<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for use of Commission only
[X] Definitive Proxy Statement (as permitted by Rule 14e-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ARV Assisted Living, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
ARV Assisted Living, Inc.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14 a-6(i)(2), or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
==========================================================================================================
Aggregate Number Per Unit Price or Proposed
Title of Each Class of Securities to Other Underlying Maximum Amount of
of Securities to which which Transaction Value of Aggregate Value Filing
Transaction Applies Applies Transaction of Transaction Fee
- - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
N/A -- -- -- --
==========================================================================================================
</TABLE>
----------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE> 2
[ARV ASSISTED LIVING LOGO]
ARV ASSISTED LIVING, INC.
245 Fischer Avenue
Costa Mesa, CA 92626
July 11, 1996
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
ARV Assisted Living, Inc. to be held at the Red Lion Hotel, Room Red Lion 4,
3050 Bristol Street, Costa Mesa, California 92626, on August 13, 1996, at 9:00
a.m.
At this meeting, we will vote to elect our Board of Directors. The
Notice of Annual Meeting of Shareholders and Proxy Statement following this
letter more fully describe the business expected to be transacted at the
meeting. Once the business has been transacted, a question and answer period
will follow.
Your vote is very important. Whether or not you attend the meeting, your
shares should be represented and voted at the meeting. Therefore, I urge you
to mark, sign, date and promptly return the enclosed proxy card. If you decide
to attend the meeting and wish to vote in person, you will still have the
opportunity to do so.
The Board of Directors appreciates your continued interest in the affairs
of the Company. We look forward to greeting personally those shareholders who
are able to attend the meeting.
Sincerely,
/s/ GARY L. DAVIDSON
Gary L. Davidson
Chairman of the Board
<PAGE> 3
ARV ASSISTED LIVING, INC.
245 Fischer Avenue
Costa Mesa, CA 92626
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, AUGUST 13, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of ARV
Assisted Living, Inc., a California corporation (the "Company"), will be held
at the Red Lion Inn, Room Red Lion 4, 3050 Bristol Street, Costa Mesa,
California 92626, at 9:00 a.m., local time, on Tuesday, August 13, 1996 for the
following purposes:
(1) To elect seven directors to the Company's Board of Directors.
(2) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on July 9, 1996 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting.
To ensure representation at the Annual Meeting, shareholders are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible,
even if they plan to attend the Annual Meeting. A return envelope, which
requires no postage if mailed in the United States, is enclosed for this
purpose. Any shareholder attending the Annual Meeting may vote in person even
if such shareholder has returned a proxy if the proxy is revoked in the manner
set forth in the accompanying Proxy Statement.
By order of the Board of Directors
/s/ GARY L. DAVIDSON
Gary L. Davidson
Chairman of the Board
Costa Mesa, California
July 11, 1996
================================================================================
WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, PLEASE MARK, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD AT YOUR EARLIEST CONVENIENCE. This will ensure the
presence of a quorum at the meeting. Promptly marking, signing, dating and
returning your proxy card will save the Company the expense of additional
solicitation. Sending in your proxy card will not prevent you from voting your
stock at the meeting if you desire to do so, as your proxy is revocable at your
election.
================================================================================
<PAGE> 4
ARV ASSISTED LIVING, INC.
-------------------------------------------
PROXY STATEMENT
-------------------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL. This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of ARV Assisted Living, Inc. (the
"Company") of proxies for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at the Red Lion Inn, Room Red Lion 4, 3050 Bristol
Street, Costa Mesa, California 92626, at 9:00 a.m., local time, on Tuesday,
August 13, 1996, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. The principal executive offices of the Company
are located at 245 Fischer Avenue, Costa Mesa, California 92626. It is
expected that this Proxy Statement and accompanying form of proxy will be
mailed to shareholders on or about July 13, 1996.
RECORD DATE AND OUTSTANDING SHARES. Holders of record of the
Company's common stock (the "Common Stock") at the close of business on July 9,
1996 are entitled to notice of and to vote at the Annual Meeting. On that date
there were 9,561,028 shares of Common Stock outstanding.
REVOCABILITY OF PROXIES. A proxy given for use at the Annual Meeting
may be revoked by the shareholder giving the proxy at any time prior to the
exercise of the powers conferred thereby. A proxy may be revoked either by (i)
filing with the Secretary of the Company prior to the Annual Meeting, at the
Company's principal executive offices, either a written revocation or a duly
executed proxy card bearing a later date or (ii) attending the Annual Meeting
and voting in person, regardless of whether a proxy has previously been given.
Presence at the Annual Meeting will not revoke the shareholder's proxy unless
such shareholder votes in person.
QUORUM AND VOTING. Under California law, action may be taken on a
matter submitted to shareholders only if a quorum exists with respect to such
matter. A majority of the outstanding shares entitled to vote, present in
person or represented by proxy, constitutes a quorum at a meeting of the
Company's shareholders.
Shares represented by proxy cards that reflect abstentions or "broker
non-votes" (i.e., shares held by brokers or nominees which are represented at
the meeting but with respect to which the brokers or nominees have not received
instructions from the beneficial owners or persons entitled to vote or do not
have discretionary power to vote on a particular matter) will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum.
Shares represented at the Annual Meeting by properly executed proxy
cards in the accompanying form and not revoked will be voted at the Annual
Meeting. The Board of Directors knows of no matters other than as listed in
the attached Notice of Annual Meeting of Shareholders which are likely to be
brought before the Annual Meeting. If, however, any other matters should
properly come before the
-1-
<PAGE> 5
Annual Meeting or any adjournment thereof, the persons named in the enclosed
proxy will vote all proxies given to them in accordance with their best
judgment of such matters.
SOLICITATION OF PROXIES. Proxies will be solicited by certain of the
Company's directors, officers and regular employees, without payment of any
additional compensation to them. Proxies will be solicited by personal
interview, mail and telephone. Any costs relating to such solicitation of
proxies will be borne by the Company. In addition, the Company may reimburse
brokerage firms and other persons representing beneficial owners of Common
Stock for their expenses in forwarding solicitation materials to such
beneficial owners.
ELECTION OF DIRECTORS
The Board of Directors is comprised of seven members. At the Annual
Meeting, all seven directors are to be elected to hold office for a term of one
year until the Company's annual meeting in 1997, in each case until such
director's successor shall be elected and qualified. Each nominee has
consented to being named in the Proxy Statement as a nominee for election as
director and has agreed to serve as director if elected.
