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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (date of earliest event reported): December 5, 1997
ARV ASSISTED LIVING, INC.
(Exact name of Registrant as specified in charter)
CALIFORNIA 33-0160968
(State or other jurisdiction of 000-26980 (I.R.S. Employer
incorporation) (Commission File Number) Identification Number)
245 FISCHER AVENUE 92626
SUITE D-1 (Zip Code)
COSTA MESA, CALIFORNIA
(Address of principal executive offices)
Registrant's telephone number, including area code: (714) 751-7400
None
(Former name or former address, if changed since last report)
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ITEM 5: OTHER EVENTS
On December 5, 1997, the Board of Directors of ARV Assisted Living,
Inc. (the "Company") approved the appointment of (i) Howard G. Phanstiel as
Chairman of the Board of Directors and Chief Executive Officer and as a
Director and (ii) Lawrence B. Murphy as President and Chief Operating Officer.
In connection with these appointments, John J. Rydzewski and John A. Booty, who
were serving as interim Chairman of the Board and interim President and Chief
Executive Officer, respectively, have resigned from such positions. Mr. Booty
and Mr. Rydzewski will continue to serve as non-employee directors of the
Company. In order to make a Board seat available for Mr. Phanstiel, James M.
Peters has resigned as a Director.
The Board also approved the rescheduling of the Company's Annual Meeting
of Shareholders to January 28, 1998 and a new record date with respect to the
Annual Meeting of December 18, 1997. At the Annual Meeting, the Company's
shareholders will vote on, among other things, a proposal to expand the Board of
Directors from nine to ten members and the election of Mr. Murphy as a Director.
In addition, the Board approved the optional redemption of the $60
million principal amount of 6.75% Convertible Subordinated Notes due 2007 (the
"Notes") held by Prometheus Assisted Living LLC, an affiliate of Lazard Freres
Real Estate Investors LLC. Per the terms of the Notes, the redemption was made
in common stock of the Company. Including the 23.214% optional redemption
premium and accrued interest to date, the issuance amounted to 4.3 million
shares at $17.25 per share. As a result, Prometheus currently owns
approximately 6.2 million common shares of the Company, representing a 39.1%
ownership stake in the Company.
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ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Exhibits
NUMBER EXHIBIT
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99.1 Press Release dated December 8, 1997 relating to the
appointments of Howard G. Phanstiel as Chairman of the
Board and Chief Executive Officer and Lawrence B. Murphy as
President and Chief Operating Officer, the rescheduling of
the Annual Meeting date and record date, and the optional
redemption.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATE: December 11, 1997 ARV ASSISTED LIVING, INC.
By: /s/ SHEILA M. MULDOON
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Sheila M. Muldoon
Vice President and General Counsel
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EXHIBIT 99.1
[LETTERHEAD OF ARV ASSISTED LIVING]
NEWS RELEASE
ARV ASSISTED LIVING ANNOUNCES APPOINTMENT OF
HOWARD PHANSTIEL AS CHAIRMAN, CEO AND
LAWRENCE MURPHY AS PRESIDENT, COO
COSTA MESA, CA (DECEMBER 8, 1997) -- ARV Assisted Living, Inc. (ASE:SRS)
announced today that the Company's Board of Directors has approved the
appointment of Howard G. Phanstiel as Chairman of the Board of Directors and
Chief Executive Officer, and Lawrence B. Murphy as President and Chief
Operating Officer. Mr. Phanstiel will join the Company's Board of Directors.
The appointments, which are effective immediately, replace John J. Rydzewski
and John A. Booty, who were serving as interim Chairman of the Board and
interim President and Chief Executive Officer, respectively. Both Mr. Rydzewski
and Mr. Booty will continue to serve as outside directors of the Company.
Mr. Rydzewski, former interim Chairman of ARV, said, "In Howard Phanstiel and
Larry Murphy, we have found two of the most experienced, visionary leaders in
health and senior living today. Howard has more than 20 years' experience in
senior health and financial services positions. Larry, who Howard helped us to
recruit, has spent the last 15 years at Marriott, most recently overseeing its
rapid expansion into senior living. We are delighted to have on board two
senior executives who have played leadership roles at respected public
companies, and are fully confident that they will lead ARV to similar success."
Prior to joining ARV, Mr. Phanstiel, 49, was Executive Vice President at
Wellpoint Health Networks, Inc., a large managed care company in Los Angeles
and parent of Blue Cross of California. From 1994 to 1997, Mr. Phanstiel was
head of finance and information systems, responsible for the managed care
company's corporate development, strategic planning, finance, actuarial
services, facilities management and information technology nationwide. While
there, he played a prominent role in overseeing the company's transition to a
national Fortune 300 public company. Mr. Phanstiel also played a leading role
in completing a $3.5 billion recapitalization of the company; in executing two
major indemnity company acquisitions, which doubled revenues and employees; and
in managing its $2.7 billion investment portfolio.
