<PAGE>
FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 33-54870
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 8, 1993
$100,000,000
NATIONWIDE HEALTH PROPERTIES, INC.
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
------------
Nationwide Health Properties, Inc. may offer from time to time up to
$100,000,000 aggregate initial offering price of its Medium-Term Notes. Each
Note will mature on a day nine months to 30 years from the date of issue, as
selected by the purchaser and agreed to by the Company, and may be subject to
redemption by the Company and to repayment at the option of the holder, in
each case in whole or in part, prior to its Stated Maturity, as set forth
therein and specified in a pricing supplement hereto.
The interest rate, if any, or interest rate formula applicable to each Note
and other variable terms of the Notes as described herein will be established
by the Company at the date of issuance of such Note and will be set forth
therein and specified in a Pricing Supplement. Interest rates, interest rate
formulae and such other variable terms are subject to change by the Company,
but no change will affect any Note already issued or as to which an offer to
purchase has been accepted by the Company. Each Note will be issued in fully
registered book-entry form or definitive form, as set forth in the applicable
Pricing Supplement, in denominations of $1,000 and integral multiples thereof,
unless otherwise specified in the applicable Pricing Supplement.
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will bear interest at a fixed rate or at floating rates determined by
reference to the Certificate of Deposit Rate, the Commercial Paper Rate, the
Federal Funds Rate, LIBOR, the Prime Rate or the Treasury Rate, two or more of
the foregoing base rates, or any other interest rate formula, as adjusted by
any Spread and/or Spread Multiplier, and will specify such other terms
applicable to such Notes. Interest on Fixed Rate Notes will accrue from their
date of issue and, unless otherwise specified in the applicable Pricing
Supplement, will be payable in arrears semiannually on each April 1 and
October 1. Notes may also be issued with original issue discount, and such
Notes may or may not bear interest. See "Description of the Notes" herein and
"Description of Debt Securities" in the accompanying Prospectus.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
THE PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
--------- ------------- ------------
<S> <C> <C> <C>
Per Note...................... 100% .125%-.750% 99.875%-99.250%
Total......................... $100,000,000 $125,000-$750,000 $99,875,000-$99,250,000
</TABLE>
- -------
(1) Unless otherwise specified in an applicable Pricing Supplement, the Notes
will be issued at 100% of their principal amount.
(2) The Company will pay the Agents a commission of from .125% to .750%,
depending on maturity, of the principal amount of any Notes sold through
them as agents (or sold to such Agents as principal in circumstances in
which no other discount is agreed). The Company has agreed to indemnify
the Agents against certain liabilities, including liabilities under the
Securities Act of 1933. See "Supplemental Plan of Distribution".
(3) Before deducting expenses payable by the Company estimated at $100,000,
including $25,000 of estimated expenses of the Agents to be reimbursed by
the Company.
------------
Offers to purchase Notes are being solicited, on a reasonable efforts basis,
from time to time by the Agents on behalf of the Company. Notes may be sold to
the Agents on their own behalf at negotiated discounts. The Company reserves
the right to sell Notes directly on its own behalf. The Company also reserves
the right to withdraw, cancel or modify the offering contemplated hereby
without notice. The Company or the Agents may reject any order as a whole or
in part. See "Supplemental Plan of Distribution".
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
------------
The date of this Prospectus Supplement is February 15, 1995.
<PAGE>
THE COMPANY
Nationwide Health Properties, Inc., a Maryland corporation organized in
October 1985 (the "Company"), is a real estate investment trust ("REIT") which
invests primarily in health care related facilities and provides financing to
health care providers. As of December 31, 1994, the Company had investments in
180 facilities located in 29 states. The facilities include 174 long-term
health care facilities, four assisted living facilities and two rehabilitation
hospitals.
As of December 31, 1994, the Company had direct ownership of 139 long-term
health care facilities, three assisted living facilities and two rehabilitation
hospitals (the "Properties"). All of the Company's owned facilities are leased
under "net" leases (the "Leases"), which are accounted for as operating leases,
to 32 health care providers (the "Lessees") including Beverly Enterprises, Inc.
("Beverly"), Sun Healthcare Group, Horizon Healthcare, Living Centers of
America, GranCare, Continental Medical Systems, Integrated Health Services and
NovaCare, Inc. Of the Lessees, only Beverly is expected to account for more
than 10% of the Company's revenue.
The Leases have initial terms ranging from 10 to 14 years, and most of the
Leases have eight five-year renewal options. The Company earns fixed monthly
minimum rents and may earn periodic additional rents. The additional rent
payments are generally computed as a percentage of facility net patient
revenues in excess of base amounts. The base amounts, in most cases, are net
patient revenues for the first year of the lease. Most Leases contain cross
collateralization and cross default provisions tied to other Leases with the
same Lessee, as well as grouped lease renewals and grouped purchase options.
Obligations under the Leases have corporate guarantees, and leases covering 73
facilities are backed by irrevocable letters of credit or security deposits
which cover from 1 to 13 months of monthly minimum rents. Under the terms of
the Leases, the Lessee is responsible for all maintenance, repairs, taxes and
insurance on the leased properties.
As of December 31, 1994, the Company held 22 mortgage loans secured by 35
long-term health care facilities and one assisted living facility. Such loans
had a net book value of approximately $105,824,000 at December 31, 1994. The
mortgage loans have individual outstanding principal balances ranging from
approximately $953,000 to $13,199,000 and have maturities ranging from 1995 to
2024.
As of December 31, 1994, 48 of the Company's 144 owned facilities were being
leased to and operated by subsidiaries of Beverly. Beverly has guaranteed
certain obligations of its subsidiaries and of certain parties unaffiliated
with Beverly in connection with 23 properties operated by such parties. Rental
and interest income from Beverly accounted for 47%, 40% and 33% of the
Company's total revenues for the years ended December 31, 1992, 1993 and 1994,
respectively. The Company expects that as new facilities are acquired, an
increasing percentage of its facilities will be leased to operators
unaffiliated with Beverly.
The Company anticipates providing lease or mortgage financing for health care
facilities to qualified operators and acquiring additional health care related
facilities, including long-term care facilities and acute care and
rehabilitation hospitals. Financing for such future investments may be provided
by borrowings under the Company's bank line of credit, private placements or
public offerings of debt or equity, and the assumption of secured indebtedness.
S-2
<PAGE>
The Company operates so as to qualify as a REIT under Sections 856 through
860 of the Internal Revenue Code of 1986, as amended (the "Code"). As a REIT,
the Company distributes to its shareholders substantially all of its cash flow
from operations and, in any event, at least 95% of its taxable income. If the
Company qualifies for taxation as a REIT, it will generally not be subject to
federal corporate income taxes on its net income that is currently distributed
to stockholders. This treatment substantially eliminates the "double taxation"
(e.g. at the corporate and stockholder levels) that generally results from
investment in stock of a corporation.
RECENT DEVELOPMENTS
During 1994, the Company acquired 12 long-term health care facilities and
three assisted living facilities in nine separate transactions for an aggregate
purchase price of approximately $58,990,000. The facilities were concurrently
leased under terms generally similar to the Company's existing Leases.
Additionally, the Company provided mortgages on eight long-term health care
facilities and one assisted living facility in an aggregate amount of
approximately $27,456,000. The acquisitions and mortgage financing were funded
by bank borrowings on the Company's bank line of credit and by cash on hand.
USE OF PROCEEDS
The Company intends to use the net proceeds received by it from this offering
for general corporate purposes, including the repayment of indebtedness
outstanding under the Company's revolving bank line of credit. As of December
31, 1994, the aggregate amount of such indebtedness was approximately
$80,200,000, having an interest rate of between 7.1875% and 8.50% and a
maturity date of March 31, 1997. Such indebtedness was incurred for general
corporate purposes, including the acquisition of health care facilities and
mortgage loans secured by healthcare facilities. See "Recent Developments."
S-3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information for each of the
three years ended December 31, 1994 is derived from the Company's 1994 and 1993
Annual Reports on Form 10-K. The Company's consolidated financial statements in
the 1994 and 1993 Annual Reports on Form 10-K have been audited by Arthur
Andersen LLP, independent accountants. The selected consolidated financial
information set forth below should be read in conjunction with the detailed
information, consolidated financial statements and related notes and applicable
"Management's Discussion and Analysis" included in the 1994 and 1993 Annual
Reports on Form 10-K.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1992 1993 1994
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues:
Minimum rent..................................... $ 38,062 $ 40,758 $ 47,805
Additional rent.................................. 6,241 8,417 9,712
Interest and other income........................ 5,504 11,210 12,468
Gain on sale of facilities....................... 138 -- --
-------- -------- --------
49,945 60,385 69,985
Expenses:
Depreciation and amortization.................... 9,142 9,937 11,952
Interest......................................... 8,162 6,186 9,921
General and administrative....................... 2,960 3,266 3,299
-------- -------- --------
20,264 19,389 25,172
-------- -------- --------
Income before extraordinary items.................. 29,681 40,996 44,813
Extraordinary charge(1)............................ -- (2,004) --
-------- -------- --------
Net income......................................... $ 29,681 $ 38,992 $ 44,813
======== ======== ========
Financial Position (at end of period):
Total assets..................................... $396,664 $440,165 $513,809
Notes and bonds payable.......................... 32,116 23,047 20,520
Bank borrowings.................................. 9,950 3,800 80,200
Convertible debentures........................... -- 65,000 65,000
Senior subordinated convertible
debentures...................................... 44,455 8,609 2,690
Stockholders' equity............................. 301,895 332,927 336,106
</TABLE>
- --------
(1) The Company incurred extraordinary charges representing the write-off of
unamortized deferred financing costs and fees in connection with the
prepayment of a substantial portion of the Company's secured debt.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio............................................ 4.03 5.44 4.64 7.63 5.52
</TABLE>
S-4
<PAGE>
DESCRIPTION OF THE NOTES
The Notes are to be issued as a series of Debt Securities under an indenture
dated as of November 16, 1992 (the "Indenture") between the Company and The
Chase Manhattan Bank (National Association), as trustee (the "Trustee"), a form
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus Supplement is a part. The following statements relating to the
Notes and the Indenture are summaries of certain provisions of the Notes and
the Indenture and do not purport to be complete, and where particular
provisions of the Notes and of the Indenture are referred to, such summaries
are qualified in their entirety by reference to such provisions. Capitalized
terms used but not defined herein have the meanings given to them in the
Indenture or the Notes, as the case may be. The term "Debt Securities," as used
under this caption, refers to all securities issued and issuable from time to
time under the Indenture and includes the Notes. The following description of
the Notes will apply to such Notes unless otherwise specified in an applicable
Pricing Supplement.
