form_s3asr.htm
AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON April 10, 2008
REGISTRATION
NO. 333-______
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
______________
OMEGA
HEALTHCARE INVESTORS, INC.
(Exact
name of registrant as specified in its charter)
______________
MARYLAND 38-3041398
(State or other jurisdiction of
incorporation or
organization) (IRS
Employer Identification Number)
______________
9690
Deereco Road, Suite 100
Timonium,
Maryland 21093
(410)
427-1700
(Address,
including zip code and telephone number, including area code,
of
registrant's principal executive offices)
______________
C.
Taylor Pickett
Chief
Executive Officer
Omega
Healthcare Investors, Inc.
9690
Deereco Road, Suite 100
Timonium,
Maryland 21093
(410)
427-1700
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
Copies of
communications to:
Eliot
W. Robinson, Esq.
Powell
Goldstein LLP
One
Atlantic Center, Fourteenth Floor
1201
West Peachtree Street, NW
Atlanta,
Georgia 30309-3488
(404)
572-6600
______________
Approximate date of commencement of
proposed sale to the public: This post-effective amendment
deregisters all of the securities that remain unsold under the registration
statement as of the date hereof.
______________
If the only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check
the following box. [X]
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective
amendment filed pursuant to Section 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. [ ]
If this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment
thereto that shall become effective upon filing with the Commission pursuant to
Rule 462(e) under the Securities Act, check the following
box. [X]
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D.
filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following
box. [ ]
CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of
Securities
to be Registered
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Amount
to be
Registered(1)
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Proposed
Maximum
Offering
Price
Per Unit(1)
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Proposed
Maximum
Aggregate
Offering
Price(1)
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Amount
of
Registration
Fee(1)
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[Missing Graphic Reference]
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Common
Stock (par value $0.10 per share)
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(1)
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(1)
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(1)
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NA
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[Missing Graphic Reference]
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Preferred
Stock (par value $1.00 per share)
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(1)
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(1)
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(1)
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NA
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[Missing Graphic Reference]
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Debt
Securities
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(1)
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(1)
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(1)
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NA
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[Missing Graphic Reference]
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Securities
Warrants
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(1)
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(1)
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(1)
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NA
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[Missing Graphic Reference]
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Units(2)
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(1)
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(1)
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(1)
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NA
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(1) An indeterminate aggregate
initial price or number of the securities of each identified class is being
registered as may from time to time be at indeterminate
prices. Separate consideration may or may not be received for
securities that are issuable on exercise, conversion or exchange of other
securities or that are issued in units or represented by depositary
shares. In accordance with Rules 456(b) and 457(r), the Registrant is
deferring payment of all of the registration fee, except for $ 43,744 that has
already been paid with respect to $ 345,257,199 aggregate initial offering price
of securities that were previously registered pursuant to the Registration
Statement No. 333-117655, and were not sold thereunder.
(2) Each
unit will be issued under a unit agreement or indenture and will represent an
interest in two or more debt securities or warrants, which may or may not be
separable from one another.
PROSPECTUS
[Missing Graphic Reference]
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Debt
Securities
Preferred
Stock
Common
Stock
Warrants
Units
Omega from time to time may offer to
sell debt securities, preferred stock, common stock, and warrants, as well as
units that include any of these securities or securities of other
entities. The debt securities, preferred stock, and warrants may be
convertible into or exercisable or exchangeable for common or preferred stock or
other securities of the Company or debt or equity securities of one or more
other entities. The common stock of the Company is listed on the NYSE
and trades under the ticker symbol OHI.
The debt
securities warrants, the preferred stock warrants and the common stock warrants
are collectively referred to herein as the securities warrants. The debt
securities, the preferred stock, the common stock and the securities warrants
are collectively referred to herein as the securities. We will provide the
specific terms of these securities in supplements to this prospectus prepared in
connection with each offering. You should read this prospectus and the
prospectus supplements carefully before you invest in the
securities.
The
Company may offer and sell these securities to or through one or more
underwriters, dealers and agents, or directly to purchasers, on a continuous or
delayed basis.
See
"Risk Factors" on page 4 for a discussion of matters that you should consider
before investing in these securities.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is April 10, 2008
This prospectus may not be used to sell
securities unless accompanied by the applicable prospectus
supplement.
S:\Finance\Omega
Healthcare Investors Inc\SEC Reporting\2008\Other Edgarfilings\4-10-08\S-3ASR -
ATL-1247299-v4-OHI - automatically effective s-3 for
shelf.DOC
We
have not authorized any dealer, salesman or other person to give any information
or to make any representation other than those contained or incorporated by
reference in this prospectus. You must not rely upon any information or
representation not contained or incorporated by reference in this prospectus or
the applicable prospectus supplement. This prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities other than
the registered securities to which they relate, nor do this prospectus nor any
applicable prospectus supplement constitute an offer to sell or the solicitation
of an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.
______________
TABLE OF
CONTENTS
ABOUT
THIS PROSPECTUS
3
WHERE YOU
CAN FIND MORE INFORMATION 3
CAUTIONARY
LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS
5
OUR
COMPANY 6
RISK
FACTORS 6
RATIO OF
EARNINGS TO FIXED CHARGES 7
USE OF
PROCEEDS
7
DESCRIPTION
OF SECURITIES
7
CAPITALSTOCK 8
CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS
21
PLAN OF
DISTRIBUTION
31
VALIDITY
OF THE SECURITIES
33
EXPERTS
33
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the SEC
utilizing a "shelf" registration process. Under this shelf registration process,
we may sell any combination of the securities described in this prospectus in
one or more offerings up to an indeterminate dollar amount. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, 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 More Information."
As
allowed by SEC rules, this prospectus omits various information you can find in
the registration statement or the exhibits to the registration statement. For
further information, we refer you to the registration statement, including its
exhibits and schedules. Statements contained in this prospectus about the
provisions or contents of any contract, agreement or any other document referred
to are not necessarily complete. For each of these contracts, agreements or
documents filed as an exhibit to the registration statement, we refer you to the
actual exhibit for a more complete description of the matters involved. You
should not assume that the information in this prospectus or any applicable
prospectus supplement is accurate as of any date other than the date on the
front of those documents. For further information about us or the securities
offered under this prospectus, you should refer to that registration statement,
which you can obtain from the SEC as described below under the heading "Where
You Can Find More Information."
Unless
the context requires otherwise, the words "we," "company," "us" and "our" refer
to Omega Healthcare Investors, Inc. and its majority-owned
subsidiaries.
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any document we file with the SEC at its
public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings are also available to the public at the
web site maintained by the SEC at http://www.sec.gov, as well as on our website
at http://www.omegahealthcare.com. You may inspect information that we file with
The New York Stock Exchange at the offices of The New York Stock Exchange at 20
Broad Street, New York, New York 10005. Information on our website is not
incorporated by reference herein and our web address is included as an inactive
textual reference only.
The SEC
allows us to "incorporate by reference" the information we file with the SEC,
which means that we can disclose important information to you by referring to
the other information we have filed with the SEC. The information that we
incorporate by reference is considered a part of this prospectus and information
that we file later with the SEC will automatically update and supersede the
information contained in this prospectus. We incorporate by reference the
following documents (File No. 1-11316) we filed with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, other than information in these documents that is not deemed to be
filed with the SEC:
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our
Annual Report on Form 10-K for the year ended December 31, 2007;
and Part III of our Annual Report on Form 10-K for the year ended December
31, 2006;
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the
description of our common stock contained in our Registration Statement on
Form 8-A, filed on August 4, 2002, and any amendments or reports filed for
the purpose of updating that description;
and
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our
current report on Form 8-K filed April 3,
2008.
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*
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This
report contains information furnished to the SEC under Items 2.02 and/or
7.01 of Form 8-K which, pursuant to General Instruction B(2) of Form 8-K,
is not deemed to be "filed" for purposes of Section 18 of the Exchange Act
and we are not subject to the liabilities imposed by that section. We are
not incorporating and will not incorporate by reference into this
prospectus past or future information or reports furnished or that will be
furnished under Items 2.02 and/or 7.01 of Form
8-K.
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All
documents we file later with the SEC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date
of this prospectus and prior to the termination of the offering of the
securities will be deemed to be incorporated by reference into this prospectus,
other than information in the documents that is not deemed to be filed with the
SEC. A statement contained in this prospectus or in a document incorporated or
deemed to be incorporated by reference into this prospectus will be deemed to be
modified or superseded to the extent that a statement contained in any
subsequently filed document that is incorporated by reference into this
prospectus, modifies or supersedes that statement. Any statements so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
We will
provide without charge to each person to whom this prospectus is delivered, on
the request of any person, a copy of any or all the documents incorporated
herein by reference, other than exhibits to the documents, unless the exhibits
are specifically incorporated by reference into the documents that this
prospectus incorporates. Requests for copies in writing or by telephone should
be directed to:
Omega
Healthcare Investors, Inc.
9690
Deereco Road
Suite
100
Timonium,
Maryland 21093
Attn:
Chief Financial Officer
(410) 427-1700
CAUTIONARY
LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. All statements other than
statements of historical facts included in this prospectus may constitute
forward-looking statements. These statements relate to our expectations,
beliefs, intentions, plans, objectives, goals, strategies, future events,
performance and underlying assumptions and other statements other than
statements of historical facts. In some cases, you can identify forward-looking
statements by the use of forward-looking terminology including, but not limited
to, terms such as “may,” “will,” “anticipates,” “expects,” “believes,”
“intends,” “should” or comparable terms or the negative thereof. These
statements are based on information available on the date of this filing and
only speak as to the date hereof and no obligation to update such
forward-looking statements should be assumed. Our actual results may differ
materially from those reflected in the forward-looking statements contained
herein as a result of a variety of factors, including, among other
things:
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those
items discussed under “Risk Factors” in Item 1 to our annual report on
Form 10-K and as supplemented from time-to-time in Part II, Item 1A to our
quarterly reports on Form 10-Q;
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uncertainties
relating to the business operations of the operators of our assets,
including those relating to reimbursement by third party payors,
regulatory matters and occupancy
levels;
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the
ability of any operators in bankruptcy to reject unexpired lease
obligations, modify the terms of our mortgages, and impede our ability to
collect unpaid rent or interest during the process of a bankruptcy
proceeding and retain security deposits for the debtors'
obligations;
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our
ability to sell closed assets on a timely basis and on terms that allow us
to realize the carrying value of these
assets;
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our
ability to negotiate appropriate modifications to the terms of our credit
facility;
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the
availability and cost of capital;
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competition
in the financing of healthcare
facilities;
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regulatory
and other changes in the healthcare
sector;
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the
effect of economic and market conditions generally and, particularly, in
the healthcare industry;
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changes
in interest rates;
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the
amount and yield of any additional
investments;
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changes
in tax laws and regulations affecting real estate investment trusts;
and
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changes
in the ratings of our debt and preferred
securities.
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Any
subsequent written or oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements set forth or referred to above, as well as the risk
factors contained in this prospectus. Except as required by law, we
disclaim any obligation to update such statements or to publicly announce the
result of any revisions to any of the forward-looking statements contained in
this prospectus to reflect future events or developments.
OUR
COMPANY
We are a self-administered real estate
investment trust (“REIT”), investing in income-producing healthcare facilities,
principally long-term care facilities located in the United States. We provide
lease or mortgage financing to qualified operators of skilled nursing facilities
(“SNFs”) and, to a lesser extent, assisted living facilities (“ALFs”),
rehabilitation and acute care facilities. We have historically financed
investments through borrowings under our revolving credit facilities, private
placements or public offerings of debt or equity securities, the assumption of
secured indebtedness, or a combination of these methods.
Our portfolio of investments, as of
December 31, 2007, consisted of 236 healthcare facilities, located in 27 states
and operated by 28 third-party operators. This portfolio was made up
of:
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222
long-term healthcare facilities and two rehabilitation hospitals owned and
leased to third parties;
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fixed
rate mortgages on 9 long-term healthcare facilities;
and
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3
long term care facilities as
held-for-sale.
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As of December 31, 2007, our gross
investments in these facilities, net of impairments and before reserve for
uncollectible loans, totaled approximately $1.3 billion. In addition,
we also held miscellaneous investments of approximately $14 million at December
31, 2007, consisting primarily of secured loans to third-party operators of our
facilities.
We were incorporated in the State of
Maryland on March 31, 1992.
RISK
FACTORS
You
should carefully consider the following factors as well as other information
contained in this prospectus and the documents incorporated by reference herein
before deciding to invest in shares of our common stock. These risks
include, but are not limited to, the risks described in our Annual Report for
the year ended December 31, 2007, and subsequently filed documents, which are
incorporated by reference in this prospectus, and any risks that may be
described in other filings we make with the SEC.
If
our stock price is volatile, purchasers of our common stock could incur
substantial losses.
