e424b5
CALCULATION
OF REGISTRATION FEE
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Title of Securities
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Proposed Maximum
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Amount of
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to be Registered
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Offering Price(1)
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Registration Fee(1)
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Common Stock, $1.00 par value per share
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$
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119,984,952
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$
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6,575
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(1) |
The filing fee of $8,555 (calculated based on a maximum
aggregate offering price in accordance with Rule 457(o) and
in accordance with Rule 457(r) and relating to Registration
Statement on
Form S-3
(No. 333-159040)
filed by Health Care REIT, Inc. on May 7, 2009) is being
offset by the $1,980 that was paid on May 7, 2009 in
connection with the filing pursuant to Rule 424(b)(5) with
respect to the $119,984,952 aggregate initial offering price of
shares of common stock that were previously registered pursuant
to Registration Statement
No. 333-159040
and were not sold thereunder.
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Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-159040
PROSPECTUS
SUPPLEMENT
(To
Prospectus Dated May 7, 2009)
$250,000,000
Common Stock
This prospectus supplement and the related prospectus relate to
the ongoing offer and sale, from time to time, of shares of our
common stock having an aggregate offering price of $250,000,000.
Through November 11, 2010, we had sold
3,177,903 shares of our common stock, with an aggregate
offering price of $130,015,047.63, in the offering to which this
prospectus supplement and prospectus relate, leaving
$119,984,952.37 in aggregate offering price of common stock to
be sold subsequent to such date.
Prior sales of our common stock in this offering were made
through UBS Securities LLC, as sales agent, in accordance with
an equity distribution agreement, as amended, between UBS
Securities LLC and us. On November 12, 2010, we entered
into substantially similar forms of equity distribution
agreements with each of UBS Securities LLC, RBS Securities Inc.,
KeyBanc Capital Markets Inc. and Credit Agricole Securities
(USA) Inc. and consequently agreed with UBS Securities LLC to
terminate, subject to certain exceptions, our prior equity
distribution agreement with them.
In accordance with the terms of the equity distribution
agreements described above, we may offer and sell, from time to
time, shares of our common stock having an aggregate offering
price equal to the remaining $119,984,952.37 available under
this prospectus supplement and the related prospectus through
UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets
Inc. and Credit Agricole Securities (USA) Inc. as our sales
agents and whom we refer to individually as a manager and
together as the managers. Sales of the shares of common stock,
if any, will be made by means of ordinary brokers
transactions on the New York Stock Exchange at market prices, in
block transactions, or as otherwise agreed with the applicable
manager, or by means of any other existing trading market for
our common stock or to or through a market maker other than on
an exchange. We will pay each manager a fee that will not exceed
1.5% of the gross sales price per share of shares sold through
it as agent under the applicable equity distribution agreement.
Under the terms of the equity distribution agreements, we also
may sell shares of our common stock to any manager as principal
for its own respective account at a price agreed upon at the
time of sale. If we sell shares to a manager as principal, we
will enter into a separate terms agreement with such manager, as
applicable, and we will describe this agreement in a separate
prospectus supplement or pricing supplement.
No manager is required to sell any specific number or dollar
amount of shares of our common stock but each will use its
reasonable efforts, as our agent and subject to the terms of the
applicable equity distribution agreement, to sell the shares
offered, as instructed by us. There is no arrangement for shares
to be received in an escrow, trust or similar arrangement. The
offering of common stock pursuant to the equity distribution
agreements will terminate upon the earlier of (i) the sale
of all shares of common stock subject to the equity distribution
agreements and (ii) with respect to a particular equity
distribution agreement, the termination of the equity
distribution agreement by either the manager or us.
Our common stock is traded on the New York Stock Exchange under
the symbol HCN. On November 11, 2010, the last
reported sale price of our common stock on the NYSE was $47.83
per share.
Investing in our common stock involves risk. Before buying
any shares, you should carefully read the discussion of material
risks of investing in our common stock under the heading
Risk factors beginning on
page S-3
of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
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UBS
Investment Bank |
RBS |
KeyBanc Capital Markets |
Credit Agricole CIB |
The date of this prospectus supplement is November 12, 2010.
TABLE OF
CONTENTS
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Page
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Prospectus Supplement
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S-1
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S-3
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S-14
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S-15
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S-16
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S-18
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S-18
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S-18
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Prospectus
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About this prospectus
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1
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Cautionary statement concerning forward-looking statements and
risk factors
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1
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Where you can find additional information
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Documents incorporated by reference
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3
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The company
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4
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Use of proceeds
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Ratios of earnings to fixed charges and earnings to combined
fixed charges and preferred stock dividends
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4
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General description of the offered securities
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5
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Description of debt securities
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5
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Description of our common stock
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11
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Description of our preferred stock
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12
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Description of depositary shares
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16
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Description of warrants
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19
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Description of units
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20
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Restrictions on transfer of securities
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20
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Description of certain provisions of our certificate of
incorporation and by-laws
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21
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Plan of distribution
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22
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Legal opinions
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24
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Experts
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You should rely only on the information incorporated by
reference or provided in this prospectus supplement, the
accompanying prospectus and any free writing
prospectus we authorize to be delivered to you. We have
not, and the managers have not, authorized anyone to provide you
with additional information or information different from that
contained in this prospectus supplement, the accompanying
prospectus and any such free writing prospectus. We
are not, and the managers are not, making an offer to sell these
securities in any jurisdiction where the offer or sale of these
securities is not permitted. You should not assume that the
information contained in this prospectus supplement, the
accompanying prospectus, any such free writing
prospectus or any document incorporated therein by
reference is accurate as of any date other than their respective
dates. Our business, financial condition, results of operations
and prospects may have changed since that date.
This document is in two parts. The first part is the prospectus
supplement, which adds to and updates information contained in
the accompanying prospectus. The second part, the prospectus,
provides more general information, some of which may not apply
to this offering. Generally, when we refer to this prospectus,
we are referring to both parts of this document combined. To the
extent there is a conflict between the information contained in
this prospectus supplement, on the one hand, and the information
contained in the accompanying prospectus, on the other hand, you
should rely on the information in this prospectus supplement.
Before purchasing any securities, you should carefully read this
prospectus supplement, the accompanying prospectus and any
free writing prospectus we authorize to be delivered
to you, together with the additional information described under
the heading, Where you can find more information, in
this prospectus supplement.
Unless we have specifically indicated otherwise, references in
this prospectus supplement to we, us,
our, the Company, or similar terms are
to Health Care REIT, Inc. and its subsidiaries.
S-i
Prospectus
supplement summary
This summary highlights selected information about us and
this offering. This information is not complete and does not
contain all of the information you should consider before
investing in our common stock. You should read this entire
prospectus supplement and the accompanying prospectus carefully,
including Risk factors and Forward-looking
statements contained in this prospectus supplement and
Cautionary Statement Concerning Forward-Looking Statements
and Risk Factors contained in the accompanying prospectus
and the financial statements and the other information
incorporated by reference in this prospectus supplement and the
accompanying prospectus, before making an investment
decision.
ABOUT OUR
COMPANY
We are a real estate investment trust that invests across the
full spectrum of senior housing and health care real estate. We
also provide an extensive array of property management and
development services.
Our principal executive offices are located at 4500 Dorr Street,
Toledo, Ohio, 43615, and our telephone number is
(419) 247-2800.
Our website address is www.hcreit.com. The information on our
website is not part of this prospectus supplement or the
accompanying prospectus.
OUR
STRATEGY
Our primary objectives are to protect stockholder capital and
enhance stockholder value. We seek to pay consistent cash
dividends to stockholders and create opportunities to increase
dividend payments to stockholders as a result of annual
increases in rental and interest income and portfolio growth. To
meet these objectives, we invest across the full spectrum of
senior housing and health care real estate and diversify our
investment portfolio by property type, operator/tenant and
geographic location.
OTHER
INFORMATION
The SEC maintains an Internet website at
http://www.sec.gov
that contains our annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K
and proxy statements, and all amendments thereto. All reports
that we file with the SEC may be read and copied at the
SECs Public Reference Room at 100 F Street,
N.E., Washington, DC 20549. Information about the operation of
the Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330.
S-1
The offering
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Issuer |
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Health Care REIT, Inc. |
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Shares of common stock offered by us hereby |
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Shares having an aggregate offering price of up to $250,000,000.
Through November 11, 2010, we had sold 3,177,903 shares of
our common stock, with an aggregate offering price of
$130,015,047.63, in the offering to which this prospectus
supplement and prospectus relate, leaving $119,984,952.37 in
aggregate offering price of common stock to be sold subsequent
to such date. |
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Use of proceeds |
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We expect to use the net proceeds from the sale of the shares
offered hereby for general corporate purposes, including
investing in health care and senior housing properties. Pending
such use, the net proceeds may be invested in short-term,
investment grade, interest-bearing securities, certificates of
deposit or indirect or guaranteed obligations of the United
States. See Use of Proceeds. |
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New York Stock Exchange symbol |
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HCN |
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Risk factors |
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You should carefully consider the information set forth in the
section of this prospectus supplement entitled Risk
factors as well as the other information included in or
incorporated by reference in this prospectus supplement and the
accompanying prospectus before deciding whether to invest in our
common stock. |
S-2
Risk factors
An investment in our common stock involves a high degree of
risk. You should carefully consider the following risk factors,
together with all of the other information included in this
prospectus supplement and the accompanying prospectus or
incorporated by reference into this prospectus, including the
section entitled Risk Factors included in our Annual
Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010, before making an investment in our
common stock. If any of the following risks actually occur, our
business, results of operations and financial condition will
likely suffer. As a result, the trading price of our common
stock may decline, and you may lose part or all of your
investment.
RISKS RELATED TO
OUR BUSINESS
Our expected
results may not be achieved
Our expected results may not be achieved, and actual results may
differ materially from our expectations. This may be a result of
various factors, including, but not limited to: the status of
the economy; the status of capital markets, including
availability and cost of capital; issues facing the health care
industry, including compliance with, and changes to, regulations
and payment policies, responding to government investigations
and punitive settlements and operators/tenants
difficulty in cost-effectively obtaining and maintaining
adequate liability and other insurance; changes in financing
terms; competition within the health care, senior housing and
life science industries; negative developments in the operating
results or financial condition of operators/tenants, including,
but not limited to, their ability to pay rent and repay loans;
our ability to transition or sell facilities with profitable
results; the failure to make new investments as and when
anticipated; acts of God affecting our properties; our ability
to re-lease space at similar rates as vacancies occur; our
ability to timely reinvest sale proceeds at similar rates to
assets sold; operator/tenant or joint venture partner
bankruptcies or insolvencies; the cooperation of joint venture
partners; government regulations affecting Medicare and Medicaid
reimbursement rates and operational requirements; regulatory
approval and market acceptance of the products and technologies
of life science tenants; liability or contract claims by or
against operators/tenants; unanticipated difficulties
and/or
expenditures relating to future acquisitions; environmental laws
affecting our properties; changes in rules or practices
governing our financial reporting; and legal and operational
matters, including real estate investment trust qualification
and key management personnel recruitment and retention.
Risk factors
related to our operators revenues and expenses
Our investment property operators revenues are primarily
driven by occupancy, Medicare and Medicaid reimbursement, if
applicable, and private pay rates. Expenses for these facilities
are primarily driven by the costs of labor, food, utilities,
taxes, insurance and rent or debt service. Revenues from
government reimbursement have, and may continue to, come under
pressure due to reimbursement cuts and state budget shortfalls.
Liability insurance and staffing costs continue to increase for
our operators. To the extent that any decrease in revenues
and/or any
increase in operating expenses result in a property not
generating enough cash to make payments to us, the credit of our
operator and the value of other collateral would have to be
relied upon.
The ongoing credit and liquidity crisis, and the weakening
economy, may have an adverse effect on our operators and
tenants, including their ability to access credit or maintain
occupancy rates. If the operations, cash flows or financial
condition of our operators are materially adversely impacted by
the current economic conditions, our revenue and operations may
be adversely affected.
Increased
competition may affect our operators ability to meet their
obligations to us
The operators of our properties compete on a local and regional
basis with operators of properties and other health care
providers that provide comparable services. We cannot be certain
that the operators of
S-3
Risk
factors
all of our facilities will be able to achieve and maintain
occupancy and rate levels that will enable them to meet all of
their obligations to us. Our operators are expected to encounter
increased competition in the future that could limit their
ability to attract residents or expand their businesses.
Risk factors
related to obligor bankruptcies
We are exposed to the risk that our obligors may not be able to
meet the rent, principal and interest or other payments due us,
which may result in an obligor bankruptcy or insolvency, or that
an obligor might become subject to bankruptcy or insolvency
proceedings for other reasons. Although our operating lease
agreements provide us with the right to evict a tenant, demand
immediate payment of rent and exercise other remedies, and our
loans provide us with the right to terminate any funding
obligation, demand immediate repayment of principal and unpaid
interest, foreclose on the collateral and exercise other
remedies, the bankruptcy and insolvency laws afford certain
rights to a party that has filed for bankruptcy or
reorganization. An obligor in bankruptcy or subject to
insolvency proceedings may be able to limit or delay our ability
to collect unpaid rent in the case of a lease or to receive
unpaid principal and interest in the case of a loan, and to
exercise other rights and remedies.
We may be required to fund certain expenses (e.g., real estate
taxes and maintenance) to preserve the value of an investment
property, avoid the imposition of liens on a property
and/or
transition a property to a new tenant. In some instances, we
have terminated our lease with a tenant and relet the property
to another tenant. In some of those situations, we have provided
working capital loans to and limited indemnification of the new
obligor. If we cannot transition a leased property to a new
tenant, we may take possession of that property, which may
expose us to certain successor liabilities. Should such events
occur, our revenue and operating cash flow may be adversely
affected.
Transfers of
health care facilities may require regulatory approvals and
these facilities may not have efficient alternative
uses
Transfers of health care facilities to successor operators
frequently are subject to regulatory approvals or notifications,
including, but not limited to, change of ownership approvals
under certificate of need (CON) laws, state
licensure laws and Medicare and Medicaid provider arrangements,
that are not required for transfers of other types of real
estate. The replacement of a health care facility operator could
be delayed by the approval process of any federal, state or
local agency necessary for the transfer of the facility or the
replacement of the operator licensed to manage the facility.
Alternatively, given the specialized nature of our facilities,
we may be required to spend substantial time and funds to adapt
these properties to other uses. If we are unable to timely
transfer properties to successor operators or find efficient
alternative uses, our revenue and operations may be adversely
affected.
Risk factors
related to government regulations
Our obligors businesses are affected by government
reimbursement and private payor rates. To the extent that an
operator/tenant receives a significant portion of its revenues
from government payors, primarily Medicare and Medicaid, such
revenues may be subject to statutory and regulatory changes,
retroactive rate adjustments, recovery of program overpayments
or set-offs, administrative rulings, policy interpretations,
payment or other delays by fiscal intermediaries or carriers,
government funding restrictions (at a program level or with
respect to specific facilities) and interruption or delays in
payments due to any ongoing government investigations and audits
at such property. In recent years, government payors have frozen
or reduced payments to health care providers due to budgetary
pressures. Health care reimbursement will likely continue to be
of paramount importance to federal and state authorities. We
cannot make any assessment as to the ultimate timing or effect
any future legislative reforms may have on the financial
condition of our obligors and properties. There can be no
assurance that adequate reimbursement levels will be available
for services provided by any property operator, whether the
property receives reimbursement from Medicare, Medicaid or
private payors. Significant limits on the scope of services
reimbursed and on reimbursement rates and fees could have a
S-4
Risk
factors
material adverse effect on an obligors liquidity,
financial condition and results of operations, which could
adversely affect the ability of an obligor to meet its
obligations to us. See
Item 1BusinessCertain Government
RegulationsReimbursement included in our Annual
Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010, and
Item 2Managements Discussion and Analysis
of Financial Condition and Results of OperationsExecutive
SummaryHealth Reform Laws and
Medicare Program Reimbursement Changes
included in our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2010.
