<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 27, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN HEALTH PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-4084878
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
6400 SOUTH FIDDLER'S GREEN CIRCLE, SUITE 1800
ENGLEWOOD, COLORADO 80111
(303) 796-9793
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JOSEPH P. SULLIVAN
6400 SOUTH FIDDLER'S GREEN CIRCLE, SUITE 1800
ENGLEWOOD, COLORADO 80111
(303) 796-9793
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
PAUL HILTON
DAVIS, GRAHAM & STUBBS, LLP
370 17TH STREET, SUITE 4700
DENVER, COLORADO 80202
(303) 892-9400
------------------------
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 the Registrant.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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, check the following box and
list the Securities Act registration 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 number of the earlier registration statement for the same
offering. [ ]
(Cover continued on following page)
================================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1)(2) OFFERING PRICE(2) FEE(2)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01
par value(3)(4)...... 250,000 shares $26.1875 $6,546,875 $1,984
======================================================================================================================
</TABLE>
(1) 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 Common Stock registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c). The registration fee was computed on the basis of
the market value of the Common Stock, computed in accordance with Rule
457(c) on the basis of the average of high and low prices per share of such
stock on The New York Stock Exchange on March 25, 1998.
(3) The aggregate amount of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) under the Securities Act of 1933,
as amended.
(4) This Registration Statement also covers Preferred Stock Purchase Rights
under the Registrant's Preferred Stock Purchase Rights Plan, which are
attached to and tradeable only with the shares of Common Stock registered
hereby. No registration fees are required for such shares and such rights as
they will be issued for no additional consideration.
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.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 27, 1998
PROSPECTUS
American Health Properties, Inc.
250,000 SHARES
COMMON STOCK
------------------------
This Prospectus covers the offer and sale of up to 250,000 shares of common
stock, $.01 par value per share (the "Common Stock"), of American Health
Properties, Inc. ("AHP" or the "Company") that may be offered and issued by the
Company from time to time in connection with future acquisitions of other
businesses or properties, or securities of other businesses, in business
combination transactions in accordance with Rule 415(a)(1)(viii) of Regulation C
under the Securities Act of 1933, as amended (the "Securities Act") or otherwise
permitted under the Securities Act. This Prospectus, as amended or supplemented,
if necessary, also relates to certain shares of Common Stock that may be resold
or reoffered by persons who acquired such shares pursuant to this Prospectus
(the "Selling Stockholders").
The Company intends to concentrate its acquisitions in areas related to the
current business of the Company. If the opportunity arises, however, the Company
may attempt to make acquisitions that are either complementary to its present
operations or that it considers advantageous even though they may be dissimilar
to its present activities. The consideration for any such acquisition may
consist of shares of Common Stock, cash, notes or other evidences of debt,
assumptions of liabilities or a combination thereof, as determined from time to
time by negotiations between the Company and the owners or controlling persons
of businesses or properties to be acquired.
The shares covered by this Prospectus may be issued in exchange for shares
of capital stock, partnership interests or other assets representing an
interest, direct or indirect, in other companies or other entities, in exchange
for assets used in or related to the business of such entities or otherwise
pursuant to the agreements providing for such acquisitions. The terms of such
acquisitions and of the issuance of shares of Common Stock under acquisition
agreements will generally be determined by direct negotiations with the owners
or controlling persons of the business or properties to be acquired or, in the
case of entities that are more widely held, through exchange offers to
stockholders or documents soliciting the approval of statutory mergers,
consolidations or sales of assets. It is anticipated that the shares of Common
Stock issued in any such acquisition will be valued at a price reasonably
related to the market value of the Common Stock either at the time of agreement
on the terms of an acquisition or at or about the time of delivery of the shares
of Common Stock.
It is not expected that underwriting discounts or commissions will be paid
by the Company in connection with issuances of shares of Common Stock under this
Prospectus. However, finders' fees or brokers' commissions may be paid from time
to time in connection with specific acquisitions, and such fees may be paid
through the issuance of shares of Common Stock covered by this Prospectus. Any
person receiving such a fee may be deemed to be an underwriter within the
meaning of the Securities Act.
The Company's Common Stock is listed on The New York Stock Exchange (Symbol:
"AHE"). The shares covered by this Prospectus will be listed, subject to notice
of issuance, on The New York Stock Exchange.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL
------------------------
The date of this Prospectus is , 1998
<PAGE> 4
No person is authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus or
in any accompanying Prospectus Supplement, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, agent or dealer. This Prospectus and any
accompanying Prospectus Supplement do not constitute an offer to sell or a
solicitation of an offer to buy any securities in any jurisdiction to any person
when such an offer would be unlawful.
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 information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and Seven World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W. Plaza, Washington,
D.C. 20549. The Commission also maintains a website at http://www.sec.gov that
contains reports, proxy statements and other information of and concerning the
Company. Such reports and proxy statements can also be inspected at the offices
of The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005
and at the offices of the National Association of Securities Dealers, Inc., 1735
K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Common Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement and
reference is hereby made to the Registration Statement and the exhibits thereto
for further information with respect to the Company and the Common Stock.
Statements contained in this Prospectus as to the contents of certain documents
are not necessarily complete, and, with respect to each such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission,
reference is made to the copy of the document so filed. Each statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1996.
2. Quarterly Report on Form 10-Q for the three months ended March 31, 1997.
3. Quarterly Report on Form 10-Q for the three and six months ended June
30, 1997.
4. Quarterly Report on Form 10-Q for the three and nine months ended
September 30, 1997.
5. Current Report on Form 8-K, dated August 14, 1995.
6. Registration Statement on Form 8-A, filed with the Commission on
November 7, 1997.
7. Description of the Company's Preferred Stock, Series A, set forth in the
Company's Registration Statement on Form 8-A dated April 20, 1990.
8. 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 Common Stock shall be deemed to be incorporated herein by reference
and to be a part of this Prospectus from the date of filing of each such
document.
2
<PAGE> 5
Any statement contained herein or in a document all or a portion of which
is 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 or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein or in any Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner of Common Stock, to whom this Prospectus is delivered, upon the
request of such person, a copy of any of the documents incorporated by reference
herein, except for the exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to 6400 South Fiddler's Green Circle, Suite 1800, Englewood, Colorado
80111 (Telephone: (303) 796-9793), Attention: Secretary.
3
<PAGE> 6
The following information is qualified in its entirety by reference to the
more detailed information and financial statements, including the notes thereto,
incorporated herein by reference. Certain capitalized terms used herein are
defined in the Glossary.
THE COMPANY
American Health Properties, Inc. (together with its subsidiaries, the
"Company") is a self-administered real estate investment trust ("REIT") that
commenced operations in 1987. The Company has investments in health care
facilities that are operated by qualified third party health care providers, as
well as medical office/clinic facilities.
As of March 15, 1998, the Company's portfolio of investments consisted of
13 acute care hospitals, three psychiatric hospitals owned by the Company, two
mortgage loans secured by psychiatric hospitals, three rehabilitation hospitals,
six assisted living facilities (two of which are under construction), one
mortgage loan secured by a long-term acute care hospital, one long-term acute
care hospital, six skilled nursing facilities (two of which are under
construction), 12 medical office/clinic facilities and two Alzheimer's care
facilities. The Company has separated its business and properties into two
distinct units: (i) the Core Group, which includes the Company's acute care,
rehabilitation hospitals, assisted living facilities, long-term acute care
facilities, skilled nursing facilities, medical office/clinic facilities and
Alzheimer's care facilities and (ii) the Psychiatric Group, which includes all
of the Company's investments in psychiatric hospitals. The Common Stock is
intended to reflect the separate financial performance of the Core Group, while
the Company's Psychiatric Group Preferred Stock ("Psychiatric Group Stock") is
intended to reflect the separate financial performance of the Psychiatric Group.
The Company's principal executive office is located at 6400 South Fiddler's
Green Circle, Suite 1800, Englewood, Colorado 80111, and its telephone number at
such address is (303) 796-9793.
MANAGEMENT AND ACCOUNTING POLICIES
The Company prepares financial statements in accordance with generally
accepted accounting principles, consistently applied, for both of the Groups,
and these financial statements, taken together, comprise all of the accounts
included in the corresponding consolidated financial statements of the Company.
The financial statements of each Group principally reflect the investments
included therein. Such Group financial statements also include allocated
portions of the Company's corporate assets, liabilities (including contingent
liabilities), stockholders' equity and items of income, expense and cash flow
that are not separately identified with the operations of the other Group.
Notwithstanding such allocations for the purpose of preparing Group financial
statements, each holder of Common Stock, preferred stock (and depositary shares
with respect thereto) or Psychiatric Group Stock is a holder of an issue of
capital stock of the entire Company and is subject to risks associated with an
investment in the entire Company and all of its businesses, assets and
liabilities.
Cash management and allocation of principal corporate activities between
the Psychiatric Group and the Core Group are based upon methods that management
believes to be reasonable and are reflected in their respective Group financial
statements. The following is a summary of certain policies adopted by the Board
and relating to these matters, as in effect as of the date of this Prospectus.