The seven nominees for election as directors who receive the greatest
number of votes cast in person or by proxy at the Annual Meeting will be
elected directors. The proxy card permits shareholders to withhold authority
to vote for any nominee. When the shareholder giving the proxy specifies a
choice with respect to the election of the directors, the proxy will be voted
in accordance with the specification made. When no specification is made on a
properly executed proxy card, the shares represented by the proxy card will be
voted FOR the election of all of the nominees for directors named in the proxy
card. Abstention from voting and broker non-votes will have no effect on the
outcome of the election since they will not be cast in favor of any nominee.
Shareholders are entitled to cast one vote for every share represented
at the Annual Meeting unless cumulative voting is provided. California law
provides that shareholders may cumulate their votes in electing directors if
one or more shareholders have given notice of their intention to cumulate their
votes at the Annual Meeting and such notice is given at any time prior to the
commencement of voting. If any one shareholder has given such notice, all
shareholders may cumulate their votes for the nominees. If no such notice is
given, there will be no cumulative voting. Under cumulative voting,
shareholders have the right to cast one vote for each director to be elected
and may allocate their votes among the nominees as the shareholder thinks
appropriate. In the event cumulative voting is provided, the persons named in
the accompanying form of proxy will have discretion to cumulate votes with
respect to all nominees listed below for whom authority has not been withheld
so as to elect the maximum number of such nominees.
UNLESS AUTHORITY TO DO SO IS WITHHELD, THE PERSONS NAMED AS PROXIES IN
THE ACCOMPANYING FORM OF PROXY CARD WILL VOTE FOR THE ELECTION OF THE NOMINEES
LISTED BELOW. If any one or more of the nominees should for any reason become
unavailable for election, the persons named in the accompanying form of proxy
card may vote for the election of such substitute nominees as the Board of
Directors may propose. The accompanying form of proxy card contains a
discretionary grant of authority with respect to this matter.
-2-
<PAGE> 6
NOMINEES FOR ELECTION. Each of the Company's nominees for election to
the Board of Directors currently serves as a director of the Company. Each
nominee first became a director of the Company in the year set forth below and
has continually served as a director of the Company since then. Additional
information regarding the nominees can be found below in the section entitled
"Management."
<TABLE>
<CAPTION>
YEAR FIRST BECAME A
NAME DIRECTOR OF THE COMPANY
---- -----------------------
<S> <C>
R. Bruce Andrews 1995
John A. Booty 1985
David P. Collins 1985
Gary L. Davidson 1985
Maurice J. DeWald 1995
James M. Peters 1995
John J. Rydzewski 1995
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH
NOMINEE NAMED ABOVE.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. The following table
sets forth certain information regarding the executive officers and Directors
of the Company as of March 31, 1996.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Gary L. Davidson 61 Chairman of the Board and Director
John A. Booty 57 President and Director
David P. Collins 58 Senior Executive Vice President and Director
Graham Espley-Jones 36 Executive Vice President, Chief Financial Officer
and Secretary
R. Bruce Andrews 56 Director
Maurice J. DeWald 56 Director
James M. Peters 60 Director
John J. Rydzewski 43 Director
</TABLE>
R. BRUCE ANDREWS. Mr. Andrews has served as President and Chief
Executive Officer of Nationwide Health Properties since September 1989 and a
director of that company since October 1989. Mr. Andrews had previously served
as a director of American Medical International, Inc., a hospital management
company, and served as its Chief Financial Officer from 1970 to 1985 and its
Chief Operating Officer in 1985 and 1986. Mr. Andrews is also a director of
Alexander Haagen Properties, Inc.
JOHN A. BOOTY. In 1980, with Mr. Davidson and others, Mr. Booty
founded the predecessor to the Company, and has served as President of the
Company since its inception in 1985. Mr. Booty is a graduate of the University
of California at Berkeley, from which he also holds a Master's Degree in
Business Administration. Prior to founding the Company, Mr. Booty was with
Ford Motor Company
-3-
<PAGE> 7
Aeronutronics, Development Research Associates, and Booz Allen and Hamilton, of
which Mr. Booty was a Vice-President.
DAVID P. COLLINS. Mr. Collins has served as Senior Executive
Vice-President in charge of capital acquisition since 1985 and served in the
same capacity with the predecessor to the Company since 1981. Mr. Collins
received his Bachelor's Degree from St. Anselm College, Manchester, New
Hampshire. Prior to 1981, Mr. Collins was active in the field of international
finance, primarily in the Middle East.
GARY L. DAVIDSON. In 1980, with Mr. Booty and others, Mr. Davidson
founded the predecessor to the Company, and has served as Chairman of the Board
of the Company since its inception in 1985. Mr. Davidson, an attorney,
received his Bachelor's Degree and his Juris Doctor Degree from the University
of California at Los Angeles. Mr. Davidson was co-founder and first president
of both the American Basketball and the World Hockey Associations, and also
founded and served as the first commissioner and president of the World
Football League. In 1994, Sports Illustrated honored him as one of the forty
most influential persons in sports over the past forty years.
MAURICE J. DEWALD. Mr. DeWald is Chairman and Chief Executive Officer
of Verity Financial Group, which he founded in 1992. Previously, Mr. DeWald
was a Managing Partner and served on the Board of Directors of KPMG Peat
Marwick. Mr. DeWald is currently a director of Tenet Healthcare Corporation,
Dai-Ichi Kangyo Bank of California and Monarch Funds. He is also a trustee of
St. John's Hospital and Health Care Foundation and Loyola Marymount
University, and serves on the Advisory Council of the University of Notre Dame
School of Business.
GRAHAM ESPLEY-JONES. Mr. Espley-Jones has served as Chief Financial
Officer of the Company since 1989, and prior to that time served the Company as
Director of Finance. Mr. Espley-Jones graduated from Pepperdine University
with a Master's Degree in Business Administration and from San Diego State
University with a Bachelor's Degree in Business Administration. Prior to
joining the Company in 1988, he served as the Controller for the real estate
division of First California Savings Bank. Mr. Espley-Jones serves on the
Executive Board of the American Senior Housing Association.