Our operators and tenants generally are subject to extensive
federal, state, local and industry-regulated licensure,
certification and inspection laws, regulations and standards.
Our operators or tenants failure to comply with any
of these laws, regulations or standards could result in loss of
accreditation, denial of reimbursement, imposition of fines,
suspension or exclusion from federal and state health care
programs, loss of licensure or closure of the facility. Such
actions may have an effect on our operators or
tenants ability to make lease payments to us and,
therefore, adversely impact us. See
Item 1BusinessCertain Government
RegulationsOther Related Laws included in our Annual
Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010, and
Item 2Managements Discussion and Analysis
of Financial Condition and Results of OperationsExecutive
SummaryHealth Reform Laws and
Medicare Program Reimbursement Changes
included in our Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2010.
Many of our properties may require a license, registration
and/or CON
to operate. Failure to obtain a license, registration or CON, or
loss of a required license, registration or CON, would prevent a
facility from operating in the manner intended by the operators
or tenants. These events could materially adversely affect our
operators or tenants ability to make rent payments
to us. State and local laws also may regulate the expansion,
including the addition of new beds or services or acquisition of
medical equipment, and the construction or renovation of health
care facilities, by requiring a CON or other similar approval
from a state agency. See
Item 1BusinessCertain Government
RegulationsLicensing and Certification included in
our Annual Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010, and
Item 2Managements Discussion and Analysis
of Financial Condition and Results of OperationsExecutive
SummaryHealth Reform Laws and
Medicare Program Reimbursement Changes
included in our Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2010.
The American Recovery and Reinvestment Act of 2009, which was
signed into law on February 17, 2009, provides
$87 billion in additional federal Medicaid funding for
states Medicaid expenditures between October 1, 2008
and December 31, 2010. On August 10, 2010, the
President signed into law H.R. 1586, which mandates a six-month
extension of the increase in federal Medicaid funding for states
through June 30, 2011, although the enhanced federal
Medicaid funding is scaled back for the first two quarters of
2011. Under both the ARRA and H.R. 1586, states meeting certain
eligibility requirements will temporarily receive additional
money in the form of an increase in the federal medical
assistance percentage. Thus, for a limited period of time, the
share of Medicaid costs that are paid for by the federal
government will go up, and each states share will go down.
We cannot predict whether states are, or will remain, eligible
to receive the additional federal Medicaid funding, or whether
the states will have sufficient funds for their Medicaid
programs. We also cannot predict the impact that such
broad-based, far-reaching legislation will have on the
U.S. economy or our business.
The Centers for Medicare and Medicaid Services (CMS)
recently released a number of rulemakings that may potentially
increase or decrease the government reimbursement of our
operators and tenants. To the extent that any of these
rulemakings decrease government reimbursement, it could
negatively impact the reimbursement levels received by our
operators and tenants.
On August 16, 2010, CMS issued a final rule updating the
long-term acute care hospital prospective payment system for
fiscal year 2011. Among other things, the final rule updates
payment rates for acute care and long-term care hospitals and
implements certain provisions of the Patient
S-5
Risk
factors
Protection and Affordable Care Act (PPACA) and the
Health Care Education and Reconciliation Act of 2010, which
amends the PPACA (collectively, the Health Reform
Laws). In the rule, CMS finalized an update of 2.5% for
inflation with a cut of 0.5% as required by the Health Reform
Laws and a negative 2.5% documentation and coding adjustment for
long-term care hospitals. CMS also released a notice and comment
rulemaking for the prospective payment system and consolidated
billing for skilled nursing facilities for fiscal year 2011 on
July 22, 2010. CMS adjusts the nursing home payment rates
for fiscal year 2011 by including a market basket increase
factor of 2.3% and a negative 0.6 percentage point forecast
error adjustment, which would result in a net increase update of
1.7% for nursing home rates.
On November 2, 2010, CMS placed the calendar year 2011
Physician Fee Schedule final rule on public display for an
expected publication date of November 29, 2010. Among other
issues addressed in the final rule, CMS reduces Medicare
payments for providers under Medicare Part B by 24.9%. CMS
also preliminary estimates in the final rule that the calendar
year 2011 Sustainable Growth Rate (SGR) formula will
be negative 13.4%. Additionally, in the final rule, CMS has
eliminated certain CPT consultation codes, which could
negatively impact the reimbursement levels received by our
operators and tenants.
Further, on November 2, 2010, CMS placed on public display
the calendar year 2011 Hospital Outpatient Prospective Payment
System (HOPPS) final rule with comment period for an
expected publication date of November 24, 2010. CMS
estimates that the cumulative effect of all changes to payment
rates for calendar year 2011 will have a positive effect,
resulting in a 2.5% estimated increase in Medicare payments to
providers paid under the HOPPS.
Finally, on September 23, 2010, CMS published a proposed
rulemaking to implement the enhanced provider and supplier
screening provisions called for in the Health Reform Laws. Under
the proposed rule, all enrolling and participating providers and
suppliers would be assessed an annual administrative fee and be
placed in one of three risk levels (limited, moderate, and high)
based on an assessment of the entitys overall risk of
fraud, waste and abuse. The Health Reform Laws granted the
Secretary of the Department of Health and Human Services
significant discretionary authority to suspend, exclude, or
impose fines on providers and suppliers based on the
agencys determination that such a provider or supplier is
high-risk, and, as a result, this proposed
rulemaking has the potential to materially adversely affect our
operators and tenants who, if implemented, may be evaluated
under the enhanced screening process.
New health care
reform laws may have a significant impact on our
business
Recently enacted public laws reforming the health care system in
the United States may have a significant impact on our business.
On March 23, 2010, the President signed into law the Health
Reform Laws, which contain various provisions that may impact us
directly and that may impact the operators and tenants of our
properties. Some of the provisions of the Health Reform Laws may
have a positive impact on our operators or tenants
revenues, for example, by increasing coverage of uninsured
individuals, while others may have a negative impact on the
reimbursement of our operators or tenants, for example, by
altering the market basket adjustments for certain types of
health care facilities. The Health Reform Laws also enhance
certain fraud and abuse penalty provisions that could apply to
our operators and tenants in the event of one or more violations
of the federal health care regulatory laws. In addition, there
are provisions that impact the health coverage that we and our
operators and tenants provide to our respective employees. We
cannot predict whether the existing Health Reform Laws or future
health care reform legislation or regulatory changes will have a
material impact on our operators or tenants property
or business. If the operations, cash flows or financial
condition of our operators and tenants are materially adversely
impacted by the Health Reform Laws, our revenue and operations
may be adversely affected as well. See
Item 2Managements Discussion and Analysis
of Financial Condition and Results of OperationsExecutive
SummaryHealth Reform Laws and
Medicare Program Reimbursement Changes
included in our Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2010.
S-6
Risk
factors
Risk factors
related to liability claims and insurance costs
In recent years, skilled nursing and seniors housing operators
have experienced substantial increases in both the number and
size of patient care liability claims. As a result, general and
professional liability costs have increased in some markets.
General and professional liability insurance coverage may be
restricted or very costly, which may adversely affect the
property operators future operations, cash flows and
financial condition, and may have a material adverse effect on
the property operators ability to meet their obligations
to us.
Risk factors
related to acquisitions
We are exposed to the risk that some of our acquisitions may not
prove to be successful. We could encounter unanticipated
difficulties and expenditures relating to any acquired
properties, including contingent liabilities, and acquired
properties might require significant management attention that
would otherwise be devoted to our ongoing business. If we agree
to provide construction funding to an operator/tenant and the
project is not completed, we may need to take steps to ensure
completion of the project. Moreover, if we issue equity
securities or incur additional debt, or both, to finance future
acquisitions, it may reduce our per share financial results.
These costs may negatively affect our results of operations.
Risk factors
related to joint ventures
We have entered into, and may continue in the future to enter
into, partnerships or joint ventures with other persons or
entities. Joint venture investments involve risks, including the
possibility that our partner might become insolvent or otherwise
refuse to make capital contributions when due; that our partner
might at any time have investment goals which are inconsistent
with ours; that we could become engaged in a dispute with our
partner, which could require us to expend additional resources
to resolve such disputes; and that our partner may be in a
position to take action or withhold consent contrary to our
instructions or requests. In addition, our ability to transfer
our interest in a joint venture to a third party may be
restricted. In some instances, we and our partner may each have
the right to trigger a buy-sell arrangement, which could cause
us to sell our interest, or acquire our partners interest,
at a time when we otherwise would not have initiated such a
transaction. Joint ventures require us to share decision-making
authority with our partners, which limits our ability to control
the properties in the joint ventures. Even when we have a
controlling interest, certain major decisions may require
partner approval.
Risk factors
related to life sciences facilities
Our tenants in the life sciences industry face high levels of
regulation, expense and uncertainty that may adversely affect
their ability to make payments to us. Research, development and
clinical testing of products and technologies can be very
expensive and sources of funds may not be available to our life
sciences tenants in the future. The products and technologies
that are developed and manufactured by our life sciences tenants
may require regulatory approval prior to being made, marketed,
sold and used. The regulatory process can be costly, long and
unpredictable. Even after a tenant gains regulatory approval and
market acceptance, the product still presents regulatory and
liability risks, such as safety concerns, competition from new
products and eventually the expiration of patent protection.
These factors may affect the ability of our life sciences
tenants to make timely payments to us, which may adversely
affect our revenue and operations.
Risk factors
related to indebtedness
Permanent financing for our investments is typically provided
through a combination of public and private offerings of debt
and equity securities and the incurrence or assumption of
secured debt. The incurrence or assumption of indebtedness may
cause us to become more leveraged, which could (1) require
us to dedicate a greater portion of our cash flow to the payment
of debt service, (2) make us
S-7
Risk
factors
more vulnerable to a downturn in the economy, (3) limit our
ability to obtain additional financing or (4) negatively
affect our credit ratings or outlook by one or more of the
rating agencies.
Our debt agreements contain various covenants, restrictions and
events of default. Among other things, these provisions require
us to maintain certain financial ratios and minimum net worth
and impose certain limits on our ability to incur indebtedness,
create liens and make investments or acquisitions. Breaches of
these covenants could result in defaults under the instruments
governing the applicable indebtedness, in addition to any other
indebtedness cross-defaulted against such instruments. These
defaults could have a material adverse impact on our business,
results of operations and financial condition.
Risk factors
related to our credit ratings
We plan to manage the Company to maintain a capital structure
consistent with our current profile, but there can be no
assurance that we will be able to maintain our current credit
ratings. Any downgrades in terms of ratings or outlook by any or
all of the rating agencies could have a material adverse impact
on our cost and availability of capital, which could in turn
have a material adverse impact on our consolidated results of
operations, liquidity
and/or
financial condition.
Risk factors
related to interest rate swaps
We enter into interest rate swap agreements from time to time to
manage some of our exposure to interest rate volatility. These
swap agreements involve risks, such as the risk that
counterparties may fail to honor their obligations under these
arrangements. In addition, these arrangements may not be
effective in reducing our exposure to changes in interest rates.
When we use forward-starting interest rate swaps, there is a
risk that we will not complete the long-term borrowing against
which the swap is intended to hedge. If such events occur, our
results of operations may be adversely affected.
Risk factors
related to environmental laws
Under various federal and state laws, owners or operators of
real estate may be required to respond to the presence or
release of hazardous substances on the property and may be held
liable for property damage, personal injuries or penalties that
result from environmental contamination or exposure to hazardous
substances. We may become liable to reimburse the government for
damages and costs it incurs in connection with the
contamination. Generally, such liability attaches to a person
based on the persons relationship to the property. Our
tenants or borrowers are primarily responsible for the condition
of the property. Moreover, we review environmental site
assessments of the properties that we own or encumber prior to
taking an interest in them. Those assessments are designed to
meet the all appropriate inquiry standard, which we
believe qualifies us for the innocent purchaser defense if
environmental liabilities arise. Based upon such assessments, we
do not believe that any of our properties are subject to
material environmental contamination. However, environmental
liabilities may be present in our properties and we may incur
costs to remediate contamination, which could have a material
adverse effect on our business or financial condition or the
business or financial condition of our obligors.
Risk factors
related to facilities that require entrance fees
Certain of our senior housing facilities require the payment of
an upfront entrance fee by the resident, a portion of which may
be refundable by the operator. Some of these facilities are
subject to substantial oversight by state regulators relating to
these funds. As a result of this oversight, residents of these
facilities may have a variety of rights, including, for example,
the right to cancel their contracts within a specified period of
time and certain lien rights. The oversight and rights of
residents within these facilities may have an effect on the
revenue or operations of the operators of such facilities and
therefore may negatively impact us.
S-8
Risk
factors
Risk factors
related to facilities under construction or
development
At any given time, we may be in the process of constructing one
or more new facilities that ultimately will require a CON and
license before they can be utilized by the operator for their
intended use. The operator also may need to obtain Medicare and
Medicaid certification and enter into Medicare and Medicaid
provider agreements
and/or third
party payor contracts. In the event that the operator is unable
to obtain the necessary CON, licensure, certification, provider
agreements or contracts after the completion of construction,
there is a risk that we will not be able to earn any revenues on
the facility until either the initial operator obtains a license
or certification to operate the new facility and the necessary
provider agreements or contracts or we can find and contract
with a new operator that is able to obtain a license to operate
the facility for its intended use and the necessary provider
agreements or contracts.
In connection with our renovation, redevelopment, development
and related construction activities, we may be unable to obtain,
or suffer delays in obtaining, necessary zoning, land-use,
building, occupancy and other required governmental permits and
authorizations. These factors could result in increased costs or
our abandonment of these projects. In addition, we may not be
able to obtain financing on favorable terms, which may render us
unable to proceed with our development activities, and we may
not be able to complete construction and
lease-up of
a property on schedule, which could result in increased debt
service expense or construction costs.
Additionally, the time frame required for development,
construction and
lease-up of
these properties means that we may have to wait years for
significant cash returns. Because we are required to make cash
distributions to our stockholders, if the cash flow from
operations or refinancing is not sufficient, we may be forced to
borrow additional money to fund such distributions. Newly
developed and acquired properties may not produce the cash flow
that we expect, which could adversely affect our overall
financial performance.
In deciding whether to acquire or develop a particular property,
we make assumptions regarding the expected future performance of
that property. In particular, we estimate the return on our
investment based on expected occupancy and rental rates. If our
financial projections with respect to a new property are
inaccurate, and the property is unable to achieve the expected
occupancy and rental rates, it may fail to perform as we
expected in analyzing our investment. Our estimate of the costs
of repositioning or redeveloping an acquired property may prove
to be inaccurate, which may result in our failure to meet our
profitability goals. Additionally, we may acquire new properties
that are not fully leased, and the cash flow from existing
operations may be insufficient to pay the operating expenses and
debt service associated with that property.
We do not know if
our tenants will renew their existing leases, and if they do
not, we may be unable to lease the properties on as favorable
terms, or at all
We cannot predict whether our tenants will renew existing leases
at the end of their lease terms, which expire at various times
through 2079. If these leases are not renewed, we would be
required to find other tenants to occupy those properties or
sell them. There can be no assurance that we would be able to
identify suitable replacement tenants or enter into leases with
new tenants on terms as favorable to us as the current leases or
that we would be able to lease those properties at all.
Our ownership of
properties through ground leases exposes us to the loss of such
properties upon breach or termination of the ground
leases
We have acquired an interest in certain of our properties by
acquiring a leasehold interest in the property on which the
building is located, and we may acquire additional properties in
the future through the purchase of interests in ground leases.
As the lessee under a ground lease, we are exposed to the
possibility of losing the property upon termination of the
ground lease or an earlier breach of the ground lease by us.
