<PAGE>
As filed with the Securities and Exchange Commission on August 19, 1998
Registration No. 333-17061
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________
NATIONWIDE HEALTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 95-3997619
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
(949) 718-4400
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
R. Bruce Andrews
Chief Executive Officer and President
Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
(949) 718-4400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy To:
Gary J. Singer, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, CA 92660-6429
____________________
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
Index to Exhibits is located at page 32.
1
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================
Amount Proposed maximum Proposed maximum
Title of each class of to be offering price aggregate Amount of
securities to be registered registered per unit offering price registration fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities............ (1)(2) (3) (1)(2) NA
- --------------------------------------------------------------------------------------------------
Preferred Stock (par value (1)(4) (3) (1)(3)(4) NA
$1.00 per share)..........
- --------------------------------------------------------------------------------------------------
Depositary Shares.......... (1)(4)(5) (3) (1)(3)(5) NA
- --------------------------------------------------------------------------------------------------
Common Stock (par value (1)(6) (3) (1)(3)(6) NA
$0.10 per share)..........
- --------------------------------------------------------------------------------------------------
Securities Warrants........ (1)(7) (3) (1)(3)(7) NA
- --------------------------------------------------------------------------------------------------
Total.................. $333,121,563 (3) $333,121,563 $101,260(8)
==================================================================================================
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
__________________________
(footnotes)
(1) In no event will the aggregate maximum offering price of all securities
issued pursuant to this Registration Statement exceed $333,121,563 or, if
any Debt Securities are issued with original issue discount, such greater
amount as shall result in an aggregate offering price of $333,121,563. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder. Pursuant to Rule 429 under the
Securities Act of 1933, as amended, the maximum offering price of all
securities of $333,121,563 includes $33,121,563 of securities being carried
forward from the earlier Registration Statement of Nationwide Health
Properties, Inc., on Form S-3 (No. 33-64798), which have not been sold. At
the date hereof, $124,499,992 of securities have been issued pursuant to
the Registration Statement of Nationwide Health Properties, Inc., on Form
S-3 (No. 333-17061).
(2) Subject to Footnote (1), there is being registered hereunder an
indeterminate principal amount of Debt Securities.
(3) The proposed maximum offering price per unit will be determined, from time
to time, by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder.
(4) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of shares of Preferred Stock (par value of $1.00 per
share) as may be sold, from time to time, by the Registrant. There is also
being registered hereunder an indeterminate number of shares of Preferred
Stock and Depositary Shares as shall be issuable upon conversion of Debt
Securities or exercise of Securities Warrants registered hereby.
(5) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Depositary Shares to be issued pursuant to Deposit
Agreements. In the event the Registrant elects to offer to the public
fractional interests in shares of the Preferred Stock registered hereunder,
Depositary Receipts will be distributed to those persons purchasing such
fractional interests, and the shares of Preferred Stock will be issued to
the Depositary under any such Deposit Agreement.
(6) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the Registrant. There is also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion of the Preferred Stock or Debt Securities or exercise of
Securities Warrants registered hereby.
2
<PAGE>
(7) Subject to Footnote (1), there is being registered hereunder an
indeterminate number of Debt Securities Warrants, Preferred Stock Warrants,
Depositary Shares Warrants and Common Stock Warrants representing rights to
purchase Debt Securities, Preferred Stock, Depositary Shares and Common
Stock, respectively, registered pursuant to this Registration Statement.
(8) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
amount of $33,121,563 of securities covered by the earlier Registration
Statement of Nationwide Health Properties, Inc., on Form S-3 (No. 33-64798)
is being carried forward and the corresponding fee of $10,350 was
previously paid at the time of filing. The remaining portion of the
registration fee ($90,910) was paid with the initial filing of this
Registration Statement. The registration fee has been calculated pursuant
to Rule 457(o) of the rules and regulations under the Securities Act of
1933, as amended.
THE PROSPECTUS THAT IS PART OF THIS REGISTRATION STATEMENT RELATES TO AND
CONSTITUTES A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT ON
FORM S-3 (NO. 33-64798) OF NATIONWIDE HEALTH PROPERTIES, INC., AND IT IS
INTENDED TO BE THE COMBINED PROSPECTUS REFERRED TO IN RULE 429 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
3
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement is being filed for the
purpose of carrying forward $33,121,563 of securities covered by the earlier
Registration Statement of Nationwide Health Properties, Inc., on form S-3 (No.
33-64798), pursuant to Rule 429 under the Securities Act of 1933, as amended.
<PAGE>
Prospectus
- ----------
NATIONWIDE HEALTH PROPERTIES, INC.
Securities
Nationwide Health Properties, Inc. (the "Company") may offer from time to
time, in one or more series, its unsecured debt securities (the "Debt
Securities"), warrants to purchase Debt Securities (the "Debt Securities
Warrants"), shares of its Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), warrants to purchase Preferred Stock (the "Preferred Stock
Warrants"), warrants to purchase Depositary Shares (as defined below) (the
"Depositary Shares Warrants"), shares of its Common Stock, par value $0.10 per
share (the "Common Stock") and warrants to purchase Common Stock (the "Common
Stock Warrants," and with the Debt Securities Warrants, the Preferred Stock
Warrants and the Depositary Shares Warrants, being collectively referred to
herein as the "Securities Warrants"). The Debt Securities, the Preferred Stock,
the Common Stock and the Securities Warrants are collectively referred to herein
as the "Securities." The Securities will have an aggregate offering price of
$300,000,000 and will be offered on terms to be determined at the time of
offering.
In the case of Debt Securities, the specific title, the aggregate principal
amount, the purchase price, the maturity, the rate and time of payment of any
interest, any redemption or sinking fund provisions, any conversion provisions
and any other specific term of the Debt Securities will be set forth in the
accompanying supplement to this Prospectus (the "Prospectus Supplement"). In the
case of Preferred Stock, the specific number of shares, designation, stated
value per share, liquidation preference per share, issuance price, dividend rate
(or method of calculation), dividend payment dates, any redemption or sinking
fund provisions, any conversion rights and other specific terms of the series of
Preferred Stock will be set forth in the accompanying Prospectus Supplement. In
addition, the Prospectus Supplement will describe whether interests in the
Preferred Stock will be represented by depositary shares (the "Depositary
Shares") evidenced by depositary receipts. In the case of Common Stock, the
specific number of shares and issuance price per share will be set forth in the
accompanying Prospectus Supplement. In the case of Securities Warrants, the
duration, offering price, exercise price and detachability, if applicable, will
be set forth in the accompanying Prospectus Supplement. The Prospectus
Supplement will also disclose whether the Securities will be listed on a
national securities exchange and if they are not to be listed, the possible
effects thereof on their marketability.
Securities may be sold directly, through agents from time to time or
through underwriters or dealers. If any agent of the Company or any underwriter
is involved in the sale of the Securities, the name of such agent or underwriter
and any applicable commission or discount will be set forth in the accompanying
Prospectus Supplement. See "Plan of Distribution." The net proceeds to the
Company from such sale also will be set forth in the applicable Prospectus
Supplement.
The Debt Securities, if issued, may rank on parity with all other unsecured
and unsubordinated indebtedness of the Company or may be subordinated to certain
other indebtedness of the Company. See "Description of Debt Securities."
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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 Securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is August 19, 1998
<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, proxy statements and other the information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements 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 7 World
Trade Center, 13th Floor, New York, New York 10048 and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can 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. In addition, such materials may also be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
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 any 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, 1997 and its Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 are incorporated in and made a part of this Prospectus. All
documents filed by the Company with the Commission pursuant to Sections 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 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
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., 610 Newport Center
Drive, Suite 1150, Newport Beach, California 92660, Attention: Mark L. Desmond
(telephone number (949) 718-4400).
2
<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 June 30, 1998, the Company had investments in 317
facilities located in 32 states. The facilities include 195 skilled nursing
facilities, 90 assisted living facilities, 13 continuing care retirement
communities, 14 residential care facilities for the elderly, 2 rehabilitation
hospitals and 3 medical clinics. The facilities are operated by 60 health care
providers including the following publicly traded companies: Alternative Living
Services, Inc., American Retirement Corporation, ARV Assisted Living, Inc.,
Beverly Enterprises, Inc., Harborside Healthcare Corporation, HEALTHSOUTH
Corporation, Integrated Health Services, Inc., Lexington Healthcare Group, Inc.,
Mariner Health Group, Inc., New Care Health Corporation, Paragon Health Network,
Res-Care, Inc. and Sun Healthcare Group, Inc. Of the operators of the
facilities, only Alternative Living Services, Inc. and Beverly Enterprises, Inc.
account for more than 10% of the Company's revenues.