JAMES M. PETERS. Mr. Peters was the founder of the J.M. Peters
Company (an American Stock Exchange listed company), a California-based home
building firm. Mr. Peters served as President and Chief Executive Officer of
the J.M. Peters Company from its inception in 1975 until his retirement in
1992. During his career, Mr. Peters has been responsible for building and
marketing more than 12,000 housing units. Mr. Peters is a principal of the
Peters - Hover Company, Inc. and serves as a member of the Board of Trustees of
the UCLA Foundation.
JOHN J. RYDZEWSKI. Mr. Rydzewski is an investment banker specializing
in health care finance and has been a member of Benedetto, Gartland & Greene,
Inc. since 1993. Mr. Rydzewski served as Executive Vice-President and Chief
Financial Officer in 1992 for Four Winds, Inc. He also served as a Vice
President in the Health Care Finance group of Kidder, Peabody & Co.
Incorporated from 1986 to 1992. He has served as a director of United Medical
Corporation and Maxim Healthcare Corporation. Mr. Rydzewski is a Certified
Public Accountant and received a Master of Business Administration and a
Bachelor of Science Degree from the Wharton School of the University of
Pennsylvania.
-4-
<PAGE> 8
INFORMATION ON COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS. The
Company's Board of Directors established a Compensation Committee and an Audit
Committee at or about the time of the initial public offering of the Company's
common stock in October 1995. The Company currently has no Nominating
Committee and the full Board of Directors selected nominees for election of
directors.
The Compensation Committee establishes salaries, incentives and other
forms of compensation for directors and executive officers, administers the
1995 Stock Option and Incentive Plan and recommends policies relating to
benefit plans. The Compensation Committee consists of John J. Rydzewski and
James M. Peters. The Compensation Committee did not meet during fiscal 1996.
The Audit Committee reviews the Company's accounting practices,
internal accounting controls and financial results and oversees the engagement
of the Company's independent auditors. The Audit Committee consists of Maurice
J. DeWald, R. Bruce Andrews and John J. Rydzewski. The Audit Committee met
once in fiscal 1996 and all members were in attendance.
During fiscal 1996, there were seven meetings of the Board of
Directors, and all directors attended at least 75% of the meetings of the Board
of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
members of the Compensation Committee, Messrs. Rydzewski and Peters, are not
present or former employees of the Company and have no relationships with the
Company requiring disclosure pursuant to rules promulgated by the Securities
and Exchange Commission.
COMPENSATION OF DIRECTORS. Non-employee directors receive $12,000 per
year, paid quarterly in advance, and $500 for each meeting of the Board of
Directors or committee of the Board of Directors that they attend. In October
1995, the Company established the 1995 Stock Option and Incentive Plan which
provides, among other things, that each nonemployee director who is initially
elected or appointed to the Board of Directors will, upon such election or
appointment, be automatically granted an option to purchase 10,000 shares of
Common Stock, vesting at the rate of 2,500 per year measured from the date of
grant, at an exercise price equal to the fair market value of the Common Stock
on the date of grant. In addition, every fourth year following the date on
which such nonemployee director is elected or appointed, on the date of the
annual meeting of the shareholders of the Company, if such person has
continuously served as a nonemployee director, such nonemployee director shall
automatically receive an option to purchase 10,000 shares of Common Stock, at
an exercise price equal to the fair market value of the Common Stock on the
date of grant, vesting at the rate of 2,500 per year measured from the date of
grant.
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS. The
following table sets forth certain information regarding beneficial ownership
of the Common Stock as of June 25, 1996 (based on a total of 8,941,093
outstanding shares of Common Stock) by (i) each of the Company's directors,
(ii) each of the Named Executive Officers and (iii) all executive officers and
directors as a group. Except as otherwise indicated, the Company believes the
persons named in the table have sole voting and investment power with respect
to all shares beneficially owned, subject to community property laws where
applicable.
-5-
<PAGE> 9
Amounts and percentages listed below include warrants and options which are
exercisable within 60 days of June 25, 1996.
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER (1) OWNED BENEFICIALLY OWNED
-------------------- --------------- ------------------
<S> <C> <C>
Gary L. Davidson (2) (3) 936,131 10.5%
John A. Booty (2) (4) 933,301 10.4%
David P. Collins (2) (5) 514,775 5.8%
Graham Espley-Jones (6) 285,052 3.2%
G. Brian Christie (7) 190,720 2.1%
R. Bruce Andrews (8) -- --
Maurice J. DeWald (8) -- --
James M. Peters (8) -- --
John J. Rydzewski (8) -- --
Directors and officers as a group (8 persons) (9) 2,669,259 29.9%
</TABLE>
(1) Except where otherwise noted, the address of the Company's directors,
executive officers and selling shareholders is c/o ARV Assisted
Living, Inc., 245 Fischer Avenue, Costa Mesa, California 92626.
(2) Excludes 477,042 shares owned of record by the Company's employee
stock ownership plan ( the "ESOP"), of which Messrs. Davidson, Booty
and Collins are trustees.
(3) Of the 936,131 shares beneficially owned by Mr. Davidson, 593,029 are
held of record by the Davidson Family Partnership and the remaining
343,102 shares are held by the Gary L. Davidson Funded Revocable
Living Trust. Excludes 9,473 shares beneficially owned by Mr.
Davidson held of record by the ESOP as of June 25, 1996. Excludes
option to purchase 101,085 shares of stock, which option vests at the
rate of 33-1/3% per year on the anniversary date of the grant, October
17, 1995.
(4) Of the 933,301 shares beneficially owned by Mr. Booty, 145,273 are
held of record by the Booty-Jones Family Partnership (of which Mr.
Booty holds a pecuniary interest equal to 1% thereof) and the
remaining 788,028 shares are held by the Booty Family Trust(as to
which Mr. Booty has shared voting and investment power). Excludes
9,473 shares beneficially owned by Mr. Booty held of record by the
ESOP as of June 25, 1996. Excludes option to purchase 101,085
shares of stock, which option vests at the rate of 33-1/3% per year on
the anniversary date of the grant, October 17, 1995.