(i) Cash needs of the Psychiatric Group in excess of cash held by the
Psychiatric Group may, at the option of the Board, be funded by advances
from the Core Group to the Psychiatric Group constituting additional
revolving inter-Group loans, but the aggregate revolving inter-Group loans
owed by the Psychiatric Group to the Core Group are limited to a maximum of
$7,870,000 at any one time outstanding, subject to reduction of such limit
commensurate with any permanent repayment in the future of working capital
loans extended to certain psychiatric hospital operators, but in no event
will such limit be reduced below $5,000,000.
4
<PAGE> 7
(ii) Except as permitted by (i) above, no additional fixed rate or
other inter-Group loans will be advanced by the Core Group to the
Psychiatric Group.
(iii) All third party debt incurred by the Company and its
subsidiaries is specifically attributed to and reflected on the financial
statements of the Core Group except for debt that is non-recourse to the
assets of the Core Group.
(iv) All Common Stock and any other class or series of stock of the
Company, including any preferred stock and any depositary shares with
respect thereto, other than the Psychiatric Group Stock, as well as the net
proceeds of any future issuances thereof, are specifically attributed to
and reflected on the financial statements of the Core Group.
(v) If the Psychiatric Group sells any assets out of the ordinary
course ("Psychiatric Group Asset Sales"), the Net Proceeds from Psychiatric
Group Asset Sales will be applied, first, to repay revolving inter-Group
loans owed by the Psychiatric Group to the Core Group to the extent of the
psychiatric hospital operator working capital loans associated with the
asset or assets sold, second, to repay fixed rate inter-Group loans owed by
the Psychiatric Group to the Core Group (until repaid in full), and third,
to repay other revolving inter-Group loans owed by the Psychiatric Group to
the Core Group (until repaid in full), before any remaining Net Proceeds
from Psychiatric Group Asset Sales may be used to make distributions to
holders of the Company's preferred stock or Psychiatric Group Stock as
described under "Description of Capital Stock -- Dividends."
(vi) Excess cash held by the Psychiatric Group (other than Net
Proceeds from Psychiatric Group Asset Sales, which is treated as described
in (v) above) is applied to reduce revolving inter-Group loans owed by the
Psychiatric Group to the Core Group (until repaid in full), subject to the
ability of the Psychiatric Group, at the option of the Board, to re-borrow
cash from the Core Group up to the limitations described in (i) above to
cover future cash needs of the Psychiatric Group (including, without
limitation, to fund dividends in a manner consistent with the dividend
policy then applicable to the Psychiatric Group Stock).
(vii) Fixed rate inter-Group loans owed by the Psychiatric Group to
the Core Group (a) bear interest at a fixed rate of approximately 13% per
annum and (b) are prepayable without premium at any time, at the option of
the Board. The higher interest rate charged to the Psychiatric Group
reflects management's belief that the consolidated Company is a stronger
credit than the Psychiatric Group on a stand alone basis.
(viii) Revolving inter-Group loans owed by the Psychiatric Group to
the Core Group (a) bear interest at a floating rate equal from time to time
to the prevailing prime rate (as determined by the Board, whose
determination shall be conclusive) plus 2% and (b) are prepayable without
premium at any time, at the option of the Board. The higher interest rate
charged to the Psychiatric Group reflects management's belief that the
consolidated Company is a stronger credit than the Psychiatric Group on a
stand alone basis.
(ix) Cash held by the Psychiatric Group in excess of inter-Group loans
owed by the Psychiatric Group required to be repaid as set forth in (v) and
(vi) above may, at the option of the Board, be advanced to the Core Group
as revolving inter-Group loans (to the extent such cash can be beneficially
put to use by the Core Group) or otherwise invested on behalf of the
Psychiatric Group.
(x) Revolving inter-Group loans owed by the Core Group to the
Psychiatric Group (a) bear interest at a floating rate equal from time to
time to the weighted average interest rate borne by the Company's revolving
debt (or, for periods in which there is no such revolving debt outstanding,
the interest rate at which the Company could borrow on a revolving basis,
as determined by the Board, whose determination shall be conclusive) and
(b) are prepayable without premium at any time, at the option of the Board.
The interest rate charged to the Core Group reflects management's belief
that the consolidated Company and the Core Group, on a stand alone basis,
are comparable credits.
5
<PAGE> 8
(xi) As a result of the foregoing, the balance sheet of the Core Group
reflects its net revolving and net fixed rate inter-Group loans to or
borrowings from the Psychiatric Group, and the balance sheet of the
Psychiatric Group reflects its net revolving and net fixed rate inter-Group
loans to or borrowings from the Core Group. Similarly, the respective
income statements of the Core Group and the Psychiatric Group reflect
interest income or expense, as the case may be, associated with such loans
or borrowings and the respective statements of cash flows of the Core Group
and the Psychiatric Group reflect changes in the amounts thereof deemed
outstanding.
(xii) Corporate, general and administrative costs that cannot be
directly allocated to either Group are allocated between the Core Group and
the Psychiatric Group on the basis of their respective contributions to
revenue, provided that at no time will such expenses allocated to either
Group be less than $250,000 per annum.
Nothing in the foregoing policies obligates the Board to cause the Core
Group to provide funds to the Psychiatric Group if the Board determines it is in
the best interests of the Company not to do so. The foregoing policies may be
modified or rescinded in the sole discretion of the Board without the approval
of stockholders, although there is no present intention to do so. The Board
could also adopt additional policies depending upon the circumstances. Any
determination by the Board to modify or rescind such policies, or to adopt
additional policies, including any such decision that could have disparate
effects upon holders of Common Stock and Psychiatric Group Stock, would be made
by the Board in the good faith belief that such decision is in the best
interests of the Company and its stockholders, including the holders of Common
Stock and Psychiatric Group Stock. In addition, generally accepted accounting
principles would require that changes in accounting principles must be
preferable (in accordance with generally accepted accounting principles) to the
principles previously in place.
6
<PAGE> 9
SELECTED FINANCIAL DATA
Set forth below for the years ended December 31, 1996, 1995, 1994 and 1993
are (a) selected consolidated financial data with respect to the Company, (b)
selected combined financial data for the Core Group, and (c) selected combined
financial data for the Psychiatric Group. The selected financial data should be
read in conjunction with the Consolidated, Core Group Combined and Psychiatric
Group Combined Financial Statements and accompanying Notes incorporated by
reference herein.
<TABLE>
<CAPTION>
CONSOLIDATED
YEARS ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues........................................ $ 88,924 $ 91,230 $ 87,027 $ 81,523
Net income (loss)(1)(2)......................... $ 44,379 $ 42,381 $ 9,693 $ 50,987
Cash flows from operating activities............ $ 61,241 $ 57,471 $ 54,984 $ 45,884
Dividends declared.............................. $ 53,681 $ 50,769 $ 47,982 $ 44,766
Total assets.................................... $577,882 $586,316 $579,503 $614,453
Total debt...................................... $207,101 $207,378 $245,663 $245,423
Stockholders' equity............................ $345,139 $353,060 $307,501 $343,303
</TABLE>
<TABLE>
<CAPTION>
CORE GROUP
YEARS ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993
-------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues........................................ $ 81,429 $ 82,913 $ 75,680 $ 73,036
Net income(1)................................... $ 38,800 $ 36,107 $ 32,548 $ 48,616
Net income per common share(1)(3)............... $ 1.65 $ 1.69 $ 1.56 $ 2.58
Weighted average common shares outstanding(3)... 23,518 21,405 20,856 18,843
Cash flows from operating activities............ $ 54,841 $ 50,413 $ 46,258 $ 41,276
Dividends declared.............................. $ 47,845 $ 44,095 $ 39,303 $ 38,078
Dividends declared per common share(3).......... $ 2.04 $ 1.99 $ 1.88 $ 1.91
Total assets.................................... $527,979 $536,199 $528,686 $532,461
Total attributed debt........................... $207,101 $207,378 $245,663 $245,423
Total attributed equity......................... $297,176 $304,947 $259,199 $263,832
</TABLE>
<TABLE>
<CAPTION>
PSYCHIATRIC GROUP
YEARS ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993
-------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues........................................ $ 9,174 $ 10,346 $ 15,388 $ 15,317
Net income (loss)(2)............................ $ 5,579 $ 6,274 $(22,855) $ 2,371
Net income (loss) per depositary share(2)(3).... $ 2.67 $ 3.00 $ (10.96) $ 1.26
Weighted average depositary shares
outstanding(3)................................ 2,093 2,091 2,086 1,884
Cash flows from operating activities............ $ 6,400 $ 7,058 $ 8,726 $ 4,608
Dividends declared.............................. $ 5,836 $ 6,674 $ 8,679 $ 6,688
Dividends declared per depositary share(3)...... $ 2.80 $ 3.20 $ 4.16 $ 3.36
Total assets.................................... $ 63,261 $ 64,555 $ 80,245 $116,820
Total attributed debt........................... $ 13,358 $ 14,438 $ 29,428 $ 34,828
Total attributed equity......................... $ 47,963 $ 48,113 $ 48,302 $ 79,471
</TABLE>
- ---------------
(1) Includes gain of $19,742,000 in 1993 on the sale of properties or
partnership interests therein.
