<PAGE> 1
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Health Care REIT, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Health Care REIT, Inc.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-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.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE> 2
HEALTH CARE REIT, INC.
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
AND
PROXY STATEMENT
MEETING DATE
MAY 21, 1996
------------------
YOUR VOTE IS IMPORTANT!
YOU ARE URGED TO SIGN, DATE, AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
<PAGE> 3
HEALTH CARE REIT, INC.
One SeaGate
Suite 1950
Toledo, Ohio 43604
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1996
TO THE STOCKHOLDERS OF HEALTH CARE REIT, INC.:
The Annual Meeting of Stockholders of Health Care REIT, Inc. will be held
on May 21, 1996 at 10:00 a.m. in the Auditorium of One SeaGate, Toledo, Ohio,
for the purpose of considering and acting upon:
1. The election of three Directors for a term of three years; and
2. The ratification of the appointment of Ernst & Young LLP as independent
auditors for the fiscal year 1996.
Stockholders of record at the close of business on April 16, 1996 will be
entitled to notice of, and to vote at, such Annual Meeting or any adjournment
thereof. Information relating to the matters to be considered and voted on at
the Annual Meeting is set forth in the Proxy Statement accompanying this Notice.
BY ORDER OF THE BOARD OF DIRECTORS
Erin C. Ibele
Vice President and Corporate Secretary
Toledo, Ohio
April 17, 1996
PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. THE
PROXY MAY BE REVOKED BY YOU AT ANY TIME, AND GIVING YOUR PROXY WILL NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE ANNUAL MEETING.
<PAGE> 4
HEALTH CARE REIT, INC.
ONE SEAGATE
SUITE 1950
TOLEDO, OHIO 43604
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
May 21, 1996
GENERAL
This Proxy Statement is furnished to the stockholders of Health Care REIT,
Inc. (the "Company") by its Management and the Board of Directors in connection
with the solicitation of proxies in the enclosed form to be used in voting at
the Annual Meeting of Stockholders (the "Annual Meeting"), which is scheduled to
be held on Tuesday, May 21, 1996 at 10:00 a.m. as set forth in the foregoing
notice. At the Annual Meeting, the stockholders will be asked to elect three
Directors, ratify the appointment of Ernst & Young LLP as independent auditors,
and transact such other business as may properly come before the Annual Meeting
or any adjournment thereof.
A share cannot be voted at the Annual Meeting unless the holder thereof is
present or represented by proxy. When proxies in the accompanying form are
returned properly executed and dated, the shares represented thereby will be
voted at the Annual Meeting. If a choice is specified in the proxy, the shares
represented thereby will be voted in accordance with such specification. If no
specification is made, the proxy will be voted FOR the action proposed. Any
stockholder giving a proxy has the right to revoke it any time before it is
voted by filing with the Vice President/Corporate Secretary of the Company a
written revocation, or by filing a duly executed proxy bearing a later date, or
by attending the Annual Meeting and voting in person. The revocation of a proxy
will not be effective until notice thereof has been received by the Vice
President/Corporate Secretary of the Company.
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, Directors and officers of the Company may
solicit proxies by telephone, telegraph or personal interview. The Company will
reimburse Directors and officers for their reasonable out-of-pocket expenses in
connection with such solicitation. The Company will request brokers and nominees
who hold shares in their names to furnish this proxy material to the persons for
whom they hold shares and will reimburse such brokers and nominees for their
reasonable out-of-pocket expenses in connection therewith. The Company has hired
Chemical Mellon Shareholder Services to solicit proxies for a fee not to exceed
$5,000, plus expenses and other customary charges.
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the total number of shares of common stock outstanding on the
record date shall constitute a quorum for the transaction of business by such
holders at the Annual Meeting. The three nominees for election as Directors who
receive the highest number of votes therefor at the Annual Meeting shall be
elected as Directors. Approval of all other matters shall require the
affirmative vote of a majority of the shares of common stock present in person
or represented by proxy.
The executive offices of the Company are located at One SeaGate, Suite
1950, Toledo, Ohio 43604, and its mailing address is One SeaGate, Suite 1950, P.
O. 1475, Toledo, Ohio 43603-1475. The telephone number is (419) 247-2800. The
approximate date on which this material was first sent to stockholders was April
19, 1996. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1995, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES AND
EXHIBITS THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE
OBTAINED WITHOUT CHARGE BY WRITING TO THE VICE PRESIDENT/CORPORATE SECRETARY,
HEALTH CARE REIT, INC. AT THE ABOVE ADDRESS.
1
<PAGE> 5
VOTING SECURITIES OUTSTANDING
The Company had outstanding 12,069,519 shares of Common Stock, $1.00 par
value per share (the "shares of common stock"), on February 29, 1996. The shares
constitute the only class of outstanding voting securities of the Company.
Stockholders of record at the close of business on April 16, 1996 are entitled
to notice of, and to vote at, the Annual Meeting and any adjournments thereof.
Each share of common stock is entitled to one vote on all matters to come before
the Annual Meeting.
