AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 5, 2004
REGISTRATION NO. 333-109306
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HEALTHCARE REALTY TRUST INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 62-1507028
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
3310 WEST END AVENUE
SEVENTH FLOOR
NASHVILLE, TENNESSEE 37203
(615) 269-8175
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
DAVID R. EMERY
HEALTHCARE REALTY TRUST INCORPORATED
3310 WEST END AVENUE
SEVENTH FLOOR
NASHVILLE, TENNESSEE 37203
(615) 269-8175
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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COPIES TO:
THEODORE W. LENZ, ESQ.
WALLER LANSDEN DORTCH & DAVIS,
A PROFESSIONAL LIMITED LIABILITY COMPANY
NASHVILLE CITY CENTER
511 UNION STREET, SUITE 2100
NASHVILLE, TENNESSEE 37219
(615) 244-6380
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If only the 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 Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ----------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED HEREIN IS A COMBINED PROSPECTUS AND RELATES TO $500,000,000 PRINCIPAL
AMOUNT OF DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK WARRANTS AND COMMON
STOCK REGISTERED UNDER REGISTRATION STATEMENT ON FORM S-3 (FILE NO. 333-56608),
A PORTION OF WHICH HAS BEEN SOLD. IN THE EVENT ANY OF SUCH PREVIOUSLY REGISTERED
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK WARRANTS AND COMMON STOCK ARE
OFFERED PRIOR TO THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, THEY WILL
NOT BE INCLUDED IN ANY PROSPECTUS HEREUNDER. THE AMOUNT OF DEBT SECURITIES,
PREFERRED STOCK, COMMON STOCK WARRANTS AND COMMON STOCK BEING REGISTERED
HEREUNDER REPRESENTS THE MAXIMUM AMOUNT OF DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK WARRANTS AND COMMON STOCK WHICH ARE EXPECTED TO BE OFFERED FOR
SALE.
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PROSPECTUS
, 2004
(HEALTHCARE REALTY TRUST LOGO)
$300,000,000
COMMON STOCK, COMMON STOCK WARRANTS,
PREFERRED STOCK AND DEBT SECURITIES
Healthcare Realty Trust Incorporated may from time to time offer, in one or
more series, the following:
- Shares of common stock;
- Warrants to purchase shares of common stock;
- Shares of preferred stock; and
- Debt securities which may be either senior debt securities or
subordinated debt securities.
HR will offer such securities at an aggregate initial public offering price
of up to $300,000,000 on terms determined at the time HR offers such securities.
HR may offer its common stock and warrants, preferred stock and debt securities
separately or together, in separate classes or series, in amounts, at prices and
on terms set forth in an applicable prospectus supplement to this prospectus and
will include, where applicable, the following:
- In the case of shares of common stock, any public offering price;
- In the case of warrants, their duration, offering price, and exercise
price and detachability;
- In the case of shares of preferred stock, the designation of any series,
any dividend, liquidation, redemption, sinking fund, conversion, voting
and other rights, preferences and limitations, and the public offering
price; and
- In the case of debt securities, the specific title, aggregate principal
amount, ranking, currency, form (which may be registered or bearer,
certificated or global), authorized denominations, maturity, rate (or
manner of calculation thereof) and time payment of interest, terms for
sinking fund payments, terms for conversion into shares of common stock
or other securities offered by HR, and any public offering price.
In addition, such specific terms may include limitations on direct or
beneficial ownership and restrictions on transfer of the securities, in each
case as may be appropriate to preserve the status of HR as a REIT for federal
income tax purposes.
The applicable prospectus supplement will also contain information, where
applicable, about certain federal income tax considerations relating to, and any
listing on a securities exchange of, the securities covered by such prospectus
supplement.
The securities may be offered directly, through agents designated from time
to time by HR, or to or through underwriters or dealers. If any agents or
underwriters are involved in the sale of any of the securities, their names, and
any applicable purchase price, fee, commission or discount arrangement between
or among them, will be set forth, or will be calculable from the information set
forth, in the applicable prospectus supplement. See "Plan of Distribution." No
securities may be sold without delivery of the applicable prospectus supplement
describing the method and terms of the offering of such series of securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
HR has filed a Registration Statement on Form S-3 with the Securities and
Exchange Commission covering the securities. The Registration Statement,
including the attached exhibits and schedules, contains additional relevant
information about the securities.
In addition, HR files reports, proxy statements and other information with
the SEC. You may also read and copy this information at the following locations
of the SEC:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Northwestern Atrium Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 2054 New York, New York 10048 Suite 1400
Chicago, Illinois
60661-2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W. Room 1024, Washington, D.C.
20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for more
information in the public reference rooms and their copy charges. HR's filings
are available to the public over the Internet at the Securities and Exchange
Commission's web site at http://www.sec.gov.
You can also inspect HR's reports, proxy statements and other information
about HR at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. This prospectus summarizes material provisions of
contracts and other documents that we refer you to. Since this prospectus may
not contain all the information that you may find important, you should review
the full text of those documents. You should rely only on the information
contained and incorporated by reference in this prospectus. HR has not, and the
underwriters have not, authorized any other person to provide you with different
or inconsistent information from that contained in this prospectus and the
applicable prospectus supplement. If anyone provides you with different or
inconsistent information, you should not rely on it. HR is not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus and the applicable prospectus
supplement, as well as information we previously filed with the SEC and
incorporated by reference, is accurate only as of the date on the front cover of
this prospectus and the applicable prospectus supplement. HR's business,
financial condition, results of operations and prospects may have changed since
those dates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows HR to "incorporate by reference" the information it files
with the SEC, which means:
- Incorporated documents are considered part of the prospectus;
- HR can disclose important information to you by referring you to those
documents; and
- Information that HR files later with the SEC will automatically update
and supercede this information.
This prospectus incorporates by reference the following documents with
respect to HR:
(1) Its Annual Report on Form 10-K for the year ended December 31,
2003;
(2) Its Current Reports on Form 8-K, filed with the SEC on January 16,
2004 and January 30, 2004; and
(3) The description of HR common stock contained in its Registration
Statement on Form 8-A, dated April 12, 1993.
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All documents that HR files with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act subsequent to the date of this
prospectus and prior to the termination of this offering shall also be deemed to
be incorporated herein by reference.
You can obtain copies of the documents incorporated by reference in this
prospectus without charge, excluding any exhibits to those documents unless the
exhibit is specifically incorporated by reference as an exhibit in this
prospectus, by requesting them in writing or by telephone at the following:
HEALTHCARE REALTY TRUST INCORPORATED
3310 WEST END AVENUE, SUITE 700
NASHVILLE, TENNESSEE 37203
ATTENTION: INVESTOR RELATIONS
TELEPHONE: (615) 269-8175
E-MAIL: HRINFO@HEALTHCAREREALTY.COM
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THE COMPANY
HR is a self-managed, self-administered real estate investment trust which
invests in, either directly or through affiliates, or provides real estate
services with respect to, healthcare related properties throughout the United
States. HR's objective is to be a valued full service provider of integrated
real estate solutions to quality healthcare providers. HR focuses predominantly
on the outpatient services and medical office segments of the healthcare
industry. HR offers a broad range of services including real estate funding,
property management, build-to-suit development and real estate advisory work. HR
is the first fully integrated healthcare REIT and management believes it is the
healthcare industry's leading provider of the full range of services described
above.
