOCK AND INCENTIVE PLAN FOR CAPITAL SENIOR LIVING CORPORATION
(Full title of the plan)
-----------------------------------
DAVID R. BRICKMAN, ESQ. COPY TO:
GENERAL COUNSEL WINSTON W. WALP, II, ESQ.
14160 DALLAS PARKWAY, SUITE 300 JENKENS & GILCHRIST,
DALLAS, TEXAS 75240 A PROFESSIONAL CORPORATION
(Name, address and telephone number 1445 ROSS AVENUE, SUITE 3200
including area code of agent for service) DALLAS, TEXAS 75202
------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2)(3) OFFERING PRICE(2)(3) FEE(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per share 2,000,000 Shares $8.838328 $17,676,656 $4,914.11
====================================================================================================================================
<FN>
(1) The securities to be registered consist of 2,000,000 shares
reserved for issuance under the 1997 Omnibus Stock and Incentive Plan for
Capital Senior Living Corporation (the "Plan"). In addition, pursuant to Rule
416 under the Securities Act of 1933, this Registration Statement covers an
indeterminate number of additional shares of the registrant's Common Stock (the
"Common Stock") issuable pursuant to the exercise of options and/or awards
granted or to be granted under the Plan to prevent dilution which may result
from any future stock splits, stock dividends or similar transactions affecting
the Common Stock. These additional shares are also being registered by this
Registration Statement.
(2) Estimated solely for the purpose of calculating the registration
fee.
(3) Calculated pursuant to Rule 457(c) and (h). Accordingly, the price
per share of the Common Stock offered hereunder pursuant to the Plan is based on
(i) 490,000 shares of Common Stock reserved for issuance under the Plan, but not
subject to outstanding stock options, at a price per share of $4.9375, which is
the average of the high and low prices for the Common Stock quoted on the New
York Stock Exchange, Inc. on November 29, 1999, and (ii) the following shares of
Common Stock reserved for issuance under the Plan and subject to options already
granted thereunder at the following exercise prices:
Number of Shares of Common Stock
Reserved for Issuance Exercise Price Per Share
- -------------------------------- ------------------------
650,500 $13.50
732,500 $ 7.0625
100,000 $10.1875
27,000 $10.50
================================================================================
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The registrant hereby incorporates by reference in this registration
statement the following documents previously filed by the registrant with the
Securities and Exchange Commission (the "Commission"):
(1) the registrant's Annual Report on Form 10-K for the annual
period ended December 31, 1998, filed with the Commission, as amended
by the registrant's Annual Report on Form 10-K/A for the annual period
ended December 31, 1998, filed with the Commission;
(2) the registrant's Current Reports on Form 8-K, dated
February 7, 1999 and February 7, 1999, filed with the Commission;
(3) the registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999, filed with the Commission, as amended by
the registrant's Quarterly Report on Form 10-Q/A for the quarter ended
March 31, 1999, filed with the Commission;
(4) the registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, filed with the Commission, as amended by
the registrant's Quarterly Report on Form 10-Q/A for the quarter ended
June 30, 1999, filed with the Commission;
(5) the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999, filed with the Commission;
(6) the registrant's Current Reports on Form 8-K, dated
October 19, 1999 and October 19, 1999, filed with the Commission; and
(7) the description of the Common Stock of the registrant set
forth in the Registration Statement on Form 8-A, filed with the
Commission on October 3, 1997, including any amendment or report filed
for the purpose of updating such description.
All documents filed by the registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this registration
statement shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of the filing of such documents until such time as
there shall have been filed a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
remaining unsold at the time of such amendment.
- ------------------------------
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933 and the Note to Part I of Form S-8.
II-1
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Amended and Restated Certificate of Incorporation of the registrant
provides for indemnification as follows:
"THIRTEENTH: The Corporation shall indemnify any person who was, is, or
is threatened to be made a party to a proceeding (as hereinafter
defined) by reason of the fact that he or she (i) is or was a director
or officer of the Corporation or (ii) while a director or officer of
the Corporation, is or was serving at the request of the Corporation as
a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, to the fullest extent
permitted under the Delaware General Corporation Law, as the same
exists or may hereafter be amended. Such right shall be a contract
right and as such shall inure to the benefit of any director or officer
who is elected and accepts the position of director or officer of the
Corporation or elects to continue to serve as a director or officer of
the Corporation while this Article Thirteenth is in effect. Any repeal
or amendment of this Article Thirteenth shall be prospective only and
shall not limit the rights of any such director or officer or the
obligations of the Corporation with respect to any claim arising from
or related to the services of such director or officer in any of the
foregoing capacities prior to any such repeal or amendment to this
Article Thirteenth. Such right shall include the right to be paid by
the Corporation expenses (including without limitation attorneys' fees)
actually and reasonably incurred by him in defending any such
proceeding in advance of its final disposition to the maximum extent
permitted under the Delaware General Corporation Law, as the same
exists or may hereafter be amended. If a claim for indemnification or
advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been
received by the Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the
claim, and if successful in whole or in part, the claimant shall also
be entitled to be paid the expenses of prosecuting such claim. It shall
be a defense to any such action that such indemnification or
advancement of costs of defense is not permitted under the Delaware
General Corporation Law, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors or any committee thereof, independent
legal counsel, or stockholders) to have made its determination prior to
the commencement of such action that indemnification of, or advancement
of costs of defense to, the claimant is permissible in the
circumstances nor any actual determination by the Corporation
(including its Board of Directors or any committee thereof, independent
legal counsel, or stockholders) that such indemnification or
advancement is not permissible shall be a defense to the action or
create a presumption that such indemnification or advance is not
permissible. In the event of the death of any person having a right of
indemnification under the foregoing provisions, such right shall inure
to the benefit of his or her heirs, executors, administrators, and
personal representatives. The rights conferred above shall not be
exclusive of any other right which any person may have or hereafter
acquire under any statute, bylaw, resolution of stockholders or
directors, agreement, or otherwise.
The Corporation may also indemnify any employee or agent of
the Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative, any appeal in
such an action, suit, or proceeding, or any inquiry or investigation
that could lead to such an action, suit, or proceeding."
II-2
<PAGE>
ITEM 8. EXHIBITS.
(a) Exhibits.
The following documents are filed as a part of this
registration statement.
Exhibit Description of Exhibit
------- ----------------------
4.1* 1997 Omnibus Stock and Incentive Plan for Capital Senior Living
Corporation, as amended
4.2* Form of Stock Option Agreement
5.1* Opinion of Jenkens & Gilchrist, a Professional Corporation
23.1* Consent of Jenkens & Gilchrist, a Professional Corporation
(included in their opinion filed as Exhibit 5.1)
23.2* Consent of Ernst & Young LLP
23.3* Consent of KPMG LLP
- --------------------
* Filed herewith.
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
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;
(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; and
(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, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) 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 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
II-3
<PAGE>
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 of 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.
II-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
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 Dallas, Texas, on November 30, 1999.