(2) Includes write-downs of $30,000,000 in 1994 relating to investments in
psychiatric properties.
(3) For purposes of computing per share and weighted average data for periods
prior to the July 25, 1995 distribution of depositary shares, each
representing one-tenth of one share of Psychiatric Group Stock (the
"Psychiatric Group Depositary Shares"), the number of shares of Common Stock
are assumed to be the same as the corresponding number of shares of the
Common Stock outstanding prior to July 25, 1995, while the number of
Psychiatric Group Depositary Shares are assumed to be one-tenth of the
corresponding number of shares of the Common Stock outstanding prior to July
25, 1995.
7
<PAGE> 10
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is traded on The New York Stock Exchange ("NYSE") under
the trading symbol "AHE." The table below shows the reported high and low sales
prices for the Company's Common Stock as reported by the NYSE Composite Tape for
the last two fiscal years and the cash dividends declared per share with respect
to such periods.
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------
DIVIDENDS
QUARTER HIGH LOW DECLARED
------- ---- ---- ---------
<S> <C> <C> <C>
1997
4th......................................................... $28 $24 $.5450
3rd......................................................... 25 15/16 24 7/16 .5250
2nd......................................................... 26 3/8 23 .5250
1st......................................................... 26 22 7/8 .5250
1996
4th......................................................... $24 3/8 $21 1/8 $.5250
3rd......................................................... 23 1/8 20 5/8 .5050
2nd......................................................... 22 3/4 20 1/2 .5050
1st......................................................... 23 7/8 21 1/2 .5050
</TABLE>
As of March 13, 1998, the reported high and low sales prices for the
Company's Common Stock for 1998 were $29 and $26, respectively. As of March 13,
1998, there were approximately 3,964 holders of record and 23,965,255 shares
outstanding of the Company's Common Stock.
In general, dividends on the Company's Common Stock and Psychiatric Group
Stock are limited by the Company's unsecured revolving credit agreement to 95%
of cash flow available for debt service, less interest expense, plus gains on
asset dispositions and certain proceeds from the disposition of Psychiatric
Group assets after the repayment of Psychiatric Group indebtedness ("PG Excess
Proceeds"). Dividends or other distributions paid out of PG Excess Proceeds will
be available only for the Psychiatric Group Stock and the Company's 8.60%
Cumulative Redeemable Preferred Stock, Series B (the "Series B Preferred
Stock"), and will be limited to $30 million in the aggregate and $15 million in
any calendar year.
The Certificate of Designation for the Series B Preferred Stock prohibits
the Company from redeeming or declaring a dividend on the Common Stock or the
Psychiatric Group Stock unless all cumulative dividends with respect to the
Series B Preferred Stock have been paid or funds have been set apart for the
payment of such dividends.
The Company expects that quarterly dividends on the Common Stock and the
Psychiatric Group Stock in the future will be based primarily upon the funds
from operations attributable to the Core Group and the Psychiatric Group,
respectively, after the payment of dividends on the Series B Preferred Stock.
Specifically, the Company expects to maintain the Common Stock dividend payout
ratio at less than 90% of annual funds from operations attributable to the Core
Group and the Psychiatric Group Stock dividend payout ratio (excluding
distributions out of PG Excess Proceeds) at less than 95% of annual funds from
operations attributable to the Psychiatric Group.
In addition, the Company expects to use the net proceeds from the
disposition of the Psychiatric Group assets initially to repay then outstanding
inter-Group loans or other debt owed by the Psychiatric Group. Subject to the
rights of holders of the Series B Preferred Stock and any other preferred stock
of the Company then outstanding, the Company intends to distribute all remaining
net proceeds, if any, to holders of Psychiatric Group Stock by dividend, tender
offer, open market or privately negotiated repurchases or otherwise (in cash, or
in Common Stock valued at a ten trading day average market value prior to the
time of the distribution).
The payment of dividends on the Common Stock and the Psychiatric Group
Stock will also be dependent in part upon the financial condition of the Company
as a whole.
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The Company expects the aggregate annual dividends paid on the Common Stock
and the Psychiatric Group Stock to be at least sufficient to cause the Company
to maintain its status as a REIT. In order to permit the Company to qualify as a
REIT, the Company must distribute to stockholders at least 95% of its annual
REIT taxable income (which essentially is its net ordinary income, excluding
capital gains). Generally, as a result of non-cash items, primarily
depreciation, cash dividends have exceeded and may continue to exceed the
Company's REIT taxable income and to that extent represent a return of capital.
Dividends on the Common Stock and the Psychiatric Group Stock will be
limited to the available dividend amount attributable to the Core Group and the
Psychiatric Group, respectively. The available dividend amount is similar to the
amount that would be legally available under Delaware law for the payment of
dividends by the Core Group or the Psychiatric Group, as the case may be, if
such Group were a separate Delaware corporation. There can be no assurance that
there will be an available dividend amount with respect to either Group. As of
December 31, 1997, the available dividend amount attributable to the Core Group,
after payment of dividends on the Series B Preferred Stock, and the Psychiatric
Group as of that date was at least $277.3 million and $36.7 million,
respectively. All dividends on Series B Preferred Stock and Common Stock will be
deemed to be out of the Core Group's funds and all dividends on Psychiatric
Group Stock will be deemed to be out of the Psychiatric Group's funds.
Dividends on Series B Preferred Stock, the Common Stock and the Psychiatric
Group Stock will be further limited to the amount of funds of the Company
legally available under Delaware law for the payment of dividends by the Company
on its capital stock. As of December 31, 1997, the funds of the Company legally
available for the payment of dividends would have been at least $314.0 million.
Payments of dividends on any of the Series B Preferred Stock, the Common Stock
or the Psychiatric Group Stock will decrease the amount of funds legally
available for the payment of dividends on the Series B Preferred Stock, the
Common Stock and the Psychiatric Group Stock.
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DESCRIPTION OF CAPITAL STOCK
The following description is intended as a summary of the principal
provisions of, and is qualified in all respects by reference to, (a) the
Company's Certificate of Incorporation and Bylaws previously filed with the
Securities and Exchange Commission, (b) the Certificate of Designations
specifying the terms of the Psychiatric Group Stock, filed as Exhibit 4.1 to the
Current Report on Form 8-K, dated August 14, 1995, (c) the Certificate of
Designations specifying the terms of the Series B Preferred Stock, filed as
Exhibit 4.1 to the Registration Statement on Form 8-A, filed with the Commission
on November 7, 1997, and (d) the description of the Company's Preferred Stock,
Series A (the "Series A Preferred Stock"), contained in the Company's
Registration Statement on Form 8-A dated April 20, 1990, each of which is
incorporated by reference herein.
GENERAL
The Certificate of Incorporation of the Company provides that the Company
is authorized to issue 100,000,000 shares of Common Stock, par value $0.01 per
share, and 1,000,000 shares of preferred stock, par value $0.01 per share,
issuable in series by the Board. As of March 13, 1998, the Company had issued
and outstanding: (a) 40,000 shares of Series B Preferred Stock, (b) 23,965,255
shares of Common Stock, and (c) approximately 208,000 shares of Psychiatric
Group Stock, which constitute a separate series of preferred stock. In addition,
the Company is authorized to issue up to 350,000 shares of Series A Preferred
Stock in connection with the Company's Preferred Stock Purchase Rights Plan. See
"-- Preferred Stock Purchase Rights Plan."
The currently outstanding shares of Psychiatric Group Stock are the only
shares of Psychiatric Group Stock authorized by the Board to be issued, except
shares of Psychiatric Group Stock issuable upon exercise of options granted in
connection with the transaction in which the Company distributed Depositary
Shares representing Psychiatric Group Stock to the holders of the Company's
Common Stock (the "Distribution").
The Series B Preferred Stock is represented by 4,000,000 depositary shares
("Series B Depositary Shares"), each of which represents a one-one-hundredth
( 1/100) interest in a share of Series B Preferred Stock. The Psychiatric Group
Stock is also represented by approximately 2,080,000 Psychiatric Group
Depositary Shares, each of which represents a one-tenth ( 1/10) interest in a
share of Psychiatric Group Stock.
The authorized but unissued shares of Common Stock of the Company will be
available for issuance from time to time by the Company at the sole discretion
of the Board for any proper corporate purpose, which could include raising
capital, providing compensation or benefits to employees, paying stock dividends
or acquiring companies or businesses. Under applicable Delaware law, such future
issuances of Common Stock would not require further approval of stockholders,
and the Company would not seek approval of stockholders unless such approval
would be required by stock exchange regulations, would be in conjunction with a
further amendment to the Certificate of Incorporation or would otherwise be
deemed advisable by the Board, in its sole discretion.