PROPOSAL 1 -- ELECTION OF THREE DIRECTORS
The By-Laws provide for nine Directors and divide them into three classes:
Class I, Class II, and Class III. The Directors are elected for a three-year
term or until the election and qualification of their respective successors. It
is intended by Management that proxies received will be voted to elect the three
Directors named below to serve for a three-year term until their respective
successors are elected and have qualified or until their earlier resignation or
removal.
Should any nominee decline or be unable to accept such nomination to serve
as a Director, events which Management does not now expect, the proxies reserve
the right to substitute another person as a Management nominee, or to reduce the
number of Management nominees, as they shall deem advisable. The Proxy solicited
hereby will not be voted to elect more than three Directors.
CLASS I
DIRECTORS TO BE ELECTED
<TABLE>
<CAPTION>
DIRECTOR BOARD COMMITTEE
NAME AGE PRINCIPAL OCCUPATION (1) SINCE MEMBERSHIP
- - ------------------------ --- ------------------------------ -------- -------------------------
<S> <C> <C> <C> <C>
William C. Ballard, Jr. 55 1992-PRESENT Of Counsel to N/A Planning Committee
Greenebaum, Doll & McDonald
(law firm); 1970 TO 1992
Executive Vice President,
Chief Financial Officer and
Director of Humana Inc.
(integrated health care
services); and Director of
American Safety Razor Co.
(manufacturer of health and
beauty aids), LG&E Energy
Corp. (utility company), Mid-
America Bancorp (banking),
United HealthCare Corp.
(managed care company) and
Vencor, Inc. (integrated
health care delivery system)
Bruce Douglas 63 Chairman of the Board of The 1975 Investment and Planning
Douglas Company (general Committees
contractor)
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR BOARD COMMITTEE
NAME AGE PRINCIPAL OCCUPATION (1) SINCE MEMBERSHIP
- - ------------------------ --- ------------------------------ -------- -------------------------
<S> <C> <C> <C> <C>
Frederic D. Wolfe 66 DECEMBER 1995-PRESENT 1971 Executive, Investment and
Consultant to the Company; Planning Committees
1970-SEPTEMBER 1995 President
of the Company; JUNE 1994-
NOVEMBER 1995 Chairman of the
Board and Director of First
Toledo Advisory Company
(former manager of the
Company); Chairman of the
Board and Director of First
Toledo Corporation (affiliate
of the Company); Director of
WT Management Company
(affiliate of the Company);
Director of Kingston
HealthCare Company, formerly
WTR Corp (affiliate of the
Company); and Director of
National City Bank, Northwest
(commercial bank)
</TABLE>
CLASS II
DIRECTORS WHOSE TERMS CONTINUE (2)
<TABLE>
<CAPTION>
DIRECTOR BOARD COMMITTEE
NAME AGE PRINCIPAL OCCUPATION (1) SINCE MEMBERSHIP
- - ------------------------ --- ------------------------------ -------- -------------------------
<S> <C> <C> <C> <C>
Pier C. Borra 56 Chairman, President and Chief 1991 Compensation, Investment,
Executive Officer of Arbor Planning and Special
Health Care Company (developer Committees
and operator of nursing homes)
George L. Chapman 48 SEPTEMBER 1995-PRESENT 1994 Investment and Planning
President of the Company; Committees
JANUARY 1992-SEPTEMBER 1995
Executive Vice President and
General Counsel of the
Company; JUNE 1994-NOVEMBER
1995 Executive Vice President
and General Counsel of First
Toledo Advisory Company
(former manager of the
Company); JANUARY
1992-DECEMBER 1995 Executive
Vice President and General
Counsel of First Toledo
Corporation (affiliate of the
Company); and 1979-JANUARY
1992, Attorney-at-Law,
Shumaker, Loop & Kendrick (law
firm)
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR BOARD COMMITTEE
NAME AGE PRINCIPAL OCCUPATION (1) SINCE MEMBERSHIP
- - ------------------------ --- ------------------------------ -------- -------------------------
<S> <C> <C> <C> <C>
Sharon M. Oster 47 Professor of Management, Yale 1994 Planning Committee
School of Management, Yale
University; and Director of
Aristotle Corporation (public
company)
</TABLE>
CLASS III
DIRECTORS WHOSE TERMS CONTINUE (2)
<TABLE>
<CAPTION>
DIRECTOR BOARD COMMITTEE
NAME AGE PRINCIPAL OCCUPATION (1) SINCE MEMBERSHIP
- - ------------------------ --- ------------------------------ -------- -------------------------
<S> <C> <C> <C> <C>
Richard C. Glowacki 63 President of The Danberry 1981 Audit, Executive,
Management Company (real Compensation, Nominating,
estate brokerage and Planning and Special
investment activities) Committees
Bruce G. Thompson 66 Chairman and Chief Executive 1971 Executive, Investment and
Officer of the Company; JUNE Planning Committees
1994-NOVEMBER 1995 President
and Director of First Toledo
Advisory Company (former
manager of the Company);
President and Director of
First Toledo Corporation
(affiliate of the Company);
Director of WT Management
Company (affiliate of the
Company); Director of Kingston
HealthCare Company, formerly
WTR Corp (affiliate of the
Company); Director of Society
National Bank, Toledo
(commercial bank); Director of
The Douglas Company (general
contractor); and Director of
Arbor Health Care Company
(developer and operator of
nursing homes)
Richard A. Unverferth... 72 Chairman of Unverferth 1971 Audit, Executive,
Manufacturing Company, Inc. Compensation, Investment,
(agricultural equipment Nominating, Planning and
manufacturer); and Chairman of Special Committees
the Board of H.C.F., Inc.