(5) Of the 514,775 shares beneficially owned by Mr. Collins, 98,678 are
held of record by the D & V Collins Family Limited Partnership (as to
which Mr. Collins has shared voting and investment power), 399,647
shares are held by the Collins Family Community Property Trust (as to
which Mr. Collins has shared voting and investment power) and the
remaining 16,450 shares are held by the David P. Collins Annuity
Trust. Excludes 8,558 shares beneficially owned by Mr. Collins held
of record by the ESOP as of June 25, 1996. Excludes option to
purchase 59,539 shares of stock, which option vests at the rate of
33-1/3% per year on the anniversary date of the grant, October 17,
1995.
(6) Excludes 5,321 shares beneficially owned by Mr. Espley-Jones held of
record by the ESOP as of March 25, 1996. Excludes option to purchase
33,618 shares of stock, which option vests at the rate of 33-1/3% per
year on the anniversary date of the grant, October 17, 1995.
-6-
<PAGE> 10
(7) Excludes 439 shares beneficially owned by Mr. Christie held of record
by the ESOP as of June 25, 1996.
(8) Excludes options granted to the non-employee directors to purchase
10,000 shares, which options vest at the rate of 2,500 shares per year
on the anniversary date of the grant, November 30, 1995.
(9) Excludes 190,720 shares beneficially owned by Mr. Christie who
resigned as Executive Vice President of the Company as of February 1,
1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. As of June 25, 1996,
the following persons are known to the Company to be the beneficial owners of
more than five percent of the Company's Common Stock. In preparing the table
shown below with respect to the two entities other than the Company's ESOP, the
Company has relied, without further investigation, on the information contained
on the copy of the Schedule 13G delivered to it, which was filed by the
respective reporting persons with the SEC under the Securities Exchange Act of
1934. The numbers shown on the table should be interpreted in light of the
related footnotes.
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------- ------------------------- ---------------------- --------
<S> <C> <C> <C>
Common Janus Capital Corporation (1) 772,800 9.5%
100 Filmore Street, Suite 300
Denver, CO 80206-4923
Common ARV Housing Group, Inc. Employee 477,042 6.3%
Stock Ownership Plan
245 Fischer Avenue
Costa Mesa, CA 92626
Common FMR Corp (2) 448,800 5.5%
82 Devonshire Street
Boston, MA 02109
</TABLE>
(1) Janus Capital Corporation ("Janus") is a registered investment adviser
which furnishes investment advice to several investment companies
registered under Section 8 of the Investment Company Act of 1940
("Investment Act") and individual and institutional clients ("Managed
Clients"). As a result of its role as investment adviser or
sub-adviser to the Managed Portfolios, Janus may be deemed to be the
beneficial owner of the shares of the Company held by such Managed
Portfolios. Janus does not have the right to receive any dividends
from, or the proceeds from the sale of, the securities held in the
Managed Portfolios and disclaims any ownership associated with such
rights. Thomas H. Bailey ("Mr. Bailey") owns approximately 12.2% of
Janus Capital and serves as President and Chairman of the Board of
Janus Capital. Mr. Bailey does not own of record any shares in the
Company. All shares reported have been acquired by the Managed
Portfolios and Mr. Bailey disclaims beneficial ownership over any
shares of the Company.
(2) Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. and an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, is the beneficial
owner of 441,000 shares of the Common Stock of the Company as a result
of acting as investment adviser to various investment companies
registered under Section 8 of the Investment Act. Edward C. Johnson
3d ("Johnson"), FMR Corp., through its control of Fidelity, and the
Funds each has sole power to dispose of the 441,000 shares owned by
the Funds, but neither FMR Corp. nor Johnson, Chairman of FMR Corp.
has the sole power to vote or direct the voting of the shares owned
directly by the Funds, which power resides with the Funds' Boards of
Trustees. Fidelity carried out the voting of the shares under written
guidelines established by the Funds' Boards of Trustees. Fidelity
Management Trust Company, a wholly-owned subsidiary of FMR Corp. and a
bank as defined in Section 3(a)(6) of the Securities Exchange Act of
1934, is the beneficial owner of 7,800 shares of the Common Stock of
the Company as a result of its serving as
-7-
<PAGE> 11
investment manager of the institutional account(s) as reported above.
Members of the Johnson family and trusts for their benefit are the
predominant owners of Class B shares of common stock of FMR Corp.,
representing approximately 49% of the voting power of FMR Corp. The
Johnson family group and all other Class B shareholders have entered
into a shareholder's voting agreement under which all Class B shares
will be voted in accordance with the majority of Class B shares.
Accordingly, through their ownership of voting common stock and the
execution of the shareholder's voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of 1940, to form
a controlling group with respect to FMR Corp.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE. The following table sets forth certain
information with respect to compensation paid by the Company in the fiscal
years ended 1995 and 1996 to the Company's Chief Executive Officer and the
Company's next most highly compensated executive officers as of March 31, 1996
whose annual salary and bonus exceeded $100,000 (the "Named Executive
Officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------- ----------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options (1) Compensation (2)
------------------ ---- ------ ----- ------------------- ----------------------
<S> <C> <C> <C> <C> <C>
Gary L. Davidson, 1996 $263,100 $140,785 101,085 $9,001
Chairman of the Board 1995 $250,250 $148,575 -- $138,984
John A. Booty, 1996 $263,100 $140,785 101,085 $6,799
President 1995 $250,250 $148,575 -- $139,000
David P. Collins, 1996 $186,132 $120,062 59,539 $3,971
Senior Executive VP 1995 $229,968 $70,043 -- $89,172
G. Brian Christie, 1996 $200,000 $60,000 33,618 $7,107
Executive VP (3) 1995 $223,333 $19,175 -- $6,553
Graham Espley-Jones, 1996 $166,000 $33,000 33,618 $7,358
Secretary, CFO 1995 $136,500 $56,610 -- $64,831
</TABLE>
(1) Options have been granted to each of the Named Executive Officers as
more fully described in "Option Grants in Last Fiscal Year" below.
(2) Includes premiums for term life, medical, and dental insurance (and
disability insurance for Messrs. Davidson, Booty and Espley-Jones)
purchased for the benefit of the Named Executive Officers in the
following amounts: Mr. Davidson - $9,001; Mr. Booty - $6,799; Mr.
Collins - $3,971; Mr. Christie - $4,910; and Mr. Espley-Jones -
$1,485. These amounts represent insurance premiums paid by the
Company beyond what it pays for other similarly situated employees.