HR owns a diversified portfolio of healthcare properties. The properties
are leased to unaffiliated healthcare providers, most of which are pursuant to
long-term net leases. Its strategy is to acquire healthcare facilities
diversified by healthcare provider, facility type, and geographic location. HR
seeks to develop relationships with well-established, rapidly growing healthcare
companies that present both relatively low risk and opportunities for future
business.
HR's principal executive offices are located at 3310 West End Avenue, Suite
700, Nashville, Tennessee 37203, and its telephone number is (615) 269-8175.
Unless the context indicates otherwise, references herein to HR include its
subsidiaries.
USE OF PROCEEDS
Unless otherwise specified in the prospectus supplement accompanying this
prospectus, HR intends to use the net proceeds from the sale of the securities
for general corporate purposes, which may include the repayment of indebtedness,
the acquisition of additional properties or mortgages and the funding of
additional lessee developments.
Pending such uses, HR will invest the net proceeds of any offering of
securities in short-term, investment grade instruments, interest-bearing bank
accounts or certificates of deposit, consistent with its qualification as a
REIT, its charter and bylaws, and its agreements with its lenders.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges for the periods
indicated:
YEARS ENDED DECEMBER 31,
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1999 2000 2001 2002 2003
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Ratio of earnings to fixed charges(1)........ 2.97x 2.60x 2.75x 2.68x 2.94x
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(1) For the purpose of calculating the ratio of earnings to fixed charges, net
income has been added to fixed charges and that sum has been divided by such
fixed charges. Fixed charges consist of interest expense, capitalized
interest and amortization of debt issue cost.
DESCRIPTION OF COMMON STOCK
HR is authorized to issue an aggregate of 200,000,000 shares of capital
stock, which may include 150,000,000 shares of common stock and 50,000,000
shares of preferred stock. The following description of the common stock sets
forth the general terms and provisions of the common stock to which any
prospectus supplement may relate, including a prospectus supplement providing
that common stock will be issuable upon conversion of debt securities or
preferred stock or upon the exercise of common stock warrants. The statements
below describing the common stock are in all respects subject to and qualified
in their entirety by reference to the applicable provisions of HR's charter and
bylaws.
Holders of common stock are entitled to receive such dividends as the board
of directors may declare out of funds legally available for the payment of
dividends. Upon issuance, the shares of common stock will be
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fully paid and nonassessable and have no preferences or conversion, exchange or
preemptive rights. In the event of any liquidation, dissolution or winding-up,
the holders of common stock are entitled to share ratably in any of HR's assets
remaining after the satisfaction of all obligations and liabilities and after
required distributions to holders of preferred stock, if any. The common stock
is subject to restrictions on transfer under certain circumstances described
under "Restrictions on Transfer" below. Each share is entitled to one vote on
all matters voted upon by the stockholders. Holders of shares of common stock
have no cumulative voting rights.
TRANSFER AGENT AND EXCHANGE LISTING
EquiServe Trust Company, N.A. is the transfer agent and registrar for the
common stock. The common stock is listed on the New York Stock Exchange under
the symbol HR.
RESTRICTIONS ON TRANSFER
For HR to qualify as a REIT under the Internal Revenue Code of 1986, as
amended,
(1) Not more than 50% in value of its outstanding capital stock may be
owned, directly or indirectly (after application of certain attribution
rules), by five or fewer individuals at any time during the last half of
its taxable year; and
(2) Its stock must be beneficially owned by 100 or more persons during
at least 335 days of a taxable year of 12 months or during a proportionate
part of a shorter taxable year.
In order to ensure that requirement (1) above is satisfied, the board of
directors has the power to refuse to transfer shares of its capital stock to any
person whose acquisition of such shares would result in the direct or indirect
ownership of more than 9.9% in value of the outstanding capital stock.
In connection with the foregoing, if the board of directors, at any time
and in good faith, believes that direct or indirect ownership (as determined
under applicable federal tax attribution rules) in excess of this ownership
limit has or may become concentrated in the hands of one beneficial owner, the
board of directors has the power to refuse to transfer or issue these excess
shares to a person whose acquisition of such excess shares would cause a
beneficial holder to exceed the ownership limit. Further, any transfer of excess
shares that would cause a beneficial owner to hold shares of capital stock in
excess of the ownership limit shall be deemed void, and the intended transferee
shall be deemed never to have had an interest therein.
If at any time there is a transfer in violation of these restrictions, the
excess shares shall be deemed to have been transferred to HR, as trustee for the
benefit of such persons to whom the excess shares are later transferred. Subject
to HR's right to purchase the excess shares, the interest in the trust
representing the excess shares shall be freely transferable by the intended
transferee at a price that does not exceed the price paid by the intended
transferee of the excess shares. Excess shares do not have voting rights, and
will not be considered for the purpose of any shareholder vote or determining a
quorum, but will continue to be reflected as issued and outstanding stock. HR
will not pay dividends with respect to excess shares. HR may purchase excess
shares for the lesser of the amount paid for the excess shares by the intended
transferee or the market price. The market price for any stock so purchased
shall be equal to the fair market value of such shares reflected in
- The closing sales price for the stock, if then listed on a national
securities exchange,
- The average closing sales price of such stock, if then listed on more
than one national securities exchange, or
- If the stock is not then listed on a national securities exchange, the
latest bid quotation for the stock if then traded over-the-counter, as of
the day immediately preceding the date on which notices of such purchase
are sent by HR.
If no such closing sales prices or quotations are available, the purchase price
shall equal the net asset value of such stock as determined by the board of
directors in good faith.
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All certificates representing shares of common stock bear a legend
referring to the restrictions described above.
These restrictions may have the effect of preventing an acquisition of
control of HR by a third party.
BUSINESS COMBINATIONS
Under Maryland law, some "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance of equity securities) between a Maryland corporation and any person
who beneficially owns 10% or more of the voting power of the corporation's
outstanding voting stock (an "interested shareholder") must be: (1) recommended
by the corporation's board of directors; and (2) approved by the affirmative
vote of at least (a) 80% of the corporation's outstanding shares entitled to
vote and (b) two-thirds of the outstanding shares entitled to vote which are not
held by the interested shareholder with whom the business combination is to be
effected, unless, among other things, the corporation's common shareholders
receive a minimum price (as defined in the statute) for their shares and the
consideration is received in cash or in the same form as previously paid by the
interested shareholder for his or her shares. In addition, an interested
shareholder or any affiliate thereof may not engage in a business combination
with the corporation for a period of five years following the date he or she
becomes an interested shareholder. These provisions of Maryland law do not
apply, however, to business combinations that are approved by the board of
directors of a Maryland corporation prior to such person becoming an interested
shareholder.
