AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 23, 2004
REGISTRATION NO. 333-08415
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OMEGA HEALTHCARE INVESTORS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
MARYLAND
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(State or Other Jurisdiction of Incorporation or Organization)
38-3041398
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(I.R.S. Employer Identification Number)
9690 Deereco Road, Suite 100
Timonium, Maryland 21093
(410) 427-1700
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(Name, 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
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(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
with copy to:
Eliot W. Robinson, Esq.
Michael J. Delaney, Esq.
Powell Goldstein LLP
One Atlantic Center
Suite 1400
1201 West Peachtree Street, N.W.
Atlanta, Georgia 30309
(404) 572-6600
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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 plan, check the following box. |X|
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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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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Title of Each Class Amount to Be Proposed Maximum Proposed Maximum Amount of Registration
of Securities to Be Registered Registered Offering Price Per Unit Aggregate Offering Fee
Price
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Common Stock, par value $.10 per share N/A (1) N/A (1) N/A (1) N/A (1)
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(1) A registration fee of $19,483 was paid in connection with the Registration
Statement No. 333-08415 on Form S-3 of Omega Healthcare Investors, Inc., a
Delaware corporation (the "Registrant"), as filed with the Securities and
Exchange Commission July 19, 1996. Of the 2,000,000 shares of Common Stock
originally registered pursuant to Registration Statement No. 333-08415,
1,650,466 shares remain unsold.
PROSPECTUS
OMEGA HEALTHCARE INVESTORS, INC.
2,000,000 SHARES
COMMON STOCK
Par Value $.10 Per Share
DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLAN
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We hereby offer participation in our enhanced and updated Dividend
Reinvestment and Common Stock Purchase Plan, or the Plan. The Plan is being
administered by EquiServe Trust Company, N.A., or the administrator. To enroll
in the Plan, a participant must complete and return an Enrollment Authorization
Form to the administrator. Our common stock is listed on the New York Stock
Exchange, or the NYSE, under the symbol "OHI." On November 22, 2004, the last
reported sale price of our common stock on the NYSE was $12.06 per share. Our
principal executive offices are located at 9690 Deereco Road, Suite 100,
Timonium, Maryland 21093, and our telephone number is (410) 427-1700.
Some of the significant features of the Plan include:
o If you are an existing stockholder, you may purchase additional shares
of common stock by automatically reinvesting all or any part of the
cash dividends paid on your shares of our common stock. There is no
minimum or maximum limitation on the amount of dividends you may
reinvest in the Plan.
o If you are an existing stockholder, you may purchase additional shares
of common stock by making optional cash purchases of between $50 and
$6,250 in any calendar month, for an annual maximum of $75,000.
Optional cash purchases of our common stock in excess of this maximum
may only be made pursuant to a written request for waiver and with our
prior written consent.
o If you are not an existing stockholder, you may make an initial cash
purchase of common stock of at least $250 with a maximum of $6,250.
Initial optional cash purchases of our common stock in excess of this
maximum may only be made pursuant to a written request for waiver and
with our prior written consent.
o We may sell newly issued shares directly to the administrator or
instruct the administrator to purchase shares in the open market or
privately negotiated transactions, or elect a combination of these
alternatives.
o You can purchase shares of our common stock without brokerage fees,
commissions or charges. We will bear the expenses for open market
purchases.
o The purchase price for newly issued shares of common stock purchased
directly from us will be the market price less a discount ranging from
0% to 5%, determined from time to time by us in accordance with the
terms of the Plan. This discount applies to either optional cash
purchases or reinvested dividends. However, no discount will be
available for common stock purchased in the open market or in
privately negotiated transactions.
o Beneficial owners (stockholders whose shares of our common stock are
registered in a name other than his or her name; for example, in the
name of a broker, bank or nominee) may participate in the Plan by
instructing their brokers, banks or nominees to reinvest dividends and
make optional cash purchases on their behalf.
o You may also make automatic monthly investments by authorizing monthly
automatic deductions from your designated U.S. bank account. You may
make automatic deductions for as little as $50 per month, after the
initial investment, but in no case for more than $6,250 per month.
Participation in the Plan is entirely voluntary, and you may terminate your
participation at any time. Once enrolled, your participation in the Plan will
continue unless you affirmatively withdraw from the Plan. You may also change
your dividend election at any time. Those holders of our common stock who do not
wish to participate in the Plan will continue to receive cash dividends in the
usual manner.
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Investing in our common stock involves risks that are described in the
section entitled "Risk Factors" beginning on page 5 of this prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is November 23, 2004.
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You should rely only on the information provided in this prospectus and the
information incorporated by reference. We have not authorized anyone to provide
you with different information. You should not assume that the information in
this prospectus or in the documents incorporated by reference is accurate as of
any date other than the date on the front of this prospectus or those documents,
as applicable.
SUMMARY
The following summary may not contain all the information that may be
important to you. You should read the entire prospectus and the documents
incorporated by reference in the prospectus before making a decision to invest
in our common stock.
All references to "you" in this prospectus refer to those persons who
invest in the securities being offered by this prospectus, and all references to
"we," "us" and "our" in this prospectus refer to Omega Healthcare Investors,
Inc., a Maryland corporation, and its subsidiaries.
FORWARD-LOOKING INFORMATION
We make statements about our business in our filings with the Securities
and Exchange Commission, or the SEC, that are "forward-looking" within the
meaning of Section 27A of the Securities Act of 1933, as amended, or the
Securities Act, and Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, and which are subject to the "safe harbor" created
by those sections. Forward-looking statements include, among other things:
expressions of the "belief," "anticipation," or "expectations" of management,
statements as to industry trends or future results of operations of our company
and its subsidiaries, and other statements that are not historical fact.
Forward-looking statements are based on various assumptions by management and
are subject to risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Among the risks and
uncertainties which can affect our future performance are:
o competitive pressures;
o 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;
o 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 debtor's obligations;
o our ability to sell closed assets on a timely basis and on terms that
allow us to realize the carrying value of these assets;
o our ability to negotiate, if and when necessary, appropriate
modifications to the terms of our credit facility;
o our ability to manage, re-lease or sell any owned and operated
facilities;
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o the availability and cost of capital;
o competition in the financing of healthcare facilities;
o regulatory and other changes in the healthcare sector;
o the effect of economic and market conditions generally and in the
healthcare industry particularly;
o changes in interest rates;
o the amount and yield of any additional investments;
o changes in tax laws and regulations affecting real estate investment
trusts;
o changes in the ratings of our debt and preferred securities;
o legal and regulatory proceedings, including the impact of ongoing
litigation;
o extraordinary items;
o the ability to recruit and replace key personnel; and
o the impact of existing, modified, or new strategic initiatives.
These and other risks and uncertainties are described in our annual report
to stockholders included in our annual report on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K. Readers are cautioned not to place
undue reliance on any forward-looking statement, which speaks only as of the
date thereof, and are urged to read carefully all of these risk factors and the
risks described in the section entitled "Risk Factors" beginning on page 5
below. We undertake no obligation to update any forward-looking statements.
THE COMPANY
We were incorporated in the State of Maryland on March 31, 1992. We are a
self-administered real estate investment trust, or 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 and, to a lesser extent,
assisted living 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.
As of September 30, 2004, our portfolio of investments consisted of 208
healthcare facilities, located in 29 states and operated by 39 third-party
operators. Our gross investment in these facilities, net of impairments and
before reserve for uncollectible loans, totaled $843.3 million at September 30,
2004, with 97.2% of our real estate investments related to long-term care
facilities. This portfolio is made up of 157 long-term healthcare facilities and
two rehabilitation hospitals owned and leased to third parties, fixed rate
mortgages on 46 long-term healthcare facilities and three long-term healthcare
facilities that were recovered from customers and are currently closed. At
September 30, 2004, we also held other investments of approximately $34.4
million, including $21.7 million of notes receivable, net of allowance.
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RISK FACTORS
Before you decide to participate in the Plan and invest in shares of our
common stock, you should be aware of the following material risks in making such
an investment. You should carefully consider the risks described below before
you decide to participate in the Plan and purchase shares of our common stock.
In addition, you should consult your own financial and legal advisors before
making any investment decisions.
Risks Associated with the Plan
You will not know the price of the shares you are purchasing under the Plan
at the time you authorize the investment or elect to have your dividends
reinvested.
The price of our shares may fluctuate between the time you decide to
purchase shares under the Plan and the time of actual purchase. In addition,
during this time period, you may become aware of additional information that
might affect your investment decision.
If you instruct the administrator to sell shares under the Plan, you will
not be able to direct the time or price at which your shares are sold. The price
of our shares may decline between the time you decide to sell shares and the
time of actual sale.
Risks Associated with Our Company
Generally speaking, the risks facing our company fall into two categories:
(i) risks related to the operations of our operators, and (ii) risks unique to
our company and operations. These risks and uncertainties are not the only ones
facing us and there may be additional matters that we are unaware of or that we
currently consider immaterial. All of these could adversely affect our business,
financial condition, results of operations and cash flows and, thus, your
investment in our company.
Risks Related to the Operators of Our Facilities
Our recent efforts to restructure and stabilize our portfolio may not prove to
be successful.
In large part as a result of the 1997 changes in Medicare reimbursement of
services provided by skilled nursing facilities and reimbursement cuts imposed
under state Medicaid programs, a number of operators of our properties have
encountered significant financial difficulties during the last several years. In
1999, our investment portfolio consisted of 216 properties and our largest
public operators (by investment) were Sun Healthcare Group, Inc., or Sun,
Integrated Health Services, or IHS, Advocat, Inc., or Advocat, and Mariner
Health Care, Inc., or Mariner. Some of these operators, including Sun, IHS and
Mariner, subsequently filed for bankruptcy protection. Our other operators were
required to undertake significant restructuring efforts. We have restructured
our arrangements with many of our operators whereby we have renegotiated lease
and mortgage terms, re-leased properties to new operators and have closed and/or
disposed of properties.
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We continue to have ongoing restructuring discussions with Claremont
regarding two facilities Claremont currently leases from us. We might not be
successful in reaching a definitive agreement with Claremont. We are also aware
of four properties in our portfolio located in Illinois where facility
operations are currently insufficient to meet rental payments due to us under
our leases for these facilities. These lease payments are currently being paid
by the lessee from funds other than those generated by the facilities. It is
possible that we will need to take steps to restructure this portion of our
portfolio or other properties in our portfolio with respect to which our
operators encounter financial difficulty. We cannot assure you that our recent
efforts to restructure and stabilize our property portfolio will be successful.
The bankruptcy, insolvency or financial deterioration of our operators could
delay our ability to collect unpaid rents or require us to find new operators
for rejected facilities.
We are exposed to the risk that our operators may not be able to meet their
obligations, which may result in their bankruptcy or insolvency. Although our
leases and loans provide us with the right to terminate an investment, evict an
operator, demand immediate repayment and other remedies, the bankruptcy laws
afford certain protections to a party that has filed for bankruptcy that may
render these remedies unenforceable. In addition, an operator in bankruptcy may
be able to restrict our ability to collect unpaid rent or mortgage payments
during the bankruptcy case.