Although
our common stock is listed on the New York Stock Exchange, such listing does not
provide any assurance that an active public market for the common stock will be
sustained. No predictions can be made as to the effect, if any, that
future market sales of common stock or the availability of common stock for sale
will have on the prevailing market price of the common stock. In
addition, the stock market in recent years has experienced price and volume
fluctuations that often have been unrelated or disproportionate to the operating
performance of companies. These fluctuations, as well as general
economic and market conditions, may adversely affect the market price of our
common stock.
If
there are sales of substantial amounts of our common stock in the future, the
price of our common stock could decline.
All of our outstanding shares of common
stock are available for immediate sale unless held by our
affiliates. Sales of substantial amounts of our common stock, or the
perception that such sales could occur, could adversely affect prevailing market
prices of the common stock.
RATIO
OF EARNINGS TO FIXED CHARGES
The table below sets forth, for the
periods indicated, our ratios of earnings to fixed charges and our ratios of
earnings to combined fixed charges and preferred stock dividends. We have
calculated the ratio of earnings to fixed charges by adding net income (loss)
from continuing operations to fixed charges and dividing that sum by such fixed
charges. Fixed charges consist of interest expense and amortization of deferred
financing costs. The ratio of earnings to combined fixed charges and preferred
stock dividends was calculated in the same manner as the ratio of earnings to
fixed charges except that accrued preferred stock dividends were included for
each of the periods shown.
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Ratio
of earnings to fixed charges
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Ratio
of earnings to combined fixed charges and preferred stock
dividends
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* Our
earnings were insufficient to cover combined fixed charges and preferred stock
dividends by $2.393 million in the year ended December 31, 2004.
USE
OF PROCEEDS
We intend
to use the net proceeds from the sales of the securities as set for in the
applicable prospectus supplement.
DESCRIPTION
OF SECURITIES
We may
refer in this prospectus to one or more of the following categories of our
securities:
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shares
of our common stock, par value $0.10 per share ("common
stock");
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shares
of our preferred stock, par value $1.00 per share, in one or more series
(the "preferred stock");
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debt
securities, in one or more series ("debt
securities");
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common
stock warrants (the "common stock
warrants");
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preferred
stock warrants (the "preferred stock
warrants");
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debt
securities warrants (the "debt securities warrants");
and
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any
combination of the foregoing, either individually or as
units.
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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.
CAPITAL
STOCK
As
of March 31, 2008, our authorized capital stock consisted of
100,000,000 shares of common stock, par value $0.10 per share, and 20,000,000
shares of preferred stock, par value $1.00 per share, of which 4,739,500 shares were designated
as Series D preferred stock. As of March 31, 2008, we had 68,996,852 shares of
our common stock and 4,739,500 shares of our
Series D preferred stock issued and outstanding.
Our
common stock and Series D preferred stock are listed on the New York Stock
Exchange. We intend to apply to list for trading on the New York Stock Exchange
any additional shares of our common stock that are issued and sold hereunder. We
may also apply to list on the New York Stock Exchange any debt securities, any
additional series of preferred stock, and any securities warrants that are
offered and sold hereunder, as described in the prospectus supplement relating
to any such securities.
Unless
otherwise indicated in a prospectus supplement relating thereto, Computershare
Trust Company, N.A. is the transfer agent and registrar of the common stock and
preferred stock.
Common
Stock
All
shares of our common stock participate equally in dividends payable to
stockholders of our common stock when and as declared by our board of directors
and in net assets available for distribution to stockholders of our common stock
on liquidation or dissolution, have one vote per share on all matters submitted
to a vote of the stockholders and do not have cumulative voting rights in the
election of directors. All issued and outstanding shares of our common stock
are, and our common stock offered hereby will be upon issuance, validly issued,
fully paid and nonassessable. Holders of our common stock do not have
preference, conversion, exchange or preemptive rights. Our common stock is
listed on the New York Stock Exchange under the symbol "OHI."
Preferred
Stock
The terms
of any series of the preferred stock offered by any prospectus supplement will
be as described in such prospectus supplement. The following description of the
terms of the preferred stock, except as modified in a prospectus supplement,
sets forth certain general terms and provisions of the preferred stock. The
description of certain provisions of the preferred stock set forth below and in
any prospectus supplement does not purport to be complete and is subject to and
qualified in its entirety by reference to the company's articles of
incorporation, as amended, and the board of directors' resolution or articles
supplementary relating to each series of the preferred stock which will be filed
with the Securities and Exchange Commission and incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part at or
prior to the time of the issuance of such series of the preferred
stock.
General
Under the
articles of incorporation, the board of directors of the company is authorized
without further stockholder action to provide for the issuance of shares of
preferred stock of the company, up to the amount of shares of preferred stock
authorized under the articles of incorporation but not issued or reserved for
issuance thereunder, in one or more series, with such designations, preferences,
powers and relative participating, optional or other special rights and
qualifications, limitations or restrictions thereon, including, but not limited
to, dividend rights, dividend rate or rates, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), redemption
price or prices, and liquidation preferences as shall be stated in the
resolution providing for the issue of a series of such stock, adopted, at any
time or from time to time, by the board of directors of the
company.
The
preferred stock shall have the dividend, liquidation, redemption and voting
rights set forth below unless otherwise provided in a prospectus supplement
relating to a particular series of the preferred stock. Reference is made to the
prospectus supplement relating to the particular series of the preferred stock
offered thereby for specific terms, including:
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the
designation and stated value per share of such preferred stock and the
number of shares offered;
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the
amount of liquidation preference per
share;
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the
initial public offering price at which such preferred stock will be
issued;
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the
dividend rate (or method of calculation), the dates on which dividends
shall be payable and the dates from which dividends shall commence to
cumulate, if any;
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any
redemption or sinking fund
provisions;
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any
conversion rights; and
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any
additional voting, dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and
restrictions.
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The
preferred stock will, when issued, be fully paid and nonassessable and will have
no preemptive rights. Unless otherwise stated in a prospectus supplement
relating to a particular series of the preferred stock, each series of the
preferred stock will rank on a parity as to dividends and distributions of
assets with each other series of the preferred stock. The rights of the holders
of each series of the preferred stock will be subordinate to those of the
company's general creditors.
Dividend
Rights
Holders
of the preferred stock of each series will be entitled to receive, when, as and
if declared by the board of directors of the company, out of funds of the
company legally available therefor, cash dividends on such dates and at such
rates as will be set forth in, or as are determined by, the method described in
the prospectus supplement relating to such series of the preferred stock. Such
rate may be fixed or variable or both. Each such dividend will be payable to the
holders of record as they appear on the stock books of the company on such
record dates, fixed by the board of directors of the company, as specified in
the prospectus supplement relating to such series of preferred
stock.
Dividends
on any series of preferred stock may be cumulative or noncumulative, as provided
in the applicable prospectus supplement. If the board of directors of the
company fails to declare a dividend payable on a dividend payment date on any
series of preferred stock for which dividends are noncumulative, then the
holders of such series of preferred stock will have no right to receive a
dividend in respect of the dividend period ending on such dividend payment date,
and the company shall have no obligation to pay the dividend accrued for such
period, whether or not dividends on such series are declared payable on any
future dividend payment dates. Dividends on the shares of each series of
preferred stock for which dividends are cumulative will accrue from the date on
which the company initially issues shares of such series.
So long
as the shares of any series of the preferred stock shall be outstanding,
unless
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full
dividends (including if such preferred stock is cumulative, dividends for
prior dividend periods) shall have been paid or declared and set apart for
payment on all outstanding shares of the preferred stock of such series
and all other classes and series of preferred stock of the company (other
than "junior stock" as defined below),
and
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the
company is not in default or in arrears with respect to the mandatory or
optional redemption or mandatory repurchase or other mandatory retirement
of, or with respect to any sinking or other analogous fund for, any shares
of preferred stock of such series or any shares of any other preferred
stock of the company of any class or series (other than junior
stock),
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the
company may not declare any dividends on any shares of common stock of the
company or any other stock of the company ranking as to dividends or
distributions of assets junior to such series of preferred stock (the common
stock and any such other stock being herein referred to as "junior stock"), or
make any payment on account of, or set apart money for, the purchase, redemption
or other retirement of, or for a sinking or other analogous fund for, any shares
of junior stock or make any distribution in respect thereof, whether in cash or
property or in obligations or stock of the company, other than junior stock
which is neither convertible into, nor exchangeable or exercisable for, any
securities of the company other than junior stock.
Liquidation
Preference
In the
event of any liquidation, dissolution or winding up of the company, voluntary or
involuntary, the holders of each series of the preferred stock will be entitled
to receive out of the assets of the company available for distribution to
stockholders, before any distribution of assets is made to the holders of common
stock or any other shares of stock of the company ranking junior as to such
distribution to such series of preferred stock, the amount set forth in the
prospectus supplement relating to such series of the preferred stock. If, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
company, the amounts payable with respect to the preferred stock of any series
and any other shares of preferred stock of the company (including any other
series of the preferred stock) ranking as to any such distribution on a parity
with such series of the preferred stock are not paid in full, the holders of the
preferred stock of such series and of such other shares of preferred stock of
the company will share ratably in any such distribution of assets of the company
in proportion to the full respective preferential amounts to which they are
entitled. After payment to the holders of the preferred stock of each series of
the full preferential amounts of the liquidating distribution to which they are
entitled, the holders of each such series of the preferred stock will be
entitled to no further participation in any distribution of assets by the
company.
If
liquidating distributions shall have been made in full to all holders of shares
of preferred stock, the remaining assets of the company shall be distributed
among the holders of junior stock, according to their respective rights and
preferences and in each case according to their respective number of shares. For
such purposes, the consolidation or merger of the company with or into any other
corporation, or the sale, lease or conveyance of all or substantially all of the
property or business of the company, shall not be deemed to constitute a
liquidation, dissolution or winding up of the company.
Redemption
A series
of the preferred stock may be redeemable, in whole or from time to time in part,
at the option of the company, and may be subject to mandatory redemption
pursuant to a sinking fund or otherwise, in each case upon terms, at the time
and at the redemption prices set forth in the prospectus supplement relating to
such series. Shares of the preferred stock redeemed by the company will be
restored to the status of authorized but unissued shares of preferred stock of
the company.
In the
event that fewer than all of the outstanding shares of a series of the preferred
stock are to be redeemed, whether by mandatory or optional redemption, the
number of shares to be redeemed will be determined by lot or pro rata (subject
to rounding to avoid fractional shares) as may be determined by the company or
by any other method as may be determined by the company in its sole discretion
to be equitable. From and after the redemption date (unless default shall be
made by the company in providing for the payment of the redemption price plus
accumulated and unpaid dividends, if any), dividends shall cease to accumulate
on the shares of the preferred stock called for redemption and all rights of the
holders thereof (except the right to receive the redemption price plus
accumulated and unpaid dividends, if any) shall cease.
So long
as any dividends on shares of any series of the preferred stock or any other
series of preferred stock of the company ranking on a parity as to dividends and
distribution of assets with such series of the preferred stock are in arrears,
no shares of any such series of the preferred stock or such other series of
preferred stock of the company will be redeemed (whether by mandatory or
optional redemption) unless all such shares are simultaneously redeemed, and the
company will not purchase or otherwise acquire any such shares; provided,
however, that the foregoing will not prevent the purchase or acquisition of such
shares pursuant to a purchase or exchange offer made on the same terms to
holders of all such shares outstanding.
Conversion
Rights
The terms
and conditions, if any, upon which shares of any series of preferred stock are
convertible into common stock will be set forth in the applicable prospectus
supplement relating thereto. Such terms will include the number of shares of
common stock into which the preferred stock is convertible, the conversion price
(or manner of calculation thereof), the conversion period, provisions as to
whether conversion will be at the option of the holders of preferred stock or
the company, the events requiring an adjustment of the conversion price and
provisions affecting conversion.
Voting
Rights
Except as
indicated below or in a prospectus supplement relating to a particular series of
the preferred stock, or except as required by applicable law, the holders of the
preferred stock will not be entitled to vote for any purpose.
So long
as any shares of the preferred stock of a series remain outstanding, the consent
or the affirmative vote of the holders of at least 80% of the votes entitled to
be cast with respect to the then outstanding shares of such series of the
preferred stock together with any "parity preferred" (as defined below), voting
as one class, either expressed in writing or at a meeting called for that
purpose, will be necessary (i) to permit, effect or validate the
authorization, or any increase in the authorized amount, of any class or series
of shares of the company ranking prior to the preferred stock of such series as
to dividends, and (ii) to repeal, amend or otherwise change any of the
provisions applicable to the preferred stock of such series in any manner which
adversely affects the powers, preferences, voting power or other rights or
privileges of such series of the preferred stock. In case any series of the
preferred stock would be so affected by any such action referred to in
clause (ii) above in a different manner than one or more series of the
parity preferred then outstanding, the holders of shares of the preferred stock
of such series, together with any series of the parity preferred which will be
similarly affected, will be entitled to vote as a class, and the company will
not take such action without the consent or affirmative vote, as above provided,
of at least 80% of the total number of votes entitled to be cast with respect to
each such series of the preferred stock and the parity preferred, then
outstanding, in lieu of the consent or affirmative vote hereinabove otherwise
required.
