Sunrise Appoints New Chief Financial Officer; Settles 2007 Annual Meeting Litigation and Appoints New Director

Category:

Monday, September 10, 2007 8:08 am EDT

Dateline:

MCLEAN, Va.

Public Company Information:

NYSE:
SRZ
"We are extremely pleased that an individual of Mr. Nadeau's caliber and extensive public company accounting experience and expertise has joined us as our new chief financial officer"

Sunrise Senior Living, Inc. (NYSE: SRZ) today announced that on September 6, 2007 its board of directors appointed Richard J. Nadeau as Sunrise's new chief financial officer. Julie A. Pangelinan, who served as acting chief financial officer from April 23, 2007 through September 5, 2007, will continue as Sunrise's chief accounting officer and work closely with Mr. Nadeau in that role.

"We are extremely pleased that an individual of Mr. Nadeau's caliber and extensive public company accounting experience and expertise has joined us as our new chief financial officer," said Paul Klaassen, chairman and CEO of Sunrise. "We believe Mr. Nadeau will assist greatly in the completion of our pending restatement and also with our board's ongoing exploration of strategic alternatives."

Mr. Nadeau previously served since July 2007 as a consultant to Sunrise to assist with the completion of Sunrise's pending restatement and Sarbanes-Oxley Section 404 compliance efforts. From July 2006 to May 2007, Mr. Nadeau served as chief financial officer of The Mills Corporation, a publicly traded developer, owner and manager of a diversified portfolio of regional shopping malls and retail and entertainment centers. From April 2006 until July 2006, Mr. Nadeau was executive vice president of finance and accounting at Mills. Mr. Nadeau joined Mills following Mills' announcement in January 2006 of a pending restatement of its financial statements. In his role as Mills' chief financial officer, he oversaw approximately 200 people in the areas of accounting, finance and budgeting, information technology and human resources, and assisted in Mills' sale process which was successfully completed in April 2007 when Mills was acquired by Simon Property Group and Farallon Capital. From May 2005 to March 2006, Mr. Nadeau was chief financial officer of Colt Defense LLC, a privately held designer, developer and manufacturer of small arms and weapon systems. From 2002 to 2005, Mr. Nadeau was a partner at the accounting firm of KPMG LLP. While at KPMG LLP, Mr. Nadeau was the engagement and audit partner for several real estate companies, including two publicly traded REITs, and served as an SEC reviewing partner for several large public companies in the Mid-Atlantic region. From 1977 to 2002, he worked for Arthur Andersen LLP, where he served as a national practice director and audit partner, serving real estate companies, service-related companies and government contractors.

Sunrise also announced today that it has settled the litigation previously filed by Millenco, L.L.C. seeking an order from the Court of Chancery of the State of Delaware pursuant to Section 211 of the Delaware General Corporation Law requiring that Sunrise hold its 2007 annual meeting of stockholders within forty-five days after the date on which any such court order is entered. As reflected in a Stipulated Final Order entered by the Delaware Chancery Court on September 5, 2007:

  • Sunrise will hold its 2007 annual meeting on October 16, 2007;
  • the record date for the 2007 annual meeting will be September 24, 2007;
  • the shares of stock represented at the 2007 annual meeting, either in person or by proxy, and entitled to vote thereat, will constitute a quorum for the purpose of the 2007 annual meeting, notwithstanding any provision in Sunrise's certificate of incorporation or bylaws to the contrary;
  • at the 2007 annual meeting, Paul J. Klaassen and Craig R. Callen, two incumbent directors whose terms of office expire at the 2007 annual meeting, and Lynn Krominga, one of the candidates proposed by Millenco and agreed to by the Sunrise board of directors, will stand for election to the director class that will next stand for election in 2010;
  • no other nominees will stand for election at the 2007 annual meeting; and
  • no business will be conducted at the 2007 annual meeting other than the election of directors.

In connection with the settlement of this litigation, effective September 5, 2007 Sunrise's board of directors also expanded the size of the board from eight to nine members and appointed Ms. Krominga as a director to an initial term of office expiring at the 2007 annual meeting.

Ms. Krominga was also appointed as a member of the committee of non- management directors. As previously announced on July 25, 2007, Sunrise's board of directors has decided to explore strategic alternatives intended to enhance shareholder value, including a possible sale of Sunrise. The committee of non-management directors, originally established in April 2007, with the assistance of its legal and financial advisors, will consider and review the terms and conditions of any transaction and make a recommendation to the full board. The committee's work is ongoing. There can be no assurance that the exploration of strategic alternatives will result in a transaction.

Ms. Krominga is an attorney and business executive. Since 1999, Ms. Krominga has been a consultant to private equity and venture capital firms and to start-up and early stage technology companies. From 1981 to 1999, Ms. Krominga held various senior executive and legal offices at Revlon Consumer Products Group, including President, Licensing Division from 1992 until 1998. Prior to that, Ms. Krominga was an attorney at American Express and at Cleary, Gottlieb, Steen & Hamilton. Ms. Krominga also currently serves on the board of directors, audit committee and compensation committee of Avis Budget Group, Inc.

"Ms. Krominga's 20 plus years of experience in senior management and as a public company director make her a welcome addition to our board," said Paul Klaassen, Chairman and CEO of Sunrise.

About Sunrise Senior Living

Sunrise Senior Living, a McLean, Va.-based company, employs approximately 40,000 people. As of June 30, 2007, Sunrise operated 453 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for more than 53,000 residents. At quarter end, Sunrise also had 38 communities under construction in these countries with a combined capacity for 6,000 additional residents. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise, please visit https://www.sunriseseniorliving.com/.

Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sunrise believes the expectations reflected in such forward- looking statements are based on reasonable assumptions, there can be no assurances that its expectations will be realized. Sunrise's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, completion of the Company's restatement of its historical financial statements, identification of any additional matters requiring restatement, the length of time needed for Sunrise to complete the restatement and for Ernst & Young LLP to complete its procedures for any reason, including the detection of new errors or adjustments, the time required for the special independent committee to complete its review and for the Company to clear comments with the SEC, the findings of the special independent committee review, the time required for the Company to prepare and file an amended 2005 Form 10-K and its Form 10-Qs for the first three quarters of 2006, its 2006 Form 10-K and its Form 10-Qs for the first and second quarters of 2007 and its Form 10-Qs for subsequent quarters that are delayed, the outcome of the SEC's investigation, the outcome of pending putative class action and derivative litigation, the outcome of the Trinity OIG investigation, the outcome of the exploration of strategic alternatives, the possible delisting of the Company's stock from the NYSE in the event the NYSE does not grant the Company an extension of trading in September 2007 or at the expiration of any additional trading extension period, the Company's ability to comply with the terms of the amendment of its bank credit facility or to obtain a further extension of the period for providing the lenders with required financial information, development and construction risks, acquisition risks, licensing risks, business conditions, competition, changes in interest rates, the Company's ability to manage its expenses, market factors that could affect the value of the Company's properties, the risks of downturns in general economic conditions, satisfaction of closing conditions, availability of financing for development and acquisitions and other risks detailed in the Company's annual report on Form 10-K filed with the SEC. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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Contact:

Sunrise Senior Living, Inc.
Lisa Mayr
Vice President, Investor Relations and Capital Markets
+1-703-744-1787

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