(3) Mr. Christie resigned as Executive Vice President of the Company on
February 1, 1996. His bonus reflects a one-time termination bonus as
discussed under "Employment Agreements," and his option to purchase
33,618 shares terminated as of that date.
-8-
<PAGE> 12
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth
certain information regarding options granted during fiscal 1996 to the Named
Executive Officers pursuant to the Company's 1995 Stock Option and Incentive
Plan.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL POTENTIAL REALIZABLE
SECURITIES OPTIONS GRANTED EXERCISE VALUE AT ASSUMED ANNUAL
UNDERLYING TO EMPLOYEES IN PRICE RATES OF STOCK PRICE
OPTIONS FISCAL PER EXPIRATION APPRECIATION FOR OPTION
NAME GRANTED YEAR (1) SHARE DATE (2) TERM (3)
---- ----------- ---------------- ------- -------- --------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Gary L. Davidson 101,085 12.8% $14 10/17/2005 $890,005 $2,255,448
John A. Booty 101,085 12.8% $14 10/17/2005 $890,005 $2,255,448
David P. Collins 59,539 7.5% $14 10/17/2005 $524,213 $1,328,458
G. Brian Christie (4) 33,618 4.3% $14 --- --- ---
Graham Espley-Jones 33,618 4.3% $14 10/17/2005 $295,991 $ 750,098
</TABLE>
(1) In fiscal 1996, the Company granted options to purchase an aggregate
of 790,782 shares under the Plan and this number was used in
calculating the percentage set forth in this column. During fiscal
1996, options to purchase 79,618 shares under the Plan were canceled
due to termination of employment.
(2) These options were granted for a term of 10 years, subject to
termination in certain events related to termination of employment,
and become exerciseable in three annual installments beginning on the
first anniversary of the date of grant.
(3) Assumed rates of stock price appreciation are calculated based on
requirements promulgated by the Securities and Exchange Commission and
are for illustrative purposes only. Actual stock prices will vary
from time to time based upon market factors and the Company's
financial performance. There can be no assurance that the assumed
rates of appreciation will be achieved.
(4) Mr. Christie resigned as Executive Vice President of the Company as of
February 1, 1996. Under the terms of his option agreement, his option
rights terminated upon the termination of his employment with the
Company.
-9-
<PAGE> 13
FISCAL YEAR-END OPTION VALUES. None of the Named Executive Officers
exercised options during fiscal 1996. The following table sets forth certain
information regarding options held as of the end of such fiscal year by each of
the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT YEAR-END MONEY OPTIONS AT YEAR-END (1)
------------------------- -----------------------------
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary L.
Davidson --- --- --- 101,085 --- $303,255
John A. Booty --- --- --- 101,085 --- $303,255
David P.
Collins --- --- --- 59,539 --- $178,617
G. Brian
Christie (2) --- --- --- --- --- ---
Graham Espley-
Jones --- --- --- 33,618 --- $100,854
</TABLE>
(1) Options are "in-the-money" if the fair market value of the underlying
securities on that date exceeds the exercise price of the option. The
amount set forth represents the difference between the fair market
value of the securities underlying the options on March 29, 1996,
based on the last sale price of $17.00 per share of Common Stock on
that date (as reported on the Nasdaq National Market) and the exercise
price of the options, multiplied by the applicable number of options,
without giving effect to the diminution of value attributable to the
restrictions on such stock.
(2) Mr. Christie resigned as Executive Vice President of the Company as of
February 1, 1996. As of that date, Mr. Christie had no vested right
to exercise options and his contingent option rights terminated.
EMPLOYMENT AGREEMENTS. The Company has entered into employment
agreements with the Named Executive Officers commencing October 1, 1995 and
ending September 30, 1998, subject to automatic 1-year extensions unless the
Named Executive Officer receives written notice at least 30 days prior to
termination date of the Company's intent to terminate the agreement. The
agreements require the Named Executive Officers to devote their full productive
time to the Company during the term of the agreement and to refrain from
competing with the Company in the business of assisted living or long-term
healthcare for a period of one year following expiration of the term of the
agreements.
The agreements include provisions for a base salary paid on a monthly
basis (the "Base Salary"), annual increases in Base Salary based on increases
in the Consumer Price Index, guaranteed bonuses each quarter equal to 6.25% of
Base Salary (the "Minimum Bonus") (Mr. Espley-Jones does not receive Minimum
Bonuses, nor was Mr. Christie eligible to receive any), and additional bonuses
no later than May 1 of each year, determined in the discretion of the Board,
based on earnings of the Company and other criteria as determined by the
Compensation Committee of the Board. The Named Executive Officers have waived
any right they may have had to discretionary bonuses for fiscal 1996. Each
Named Executive Officer has also been granted certain stock options. The
Company may terminate any Named Executive Officer without cause by making such
Named Executive Officer a cash payment equal to the greater of (i)
-10-
<PAGE> 14
one year's Base Salary and, if applicable, Minimum Bonus, or (ii) the current
annual Base Salary and, if applicable, Minimum Bonus divided by 12 and
multiplied by the number of remaining months under the employment agreement,
and, in addition, the payment by the Company of premiums of COBRA benefits for
the maximum period of eligibility. Any Named Executive Officer voluntarily
terminating his employment with the Company will receive a lump-sum payment
equal to 3 months' Base Salary.
CHANGE IN CONTROL ARRANGEMENTS. In fiscal 1996, the Board of
Directors took action to better assure that the Named Executive Officers would
continue to provide independent leadership consistent with the Company's best
interests in the event of an actual or threatened change of control of the
Company. The employment agreements of each of the Named Executive Officers
provide certain protections in the event of a change in control. A "change in
control" of the Company is defined as a change in ownership such that any one
person, or more than one person acting as a group, would have possession of
more than 50% of the total fair market value or the total voting power of the
capital stock of the Company; or a change in effective control of the Company
such that any one person or more than one person acting as a group would
acquire ownership of capital stock possessing 20% or more of the voting power
of the Company, or a majority of the members of the Board of Directors of the
Company was replaced during any 12-month period by directors whose appointment
or election was not endorsed by a majority of the members of the Board prior to
the date of such appointment or election; or a change in the ownership of a
substantial portion of the Company's assets such that any one person or more
than one person acting as a group would acquire, within a 12-month period,
assets from the Company having a total fair market value equal to or more than
33-1/3% of the total fair market value of all of the assets of the Company
immediately prior to such acquisitions. Upon any "change in control," the
Named Executive Officers are entitled to receive a lump sum equal to two times
the total compensation received during the immediately preceding calendar year.