With
respect to any matter as to which the preferred stock of any series is entitled
to vote, holders of the preferred stock of such series and any other series of
preferred stock of the company ranking on a parity with such series of the
preferred stock as to dividends and distributions of assets and which by its
terms provides for similar voting rights (the "parity preferred") will be
entitled to cast the number of votes set forth in the prospectus supplement with
respect to that series of preferred stock. As a result of the provisions
described in the preceding paragraph requiring the holders of shares of a series
of the preferred stock to vote together as a class with the holders of shares of
one or more series of parity preferred, it is possible that the holders of such
shares of parity preferred could approve action that would adversely affect such
series of preferred stock, including the creation of a class of capital stock
ranking prior to such series of preferred stock as to dividends, voting or
distributions of assets.
The
foregoing voting provisions will not apply if, at or prior to the time when the
act with respect to which such vote would otherwise be required shall be
effected, all outstanding shares of the preferred stock shall have been redeemed
or called for redemption and sufficient funds shall have been deposited in trust
to effect such redemption.
Redemption
and Business Combination Provisions
If our
board of directors is, at any time and in good faith, of the opinion that actual
or constructive ownership of at least 9.9% or more of the value of our
outstanding capital stock has or may become concentrated in the hands of one
owner, our board of directors will have the power:
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by
means deemed equitable by it, to call for the purchase from any of our
stockholders a number of voting shares sufficient, in the opinion of our
board of directors, to maintain or bring the actual or constructive
ownership of such owner to a level of no more than 9.9% of the value of
our outstanding capital stock; and
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to
refuse to transfer or issue voting shares of our capital stock to any
person whose acquisition of such voting shares would, in the opinion of
our board of directors, result in the actual or constructive ownership by
that person of more than 9.9% of the value of our outstanding capital
stock.
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Subject
to the rights of the preferred stock described below, the purchase price for any
voting shares of our capital stock so redeemed will be equal to the fair market
value of the shares reflected in the closing sales prices for the shares, if
then listed on a national securities exchange, or the average of the closing
sales prices for the shares if then listed on more than one national securities
exchange, or if the shares are not then listed on a national securities
exchange, the latest bid quotation for the shares if then traded
over-the-counter, on the last business day immediately preceding the day on
which we send notices of such acquisitions, or, if no such closing sales prices
or quotations are available, then the purchase price shall be equal to the net
asset value of such stock as determined by our board of directors in accordance
with the provisions of applicable law. The purchase price for shares of
Series D preferred stock will be equal to the fair market value of the
shares reflected in the closing sales price for the shares, if then listed on a
national securities exchange, or if the shares are not then listed on a national
securities exchange, the purchase price will be equal to the liquidation
preference of such shares of Series D preferred stock. From and after the
date fixed for purchase by our board of directors, the holder of any shares so
called for purchase will cease to be entitled to distributions, voting rights
and other benefits with respect to such shares, except the right to payment of
the purchase price for the shares. Further, any transfer of shares,
options, warrants, or other securities convertible into voting shares that would
create a beneficial owner of more than 9.9% of the value of our outstanding
capital stock will be deemed void ab initio and the intended transferee will be
deemed never to have had an interest therein.
Our
articles of incorporation require that, except in certain circumstances,
business combinations between us and a beneficial holder of 10% or more of our
outstanding voting stock, a related person, be approved by the affirmative vote
of at least 80% of our outstanding voting shares.
A
"business combination" is defined in the articles of incorporation
as:
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any
merger or consolidation of our company with or into a related
person;
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any
sale, lease, exchange, transfer or other disposition, including without
limitation a mortgage or any other security device, of all or any
"substantial part," as defined below, of our assets including, without
limitation, any voting securities of a subsidiary to a related
person;
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any
merger or consolidation of a related person with or into our
company;
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any
sale, lease, exchange, transfer or other disposition of all or any
substantial part of the assets of a related person to our
company;
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the
issuance of any securities (other than by way of pro rata distribution to
all stockholders) of our company to a related person;
and
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any
agreement, contract or other arrangement providing for any of the
transactions described in the definition of business
combination.
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The term
"substantial part" is defined as more than 10% of the book value of our total
assets as of the end of our most recent fiscal year ending prior to the time the
determination is being made.
The 80%
voting requirement described above will not be applicable if (i) our board
of directors has unanimously approved in advance the acquisition of our stock
that caused a related person to become a related person, or (ii) the
business combination is solely between us and a wholly owned
subsidiary.
Under the
terms of our articles of incorporation, as amended, our board of directors is
classified into three classes. Each class of directors serves for a term of
three years, with one class being elected each year.
The
foregoing provisions of the articles of incorporation and certain other matters
may not be amended without the affirmative vote of at least 80% of our
outstanding voting shares.
The
foregoing provisions may have the effect of discouraging unilateral tender
offers or other takeover proposals which certain stockholders might deem in
their interests or in which they might receive a substantial premium. Our board
of directors' authority to issue and establish the terms of currently authorized
preferred stock, without stockholder approval, may also have the effect of
discouraging takeover attempts. The provisions could also have the effect of
insulating current management against the possibility of removal and could, by
possibly reducing temporary fluctuations in market price caused by accumulation
of shares, deprive stockholders of opportunities to sell at a temporarily higher
market price. However, our board of directors believes that inclusion of the
business combination provisions in the articles of incorporation may help assure
fair treatment of stockholders and preserve our assets.
The
foregoing summary of certain provisions of the articles of incorporation does
not purport to be complete or to give effect to provisions of statutory or
common law. The foregoing summary is subject to, and qualified in its entirety
by reference to, the provisions of applicable law and the articles of
incorporation, a copy of which is incorporated by reference as an exhibit to the
registration statement of which this prospectus is a part.
Termination
of Stockholder Rights Plan
On
May 12, 1999, our board of directors authorized the adoption of a
stockholder rights plan and declared a dividend distribution of one right for
each common share outstanding on May 24, 1999. We terminated the
stockholder rights plan on April 3, 2008, and the associated rights expired on
that date. The plan was neither adopted nor terminated in response to any
specific attempt to acquire control of our company.
Debt
Securities
The terms
of any debt securities offered by any prospectus supplement will be as described
in such prospectus supplement, and as provided herein to the extent not modified
in the prospectus supplement. Debt securities may be issued from time to time in
series under an Indenture (the "Indenture") to be entered into between the
company and a trustee to be identified in the applicable prospectus supplement
(the "Trustee"). As used under this caption, unless the context otherwise
requires, offered debt securities shall mean the debt securities offered by this
prospectus and the accompanying prospectus supplement. The statements under this
caption are brief summaries of certain provisions contained in the Indenture, do
not purport to be complete and are qualified in their entirety by reference to
the Indenture, including the definition therein of certain terms, a copy of
which is incorporated by reference as an exhibit to the registration statement
of which this prospectus is a part. The following sets forth certain general
terms and provisions of the debt securities. Further terms of the offered debt
securities will be set forth in the prospectus supplement.
General
The
Indenture provides for the issuance of debt securities in series, and does not
limit the principal amount of debt securities which may be issued
thereunder.
Reference
is made to the prospectus supplement for the following terms of the offered debt
securities:
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the
specific title of the offered debt
securities;
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the
aggregate principal amount of the offered debt
securities;
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the
percentage of the principal amount at which the offered debt securities
will be issued;
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the
date on which the offered debt securities will
mature;
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the
rate or rates per annum or the method for determining such rate or rates,
if any, at which the offered debt securities will bear
interest;
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the
times at which any such interest will be
payable;
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any
provisions relating to optional or mandatory redemption of the offered
debt securities at the option of the company or pursuant to sinking fund
or analogous provisions;
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the
denominations in which the offered debt securities are authorized to be
issued if other than $100,000;
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any
provisions relating to the conversion or exchange of the offered debt
securities into common stock or into debt securities of another
series;
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the
portion of the principal amount, if less than the principal amount,
payable on acceleration;
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the
place or places at which the company will make payments of principal (and
premiums, if any) and interest, if any, and the method of
payment;
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whether
the offered debt securities will be issued in whole or in part in global
form;
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any
additional covenants and events of default and the remedies with respect
thereto not currently set forth in the
Indenture;
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the
identity of the Trustee for the debt securities, and if not the Trustee,
the identity of each paying agent and the debt securities
Registrar;
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the
currency or currencies other than United States Dollars in which any
series of debt securities will be issued;
and
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any
other specific terms of the offered debt
securities.
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One or
more series of the debt securities may be issued as discounted debt securities
(bearing no interest or bearing interest at a rate which at the time of issuance
is below market rates) to be sold at a substantial discount below their stated
principal amount. Tax and other special considerations applicable to any such
discounted debt securities will be described in the prospectus supplement
relating thereto.
Status
of Debt Securities
The
status and ranking of the debt securities will be as set forth in the prospectus
supplement. Except as otherwise set forth in the prospectus supplement, the debt
securities will be unsecured obligations of the company ranking on a parity with
all other unsecured and unsubordinated indebtedness.
Conversion
Rights
The
terms, if any, on which debt securities of a series may be exchanged for or
converted into shares of common stock, preferred stock or debt securities of
another series will be set forth in the prospectus supplement relating thereto.
To protect the company's status as a REIT, a beneficial holder may not convert
any debt security, and such debt security shall not be convertible by any
holder, if as a result of such conversion any person would then be deemed to
beneficially own, directly or indirectly, 9.9% or more of the company's shares
of common stock.
Absence
of Restrictive Covenants
Except as
noted below under "Dividends, Distributions and Acquisitions of Capital Stock,"
the company is not restricted by the Indenture from paying dividends or from
incurring, assuming or becoming liable for any type of debt or other obligations
or from creating liens on its property for any purpose. The Indenture does not
require the maintenance of any financial ratios or specified levels of net worth
or liquidity. Except as may be set forth in the prospectus supplement, there are
no provisions of the Indenture which afford holders of the debt securities
protection in the event of a highly leveraged transaction involving the
company.
Optional
Redemption
The debt
securities will be subject to redemption, in whole or from time to time in part,
at any time for certain reasons intended to protect the company's status as a
REIT, at the option of the company in the manner specified in the Indenture at a
redemption price equal to 100% of the principal amount, premium, if any, plus
interest accrued to the date of redemption. The Indenture does not contain any
provision requiring the company to repurchase the debt securities at the option
of the holders thereof in the event of a leveraged buyout, recapitalization or
similar restructuring of the company.
Dividends,
Distributions and Acquisitions of Capital Stock
The
Indenture provides that the company will not (i) declare or pay any
dividend or make any distribution on its capital stock or to holders of its
capital stock (other than dividends or distributions payable in its capital
stock or other than as the company determines is necessary to maintain its
status as a REIT), or (ii) purchase, redeem or otherwise acquire or retire
for value any of its capital stock, or any warrants, rights or options or other
securities to purchase or acquire any shares of its capital stock (other than
the debt securities) or permit any subsidiary to do so, if at the time of such
action an event of default (as defined in the Indenture) has occurred and is
continuing or would exist immediately after giving effect to such
action.
Events
of Default
An event
of default with respect to debt securities of any series is defined in the
Indenture as being:
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failure
to pay principal of or any premium on any debt security of that series
when due;
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failure
to pay any interest on any debt security of that series when due,
continued for 30 days;
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failure
to deposit any sinking fund payment when due, in respect of any debt
security of that series;
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failure
to perform any other covenant of the company in the Indenture (other than
a covenant included in the Indenture solely for the benefit of one or more
series of debt securities other than that series), continued for
60 days after written notice as provided in the
Indenture;
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certain
events of bankruptcy, insolvency, conservatorship, receivership or
reorganization; and
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any
other event of default provided with respect to the debt securities of
that series.
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If an
event of default with respect to the outstanding debt securities of any series
occurs and is continuing, either the Trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of that series may
declare the principal amount (or, if the debt securities of that series are
original issue discount debt securities, such portion of the principal amount as
may be specified in the terms of that series) of all the outstanding debt
securities of that series to be due and payable immediately. At any time after
the declaration of acceleration with respect to the debt securities of any
series has been made, but before a judgment or decree based on acceleration has
been obtained, the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series may, under certain circumstances,
rescind and annul such acceleration.
The
Indenture provides that, subject to the duty of the Trustee during default to
act with the required standard of care, the Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at the request or
direction of any of the holders, unless such holders shall have offered to the
Trustee reasonable indemnity. Subject to such provisions for the indemnification
of the Trustee and subject to certain limitations, the holders of a majority in
aggregate principal amount of the outstanding debt securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the debt securities of that
series.