(operator of a nursing home
chain)
- - ---------------
<FN>
(1) Unless otherwise noted, each person has had the same principal occupation
and employment during the last five years.
(2) The terms of Messrs. Borra and Chapman and Ms. Oster expire in 1997. The
terms of Messrs. Glowacki, Thompson and Unverferth expire in 1998.
</TABLE>
4
<PAGE> 8
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY STOCKHOLDERS VOTE "FOR"
THE ELECTION OF THE ABOVE NOMINEES. The nominees who receive the highest number
of votes at the Annual Meeting shall be elected as Directors.
BOARD AND COMMITTEES
The Board met eight times during the year ended December 31, 1995. The
Board has appointed standing Audit, Executive, Compensation (formerly known as
Incentive Stock Option), Investment, Nominating and Planning Committees. In
1994, the Board appointed a Special Committee to act with respect to the merger
of First Toledo Advisory Company with and into the Company. The Special
Committee met throughout 1994 and 1995. In 1995, each incumbent Director
attended at least 75% of the aggregate of the meetings of the Board and the
committees on which they served.
The Audit Committee met once during the year ended December 31, 1995. The
purpose of the Audit Committee is to review the external audit function and the
operations of the principal accounting officer of the Company, and to make
recommendations to the Board with respect to the formulation and development of
the auditing policies of the Company. The Audit Committee may also make
recommendations to the Board with respect to the selection of the independent
auditing firm to audit the Company's records.
The function of the Executive Committee is to exercise all the powers of
the Board (except any powers specifically reserved to the Board) during
intervals between meetings of the Board.
The Compensation Committee, which met once during 1995, has the authority
to develop and review compensation policies and to determine which officers and
key employees of the Company will receive option awards under the Company's 1985
Incentive Stock Option Plan and the 1995 Stock Incentive Plan, and the terms of
such awards.
The Investment Committee met nine times during the year ended December 31,
1995.
The function of the Nominating Committee, which did not meet during the
year ended December 31, 1995, is to select and recommend to the full Board
nominees for election as Directors. The Committee may, in its discretion,
consider nominees proposed by stockholders of the Company for the 1997 Annual
Meeting of Stockholders, provided such recommendations are in writing, contain a
description of the nominee's qualifications and his consent to serve, and are
received by the Company by December 19, 1996.
The Special Committee met ten times during the year ended December 31,
1995.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of February 29, 1996, unless otherwise
specified, certain information with respect to the beneficial ownership of the
Company's shares by each person who is a Director of the Company, a nominee for
the Board, each of the named executive officers, and by the Directors and
officers of the Company as a group. The Company's Management is not aware of any
person who, as of December 31, 1995, was the beneficial owner of more than 5% of
the outstanding shares of the Company.
5
<PAGE> 9
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP
NAME OF BENEFICIAL OWNER OF COMMON STOCK AS OF FEBRUARY 29, 1996 PERCENT OF CLASS
---------------------------------------
<S> <C> <C> <C>
William C. Ballard, Jr. Sole voting power 6,300 .05
Shared voting power 0 N/A
Sole investment power 6,300 .05
Shared investment power 0 N/A
TOTAL 6,300 .05
Pier C. Borra Sole voting power 0 N/A
Shared voting power 0 N/A
Sole investment power 0 N/A
Shared investment power 2,570 .02
TOTAL 2,570 .02
Raymond W. Braun Sole voting power 42,994(1) .35
Shared voting power 0 N/A
Sole investment power 42,994(1) .35
Shared investment power 0 N/A
TOTAL 42,994(1) .35
George L. Chapman Sole voting power 84,323(1) .69
Shared voting power 0 N/A
Sole investment power 84,323(1) .69
Shared investment power 0 N/A
TOTAL 84,323(1) .69
George Chopivsky, Jr. Sole voting power 3,076 .03
Shared voting power 0 N/A
Sole investment power 3,076 .03
Shared investment power 0 N/A
TOTAL 3,076 .03
Bruce Douglas Sole voting power 36,976 .30
Shared voting power 0 N/A
Sole investment power 36,976 .30
Shared investment power 0 N/A
TOTAL 36,976 .30
Richard C. Glowacki Sole voting power 16,202 .13
Shared voting power 0 N/A
Sole investment power 16,202 .13
Shared investment power 0 N/A
TOTAL 16,202 .13
Sharon M. Oster Sole voting power 100 .00
Shared voting power 0 N/A
Sole investment power 100 .00
Shared investment power 0 N/A
TOTAL 100 .00
Robert J. Pruger Sole voting power 38,895(1) .32