As of June 30, 1998, the Company had direct ownership of 152 skilled
nursing facilities, 84 assisted living facilities, 8 continuing care retirement
communities, 14 residential care facilities for the elderly, 2 rehabilitation
hospitals and 3 medical clinics. All of the Company's owned facilities are
leased under "net" leases (the "Leases"), which are accounted for as operating
leases.
The Leases have initial terms ranging from 10 to 19 years, and generally
the Leases have two or more multi-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 or as a percentage of the increase in the
consumer price index. Additional rents are generally calculated and payable
monthly or quarterly. Most leases contain provisions such that the total rent
cannot decrease from one year to the next. 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 172
facilities are backed by irrevocable letters of credit or security deposits
which cover 1 to 12 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 June 30, 1998, the Company held 32 mortgage loans secured by 43
skilled nursing facilities, 6 assisted living facilities and 5 continuing care
retirement communities. As of June 30, 1998, the mortgage loans had a net book
value of approximately $196,472,000 with individual outstanding balances ranging
from approximately $601,000 to $21,400,000 and maturities ranging from 1998 to
2031.
As of June 30, 1998, 49 of the Company's owned facilities and 4 of the
facilities securing the Company's mortgage loans were being operated by
subsidiaries of Beverly Enterprises, Inc. ("Beverly"). Beverly has guaranteed
certain obligations of its subsidiaries and of certain parties unaffiliated with
Beverly in connection with 26 properties operated by such parties. Rental and
interest income from Beverly accounted for 27%, 23% and 17% of the Company's
total revenues for the years ended December 31, 1995, 1996 and 1997,
respectively, and for 15% of the Company's total revenues for the six months
ended June 30, 1998.
As of June 30, 1998, 47 of the Company's owned facilities were leased to
subsidiaries of Alternative Living Services, Inc. ("ALS"). ALS has guaranteed
certain of the obligations of its subsidiaries. Rental income from ALS
accounted for 0.3%, 6%, and 8% of the Company's total revenues for the years
ended December 31, 1995, 1996 and 1997, respectively, and for 12% of the
Company's revenues for the six months ended June 30, 1998.
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 health care facilities, assisted living
facilities, acute care hospitals and medical office buildings. Financing for
such future investment 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 indebtedness.
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 stockholders 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.
The Company's principal executive offices are located at 610 Newport Center
Drive, Suite 1150, Newport Beach, California 92660 and its telephone number is
(949) 718-4400.
3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information of the Company,
restated for the two-for-one stock split effective March 8, 1996, for each of
the five years ended December 31, 1997 is derived from the Company's audited
consolidated financial statements, which have been audited by Arthur Andersen
LLP, independent accountants. The selected consolidated financial information
for the six month periods ended June 30, 1998 and 1997 has been derived from the
unaudited interim consolidated financial statements of the Company and includes,
in the opinion of management, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the financial
position and results of operations as of and for such periods. Such financial
information has been derived from financial information included in the
Company's Annual Reports on Form 10-K and the Company's Quarterly Reports on
Form 10-Q. 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 1997, 1996, 1995, 1994 and 1993 Annual Reports on
Form 10-K.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1998 1997
----------------------
(in thousands, except
per share data)
<S> <C> <C>
Operating Data:
Revenues:
Minimum rent............................................ $ 48,536 $ 36,747
Interest and other income............................... 11,396 10,095
Additional rent and additional interest................. 7,717 6,658
---------------------
67,649 53,500
Expenses:
Interest and amortization of deferred financing costs... 16,836 12,767
Depreciation and non-cash charges....................... 12,803 9,252
General and administrative.............................. 2,295 1,812
---------------------
31,934 23,831
---------------------
Income from operations.................................... 35,715 29,669
Gain on sale of facilities................................ 2,321 --
Extraordinary charge (1).................................. -- --
---------------------
Net income................................................ 38,036 29,669
Preferred stock dividends (3,839) --
---------------------
Net income available to common stockholders $ 34,197 $ 29,669
=====================
Dividends paid on common stock............................ $ 36,945 $ 32,607
Per Share Data
Basic/ diluted income from operations available to common
stockholders............................................. $ 0.73 $ 0.71
Basic/diluted net income available to common stockholders. 0.78 0.71
Dividends paid on common stock............................ 0.84 0.78
Balance Sheet Data:
Investments in real estate, net........................... $1,174,146 $ 820,596
Total assets.............................................. 1,207,052 843,939
Senior unsecured notes due 2000-2037...................... 375,000 275,000
Bank borrowings........................................... 87,700 46,300
Convertible debentures.................................... 58,875 64,720
Notes and bonds payable................................... 65,234 9,189
Stockholders' equity...................................... 584,250 426,064
Other Data:
Net cash provided by operating activities................. $ 52,666 $ 39,562
Net cash used in investing activities..................... (121,237) (106,282)
Net cash provided by financing activities................. 72,293 65,697
Funds from operations available to common stockholders(3). 44,679 38,921
Weighted Average Shares Outstanding....................... 43,760 41,802
<CAPTION>
Year Ended December 31,
---------------------------------------------------------
1997 1996 1995 1994 1993
---------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Operating Data:
Revenues:
Minimum rent............................................ $ 79,587 $ 66,536 $ 54,504 $ 47,805 $ 40,758
Interest and other income............................... 22,454 17,104 14,759 12,413 11,210
Additional rent and additional interest................. 13,664 12,136 11,776 9,767 8,417
---------------------------------------------------------
115,705 95,776 81,039 69,985 60,385
Expenses:
Interest and amortization of deferred financing costs... 28,899 20,797 14,628 9,921 6,186
Depreciation and non-cash charges....................... 19,825 16,723 13,885 12,244 10,115
General and administrative.............................. 3,993 3,312 3,144 3,007 3,088
---------------------------------------------------------
52,717 40,832 31,657 25,172 19,389
---------------------------------------------------------
Income from operations.................................... 62,988 54,944 49,382 44,813 40,996
Gain on sale of facilities................................ 829 -- 989 -- --
Extraordinary charge (1).................................. -- -- -- -- (2,004)
---------------------------------------------------------
Net income................................................ 63,817 54,944 50,371 44,813 38,992
Preferred stock dividends................................. (1,962) -- -- -- --
---------------------------------------------------------
Net income available to common stockholders............... $ 61,855 $ 54,944 $ 50,371 $ 44,813 $ 38,992
=========================================================
Dividends paid on common stock............................ $ 65,734 $ 59,581 $ 53,182 $ 47,751 $ 42,883
Per Share Data
Basic/ diluted income from operations available to common
stockholders............................................. $ 1.45 $ 1.36 $ 1.30 $ 1.23 $ 1.17
Basic/diluted net income available to common stockholders. 1.47 1.36 1.33 1.23 1.11
Dividends paid on common stock............................ 1.56 1.48 1.41 1.31 1.21
Balance Sheet Data:
Investments in real estate, net........................... $1,053,273 $722,506 $ 652,231 $501,862 $428,473
Total assets.............................................. 1,077,394 744,984 670,111 513,809 440,165
Senior unsecured notes due 2000-2037...................... 355,000 190,000 100,000 -- --
Bank borrowings........................................... 19,600 32,300 93,900 80,200 3,800
Convertible debentures.................................... 64,512 64,920 65,000 67,920 73,609
Notes and bonds payable................................... 58,297 9,229 23,364 20,520 23,047
Stockholders' equity...................................... 553,046 428,588 371,822 336,106 332,927
Other Data:
Net cash provided by operating activities................. $ 86,010 $ 74,129 $ 66,972 $ 56,756 $ 49,725
Net cash used in investing activities..................... (267,302) (85,034) (151,476) (83,185) (56,261)
Net cash provided by financing activities................. 179,775 14,667 88,699 26,544 1,882
Funds from operations available to common stockholders(3). 80,851 71,667 63,267 57,057 51,111
Weighted Average Shares Outstanding....................... 42,164 40,373 37,808 36,356 35,188
</TABLE>
_______________________
(1) The Company incurred an extraordinary charge 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.
(2) For per share purposes, income from continuing operations is defined as
income before the effect of any gains or losses on sales of properties.
(3) Industry analysts generally consider funds from operations to be an
alternative measure of the performance of an equity REIT. The Company
therefore discloses funds from operations, although it is a measurement that
is not defined by generally accepted accounting principles. The Company
uses the NAREIT measure of funds from operations, which is generally defined
as income before extraordinary items plus certain non-cash items, primarily
real estate depreciation, less gains on sales of facilities. The NAREIT
measure may not be comparable to similarly titled measures used by other
REITs. Consequently, the Company's funds from operations may not provide a
meaningful measure of the Company's performance as compared to that of other
REITs. Funds from operations does not represent cash generated from
operating activities as defined by generally accepted accounting principles
(funds from operations does not include changes in operating assets and
liabilities) and, therefore, should not be considered as an alternative to
net income as the primary indicator of operating performance or to cash flow
as a measure of liquidity.