In addition, the stock option agreements between the Company and the Named
Executive Officers include a provision authorizing the Compensation Committee
to accelerate vesting of the options.
-11-
<PAGE> 15
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Board established the Compensation Committee of the Board (the
"Committee") in November 1995. The Committee consists of two non- employee
directors. The Committee is responsible for administering the Company's 1995
Stock Option and Incentive Plan and establishing and administering the
Company's executive compensation programs. The objectives of these programs
will be to pay competitively in order to attract qualified executive personnel
given the Company's needs; retain and motivate these executives to achieve
superior performance; link individual compensation to individual and company
performance; and align executives' financial interests with those of the
Company's shareholders.
Compensation levels for fiscal year ended March 31, 1996 were set
prior to the Company's initial public offering and prior to the creation of the
Committee. As a privately-held company and prior to the creation of the
Committee, the Company's compensation procedures were determined by the Board
of Directors and were informal. Commencing on October 1, 1995, the Company's
Named Executive Officers, Messrs. Davidson, Chairman; Booty, President;
Collins, Senior Executive Vice President, Espley-Jones, Chief Financial
Officer; and Christie, Executive Vice President, entered into three year
employment agreements with the Company ending September September 30, 1998.
The term is renewable from year to year thereafter.
1996 EXECUTIVE COMPENSATION COMPONENTS. Executive compensation
consists of three components: base salary, bonus and long-term incentive
awards. The Company also relies on the recommendations of the Chairman and
President in matters related to the individual performance of the employees of
the Company, other than Named Executives Officers, because the Committee
believes they are the most qualified to make this assessment.
Base Salary. Base salaries for the Named Executive Officers
were established in their respective employment contracts effective as of
October 1, 1995, and provide for a base salary of $264,480, $264,480, $197,904,
$188,000 and $240,000, for Messrs. Davidson, Booty, Collins, Espley-Jones and
Christie, respectively. The base salaries are increased annually on April 1 by
a percentage equal to the Consumer Price Index.
Bonus. With respect to Messrs. Davidson, Booty and Collins,
their employment contracts provide for a minimum bonus of 25% of their
respective base salary to be paid to them in quarterly installments. Between
October 1, 1995 and March 31, 1996, minimum bonuses of $33,060, $33,060 and
$24,378 were paid or accrued to Messrs. Davidson, Booty and Collins,
respectively. All of the Named Executive Officers' contracts provide for
discretionary bonuses to be set by the Compensation Committee based on the
earnings of the Company and other criteria determined by the Compensation
Committee. Because criteria had not been established by the Committee in
fiscal 1996, the Named Executive Officers waived their right to receive
discretionary bonuses.
Long Term Incentive Awards. Stock options are granted to
provide a long-term incentive opportunity that is directly linked to
shareholder value. The Named Executive Officers were granted options to
purchase shares of Common Stock as follows: Gary L. Davidson - 101,085 shares;
John A. Booty - 101,085 shares; David P. Collins - 59,539 shares; and Graham
Espley-Jones - 33,618 shares. The
-12-
<PAGE> 16
exercise price is equal to the market value of the Common Stock on the date of
grant ($14 per share), and the options become exercisable in 33- 1/3% annual
increments beginning one year after the date of grant and an additional 33-1/3%
each year thereafter.
In the fiscal year ended March 31, 1996, stock options were granted by
the Company to 40 of its employees in recognition of their dedication,
commitment and hard work and their contribution to the success of Company's
initial public offering of the Common Stock.
POLICY WITH RESPECT TO SECTION 162 (M). Section 162(m) of the Code
includes potential limitations on the deductibility for federal income tax
purposes of compensation in excess of $1 million paid or accrued with respect
to any of the executive officers whose compensation is required to be reported
in the Company's proxy statement. Qualifying performance-based compensation is
not subject to the deduction limit if certain requirements are met. For 1996,
the Committee does not contemplate that there will be any such nondeductible
compensation.
Additional information concerning the salary, bonus and stock awards
for the Company's Named Executive Officers can be found in the tables appearing
under "Compensation of Executive Officers."
THE COMPENSATION COMMITTEE
John J. Rydzewski
James M. Peters
-13-
<PAGE> 17
PERFORMANCE GRAPH
The following chart presents a comparison of the cumulative total
return on shares of the Company's Common Stock with the cumulative total return
of the NASDAQ Stock Market-U.S. Index and a peer group selected by the Company
for the period beginning October 19, 1995, the first day of trading for the
Company's Common Stock, and ending March 31, 1996, the end of the Company's
last fiscal year.
Comparison of 5 Month Cumulative Total Return* Among ARV Assisted Living, Inc.,
the NASDAQ Stock Market-U.S. Index and the Peer Group
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ARV ASSISTED LIVING, INC. PEER GROUP NASDAQ STOCK MARKET-US
- - ------------------ ------------------------- ---------- ----------------------
<S> <C> <C> <C>
10/19/95 100 100 100
03/96 121 96 105
</TABLE>
- - ------------
* The performance graph assumes investment of $100 in ARV Assisted
Living, Inc. Common Stock, the NASDAQ Stock Market-U.S. and the peer group,
with all dividends reinvested. The stock price shown above for the Common
Stock is historical and not necessariy indicative of future price performance.
The peer group consists of three companies primarily involved in the
provision of assisted living services: Assisted Living Concepts, Inc., Just
Like Home, Inc. and The Standish Care Company, all of which were public as of
October 19, 1995. All of the companies in the self- constructed peer group are
weighted by their respective market capitalization.