When one of our lessees seeks bankruptcy protection, Title 11 of the United
States Code, or the Bankruptcy Code, provides that a trustee in a liquidation or
reorganization case under the Bankruptcy Code, or a debtor-in-possession in a
reorganization case under the Bankruptcy Code, has the option to assume or
reject the unexpired lease obligations of a debtor-lessee. However, our lease
arrangements with operators who operate more than one of our facilities are
generally made pursuant to a single master lease covering all of that operator's
facilities leased from us. Subject to certain restrictions, a debtor-lessee
under a master lease agreement would generally be required to assume or reject a
master lease as a whole, rather than making the decision on a
facility-by-facility basis, thereby preventing the debtor-lessee from assuming
only the better performing facilities and terminating the leasing arrangement
with respect to the poorer performing facilities. Whether or not a court would
require a master lease agreement to be assumed or rejected as a whole would
depend on a number of factors, including applicable state law, the parties'
intent, whether the master lease agreement and related documents were executed
contemporaneously, the nature and purpose of the relevant documents, whether
there was separate and distinct consideration for each lease, and the provisions
contained in the relevant documents, including whether the relevant documents
are interrelated and contain ample cross-references. Therefore, it is not
possible to predict how a bankruptcy court would decide this issue.
o Assumption of Leases. In the event that an unexpired lease is assumed by or
on behalf of the debtor-lessee, any defaults, other than those created by
the financial condition of the debtor-lessee, the commencement of its
bankruptcy case or the appointment of a trustee, would have to be cured and
all the rental obligations thereunder generally would be entitled to a
priority over other unsecured claims. Generally, unexpired leases must be
assumed in their totality. However, a bankruptcy court has the power to
refuse to enforce certain provisions of a lease, such as cross-default
provisions or penalty provisions, that would otherwise prevent or limit the
ability of a debtor-lessee from assuming or assuming and assigning the
unexpired lease to another party.
o Rejection of Leases. Generally, the debtor-lessee is required to make rent
payments to us during its bankruptcy unless and until it rejects the lease.
The rejection of a lease is deemed to be a pre-petition breach of the lease
and the lessor will be allowed a pre-petition general unsecured claim that
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will be limited to any unpaid rent already due plus an amount equal to the
rent reserved under the lease, without acceleration, for the greater of (a)
one year, or (b) fifteen percent (15%), not to exceed three years, of the
remaining term of such lease, following the earlier of (i) the petition
date, or (ii) repossession or surrender of the leased property. Although
the amount of a lease rejection claim is subject to the statutory cap
described above, the lessor should receive the same percentage recovery on
account of its claim as other holders of allowed pre-petition unsecured
claims receive from the bankruptcy estate. If the debtor-lessee rejects the
lease, the facility would be returned to us. In that event, if we were
unable to re-lease the facility to a new operator on favorable terms or
only after a significant delay, we could lose some or all of the associated
revenue from that facility for an extended period of time.
If an operator defaults under one of our mortgage loans, we may have to
foreclose on the mortgage or protect our interest by acquiring title to the
property and thereafter making substantial improvements or repairs in order to
maximize the facility's investment potential. Operators may contest enforcement
of foreclosure or other remedies, seek bankruptcy protection against our
exercise of enforcement or other remedies and/or bring claims for lender
liability in response to actions to enforce mortgage obligations. If an operator
seeks bankruptcy protection, the automatic stay provisions of the Bankruptcy
Code would preclude us from enforcing foreclosure or other remedies against the
operator unless relief is obtained from the court. High "loan to value" ratios
or declines in the value of the facility may prevent us from realizing an amount
equal to our mortgage loan upon foreclosure.
The receipt of liquidation proceeds or the replacement of an operator that
has defaulted on its lease or loan could be delayed by the approval and
licensure process of any federal, state or local agency necessary for the
replacement of the previous operator licensed to manage the facility. In some
instances, we may take possession of a property and such action could expose us
to successor liabilities. These events, if they were to occur, could reduce our
revenue and operating cash flow.
Operators that fail to comply with the requirements of governmental
reimbursement programs such as Medicare or Medicaid, licensing and certification
requirements, fraud and abuse regulations or new legislative developments may be
unable to meet their obligations to us.
Our operators are subject to numerous federal, state and local laws and
regulations that are subject to frequent and substantial changes (sometimes
applied retroactively) resulting from legislation, adoption of rules and
regulations, and administrative and judicial interpretations of existing law.
The ultimate timing or effect of these changes cannot be predicted. These
changes may have a dramatic effect on our operators' costs of doing business and
the amount of reimbursement by both government and other third-party payors. The
failure of any of our operators to comply with these laws, requirements and
regulations could adversely affect their ability to meet their obligations to
us. In particular:
o Medicare and Medicaid. A significant portion of our skilled nursing
facility operators' revenue is derived from governmentally-funded
reimbursement programs, primarily Medicare and Medicaid, and failure to
maintain certification and accreditation in these programs would result in
a loss of funding from such programs. Loss of certification or
accreditation could cause the revenues of our operators to decline,
potentially jeopardizing their ability to meet their obligations to us. In
that event, our revenues from those facilities could be reduced, which
could in turn cause the value of our affected properties to decline. State
licensing and Medicare and Medicaid laws also require operators of nursing
homes and assisted living facilities to comply with extensive standards
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governing operations. Federal and state agencies administering those laws
regularly inspect such facilities and investigate complaints. Our operators
and their managers receive notices of potential sanctions and remedies from
time to time, and such sanctions have been imposed from time to time on
facilities operated by them. If they are unable to cure deficiencies which
have been identified or which are identified in the future, such sanctions
may be imposed and, if imposed, may adversely affect our operators'
revenues, potentially jeopardizing their ability to meet their obligations
to us.
o Licensing and Certification. Our operators and facilities are subject to
regulatory and licensing requirements of federal, state and local
authorities and are periodically audited by them to confirm compliance.
Failure to obtain licensure or loss or suspension of licensure would
prevent a facility from operating or result in a suspension of
reimbursement payments until all licensure issues have been resolved and
the necessary licenses obtained or reinstated. Our skilled nursing
facilities require governmental approval, in the form of a certificate of
need that generally varies by state and is subject to change, prior to the
addition or construction of new beds, the addition of services or certain
capital expenditures. Some of our facilities may be unable to satisfy
current and future certificate of need requirements and may for this reason
be unable to continue operating in the future. In such event, our revenues
from those facilities could be reduced or eliminated for an extended period
of time.
o Fraud and Abuse Regulations. There are various extremely complex and
largely uninterpreted federal and state laws governing a wide array of
referrals, relationships and arrangements and prohibiting fraud by
healthcare providers, including criminal provisions that prohibit filing
false claims or making false statements to receive payment or certification
under Medicare and Medicaid, or failing to refund overpayments or improper
payments. Governments are devoting increasing attention and resources to
anti-fraud initiatives against healthcare providers. The Health Insurance
Portability and Accountability Act of 1996 and the Balanced Budget Act of
1997 expanded the penalties for healthcare fraud, including broader
provisions for the exclusion of providers from the Medicare and Medicaid
programs. Furthermore, the Office of Inspector General of the U.S.
Department of Health and Human Services, in cooperation with other federal
and state agencies, continues to focus on the activities of skilled nursing
facilities in certain states in which we have properties. In addition, the
federal False Claims Act allows a private individual with knowledge of
fraud to bring a claim on behalf of the federal government and earn a
percentage of the federal government's recovery. Because of these
incentives, these so-called "whistleblower" suits have become more
frequent. The violation of any of these regulations by an operator may
result in the imposition of fines or other penalties that could jeopardize
that operator's ability to make lease or mortgage payments to us or to
continue operating its facility.
o Legislative and Regulatory Developments. Each year, legislative proposals
are introduced or proposed in Congress and in some state legislatures that
would affect major changes in the healthcare system, either nationally or
at the state level. The Medicare Prescription Drug Improvement and
Modernization Act of 2003, Pub. L. 108-173, which is one example of such
legislation, was enacted in late 2003. The Medicare reimbursement changes
for the skilled nursing facility industry under this law are limited to a
temporary increase in the per diem amount paid to skilled nursing
facilities for residents who have AIDS. The significant expansion of other
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Medicare benefits under this legislation, such as the expanded prescription
drug benefit, could result in financial pressures on the Medicare program
that might result in future legislative and regulatory changes with impacts
for our operators. Other proposals under consideration include efforts by
individual states to control costs by decreasing state Medicaid
reimbursements; a federal "Patient Protection Act" to protect consumers in
managed care plans, efforts to improve quality of care, report performance
measures relating to quality and reduce medical errors throughout the
healthcare industry; and hospital cost-containment initiatives by public
and private payors. We cannot accurately predict whether any proposals will
be adopted or, if adopted, what effect, if any, these proposals would have
on operators and, thus, our business.
Regulatory proposals and rules are released on an ongoing basis that may
have a major impact on the healthcare system generally and the skilled nursing
and long-term care industries particularly.
Our operators depend on reimbursement from governmental and other third-party
payors and reimbursement rates from such payors may be reduced.
Changes in the reimbursement rate or methods of payment from third-party
payors, including the Medicare and Medicaid programs, or the implementation of
other measures to reduce reimbursements for services provided by our operators
has in the past, and could in the future, result in a substantial reduction in
our operators' revenues and operating margins. Additionally, net revenue
realizable under third-party payor agreements can change after examination and
retroactive adjustment by payors during the claims settlement processes or as a
result of post-payment audits. Payors may disallow requests for reimbursement
based on determinations that certain costs are not reimbursable or reasonable or
because additional documentation is necessary or because certain services were
not covered or were not medically necessary. There also continue to be new
legislative and regulatory proposals that could impose further limitations on
government and private payments to healthcare providers. In some cases, states
have enacted or are considering enacting measures designed to reduce their
Medicaid expenditures and to make changes to private healthcare insurance. We
cannot assure you that adequate reimbursement levels will continue to be
available for the services provided by our operators, which are currently being
reimbursed by Medicare, Medicaid or private third-party payors. Further limits
on the scope of services reimbursed and on reimbursement rates could have a
material adverse effect on our operators' liquidity, financial condition and
results of operations, which could cause the revenues of our operators to
decline and potentially jeopardize their ability to meet their obligations to
us.
Our operators may be subject to significant legal actions that could subject
them to increased operating costs and substantial uninsured liabilities, which
may affect their ability to pay their lease and mortgage payments to us.
As is typical in the healthcare industry, our operators are often subject
to claims that their services have resulted in resident injury or other adverse
effects. Many of these operators have experienced an increasing trend in the
frequency and severity of professional liability and general liability insurance
claims and litigation asserted against them. The insurance coverage maintained
by our operators may not cover all claims made against them nor continue to be
available at a reasonable cost, if at all. In some states, insurance coverage
for the risk of punitive damages arising from professional liability and general
liability claims and/or litigation may not, in certain cases, be available to
operators due to state law prohibitions or limitations of availability. As a
result, our operators operating in these states may be liable for punitive
damage awards that are either not covered or are in excess of their insurance
policy limits. We also believe that there has been, and will continue to be, an
increase in governmental investigations of long-term care providers,
particularly in the area of Medicare/Medicaid false claims, as well as an
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increase in enforcement actions resulting from these investigations. Insurance
is not available to cover such losses. Any adverse determination in a legal
proceeding or governmental investigation, whether currently asserted or arising
in the future, could have a material adverse effect on an operator's financial
condition. If an operator is unable to obtain or maintain insurance coverage, if
judgments are obtained in excess of the insurance coverage, if an operator is
required to pay uninsured punitive damages, or if an operator is subject to an
uninsurable government enforcement action, the operator could be exposed to
substantial additional liabilities.