GENERAL
All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured general obligations of the Company and will rank
pari passu with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding. The Indenture does not limit the
aggregate principal amount of Debt Securities which may be issued thereunder
and provides that the Debt Securities may be issued in one or more series up to
the aggregate principal amount which may be authorized from time to time by the
Company. The Company may, from time to time, without the consent of the holders
of the Notes, provide for the issuance of Notes or other Debt Securities under
the Indenture in addition to the $100,000,000 aggregate initial offering price
of Notes authorized as of the date of this Prospectus Supplement.
The Notes are currently limited to $100,000,000 aggregate initial offering
price. The Notes will be offered on a continuing basis and will mature on a day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by the Company. Each interest bearing Note will bear interest at
either (a) a fixed rate of interest ("Fixed Rate Notes"), or (b) a rate
determined by reference to the specified Base Rate or two or more specified
Base Rates, which may in either case be adjusted by a Spread and/or Spread
Multiplier (as defined herein) ("Floating Rate Notes"). Notes may be issued at
significant discounts from their principal amount payable at Stated Maturity
(or on any prior date on which the principal or an installment of principal of
a Note becomes due and payable, whether by the declaration of acceleration,
call for redemption at the option of the Company, repayment at the option of
the holder or otherwise) (each such date, a "Maturity") ("Original Issue
Discount Notes") and some Notes may not bear interest.
Interest rates, interest rate formulae and other variable terms of the Notes
are subject to change by the Company from time to time, but no such change will
affect any Note already issued or as to which an offer to purchase has been
accepted by the Company. Interest rates offered by the Company with respect to
the Notes may differ depending upon, among other things, the aggregate
principal amount of the Notes purchased in any single transaction.
Each Note will be issued in fully registered book-entry form (a "Book-Entry
Note") or definitive form (a "Definitive Note"), in denominations of $1,000 and
integral multiples thereof, unless otherwise
S-5
<PAGE>
specified in the applicable Pricing Supplement. Book-Entry Notes may be
transferred or exchanged only through a participating member of The Depository
Trust Company (or such other depositary as is identified in an applicable
Pricing Supplement) (the "Depositary"). See "Book-Entry Notes." Registration of
transfer of Definitive Notes will be made at the Corporate Trust Office of the
Trustee. No service charge will be made by the Company, the Trustee or the
Security Registrar for any such registration of transfer or exchange of Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith (other than exchanges
pursuant to the Indenture, not involving any transfer).
Payments of principal of, and premium and interest, if any, on Book-Entry
Notes will be made by the Company through the Trustee to the Depositary. See
"Book-Entry Notes." In the case of Definitive Notes, payment of principal or
premium, if any, at the Maturity of each Definitive Note will be made in
immediately available funds upon presentation of the Definitive Note at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York, or at such other place as the Company may designate. Payment of
interest due at Maturity will be made to the person to whom payment of the
principal of the Definitive Note shall be made. Payment of interest due on
Definitive Notes other than at Maturity will be made at the Corporate Trust
Office of the Trustee or, at the option of the Company, may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register. Notwithstanding the foregoing, a holder of
$10,000,000 or more in aggregate principal amount of Definitive Notes having
the same Interest Payment Dates (as defined herein) will be entitled to receive
interest payments (other than at Maturity) by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received in
writing by the Trustee not less than 15 days prior to the applicable Interest
Payment Date.
As used herein, "Business Day" means, unless otherwise specified in the
applicable Pricing Supplement, any day other than a Saturday or Sunday or any
other day on which banks in The City of New York are generally authorized or
obligated by law or executive order to close and, with respect to Notes as to
which LIBOR is an applicable Base Rate, is also a London Business Day. As used
herein, "London Business Day" means any day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
REDEMPTION
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund. If provided in the applicable Pricing
Supplement, the Notes may be subject to redemption, in whole or in part, prior
to their Stated Maturity at the option of the Company, or through operation of
a sinking fund or analogous provisions, on notice given not less than 30 nor
more than 60 days prior to the date of redemption. Such Pricing Supplement will
set forth the terms of such redemption, including, but not limited to, the
dates on which redemption may be elected and the price (including premium, if
any) at which such Notes may be redeemed.
REPAYMENT
If provided in an applicable Pricing Supplement, the Notes will be subject to
repayment, in whole or in part, on a given day or days prior to their Stated
Maturity at the option of the holders thereof in accordance with the terms of
such Notes on their respective optional repayment dates, if any, as agreed upon
by the Company and the purchasers thereof at the time of such sale (each, an
"Optional Repayment Date"). Such Pricing Supplement will set forth the terms of
such repayment, including, but not limited to, the dates on which repayment may
be effected and the price at which such Notes may be repaid. Unless otherwise
provided in the applicable Pricing Supplement, such Notes will be repaid upon
notice given not less than 30 nor more than 60 days prior to the related
Optional Repayment Date. If no Optional Repayment Date is indicated with
respect to a Note, such Note will not be repayable at the option of the holder
thereof prior to its Stated Maturity.
S-6
<PAGE>
INTEREST
General
Unless otherwise specified in the applicable Pricing Supplement, each Note
will bear interest from the date of issue at the rate per annum or, in the case
of a Floating Rate Note, pursuant to the Base Rate or interest rate formula,
stated therein until the principal thereof is paid or made available for
payment. Unless otherwise specified in an applicable Pricing Supplement,
interest payments shall be the amount of interest accrued from and including
the next preceding Interest Payment Date in respect of which interest has been
paid (or from and including the date of issue if no interest has been paid with
respect to such Note), to but excluding the Interest Payment Date or Maturity
(an "Interest Accrual Period"), as the case may be.
Interest will be payable in arrears on each date specified in the applicable
Pricing Supplement on which an installment of interest is due and payable
(each, an "Interest Payment Date") and at Maturity. Interest will be payable to
the person in whose name a Note is registered at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, that interest payable at Maturity will be payable to the person to
whom principal shall be payable. Unless otherwise specified in an applicable
Pricing Supplement, if the original issue date of a Note is between a Regular
Record Date and the related Interest Payment Date, the initial interest payment
will be made on the Interest Payment Date following the next succeeding Regular
Record Date to the registered holder on such next succeeding Regular Record
Date. Unless otherwise specified in the applicable Pricing Supplement, the
"Regular Record Date" will be the date 15 calendar days (whether or not a
Business Day) immediately preceding the related Interest Payment Date.
Fixed Rate Notes
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable semiannually on each April 1 and October 1 and
at Maturity. If any Interest Payment Date or Maturity of a Fixed Rate Note
falls on a day that is not a Business Day, the related payment of principal,
premium, if any, and interest will be made on the next succeeding Business Day
as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be. Unless otherwise specified in an
applicable Pricing Supplement, interest on each Fixed Rate Note will be
calculated on the basis of a 360-day year of twelve 30-day months.
Floating Rate Notes
Unless otherwise specified in an applicable Pricing Supplement, Floating Rate
Notes will be issued as described below. Interest on Floating Rate Notes will
be determined by reference to a "Base Rate," which may be one or more of (a)
the Certificate of Deposit Rate, in which case such Note will be a "Certificate
of Deposit Rate Note;" (b) the Commercial Paper Rate, in which case such Note
will be a "Commercial Paper Rate Note;" (c) the Federal Funds Rate, in which
case such Note will be a "Federal Funds Rate Note;" (d) LIBOR, in which case
such Note will be a "LIBOR Note;" (e) the Prime Rate, in which case such Note
will be a "Prime Rate Note;" (f) the Treasury Rate, in which case such Note
will be a "Treasury Rate Note;" or (g) such other Base Rate or interest rate
formula as may be set forth in the applicable Pricing Supplement. In addition,
a Floating Rate Note may bear interest by reference to two or more Base Rates
determined in the same manner as the Base Rates are determined for the types of
Notes described above.
The applicable Pricing Supplement and the related Note will specify the Base
Rate or Rates and the Spread and/or Spread Multiplier, if any, and the maximum
or minimum interest rate limitation, if any, applicable to each Floating Rate
Note. In addition, such Pricing Supplement and the applicable Note will define
or particularize for each Floating Rate Note the following terms, if
applicable: Initial
S-7
<PAGE>
Interest Rate, Index Maturity, Interest Payment Dates, Interest Reset Dates,
Interest Rate Reset Period, Regular Record Dates, and Calculation Agent (if
other than The Chase Manhattan Bank (National Association)).
The interest rate on each Floating Rate Note will be calculated by reference
to the specified Base Rate or two or more specified Base Rates, in either case
plus or minus the Spread, if any, and/or multiplied by the Spread Multiplier,
if any. The "Spread" is the number of basis points to be added to or subtracted
from the related Base Rate or Rates applicable to such Floating Rate Note. The
"Spread Multiplier" is the percentage of the related Base Rate or Rates
applicable to such Floating Rate Note by which such Base Rate or Rates will be
multiplied to determine the applicable interest rate on such Floating Rate
Note. The "Index Maturity" is the period to maturity of the instrument or
obligation with respect to which the related Base Rate or Rates is calculated.
The Spread, Spread Multiplier, Index Maturity and other variable terms of the
Floating Rate Notes are subject to change by the Company from time to time, but
no such change will affect any Floating Rate Note previously issued or as to
which an offer has been accepted by the Company.