Shared voting power 0 N/A
Sole investment power 38,895(1) .32
Shared investment power 0 N/A
TOTAL 38,895(1) .32
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP
NAME OF BENEFICIAL OWNER OF COMMON STOCK AS OF FEBRUARY 29, 1996 PERCENT OF CLASS
---------------------------------------
<S> <C> <C> <C>
Bruce G. Thompson Sole voting power 207,649(1) 1.69
Shared voting power 0 N/A
Sole investment power 207,649(1) 1.69
Shared investment power 0 N/A
TOTAL 207,649(1) 1.69
Richard A. Unverferth Sole voting power 0 N/A
Shared voting power 0 N/A
Sole investment power 0 N/A
Shared investment power 3,816 .03
TOTAL 3,816 .03
Frederic D. Wolfe Sole voting power 238,704 1.94
Shared voting power 35,075 .29
Sole investment power 238,704 1.94
Shared investment power 35,075 .29
TOTAL 273,779 2.23
All Directors and Officers Sole voting power 715,684(2) 5.82
as a group (13 persons) Shared voting power 35,075 .29
Sole investment power 715,684(2) 5.82
Shared investment power 41,461 .34
TOTAL 757,145(2) 6.16
- - ---------------
<FN>
(1) Includes shares not actually owned by such individuals as of February 29,
1996, but of which beneficial ownership could be acquired currently by such
individuals upon the exercise of outstanding options.
(2) Includes an aggregate of 217,317 shares not actually owned by such Directors
and officers as of February 29, 1996, but of which beneficial ownership
could be acquired currently by such Directors and officers upon the exercise
of outstanding options.
</TABLE>
7
<PAGE> 11
EXECUTIVE OFFICERS OF THE COMPANY
The following information is furnished as to the Executive Officers of the
Company, each of whom has a term of office of one year or until their successors
are chosen and qualified or until their earlier resignation or removal:
<TABLE>
<CAPTION>
YEAR APPOINTED
NAME AGE OFFICE AND BUSINESS EXPERIENCE EXECUTIVE OFFICER
- - ------------------------- --- -------------------------------------------- -----------------
<S> <C> <C> <C>
Bruce G. Thompson 66 Chairman and Chief Executive Officer of the 1971
Company; JUNE 1994-NOVEMBER 1995 President
and Director of First Toledo Advisory
Company (former manager of the Company);
President and Director of First Toledo
Corporation (affiliate of the Company);
Director of WT Management Company (affiliate
of the Company); Director of Kingston
HealthCare Company, formerly WTR Corp
(affiliate of the Company); Director of
Society National Bank, Toledo (commercial
bank); Director of The Douglas Company
(general contractor); and Director of Arbor
Health Care Company (developer and operator
of nursing homes)
George L. Chapman 48 SEPTEMBER 1995-PRESENT President of the 1992
Company; JANUARY 1992-SEPTEMBER 1995
Executive Vice President and General Counsel
of the Company; JUNE 1994-NOVEMBER 1995
Executive Vice President and General Counsel
of First Toledo Advisory Company (former
manager of the Company); JANUARY
1992-DECEMBER 1995 Executive Vice President
and General Counsel of First Toledo
Corporation (affiliate of the Company); and
1979-1991 Attorney-at-Law, Shumaker, Loop &
Kendrick (law firm)
Raymond W. Braun 38 JULY 1994-PRESENT Vice President and 1995
Assistant General Counsel of the Company;
JANUARY 1993-JULY 1994 Assistant Vice
President of the Company; JANUARY 1993-APRIL
1996 of Counsel, Shumaker, Loop & Kendrick
(law firm); and 1983-1993 Attorney-at-Law,
Shumaker, Loop & Kendrick (law firm)
Erin C. Ibele 34 JANUARY 1993-PRESENT Vice President and 1987
Corporate Secretary of the Company; 1987-
JANUARY 1993 Corporate Secretary of the
Company; 1987-PRESENT Vice President,
Corporate Secretary and Director of First
Toledo Corporation (affiliate of the
Company); and JUNE 1994-NOVEMBER 1995 Vice
President, Corporate Secretary and Director
of First Toledo Advisory Company (former
manager of the Company)
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
YEAR APPOINTED
NAME AGE OFFICE AND BUSINESS EXPERIENCE EXECUTIVE OFFICER
- - ------------------------- --- -------------------------------------------- -----------------
<S> <C> <C> <C>
Edward F. Lange, Jr. 36 MARCH 1996-PRESENT Vice President, Chief 1996
Financial Officer and Treasurer of the
Company; JANUARY 1995-MARCH 1996 Senior Vice
President-Finance of The CarePlex Group,
Inc. (long term care operating company);
1994-1995 Vice President-Finance of
MediTrust (real estate investment trust);
1993-1994 Senior Vice President-Finance of
The MediPlex Group, Inc. (long term care
operating company); 1988-1992 Vice
President, Public Finance of The Advest
Group, Inc. (investment banking/brokerage)
Robert J. Pruger 47 1987-MARCH 1996 Chief Financial Officer and 1986
Treasurer of the Company; 1986-JANUARY 1993
Controller of the Company; 1987-APRIL 1996
Treasurer and Director of First Toledo
Corporation (affiliate of the Company); and
JUNE 1994-NOVEMBER 1995 Treasurer and