-14-
<PAGE> 18
CERTAIN TRANSACTIONS
General partnerships in which certain Directors and executive officers
of the Company and others are partners own three of the four adjoining office
condominiums comprising the Company's headquarters complex. In 1981, the
Company leased the first of the office condominiums from a general partnership
in which Messrs. Booty and Davidson and others are partners. As the Company's
space requirements increased, management determined that expansion through
lease of two suites adjoining its first office would be the most economic and
efficient method. In January 1994, the Company leased an additional property
from a limited partnership in which Messrs. Davidson, Booty, Collins,
Espley-Jones and others are partners. All leases between the Company and these
partnerships are triple net (the Company is responsible for taxes, insurance,
and maintenance). The Company believes the terms of the leases were at fair
market value at the time of inception. The partners of these partnerships may
benefit as a result of any appreciation in value due to the Company's lease of
its headquarters' space. In May 1995, the Company purchased one of the office
condominiums which it formerly leased from a general partnership in which
Messrs. Booty and Davidson and others were partners. The purchase price for
this property was $629,506, the value of the mortgage on the property and other
capitalized costs, and no funds were distributed to the partners.
In October 1993, LVP Services, Inc. ("LVP") was formed by Messrs.
Davidson, Booty, Collins and Espley-Jones as well as other employees to provide
laundry and vending equipment leasing services to apartment projects. LVP
provides laundry services under lease arrangements with four apartment projects
managed by the Company in which the gross proceeds generated by the laundry
business are split between LVP and the facility. In June 1995, the Company
acquired all of the stock of LVP for $54,720, an amount approximately equal to
150% of the capital invested by such persons in the Company, with the
consideration to Messrs. Davidson, Booty, Collins and Espley-Jones being
$7,140, $7,140, $7,140 and $4,493, respectively. LVP was merged into the
Company in August 1995.
To address certain structural issues in connection with tax credit
partnerships, Pacific Demographics Corporation ("Pacific Demographics")
(formerly ARVTC, Inc.), was formed in August 1994 by Messrs. Davidson, Booty,
Collins and Espley-Jones, as well as two former Company officers, to provide
certain development services for these partnerships in exchange for cash and
deferred development fees generated by the tax credit partnerships. The
Company provided services to Pacific Demographics for which it received certain
fees from Pacific Demographics. The Company believes that these arrangements
were fair to the Company and that the compensation paid to Pacific Demographics
by the tax credit partnerships and by Pacific Demographics to the Company
appropriately reflected the services rendered by Pacific Demographics and the
Company, respectively, and the risks incurred by the shareholders of Pacific
Demographics who provided the guaranties for these projects.
In order to lessen potential conflicts of interest, in July 1995, the
Company's principal shareholders sold Pacific Demographics, Inc. to the
Company for $100,000 in cash. In addition, they became co-developers with
Pacific Demographics and retained the right to receive 20% of all developer
fees up to a maximum of $850,000.
As part of the Company's strategy to de-emphasize the Low Income
Housing Tax Credit segment of its business, the Company entered into two
separate transactions with two former employees who were instrumental in the
development of the Low Income Housing Tax Credit senior and multi-family
apartments.
-15-
<PAGE> 19
In October, 1995, the Company sold to Woodpark Development Company, Inc., the
principal of which is G. Scott Gaynor, a receivable for developer fees of
$1,220,000 for $741,000, the net present value of the receivable. The purchase
price was paid in cash and a promissory note. In March, 1996, Pacific
Demographics Corporation sold to American Housing Concepts, the principal of
which is Brian Flornes, receivables for developer fees for the Lansing and
Grand Rapids apartment complexes of $2,411,200 for $479,100, their net present
value. The purchase price was paid in cash and a promissory note. In addition,
the Company assigned to American Housing Concepts certain loans outstanding and
rights to receive priority payments owned by three limited partnerships for
which the Company is the general partner. The loans and payment rights
totalled $1,541,000 and were sold for $390,000, their net present value. The
purchase price was paid in cash and a promissory note. There was no book gain
or loss recognized on these sales, although the Company did receive a tax
benefit as a result of the transactions.
In August 1994, the Company created ARV Mortgage Group, Inc. to
provide residential mortgage brokerage services. The Company purchased a 64%
interest in ARV Mortgage Group, Inc. for $6,400. In August 1995, as part of a
refocusing of the Company's core business, the Company sold for nominal
consideration its interest in ARV Mortgage Group, Inc. to Red Hill Hunter
Associates, Inc., a corporation whose shareholders are Messrs. Davidson, Booty,
Collins and Espley-Jones, as well as a former Company officer, subject to a
commitment by ARV Mortgage Group Inc. to repay an advance of approximately
$250,000 to the Company. As of February 9, 1996, Redhill Hunter Associates,
Inc. sold its stock in ARV Mortgage, Inc. to its President, who is not
affiliated with the Company.
In June 1995, the Company purchased 82,237 shares of Common Stock from
Richard H. Tourtelot, then an executive officer of the Company, for $125,000
and in July 1995 purchased an additional 82,237 shares for $125,000. In April
1995, the Company entered into a voluntary separation agreement with
Christopher M. Santoro, then an executive officer of the Company, whereby the
Company purchased Mr. Santoro's 328,947 shares of Common Stock for $100,000.
On several occasions during 1994 and 1995, certain shareholders (and a
relation of one shareholder) have made advances to the Company or affiliates
thereof to fund short-term cash flow needs. At April 1, 1995, the Company (or
an affiliate thereof) was the payor on 10% demand notes evidencing such
advances in the amounts of $50,000, $168,000, $225,000, $100,000 and $200,000
respectively, payable to Messrs. Davidson, Booty, Collins and Rota and to the
father-in-law of Mr. Booty. As of the date hereof, all such notes have been
repaid.
The Company is the general partner of Fullerton Equities Limited, a
California limited partnership ("Fullerton"). The Company had loaned Fullerton
in excess of $1.1 million, $1.0 million of which was secured by a deed of
trust. On January 3, 1996, Fullerton sold its sole physical asset, an assisted
living and Alzheimer facility, to an unrelated third party and took back a $2.0
million note secured by a deed of trust which wrapped the Company's deed of
trust. Gary L. Davidson, John A. Booty, David P. Collins and Graham
Espley-Jones, as tenants in common, purchased the $2.0 million note from
Fullerton for full value on March 6, 1996, which enabled Fullerton to pay off
all of its secured indebtedness and a portion of the unsecured debt to the
Company. It is anticipated that Fullerton will be dissolved in 1996.
-16-
<PAGE> 20
ANNUAL REPORT
A copy of the Company's Annual Report, including financial statements
for the fiscal years ended March 31, 1996 and March 31, 1995 is being mailed
with this Proxy Statement to shareholders of record on or about the Record
Date, but such report is not incorporated herein and is not deemed to be a part
of this proxy solicitation material.