Increased competition as well as increased operating costs have resulted in
lower revenues for some of our operators and may affect the ability of our
tenants to meet their payment obligations to us.
The healthcare industry is highly competitive and we expect that it will
likely become more competitive in the future. Our operators are competing with
numerous other companies providing similar healthcare services or alternatives
such as home health agencies, life care at home, community-based service
programs, retirement communities and convalescent centers. We cannot be certain
the operators of all of our facilities will be able to achieve occupancy and
rate levels that will enable them to meet all of their obligations to us. Our
operators may encounter increased competition in the future that could limit
their ability to attract residents or expand their businesses and therefore
affect their ability to pay their lease or mortgage payments.
The market for qualified nurses, healthcare professionals and other key
personnel is highly competitive and our operators may experience difficulties in
attracting and retaining qualified personnel. Increases in labor costs due to
higher wages and greater benefits required to attract and retain qualified
healthcare personnel incurred by our operators could affect their ability to pay
their lease or mortgage payments. This situation could be particularly acute in
certain states that have enacted legislation establishing minimum staffing
requirements.
Risks Unique to Our Company and Operations
In addition to the operator related risks discussed above, there are a
number of risks directly associated with our company and operations.
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We rely on external sources of capital to fund future capital needs, and if we
encounter difficulty in obtaining such capital, we may not be able to make
future investments necessary to grow our business or meet maturing commitments.
In order to qualify as a REIT under the Internal Revenue Code of 1986, as
amended, or the Internal Revenue Code, we are required, among other things, to
distribute each year to our stockholders at least 90% of our REIT taxable
income. Because of this distribution requirement, we may not be able to fund,
from cash retained from operations, all future capital needs, including capital
needs to make investments and to satisfy or refinance maturing commitments. As a
result, we rely on external sources of capital. If we are unable to obtain
needed capital at all or only on unfavorable terms from these sources, we might
not be able to make the investments needed to grow our business, or to meet our
obligations and commitments as they mature, which could negatively affect the
ratings of our debt and even, in extreme circumstances, affect our ability to
continue operations. Our access to capital depends upon a number of factors over
which we have little or no control, including, but not limited to, general
market conditions, the market's perception of our growth potential, our current
and potential future earnings and cash distributions, and the market price of
the shares of our capital stock. Generally speaking, difficult capital market
conditions in our industry during the past several years and our need to
stabilize our portfolio have limited our access to capital. Our potential
capital sources include, but are not limited to, the following transactions:
Equity Financing. As with other publicly-traded companies, the availability
of equity capital will depend, in part, on the market price of our common stock
which, in turn, will depend upon various market conditions and other factors
that may change from time to time including:
o the extent of investor interest;
o the general reputation of REITs and the attractiveness of their equity
securities in comparison to other equity securities, including
securities issued by other real estate-based companies;
o our financial performance and that of our operators;
o the contents of analyst reports about us and the REIT industry;
o general stock and bond market conditions, including changes in
interest rates on fixed income securities, which may lead prospective
purchasers of our common stock to demand a higher annual yield from
future distributions;
o our failure to maintain or increase our dividend, which is dependent,
to a large part, on growth of funds from operations which in turn
depends upon increased revenues from additional investments and rental
increases; and
o other factors, including governmental regulatory action and changes in
REIT tax laws.
The market value of the equity securities of a REIT is generally based upon
the market's perception of the REIT's growth potential and its current and
potential future earnings and cash distributions. Our failure to meet the
market's expectation with regard to future earnings and cash distributions would
likely adversely affect the market price of our common stock.
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Debt Financing/Leverage. Financing for future investments and our maturing
commitments may be provided by borrowings under our senior credit facility,
private or public offerings of debt, the assumption of secured indebtedness,
mortgage financing on a portion of our owned portfolio or through joint
ventures. We are subject to risks normally associated with debt financing,
including the risks that our cash flow will be insufficient to make timely
payments of interest, that we will be unable to refinance existing indebtedness,
and that the terms of refinancing will not be as favorable as the terms of
existing indebtedness. If we are unable to refinance or extend principal
payments due at maturity or pay them with proceeds from other capital
transactions, our cash flow may not be sufficient in all years to pay
distributions to our stockholders and to repay all maturing debt. Furthermore,
if prevailing interest rates, changes in our debt ratings or other factors at
the time of refinancing result in higher interest rates imposed on refinancing,
the interest expense relating to that refinanced indebtedness would increase,
which could reduce our profitability and the amount of dividends we are able to
pay. Moreover, additional debt financing increases the amount of our leverage.
Certain of our operators account for a significant percentage of our revenues.
Based on existing contractual rent and lease payments regarding the
restructuring of certain existing investments, Advocat and Sun each account for
over 10% of our current contractual monthly revenues, with Sun accounting for
over 20% of our current contractual monthly revenues. Additionally, our top five
operators account for approximately 55% of our current contractual monthly
revenues. The failure or inability of any of these operators to pay their
obligations to us could materially reduce our revenues and net income, which
could in turn reduce the amount of dividends we pay and cause our stock price to
decline.
Unforeseen costs associated with the acquisition of new properties could reduce
our profitability.
Our business strategy contemplates future acquisitions that may not prove
to be successful. For example, we might encounter unanticipated difficulties and
expenditures relating to any acquired properties, including contingent
liabilities, or newly acquired properties might require significant management
attention that would otherwise be devoted to our ongoing business. If we agree
to provide funding to enable healthcare operators to build, expand or renovate
facilities on our properties and the project is not completed, we could be
forced to become involved in the development to ensure completion or we could
lose the property. These costs may negatively affect our results of operations.
Our assets may be subject to impairment charges.
We periodically, but not less than annually, evaluate our real estate
investments and other assets for impairment indicators. The judgment regarding
the existence of impairment indicators is based on factors such as market
conditions, operator performance and legal structure. If we determine that a
significant impairment has occurred, we would be required to make an adjustment
to the net carrying value of the asset, which could have a material adverse
affect on our results of operations and funds from operations in the period in
which the write-off occurs.
We may not be able to sell certain closed facilities for their book value.
From time to time, we close facilities and actively market such facilities
for sale. To the extent we are unable to sell these properties for our book
value, we may be required to take a non-cash impairment charge or loss on the
sale, either of which would reduce our net income.
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Our real estate investments are relatively illiquid.
Real estate investments are relatively illiquid and, therefore, tend to
limit our ability to vary our portfolio promptly in response to changes in
economic or other conditions. All of our properties are "special purpose"
properties that could not be readily converted to general residential, retail or
office use. Healthcare facilities that participate in Medicare or Medicaid must
meet extensive program requirements, including physical plant and operational
requirements, which are revised from time to time. Such requirements may include
a duty to admit Medicare and Medicaid patients, limiting the ability of the
facility to increase its private pay census beyond certain limits. Medicare and
Medicaid facilities are regularly inspected to determine compliance, and may be
excluded from the programs - in some cases without a prior hearing - for failure
to meet program requirements. Transfers of operations of nursing homes and other
healthcare-related facilities are subject to regulatory approvals not required
for transfers of other types of commercial operations and other types of real
estate. Thus, if the operation of any of our properties becomes unprofitable due
to competition, age of improvements or other factors such that our lessee or
mortgagor becomes unable to meet its obligations on the lease or mortgage loan,
the liquidation value of the property may be substantially less, particularly
relative to the amount owing on any related mortgage loan, than would be the
case if the property were readily adaptable to other uses. The receipt of
liquidation proceeds or the replacement of an operator that has defaulted on its
lease or loan could be delayed by the approval process of any federal, state or
local agency necessary for the transfer of the property or the replacement of
the operator with a new operator licensed to manage the facility. In addition,
certain significant expenditures associated with real estate investment, such as
real estate taxes and maintenance costs, are generally not reduced when
circumstances cause a reduction in income from the investment. Should such
events occur, our income and cash flows from operations would be adversely
affected.
As an owner or lender with respect to real property, we may be exposed to
possible environmental liabilities.
Under various federal, state and local environmental laws, ordinances and
regulations, an owner of real property or a secured lender, such as us, may be
liable in certain circumstances for the costs of removal or remediation of
certain hazardous or toxic substances at, under or disposed of in connection
with such property, as well as certain other potential costs relating to
hazardous or toxic substances, including government fines and damages for
injuries to persons and adjacent properties. Such laws often impose liability
without regard to whether the owner knew of, or was responsible for, the
presence or disposal of such substances and liability may be imposed on the
owner in connection with the activities of an operator of the property. The cost
of any required remediation, removal, fines or personal or property damages and
the owner's liability therefore could exceed the value of the property and/or
the assets of the owner. In addition, the presence of such substances, or the
failure to properly dispose of or remediate such substances, may adversely
affect the owner's ability to sell or rent such property or to borrow using such
property as collateral which, in turn, would reduce the owner's revenues.
Although our leases and mortgage loans require the lessee and the mortgagor
to indemnify us for certain environmental liabilities, the scope of such
obligations may be limited, and we cannot assure you that any such mortgagor or
lessee would be able to fulfill its indemnification obligations.
The industry in which we operate is highly competitive. This competition may
prevent us from raising prices at the same pace as our costs increase.
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We compete for additional healthcare facility investments with other
healthcare investors, including other REITs. The operators of the facilities
compete with other regional or local nursing care facilities for the support of
the medical community, including physicians and acute care hospitals, as well as
the general public. Some significant competitive factors for the placing of
patients in skilled and intermediate care nursing facilities include quality of
care, reputation, physical appearance of the facilities, services offered,
family preferences, physician services and price. If our cost of capital should
increase relative to the cost of capital of our competitors, the spread that we
realize on our investments may decline if competitive pressures limit or prevent
us from charging higher lease or mortgage rates.
We are named as defendants in litigation arising out of professional liability
and general liability claims relating to our previously owned and operated
facilities which if decided against us, could adversely affect our financial
condition.
We and several of our wholly-owned subsidiaries have been named as
defendants in professional liability and general liability claims related to our
owned and operated facilities. Other third-party managers responsible for the
day-to-day operations of these facilities have also been named as defendants in
these claims. In these suits, patients of certain previously owned and operated
facilities have alleged significant damages, including punitive damages, against
the defendants. The lawsuits are in various stages of discovery and we are
unable to predict the likely outcome at this time. We continue to vigorously
defend these claims and pursue all rights we may have against the managers of
the facilities under the terms of the management agreements. We have insured
these matters, subject to self-insured retentions of various amounts. There can
be no assurance that we will be successful in our defense of these matters or in
asserting our claims against various managers of the subject facilities or that
the amount of any settlement or judgment will be substantially covered by
insurance or that any punitive damages will be covered by insurance.
If we fail to maintain our REIT status, we will be subject to federal income tax
on our taxable income at regular corporate rates.
We were organized to qualify for taxation as a REIT under Sections 856
through 860 of the Internal Revenue Code. We believe we have conducted, and we
intend to continue to conduct, our operations so as to qualify as a REIT.