Director of First Toledo Advisory Company
(former manager of the Company)
Frederic D. Wolfe 66 DECEMBER 1995-PRESENT Consultant to the 1971
Company; 1970-SEPTEMBER 1995 President of
the Company; JUNE 1994-NOVEMBER 1995
Chairman of the Board and Director of First
Toledo Advisory Company (former manager of
the Company); Chairman of the Board and
Director of First Toledo Corporation
(affiliate of the Company); Director of WT
Management Company (affiliate of the
Company); Director of Kingston HealthCare
Company, formerly WTR Corp (affiliate of the
Company); and Director of National City
Bank, Northwest (commercial bank)
</TABLE>
9
<PAGE> 13
REMUNERATION
COMPENSATION OF EXECUTIVE OFFICERS
Beginning in December 1995, each executive officer of the Company became
employed and compensated by the Company. Previously, each executive officer of
the Company was employed and compensated by the management company, First Toledo
Advisory Company ("FTAC"). The following table presents the total compensation
awarded to, earned by, or paid to, the chief executive officer of the Company
during 1995, and the Company's most highly compensated executive officers who
were serving at the end of 1995 and whose total annual salary and bonus, if any,
exceeded $100,000. Additionally, the table sets forth the total compensation
awarded to, earned by, or paid to, one other individual for whom disclosure
would have been provided but for the fact he was not serving as an executive
officer at the end of 1995 (Mr. Wolfe).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
NAME AND ---------------------- ----------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(3)
- - --------------------------- ----- --------- -------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Bruce G. Thompson, 1995 $113,984 (1) $ -0- -0- $6,839
Chairman and
Chief Executive Officer
George L. Chapman, 1995 240,000 107,500 139,268 9,000
President
Raymond W. Braun, 1995 174,307 (2) 40,555 70,000 9,000
Vice President and
Assistant General Counsel
Frederic D. Wolfe, 1995 70,608 (1) -0- -0- -0-
Consultant and
former President
Robert J. Pruger, 1995 104,000 25,000 25,000 7,740
former Chief Financial
Officer and Treasurer
- - ---------------
<FN>
(1) Does not include FTAC dividends paid to Messrs. Thompson and Wolfe in 1995.
See "Certain Relationships and Related Transactions -- First Toledo Advisory
Company, the Former Manager" for a discussion of management fees paid by the
Company to FTAC.
(2) Also includes $35,445 in commissions received in connection with financings
closed by the Company.
(3) Includes contributions made in connection with the Company's Retirement Plan
and Trust (formerly known as the First Toledo Advisory Company Retirement
Plan and Trust).
</TABLE>
EMPLOYMENT AGREEMENTS
Pursuant to an Employment and Consulting Agreement entered into in 1995,
Mr. Thompson will serve as the Company's Chief Executive Officer until December
31, 1996, and will thereafter serve as a consultant to the Company, performing
such services as are requested of him by the Board of Directors and management,
until December 31, 1997, subject to three optional one-year extensions. During
the term of this agreement, Mr. Thompson will receive a salary of $135,000 per
annum, subject to adjustment for changes in the Consumer Price Index-All Urban
Consumers (CPI-UC). Pursuant to a Consulting Agreement with the Company, Mr.
Wolfe will act as a consultant and perform such services as the Company's Board
of Directors and management may request until December 31, 1996, with four
optional one-year extensions, in exchange for a consulting fee of $100,000 per
annum, to be adjusted each year for changes in the CPI-UC.
10
<PAGE> 14
The Company and Mr. Chapman have entered into a three-year employment
agreement effective January 1, 1996, subject to optional successive two-year
renewal terms. Mr. Chapman will serve as the Company's President and receive a
minimum annual base salary of $275,000, as well as discretionary annual bonuses
and stated fringe benefits. If Mr. Chapman is terminated without cause, he would
receive severance pay for the remaining term of the agreement, or for
twenty-four months, whichever is greater. If Mr. Chapman is terminated without
cause or resigns during the twelve months following a "change in corporate
control" (as defined in the employment agreement), he would be entitled to
receive monthly severance benefits for three years in an aggregate annual amount
equal to the sum of his base salary and his bonus for the year immediately
preceding the change in corporate control. In addition, Mr. Chapman's stock
options under the 1995 Stock Incentive Plan would become vested and immediately
exercisable in the event of a change in corporate control or involuntary
termination without cause.