Each applicable Pricing Supplement will specify whether the rate of interest
on each Floating Rate Note will be reset daily, weekly, monthly, quarterly,
semiannually, annually or such other period (each, an "Interest Reset Period"),
and the dates on which such interest rate will be reset (each, an "Interest
Reset Date"). Unless otherwise specified in an applicable Pricing Supplement,
the Interest Reset Date will be, in the case of Floating Rate Notes which reset
(a) daily, each Business Day; (b) weekly, the Wednesday of each week (with the
exception of weekly reset Treasury Rate Notes which will reset the Tuesday of
each week, except as specified below); (c) monthly, the third Wednesday of each
month; (d) quarterly, the third Wednesday of March, June, September and
December of each year, (e) semiannually, the third Wednesday of each of the two
months specified in the applicable Pricing Supplement; and (f) annually, the
third Wednesday of the month specified in the applicable Pricing Supplement. If
any Interest Reset Date for any Floating Rate Note would otherwise be a day
that is not a Business Day, such Interest Reset Date will be postponed to the
next succeeding Business Day, except that in the case of a LIBOR Note (or a
Note for which the interest rate is determined with reference to LIBOR), if
such Business Day is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day.
The interest rate applicable to each Interest Accrual Period commencing on
the Interest Reset Date applicable to such Interest Accrual Period will be the
rate determined on the applicable "Interest Determination Date." Unless
otherwise specified in an applicable Pricing Supplement, the Interest
Determination Date with respect to the Certificate of Deposit Rate, Commercial
Paper Rate, Federal Funds Rate and the Prime Rate will be the second Business
Day preceding each Interest Reset Date for the related Note; and the Interest
Determination Date with respect to LIBOR will be the second London Business Day
preceding each Interest Reset Date. With respect to the Treasury Rate, unless
otherwise specified in an applicable Pricing Supplement, the Interest
Determination Date will be the day of the week in which the Interest Reset Date
falls on which Treasury Bills (as defined below) normally would be auctioned
(Treasury Bills are normally sold at auction on Monday of each week, unless
that day is a legal holiday, in which case the auction is normally held on the
following Tuesday, except that such auction may be held on the preceding
Friday); provided, however, that if as a result of a legal holiday an auction
is held on the Friday of the week preceding the related Interest Reset Date,
the related Interest Determination Date shall be such preceding Friday; and
provided, further, that if an auction shall fall on any Interest Reset Date,
then the related Interest Reset Date shall instead be the first Business Day
following such auction. The Interest Determination Date pertaining to a
Floating Rate Note the interest rate of which is determined with reference to
two or more Base Rates will be the latest Business Day which is at least two
Business Days prior to the Interest Reset Date for such Note on which each Base
Rate is determinable. Each Base Rate shall be determined and compared on such
date, and the applicable interest rate shall take effect on the related
Interest Reset Date.
S-8
<PAGE>
A Floating Rate Note may also have either or both of the following: (a) a
maximum limit, or ceiling, on the rate of interest which may accrue during any
Interest Accrual Period, and (b) a minimum limit, or floor, on the rate of
interest which may accrue during any Interest Accrual Period. In addition to
any maximum interest rate that may be applicable to any Floating Rate Note
pursuant to the above provisions, the interest rate on Floating Rate Notes will
in no event be higher than the maximum rate permitted by New York law, as the
same may be modified by United States law of general application.
Except as provided below or in the applicable Pricing Supplement, interest
will be payable, in the case of Floating Rate Notes which reset (a) daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Pricing Supplement; (b) quarterly, on the third Wednesday of
March, June, September and December of each year; (c) semiannually, on the
third Wednesday of each of the two months of each year specified in the
applicable Pricing Supplement; and (d) annually, on the third Wednesday of the
month specified in the applicable Pricing Supplement and, in each case, at
Maturity.
If any Interest Payment Date (other than at Maturity) with respect to a
Floating Rate Note falls on a day that is not a Business Day, such Interest
Payment Date will be the following Business Day, except that, in the case of a
LIBOR Note (or a Note for which the interest rate is determined with reference
to LIBOR), if such Business Day is in the next succeeding calendar month, such
Interest Payment Date shall be the immediately preceding Business Day. If the
Maturity of a Floating Rate Note falls on a day that is not a Business Day, the
payment of principal, premium, if any, and interest will be made on the next
succeeding Business Day, and no interest on such payment shall accrue for the
period from and after such Maturity.
The interest rate in effect with respect to a Floating Rate Note on each day
that is not an Interest Reset Date will be the interest rate determined as of
the Interest Determination Date pertaining to the immediately preceding
Interest Reset Date and the interest rate in effect on any day that is an
Interest Reset Date will be the interest rate determined as of the Interest
Determination Date pertaining to such Interest Reset Date, subject in either
case to any maximum or minimum interest rate limitation referred to above;
provided, however, that the interest rate in effect with respect to a Floating
Rate Note for the period from the date of issue to the first Interest Reset
Date will be the Initial Interest Rate (as defined herein) specified in the
applicable Pricing Supplement and the related Note.
With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day from the date of issue, or from the last date to which interest has been
paid, to the date for which accrued interest is being calculated. Unless
otherwise specified in an applicable Pricing Supplement, the interest factor
for each such day is computed by dividing the interest rate applicable to such
day by 360, in the case of Certificate of Deposit Rate Notes, Commercial Paper
Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime Rate Notes, or by
the actual number of days in the year in the case of Treasury Rate Notes.
Unless otherwise specified in the applicable Pricing Supplement, the interest
factor for Notes for which the interest rate is calculated with reference to
the lowest of two or more Base Rates will be calculated in each period in the
same manner as if only the lowest of the applicable Base Rates applied.
All percentages resulting from any calculation on Floating Rate Notes will be
rounded to the nearest one hundred-thousandth of a percentage point with five
one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts
used in or resulting from such calculation on Floating Rate Notes will be
rounded to the nearest cent (with one-half cent being rounded upward).
Unless otherwise specified in the applicable Pricing Supplement, The Chase
Manhattan Bank (National Association) will be the "Calculation Agent." Upon the
request of the holder of any Floating
S-9
<PAGE>
Rate Note, the Calculation Agent will provide the interest rate then in effect
and, if determined, the interest rate that will become effective as a result of
a determination made for the next Interest Reset Date with respect to such
Floating Rate Note. Unless otherwise specified in an applicable Pricing
Supplement, the "Calculation Date," if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date, or, if any such day is not a Business Day, the
next succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or the Maturity, as the case may be.
The interest rate in effect with respect to a Floating Rate Note from the
date of issue to the first Interest Reset Date (the "Initial Interest Rate")
will be specified in the applicable Pricing Supplement. The interest rate for
each subsequent Interest Reset Date will be determined by the Calculation Agent
as follows:
Certificate of Deposit Rate. Certificate of Deposit Rate Notes will bear
interest at the interest rates (calculated with reference to the Certificate of
Deposit Rate and the Spread and/or Spread Multiplier, if any) specified in such
Certificate of Deposit Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Certificate
of Deposit Rate" means, with respect to any Interest Determination Date
relating to a Certificate of Deposit Rate Note or any Interest Determination
Date for a Floating Rate Note for which the interest rate is determined with
reference to the Certificate of Deposit Rate (a "Certificate of Deposit Rate
Interest Determination Date"), the rate on such date for negotiable
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15(519), Selected Interest Rates" or
any successor publication ("H.15(519)") under the heading "CDs (Secondary
Market)." In the event such rate is not published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Certificate of Deposit Rate
Interest Determination Date, then the Certificate of Deposit Rate will be the
rate on such Certificate of Deposit Rate Interest Determination Date for
negotiable certificates of deposit of the Index Maturity specified in the
applicable Pricing Supplement as published by the Federal Reserve Bank of New
York in its daily statistical release "Composite 3:30 P.M. Quotations for U.S.
Government Securities" or any successor publication ("Composite Quotations")
under the heading "Certificates of Deposit." If such rate is not published in
either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
such Calculation Date, then the Certificate of Deposit Rate on such Certificate
of Deposit Rate Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such Certificate of
Deposit Rate Interest Determination Date, of three leading nonbank dealers in
negotiable United States dollar certificates of deposit in New York, New York
(which may include one or both of the Agents) selected by the Calculation Agent
for negotiable certificates of deposit of major United States money center
banks in the market for negotiable certificates of deposit with a remaining
maturity closest to the Index Maturity specified in the applicable Pricing
Supplement in an amount that is representative for a single transaction in that
market at that time; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Certificate of Deposit Rate in effect for the applicable period
will be the Certificate of Deposit Rate in effect on such Certificate of
Deposit Rate Interest Determination Date.
Commercial Paper Rate. Commercial Paper Rate Notes will bear interest at the
interest rates (calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any) specified in such Commercial Paper
Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to
a Commercial Paper Rate Note or any Interest Determination Date for a Floating
Rate Note for which the interest rate is determined with reference to the
Commercial Paper Rate (a "Commercial Paper Rate Interest Determination Date"),
S-10
<PAGE>
the Money Market Yield (as defined below) on such date of the rate for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15(519) under the heading "Commercial Paper." In
the event that such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Commercial Paper Rate Interest
Determination Date, then the Commercial Paper Rate will be the Money Market
Yield on such Commercial Paper Rate Interest Determination Date of the rate for
commercial paper of the Index Maturity specified in the applicable Pricing
Supplement as published in Composite Quotations under the heading "Commercial
Paper" (with an Index Maturity of one month or three months being deemed to be
equivalent to an Index Maturity of 30 days or 90 days, respectively). If such
rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M.,
New York City time, on such Calculation Date, then the Commercial Paper Rate
will be calculated by the Calculation Agent and will be the Money Market Yield
of the arithmetic mean of the offered rates, as of 11:00 A.M., New York City
time, on such Commercial Paper Rate Interest Determination Date, of three
leading dealers of commercial paper in New York, New York (which may include
one or both of the Agents) selected by the Calculation Agent for commercial
paper of the specified Index Maturity placed for an industrial issuer whose
bond rating is "AA," or the equivalent, from a nationally recognized
statistical rating agency; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Commercial Paper Rate in effect for the applicable period will be
the Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point)
calculated in accordance with the following formula:
D X 360
Money Market Yield = ----------- X 100
360-(D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
Federal Funds Rate. Federal Funds Rate Notes will bear interest at the
interest rates (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in such Federal Funds Rate
Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to
a Federal Funds Rate Note or any Interest Determination Date for a Floating
Rate Note for which the interest rate is determined with reference to the
Federal Funds Rate (a "Federal Funds Rate Interest Determination Date"), the
rate of interest on that day for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)." In the event such rate is not
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Federal Funds Rate Interest Determination Date, then the Federal Funds
Rate will be the rate on such Federal Funds Rate Interest Determination Date as
published in Composite Quotations under the heading "Federal Funds/Effective
Rate." If such rate is not published in either H.15(519) or Composite
Quotations by 3:00 P.M., New York City time, on such Calculation Date, the
Federal Funds Rate on such Federal Funds Rate Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic mean of the
rates for the last transaction in overnight Federal Funds arranged by three
leading dealers of Federal Funds transactions in New York, New York (which may
include one or both of the Agents) selected by the Calculation Agent as of 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination
Date; provided, however, that if the dealers so selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate in effect for the applicable period will be the Federal Funds Rate
in effect on such Federal Funds Rate Interest Determination Date.