S-9
Risk
factors
Illiquidity of
real estate investments could significantly impede our ability
to respond to adverse changes in the performance of our
properties
Real estate investments are relatively illiquid. Our ability to
quickly sell or exchange any of our properties in response to
changes in economic and other conditions will be limited. No
assurances can be given that we will recognize full value for
any property that we are required to sell for liquidity reasons.
Our inability to respond rapidly to changes in the performance
of our investments could adversely affect our financial
condition and results of operations. In addition, we are exposed
to the risks inherent in concentrating investments in real
estate, and in particular, the seniors housing and health care
industries. A downturn in the real estate industry could
adversely affect the value of our properties and our ability to
sell properties for a price or on terms acceptable to us.
Risk factors
related to reinvestment of sale proceeds
From time to time, we will have cash available from (1) the
proceeds of sales of our securities, (2) principal payments
on our loans receivable and (3) the sale of properties,
including non-elective dispositions, under the terms of master
leases or similar financial support arrangements. In order to
maintain current revenues and continue generating attractive
returns, we expect to re-invest these proceeds in a timely
manner. We compete for real estate investments with a broad
variety of potential investors. This competition for attractive
investments may negatively affect our ability to make timely
investments on terms acceptable to us.
Failure to
properly manage our rapid growth could distract our management
or increase our expenses
We have experienced rapid growth and development in a relatively
short period of time and expect to continue this rapid growth in
the future. This growth has resulted in increased levels of
responsibility for our management. Future property acquisitions
could place significant additional demands on, and require us to
expand, our management, resources and personnel. Our failure to
manage any such rapid growth effectively could harm our business
and, in particular, our financial condition, results of
operations and cash flows, which could negatively affect our
ability to make distributions to stockholders. Our rapid growth
could also increase our capital requirements, which may require
us to issue potentially dilutive equity securities and incur
additional debt.
We might fail to
qualify or remain qualified as a REIT
We intend to operate as a REIT under the Internal Revenue Code
and believe we have and will continue to operate in such a
manner. If we lose our status as a REIT, we will face serious
tax consequences that will substantially reduce the funds
available for satisfying our obligations and for distribution to
our stockholders for each of the years involved because:
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we would not be allowed a deduction for distributions to
stockholders in computing our taxable income and would be
subject to federal income tax at regular corporate rates;
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we could be subject to the federal alternative minimum tax and
possibly increased state and local taxes; and
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unless we are entitled to relief under statutory provisions, we
could not elect to be subject to tax as a REIT for four taxable
years following the year during which we were disqualified.
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Since REIT qualification requires us to meet a number of complex
requirements, it is possible that we may fail to fulfill them,
and if we do, our earnings will be reduced by the amount of
federal taxes owed. A reduction in our earnings would affect the
amount we could distribute to our stockholders and could
adversely affect the value of our common stock. In addition, if
we fail to qualify as a REIT, we would not be required to make
distributions to stockholders since in general a corporation is
not required to pay dividends to stockholders; however, all
distributions to stockholders would continue to be treated as
dividends to the extent of our current and accumulated earnings
and profits, although corporate stockholders may be eligible for
the dividends received deduction, and individual stockholders
S-10
Risk
factors
may be eligible for taxation at the rates generally applicable
to long-term capital gains (currently at a maximum rate of 15%)
with respect to distributions. See
Item 1BusinessTaxationFederal
Income Tax Considerations of our Annual Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on Form 8-K filed November 8, 2010, for
a discussion of the provisions of the Internal Revenue Code that
apply to us and the effects of non-qualification.
As a result of all these factors, our failure to qualify as a
REIT also could impair our ability to implement our business
strategy and would adversely affect the value of our common
stock.
Qualification as a REIT involves the application of highly
technical and complex Internal Revenue Code provisions for which
there are only limited judicial and administrative
interpretations. The determination of various factual matters
and circumstances not entirely within our control may affect our
ability to remain qualified as a REIT. Although we believe that
we qualify as a REIT, we cannot assure you that we will continue
to qualify or remain qualified as a REIT for tax purposes. See
Item 1BusinessTaxationFederal
Income Tax Considerations of our Annual Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on Form 8-K filed November 8, 2010.
The 90% annual
distribution requirement will decrease our liquidity and may
limit our ability to engage in otherwise beneficial
transactions
To comply with the 90% distribution requirement applicable to
REITs and to avoid being subject to a nondeductible excise tax,
we must make certain distributions to our stockholders. See
Item 1BusinessTaxationFederal
Income Tax ConsiderationsQualification as a
REITAnnual Distribution Requirements included in our
Annual Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010. Although we anticipate that we
generally will have sufficient cash or liquid assets to enable
us to satisfy the REIT distribution requirement, it is possible
that, from time to time, we may not have sufficient cash or
other liquid assets to meet the 90% distribution requirement, or
we may decide to retain cash or distribute such greater amount
as may be necessary to avoid income and excise taxation. This
may be due to timing differences between the actual receipt of
income and actual payment of deductible expenses, on the one
hand, and the inclusion of that income and deduction of those
expenses in arriving at our taxable income, on the other hand.
In addition, non-deductible expenses such as principal
amortization or repayments or capital expenditures in excess of
non-cash deductions may cause us to fail to have sufficient cash
or liquid assets to enable us to satisfy the 90% distribution
requirement. In the event that timing differences occur, we have
insufficient cash or liquid assets to meet the distribution
requirement, or we deem it appropriate to retain cash, then we
may borrow funds, issue additional equity securities (although
we cannot assure you that we will be able to do so), pay taxable
stock dividends, if possible, distribute other property or
securities or engage in a transaction intended to enable us to
meet the REIT distribution requirements. This may require us to
raise additional capital to meet our obligations, even if the
then-prevailing market conditions are not favorable for raising
such capital.
The amount of additional indebtedness we may incur is limited by
the terms of our line of credit arrangement and the indentures
governing our senior unsecured notes. In addition, adverse
economic conditions may impact the availability of additional
funds or could cause the terms on which we are able to borrow
additional funds to be unfavorable. In those circumstances, we
may decide or be required to raise additional equity in the
capital markets. Our access to capital depends upon a number of
factors over which we have little or no control, including
rising interest rates, inflation and other general market
conditions and the markets perception of our growth
potential and our current and potential future earnings and cash
distributions and the market price of the shares of our capital
stock. We cannot assure you that we will be able to raise the
capital necessary to make future investments or to meet our
obligations and commitments as they mature.
S-11
Risk
factors
If certain
sale-leaseback transactions are not characterized by the IRS as
true leases, we may be subject to adverse tax
consequences
We may purchase properties and lease them back to the sellers of
such properties. We intend for any such sale-leaseback
transaction to be structured in such a manner that the lease
will be characterized as a true lease, thereby
allowing us to be treated as the owner of the property for
federal income tax purposes. However, depending on the terms of
any specific transaction, the Internal Revenue Service might
take the position that the transaction is not a true
lease but is more properly treated in some other manner.
In the event any sale-leaseback transaction is challenged and
successfully re-characterized by the Internal Revenue Service,
we would not be entitled to claim the deductions for
depreciation and cost recovery generally available to an owner
of the property. Furthermore, if a sale-leaseback transaction
were so re-characterized, we might fail to satisfy the REIT
asset tests or income tests and, consequently, could lose our
REIT status effective with the year of re-characterization. See
Item 1 Business
Taxation Federal Income Tax
Considerations Qualification as a REIT
Asset Tests and Income Tests
included in our Annual Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010. Alternatively, the amount of our
REIT taxable income could be recalculated, which may also cause
us to fail to meet the REIT annual distribution requirements for
a taxable year. See Item 1
Business Taxation Federal Income Tax
Considerations Qualification as a REIT
Annual Distribution Requirements included in our Annual
Report on
Form 10-K
for the year ended December 31, 2009, as updated by our
Current Report on
Form 8-K
filed November 8, 2010.
Other risk
factors
We are also subject to other risks. Our Second Restated
Certificate of Incorporation and Second Amended and Restated
By-Laws contain anti-takeover provisions (staggered board
provisions, restrictions on share ownership and transfer and
super majority stockholder approval requirements for business
combinations) that could make it more difficult for or even
prevent a third party from acquiring us without the approval of
our incumbent Board of Directors. Provisions and agreements that
inhibit or discourage takeover attempts could reduce the market
value of our common stock.
Additionally, we are dependent on key personnel. Although we
have entered into employment agreements with our executive
officers, losing any one of them could, at least temporarily,
have an adverse impact on our operations. We believe that losing
more than one could have a material adverse impact on our
business.
RISKS RELATED TO
OUR COMMON STOCK
The share price
of our common stock could be affected by several
factors
The share price of our common stock depends upon several
factors, including, but not limited to: our financial condition,
performance and prospects; general economic and financial market
conditions; changes in estimates by analysts; the market for
similar securities issued by real estate investment trusts; and
our ability to meet analysts estimates. In addition, the
market price of our common stock may be affected by future sales
of our securities, including additional issuances of common
stock and securities convertible into common stock. These
factors, among others, could significantly depress the trading
price of our common stock.
Holders of our
outstanding shares of preferred stock have, and holders of any
future outstanding shares of preferred stock will have,
liquidation, dividend and other rights that are senior to the
rights of the holders of our common stock
Since our board of directors has the authority to designate and
issue preferred stock with liquidation, dividend and other
rights that are senior to those of our common stock, the holders
of our issued and outstanding shares of preferred stock, as well
as any that may be issued in the future, would receive, upon our
voluntary or involuntary liquidation, dissolution or winding up,
before any payment is made to holders of our common stock, their
liquidation preferences as well as any accrued and unpaid
distributions. These payments would reduce the remaining amount
of our assets, if any, available for distribution to holders of
our common stock.
S-12
Risk
factors
Our issuance of
additional securities may reduce the market price for our
shares
The market price of our common stock may be affected by future
sales of our securities, including those made pursuant to each
equity distribution agreement and other additional issuances of
common stock and securities convertible into common stock. We
also are required to issue common stock to the holders of the
4.75% Convertible Senior Notes due 2026, the
4.75% Convertible Senior Notes due 2027 and the
3.00% Convertible Senior Notes due 2029 if and when the
holders exercise their conversion rights. The number of shares
of common stock that we may issue upon conversion could be
significant and dilutive to our existing stockholders.
Our ability to
pay dividends in the future is subject to many factors
Our ability to pay dividends may be impaired if any of the risks
described in this prospectus supplement and the accompanying
prospectus or incorporated by reference herein and in the
accompanying prospectus, were to occur. In addition, payment of
our dividends depends upon our earnings, our financial
condition, maintenance of our REIT status and other factors as
our board of directors may deem relevant from time to time.
If we decide to
pay taxable stock dividends to meet the REIT distribution
requirements, your tax liability may be greater than the amount
of cash you receive.
The Internal Revenue Service (IRS) has recently
issued Revenue Procedure
2010-12.
Under this Revenue Procedure, the IRS will treat stock dividends
declared on or before December 31, 2012, for taxable years
ending before December 31, 2011, as distributions for
purposes of satisfying the REIT distribution requirements, if
each stockholder can elect to receive the distribution in cash
or stock, even if the aggregate cash amount paid to all
stockholders is limited, provided certain requirements are met.
Taxable stockholders receiving such dividends will be required
to include the full amount of the dividend as income for federal
income tax purposes to the extent of our current and accumulated
earnings and profits. Accordingly, if we decide to pay a stock
dividend in accordance with Revenue Procedure
2010-12,
your tax liability with respect to such dividend may be
significantly greater than the amount of cash you receive. If
you decide to sell the stock received as a dividend in order to
pay this tax, the sales proceeds you receive may be less than
the amount you are required to include in income with respect to
the dividend, depending on the market price of the stock at the
time of the sale. With respect to foreign stockholders, we may
be required to withhold U.S. tax with respect to such
dividends, including in respect of all or a portion of such
dividend that is payable in stock. In addition, if a significant
number of our stockholders sell shares of stock in order to pay
taxes owed on dividends, such sales may put downward pressure on
the trading price of our stock.
Certain
provisions in our certificate of incorporation and by-laws may
restrict your ownership of shares of our capital stock
and/or
discourage or prevent a change in control
In order to assist us in maintaining our qualification as a REIT
for U.S. federal income tax purposes, our Second Amended
and Restated By-Laws provide that no person may own, or be
deemed to own by virtue of the attribution rules of the Internal
Revenue Code, more than 9.8% of the value of our outstanding
capital stock, subject to certain exceptions. For this purpose,
all options, warrants, convertible securities or other rights to
acquire our common stock will be treated as if all such rights
had been exercised. If any shares or other securities in excess
of this limit are issued or transferred to any person, such
issuance or transfer shall be valid only with respect to such
amount of shares or securities as does not exceed this limit,
and such issuance or transfer will be void with respect to the
excess. These and other provisions in our Second Restated
Certificate of Incorporation, Second Amended and Restated
By-Laws, and Delaware law could delay, prevent or deter a
transaction or change in control, including an acquisition of us
by a third party, that might involve a premium price for our
common stock or otherwise be favorable to you as a stockholder.
S-13
Forward-looking
statements
This prospectus supplement, the accompanying prospectus and the
documents incorporated by reference contain
forward-looking statements as that term is defined
under federal securities laws. These forward-looking statements
include, but are not limited to, those regarding:
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the possible expansion of our portfolio;
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the sale of properties;
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the performance of our operators/tenants and properties;
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our ability to enter into agreements with new viable tenants for
vacant space or for properties that we take back from
financially troubled tenants, if any;
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our occupancy rates;
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our ability to acquire, develop and/or manage properties;
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our ability to make distributions to stockholders;
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our policies and plans regarding investments, financings and
other matters;
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our tax status as a real estate investment trust;
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our critical accounting policies;
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our ability to appropriately balance the use of debt and equity;
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our ability to access capital markets or other sources of funds;
and
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our ability to meet our earnings guidance.
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For example, when we use words such as may,
will, intend, should,
believe, expect, anticipate,
project, estimate or similar
expressions, we are making forward-looking statements.
Forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Our expected
results may not be achieved, and actual results may differ
materially from our expectations. This may be a result of
various factors, including, but not limited to, the risks
discussed above, in the sections captioned Risk
factors in this prospectus supplement and Cautionary
Statement Concerning Forward-Looking Statements and Risk
Factors in the accompanying prospectus and the documents
that are incorporated herein by reference. We assume no
obligation to update or revise any forward-looking statements or
to update the reasons why actual results could differ from those
projected in any forward-looking statements.
S-14
Use of proceeds
We expect to use the net proceeds from the sale of the shares of
common stock that we may offer under this prospectus supplement
and the accompanying prospectus for general corporate purposes,
including investing in health care and senior housing
properties. Pending such use, the net proceeds may be invested
in short-term, investment grade, interest-bearing securities,
certificates of deposit or indirect or guaranteed obligations of
the United States. As of November 11, 2010, we had zero
outstanding balance under our unsecured line of credit.
Affiliates of certain of the underwriters are lenders under our
Fourth Amended and Restated Loan Agreement dated as of
August 6, 2007. See Plan of distribution.
S-15
Plan of distribution
This prospectus supplement and the related prospectus relates to
the ongoing offer and sale, from time to time, of shares of our
common stock having an aggregate offering price of $250,000,000.
Through November 12, 2010, we had sold
3,177,903 shares of our common stock, with an aggregate
offering price of $130,015,047.63, in the offering to which this
prospectus supplement and prospectus relate, leaving
$119,984,952.37 in aggregate offering price of common stock to
be sold subsequent to such date.
Prior sales of our common stock in this offering were made
through UBS Securities LLC, as sales agent, in accordance with
an equity distribution agreement, as amended, between UBS
Securities LLC and us. On November 12, 2010, we entered
into substantially similar forms of equity distribution
agreements with each of UBS Securities LLC, RBS Securities Inc.,
KeyBanc Capital Markets Inc. and Credit Agricole Securities
(USA) Inc. and consequently agreed with UBS Securities LLC to
terminate, subject to certain exceptions, our prior equity
distribution agreement with them. In accordance with the terms
of the equity distribution agreements described above, we may
offer and sell, from time to time, shares of our common stock
having an aggregate offering price equal to the remaining
$119,984,952.37 available under this prospectus supplement and
the related prospectus through UBS Securities LLC, RBS
Securities Inc., KeyBanc Capital Markets Inc. and Credit
Agricole Securities (USA) Inc. as our sales agents and whom we
refer to individually as a manager and together as the managers.