CAPITAL SENIOR LIVING CORPORATION
By: /s/ Lawrence A. Cohen
-----------------------------------------
Lawrence A. Cohen,
Chief Executive Officer and Vice Chairman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Lawrence A. Cohen and James A. Stroud and
each of them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same with all exhibits, thereto, and all documents in connection
therewith, with the Commission, granting unto each of 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 connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents or his
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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ James A. Stroud Chairman of the Board of Directors and Chairman November 19, 1999
- -------------------------------- and Secretary
James A. Stroud
/s/ Lawrence A. Cohen Vice Chairman of the Board of Directors and Chief November 30, 1999
- -------------------------------- Executive Officer (Principal Executive Officer)
Lawrence A. Cohen
/s/ Keith N. Johannessen President and Chief Operating Officer and Director November 30, 1999
- --------------------------------
Keith N. Johannessen
/s/ Ralph A. Beattie Executive Vice President and Chief Financial Officer November 30, 1999
- -------------------------------- (Principal Financial Officer)
Ralph A. Beattie
/s/ Dr. Gordon I. Goldstein Director November 30, 1999
- --------------------------------
Dr. Gordon I. Goldstein
/s/ James A. Moore Director November 18, 1999
- --------------------------------
James A. Moore
/s/ Dr. Victor W. Nee Director November 30, 1999
- --------------------------------
Dr. Victor W. Nee
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Sequential
Exhibit Page
Number Document Description Number
------- -------------------- ----------
<S> <C> <C>
4.1 1997 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation, as
amended
4.2 Form of Stock Option Agreement
5.1 Opinion of Jenkens & Gilchrist, a Professional Corporation
23.1 Consent of Jenkens & Gilchrist, a Professional Corporation (included in their
opinion filed as Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of KPMG LLP
</TABLE>
EXHIBIT 4.1
<PAGE>
1997 OMNIBUS STOCK AND INCENTIVE PLAN
FOR
CAPITAL SENIOR LIVING CORPORATION
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
1. Purpose 1
-------
2 Definitions 1
-----------
(a) "Affiliate" 1
(b) "Agreed Price" 1
(c) "Award" 1
(d) "Available Shares" 1
(e) "Board" 1
(f) "Cause" 1
(g) "Change in Control" 1
(h) "Change in Control Price" 2
(i) "Code" 2
(j) "Committee" 2
(k) "Common Stock" 2
(l) "Company" 2
(m) "Consultant" 3
(n) "Date of Grant" 3
(o) "Director" 3
(p) "Disability" 3
(q) "Effective Date" 3
(r) "Eligible Person" 3
(s) "Fair Market Value" 3
(t) "Holder" 3
(u) "Immediate Family" 3
(v) "Incentive Stock Option" 4
(w) "Limited SAR" 4
(x) "Non-Employee Director" 4
(y) "Non-qualified Stock Option" 4
(z) "Option" 4
(aa) "Optionee" 4
(bb) "Option Price" 4
(cc) "Option Proceeds" 4
(dd) "Outside Director" 4
(ee) "Outside Director Option" 4
(ff) "Parent" 4
(gg) "Performance Award" 4
(hh) "Performance Period" 4
(ii) "Plan" 4
(jj) "Plan Year" 5
(kk) "Potential Change In Control" 5
(ll) "Reacquired Shares" 5
(mm) "Restriction(s)" 5
(nn) "Restricted Period" 5
(oo) "Restricted Shares" 5
(pp) "Restricted Share Award" 5
(qq) "Restricted Share Distributions" 5
(rr) "SAR" 5
(ss) "Section 162(m) Maximum" 5
(tt) "Share(s)" 5
(uu) "Spread" 5
(vv) "Subsidiary" 5
(ww) "1933 Act" 6
(xx) "1934 Act" 6
<PAGE>
3 Award of Available Shares 6
4 Conditions for Grant of Awards 6
5 Grant of Options 7
6 Option Price 8
7 Exercise of Options 8
8 Exercisability of Options 8
9 Termination of Option Period 8
10 Incentive Stock Options for 10% Shareholder 9
11 Non-qualified Stock Options 9
12 Restricted Share Awards 9
13 Performance Awards 10
14 Acceleration on Change in Control 11
15 Adjustment of Available Shares 11
16 Transferability of Awards 12
17 Issuance of Shares 13
18 Stock Appreciation Rights and Limited Stock Appreciation Rights 13
19 Administration of the Plan 16
20 Tax Withholding 17
21 Interpretation 18
22 Amendment and Discontinuation of the Plan 18
23. Section 83(b) Election 19
24. Awards to Outside Directors 19
25. Effective Date and Termination Date 20
</TABLE>
<PAGE>
1997 OMNIBUS STOCK AND INCENTIVE PLAN
FOR
CAPITAL SENIOR LIVING CORPORATION
1. PURPOSE. The purpose of this Plan is to advance the interests of
Capital Senior Living Corporation and increase shareholder value by providing
additional incentives to attract, retain and motivate those qualified and
competent employees, Directors and Consultants upon whose efforts and judgment
its success is largely dependent.
2. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:
(a) "AFFILIATE" means any entity other than the Parent that is
designated by the Board as a participating employer under the Plan, provided
that the Parent directly or indirectly owns at least 20% of the combined voting
power of all classes of stock of such entity or at least 20% of the ownership
interests in such entity.
(b) "AGREED PRICE" shall relate to the grant of a SAR or Limited SAR
under an Award, and shall mean the value assigned to the Available Shares in the
Award which will form the basis for calculating the Spread on the date of
exercise of the SAR or Limited SAR, which assigned value may be any value
determined by the Committee, including the Fair Market Value of the Shares on
the Date of Grant.
(c) "AWARD" shall mean either an Option, an SAR, a Restricted Share
Award, or a Performance Award, except that where it shall be appropriate to
identify the specific type of Award, reference shall be made to the specific
type of Award.
(d) "AVAILABLE SHARES" shall mean, at each time of reference, the total
number of Shares described in SECTION 3 with respect to which the Committee may
grant an Award, all of which Available Shares shall be held in the Parent's
treasury or shall be made available from authorized and unissued Shares.
(e) "BOARD" shall mean the Board of Directors of the Parent.
(f) "CAUSE" shall mean (i) a final, nonappealable conviction of a
holder for commission of a felony involving moral turpitude, (ii) Holder's
willful gross misconduct that causes material economic harm to the Company or
that brings substantial discredit to the Company's reputation, or (iii) Holder's
material failure or refusal to perform his duties if Holder has failed to cure
such failure or refusal to perform within thirty (30) days after the Company
notifies Holder in writing of such failure or refusal to perform.
(g) "CHANGE IN CONTROL" shall mean the first to occur of (i) a merger,
consolidation, statutory share exchange or sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company that requires the consent or vote
of the holders of the Parent's Common Stock, other than a consolidation, merger
or share exchange of the Parent in which the holders of the Parent's Common
Stock immediately prior to such transaction have the same proportionate
ownership of common stock of the surviving corporation immediately after such
transaction; (ii) the shareholders of the Parent approve any plan or proposal
for the liquidation or dissolution of the Company; (iii) the cessation of
control (by virtue of their not constituting a majority of Directors) of the
Board of Directors of the Parent by the individuals (the "Continuing Directors")
who (x) on the Effective Date were Directors or (y) become Directors after the
date of this Agreement and whose election or nomination for election by the
Parent's shareholders was approved by a vote of at least two-thirds of the
Directors then in office who were Directors at the Effective Date or whose
election or nomination for election was previously so approved; (iv) the
acquisition of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of an aggregate of 20% or more of the voting power of the Parent's
outstanding voting securities by any person or group (as such term is used in
Rule 13d-5 under the Exchange Act) who beneficially owned less than 15% of the
voting power of the Parent's outstanding voting securities on the Effective
Date, or the acquisition of beneficial ownership of an additional 5% of the
voting power of the Parent's outstanding voting securities by any person or
group who beneficially
1
<PAGE>
owned at least 15% of the voting power of the Parent's outstanding voting
securities on the Effective Date; provided, however, that notwithstanding the
foregoing, an acquisition shall not be described hereunder if the acquiror is
(x) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company and acting in such capacity, (y) a wholly-owned subsidiary
of the Parent or a corporation owned, directly or indirectly, by the
shareholders of the Parent in the same proportions as their ownership of voting
securities of the Parent or (z) any other person whose acquisition of shares of
voting securities is approved in advance by a majority of the Continuing
Directors; or (v) in a Title 11 bankruptcy proceeding, the appointment of a
trustee or the conversion of a case involving the Company to a case under
Chapter 7.
(h) "CHANGE IN CONTROL PRICE" shall mean the highest price per share
paid in any transaction reported on the NYSE or such other exchange or market as
is the principal trading market for the Common Stock, or paid or offered in any
bona fide transaction related to a Potential or actual Change in Control at any
time during the 60 day period immediately preceding such occurrence, in each
case as determined by the Committee except that, in the case of Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the Holder exercises
such Stock Appreciation Rights or, where applicable, the date on which a cash
out occurs.
(i) "CODE" shall mean the Internal Revenue Code of 1986, as now or
hereafter amended.
(j) "COMMITTEE" shall mean the a Committee composed entirely of
Non-Employee Directors, not less than 2 in number, unless the Board expressly
elects to act as the Committee.
(k) "COMMON STOCK" shall mean the common stock, par value $.01 per
share, of the Parent.
(l) "COMPANY" shall mean the Parent, its Subsidiaries and Affiliates,
except when it shall be appropriate to refer only to Capital Senior Living
Corporation, then it shall be referred to as "Parent".
(m) "CONSULTANT" shall mean any person or entity who or which is
engaged by the Company to render consulting services and is compensated for such
consulting services and any director of the Employer whether compensated for
such services or not; provided that, in the event the Company registers any
security under Section 12 of the Securities Exchange Act of 1934, as amended,
the term Consultant shall thereafter not include Directors who are not
compensated for their services and are paid only a director's fee by the
Employer.
(n) "DATE OF GRANT" shall mean the date on which the Committee takes
formal action to grant an Award, provided that it is followed, as soon as
reasonably possible, by written notice to the Eligible Person receiving the
Award.
(o) "DIRECTOR" shall mean a member of the Board.
(p) "DISABILITY" shall mean a Holder's present incapacity resulting
from an injury or illness (either mental or physical) which, in the reasonable
opinion of the Committee based on such medical evidence as it deems necessary,
will result in death or can be expected to continue for a period of at least
twelve (12) months and will prevent the Holder from performing the normal
services required of the Holder by the Company, provided, however, that such
disability did not result, in whole or in part: (i) from chronic alcoholism;
(ii) from addiction to narcotics; (ii) from a felonious undertaking; or (iv)
from an intentional self-inflicted wound.
(q) "EFFECTIVE DATE" shall mean September 1, 1997.
(r) "ELIGIBLE PERSON" shall mean employees of the Company who the
Committee determines have the capacity to substantially contribute to the
success of the Company.
2
<PAGE>
(s) "FAIR MARKET VALUE" shall mean, as of a particular date, the
closing sale price of Shares, which shall be (i) if the Shares are listed or
admitted for trading on any United States national securities exchange, the last
reported sale price of the Shares on such exchange as reported in any newspaper
of general circulation or (ii) if the Shares are quoted on NASDAQ, or any
similar system of automated dissemination of quotations of securities prices in
common use, the mean between the closing high bid and low asked quotations for
such day on such system. If neither clause (i) nor clause (ii) is applicable,
the fair market value shall be determined by any fair and reasonable means
prescribed by the Committee.