Qualification as a REIT involves the satisfaction of numerous requirements, some
on an annual and some on a quarterly basis, established under highly technical
and complex provisions of the Internal Revenue Code for which there are only
limited judicial and administrative interpretations and involve the
determination of various factual matters and circumstances not entirely within
our control. We cannot assure you that we will at all times satisfy these rules
and tests.
If we were to fail to qualify as a REIT in any taxable year, as a result of
a determination that we failed to meet the annual distribution requirement or
otherwise, we would be subject to federal income tax, including any applicable
alternative minimum tax, on our taxable income at regular corporate rates with
respect to each such taxable year for which the statute of limitations has not
expired. Moreover, unless entitled to relief under certain statutory provisions,
we also would be disqualified from treatment as a REIT for the four taxable
years following the year during which qualification is lost. This treatment
would significantly reduce our net earnings and cash flow because of our
additional tax liability for the years involved, which could significantly
impact our ability to pay interest and principal with respect to the notes.
We are exposed to market risk due to the fact that borrowings under our new
senior credit facility are or will be subject to wide fluctuations based on
changing interest rates.
Market risk is the risk of loss arising from adverse changes in market
rates and prices, such as interest rates, foreign currency exchange rates and
commodity prices. Our primary exposure to market risk is interest rate risk
associated with variable borrowings under our senior credit facility. Since our
senior credit facility provides for variable rates, if market interest rates
rise, so will our required interest payments on borrowings under the senior
credit facility. We do not currently have any mechanism in place to manage, or
hedge, the market risk associated with our variable rate debt.
We depend upon our key employees and may be unable to attract or retain
sufficient numbers of qualified personnel.
Our future performance depends to a significant degree upon the continued
contributions of our executive management team and other key employees.
Accordingly, our future success depends on our ability to attract, hire, train
and retain highly skilled management and other qualified personnel. Competition
for qualified employees is intense, and we compete for qualified employees with
companies that may have greater financial resources than we have. Our employment
agreements with our executive officers provide that their employment may be
terminated by either party at any time. Consequently, we may not be successful
in attracting, hiring, training and retaining the people we need, which would
seriously impede our ability to implement our business strategy.
DIVIDEND REINVESTMENT AND COMMON STOCK PURCHASE PLAN
The following discussion, in question and answer format, explains the
provisions of the Plan.
1. What is the purpose of the Plan?
The purpose of the Plan is to provide our stockholders and investors with a
convenient and economical way to purchase shares of our common stock and to
reinvest all or a portion of their cash dividends in additional shares of our
common stock. The Plan is designed to promote ownership among stockholders who
are committed to investing a minimum amount, holding their shares in direct form
and building share ownership over time. Also, because the shares of common stock
purchased under the Plan may be acquired directly from us, we may receive
additional equity funds, which will be added to our general funds and will be
used for general corporate purposes.
2. Who administers the Plan for the Participants?
EquiServe Trust Company, N.A., referred to in this prospectus as
"EquiServe" or the "administrator," administers the Plan, holds shares of common
stock acquired under the Plan, keeps records, sends statements of activity to
participants, and performs other duties related to the Plan. EquiServe, Inc., an
affiliate of the administrator, is a transfer agent registered with the
Securities and Exchange Commission and acts as service agent for the
administrator.
You may contact the administrator in any of the following ways:
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By telephone: Internet:
Toll Free: (800) 317-4555 Unless you are participating in the Plan through your
bank, broker or other nominee, you can obtain
An automated telephone system is available 24 hours information about your Plan account through the
a day, seven days a week. Customer service Internet at the Plan administrator's website at
representatives are available from 9:00 a.m. to www.equiserve.com. On the website, you can access
5:00 p.m., Eastern Time, each business day. If you your share balance, sell shares, request a stock
reside outside the United States and Canada you may certificate and obtain online forms and other
contact the Plan administrator at (781) 575-2724. information about your Plan account. To gain access,
you will require a password, which is included on
your dividend statement. You may also request your
password by calling (800) 317-4445.
Telecommunications device In writing:
for the hearing impaired:
EquiServe Trust Company, N.A.
TDD: (800) 952-9245 Attn: Omega Healthcare Investors, Inc.
Dividend Reinvestment Plan
P.O. Box 43081
Providence, Rhode Island 02940-3881
Please reference Omega Healthcare Investors, Inc. and
your account number in all correspondence. When
corresponding with the administrator, we suggest that
you give your daytime telephone number and area code.
3. What are the advantages of the Plan?
o There are no fees or brokerage commissions on purchases, and we will
bear the expenses for open market purchases.
o Participation is voluntary and automatic. All or any part of your
quarterly stock dividends may be reinvested.
o The automatic reinvestment of dividends will enable you to add to your
investment in our company in a timely and systematic fashion.
o In addition to being able to reinvest your dividends, if you are an
existing stockholder, you may purchase additional shares of our common
stock by making optional cash purchases of between $50 and $6,250 per
calendar month. These optional cash purchases may be made occasionally
or at regular intervals, subject to the restrictions described above.
You may make optional cash purchases even if dividends on your shares
are not being reinvested under the Plan. We may waive the maximum in
our sole discretion and permit a larger investment.
o If you are not presently one of our stockholders, you may become a
participant in the Plan by making an initial cash investment in our
common stock of not less than $250 and not more than $6,250. We may
waive this maximum, in our sole discretion, and permit a larger
investment.
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o The purchase price for newly issued shares of our common stock
purchased directly from us either through dividend reinvestment or
optional cash purchases may be issued at a discount from the market
price. We will periodically establish a discount rate ranging from 0%
to 5%.
o You may purchase fractional shares of our common stock under the Plan.
This means that you may fully invest your dividends and any optional
cash purchases. Dividends will be paid on the fractional shares of our
common stock which also may be reinvested in additional shares.
o You may direct the administrator to transfer, at any time and at no
cost to you, all or a portion of your shares in the Plan to a Plan
account for another person.
o You can avoid the need of holding your stock certificates by
submitting them to the administrator for safekeeping. By depositing
your stock certificates, you do not have to worry about them being
lost or stolen. The shares will be credited to your Plan account in
"book-entry" form.
o You or any other person that is a holder of record of shares of our
common stock may direct the administrator to sell or transfer all or a
portion of your shares held in the Plan.
o You will receive periodic statements reflecting all current activity
in your Plan accounts, including purchases, sales and latest balances,
to simplify your record keeping. You may also view year-to-date
activity in your Plan account, as well as activity in prior years, by
accessing your Plan account at the administrator's website at
www.equiserve.com.
4. What are the disadvantages of the Plan?
o Cash dividends that you reinvest will be treated for federal income
tax purposes as a dividend received by you on the date we pay
dividends and may create a liability for the payment of income tax
without providing you with immediate cash to pay this tax when it
becomes due.
o We may, without giving you prior notice, change our determination as
to whether the administrator will purchase shares of our common stock
directly from us, in the open market or in privately negotiated
transactions from third parties, which in turn will affect whether
such shares will be sold to you at a discount. We will not, however,
change our determination more than once in any three-month period. You
will not know the actual number of shares purchased in any month on
your behalf under the Plan until after the applicable investment date.
o You will have limited control regarding the timing of sales under the
Plan. Because the administrator will effect sales under the Plan only
as soon as practicable after it receives instructions from you, you
may not be able to control the timing of sales as you might for
investments made outside the Plan.
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o The market price of the shares of our common stock may fluctuate
between the time the administrator receives an investment instruction
and the time at which the shares of our common stock are sold. Because
purchases under the Plan are only made as of the dividend payment
date, in the case of dividends, or the applicable investment date, in
the case of optional cash purchases, you have no control over the
timing of your purchases under the Plan.
o No discount will be available for shares acquired in the open market
or in privately negotiated transactions.
o While a discount from market prices of up to 5% may be established for
a particular month for shares purchased directly from us, a discount
for one month will not insure the availability of a discount or the
same discount in future months. Each month we may, without giving you
prior notice, change or eliminate the discount. Further, in no event
may we issue shares at a price less than 95% of the market price of
our common stock on the date of issuance.
o Shares deposited in a Plan account may not be pledged until the shares
are withdrawn from the Plan.
o Your investment in the shares of common stock held in your account is
no different than a direct investment in shares of our common stock.
You bear the risk of loss and the benefits of gain from market price
changes for all of your shares of common stock. Neither we nor the
administrator can assure you that shares of our common stock purchased
under the Plan will, at any particular time, be worth more or less
than the amount you paid for them.
5. Who pays the expenses of the Plan?
We will pay all day-to-day costs of the administration of the Plan. You
will be charged a service fee of $15 for each requested sale and a processing
fee of $0.12 per each whole share and fraction sold, which includes the
applicable brokerage commissions the administrator is required to pay. We will
pay for all applicable fees (including any brokerage commissions the
administrator is required to pay) associated with your purchases under the Plan.
6. Who is eligible to participate in the Plan?
A "registered stockholder" (a stockholder whose shares of common stock are
registered in our stock transfer books in his or her name) or a "beneficial
owner" (a stockholder whose shares of common stock are registered in a name
other than his or her name; for example, in the name of a broker, bank or
nominee) may participate in the Plan. In addition, an interested investor that
is not a stockholder may participate in the Plan by making an initial cash
investment of at least $250. For further instructions, please see Question 7
below.
7. How do I enroll in the Plan?
Registered Stockholders. After reading our prospectus, if you are a
registered stockholder of our common stock, you may join the Plan by going to
the administrator's web site at www.equiserve.com, or by completing and signing
an Enrollment Authorization Form and returning it to the administrator.
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Beneficial Owners. If you are a beneficial owner and wish to join the Plan,
you must contact your bank, broker or other nominee to arrange participation in
the Plan on your behalf. To facilitate participation by beneficial owners, we
have made arrangements with the Plan administrator to reinvest dividends and
accept optional cash investments under the stock purchase feature of the Plan by
registered stockholders such as brokers, banks and other nominees, on behalf of
beneficial owners.
Alternatively, if you are a beneficial owner of our common stock, you may
simply request that the number of shares of our common stock you wish to enroll
in the Plan be re-registered by the bank, broker or other nominee in your own
name as record stockholder. You can then directly participate in the Plan as
described above. You should contact your bank, broker or nominee for information
on how to re-register your shares.
New Investors. If you do not currently own shares of our common stock, you
may join the Plan in either of the following ways:
o Going to the administrator's web site at www.equiserve.com, and
following the instructions provided for opening a Plan account online.
You will be asked to complete an Online Initial Investment Form and to
submit an initial optional cash purchase between $250 and $6,250. To
make an initial optional cash purchase you may authorize a one-time
online bank debit from your U.S. bank account or you may authorize a
minimum of five (5) consecutive monthly automatic deductions of at
least $50 each from your U.S. bank account.
o Completing and signing an Initial Investment Form and submitting an
initial investment in the amount between $250 and $6,250. To make an
initial optional cash purchase in this manner, you may enclose a
check, payable in U.S. funds and drawn against a U.S. bank, to
"EquiServe Trust Company, N.A.," or you may authorize a minimum of
five consecutive monthly automatic deductions of at least $50 each
from your U.S. bank account on the reverse side of the Initial
Investment Form and follow the instructions provided.