S-11
<PAGE>
LIBOR. LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified
in such LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note or any Interest Determination Date for a Floating Rate Note for which
the interest rate is determined with reference to LIBOR (a "LIBOR Interest
Determination Date"), LIBOR will be, as specified in the applicable Pricing
Supplement, either: (a) the arithmetic mean of the offered rates for
deposits in U.S. dollars having the Index Maturity designated in the
applicable Pricing Supplement, commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, that appear
on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on that
LIBOR Interest Determination Date, if at least two such offered rates
appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (b) the rate
for deposits in U.S. dollars having the Index Maturity designated in the
applicable Pricing Supplement commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date, that appears
on the Telerate Page 3750 as of 11:00 a.m., London time, on that LIBOR
Interest Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London interbank offered rates of
major banks). "Telerate Page 3750" means the display designated as page
"3750" on the Telerate Service (or such other page as may replace the 3750
page on that service or such other service or services as may be nominated
by the British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters
nor LIBOR Telerate is specified in the applicable Pricing Supplement, LIBOR
will be determined as if LIBOR Telerate has been specified. If fewer than
two offered rates appear on the Reuters Screen LIBO Page, or if no rate
appears on the Telerate Page 3750, as applicable, LIBOR in respect of that
LIBOR Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as specified
in (i) (a) above, or on which no rate appears on Telerate Page 3750, as
specified in (i) (b) above, as applicable, LIBOR will be determined on the
basis of the rates at which deposits in U.S. dollars having the Index
Maturity designated in the applicable Pricing Supplement are offered at
approximately 11:00 a.m., London time, on that LIBOR Interest Determination
Date by four major banks in the London interbank market selected by the
Calculation Agent ("Reference Banks") to prime banks in the London
interbank market commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is representative for a
single transaction in such market at such time. The Calculation Agent will
request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are
provided, LIBOR in respect of that LIBOR Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR in respect of that LIBOR Interest Determination Date will
be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New
York City time, on that LIBOR Interest Determination Date by three major
banks in the City of New York selected by the Calculation Agent for loans
in U.S. dollars to leading European banks having the Index Maturity
designated in the applicable Pricing Supplement commencing on the second
London Business Day immediately following that LIBOR Interest Determination
Date and in a principal amount equal to an amount of not less than
$1,000,000 that is representative for a single transaction in such market
at such time; provided, however, that if the banks selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
in effect for the applicable period will be LIBOR in effect on such LIBOR
Interest Determination Date.
S-12
<PAGE>
Prime Rate. Prime Rate Notes will bear interest at the rates (calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any)
specified in such Prime Rate Notes and the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Interest Determination Date relating to a Prime Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the Prime Rate (a "Prime Rate Interest Determination Date"), the
rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates but more than one such rate
appear on the Reuters Screen NYMF Page for such Prime Rate Interest
Determination Date, the Prime Rate shall be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by three
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, having total equity capital of at
least $500 million and being subject to supervision or examination by Federal
or State authority, selected by the Calculation Agent to provide such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid are not quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date will be the Prime
Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the NYMF
page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
Treasury Rate. Treasury Rate Notes will bear interest at the rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in such Treasury Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate Note or any Interest Determination Date for a Floating Rate Note
for which the interest rate is determined with reference to the Treasury Rate
(a "Treasury Rate Interest Determination Date"), the rate applicable to the
most recent auction of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate is published in H.15(519) under the heading "Treasury
Bills-auction average (investment)" or, if not published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Treasury Rate Interest
Determination Date, the auction average rate (expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury Bills having the
specified Index Maturity are not reported as provided by 3:00 P.M., New York
City time, on such Calculation Date, or if no such auction is held in a
particular week, then the Treasury Rate shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury Rate Interest
Determination Date, of three leading primary United States government
securities dealers (which may include one or both of the Agents) selected by
the Calculation Agent, for the issue of Treasury Bills with a remaining
maturity closest to the specified Index Maturity; provided, however, that if
the dealers selected as aforesaid by
S-13
<PAGE>
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate in effect for the applicable period will be the Treasury Rate in
effect on such Treasury Rate Interest Determination Date.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their stated redemption price at
maturity, resulting in the Notes being treated as issued with original issue
discount for federal income tax purposes. Such discounted Notes may currently
pay no interest or interest at a rate which at the time of issuance is below
market rates and such Notes may provide that upon redemption or repayment prior
to their Stated Maturity or upon acceleration of the maturity of such Notes, an
amount less than the stated principal amount thereof shall become due and
payable. If Notes are issued with original issue discount, holders of such
Notes will be required to include the amount of original issue discount in
income in accordance with applicable provisions of the Internal Revenue Code of
1986, as amended, and the Treasury Regulations promulgated thereunder. Special
federal income tax and other considerations applicable to any such discounted
Notes may be described in the applicable Pricing Supplement.
INDEXED NOTES
Notes also may be issued with the principal amount payable at Maturity,
premium, if any, and/or interest to be paid thereon to be determined with
reference to the price or prices of specified commodities or stocks, interest
rate indices, interest rate or exchange rate swap indices, the exchange rate of
one or more specified currencies (including a composite currency such as the
European Currency Unit) relative to an indexed currency, or such other price or
exchange rate or other financial index or indices as may be specified in such
Note ("Indexed Notes"), as set forth in an Indexed Note Supplement. Holders of
such Notes may receive a principal amount at Maturity that is greater than or
less than the face amount of the Notes depending upon the relative value at
Maturity of the specified indexed item. Information as to the method for
determining the principal payable at Maturity and, where applicable, certain
historical information with respect to the specified indexed item or items and
tax considerations associated with investment in Indexed Notes, will be set
forth in the applicable Indexed Note Supplement.
An investment in Notes indexed, as to principal, premium and/or interest, to
one or more values of currencies (including exchange rates and swap indices
between currencies), commodities or interest rate or other indices entails
significant risks that are not associated with similar investments in a
conventional fixed-rate debt security. If the interest rate of an Indexed Note
is so indexed, it may result in an interest rate that is less than that payable
on a conventional fixed-rate debt security issued at the same time, including
the possibility that no interest will be paid, and, if the principal of and/or
premium amount of such an Indexed Note is so indexed, the principal amount
payable in respect thereof may be less than the original purchase price of such
Indexed Note if allowed pursuant to the terms thereof, including the possibility
that no principal will be paid. The secondary market for Indexed Notes will be
affected by a number of factors, independent of the creditworthiness of the
Company and the value of the applicable currency, commodity or interest rate
index, including the volatility of the applicable currency, commodity or
interest rate index, the time remaining to the maturity of such Notes, the
amount outstanding of such Notes and market interest rates. The value of the
applicable currency, commodity or interest rate index depends on a number of
interrelated factors, including economic, financial and political events, over
which the Company has no control. Additionally, if the formula used to determine
the principal, premium or interest payable with respect to Indexed Notes
contains a multiple or leverage factor, the effect of any change in the
applicable currency, commodity or interest rate index may be increased. The
historical experience of the relevant currencies, commodities or interest rate
indices should not be taken as an indication of future performance of such
currencies, commodities or interest rate indices during the term of any Indexed
Note. Accordingly, prospective investors should consult their own financial and
legal advisors as to the risks entailed by an investment in Indexed Notes and
the suitability of Indexed Notes in light of their particular circumstances.
S-14
<PAGE>
Notwithstanding anything to the contrary contained herein or in the
Prospectus, for purposes of determining the rights of a Holder of a Note
indexed as to principal in respect of voting for or against amendments to the
Indenture and modifications and the waiver or rights thereunder, the principal
amount of such Indexed Note shall be deemed to be equal to the face amount
thereof upon issuance. The amount of principal payable at Maturity will be
specified in the applicable Pricing Supplement.
BOOK-ENTRY NOTES
Unless otherwise specified in an applicable Pricing Supplement, upon
issuance, all Book-Entry Notes having the same Original Issue Date, Stated
Maturity and otherwise having identical terms and provisions will be
represented by a single global security (each, a "Global Security"). Each
Global Security representing Book-Entry Notes will be deposited with, or on
behalf of, the Depositary. Except as set forth below, a Global Security may not
be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any nominee to a successor of
the Depositary or a nominee of such successor.
The Depository Trust Company, New York, New York ("DTC"), will be the initial
Depositary with respect to the Notes. DTC has advised the Company and the
Agents that it is a limited-purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Depositary was
created to hold securities of its participants and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers
(including the Agents), banks, trust companies, clearing corporations and
certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Persons who are not participants may beneficially own securities held by DTC
only through participants.
Upon the issuance of the Notes represented by a Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
principal amounts of the Notes represented by such Global Security to the
accounts of participants. The accounts to be credited will be designated by the
Agents or underwriters of such Book-Entry Notes, as the case may be. Ownership
of beneficial interests in the Global Security will be limited to participants
or persons that hold interests through participants. Ownership of beneficial
interest in the Notes will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the Depositary (with respect to
interests of participants in the Depositary), or by participants in the
Depositary or persons that may hold interests through such participants (with
respect to persons other than participants in the Depositary). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limitations and such laws may impair
the ability of holders of the Notes to transfer beneficial interests in a
Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, the Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Notes
represented by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in the Notes
represented by a Global Security will not be entitled to have the Notes
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of the Notes in definitive form and
will not be considered the owners or holders thereof under the Indenture.