(t) "HOLDER" shall mean, at each time of reference, each person
(including, but not limited to an Optionee) with respect to whom an Award is in
effect, except that where it should be appropriate to distinguish between a
Holder with respect to an Option and a Holder with respect to a different type
of Award, reference shall be made to Optionee; and provided further that to the
extent provided under, and subject to the conditions of, the Award, it shall
refer to the person who succeeds to the rights of the Holder upon the death of
the Holder.
(u) "IMMEDIATE FAMILY" means any child, stepchild, grandchild, parent
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.
(v) "INCENTIVE STOCK OPTION" shall mean an Option that is an incentive
stock option as defined in Section 422 of the Code.
(w) "LIMITED SAR" shall mean a limited stock appreciation right as
defined in SECTION 18 hereof.
(x) "NON-EMPLOYEE DIRECTOR" means a member of the Board who is a
Non-Employee Director within the meaning of Rule 16b-3(b)(3) promulgated under
the 1934 Act and an outside director within the meaning of Treasury Regulation
Sec. 162-27(e)(3) promulgated under the Code.
(y) "NON-QUALIFIED STOCK OPTION" shall mean an Option that is not an
Incentive Stock Option.
(z) "OPTION" (when capitalized) shall mean any Incentive Stock Option
and Non-qualified Stock Option granted under this Plan, except that, where it
shall be appropriate to identify a specific type of Option, reference shall be
made to the specific type of Option; provided, further, without limitation, that
a single Option may include both Incentive Stock Option and Non-qualified Stock
Option provisions.
(aa) "OPTIONEE" shall mean a person to whom an Option is granted (often
referred to as a Holder).
(bb) "OPTION PRICE" shall mean the price per Share which is required to
be paid by the Optionee in order to exercise his right to acquire the Share
under the terms of the Option.
(cc) "OPTION PROCEEDS" shall mean the cash proceeds received by the
Company from the exercise of Options reduced by any such amounts previously used
to purchase Reacquired Shares.
(dd) "OUTSIDE DIRECTOR" means a member of the Board who is not an
officer or employee of the Company.
(ee) "OUTSIDE DIRECTOR OPTION" means an award to an Outside Director
under SECTION 24 below.
(ff) "PARENT" shall mean Capital Senior Living Corporation, a Delaware
corporation.
3
<PAGE>
(gg) "PERFORMANCE AWARD" shall mean the award which is granted
contingent upon the attainment of the performance objectives during the
Performance Period, all as described more fully in SECTION 13.
(hh) "PERFORMANCE PERIOD" shall mean the period described in SECTION 13
with respect to which the performance objectives relate.
`
(ii) "PLAN" shall mean this 1997 Omnibus Stock and Incentive Plan For
Capital Senior Living Corporation
(jj) "PLAN YEAR" shall mean the Parent's fiscal year.
(kk) "POTENTIAL CHANGE IN CONTROL" shall mean the first to occur of (i)
approval by shareholders of an agreement by the Parent, the consummation of
which would result in a Change in Control; or (ii) the acquisition of beneficial
ownership, directly or indirectly, by any entity, person or group (other than
the Company or any Company employee benefit plan of securities of the Company
representing 5% or more of the combined voting power of the Parent's outstanding
securities and the adoption by the Committee of a resolution to the effect that
a Potential Change in Control has occurred for purposes of this Plan.
(ll) "REACQUIRED SHARES" shall mean Shares, if any, reacquired by the
Company on the open market with the Option Proceeds, provided that the aggregate
of such Reacquired Shares may not exceed fifty percent (50%) of the aggregate
Shares (excluding Reacquired Shares) authorized in SECTION 3.
(mm) "RESTRICTION(S)" shall mean the restrictions applicable to
Available Shares subject to an Award which prohibit the "transfer" of such
Available Shares, and which constitute "a substantial risk of forfeiture" of
such Available Shares, as those terms are defined under Section 83(a)(1) of the
Code.
(nn) "RESTRICTED PERIOD" shall mean the period during which Restricted
Shares shall be subject to Restrictions.
(oo) "RESTRICTED SHARES" shall mean the Available Shares granted to an
Eligible Person which are subject to Restrictions.
(pp) "RESTRICTED SHARE AWARD" shall mean the award of Restricted
Shares.
(qq) "RESTRICTED SHARE DISTRIBUTIONS" shall mean any amounts, whether
Shares, cash or other property (other than regular cash dividends) paid or
distributed by the Parent with respect to Restricted Shares during a Restricted
Period.
(rr) "SAR" shall mean a stock appreciation right as defined in SECTION
18 hereof.
(ss) "SECTION 162(M) MAXIMUM" shall mean 100,000 Shares.
(tt) "SHARE(S)" shall mean a share or shares of Common Stock.
(uu) "SPREAD" shall mean the difference between the Option Price, or
the Agreed Price, as the case may be, of the Share(s) and the Fair Market Value
of such Share(s), on the date of reference.
(vv) "SUBSIDIARY" shall mean any corporation (other than the Parent) in
any unbroken chain of corporations beginning with the Parent if, at the time of
the granting of the Award, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50%or more of the total
combined voting power of all classes of stock in one of the other corporations
in such unbroken chain.
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(ww) "1933 ACT" shall mean the Securities Act of 1933, as amended.
(xx) "1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
3. AWARD OF AVAILABLE SHARES. As of the Effective Date, 1,565,000
Shares shall automatically, and without further action, become Available Shares.
To the extent any Award shall terminate, expire or be canceled, or the Award
shall be paid in cash, the Available Shares subject to such Award (or with
respect to which the Award is measured), shall remain Available Shares. Such
number shall be increased automatically by the number of Reacquired Shares;
provided, however, that Incentive Stock Options may not be issued after
1,565,000 Shares have been issued under the Plan. No person whose compensation
may be subject to the limitations on deductibility under Section 162(m) of the
Code shall be eligible to receive Awards pursuant to this Plan in any Plan Year
which relate to Shares which exceed the Section 162(m) Maximum.
4. CONDITIONS FOR GRANT OF AWARDS.
(a) Without limiting the generality of the provisions hereof which deal
specifically with each form of Award, Awards shall only be granted to such one
or more Eligible Persons as shall be selected by the Committee.
(b) In granting Awards, the Committee shall take into consideration the
contribution the Eligible Person has made or may be reasonably expected to make
to the success of the Company and such other factors as the Committee shall
determine. The Committee shall also have the authority to consult with and
receive recommendations from officers and other personnel of the Company with
regard to these matters. The Committee may from time to time in granting Awards
under the Plan prescribe such other terms and conditions concerning such Awards
as it deems appropriate, including, without limitation, relating an Award to
achievement of specific goals established by the Committee or to the continued
employment of the Eligible Person for a specified period of time, provided that
such terms and conditions are not inconsistent with the provisions of this Plan.
(c) Incentive Stock Options may be granted only to Employees, and all
other Awards may be granted to either Employees, Consultants or Non-Employee
Directors. Outside Directors are eligible to receive Awards only pursuant to
SECTION 24.
(d) The Plan shall not confer upon any Holder any right with respect to
continuation of employment by, or consulting relationship with, the Company, nor
shall it interfere in any way with his right or the Company's right to terminate
his employment, consulting relationship or Directorship at any time, nor shall
the reference to "Company" confer an employment relationship on a Consultant.
(e) The Awards granted to Eligible Persons shall be in addition to
regular salaries, pension, life insurance or other benefits related to their
service to the Company. Neither the Plan nor any Award granted under the Plan
shall confer upon any person any right to continuance of employment by the
Company; and provided, further, that nothing herein shall be deemed to limit the
ability of the Company to enter into any other compensation arrangements with
any Eligible Person.
(f) The Committee shall determine in each case whether periods of
military or government service shall constitute a continuation of employment for
the purposes of this Plan or any Award.
(g) Notwithstanding any provision hereof to the contrary, each Award
which in whole or in part involves the issuance of Available Shares may provide
for the issuance of such Available Shares for consideration consisting of such
consideration as the Committee may determine, including (without limitation) as
compensation for past services rendered.
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5. GRANT OF OPTIONS.
(a) The Committee may grant to Optionees from time to time Options
alone, in addition to, or in tandem with , other Awards granted under the Plan
and/or cash Awards made outside of the Plan, to purchase some or all of the
Available Shares. An Option granted hereunder shall be either an Incentive Stock
Option or a Non-qualified Stock Option, shall be evidenced by a written
agreement that shall contain such provisions as shall be selected by the
Committee, which may incorporate the terms of this Plan by reference, and which
clearly shall state whether it is (in whole or in part) an Incentive Stock
Option or a Non-qualified Stock Option.
(b) The aggregate Fair Market Value (determined as of the Date of
Grant) of the Available Shares with respect to which any Incentive Stock Option
is exercisable for the first time by an Optionee during any calendar year under
the Plan and all such plans of the Company (as defined in Section 425 of the
Code) shall not exceed $100,000.