The Company anticipates that it will enter into similar employment
agreements with the Company's other executive officers, which will provide for
two-year terms, minimum annual salaries, stated benefits, and severance payments
in the event of a termination without cause or a change in corporate control.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SHARES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION
OPTIONS EMPLOYEES OR BASE TERM(3)
GRANTED (#) IN FISCAL PRICE EXPIRATION ------------------------
NAME (1), (2) YEAR ($/SH) DATE 5%($) 10%($)
- - --------------------------- ----------- ---------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Bruce G. Thompson.......... 0 N/A N/A N/A N/A N/A
George L. Chapman.......... 39,268 12.42% $22.125 2/5/05 $ 546,387 $ 1,384,651
100,000 31.62% 17.875 8/28/05 1,124,149 2,848,815
Raymond W. Braun........... 20,000 6.32% 22.125 2/5/05 278,286 705,231
50,000 15.81% 17.875 8/28/05 562,075 1,424,407
Frederic D. Wolfe.......... 0 N/A N/A N/A N/A N/A
Robert J. Pruger........... 10,000 3.16% 22.125 2/5/05 139,143 352,616
15,000 4.74% 17.875 8/28/05 168,622 427,322
- - ---------------
<FN>
(1) Of the options granted, 36,351 shares are currently exercisable and options
for 197,917 vest between the years 1996 and 2005.
(2) The terms of the options granted permit cashless exercises and payment of
the option exercise price by delivery of previously owned shares.
(3) Gains are reported net of the exercise price, but before taxes associated
with the exercise. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the shares, as well as the optionee's
continued employment through the vesting period. The amount reflected in
this Table may not necessarily be achieved.
</TABLE>
11
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE AT FISCAL YEAR END FISCAL YEAR END ($)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bruce G. Thompson..... 10,000 $78,751 14,123 17,877 $ -0- $ -0-
George L. Chapman..... -- -- 38,526 124,742 2,500 10,000
Raymond W. Braun...... -- -- 23,275 56,725 1,250 5,000
Frederic D. Wolfe..... 4,140 15,871 14,123 15,877 -0- -0-
Robert J. Pruger...... -- -- 34,076 21,924 21,813 1,500
</TABLE>
COMPENSATION OF DIRECTORS
In 1995, each Director received a fee of $12,000 for his service as such.
In addition, each Director received a fee of $1,500 for each Board meeting
attended. These fees will remain the same for 1996. The schedule set forth below
indicates the fees paid to each Director for each committee meeting attended in
1995 and the fees that will be paid for each committee meeting attended in 1996:
<TABLE>
<CAPTION>
FEES
---------------
COMMITTEE 1995 1996
----------------------------------------------------------------- ------ ------
<S> <C> <C>
Audit............................................................ $1,000 $1,000
Executive........................................................ -0- -0-
Compensation..................................................... 400 1,000
Investment, no quarterly board meetings.......................... 1,200 1,200
Investment, quarterly board meetings............................. 600 1,200
Nominating....................................................... -0- -0-
Planning......................................................... 1,500 1,500
Special.......................................................... 1,000 N/A
</TABLE>
Messrs. Chapman and Thompson are not, and Mr. Wolfe through November 30,
1995 was not, paid fees for Board or committee meetings. The fees paid to the
other Directors totalled $190,400 in 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ending December 31, 1995, the Compensation Committee
of the Board consisted of Pier C. Borra, Richard C. Glowacki and Richard A.
Unverferth. The Compensation Committee of the Board has the authority to develop
and review compensation policies and to determine which officers and key
employees of the Company will receive option awards under the Company's 1985
Incentive Stock Option Plan (the "1985 Plan") and the 1995 Stock Incentive Plan
(the "1995 Plan") and the terms of any options granted under the 1985 and the
1995 Plan.
REPORT OF THE COMPENSATION COMMITTEE
Until the completion of the merger of the Company's manager, First Toledo
Advisory Company, with and into the Company, effective December 1, 1995, the
officers of the Company received only nominal compensation from the Company. The
Board and the stockholders of the Company adopted the 1985 Plan in order to
reward individual performance and to provide long-term incentives. Under the
terms of the 1985 Plan, the Compensation Committee, formerly known as the
Incentive Stock Option Committee, has authority to approve stock option awards
to officers of the Company and to determine the terms and conditions of such
awards. The 1985 Plan terminated July 24, 1995. Similarly, in 1995 the Board and
the stockholders of the Company adopted the 1995 Plan, which is intended to
enable the Company to continue to provide its officers and key employees with
competitive equity-based compensation and create appropriate long-term
incentives. Under the terms of the 1995 Plan, the Compensation Committee has
authority to approve stock option
12
<PAGE> 16
awards, restricted shares or other equity-based incentive awards to officers and
key employees and to determine the terms of these awards.
In February and August 1995, the Compensation Committee granted to officers
and certain key employees of the Company options to purchase an aggregate of
316,268 shares pursuant to the 1985 Plan and the 1995 Plan. The criteria
considered by the Compensation Committee in deciding whether to grant stock
options included the Company's financial performance during the prior year,
individual performance and potential contributions to the Company's
profitability and long term growth. The Compensation Committee's decision to
grant the options to acquire 316,268 shares was based on, among other things,
the optionees' roles in the Company's success during the fiscal year ending
December 31, 1994, as well as the Compensation Committee's perception of their
past and expected future contributions to the Company's achievement of its
long-term performance goals.