The
company is required to furnish to the Trustee annually a statement as to the
performance by the company of certain of its obligations under the Indenture and
as to any default in such performance.
Modifications
and Waiver
Modifications
and amendments of the Indenture may be made by the company and the Trustee
without the consent of any holders to, among other things,
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evidence
the succession of another corporation to the
company;
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add
to the covenants of the company or surrender any right or power conferred
upon the company;
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establish
the form or terms of debt securities, including any subordination
provisions;
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cure
any ambiguity, correct or supplement any provision which may be defective
or inconsistent or make any other provisions with respect to matters or
questions arising under the Indenture, provided that such action does not
adversely affect the interests of the holders of debt securities of any
series in any material respect;
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to
add to, delete, or revise conditions, limitations and restrictions on the
authorized amounts, terms or purpose of debt securities, as set forth in
the Indenture; or
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evidence
and provide for a successor
Trustee.
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Modifications
and amendments of the Indenture may be made by the company and the Trustee with
the consent of the holders of a majority in aggregate principal amount of the
outstanding debt securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding debt security affected
thereby:
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change
the stated maturity date of the principal of, or any installment of
principal of or interest, if any, on any debt
security;
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reduce
the principal amount of, or premium or interest if any, on any debt
security;
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reduce
the amount of principal of an original issue discount debt security
payable upon acceleration of the maturity
thereof;
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change
the currency of payment of the principal of, or premium or interest, if
any, on any debt security;
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impair
the right to institute suit for the enforcement of any payment on or with
respect to any debt security;
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modify
the conversion provisions, if any, of any debt security in a manner
adverse to the holder of that debt security;
or
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reduce
the percentage in principal amount of the outstanding debt security of any
series, the consent of whose holders is required for modification or
amendment of that Indenture or for waiver of compliance with certain
provisions of that Indenture or for waiver of certain
defaults.
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The
holders of a majority in aggregate principal amount of the outstanding debt
security of each series may, on behalf of all holders of the debt securities of
that series, waive, insofar as that series is concerned, compliance by the
company with certain restrictive provisions of the Indenture. The holders of a
majority in aggregate principal amount of the outstanding debt securities of
each series may, on behalf of all holders of the debt securities of that series,
waive any past default under the Indenture with respect to the debt securities
of that series, except a default in the payment of principal or premium or
interest, if any, or a default in respect of a covenant or provision which under
the terms of the Indenture cannot be modified or amended without the consent of
the holder of each outstanding debt security of the series
affected.
Consolidation,
Merger and Sale of Assets
The
Indenture provides that the company, without the consent of the holders of any
of the debt securities, may consolidate or merge with or into or transfer its
assets substantially as an entirety to, any entity organized under the laws of
the United States or any state, provided that the successor entity assumes the
company's obligations under the Indenture, that after giving effect to the
transaction no event of default, and no event which, after notice or lapse of
time, would become an event of default, shall have occurred and be continuing,
and that certain other conditions are met.
Global
Securities
The debt
securities of a series may be issued in whole or in part in global form (the
"Global Securities"). Except as set forth in a prospectus supplement, the terms
and provisions with respect to any Global Securities will be as set forth in
this section captioned "Global Securities." The Global Securities will be
deposited with a depositary (the "Depositary"), or with a nominee for a
Depositary, identified in the prospectus supplement. In such case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding debt
securities of the series to be represented by such Global Security or
Securities. Unless and until it is exchanged in whole or in part for debt
securities in definitive form, a Global Security may not be transferred except
as a whole by the Depositary for such Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
The
specific material terms of the depositary arrangement with respect to any
portion of a series of debt securities to be represented by a Global Security
will be described in the prospectus supplement. The company anticipates that the
following provisions will apply to all depositary arrangements.
Upon the
issuance of a Global Security, the Depositary for such Global Security will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the debt securities represented by such Global Security to
the accounts of persons that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by any
underwriters or agents participating in the distribution of such debt
securities. Ownership of beneficial interests in a Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary for such Global Security (with respect to interests of
participants) or by participants or persons that hold through participants (with
respect to interests of persons other than participants). So long as the
Depositary for a Global Security, or its nominee, is the registered owner of
such Global Security, such Depositary or such nominee, as the case may be, will
be considered the sole owner or holder of the debt securities represented by
such Global Security for all purposes under the Indenture; provided, however,
that for the purposes of obtaining any consents or directions required to be
given by the holders of the debt securities, the company, the Trustee and its
agents will treat a person as the holder of such principal amount of debt
securities as specified in a written statement of the Depositary. Except as set
forth herein or otherwise provided in the prospectus supplement, owners of
beneficial interests in a Global Security will not be entitled to have the debt
securities represented by such Global Security registered in their names, will
not receive physical delivery of such debt securities in definitive form and
will not be considered the registered owners or holders thereof under the
Indenture, but the beneficial owners and holders only.
Principal,
premium, if any, and interest payments on debt securities represented by a
Global Security registered in the name of a Depositary or its nominee will be
made to such Depositary or its nominee, as the case may be, as the registered
owner of such Global Security. None of the company, the Trustee or any Paying
Agent for such debt securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership
interests.
The
company expects that the Depositary for any debt securities represented by a
Global Security, upon receipt of any payment of principal, premium, if any, or
interest will immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of such Depositary. The company
also expects that payments by participants will be governed by standing
instructions and customary practices, as is now the case with the securities
held for the accounts of customers registered in "street names" and will be the
responsibility of such participants.
If the
Depositary for any debt securities represented by a Global Security is at any
time unwilling or unable to continue as Depositary and a successor Depositary is
not appointed by the company within 90 days, the company will issue such
debt securities in definitive form in exchange for such Global Security. In
addition, the company may at any time and in its sole discretion determine not
to have any of the debt securities of a series represented by one or more Global
Securities and, in such event, will issue debt securities of such series in
definitive form in exchange for all of the Global Security or securities
representing such debt securities.
The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the ability
to transfer beneficial interests in debt securities represented by Global
Securities.
Securities
Warrants
The terms
of any securities warrants offered by any prospectus supplement will be as
described in such prospectus supplement, and as provided herein to the extent
not modified in the prospectus supplement. The company may issue securities
warrants for the purchase of common stock, preferred stock or debt securities.
securities warrants may be issued independently or together with common stock,
preferred stock or debt securities offered by any prospectus supplement and may
be attached to or separate from such common stock, preferred stock, or debt
securities. Each series of securities warrants will be issued under a separate
warrant agreement (a "Securities Warrant Agreement") to be entered into between
the company and a bank or trust company, as securities warrant agent, all as set
forth in the prospectus supplement relating to the particular issue of offered
securities warrants. The securities warrant agent will act solely as an agent of
the company in connection with the securities warrants of such series and will
not assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of securities warrants. The following summaries of
certain provisions of the Securities Warrant Agreement and securities warrants
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Securities Warrant Agreement
and the securities warrants relating to each series of securities warrants which
will be filed with the Securities and Exchange Commission and incorporated by
reference as an exhibit to the registration statement of which this prospectus
is a part at or prior to the time of the issuance of such series of securities
warrants.
In the
case of securities warrants for the purchase of common stock or preferred stock,
the applicable prospectus supplement will describe the terms of such securities
warrants, including the following where applicable:
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the
aggregate number of shares purchasable upon exercise of such securities
warrants, the exercise price, and in the case of securities warrants for
preferred stock the designation, aggregate number and terms of the series
of preferred stock purchasable upon exercise of such securities
warrants;
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the
designation and terms of any series of preferred stock with which such
securities warrants are being offered and the number of such securities
warrants being offered with such preferred
stock;
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the
date, if any, on and after which such securities warrants and the related
series of preferred stock or common stock will be transferable
separately;
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the
date on which the right to exercise such securities warrants shall
commence and the Expiration Date;
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any
special United States Federal income tax consequences;
and
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any
other terms of such securities
warrants.
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If
securities warrants for the purchase of debt securities are offered, the
applicable prospectus supplement will describe the terms of such securities
warrants, including the following where applicable:
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the
denominations and terms of the series of debt securities purchasable upon
exercise of such securities
warrants;
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the
designation and terms of any series of debt securities, with which such
securities warrants are being offered with each such debt
securities;
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the
date, if any, on and after which such securities warrants and the related
series of debt securities will be transferable
separately;
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the
principal amount of the series of debt securities purchasable upon
exercise of each such securities warrant and the price at which such
principal amount of debt securities of such series may be purchased upon
such exercise;
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the
date on which the right shall expire (the "Expiration
Date");
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whether
the securities warrants will be issued in registered or bearer
form;
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any
special United States Federal income tax
consequences;
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the
terms, if any, on which the company may accelerate the date by which the
securities warrants must be exercised;
and
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any
other terms of such securities
warrants.
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Securities
warrant certificates may be exchanged for new securities warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the securities warrant agent or any other office indicated in the applicable
prospectus supplement. Prior to the exercise of any securities warrant to
purchase debt securities, holders of such securities warrants will not have any
of the rights of holders of the debt securities purchasable upon such exercise,
including the right to receive payments of principal or premium, if any, or
interest, if any, on such debt securities or to enforce covenants in the
applicable indenture. Prior to the exercise of any securities warrants to
purchase common stock or preferred stock, holders of such securities warrants
will not have any rights of holders of such common stock or preferred stock,
including the right to receive payments of dividends, if any, on such common
stock or preferred stock, or to exercise any applicable right to
vote.
Exercise
of Securities Warrants
Each
securities warrant will entitle the holder thereof to purchase a number of
shares of common stock, preferred stock or such principal amount of debt
securities, as the case may be, at such exercise price as shall in each case be
set forth in, or calculable from, the prospectus supplement relating to the
offered securities warrants. After the close of business on the Expiration Date
(or such later date to which such Expiration Date may be extended by the
company), unexercised securities warrants will become void.
Securities
warrants may be exercised by delivering to the securities warrant agent payment
as provided in the applicable prospectus supplement of the amount required to
purchase the common stock, preferred stock or debt securities, as the case may
be, purchasable upon such exercise together with certain information set forth
on the reverse side of the securities warrant certificate. securities warrants
will be deemed to have been exercised upon receipt of payment of the exercise
price, subject to the receipt within five (5) business days, of the
securities warrant certificate evidencing such securities warrants. Upon receipt
of such payment and the securities warrant certificate properly completed and
duly executed at the corporate trust office of the securities warrant agent or
any other office indicated in the applicable prospectus supplement, the company
will, as soon as practicable, issue and deliver the common stock, preferred
stock or debt securities, as the case may be, purchasable upon such exercise. If
fewer than all of the securities warrants represented by such securities warrant
certificate are exercised, a new securities warrant certificate will be issued
for the remaining amount of securities warrants.
Amendments
and Supplements to Securities Warrant Agreement
The
Securities Warrant Agreements may be amended or supplemented without the consent
of the holders of the securities warrants issued thereunder to effect changes
that are not inconsistent with the provisions of the securities warrants and
that do not adversely affect the interests of the holders of the securities
warrants.
Common
Stock Warrant Adjustments
Unless
otherwise indicated in the applicable prospectus supplement, the exercise price
of, and the number of shares of common stock covered by a common stock warrant
are subject to adjustment in certain events, including:
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payment
of a dividend on the common stock payable in capital stock and stock
splits, combinations or reclassifications of the common
stock;
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issuance
to all holders of common stock of rights or warrants to subscribe for or
purchase shares of common stock at less than their current market price
(as defined in the Securities Warrant Agreement for such series of common
stock warrants); and
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certain
distributions of evidences of indebtedness or assets (including cash
dividends or distributions paid out of consolidated earnings or retained
earnings or dividends payable in common stock) or of subscription rights
and warrants (excluding those referred to
above).
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No
adjustment in the exercise price of, and the number of shares of common stock
covered by a common stock warrant will be made for regular quarterly or other
periods of recurring cash dividends or distributions or for cash dividends or
distributions to the extent paid from consolidated earnings or retained
earnings. No adjustment will be required unless such adjustment would require a
change of at least 1% in the exercise price then in effect. Except as stated
above, the exercise price of, and the number of shares of common stock covered
by, a common stock warrant will not be adjusted for the issuance of common stock
or any securities convertible into or exchangeable for common stock, or carrying
the right or option to purchase or otherwise acquire the foregoing in exchange
for cash, other property or services.
In the
event of any (i) consolidation or merger of the company with or into any
entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
common stock), (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of the company, or (iii) reclassification,
capital reorganization or change of the common stock (other than solely a change
in par value or from par value to no par value), then any holder of a common
stock warrant will be entitled, on or after the occurrence of any such event, to
receive on exercise of such common stock warrant the kind and amount of shares
of stock or other securities, cash or other property (or any combination
thereof) that the holder would have received had such holder exercised such
holder's common stock warrant immediately prior to the occurrence of such event.