New investors choosing to make their initial optional cash purchase through
automatic monthly deductions should note that the automatic monthly deductions
will continue indefinitely beyond the initial investment unless the
administrator is notified to discontinue such deductions. Please see Question 12
for further information on optional cash purchases.
Current Plan Participants. If you are participating in our current Dividend
Reinvestment and Common Stock Purchase Plan, you will automatically continue to
be enrolled in the Plan without having to submit a new Enrollment Authorization
Form. Your participation in the Plan will continue unless you affirmatively
withdraw from the Plan. You may also change your dividend election at any time.
Those holders of our common stock who do not wish to participate in the
Plan will continue to receive cash dividends in the usual manner.
8. What does the Enrollment Authorization Form provide?
The Enrollment Authorization Form appoints the Plan's administrator as your
administrator for purposes of the Plan and directs the administrator to apply to
the purchase of additional shares of common stock all of the cash dividends on
the specified number of shares of our common stock owned by you on the
applicable record date and designated by you to be reinvested through the Plan.
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The Enrollment Authorization Form also directs the administrator to purchase
additional shares of our common stock with any optional cash purchases that you
may elect to make. By checking the appropriate box on the Enrollment
Authorization Form, you indicate which features of the Plan you will use.
Full Reinvestment of Dividends. Select this option if you wish to reinvest
the dividends on all our common stock registered in your name in a certificate
form as well as on all common stock credited to your Plan account. Selecting
this alternative also permits you to make monthly optional cash purchases;
however, you must still comply with the other requirements for making optional
cash investments.
Partial Reinvestment of Dividends. Select this option if you wish to
receive cash dividends on the number of shares that you designate from those
credited to your Plan account and those registered in your name in a certificate
form. The Plan administrator will apply the dividends paid on any remaining
shares to the purchase of additional shares of our common stock, which will then
be credited to your Plan account. Selecting this alternative also allows you to
make monthly optional cash purchases; however, you must still comply with the
other requirements for making optional cash purchases.
All Cash (No Dividend Reinvestment). Select this option if you do not wish
to have the cash dividends paid on the shares credited to your Plan account and
those registered in your name in a certificate form be reinvested, but rather
sent to you by check or through direct deposit to your U.S. bank account.
Selecting this alternative still allows you to make monthly optional cash
purchases; however, you must still comply with the other requirements for making
optional cash purchases.
9. How can I change my method of participation or discontinue dividend
reinvestment?
You may change your method of participation at any time by:
o accessing your Plan account through the Internet at the
administrator's web site at www.equiserve.com;
o calling the administrator at (800) 317-4445;
o submitting a newly executed Enrollment Authorization Form to the
administrator; or
o writing to the administrator at the address listed in Question 2.
If you do not make an election on your Enrollment Authorization Form, the
administrator will reinvest all dividends paid on your shares. Any change in the
number of shares with respect to which the administrator is authorized to
reinvest dividends must be received by the administrator prior to the record
date for a dividend to permit the new number of shares to apply to that
dividend. For each method of dividend reinvestment, cash dividends will be
reinvested on all shares other than those designated for payment of cash
dividends in the manner specified above until you specify otherwise or withdraw
from the Plan altogether, or until the Plan is terminated.
You may discontinue reinvestment of cash dividends under the Plan at any
time by accessing your Plan account through the Internet at the administrator's
web site at www.equiserve.com, by calling the administrator at (800) 317-4445,
or by written notice to the administrator at the address listed in Question 2.
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If a notice to discontinue is received by the administrator after the dividend
record date for a dividend payment, the administrator in its sole discretion may
either pay such dividend in cash or reinvest it in shares on behalf of the
discontinuing Plan participant. If such dividend is reinvested, the
administrator may sell the shares purchased less any fees and any applicable
costs of sales. After processing your request to discontinue dividend
reinvestment, any shares credited to your Plan account will continue to be held
in "book-entry" form. Dividends on any shares held in "book-entry" form and any
shares held in certificated form will be paid in cash.
10. When will my participation in the Plan begin?
Your participation in the dividend reinvestment portion of the Plan will
commence on the next date we pay dividends, provided the administrator receives
your Enrollment Authorization Form on or before the record date for the payment
of the dividend.
Your participation in the optional cash purchase portion of the Plan will
commence on the next investment date, which will be the 15th calendar day of the
month (unless there are no trades of our common stock reported on the NYSE on
the 15th calendar day, in which case the investment date will be the next
trading day following the 15th calendar day of that month in which trades of our
common stock are reported on the NYSE), provided that sufficient funds to be
invested are received on or before the business day immediately prior to the
investment date. Should the funds to be invested arrive after the applicable
optional cash investment due date, those funds will be held without interest
until they can be invested on the next investment date unless you request a
refund from the administrator.
Once enrolled, you will remain enrolled until you discontinue participation
or until we terminate the Plan.
11. How many shares may be purchased by a participant during any month or year?
Reinvested dividends are not subject to any minimum or maximum limits.
Optional cash purchases are subject to a minimum investment of $50 and a
maximum investment of $6,250 in any calendar month.
Initial optional cash purchases by investors that are not yet one of our
stockholders are subject to a minimum of $250 and a maximum of $6,250 in any
calendar month.
The maximum for optional cash purchases may be waived by us in our sole and
absolute discretion. You may request a waiver of such maximum by submitting a
request for waiver which we must receive at least five business days prior to
the applicable pricing period. The "pricing period" is the period of time
encompassing the ten consecutive trading days ending on the last trading day
preceding the investment date of each month as described in Question 18.
Optional cash purchase amounts of less than $50, or $250 in the case of an
initial optional cash purchase by a non-stockholder, and, unless the maximum is
waived, any optional cash purchases that exceed the maximum of $6,250 per
calendar month, will be returned to you without interest.
12. How are optional cash purchases made?
Optional cash purchases allow you to purchase more shares than you could
purchase just by reinvesting dividends. You can buy shares of our common stock
each month with optional cash investments after you have enrolled in the Plan as
described in Question 7 above. The administrator will use your funds to purchase
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common stock for your Plan account on the next investment date after it receives
your cash payment. If the administrator does not receive your funds at least one
business day prior to the next investment date, the administrator will not
invest your funds on the next investment date but will hold your funds for
investment on the next subsequent investment date.
You can make optional cash purchases even if you have not chosen to
reinvest your cash dividends on any shares held by you. If you choose to make
only optional cash purchases, we will continue to pay cash dividends when and as
declared on any shares of our common stock registered in your name in a
certificate form and those shares credited to your Plan account.
Investment by One-Time Online Bank Debit. At any time, you may make an
optional cash purchase within the Plan limits by going to the administrator's
website at www.equiserve.com, and authorizing a one-time online bank debit from
your U.S. bank account. One-time online optional cash purchase funds will be
held by the Plan administrator for three business days before such funds are
invested. Please refer to the online confirmation for your bank account debit
date and investment date.
Investment by Check. You may make your first optional cash purchase when
you enroll by enclosing a check with the Enrollment Authorization Form. You may
also make an optional cash purchase within the Plan limits by completing the
Cash Investment Form attached to your Plan account statement. Checks should be
made payable to "EquiServe Trust Company, N.A.," in U.S. funds and drawn on a
U.S. bank. It is also important to indicate your Plan account number on your
check. Do not send cash, traveler's checks, money orders, or third party checks
for optional cash investments.
Automatic Monthly Investments. You may also make optional cash purchases
each month, within the Plan limits, by instructing the Plan administrator to
arrange for automatic monthly deductions from your designated U.S. bank account.
Automatic monthly investments may be authorized through the Internet at the
administrator's web site at www.equiserve.com, or by completing an Automatic
Monthly Investment Form and returning it to the Plan administrator. It takes
approximately four to six weeks from the time the administrator receives your
authorization until your first deduction occurs.
Once you begin making automatic monthly investments, the Plan administrator
will draw funds from your designated account three business days before the next
investment date of each month and will purchase shares of common stock on that
investment date. Automatic monthly investments will continue at the level you
set until you instruct the administrator otherwise. You can change or stop
automatic monthly investments by accessing your Plan account through the
Internet at the Plan administrator's web site, www.equiserve.com, by calling the
administrator at (800) 317-4445, by completing and returning a new Automatic
Monthly Investment Form or giving written instructions to the administrator. If
you wish to stop automatic monthly investments, or to change the dollar amount
to be withdrawn, your request must be received at least seven business days
prior to the next debit date.
If the Plan administrator is unable to process your optional cash
purchase(s) within 35 days, the Plan administrator will return the funds to you
by check. No interest will be paid on funds held by the administrator pending
investment.
If any optional cash purchase is returned unpaid, whether the investment
was made by check or by an attempted automatic withdrawal from your U.S. bank
account, the administrator may consider the request for the investment of such
money null and void and may immediately remove from your account shares of
common stock purchased. The administrator may sell those shares to satisfy any
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uncollected amount and a $25 returned funds fee. By enrolling in the Plan, you
authorize the administrator to deduct this fee by selling the shares from your
Plan account. If the proceeds from the sale of the common stock do not satisfy
the service and processing fees, uncollected balance and returned funds fee, the
administrator may sell additional shares from your Plan account to satisfy such
fees.
13. How do I get a refund of an optional cash purchase if I change my mind?
You may obtain a refund of any optional cash purchase payment not yet
invested by calling the administrator at (800) 317-4445 and requesting a refund
of your payment. The administrator must receive your request for a refund not
later than two business days prior to the next investment date. If the
administrator receives your request later than the specified date, your cash
purchase payment will be applied to the purchase of shares of common stock.
14. Will I be paid interest on funds held for optional cash purchases prior to
investment?
You will not be paid interest on funds you send to the administrator for
optional cash purchases. Consequently, we strongly suggest that you deliver
funds to the administrator to be used for investment in optional cash purchases
shortly prior to but not after the applicable optional cash investment due date
so that they are not held over to the following investment date. If you have any
questions regarding the applicable investment dates or the dates as of which
funds should be delivered to the administrator, you should contact the
administrator through the Internet, by telephone or in writing at the address
and telephone numbers specified in Question 2 above.
You should be aware that because investments under the Plan are made as of
specified dates, you may lose any advantage that you otherwise might have from
being able to control the timing of an investment. Neither we nor the
administrator can assure you a profit or protect you against a loss on shares of
common stock purchased under the Plan.
15. When will shares be purchased under the Plan?
The administrator will credit shares of our common stock purchased with
reinvested dividends to your account on the applicable "investment date" for the
fiscal quarter in which the purchase is made. The Plan administrator will credit
shares to your Plan account for optional cash purchases on the next "investment
date" after the administrator receives your cash payment.
The investment date is the date on which shares of our common stock are
purchased with reinvested dividends, initial and optional cash investments of up
to $6,250 and in excess of $6,250.
If you are reinvesting dividends declared on our common stock, the
investment date is the date of payment of quarterly dividends on our common
stock, or the dividend payment date, provided that if no trades of our common
stock are reported on the NYSE on the date we pay dividends, or the trading day,
the administrator shall apply such reinvested dividends on the next trading day
on which there are trades of our common stock reported on the NYSE. The record
date associated with a particular dividend distribution is referred to in this
prospectus as a "dividend record date."