S-15
<PAGE>
Payments of principal of and interest on the Notes will be made by the
Company through the Trustee to the Depositary or its nominee, as the case may
be, as the registered owner of a Global Security. Neither the Company nor the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests. The Company expects that the
Depositary, upon receipt of any payment of principal or interest in respect of
a Global Security, will credit the accounts of the related participants with
payment in amounts proportionate to their respective holdings in principal
amount of beneficial interest in such Global Security as shown on the records
of the Depositary. The Company also expects that payments by participants to
owners of beneficial interests in a Global Security will be governed by
standing customer instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name" and will be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by the Company within 90
days, the Company will issue Definitive Notes in exchange for the Notes
represented by such Global Security or Securities. In addition, the Company may
at any time and in its sole discretion determine to discontinue use of the
Global Security and, in such event, will issue Definitive Notes in exchange for
the Notes represented by such Global Security or Securities. Notes so issued
will be issued in denominations of $1,000 and integral multiples thereof and
will be issued in registered form only, without coupons.
UNITED STATES TAXATION
Set forth below is a summary of certain U.S. federal income tax
considerations of importance to holders of the Notes. The summary concerns
holders who hold the Notes as capital assets and not special classes of
holders, such as dealers in securities or currencies, persons who hold the
Notes as a hedge against currency risks or who hedge any currency risks of
holding the Notes, tax-exempt investors or U.S. holders (as defined below)
whose functional currency is other than the U.S. dollar. The summary also does
not deal with holders of the Notes other than original purchasers. The
discussion below is based upon the United States Internal Revenue Code of 1986,
as amended (the "Code"), and final, temporary and proposed U.S. Treasury
Regulations, which are subject to change possibly with retroactive effect.
Persons considering the purchase of the Notes should consult their own tax
advisors concerning the application of U.S. federal income tax laws to their
particular situations as well as any consequences arising under the laws of any
other taxing jurisdiction.
U.S. TAX CONSIDERATIONS FOR U.S. HOLDERS
General
Interest on the Notes will be taxable to a U.S. holder as ordinary interest
income at the time it is accrued or received, depending in part on the U.S.
holder's method of accounting for tax purposes.
As used herein, "U.S. holder" means a holder of a Note who is a citizen or
resident of the United States, a corporation or partnership (including an
entity treated as a corporation or partnership for U.S. tax purposes) or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, an estate or trust the income of which is
subject to U.S. federal income taxation regardless of its source, and any other
holder whose ownership of a Note is effectively connected with the conduct of a
trade or business in the United States. As used herein, the term "non-U.S.
holder" means a holder that is not a U.S. holder.
S-16
<PAGE>
Original Issue Discount
General. Notes with a term greater than one year may be issued with original
issue discount ("OID") for federal income tax purposes. OID is the excess of
the "stated redemption price at maturity" of a Note over its "issue price." If
this excess is less than 0.25% of the Note's stated redemption price at
maturity multiplied by the number of complete years to its maturity (a "de
minimis amount"), the amount of OID is considered to be zero. The "stated
redemption price at maturity" of a Note is all amounts payable on the Note
however designated other than payments of "qualified stated interest." "Issue
price" is defined as the first offering price to the public at which a
substantial amount of the Notes have been sold. "Qualified stated interest" is
stated interest that is unconditionally payable in cash or in property (other
than debt instruments of the issuer) at least annually at a single fixed rate
(a single fixed rate is a rate that takes into account the length of time
between payments). If a Note has certain interest payment characteristics
(e.g., interest holidays, interest payable in additional Notes or stepped
interest rates), then the Note may also be treated as having OID for federal
income tax purposes even if such Note was issued at an issue price which does
not otherwise result in OID.
Accrual of OID. U.S. holders are required to include OID in income before the
receipt of cash attributable to such income regardless of such U.S. holder's
method of accounting for tax purposes. The amount of OID includible in income
by the initial U.S. holder of a Note is the sum of the daily portions of OID
which accrues under a constant yield method with respect to such Note for each
day during the accrual period or portion of the accrual period in which such
U.S. holder held such Note. The amount of OID which accrues in an accrual
period is an amount equal to the excess (if any) of (a) the product of the
Note's adjusted issue price at the beginning of such accrual period and its
yield to maturity (determined on the basis of compounding at the end of each
accrual period and appropriately adjusted to take into account the length of
the particular accrual period), over (b) the sum of the qualified stated
interest payments, if any, allocable to the accrual period. The daily portion
of OID is determined by allocating to each day in any accrual period a ratable
portion of the increase during such accrual period in the Note's "adjusted
issue price." The "adjusted issue price" of a Note at the beginning of any
accrual period is the sum of the issue price of such Note plus the OID
allocable to all prior accrual periods reduced by payments on the Note other
than qualified stated interest. An "accrual period" may be of any length and
the accrual periods may even vary in length over the term of the debt
instrument, provided that each accrual period is no longer than one year and
each scheduled payment of principal or interest occurs at the first day or the
last day of an accrual period. Under these rules, U.S. holders will generally
have to include in income increasingly greater amounts of OID in successive
accrual periods.
Floating Rate Notes. OID for any accrual period on a Floating Rate Note is
determined under special rules. The application, if any, of these rules will be
described in an applicable Pricing Supplement.
Notes with put and/or call options. Certain notes (i) may be redeemable at
the option of the Company prior to their stated maturity--i.e., a "call
option," and /or (ii) may be repayable at the option of the holder prior to
their stated maturity, i.e., a "put option." Notes containing such features may
be subject to special rules. The application, if any, of these rules will be
described in the related Pricing Supplement.
Acquisition Discount on Short Term Notes
Notes that have a fixed maturity of one year or less ("Short-Term Notes") may
be issued with acquisition discount. U.S. holders who are accrual basis
taxpayers, cash basis taxpayers making an appropriate election under the Code
and taxpayers in certain specified classes will be required to include
acquisition discount in income currently in an amount and manner similar to
that applicable to OID. Individuals and non-electing cash basis taxpayers
holding Short-Term Notes are not required to
S-17
<PAGE>
include accrued acquisition discount in income until the cash payments
attributable to such discount are received, which payments will be treated as
ordinary income. A U.S. holder who does not recognize acquisition discount
currently will be required to recognize ordinary income on the sale, exchange
or retirement of the Short-Term Note to the extent of accrued acquisition
discount, and may be subject to limitations on the deductibility of interest on
indebtedness incurred to purchase or carry such Notes.
Market Discount and Premium
If a U.S. holder purchases a Note that was not issued with OID, for an amount
that is less than its issue price (or, in the case of a subsequent purchaser,
its stated redemption price at maturity) or, in the case of a Note that was
issued with OID, its adjusted issue price as of the purchase date, the amount
of the difference will be treated as a "market discount." If the market
discount exceeds a de minimis amount, any gain on the sale, exchange or
retirement of the Note is treated as ordinary interest income at the time of
the disposition to the extent of the accrued market discount, unless the U.S.
holder elects to accrue market discount in income on a current basis. In
addition, a U.S. holder is required to defer deductions until maturity of the
Note or its earlier disposition for a portion of such holder's interest expense
on any indebtedness incurred to purchase or carry such Note. Market discount is
normally accrued on a straight-line basis, but a holder may elect to use a
constant yield method.
If a U.S. holder acquires a Note issued with OID for an amount above the
adjusted issue price, such U.S. holder may be considered to have purchased the
Note at an "acquisition premium." The amount of OID which such holder must
otherwise include in its gross income with respect to the Note for any taxable
year (or portion thereof in which the holder holds the Note) will be reduced
(but not below zero) by the portion of acquisition premium properly allocable
to such period.
If a U.S. holder acquires a Note for an amount that is greater than the
stated redemption price at maturity, such U.S. holder will be considered to
have purchased the Note with "amortizable bond premium" equal to the amount of
such excess. Such a U.S. holder may elect to amortize this premium over the
remaining life of the Note (using a constant yield method) as an offset to
income otherwise includible in the U.S. holder's income.
Election to Treat all Interest and Premium as OID
U.S. holders utilizing the accrual method of accounting may generally elect
to include all interest and discount (including stated interest, acquisition
discount, OID, de minimis OID, market discount, de minimis market discount, and
unstated interest, as adjusted by any amortizable bond premium or acquisition
premium on a debt instrument) in income by using the constant yield method
applicable to OID, subject to certain limitations and exceptions.
Disposition or Repayment of a Note
U.S. holders of Notes recognize gain or loss on the sale, redemption,
exchange or other disposition of a Note. This gain or loss is measured by the
difference between the amount realized (except to the extent attributable to
accrued interest) and the U.S. holder's adjusted tax basis in the Note. A U.S.
holder's adjusted tax basis for determining gain or loss on a sale or
disposition of a Note generally will be such holder's cost increased by any
amounts included in income, other than qualified stated interest, and reduced
by any amortized premium and cash received other than qualified stated
interest. Gain or loss on the sale, exchange or redemption of a Note generally
will be long-term capital gain or loss if the Note has been held for more than
one year, except to the extent that gain represents accrued market or
acquisition discount not previously included in the U.S. holder's income.
S-18
<PAGE>
Foreign Currency Notes
Notes may be denominated in, or interest or principal on the Notes may be
determined by reference to, a foreign currency or foreign currency unit (e.g.,
the ECU) ("Foreign Currency Notes"). OID for any accrual period on a Foreign
Currency Note is determined under special rules. The application of these rules
will be described in an applicable Pricing Supplement.
U.S. TAX CONSIDERATIONS FOR FOREIGN HOLDERS
Set forth below is a summary of certain U.S. federal income tax consequences
for non-U.S. holders of the Notes.