If the consideration to be received upon exercise of the common stock warrant
following any such event consists of common stock of the surviving entity, then
from and after the occurrence of such event, the exercise price of such common
stock warrant will be subject to the same anti-dilution and other adjustments
described in the second preceding paragraph, applied as if such common stock of
the surviving entity were common stock.
CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS
Consequences
of an Investment in Our Securities
The
following is a general summary of material U.S. federal income tax
considerations applicable to us, and to the purchasers of our securities and our
election to be taxed as a REIT. It is not tax advice. The summary is not
intended to represent a detailed description of the U.S. federal income tax
consequences applicable to a particular stockholder in view of any person's
particular circumstances, nor is it intended to represent a detailed description
of the U.S. federal income tax consequences applicable to stockholders subject
to special treatment under the federal income tax laws such as insurance
companies, tax-exempt organizations, financial institutions, securities
broker-dealers, investors in pass-through entities, expatriates and taxpayers
subject to alternative minimum taxation.
The
following discussion relating to an investment in our securities was based on
consultations with Powell Goldstein LLP, our special counsel. In the
opinion of Powell Goldstein LLP, the following discussion, to the extent it
constitutes matters of law or legal conclusions (assuming the facts,
representations, and assumptions upon which the discussion is based are
accurate), accurately represents the material U.S. federal income tax
considerations relevant to purchasers of our securities. Powell Goldstein LLP
has not rendered any opinion regarding any effect of such issuance on purchasers
of our securities. The sections of the Code relating to the qualification and
operation as a REIT are highly technical and complex. The following discussion
sets forth the material aspects of the Code sections that govern the federal
income tax treatment of a REIT and its stockholders. The information in this
section is based on the Code; current, temporary, and proposed Treasury
regulations promulgated under the Code; the legislative history of the Code;
current administrative interpretations and practices of the Internal Revenue
Service, or IRS; and court decisions, in each case, as of the date of this
prospectus. In addition, the administrative interpretations and practices of the
IRS include its practices and policies as expressed in private letter rulings
which are not binding on the IRS, except with respect to the particular
taxpayers who requested and received these rulings.
Taxation
of Omega
General. We have elected to
be taxed as a real estate investment trust, or a REIT, under Sections 856
through 860 of the Code beginning with our taxable year ended December 31,
1992. We believe that we have been organized and operated in such a manner as to
qualify for taxation as a REIT under the Code and we intend to continue to
operate in such a manner, but no assurance can be given that we have operated or
will be able to continue to operate in a manner so as to qualify or remain
qualified as a REIT.
The
sections of the Code that govern the federal income tax treatment of a REIT are
highly technical and complex. The following sets forth the material aspects of
those sections. This summary is qualified in its entirety by the applicable Code
provisions, rules and regulations promulgated thereunder, and administrative and
judicial interpretations thereof.
In the
opinion of Powell Goldstein LLP, which opinion has been filed as an exhibit to
the registration statement of which this prospectus is a part, we are organized
in conformity with the requirements for qualification as a REIT, and our current
and proposed method of operation will enable us to continue to meet the
requirements for continued qualification and taxation as a REIT under the Code.
This opinion is based on various assumptions and is conditioned upon certain
representations made by us as to factual matters concerning our business and
properties. Moreover, such qualification and taxation as a REIT depends upon our
ability to meet, through actual annual operating results, distribution levels
and diversity of stock ownership, the various qualification tests imposed under
the Code discussed below, the results of which will not be reviewed by Powell
Goldstein LLP on an ongoing basis. Accordingly, no assurance can be given that
the various results of our operation for any particular taxable year will
satisfy such requirements. Further, such requirements may be changed, perhaps
retroactively, by legislative or administrative actions at any time. We have
neither sought nor obtained any formal ruling from the IRS regarding our
qualification as a REIT and presently have no plan to apply for any such ruling.
See "—Failure to Qualify."
If we
qualify for taxation as a REIT, we generally will not be subject to federal
corporate income taxes on our net income that is currently distributed to
stockholders. This treatment substantially eliminates the "double taxation"
(i.e., taxation at both the corporate and the stockholder levels) that generally
results from an investment in a corporation. However, we will be subject to
federal income taxation as follows: First, we will be taxed at regular corporate
rates on any undistributed REIT taxable income, including undistributed net
capital gains; provided, however, that if we have a net capital gain, we will be
taxed at regular corporate rates on our undistributed REIT taxable income,
computed without regard to net capital gain and the deduction for capital gains
dividends, plus a 35% tax on undistributed net capital gain, if our tax as thus
computed is less than the tax computed in the regular manner. Second, under
certain circumstances, we may be subject to the "alternative minimum tax" on our
items of tax preference that we do not distribute or allocate to our
stockholders. Third, if we have (i) net income from the sale or other
disposition of "foreclosure property" which is held primarily for sale to
customers in the ordinary course of business, or (ii) other nonqualifying
income from foreclosure property, we will be subject to tax at the highest
regular corporate rate on such income. Fourth, if we have net income from
prohibited transactions (which are, in general, certain sales or other
dispositions of property (other than foreclosure property) held primarily for
sale to customers in the ordinary course of business by us, (i.e., when we are
acting as a dealer)), such income will be subject to a 100% tax. Fifth, if we
should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), but have nonetheless maintained our qualification as a
REIT because certain other requirements have been met, we will be subject to a
100% tax on an amount equal to (a) the gross income attributable to the
greater of the amount by which we fail the 75% or 95% test, multiplied by
(b) a fraction intended to reflect our profitability. Sixth, if we should
fail to distribute by the end of each year at least the sum of (i) 85% of
our REIT ordinary income for such year, (ii) 95% of our REIT capital gain
net income for such year, and (iii) any undistributed taxable income from
prior periods, we will be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed. Seventh, we will be
subject to a 100% excise on transactions with a taxable REIT subsidiary, or TRS,
that are not conducted on an arm's-length basis. Eighth, if we acquire any
asset, which is defined as a "built-in gain asset" from a C corporation that is
not a REIT (i.e., generally a corporation subject to full corporate-level tax)
in a transaction in which the basis of the built-in gain asset in our hands is
determined by reference to the basis of the asset (or any other property) in the
hands of the C corporation, and we recognize gain on the disposition of such
asset during the 10-year period, which is defined as the "recognition period,"
beginning on the date on which such asset was acquired by us, then, such gain,
but not more than built-in gain (i.e., the excess of (a) the fair market
value of such asset on the date such asset was acquired by us over (b) our
adjusted basis in such asset on such date), will be subject to tax at the
highest regular corporate rate. The results described above with respect to the
recognition of built-in gain assume that we will not make an election pursuant
to Treasury Regulations. Section 1.337(d)-7(c)(5).
Requirements for Qualification.
The Code defines a REIT as a domestic corporation, trust or association:
(1) which is managed by one or more trustees or directors; (2) the
beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest; (3) which would be
taxable as a domestic corporation, but for Sections 856 through 859 of the Code;
(4) which is neither a financial institution nor an insurance company
subject to the provisions of the Code; (5) the beneficial ownership of
which is held by 100 or more persons; (6) during the last half year of each
taxable year not more than 50% in value of the outstanding stock of which is
owned, actually or constructively, by five or fewer individuals (as defined in
the Code to include certain entities); and (7) which meets certain other
tests, described below, regarding the nature of its income and assets and the
amount of its annual distributions to stockholders. The Code provides that
conditions (1) to (4), inclusive, must be met during the entire taxable
year and that condition (5) must be met during at least 335 days of a
taxable year of twelve months, or during a proportionate part of a taxable year
of less than twelve months. For purposes of conditions (5) and (6), pension
funds and certain other tax-exempt entities are treated as individuals, subject
to a "look-through" exception in the case of condition (6). We may
avoid disqualification as a REIT for a failure to satisfy any of these tests if
such failure is due to reasonable cause and not willful neglect, and we pay a
penalty of $50,000 for each such failure.
Income Tests. In order to
maintain our qualification as a REIT, we annually must satisfy two gross income
requirements. First, at least 75% of our gross income (excluding gross income
from prohibited transactions) for each taxable year must be derived directly or
indirectly from investments relating to real property or mortgages on real
property (including generally "rents from real property," interest on mortgages
on real property and gains on sale of real property and real property mortgages,
other than property described in Section 1221 of the Code) and income
derived from certain types of temporary investments. Second, at least 95% of our
gross income (excluding gross income from prohibited transactions) for each
taxable year must be derived from such real property investments, dividends,
interest, and gain from the sale or disposition of stock or securities other
than property held for sale to customers in the ordinary course of
business.
Rents
received by us will qualify as "rents from real property" in satisfying the
gross income requirements for a REIT described above only if several conditions
are met. First, the amount of the rent must not be based in whole or in part on
the income or profits of any person. However, any amount received or accrued
generally will not be excluded from the term "rents from real property" solely
by reason of being based on a fixed percentage or percentages of receipts or
sales. Second, the Code provides that rents received from a tenant will not
qualify as "rents from real property" in satisfying the gross income tests if we
or an owner (actually or constructively) of 10% or more of the value of our
stock, actually or constructively owns 10% or more of such tenant, which is
defined as a related party tenant. Third, if rent attributable to personal
property, leased in connection with a lease of real property, is greater than
15% of the total rent received under the lease, then the portion of rent
attributable to such personal property will not qualify as "rents from real
property." Finally, for rents received to qualify as "rents from real property,"
we generally must not operate or manage the property or furnish or render
services to the tenants of such property, other than through an independent
contractor from which we derive no revenue. We may, however, directly perform
certain services that are "usually or customarily rendered" in connection with
the rental of space for occupancy and that are not otherwise considered
"rendered to the occupant" of the property. In addition, we may provide a
minimal amount of "non-customary" services to the tenants of a property, other
than through an independent contractor, as long as our income from the services
does not exceed 1% of our income from the related property. Furthermore, we may
own up to 100% of the stock of a TRS, which may provide customary and
noncustomary services to our tenants without tainting our rental income from the
related properties.
The term
"interest" generally does not include any amount received or accrued (directly
or indirectly) if the determination of such amount depends in whole or in part
on the income or profits of any person. However, an amount received or accrued
generally will not be excluded from the term "interest" solely by reason of
being based on a fixed percentage or percentages of gross receipts or sales. In
addition, an amount that is based on the income or profits of a debtor will be
qualifying interest income as long as the debtor derives substantially all of
its income from the real property securing the debt as a result of leasing
substantially all of its interest in such real property, but only to the extent
that the amounts received by the debtor would be qualifying "rents from real
property" if received directly by a REIT.
If a loan
contains a provision that entitles us to a percentage of the borrower's gain
upon the sale of the real property securing the loan or a percentage of the
appreciation in the property's value as of a specific date, income attributable
to that loan provision will be treated as gain from the sale of the property
securing the loan, which generally is qualifying income for purposes of both
gross income tests.
Interest
on debt secured by mortgages on real property or on interests in real property
generally is qualifying income for purposes of the 75% gross income test.
However, if the highest principal amount of a loan outstanding during a taxable
year exceeds the fair market value of the real property securing the loan as of
the date we agreed to originate or acquire the loan, a portion of the interest
income from such loan will not be qualifying income for purposes of the 75%
gross income test, but will be qualifying income for purposes of the 95% gross
income test. The portion of the interest income that will not be qualifying
income for purposes of the 75% gross income test will be equal to the portion of
the principal amount of the loan that is considered not to be secured by real
property.
Prohibited Transactions. We
will incur a 100% tax on the net income derived from any sale or other
disposition of property, other than foreclosure property, that we hold primarily
for sale to customers in the ordinary course of a trade or business. We believe
that none of our assets is held for sale to customers and that a sale of any of
our assets would not be in the ordinary course of our business. Whether a REIT
holds an asset primarily for sale to customers in the ordinary course of a trade
or business depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular asset. Nevertheless, we will
attempt to comply with the terms of safe-harbor provisions in the federal income
tax laws prescribing when an asset sale will not be characterized as a
prohibited transaction. We cannot assure you, however, that we can comply with
the safe-harbor provisions or that we will avoid owning property that may be
characterized as property that we hold primarily for sale to customers in the
ordinary course of a trade or business.
Foreclosure Property. We will
be subject to tax at the maximum corporate rate on any income from foreclosure
property, other than income that otherwise would be qualifying income for
purposes of the 75% gross income test, less expenses directly connected with the
production of that income. However, gross income from foreclosure property will
qualify for purposes of the 75% and 95% gross income tests. Foreclosure property
is any real property, including interests in real property, and any personal
property incident to such real property:
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that
is acquired by a REIT as the result of the REIT having bid in such
property at foreclosure, or having otherwise reduced such property to
ownership or possession by agreement or process of law, after there was a
default or default was imminent on a lease of such property or on
indebtedness that such property
secured;
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for
which the related loan or lease was acquired by the REIT at a time when
the default was not imminent or anticipated;
and
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for
which the REIT markets a proper election to treat the property as
foreclosure property.