Each holder of Series B Preferred Stock, Common Stock or Psychiatric Group
Stock is a holder of an issue of capital stock of the entire Company and is
subject to the risks associated with an investment in the Company and all of its
businesses, assets and liabilities. For example, if the cash flow and proceeds
of any sales of assets of the Psychiatric Group should be insufficient to
service inter-Group loans or other debt owed by the Psychiatric Group, the Core
Group would be adversely affected.
The Common Stock trades on The New York Stock Exchange, Inc. under the
symbol "AHE" and the Psychiatric Group Stock is quoted on the National
Association of Securities Dealers Automated Quotations National Market under the
symbol "AHEPZ." The Series B Preferred Stock trades on The New York Stock
Exchange under the symbol "AHEpB."
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RANKING
With respect to payment of dividends and amounts upon liquidation,
dissolution or winding up, the Series B Preferred Stock ranks senior to the
Common Stock, the Series A Preferred Stock (if and when issued), and the
Psychiatric Group Stock.
While any Series B Preferred Stock is outstanding, the Company may not
authorize, create or increase the authorized amount of any class of security
that ranks senior to the Series B Preferred Stock with respect to the payment of
dividends or amounts payable upon liquidation, dissolution or winding up, or any
class of security convertible into shares of such a class, without the consent
of the holders of two thirds of the outstanding Series B Preferred Stock and
Parity Shares (as defined below), voting as a single class. However, the Company
may create additional classes of other stock, increase the authorized number of
shares of preferred stock, issue series of Preferred Stock that are subordinated
to the Series B Preferred Stock, or issue series of preferred stock ranking on a
parity with the Series B Preferred Stock with respect, in each case, to the
payment of dividends and amounts upon liquidation, dissolution and winding up (a
"Parity Share"), without the consent of the holders of Series B Preferred Stock.
DIVIDENDS
Holders of the Series B Preferred Stock are entitled to receive, when and
as declared by the Board of Directors, out of funds legally available for the
payment of dividends, cumulative preferential annual cash dividends of $215.00
per share (equivalent to $2.15 per Series B Depositary Share per annum). Such
dividends are cumulative and payable quarterly in arrears on the last calendar
day (or, if such day is not a business day, the next business day) of each
February, May, August and November. Dividends on Series B Preferred Stock will
accrue whether or not the Company has earnings, whether or not there are funds
legally available for the payment of such dividends and whether or not such
dividends are declared.
Subject to the rights, if any, of holders of any other preferred stock
(including holders of the Series B Preferred Stock), dividends may be paid on
the Common Stock and/or the Psychiatric Group Stock in equal or unequal amounts,
when, as and if declared by the Board. Dividends on the Common Stock and
Psychiatric Group Stock will be limited to the Available Dividend Amount
attributable to the Core Group and the Psychiatric Group, respectively. As of
December 31, 1997, the Available Dividend Amount attributable to the Core Group,
after payment of dividends on the Series B Preferred Stock and the Psychiatric
Group as of that date was at least $277.3 million and $36.7 million,
respectively. The Available Dividend Amount is similar to the amount that would
be legally available under Delaware law for the payment of dividends by the Core
Group or Psychiatric Group, as the case may be, if such Group were a separate
Delaware corporation. There can be no assurance that there will be an Available
Dividend Amount with respect to either Group.
The payment of dividends on the Series B Preferred Stock, the Common Stock
and the Psychiatric Group Stock will be further limited to the amount of funds
of the Company legally available under Delaware law for the payment of dividends
by the Company on its capital stock. As of December 31, 1997 the funds of the
Company legally available for the payment of dividends would have been at least
$314.0 million. Payments of dividends on the Series B Preferred Stock, the
Common Stock or the Psychiatric Group Stock will decrease the amount of funds
legally available for the payment of dividends on the Series B Preferred Stock,
the Common Stock and the Psychiatric Group Stock.
In general, dividends on the Company's Common Stock and Psychiatric Group
Stock are limited by the Company's unsecured revolving credit agreement to 95%
of cash flow available for debt service, less interest expense, plus PG Excess
Proceeds. Dividends or other distributions paid out of PG Excess Proceeds will
be available only for the Psychiatric Group Stock and the Series B Preferred
Stock, and will be limited to $30 million in the aggregate and $15 million in
any calendar year.
The Certificate of Designation for the Series B Preferred Stock prohibits
the Company from redeeming or declaring a dividend on the Common Stock or the
Psychiatric Group Stock unless all cumulative dividends with respect to the
Series B Preferred Stock have been paid or funds have been set apart for the
payment of such dividends.
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The Company expects that quarterly dividends on the Common Stock and the
Psychiatric Group Stock in the future will be based primarily upon the funds
from operations attributable to the Core Group and the Psychiatric Group,
respectively, after the payment of dividends on the Series B Preferred Stock or
any other preferred stock then outstanding (other than the Psychiatric Group
Stock). Specifically, the Company expects to maintain the Common Stock dividend
payout ratio at less than 90% of annual funds from operations attributable to
the Core Group and the Psychiatric Group Stock dividend payout ratio (excluding
distributions out of PG Excess Proceeds) at less than 95% of annual funds from
operations attributable to the Psychiatric Group.
EXCHANGE AND REDEMPTION
Series B Preferred Stock
The Series B Preferred Stock is not redeemable by the Company prior to
October 27, 2002. On and after October 27, 2002, the Company, at its option, may
redeem the Series B Preferred Stock, in whole or in part, at any time or from
time to time, for cash at a redemption price of $2,500.00 per share of Series B
Preferred Stock ($25.00 per Series B Depositary Share), plus accumulated,
accrued and unpaid dividends thereon to the date fixed for redemption, without
interest. The redemption price of the Series B Preferred Stock (other than the
portion thereof consisting of accrued and unpaid dividends) is payable solely
out of proceeds from the sale of other capital stock of the Company, which may
include Common Stock, preferred stock, depositary shares, interests,
participations or other ownership interests in the Company however designated
(other than debt securities convertible into or exchangeable for equity
securities), and any rights, warrants or options to purchase any thereof.
Unless full cumulative dividends on all Series B Preferred Stock and any
Parity Shares have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
dividend periods and the then current dividend period, no Series B Preferred
Stock or Parity Shares may be redeemed or purchased by the Company except
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding Series B Preferred Stock or Parity Shares, as the case may be.
The Series B Preferred Stock has no stated maturity and is not subject to
any sinking fund or mandatory redemption.
Common Stock
The Certificate of Incorporation does not provide for either mandatory or
optional conversion, exchange or redemption rights relating to outstanding
shares of Common Stock.
Psychiatric Group Stock
Subject to the rights of the holders of the Series B Preferred Stock and
any other preferred stock then outstanding, the Company may, at any time
commencing one year after the date of the Distribution and in its sole
discretion, redeem all outstanding shares of Psychiatric Group Stock for cash in
an amount, or in exchange for newly issued shares of Common Stock having an
aggregate value (based on the average Market Value for the ten consecutive
Trading Days ending on the last Trading Day prior to the date on which notice of
such exchange is mailed to holders of Psychiatric Group Stock), equal to 115% of
the average Market Value during such ten Trading Day period of the shares of
Psychiatric Group Stock being redeemed; provided, however, that in connection
with the sale of all or substantially all of the assets of the Psychiatric Group
the Company may at any time after the date of the Distribution redeem all
outstanding shares of Psychiatric Group Stock for cash or in exchange for newly
issued shares of Common Stock having an aggregate value (based on the average
Market Value for the ten consecutive Trading Days ending on the last Trading Day
prior to the date on which notice of such exchange is mailed to holders of
Psychiatric Group Stock), equal to 105% of the average Market Value during such
ten Trading Day period of the shares of Psychiatric Group Stock being redeemed.
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If at any time commencing one year after the date of the Distribution, the
Fair Market Value of the assets (other than cash, deposits and readily
marketable securities) of the Psychiatric Group (as determined by the Board,
whose determination shall be conclusive) is less than $10,000,000, the Company
may, in its sole discretion, redeem all outstanding shares of Psychiatric Group
Stock for cash in an amount, or in exchange for newly issued shares of Common
Stock having an aggregate value (based on the average Market Value for the ten
consecutive Trading Days ending on the last Trading Day prior to the date on
which notice of such exchange is mailed to holders of Psychiatric Group Stock),
equal to 105% of the Net Fair Market Value of the Psychiatric Group (as
determined by the Board, whose determination shall be conclusive).
VOTING RIGHTS
Series B Preferred Stock
Except as indicated below, or except as otherwise from time to time
required by applicable law, the holders of Series B Preferred Stock have no
voting rights.