CONTROL SHARE ACQUISITIONS
Maryland law also provides that "control shares" of a Maryland corporation
acquired in a "control share acquisition" may not be voted except to the extent
approved by a vote of two-thirds of all the votes entitled to be cast on the
matter by shareholders excluding voting shares owned by the acquirer, and
officers and directors who are also employees of the corporation. "Control
shares" are voting shares which, if aggregated with all other shares owned by a
person or in respect of which that person is entitled to exercise or direct the
exercise of voting power, would entitle the acquirer to vote (1) 20% or more but
less than one-third, (2) one-third or more but less than a majority, or (3) a
majority or more of the outstanding voting shares. Control shares do not include
shares the acquiring person is entitled to vote because shareholder approval has
previously been obtained. A "control share acquisition" means the acquisition of
control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition and
who has obtained a definitive financing agreement with a responsible financial
institution providing for any amount of financing not to be provided by the
acquiring person may compel the corporation's board of directors to call a
special meeting of shareholders to be held within 50 days of demand to consider
the voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any shareholders' meeting.
Subject to certain conditions and limitations, the corporation may redeem
any or all of the control shares, except those for which voting rights have
previously been approved, for fair value determined, without regard to voting
rights, as of the date of the last control share acquisition or as of the date
of any meeting of shareholders at which the voting rights of such shares are
considered and not approved. If the shareholders approve voting rights for
control shares and the acquirer is entitled to vote a majority of the shares
entitled to vote, all other shareholders may exercise appraisal rights. The fair
value of the shares as determined for purposes of such appraisal rights may not
be less than the highest price per share in the control share acquisition, and
certain limitations and restrictions otherwise applicable to the exercise of
dissenter's rights do not apply in the context of a control share acquisition.
The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the articles of
incorporation or bylaws of the corporation prior to a control share acquisition.
The limitation on ownership of common stock set forth in HR's charter, as
well as the provisions of Maryland law described above, could have the effect of
discouraging offers to acquire HR and of increasing the difficulty of
consummating any such offer.
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DIVIDEND REINVESTMENT PLAN AND EMPLOYEE STOCK PURCHASE PLAN
HR has adopted and implemented a dividend reinvestment plan to provide
registered owners of HR's common stock with a method of investing dividends and
other distributions paid in cash in additional shares of the common stock. HR
has also adopted an employee stock purchase plan to allow employees to purchase
common stock on terms and conditions set forth in such plan. Since such
additional common stock will be purchased from HR, HR will receive additional
funds which will be used for its general corporate purposes.
DESCRIPTION OF COMMON STOCK WARRANTS
HR may issue common stock warrants for the purchase of common stock. Common
stock warrants may be issued independently or together with any other securities
pursuant to any prospectus supplement and may be attached to or separate from
such securities. Each series of common stock warrants will be issued under a
separate warrant agreement to be entered into between HR and the warrant
recipient or, if the recipients are numerous, a warrant agent identified in the
applicable prospectus supplement. The warrant agent, if engaged, will act solely
as HR's agent in connection with the common stock 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 common stock warrants. Further terms of the
common stock warrants and the applicable warrant agreements will be set forth in
the prospectus supplement.
The applicable prospectus supplement will describe the terms of any common
stock warrants in respect of which this prospectus is being delivered,
including, where applicable, the following:
- The title of such common stock warrants;
- The aggregate number of such common stock warrants;
- The price or prices at which such common stock warrants will be issued;
- The designation, number and terms of the shares of common stock
purchasable upon exercise of such common stock warrants;
- The designation and terms of the other securities with which such common
stock warrants are issued and the number of such common stock warrants
issued with each such offered security;
- The date, if any, on and after which such common stock warrants and the
related common stock will be separately transferable;
- The price at which each share of common stock purchasable upon exercise
of such common stock warrants may be purchased;
- The date on which the right to exercise such common stock warrants shall
commence and the date on which such right shall expire;
- The minimum or maximum amount of such common stock warrants which may be
exercised at any one time;
- Information with respect to book-entry procedures, if any;
- A discussion of certain federal income tax considerations; and
- Any other terms of such common stock warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
common stock warrants.
You should review the section captioned "Description of Common Stock" for a
general description of the common stock which would be acquired upon the
exercise of the common stock warrants and a description of certain restrictions
on transfer of the common stock.
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DESCRIPTION OF PREFERRED STOCK
GENERAL
HR is authorized to issue 50,000,000 shares of preferred stock. The
following description of the preferred stock sets forth certain anticipated
general terms and provisions of the preferred stock to which any prospectus
supplement may relate. Certain other terms of any series of preferred stock
(which terms may be different than those stated below) will be described in the
prospectus supplement to which such series relates. The statements below
describing the preferred stock are in all respects subject to and qualified in
their entirety by reference to the applicable provisions of the prospectus
supplement, HR's charter, (including the amendment describing the designations,
rights, and preferences of each series of preferred stock) and bylaws.
Subject to limitations prescribed by Maryland law and the charter, the
board of directors is authorized to fix the number of shares constituting each
series of preferred stock and the designations and powers, preferences and
relative, participating, optional or other special rights and qualifications,
limitations or restrictions thereof, including such provisions as may be desired
concerning voting, redemption, dividends, dissolution or the distribution of
assets, conversion or exchange, and such other subjects or matters as may be
fixed by resolution of the board of directors or the duly authorized committee
thereof. The preferred stock will, when issued, be fully paid and nonassessable
and will have no preemptive rights.
The prospectus supplement relating to preferred stock will contain the
specific terms, including:
- The title and stated value of such preferred stock;
- The number of shares of such preferred stock offered, the liquidation
preference per share and the offering price of such preferred stock;
- The dividend rate(s), period(s) and or payment date(s) or method(s) of
calculation thereof applicable to such preferred stock;
- The date from which dividends on such preferred stock shall accumulate,
if applicable;
- The provision for a sinking fund, if any, for such preferred stock;
- The provisions for redemption, if applicable, of such preferred stock;
- Any listing of such preferred stock on any securities exchange;
- The terms and conditions, if applicable, upon which such preferred stock
will be convertible into common stock, including the conversion price (or
manner of calculation thereof);
- A discussion of certain federal income tax considerations applicable to
such preferred stock;
- The relative ranking and preferences of such preferred stock as to
dividend rights and rights upon HR's liquidation, dissolution or winding
up of its affairs;
- Any limitations on issuance of any series of preferred stock ranking
senior to or on a parity with such series of preferred stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
affairs;
- Any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the status of HR
as a REIT; and
- Any other specific terms, preferences, rights, limitations or
restrictions of such preferred stock.