4
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended
----------------------- June 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio .......................... 7.63 5.52 4.44 3.64 3.03 2.88
</TABLE>
RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended
----------------------- June 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio .......................... 7.63 5.52 4.44 3.64 2.85 2.61
</TABLE>
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, the net proceeds from the sale of the Securities offered from
time to time hereby will be used for general corporate purposes, including the
repayment of bank lines of credit and investments in health care related
properties. The Company uses its existing revolving bank credit facility
primarily to provide 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 Securities, it is currently required to
use the proceeds of such issuance to repay amounts outstanding under the credit
facility.
DESCRIPTION OF DEBT SECURITIES
Debt Securities may be issued from time to time in series under an
Indenture (the "Indenture") to be entered into between the Company and The Bank
of New York, as Trustee (the "Trustee"). As used under this caption, unless the
context otherwise requires, Offered Debt Securities shall mean the Debt
Securities offered by this Prospectus and the accompanying Prospectus
Supplement. The statements under this caption are brief summaries of certain
provisions contained in the Indenture, do not purport to be complete and are
qualified in their entirety by reference to the Indenture, including the
definition therein of certain terms, a copy of which is filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The following
sets forth certain general terms and provisions of the Debt Securities. Further
terms of the Offered Debt Securities will be set forth in the Prospectus
Supplement.
General
The Indenture provides for the issuance of Debt Securities in series, and
does not limit the principal amount of Debt Securities which may be issued
thereunder.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (1) the specific title of the Offered Debt
Securities; (2) the aggregate principal amount of the Offered Debt Securities;
(3) the percentage of their principal amount at which the Offered Debt
Securities will be issued; (4) the date on which the Offered Debt Securities
will mature; (5) the rate or rates per annum or the method for determining such
rate or rates, if any, at which the Offered Debt Securities will bear interest;
(6) the times at which any such interest will be payable; (7) any provisions
relating to optional or mandatory redemption of the Offered Debt Securities at
the option of the Company or pursuant to sinking fund or analogous provisions;
(8) the denominations in which the Offered Debt Securities are authorized to be
issued; (9) any provisions relating to the conversion or exchange of the
5
<PAGE>
Offered Debt Securities into Common Stock, Preferred Stock or into Debt
Securities of another series; (10) whether the Offered Debt Securities are to be
issued in fully registered form without coupons or in bearer form with interest
coupons or both; (11) the place or places at which the Company will make
payments of principal (and premium, if any) and interest, if any, and the method
of payment; (12) whether the Offered Debt Securities will be issued in whole or
in part in global form; (13) any additional covenants and Events of Default and
the remedies with respect thereto not currently set forth in the Indenture; (13)
whether the Offered Debt Securities will be subordinated to other indebtedness
of the Company; and (14) any other specific terms of the Offered Debt
Securities.
One or more series of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or bearing interest at a rate which at the time
of issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Tax and other special considerations applicable
to any such discounted Debt Securities will be described in the Prospectus
Supplement relating thereto.
Status of Debt Securities
The Debt Securities will be unsecured obligations of the Company and may be
ranking on a parity with all other unsecured and unsubordinated indebtedness or
may be subordinated to certain other indebtedness of the Company.
Conversion Rights
The terms, if any, on which Debt Securities of a series may be exchanged
for or converted into shares of Common Stock, Preferred Stock or Debt Securities
of another series will be set forth in the Prospectus Supplement relating
thereto. To protect the Company's status as a REIT, a Holder may not convert any
Debt Security, and such Debt Security shall not be convertible by any Holder, if
as a result of such conversion any person would then be deemed to beneficially
own, directly or indirectly, 9.9% or more of the Company's shares of Common
Stock.
Absence of Restrictive Covenants
Except as noted below under "Dividends, Distributions and Acquisitions of
Capital Stock," the Company is not restricted by the Indenture from paying
dividends or from incurring, assuming or becoming liable for any type of debt or
other obligations or from creating liens on its property for any purpose. The
Indenture does not require the maintenance of any financial ratios or specified
levels of net worth or liquidity. Except as may be set forth in the Prospectus
Supplement, there are no provisions of the Indenture which afford holders of the
Debt Securities protection in the event of a highly leveraged transaction
involving the Company.
Optional Redemption
The Debt Securities will be subject to redemption, in whole or from time to
time in part, at any time for certain reasons intended to protect the Company's
status as a REIT, at the option of the Company in the manner specified in the
Indenture at a redemption price equal to 100% of the principal amount, plus
interest accrued to the date of redemption. The Indenture does not contain any
provision requiring the Company to repurchase the Debt Securities at the option
of the Holders thereof in the event of a leveraged buyout, recapitalization or
similar restructuring of the Company, even though the Company's creditworthiness
and the market value of the Debt Securities may decline significantly as a
result of such transaction. The Indenture does not protect Holders of the Debt
Securities against any decline in credit quality, whether resulting from any
such transaction or from any other cause.
Dividends, Distributions and Acquisitions of Capital Stock
The Indenture provides that the Company will not (i) declare or pay any
dividend or make any distribution on its capital stock or to holders of its
capital stock (other than dividends or distributions
6
<PAGE>
payable in its capital stock or other than as the Company determines is
necessary to maintain its status as a REIT) or (ii) purchase, redeem or
otherwise acquire or retire for value any of its capital stock, or any warrants,
rights or options or other securities to purchase or acquire any shares of its
capital stock (other than the Debt Securities) or permit any subsidiary to do
so, if at the time of such action an Event of Default (as defined in the
Indenture) has occurred and is continuing or would exist immediately after
giving effect to such action.
Events of Default
An Event of Default with respect to Debt Securities of any series is
defined in the Indenture as being: (a) failure to pay principal of or any
premium on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure to deposit any sinking fund payment when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of one or more series of Debt Securities other than that
series), continued for 60 days after written notice as provided in the
Indenture; (e) certain events of bankruptcy, insolvency, conservatorship,
receivership or reorganization; (f) a default under any mortgage, indenture or
instrument evidencing any indebtedness for borrowed money by the Company
(including the Indenture) resulting in an aggregate principal amount exceeding
$10,000,000 becoming or being declared due and payable prior to its maturity
date or constituting a failure to pay at maturity an aggregate principal amount
exceeding $10,000,000, unless such acceleration has been rescinded or annulled
or such indebtedness has been discharged within 10 days after written notice to
the Company by the Trustee or Holders of at least 25% in aggregate principal
amount of the outstanding Debt Securities declaring a default or the Company is
contesting the validity of such default in good faith by appropriate
proceedings; and (g) any other Event of Default provided with respect to the
Debt Securities of that series.
If an Event of Default with respect to the outstanding Debt Securities of
any series occurs and is continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt Securities of that
series are original issue discount Debt Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
outstanding Debt Securities of that series to be due and payable immediately. At
any time after the declaration of acceleration with respect to the Debt
Securities of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, 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 shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee and subject to certain limitations, the Holders
of a majority in aggregate 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 that series.
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company
and the Trustee without the consent of any Holders to, among other things, (a)
evidence the succession of another corporation to the Company, (b) add to the
covenants of the Company or surrender any right or power conferred upon the
Company, (c) cure any ambiguity, correct or supplement any provision which may
be defective or inconsistent or make any other provisions with respect to
matters or questions arising under
7
<PAGE>
the Indenture, provided that such action does not adversely affect the interests
of the Holders of Debt Securities of any series in any material respect, or (d)
evidence and provide for a successor Trustee.
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of each series affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each outstanding Debt
Security affected thereby, (a) change the stated maturity date of the principal
of, or any installment of principal of or interest, if any, on any Debt
Security, (b) reduce the principal amount of, or premium or interest if any, on
any Debt Security, (c) reduce the amount of principal of an original issue
discount Debt Security payable upon acceleration of the maturity thereof, (d)
change the currency of payment of the principal of, or premium or interest, if
any, on any Debt Security, (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security, (f) modify
the conversion provisions, if any, of any Debt Security in a manner adverse to
the Holder of that Debt Security, or (g) reduce the percentage in principal
amount of the outstanding Debt Security of any series, the consent of whose
Holders is required for modification or amendment of that Indenture or for
waiver of compliance with certain provisions of that Indenture or for waiver of
certain defaults.
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all Holders of the Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
The Holders of a majority in aggregate principal amount of the outstanding Debt
Securities of each series may, on behalf of all Holders of the Debt Securities
of that series, waive any past default under the Indenture with respect to the
Debt Securities of that series, except a default in the payment of principal or
premium or interest, if any, or a default in respect of a covenant or provision
which under the terms of the Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Debt Security of the series affected.