If six consecutive quarterly dividends payable on the Series B Preferred
Stock or any Parity Shares are in arrears, whether or not earned or declared,
the number of directors then constituting the Board of Directors of the Company
will be increased by two, and the holders of Series B Preferred Stock, voting
together as a class with the holders of any other series of Parity Shares, will
have the right to elect two additional directors to serve on the Company's Board
of Directors at any annual meeting of shareholders or a properly called special
meeting of the holders of the voting Parity Shares until all such dividends and
dividends for the current quarterly period on the Series B Preferred Stock and
such other voting Parity Shares have been declared and paid or set aside for
payment. Such voting rights will terminate when all such accrued and unpaid
dividends have been declared and paid or set aside for payment. The term of
office of all directors so elected will terminate with the termination of such
voting rights.
The approval of two thirds of the outstanding Series B Preferred Stock and
all other Parity Shares similarly affected, voting as a single class, is
required in order to (i) amend the Certificate of Incorporation to affect
materially and adversely the rights, preferences or voting power of the holders
of the Series B Preferred Stock or the Parity Shares (except that if such
amendment would materially and adversely affect any right, preference, privilege
or voting power of the Series B Preferred Stock or another series of Parity
Shares that is not enjoyed by the other, then the approval of two thirds of the
holders of all series similarly affected shall be required); (ii) enter into a
share exchange that affects the Series B Preferred Stock, or consolidate the
Company with or merge the Company with another entity, unless in each such case
each share of Series B Preferred Stock remains outstanding without a material
adverse change to its terms and rights or is converted into or exchanged for
preferred stock of the surviving entity having preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption thereof identical to that of the Series B
Preferred Stock (except for changes that do not materially and adversely affect
the holders of Series B Preferred Stock); or (iii) authorize, reclassify, create
or increase the authorized or issued amount of any shares of any class, or any
security convertible into shares of any class, having rights senior to the
Series B Preferred Stock with respect to the payment of dividends or the
distribution of assets or amounts upon liquidation, dissolution or winding up of
the Company.
Common Stock
Holders of Common Stock are entitled to one vote per share and vote as one
class with the holders of Psychiatric Group Stock (together with any other
series of preferred stock outstanding at the time of such vote and so entitled
to vote) on all matters submitted to stockholders, other than matters which
would be required by law or the Company's Certificate of Incorporation to be
submitted to a separate class vote.
Psychiatric Group Stock
Holders of Psychiatric Group Stock are entitled to a variable number of
votes per share equal to the ratio (calculated to the nearest three decimal
places) of the average Market Value of one share of Psychiatric Group Stock to
one share of Common Stock for the ten consecutive Trading Days ending on the
last Trading
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Day prior to the applicable record date, and could have more than, less than or
exactly one vote per share. This formula is intended to equate the proportionate
voting rights of the Common Stock and Psychiatric Group Stock to their
respective Market Values at the time of any vote. Holders of Psychiatric Group
Stock vote as one class with holders of Common Stock (together with any other
series of preferred stock outstanding at the time of such vote and so entitled
to vote) on all matters submitted to stockholders, other than matters which
would be required by law or the Company's Certificate of Incorporation to be
submitted to a separate class vote. Each holder of Depositary Shares
representing interests in Psychiatric Group Stock is, through the depositary
share arrangements relating thereto, entitled to a number of votes per
Depositary Share equal to one-tenth the number of votes to which a holder of one
share of Psychiatric Group Stock is entitled.
No class vote of holders of Psychiatric Group Stock is required upon a
merger or consolidation if (a) the Psychiatric Group Stock remains outstanding
and unchanged as a result of the merger or consolidation, (b) the type and
amount of consideration for such merger or consolidation is divided between
holders of Psychiatric Group Stock and holders of Common Stock in a manner
determined to be fair by the Board (whose determination shall be conclusive) or
(c) the Psychiatric Group Stock is converted into capital stock of the surviving
company to the merger or consolidation having terms substantially similar to the
terms of the Psychiatric Group Stock. A class vote of the holders of a majority
of the outstanding shares of Psychiatric Group Stock is required for any other
merger or consolidation.
Provisions of the Company's Certificate of Incorporation require that any
action permitted or required to be taken by the stockholders must be effected at
a duly called annual or special meeting; stockholders cannot take any action by
written consent of the stockholders. Special meetings of the stockholders may be
called only by a majority of the Board, by the Chairman of the Board or by the
President and may not be called by the stockholders.
Neither the holders of Common Stock nor the holders of Psychiatric Group
Stock have any cumulative voting rights or any preemptive rights to subscribe
for or purchase additional shares of capital stock or any other obligations
convertible into or exercisable for shares of capital stock that may hereafter
be issued by the Company.
LIQUIDATION
Series B Preferred Stock
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, the holders of Series B Preferred Stock will be entitled to receive
out of assets of the Company legally available for distribution to stockholders
a liquidation preference of $2,500.00 per share of Series B Preferred Stock
($25.00 per Series B Depositary Share), plus an amount per share of Series B
Preferred Stock equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution to such holders,
and no more.
Until the holders of Series B Preferred Stock and Parity Shares have been
paid their liquidation preference in full, no payment will be made to any holder
of shares that are subordinated to the Series B Preferred Stock or Parity Shares
upon the liquidation, dissolution or winding up of the Company. If upon any
liquidation, dissolution or winding up of the Company, the assets of the
Company, or proceeds thereof, distributable among the holders of the Series B
Preferred Stock are insufficient to pay in full the amount payable upon
liquidation with respect to the Series B Preferred Stock and any other Parity
Shares, then such assets, or the proceeds thereof, will be distributed among the
holders of Series B Preferred Stock and any such Parity Shares ratably in
accordance with the respective amounts which would be payable on such Series B
Preferred Stock and any such Parity Shares if all amounts payable thereon were
paid in full. Neither a consolidation nor a merger of the Company with another
entity, a statutory share exchange by the Company or a sale, lease or transfer
of all or substantially all of the Company's assets will be considered a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Company.
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Common Stock and Psychiatric Group Stock
Subject to the rights of the holders of the Series B Preferred Stock and
any other preferred stock then outstanding, in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, holders of
Common Stock and Psychiatric Group Stock are entitled to receive their
respective proportionate interests in the net assets of the Company, if any,
remaining for distribution to holders of stock (after payment or provision for
all liabilities, including contingent liabilities, of the Company and payment of
the liquidation preference payable to holders of any other series of preferred
stock ranking senior to the Psychiatric Group Stock as to distributions upon
liquidation) pro rata based upon the average Market Value of the Common Stock as
compared to the average Market Value of the Psychiatric Group Stock, in each
case for the ten consecutive Trading Days ending on the Trading Day prior to the
date of the first public announcement of (i) a voluntary liquidation,
dissolution or winding-up of the Company or (ii) the institution of any
proceeding for the involuntary liquidation, dissolution or winding-up of the
Company; provided that if the foregoing would result in a liquidation payment
valued at less than $1.00 per share of the Psychiatric Group Stock, the holders
of Psychiatric Group Stock are not entitled to a proportionate interest in such
net assets but instead are entitled to receive a liquidation preference of $1.00
per share (and no more) before any payment may be made to holders of Common
Stock.
Neither the merger nor consolidation of the Company into or with any other
corporation, nor the merger or consolidation of any other corporation into or
with the Company, nor a sale, transfer or lease of all or any part of the assets
of the Company, would be deemed a liquidation, dissolution or winding-up for
these purposes.
CONVERSION
Neither the Series B Preferred Stock nor the Common Stock is not
convertible into or exchangeable for any other property or securities of the
Company at the option of the holder. The Psychiatric Group Stock may be
exchanged for shares of Common Stock in certain circumstances and at the option
of the Company. See "-- Exchange and Redemption."
DETERMINATIONS BY THE BOARD
The Company's Certificate of Incorporation provides that a Director will
not be liable to the Company or its stockholders for monetary damages for breach
of fiduciary duty as a Director, except for liability (i) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) pursuant to specific provisions of Delaware law
or (iv) for any transaction from which the Director derived any improper
personal benefit. The liability of Directors will be further eliminated or
limited to the fullest extent permitted by future changes in Delaware law. In
addition, the Certificates of Designations relating to the Series B Preferred
Stock and the Psychiatric Group Stock provides that any determinations made in
good faith by the Board under such Certificates of Designations, and any
determinations with respect to either Group or the rights of holders of shares
of Series B Preferred Stock, Common Stock or Psychiatric Group Stock made
pursuant to or in furtherance of such Certificates of Designations, will be
final and binding on all stockholders of the Company, subject to the rights of
stockholders under Delaware law and under the federal securities laws.
PREFERRED STOCK PURCHASE RIGHTS PLAN
On April 20, 1990, the Company distributed to its holders of Common Stock
one preferred stock purchase right (each, a "Right") for each outstanding share
of Common Stock. Under certain conditions, each Right may be exercised to
purchase one one-hundredth of a share of Series A Preferred Stock, at a price of
$45. The total number of Rights issued or issuable at December 31, 1997,
including Rights issuable in connection with Common Stock that may be issued
under the Company's stock incentive plans and upon the conversion of the
Company's outstanding Swiss franc convertible bonds, was approximately
25,719,000. Approximately 257,000 shares of Series A Preferred Stock could be
purchased upon the exercise of all Rights issued or issuable at December 31,
1997. The number of Rights outstanding and shares of Series A Preferred
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Stock issuable upon exercise, as well as the Series A Preferred Stock purchase
price, are subject to customary antidilution adjustments.