(c) A Non-qualified Stock Option shall not be transferable by the
Holder without the prior written consent of the Committee other than (i)
transfers by the Holder to a member of his or her Immediate Family or a trust
for the benefit of the optionee or a member of his or her Immediate Family, or
(ii) transfers by will or by the laws of descent and distribution. An Incentive
Stock Option shall not be transferable by the Holder otherwise than by will or
by the laws of descent and distribution. All Options shall be exercisable,
during the Holder's lifetime, only by the Holder.
(d) In the case of a Non-qualified Stock Option or a Holder who elects
to make a disqualifying disposition (as defined in Section 422(a)(1) of the
Code) of Shares acquired pursuant to the exercise of an Incentive Stock Option,
the Committee in its discretion may award at the time of grant or thereafter the
right to receive upon exercise of such Option a cash bonus calculated to pay
part or all of the federal and state, if any, income tax incurred by the Holder
upon such exercise.
(e) The Committee may at any time offer to buy out for a payment in
cash, Common Stock, or Restricted Stock an Option previously granted, based on
such terms and conditions as the Committee shall establish and communicate to
the Holder at the time that such offer is made.
(f) If the Option agreement so provides at Date of Grant or (except in
the case of an Incentive Stock Option) is amended after Date of Grant and prior
to exercise to so provide (with the Holder's consent), the Committee may require
that all or part of the Shares to be issued with respect to the Spread take the
form of Restricted Stock, which shall be valued on the date of exercise on the
basis of the Fair Market Value of such Restricted Stock determined without
regard to the transferability and forfeiture restrictions involved.
(g) Without limitation, the Committee may condition the exercise of any
Option upon the attainment of specified performance goals or other factors as
the Committee may determine, in its sole discretion. Unless specifically
provided in the Option agreement, any such conditional Option shall vest twelve
(12) months prior to its expiration if the conditions to exercise have not
theretofore been satisfied.
6. OPTION PRICE.
(a) The Option Price shall be any price determined by the Committee;
provided, however, that the Option Price may not be less than the par value of
the Common Stock, and in the case of an Incentive Stock Option, shall not be
less than one hundred percent (100%) of the Fair Market Value per Share on the
Date of Grant.
(b) Unless further limited by the Committee in any Option, the Option
Price shall be paid solely in cash, by certified or cashier's check, by wire
transfer, by money order, with Common Stock (but with Shares only if expressly
permitted by the terms of the Option), or by a combination of the above;
provided, however, that the Committee may accept a personal check in full or
partial payment. If the Option Price is permitted to be, and is, paid in whole
or in
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part with Common Stock, the value of the Common Stock surrendered shall its Fair
Market Value on the date surrendered.
7. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i)
the Committee has received written notice of such exercise in accordance with
the terms of the Option, and (ii) full payment of the aggregate Option Price of
the Available Shares as to which the Option is exercised has been made. Separate
stock certificates shall be issued by the Parent for any Available Shares
acquired as a result of exercising an Incentive Stock Option and a Non-qualified
Stock Option.
8. EXERCISABILITY OF OPTIONS.
(a) Each Option shall become exercisable in whole or in part and
cumulatively, and shall expire, according to the terms of the Option to the
extent not inconsistent with the express provisions of this Plan; and provided
further, without limitation, that in the case of the grant of an Option to an
officer (as that term is used in Rule 16a-1 promulgated under the 1934 Act) or
any similar rule which may subsequently be in effect, the Committee may provide
that no Available Shares acquired on the exercise of such Option shall be
transferable during such 6 month period following the Date of Grant.
(b) The Committee, in its sole discretion, may accelerate the date on
which all or any portion of an otherwise unexercisable Option may be exercised
or a restriction will lapse.
9. TERMINATION OF OPTION PERIOD.
(a) As provided in SECTION 5, and without limitation, each Option shall
be evidenced by an agreement that may contain any provisions selected by the
Committee; provided, however, that in each case, unless terminated earlier under
the express terms of the Option, the unexercised portion of an Option shall
automatically and without notice terminate and become null and void on the
earlier of (i) the date that Optionee ceases to be employed by the Company, if
such cessation is for Cause, (ii) the tenth (10th) anniversary of the Date of
Grant; and (iii) solely in the case of an Incentive Stock Option, three months
after the date that Optionee ceases to be employed by the Company regardless of
the reason therefor, other than a cessation by reason of death, or Disability,
in which case the date of termination may be extended under the terms of the
Incentive Stock Option agreement.
(b) Notwithstanding any provision of SECTION 14(a) to the contrary, if
provided in an Option, the Committee may, by giving written notice
("CANCELLATION NOTICE"), cancel, effective upon the date of the consummation of
any of the transactions described in SUBSECTION 14(a), all or any portion of
such Option which remains unexercised on such date. Such Cancellation Notice
shall be given a reasonable period of time (but not less than 15 days) prior to
the proposed date of such cancellation, and may be given either before or after
shareholder approval of such corporate transaction.
10. INCENTIVE STOCK OPTIONS FOR 10% SHAREHOLDER. Notwithstanding any
other provisions of the Plan to the contrary, an Incentive Stock Option shall
not be granted to any person owning directly (or indirectly through attribution
under Section 425(d) of the Code) at the Date of Grant, stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company (as defined in Section 425 of the Code) at the Date of Grant, unless the
Option Price of such Incentive Stock Option is at least 110% of the Fair Market
Value on the Date of Grant of the Available Shares subject to such Incentive
Stock Option, and the period during which the Incentive Stock Option may be
exercised does not exceed five (5) years from the Date of Grant.
11. NON-QUALIFIED STOCK OPTIONS. Non-qualified Stock Options may be
granted hereunder and shall contain such terms and provisions as shall be
determined by the Committee, except that each such Non-qualified Stock Option
(i) must be clearly designated as a Non-qualified Stock Option; (ii) may be
granted for Available Shares which become exercisable in excess of the limits
contained in SUBSECTION 5(B); and (iii) shall not be subject to
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SECTION 10 hereof. If both Incentive Stock Options and Non-qualified Stock
Options are granted to an Optionee, the right to exercise, to the full extent
thereof, Options of either type shall not be contingent in whole or in part upon
the exercise of, or failure to exercise, Options of the other type.
12. RESTRICTED SHARE AWARDS.
(a) Each Restricted Share Award shall be evidenced by an agreement that
may contain any provisions selected by the Committee, including, without
limitation, a provision allowing the Holder, prior to the date on which the
Restrictions lapse with respect to the Restricted Shares of reference, or within
a period of 10 days after such lapse where such lapse is accelerated, to elect
to receive cash in an amount equal to the Fair Market Value of some or all of
the Restricted Shares on the date the Restrictions with respect to such
Restricted Shares lapse, in lieu of retaining the corresponding formerly
Restricted Shares; and provided, further, that in the event such a provision is
included in the Restricted Share Award of an officer (as defined in SECTION
18(l) the election to receive cash in lieu of Restricted Shares shall be subject
to the same limitations on exercise as are set forth in SECTION 18(l). As a
condition to the grant of a Restricted Share Award, the Committee shall require
the Eligible Person receiving the Restricted Share Award to pay at least an
amount equal to the par value of the Restricted Shares granted under such
Restricted Share Award, and such Restricted Share Award shall automatically
terminate if such payment is not received within 30 days following the Date of
Grant. Except as otherwise provided in the express terms and conditions of each
Restricted Share Award, the Eligible Person receiving the Restricted Share Award
shall have all of the rights of a shareholder with respect to such Restricted
Shares including, but not limited to, voting rights and the right to receive any
dividends paid, subject only to the retention provisions of the Restricted Share
Distributions.
(b) The Restrictions on Restricted Shares shall lapse in whole, or in
installments, over whatever Restricted Period shall be selected by the
Committee; provided, however, that a complete lapse of Restrictions always shall
occur on or before the 9th anniversary of the Date of Grant.
(c) The Committee may accelerate the date on which Restrictions lapse
with respect to any Restricted Shares.
(d) During the Restricted Period, the certificates representing the
Restricted Shares, and any Restricted Share Distributions, shall be registered
in the Holder's name and bear a restrictive legend disclosing the Restrictions,
the existence of the Plan, and the existence of the applicable agreement
granting such Restricted Share Award. Such certificates shall be deposited by
the Holder with the Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit the transfer to the
Company of all or any portion of the Restricted Shares, and any assets
constituting Restricted Share Distributions, which shall be forfeited in
accordance with the applicable agreement granting such Restricted Share Award.
Restricted Shares shall constitute issued and outstanding Common Stock for all
corporate purposes and the Holder shall have all rights, powers and privileges
of a Holder of unrestricted Shares except that the Holder will not be entitled
to delivery of the stock certificates until all Restrictions shall have
terminated, and the Company will retain custody of all related Restricted Share
Distributions (which will be subject to the same Restrictions, terms, and
conditions as the related Restricted Shares) until the conclusion of the
Restricted Period with respect to the related Restricted Shares; and provided,
further, that any Restricted Share Distributions shall not bear interest or be
segregated into a separate account but shall remain a general asset of the
Company, subject to the claims of the Company's creditors, until the conclusion
of the applicable Restricted Period; and provided, finally, that any material
breach of any terms of the agreement granting the Restricted Share Award, as
reasonably determined by the Committee will cause a forfeiture of both
Restricted Shares and Restricted Share Distributions.
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13. PERFORMANCE AWARDS.
