(LOGO)
NATIONAL HEALTH INVESTORS, INC.
-------------------------
NOTICE OF EIGHTH ANNUAL MEETING OF STOCKHOLDERS
April 26, 1999
To the Stockholders:
The Annual Meeting of the Stockholders (the "Meeting") of
National Health Investors, Inc. (the "Company") will be held at
City Center, 14th Floor, 100 Vine Street, Murfreesboro, Tennessee
on Monday, April 26, 1999, at 4:30 p.m. C.D.T., for the following
purposes:
1. To re-elect two directors;
2. To ratify the selection of Arthur Andersen LLP as
independent accountants for the year ending December 31, 1999;
and
3. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The nominees for re-election as directors are Jack Tyrrell
and W. Andrew Adams. They currently serve as directors of the
Company.
The Board of Directors has fixed the close of business on
Friday, January, 29, 1999, as the record date for the
determination of stockholders who are entitled to notice of and
to vote at the Annual Meeting of the Stockholders or any
adjournments thereof.
We encourage you to attend the Meeting. Whether you are
able to attend or not, we urge you to indicate your vote on the
enclosed proxy card FOR the re-election of Messrs. Tyrrell and
Adams as directors and FOR ratification of the selection of
Arthur Andersen LLP as independent accountants for the year
ending December 31, 1999. Please sign, date, and return the
proxy card promptly in the enclosed envelope. If you attend the
Meeting, you may vote in person even if you have previously
mailed a proxy card.
By Order of the Board of Directors
Richard F. LaRoche, Jr.
Secretary
March 1, 1999
Murfreesboro, Tennessee
NATIONAL HEALTH INVESTORS, INC.
100 Vine Street
Murfreesboro, Tennessee 37130
------------------
PROXY STATEMENT
------------------
EIGHTH ANNUAL MEETING OF STOCKHOLDERS
April 26, 1999
The accompanying proxy is solicited by the Board of
Directors of National Health Investors, Inc., (the "Company") to
be voted at the Annual Meeting of the Stockholders (the
"Meeting") to be held on Monday, April 26, 1999, commencing at
4:30 p.m. C.D.T. and at any adjournments of the Meeting. The
Meeting will be held at the City Center, 14th Floor,
Murfreesboro, Tennessee. It is anticipated that this proxy
material will be mailed on or about March 1, 1999, to all
stockholders of record on January 29, 1999.
A copy of the Annual Report of the Company for the year
ended December 31, 1998, including financial statements, is
enclosed herewith. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO
ANY PERSON SOLICITED HEREBY, UPON THE WRITTEN REQUEST OF SUCH
PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1998, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. SUCH REQUESTS SHOULD BE DIRECTED TO
RICHARD F. LaROCHE, JR., SHAREHOLDER RELATIONS-SUITE 600, 100
VINE STREET, MURFREESBORO, TENNESSEE 37130.
A stockholder giving a proxy has the power to revoke it at
any time before it is exercised. A proxy may be revoked by
filing with the Secretary of the Company (i) an instrument
revoking the proxy or (ii) a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if the
person executing the proxy is present at the Meeting and elects
to vote in person. If the proxy is neither revoked nor
suspended, it will be voted by those therein named.
Votes Required
Shares of common stock represented in person or by proxy at
the Meeting (including shares which abstain or do not vote with
respect to one or more of the matters presented at the Meeting)
will be tabulated by the Company's Secretary who will determine
whether or not a quorum is present. Abstentions will be counted
as shares that are present and entitled to vote for purposes of
determining the number of shares that are present and entitled to
vote with respect to any particular matter, but will not be
counted as votes in favor of such matter. Accordingly, an
abstention from voting on Proposals I and II will have the same
legal effect as a vote "against" the matter even though the
stockholder or interested parties analyzing the results of the
voting may interpret such vote differently. If a broker holding
stock in "street name" indicates on the proxy that it does not
have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present
and entitled to vote with respect to that matter. Accordingly, a
"broker non-vote" may effect establishment of a quorum, but, once
a quorum is established, will have no effect on the voting on
such matter.