Sales of the shares of common stock, if any, will be made by
means of ordinary brokers transactions on the New York
Stock Exchange at market prices, in block transactions, or as
otherwise agreed with the applicable manager, or by means of any
other existing trading market for our common stock or to or
through a market maker other than on an exchange. As an agent, a
manager will not engage in any transactions that stabilize the
price of our common stock.
Each manager, as agent, will use its reasonable efforts to
solicit offers to purchase the shares of common stock on a daily
basis or as otherwise agreed upon by us and the applicable
manager. We will designate the maximum amount of shares of
common stock to be sold through each manager on a daily basis or
otherwise as we and the applicable manager agree. Subject to the
terms and conditions of the applicable equity distribution
agreement, the manager will use its reasonable efforts to sell
on our behalf all of the designated shares of common stock. We
may instruct the managers not to sell shares of common stock if
the sales cannot be effected at or above the price designated by
us in any such instruction. We or the applicable manager may
suspend the offering of shares of common stock by notifying the
other.
We will pay each manager a fee that will not exceed 1.5% of the
gross sales price per share of shares sold through it as agent
under the equity distribution agreement. The remaining sales
proceeds, after deducting any expenses payable by us and any
transaction fees imposed by any governmental or self-regulatory
organization in connection with the sales, will equal our net
proceeds for the sale of the shares. We have agreed to reimburse
each manager for certain of its expenses in certain
circumstances.
Settlement for sales of common stock will occur on the third
business day following the date on which any sales were made in
return for payment of the net proceeds to us. There is no
arrangement for funds to be received in an escrow, trust or
similar arrangement.
Under the terms of the equity distribution agreements, we also
may sell shares to any manager as principal for its own
respective account at a price agreed upon at the time of sale.
If we sell shares to any manager as principal, we will enter
into a separate terms agreement with such manager, as
applicable, and we will describe this agreement in a separate
prospectus supplement or pricing supplement.
In connection with the sale of the common stock on our behalf, a
manager may be deemed to be an underwriter within
the meaning of the Securities Act of 1933, as amended, and the
compensation paid to a manager may be deemed to be underwriting
commissions or discounts. We have agreed to
S-16
Plan of
distribution
provide indemnification and contribution to each manager against
certain civil liabilities, including liabilities under the
Securities Act. Any manager may engage in transactions with, or
perform other services for, us in the ordinary course of
business.
In compliance with the guidelines of the Financial Industry
Regulatory Authority, Inc. (FINRA), the maximum
discount or commission to be received by any FINRA member or
independent broker-dealer may not exceed 8% of the aggregate
offering price of the shares offered hereby.
If any manager or we have reason to believe that our common
stock is no longer an actively-traded security as
defined under Rule 101(c)(1) of Regulation M under the
Securities Exchange Act of 1934, as amended, that party will
promptly notify the other, and sales of common stock under the
applicable equity distribution agreement and any terms agreement
will be suspended until that or other exemptive provisions have
been satisfied in the judgment of the manager and us.
The offering of common stock pursuant to the equity distribution
agreements will terminate upon the earlier of (i) the sale
of all shares of common stock subject to the equity distribution
agreements and (ii) with respect to a particular equity
distribution agreement, the termination of the equity
distribution agreement by either the manager or us.
The managers and their affiliates have provided and may provide
commercial banking, financial advisory and investment banking
services to us for which they receive fees. Affiliates of UBS
Securities LLC, RBS Securities Inc., KeyBanc Capital Markets
Inc. and Credit Agricole Securities (USA) Inc. are lenders under
our Fourth Amended and Restated Loan Agreement dated
August 6, 2007. UBS Securities LLC and Credit Agricole
Corporate and Investment Bank are documentation agents and
KeyBank National Association is the administrative agent under
such agreement.
S-17
Legal matters
Certain legal matters in connection with the offering of the
common stock hereby will be passed upon for us by Shumaker,
Loop & Kendrick, LLP, Toledo, Ohio. Arnold &
Porter LLP will pass upon certain federal income tax matters
relating to us. Dewey & LeBoeuf LLP, New York, New
York is counsel for the managers in connection with the offering.
Experts
Ernst & Young LLP, independent registered public
accounting firm, has audited our consolidated financial
statements and schedules included in our Current Report on
Form 8-K
dated November 8, and the effectiveness of our internal
control over financial reporting as of December 31, 2009,
included in our Annual Report on
Form 10-K
for the year ended December 31, 2009, as set forth in their
reports, which are incorporated by reference in this prospectus
supplement and the accompanying prospectus. Our financial
statements and schedules are incorporated by reference in
reliance upon Ernst & Young LLPs reports,
given on their authority as experts in accounting and auditing.
Where you can find
more information
The prospectus supplement and the accompanying prospectus are
part of a registration statement that we filed with the SEC
covering the securities that may be offered under this
prospectus supplement. The registration statement, including the
attached exhibits and schedules, contain additional relevant
information about the securities.
Additionally, we file annual, quarterly and current reports,
proxy statements and other information with the SEC, all of
which are made available, free of charge, on our Internet
website at http:// www.hcreit.com as soon as reasonably
practicable after they are filed with, or furnished to, the SEC.
The information on or connected to our Internet website is not,
and shall not be deemed to be, a part of, or incorporated into
this prospectus supplement. You can review these SEC filings and
the registration statement by accessing the SECs Internet
website at
http://www.sec.gov.
You also may read and copy the registration statement and any
reports, statements or other information on file at the
SECs public reference room at 100 F Street,
N.E., Washington, DC 20549. You can request copies of those
documents upon payment of a duplicating fee to the SEC. Please
call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
room. These filings with the SEC are also available through the
New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
INCORPORATION OF
INFORMATION FILED WITH THE SEC
The SEC allows us to incorporate by reference the
information we file with the SEC, which means:
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we consider incorporated documents to be part of this prospectus
supplement;
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we may disclose important information to you by referring you to
those documents; and
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information we subsequently file with the SEC will automatically
update and supersede the information in this prospectus
supplement.
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DOCUMENTS
INCORPORATED BY REFERENCE
This prospectus supplement incorporates by reference the
following documents we filed with the SEC:
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Annual Report on
Form 10-K
for the year ended December 31, 2009;
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Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2010;
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Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2010;
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Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2010;
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S-18
Where you can
find more information
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Current Reports on
Form 8-K
filed on March 15, 2010, April 5, 2010, April 7,
2010, May 10, 2010, June 8, 2010, June 18, 2010,
September 13, 2010, September 15, 2010, September 24, 2010 and
November 8, 2010;
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The description of our common stock as set forth in our
registration statement filed under the Exchange Act on
Form 8-A
on June 17, 1985, including any amendment or report for the
purpose of updating such description;
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Ø
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The description of the rights to purchase our Series A
Junior Participating Preferred Stock, par value $1.00 per share,
associated with our common stock, as set forth in our
registration statement filed under the Exchange Act on
Form 8-A
on August 3, 1994, including any amendment or report for
the purpose of updating such description;
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The description of our
77/8%
Series D Cumulative Redeemable Preferred Stock as set forth
in the registration statement filed under the Exchange Act on
Form 8-A/A
on July 8, 2003, including any amendment or report for the
purpose of updating such description;
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Ø
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The description of our
75/8%
Series F Cumulative Redeemable Preferred Stock as set forth
in the registration statement filed under the Exchange Act on
Form 8-A
on September 10, 2004, including any amendment or report
for the purpose of updating such description; and
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All subsequent documents filed by us under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act of 1934 after the date of
this prospectus supplement and before the date this offering is
terminated;
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other than the portions of such documents that by statute or
rule, by designation in such document or otherwise, are not
deemed to be filed with the SEC or are not required to be
incorporated herein by reference.
This prospectus supplement summarizes material provisions of
contracts and other documents to which we refer. Since this
prospectus supplement may not contain all the information that
you may find important, you should review the full text of those
documents. Upon request, we will provide each person receiving
this prospectus supplement a free copy, without exhibits, of any
or all documents incorporated by reference into this prospectus
supplement. You may direct such requests to:
Erin C. Ibele
Senior Vice PresidentAdministration and Corporate
Secretary
Health Care REIT, Inc.
4500 Dorr Street
Toledo, Ohio 43615
(419) 247-2800
S-19
HEALTH CARE REIT,
INC.
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
UNITS
We may periodically offer and sell, in one or more offerings:
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debt securities
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shares of common stock
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shares of preferred stock
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depositary shares
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warrants to purchase debt securities, preferred stock,
depositary shares or common stock
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units consisting of one or more debt securities or other
securities
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We may offer these securities from time to time on terms we will
determine at the time of offering. We will provide the specific
terms of the securities being offered in supplements to this
prospectus prepared in connection with each offering. You should
read this prospectus and the supplement for the specific
security being offered carefully before you invest.
We may offer these securities directly, through agents we
designate periodically, or to or through underwriters or
dealers. If designated agents or underwriters are involved in
the sale of any of the securities, we will disclose in the
prospectus supplement their names, any applicable purchase
price, fee, compensation arrangement between or among them, and
our net proceeds from such sale. See Plan of
Distribution. No securities may be sold without the
delivery of the applicable prospectus supplement describing the
securities and the method and terms of their offering.
Our shares of common stock are listed on the New York Stock
Exchange under the symbol HCN. Our executive offices
are located at One SeaGate, Suite 1500, Toledo, Ohio 43604,
telephone number:
419-247-2800,
facsimile:
419-247-2826,
and website: www.hcreit.com. Unless specifically noted
otherwise in this prospectus, all references to we,
us, our, or the Company
refer to Health Care REIT, Inc. and its subsidiaries.
Investing in our securities involves risk. See
Cautionary Statement Concerning Forward-Looking Statements
and Risk Factors beginning on page 1 of this
prospectus.
The information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities, or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is May 7, 2009.
TABLE OF
CONTENTS
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i
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement we filed
with the SEC using a shelf registration process.
Under this shelf process, we may sell any combination of the
securities described in this prospectus from time to time in one
or more offerings. This prospectus provides you only with a
general description of the securities we may offer. Each time we
sell securities, we will provide a prospectus supplement
containing specific information about the terms of that
offering. The prospectus supplement may also add to, update or
change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with
additional information described under the heading Where
You Can Find Additional Information and Documents
Incorporated By Reference.
You should rely only on the information contained and
incorporated by reference in this prospectus. Neither we nor the
underwriters have authorized any other person to provide you
with different or inconsistent information from that contained
in this prospectus and the applicable prospectus supplement. If
anyone provides you with different or inconsistent information,
you should not rely on it. You should assume that the
information in this prospectus and the applicable prospectus
supplement, as well as information we previously filed with the
SEC and incorporated by reference, is accurate only as of the
date on the front cover of this prospectus and the applicable
prospectus supplement. Our business, financial condition,
results of operations and prospects may have changed since those
dates.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
AND RISK FACTORS
This prospectus and the documents incorporated by reference in
this prospectus contain forward-looking statements
as that term is defined under federal securities laws. These
forward-looking statements include, but are not limited to,
those regarding:
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the possible expansion of our portfolio;
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the sale of properties;
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the performance of our operators/tenants and properties;
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our ability to enter into agreements with new viable tenants for
vacant space or for properties that we take back from
financially troubled tenants, if any;
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our occupancy rates;
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our ability to acquire, develop
and/or
manage properties;
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our ability to make distributions to stockholders;
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our policies and plans regarding investments, financings and
other matters;
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our tax status as a real estate investment trust;
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our critical accounting policies;
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our ability to appropriately balance the use of debt and equity;
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our ability to access capital markets or other sources of
funds; and
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our ability to meet earnings guidance.
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When we use words such as may, will,
intend, should, believe,
expect, anticipate, project,
estimate or similar expressions, we are making
forward-looking statements. Forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties. Our expected results may not be achieved, and
actual results may differ materially from our expectations. This
may be a result of various factors, including, but not limited
to:
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the status of the economy;
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the status of capital markets, including availability and cost
of capital;
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issues facing the health care industry, including compliance
with, and changes to, regulations and payment policies,
responding to government investigations and punitive settlements
and operators/tenants difficulty in cost-effectively
obtaining and maintaining adequate liability and other insurance;
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changes in financing terms;
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competition within the health care and senior housing industries;
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negative developments in the operating results or financial
condition of operators/tenants, including, but not limited to,
their ability to pay rent and repay loans;
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our ability to transition or sell facilities with profitable
results;
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the failure to make new investments as and when anticipated;
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acts of God affecting our properties;
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our ability to re-lease space at similar rates as vacancies
occur;
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our ability to timely reinvest sale proceeds at similar rates to
assets sold;
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operator/tenant bankruptcies or insolvencies;
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government regulations affecting Medicare and Medicaid
reimbursement rates and operational requirements;
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liability or contract claims by or against operators/tenants;
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unanticipated difficulties
and/or
expenditures relating to future acquisitions;
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environmental laws affecting our properties;
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changes in rules or practices governing our financial
reporting; and
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legal and operational matters, including real estate investment
trust qualification and key management personnel recruitment and
retention.
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Our business is subject to certain risks, which are discussed in
our most recent Annual Report on
Form 10-K,
as amended or updated, under the headings Business,
Risk Factors and Managements Discussion
and Analysis of Financial Condition and Results of
Operations. Updated information relating to such risks, as
well as additional risks specific to the securities to be
offered hereby, will be set forth in the prospectus supplement
relating to such offered securities. We assume no obligation to
update or revise any forward-looking statements or to update the
reasons why actual results could differ from those projected in
any forward-looking statements.
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
This prospectus is part of a registration statement that we have
filed with the SEC covering the securities that may be offered
under this prospectus. The registration statement, including the
attached exhibits and schedules, contains additional relevant
information about the securities.
Additionally, we file annual, quarterly and current reports,
proxy statements and other information with the SEC, all of
which are made available, free of charge, on our Internet
website at www.hcreit.com as soon as reasonably
practicable after they are filed with, or furnished to, the SEC.
You can review our SEC filings and the registration statement by
accessing the SECs Internet site at
http://www.sec.gov.
You also may read and copy the registration statement and any
reports, statements or other information on file at the
SECs public reference room at 100 F Street,
N.E., Washington, D.C. 20549. You can request copies of
those documents upon payment of a duplicating fee to the SEC.
Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
room. Our filings with the SEC are also available through the
New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
This prospectus does not contain all the information set forth
in the registration statement. We have omitted certain parts
consistent with SEC rules. For further information, please see
the registration statement.
2
DOCUMENTS
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with the SEC, which means:
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we consider incorporated documents to be part of the prospectus;
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we may disclose important information to you by referring you to
those documents; and
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information we subsequently file with the SEC will automatically
update and supersede the information in this prospectus.
