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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): July 14, 1997
ARV ASSISTED LIVING, INC.
(Exact name of registrant as specified in its charter)
California 000-26980 33-0160968
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
245 Fischer Avenue, Suite D-1, Costa Mesa, California 92626
(Address of principal executive offices) (Zip Code)
(714) 751-7400
(Registrant's telephone number, including area code)
None
(former name or former address, if changed since last report)
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Item 5. Other Events.
On July 14, 1997, the Board of Directors of ARV Assisted Living, Inc.
(the "Company"), adopted a Shareholder Rights Plan.
In connection with the Rights Plan, the Board of Directors of the
Company declared a dividend of one preferred share purchase right (the "Rights")
for each outstanding share of common stock, no par value (the "Common Shares"),
of the Company outstanding at the close of business on August 8, 1997 (the
"Record Date"). Each Right will entitle the registered holder thereof, after the
Rights become exercisable and until August 8, 2007 (or the earlier redemption,
exchange or termination of the Rights), to purchase from the Company one
one-hundredth (1/100th) of a share of Series C Junior Participating Preferred
Stock, no par value per share (the "Preferred Shares"), at a price of $70.00 per
one one-hundredth (1/100th) of a Preferred Share, subject to certain
anti-dilution adjustments (the "Purchase Price"). Until the earlier to occur of
(i) ten (10) days following a public announcement that a person or group of
affiliated or associated persons (other than (A) Gary L. Davidson, (B) Morgan
Stanley, Dean Witter, Discover & Co. (with respect to the shares it already
owns) and (C) Lazard Freres Real Estate Investors LLC ("LFREI") and its
affiliates (with respect to the shares purchased and to be purchased by an
affiliate of LFREI pursuant to the Stock Purchase Agreement dated July 14, 1997,
as amended on July 20, 1997, and July 22, 1997, among the Company, LFREI and an
affiliate of LFREI and the Stockholders Agreement dated July 14, 1997, among
the Company, LFREI and an affiliate of LFREI) has acquired, or obtained the
right to acquire, beneficial ownership of 10% or more of the Common Shares (an
"Acquiring Person") or (ii) ten (10) business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in the beneficial ownership by a
person or group of 10% or more of the Common Shares (the earlier of (i) and (ii)
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate. The Rights will be transferred with and
only with the Common Shares until the Distribution Date or earlier redemption or
expiration of the Rights. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights. The Rights will at no time have any voting rights.
Each Preferred Share purchasable upon exercise of the Rights will be
entitled, when, as and if declared, to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend of 100
times the dividend, if any, declared per Common Share. In the event of
liquidation, dissolution or winding up of the Company, the holders of the
Preferred Shares will be entitled to a preferential liquidation payment of $100
per share plus any accrued but unpaid dividends but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes and will vote together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. Preferred Shares will not be
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redeemable. These Rights are protected by customary anti-dilution provisions.
Because of the nature of the Preferred Share's dividend, liquidation and voting
rights, the value of one one-hundredth of a Preferred Share purchasable upon
exercise of each Right should approximate the value of one Common Share.
In the event that a Person becomes an Acquiring Person or if the
Company were the surviving corporation in a merger with an Acquiring Person or
any affiliate or associate of an Acquiring Person and the Common Shares were not
changed or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the then current
Purchase Price of one Right. In the event that, after a person has become an
Acquiring Person, the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the then current Purchase Price of one Right.
At any time after a Person becomes an Acquiring Person and prior to the
earlier of one of the events described in the last sentence in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the then
outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person which have
become void), in whole or in part, for Common Shares at an exchange rate of one
Common Share per Right (subject to adjustment).
The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the time that an Acquiring Person has become such. The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will receive the
Redemption Price.
The Rights will expire on August 8, 1997 (unless earlier redeemed,
exchanged or terminated). ChaseMellon Shareholder Services, L.L.C., is the
Rights Agent.
The Purchase Price payable, and the number of one one-hundredths of a
Preferred Share or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for or purchase
Preferred Shares or convertible securities at less than the current market price
of the Preferred Shares or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness, cash, securities or assets
(excluding regular periodic cash dividends at a rate not in excess of 125% of
the rate of the last regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share
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of the Company for the four quarters ended immediately prior to the payment of
such dividend, or dividends payable in Preferred Shares (which dividends will be
subject to the adjustment described in clause (i) above)) or of subscription
rights or warrants (other than those referred to above).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company beyond those as an existing shareholder,
including, without limitation, the right to vote or to receive dividends.
Any of the provisions of the Rights Agreement dated as of July 14,
1997, between the Company and the Rights Agent (the "Rights Agreement") may be
amended by the Board of Directors of the Company for so long as the Rights are
then redeemable, and after the Rights are no longer redeemable, the Company may
amend or supplement the Rights Agreement in any manner that does not adversely
affect the interests of the holder of the Rights.
One Right will be distributed to shareholders of the Company for each
Common Share owned of record by them on August 8, 1997. As long as the Rights
are attached to the Common Shares, the Company will issue one Right with each
new Common Share so that all such shares will have attached Rights. The Company
has agreed that, from and after the Distribution Date, the Company will reserve
400,000 Preferred Shares initially for issuance upon exercise of the Rights.
The rights are designed to assure that all of the Company's
shareholders receive fair and equal treatment in the event of any proposed
takeover of the Company and to guard against partial tender offers, open market
accumulations and other abusive tactics to gain control of the Company without
paying all shareholders a control premium. The Rights will cause substantial
dilution to a person or group (other than an exempt person or group) that
acquires 10% or more of the Company's stock on terms not approved by the
Company's Board of Directors. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors at any time prior
to the first date that a Person or group has become an Acquiring Person.
The Rights Agreement specifying the terms of the Rights and the text of
the press release announcing the declaration of the Rights, are incorporated
herein by reference as exhibits to this Current Report. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibits.
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Item 7. Exhibits.
4.1 Rights Agreement, dated as of July 14, 1997, between ARV
Assisted Living, Inc., and ChaseMellon Shareholder Services,
L.L.C. which includes the form of Certificate of Determination
of the Series C Junior Participating Preferred Stock of ARV
Assisted Living, Inc. as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights to Purchase
Preferred Shares as Exhibit C.
99.1 Text of Press Release, dated July 15, 1997, incorporated by
reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K filed with the Commission on July 23, 1997.
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SIGNATURE
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.
Dated: August 8, 1997
ARV Assisted Living, Inc.
By: /s/ SHEILA M. MULDOON
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Name: Sheila M. Muldoon
Title: Vice President and General
Counsel
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EXHIBIT INDEX
4.1 Rights Agreement, dated as of July 14, 1997, between ARV
Assisted Living, Inc., and ChaseMellon Shareholder Services,
L.L.C. which includes the form of Certificate of Determination
of the Series C Junior Participating Preferred Stock of ARV
Assisted Living, Inc. as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights to Purchase
Preferred Shares as Exhibit C.
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