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Property
generally ceases to be foreclosure property at the end of the third taxable year
following the taxable year in which the REIT acquired the property, or longer if
an extension is granted by the Secretary of the Treasury. This grace period
terminates and foreclosure property ceases to be foreclosure property on the
first day:
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on
which a lease is entered into for the property that, by its terms, will
give rise to income that does not qualify for purposes of the 75% gross
income test, or any amount is received or accrued, directly or indirectly,
pursuant to a lease entered into on or after such day that will give rise
to income that does not qualify for purposes of the 75% gross income
test;
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on
which any construction takes place on the property, other than completion
of a building or any other improvement, where more than 10% of the
construction was completed before default became imminent;
or
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which
is more than 90 days after the day on which the REIT acquired the
property and the property is used in a trade or business which is
conducted by the REIT, other than through an independent contractor from
whom the REIT itself does not derive or receive any
income.
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Beginning
on January 1, 2001, foreclosure property also includes any "qualified
health care property," as defined in Code Section 856(e)(6) acquired by us
as the result of the termination or expiration of a lease of such property. We
may operate a qualified healthcare facility, acquired in this manner for two
years or longer if an extension is granted. At present, we do not own property
with respect to which we have made foreclosure property elections. Properties
that are taken back in a foreclosure or bankruptcy and operated for our own
account are treated as foreclosure properties for income tax purposes, pursuant
to Internal Revenue Code Section 856(e). Gross income from foreclosure
properties is "good income" for purposes of the annual REIT income tests. Once
this election is made on the tax return, it is "good income" for a period of
three years, or until the properties are no longer operated for our own account.
An election to extend the foreclosure status period for an additional three
years can be made. In all cases of the foreclosure property, we utilize an
independent contractor to conduct day-to-day operations in order to maintain
REIT status. In certain cases, we may operate facilities through a taxable REIT
subsidiary. For those properties operated through the taxable REIT subsidiary,
we utilize an eligible independent contractor to conduct day-to-day operations
to maintain REIT status. As a result of the foregoing, we do not believe that
our participation in the operation of nursing homes will increase the risk that
we will fail to qualify as a REIT. Through our 2007 taxable year, we have not
paid any tax on our foreclosure property because those properties have been
producing losses. However, in the future, our income from foreclosure property
could be significant and we could be required to pay a significant amount of tax
on that income.
Hedging Transactions. From
time to time, we enter into hedging transactions with respect to one or more of
our assets or liabilities. Our hedging activities may include entering into
interest rate swaps, caps, and floors, options to purchase these items, and
futures and forward contracts. To the extent that we enter into an interest rate
swap or cap contract, option, futures contract, forward rate agreement, or any
similar financial instrument to hedge our indebtedness incurred to acquire or
carry "real estate assets," any periodic income or gain from the disposition of
that contract will be excluded from gross income (both the numerator and the
denominator) for purposes of the 95% gross income test, but will not be
qualifying gross income (not included in the numerator but included in the
denominator) for purposes of the 75% gross income test. To the extent that we
hedge with other types of financial instruments, or in other situations, it is
not entirely clear how the income from those transactions will be treated for
purposes of the gross income tests. We have structured and intend to continue to
structure any hedging transactions in a manner that does not jeopardize our
status as a REIT.
TRS Income. A TRS may earn
income that would not be qualifying income if earned directly by the parent
REIT. Both the subsidiary and the REIT must jointly elect to treat the
subsidiary as a TRS. If a TRS directly or indirectly owns more than 35% of the
voting power or value of the stock of another corporation, the other corporation
also will automatically be treated as a TRS as well. Overall, no more than 20%
of the value of a REIT's assets may consist of securities of one or more TRSs.
However, a corporation which directly or indirectly (i) operates or manages
a health care (or lodging) facility, or (ii) provides to any other person
(under a franchise, license, or otherwise) rights to any brand name under which
a health care (or lodging) facility is operated, cannot be a TRS. A TRS will pay
income tax at regular corporate rates on any income that it earns. In addition,
the new rules limit the deductibility of interest paid or accrued by a TRS to
its parent REIT to assure that the TRS is subject to an appropriate level of
corporate taxation. The rules also impose a 100% excise tax on transactions
between a TRS and its parent REIT or the REIT's tenants that are not conducted
on an arm's-length basis. We have made a TRS election with respect to Omega TRS
I, Inc., which previously owned all of the preferred stock of Omega Worldwide.
This entity will pay corporate income tax on their taxable income and their
after-tax next income will be available for distribution to us, if
any.
Failure to Satisfy Income Tests.
If we fail to satisfy one or both of the 75% or 95% gross income tests
for any taxable year, we may nevertheless qualify as a REIT for such year if we
are entitled to relief under certain provisions of the Code. These relief
provisions will be generally available if our failure to meet such tests was due
to reasonable cause and not due to willful neglect, we attach a schedule of the
sources of our income to our tax return, and any incorrect information on the
schedule was not due to fraud with intent to evade tax. It is not possible,
however, to state whether in all circumstances we would be entitled to the
benefit of these relief provisions. Even if these relief provisions apply, we
would incur a 100% tax on the gross income attributable to the greater of the
amounts by which we fail the 75% and 95% gross income tests, multiplied by a
fraction intended to reflect our profitability.
Asset Tests. At the close of
each quarter of our taxable year, we must also satisfy the following tests
relating to the nature of our assets. First, at least 75% of the value of our
total assets must be represented by (i) real estate assets, including
(i) our allocable share of real estate assets held by partnerships in which
we own an interest, and (ii) stock or debt instruments held for not more
than one year purchased with the proceeds of a stock offering or long-term (at
least five years) debt offering of our company), cash, cash items and government
securities. Second, of our investments not included in the 75% asset class, the
value of our interest in any one issuer's securities may not exceed 5% of the
value of our total assets. Third, we may not own more than 10% of the voting
power or value of any one issuer's outstanding securities. Fourth, no more than
20% of the value of our total assets may consist of the securities of one or
more TRSs. Fifth, no more than 25% of the value of our total assets may consist
of the securities of TRSs and other non-TRS taxable subsidiaries and other
assets that are not qualifying assets for purposes of the 75% asset
test.
For
purposes of the second and third asset tests, the term "securities" does not
include any security in another REIT, debt or equity securities of a qualified
REIT subsidiary or TRS, any loan to an individual or an estate, any Code Section
467 rental agreement, any obligation to pay rents from real property, certain
government issued securities, certain debt securities of a partnership, or
equity interest in any partnership. The term "securities," however, generally
includes debt securities issued by another REIT or a partnership, except that
debt securities of a partnership are not treated as securities for purposes of
the 10% value test if we own at least a 20% profits interest in the
partnership.
We may
own up to 100% of the stock of one or more TRSs. However, overall, no more than
20% of the value of our assets may consist of securities of one or more TRSs,
and no more than 25% of the value of our assets may consist of the securities of
TRSs and other non-TRS taxable subsidiaries (including stock in non-REIT C
Corporations) and other assets that are not qualifying assets for purposes of
the 75% asset test.
If the
outstanding principal balance of a mortgage loan exceeds the fair market value
of the real property securing the loan, a portion of such loan likely will not
be a qualifying real estate asset under the federal income tax laws. The
non-qualifying portion of that mortgage loan will be equal to the portion of the
loan amount that exceeds the value of the associated real property.
After
initially meeting the asset tests at the close of any quarter, we will not lose
our status as a REIT for failure to satisfy any of the asset tests at the end of
a later quarter solely by reason of changes in asset values. If the failure to
satisfy the asset tests results from an acquisition of securities or other
property during a quarter, the failure can be cured by disposition of sufficient
non-qualifying assets within 30 days after the close of that quarter. We
have maintained and intend to continue to maintain adequate records of the value
of our assets to ensure compliance with the asset tests and to take such other
action within 30 days after the close of any quarter as may be required to
cure any noncompliance.
Failure to Satisfy Asset Tests.
Subject to certain deminimis exceptions, we may avoid disqualification as
a REIT in the event of certain failures to satisfy the asset tests provided that
our failure to meet such tests was due to reasonable cause and not due to
willful neglect, we attach a schedule with our return that contains a
description of each asset that caused the failure, we dispose of the assets
generally within six (6) months of the last day of the quarter in which
identification of the failure occurred, and we pay a tax on the failure equal to
the greater of (a) $50,000, and (b) the product of the net income for the period
beginning on the date of the failure and ending generally on the date of
disposition of the asset that was generated by the assets that caused the
failure multiplied by the highest applicable corporate tax rate.
Annual Distribution Requirements.
In order to qualify as a REIT, we are required to distribute dividends
(other than capital gain dividends) to our stockholders in an amount at least
equal to (A) the sum of (i) 90% of our "REIT taxable income" (computed
without regard to the dividends paid deduction and our net capital gain) and
(ii) 90% of the net income (after tax), if any, from foreclosure property,
minus (B) the sum of certain items of noncash income. Such distributions
must be paid in the taxable year to which they relate, or in the following
taxable year if declared before we timely file our tax return for such year and
paid on or before the first regular dividend payment after such declaration. In
addition, such distributions are required to be made pro rata, with no
preference to any share of stock as compared with other shares of the same
class, and with no preference to one class of stock as compared with another
class except to the extent that such class is entitled to such a preference. To
the extent that we do not distribute all of our net capital gain or do
distribute at least 90%, but less than 100% of our "REIT taxable income," as
adjusted, we will be subject to tax thereon at regular ordinary and capital gain
corporate tax rates.
Furthermore,
if we fail to distribute during a calendar year, or by the end of January
following the calendar year in the case of distributions with declaration and
record dates falling in the last three months of the calendar year, at least the
sum of:
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85%
of our REIT ordinary income for such
year;
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95%
of our REIT capital gain income for such year;
and
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any
undistributed taxable income from prior
periods,
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we will
incur a 4% nondeductible excise tax on the excess of such required distribution
over the amounts we actually distribute. We may elect to retain and pay income
tax on the net long-term capital gain we receive in a taxable year. If we so
elect, we will be treated as having distributed any such retained amount for
purposes of the 4% excise tax described above. We have made, and we intend to
continue to make, timely distributions sufficient to satisfy the annual
distribution requirements. We may also be entitled to pay and deduct deficiency
dividends in later years as a relief measure to correct errors in determining
our taxable income. Although we may be able to avoid income tax on amounts
distributed as deficiency dividends, we will be required to pay interest to the
IRS based upon the amount of any deduction we take for deficiency
dividends.
Our
ability to make distributions in amounts sufficient to meet the requirements set
forth in the previous paragraph may be dependent, in part, on our ability to
claim,, among other things, depreciation deductions with respect to owned
facilities. This treatment for federal income tax purposes depends
upon classification of the leases with respect to such owned facilities as "true
leases" rather than financing arrangements. The question of whether we are the
owner of such facilities and whether the leases are true leases for federal tax
purposes is essentially based upon factual matters. We believe that we will be
treated as the owner of each of the facilities that we lease, and such leases
will be treated as “true leases” for federal income tax purposes. However, no
assurances can be given that the IRS will not successfully challenge our status
as the owner of our facilities subject to leases, and the status of such leases
as true leases, asserting that the purchase of the facilities by us and the
leasing of such facilities merely constitute steps in secured financing
transactions in which the lessees are owners of the facilities and we are merely
a secured creditor. In such event, we would not be entitled to claim
depreciation deductions with respect to any of the affected facilities. As a
result, we might fail to meet the 90% distribution requirement or, if such
requirement is met, we might be subject to corporate income tax or the 4% excise
tax.
Failure
to Qualify
If we
fail to qualify as a REIT in any taxable year, and the relief provisions do not
apply, we will be subject to tax (including any applicable alternative minimum
tax) on our taxable income at regular corporate rates. Distributions to
stockholders in any year in which we fail to qualify will not be deductible and
our failure to qualify as a REIT would reduce the cash available for
distribution by us to our stockholders. In addition, if we fail to qualify as a
REIT, all distributions to stockholders will be taxable as ordinary income, to
the extent of current and accumulated earnings and profits, and, subject to
certain limitations of the Code, corporate distributees may be eligible for the
dividends received deduction. Unless entitled to relief under specific statutory
provisions, we would also be disqualified from taxation as a REIT for the four
taxable years following the year during which qualification was lost. It is not
possible to state whether in all circumstances we would be entitled to such
statutory relief. Failure to qualify could result in our incurring indebtedness
or liquidating investments in order to pay the resulting taxes.