Assuming certain certification requirements are satisfied (which generally
can be satisfied by providing Internal Revenue Service Form W-8, identifying
the beneficial owner of the instrument as a non-U.S. person and disclosing the
non-U.S. holder's name and address), under current U.S. federal income and
estate tax laws:
(i) Payments of principal and interest (including OID) on a Note to a
non-U.S. holder will not be subject to U.S. federal income tax or
withholding tax. provided that, in the case of interest and OID, (a) the
payments are not effectively connected with a U.S. trade or business, (b)
the holder does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to
vote, (c) the holder is not a controlled foreign corporation related to the
Company through stock ownership, and (d) the holder is not a bank receiving
interest pursuant to a loan agreement entered into in the ordinary course
of its trade or business;
(ii) A non-U.S. holder of a Note will not be subject to U.S. federal
income tax on gain realized on the sale, exchange or redemption of a Note
if such gain is not effectively connected with a U.S. trade or business
and, in the case of a non-U.S. holder who is an individual, such holder is
not present in the United States for a total of 183 days or more during the
taxable year in which such gain is realized; and
(iii) A Note held by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to U.S.
federal estate tax as a result of such individual's death, unless the
individual actually or constructively owns 10% or more of the total
combined voting power of all classes of stock of the Company entitled to
vote or the interest received on such Note is effectively connected with
the conduct by such holder of a U.S. trade or business.
BACKUP WITHHOLDING
Under current U.S. federal income tax law, a 31% "backup" withholding tax is
applied to certain interest and principal payments made to, and to the proceeds
of sales before maturity by, certain U.S. persons if such persons fail to
supply taxpayer identification numbers and other information. Interest paid
with respect to a Note and received by a non-U.S. holder will not be subject to
backup withholding if the person required to withhold has received appropriate
certification statements. The applicable certification procedures require that
the holder certify as to its non-U.S. status and provide its name and address.
S-19
<PAGE>
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution Agreement,
the Notes are being offered on a continuing basis for sale by the Company
through Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Agents"), who have agreed to use reasonable efforts to
solicit purchases of the Notes. The Company will have the sole right to accept
offers to purchase Notes and may reject any proposed purchase of Notes in whole
or in part. The Agents shall have the right, in their discretion reasonably
exercised, to reject any offer to purchase Notes, in whole or in part. The
Company will pay the Agents a commission of from 0.125% to 0.750% of the
principal amount of Notes, depending upon maturity, for sales made through them
as Agents.
The Company may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the purchasing
Agents may receive from the Company a commission or discount equivalent to that
set forth on the cover page hereof in the case of any such principal
transaction in which no other discount is agreed. Such Notes may be resold at
prevailing market prices, or at prices related thereto, at the time of such
resale, as determined by the Agents. The Company reserves the right to sell
Notes directly on its own behalf. No commission will be payable on any Notes
sold directly by the Company.
In addition, the Agents may offer the Notes they have purchased as principal
to other dealers. The Agents may sell Notes to any dealer at a discount and,
unless otherwise specified in the applicable Pricing Supplement, such discount
allowed to any dealer may include all or part of the discount to be received
from the Company. Unless otherwise indicated in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be purchased by such
Agent at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to any agency sale of a Note of
identical maturity. After the initial public offering of Notes to be resold to
investors and other purchasers on a fixed public offering price basis, the
public offering price, concession and discount may be changed.
The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Act"). The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Act. The Company has agreed to reimburse the Agents for
certain expenses.
The Agents may sell to or through dealers who may resell to investors, and
the Agents may pay all or part of their discount or commission to such dealers.
Such dealers may be deemed to be "underwriters" within the meaning of the Act.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately
available funds in The City of New York.
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
may be customers of, engage in transactions with and perform services for the
Company in the ordinary course of business.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given as
to the existence or liquidity of the secondary market for the Notes.
S-20
<PAGE>
PROSPECTUS
- ----------
NATIONWIDE HEALTH PROPERTIES, INC.
DEBT SECURITIES
----------------
Nationwide Health Properties, Inc. (the "Company") may offer from time to
time its senior unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness (the "Debt Securities"), at an aggregate
initial offering price of not more than $100,000,000. The Debt Securities may
be offered as a single series or as two or more separate series in amounts, at
prices and on terms to be determined in light of market conditions at the time
of sale and to be set forth in a Prospectus Supplement or Prospectus
Supplements.
The terms of each series of Debt Securities, including, where applicable, the
specific designation, aggregate principal amount, authorized denominations,
maturity, rate or rates and time or times of payment of any interest, any terms
for optional or mandatory redemption or payment of additional amounts or any
sinking fund provisions, the initial public offering price, the proceeds to the
Company and any other specific terms in connection with the offering and sale
of such series will be set forth in a Prospectus Supplement or Prospectus
Supplements.
The Debt Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See
"Plan of Distribution." If any agents of the Company or any underwriters are
involved in the sale of any Debt Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement. The net proceeds to the Company from such sale also will be set
forth in the applicable Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
----------------
This Prospectus may not be used to consummate sales of Debt Securities unless
accompanied by a Prospectus Supplement.
----------------
The date of this Prospectus is January 8, 1993.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected and copied at the Public Reference Room of the Commission, Room 1024,
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices at 75 Park Place, Room 1228, New York, New York 10007 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60621. Copies of such material may also be obtained by mail from the
Public Reference Section of the Commission, at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 at prescribed rates. Copies of such reports and
other information may also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, on which other
securities of the Company are listed.
The Company has filed with the Commission a Registration Statement on Form S-
3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus and the accompanying Prospectus Supplement do not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement, which may be examined without charge at the public reference
facilities maintained by the Commission at the Public Reference Room of the
Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies
thereof may be obtained from the Commission upon payment of the prescribed
fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1991, its Quarterly Reports on Form 10-Q for the quarters ended March 31,
1992, June 30, 1992, and September 30, 1992, and its Current Reports on Form 8-
K, dated May 29, 1992 and November 23, 1992 are incorporated in and made a part
of this Prospectus. All documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of the offering of the
Debt Securities shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing such documents. A statement contained
herein, in a Prospectus Supplement or in a document incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, in a Prospectus Supplement or in any subsequently filed
document which is incorporated by reference herein, modifies or supersedes such
statement. Any such statements so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR
ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO
SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO THE DOCUMENTS THAT THIS PROSPECTUS INCORPORATES). REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO NATIONWIDE HEALTH PROPERTIES, INC., 4675 MACARTHUR COURT,
SUITE 1170, NEWPORT BEACH, CALIFORNIA 92660, ATTENTION: MARK L. DESMOND
(TELEPHONE NUMBER (714) 251-1211).
2
<PAGE>
THE COMPANY
Nationwide Health Properties, Inc. (the "Company"), a Maryland corporation
organized in October 1985, invests primarily in health care facilities and
provides financing to health care providers. As of October 31, 1992, the
Company had investments in 154 facilities, 152 of which are long-term care
facilities and two of which are rehabilitation hospitals. The facilities are
located in 28 states.
As of October 31, 1992, the Company owned 115 facilities which were leased to
health care operating companies under "net" leases which are accounted for as
operating leases. The leases have initial terms ranging from 10 to 14 years,
and most of the leases have eight five-year renewal options. The Company earns
fixed monthly minimum rents and may earn periodic additional rents. The
additional rent payments are generally computed as a percentage of facility net
patient revenues in excess of base amounts. The base amounts, in most cases,
are net patient revenues for the first year of the lease. Under the terms of
the leases, the lessee is responsible for all maintenance, repairs, taxes and
insurance on the leased properties.
As of October 31, 1992, the Company held 20 mortgage loans secured by 39
long-term care facilities. As of October 31, 1992, the mortgage loans had an
aggregate outstanding balance of approximately $80,300,000, with individual
outstanding balances ranging from approximately $1,035,000 to $10,321,000. The
Company's investment in the mortgage loans as of October 31, 1992, was net of a
discount of approximately $10,000,000. The stated interest rates range from
approximately 9.2% to 12.6%, and the mortgage loans have balloon maturities
ranging from 1993 to 1999.
The Company anticipates providing lease or mortgage financing for health care
facilities to qualified operators and acquiring additional health care related
facilities, including long-term care facilities and acute care and
rehabilitation hospitals. Financing for such future acquisitions may be
provided by borrowings and the assumption of secured indebtedness. In addition,
the Company may finance acquisitions of additional facilities with the proceeds
of public or private offerings of debt or equity, depending upon market
conditions.
The Company operates so as to qualify as a real estate investment trust
("REIT") under Sections 856-860 of the Internal Revenue Code of 1986, as
amended (the "Code"). As a REIT, the Company distributes to its shareholders
substantially all of its cash flow from operations and, in any event, at least
95% of its taxable income.
As of October 31, 1992, 62 of the 115 owned facilities were being leased to
and operated by subsidiaries of Beverly Enterprises, Inc. (Beverly Enterprises,
Inc. and its subsidiaries are referred to herein as "Beverly"). Beverly has
furnished certain guaranties with respect to the obligations of its operating
subsidiaries under their leases and with respect to 15 of the leases of
properties operated by parties unaffiliated with Beverly. Based on public
reports, Beverly's revenues and net income for the year ended December 31, 1991
were $2,320,904,000 and $29,172,000, respectively. Beverly stockholders' equity
at December 31, 1991 was $599,109,000. Rental income from Beverly accounted for
92%, 82% and 62% of the Company's rental revenues for the years ended December
31, 1989, 1990 and 1991, respectively.
The Company's principal executive offices are located at 4675 MacArthur
Court, Suite 1170, Newport Beach, California 92660, and its telephone number is
(714) 251-1211.