Consolidation, Merger and Sale of Assets
The Indenture provides that the Company, without the consent of the Holders
of any of the Debt Securities, may consolidate or merge with or into, or
transfer its assets substantially as an entirety to, any corporation organized
under the laws of the United States or any state, provided that the successor
corporation assumes the Company's obligations under the Indenture, that after
giving effect to the transaction no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing, and that certain other conditions are met.
Global Securities
The Debt Securities of a series may be issued in whole or in part in global
form (the "Global Securities"). The Global Securities will be deposited with a
depositary (the "Depositary"), or with a nominee for a Depositary, identified in
the Prospectus Supplement. In such case, one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal amount of outstanding Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive form, a Global
Security may not be transferred except as a whole by the Depositary for such
Global 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.
The specific material terms of the depositary arrangement with respect to
any portion of a series of Debt Securities to be represented by a Global
Security will be described in the Prospectus Supplement. The Company anticipates
that the following provisions will apply to all depositary arrangements.
8
<PAGE>
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of persons that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by any
underwriters or agents participating in the distribution of such Debt
Securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary for such Global Security (with respect to interests of
participants) or by participants or persons that hold through participants (with
respect to interests of persons other than participants). So long as the
Depositary for a Global Security, or its nominee, is the registered owner of
such Global Security, such Depositary or such nominee, as the case may be, will
be considered the sole owner or Holder of the Debt Securities represented by
such Global Security for all purposes under the Indenture; provided, however,
that for purposes of obtaining any consents or directions required to be given
by the Holders of the Debt Securities, the Company, the Trustee and its agents
will treat a person as the holder of such principal amount of Debt Securities as
specified in a written statement of the Depositary. Except as set forth herein
or otherwise provided in the Prospectus Supplement, owners of beneficial
interests in a Global Security will not be entitled to have the Debt Securities
represented by such Global Security registered in their names, will not receive
physical delivery of such Debt Securities in definitive form and will not be
considered the owners or Holders thereof under the Indenture.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Global Security registered in the name of a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner of such Global Security. None of the Company, the Trustee
or any Paying Agent for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium, if any,
or interest will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants will be governed by standing
instructions and customary practices, as is now the case with the securities
held for the accounts of customers registered in "street names" and will be the
responsibility of such participants.
If the Depositary for any Debt Securities represented by a Global Security
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 such Debt Securities in definitive form in exchange for such Global
Security. In addition, the Company may at any time and in its sole discretion
determine not to have any of the Debt Securities of a series represented by one
or more Global Securities and, in such event, will issue Debt Securities of such
series in definitive form in exchange for all of the Global Security or
Securities representing such Debt Securities.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in Debt Securities represented by
Global Securities.
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.
9
<PAGE>
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Stock set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Company's Amended and Restated Articles of Incorporation (the "Articles of
Incorporation"), and the articles supplementary (the "Articles Supplementary")
relating to each series of the Preferred Stock which will be filed with the
Commission and incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part at or prior to the time of the
issuance of such series of the Preferred Stock.
General
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, $0.10 par value per share, and 5,000,000 shares of preferred
stock, $1.00 par value per share ("preferred stock of the Company," which term,
as used herein, includes the Preferred Stock offered hereby). See "Description
of Common Stock."
Under the Articles of Incorporation, the Board of Directors of the Company
is authorized without further stockholder action to provide for the issuance of
up to 5,000,000 shares of preferred stock of the Company, in one or more series,
with such voting, dividend, conversion or liquidation rights, designations,
preferences, powers and relative participating, optional or other special rights
and qualifications, limitations or restrictions of shares of such series as
shall be stated in the resolution providing for the issue of a series of such
stock, adopted, at any time or from time to time, by the Board of Directors of
the Company.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer Depositary Shares evidenced by depositary receipts
(the "Depositary Receipts"), each representing a fraction (to be specified in
the Prospectus Supplement relating to the particular series of the Preferred
Stock) of a share of the particular series of the Preferred Stock issued and
deposited with a depositary, in lieu of offering full shares of such series of
the Preferred Stock.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation and stated value per share of such Preferred Stock and the number of
shares offered; (ii) the amount of liquidation preference per share; (iii) the
initial public offering price at which such Preferred Stock will be issued; (iv)
the dividend rate (or method of calculation), the dates on which dividends shall
be payable and the dates from which dividends shall commence to cumulate, if
any; (v) any redemption or sinking fund provisions; (vi) any conversion rights;
(vii) whether the Company has elected to offer Depositary Shares as described
below under "Description of Depositary Shares;" and (viii) any additional
voting, dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. Unless otherwise stated in a Prospectus
Supplement relating to a particular series of the Preferred Stock, each series
of the Preferred Stock will rank on a parity as to dividends and distributions
of assets with each other series of the Preferred Stock. The rights of the
holders of each series of the Preferred Stock will be subordinate to those of
the Company's general creditors.
10
<PAGE>
Certain Provisions of the Articles of Incorporation
See "Description of Common Stock--Redemption and Business Combination
Provisions" for a description of certain provisions of the Articles of
Incorporation, including provisions relating to redemption rights and provisions
which may have certain anti-takeover effects.
Dividend Rights
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
of the Company legally available therefor, cash dividends on such dates and at
such rates as are set forth in, or as are determined by the method described in,
the Prospectus Supplement relating to such series of the Preferred Stock. Such
rate may be fixed or variable or both. Each such dividend will be payable to the
holders of record as they appear on the stock books of the Company (or, if
applicable, the records of the Depositary (as hereinafter defined) referred to
under "Description of Depositary Shares") on such record dates, fixed by the
Board of Directors of the Company, as specified in the Prospectus Supplement
relating to such series of Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Preferred Stock. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company shall
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
dates. Dividends on the shares of each series of Preferred Stock for which
dividends are cumulative will accrue from the date on which the Company
initially issues shares of such series.
So long as the shares of any series of the Preferred Stock shall be
outstanding, unless (i) full dividends (including if such Preferred Stock is
cumulative, dividends for prior dividend periods) shall have been paid or
declared and set apart for payment on all outstanding shares of the Preferred
Stock of such series and all other classes and series of preferred stock of the
Company (other than Junior Stock, as defined below) and (ii) the Company is not
in default or in arrears with respect to the mandatory or optional redemption or
mandatory repurchase or other mandatory retirement of, or with respect to any
sinking or other analogous fund for, any shares of Preferred Stock of such
series or any shares of any other preferred stock of the Company of any class or
series (other than Junior Stock), the Company may not, other than as the Company
determines is necessary to maintain its status as a REIT, declare any dividends
on any shares of Common Stock of the Company or any other stock of the Company
ranking as to dividends or distributions of assets junior to such series of
Preferred Stock (the Common Stock and any such other stock ranking junior to
such series of Preferred Stock being herein referred to as "Junior Stock"), or
make any payment on account of, or set apart money for, the purchase, redemption
or other retirement of, or for a sinking or other analogous fund for, any shares
of Junior Stock or make any distribution in respect thereof, whether in cash or
property or in obligations or stock of the Company, other than Junior Stock
which is neither convertible into, nor exchangeable or exercisable for, any
securities of the Company other than Junior Stock.
Liquidation Preference
In the event of any liquidation, dissolution or winding up of the Company,
voluntary or involuntary, the holders of each series of the Preferred Stock will
be entitled to receive out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to the
holders of Common Stock or any other shares of stock of the Company ranking
junior as to such distribution to such series of Preferred Stock, the amount set
forth in the Prospectus Supplement relating to such series of the Preferred
Stock. If, upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the amounts payable with respect to the Preferred Stock of
any series and any other shares of preferred stock of the Company (including any
other series of the Preferred Stock) ranking as to any such distribution on a
parity with such series of the Preferred Stock are not paid in full,
11
<PAGE>
the holders of the Preferred Stock of such series and of such other shares of
preferred stock of the Company will share ratably in any such distribution of
assets of the Company in proportion to the full respective preferential amounts
to which they are entitled. After payment to the holders of the Preferred Stock
of each series of the full preferential amounts of the liquidating distribution
to which they are entitled, the holders of each such series of the Preferred
Stock will be entitled to no further participation in any distribution of assets
by the Company.
Redemption
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the times and at the redemption prices set forth in the Prospectus Supplement
relating to such series. Shares of the Preferred Stock redeemed by the Company
will be restored to the status of authorized but unissued shares of preferred
stock of the Company.
In the event that fewer than all of the outstanding shares of a series of
the Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or pro
rata (subject to rounding to avoid fractional shares) as may be determined by
the Company or by any other method as may be determined by the Company in its
sole discretion to be equitable. From and after the redemption date (unless
default shall be made by the Company in providing for the payment of the
redemption price plus accumulated and unpaid dividends, if any), dividends shall
cease to accumulate on the shares of the Preferred Stock called for redemption
and all rights of the holders thereof (except the right to receive the
redemption price plus accumulated and unpaid dividends, if any) shall cease.