RANK
Unless otherwise specified in the prospectus supplement, the preferred
stock will, with respect to dividend rights and rights upon HR's liquidation,
dissolution or winding up, rank
- Senior to all classes or series of common stock, and to all equity
securities ranking junior to such preferred stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up;
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- On a parity with all equity securities the terms of which specifically
provide that such equity securities rank on a parity with the preferred
stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up; and
- Junior to all equity securities the terms of which specifically provide
that such equity securities rank senior to the preferred stock with
respect to dividend rights or rights upon liquidation, dissolution or
winding up.
DIVIDENDS
Holders of preferred stock of each series shall be entitled to receive,
when, as and if declared by the board of directors, out of HR's assets legally
available for payment, cash dividends (or dividends in kind or in other property
if expressly permitted and described in the applicable prospectus supplement) at
such rates and on such dates as will be set forth in the applicable prospectus
supplement. Each such dividend shall be payable to holders of record as they
appear on HR's stock transfer books on such record dates as shall be fixed by
the board of directors.
Dividends on any series of preferred stock may be cumulative or
non-cumulative, as provided in the applicable prospectus supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
prospectus supplement. If the board of directors 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 HR will 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 date.
Unless otherwise specified in the applicable prospectus supplement, if any
preferred stock of any series is outstanding, no full dividends shall be
declared or paid or set apart for payment on the preferred stock of any other
series ranking, as to dividends, on a parity with or junior to the preferred
stock of such series for any period unless full dividends (which include all
unpaid dividends in the case of cumulative dividend preferred stock) have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the preferred stock of such
series.
When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the preferred stock of any series and the
shares of any other series of preferred stock ranking on a parity as to
dividends with the preferred stock of such series, all dividends declared upon
shares of preferred stock of such series and any other series of preferred stock
ranking on a parity as to dividends with such preferred stock shall be declared
pro rata among the holders of such series. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
preferred stock of such series which may be in arrears.
Until required dividends are paid, no dividends (other than in common stock
or other capital stock ranking junior to the preferred stock of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the common stock or
any other capital stock ranking junior to or on a parity with the preferred
stock of such series as to dividends or upon liquidation. In addition, no common
stock or any other capital stock ranking junior to or on a parity with the
preferred stock of such series as to dividends or upon liquidation shall be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by HR (except by conversion into or exchange for other
capital stock ranking junior to the preferred stock of such series as to
dividends and upon liquidation).
Any dividend payment made of a series of preferred stock shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of preferred stock of such series which remains payable.
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REDEMPTION
If so provided in the applicable prospectus supplement, any series of
preferred stock will be subject to mandatory redemption or redemption at HR's
option, as a whole or in part, in each case upon the terms, at the times and at
the redemption prices set forth in such prospectus supplement.
The prospectus supplement relating to a series of preferred stock that is
subject to mandatory redemption will specify the number of shares of such
preferred stock that HR shall redeem in each year commencing after a date to be
specified, at a redemption price per share to be specified, together with an
amount equal to all accrued and unpaid dividends thereon (which shall not, if
such preferred stock does not have a cumulative dividend, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. HR may pay the redemption price in cash or other property,
as specified in the prospectus supplement. If the redemption price for preferred
stock of any series is payable only from the net proceeds of the issuance of
capital stock of HR, the terms of such preferred stock may provide that, if no
such capital stock shall have been issued or to the extent the net proceeds from
any issuance are insufficient to pay in full the aggregate redemption price then
due, such preferred stock shall automatically and mandatorily be converted into
shares of the applicable capital stock pursuant to conversion provisions
specified in the applicable prospectus supplement.
So long as any dividends on any series of preferred stock ranking on a
parity as to dividends and distributions of assets with such series of the
preferred stock are in arrears, no shares of any such series of the preferred
stock will be redeemed (whether by mandatory or optional redemption) unless all
such shares are simultaneously redeemed, and HR will not purchase or otherwise
acquire any such shares. However, this will not prevent the purchase or
acquisition of preferred stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding preferred stock of such series and,
unless the full cumulative dividends on all outstanding shares of any cumulative
preferred stock of such series and any other stock of HR ranking on a parity
with such series as to dividends and upon liquidation shall have been paid or
contemporaneously are declared and paid for all past dividend periods, HR shall
not purchase or otherwise acquire directly or indirectly any preferred stock of
such series (except by conversion into or exchange for stock ranking junior to
the preferred stock of such series as to dividends and upon liquidation).
However, this will not prevent the purchase or acquisition of such preferred
stock to preserve HR's REIT status or pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding shares of preferred stock
of such series.
If HR is to redeem fewer than all of the outstanding preferred stock of any
series, HR will determine the number of shares to be redeemed and such shares
may be redeemed pro rata from the holders of record of such shares in proportion
to the number of such shares held by such holders (with adjustments to avoid
redemption of fractional shares) or any other equitable method determined by HR
that will not result in the issuance of any excess shares.
HR will mail a notice of redemption at least 30 days but not more than 60
days before the redemption date to each holder of record of preferred stock of
any series to be redeemed. If notice of redemption of any preferred stock has
been given and HR has set aside the funds necessary for such redemption in trust
for the benefit of the holders of any preferred stock so called for redemption,
then from and after the redemption date dividends will cease to accrue on such
preferred stock, such preferred stock shall no longer be deemed outstanding and
all rights of the holders of such shares will terminate, except the right to
receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
HR's affairs, then, before any distribution or payment shall be made to the
holders of common stock, or any other class or series of capital stock of HR
ranking junior to the preferred stock in the distribution of assets upon any
liquidation, dissolution or winding up, the holders of each series of preferred
stock will be entitled to receive out of HR assets legally available for
distribution to shareholders liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable prospectus
supplement), plus an amount equal to all dividends accrued
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and unpaid thereon (which shall not include any accumulation in respect of
unpaid dividends for prior dividend periods if such preferred stock does not
have a cumulative dividend). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of preferred stock will
have no right or claim to any of HR's remaining assets. In the event that, upon
any such voluntary or involuntary liquidation, dissolution or winding up, the
legally available assets of HR are insufficient to pay the amount of the
liquidating distributions on all outstanding preferred stock and the
corresponding amounts payable on all shares of other classes or series of
capital stock ranking on a parity with the preferred stock in the distribution
of assets upon liquidation, dissolution or winding up, then the holders of the
preferred stock and all other such classes or series of capital stock shall
share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
preferred stock, HR's remaining assets shall be distributed among the holders of
any other classes or series of capital stock ranking junior to the preferred
stock upon liquidation, dissolution or winding up, according to their respective
rights and preferences and in each case according to their respective number of
shares.
VOTING RIGHTS
Holders of preferred stock will not have any voting rights, except as set
forth below or as otherwise from time to time required by law or as indicated in
the applicable prospectus supplement.
Any series of preferred stock may provide that, so long as any shares of
such series remain outstanding, the holders of such series may vote as a
separate class on certain specified matters, which may include changes in HR's
capitalization, amendments to its charter and mergers and dispositions.
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 such series of preferred stock shall have
been redeemed or called for redemption upon proper notice and sufficient funds
shall have been irrevocably deposited in trust to effect such redemption.