SHAREHOLDER PROPOSALS
Shareholders who wish to include proposals for action at the Company's
1997 Annual Meeting of Shareholders in next year's proxy statement must, in
addition to other applicable requirements, cause their proposals to be received
in writing by the Company at its address set forth on the first page of this
Proxy Statement no later than April 15, 1997. Such proposals should be
addressed to the Company's Secretary and may be included in next year's proxy
statement if they comply with certain rules and regulations promulgated by the
Securities and Exchange Commission.
OTHER MATTERS
PUBLIC ACCOUNTANTS. KPMG Peat Marwick LLP has been appointed as the
Company's independent public accountants for fiscal year 1997, subject to the
discretion of the Board of Directors to appoint another firm if it deems such
appointment appropriate. There are no affiliations between the Company, its
directors, officers employees or associates and KPMG Peat Marwick LLP, its
partners, employees or associates, other than relating to its engagement as
independent accountants for the Company and its affiliates in fiscal year 1996.
SECTION 16(A) COMPLIANCE. Section 16(a) of the Exchange Act requires
the Company's executive officers and directors, and persons who own more than
ten percent of a registered class of the Company's equity securities
(collectively, "Reporting Persons"), to file reports on Forms 3, 4 and 5 of
stock ownership and changes in ownership with the Securities and Exchange
Commission. Reporting Persons are required to furnish the Company with copies
of all forms that they file. Based on the Company's review of copies of Forms
3, 4 and 5, and amendments thereto, received by the Company for the year ended
March 31, 1996, or written representations from certain Reporting Persons that
no Forms 5 were required to be filed by those persons, the Company believes
that during fiscal year 1996 all filing requirements were complied with by the
Reporting Persons except that Forms 3 required for each of the Named Executive
Officers, directors and the Booty Family Trust, a Form 4 for Mr. Christie, and
Forms 5 for Messrs. Christie, Booty and Espley-Jones were not timely filed.
OTHER BUSINESS. The Board of Directors knows of no matters other than
as listed in the attached Notice of Annual Meeting of Shareholders which are
likely to be brought before the Annual Meeting. If, however, any other matters
should properly come before the Annual Meeting or any adjournment thereof, the
persons named in the enclosed proxy will vote all proxies given to them in
accordance with their best judgment of such matters.
-17-
<PAGE> 21
EACH SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY CARD. Any questions should be addressed to Caryn Raphael,
Vice President Corporate Communications, at ARV Assisted Living, Inc., 245
Fischer Avenue, Costa Mesa, CA 92626, telephone (714) 751-7400.
By order of the Board of Directors
/s/
Gary L. Davidson
Chairman of the Board
Dated: July 11, 1996
-18-
<PAGE> 22
ANNUAL MEETING OF STOCKHOLDERS
ARV ASSISTED LIVING, INC.
DATE: AUGUST 13, 1996
TIME: 9:00 A.M.
PLACE: RED LION HOTEL
RED LION BALLROOM 4
3050 BRISTOL STREET
COSTA MESA, CALIFORNIA 92626
COMPLIMENTARY PARKING IS
AVAILABLE AT THE RED LION
HOTEL SELF-PARKING
STRUCTURE. ATTENDEES
[MAP] SHOULD ENTER THE PARKING
STRUCTURE AND PROCEED TO
THE LOWER BANQUET-LEVEL
PARKING FLOORS. THE RED
LION BALLROOM 4 IS LOCATED
ON THE B-2 LEVEL
<PAGE> 23
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ARV ASSISTED LIVING, INC.
The undersigned hereby appoints Bernard Wheeler-Medley and Mary Pat Gregory,
and each of them, as attorneys, proxies, and agents, each with the power of
substitution, and hereby authorizes them to represent and vote, as designated
herein, all the shares of stock of ARV Assisted Living, Inc. (the "Company")
entitled to be voted by the undersigned with all powers which the undersigned
would possess if present at the Annual Meeting of Stockholders of the Company
to be held August 13, 1996 at 9:00 a.m., or at any adjournment thereof (the
"Meeting").
This proxy when properly executed will be voted in the manner specified herein.
IF NO INSTRUCTION IS SPECIFIED HEREIN WITH RESPECT TO A MATTER TO BE ACTED UPON,
THE SHARES REPRESENTED BY THIS PROXY WILL, UNLESS OTHERWISE INDICATED IN THE
PROXY STATEMENT RELATING TO THE MEETING, BE VOTED "FOR" THE NOMINEES TO THE
BOARD OF DIRECTORS AND "FOR" ITEM 2 LISTED ON THIS PROXY CARD.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF ITEM 2 AND FOR THE
ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS ON THIS PROXY CARD.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- - -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
COMPLIMENTARY PARKING IS
AVAILABLE AT THE RED LION
HOTEL SELF-PARKING
STRUCTURE. ATTENDEES
[MAP] SHOULD ENTER THE PARKING
STRUCTURE AND PROCEED TO
THE LOWER BANQUET-LEVEL
PARKING FLOORS. THE RED
LION BALLROOM 4 IS LOCATED
ON THE B-2 LEVEL
<PAGE> 24
Please mark
your votes as [X]
indicated in
this example.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1 AND 2 WITHHELD
FOR FOR ALL
ITEM 1 - ELECTION OF DIRECTORS [ ] [ ]
Nominees:
R. Bruce Andrews
John A. Booty
David P. Collins
Gary L. Davidson
Maurice J. DeWald
James M. Peters
John J. Rydzewski
WITHHELD FOR: (Write that nominee's name in the space provided below):
- - -------------------------------------------------------------------------------
ITEM 2 - In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournment
thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Signature(s) Date:
------------------------------------------- ------------------
Note: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, administrator, trustee or guardian, please give full title
as such.
- - -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
ANNUAL MEETING OF STOCKHOLDERS
ARV ASSISTED LIVING, INC.
DATE: AUGUST 13, 1996
TIME: 9:00 A.M.
PLACE: RED LION HOTEL
RED LION BALLROOM 4
3050 BRISTOL STREET
COSTA MESA, CALIFORNIA 92626
(PLEASE SEE REVERSE SIDE)