So long as any dividends on shares of any series of the Preferred Stock or
any other series of preferred stock of the Company ranking on a parity as to
dividends and distribution of assets with such series of the Preferred Stock are
in arrears, no shares of any such series of the Preferred Stock or such other
series of preferred stock of the Company will be redeemed (whether by mandatory
or optional redemption) unless all such shares are simultaneously redeemed, and
the Company will not purchase or otherwise acquire any such shares; provided,
however, that the foregoing will not prevent the purchase or acquisition of such
shares pursuant to a purchase or exchange offer made on the same terms to
holders of all such shares outstanding.
Conversion Rights
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of Common
Stock or another series of Preferred Stock will be set forth in the Prospectus
Supplement relating thereto. See "Description of Common Stock."
Voting Rights
Except as indicated below or in a Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as required by applicable
law, the holders of the Preferred Stock will not be entitled to vote for any
purpose.
So long as any shares of the Preferred Stock of a series remain
outstanding, the consent or the affirmative vote of the holders of at least 66-
2/3% of the votes entitled to be cast with respect to the then outstanding
shares of such series of the Preferred Stock together with any Other Preferred
Stock (as defined below), voting as one class, either expressed in writing or at
a meeting called for that purpose, will be necessary (i) to permit, effect or
validate the authorization, or any increase in the authorized amount, of any
class or series of shares of the Company ranking prior to the Preferred Stock of
such series as to dividends, voting or upon distribution of assets and (ii) to
repeal, amend or otherwise change any of the provisions applicable to the
Preferred Stock of such series in any manner which adversely affects the powers,
preferences, voting power or other rights or privileges qualifications,
limitations and other
12
<PAGE>
characteristics of such series of the Preferred Stock. In case any series of the
Preferred Stock would be so affected by any such action referred to in clause
(ii) above in a different manner than one or more series of the Other Preferred
Stock then outstanding, the holders of shares of the Preferred Stock of such
series, together with any series of the Other Preferred Stock which will be
similarly affected, will be entitled to vote as a class, and the Company will
not take such action without the consent or affirmative vote, as above provided,
of at least 66-2/3% of the total number of votes entitled to be cast with
respect to each such series of the Preferred Stock and the Other Preferred Stock
similarly affected, then outstanding, in lieu of the consent or affirmative vote
hereinabove otherwise required.
With respect to any matter as to which the Preferred Stock of any series is
entitled to vote, holders of the Preferred Stock of such series and any other
series of preferred stock of the Company ranking on a parity with such series of
the Preferred Stock as to dividends and distributions of assets and which by its
terms provides for similar voting rights (the "Other Preferred Stock") will be
entitled to cast the number of votes set forth in the Prospectus Supplement with
respect to that series of Preferred Stock. As a result of the provisions
described in the preceding paragraph requiring the holders of shares of a series
of the Preferred Stock to vote together as a class with the holders of shares of
one or more series of Other Preferred Stock, it is possible that the holders of
such shares of Other Preferred Stock could approve action that would adversely
affect such series of Preferred Stock, including the creation of a class of
capital stock ranking prior to such series of Preferred Stock as to dividends,
voting or distributions of assets.
As more fully described below under "Description of Depositary Shares," if
the Company elects to issue Depositary Shares, each representing a fraction of a
share of a series of the Preferred Stock, each such Depositary Share will, in
effect, be entitled to such fraction of a vote per Depositary Share.
Transfer Agent and Registrar
Unless otherwise indicated in a Prospectus Supplement relating thereto, The
Bank of New York will be the transfer agent, dividend and redemption price
disbursement agent and registrar for shares of each series of the Preferred
Stock.
13
<PAGE>
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in the Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts do not purport to be complete and are subject to
and qualified in their entirety by reference to the Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which will be
filed with the Commission and incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such series of the Preferred Stock. The forms of Deposit
Agreement and Depositary Receipt are filed as exhibits to the Registration
Statement of which this Prospectus is a part.
General
The Company may, at its option, elect to offer fractional shares of
Preferred Stock rather than full shares of Preferred Stock. In the event such
option is exercised, the Company will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of the Preferred
Stock) of a share of a particular series of the Preferred Stock as described
below.
The shares of any series of the Preferred Stock represented by Depositary
Shares will be deposited under a separate deposit agreement (the "Deposit
Agreement") among the Company, a bank or trust company selected by the Company
(the "Depositary") and the holders from time to time of the Depositary Receipts.
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will in general be entitled, in proportion to the applicable fraction of a share
of Preferred Stock represented by such Depositary Share, to all the rights and
preferences of the Preferred Stock represented thereby (including dividend,
voting, redemption and liquidation rights).
The Depositary Shares relating to any series of the Preferred Stock will be
evidenced by Depositary Receipts issued pursuant to the related Deposit
Agreement. Depositary Receipts will be distributed to those persons purchasing
such Depositary Shares in accordance with the terms of the offering made by the
related Prospectus Supplement.
Upon surrender of Depositary Receipts at the office of the Depositary equal
to one or more whole Depositary Shares and upon payment of the charges provided
in the Deposit Agreement and subject to the terms thereof, a holder of
Depositary Receipts is entitled to have the Depositary deliver to such holder
certificates representing the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Receipts relating to such Preferred Stock in proportion, insofar
as practicable, to the respective numbers of Depositary Shares evidenced by such
Depositary Receipts held by such holders on the relevant record date. The
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Receipts a fraction of one cent,
and any balance not so distributed shall be added to and treated as part of the
next sum received by the Depositary (without liability for the interest
thereon), for distribution to record holders of Depositary Receipts then
outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute such amounts of the securities or property received by it as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Depositary Receipts held by such holders on the relevant
record date, unless the Depositary determines that it is not feasible to make
such distribution, in which case the Depositary may, with the approval of the
Company, adopt such method as it deems equitable and practicable for the purpose
of effecting such distribution, including the sale of such securities or
property.
14
<PAGE>
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Receipts.
The amount distributed in all of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Depositary on account of
taxes and governmental charges.
Redemption of Depositary Shares
If a series of the Preferred Stock represented by Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary
Receipts evidencing the Depositary Shares to be so redeemed at their respective
addresses appearing in the Depositary's books. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the Preferred Stock plus
all money and other property, if any, payable with respect to such Depositary
Share, including all amounts payable by the Company in respect of any
accumulated but unpaid dividends; provided, however, the Depositary may deduct
such fees and charges as are expressly provided in the Deposit Agreement for the
account of the holders of Depositary Receipts. Whenever the Company redeems
shares of Preferred Stock held by the Depositary, the Depositary will redeem as
of the same redemption date the number of Depositary Shares representing shares
of Preferred Stock so redeemed. If less than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata (subject to rounding to avoid fractions of Depositary Shares) as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of Depositary Receipts evidencing such Depositary Shares will cease,
except the right to receive without interest the moneys payable upon such
redemption and any money or other property to which such holders were entitled
upon such redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting or action to be taken by written
consent at or as to which the holders of the Preferred Stock are entitled to
vote or consent, the Depositary will mail the information contained in such
notice of meeting or action to the record holders of the Depositary Receipts
evidencing the Depositary Shares relating to such Preferred Stock. Each record
holder of such Depositary Receipts on the record date (which will be the same
date as the record date for the Preferred Stock) will be entitled to instruct
the Depositary as to the exercise of the voting rights or the giving or refusal
of consent, as the case may be, pertaining to the number of shares of the
Preferred Stock represented by the Depositary Shares evidenced by such holder's
Depositary Receipts. The Depositary will endeavor, insofar as practicable, to
vote, or give or withhold consent with respect to, the maximum number of whole
shares of the Preferred Stock represented by all Depositary Shares as to which
any particular voting or consent instructions are received, and the Company will
agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will abstain from
voting, or giving consents with respect to, shares of the Preferred Stock to the
extent it does not receive specific instructions from the holders of Depositary
Receipts evidencing Depositary Shares representing such Preferred Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares relating to
any series of Preferred Stock and any provision of the related Deposit Agreement
may at any time and from time to
15
<PAGE>
time be amended by agreement between the Company and the Depositary in any
respect which they may deem necessary or desirable.