The provisions of a series of preferred stock may provide for additional
rights, remedies, and privileges if dividends on such series are in arrears for
specified periods, which rights and privileges will be described in the
applicable prospectus supplement.
Under Maryland law, notwithstanding anything to the contrary set forth
above, each series of preferred stock will be entitled to vote upon a proposed
amendment to HR's charter, whether or not entitled to vote thereon by the
charter, if the amendment would alter the contract rights, as set forth in the
charter, of their shares of stock.
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
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 the
preferred stock or HR, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of such
preferred stock.
RESTRICTIONS ON OWNERSHIP
As discussed above under "Description of Common Stock -- Restrictions on
Transfer," for HR to qualify as a REIT under the Code, not more than 50% in
value of its outstanding capital stock may be owned, directly or indirectly, by
five or fewer individuals (as defined in the Code to include certain entities)
during the last half of a taxable year, and the stock must be beneficially owned
by 100 or more persons during at least 335 days of a taxable year of 12 months
or during a proportionate part of a shorter taxable year. Therefore, ownership
and transfer of each series of preferred stock will be restricted in the same
manner as the common stock.
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All certificates representing preferred stock will bear a legend referring
to the restrictions described above.
DESCRIPTION OF DEBT SECURITIES
HR may issue debt securities under one or more trust indentures to be
executed by HR and a specified trustee. The terms of the debt securities will
include those stated in the indenture and those made a part of the indenture
(before any supplements) by reference to the Trust Indenture Act of 1939. The
indentures will be qualified under the Trust Indenture Act.
The following description sets forth certain anticipated general terms and
provisions of the debt securities to which any prospectus supplement may relate.
The particular terms of the debt securities offered by any prospectus supplement
(which terms may be different than those stated below) and the extent, if any,
to which such general provisions may apply to the debt securities so offered
will be described in the prospectus supplement relating to such debt securities.
Accordingly, for a description of the terms of a particular issue of debt
securities, investors should review both the prospectus supplement relating
thereto and the following description. Forms of the senior indenture (as
discussed herein) and the subordinated indenture (as discussed herein) have been
filed as exhibits to the Registration Statement of which this prospectus is a
part.
GENERAL
The debt securities will be direct obligations of HR and may be either
senior debt securities or subordinated debt securities. The indebtedness
represented by subordinated securities will be subordinated in right of payment
to the prior payment in full of HR's senior debt (as defined in the applicable
indenture). Senior securities and subordinated securities will be issued
pursuant to separate indentures (respectively, a senior indenture and a
subordinated indenture), in each case between HR and a trustee.
Except as set forth in the applicable indenture and described in a
prospectus supplement relating thereto, the debt securities may be issued
without limit as to aggregate principal amount, in one or more series, secured
or unsecured, in each case as established from time to time in or pursuant to
authority granted by a resolution of the board of directors or as established in
the applicable indenture. All debt securities of one series need not be issued
at the time and, unless otherwise provided, a series may be reopened, without
the consent of the holders of the debt securities of such series, for issuance
of additional debt securities of such series.
The prospectus supplement relating to any series of debt securities being
offered will contain the specific terms thereof, including, without limitation:
- The title of such debt securities and whether such debt securities are
senior securities or subordinated securities;
- The aggregate principal amount of such debt securities and any limit on
such aggregate principal amount;
- The percentage of the principal amount at which such debt securities will
be issued and, if other than the principal amount thereof, the portion of
the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or (if applicable) the portion of the principal
amount of such debt securities which is convertible into common stock or
preferred stock, or the method by which any such portion shall be
determined;
- If convertible, any applicable limitations on the ownership or
transferability of the common stock or preferred stock into which such
debt securities are convertible;
- The date or dates, or the method for determining the date or dates, on
which the principal of such debt securities will be payable;
- The rate or rates (which may be fixed or variable), or the method by
which the rate or rates shall be determined, at which such debt
securities will bear interest, if any;
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- The date or dates, or the method for determining such date or dates, from
which any interest will accrue, the interest payment dates on which any
such interest will be payable, the regular record dates for such interest
payment dates, or the method by which any such date shall be determined,
the person to whom such interest shall be payable, and the basis upon
which interest shall be calculated if other than that of a 360-day year
of twelve 30-day months;
- The place or places where the principal of (and premium, if any) and
interest, if any, on such debt securities will be payable, such debt
securities may be surrendered for conversion or registration of transfer
or exchange and notices or demands to or upon HR in respect of such debt
securities and the applicable indenture may be served;
- The period or periods within which, the price or prices at which and the
terms and conditions upon which such debt securities may be redeemed, as
a whole or in part, at HR's option, if HR is to have such an option;
- The obligation, if any, of HR to redeem, repay or purchase such debt
securities pursuant to any sinking fund or analogous provision or at the
option of a holder thereof, and the period or periods within which, the
price or prices at which and the terms and conditions upon which such
debt securities will be redeemed, repaid or purchased, as a whole or in
part, pursuant to such obligation;
- If other than U.S. dollars, the currency or currencies in which such debt
securities are denominated and payable, which may be a foreign currency
or units of two or more foreign currencies or a composite currency or
currencies, and the terms and conditions relating thereto;
- Whether the amount of payments of principal of (and premium, if any) or
interest, if any, on such debt securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency
unit or units or composite currencies) and the manner in which such
amounts shall be determined;
- Any additions to, modifications of or deletions from the terms of such
debt securities with respect to the events of default or covenants set
forth in the indenture;
- Any provisions for collateral security for repayment of such debt
securities;
- Whether such debt securities will be issued in certificated and/or
book-entry form;
- Whether such debt securities will be in registered or bearer form and, if
in registered form, the denominations thereof if other than $1,000 and
any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
- The applicability, if any, of defeasance and covenant defeasance
provisions of the applicable indenture;
- The terms, if any, upon which such debt securities may be convertible
into HR's common stock or preferred stock and the terms and conditions
upon which such conversion will be effected, including, without
limitation, the initial conversion price or rate and the conversion
period;
- Whether and under what circumstances HR will pay additional amounts as
contemplated in the indenture on such debt securities in respect of any
tax, assessment or governmental charge and, if so, whether HR will have
the option to redeem such debt securities in lieu of making such payment;
and
- Any other terms of such debt securities not inconsistent with the
provisions of the applicable indenture.
The debt securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof.
Special federal income tax, accounting and other considerations applicable to
these original issue discount securities will be described in the applicable
prospectus supplement.
Except as set forth in the applicable indenture, the applicable indenture
will not contain any provisions that would limit HR's ability to incur
indebtedness or that would afford holders of debt securities protection in the
event of a highly leveraged or similar transaction involving HR or in the event
of a change of control.