(a) The Committee may grant Performance Awards, which may in the sole
discretion of the Committee represent a Share or be related to the increase in
value of a Share, or be contingent on the Company's achievement of the specified
performance measures during the Performance Period, including, without
limitation, performance shares, convertible preferred stock, convertible
debentures, exchangeable securities and Restricted Share Awards or Options
valued by reference to earnings per Share or Subsidiary performance, may be
granted either alone, in addition to, or in tandem with, other Awards and cash
awards made outside of the Plan. The Committee shall establish the performance
measures for each Performance Period, and such performance measures, and the
duration of any Performance Period, may differ with respect to each Eligible
Person who receives a Performance Award, or with respect to separate Performance
Awards issued to the same Eligible Person. The performance measures, the medium
of payment, the Performance Period(s) and any other conditions to the Company's
obligation to pay such Performance Award in full or in part, shall be set forth
in the written agreement evidencing each Performance Award.
(b) The Committee shall determine the manner and medium of payment of
each Performance Award.
(c) Unless otherwise expressly provided in the agreement evidencing the
Performance Award, the Holder of the Performance Award must remain employed by
the Company until the end of the Performance Period in order to be entitled to
any payment under such Performance Award; provided, however, that the Committee
expressly may provide in the agreement granting such Performance Award that such
Holder may become entitled to a specified portion of the amount earned under
such Performance Award based on one or more specified period(s) of time between
the Date of Grant of such Performance Award and such Holder's termination of
employment by the Company prior to the end of the Performance Period.
14. ACCELERATION ON CHANGE IN CONTROL.
(a) In the event of either a Change in Control, or a Potential Change
in Control, unless otherwise expressly provided by the Committee prior to such
event, (i) all Awards, other than Performance Awards, shall become fully
exercisable, nonforfeitable, or the Restricted Period shall terminate, as the
case may be (hereafter, in this SECTION 14, such Award shall be "accelerated")
and (ii) the value of all outstanding Non-qualified Stock Options, Stock
Appreciation Rights, Restricted Stock, and Outside Director Options shall be
cashed out on the basis of the Change in Control Price, effective as the date of
the Change in Control, or on such other date as the Committee may determine
prior to the Change in Control.
(b) Notwithstanding any provisions hereof to the contrary, if an Award
is accelerated under SUBSECTION 14(b), the portion of the Award which is
accelerated is limited to that portion which can be accelerated without causing
the Holder to have an "excess parachute payment" as determined under Section
280G of the Code, determined by taking into account all of the Holder's
"parachute payments" determined under Section 280G of the Code, all as
reasonably determined by the Committee.
15. ADJUSTMENT OF AVAILABLE SHARES.
(a) If at any time while the Plan is in effect or Awards with respect
to Available Shares are outstanding, there shall be any increase or decrease in
the number of issued and outstanding Shares through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum number
of Available Shares which may be granted under SECTION 3, and in the
Available Shares which are then subject to each Award, so that the same
proportion of the Parent's issued and outstanding Common Stock shall
continue to be subject to grant under SECTION 3, and to such Award, and
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(ii) in addition, and without limitation, in the case of each
Award (including, without limitation, Options) which requires the
payment of consideration by the Holder in order to acquire Shares, an
appropriate adjustment shall be made in the consideration (including,
without limitation the Option Price) required to be paid to acquire the
each Share, so that (i) the aggregate consideration to acquire all of
the Shares subject to the Award remains the same and, (ii) so far as
possible (and without disqualifying an Incentive Stock Option) as
reasonably determined by the Committee in its sole discretion, the
relative cost of acquiring each Share subject to such Award remains the
same.
(b) The Committee may change the terms of Options outstanding under
this Plan, with respect to the Option Price or the number of Available Shares
subject to the Options, or both, when, in the Committee's judgment, such
adjustments become appropriate by reason of a corporate transaction (as defined
in Treasury Regulation Section 1.425-1(a)(1)(ii)); provided, however, that if by
reason of such corporate transaction an Incentive Stock Option is assumed or a
new option is substituted therefore, the Committee may only change the terms of
such Incentive Stock Option such that (i) the excess of the aggregate Fair
Market Value of the Shares subject to option immediately after the substitution
or assumption, over the aggregate option price of such Shares, is not more than
the excess of the aggregate Fair Market Value of all Available Shares subject to
the Option immediately before such substitution or assumption over the aggregate
Option Price of such Available Shares, and (ii) the new option, or the
assumption of the old Incentive Stock Option does not give the Optionee
additional benefits which he did not have under the old Incentive Stock Option.
(c) Except as otherwise expressly provided herein, the issuance by the
Parent of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Parent convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to Available Shares subject to Awards granted under the
Plan.
(d) Without limiting the generality of the foregoing, the existence of
outstanding Awards with respect to Available Shares granted under the Plan shall
not affect in any manner the right or power of the Parent to make, authorize or
consummate (1) any or all adjustments, recapitalizations, reorganizations or
other changes in the Parent's capital structure or its business; (2) any merger
or consolidation of the Parent; (3) any issue by the Parent of debt securities,
or preferred or preference stock which would rank above the Available Shares
subject to outstanding Awards; (4) the dissolution or liquidation of the Parent;
(5) any sale, transfer or assignment of all or any part of the assets or
business of the Company; or (6) any other corporate act or proceeding, whether
of a similar character or otherwise.
16. TRANSFERABILITY OF AWARDS. Each Award shall provide that such Award
shall not be transferable by the Holder otherwise than by will or the laws of
descent and distribution, or, if so provided in the Award, (a) that such Award
is transferable, in whole or in part, without payment of consideration, to
members of the Holder's Immediate Family, to trusts for such Immediate Family
members, or to partnerships whose only partners are such Immediate Family
members, or (b) except as prohibited by Rule 16b-3, to a person or other entity
for which the Holder is entitled to a deduction for a "charitable contribution"
under Section 170(a)(i) of the Code (provided, in each such case that no further
transfer by any such permitted transferee(s) shall be permitted); provided,
further, that in each case the exercise of the Award will remain the power and
responsibility of the Holder and that so long as the Holder lives, only such
Holder (even if pursuant to the legal direction of the person to whom a
charitable contribution has been made) or his guardian or legal representative
shall have the rights set forth in such Award.
17. ISSUANCE OF SHARES. No Holder or other person shall be, or have any
of the rights or privileges of, the owner of Shares subject to an Award unless
and until certificates representing such Common Stock shall have been issued and
delivered to such Holder or other person. As a condition of any issuance of
Common Stock, the Committee may obtain such agreements or undertakings, if any,
as the Committee may deem necessary or advisable to assure compliance with any
such law or regulation including, but not limited to, the following:
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(i) a representation, warranty or agreement by the Holder to
the Parent, at the time any Shares are transferred, that he is
acquiring the Shares to be issued to him for investment and not with a
view to, or for sale in connection with, the distribution of any such
Shares; and
(ii) a representation, warranty or agreement to be bound by
any legends that are, in the opinion of the Committee, necessary or
appropriate to comply with the provisions of any securities law deemed
by the Committee to be applicable to the issuance of the Shares and are
endorsed upon the Share certificates.
Share certificates issued to the Holder receiving such Shares who are
parties to any shareholders agreement or any similar agreement shall bear the
legends contained in such agreements. Notwithstanding any provision hereof to
the contrary, no Shares shall be required to be issued with respect to an Award
unless counsel for the Parent shall be reasonably satisfied that such issuance
will be in compliance with applicable Federal or state securities laws.
18. STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS.
(a) The Committee shall have authority to grant a SAR, or to grant a
Limited SAR with respect to all or some of the Available Shares covered by any
Option ("RELATED OPTION"), or with respect to, or as some or all of, a
Performance Award ("RELATED PERFORMANCE AWARD"). A SAR or Limited SAR granted
with respect to an Incentive Stock Option must be granted on the Date of Grant
of such related Option. A SAR or Limited SAR granted with respect to a Related
Non-qualified Stock Option or a Performance Award, may be granted on or after
the Date of Grant of such Related Option or Related Performance Award.
(b) For the purposes of this SECTION 18, the following definitions
shall apply:
(i) The term "OFFER" shall mean any tender offer or exchange
offer for thirty percent (30%) or more of the outstanding Common Stock
of the Parent, other than one made by the PARENT; provided that the
corporation, person or other entity making the Offer acquires Common
Stock pursuant to such Offer.
(ii) The term "OFFER PRICE PER SHARE" shall mean the highest
price per Share paid in any Offer which is in effect at any time during
the period beginning on the sixtieth (60th) day prior to the date on
which a Limited SAR is exercised and ending on the date on which the
Limited SAR is exercised. Any securities or properties which are a part
or all of the consideration paid or to be paid for Common Stock in the
Offer shall be valued in determining the Offer Price Per Share at the
higher of (1) the valuation placed on such securities or properties by
the person making such Offer, or (2) the valuation placed on such
securities or properties by the Committee.
(iii) The term "LIMITED SAR" shall mean a right granted under
this Plan with respect to a Related Option or Related Performance
Award, that shall entitle the Holder to an amount in cash equal to the
Offer Spread in the event an Offer is made.