However, any amendment which imposes or increases any fees, taxes or
charges upon holders of Depositary Shares or Depositary Receipts relating to any
series of Preferred Stock or which materially and adversely alters the existing
rights of such holders will not be effective unless such amendment has been
approved by the record holders of Depositary Receipts evidencing at least a
majority of such Depositary Shares then outstanding. Notwithstanding the
foregoing, no such amendment may impair the right of any holder of Depositary
Shares or Depositary Receipts to receive any moneys or other property to which
such holder may be entitled under the terms of such Depositary Receipts or the
Deposit Agreement at the times and in the manner and amount provided for
therein. A Deposit Agreement may be terminated by the Company or the Depositary
only after (i) all outstanding Depositary Shares relating thereto have been
redeemed and any accumulated and unpaid dividends on the Preferred Stock
represented by the Depositary Shares, together with all other moneys and
property, if any, to which holders of the related Depositary Receipts are
entitled under the terms of such Depositary Receipts or the related Deposit
Agreement, have been paid or distributed as provided in the Deposit Agreement or
provision therefor has been duly made, (ii) there has been a final distribution
in respect of the Preferred Stock of the relevant series in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of the related Depositary Receipts, or (iii) in
the event the Depositary Shares relate to a series of Preferred Stock which is
convertible into shares of Common Stock, all outstanding Depositary Shares have
been converted into shares of Common Stock; provided, however, that resignation
and removal of the Depositary, and appointment of a successor Depositary shall
not constitute a termination of a Deposit Agreement.
Miscellaneous
The Depositary will forward to record holders of Depositary Receipts, at
their respective addresses appearing in the Depositary's books, all reports and
communications from the Company which are delivered to the Depositary and which
the Company is required to furnish to the holders of the Preferred Stock or
Depositary Receipts.
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and the initial issuance of the Depositary Receipts evidencing
the Depositary Shares, any redemption of the Preferred Stock and any withdrawals
of Preferred Stock by the holders of Depositary Shares. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts which may be deducted from payments otherwise due to such holders with
respect to their Depositary Receipts.
The Deposit Agreement will contain provisions relating to adjustments in
the fraction of a share of Preferred Stock represented by a Depositary Share in
the event of a change in par or stated value, split-up, combination or other
reclassification of the Preferred Stock or upon any recapitalization, merger or
sale of substantially all of the assets of the Company.
Neither the Depositary nor any of its agents nor any registrar nor the
Company will be (i) liable if it is prevented or delayed by law or any
circumstance beyond its control in performing its obligations under the Deposit
Agreement, (ii) subject to any liability under the Deposit Agreement to holders
of Depositary Receipts other than for the relevant party's gross negligence or
willful misconduct or (iii) obligated to prosecute or defend any legal
proceeding in respect of any Depositary Receipts, Depositary Shares or the
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by holders of
Depositary Receipts or other persons in good faith believed to be competent and
on documents reasonably believed to be genuine.
16
<PAGE>
Resignation or Removal of Depositary
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal.
17
<PAGE>
DESCRIPTION OF COMMON STOCK
Common Stock
All shares of Common Stock participate equally in dividends payable to
stockholders of Common Stock when and as declared by the Board of Directors and
in net assets available for distribution to stockholders of Common Stock on
liquidation or dissolution, have one vote per share on all matters submitted to
a vote of the stockholders and do not have cumulative voting rights in the
election of directors. All issued and outstanding shares of Common Stock are,
and the Common Stock offered hereby will be upon issuance, validly issued, fully
paid and nonassessable. Holders of the Common Stock do not have preference,
conversion, exchange or preemptive rights. The Common Stock is listed on the New
York Stock Exchange (NYSE Symbol: NHP).
Redemption and Business Combination Provisions
If the Board of Directors shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of at least 9.9% or more of the voting
shares of capital stock has or may become concentrated in the hands of one
beneficial owner, the Board of Directors shall have the power (i) by lot or
other means deemed equitable by it to call for the purchase from any stockholder
of the Company a number of voting shares sufficient, in the opinion of the Board
of Directors, to maintain or bring the direct or indirect ownership of voting
shares of capital stock of such beneficial owner to a level of no more than 9.9%
of the outstanding voting shares of the Company's capital stock, and (ii) to
refuse to transfer or issue voting shares of capital stock to any person whose
acquisition of such voting shares would, in the opinion of the Board of
Directors, result in the direct or indirect ownership by that person of more
than 9.9% of the outstanding voting shares of capital stock of the Company.
Further, any transfer of shares, options, warrants or other securities
convertible into voting shares that would create a beneficial owner of more than
9.9% of the outstanding voting shares shall be deemed void ab initio and the
intended transferee shall be deemed never to have had an interest therein. The
purchase price for any voting shares of capital stock so redeemed shall be equal
to the fair market value of the shares reflected in the closing sales price for
the shares, if then listed on a national securities exchange, or the average of
the closing sales prices for the shares if then listed on more than one national
securities exchange, or if the shares are not then listed on a national
securities exchange, the latest bid quotation for the shares if then traded
over-the-counter, on the last business day immediately preceding the day on
which notices of such acquisitions are sent by the Company, or, if no such
closing sales prices or quotations are available, then the purchase price shall
be equal to the net asset value of such stock as determined by the Board of
Directors in accordance with the provisions of applicable law. From and after
the date fixed for purchase by the Board of Directors, the holder of any shares
so called for purchase shall cease to be entitled to distributions, voting
rights and other benefits with respect to such shares, except the right to
payment of the purchase price for the shares.
The Articles of Incorporation require that, except in certain
circumstances, Business Combinations (as defined) between the Company and a
beneficial holder of 10% or more of the Company's outstanding voting stock (a
"Related Person") be approved by the affirmative vote of at least 90% of the
outstanding voting shares of the Company.
A Business Combination is defined in the Articles of Incorporation as (a)
any merger or consolidation of the Company with or into a Related Person, (b)
any sale, lease, exchange, transfer or other disposition, including without
limitation a mortgage or any other security device, of all or any "Substantial
Part" (as defined below) of the assets of the Company (including without
limitation any voting securities of a subsidiary) to a Related Person, (c) any
merger or consolidation of a Related Person with or into the Company, (d) any
sale, lease, exchange, transfer or other disposition of all or any Substantial
Part of the assets of a Related Person to the Company, (e) the issuance of any
securities (other than by way of pro rata distribution to all stockholders) of
the Company to a Related Person, and (f) any agreement, contract or other
arrangement providing for any of the transactions described in the definition of
Business Combination. The term "Substantial Part" shall mean more than 10% of
the book value of the
18
<PAGE>
total assets of the Company as of the end of its most recent fiscal year ending
prior to the time the determination is being made.
Pursuant to the Articles of Incorporation, the Company's Board of Directors
is classified into three classes. Each class of directors serves for a term of
three years, with one class being elected each year. As of the date of this
Prospectus, there are six directors, divided into three classes consisting of
one, two and three directors, respectively.
The foregoing provisions of the Articles of Incorporation and certain other
matters may not be amended without the affirmative vote of at least 90% of the
outstanding voting shares of the Company.
The foregoing provisions may have the effect of discouraging unilateral
tender offers or other takeover proposals which certain stockholders might deem
in their interests or in which they might receive a substantial premium. The
Board of Directors' authority to issue and establish the terms of currently
authorized Preferred Stock, without stockholder approval, may also have the
effect of discouraging takeover attempts. See "Description of Preferred Stock."
The provisions could also have the effect of insulating current management
against the possibility of removal and could, by possibly reducing temporary
fluctuations in market price caused by accumulations of shares, deprive
stockholders of opportunities to sell at a temporarily higher market price.
However, the Board of Directors believes that inclusion of the Business
Combination provisions in the Articles of Incorporation may help assure fair
treatment of stockholders and preserve the assets of the Company.
The foregoing summary of certain provisions of the Articles of
Incorporation does not purport to be complete or to give effect to provisions of
statutory or common law. The foregoing summary is subject to, and qualified in
its entirety by reference to, the provisions of applicable law and the Articles
of Incorporation, a copy of which is incorporated by reference as an exhibit to
the Registration Statement of which this Prospectus is a part.
Transfer Agent and Registrar
The Bank of New York is the transfer agent and registrar of the Common
Stock.
19
<PAGE>
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Securities
Warrants may be issued independently or together with Debt Securities, Preferred
Stock, Depositary Shares or Common Stock offered by any Prospectus Supplement
and may be attached to or separate from such Debt Securities, Preferred Stock,
Depositary Shares or Common Stock. Each series of Securities Warrants will be
issued under a separate warrant agreement (a "Securities Warrant Agreement") to
be entered into between the Company and a bank or trust company, as Securities
Warrant agent, all as set forth in the Prospectus Supplement relating to the
particular issue of offered Securities Warrants. The Securities Warrant agent
will act solely as an agent of the Company in connection with the Securities
Warrant certificates relating to the Securities Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders of
Securities Warrant certificates or beneficial owners of Securities Warrants. The
following summaries of certain provisions of the Securities Warrant Agreement
and Securities Warrants do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Securities Warrant Agreement and the Securities Warrant certificates relating to
each series of Security Warrants which will be filed with the Commission and
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part at or prior to the time of the issuance of such series
of Securities Warrants.