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This prospectus incorporates by reference the following
documents we filed with the SEC; provided, however, that we are
not incorporating any documents or information deemed to have
been furnished and not filed in accordance with SEC rules:
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Annual Report on
Form 10-K
for the year ended December 31, 2008;
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Quarterly Report on
Form 10-Q
for the quarterly period ended March 31, 2009;
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Current Reports on
Form 8-K
filed on January 5, 2009, January 29, 2009 (except
that the information furnished pursuant to Items 2.02 and
7.01 of
Form 8-K
and the exhibits relating to such information are not
incorporated into this prospectus), January 30, 2009
(except that the information furnished pursuant to
Item 7.01 of
Form 8-K
and the exhibit relating to such information are not
incorporated into this prospectus) and May 7, 2009;
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The description of our common stock as set forth in our
registration statement filed under the Exchange Act on
Form 8-A
on June 17, 1985, including any amendment or report for the
purpose of updating such description;
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The description of the rights to purchase our Series A
Junior Participating Preferred Stock, par value $1.00 per share,
associated with our common stock, as set forth in our
registration statement filed under the Exchange Act on
Form 8-A
on August 3, 1994, including any amendment or report for
the purpose of updating such description;
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The description of our
77/8%
Series D Cumulative Redeemable Preferred Stock as set forth
in our registration statement filed under the Exchange Act on
Form 8-A/A
on July 8, 2003, including any amendment or report for the
purpose of updating such description;
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The description of our
75/8%
Series F Cumulative Redeemable Preferred Stock as set forth
in our registration statement filed under the Exchange Act on
Form 8-A
on September 10, 2004, including any amendment or report
for the purpose of updating such description;
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The description of our 7.5% Series G Cumulative Convertible
Preferred Stock as set forth in the registration statement filed
under the Exchange Act on
Form 8-A
on December 18, 2006, including any amendment or report for
the purpose of updating such description; and
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All subsequent documents filed by us under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act of 1934 after the date of
this prospectus and before the termination of the offering.
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other than the portions of such documents that by statute or
rule, by designation in such document or otherwise, are not
deemed to be filed with the SEC or are not required to be
incorporated herein by reference.
This prospectus summarizes material provisions of contracts and
other documents to which we refer. Since this prospectus may not
contain all the information that you may find important, you
should review the full text of those documents. Upon request, we
will provide each person receiving this prospectus a free copy
of any or all documents incorporated by reference into this
prospectus. You may direct such requests to:
Erin C. Ibele
Senior Vice President-Administration and Corporate Secretary
Health Care REIT, Inc.
One SeaGate, Suite 1500
Toledo, Ohio 43604
(419) 247-2800
3
THE
COMPANY
We are a real estate investment trust that invests in senior
housing and health care real estate. We also provide an
extensive array of property management and development services.
Our principal executive offices are located at One SeaGate,
Suite 1500, Toledo, Ohio, 43604, and our telephone number
is
(419) 247-2800.
Our website address is www.hcreit.com. The information on
our website is not part of this prospectus.
Our primary objectives are to protect stockholder capital and
enhance stockholder value. We seek to pay consistent cash
dividends to stockholders and create opportunities to increase
dividend payments to stockholders as a result of annual
increases in rental and interest income and portfolio growth. To
meet these objectives, we invest in the full spectrum of senior
housing and health care real estate and diversify our investment
portfolio by property type, operator/tenant and geographic
location.
For additional information regarding our business, please see
the information under the heading Business in our
most recent Annual Report on
Form 10-K,
which is incorporated by reference in this prospectus.
USE OF
PROCEEDS
Unless otherwise described in a prospectus supplement, we intend
to use the net proceeds from the sale of any securities under
this prospectus for general business purposes, which may include
acquisition of and investment in additional health care and
senior housing properties and the repayment of borrowings under
our credit facilities or other debt. Until the proceeds from a
sale of securities by us are applied to their intended purposes,
they may be invested in short-term, investment grade,
interest-bearing securities, certificates of deposit or direct
or guaranteed obligations of the United States.
RATIOS OF
EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred
stock dividends for the periods indicated. The ratio of earnings
to fixed charges was computed by dividing earnings by our fixed
charges. The ratio of earnings to combined fixed charges and
preferred stock dividends was computed by dividing earnings by
our combined fixed charges and preferred stock dividends. For
purposes of calculating these ratios, earnings
includes income from continuing operations, excluding the equity
earnings in a less than 50% owned subsidiary, plus fixed charges
and reduced by capitalized interest. Fixed charges
consists of interest expensed and capitalized and the amortized
premiums, discounts and capitalized expenses related to
indebtedness.
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Year Ended December 31,
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Three Months Ended March 31,
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2004
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2005
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2006
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2007
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2008
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2008
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2009
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Consolidated ratio of earnings to fixed charges
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1.89
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1.77
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1.87
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1.71
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1.85
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1.78
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2.18
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Consolidated ratio of earnings to combined fixed charges and
preferred stock dividends
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1.62
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1.41
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1.54
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1.47
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1.61
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1.54
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1.89
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We issued 4,000,000 shares of
77/8%
Series D Cumulative Redeemable Preferred Stock in July
2003. We issued 1,060,000 shares of 6% Series E
Cumulative Convertible and Redeemable Preferred Stock in
September 2003. During the year ended December 31, 2004,
certain holders of our Series E Preferred Stock converted
480,399 shares into 367,724 shares of our common
stock, leaving 350,045 of such shares outstanding at
December 31, 2004. During the year ended December 31,
2005, certain holders of our Series E Preferred Stock
converted 275,056 shares into 210,541 shares of our
common stock, leaving 74,989 of such shares outstanding at
December 31, 2005, 2006, 2007 and 2008 and March 31,
2009. We issued 7,000,000 shares of
75/8%
Series F Cumulative Redeemable Preferred Stock in September
2004. We issued 2,100,000 shares of 7.5% Series G
Cumulative Convertible Preferred Stock in December 2006. During
the year ended December 31, 2007, certain holders of our
Series G Preferred Stock converted 295,000 shares into
211,702 shares of our common stock, leaving 1,804,200 of
such shares outstanding at
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December 31, 2007. During the year ended December 31,
2008, certain holders of our Series G Preferred Stock
converted 1,362,887 shares into 975,397 shares of our
common stock, leaving 441,313 of such shares outstanding at
December 31, 2008. During the quarterly period ended
March 31, 2009, certain holders of our Series G
Preferred Stock converted 40,600 shares into
29,056 shares of our common stock, leaving 400,713 of such
shares outstanding at March 31, 2009.
GENERAL
DESCRIPTION OF THE OFFERED SECURITIES
We may offer under this prospectus one or more of the following
categories of our securities:
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debt securities, in one or more series;
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shares of our common stock, par value $1.00 per share;
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shares of our preferred stock, par value $1.00 per share, in one
or more series;
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depositary shares, representing interests in our preferred
stock, in one or more series;
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warrants to purchase any of the foregoing securities; and
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units consisting of any combination of the foregoing securities.
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The terms of any specific offering of securities, including the
terms of any units offered, will be set forth in a prospectus
supplement relating to such offering.
Our certificate of incorporation authorizes us to issue
225,000,000 shares of common stock and
50,000,000 shares of preferred stock. Of our preferred
stock:
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13,000 shares have been designated as Junior Participating
Preferred Stock, Series A;
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4,000,000 shares have been designated as
77/8%
Series D Cumulative Redeemable Preferred Stock;
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1,060,000 shares have been designated as 6% Series E
Cumulative Convertible and Redeemable Preferred Stock;
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7,000,000 shares have been designated as
75/8%
Series F Cumulative Redeemable Preferred Stock; and
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2,100,000 shares have been designated as 7.5% Series G
Cumulative Convertible Preferred Stock.
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As of March 31, 2009, we had outstanding
111,013,261 shares of common stock, 4,000,000 shares
of Series D Preferred Stock, 74,989 shares of
Series E Preferred Stock, 7,000,000 shares of
Series F Preferred Stock and 400,713 shares of
Series G Preferred Stock.
Our common stock is listed on the New York Stock Exchange under
the symbol HCN. We intend to apply to list any
additional shares of common stock that are issued and sold
hereunder. Our Series D Preferred Stock, Series F
Preferred Stock and Series G Preferred Stock are listed on
the New York Stock Exchange under the symbols HCN
PrD, HCN PrF and HCN PrG,
respectively. We may apply to list shares of any series of
preferred stock or any depositary shares which are offered and
sold hereunder, as described in the applicable prospectus
supplement relating to such preferred stock or depositary shares.
For a discussion of the taxation of the Company and the material
federal tax consequences to you as a holder of our common stock
and debt securities offered under this prospectus, see
Item 1 Business
Taxation Federal Income Tax Considerations
included in our most recent Annual Report on
Form 10-K.
The applicable prospectus supplement delivered with this
prospectus will provide any necessary information about
additional federal income tax considerations, if any, related to
the particular securities being offered.
DESCRIPTION
OF DEBT SECURITIES
The debt securities sold under this prospectus will be our
direct obligations, which may be secured or unsecured, and which
may be senior or subordinated indebtedness. The debt securities
may be guaranteed on a secured or unsecured, senior or
subordinated basis, by one or more of our subsidiaries. The debt
securities will be issued under one or more indentures between
us and a specified trustee. Any indenture will be subject to and
governed by the Trust Indenture Act of 1939, as amended.
The statements made in this prospectus relating to any
indentures and the debt securities to be issued under the
indentures are summaries of certain anticipated provisions of
the indentures.
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The following is a summary of the material terms of our debt
securities. Because it is a summary, it does not contain all of
the information that may be important to you. If you want more
information, you should read the form of indenture for senior
debt securities and the forms of indentures for senior
subordinated and junior subordinated debt securities which we
have filed as exhibits to the registration statement of which
this prospectus is a part. We will file any final indentures for
senior subordinated and junior subordinated debt securities and
supplemental indentures if we issue debt securities of this
type. See Where You Can Find Additional Information.
This summary is also subject to and qualified by reference to
the descriptions of the particular terms of the securities
described in the applicable prospectus supplement.
General
We may issue debt securities that rank senior,
senior subordinated or junior
subordinated. The debt securities that we refer to as
senior will be our direct obligations and will rank
equally and ratably in right of payment with our other
indebtedness not subordinated. We may issue debt securities that
will be subordinated in right of payment to the prior payment in
full of senior debt, as defined in the applicable prospectus
supplement, and may rank equally and ratably with the other
senior subordinated indebtedness. We refer to these as
senior subordinated securities. We may also issue
debt securities that may be subordinated in right of payment to
the senior subordinated securities. These would be junior
subordinated securities. We have filed with the
registration statement, of which this prospectus is a part, a
form of indenture for senior debt securities and two separate
forms of indenture, one for the senior subordinated securities
and one for the junior subordinated securities. We refer to
senior subordinated and junior subordinated securities as
subordinated.
We may issue the debt securities without limit as to aggregate
principal amount, in one or more series, in each case as we
establish in one or more supplemental indentures. We need not
issue all debt securities of one series at the same time. Unless
we otherwise provide, we may reopen a series, without the
consent of the holders of the series, for issuances of
additional securities of that series.
We anticipate that any indenture will provide that we may, but
need not, designate more than one trustee under an indenture,
each with respect to one or more series of debt securities. Any
trustee under any indenture may resign or be removed with
respect to one or more series of debt securities, and we may
appoint a successor trustee to act with respect to that series.
The applicable prospectus supplement will describe the specific
terms relating to the series of debt securities we will offer,
including, where applicable, the following:
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the title and series designation and whether they are senior
securities, senior subordinated securities or subordinated
securities;
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the aggregate principal amount of the securities;
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the percentage of the principal amount at which we will issue
the debt securities and, if other than the principal amount of
the debt securities, the portion of the principal amount of the
debt securities payable upon maturity of the debt securities;
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if convertible, the securities into which they are convertible,
the initial conversion price, the conversion period and any
other terms governing such conversion;
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the stated maturity date;
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any fixed or variable interest rate or rates per annum;
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if other than at the corporate trust office of the trustee, the
place where principal, premium, if any, and interest will be
payable and where the debt securities can be surrendered for
transfer, exchange or conversion;
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the date from which interest may accrue and any interest payment
dates;
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any sinking fund requirements;
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any provisions for redemption, including the redemption price
and any remarketing arrangements;
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any provisions for denomination or payment of the securities in
a foreign currency or units of two or more foreign currencies;
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the events of default and covenants of such securities, to the
extent different from or in addition to those described in this
prospectus;
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whether we will issue the debt securities in certificated or
book-entry form;
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whether the debt securities will be in registered or bearer form
and, if in registered form, the denominations if other than in
even multiples of $1,000 and, if in bearer form, the
denominations and terms and conditions relating thereto;
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whether we will issue any of the debt securities in permanent
global form and, if so, the terms and conditions, if any, upon
which interests in the global security may be exchanged, in
whole or in part, for the individual debt securities represented
by the global security;
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the applicability, if any, of the defeasance and covenant
defeasance provisions described in this prospectus or any
prospectus supplement;
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any provisions for payment of additional amounts on the
securities in respect of any tax, assessment or governmental
charge and rights for us to redeem the debt securities instead
of making this payment;
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the subordination provisions, if any, relating to the debt
securities;
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if the debt securities are to be issued upon the exercise of
debt warrants, the time, manner and place for them to be
authenticated and delivered;
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whether any of our subsidiaries will be bound by the terms of
the indenture, in particular any restrictive covenants;
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the provisions relating to any security provided for the debt
securities; and
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the provisions relating to any guarantee of the debt securities.
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We may issue debt securities at less than the principal amount
payable at maturity. We refer to these securities as
original issue discount securities. If material or
applicable, we will describe in the applicable prospectus
supplement special U.S. federal income tax, accounting and
other considerations applicable to original issue discount
securities.
Except as may be described in any prospectus supplement, an
indenture will not contain any provisions that would limit our
ability to incur indebtedness or that would afford holders of
the debt securities protection in the event of a highly
leveraged or similar transaction involving us or in the event of
a change of control. You should review carefully the applicable
prospectus supplement for information with respect to events of
default and covenants applicable to the securities being offered.
Denominations,
Interest, Registration and Transfer
Unless otherwise described in the applicable prospectus
supplement, we will issue the debt securities of any series that
are registered securities in denominations that are even
multiples of $1,000, other than global securities, which may be
of any denomination.
Unless otherwise specified in the applicable prospectus
supplement, we will pay the interest, principal and any premium
at the corporate trust office of the trustee. At our option,
however, we may make payment of interest by check mailed to the
address of the person entitled to the payment as it appears in
the applicable register or by wire transfer of funds to that
person at an account maintained within the United States.
If we do not punctually pay or otherwise provide for interest on
any interest payment date, the defaulted interest will be paid
either:
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to the person in whose name the debt security is registered at
the close of business on a special record date the trustee will
fix; or
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in any other lawful manner, all as the applicable indenture
describes.
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You may have your debt securities divided into more debt
securities of smaller denominations or combined into fewer debt
securities of larger denominations, as long as the total
principal amount is not changed. We call this an
exchange. You may exchange or transfer debt
securities at the office of the applicable trustee. The trustee
acts
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as our agent for registering debt securities in the names of
holders and transferring debt securities. We may change this
appointment to another entity or perform it ourselves.
The entity performing the role of maintaining the list of
registered holders is called the registrar. It will
also perform transfers. You will not be required to pay a
service charge to transfer or exchange debt securities, but you
may be required to pay for any tax or other governmental charge
associated with the exchange or transfer. The registrar will
make the transfer or exchange only if it is satisfied with your
proof of ownership.
Merger,
Consolidation or Sale of Assets
Under any indenture, we are generally permitted to consolidate
or merge with another company. We are also permitted to sell
substantially all of our assets to another company, or to buy
substantially all of the assets of another company. However, we
may not take any of these actions unless the following
conditions are met:
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if we merge out of existence or sell our assets, the other
company must be an entity organized under the laws of one of the
states of the United States or the District of Columbia or under
United States federal law and must agree to be legally
responsible for our debt securities; and
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immediately after the merger, sale of assets or other
transaction, we may not be in default on the debt securities. A
default for this purpose would include any event that would be
an event of default if the requirements regarding notice of
default or continuing default for a specific period of time were
disregarded.
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Certain
Covenants
Existence. Except as permitted and described
above under Merger, Consolidation or Sale of
Assets, we will agree to do all things necessary to
preserve and keep our existence, rights and franchises, provided
that it is in our best interests for the conduct of business.
Provisions of Financial Information. To the
extent permitted by law, we will agree to file all annual,
quarterly and other reports and financial statements with the
SEC and the trustee on or before the applicable SEC filing dates
whether or not we remain required to do so under the Exchange
Act.