(iv) The term "OFFER SPREAD" shall mean, with respect to each
Limited SAR, an amount equal to the product of (1) the excess of (A)
the Offer Price Per Share immediately preceding the date of exercise
over (B) (x) if the Limited SAR is granted in tandem with an Option,
then the Option Price per Share of the Related Option, or (y) if the
Limited SAR is issued with respect to a Performance Award, the Agreed
Price under the Related Performance Award, multiplied by (2) the number
of Available Shares with respect to which such Limited SAR is being
exercised; provided, however that with respect to any Limited SAR
granted in tandem with an Incentive Stock Option, in no event shall the
Offer Spread exceed the amount permitted to be treated as the Offer
Spread under applicable Treasury Regulations or other legal authority
without disqualifying the Option as an Incentive Stock Option.
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(v) The term "SAR" shall mean a right granted under this Plan,
including, without limitation, a right granted in tandem with an Award,
that shall entitle the Holder thereof to an amount in cash equal to the
Spread.
(vi) The term "SAR SPREAD" shall mean with respect to each SAR
an amount equal to the product of (1) the excess of (A) the Fair Market
Value per Share on the date of exercise over (B) (x) if the SAR is
granted in tandem with an Option, then the Option Price per Share of
the Related Option, (y) if the SAR is granted in tandem with a
Performance Award, the Agreed Price under the Related Performance
Award, or (z) if the SAR is granted by itself with respect to a
designated number of Available Shares, then whichever of the FMV of the
Available Shares on the Date of Grant, or the Agreed Price, shall be
designated in the SAR agreement, in each case multiplied by (2) the
number of Available Shares with respect to which such SAR is being
exercised; provided, however, that with respect to any SAR granted in
tandem with an Incentive Stock Option, in no event shall the SAR Spread
exceed the amount permitted to be treated as the SAR Spread under
applicable Treasury Regulations or other legal authority without
disqualifying the Option as an Incentive Stock Option.
(c) To exercise the SAR or Limited SAR, the Holder shall:
(i) Give written notice thereof to the Company, specifying the
SAR or Limited SAR being exercised and the number or Available Shares
with respect to which such SAR or Limited SAR is being exercised, and
(ii) If requested by the Company, deliver within a reasonable
time the agreement evidencing the SAR or Limited SAR being exercised,
and the Related Option agreement, or Related Performance Award
agreement, to the Secretary of the Company who shall endorse or cause
to be endorsed thereon a notation of such exercise and return all
agreements to the Holder.
(d) As soon as practicable after the exercise of a SAR or Limited SAR,
the Company shall pay to the Holder (i) cash, (ii) at the request of the Holder
and the approval of the Committee, or in accordance with the terms of the Award,
Shares, or (iii) a combination of cash and Shares, having a Fair Market Value
equal to either the SAR Spread, or to the Offer Spread, as the case may be;
provided, however, that the Company may, in its sole discretion, withhold from
such payment any amount necessary to satisfy the Company's obligation for
federal and state withholding taxes with respect to such exercise.
(e) A SAR or Limited SAR may be exercised only if and to the extent
that it is permitted under the terms of the Award which, in the case of a
Related Option, shall be only when such Related Option is eligible to be
exercised; provided, however, a Limited SAR may be exercised only during the
period beginning on the first day following the date of expiration of the Offer
and ending on the thirtieth (30th) day following such date.
(f) Upon the exercise or termination of a Related Option, or the
payment or termination of a Related Performance Award, the SAR or Limited SAR
with respect to such Related Option or Related Performance Award likewise shall
terminate.
(g) A SAR or Limited SAR shall be transferable only to the extent, if
any, that the Related Award is transferable, and under the same conditions.
(h) A SAR or Limited SAR granted with respect to an Incentive Stock
Option may be exercised only when the Fair Market Value of the Available Shares
exceeds the Option Price.
(i) Each SAR or Limited SAR shall be on such terms and conditions not
inconsistent with this Plan as the Committee may determine and shall be
evidenced by a written agreement.
12
<PAGE>
(j) The Holder shall have no rights as a stockholder with respect to
the related Available Shares as a result of the grant of a SAR or Limited SAR.
(k) With respect to a Holder who, on the date of a proposed exercise of
a SAR or Limited SAR, is an officer (as that term is used in Rule 16a-1
promulgated under the 1934 Act or any similar rule which may subsequently be in
effect), and who would receive cash in whole or in part upon the proposed
exercise of his SAR, or Limited SAR such proposed exercise may only occur as
permitted by Rule 16b-3, including without limitation paragraph (e)(3)(iii) (or
any similar rule which may subsequently be in effect promulgated pursuant to
Section 16(b) of the 1934 Act) which, at the date of adopting this Plan, among
other things, permits exercise during a period beginning on the third (3rd)
business day following the Parent's public release of quarterly or annual
summary statements of sales and earnings and ending on the twelfth (12th)
business day following such public release.
19. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee and, except for the
powers reserved to the Board in SECTION 22 hereof, the Committee shall have all
of the administrative powers under Plan. The initial Committee shall be the
Compensation Committee of the Board. In the event there are not at least two
Non- Employee Directors on the Board, the Plan shall be administered by the
Board and all references herein to the Committee shall refer to the Board.
(b) The Committee, from time to time, may adopt rules and regulations
for carrying out the purposes of the Plan and, without limitation, may delegate
all of what, in its sole discretion, it determines to be ministerial duties to
an officer of the Parent. The determinations under, and the interpretations of,
any provision of the Plan or an Award by the Committee shall, in all cases, be
in its sole discretion, and shall be final and conclusive.
(c) Any and all determinations and interpretations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at a
meeting duly called, with at least 3 days prior notice and a general explanation
of the subject matter given to each member, or (ii) without a meeting, by the
written approval of all members of the Committee.
(d) No member of the Committee shall be liable for any action taken or
omitted to be taken by him or by any other member of the Committee with respect
to the Plan, and to the extent of liabilities not otherwise insured under a
policy purchased by the Company, the Company does hereby indemnify and agree to
defend and save harmless any member of the Committee with respect to any
liabilities asserted or incurred in connection with the exercise and performance
of their powers and duties hereunder, unless such liabilities are judicially
determined to have arisen out of such member's gross negligence, fraud or bad
faith. Such indemnification shall include attorney's fees and all other costs
and expenses reasonably incurred in defense of any action arising from such act
of commission or omission. Nothing herein shall be deemed to limit the Company's
ability to insure itself with respect to its obligations hereunder.
(e) In particular, and without limitation, the Committee shall have the
authority, consistent with the terms of the Plan:
(i) to select the officers, key employees of and consultants
to the Company to whom Awards may from time to time be granted here-
under;
(ii) to determine whether and to what extent Awards are to be
granted hereunder to one or more eligible persons;
(iii) to determine the number of Shares to be covered by each
such Award granted hereunder;
13
<PAGE>
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Award granted hereunder (including,
but not limited to, the Agreed Value and any restriction or limitation,
or any vesting acceleration or waiver of forfeiture restrictions, based
in each case on such factors as the Committee shall determine, in its
sole discretion); and to amend or waive any such terms and conditions
to the extent permitted by the Plan;
(v) to determine whether and under what circumstances an
Option may be settled in cash or Restricted Shares instead of Shares;
(vi) to determine whether, to what extent, and under what
circumstances Awards under the Plan are to be made, and operate, on a
tandem basis vis-a-vis other Awards under the Plan and/or cash awards
made outside of the Plan;
(vii) to determine whether and to what extent, and under what
circumstances Shares and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the Holder
(including providing for and determining the amount (if any) of any
deemed earnings on any deferred amount during any deferral period); and
(viii) to determine whether to require payment of tax
withholding requirements in Shares and to impose any holding period
required to satisfy Section 16 under the Exchange Act.
(f) The Committee shall have the authority to adopt, alter, and repeal
such rules, guidelines, and practices governing the Plan as it shall, from time
to time, deem advisable; to interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan; provided, however, that to
the extent that this Plan otherwise requires the approval of the Board or the
shareholders of the Parent, all decisions of the Committee shall be subject to
such Board or shareholder approval. Subject to the foregoing, and without
limitation, all decisions made by the Committee pursuant to the provisions of
the Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Holders.
20. TAX WITHHOLDING. On or immediately prior to the date on which a
payment is made to a Holder hereunder or, if earlier, the date on which an
amount is required to be included in the income of the Holder as a result of an
Award, the Holder shall be required to pay to the Company, in cash or in Shares
(including, but not limited to, the reservation to the Company of the requisite
number of Available Shares otherwise payable to such Holder with respect to such
Award) the amount which the Company reasonably determines to be necessary in
order for the Company to comply with applicable federal or state tax withholding
requirements, and the collection of employment taxes, if applicable; provided,
further, that the Committee may require that such payment be made in cash.
21. INTERPRETATION.
(a) If any provision of the Plan is held invalid for any reason, such
holding shall not affect the remaining provisions hereof, but instead the Plan
shall be construed and enforced as if such provision had never been included in
the Plan.
(b) THIS PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
(c) Headings contained in this Agreement are for convenience only and
shall in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall be
a reference to such other gender as is appropriate.
14
<PAGE>
(e) The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
Holder, nothing contained herein shall give any such Holder any rights that are
greater than those of a general creditor of the Company. In its sole discretion,
the Committee may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver Common Stock or payments in
lieu of or with respect to Awards hereunder; provided, however, that, unless the
Committee otherwise determines with the consent of the affected Holder, the
existence of such trusts or other arrangements is consistent with the "unfunded"
status of the Plan.