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) the denominations and terms of the
series of Debt Securities purchasable upon exercise of such Securities Warrants;
(iii) the designation and terms of any series of Debt Securities, Preferred
Stock or Depositary Shares with which such Securities Warrants are being offered
and the number of such Securities Warrants being offered with each such Debt
Security, Preferred Stock or Depositary Share; (iv) the date, if any, on and
after which such Securities Warrants and the related series of Debt Securities,
Preferred Stock or Depositary Shares will be transferable separately; (v) the
principal amount of the series of Debt Securities purchasable upon exercise of
each such Securities Warrant and the price at which such principal amount of
Debt Securities of such series may be purchased upon such exercise; (vi) the
date on which the right to exercise such Securities Warrants shall commence and
the date (the "Expiration Date") on which such right shall expire; (vii) whether
the Securities Warrants will be issued in registered or bearer form; (viii) any
special United States Federal income tax consequences; (ix) the terms, if any,
on which the Company may accelerate the date by which the Securities Warrants
must be exercised; and (x) any other terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock,
Depositary Shares or Common Stock, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including the following where
applicable: (i) the offering price; (ii) the aggregate number of shares
purchasable upon exercise of such Securities Warrants, the exercise price, and
in the case of Securities Warrants for Preferred Stock or Depositary Shares, the
designation, aggregate number and terms of the series of Preferred Stock
purchasable upon exercise of such Securities Warrants or underlying the
Depositary Shares purchasable upon exercise of such Securities Warrants; (iii)
the designation and terms of the series of Debt Securities, Preferred Stock or
Depositary Shares with which such Securities Warrants are being offered and the
number of such Securities Warrants being offered with each such Debt Security,
Preferred Stock or Depositary Share; (iv) the date, if any, on and after which
such Securities Warrants and the related series of Debt Securities, Preferred
Stock, Depositary Shares or Common Stock will be transferable separately; (v)
the date on which the right to exercise such Securities Warrants shall commence
and the Expiration Date; (vi) any special United States Federal income tax
consequences; and (vii) any other terms of such Securities Warrants.
Securities Warrant certificates may be exchanged for new Securities Warrant
certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Securities Warrant agent or any other office indicated in
the
20
<PAGE>
applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of, premium,
if any, or interest, if any, on such Debt Securities or to enforce covenants in
the applicable indenture. Prior to the exercise of any Securities Warrants to
purchase Preferred Stock, Depositary Shares or Common Stock, holders of such
Securities Warrants will not have any rights of holders of such Preferred Stock,
Depositary Shares or Common Stock, including the right to receive payments of
dividends, if any, on such Preferred Stock or Common Stock, or to exercise any
applicable right to vote.
Certain Risk Considerations
Any Securities Warrants issued by the Company will involve a certain degree
of risk, including risks arising from fluctuations in the price of the
underlying securities and general risks applicable to the stock market (or
markets) on which the underlying securities are traded.
Prospective purchasers of the Securities Warrants should recognize that the
Securities Warrants may expire worthless and, thus, purchasers should be
prepared to sustain a total loss of the purchase price of their Securities
Warrants. This risk reflects the nature of a Securities Warrant as an asset
which, other factors held constant, tends to decline in value over time and
which may, depending on the price of the underlying securities, become worthless
when it expires. The trading price of a Securities Warrant at any time is
expected to increase if the price, or, if applicable, dividend rate on the
underlying securities, increases. Conversely, the trading price of a Securities
Warrant is expected to decrease as the time remaining to expiration of the
Securities Warrant decreases and as the price or, if applicable, dividend rate
on the underlying securities, decreases. Assuming all other factors are held
constant, the more a Securities Warrant is "out-of-the-money" (i.e., the more
the exercise price exceeds the price of the underlying securities and the
shorter its remaining term to expiration), the greater the risk that a purchaser
of the Securities Warrant will lose all or part of his or her investment. If the
price of the underlying securities does not rise before the Securities Warrant
expires to an extent sufficient to cover a purchaser's cost of the Securities
Warrant, the purchaser will lose all or part of his or her investment in such
Securities Warrant upon expiration.
In addition, prospective purchasers of the Securities Warrants should be
experienced with respect to options and option transactions and understand the
risks associated with options and should reach an investment decision only after
careful consideration, with their financial advisers, of the suitability of the
Securities Warrants in light of their particular financial circumstances and the
information discussed herein and, if applicable, the Prospectus Supplement.
Before purchasing, exercising or selling any Securities Warrants, prospective
purchasers and holders of Securities Warrants should carefully consider, among
other things, (i) the trading price of the Securities Warrants, (ii) the price
of the underlying securities at such time, (iii) the time remaining to
expiration and (iv) any related transaction costs. Some of the factors referred
to above are in turn influenced by various political, economic and other factors
that can affect the trading price of the underlying securities and should be
carefully considered prior to making any investment decisions.
Purchasers of the Securities Warrants should further consider that the
initial offering price of the Securities Warrants may be in excess of the price
that a purchaser of options might pay for a comparable option in a private, less
liquid transaction. In addition, it is not possible to predict the price at
which the Securities Warrants will trade in the secondary market or whether any
such market will be liquid. The Company may, but is not obligated to, file an
application to list any Securities Warrants issued on a United States national
securities exchange. To the extent that any Securities Warrants are exercised,
the number of Securities Warrants outstanding will decrease, which may result in
a lessening of the liquidity of the Securities Warrants. Finally, the Securities
Warrants will constitute direct, unconditional and unsecured obligations of the
Company and as such will be subject to any changes in the perceived
creditworthiness of the Company.
21
<PAGE>
Exercise of Securities Warrants
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of shares of Preferred Stock,
Depositary Shares or Common Stock, as the case may be, at such exercise price as
shall in each case be set forth in, or calculable from, the Prospectus
Supplement relating to the offered Securities Warrants. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Company), unexercised Securities Warrants will
become void.
Securities Warrants may be exercised by delivering to the Securities
Warrant agent payment as provided in the applicable Prospectus Supplement of the
amount required to purchase the Debt Securities, Preferred Stock, Depositary
Shares or Common Stock, as the case may be, purchasable upon such exercise
together with certain information set forth on the reverse side of the
Securities Warrant certificate. Securities Warrants will be deemed to have been
exercised upon receipt of payment of the exercise price, subject to the receipt
within five (5) business days, of the Securities Warrant certificate evidencing
such Securities Warrants. Upon receipt of such payment and the Securities
Warrant certificate properly completed and duly executed at the corporate trust
office of the Securities Warrant agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
issue and deliver the Debt Securities, Preferred Stock, Depositary Shares or
Common Stock, as the case may be, purchasable upon such exercise. If fewer than
all of the Securities Warrants represented by such Securities Warrant
certificate are exercised, a new Securities Warrant certificate will be issued
for the remaining amount of Securities Warrants.
Amendments and Supplements to Securities Warrant Agreement
The Securities Warrant Agreements may be amended or supplemented without
the consent of the holders of the Securities Warrants issued thereunder to
effect changes that are not inconsistent with the provisions of the Securities
Warrants and that do not adversely affect the interests of the holders of the
Securities Warrants.
Common Stock Warrant Adjustments
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a Common
Stock Warrant are subject to adjustment in certain events, including (i) payment
of a dividend on the Common Stock payable in capital stock and stock splits,
combinations or reclassifications of the Common Stock, (ii) issuance to all
holders of Common Stock of rights or warrants to subscribe for or purchase
shares of Common Stock at less than their current market price (as defined in
the Securities Warrant Agreement for such series of Common Stock Warrants), and
(iii) certain distributions of evidences of indebtedness or assets (including
securities but excluding cash dividends or distributions paid out of
consolidated earnings or retained earnings or dividends payable in Common Stock)
or of subscription rights and warrants (excluding those referred to above).
No adjustment in the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from consolidated earnings or
retained earnings. No adjustment will be required unless such adjustment would
require a change of at least 1% in the exercise price then in effect. Except as
stated above, the exercise price of, and the number of shares of Common Stock
covered by, a Common Stock Warrant will not be adjusted for the issuance of
Common Stock or any securities convertible into or exchangeable for Common
Stock, or carrying the right or option to purchase or otherwise acquire the
foregoing, in exchange for cash, other property or services.