The Rights are evidenced by the certificates for shares of Common Stock,
and in general are not transferable apart from the Common Stock or exercisable
until after a party has acquired beneficial ownership of or made a tender offer
for 10% or more of the outstanding Common Stock of the Company (an "Acquiring
Person"), or the occurrence of other events as specified in the Rights Plan.
Under certain conditions as specified in the Rights Plan, including but not
limited to the acquisition by a party of 15% or more of the outstanding Common
Stock of the Company or the acquisition of the Company in a merger or other
business combination, each holder of a Right (other than an Acquiring Person,
whose Rights will be void) will receive upon exercise thereof and payment of the
exercise price that number of shares of Common Stock of the Company or of the
other party, as applicable, having a market value of two times the exercise
price of the Right.
The Rights expire on April 20, 2000, and until exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company. At the
Company's option, the Rights may be redeemed in whole at a price of $.01 per
Right at any time prior to becoming exercisable. In general, the Company may
also exchange the Rights at a ratio of one share of Common Stock per Right after
becoming exercisable but prior to the acquisition of 50% or more of the
outstanding shares of Common Stock by any party.
Series A Preferred Stock issuable upon exercise of the Rights will not be
redeemable. Each share of Series A Preferred Stock will have 100 votes and will
be entitled to (a) dividends in an amount equal to the greater of $1.00 or 100
times the amount of the dividends per share paid on the Common Stock, (b) a
liquidation preference in an amount equal to the greater of $100 or 100 times
the amount per share paid on the Common Stock and (c) a payment in connection
with a business combination (in which shares of Common Stock are exchanged)
equal to 100 times the amount per share paid on the Common Stock.
Neither the Series B Preferred Stock nor the Psychiatric Group Stock
includes, or entitles the holders thereof to receive, the Rights, which are
applicable only to the Common Stock.
LIMITS ON STOCK OWNERSHIP
The Company's Certificate of Incorporation provides that as a condition to
the transfer and/or registration of transfer of any shares of capital stock of
the Company which would result in any stockholder owning, directly or
indirectly, shares in excess of 9% of the issued and outstanding capital stock
of the Company, the proposed transferee must file with the Company an affidavit
setting forth the number of shares owned, directly or indirectly, by such
transferee. Any acquisition of shares, transfer of shares or any options,
warrants or other securities convertible into shares that would result in the
disqualification of the Company as a REIT will be deemed void to the fullest
extent permitted under applicable law and the intended transferee shall be
deemed never to have had an interest therein. If more than 9.8% of the capital
stock of the Company has become concentrated in the hands of one beneficial
owner, (i) such beneficial owner and its affiliates and associates will be
deemed to have offered to sell to the Company or its designee on the date
specified in the Company's notice of acceptance of such offer to sell such
number of shares sufficient, in the opinion of the Board, to maintain or bring
the direct or indirect ownership of the capital stock of the Company held by
such beneficial owner to a level of no more than 9.8% of the issued and
outstanding capital stock of the Company, and (ii) the Board also will refuse to
transfer or issue shares of capital stock to any person whose acquisition of
such shares would result in the direct or indirect ownership by that person of
more than 9.8% of the issued and outstanding capital stock of the Company. The
purchase price for any shares of capital stock of the Company so redeemed will
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 notice of acceptance of the offer of sale is sent by the Company, or,
if no such closing sales prices or quotations are available, then the purchase
price will be equal to the net asset value of such shares as determined in good
faith by the Board. The purchase price of any such shares
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acquired by the Company, or its designee, will be paid, at the option of the
Company, in cash or in the form of an unsecured, subordinated promissory note of
the Company, or its designee, bearing interest and having a term to maturity (to
be not less than 5 nor more than 20 years) as determined by the Board. From and
after the tender by the Company of the purchase price therefor, the holder of
any shares of capital stock of the Company so called for purchase will cease to
be entitled to any rights as a holder of such shares, except the right to
payment of the purchase price therefor.
BUSINESS COMBINATION PROVISIONS
The Certificate of Incorporation requires that Business Combinations (as
defined in the Certificate of Incorporation) between the Company and a
Beneficial Owner (as defined in the Certificate of Incorporation) of 10% or more
of the Company's outstanding shares of Voting Stock (as defined in the
Certificate of Incorporation) (a "Related Person"), and any Affiliate (as
defined in the Certificate of Incorporation) or Associate (as defined in the
Certificate of Incorporation) of such person, be approved by (i) the affirmative
vote of the holders of not less than 80% of the outstanding shares of Voting
Stock and (ii) the holders of a majority of the outstanding shares of Voting
Stock other than such Related Person and such person's Associates and
Affiliates, unless a majority of the Continuing Directors (as defined in the
Certificate of Incorporation) shall have approved the Business Combination or
shall have approved the acquisition of outstanding shares of Voting Stock which
caused the Related Person to become a Related Person. In general, Voting Stock
means the capital stock of the Company entitled to vote generally in the
election of directors, including the Psychiatric Group Stock, and each share is
allocated for this purpose the number of votes granted to it generally in the
election of directors.
A "Business Combination" is defined in the Certificate of Incorporation as
(a) any merger or consolidation of the Company or any subsidiary (other than
pursuant to Section 253 of the Delaware General Corporation Law with or into any
corporation which owns at least 90% of the outstanding shares of each class of
stock of the Company or its subsidiary, as applicable) with a Related Person or
any other corporation (whether or not itself a Related Person) which is, or
after such merger or consolidation would be, an Affiliate or Associate of a
Related Person, (b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with a
Related Person or such person's Affiliates or Associates of any assets of the
Company (including the securities of a subsidiary) or a subsidiary having a fair
market value of $20 million or more, (c) the issuance or transfer of any
securities of the Company or a subsidiary by the Company or such subsidiary to
any Related Person having an aggregate fair market value of $20 million or more,
other than by any distribution pro rata to, or exchange offer made to, all
holders of a publicly held class or series of stock of the Company or any of its
subsidiaries, or upon the exercise, conversion or exchange of securities of the
Company or any of its subsidiaries which are exercisable, convertible or
exchangeable into or for securities of the Company or any of its subsidiaries,
(d) the adoption of any plan or proposal for the liquidation or dissolution of
the Company by or on behalf of a Related Person or any of such person's
Affiliates or Associates or (e) any reclassification of securities or
recapitalization of the Company (including any reverse stock split), or any
merger or consolidation of the Company with any of its subsidiaries or any other
transaction involving the Company or any of its subsidiaries (whether or not
with or into or otherwise involving a Related Person) which has the effect,
directly or indirectly, of increasing the proportionate share of the outstanding
shares of any class of voting stock of the Company or of any of its subsidiaries
directly or indirectly owned by any Related Person or such person's Associates
or Affiliates.
The Company is also subject to the provisions of Section 203 of the
Delaware General Corporation Law, which relate to business combinations.
STAGGERED BOARD; REMOVAL OF DIRECTORS
The Board is divided into three classes, each class consisting, as nearly
as may be possible, of one-third of the total number of Directors. Directors are
elected for a three-year term and the term of one class expires each year. A
Director holds office until the annual meeting for the year in which his or her
term expires. If the number of Directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the number of Directors
in each class as nearly equal as possible, but in no case will a decrease in the
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<PAGE> 20
number of Directors shorten the term of any incumbent Director. Under Delaware
law, because the Board is divided into classes, no Director may be removed from
office before expiration of his or her term except for cause.
VOTE REQUIRED TO CHANGE CERTAIN PROVISIONS
The provisions described under "Limits on Stock Ownership" and "Business
Combination Provisions" above may not be amended without the affirmative vote of
stockholders holding at least 80% of the Voting Stock of the Company and, with
respect to the provisions under "Business Combination Provisions" only, a
majority vote of the stockholders of Voting Stock who are Disinterested
Stockholders (as defined in the Certificate of Incorporation). The provisions
described under "Staggered Board" above may not be amended without the
affirmative vote of stockholders holding at least 66 2/3% of the outstanding
shares of capital stock of the Company entitled to vote generally in the
election of Directors.
CERTAIN ANTI-TAKEOVER EFFECTS
The provisions described under "-- Preferred Stock Purchase Rights Plan,"
"-- Limits on Stock Ownership," "-- Business Combination Provisions" and
"-- Staggered Board" above 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 over market
price for their shares. The Board's authority to issue and establish the terms
of currently authorized preferred stock without stockholder approval may also
have the effect of discouraging takeover attempts. 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 Common Stock, deprive stockholders of opportunities
to sell at a temporarily higher market price. However, the Board believes that
the Preferred Stock Purchase Rights Plan and inclusion of the Business
Combination and Staggered Board provisions may help assure fair treatment of
stockholders and continuity of management and that the Limits on Stock Ownership
provision is reasonably necessary to safeguard the Company's REIT status.