The Compensation Committee believes that stock options provide a desirable
set of incentives to retain and encourage future efforts by the Company's
officers. Since the options are granted at prevailing market value, the options
will only have value if the stock price increases.
Bruce G. Thompson, the Chief Executive Officer of the Company, was not
granted stock options during 1995, because the Committee concluded, in
connection with the negotiation of the merger of First Toledo Advisory Company
and the Company, that it would not be appropriate or desirable for Mr. Thompson
to receive any equity award under the 1985 Plan or the 1995 Plan in addition to
the equity to be issued to him upon completion of the merger. The base salary
and other compensation Mr. Thompson will receive from the Company for periods
after the December 1, 1995 merger of First Toledo Advisory Company with and into
the Company are determined by the terms of the Employment and Consulting
Agreement negotiated between Mr. Thompson and the Company in connection with the
merger, as disclosed to stockholders at the time of the 1995 Annual Meeting of
Stockholders. The Compensation Committee did not approve any bonuses or
additional compensation for Mr. Thompson during 1995, and does not anticipate
that it would consider doing so during 1996.
Compensation Committee of the Board of Directors
Health Care REIT, Inc.
Pier C. Borra
Richard C. Glowacki
Richard A. Unverferth
13
<PAGE> 17
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change and
the cumulative total stockholder return on the Company's shares against the
cumulative total return of the S & P Composite-500 Stock Index and the NAREIT
Hybrid Index prepared by NAREIT. Seventeen companies comprise the NAREIT Hybrid
Index. The Index consists of REITs identified by NAREIT as hybrid (those REITs
which have both mortgage and equity investments). Upon written request to Erin
C. Ibele, Health Care REIT, Inc., One SeaGate, Suite 1950, Toledo, Ohio, 43604,
the Company shall provide stockholders with the names of the component issuers.
The data are based on the last closing prices as of December 31 for each of the
five years. 1990 equals $100 and dividends are assumed to be reinvested.
[FIGURE]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) S & P 500 Company Hybrid
<S> <C> <C> <C>
12/31/90 100.00 100.00 100.00
12/31/91 130.55 173.84 139.16
12/31/92 140.56 194.67 162.24
12/31/93 154.60 225.88 196.61
12/31/94 156.63 215.13 204.48
12/31/95 215.25 214.80 251.49
</TABLE>
Except to the extent the Company specifically incorporates this information
by reference, the foregoing Report of the Compensation Committee and Stockholder
Return Performance Presentation shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934. This information shall not otherwise be deemed filed under such Acts.
SECTION 16(a) COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own beneficially
more than ten percent (10%) of the Common Stock of the Company, to file reports
of ownership and changes of ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Copies of all filed reports are
required to be furnished to the Company pursuant to Section 16(a). Based solely
on the reports received by the Company and on written representations from
reporting persons, the Company believes that the directors and executive
officers complied with all applicable filing requirements during the fiscal year
ended December 31, 1995.
14
<PAGE> 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PARTNERSHIP FINANCINGS
The Company has provided direct loans and credit enhancements to five
partnerships in connection with four assisted living and retirement facilities
and two nursing homes. First Toledo Corporation, which is wholly owned by
Messrs. Thompson and Wolfe, serves as a general partner in each partnership. The
partnership structures facilitated industrial development bond financing in four
of the projects. Credit enhancements were provided in the form of the Company's
agreement to purchase the facilities or the bonds in the event of default by the
partnerships. As of December 31, 1995, the Company had $5,429,000 outstanding in
loans to three of these partnerships and was obligated to make additional loans
aggregating $354,000. The Company has contingent obligations under the
agreements to purchase which currently total $19,530,000. For the years ended
1995, 1994 and 1993, the Company received $383,000, $339,000 and $422,000,
respectively in connection with its contingent obligations pursuant to the
agreements to purchase. Messrs. Thompson and Wolfe are limited partners in three
of the partnerships, an affiliate of Mr. Douglas, a director of the Company,
serves as a general partner of one of the partnerships, and an affiliate of
Messrs. Thompson and Wolfe, Kingston HealthCare Company ("Kingston"), operates
four of the facilities.
FIRST TOLEDO ADVISORY COMPANY, THE FORMER MANAGER
Until November 30, 1995, when First Toledo Advisory Company (FTAC) was
merged with and into the Company and the Company became self-administered, FTAC
received management fees from the Company. Mr. Thompson, Chairman, Chief
Executive Officer and Director, and Mr. Wolfe former President and Director of
the Company, each owned 50% of First Toledo Advisory Company. In 1995, 1994 and
1993, FTAC was paid $2,386,000, $3,087,000 and $2,427,000, respectively, in
management fees by the Company. Effective December 1, 1995, FTAC was merged with
and into the Company. In consideration, all of the outstanding stock of FTAC was
converted into 282,407 shares of common stock, $1.00 per value per share, of the
Company.