A majority of the issued and outstanding shares of common
stock entitled to vote constitutes a quorum at the Meeting. The
affirmative vote of the holders of a majority of the votes cast
at the Meeting is required for the election of directors, while
the ratification of the appointment of the Company's independent
accountants requires the affirmative vote of the holders of a
majority of the issued and outstanding shares of common stock.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on
January 29, 1999 as the record date. The outstanding voting
securities of the Company as of December 31, 1998, consisted of
24,364,391 shares of common stock, par value $.01 per share
("Common Stock"). Stockholders of record as of the record date
are entitled to notice of and to vote at the Meeting or any
adjournments thereof. Each holder of the shares of Common Stock
is entitled to one vote per share on all matters properly brought
before the Meeting. Stockholders are not permitted to cumulate
votes for the purpose of electing directors or otherwise.
The following information is based upon filings made by the
entities identified below with the Securities and Exchange
Commission: Except as set forth below, on December 31, 1998 no
person was known to the Company to own beneficially more than 5%
of the outstanding Common Stock:
<TABLE>
<CAPTION>
Shares Percent of
Beneficially Outstanding
Owned at Shares on
Name and Address Dec. 31, 1998 Dec. 31, 1998
- -----------------------------------------------------------------
<S> <C> <C>
Franklin Resources, Inc. 2,557,073 <F1> 10.5%
777 Mariners Island Blvd.
P. O. Box 7777
San Mateo, CA 94403-7777
Nicholas Fund, Inc. 1,619,800 6.6%
and Nicholas Income Fund, Inc.
6002 North Highway 83
Hartland, WI 53029-8503
<FN>
<F1> This is ownership for SEC purposes and not for purposes of real estate
investment trust regulations.
</TABLE>
PROPOSAL I
ELECTION OF DIRECTORS
Pursuant to the Company's Articles of Incorporation, the
directors have been divided into three groups. At the April 26,
1999 Meeting, two directors will be elected to hold office each
for a term of three years or until their successor shall have
been duly elected and qualified.
The nominees for election to the positions of director to be
voted upon at the Meeting are Jack Tyrrell and W. Andrew Adams,
currently directors of the Company. Unless authority to vote for
the election of directors has been specifically withheld, the
persons named in the accompanying proxy intend to vote for the
election of Mr. Tyrrell and Mr. Adams to hold office as
directors, each for terms of three years or until their successor
has been duly elected and qualified.
If a nominee becomes unavailable for any reason (which event
is not anticipated), the shares represented by the enclosed proxy
may (unless such proxy contains instructions to the contrary) be
voted for such other person as may be determined by the holders
of such proxies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES.
The following information relates to the nominees for
election as directors of the Company and the other persons whose
terms as directors continue after the Meeting, as well as
executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Common Percent
Stock of
Expiration Beneficially Shares
of term as Owned at Outstanding
Name Age Position Director<F1> 12/31/98<F2> 12/31/98
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jack Tyrrell 52 Director 1999 45,586 *
W. Andrew Adams 53 Director &
President 1999 1,151,426 4.7%
Robert T. Webb 54 Director 2000 72,623 *
Robert G. Adams 52 Vice President 356,169 1.5%
Ted H. Welch 65 Director 2001 55,000 *
Richard F. LaRoche, 53 Director &
Jr. Secretary 2001 328,073 1.3%
All Directors and Executive Officers
as a group (6 people) 2,008,877 8.2%
- ------------------------
*Less than 1%
<FN>
<F1> All directors were first elected in 1991.
<F2> Except as otherwise noted, all shares are owned beneficially
with sole voting and investment power. Included in the amounts
above are 41,000 shares to Mr. Tyrrell (which are held in trust
for a family member), 40,000 shares to Mr. W. A. Adams, 30,000 to
Mr. R. Adams, 30,000 to Mr. Webb, 35,000 to Mr. Welch, and 30,000
to Mr. LaRoche, of which all may be acquired upon the exercise of
stock options granted under the Company's 1991 Stock Option Plan
and 1997 Stock Option Plan.
</TABLE>
Jack Tyrrell has served as a director of the Company since
its inception in 1991. Mr. Tyrrell is Managing Partner of
Richland Ventures, L.P. and Richland Ventures, L.P. II, venture
capital firms based in Nashville, Tennessee, which were founded
in May 1994 and September 1996. He also currently serves as a
General Partner of Lawrence, Tyrrell, Ortale & Smith and
Lawrence, Tyrrell, Ortale & Smith, II, L.P., venture capital
partnerships based in Nashville, Tennessee and New York, New
York.
W. Andrew Adams has been President and a director of the
Company since its inception in 1991. Mr. Adams has also been
President and a director of National HealthCare Corporation
("NHC"), the Company's Investment Advisor, since 1974. He has
served on the Multi-Facility Committee of the American Health
Care Association, the trade association for long-term health care
center companies. He has an M.B.A. from Middle Tennessee State
University. Mr. Adams serves on the Board of Directors of David
Lipscomb University in Nashville, Tennessee, SunTrust Bank in
Nashville, Tennessee, and National Health Realty, Inc.