It is our policy to declare quarterly distributions to the holders of
common stock so as to comply with applicable sections of the Internal Revenue
Code governing REITs. Subject to the foregoing, future dividends will be
determined in light of our earnings, financial condition and other relevant
factors.
-23-
For initial and optional cash purchases, both within the Plan limits and
pursuant to an approved request for waiver, the monthly investment date is the
15th day of the calendar month (unless the 15th calendar day is not a trading
day, in which case the investment date will be the first trading day following
the 15th calendar day of that month).
16. How are shares purchased under the Plan?
The administrator may purchase shares from (i) the open market or in
privately negotiated transactions, (ii) our authorized but unissued shares of
our common stock, or (iii) a combination of both. There is no limit on the
number of shares that the administrator may purchase in the open market or
pursuant to privately negotiated purchases.
However, shares of common stock purchased by the administrator for initial
and optional cash purchases made above the $6,250 maximum limit with our
permission will be acquired only from newly issued common stock and may not be
acquired from open market purchases or privately negotiated transactions. See
Question 17.
Because we presently expect to continue the Plan indefinitely, we may
authorize additional shares from time to time as necessary for purposes of the
Plan.
17. At what price will shares be purchased?
The purchase price for shares of our common stock under the Plan depends on
how you purchase the shares and on whether we issue new shares to you or the
Plan obtains your shares by purchasing them in the open market or through
privately negotiated transactions.
Reinvested dividends and/or optional cash purchases under the maximum
thresholds of $6,250. The purchase price for each share of common stock acquired
through the Plan by the reinvestment of dividends and/or optional cash purchases
of $6,250 or less per month will be equal to:
o in the case of newly issued shares of common stock, the average of the
high and low NYSE prices on the applicable investment date on which we
declare dividends and/or make optional cash purchases of $6,250 or
less per month less a discount ranging from 0% to 5%, provided that if
no trades of our common stock are reported on the NYSE on the
applicable investment date, the administrator shall apply the
reinvested dividends and/or optional cash purchases of $6,250 or less
per month on the next trading day on which there are trades of our
common stock reported on the NYSE; or
o in the case of open market or privately negotiated transactions, the
weighted average of the purchase price of all shares purchased by the
administrator for the Plan with reinvested dividends and/or optional
cash purchases of $6,250 or less per month on the applicable
investment date. Discounts are not available when shares are purchased
from persons other than us.
All shares purchased under the Plan through open market purchases will be
acquired as soon as practicable, beginning on the investment date and will be
completed no later than 30 days from such date for reinvestment of dividends and
35 days from such date for optional cash investments, except where completion at
a later date is necessary or advisable under any applicable federal securities
laws. Such purchases may be made on any securities exchange where such shares
are traded, in the over-the-counter-market or in negotiated transactions and may
be subject to such terms with respect to price, delivery, etc. to which the
administrator may agree. Neither we nor the Plan participant shall have any
authority or power to direct the time or price at which shares may be purchased,
or the selection of the broker or dealer through or from whom purchases are to
be made.
-24-
Optional cash purchases made above the $6,250 per month maximum limit with
our permission. If we elect to allow you to purchase in excess of $6,250 in any
calendar month, the price will be equal to the average of the daily high and low
NYSE prices for each of the 10 trading days immediately preceding the applicable
investment date, or the daily average price, less a discount ranging from 0% to
5%.
All shares of common stock purchased in excess of the maximum limit will be
newly issued, and no shares will be acquired in open market purchases or in
privately negotiated transactions. Purchases made in excess of the maximum limit
may be subject to a minimum price as described below. To obtain specific
information for a specific investment date, please call us at (410) 427-1700 or
visit our website at www.omegahealthcare.com.
Threshold Price. We may establish a minimum or "threshold" price for
optional cash purchases made with requests for waiver for any pricing period.
For some pricing period's dates, we may not establish a threshold price. At
least three trading days before the first day of a pricing period we will
determine whether a threshold price wil be in effect, and if so, its amount. If
we establish a threshold price, it will be stated as a dollar amount that the
purchase price for the shares of our common stock must equal or exceed. If the
price of our common stock is less than the threshold price on any trading day
during the pricing period, or if no trades of our common stock are reported on
the NYSE, then we will exclude that day and the trading prices for that day from
the calculation of the purchase price. For example, if the minimum price is not
satisfied for three of the ten days in a pricing period, then the purchase price
will be based on the remaining seven days when the minimum price is satisfied.
For each day during the pricing period that the minimum price is not satisfied,
we will return one tenth (1/10) of each optional cash purchase made with a
request for waiver to you by check, without interest, as soon as practicable
after the applicable investment date. The establishment of a threshold price and
the possible return of a portion of the optional cash purchase applies only to
optional cash purchases made pursuant to a request for waiver.
Setting a threshold price for a pricing period shall not affect the setting
of a threshold price for any subsequent pricing period. For any particular
month, we reserve the right whether or not to set a threshold price. Neither we
nor the administrator shall be required to provide any written notice to
participants as to the threshold price for any pricing period. Participants may
however ascertain whether a threshold price has been set or not set for any
given pricing period by telephoning us at (410) 427-1700 or visiting our website
at www.omegahealthcare.com.
Maximum discount applicable to all dividend reinvestments and optional cash
purchases. Whether you are reinvesting dividends or making optional cash
purchases, you may not purchase shares of our common stock on any particular
trading day (whether such shares are newly issued shares or purchased by the
administrator in open market or privately negotiated transactions) for an
amount, less any brokerage commissions, trading fees and any other costs of
purchase paid by us, which is less than 95% of the average of the high and low
NYSE prices on that particular trading day. In the event that shares would be
purchased for an amount, less any brokerage commissions, trading fees and other
costs, which is below 95% of this average, your purchase price, less any
brokerage commissions, trading fees and other costs, will equal 95% of the
average of the high and low NYSE prices on that day.
18. How do I request a waiver of the purchase limitation?
-25-
You may make optional cash purchases in excess of $6,250 during any
calendar month only pursuant to a request for waiver approved by us in our sole
and absolute discretion. To obtain a Request for Waiver Form, you should contact
us at (410) 427-1700. Completed Requests for Waiver Forms can be sent to us by
facsimile at (410) 427-8822, Attention: Chief Financial Officer, by 2:00 p.m.,
Eastern Time, or mailed to us at Omega Healthcare Investors Inc., 9690 Deereco
Road, Suite 100, Timonium, MD 21093, Attention: Chief Financial Officer. We must
receive your request at least five business days before the start of the ten-day
pricing period for the applicable investment date. We will promptly notify you
as to whether we approved your request and the amount of your request that we
approved. If your request is approved, you a must send the administrator a copy
of our Form of Approval, together with your optional cash purchase in good funds
no later than 2:00 p.m., Eastern Time, on the business day before the first day
of the pricing period for the next applicable investment date. To obtain
specific information for a specific investment date, please call us at (410)
427-1700 or visit our web site at www.omegahealthcare.com.
In the event that your request for waiver is not received by us on a timely
basis, the waiver will not be approved for that investment date and your
optional cash purchase will be limited to $6,250 for that investment date. If
your request for a waiver is not timely, or if we deny your request for a
waiver, the administrator will refund the entire amount submitted without
interest thereon. We have sole and absolute discretion to grant any approval for
optional cash purchases in excess of the allowable maximum amounts.
In deciding whether to approve or deny a request for waiver, we will
consider each request on a case-by-case basis and consider various relevant
factors, including, but not limited to:
o our need for additional funds;
o the attractiveness of obtaining the additional funds through the sale
of common stock as compared to other sources of funds;
o the purchase price likely to apply to any sale of common stock;
o the participant submitting the request, including the extent and
nature of such participant's prior participation in the Plan, and the
number of shares of our common stock held of record and/or
beneficially by such participant; and
o the aggregate amount, if any, of optional cash purchases for which
requests for waiver have been submitted by all participants.
If requests for waiver are submitted for any investment date for an
aggregate amount in excess of the amount we are then willing to accept, we may
honor those requests by any method that we determine to be appropriate. With
regard to optional cash purchases made pursuant to a request for waiver, the
Plan does not provide for a predetermined maximum limit on the amount that you
may invest or on the number of shares that may be purchased. We reserve the
right to modify, suspend or terminate participation in the Plan by otherwise
eligible holders or beneficial owners of our common stock for any reason
whatsoever including, without limitation, the elimination of practices that are
not consistent with the purposes of the Plan.
The Plan may also be used by us to raise additional capital through the
sale each month of a portion of the shares available for issuance under the Plan
to owners (including brokers or dealers) who in connection with any resales of
such shares, may be deemed to be underwriters. These sales will be effected
-26-
through our ability to approve requests for waiver. To the extent shares are
purchased from us under the Plan, we will receive additional funds for general
corporate purposes. The Plan is intended for the benefit of investors in our
common stock and not for individuals or investors who engage in transactions
which may cause aberrations in the price or trading volume of our common stock.
See the section entitled "Plan of Distribution" below.
19. How and when will we determine whether shares of common stock will be newly
issued or purchased in the market, and how and when will we establish a
discount?
We may, without prior notice to you, change our determination as to whether
common stock will be purchased by the administrator directly from us, in the
open market or in privately negotiated transactions from third parties or in a
combination of both, in connection with the purchase of shares of common stock
from reinvested dividends or from optional cash purchases. We will not, however,
change our determination more than once in any three-month period.
We may, in our sole discretion, establish a discount of 0% to 5% from the
current market price for shares of our common stock purchased through the Plan.
This discount may apply to reinvested dividends, initial optional cash
purchases, optional cash purchases or any combination thereof as we may
determine from time to time. If we elect to offer a discount, we will fix the
discount at least three business days before the investment date with respect to
dividend reinvestments, initial optional cash purchases and optional cash
purchases within the Plan limits. The discount rate, if any, on optional cash
investments pursuant to a request for waiver will be announced at least three
business days before the first day of the pricing period. Such discounts may
vary each month and may not apply uniformly to all purchases made pursuant to
the Plan for that month. The discount will be established at our sole discretion
after a review of current market conditions, the level of participation in the
Plan, and current and projected capital needs. You may obtain the discount, if
any, applicable to the next investment date by calling the administrator at
(800) 317-4445 or us at (410) 427-1700. You may also visit our web site at
www.omegahealthcare.com.
While a discount from market prices of up to 5% may be established, the
discount is subject to change from time to time and is also subject to
discontinuance at our discretion at any time. We will not offer a discount for
common stock purchased in the open market or in privately negotiated
transactions.
20. Will certificates be issued for share purchases?
The administrator will not issue certificates for shares that you purchase
under the Plan. Your account statement will show the number of shares credited
to your Plan account in "book-entry" form. This service protects against the
loss, theft, or destruction of certificates evidencing shares. However, you may
at any time request that the administrator issue a certificate for any whole
number of shares of common stock, up to the number of whole shares credited to
your Plan account. You can request a certificate for some or all of your shares
by accessing your Plan account through the Internet at the Plan administrator's
web site at www.equiserve.com, by calling the Plan administrator at (800)
445-2617, or by writing to the Plan administrator at the address listed in
Question 2 above. The administrator will not issue certificates for fractional
shares of common stock under any circumstances. If you request a certificate for
all shares credited to your Plan account, a certificate will be issued for the
whole shares and a cash payment will be made for any remaining fractional share.