Additional Covenants. Any additional or
different covenants or modifications to the foregoing covenants
with respect to any series of debt securities will be described
in the applicable prospectus supplement.
Events of
Default and Related Matters
Events of Default. The term event of
default for any series of debt securities means any of the
following:
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We do not pay the principal or any premium on a debt security of
that series within 30 days after its maturity date.
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We do not pay interest on a debt security of that series within
30 days after its due date.
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We do not deposit any sinking fund payment for that series
within 30 days after its due date.
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We remain in breach of any other term of the applicable
indenture (other than a term added to the indenture solely for
the benefit of another series) for 60 days after we receive
a written notice of default from the trustee or holders of at
least a majority in principal amount of debt securities of the
affected series specifying the breach and requiring it to be
remedied.
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We default under any of our other indebtedness in specified
amounts after the expiration of any applicable grace period,
which default results in the acceleration of the maturity of
such indebtedness. Such default is not an event of default if
the other indebtedness is discharged, or the acceleration is
rescinded or annulled, within a period of 10 days after we
receive a written notice from the trustee or holders of at least
a majority in principal amount of debt securities of the
affected series specifying the default and requiring that we
discharge the other indebtedness or cause the acceleration to be
rescinded or annulled.
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We or one of our significant subsidiaries, if any,
files for bankruptcy or certain other events in bankruptcy,
insolvency or reorganization occur. The term significant
subsidiary means each of our significant subsidiaries, if
any, as defined in
Regulation S-X
under the Securities Act.
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Any other event of default described in the applicable
prospectus supplement occurs.
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Remedies if an Event of Default Occurs. If an
event of default has occurred and has not been cured, the
trustee or the holders of at least a majority in principal
amount of the debt securities of the affected series may declare
the entire principal amount of all the debt securities of that
series to be due and immediately payable. If an event of default
occurs because of certain events in bankruptcy, insolvency or
reorganization, the principal amount of all the debt securities
of that series will be automatically accelerated, without any
action by the trustee or any holder. At any time after the
trustee or the holders have accelerated any series of debt
securities, but before a judgment or decree for payment of the
money due has been obtained, the holders of at least a majority
in principal amount of the debt securities of the affected
series may, under certain circumstances, rescind and annul such
acceleration.
The trustee will be required to give notice to the holders of
debt securities within 90 days after a default under the
applicable indenture unless the default has been cured or
waived. The trustee may withhold notice to the holders of any
series of debt securities of any default with respect to that
series, except a default in the payment of the principal of or
interest on any debt security of that series, if specified
responsible officers of the trustee in good faith determine that
withholding the notice is in the interest of the holders.
Except in cases of default, where the trustee has some special
duties, the trustee is not required to take any action under the
applicable indenture at the request of any holders unless the
holders offer the trustee reasonable protection from expenses
and liability. We refer to this as an indemnity. If
reasonable indemnity satisfactory to it is provided, the holders
of a majority in principal amount of the outstanding securities
of the relevant series may direct the time, method and place of
conducting any lawsuit or other formal legal action seeking any
remedy available to the trustee. These majority holders may also
direct the trustee in performing any other action under the
applicable indenture, subject to certain limitations.
Before you bypass the trustee and bring your own lawsuit or
other formal legal action or take other steps to enforce your
rights or protect your interests relating to the debt
securities, the following must occur:
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you must give the trustee written notice that an event of
default has occurred and remains uncured;
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the holders of at least a majority in principal amount of all
outstanding securities of the relevant series must make a
written request that the trustee take action because of the
default, and must offer reasonable indemnity to the trustee
against the cost and other liabilities of taking that
action; and
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the trustee must have not taken action for 60 days after
receipt of the notice and offer of indemnity.
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However, you are entitled at any time to bring a lawsuit for the
payment of money due on your security after its due date.
Every year we will furnish to the trustee a written statement by
certain of our officers certifying that to their knowledge we
are in compliance with the applicable indenture, or else
specifying any default.
Modification
of an Indenture
There are three types of changes we can make to the indentures
and the debt securities:
Changes Requiring Your Approval. First, there
are changes we cannot make to your debt securities without your
specific approval. The following is a list of those types of
changes:
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change the stated maturity of the principal or interest on a
debt security;
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reduce any amounts due on a debt security;
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reduce the amount of principal payable upon acceleration of the
maturity of a debt security following a default;
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change the currency of payment on a debt security;
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impair your right to sue for payment;
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modify the subordination provisions, if any, in a manner that is
adverse to you;
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reduce the percentage of holders of debt securities whose
consent is needed to modify or amend an indenture or to waive
compliance with certain provisions of an indenture;
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reduce the percentage of holders of debt securities whose
consent is needed to waive past defaults or change certain
provisions of the indenture relating to waivers of
default; or
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waive a default or event of default in the payment of principal,
interest, or premium, if any, on the debt securities.
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Changes Requiring A Majority Vote. The second
type of change is the kind that requires the vote of holders of
debt securities owning a majority of the principal amount of the
particular series affected. Most changes fall into this
category, except for clarifying changes and certain other
changes that would not materially adversely affect holders of
the debt securities. We require the same vote to obtain a waiver
of a past default; however, we cannot obtain a waiver of a
payment default or any other aspect of an indenture or the debt
securities listed in the first category described above under
Changes Requiring Your Approval unless we
obtain your individual consent to the waiver.
Changes Not Requiring Approval. The third type
of change does not require any vote by holders of debt
securities. This type is limited to clarifications and certain
other changes that would not materially adversely affect holders
of the debt securities.
Further Details Concerning Voting. Debt
securities are not considered outstanding, and therefore the
holders of debt securities are not eligible to vote on matters
relating thereto, if we have deposited or set aside in trust for
such holders money for payment or redemption of debt securities
or if we or one of our affiliates own the debt securities. The
holders of debt securities are also not eligible to vote if the
debt securities have been fully defeased as described below
under Discharge, Defeasance and Covenant
Defeasance Full Defeasance.
Discharge,
Defeasance and Covenant Defeasance
Discharge. We may discharge some obligations
to holders of any series of debt securities that either have
become due and payable or will become due and payable within one
year, or scheduled for redemption within one year, by
irrevocably depositing with the trustee, in trust, funds in the
applicable currency in an amount sufficient to pay the debt
securities, including any premium and interest.
Full Defeasance. We can, under particular
circumstances, effect a full defeasance of your series of debt
securities. By this we mean we can legally release ourselves
from any payment or other obligations on the debt securities if,
among other things, we put in place the arrangements described
below to repay you and deliver certain certificates and opinions
to the trustee:
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we must deposit in trust for your benefit and the benefit of all
other direct holders of the debt securities a combination of
money or U.S. government or U.S. government agency
notes or bonds or, in some circumstances, depositary receipts
representing these notes or bonds, that will generate enough
cash to make interest, principal and any other payments on the
debt securities on their various due dates;
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under current federal income tax law, the deposit and our legal
release from the debt securities would be treated as though we
redeemed your debt securities in exchange for your share of the
cash and notes or bonds deposited in trust. This treatment would
result in sale or exchange treatment of your notes, which would
cause you to recognize gain or loss equal to the amount
described in Item 1 Business
Taxation U.S. Federal Income Tax
Considerations U.S. Federal Income and Estate
Taxation of Holders of Our Debt Securities
U.S. Holders Sale, Exchange or Other
Disposition of Notes included in our most recent Annual
Report on
Form 10-K; and
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we must deliver to the trustee a legal opinion confirming the
tax law change described above.
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If we did accomplish full defeasance, you would have to rely
solely on the trust deposit for repayment on the debt
securities. You could not look to us for repayment in the
unlikely event of any shortfall. Conversely, the trust deposit
would most likely be protected from claims of our lenders and
other creditors if we ever became bankrupt or insolvent. You
would also be released from any subordination provisions.
Covenant Defeasance. Under current federal
income tax law, we can make the same type of deposit described
above and be released from some of the restrictive covenants in
the debt securities. This is called covenant
defeasance. In that event, you would lose the protection
of those restrictive covenants but would gain the
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protection of having money and securities set aside in trust to
repay the securities and you would be released from any
subordination provisions.
If we did accomplish covenant defeasance, the following
provisions of an indenture and the debt securities would no
longer apply:
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any covenants applicable to the series of debt securities and
described in the applicable prospectus supplement;
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any subordination provisions; and
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certain events of default relating to breach of covenants and
acceleration of the maturity of other debt set forth in any
prospectus supplement.
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If we did accomplish covenant defeasance, you could still look
to us for repayment of the debt securities if a shortfall in the
trust deposit occurred. If one of the remaining events of
default occurred, for example, our bankruptcy, and the debt
securities became immediately due and payable, there may be a
shortfall. Depending on the event causing the default, you may
not be able to obtain payment of the shortfall.
Subordination
We will describe in the applicable prospectus supplement the
terms and conditions, if any, upon which any series of senior
subordinated securities or junior subordinated securities is
subordinated to debt securities of another series or to our
other indebtedness. The terms will include a description of:
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the indebtedness ranking senior to the debt securities being
offered;
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the restrictions, if any, on payments to the holders of the debt
securities being offered while a default with respect to the
senior indebtedness is continuing;
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the restrictions, if any, on payments to the holders of the debt
securities being offered following an event of default; and
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provisions requiring holders of the debt securities being
offered to remit some payments to holders of senior indebtedness.
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Guarantees
Our payment obligations under any series of our debt securities
may be guaranteed by some or all of our subsidiaries. The
guarantees may be secured or unsecured and may be senior or
subordinated obligations. The guarantors will be identified and
the terms of the guarantees will be described in the applicable
prospectus supplement.
Global
Securities
If so set forth in the applicable prospectus supplement, we may
issue the debt securities of a series in whole or in part in the
form of one or more global securities that will be deposited
with a depositary identified in the prospectus supplement. We
may issue global securities in either registered or bearer form
and in either temporary or permanent form. The specific terms of
the depositary arrangement with respect to any series of debt
securities will be described in the prospectus supplement.
DESCRIPTION
OF OUR COMMON STOCK
The following is a summary of certain terms of our common stock.
Because this summary is not complete, you should refer to our
certificate of incorporation and by-laws, which documents
provide additional information regarding our common stock. See
also Description of Certain Provisions of Our Certificate
of Incorporation and By-Laws below. Copies of our
certificate of incorporation and by-laws, as amended, are
incorporated by reference as exhibits to the registration
statement of which this prospectus is a part. This summary is
also subject to and qualified by reference to the description of
the particular terms of the securities described in the
applicable prospectus supplement.
Common stockholders are entitled to receive dividends when
declared by the board of directors and after payment of, or
provision for, full cumulative dividends on and any required
redemptions of shares of preferred stock
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then outstanding. Common stockholders have one vote per share,
and there are no cumulative voting rights. If we are voluntarily
or involuntarily liquidated or dissolved, common stockholders
are to share ratably in our distributable assets remaining after
the satisfaction of all of our debts and liabilities and the
preferred stockholders prior preferential rights. Common
stockholders do not have preemptive rights. The common stock
will be, when issued, fully paid and nonassessable. The common
stock is subject to restrictions on transfer under certain
circumstances described under Restrictions on Transfer of
Securities below. The transfer agent for our common stock
is BNY Mellon Shareowner Services.
The rights, preferences and privileges of holders of our common
stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of our preferred
stock which are outstanding or which we may designate and issue
in the future. See Description of Our Preferred
Stock below.
DESCRIPTION
OF OUR PREFERRED STOCK
The following is a summary description of the material terms of
our shares of preferred stock. Because it is a summary, it does
not contain all of the information that may be important to you.
If you want more information, you should read our certificate of
incorporation and by-laws, copies of which are incorporated by
reference as exhibits to the registration statement of which
this prospectus is a part. This summary is also subject to and
qualified by reference to the description of the particular
terms of the securities described in the applicable prospectus
supplement.
General
Our board of directors or a duly authorized committee thereof
will determine the designations, preferences, limitations and
relative rights of our authorized and unissued preferred shares.
These may include:
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the distinctive designation of each series and the number of
shares that will constitute the series;
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the voting rights, if any, of shares of the series;
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the distribution rate on the shares of the series, any
restriction, limitation or condition upon the payment of the
distribution, whether distributions will be cumulative, and the
dates on which distributions are payable;
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if the shares are redeemable, the prices at which, and the terms
and conditions on which, the shares of the series may be
redeemed;
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the purchase or sinking fund provisions, if any, for the
purchase or redemption of shares of the series;
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any preferential amount payable upon shares of the series upon
our liquidation or the distribution of our assets;
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if the shares are convertible, the price or rates of conversion
at which, and the terms and conditions on which, the shares of
the series may be converted into other securities; and
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whether the series can be exchanged, at our option, into debt
securities, and the terms and conditions of any permitted
exchange.
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The issuance of preferred shares, or the issuance of rights to
purchase preferred shares, could discourage an unsolicited
acquisition proposal. In addition, the rights of holders of
common shares will be subject to, and may be adversely affected
by, the rights of holders of any preferred shares that we may
issue in the future.
The following describes some general terms and provisions of the
preferred shares to which a prospectus supplement may relate.
The statements below describing the preferred shares are in all
respects subject to and qualified in their entirety by reference
to the applicable provisions of our certificate of
incorporation, including any applicable certificate of
designation, and our by-laws.
The prospectus supplement will describe the specific terms as to
each issuance of preferred shares, including:
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the description of the preferred shares;
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the number of preferred shares offered;
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the offering price of the preferred shares;
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the distribution rate, when distributions will be paid, or the
method of determining the distribution rate if it is based on a
formula or not otherwise fixed;
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the date from which distributions on the preferred shares shall
accumulate;
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the voting rights, if any, of the holders of the preferred
shares;
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the provisions for any auctioning or remarketing, if any, of the
preferred shares;
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the provision, if any, for redemption or a sinking fund;
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the liquidation preference per share;
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any listing of the preferred shares on a securities exchange;
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whether the preferred shares will be convertible and, if so, the
security into which they are convertible and the terms and
conditions of conversion, including the conversion price or the
manner of determining it;
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whether interests in the shares of preferred stock will be
represented by depositary shares as more fully described below
under Description of Depositary Shares;
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a discussion of federal income tax considerations;
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the relative ranking and preferences of the preferred shares as
to distribution and liquidation rights;
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any limitations on issuance of any preferred shares ranking
senior to or on a parity with the series of preferred shares
being offered as to distribution and liquidation rights;
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any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be appropriate to
preserve our status as a real estate investment trust; and
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any other specific terms, preferences, rights, limitations or
restrictions of the preferred shares.
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As described under Description of Depositary Shares,
we may, at our option, elect to offer depositary shares
evidenced by depositary receipts. If we elect to do this, each
depositary receipt will represent a fractional interest in a
share of the particular series of preferred stock issued and
deposited with a depositary. The applicable prospectus
supplement will specify that fractional interest.
Rank
Unless our board of directors otherwise determines and we so
specify in the applicable prospectus supplement, we expect that
the preferred shares will, with respect to distribution rights
and rights upon liquidation or dissolution, rank senior to all
of our common shares.
Distributions
Holders of preferred shares of each series will be entitled to
receive cash
and/or share
distributions at the rates and on the dates shown in the
applicable prospectus supplement. Even though the preferred
shares may specify a fixed rate of distribution, our board of
directors must authorize and declare those distributions and
they may be paid only out of assets legally available for
payment. We will pay each distribution to holders of record as
they appear on our share transfer books on the record dates
fixed by our board of directors. In the case of shares of
preferred stock represented by depositary receipts, the records
of the depositary referred to under Description of
Depositary Shares will determine the persons to whom
dividends are payable.