(f) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to shareholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
22. AMENDMENT AND DISCONTINUATION OF THE PLAN. The Board, or the
Committee (subject to the prior written authorization of the Board), may from
time to time amend the Plan or any Award; provided, however, that [except to the
extent provided in SECTION 9(B) AND 15 hereof] no such amendment may, without
approval by the shareholders of the Parent, (a) increase the number of Available
Shares or change the class of Eligible Persons, (b) permit the granting of
Awards which expire beyond the maximum 10-year period described in SUBSECTION
9(A)(II), (c) extend the termination date of the Plan as set forth in SECTION
25, (d) increase the Section 162(m) Maximum; (e) amend SECTION 24 so as to
materially increase the benefits to Outside Directors; or (f) make any change
for which applicable law or regulatory authority (including the regulatory
authority of the NYSE or any other market or exchange on which the Common Stock
is traded) would require shareholder approval or for which shareholder approval
would be required to secure all deductibility of compensation received under the
Plan under Section 162(m) of the Code; and provided, further, that no amendment
or suspension of the Plan or any Award issued hereunder shall, except as
specifically permitted in this Plan or under the terms of such Award,
substantially impair any Award previously granted to any Holder without the
consent of such Holder. Solely for purposes of computing the Section 162(m)
Maximum, if any Award(s) previously granted is canceled and new Award(s) having
a lower Option Price or other more favorable terms for the Holder are
substituted in their place, both the initial Award(s) and the replacement
Award(s) will be deemed to be outstanding (although the canceled Award(s) will
not be exercisable or deemed outstanding for any other purposes).
23. SECTION 83(b) ELECTION. If as a result of receiving an Award, a
Holder receives Restricted Shares subject to a "substantial risk of forfeiture",
then such Holder may elect under Section 83(b) of the Code to include in his
gross income, for his taxable year in which the Restricted Shares are
transferred to him, the excess of the Fair Market Value (determined without
regard to any Restriction other than one which by its terms will never lapse),
of such Restricted Shares at the Date of Grant, over the amount paid for the
Restricted Shares. If the Holder makes the Section 83(b) election described
above, the Holder shall (i) make such election in a manner that is satisfactory
to the Committee, (ii) provide the Committee with a copy of such election, (iii)
agree to promptly notify the Company if any Internal Revenue Service or state
tax agent, on audit or otherwise, questions the validity or correctness of such
election or of the amount of income reportable on account of such election, and
(iv) agree to such federal and state income withholding as the Committee may
reasonably require in its sole and absolute discretion.
24. AWARDS TO OUTSIDE DIRECTORS.
(a) The provisions of this SECTION 24 shall apply only to Awards to
Outside Directors in accordance with this SECTION 24. The Committee shall have
no authority to determine the timing of or the terms or conditions of any award
under this SECTION 24.
(b) At the date of the Parent's initial public offering, each person
serving as an Outside Director on such date will receive a Non-qualified Stock
Option to purchase 9,000 Shares at a per Share Option Price equal to the initial
public offering price. Such Option shall vest and become exercisable with
respect 3,000 Shares on each of the annual meeting of shareholders ("Annual
Meeting") dates, beginning with the Annual Meeting in 1998.
15
<PAGE>
(c) If any person who was not previously a member of the Board is
elected or appointed an Outside Director following the initial public offering
but prior to the date of the Annual Meeting in the year 2000, such Outside
Director will receive a Non-qualified Stock Option to purchase 7,000 Shares if
such Outside Director's service begins prior to the second anniversary of the
initial public offering, and 5,000 Shares if such Outside Directors service
begins after the second anniversary of the initial public offering but prior to
the date of the Annual Meeting in the year 2000. It is intended that such grant
may be increased or decreased to extent deemed appropriate by the Board, in its
sole discretion, to reflect the extent to which Director's expected service
prior to the Annual Meeting in 2000 may exceed two years or may be less than one
full year. The Option Price of each option granted pursuant to this SECTION
24(c) shall equal the Fair Market Value on the Date of Grant. Options granted
under this SECTION 24(c) shall vest and become exercisable with respect to 33.3%
of the Shares on each Annual Meeting date following the Date of Grant.
(d) On the date of each Annual Meeting, beginning with the Annual
Meeting in 2000, unless this Plan has been previously terminated, each Outside
Director who will continue as a Director following such meeting will receive a
Non-qualified Stock Option to purchase 3,000 Shares. The Option Price per each
Option granted pursuant to this SECTION 24(d) shall equal the Fair Market Value
per Share on the Date of Grant. Such Option shall vest and become exercisable
with respect to all 3,000 Shares on the date of the next Annual Meeting if the
Holder has been a member of the Board until such date (whether or not such
Holder will remain a Director following such Annual Meeting).
(e) No Outside Director Option shall be exercisable prior to vesting.
Each Outside Director Option shall expire, if unexercised, on the tenth
anniversary of the Date of Grant. The Option Price may be paid in cash or in
Common Stock, including Shares subject to the Outside Director Option.
(f) Upon termination of an Outside Director's service as a Director,
all Outside Director Options theretofore exercisable and held by such Outside
Director will remain vested and exercisable through the expiration date and all
remaining Outside Director Options held by such Outside Director will become
exercisable and vested and remain so through the expiration date to the extent
of any Shares that would have become exercisable and vested within a period of
less than twelve months following the date of termination of his or her status
as Director. Any unvested Outside Director Options held by the Outside Director
on the date of termination of his or her status as Director will be forfeited to
the extent of any Shares that would not have become vested and exercisable until
at least twelve months from the date of termination of his or her status as
Director. The Board may, in its sole discretion, elect to accelerate the vesting
of any Outside Director Options in connection with the termination of his or her
status as Director.
(g) The Board, in its sole discretion, may determine to reduce the size
of any Outside Director Option prior to Date of Grant or to postpone the vesting
and exercisability of any Outside Director Option prior to Date of Grant.
25. EFFECTIVE DATE AND TERMINATION DATE. The Plan shall be effective as
of its Effective Date, and shall terminate on the tenth anniversary of such
Effective Date.
CAPITAL SENIOR LIVING
CORPORATION
---------------------
16
<PAGE>
FIRST AMENDMENT
TO THE
1997 OMNIBUS STOCK AND INCENTIVE PLAN
FOR
CAPITAL SENIOR LIVING CORPORATION
This First Amendment to the 1997 Omnibus Stock And Incentive Plan For
Capital Senior Living Corporation ("Plan") made and entered into effective as of
the 22nd day of July, 1999.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Capital Senior Living Corporation ("Company") established the
Plan effective September 1, 1997; and
WHEREAS, under and in accordance with Section 22 of the Plan, the Board
of Directors ("Board") of the Company has been granted the authority to amend
the Plan, subject to certain limitations; and
WHEREAS, the Board has previously authorized the amendment of the Plan
to increase the number of shares of common stock of the Company ("Shares") which
automatically will be available for grant under the Plan by 435,000 Shares,
which will have the effect of increasing the total of such automatically
available Shares, measured from the inception of the Plan, to 2,000,000 Shares;
and
WHEREAS, under the terms of Section 22 of the Plan, such amendment
required the concurrence and approval of the shareholders of the Company, which
approval and concurrence was given on April 20, 1999; and
WHEREAS, this Amendment has been fully approved and authorized by the
Board and the Shareholders and the proper officers of the Company are authorized
to execute such Amendment.
NOW THEREFORE, The Plan Is Hereby Amended As Follows:
I. Section 2(ll) is amended effective July 22, 1999 by
deleting it in its entirety and substituting therefor the following:
""Reacquired Shares" shall mean Shares, if any, reacquired by
the Company on the open market with the Option Proceeds,
provided that the aggregate of such Reacquired Shares may not
exceed fifty percent (50%) of the aggregate Shares (excluding
Reacquired Shares) authorized in Section 3 at the time of
reference.
II. Section 3 is amended effective July 22, 1999 by deleting
it in its entirety and substituting therefor the following:
<PAGE>
"Award of Available Shares. As of the Effective Date,
1,565,000 Shares shall automatically, and without further
action, become Available Shares, and as of July 22, 1999 an
additional 435,000 Shares shall automatically and without
further action, become Available Shares. To the extent any
Award shall terminate, expire or be canceled, or the Award
shall be paid in cash, the Available Shares subject to such
Award (or with respect to which the Award in measured), shall
remain Available Shares. Such number shall be increased
automatically by the number of Reacquired Shares; provided,
however, that Incentive Stock Options may not be issued after
2,000,000 Shares have been issued under the Plan. No person
whose compensation may be subject to the limitations on
deductibility under Section 162(m) of the Code shall be
eligible to receive Awards pursuant to this Plan in any Plan
Year which relate to Shares which exceed the Section 162(m)
Maximum.
Dated July 22, 1999.