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Restrictions on ownership and transfers of HR's common stock and preferred stock
are designed to preserve its status as a REIT and, therefore, may act to prevent
or hinder a change of control. See "Description of Preferred
Stock -- Restrictions on Ownership." Investors should review the applicable
prospectus supplement for information with respect to any deletions from,
modifications of or additions to the events of default or covenants that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
MERGER, CONSOLIDATION OR SALE
The indenture will provide that HR may consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with or into, any
other corporation, provided that:
- Either HR shall be the continuing corporation, or the successor
corporation (if other than HR) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such
assets shall expressly assume payment of the principal of (and premium,
if any), and interest on, all of the applicable debt securities and the
due and punctual performance and observance of all of the covenants and
conditions contained in the applicable indenture;
- Immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of HR or any subsidiary as a
result thereof as having been incurred by HR or such subsidiary at the
time of such transaction, no event of default under the applicable
indenture, and no event which, after notice or the lapse of time, or
both, would become such an event of default, shall have occurred and be
continuing; and
- An officer's certificate and legal opinion covering such conditions shall
be delivered to the trustee.
COVENANTS
The indenture will contain covenants requiring HR to take certain actions
and prohibiting HR from taking certain actions. The covenants with respect to
any series of debt securities will be described in the prospectus supplement
relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each indenture will describe specific "events of default" with respect to
any series of debt securities issued thereunder. Such "events of default" are
likely to include (with grace and cure periods):
- Default in the payment of any installment of interest on any debt
security of such series;
- Default in the payment of principal of (or premium, if any, on) any debt
security of such series at its maturity;
- Default in making any required sinking fund payment for any debt security
of such series;
- Default in the performance or breach of any other covenant or warranty of
HR contained in the applicable indenture (other than a covenant added to
the indenture solely for the benefit of a series of debt securities
issued thereunder other than such series), continued for a specified
period of days after written notice as provided in the applicable
indenture;
- Default in the payment of specified amounts of indebtedness of HR or any
mortgage, indenture or other instrument under which such indebtedness is
issued or by which such indebtedness is secured, such default having
occurred after the expiration of any applicable grace period and having
resulted in the acceleration of the maturity of such indebtedness, but
only if such indebtedness is not discharged or such acceleration is not
rescinded or annulled; and
- Certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of HR or any significant
subsidiary or either of its property.
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If an event of default under any indenture with respect to debt securities
of any series at the time outstanding occurs and is continuing, then the
applicable trustee or the holders of not less than 25% of the 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
securities or indexed securities, such portion of the principal amounts may be
specified in the terms thereof) of all the debt securities of that series to be
due and payable immediately by written notice thereof to HR (and to the
applicable trustee if given by the holders). However, at any time after such a
declaration of acceleration with respect to debt securities of such series (or
of all debt securities then outstanding under any indenture, as the case may be)
has been made, but before a judgment or decree for payment of the money due has
been obtained by the applicable trustee, the holders of not less than a majority
in principal amount of outstanding debt securities of such series (or of all
debt securities then outstanding under the applicable indenture, as the case may
be) may rescind and annul such declaration and its consequences if
- HR shall have deposited with the applicable trustee all required payments
of the principal of (and premium, if any) and interest on the debt
securities of such series (or of all debt securities then outstanding
under the applicable indenture, as the case may be), plus certain fees,
expenses, disbursements and advances of the applicable trustee and
- All events of default, other than the non-payment of accelerated
principal (or specified portion thereof), with respect to debt securities
of such series (or of all debt securities then outstanding under the
applicable indenture, as the case may be) have been cured or waived as
provided in such indenture.
Each indenture also will provide that the holders of not less than a
majority in principal amount of the outstanding debt securities of any series
(or of all debt securities then outstanding under the applicable indenture, as
the case may be) may waive any past default with respect to such series and its
consequences, except a default
- In the payment of the principal of (or premium, if any) or interest on
any debt security of such series or
- In respect of a covenant or provision contained in the applicable
indenture that cannot be modified or amended without the consent of the
holder of each outstanding debt security affected thereby.
Each trustee will be required to give notice to the holders of debt
securities within 90 days of a default under the applicable indenture unless
such default shall have been cured or waived; provided, however, that such
trustee may withhold notice to the holders of any series of debt securities of
any default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any debt security of such
series or in the payment of any sinking fund installment in respect of any debt
security of such series) if specified responsible officers of such trustee
consider such withholding to be in the interest of such holders.
Each indenture will provide that no holders of debt securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such indenture or for any remedy thereunder, except in the cases of failure of
the applicable trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an event of default from the
holders of not less than 25% in principal amount of the outstanding debt
securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of debt
securities from instituting suit for the enforcement of payment of the principal
of (and premium, if any) and interest on such debt securities at the respective
due dates thereof.
Subject to provisions in each indenture relating to its duties in case of
default, no trustee will be under any obligation to exercise any of its rights
or powers under an indenture at the request or direction of any holders of any
series of debt securities then outstanding under such indenture, unless such
holders shall have offered to the trustee thereunder reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding debt securities of any series (or of all debt securities then
outstanding under an indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable trustee, or of exercising any trust or power
conferred
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upon such trustee. However, a trustee may refuse to follow any direction which
is in conflict with any law or the applicable indenture, which may involve such
trustee in personal liability or which may be unduly prejudicial to the holders
of debt securities of such series not joining therein.
Within 120 days after the close of each fiscal year, HR will be required to
deliver to each trustee a certificate, signed by one of several specified
officers, stating whether or not such officer has knowledge of any default under
the applicable indenture and, if so, specifying each such default and the nature
and status thereof.
MODIFICATION OF THE INDENTURES
It is anticipated that modifications and amendments of an indenture may be
made by HR and the trustee, with the consent of the holders of not less than a
majority in principal amount of each series of the outstanding debt securities
issued under the indenture which are affected by the modification or amendment,
provided that no such modification or amendment may, without the consent of each
holder of such debt securities affected thereby,
- Change the stated maturity date of the principal of (or premium, if any)
or any installment of interest, if any, on any such debt security;
- Reduce the principal amount of (or premium, if any) or the interest, if
any, on any such debt security or the principal amount due upon
acceleration of an original issue discount security;
- Change the place or currency of payment of principal of (or premium, if
any) or interest, if any, on any such debt security;
- Impair the right to institute suit for the enforcement of any such
payment on or with respect to any such debt security;
- Reduce the above-stated percentage of holders of debt securities
necessary to modify or amend the indenture; or
- Modify the foregoing requirements or reduce the percentage of outstanding
debt securities necessary to waive compliance with certain provisions of
the indenture or for waiver of certain defaults.
A record date may be set for any act of the holders with respect to
consenting to any amendment.
The holders of not less than a majority in principal amount of outstanding
debt securities of each series affected thereby will have the right to waive
compliance by HR with certain covenants in such indenture.
Each indenture will contain provisions for convening meetings of the
holders of debt securities of a series to take permitted action.
REDEMPTION OF SECURITIES
The indenture will provide that the debt securities may be redeemed at any
time at the option of HR, in whole or in part, for certain reasons intended to
protect HR's status as a REIT. Debt securities may also be subject to optional
or mandatory redemption on terms and conditions described in the applicable
prospectus supplement.