3
<PAGE>
SELECTED FINANCIAL INFORMATION
The following selected financial information for each of the three years
ended December 31, 1991 is derived from the Company's 1991 and 1990 Annual
Reports on Form 10-K. The selected financial information for the periods ended
September 30, 1991 and September 30, 1992 is derived from the Company's
Quarterly Reports on Form 10-Q for the periods ended September 30, 1992 and
1991. The Company's consolidated financial statements in the 1991 and 1990
Annual Reports on Form 10-K have been audited by Arthur Andersen & Co.,
independent accountants. The selected financial information set forth below
should be read in conjunction with the detailed information, consolidated
financial statements and related notes and applicable "Management's Discussion
and Analysis" included in the 1991 and 1990 Annual Reports on Form 10-K and the
Quarterly Reports on Form 10-Q for the periods ended September 30, 1992 and
1991.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------- ---------------------
1989 1990 1991 1991 1992
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues:
Base rent............... $ 31,871 $ 26,981 $ 31,439 $ 22,221 $ 28,194
Additional rent......... 2,199 2,618 4,063 2,902 4,460
Interest and other in-
come................... 257 1,847 876 731 2,891
Gain on sale of facili-
ties................... 990 92 -- -- 138
-------- -------- -------- -------- --------
35,317 31,538 36,378 25,854 35,683
Expenses:
Depreciation & amortiza-
tion................... 7,155 6,401 7,585 5,355 6,778
Interest................ 14,353 5,640 4,849 2,895 6,096
General and administra-
tive................... 2,169 2,389 2,403 1,732 2,211
-------- -------- -------- -------- --------
23,677 14,430 14,837 9,982 15,085
-------- -------- -------- -------- --------
Income before extraordi-
nary items............... 11,640 17,108 21,541 15,872 20,598
Extraordinary charge...... -- -- (3,460)(1) (3,460)(1) --
-------- -------- -------- -------- --------
Net income................ $ 11,640 $ 17,108 $ 18,081 $ 12,412 $ 20,598
======== ======== ======== ======== ========
Financial Position (at end
of period):
Total assets............ $214,191 $229,947 $305,837 $290,357 $387,423
Notes and bonds payable. 10,686 39,352 33,124 33,353 32,362
Bank borrowings......... 47,931 -- -- 33,400 1,500
Senior subordinated con-
vertible debt.......... -- -- 50,000 -- 45,015
Stockholders equity..... 151,484 189,140 218,772 220,006 301,374
</TABLE>
- --------
(1) The Company incurred an extraordinary charge of $3,460,000 representing the
write-off of unamortized deferred financing costs and fees in connection
with the prepayment of a substantial portion of the Company's secured debt.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------ SEPTEMBER 30,
1987 1988 1989 1990 1991 1992
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio.............................. 2.49 1.78 1.81 4.03 5.44 4.38
</TABLE>
4
<PAGE>
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, the net proceeds from the sale of the Debt Securities offered
from time to time hereby will be used for general corporate purposes, including
the repayment of short term bank lines of credit and investments in health care
related properties. The Company uses its existing revolving bank credit
facility primarily to provide short term financing for the acquisitions of
health care related facilities. To the extent that the Company has amounts
outstanding under the credit facility at the time it issues Debt Securities, it
is currently required to use the proceeds of such issuance to repay amounts
outstanding under the credit facility.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time as a single series or in
two or more separate series. The following description of the terms of the Debt
Securities sets forth certain general terms and provisions of the Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Debt Securities offered by any Prospectus Supplement (the "Offered Debt
Securities"), and the extent to which such general provisions may apply to the
Offered Debt Securities, will be described in a Prospectus Supplement relating
to such Offered Debt Securities.
The Debt Securities will be issued under an indenture, dated as of November
16, 1992, as such indenture may be amended from time to time (the "Indenture"),
between the Company and The Chase Manhattan Bank (National Association), as
trustee (the "Trustee"). The terms of the Debt Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and holders of
the Debt Securities are referred to the Indenture and the Trust Indenture Act
for a statement thereof. The following summary of certain provisions of the
Debt Securities and of the Indenture does not purport to be complete and is
qualified in its entirety by reference to the Indenture, a copy of which has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part. Capitalized terms used but not defined herein have the meanings
given to them in the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and Debt Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by the
Company for each series. As of the date of this Prospectus, the Company has
authorized the issuance under the Indenture of up to $100,000,000 aggregate
initial offering price of Debt Securities of which none has been issued.
The Debt Securities will be unsecured general obligations of the Company and
will rank pari passu with all other unsecured and unsubordinated indebtedness
of the Company from time to time outstanding.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the terms of the Offered Debt Securities, including: (i) the aggregate
principal amount and denominations of such Debt Securities; (ii) the date on
which such Debt Securities will mature; (iii) the date or dates on which the
principal of such Debt Securities is payable, if other than on maturity, or the
method of determination thereof; (iv) the rate or rates per annum (which may be
fixed or variable), or formula for determining such rate or rates, at which
such Debt Securities will bear interest, if any; (v) the dates on which such
interest, if any, will be payable; (vi) the Place of Payment or transfer with
respect to such Debt Securities; (vii) the provisions for redemption or
repayment of such Debt Securities, if any, including the redemption and/or
repayment price or prices and any remarketing arrangements relating thereto;
(viii) the sinking fund requirements or amortization provisions, if any, with
respect to such Debt Securities; (ix) whether such Debt Securities are
denominated or provide for payment in United States dollars or a foreign
5
<PAGE>
currency or units of two or more currencies; (x) the form (registered or bearer
or both) in which such Debt Securities may be issued and any restrictions
applicable to the exchange of one form for another and to the offer, sale and
delivery of Debt Securities in either form; (xi) if the Company will pay
additional amounts ("Additional Amounts") in respect of Debt Securities held by
a person who is not a U.S. person in respect of specified taxes, assessments or
other governmental charges, under what circumstances the Company will pay such
Additional Amounts and whether the Company has the option to redeem the
affected Debt Securities rather than pay such Additional Amounts; (xii) whether
such Debt Securities will be issued in whole or in part in the form of one or
more global securities and, in such case, the Depositary for such global
securities; (xiii) the title of such Debt Securities and the series of which
such Debt Securities shall be a part; and (xiv) any other terms of such Debt
Securities. Reference is made to the Prospectus Supplement for the terms of the
Debt Securities being offered thereby. The variable terms of the Debt
Securities are subject to change from time to time, but no such change will
affect any Debt Security already issued or as to which an offer to purchase has
been accepted by the Company.
The provisions of the Indenture described above provide the Company with the
ability, in addition to the ability to issue Debt Securities with terms
different from those of Debt Securities previously issued, to "reopen" a
previous issue or a series of Debt Securities and issue additional Debt
Securities of such issue or series.
Unless otherwise indicated in a Pricing Supplement, the covenants contained
in the Indenture and the Notes as described below would not necessarily afford
Holders of the Notes protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect Holders.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and premium and interest, if any, on Debt Securities will be made
at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment
of any interest may be made (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer to an account maintained by the Person entitled thereto as
specified in the Security Register. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Debt
Securities will be made to the Person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee, acting through its Corporate Trust Office, will be designated as the
Company's sole Paying Agent for payments with respect to Debt Securities of
such series. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that the Company will be required
to maintain a Paying Agent in each Place of Payment for such series. All moneys
paid by the Company to a Paying Agent for the payment of principal of or
premium or interest, if any, on any Debt Security which remain unclaimed at the
end of two years after such principal, premium or interest shall have become
due and payable will be repaid to the Company, and the Holder of such Debt
Security or any coupon will thereafter look only to the Company for payment
thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole by the Depositary for such Debt Security to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such successor.
If any Debt
6
<PAGE>
Securities of a series are issuable in global form, the applicable Prospectus
Supplement will describe the circumstances, if any, under which beneficial
owners of interests in any such global Debt Security may exchange such
interests for definitive Debt Securities of such series and of like tenor and
principal amount in any authorized form and denomination, the manner of payment
of principal of, premium and interest, if any, on any such global Debt Security
and the material terms of the depositary arrangement with respect to any such
global Debt Security.
CERTAIN COVENANTS
The Debt Securities will not be secured by mortgage, pledge or other lien.
The Company will covenant in the Indenture not to pledge or otherwise subject
to any lien any property or assets of the Company unless the Debt Securities
are secured by such pledge or lien equally and ratably with all other
obligations secured thereby so long as such obligations shall be so secured;
provided, however, that such covenant will not apply to liens securing
obligations which do not in the aggregate at any one time outstanding exceed
10% of Consolidated Net Tangible Assets (as defined below) of the Company and
its consolidated subsidiaries and will not apply to:
(1) Any lien or charge on any property, tangible or intangible, real or
personal, existing at the time of acquisition or construction of such
property (including acquisition through merger or consolidation) or given
to secure the payment of all or any part of the purchase or construction
price thereof or to secure any indebtedness incurred prior to, at the time
of, or within one year after, the acquisition or completion of construction
thereof for the purpose of financing all or any part of the purchase or
construction price thereof;
(2) Any liens securing the performance of any contract or undertaking of
the Company not directly or indirectly in connection with the borrowing of
money, obtaining of advances or credit or the securing of debts, if made
and continuing in the ordinary course of business;
(3) Any lien to secure nonrecourse obligations in connection with the
Company's engaging in leveraged or single investor lease transactions;
(4) Any lien in favor of the United States or any state thereof or the
District of Columbia, or any agency, department or other instrumentality
thereof, to secure progress, advance, or other payments pursuant to any
contract or provision of any statute;
(5) Mechanics', materialmen's, carriers', or other like liens arising in
the ordinary course of business (including construction of facilities) in
respect of obligations which are not due or which are being contested in
good faith;
(6) Any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or
approved by law or governmental regulations, which is required by law or
governmental regulation as a condition to the transaction of any business,
or the exercise of any privilege, franchise or license;
(7) Any liens for taxes, assessments or governmental charges or levies
not yet delinquent, or liens for taxes, assessments or governmental charges
or levies already delinquent but the validity of which is being contested
in good faith;
(8) Liens (including judgment liens) arising in connection with legal
proceedings so long as such proceedings are being contested in good faith
and in the case of judgment liens, execution thereof is stayed;
(9) Liens relating to secured indebtedness of the Company outstanding as
of October 31, 1992; and
(10) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any lien referred to
in the foregoing clauses (1) to (9) inclusive, provided, however, that the
amount of any and all obligations and indebtedness secured thereby shall
not exceed the amount thereof so secured immediately prior to the time of
such
7
<PAGE>
extension, renewal or replacement and that such extension, renewal or
replacement shall be limited to all or a part of the property which secured
the charge or lien so extended, renewed or replaced (plus improvements on
such property).