Robert T. Webb has served as a director of the Company since
its inception in 1991. Mr. Webb is the owner of commercial
buildings and rental properties in the Middle Tennessee area, a
subdivision developer, and a partner in commercial properties
located in Rosslyn, Virginia, and Phoenix, Arizona. Mr. Webb is
the President and sole owner of Webb's Refreshments, Inc., which
has been in operation serving the Middle Tennessee area since
1976. He attended David Lipscomb College and received a B.A. in
business marketing from Middle Tennessee State University in
1969.
Ted H. Welch has served as a director of the Company since
its inception in 1991. Mr. Welch has owned and operated income
producing real estate (primarily office buildings) in the
southeastern United States since 1976. From 1953 until 1971, Mr.
Welch worked for the Southwestern Company where he became
Executive Vice President. From 1971 to 1974, he served as the
Commissioner of Finance and Administration for the State of
Tennessee, in which capacity he was responsible for all
construction and maintenance of State of Tennessee real property,
along with being Chief Operating Officer. Mr. Welch received a
B.S. from the University of Tennessee at Martin and attended the
Graduate School of Management at Indiana University. Mr. Welch
is Chairman and Chief Executive Officer of Eagle Communications.
He serves on the Board of Directors of American Constructors,
Inc.; First American Corporation, Nashville, Tennessee; Logan's
Roadhouse, Inc.; and Southeast Service Corporation.
Richard F. LaRoche has served as Vice President, Secretary
and a director of the Company since its inception in 1991. Mr.
LaRoche has also been General Counsel of NHC since 1971,
Secretary of NHC since 1974 and Senior Vice President of NHC
since 1986. He serves in similar positions with National Health
Realty, Inc. He received a J.D. from Vanderbilt University and
an A.B. from Dartmouth College. Mr. LaRoche is responsible for
legal affairs, acquisitions, and finance for all three companies.
Robert G. Adams has served as Vice President since 1997 and
is also the brother of W. Andrew Adams. Mr. Adams is the Chief
Operating Officer of NHC and serves on NHC and NHR's Board of
Directors. He is responsible for oversight of all company due
diligence reports and financial proformas. He received a B.S.
degree from Middle Tennessee State University.
Board of Directors and Committees of the Board
The Board of Directors held 4 meetings during 1998. All
directors were present at the meetings of the Board and of
committees on which they served. The Board as a whole serves as
the Audit Committee, and the Compensation Committee is comprised
of non-employee directors (Mr. Webb, Mr. Welch and Mr. Tyrrell).
The Audit Committee, which met one time in 1998, selects the
Company's independent accountants, fixes the compensation to be
paid to such accountants, reports to the Board with respect to
the scope of audit procedures, and determines compliance as to
the company's policies and procedures.
The Compensation Committee did not meet in 1998 since it
currently has no responsibilities. The Company contracts with
NHC to act as its Investment Advisor, one responsibility of which
is to employ and compensate all officers and employees.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN TRANSACTIONS
Cash Compensation
Directors not affiliated with NHC, the Company's Investment
Advisor, receive compensation for their Board service in the
amount of $2,500 per meeting attended. The Company reimburses
all directors for travel expenses incurred in connection with
their duties as directors of the Company.
The Company's executive officers (Mr. Andy Adams, Mr. Robert
Adams and Mr. LaRoche) are also employees of NHC. Their
compensation is determined solely by NHC, which allocates a
portion of their annual performance bonus to the Company.
Payment of the allocated amount by the Company is credited
against the Advisory fee paid NHC. Neither Messrs. Adams nor
LaRoche have yet been allocated any performance bonus for 1998.
Mr. Andy Adams, Mr. Robert Adams, and Mr. LaRoche received
$600,000, $400,000 and $400,000 respectively for allocated bonus
in 1997. Mr. Andy Adams and Mr. LaRoche received $450,000 and
$225,000 respectively for allocated bonus in 1996, and $400,000
and $200,000 respectively for allocated bonus in 1995. The
Company paid no other perquisites or bonuses to its executive
officers. Because NHC sets the salaries of the Company's three
executive officers, the Company's Compensation Committee does not
issue a Compensation Committee Report for its proxy statements.