From and after notice has been given as provided in the indenture, if funds
for the redemption of any debt securities called for redemption shall have been
made available on such redemption date, such debt securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the holders of the debt securities will be to receive payment of
the redemption price.
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CONVERSION OF SECURITIES
The terms and conditions, if any, upon which any debt securities are
convertible into common stock or preferred stock will be set forth in the
applicable prospectus supplement relating thereto. Such terms will include
- Whether such debt securities are convertible into common stock or
preferred stock,
- The conversion price (or manner of calculation thereof),
- The conversion period,
- Provisions as to whether conversion will be at the option of the holders
or HR,
- The events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such debt
securities and
- Any restrictions on conversion, including restrictions directed at
maintaining HR's REIT status.
SUBORDINATION
Upon any distribution to HR's creditors in a liquidation, dissolution or
reorganization, the payment of the principal of and interest on any subordinated
securities will be subordinated to the extent provided in the applicable
indenture in right of payment to the prior payment in full of all senior
securities. No payment of principal or interest will be permitted to be made on
subordinated securities at any time if a default in senior securities exists
that permits the holders of such senior securities to accelerate their maturity
and the default is the subject of judicial proceedings or HR receives notice of
the default. After all senior securities are paid in full and until the
subordinated securities are paid in full, holders of subordinated securities
will be subrogated to the right of holders of senior securities to the extent
that distributions otherwise payable to holders of subordinated securities have
been applied to the payment of senior securities. By reason of such
subordination, in the event of a distribution of assets upon insolvency, certain
general creditors of HR may recover more, ratably, than holders of subordinated
securities. If this prospectus is being delivered in connection with a series of
subordinated securities, the accompanying prospectus supplement or the
information incorporated herein by reference will contain the approximate amount
of senior securities outstanding as of the end of HR's most recent fiscal
quarter.
FEDERAL INCOME TAX AND ERISA CONSIDERATIONS
The following description of certain federal income tax matters and
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
considerations relating to HR is qualified in its entirety by reference to the
more detailed description thereof contained in the opinion of Stites & Harbison,
PLLC, Nashville, Tennessee, regarding such matters, which has been filed as an
exhibit to the registration statement of which this prospectus is a part.
HR is and intends to remain qualified as a REIT under the Internal Revenue
Code of 1986, as amended. As a REIT, HR's net income which is distributed as
dividends to shareholders will be exempt from federal taxation. Distributions to
HR's shareholders generally will be includable in their income. However,
dividends distributed which are in excess of current or accumulated earnings
will be treated for tax purposes as a return of capital to the extent of a
shareholder's basis, and will reduce the basis of shareholders' securities with
respect to which the distribution is paid or, to the extent that they exceed
such basis, will be taxed in the same manner as gain from the sale of those
securities.
HR intends to conduct its affairs so that its assets will not be deemed to
be "plan assets" of any individual retirement account, employee benefit plan
subject to Title I of ERISA, or other qualified retirement plan subject to
Section 4975 of the Code which acquires its securities. HR believes that, under
present law, its distributions do not create so called "unrelated business
taxable income" to tax exempt entities such as pension trusts, subject, however,
to special rules which apply to pension trusts holding more than 10% of the
securities.
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RECENT TAX LEGISLATION AFFECTING REITS
On May 28, 2003, President Bush signed into law the Jobs and Growth Tax
Relief Reconciliation Act of 2003. This new tax legislation reduces the maximum
individual tax rate for long-term capital gains generally from 20% to 15% (for
sales occurring after May 6, 2003 through December 31, 2008) and for dividends
generally from 38.6% to 15% (for tax years from 2003 through 2008). Without
future congressional action, the maximum tax rate on long-term capital gains
will return to 20% in 2009, and the maximum rate on dividends will move to 35%
in 2009 and 39.6% in 2011. Because HR is not generally subject to federal income
tax on the portion of its REIT taxable income or capital gains distributed to
its shareholders, our dividends are generally not eligible for the new 15% tax
rate on dividends. As a result, HR's ordinary REIT dividends will continue to be
taxed at the higher tax rates (currently, 35%) applicable to ordinary income.
EACH PROSPECTIVE PURCHASER OF THE SECURITIES IS ADVISED TO CONSULT HIS OWN
PROFESSIONAL ADVISOR REGARDING THE SPECIFIC FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX AND ERISA CONSEQUENCES TO HIM OF THE PURCHASE, OWNERSHIP AND SALE OF
THE SECURITIES.
PLAN OF DISTRIBUTION
HR may sell securities through underwriters for public offer and sale by
them, and also may sell securities offered hereby to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
the securities will be named in the applicable prospectus supplement.
Underwriters may offer and sell the securities at a fixed price or prices,
which may be changed, at prices related to the prevailing market prices at the
time of sale or at negotiated prices. HR also may, from time to time, authorize
underwriters acting as its agents to offer and sell securities upon terms and
conditions set forth in the applicable prospectus supplement. In connection with
the sale of the securities, underwriters may be deemed to have received
compensation from HR in the form of underwriting discounts or commissions and
may also receive commissions from purchasers of the securities for whom they may
act as agent. Underwriters may sell securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any underwriters or agents in connection with an offering of the
securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
prospectus supplement. Underwriters, dealers and agents participating in the
distribution of the securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the securities may be deemed to be underwriting discounts and
commissions, under the Securities Act of 1933, as amended. Underwriters, dealers
and agents may be entitled, under agreements to be entered into with HR, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act or to contributions with respect
to payments which the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may engage in transactions with or perform
services for HR in the ordinary course of business.
If so indicated in the applicable prospectus supplement, HR will authorize
underwriters or other persons acting as its agents to solicit offers by certain
institutions to purchase securities from HR at the public offering price set
forth in such prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on the date or dates stated in such
prospectus supplement. Each delayed delivery contract will be for an amount not
less than, and the aggregate principal amount of securities sold pursuant to
delayed delivery contracts shall not be less nor more than, the respective
amounts stated in the applicable prospectus supplement. Institutions with whom
delayed delivery contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions, and other institutions but will in all
cases be subject to approval. Delayed delivery contracts will not be subject to
any conditions except (i) the purchase by an institution of the securities
covered by its delayed delivery contracts shall not at the time of delivery be
prohibited under the laws of any
18
jurisdiction in the United States to which such institution is subject, and (ii)
if the securities are being sold to underwriters, HR shall have sold to such
underwriters the total principal amount of the securities less the principal
amount thereof covered by delayed delivery contracts.
EXPERTS
The consolidated financial statements and schedules of HR, incorporated by
reference or appearing in HR's Annual Report (Form 10-K) for the year ended
December 31, 2003, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their reports thereon incorporated or included therein and
incorporated herein by reference. Such consolidated financial statements and
schedules are incorporated herein by reference in reliance upon the reports of
Ernst & Young LLP pertaining to such consolidated financial statements and
schedules given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The legality of the securities will be passed upon by Waller Lansden Dortch
& Davis, A Professional Limited Liability Company, Nashville, Tennessee. The
description of the federal income tax considerations will be passed upon by
Stites & Harbison, PLLC, Nashville, Tennessee.