Distributions on any series of preferred shares may be
cumulative or noncumulative, as provided in the applicable
prospectus supplement. We refer to each particular series, for
ease of reference, as the applicable series. Cumulative
distributions will be cumulative from and after the date shown
in the applicable prospectus supplement. If our board of
directors fails to authorize a distribution on any applicable
series that is noncumulative, the holders will have no right to
receive, and we will have no obligation to pay, a distribution
in respect of the applicable distribution period, whether or not
distributions on that series are declared payable in the future.
If the applicable series is entitled to a cumulative
distribution, we may not declare, or pay or set aside for
payment, any full distributions on any other series of preferred
shares ranking, as to distributions, on a parity with or junior
to the applicable series, unless we declare, and either pay or
set aside for payment, full cumulative distributions on the
applicable series for all past distribution periods and the then
current distribution period. If the applicable series does not
have a cumulative distribution, we must declare, and pay or set
aside for payment, full distributions for the
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then current distribution period only. When distributions are
not paid, or set aside for payment, in full upon any applicable
series and the shares of any other series ranking on a parity as
to distributions with the applicable series, we must declare,
and pay or set aside for payment, all distributions upon the
applicable series and any other parity series proportionately,
in accordance with accrued and unpaid distributions of the
several series. For these purposes, accrued and unpaid
distributions do not include unpaid distribution periods on
noncumulative preferred shares. No interest will be payable in
respect of any distribution payment that may be in arrears.
Except as provided in the immediately preceding paragraph,
unless we declare, and pay or set aside for payment, full
cumulative distributions, including for the then current period,
on any cumulative applicable series, we may not declare, or pay
or set aside for payment, any distributions upon common shares
or any other equity securities ranking junior to or on a parity
with the applicable series as to distributions or upon
liquidation. The foregoing restriction does not apply to
distributions paid in common shares or other equity securities
ranking junior to the applicable series as to distributions and
upon liquidation. If the applicable series is noncumulative, we
need only declare, and pay or set aside for payment, the
distribution for the then current period, before declaring
distributions on common shares or junior or parity securities.
In addition, under the circumstances that we could not declare a
distribution, we may not redeem, purchase or otherwise acquire
for any consideration any common shares or other parity or
junior equity securities, except upon conversion into or
exchange for common shares or other junior equity securities. We
may, however, make purchases and redemptions otherwise
prohibited pursuant to certain redemptions or pro rata offers to
purchase the outstanding shares of the applicable series and any
other parity series of preferred shares.
We will credit any distribution payment made on an applicable
series first against the earliest accrued but unpaid
distribution due with respect to the series.
Redemption
We may have the right or may be required to redeem one or more
series of preferred shares, as a whole or in part, in each case
upon the terms, if any, and at the times and at the redemption
prices shown in the applicable prospectus supplement.
If a series of preferred shares is subject to mandatory
redemption, we will specify in the applicable prospectus
supplement the number of shares we are required to redeem, when
those redemptions start, the redemption price, and any other
terms and conditions affecting the redemption. The redemption
price will include all accrued and unpaid distributions, except
in the case of noncumulative preferred shares. The redemption
price may be payable in cash or other property, as specified in
the applicable prospectus supplement. If the redemption price
for preferred shares of any series is payable only from the net
proceeds of our issuance of shares of capital stock, the terms
of the preferred shares may provide that, if no shares of such
capital stock shall have been issued or to the extent the net
proceeds from any issuance are insufficient to pay in full the
aggregate redemption price then due, the preferred shares will
automatically and mandatorily be converted into shares of the
applicable capital stock pursuant to conversion provisions
specified in the applicable prospectus supplement.
Liquidation
Preference
The applicable prospectus supplement will show the liquidation
preference of the applicable series. Upon our voluntary or
involuntary liquidation, before any distribution may be made to
the holders of our common shares or any other shares of capital
stock ranking junior in the distribution of assets upon any
liquidation to the applicable series, the holders of that series
will be entitled to receive, out of our assets legally available
for distribution to stockholders, liquidating distributions in
the amount of the liquidation preference, plus an amount equal
to all distributions accrued and unpaid. In the case of a
noncumulative applicable series, accrued and unpaid
distributions include only the then current distribution period.
Unless otherwise provided in the applicable prospectus
supplement, after payment of the full amount of the liquidating
distributions to which they are entitled, the holders of
preferred shares will have no right or claim to any of our
remaining assets. If liquidating distributions shall have been
made in full to all holders of preferred shares, our remaining
assets will be distributed among the holders of any other shares
of capital stock ranking junior to the preferred shares upon
liquidation, according to their rights and preferences and in
each case according to their number of shares.
If, upon any voluntary or involuntary liquidation, our available
assets are insufficient to pay the amount of the liquidating
distributions on all outstanding shares of that series and the
corresponding amounts payable on all shares
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of capital stock ranking on a parity in the distribution of
assets with that series, then the holders of that series and all
other equally ranking shares of capital stock shall share
ratably in the distribution in proportion to the full
liquidating distributions to which they would otherwise be
entitled. For these purposes, our consolidation or merger with
or into any other corporation or other entity, or the sale,
lease or conveyance of all or substantially all of our property
or business, shall not be deemed to constitute a liquidation.
Voting
Rights
Holders of the preferred shares will not have any voting rights,
except as described below or as otherwise from time to time
required by law or as specified in the applicable prospectus
supplement. As more fully described under Description of
Depositary Shares below, if we elect to issue depositary
shares, each representing a fraction of a share of a series of
preferred stock, each holder thereof will in effect be entitled
to a fraction of a vote per depositary share.
Unless otherwise provided for in an applicable series, so long
as any preferred shares are outstanding, we may not, without the
affirmative vote or consent of the holders of a majority of the
shares (or such greater vote or consent as is required by the
then current rules of any stock exchange or trading market on
which we shall have listed the applicable series of preferred
stock for trading or as otherwise provided in our organizational
documents) of each series of preferred shares outstanding at
that time:
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authorize, create or increase the authorized or issued amount of
any class or series of shares of capital stock ranking senior to
that series of preferred shares with respect to distribution and
liquidation rights;
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reclassify any authorized shares of capital stock into a series
of shares of capital stock ranking senior to that series of
preferred shares with respect to distribution and liquidation
rights;
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create, authorize or issue any security or obligation
convertible into or evidencing the right to purchase any shares
of capital stock ranking senior to that series of preferred
shares with respect to distribution and liquidation
rights; and
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amend, alter or repeal the provisions of our certificate of
incorporation relating to that series of preferred shares that
materially and adversely affects the series of preferred shares.
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The authorization, creation or increase of the authorized or
issued amount of any class or series of shares of capital stock
ranking on parity with or junior to a series of preferred shares
with respect to distribution and liquidation rights will not be
deemed to materially and adversely affect that series.
Conversion
Rights
We will describe in the applicable prospectus supplement the
terms and conditions, if any, upon which you may, or we may
require you to, convert shares of any series of preferred shares
into common shares or any other class or series of shares of
capital stock. The terms will include the number of common
shares or other capital stock into which the preferred shares
are convertible, the conversion price or manner of determining
it, the conversion period, provisions as to whether conversion
will be at the option of the holders of the series or at our
option, the events requiring an adjustment of the conversion
price, and provisions affecting conversion upon the redemption
of shares of the series.
Our
Exchange Rights
We will describe in the applicable prospectus supplement the
terms and conditions, if any, upon which we can require you to
exchange shares of any series of preferred shares for debt
securities. If an exchange is required, you will receive debt
securities with a principal amount equal to the liquidation
preference of the applicable series of preferred shares. The
other terms and provisions of the debt securities will not be
materially less favorable to you than those of the series of
preferred shares being exchanged.
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DESCRIPTION
OF DEPOSITARY SHARES
This section describes the general terms and provisions of
shares of preferred stock represented by depositary shares. The
applicable prospectus supplement will describe the specific
terms of the depositary shares offered through that prospectus
supplement and any general terms outlined in this section that
will not apply to those depositary shares.
We have summarized in this section certain terms and provisions
of the deposit agreement, the depositary shares and the receipts
representing depositary shares. The summary is not complete. You
should read the forms of deposit agreement and depositary
receipt that we will file with the SEC at or before the time of
the offering of the depositary shares for additional information
before you buy any depositary shares.
General
We may, at our option, elect to offer fractional interests in
shares of preferred stock, rather than shares of preferred
stock. If we exercise this option, we will appoint a depositary
to issue depositary receipts representing those fractional
interests. Shares of preferred stock of each series represented
by depositary shares will be deposited under a separate deposit
agreement between us and the depositary. The prospectus
supplement relating to a series of depositary shares will
provide the name and address of the depositary. Subject to the
terms of the applicable deposit agreement, each owner of
depositary shares will be entitled to all of the dividend,
voting, conversion, redemption, liquidation and other rights and
preferences of the shares of preferred stock represented by
those depositary shares.
Depositary receipts issued pursuant to the applicable deposit
agreement will evidence ownership of depositary shares. Upon
surrender of depositary receipts at the office of the
depositary, and upon payment of the charges provided in and
subject to the terms of the deposit agreement, a holder of
depositary shares will be entitled to receive the shares of
preferred stock underlying the surrendered depositary receipts.
Distributions
A depositary will be required to distribute all dividends or
other cash distributions received in respect of the applicable
shares of preferred stock to the record holders of depositary
receipts evidencing the related depositary shares in proportion
to the number of depositary receipts owned by the holders.
Fractions will be rounded down to the nearest whole cent.
If the distribution is other than in cash, a depositary will be
required to distribute property received by it to the record
holders of depositary receipts entitled thereto, unless the
depositary determines that it is not feasible to make the
distribution. In that case, the depositary may, with our
approval, sell the property and distribute the net proceeds from
the sale to the holders of depositary shares.
Depositary shares that represent shares of preferred stock
converted or exchanged will not be entitled to distributions.
The deposit agreement also will contain provisions relating to
the manner in which any subscription or similar rights we offer
to holders of shares of preferred stock will be made available
to holders of depositary shares. All distributions will be
subject to obligations of holders to file proofs, certificates
and other information and to pay certain charges and expenses to
the depositary.
Withdrawal
of Shares of Preferred Stock
You may receive the number of whole shares of your series of
preferred stock and any money or other property represented by
your depositary receipts after surrendering your depositary
receipts at the corporate trust office of the depositary.
Partial shares of preferred stock will not be issued. If the
depositary shares that you surrender exceed the number of
depositary shares that represent the number of whole shares of
preferred stock you wish to withdraw, then the depositary will
deliver to you at the same time a new depositary receipt
evidencing the excess number of depositary shares. Once you have
withdrawn your shares of preferred stock, you will not be
entitled to re-deposit those shares of preferred stock under the
deposit agreement in order to receive depositary shares. We do
not expect that there will be any public trading market for
withdrawn shares of preferred stock.
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Redemption
of Depositary Shares
If we redeem a series of the preferred stock underlying the
depositary shares, the depositary will redeem those shares from
the proceeds it receives. The redemption price per depositary
share will be equal to the applicable fraction of the redemption
price per share payable with respect to the series of the
preferred stock. The redemption date for depositary shares will
be the same as that of the preferred stock. If we are redeeming
less than all of the depositary shares, the depositary will
select the depositary shares we are redeeming by lot or pro rata
as the depositary may determine.
After the date fixed for redemption, the depositary shares
called for redemption will no longer be deemed outstanding. All
rights of the holders of the depositary shares and the related
depositary receipts will cease at that time, except the right to
receive the money or other property to which the holders of
depositary shares were entitled upon redemption. Receipt of the
money or other property is subject to surrender to the
depositary of the depositary receipts evidencing the redeemed
depositary shares.
Voting of
the Underlying Shares of Preferred Stock
Upon receipt of notice of any meeting at which the holders of
the preferred stock are entitled to vote, a depositary will be
required to mail the information contained in the notice of
meeting to the record holders of the depositary shares
representing such preferred stock. Each record holder of
depositary receipts on the record date will be entitled to
instruct the depositary as to how the holders depositary
shares will be voted. The record date for the depositary shares
will be the same as the record date for the preferred stock. The
depositary will vote the shares as you instruct. We will agree
to take all reasonable action that the depositary deems
necessary in order to enable it to vote the preferred stock in
that manner. If you do not instruct the depositary how to vote
your shares, the depositary will abstain from voting those
shares. The depositary will not be responsible for any failure
to carry out any voting instruction, or for the manner or effect
of any vote, as long as its action or inaction is in good faith
and does not result from its negligence or willful misconduct.
Liquidation
Preference
Upon our liquidation, whether voluntary or involuntary, each
holder of depositary shares will be entitled to the fraction of
the liquidation preference accorded each share of preferred
stock represented by the depositary shares, as described in the
applicable prospectus supplement.
Conversion
or Exchange of Shares of Preferred Stock
The depositary shares will not themselves be convertible into or
exchangeable for shares of common stock or preferred stock or
any of our other securities or property. Nevertheless, if so
specified in the applicable prospectus supplement, the
depositary receipts may be surrendered by holders to the
applicable depositary with written instructions to it to
instruct us to cause the conversion of the preferred stock
represented by the depositary shares. Similarly, if so specified
in the applicable prospectus supplement, we may require you to
surrender all of your depositary receipts to the applicable
depositary upon our requiring the conversion or exchange of the
preferred stock represented by the depositary shares into our
debt securities. We will agree that, upon receipt of the
instruction and any amounts payable in connection with the
conversion or exchange, we will cause the conversion or exchange
using the same procedures as those provided for delivery of
shares of preferred stock to effect the conversion or exchange.
If you are converting only a part of the depositary shares, the
depositary will issue you a new depositary receipt for any
unconverted depositary shares.
Amendment
and Termination of a Deposit Agreement
We and the applicable depositary are permitted to amend the
provisions of the depositary receipts and the deposit agreement.
However, the holders of at least a majority of the applicable
depositary shares then outstanding (or such greater approval as
is required by the then current rules of any stock exchange or
trading market on which we shall have listed the applicable
underlying series of preferred stock for trading or as otherwise
provided in our organizational documents) must approve any
amendment that adds or increases fees or charges or prejudices
an
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important right of holders. Every holder of an outstanding
depositary receipt at the time any amendment becomes effective,
by continuing to hold the receipt, will be bound by the
applicable deposit agreement, as amended.
Any deposit agreement may be terminated by us upon not less than
30 days prior written notice to the applicable
depositary if (1) the termination is necessary to preserve
our status as a REIT or (2) a majority of each series of
preferred stock affected by the termination consents to the
termination. When either event occurs, the depositary will be
required to deliver or make available to each holder of
depositary receipts, upon surrender of the depositary receipts
held by the holder, the number of whole or fractional shares of
preferred stock as are represented by the depositary shares
evidenced by the depositary receipts, together with any other
property held by the depositary with respect to the depositary
receipts. In addition, a deposit agreement will automatically
terminate if:
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all depositary shares have been redeemed;
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there shall have been a final distribution in respect of the
related preferred stock in connection with our liquidation and
the distribution has been made to the holders of depositary
receipts evidencing the depositary shares underlying the
preferred stock; or
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each related share of preferred stock shall have been converted
or exchanged into securities not represented by depositary
shares.
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Charges
of a Depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of a deposit
agreement. In addition, we will pay the fees and expenses of a
depositary in connection with the initial deposit of the
preferred stock and any redemption of preferred stock. However,
holders of depositary receipts will pay any transfer or other
governmental charges and the fees and expenses of a depositary
for any duties the holders request to be performed that are
outside of those expressly provided for in the applicable
deposit agreement.
Resignation
and Removal of a Depositary
A depositary may resign at any time by providing us notice of
its election to resign. In addition, we may at any time remove a
depositary. Any resignation or removal will take effect when we
appoint a successor depositary and it accepts the appointment.
We must appoint a successor depositary within 60 days after
delivery of the notice of resignation or removal. A depositary
must be a bank or trust company that has its principal office in
the United States and a combined capital and surplus of at least
$50 million.