Other
Tax Matters
We own
and operate a number of properties through subsidiaries, known as qualified REIT
subsidiaries, or "QRSs". Code Section 856(i) provides that a
corporation which is a qualified REIT subsidiary shall not be treated as a
separate corporation, and all assets, liabilities, and items of income,
deduction, and credit of a qualified REIT subsidiary shall be treated as assets,
liabilities and such items (as the case may be) of the REIT. Thus, in applying
the tests for REIT qualification described in this prospectus under the heading
"Taxation of Omega," the QRSs will be ignored, and all assets, liabilities and
items of income, deduction, and credit of such QRSs will be treated as our
assets, liabilities and items of income, deduction, and credit.
In the
case of a REIT that is a partner in a partnership, the REIT is treated as owning
its proportionate share of the assets of the partnership and as earning its
allocable share of the gross income of the partnership for purposes of the
applicable REIT qualification tests. Thus, our proportionate share of the
assets, liabilities, and items of income of any partnership, joint venture, or
limited liability company that is treated as a partnership for federal income
tax purposes in which we own an interest, directly or indirectly, will be
treated as our assets and gross income for purposes of applying the various REIT
qualification requirements.
Taxation
of Stockholders
Taxation of Domestic Stockholders.
As long as we qualify as a REIT, if you are a taxable U.S. stockholder,
distributions made to you out of current or accumulated earnings and profits
(and not designated as capital gain dividends) will be taken into account by you
as ordinary income and will not be eligible for the dividends received deduction
for corporations or the special 15% tax rate applicable to individuals and
certain other taxpayers in the case of dividends paid by a regular C
corporation. However, to the extent that any of our income represents
income on which we have paid tax at corporate income tax rates or dividend
income from a regular C corporation, including dividend income from a TRS that
we own, your proportionate share of such dividend income will be eligible for
such special 15% tax rate. Distributions that are designated as
capital gain dividends will be taxed as long-term capital gains (to the extent
they do not exceed our actual net capital gain for the taxable year) and
eligible for the special 15% maximum tax rate on capital gain income applicable
to individuals and certain other tax payers (unless such capital gain income is
attributable to unrecaptured Section 1250 gain, in which case the applicable
maximum tax rate will be 25%, instead of 15%), without regard to the period for
which you have held our stock. However, if you are a corporation, you may be
required to treat up to 20% of certain capital gain dividends as ordinary
income. Further, if we designate a dividend as a capital gain
dividend to you and you dispose of your shares in a sale or exchange in which
you recognize a loss, and have held those shares for six (6) months or less, you
will be required to treat the loss from the sale of your shares as long-term
(instead of short-term) capital loss to the extent of the of the dividend
distributions you received from us that were designated as capital gain
distributions that were permitted to treat as long-term capital
gains.
Distributions
in excess of current and accumulated earnings and profits will not be taxable to
you to the extent that they do not exceed the adjusted basis of your shares, but
rather will reduce the adjusted basis of those shares. To the extent that
distributions in excess of current and accumulated earnings and profits exceed
the adjusted basis of your shares, you will include the distributions in income
as long-term capital gain (or short-term capital gain if you have held the
shares for one year or less) assuming the shares are a capital asset in your
hands. In addition, any distribution declared by us in October, November, or
December of any year payable to you as a stockholder of record on a specified
date in any of these months shall be treated as both paid by us and received by
you on December 31 of that year, provided that the distribution is actually
paid by us during January of the following calendar year. You may not include in
your individual income tax returns any of our net operating losses or capital
losses.
Backup
Withholding
Assuming
that you are a U.S. stockholder, we will report to you and the IRS the amount of
distributions paid during each calendar year, and the amount of tax withheld, if
any. Under the backup withholding rules, you may be subject to backup
withholding with respect to distributions paid unless you:
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are
a corporation or come within certain other exempt categories and when
required, demonstrate this fact; or
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provide
a taxpayer identification number, certify as to no loss of exemption from
backup withholding, and otherwise comply with applicable requirements of
the backup withholding rules.
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If you do
not provide us with your correct taxpayer identification number, you may also be
subject to penalties imposed by the IRS. Any amount paid as backup withholding
will be creditable against your income tax liability. In addition, we may be
required to withhold a portion of capital gain distributions to you, if you fail
to certify your nonforeign status to us. See "—Taxation of Stockholders—Taxation
of Foreign Stockholders."
Treatment of Tax-Exempt
Stockholders. If you are a tax-exempt employee pension trust or other
domestic tax-exempt stockholder, our distributions to you generally will not
constitute "unrelated business taxable income," or UBTI, unless you have
borrowed to acquire or carry our common stock. However, qualified trusts that
hold more than 10% (by value) of certain REITs may be required to treat a
certain percentage of that REIT's distributions as UBTI. This requirement will
apply only if:
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the
REIT would not qualify for federal income tax purposes but for the
application of a "look-through" exception to the "five or fewer"
requirement applicable to shares held by qualified trusts;
and
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the
REIT is "predominantly held" by qualified
trusts.
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A REIT is
predominantly held if either:
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a
single qualified trust holds more than 25% by value of the REIT interests;
or
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one
or more qualified trusts, each owning more than 10% by value of the REIT
interests, hold in the aggregate more than 50% by value of the REIT
interests.
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The
percentage of any REIT dividend treated as UBTI is equal to the ratio of the
UBTI earned by the REIT (treating the REIT as if it were a qualified trust and
therefore subject to tax on UBTI) to the total gross income (less certain
associated expenses) of the REIT.
A de
minimis exception applies where the ratio set forth in the preceding sentence is
less than 5% for any year. For those purposes, a qualified trust is any trust
described in section 401(a) of the Internal Revenue Code and exempt from
tax under section 501(a) of the Internal Revenue Code. The provisions
requiring qualified trusts to treat a portion of REIT distributions as UBTI will
not apply if the REIT is able to satisfy the "five or fewer" requirement without
relying upon the "look-through" exception. The restrictions on ownership of our
common stock in our Amended and Restated Articles of Incorporation, as amended,
generally will prevent application of the provisions treating a portion of REIT
distributions as UBTI to tax-exempt entities purchasing our common stock, absent
approval by our board of directors.
Taxation of Foreign Stockholders.
The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
stockholders (collectively, Non-U.S. Stockholders) are complex and no attempt
will be made herein to provide more than a summary of these rules. Prospective
Non-U.S. Stockholders should consult with their own tax advisors to determine
the impact of federal, state and local income tax laws with regard to an
investment in shares, including any reporting requirements.
If you
are a Non-U.S. Stockholder, the following discussion will apply to you.
Distributions that are not attributable to gain from our sales or exchanges of
U.S. real property interests and not designated by us as capital gains dividends
will be treated as dividends of ordinary income to the extent that they are made
out of our current or accumulated earnings and profits. Such distributions will
ordinarily be subject to a withholding tax equal to 30% of the gross amount of
the distribution unless an applicable tax treaty reduces or eliminates that
tax.
However,
if income from the investment in the shares is treated as effectively connected
with your conduct of a U.S. trade or business, you generally will be subject to
a tax at graduated rates, in the same manner as U.S. stockholders are taxed with
respect to the distributions (and may also be subject to the 30% branch profits
tax if you are a foreign corporation). We expect to withhold U.S. income tax at
the rate of 30% on the gross amount of any distributions made to you
unless:
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a
lower treaty rate applies, you file an IRS Form W-8BEN with us and
other conditions are met; or
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you
file an IRS Form W-8ECI with us claiming that the distribution is
effectively connected income, and other conditions are
met.
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Distributions
in excess of our current and accumulated earnings and profits will not be
taxable to you to the extent that the distributions do not exceed the adjusted
basis of your shares, but rather will reduce the adjusted basis of the shares.
To the extent that distributions in excess of current accumulated earnings and
profits exceed the adjusted basis of your shares, these distributions will give
rise to tax liability if you would otherwise be subject to tax on any gain from
the sale or disposition of your shares in us, as described below. If it cannot
be determined at the time a distribution is made whether or not the distribution
will be in excess of current and accumulated earnings and profits, the
distributions will be subject to withholding at the same rate as dividends.
However, amounts withheld can be refundable if the Non-U.S. stockholder files a
U.S. tax return if it is subsequently reporting that a distribution was, in
fact, in excess of our current and accumulated earnings and
profits.
For any
year in which we qualify as a REIT, distributions that are attributable to gain
from our sales or exchanges of U.S. real property interests will be taxed to you
under the provisions of the Foreign Investment in Real Property Tax Act of 1980,
or FIRPTA. Under FIRPTA, distributions attributable to gain from sales of U.S.
real property interests are taxed to you as if the gain were effectively
connected with a U.S. business. You would thus be taxed at the normal capital
gain rates applicable to U.S. stockholders (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of nonresident
alien individuals). Also, distributions subject to FIRPTA may be subject to a
30% branch profits tax in the hands of a foreign corporate stockholder not
entitled to a treaty exemption. We are required by applicable Treasury
Regulations to withhold 35% of any distribution that could be designated by us
as a capital gains dividend. This amount is creditable against your FIRPTA tax
liability. Notwithstanding the foregoing, in the case of any
distribution attributable to gain from a sale by us of U.S. real property
interests, if the distribution is with respect to a class of our stock that is
regularly traded on an established securities market, you do not own more than
5% of that class of stock at any time during the one-year period ending on the
date of the distribution, and we are a “domestically controlled REIT” as defined
below, then the distribution will be exempted from the application of the FIRPTA
rules and the distribution will be subject to the withholding rules for ordinary
income, i.e., subject
to a 30% withholding tax unless the a Form W-8BEN has been filed (indicating
that a lower treaty rate applies) or a Form W-8ECI has been filed (indicating
that the distribution is effectively connected income).
Gain
recognized by you upon a sale of shares generally will not be taxed under FIRPTA
if we are a "domestically controlled REIT," defined generally as a REIT in which
at all times during a specified testing period less than 50% in value of the
stock was held directly or indirectly by foreign persons. It is currently
anticipated that we will be a "domestically controlled REIT," although there can
be no assurance that we will retain that status. If we are not "domestically
controlled," gain recognized by you will continue to be exempt under FIRPTA if
you at no time owned more than five percent of our common stock. However, gain
not subject to FIRPTA will be taxable to you if:
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investment
in the shares is effectively connected with your U.S. trade or business,
in which case you will be subject to the same treatment as U.S.
stockholders with respect to the gain;
or
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you
are a nonresident alien individual who was present in the United States
for more than 182 days during the taxable year and other applicable
requirements are met, in which case you will be subject to a 30% tax on
your capital gains.
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If the
gain on the sale of shares were to be subject to taxation under FIRPTA, you will
be subject to the same treatment as U.S. stockholders with respect to the gain
(subject to applicable alternative minimum tax and a special alternative minimum
tax in the case of nonresident alien individuals).
If the
proceeds of a sale of shares by you are paid by or through a U.S. office of a
broker, the payment is subject to information reporting and to backup
withholding unless you certify as to your name, address and non-U.S. status or
otherwise establish an exemption. Generally, U.S. information reporting and
backup withholding will not apply to a payment of disposition proceeds if the
payment is made outside the U.S. through a non-U.S. office of a non-U.S. broker.
U.S. information reporting requirements (but not backup withholding) will apply,
however, to a payment of disposition proceeds outside the U.S. if:
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the
payment is made through an office outside the U.S. of a broker that is:
(a) a U.S. person; (b) a foreign person that derives 50% or more
of its gross income for certain periods from the conduct of a trade or
business in the U.S.; or (c) a "controlled foreign corporation" for
U.S. federal income tax purposes;
and
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the
broker fails to initiate documentary evidence that you are a Non-U.S.
Stockholder and that certain conditions are met or that you otherwise are
entitled to an exemption.
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Possible
Legislative or Other Actions Affecting Tax Consequences
Prospective
holders of our securities should recognize that the present federal income tax
treatment of investment in our company may be modified by legislative, judicial
or administrative action at any time and that any of these actions may affect
investments and commitments previously made. The rules dealing with federal
income taxation are constantly under review by persons involved in the
legislative process and by the IRS and the Treasury Department, resulting in
revisions of regulations and revised interpretations of established concepts as
well as statutory changes. Revisions in federal tax laws and interpretations
thereof could adversely affect the tax consequences of investment in our
company.
State
and Local Taxes
We may be
and you may be subject to state or local taxes in other jurisdictions such as
those in which we may be deemed to be engaged in activities or own property or
other interests. The state and local tax treatment of us may not conform to the
federal income tax consequences discussed above.
PLAN
OF DISTRIBUTION
We may
sell the securities covered by this prospectus from time to time. Registration
of the securities covered by this prospectus does not mean, however, that those
securities will necessarily be offered or sold.
We may
sell the securities separately or together:
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through
one or more underwriters or dealers in a public offering and sale by
them;
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directly
to investors; or
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We may
sell the securities from time to time:
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in
one or more transactions at a fixed price or prices, which may be changed
from time to time;
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at
market prices prevailing at the times of
sale;
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at
price related to such prevailing market prices;
or
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We will
describe the method of distribution of the securities and the terms of the
offering in the prospectus supplement.