"Consolidated Net Tangible Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) less (i) all current
liabilities and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expenses and other like intangibles of the
Company and its consolidated subsidiaries, all as set forth on the most recent
balance sheet of the Company and its consolidated subsidiaries prepared in
accordance with generally accepted accounting principles.
The Company also covenants in the Indenture that it will not create, assume,
incur, or otherwise become liable in respect of, any
(a) Senior Debt (as defined below) unless the aggregate outstanding
principal amount of Senior Debt of the Company will not, at the time of
such creation, assumption or incurrence and after giving effect thereto and
to any concurrent transactions, exceed the greater of (i) 150% of Capital
Base (as defined below), or (ii) 225% of Tangible Net Worth (as defined
below); and
(b) Non-Recourse Debt (as defined below) unless the aggregate outstanding
principal amount of Senior Debt and Non-Recourse Debt of the Company will
not, at the time of such creation, assumption or incurrence and after
giving effect thereto and to any concurrent transactions, exceed 225% of
Capital Base.
For the purposes of this limitation as to borrowing money, "Senior Debt"
means all Debt other than Non-Recourse Debt and Subordinated Debt; "Debt", with
respect to any Person, means (i) its indebtedness, secured or unsecured, for
borrowed money; (ii) Liabilities secured by any existing lien on property owned
by such Person; (iii) Capital Lease Obligations, and the present value of all
payments due under any arrangement for retention of title (discounted at a rate
per annum equal to the average interest borne by all outstanding Debt
Securities determined on a weighted average basis and compounded semi-annually)
if such arrangement is in substance an installment purchase or an arrangement
for the retention of title for security purposes; and (iv) guarantees of
obligations of the character specified in the foregoing clauses (i), (ii) and
(iii), to the full extent of the liability of the guarantor (discounted to
present value, as provided in the foregoing clause (iii), in the case of
guarantees of title retention arrangements); "Capital Lease" means at any time
any lease of property, real or personal, which, in accordance with generally
accepted accounting principles, would at such time be required to be
capitalized on a balance sheet of the lessee; "Capital Lease Obligation" means
at any time the amount of the liability in respect of a Capital Lease which, in
accordance with generally accepted accounting principles, would at such time be
required to be capitalized on a balance sheet of the lessee; "Person" means an
individual, partnership, corporation, joint venture, association, joint stock
company, trust, unincorporated organization, or a government or agency or
political subdivision thereof; "Non-Recourse Debt" with respect to any Person,
means any Debt secured by, and only by, property on or with respect to which
such Debt is incurred where the rights and remedies of the holder of such Debt
in the event of default do not extend to assets other than the property
constituting security therefor; "Subordinated Debt" means any unsecured Debt of
the Company which is issued or assumed pursuant to, or evidenced by, an
indenture or other instrument which contains provisions for the subordination
of such other Debt (to which appropriate reference shall be made in the
instruments evidencing such other Debt if not contained therein) to the Debt
Securities (and, at the option of the Company, if so provided, to other Debt of
the Company, either generally or as specifically designated); "Capital Base"
means, at any date, the sum of Tangible Net Worth and Subordinated Debt;
"Tangible Net Worth" means, at any date, the net book value (after deducting
related depreciation, obsolescence, amortization, valuation, and other proper
reserves) of the tangible assets of the Company at such date, minus the amount
of its Liabilities at such date; and "Liabilities" means, at any date, the
items shown as liabilities on the balance sheet of the Company, except any
items of deferred income, including capital gains.
8
<PAGE>
SUCCESSOR CORPORATION
The Indenture provides that the Company may consolidate with, or sell, lease
or convey all or substantially all of its assets to, or merge with or into, any
other Person provided, that in any such case: (i) either the Company shall be
the continuing corporation, or the successor Person shall be a corporation,
partnership or trust organized and existing under the laws of the United States
or any state thereof or the District of Columbia and shall expressly assume, by
a supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company under the
Debt Securities and the Indenture; and (ii) the Company or such successor
Person, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, lease or conveyance, be in default in the
performance of any such obligation. Subject to certain limitations in the
Indenture, the Trustee may receive from the Company an officers' certificate
and an opinion of counsel as conclusive evidence that any such consolidation,
merger, sale, lease or conveyance, and any such assumption, complies with the
provisions of the Indenture.
SUPPLEMENTAL INDENTURES
Supplemental indentures may be made by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of any series of
outstanding Debt Securities, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the Holders of each such series
affected by such modification or amendment, provided that no supplemental
indenture may, among other things, reduce the principal amount of or interest
on any Debt Securities, change the maturity date of the principal, the interest
payment dates or other terms of payment or reduce the percentage in principal
amount of outstanding Debt Securities of any series the consent of whose
Holders is necessary to modify or alter the Indenture, without the consent of
each Holder of Debt Securities affected thereby. Under certain circumstances,
supplemental indentures may also be made without the consent of the Holders.
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events and such other events as
may be established for the Debt Securities of a particular series: (i) default
in payment of any interest or Additional Amount on the Debt Securities of such
series and continuance of such default for a period of 30 days; (ii) default in
payment of principal or premium, if any, on the Debt Securities of such series;
(iii) default in the deposit of any sinking fund payment with respect to such
series when, as and if due; (iv) default in the performance, or breach, of any
covenant or warranty, of the Company in the Indenture (other than a covenant or
warranty in the Indenture solely for the benefit of a series of Debt Securities
other than such series) continued for 60 days after appropriate notice; (v)
certain events of bankruptcy, insolvency, reorganization or other similar
occurrences; and (vi) certain other events of default, if any, relating to a
particular series of Debt Securities. No Event of Default with respect to a
particular series of Debt Securities issued under the Indenture necessarily
constitutes an Event of Default with respect to any other series of Debt
Securities issued thereunder. If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of
Debt Securities of each series affected thereby may declare the Debt Securities
of such series to be due and payable. Any past default with respect to a
particular series of Debt Securities may be waived by the Holders of at least a
majority in aggregate principal amount of the outstanding Debt Securities of
such series, except in a case of failure to pay principal of, or premium, if
any, or interest on such Debt Securities for which payment had not been
subsequently made or a default in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the consent of the Holder
of each outstanding Debt Security of such series. The Company will be required
to file with the Trustee annually an Officers' Certificate as to the absence of
certain defaults. The Trustee may withhold notice to Holders of any series of
Debt Securities of any default with respect to such series (except in payment
of principal, premium, if any, or interest) if it in good faith determines that
it is in the interest of such Holders to do so.
9
<PAGE>
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders have offered to the Trustee reasonable indemnity or security against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction. Subject to provisions in the Indenture for the
indemnification of the Trustee and to certain other limitations, the Holders of
a majority in principal amount of the outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series.
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture (except for certain specified surviving obligations including,
among other things, the Company's obligation to pay the principal of, and
premium, if any, and interest on the Notes) will be discharged with respect to
the Debt Securities of any series which are due and payable or will become due
and payable at maturity or redemption within one year upon the satisfaction of
certain conditions, including the payment in full of the principal of, and
premium, if any, and interest on all of the Debt Securities of such series or
the deposit with the Trustee of an amount in cash or United States government
obligations sufficient for such payment or redemption, in accordance with the
Indenture.
DEFEASANCE
The Company may terminate certain of its obligations under the Indenture with
respect to the Debt Securities of any series, including its obligations to
comply with the restrictive covenants set forth in the Indenture (see "Certain
Covenants") with respect to the Debt Securities of such series, on the terms
and subject to the conditions contained in the Indenture, by depositing in
trust with the Trustee cash or United States government obligations sufficient
to pay the principal of, and premium, if any, and interest on the Debt
Securities of such series to their maturity in accordance with the terms of the
Indenture and the Debt Securities of such series. In such event, the Trustee
will receive an opinion of counsel stating that such deposit and termination
will not have any federal income tax consequences to the Holders.
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company; provided, however, that if the Trustee
acquires any conflicting interest it must eliminate such conflict or resign.
The Indenture provides that, in case an Event of Default has occurred and is
continuing, the Trustee is required to use the degree of care and skill of a
prudent person in the conduct of his or her own affairs in the exercise of its
powers.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
10
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities through underwriters or agents or
directly to purchasers. A Prospectus Supplement will set forth the names of
such underwriters or agents, if any, and the specific designation, aggregate
principal amount, rate and time of payment and interest, if any, redemption
and/or repayment, if any, and other terms, and any listing on a securities
exchange of the Debt Securities in respect of which this Prospectus is
delivered.
The Debt Securities may be sold to underwriters for their own account and may
be resold to the public from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. A Prospectus Supplement will set
forth any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
The Debt Securities may be sold directly by the Company, or through agents
designated by the Company from time to time. A Prospectus Supplement will set
forth any commission payable by the Company to such agent. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a
reasonable efforts basis for the period of its appointment.
The net proceeds to the Company from the sale of the Debt Securities will be
the purchase price of the Debt Securities less any such discounts or
commissions and the other attributable expenses of issuance and distribution.
The Company will agree to indemnify underwriters and agents against certain
civil liabilities, including liabilities under the Securities Act, or
contribute to payments underwriters or agents may be required to make in
respect thereof.
LEGAL MATTERS
The validity of the Debt Securities offered hereby will be passed upon for
the Company by O'Melveny & Myers. Unless otherwise specified in an applicable
Prospectus Supplement, Brown & Wood will act as counsel for the underwriters or
agents, if any. Paul C. Pringle, a partner at Brown & Wood, owns 2,500 shares
of Common Stock of the Company.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1991 and
1990 and the consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1991,
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen & Co., independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
11
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANYTIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company................................................................ S-2
Recent Developments........................................................ S-3
Use of Proceeds............................................................ S-3
Selected Consolidated Financial Information................................ S-4
Ratio of Earnings to Fixed Charges......................................... S-4
Description of the Notes................................................... S-5
United States Taxation..................................................... S-16
Supplemental Plan of Distribution.......................................... S-20
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Selected Financial Information............................................. 4
Ratio of Earnings to Fixed Charges......................................... 4
Use of Proceeds............................................................ 5
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$100,000,000
NATIONWIDE HEALTH PROPERTIES, INC.
MEDIUM-TERM NOTES
----------------
PROSPECTUS SUPPLEMENT
----------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