OTHER RELATIONSHIPS
George Chopivsky, Jr., a former Director of the Company, and his affiliates
have interests in two behavioral care facilities for which the Company is
providing financing in the total amount of $12,531,000.
Bruce G. Thompson, Chairman, Chief Executive Officer and Director of the
Company, is a Director of the Toledo District Board of Directors of Society
National Bank. Society National Bank is a participant in the Company's revolving
line of credit.
Frederic D. Wolfe, a consultant to and former President of the Company, and
a Director of the Company, is a Director of National City Bank, Northwest (NCB),
which is a participant in the Company's revolving line of credit. NCB is an
affiliate of National City Bank of Cleveland, which is agent for, and a
participant in, the Company's revolving line of credit.
For the years ended 1995, 1994 and 1993, the Company recorded lease and
interest income from Kingston in the amounts of $202,000, $313,000 and $202,000,
respectively.
GENERAL
All of the related party matters were approved by a majority of Directors
unaffiliated with the transactions. For the years ended December 31, 1995, 1994
and 1993, gross income from related parties totalled $3,798,000, $3,810,000 and
$3,612,000 or 8.52%, 8.92% and 10.03%, respectively, of the gross income of the
Company.
15
<PAGE> 19
PROPOSAL 2 -- RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
The firm of Ernst & Young LLP served as independent auditors of the Company
for the year ended December 31, 1995 and has been selected by the Company to
serve as its independent auditors for the year ending December 31, 1996. Ernst &
Young LLP has served as independent auditors of the Company since the Company's
inception in 1970. Although the submission for this matter for approval by
stockholders is not legally required, the Board believes that such submission
follows sound business practice and is in the best interests of the
stockholders. If this appointment is not ratified by the holders of a majority
of the shares present in person or by proxy at the Annual Meeting, the Directors
will consider the selection of another accounting firm. If such a selection were
made, it may not become effective until 1997 because of the difficulty and
expense of making a substitution. Management anticipates that a representative
of Ernst & Young LLP will attend the Annual Meeting.
Audit services of Ernst & Young LLP for the year ended December 31, 1995
included the audit of the financial statements of the Company included in the
Annual Report to Stockholders for 1995, services related to filings with the
Securities and Exchange Commission, and consultation and assistance on
accounting and related matters.
The services furnished by Ernst & Young LLP have been at customary rates
and terms. There are no existing direct or indirect understandings or agreements
that place a limit on future years' audit fees.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY STOCKHOLDERS VOTE "FOR"
THE RATIFICATION OF ERNST & YOUNG LLP. The affirmative vote of the holders of a
majority of shares of common stock present in person or by proxy at the Annual
Meeting will be required for such ratification.
OTHER MATTERS
Management is not aware of any matters to be presented for action at the
Annual Meeting other than the matters set forth above. If any other matters do
properly come before the meeting or any adjournment thereof, it is intended that
the persons named in the proxy will vote in accordance with their judgment on
such matters.
STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Stockholders' proposals intended to be presented at the 1997 Annual Meeting
of Stockholders must be received by the Company no later than December 19, 1996
for inclusion in the Company's proxy statement and form of proxy relating to
that meeting.
BY THE ORDER OF THE BOARD OF DIRECTORS
Erin C. Ibele
Vice President and Corporate Secretary
16
<PAGE> 20
HEALTH CARE REIT, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints B. G. Thompson and G. L.
Chapman, and each of them, with full power of substitution,
to vote all shares of Common Stock, $1.00 par value, of
P Health Care REIT, Inc. (the "Company"), that the undersigned
R is entitled to vote at the Annual Meeting of the Stockholders
O of the Company to be held on Tuesday, May 21, 1996, or any
X adjournments thereof.
Y
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE
TAKING OF A VOTE ON THE MATTERS HEREIN.
Returned proxy cards will be voted: (1) as specified on
the matters listed below; (2) in accordance with the
Directors' recommendations where a choice is not specified;
and (3) in accordance with the judgment of the proxies on any
other matters that may properly come before the meeting.
(Over)
<PAGE> 21
[ X ] PLEASE MARK
YOUR CHOICE
LIKE THIS
IN BLUE OR
BLACK INK.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. MANAGEMENT AND THE BOARD OF DIRECTORS OF THE COMPANY RECOMMEND VOTES
"FOR" ALL OF THE FOLLOWING:
FOR WITHHELD
ALL FOR ALL
1. Election of three Directors for a [ ] [ ]
term of three years:
WILLIAM C. BALLARD, JR., BRUCE
DOUGLAS AND FREDERIC D. WOLFE
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, PLEASE WRITE THE PERSON'S NAME IN THE
FOLLOWING SPACE:
-----------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment of [ ] [ ] [ ]
Ernst & Young LLP as independent
auditors for the fiscal year 1996.
3. With discretionary authority on any other business that may properly
come before the meeting or any adjournment thereof.
Signature(s)_______________________________________ Date ____________
NOTE: Please sign exactly as your name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. Corporate or partnership proxies should be signed by an
authorized person with the person's title indicated.
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