STOCK REGISTRAR AND TRANSFER AGENT
ChaseMellon Shareholder Services L.L.C. is the registrar and transfer agent
for the Common Stock and the Psychiatric Group Stock. ChaseMellon Shareholder
Services L.L.C. is also depositary for the depositary shares with respect to the
Series B Preferred Stock and the Psychiatric Group Stock.
PLAN OF DISTRIBUTION
This Prospectus relates to 250,000 shares of Common Stock that may be
offered and issued by the Company from time to time in connection with future
acquisitions of other businesses or properties, or securities of other
businesses, by the Company. This Prospectus, as amended or supplemented, if
necessary, also relates to certain shares of Common Stock that may be resold or
reoffered by persons who acquired such shares pursuant to this Prospectus.
The Company intends to concentrate its acquisitions in areas related to the
current business of the Company. If the opportunity arises, however, the Company
may attempt to make acquisitions that are either complementary to its present
operations or that it considers advantageous even though they may be dissimilar
to its present activities. The consideration for any such acquisition may
consist of shares of Common Stock, cash, notes, or other evidences of debt,
assumptions of liabilities or a combination thereof, as determined from time to
time by negotiations between the Company and the owners or controlling persons
of businesses or properties to be acquired.
The shares covered by this Prospectus may be issued in exchange for shares
of capital stock, partnership interests or other assets representing an
interest, direct or indirect, in other companies or other entities, in exchange
for assets used in or related to the business of such entities or otherwise
pursuant to the agreements providing for such acquisitions. The terms of such
acquisitions and of the issuance of shares of Common Stock
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<PAGE> 21
under acquisition agreements will generally be determined by direct negotiations
with the owners or controlling persons of the business or properties to be
acquired or, in the case of entities that are more widely held, through exchange
offers to stockholders or documents soliciting the approval of statutory
mergers, consolidations or sales of assets. It is anticipated that the shares of
Common Stock issued in any such acquisition will be valued at a price reasonably
related to the market value of the Common Stock either at the time of agreement
on the terms of an acquisition or at or about the time of delivery of the
shares.
It is not expected that underwriting discounts or commissions will be paid
by the Company in connection with issuances of shares of Common Stock under this
Prospectus. However, finders' fees or brokers' commissions may be paid from time
to time in connection with specific acquisitions, and such fees may be paid
through the issuance of shares of Common Stock covered by this Prospectus. Any
person receiving such a fee may be deemed to be an underwriter within the
meaning of the Securities Act.
The sale of all or a portion of the shares of Common Stock offered hereby
by the Selling Stockholders may be effected from time to time on The New York
Stock Exchange at prevailing prices at the time of such sales, at prices related
to such prevailing prices or at negotiated prices. The Selling Stockholders may
sell all or a portion of the shares offered hereby in private transactions or in
the over-the-counter market at prices related to the prevailing prices of the
shares on The New York Stock Exchange.
The Selling Stockholders may effect such transactions by selling to or
through one or more broker-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders. The Selling Stockholders and any broker-dealers
that participate in the distribution may under certain circumstances be deemed
to be underwriters within the meaning of the Securities Act, and any commissions
received by such broker-dealers and any profits realized on the resale of shares
by them may be deemed to be underwriting discounts and commissions under the
Securities Act. The Company and the Selling Stockholders may agree to indemnify
such broker-dealers against certain liabilities, including liabilities under the
Securities Act. In addition, the Company may agree to indemnify the Selling
Stockholders and any underwriter with respect to the shares of Common Stock
offered hereby against certain liabilities, including, without limitation,
certain liabilities under the Securities Act, or, if such indemnity is
unavailable to contribute toward amounts required to be paid in respect of such
liabilities.
To the extent required under the Securities Act, a supplemental prospectus
will be filed, disclosing (a) the name of any Selling Stockholders, (b) the name
of any such broker-dealers, (c) the number of shares involved, (d) the price at
which such shares are to be sold, (e) the commissions paid or discounts or
concessions allowed to such broker-dealer, where applicable, (f) that such
broker-dealers did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus, as supplemented, and (g)
other facts material to the transaction.
There is no assurance that any of the Selling Stockholders will sell any or
all of the shares of Common Stock offered hereby.
The Company may agree to pay certain costs and expenses incurred in
connection with the registration of the shares of Common Stock offered hereby,
except that the Selling Stockholders shall be responsible for all selling
commissions, transfer taxes and related charges in connection with the offer and
sale of such shares.
The Company may agree to keep the Registration Statement relating to the
offering and sale by the Selling Stockholders of the shares of Common Stock
continuously effective until a fixed date or such earlier date as such shares of
Common Stock may be resold without registration under the provisions of the
Securities Act.
SELLING STOCKHOLDERS
The Selling Stockholders may sell the shares of Common Stock offered hereby
from time to time and may choose to sell less than all or none of such shares.
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<PAGE> 22
VALIDITY OF SECURITIES
The validity of the Common Stock offered will be passed upon for the
Company by Davis, Graham & Stubbs, LLP, Denver, Colorado.
EXPERTS
The consolidated balance sheets of American Health Properties, Inc. and
subsidiaries as of December 31, 1996 and December 31, 1995 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1996; the combined
balance sheets of the Core Group (a business unit of American Health Properties,
Inc.) as of December 31, 1996 and December 31, 1995 and the related combined
statements of operations, total attributed equity and cash flows for each of the
three years in the period ended December 31, 1996; and the combined balance
sheets of the Psychiatric Group (a business unit of American Health Properties,
Inc.) as of December 31, 1996 and December 31, 1995 and the related combined
statements of operations, total attributed equity and cash flows for each of the
three years in the period ended December 31, 1996, incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as stated 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.
GLOSSARY
"Available Dividend Amount," on any date (the "calculation date") with
respect to the Common Stock or the Psychiatric Group Stock (the "subject group
stock") issued with reference to either Group (the "subject group"), means
either:
(i) the excess of (x) an amount equal to the total assets of the
subject group less its total liabilities as of such calculation date,
determined in accordance with Delaware law applied as if the subject group
were a Delaware corporation, over (y) the sum of the aggregate par value of
all outstanding subject group stock and all other capital stock of the
Company attributed to the subject group; or
(ii) in case there shall be no such excess, an amount equal to the net
profits, if any, of the subject group for the fiscal year in which the
dividend is declared and/or the preceding fiscal year, determined in
accordance with Delaware law applied as if the subject group were a
Delaware corporation.
"Board" means the Board of Directors of the Company.
"Core Group" means all assets and liabilities of, and all activities
engaged in by, the Company and its subsidiaries, other than assets, liabilities
and activities which comprise part of the Psychiatric Group. Future issuances of
Common Stock or any other capital stock of the Company (other than Psychiatric
Group Stock) will be deemed to be for the account of, and net proceeds from such
issuances will be deemed to be assets of, the Core Group. All dividends or other
distributions on or repurchases of the Common Stock or any other capital stock
of the Company (other than Psychiatric Group Stock), and all costs attributed by
the Board to the Core Group, will be deemed to be funded out of assets of the
Core Group. In the case of an issuance of shares of Common Stock as a dividend
or other distribution on Psychiatric Group Stock, the Psychiatric Group will be
deemed to have purchased such shares for an amount equal to the average Market
Value of such shares for the ten consecutive Trading Days ending on the last
Trading Day prior to the record date for determining holders of Psychiatric
Group Stock entitled to receive such dividend or distribution, and an amount
equal to such purchase price shall be deemed to have been transferred from the
Psychiatric Group to the Core Group.
"Fair Market Value" for any assets means the price that a willing buyer
adequately informed and not compelled to buy would pay for such assets to a
willing seller adequately informed and not compelled to sell, as determined by
the Board (whose determination shall be conclusive).
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<PAGE> 23
"Funds From Operations" as used herein means net income (loss) computed in
accordance with GAAP, excluding gains (losses) from sales of property, adjusted
for write-downs of mortgage notes and investments in real estate and certain
other non-cash items, primarily depreciation and amortization. Funds From
Operations does not represent cash generated from operating activities in
accordance with GAAP and should not be considered an alternative to net income
as an indicator of the Company's operating performance or an alternative to cash
flow as a measure of liquidity.
"GAAP" means generally accepted accounting principles.
"Group" means the Core Group or the Psychiatric Group.