Director and Officer Options
The 1991 Option Plan (as amended in 1994) provided for an
automatic grant to each non-NHC affiliated director of an option
to purchase 5,000 shares of Common Stock on the date of the
Annual Stockholder's Meeting at the then fair market value. The
1997 Stock Option Plan increased that number to 15,000 shares per
Annual Meeting.
Both plans permit options to be exercised for cash or by
surrender of shares of Common Stock of the Company valued at the
then fair market value. Unless otherwise specifically provided
in the option agreement, no option or SAR shall be transferable
other than by will, family gift, or the laws of descent and
distribution. All shares which may be issued under either plan
and the exercise prices for outstanding options are subject to
adjustment in the event that the number of outstanding shares of
Common Stock will be changed by reason of stock splits, stock
dividends, reclassifications or recapitalizations. In addition,
upon a merger or consolidation involving the Company,
participants are entitled to shares in the surviving corporation.
Pursuant to the automatic grant provisions of the plans, the
three non-NHC affiliated directors have each received options to
purchase shares at $28.75 per share in 1994, $25.38 in 1995,
$33.50 in 1996, $36.00 in 1997, and $39.88 in 1998. The outside
directors have exercised all but 1,000 of the 1994 grants, all
but 5,060 of the 1995 grants, 5,000 of the 1996 grants, and none
of the 1997 and 1998 grants.
In 1993 the Board awarded options on 100,000 shares at the
then fair market value of $25.00 to its Investment Advisor, with
the direction that they be allocated among those employees who
were directly involved in the provision of investment advisory
services to the Company. All have now been exercised. On June
1, 1995, the Company awarded options on another 100,000 shares at
the then fair market value of $26.00 per share to key NHC
employees. All have now been exercised. On January 15, 1997,
the balance of the shares available under the 1991 Plan were
granted to Key Employees at $36.00 per share. 45,000 shares from
the 1997 Plan have been granted, all to non NHC affiliated
directors. None of the 1997 Stock Option grants have been
exercised. Of the 400,000 shares available under the 1991 and
1994 Plans all but 20,800 have been granted. Of the 600,000
shares available under the 1997 Plan, 510,000 are available for
future grants.
Table A and B below set forth information regarding options
which are outstanding, granted or exercised under the 1991 and
1997 Option Plans as of December 31, 1998, for the Company's
three executive officers. Table C sets forth information
regarding options outstanding and exercised during 1998 for the
executive officers, all non-NHC affiliated directors and all
other NHC employees as a group. The Company has not granted any
SARs.
<TABLE>
TABLE A
Option/SAR Grants in Last Fiscal Year [12-31-98]
<CAPTION>
Potential Realizable Value
At Assumed Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term
- ----------------------------------------------------------------------------
Percent of
Total
Number of Options/
Securities SARs
Underlying Granted
Option/ to Exercise
SARs Employees of Base Expir-
Granted in Fiscal Price ation
(#) Year (S/Sh) Date 5%($) 10%($)
- ----------------------------------------------------------------------------
<S> <C> <C>
W. Andrew Adams -0- -0-
Robert G. Adams -0- -0-
Richard F. LaRoche, -0- -0-
Jr.
</TABLE>
<TABLE>
TABLE B
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-
Options/ Money
SARs at Options/
Fiscal Year- SARs at
Shares Value End Fiscal Year-
Acquired on Realized (#) End ($)
Name Exercise (#) ($) Exercisable Exercisable
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
W. Andrew Adams 36,000 64,625 40,000 <452,500>
Robert G. Adams 4,000 61,625 30,000 <339,375>
Richard F. LaRoche, Jr. 4,000 61,625 30,000 <339,375>
</TABLE>
<TABLE>
TABLE C
<CAPTION>
Shares
Under Expir- Options Remaining Exercise
Name of Participant Option: ation Exercised: Options Price
1998 Date 1998
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
W. Andrew Adams 8,000 3/4/98 8,000 -0- $25.00
28,000 6/1/00 28,000 -0- $26.00
40,000 1/15/02 -0- 40,000 $36.00
Richard F. LaRoche, 4,000 3/4/98 4,000 -0- $25.00
Jr. 30,000 1/15/02 -0- 30,000 $36.00
Robert G. Adams 4,000 3/4/98 4,000 -0- $25.00
30,000 1/15/02 -0- 30,000 $36.00
All Executive 16,000 3/4/98 16,000 -0- $25.00
Officers (3 28,000 6/1/00 28,000 -0- $26.00
Persons) 100,000 1/15/02 -0- 100,000 $36.00
All Non-NHC 2,000 3/4/98 2,000 -0- $25.00
Affiliated 1,000 3/10/99 -0- 1,000 $28.75
Directors (3 9,000 3/16/00 3,940 5,060 $25.38