If
underwriters are used in the sale of any securities, the securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions described above. The securities may be
either offered to the public through underwriting syndicates represented by
managing underwriters, or directly by underwriters. Generally, the underwriters’
obligations to purchase the securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all of the securities being
distributed if they purchase any of the securities.
We may
authorize underwriters, dealers or agents to solicit offers by certain
purchasers to purchase the securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. The
contracts will be subject only to those conditions set forth in the prospectus
supplement, and the prospectus supplement will set forth any commissions we pay
for solicitation of these contracts.
We may
enter into derivative transactions with third parties, or sell securities not
covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in connection
with those derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use securities pledged by us or
borrowed from us or others to settle those sales or to close out any related
open borrowings of stock, and may use securities received from us in settlement
of those derivatives to close out any related open borrowings of stock. The
third party in such sale transactions will be an underwriter and will be
identified in the applicable prospectus supplement or in a post-effective
amendment.
If so
indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers or other persons to solicit offers by certain institutions
to purchase offered securities from us at the public offering price set forth in
the applicable prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date or dates. Institutions with
which these contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others. The obligations of any purchasers under any
delayed delivery contract will not be subject to any conditions
except:
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the
purchase of the offered securities must not at the time of delivery be
prohibited under the laws of the jurisdiction to which the purchaser is
subject; and
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if
the offered securities are also being sold to underwriters, we will have
sold to the underwriters the offered securities not sold for delayed
delivery.
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The
underwriters, dealers and other persons will not have any responsibility for the
validity or performance of these contracts. The prospectus supplement relating
to the contracts will set forth the price to be paid for securities under the
contracts, the commission payable for solicitation of the contracts and the date
or dates in the future for delivery of offered securities under the
contracts.
Underwriters,
dealers and agents may be entitled to indemnification by us against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments made by the underwriters, dealers or
agents, under agreements between us and the underwriters, dealers and
agents.
We may
grant underwriters who participate in the distribution of securities an option
to purchase additional securities in connection with the
distribution.
Underwriters,
dealers or agents may receive compensation in the form of discounts, concessions
or commissions from us or our purchasers, as their agents in connection with the
sale of securities. These underwriters, dealers or agents may be considered to
be underwriters under the Securities Act. As a result, discounts, commissions or
profits on resale received by the underwriters, dealers or agents may be treated
as underwriting discounts and commissions. The prospectus supplement will
identify any such underwriter, dealer or agent and describe any compensation
received by them from us. In no event will the aggregate discounts, concessions
and commissions to any underwriters, dealers or agents exceed eight percent of
the gross proceeds. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
Shares of
our common stock are listed on the New York Stock Exchange. Unless otherwise
specified in the related prospectus supplement, all securities we offer, other
than common stock, will be new issues of securities with no established trading
market. Any underwriter may make a market in these securities, but will not be
obligated to do so and may discontinue any market making at any time without
notice. We may apply to list any series of debt securities, preferred stock or
warrants on an exchange, but we are not obligated to do so. Therefore, there may
not be liquidity or a trading market for any series of securities.
In
connection with an offering, the underwriters may purchase and sell securities
in the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the underwriters of a greater number of securities
than they are required to purchase in an offering. Stabilizing transactions
consist of certain bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the securities while an offering is
in progress.
The
underwriters may also impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount
received by it because the underwriters have repurchased securities sold by or
for the account of that underwriter in stabilizing or short-covering
transactions.
These
activities by the underwriters may stabilize, maintain or otherwise affect the
market price of the securities. As a result, the price of the securities may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may be effected on an exchange or automated quotation
system, if the securities are listed on that exchange or admitted for trading on
that automated quotation system, or in the over-the-counter market or
otherwise.
Underwriters,
dealers or agents who may become involved in the sale of our securities may
engage in transactions with and perform other services for us in the ordinary
course of their business for which they receive compensation.
VALIDITY
OF THE SECURITIES
In connection with particular offerings
of the securities in the future, and if stated in the applicable prospectus
supplements, the validity of those securities may be passed upon for the Company
by Powell Goldstein LLP and for any underwriters or agents by counsel named in
the applicable prospectus supplement.
EXPERTS
Ernst
& Young LLP, independent registered public accounting firm, has audited our
consolidated financial statements and schedules included in our Annual Report on
Form 10-K for the year ended December 31, 2007, and the effectiveness of our
internal control over financial reporting as of December 31, 2007, 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 on Ernst & Young LLP’s reports,
given on their authority as experts in accounting and auditing.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following table sets forth the costs and expenses to be paid by the Company in
connection with the offering of the securities registered. All amounts are
estimates except for the registration fee.
|
SEC
Registration Fee
|
|
$ |
|
* |
|
Accounting
Fees and Expenses
|
|
|
+ |
|
|
Legal
Fees and Expenses
|
|
|
+ |
|
|
Rating
Agency Fees
|
|
|
+ |
|
|
Listing
Fees
|
|
|
+ |
|
|
Transfer
Agent or Trustee Fees
|
|
|
+ |
|
|
Printing
and Engraving Costs
|
|
|
+ |
|
|
Miscellaneous
|
|
|
+ |
|
|
Total
|
|
$ |
|
+ |
__________
|
*
|
In
accordance with Rule 456(b) and Rule 457(r) the Company is deferring
payment of all registration fees, except for fees of $43,744 relating to
$345,257,199 of securities previously registered by the Company on
Registration Statement No.
333-117655.
|
|
+
|
Estimated
expenses are not presently known. Estimated expenses in
connection with a given offering will be reported on a Current Report on
Form 8-K and incorporated by reference
herein.
|
Item
15. Indemnification of Directors and Officers
The
articles of incorporation and bylaws of the registrant provide for
indemnification of directors and officers to the full extent permitted by
Maryland law.
Section
2-418 of the General Corporation Law of the State of Maryland generally permits
indemnification of any director or officer with respect to any proceedings
unless it is established that: (a) the act or omission of the director or
officer was material to the matter giving rise to the proceeding and was either
committed in bad faith or the result of active or deliberate dishonesty; (b) the
director or officer actually received an improper personal benefit in money,
property or services; or (c) in the case of a criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful. The indemnity may include judgments, penalties, fines, settlements,
and reasonable expenses actually incurred by the director or officer in
connection with the proceedings. However, a corporation may not indemnify a
director or officer who shall have been adjudged to be liable to the
corporation, or who instituted a proceeding against the corporation (unless such
proceeding was brought to enforce the charter, bylaws, or the indemnification
provisions thereunder). The termination of any proceeding by judgment, order or
settlement does not create a presumption that the director or officer did not
meet the requisite standard of conduct required for permitted indemnification.
The termination of any proceeding by conviction, or plea of nolo contendere or
its equivalent, or an entry of an order of probation prior to judgment, creates
a rebuttable presumption that the director or officer did not meet that standard
of conduct. A director may not be indemnified for any proceeding
brought by that director against the corporation, except to enforce an
indemnification right, or if the corporation’s charter or an outside agreement
provides otherwise.
The
registrant has also entered into indemnity agreements with the officers and
directors of the registrant that provide that the registrant will, subject to
certain conditions, pay on behalf of the indemnified party any amount which the
indemnified party is or becomes legally obligated to pay because of any act or
omission or neglect or breach of duty, including any actual or alleged error or
misstatement or misleading statement, which the indemnified party commits or
suffers while acting in the capacity as an officer or director of the
registrant. Once an initial determination is made by the registrant that a
director or officer did not act in bad faith or for personal benefit, the
indemnification provisions contained in the charter, bylaws, and indemnity
agreements would require the registrant to advance any reasonable expenses
incurred by the director or officer, and to pay the costs, judgments, and
penalties determined against a director or officer in a proceeding brought
against them.
Insofar
as indemnification for liabilities arising under the Securities Act is permitted
to directors and officers of the registrant pursuant to the above-described
provisions, the registrant understands that the Commission is of the opinion
that such indemnification contravenes federal public policy as expressed in said
act and therefore is unenforceable.
Item
16. Exhibits
The exhibits to this registration
statement are listed in the Exhibit Index that immediately precedes such
exhibits and is hereby incorporated by reference.
Item
17. Undertakings
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information in this registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to
such information in the registration statement.
provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended, that are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to Rule 424(b) that is part
of the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i) If the registrant is relying on
Rule 430B:
|
|
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall
be deemed to be part of the registration statement as of the date the
filed prospectus was deemed part of and included in the registration
statement; and
|
|
|
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x)
for the purpose of providing the information required by Section 10(a) of
the Securities Act of 1933 shall be deemed to be part of and included in
the registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof. Provided, however, that
no statement made in a registration statement or prospectus that is part
of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective date;
or
|
(5) That, for the purpose of
determining liability of the registrant under the Securities Act of 1933 to any
purchaser in the initial distribution of the securities: The undersigned
registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
|
|
(ii)
Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
|
(iii) The portion of any other free
writing prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and
(iv) Any other communication that is
an offer in the offering made by the undersigned registrant to the
purchaser.
(b) The
for purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) To file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
(d) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of each Registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies that
it has reasonable grounds to believe it meets all the requirements for filing on
Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Timonium,
State of Maryland, on this 10th day of
April, 2008.
OMEGA HEALTHCARE INVESTORS,
INC.
By: /s/
C. Taylor Pickett
C. Taylor Pickett
Chief
Executive Officer
POWER
OF ATTORNEY
KNOW ALL MEN BY THESE
PRESENTS, that each person who signature appears below constitutes and
appoints C. Taylor Pickett and Robert O. Stephenson, or either of them, his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto either of
said attorneys-in-fact and agents, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully as to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that either of said
attorneys-in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities indicated on April
10, 2008.
|
Signature
|
|
Position
|
|
/s/
C. Taylor Pickett
|
|
|
|
C.
Taylor Pickett
|
|
Chief
Executive Officer and Director
(Principal
Executive Officer)
|
|
/s/
Robert O. Stephenson
|
|
|
|
Robert
O. Stephenson
|
|
Chief
Financial Officer
(Principal
Financial Officer)
|
|
/s/
Michael D. Ritz
|
|
|
|
Michael
D. Ritz
|
|
Chief
Accounting Officer
(Principal
Accounting Officer)
|
|
/s/
Bernard J. Korman
|
|
|
|
Bernard
J. Korman
|
|
Chairman
of the Board of Directors
|
|
/s/
Thomas S. Franke
|
|
|
|
Thomas
S. Franke
|
|
Director
|
|
/s/
Harold J. Kloosterman
|
|
|
|
Harold
J. Kloosterman
|
|
Director
|
|
/s/
Edward Lowenthal
|
|
|
|
Edward
Lowenthal
|
|
Director
|
|
/s/
Stephen D. Plavin
|
|
|
|
Stephen
D. Plavin
|
|
Director
|
S:\Finance\Omega Healthcare Investors
Inc\SEC Reporting\2008\Other Edgarfilings\4-10-08\S-3ASR - ATL-1247299-v4-OHI -
automatically effective s-3 for shelf.DOC II-
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
1.1
|
Form
of Underwriting Agreement.*
|
|
4.1
|
Form
of Indenture for Debt Securities (incorporated by reference to Exhibit 4.1
of the Company’s Form S-3 filed on July 26, 2004, File No.
333-117655).
|
|
4.2
|
Form
of Debt Security.*
|
|
4.3
|
Form
of Articles Supplementary for Preferred Stock.*
|
|
4.4
|
Form
of Securities Warrant Agreement.*
|
|
5.1+
|
Opinion
of Powell Goldstein LLP as to the legality of the securities registered
hereby.
|
|
8.1+
|
Opinion
of Powell Goldstein LLP regarding certain tax matters.
|
|
12.1
|
Statement
Regarding Computation of Ratio of Earnings to Fixed
Charges. (incorporated by reference to Exhibit 12.1 of the
Company’s Form 10-K for the year ended December 31,
2007)
|
|
12.2
|
Statement
Regarding Computation of Ratio of Earnings to Fixed Charges and Preferred
Stock Dividends
(incorporated
by reference to Exhibit 12.1 of the Company’s Form 10-K for the year ended
December 31, 2007)
|
|
23.1+
|
Consent
of Ernst & Young LLP, independent registered public accounting
firm.
|
|
23.2+
|
Consent
of Powell Goldstein LLP (included in Exhibit 5.1 and Exhibit
8.1).
|
|
24.1
|
Power
of Attorney (included on signature page).
|
|
25.1
|
Statement
of Eligibility of Trustee on Form
T-1**
|
________________________
+ Filed
herewith.
* To
be filed by amendment or incorporated by reference in connection with any
offering of Securities.
** To
be filed separately pursuant to Section 305(b)(2) of the Trust Indenture Act of
1939, as amended.