That cash payment will be based upon the then-current market value of the
shares, less any applicable fees.
-27-
Receiving a portion of your shares in a certificate form from your Plan
account does not affect your dividend reinvestment option. For example, if you
authorized full dividend reinvestment, cash dividends with respect to the shares
issued in certificate form will continue to be reinvested. However, if you
withdraw all of your whole and fractional shares from your Plan account, your
participation in the Plan will be terminated and any future dividends will be
paid by check or direct deposit to your bank account.
21. What if I have more than one Plan account?
For purposes of the limitations discussed in this prospectus, we may
aggregate all optional cash purchases for you if you have more than one Plan
account which uses the same social security or taxpayer identification number.
If you are unable to supply a social security or taxpayer identification number,
your participation may be limited by us to only one Plan account. Also for the
purpose of these limitations, all Plan accounts that we believe to be under
common control or management or to have common beneficial ownership may be
aggregated. Unless we have determined that reinvestment of dividends and
optional cash purchases for each Plan account would be consistent with the
purposes of the Plan, we will have the right to aggregate all of these accounts
and to return, without interest, any amounts in excess of the investment
limitations.
22. May I add shares of common stock to my Plan account by depositing stock
certificates that I possess?
You may send to the Plan for safekeeping all common stock certificates
which you hold. The safekeeping of shares offers the advantage of protection
against loss, theft or destruction of certificates as well as convenience if and
when shares are sold through the Plan. All shares represented by certificates
will be kept for safekeeping and credited to your Plan account in "book-entry"
form and combined with any full and fractional shares then held by the Plan for
you. If you wish to deposit your certificates of our common stock, you must mail
them along with a request to the administrator to hold your certificates for
safekeeping. The certificates should not be endorsed. Any certificates sent to
the administrator should be sent registered mail or certified mail, return
receipt requested, and properly insured, as you bear the risk for certificates
lost or stolen in transit. You may mail certificates to the administrator at the
address provided in Question 2 above.
The administrator will promptly send you a statement confirming each
deposit of your common stock certificates. When necessary, you can simply
request that certificates be issued as your needs require.
23. How do I sell shares of common stock in my Plan account?
You may sell some or all of your shares in your Plan account (including
shares deposited by you with the Plan administrator for safekeeping) by
accessing your Plan account through the Internet at the Plan administrator's web
site at www.equiserve.com, by calling the Plan administrator at (800) 446-2617
or by writing to the Plan administrator at the address listed in Question 2
above. You will be charged a service fee of $15 for each requested sale and a
processing fee of $0.12 per each whole share and fraction sold, which includes
the applicable brokerage commissions the administrator is required to pay. The
fees will be deducted from the proceeds of the sale. Shares you sell in this
manner will be aggregated with those of other participants for whom the
administrator is also selling shares on the same date. The administrator will
process all sale orders on the day the administrator receives them, provided
that the instructions are received before 1:00 p.m., Eastern time, on a business
day during which the Plan administrator and the NYSE are open for business. If
your sale instructions are received after 1:00 p.m., Eastern Time, on a business
day on which the administrator and the NYSE are open for business, the sale
order will be processed on the following business day. The sale price for shares
sold will be the market price received from the sale of such shares. Your sales
proceeds would then be remitted to you by check.
-28-
You will not earn interest on funds generated from the sale of shares for
the time period between the date of sale and the date on which you receive your
check. The administrator reserves the right to designate a broker to sell shares
on the open market. All sale requests having an anticipated market value of
$100,000 or more must be submitted in written form. In addition, all sale
requests within 30 days of an address change to your account must be submitted
in written form.
Neither we nor any Plan participant has the authority or power to control
the timing, pricing, or the selection of a broker of any shares sold. Therefore,
you will not be able to precisely time your sales through the Plan, and you will
bear the market risk associated with fluctuations in the price of our common
stock. That is, if you send in a request for a sale, it is possible that the
market price of our common stock could increase or decrease before the sale is
completed. If you prefer to have control over the exact price and timing of your
sale, you may request through the Internet, by telephone or in writing that the
administrator issue to you a certificate for any or all of the whole shares in
your Plan account, and thereafter, you can conduct the transaction through a
broker-dealer of your choice.
Instructions sent to the administrator to sell shares are binding on all
participants and may not be rescinded.
24. How may I transfer all or a part of my shares held in the Plan to another
person?
You may transfer ownership of all or part of your shares held in the Plan
through gift, private sale or otherwise, by mailing to the administrator at the
address provided in Question 2 above a properly executed stock power, along with
a letter with specific instructions regarding the transfer and a Substitute Form
W-9 (Certification of Taxpayer Identification Number) completed by the
transferee. Requests for transfer of shares held in the Plan are subject to the
same requirements as the transfer of common stock certificates, including the
requirement of a medallion signature guarantee on the stock power. The
administrator will provide you with the appropriate forms upon request. If you
have any stock certificates bearing a restrictive legend in your Plan account,
the administrator will comply with the provisions of the restrictive legend
before effecting a sale or transfer of the restricted shares. All transfers will
be subject to the limitations on ownership and transfer provided in our charter
which are summarized below in the section entitled "Restrictions on Ownership of
Shares" and which are incorporated into this prospectus by reference. If you
have any questions regarding transfer requirements for shares in your Plan
account, please contact the administrator as specified in Question 2 above.
25. What reports will be sent to participants in the Plan?
You will receive a statement whenever there is activity affecting your Plan
account. The statement will confirm each transaction, such as any purchase,
sale, transfer, certificate deposit, certificate issuance, or dividend
reinvestment. Statements will be sent promptly following each transaction. These
statements are a record of your Plan account activity showing your cumulative
share position and the prices for your purchases and sales of shares under the
Plan. The statements will also show the amount of dividends reinvested (if
applicable) and any applicable fees charged for your respective transactions
during that period. You should retain these statements for tax purposes.
The final statement for each year will show all pertinent information for
that calendar year, including tax-related information. The Plan administrator
may charge you a fee for additional copies of your account statements.
-29-
You may also view year-to-date transaction activity in your Plan account
for the current year, as well as activity in prior years, by accessing your Plan
account at the administrator's website at www.equiserve.com.
The administrator will also send you copies of each prospectus and any
amendments or supplements to the prospectus describing the Plan. We will also
send you the same information that we send to other stockholders, including
annual reports, notices of stockholders' meetings, proxy statements, and income
tax reporting information.
Any participant that participates in the Plan through a broker, bank or
nominee, should contact that party for similar statements or material.
26. What happens if we issue a stock dividend or subscription rights, declare a
stock split or make any other distribution in respect of shares of our
common stock?
All split shares, stock dividends, or any other distribution of our common
stock on shares credited to your Plan account and/or on shares held by you in
the form of stock certificates will be credited to your Plan account with the
appropriate number of shares of our common stock on the payment date. In the
event that we make available to the holders of our common stock subscription
rights to purchase additional shares of common stock, the administrator will
sell the rights accruing to all shares held by the administrator for
participants and apply the net proceeds of the sale to the purchase of common
stock with the next monthly optional cash purchase.
27. May shares in my account be pledged?
You may not pledge shares credited to your or any other participant's
account and any purported pledge will be void. If you wish to pledge shares,
those shares must be withdrawn from the Plan.
28. Will I be able to vote my shares of common stock held in the Plan?
Whole shares held in a Plan account may be voted in person or by the proxy
sent to you. Fractions of shares may not be voted.
If you return your proxy properly signed and marked for voting, all the
shares covered by the proxy - those registered in your name and/or those
credited to your account under the Plan - will be voted as marked. If the proxy
is returned properly signed but without indicating instructions as to the manner
in which your shares are to be voted with respect to any item thereon, the
shares will be voted in accordance with the recommendations of our board of
directors. If your proxy is not returned, or if it is returned unexecuted or
improperly executed, your shares will be voted only if you attend the meeting
and vote in person.
29. What are the federal income tax consequences of participating in the Plan?
If you reinvest dividends, you will still be treated for federal income tax
purposes as having received a dividend on the dividend payment date. By
reinvesting dividends you will be liable for the payment of income tax on the
dividends despite not receiving immediate cash dividends to satisfy the tax
liability. In addition, for reinvested dividends and optional cash purchases,
you will be generally treated as having received a constructive distribution,
which may give rise to additional tax liability to the extent we pay brokerage
commissions on your behalf or purchase shares at a discount. See the section
entitled "Certain Federal Income Tax Consequences Associated with Participating
in the Plan" below.
30. Are there any limitations of liability for the company or the
administrator?
Neither we nor the administrator (nor any of our or its respective agents,
representatives, employees, officers, directors, or subcontractors) will be
liable in administering the Plan for any act done in good faith nor for any good
faith omission to act, including, without limitation, any claim of liability
arising from failure to terminate your Plan account upon your death prior to
receipt of notice in writing of such death, with respect to the prices or times
at which shares are purchased or sold for you or fluctuations in the market
value of common stock. You should recognize that the prices of shares purchased
under the Plan will be determined by, and subject to, market conditions, and
neither we nor the administrator can provide any assurance of a profit or
protection against loss on any shares purchased under the Plan.
31. May the Plan be changed or terminated?
We may amend, modify, suspend or terminate the Plan at any time. You will
be notified by the administrator in writing of any substantial modifications
made to the Plan. Any amendment may include an appointment by the administrator
in its place of a successor administrator under the terms and conditions set
forth herein, in which event we are authorized to pay the successor for the
account of each participant, all dividends and distributions payable on common
stock held by the participant under the Plan for application by the successor as
provided herein. Notwithstanding the foregoing, this action will not have any
retroactive effect that would prejudice your interests.
Any amendment, suspension, modification or termination of the Plan will not
affect your rights as a stockholder in any way, and any "book-entry" shares you
own will continue to be credited to your account with the administrator unless
you specifically request otherwise.
If your Plan account balance falls below one full share, the administrator
reserves the right to liquidate your Plan account and remit the proceeds, less
any applicable fees, to you at your address of record and to terminate your
participation in the Plan.
32. What law governs the Plan?
The Plan is governed by the laws of the State of Maryland.
-31-
RESTRICTIONS ON OWNERSHIP OF SHARES
Because our board of directors believes it is essential for us to continue
to qualify as a REIT, our charter documents contain restrictions on the
ownership and transfer of our capital stock which are intended to assist us in
complying with the requirements to qualify as a real estate investment trust.
If our board of directors is, at any time and in good faith, of the opinion
that direct or indirect ownership of at least 9.9% or more of the voting shares
of stock has or may become concentrated in the hands of one beneficial owner (as
that term is defined in Rule 13d-3 under the Exchange Act), our board of
directors has the power:
o by any means deemed equitable by it to call for the purchase from any
stockholder a number of voting shares sufficient, in the opinion of
our board of directors, to maintain or bring the direct or indirect
ownership of voting shares of stock of the beneficial owner to a level
of no more than 9.9% of the outstanding voting shares of our stock;
and
o to refuse to transfer or issue voting shares of stock to any person
whose acquisition of those voting shares would, in the opinion of our
board of directors, result in the direct or indirect ownership by that
person of more than 9.9% of the outstanding voting shares of our
stock.