Persons) 10,000 3/21/01 -0- 10,000 $33.50
45,000 1/15/02 -0- 45,000 $36.00
45,000 3/30/03 -0- 45,000 $39.88
All Other NHC 1,000 3/4/98 1,000 -0- $25.00
Employees 8,080 6/1/00 8,080 -0- $26.00
(11 persons) 21,490 1/15/02 6,416 15,074 $36.00
</TABLE>
The Company's grant or issuance of an incentive stock option
under both the 1991 and 1997 Option Plans has no federal income
tax consequences to either the Company or the optionee. Nor do
any federal income tax consequences occur to either the Company
or the Key NHC Employee optionee upon the optionee's exercise of
his or her incentive stock option and purchase of Common Stock up
to $100,000 per year, except that the difference between the fair
market value of the stock purchased pursuant to the exercise of
the option and the amounts paid upon the option's exercise (the
"Spread") would be included in the optionee's alternative minimum
taxable income for alternative minimum tax purposes. For options
purchased in excess of the $100,000 limit, or for options granted
to non NHC affiliated directors, or which are not held for the
time discussed in the next paragraph, the Spread is taxable as
ordinary income to the Key Employee and deductible by the Company
at the time of exercise.
If the optionee holds the stock purchased upon the exercise
of the option for the requisite period under the Internal Revenue
Code, then upon the optionee's disposition of the stock he or she
will recognize capital gain (or loss) for federal income tax
purposes on the amount of the Spread. The Company would not be
entitled to a deduction upon such a disposition. To be entitled
to such capital gains treatment, the optionee must not dispose of
the underlying stock within two (2) years after the date the
option is granted or one (1) year after the option is exercised.
If the optionee disposes of the stock prior to such time,
then the optionee will recognize ordinary income in an amount
equal to the lesser of (i) the difference between the sales
proceeds and the optionee's cost, and (ii) the difference between
the fair market value of the stock on the date of exercise and
the optionee's cost. The balance of the gain on a premature
disposition of the stock, if any, will be capital gain for
federal income tax purposes. Such a premature disposition will
entitle the Company to a deduction equal to the amount of
ordinary income recognized by the optionee.
The Company has implemented an option exercise loan
guaranty program, the purpose of which is to facilitate directors
and Key Employees (of either NHI or the Investment Advisor)
exercising options to purchase NHI common stock. Each director
and Key Employee to whom options to purchase NHI common shares
have been granted is eligible to have up to $100,000 per year of
loans made from commercial banking institutions, the proceeds of
which are used to exercise NHI options, guaranteed by NHI. The
guarantee is structured as follows: Option holders must pledge
to NHI 125% of the loan amount in publicly traded stock as
additional collateral for the guarantee; the option holder must
personally guarantee the loan to the bank and indemnify NHI for
any loss or liability on its guaranty; the interest rate charged
by the bank and all expenses pertaining to the loan are to be
borne by the director or employee, and the maximum aggregate
outstanding amount of loan guarantees is $5,000,000. Although
the facility has a one year term, the guarantee will continue for
five years, and is renewable at the discretion of the directors.
The below table indicates the current amount of loans outstanding
by directors of NHI individually and by all designated NHC
employees collectively as of December 31, 1998.
<TABLE>
<CAPTION>
Current Maximum
Loan Loan Commercial Bank
Outstanding Outstanding Originating Loan
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
W. Andrew Adams -0- -0- N/A
Robert G. Adams -0- $ 100,000 SouthTrust Bank of TN
Richard F. LaRoche,
Jr. -0- $ 200,000 SouthTrust Bank of TN
Jack Tyrrell -0- -0- N/A
Robert T. Webb -0- -0- SouthTrust Bank of TN
Ted H. Welch -0- -0- SouthTrust Bank of TN
NHC Employees $1,298,570 $1,654,333 SouthTrust Bank of TN
</TABLE>
Section 16(a) Disclosure Compliance
Section 16(a) of the Securities and Exchange Act of 1934 as
amended requires officers, directors, and persons who own more
than 10% of the Company's equity securities to file statements of
changes in beneficial ownership (Forms 4 or 5) with the
Securities and Exchange Commission (the SEC) and the New York
Stock Exchange. Officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the
Company with copies of all such forms they file.