Previously, Mr. Phanstiel was Chairman and Chief Executive Officer at
Prudential Bache International Bank, where he was responsible for launching the
Bank's global private banking business and for integrating it with Prudential
Securities' international brokerage operations. He also served as Managing
Director of Prudential Securities, Inc. and was a Member of the Board of
Prudential Bache Securities, Inc. Before that, Mr. Phanstiel held a variety of
senior management positions in federal and state agencies and leading public
operating companies, including Citibank, Marine Midland Bank, Sallie Mae, the
U.S. Department of Health, Education & Welfare, and the Bureaus of Budget for
Illinois and Wisconsin. Mr. Phanstiel earned an M.P.A. from the Maxwell School
of Public Administration at Syracuse University in 1971, and B.A. in Political
Science from Syracuse in 1970.
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Prior to joining ARV, Mr. Murphy, 39, was Senior Vice President at Marriott
Senior Living Services, a $550 million subsidiary of Marriott International,
Inc., a global provider of lodging, food and hospitality services. At Marriott,
Mr. Murphy was an integral part of the senior management team, responsible for
all operations of the senior living services division. While he had these
responsibilities, Marriott successfully increased its total number of senior
living communities by 500%. Earlier this year, Mr. Murphy also played a leading
role in the $605 million acquisition of Forum Group, Inc., a leading provider
of senior care facilities. The Marriott senior living division now includes 95
communities.
Previously, Mr. Murphy held a broad array of management positions at Marriott,
including serving as general manager of the Washington Marriott Hotel, as well
as a Vice President of operations and service development. Mr. Murphy began his
operations career with Flautt & Mann Properties, a Memphis-based hotel company.
Mr. Murphy received a B.S. in hotel administration from Cornell University in
1981.
ARV Assisted Living also announced that in order to make a seat available for
Mr. Phanstiel, James M. Peters has resigned from the ARV Board of Directors.
Mr. Rydzewski said of Mr. Peters, "Jim Peters' efforts over the past two years
in helping ARV become one of the leading assisted living companies in the
country were significant. While his decision to help expedite the Company's
transition to new leadership by offering his resignation early is appreciated,
he will be missed. We all wish him the best in the future."
ARV also announced today initiatives to enhance the Company's strategic
position and the pursuit of its strategic plan to be the preeminent public
company within the $12 billion assisted living industry. The Board of Directors
of ARV has approved:
o The rescheduling of the Company's Annual Meeting of Shareholders to
January 28, 1998. This will enable shareholders to vote on, among
other things, the expansion of the Board of Directors from nine to ten
seats and the election of Mr. Murphy to the Board of Directors. A new
record date for the Annual Meeting has been set for December 18, 1997;
and
o The optional redemption of the $60 million principal amount of 6.75%
Convertible Subordinated Notes due 2007 (the "Notes") held by
Prometheus Assisted Living LLC ("Prometheus"), an affiliate of Lazard
Freres Real Estate Investors LLC ("LFREI"). Per the terms of the
Notes, the redemption was made in common stock of ARV Assisted Living.
Including the 23.214% optional redemption premium and accrued interest
to date, this results in the issuance of 4.3 million shares at $17.25
per share. As a result, Prometheus currently owns approximately 6.2
million common shares of ARV, representing approximately a 39.1%
ownership stake in the Company.
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Mr. Howard Phanstiel, Chairman and Chief Executive Officer of ARV Assisted
Living, Inc., said, "The changes announced today position the Company for
future growth and profitability and reaffirm the Company's commitment to
maximizing shareholder value through our strategic relationship with
Prometheus. We are gratified by LFREI's continued vote of confidence in our
strategy to be the preeminent national provider of assisted living services. We
will continue to look forward for ways to create value for all of ARV's
shareholders."
Mr. Lawrence Murphy, President and Chief Operating Officer of ARV Assisted
Living, Inc., said, "ARV is uniquely positioned to capitalize on the enormous
growth potential of the assisted living industry. Due to demographic changes,
there is growing demand for housing in an aging population and ARV is one of
the nation's largest providers of assisted living services to the country's
burgeoning senior population. With our management team in place and a strong
balance sheet, ARV is ready, willing and able to thrive in this industry."
Robert P. Freeman, President of LFREI, said, "We are committed to our
relationship with ARV. The new leadership at ARV, as well as the recently
announced proposed alliance with Kapson Senior Quarters Corp., has great
potential for all ARV shareholders. We look forward to working with Mr.
Phanstiel and Mr. Murphy to continue our efforts to build upon ARV's strong
position in the marketplace."
On October 28, 1997, ARV announced that it issued to Prometheus Assisted Living
LLC, an affiliate of LFREI, $60 million of 6.75% Convertible Subordinated Notes
due 2007. On October 2, LFREI and ARV announced an expected strategic alliance
between ARV and Kapson Senior Quarters Corp. (NASDAQ:KPSQ), the largest
operator of assisted living facilities in the Northeast United States,
following the proposed purchase by an affiliate of LFREI of substantially all
of the outstanding shares of Kapson.
ARV Assisted Living, Inc., formerly American Retirement Villas, founded in
1980, is one of the largest operators of assisted living communities in the
nation. The Company operates 49 communities containing approximately 6,300
units in 11 states. It has six communities containing 756 units under
construction in California, Florida, Massachusetts and Nevada.
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Note: Photographs of Howard Phanstiel and Lawrence Murphy are available upon
request.
CONTACTS:
ARV Assisted Living, Inc. The Abernathy MacGregor Group Inc.
Director of Investor Relations Dan Katcher/Matt Sherman
Mitch Gellman (212) 371-5999
(714) 435-4322