19
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUER, BY THE AGENTS OR BY ANY OTHER PERSON. THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION MAY NOT
LAWFULLY BE MADE. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR ANY
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAD BEEN NO CHANGE IN THE
AFFAIRS OF THE ISSUER SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
PROSPECTUS
PAGE
----
Where You Can Find Additional
Information......................... 2
Incorporation of Certain Information
by Reference........................ 2
The Company........................... 4
Use of Proceeds....................... 4
Ratio of Earnings to Fixed Charges.... 4
Description of Common Stock........... 4
Description of Common Stock
Warrants............................ 7
Description of Preferred Stock........ 8
Description of Debt Securities........ 12
Federal Income Tax and ERISA
Considerations...................... 17
Plan of Distribution.................. 18
Experts............................... 19
Legal Matters......................... 19
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$300,000,000
(HEALTHCARE REALTY TRUST LOGO)
--------------------
PROSPECTUS
--------------------
, 2004
------------------------------------------------------
------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses of this offering are estimated as follows:
SEC registration fee........................................ $ 24,270
NASD filing fee............................................. *
Printing and shipping expenses.............................. *
Legal fees and expenses..................................... *
Blue Sky filing fees and expenses........................... *
Accounting fees and expenses................................ *
Transfer agent or trustee fees.............................. *
Exchange listing fees....................................... *
Miscellaneous............................................... *
--------
Total............................................. $ *
========
---------------
* To be filed by amendment or incorporated by reference when required in
connection with the offering of Securities.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Second Articles of Amendment and Restatement of the Registrant provide
as follows:
ARTICLE IX
LIMITATION ON PERSONAL LIABILITY
OF DIRECTORS AND OFFICERS; INDEMNIFICATION
A director or officer shall not be personally liable to the corporation or
its shareholders for money damages unless (i) it is proved that the person
actually received an improper benefit or profit in money, property, or services,
for the amount of the benefit or profit in money, property, or services actually
received or (ii) a judgement or other final adjudication adverse to the person
is entered in a proceeding, based on a finding in the proceeding that the
person's action, or failure to act, was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding.
If the law of the State of Maryland is hereafter amended to authorize
corporation action further limiting or eliminating the personal liability of
directors or officers or expanding such liability, then the liability of
directors or officers to the corporation or its shareholders shall be limited or
eliminated to the fullest extent permitted by Maryland law as so amended from
time to time. Any repeal or modification of this Article IX by the shareholders
of the corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer or the corporation
existing at the time of such repeal or modification.
The corporation shall indemnify directors, officers, employees and agents
to the fullest extent permitted by the law of the State of Maryland. The
corporation may purchase and maintain liability insurance, or make other
arrangements for such obligations or otherwise, to the extent permitted by the
law of the State of Maryland, whether or not the corporation would have the
power to indemnify against liability under the provisions of such law.
II-1
The Amended and Restated Bylaws of the Registrant provides as follows:
ARTICLE X
INDEMNIFICATION
The Corporation shall indemnify and advance expenses to its directors,
officers, employees and agents to the fullest extent permitted by Maryland
General Corporation Law, and as provided in the Corporation's Articles of
Incorporation. The Corporation may purchase and maintain liability insurance or
make other arrangements for such obligations.
ITEM 16. EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- -----------
1 -- Form of Underwriting Agreement.(1)
4.1 -- Second Articles of Amendment and Restatement of the
Registrant.(2)
4.2 -- Amended and Restated Bylaws of the Registrant.(3)
4.3 -- Form of Senior Indenture.(4)
4.4 -- Form of Subordinated Indenture.(4)
4.5 -- Specimen Common Stock Certificate.(2)
5 -- Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company.*
8 -- Opinion of Stites & Harbison, PLLC regarding tax matters.*
12 -- Statement regarding Computation of Ratio of Earnings to
Fixed Charges.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (contained in opinion filed as
Exhibit 5).*
23.3 -- Consent of Stites & Harbison, PLLC (contained in opinion
filed as Exhibit 8).*
24 -- Power of Attorney (included on signature page hereto).
25.1 -- Statement of Eligibility and Qualification of Senior Trustee
under the Trust Indenture Act of 1939 (to be filed in
accordance with Rule 305(b)(2) of the Trust Indenture Act of
1939).(1)
25.2 -- Statement of Eligibility and Qualification of Subordinated
Trustee under the Trust Indenture Act of 1939 (to be filed
in accordance with Rule 305(b)(2) of the Trust Indenture Act
of 1939).(1)
---------------
* Previously filed.
(1) To be filed by amendment or incorporated by reference when required in
connection with the offering of Securities.
(2) Previously filed as an exhibit to the Registrant's Registration Statement on
Form S-11 (Registration No. 33-60506) and incorporated herein by reference.
(3) Previously filed as Exhibit 3.2 to the Registrant's Form 10-Q for the
quarter ended September 30, 1999 and incorporated herein by reference.
(4) Previously filed as an exhibit to the Registrant's Registration Statement on
Form S-3 (File No. 33-97888) and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, 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 repayment
II-2
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.
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 provisions required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and 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 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration
II-3
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.
The undersigned registrant hereby undertakes 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 (the "TIA") in
accordance with the rules and regulations prescribed by the Commission
under section 305(b)(2) of the TIA.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Nashville, State of Tennessee, on the 4th day of
March, 2004.
HEALTHCARE REALTY TRUST
INCORPORATED
By: /s/ DAVID R. EMERY
------------------------------------
David R. Emery
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DAVID R. EMERY Chairman and Chief March 4, 2004
-------------------------------------------------------- Executive Officer
David R. Emery (Principal Executive
Officer)
* Senior Vice President and March 4, 2004
-------------------------------------------------------- Chief Financial Officer
Scott W. Holmes (Principal Financial
Officer)
* Vice President, Financial March 4, 2004
-------------------------------------------------------- Reporting (Principal
Leigh Ann Stach Accounting Officer)
* Director March 4, 2004
--------------------------------------------------------
Errol L. Biggs, Ph.D.
* Director March 4, 2004
--------------------------------------------------------
Charles Raymond Fernandez, M.D.
* Director March 4, 2004
--------------------------------------------------------
Batey M. Gresham, Jr.
* Director March 4, 2004
--------------------------------------------------------
Marliese E. Mooney
* Director March 4, 2004
--------------------------------------------------------
Edwin B. Morris III
II-5
SIGNATURE TITLE DATE
--------- ----- ----
* Director March 4, 2004
--------------------------------------------------------
John Knox Singleton
* Director March 4, 2004
--------------------------------------------------------
Dan S. Wilford
*By:/s/ DAVID R. EMERY March 4, 2004
--------------------------------------------------------
David R. Emery
As Attorney-in-Fact
II-6