CAPITAL SENIOR LIVING CORPORATION
By: /s/ Keith Johannessen
------------------------------
President
EXHIBIT 4.2
<PAGE>
Key Employee [name Optionee]
- ----------------------------
NONQUALIFIED STOCK OPTION
UNDER THE
1997 OMNIBUS STOCK AND INCENTIVE PLAN
for
CAPITAL SENIOR LIVING CORPORATION
Effective as of ______________________ ("Date of Grant"), a Stock Option
(the "Option") for a total of _______________ shares of common stock ("Shares")
of Capital Senior Living Corporation. (the "Company"), is hereby granted to
____________________ (the "Optionee"), this Option being in all respects subject
to the terms, definitions and provisions, of the 1997 Omnibus Stock and
Incentive Plan For Capital Senior Living Corporation (the "Plan"), and all of
which are incorporated herein by reference, except to the extent otherwise
expressly provided in this Option.
1. Option Price. The Option Price is $____________for each Share.
2. Vesting of Option Shares. Without limitation, the Shares subject to
this Option shall vest in accordance with the following vesting schedule:
(i) ____% of the Shares shown in the Section 1, on the __________
[i.e ____st anniversary of the Date of Grant, or Date of Hire
etc].
(ii) _____% of the Shares shown in Section 1 on the ______________.
(iii) _____% of the Shares shown in Section 1 on the ______________.
(iv through _________)
[Non "time" related vesting dates could be used in place of, or in conjunction
with, the time related vesting dates. Could use things like (i) Company attains
certain level of EPS, (ii) certain aspect of business (optionee responsible for)
attains a targeted level of performance, (iii) Company stock hits a certain
trading value, (iv) completion of a key long term project etc.]
3. Exercisability of Option.
[Optional] (i) Date on Which Option Becomes Exercisable. This Option,
to the extent it is still in effect, shall be exercisable to the extent vested
on or after ___________, [i.e. the ___th anniversary of the Date of Grant, the
date on which the Company Shares are traded at $____, the date the Company's EPS
for the preceding Quarter(year etc) is $_____ or greater, etc.] but only with
respect to Shares which are vested at the date of exercise. [This is optional
because, in many (possibly most) cases Options become immediately exercised
after they vest. See (2) above.]
(ii) Method of Exercise. Without limitation, this Option shall
be exercised by a written notice delivered to the Committee which shall:
1
<PAGE>
(a) state the election to exercise the Option and
the number of vested Shares in respect of which it is being exercised; and
(b) be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person or
persons other than the Optionee, be accompanied by proof, satisfactory to the
Company, of the right of such person or persons to exercise the Option.
(iii) Payment and Withholding. The Option Price of any Shares
purchased, and any applicable withholding, shall be paid solely in cash [or, [at
the option of the Company], the Option Price [and withholding] may be paid in
whole or in part with Common Stock (including Shares)].
(iv) Issuance of Shares. Without limitation, no person shall
be, or have any of the rights or privileges of, a holder of Shares subject to
this Option unless and until certificates representing such Shares shall have
been issued and delivered to such person. Without limitation, the Shares shall
be issued subject to the agreements and undertakings described in Section 17 of
the Plan.
(v) Surrender of Option. Upon exercise of this Option in whole
or in part, if requested by the Company, the Optionee shall deliver this Option
and any other written agreements executed by the Company and the Optionee with
respect to this Option to the Company who shall endorse or cause to be endorsed
thereon a notation of such exercise and return all agreements to the Optionee.
4. Term of Option. Without limitation, [in addition to terminating in
accordance with Section 9(a) of the Plan, the unexercised portion of this Option
shall automatically terminate ____________ [i.e. ____ months [days] after
termination of service, or on the ____th anniversary of the Date of Grant, etc.]
the unexercised portion of this Option shall automatically terminate in
accordance with the term of the Plan.
5. Transferability of Option. This Option shall not be transferable by
the Optionee otherwise than by will or the laws of descent and distribution [,
except that it is transferable, in whole or in part, without payment of
consideration, to members of the Optionee's Immediate Family, to trusts for such
Immediate Family members, or to partnerships whose only partners are such
Immediate Family members, or (b) except as prohibited by Rule 16b-3, to a person
or other entity for which the Optionee is entitled to a deduction for a
"charitable contribution" under Section 170(a)(i) of the Code (provided, in each
such case that no further transfer by any such permitted transferee(s) shall be
permitted); provided, further, that in each case the exercise of the Award will
remain the power and responsibility of the Optionee and that so long as the
Optionee lives, only Optionee (even if pursuant to the legal direction of the
person to whom a charitable contribution has been made) or his guardian or legal
representative shall have the rights set forth in this Option.].
6. Interpretation. (a) If any provision of the Option is held invalid
for any reason, such holding shall not affect the remaining provisions hereof,
but instead the Option shall be construed and enforced as if such provision had
never been included in the Option.
2
<PAGE>
(b) This Option shall be governed by the laws of the State of Texas.
(c) Headings contained in this Option are for convenience only and
shall in no manner be construed as part of this Option.
(d) Any reference to the masculine, feminine, or neuter gender shall be
a reference to such other gender as is appropriate.
Dated this __________ day of ___________________, 199__.
CAPITAL SENIOR LIVING CORPORATION
By:
------------------------------
OPTIONEE
Optionee acknowledges receipt of a copy of the Plan, and represents
that he is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all the terms and provisions of both the Option and the
Plan. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee (as defined in the Plan) upon any
questions arising under this Option or the Plan.
Dated this day of , 199 .
--------- ------------ ---
--------------------------------
Optionee
3
EXHIBIT 5.1
<PAGE>
[Jenkens & Gilchrist Letterhead]
December 3, 1999
Capital Senior Living Corporation
14160 Dallas Parkway, Suite 300
Dallas, TX 75240
Re: Capital Senior Living Corporation - Registration Statement on Form
S-8
Gentlemen:
We are counsel to Capital Senior Living Corporation, a Delaware
corporation (the "Company"), and have acted as such in connection with the
preparation of the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission on or about
December 3, 1999, under the Securities Act of 1933, as amended (the "Securities
Act"), relating to 2,000,000 shares (the "Shares") of the $0.01 par value common
stock (the "Common Stock") of the Company that have been or may be issued by the
Company pursuant to the 1997 Omnibus Stock and Incentive Plan for Capital Senior
Living Corporation, as amended (the "Plan").
You have requested an opinion with respect to certain legal aspects of
the proposed offering. In connection therewith, we have examined and relied upon
the original, or copies identified to our satisfaction, of (1) the Certificate
of Incorporation of the Company, as amended, and the Bylaws of the Company, as
amended; (2) minutes and records of the corporate proceedings of the Company
with respect to the establishment of the Plan, the reservation of 2,000,000
Shares to be issued pursuant to the Plan and to which the Registration Statement
relates, the issuance of the shares of Common Stock pursuant to the Plan and
related matters; (3) the Registration Statement and exhibits thereto, including
the Plan; and (4) such other documents and instruments as we have deemed
necessary for the expression of opinions herein contained. In making the
foregoing examinations, we have assumed the genuineness of all signatures and
the authenticity of all documents submitted to us as originals, and the
conformity to original documents of all documents submitted to us as certified
or photostatic copies. As to various questions of fact material to this opinion,
and as to the content and form of the Certificate of Incorporation, as amended,
the Bylaws, as amended, minutes, records, resolutions and other documents or
writings of the Company, we have relied, to the extent deemed reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independent check or verification of their accuracy.
<PAGE>
Capital Senior Living Corporation
December 3, 1999
Page 2
Based upon our examination, consideration of, and reliance on the
documents and other matters described above, and assuming that:
(1) the Shares to be sold and issued in the future will be duly issued
and sold in accordance with the terms of the Plan;
(2) the Company maintains an adequate number of authorized but unissued
shares and/or treasury shares available for issuance to those persons who
purchase Shares pursuant to the Plan; and
(3) the consideration for the Shares issued pursuant to the Plan is
actually received by the Company as provided in the Plan and exceeds the par
value of such shares;
then, we are of the opinion that, the Shares issued or sold in accordance with
the terms of the Plan will be duly and validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to us included in or made a part of the
Registration Statement. In giving this consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act or the Rules and Regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
Jenkens & Gilchrist,
A Professional Corporation
By: /s/ Winston W. Walp II
----------------------
Winston W. Walp II
Authorized Signatory
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1997 Omnibus Stock and Incentive Plan for Capital Senior
Living Corporation of Capital Senior Living Corporation of our report dated
February 5, 1999 (except for Notes 20 and 12, as to which the dates are February
7, 1999 and February 12, 1999, respectively), with respect to the consolidated
financial statements of Capital Senior Living Corporation included in its Annual
Report, as amended (Form 10-K/A) for the year ended December 31, 1998, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Dallas, Texas
December 2, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
<PAGE>
Independent Auditors' Consent
The Partners
HealthCare Properties
We consent to incorporation by reference in the registration statement for the
1997 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation, as
amended, on Form S-8 of our report dated February 5, 1999, relating to the
consolidated balance sheets of HealthCare Properties, L.P. and subsidiaries as
of December 31, 1998 and 1997, and the related consolidated statements of
income, partnership equity, and cash flows for each of the years in the
three-year period ended December 31, 1998, which report appears in the December
31, 1998 annual report, as amended, on Form 10-K/A of Capital Senior Living
Corporation.
/s/ KPMG LLP
Dallas, Texas
December 2, 1999