"Market Value" of any stock on any Trading Day means the average of the
high and low reported sales prices regular way of a share of such stock on such
Trading Day or in case no such reported sale takes place on such Trading Day the
average of the reported closing bid and asked prices regular way of a share of
such stock on such Trading Day, in either case on The New York Stock Exchange
Composite Tape or other national securities exchange, or if the shares of such
stock are not listed or admitted to trading on any national securities exchange
on such Trading Day, on the NASDAQ/NM, or if the shares of such stock are not
listed or admitted to trading on any national securities exchange or quoted on
such National Market on such Trading Day, the average of the closing bid and
asked prices of a share of such stock in the over-the-counter market on such
Trading Day as furnished by any New York Stock Exchange member firm selected
from time to time by the Company, or if such closing bid and asked prices are
not made available by any such New York Stock Exchange member firm on such
Trading Day, the market value of a share of such stock (as determined by the
Board, whose determination shall be conclusive); provided that, for purposes of
determining the ratios which compare the Market Values of Common Stock and
Psychiatric Group Stock, as calculated over any period, (i) the "Market Value"
of any share of Common Stock and/or Psychiatric Group Stock on any day prior to
the "ex" date or any similar date occurring during such period for any dividend
or distribution paid or to be paid with respect to such stock shall be reduced
by the fair market value of the per share amount of such dividend or
distribution (as determined by the Board, whose determination shall be
conclusive) and (ii) the "Market Value" of any share of Common Stock and/or
Psychiatric Group Stock on any day prior to (A) the effective date of any
subdivision (by stock split or otherwise) or combination occurring during such
period or (B) the "ex" date or any similar date occurring during such period for
any dividend or distribution with respect to such stock in shares of such stock
shall be appropriately adjusted to reflect such subdivision, combination,
dividend or distribution. For purposes of the foregoing, the Market Value of the
Psychiatric Group Stock on any day will be deemed to equal ten times (or such
other ratio as reflects the number or fraction of shares of Psychiatric Group
Stock that a Depositary Share represents, if such number or fraction is changed)
the Market Value of the Depositary Shares on such day.
"NASDAQ/NM" means the National Association of Securities Dealers Automated
Quotations National Market.
"Net Fair Market Value" of the Psychiatric Group or Core Group, as the case
may be, means the hypothetical Fair Market Value of 100% of the stock of a
corporation, assuming the corporation had all of the assets and liabilities of
such Group and no other assets or liabilities, as determined by the Board (whose
determination shall be conclusive).
"Net Proceeds from Psychiatric Group Asset Sales" means the net proceeds of
any sales of Psychiatric Group investments (after transaction costs and reserves
for contingencies).
"Psychiatric Group" means (a) the interests of the Company and its
subsidiaries in their respective investments in psychiatric hospitals, (b) all
activities engaged in by the Company and its subsidiaries in connection with
such investments and (c) all assets and liabilities of the Company or any of its
subsidiaries relating to or arising out of, or otherwise attributed by the Board
to, such investments or activities. Future issuances of Psychiatric Group Stock
will be deemed to be for the account of, and net proceeds from such issuances
will be deemed to be assets of, the Psychiatric Group. All dividends or other
distributions on or repurchases of the Psychiatric Group Stock, and all costs
attributed by the Board to the Psychiatric Group, will be deemed to be funded
out of assets of the Psychiatric Group. In the case of an issuance of shares of
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<PAGE> 24
Common Stock as a dividend or other distribution on Psychiatric Group Stock, the
Psychiatric Group will be deemed to have purchased such shares for an amount
equal to the average Market Value of such shares for the ten consecutive Trading
Days ending on the last Trading Day prior to the record date for determining
holders of Psychiatric Group Stock entitled to receive such dividend or
distribution, and an amount equal to such purchase price shall be deemed to have
been transferred from the Psychiatric Group to the Core Group.
"REIT" means a real estate investment trust.
"Trading Day" means each weekday other than any day on which the Common
Stock or Depositary Shares, as the case may be, is not traded on any national
securities exchange or the NASDAQ/NM or in the over-the-counter market.
22
<PAGE> 25
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.
------------------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 4
Management and Accounting Policies... 4
Selected Financial Data.............. 7
Price Range of Common Stock and
Dividends.......................... 8
Description of Capital Stock......... 10
Plan of Distribution................. 18
Validity of Securities............... 20
Experts.............................. 20
Glossary............................. 20
</TABLE>
======================================================
======================================================
250,000 SHARES
AMERICAN HEALTH PROPERTIES, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
, 1998
======================================================
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law grants to the Company
the power to indemnify its directors, employees and agents against liability
arising out of their respective capacities as directors, officers employees or
agents. Article V of the Company's Certificate of Incorporation provides for the
limitation of personal liability of the directors of the Company as follows:
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING AND
REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE DIRECTORS
AND STOCKHOLDERS
Section 4. A Director of this Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except for liability (i) for any
breach of the Director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the Director derived any improper personal benefit. If the
Delaware General Corporation Law is amended after the date hereof to permit
the further elimination or limitation of the personal liability of
directors, then the liability of a Director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Article V of the Company's Bylaws provides for indemnification of officers,
directors and employees of the Company as follows:
Section 13. Indemnification. Each officer, director and employee of
the Corporation shall be indemnified by the Corporation as provided in the
Certificate of Incorporation.
The Company has entered into indemnification agreements with its
directors that would require the Company, subject to any limitations on the
maximum permissible indemnification that may exist at law, to indemnify a
director for claims that arise because of his capacity as a director. The
Company also provides its directors and officers with coverage pursuant to
a policy of directors' and officers' liability insurance.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
3.1 -- Restated Certificate of Incorporation, incorporated by
reference from Exhibit 4.1 to the Company's Registration
Statement on Form S-3 (No. 33-61895)
3.2 -- Amended and Restated Bylaws of the Company, filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992, and incorporated
herein by reference.
4.1 -- Rights Agreement dated as of April 10, 1990, filed as
Exhibit 2 to the Company's Registration Statement on Form
8-A dated April 20, 1990, and incorporated herein by
reference.
4.2 -- Indenture dated as of January 15, 1997 between American
Health Properties, Inc. and The Bank of New York as
Trustee, filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K dated January 21, 1997, and
incorporated by reference.
</TABLE>
II-1
<PAGE> 27
<TABLE>
<C> <S>
4.3 -- Certificate of Designations of Psychiatric Group
Preferred Stock, incorporated by reference from Exhibit
4.1 to the Current Report on Form 8-K dated August 14,
1995
4.4 -- Certificate of Designations of Series B Preferred Stock,
filed as Exhibit 4.1 to the Company's Registration
Statement on Form 8-A filed November 7, 1997, and
incorporated herein by reference.
4.5 -- Specimen Stock to Common Stock, incorporated by reference
to Exhibit 4.10 to Statement on Form S-3 dated September
26, 1995 (No. 33-61895)
4.6 -- Rights Agreement, dated as of April 10, 1990, filed as
Exhibit 2 to the Company's Registration Statement on Form
8-A dated April 20, 1990, and incorporated herein by
reference.
5.1* -- Opinion of Davis, Graham & Stubbs, LLP
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants
23.2* -- Consent of Davis, Graham & Stubbs, LLP (included in
Exhibit 5.1)
24.1 -- Powers of Attorney (included in signature page)
</TABLE>
- ---------------
* To be filed by amendment
ITEM 22. UNDERTAKINGS
(A) The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE> 28
(B) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(D) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subject to the effective date of the registration statement through the
date of responding to the request.
(E) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
Company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(F) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(G) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (f) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
II-3
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Englewood, State of
Colorado on the 27th day of March, 1998.
AMERICAN HEALTH PROPERTIES, INC.
By: /s/ JOSEPH P. SULLIVAN
------------------------------------
Joseph P. Sullivan
Chairman of the Board of Directors,
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Joseph P. Sullivan and Michael J. McGee, and each
or either of them as his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this registration statement,
including any amendments under Rule 462(b) under the Securities Act of 1933, as
amended, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute may lawfully do or cause to be done by virtue hereof.
<TABLE>
<C> <S> <C>
/s/ JOSEPH P. SULLIVAN Chairman of the Board of March 27, 1998
- --------------------------------------------- Directors, President and Chief
Joseph P. Sullivan Executive Officer
/s/ MICHAEL J. MCGEE Senior Vice President, Chief March 27, 1998
- --------------------------------------------- Financial Officer (Principal
Michael J. McGee Financial and Accounting Officer)
and Assistant Secretary
/s/ ROYCE DIENER Director March 27, 1998
- ---------------------------------------------
Royce Diener
/s/ JAMES L. FISHEL Director March 27, 1998
- ---------------------------------------------
James L. Fishel
/s/ JAMES D. HARPER, JR. Director March 27, 1998
- ---------------------------------------------
James D. Harper, Jr.
/s/ SHELDON S. KING Director March 27, 1998
- ---------------------------------------------
Sheldon S. King
/s/ JOHN P. MAMANA, M.D. Director March 27, 1998
- ---------------------------------------------
John P. Mamana, M.D.
Director
- ---------------------------------------------
Louis T. Rosso
</TABLE>
II-4
<PAGE> 30
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
------- -------
<C> <S> <C>
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants
24.1 -- Powers of Attorney (included in signature page)
</TABLE>
<PAGE> 1
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 reports dated March 24, 1997
included in American Health Properties, Inc.'s Form 10-K for the year ended
December 31, 1996, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
---------------------------------
ARTHUR ANDERSEN LLP
Denver, Colorado
March 27, 1998