In the event of any (i) consolidation or merger of the Company with or into
any entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), (ii) sale, transfer, lease or conveyance of all or substantially
all of the assets of the Company or (iii) reclassification, capital
reorganization or change of
22
<PAGE>
the Common Stock (other than solely a change in par value or from par value to
no par value), then any holder of a Common Stock Warrant will be entitled, on or
after the occurrence of any such event, to receive on exercise of such Common
Stock Warrant the kind and amount of shares of stock or other securities, cash
or other property (or any combination thereof) that the holder would have
received had such holder exercised such holder's Common Stock Warrant
immediately prior to the occurrence of such event. If the consideration to be
received upon exercise of the Common Stock Warrant following any such event
consists of common stock of the surviving entity, then from and after the
occurrence of such event, the exercise price of such Common Stock Warrant will
be subject to the same anti-dilution and other adjustments described in the
second preceding paragraph, applied as if such common stock were Common Stock.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directory or
through agents. Any such underwriter or agent involved in the offer and sale of
Securities will be named in the applicable Prospectus Supplement. The Company
has reserved the right to sell Securities directly to investors on its own
behalf in those jurisdictions where and in such manner as it is authorized to do
so.
Underwriters may offer and sell Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Company
also may offer and sell Securities in exchange for one or more of its
outstanding issues of the Securities or other securities. The Company also may,
from time to time, authorize dealers, acting as the Company's agents, to offer
and sell Securities upon the terms and conditions as are set forth in the
applicable Prospectus Supplement. In connection with the sale of Securities,
underwriters may receive compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in the
distribution of Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them on resale of
the Securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities.
If so indicated in the Prospectus Supplement, the Company will authorize
dealers acting as the Company's agents to solicit offers by certain institutions
to purchase the Securities from the Company at the public offering price set
forth in the applicable Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of the Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in the
applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions but will in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
(i) the purchase by an institution of the Securities covered by its Contracts
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of such Securities less the
principal amount thereof covered by Contracts.
23
<PAGE>
The net proceeds to the Company from the sale of the Securities will be the
purchase price of the Securities less any such discounts or commissions and the
other attributable expenses of issuance and distribution.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by O'Melveny & Myers LLP. In addition, O'Melveny & Myers LLP has passed
upon certain federal income tax matters relating to the Company.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1997,
1996, 1995, 1994, and 1993 and the consolidated statements of operations,
stockholders' equity and cash flows for each of the five years in the period
ended December 31, 1997, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports 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.
24
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 16. Exhibits.
Exhibit
No. Description
- ------- -----------
1.1* Form of Underwriting Agreement
3.1(a)* Amended and Restated Articles of Incorporation, filed as Exhibit 3.1
to the Company's Registration Statement on Form S-11 (No. 33-1128),
effective December 19, 1985.
3.1(b)* Articles of Amendment and Restated Articles of Incorporation of the
Company, filed as Exhibit 3.1 to the Company's Form 10-Q for the
quarter ended March 31, 1989.
3.1(c)* Articles of Amendment of Amended and Restated Articles of
Incorporation of the Company, filed as Exhibit 3.1(c) to the Company's
Registration Statement on Form S-11 (No. 33-32251), effective January
23, 1990.
3.1(d)* Articles of Amendment of Amended and Restated Articles of
Incorporation of the Company, filed as Exhibit 3.1(d) to the Company's
Form 10-K for the year ended December 31, 1994.
4.1* Form of Indenture to be entered into between the Company and The Bank
of New York, as Trustee, and relating to the Debt Securities.
4.2* Form of Deposit Agreement.
4.3* Form of Depository Receipt (attached as Exhibit A to Deposit Agreement
included as Exhibit 4.3).
5.1* Opinion of O'Melveny & Myers LLP as to the validity of the Securities.
8.1 Opinion of O'Melveny & Myers LLP re tax matters.
12* Statement re Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP.
23.2* Consent of O'Melveny & Myers LLP (included in Exhibit 5.1).
23.3 Consent of O'Melveny & Myers LLP (included in Exhibit 8.1).
24* Power of Attorney.
25* Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Bank of New York, as Trustee (separately
bound).
_________________
* Previously filed or incorporated by reference.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment No. 2 to Form S-3 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Newport Beach, State of California, on
the 19th day of August, 1998.
NATIONWIDE HEALTH PROPERTIES, INC.
By: /s/ R. Bruce Andrews
--------------------------------------
R. Bruce Andrews
President, Chief Executive Officer and
Director
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 2 to Form S-3 has been signed by the following persons
in the capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
* Chairman and Director August 19, 1998
- --------------------------------------
Charles D. Miller
/s/ R. Bruce Andrews President, Chief Executive Officer August 19, 1998
- -------------------------------------- and Director (Principal executive
R. Bruce Andrews officer)
/s/ Mark L. Desmond Senior Vice President and Chief August 19, 1998
- -------------------------------------- Financial Officer (Principal
Mark L. Desmond financial and accounting officer)
* Director August 19, 1998
- --------------------------------------
David R. Banks
* Director August 19, 1998
- --------------------------------------
Sam A. Brooks
* Director August 19, 1998
- --------------------------------------
Jack D. Samuelson
* Director August 19, 1998
- --------------------------------------
Milton J. Brock, Jr.
*By: /s/ Mark L. Desmond
------------------------
Mark L. Desmond,
Attorney-in-fact
</TABLE>
II-2
<PAGE>
NATIONWIDE HEALTH PROPERTIES, INC.
EXHIBIT INDEX
TO AMENDMENT NO. 2 TO REGISTRATION STATEMENT ON FORM S-3
EXHIBIT
NUMBER EXHIBIT LOCATION
- ------- ------- --------
8.1 Opinion of O'Melveny & Myers LLP Contained herein on page 33.
re tax matters
23.1 Consent of Arthur Andersen LLP Contained herein on page 35.
23.3 Consent of O'Melveny & Myers LLP Contained in Exhibit 8.1
included herein on page 33.
32
<PAGE>
EXHIBIT 8.1
August 19, 1998
Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
Re: Nationwide Health Properties, Inc. --
Form S-3 Registration Statement (File No. 33-10671)
---------------------------------------------------
Gentlemen
In connection with the above Registration Statement regarding the
proposed issuance and sale of the Securities of Nationwide Health Properties,
Inc., a Maryland corporation (the "Company"), you have requested our opinion
whether the Company qualified as a real estate investment trust (a "REIT") under
sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), for its taxable year ended December 31, 1997 and whether it will
continue to so qualify if it operates subsequent to June 30, 1998 in the same
manner as it has prior to that date. You have also asked our opinion whether
the Company should be treated as the owner of its properties listed in the
schedule which you provided to us (the "Properties") for federal income tax
purposes and whether the leases with respect to such Properties (the "Leases")
should be treated as true leases, and not financing arrangements, for such
purposes. All capitalized terms in this opinion and not otherwise defined
herein shall have the same respective meanings as set forth in the Registration
Statement.
As of July 25, 1997, we delivered our opinion (the "7/25/97 Opinion")
concerning the qualification of the Company as a REIT for its taxable year ended
December 31, 1996 and its continuing qualifications as a REIT if it operated
subsequent to June 30, 1997 in the same manner as it had prior to that date.
The 7/25/97 Opinion, and the certificates, documents and other materials
referred to therein, are hereby incorporated by reference. Since July 25, 1997,
there have been delivered to us certain certificates and schedules prepared and
executed by Company personnel, setting forth certain factual representations
regarding the Company and its assets and operations. This opinion specifically
relies on such documents, certificates and schedules and assumes that the facts
represented therein will not change in any material way so long as the Company
seeks to qualify as a REIT.
On the basis of the foregoing and subject to all of the
qualifications, conditions and factual assumptions set forth herein and in the
7/25/97 Opinion, we are of the opinion that for the calendar year 1997, the
Company met each of the requirements for qualification as a REIT, and if the
Company operates subsequent to June 30, 1998 in the same manner as it has prior
to such date, it will continue to so qualify, provided that the various tests
for qualification as a REIT relating to its income, assets, distributions,
ownership and certain administrative matters are satisfied in those years.
However, we are unable to opine whether the Company will actually continue to
qualify as a REIT because such qualification will depend on future transactions
and events which cannot be known at this time.
33
<PAGE>
We also wish to advise you that on the basis of and in reliance on the
foregoing and on the facts set forth in the Registration Statement, it is the
opinion of O'Melveny & Myers LLP that under current law, including relevant
statutes, regulations, and judicial and administrative precedent (which law is
subject to change on a retroactive basis), a court, more likely than not, would
hold that the Company would be treated as the owner of the Properties for
federal income tax purposes and the Leases would be treated as true leases, and
not financing arrangements, for such purposes. You should be aware that this
opinion is not binding on the Internal Revenue Service and no assurance can be
given that the Internal Revenue Service may not successfully challenge the
conclusions set forth in this opinion. If the Internal Revenue Service
successfully challenged such conclusions, the Company would not be entitled to
claim depreciation with respect to the Properties and might be compelled to make
deficiency dividends to satisfy the 95% dividend distribution requirement or
lose its REIT status.
Respectfully submitted,
/s/ O'MELVENY & MYERS LLP
34
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 16, 1998
included in Nationwide Health Properties, Inc.'s Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Orange County, California
August 17, 1998
35