To the Company's knowledge, based solely on the review of
the copies of such forms received by it, the Company believes
that during 1998 all filing requirements applicable to its
officers, directors, and greater than 10% beneficial owners were
complied with and timely filed.
Investment Advisor
The Company has entered into an Advisory Administrative
Services and Facilities Agreement (the "Advisory Agreement") with
NHC as Advisor under which NHC will provide management and
advisory services during the term of the Advisory Agreement.
Under the terms of the Advisory Agreement, NHC, as Advisor,
agrees to use its best efforts:
a) To present to the Company a continuing and suitable
investment program consistent with the investment policy of the
Company as adopted by the directors from time to time;
b) To manage the day-to-day affairs and operations of the
Company, including the employment of and compensation to all
personnel; and
c) To provide administrative services and facilities
appropriate for such management.
In performing its obligations under the Agreement, the
Advisor is subject to the supervision of and policies established
by the Company's Board of Directors.
The Advisory Agreement is for a stated term which expired
December 31, 1996, and is currently cancelable without cause on
90 days notice and by the Company for cause at any time.
For its services under the Advisory Agreement, the Advisor
is entitled to annual compensation of $1,625,000 payable in
monthly installments of $135,417. Salaries or bonuses paid by
the Company to its executive officers are credited against these
installments. From 1993 and later years in which Per Share Funds
From Operations of the Company exceed Per Common Share Funds From
Operations during 1992, the $1,625,000 annual compensation
increases by the same percentage that Per Common Share Funds From
Operations in such later years exceed those in 1992. $3,310,000
was earned in 1998. The Advisory Agreement conditions payment of
such annual compensation in any year upon the Company's having
funds from operations in such year sufficient to enable the
Company to pay from funds from operations annual dividends of at
least $2.00 per share. Unpaid compensation will accrue together
with interest at Prime + 2 percentage points to be paid in later
years to the extent that funds from operations exceed the
dividend requirements. All payments are current.
Comparison of Cumulative Total Return
Since the Company's creation in October, 1991, the Company's
cumulative total return as compared with the S & P 500 Index and
all other publicly traded real estate investment companies
(NAREIT Hybrid) is as shown in the graph on the last page of this
proxy statement.
PROPOSAL II
RATIFICATION OF APPOINTMENT OF AND
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company has selected Arthur Andersen LLP as its
independent auditors for fiscal year ending December 31, 1999.
Although a stockholder vote is not required, the Board would like
the approval of stockholders for this appointment. Arthur
Andersen LLP audited the Company's financial statements for the
year ended December 31, 1998.
If the stockholders do not ratify the selection of Arthur
Andersen LLP, the selection of independent accountants will be
reconsidered by the Board of Directors, although the Board of
Directors would not be required to select different independent
accountants for the Company. The Board of Directors retains the
power to select another firm as independent accountants for the
Company to replace the firm whose selection was ratified by the
Company's stockholders in the event the Board of Directors
determines that the best interest of the Company warrants a
change of its independent accountants.
Representatives of Arthur Andersen LLP will be present at
the Annual Meeting and will be given the opportunity to make a
statement if they desire to do so. They will also be available
to respond to appropriate questions from stockholders at the
Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" PROPOSAL II.
STOCKHOLDER PROPOSALS
October 1, 1999, is the date by which proposals of
stockholders intended to be presented at the 2000 Annual Meeting
of Stockholders must be received by the Company for inclusion in
the Company's proxy statement and form of proxy relating to that
meeting.
EXPENSES OF SOLICITATION
The total cost of this solicitation will be borne by the
Company. In addition to use of the mail, proxies may be
solicited by directors and officers of the Company personally and
by telephone, telegraph, or facsimile transmission.
OTHER MATTERS
The Board of Directors knows of no other business to be
presented at the Meeting, but if other matters do properly come
before the Meeting, it is intended that the persons named in the
proxy will vote on such matters in accordance with their best
judgment.
s/Richard F. LaRoche, Jr.
Richard F. LaRoche, Jr., Secretary
March 1, 1999
Murfreesboro, Tennessee
<TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN*
<CAPTION>
1993 1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NHI 100 102.4 142.2 177 211.2 136.2
S & P 500 100 101.3 139.2 171.2 228.3 293.6
NAREIT Hybrid 100 104 127.9 165.5 183.3 120.9
*Assumes $100 invested 12/31/93 in NHI, S & P 500, and NAREIT Hybrid.
</TABLE>