Miscellaneous
A depositary will be required to forward to holders of
depositary receipts any reports and communications from us that
it receives with respect to the related shares of preferred
stock. Holders of depository receipts will be able to inspect
the transfer books of the depository and the list of holders of
receipts upon reasonable notice. Neither we nor any depositary
will be liable if either party is prevented from or delayed in
performing its obligations under a deposit agreement by law or
any circumstances beyond its control. Our obligations and those
of the depositary under a deposit agreement will be limited to
performing duties in good faith and without gross negligence or
willful misconduct.
Neither we nor any depositary will be obligated to prosecute or
defend any legal proceeding in respect of any depositary
receipts, depositary shares or related shares of preferred stock
unless satisfactory indemnity is furnished. We and each
depositary will be permitted to rely on written advice of
counsel or accountants, on information provided by persons
presenting shares of preferred stock for deposit, by holders of
depositary receipts, or by other persons believed in good faith
to be competent to give the information, and on documents
believed in good faith to be genuine and signed by a proper
party.
If a depositary receives conflicting claims, requests or
instructions from any holder of depositary receipts, on the one
hand, and us, on the other hand, the depositary shall be
entitled to act on the claims, requests or instructions received
from us.
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DESCRIPTION
OF WARRANTS
This section describes the general terms and provisions of the
warrants. The applicable prospectus supplement will describe the
specific terms of the warrants offered through that prospectus
supplement and any general terms outlined in this section that
will not apply to those warrants.
We have summarized in this section certain terms and provisions
of the warrant agreement and the warrants. The summary is not
complete. You should read the forms of warrant and warrant
agreement that we will file with the SEC at or before the time
of the offering of the applicable series of warrants for
additional information before you buy any warrants.
We may issue, together with any other securities being offered
or separately, warrants entitling the holder to purchase from or
sell to us, or to receive from us the cash value of the right to
purchase or sell, debt securities, preferred stock, depositary
shares or common stock. We and a warrant agent will enter into a
warrant agreement pursuant to which the warrants will be issued.
The warrant agent will act solely as our agent in connection
with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or
beneficial owners of warrants.
In the case of each series of warrants, the applicable
prospectus supplement will describe the terms of the warrants
being offered thereby. These include the following, if
applicable:
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the offering price;
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the number of warrants offered;
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the securities underlying the warrants;
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the exercise price, the procedures for exercise of the warrants
and the circumstances, if any, that will cause the warrants to
be automatically exercised;
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the date on which the warrants will expire;
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federal income tax consequences;
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the rights, if any, we have to redeem the warrants;
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the name of the warrant agent; and
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the other terms of the warrants.
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Warrants may be exercised at the appropriate office of the
warrant agent or any other office indicated in the applicable
prospectus supplement. Before the exercise of warrants, holders
will not have any of the rights of holders of the securities
underlying the warrants and will not be entitled to payments
made to holders of those securities.
The warrant agreements may be amended or supplemented without
the consent of the holders of the warrants to which the
amendment or supplement applies to effect changes that are not
inconsistent with the provisions of the warrants and that do not
adversely affect the interests of the holders of the warrants.
However, any amendment that materially and adversely alters the
rights of the holders of warrants will not be effective unless
the holders of at least a majority of the applicable warrants
then outstanding (or such greater approval as is required by the
then current rules of any stock exchange or trading market on
which we shall have listed the applicable underlying shares of
capital stock for trading or as otherwise provided in our
organizational documents) approve the amendment. Every holder of
an outstanding warrant at the time any amendment becomes
effective, by continuing to hold the warrant, will be bound by
the applicable warrant agreement, as amended. The prospectus
supplement applicable to a particular series of warrants may
provide that certain provisions of the warrants, including the
securities for which they may be exercisable, the exercise
price, and the expiration date, may not be altered without the
consent of the holder of each warrant.
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DESCRIPTION
OF UNITS
We may, from time to time, issue units comprised of one or more
of the other securities that may be offered under this
prospectus, in any combination. Each unit will be issued so that
the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the
rights and obligations of a holder of each included security.
The unit agreement under which a unit is issued may provide that
the securities included in the unit may not be held or
transferred separately at any time, or at any time before a
specified date.
Any applicable prospectus supplement will describe:
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the material terms of the units and of the securities comprising
the units, including whether and under what circumstances those
securities may be held or transferred separately;
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any material provisions relating to the issuance, payment,
settlement, transfer or exchange of the units or of the
securities comprising the units;
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any special federal income tax considerations applicable to the
units; and
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any material provisions of the governing unit agreement that
differ from those described above.
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RESTRICTIONS
ON TRANSFER OF SECURITIES
For us to qualify as a real estate investment trust, not more
than 50% in value of our outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals at any time
during the last half of our taxable year. In order to ensure
that this requirement is satisfied, our by-laws (with respect to
our common stock and preferred stock) and our certificates of
designation (for our preferred stock) provide that no person may
acquire securities that would result in the direct or indirect
beneficial ownership of more than 9.8% of our common stock or
more than 9.8% in value of our outstanding capital stock by such
person. For purposes of application of such limitations to any
person, all options, warrants, convertible securities or other
rights to acquire our common stock held directly or indirectly
by such person will be treated as if all such rights had been
exercised. If any securities in excess of this limit are issued
or transferred to any person, such issuance or transfer shall be
valid only with respect to such amount of securities as does not
exceed this limit, and such issuance or transfer will be void
with respect to the excess. The board of directors may grant
limited exemptions from the ownership restrictions set forth in
the by-laws to specified persons if the board determines that
each such limited exemption is in the best interests of us and
our stockholders.
Our by-laws and certificates of designation further provide
that, if the foregoing stock ownership limitations are
determined to be invalid by virtue of any legal decision,
statute, rule or regulation, then the transferee of the shares
or other securities will be deemed to have acted as our agent in
acquiring the shares or other securities that are in excess of
the limit, and will be deemed to hold such excess shares or
securities on our behalf. As the equivalent of treasury
securities for such purposes, the excess securities will not be
entitled to any voting rights, will not be considered to be
outstanding for quorum or voting purposes, and will not be
entitled to receive dividends, interest or any other
distribution with respect to such securities. Any person who
receives dividends, interest or any other distribution in
respect of the excess securities will hold the same as our agent
and for the transferee of the excess securities following a
permitted transfer.
In addition, under our by-laws and certificates of designation,
we may refuse to transfer any shares, passing either by
voluntary transfer, by operation of law, or under the last will
and testament of any stockholder, if such transfer would or
might, in the opinion of our board of directors or counsel,
disqualify us as a real estate investment trust.
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DESCRIPTION
OF CERTAIN PROVISIONS OF OUR CERTIFICATE OF
INCORPORATION AND BY-LAWS
Anti-Takeover
Provisions
Our certificate of incorporation and by-laws contain provisions
that may have the effect of discouraging persons from acquiring
large blocks of our stock or delaying or preventing a change in
our control. The material provisions that may have such an
effect are:
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Classification of our board of directors into three classes with
the term of only one class expiring each year.
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A provision permitting our board of directors to make, amend or
repeal our by-laws.
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Authorization for our board of directors to issue preferred
stock in series and to fix the rights and preferences of the
series, including, among other things, whether and to what
extent the shares of any series will have voting rights and the
extent of the preferences of the shares of any series with
respect to dividends and other matters (see Description of
Our Preferred Stock above).
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A prohibition on stockholders taking action by written consent
in lieu of a meeting.
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Advance notice procedures with respect to nominations of
directors by stockholders and proposals by stockholders of
business at an annual meeting.
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The grant only to our board of directors of the right to call
special meetings of stockholders.
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Limitations on the number of shares of our capital stock that
may be beneficially owned, directly or indirectly, by any one
stockholder (see Restrictions on Transfer of
Securities above).
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Limitations on transactions that involve us and any stockholder
who beneficially owns 5% or more of our voting stock (see
Limitations on Transactions Involving Us and Our
Stockholders below).
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A provision permitting amendment by the stockholders of certain
of the provisions listed above only by an affirmative vote of
the holders of at least three-quarters of all of the outstanding
shares of our voting stock, voting together as a single class.
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Limitations
on Transactions Involving Us and Our Stockholders
Under our by-laws, in addition to any vote otherwise required by
law, our certificate of incorporation or our by-laws, the
following transactions will require the affirmative vote of the
holders of at least 75% of the voting power of our then
outstanding shares of capital stock entitled to vote generally
in the election of directors, voting together as a single class:
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Our merger or consolidation with or into
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any stockholder that owns 5% or more of our voting stock; or
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any other corporation or entity which is, or after such merger
or consolidation would be, an affiliate of a stockholder that
owns 5% or more of our voting stock.
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Any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of substantially all of our assets, in one
transaction or a series of transactions, to or with any
stockholder that owns 5% or more of our voting stock or an
affiliate of any such stockholder.
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Any reclassification of our securities, including any reverse
stock split, or recapitalization or any other transaction that
has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
our equity securities that is directly or indirectly owned by
any stockholder that owns 5% or more of our voting stock or any
affiliate of such a stockholder, whether or not the transaction
involves such a stockholder.
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The adoption of any plan or proposal for our liquidation or
dissolution proposed by or on behalf of a stockholder that owns
5% or more of our voting stock or any affiliate of such a
stockholder.
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These provisions will not apply to any of the transactions
described above if:
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We are at the time of the consummation of the transaction, and
at all times throughout the preceding twelve months have been,
directly or indirectly, the owner of a majority of each class of
the outstanding equity securities of the 5% stockholder that is
a party to the transaction; or
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The transaction has been approved by a majority of the members
of our board of directors who, at the time such approval is
given, were not affiliates or nominees of the 5%
stockholder; or
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Both of the following conditions have been met:
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the aggregate amount of the cash and the fair market value, as
determined in good faith by our board of directors, of the
consideration other than cash to be received per share by
holders of our voting stock in such transaction shall be at
least equal to the highest per share price paid by the 5%
stockholder for any shares of voting stock acquired by it:
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within the two-year period immediately prior to the first public
announcement of the proposal of the transaction, or
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in the transaction in which it became a 5% stockholder,
whichever is higher; and
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the consideration to be received by holders of a particular
class of outstanding voting stock shall be in cash or in the
same form as the 5% stockholder previously paid for shares of
such voting stock. If the 5% stockholder paid for shares of any
class of voting stock with varying forms of consideration, the
form of consideration to be paid by the 5% stockholder for such
class of voting stock shall be either cash or the form used to
acquire the largest number of shares of such class of voting
stock previously acquired by the stockholder.
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The foregoing summary of certain provisions of our certificate
of incorporation and by-laws does not purport to be complete or
to give effect to provisions of statutory or common law. The
foregoing summary is subject to, and qualified in its entirety
by reference to, the provisions of applicable law and our
certificate of incorporation and by-laws, copies of which are
incorporated by reference as exhibits to the registration
statement of which this prospectus is a part.
PLAN OF
DISTRIBUTION
We may sell the securities:
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through underwriters or dealers;
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through agents;
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directly to purchasers; or
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through a combination of any of these methods of sale.
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The applicable prospectus supplement will describe the plan of
distribution of the securities and the terms of the offering and
will name any underwriter or agent involved in the offer and
sale of the securities. Direct sales to investors or our
stockholders may be accomplished through subscription offerings
or through stockholder purchase rights distributed to
stockholders. In connection with subscription offerings or the
distribution of stockholder purchase rights to stockholders, if
all of the underlying securities are not subscribed for, we may
sell any unsubscribed securities to third parties directly or
through underwriters or agents. In addition, whether or not all
of the underlying securities are subscribed for, we may
concurrently offer additional securities to third parties
directly or through underwriters or agents. If securities are to
be sold through stockholder purchase rights, the stockholder
purchase rights will be distributed as a dividend to the
stockholders for which they will pay no separate consideration.
The prospectus supplement with respect to the offer of
securities under stockholder purchase rights will set forth the
relevant terms of the stockholder purchase rights, including:
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whether common stock, preferred stock or some other type of
capital stock, or warrants for those securities, will be offered
under the stockholder purchase rights;
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the number of those securities or warrants that will be offered
under the stockholder purchase rights;
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the period during which and the price at which the stockholder
purchase rights will be exercisable;
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the number of stockholder purchase rights then outstanding;
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any provisions for changes to or adjustments in the exercise
price of the stockholder purchase rights; and
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any other material terms of the stockholder purchase rights.
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Underwriters and our agents may offer and sell the securities at:
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fixed prices, which may be changed;
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prices related to the prevailing market prices at the time of
sale; or
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negotiated prices.
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We also may, from time to time, authorize underwriters and our
agents to offer and sell the securities upon the terms and
conditions as are set forth in the applicable prospectus
supplement. In connection with the sale of securities,
underwriters may be deemed to have received compensation from us
in the form of underwriting discounts, commissions or fees and
may also receive commissions from purchasers of securities for
whom they may act as agent. Underwriters may sell securities to
or through dealers, and these dealers may receive compensation
in the form of discounts, concessions or commissions from the
underwriters or commissions from the purchasers for whom they
may act as agent, or both. The applicable prospectus supplement
will disclose:
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any underwriting compensation we pay to underwriters or agents
in connection with the offering of securities; and
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any discounts, concessions or commissions allowed by
underwriters to participating dealers.
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Under the Securities Act, underwriters, dealers and agents
participating in the distribution of the securities may be
deemed to be underwriters and any discounts, commissions and
fees received by them and any profit realized by them on resale
of the securities may be deemed to be underwriting compensation,
discounts and commissions. We may agree to indemnify
underwriters, dealers and agents against civil liabilities,
including liabilities under the Securities Act, and to make
contribution to them in connection with those liabilities.
If indicated in the applicable prospectus supplement, we may
also offer and sell securities through one or more firms that
will remarket the securities. These firms may act as principals
for their own account or as our agents. These firms may be
deemed to be underwriters in connection with the securities
being remarketed. We may agree to indemnify these firms against
liabilities, including liabilities under the Securities Act.
If indicated in the applicable prospectus supplement, we may
authorize underwriters, agents or dealers to solicit offers by
institutions to purchase securities at the offering price set
forth in that prospectus supplement under delayed delivery
contracts providing for payment and delivery on the dates stated
in the prospectus supplement. Each contract will be for an
amount not less than, and the aggregate principal amount of
securities sold under contracts will be not less nor more than,
the respective amounts stated in the applicable prospectus
supplement. Institutions with whom contracts, when authorized,
may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all
cases be subject to our approval. Contracts will not be subject
to any conditions except:
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the purchase by an institution of the securities covered by its
contracts will not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which the
institution is subject; and
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if the securities are also being sold to underwriters, we will
have sold to them the total principal amount of the securities
less the principal amount of the securities covered by contracts.
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Underwriters and agents will have no responsibility in respect
of the delivery or performance of contracts.
Some of the underwriters and their affiliates may engage in
transactions with or perform services for us in the ordinary
course of business.
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LEGAL
OPINIONS
Certain legal matters regarding the securities offered hereby
will be passed upon for us by Shumaker, Loop &
Kendrick, LLP, Toledo, Ohio. As of May 7, 2009, the attorneys of
Shumaker, Loop & Kendrick, LLP participating in the
preparation of this prospectus, the registration statement and
the required legal opinions beneficially held, in the aggregate,
approximately 2,500 shares of our common stock and
1,000 shares of our preferred stock. Arnold &
Porter LLP will pass upon certain federal income tax matters
relating to us. Any underwriters or agents will be represented
by their own legal counsel.
EXPERTS
Ernst & Young LLP, independent registered public
accounting firm, has audited our consolidated financial
statements and schedules included in our Current Report on
Form 8-K
dated May 7, 2009, and the effectiveness of our internal
control over financial reporting as of December 31, 2008,
included in our Annual Report on
Form 10-K
for the year ended December 31, 2008, as set forth in their
reports, which are incorporated by reference in this prospectus
and elsewhere in the registration statement. Our financial
statements and schedules are incorporated by reference in
reliance upon Ernst & Young LLPs reports, given
on their authority as experts in accounting and auditing.
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