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 outstanding shares of our stock shall be deemed void ab initio and
the intended transferee shall be deemed never to have had an interest therein.
The purchase price for any voting shares of stock so redeemed shall be equal to:
o the fair market value of the shares reflected in the closing sales
price for the shares, if then listed on a national securities
exchange;
o the average of the closing sales prices for the shares, if then listed
on more than one national securities exchange;
o 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 notices of the acquisitions are sent; or
o if none of these closing sales prices or quotations are available,
then the purchase price will be equal to the net asset value of the
stock as determined by our board of directors in accordance with the
provisions of applicable law.
From and after the date fixed for purchase by our board of directors, the
holder of any shares so called for purchase shall cease to be entitled to
distributions, voting rights and other benefits with respect to those shares,
except the right to payment of the purchase price for the shares.
-32-
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
ASSOCIATED WITH PARTICIPATING IN THE PLAN
Dividends you receive on shares of our common stock that you hold in the
Plan and which are reinvested in newly issued shares will be treated for federal
income tax purposes as a taxable stock distribution to you. Accordingly, you
will receive taxable dividend income in an amount equal to the fair market value
of the shares of our common stock that you receive on the date we pay dividends
to the extent we have current or accumulated earnings and profits for federal
income tax purposes. We intend to take the position that the fair market value
of the newly issued shares purchased with reinvested dividends equals the
average of the high and low NYSE prices of our common stock on the related date
we pay dividends. The treatment described above will apply to you whether or not
the shares are purchased at a discount. On the other hand, dividends you receive
on shares of our common stock that you hold in the Plan, which are reinvested in
shares of our common stock purchased by the administrator in the open market or
in privately negotiated transactions, will be treated for federal income tax
purposes as a taxable cash distribution to you in an amount equal to the
purchase price of such shares to the extent that we have current or accumulated
earnings and profits for federal income tax purposes. The portion of a
distribution you receive that is in excess of our current and accumulated
earnings and profits will not be taxable to you if this portion of the
distribution does not exceed the adjusted tax basis of your shares. If a portion
of your distribution exceeds the adjusted tax basis of your shares, that portion
of your distribution will be taxable as a capital gain. If we properly designate
a portion of your distribution as a capital gain dividend, then that portion
will be reportable as a capital gain. Capital gains will be taxed to you at a
15% or 25% income tax rate, depending on the tax characteristics of the assets
which produced such gains, and on certain other designations, if any, that we
may make.
The Internal Revenue Service has indicated in somewhat similar situations
that a participant who participates in the dividend reinvestment portion of the
Plan and makes an optional cash purchase of common stock under the Plan will be
treated as having received a distribution equal to the excess, if any, of the
fair market value on the investment date of the common shares over the amount of
the optional cash payment made by the participant. The fair market value will
equal the average of the high and low NYSE prices of our common stock on the
applicable investment date. Any distributions which the participant is treated
as receiving, including the discount, would be taxable income or gain or would
reduce his or her basis in common stock, or some combination thereof, under the
rules described above.
Under the Plan, we will bear any trading fees or brokerage commissions
related to the acquisition of, but not the sale of, shares of our common stock.
Brokerage commissions paid by a corporation with respect to open market
purchases on behalf of participants in a dividend reinvestment plan or pursuant
to the optional cash purchase features of a plan are generally treated as
constructive distributions to the participants, and the payment of these fees or
commissions is generally subject to income tax in the same manner as
distributions and includable in the participant's cost basis of the shares
purchased. Accordingly, to the extent that we pay brokerage commissions with
respect to any open market or privately negotiated purchases made with
reinvested dividends or optional cash purchases by the administrator,
participants will generally be treated as receiving their proportionate amount
of the commissions as distributions in addition to the amounts described above.
Your tax basis in your shares of common stock acquired under the dividend
reinvestment features of the Plan will generally equal the total amount of
distributions you are treated as receiving, as described above. Your tax basis
in your shares of common stock acquired through an optional cash purchase under
the Plan will generally equal the total amount of distributions you are treated
as receiving, as described above, plus the amount of the optional cash payment.
Your holding period for the shares of our common stock acquired under the Plan
will begin on the day following the date such shares were purchased for your
Plan account. Consequently, shares of our common stock purchased in different
quarters will have different holding periods.
-33-
You will not realize any gain or loss when you receive certificates for
whole shares of our common stock credited to your account, either upon your
request, when you withdraw from the Plan or if the Plan terminates. However, you
will recognize gain or loss when you sell or exchange whole shares of our common
stock acquired under the Plan. You will also recognize gain or loss when you
receive a cash payment for a fractional share of our common stock credited to
your Plan account when you withdraw from the Plan or if the Plan terminates. The
amount of your gain or loss will equal the difference between the amount of cash
you receive for your fractional shares of our common stock, net of any costs of
sale paid by you, and your tax basis of such fractional shares.
Backup Withholding and Information Reporting. In general, we are required
to report to the Internal Revenue Service all actual and constructive dividend
distributions to you, unless you are a corporation or other shareholder exempt
from reporting requirements. Additionally, dividends are subject to backup
withholding, currently at a 28% rate, unless you provide your taxpayer
identification number in the manner prescribed in applicable Treasury
Regulations, certify that such number is correct, certify as to no loss of
exemption from backup withholding, and meet certain other conditions, or
otherwise establish an exemption. Backup withholding amounts will be withheld
from dividends before those dividends are reinvested under the Plan. Therefore,
dividends to be reinvested under the Plan by participants subject to backup
withholding will be reduced by the backup withholding amount. The withheld
amounts will generally be allowed as a refund or credit against the
participant's U.S. federal income tax liability, provided the required
information is furnished to the Internal Revenue Service.
REIT Taxation. As an owner of shares of a REIT, you will be generally taxed
on distributions made to you (not designated as capital gain dividends), to the
extent of our earnings and profits, at ordinary tax rates of up to 35% (in the
case of a shareholder who is an individual). Because we are not generally
subject to federal income tax on the portion of our REIT taxable income or
capital gains distributed to our stockholders, our dividends will generally not
be eligible for the low 15% tax rate on dividends distributed by regular "C"
corporations. As a result, our ordinary REIT dividends will continue to be taxed
at the higher tax rates applicable to ordinary income. However, the 15% tax rate
for long-term capital gains and dividends will generally apply to:
o your long-term capital gains, if any, recognized on the disposition of
our shares;
o our distributions designated as long-term capital gain dividends
(except to the extent attributable to "unrecaptured Section 1250
gain," in which case such distributions would continue to be subject
to a 25% tax rate);
o our dividends attributable to dividends received by us from non-REIT
corporations, such as taxable REIT subsidiaries; and
o our dividends to the extent attributable to income upon which we have
paid corporate income tax (e.g., to the extent that we distribute less
than 100% of our taxable income).
The foregoing summary of certain federal income tax considerations
regarding the Plan is based on current law, is for your general information only
and is not tax advice. This discussion does not purport to deal with all aspects
of taxation that may be relevant to you in light of your personal investment
circumstances, or if you are a type of investor (including insurance companies,
tax-exempt organizations, entities treated as pass-through entities for U.S.
federal income tax purposes, financial institutions or broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States)
that is subject to special treatment under the federal income tax laws.
-34-
FOR FURTHER INFORMATION AS TO THE TAX CONSEQUENCES TO PARTICIPANTS IN THE PLAN,
INCLUDING STATE, LOCAL AND FOREIGN TAX CONSEQUENCES, YOU SHOULD CONSULT WITH
YOUR OWN TAX ADVISOR(S). THE ABOVE DISCUSSION IS BASED ON FEDERAL INCOME TAX
LAWS AS IN EFFECT AS OF THE DATE HEREOF. ALL PARTICIPANTS SHOULD CONSULT THEIR
TAX ADVISORS WITH RESPECT TO THE IMPACT OF ANY FUTURE LEGISLATIVE PROPOSALS OR
LEGISLATION ENACTED AFTER THE DATE OF THIS PROSPECTUS.
PLAN OF DISTRIBUTION
Except to the extent the administrator purchases shares of our common stock
in the open market, we will sell directly to the administrator the shares of our
common stock acquired under the Plan. There are no brokerage commissions in
connection with the purchases of such newly issued shares of our common stock.
In connection with the administration of the Plan, we may be requested to
approve investments made pursuant to requests for waiver by or on behalf of
participants or other investors who may be engaged in the securities business.
Persons who acquire shares of common stock through the Plan and resell them
shortly after acquiring them, including coverage of short positions, under
certain circumstances, may be participating in a distribution of securities that
would require compliance with Regulation M under the Exchange Act and may be
considered to be underwriters within the meaning of the Securities Act. We will
not extend to any such person any rights or privileges other than those to which
it would be entitled as a participant, nor will we enter into any agreement with
any such person regarding the resale or distribution by any such person of the
shares of our common stock so purchased. We may, however, accept investments
made pursuant to requests for waiver by such persons.
You will only be responsible for a transaction fee and your pro rata share
of trading fees and any brokerage commissions associated with your sales of
shares of common stock attributable to you under the Plan. We will pay for all
fees and commissions associated with your purchases under the Plan. Our common
stock is listed on the NYSE under the symbol "OHI."
Pursuant to the Plan, we may be requested to approve optional cash
purchases in excess of the allowable maximum amounts pursuant to requests for
waiver on behalf of participants that may be engaged in the securities business.
In deciding whether to approve this request, we will consider relevant factors
including, but not limited to:
o our need for additional funds;
o the attractiveness of obtaining these funds by the sale of common
stock under the Plan in comparison to other sources of funds;
o the purchase price likely to apply to any sale of common stock;
o the participant submitting the request, including the extent and
nature of the participant's prior participation in the Plan and the
number of shares of common stock held of record by the participant;
and
-35-
o the aggregate number of requests for waiver that have been submitted
by all participants.
From time to time, financial intermediaries, including brokers and dealers,
and other persons may engage in positioning transactions in order to benefit
from any waiver discounts applicable to investments made pursuant to requests
for waiver under the Plan. Those transactions may cause fluctuations in the
trading volume of our common stock. Financial intermediaries and such other
persons who engage in positioning transactions may be deemed to be underwriters.
We have no arrangements or understandings, formal or informal, with any person
relating to the sale of shares of our common stock to be received under the
Plan. We reserve the right to modify, suspend or terminate participation in the
Plan by otherwise eligible persons to eliminate practices that are inconsistent
with the purpose of the Plan.
USE OF PROCEEDS
We are unable to predict the number of shares of common stock that will
ultimately be sold under the Plan, the prices at which such shares will be sold,
or the number of such shares, if any, that will be sold by us from the our
authorized but unissued shares of common stock. Therefore, we cannot estimate
the amount of proceeds to be received from the sale of such shares. To the
extent that shares of common stock are sold from our authorized but unissued
shares of common stock, the proceeds of such sales will be added to our general
funds and will be used for funding of real estate investments or for general
corporate purposes.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Exchange Act and
file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or other
information that we file with the SEC at the SEC's public reference rooms at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from commercial document retrieval
services and free of charge at the website maintained by the SEC at www.sec.gov.
We have filed with the SEC a registration statement on Form S-3, or the
registration statement, under the Securities Act. This prospectus does not
contain all the information set forth in the registration statement, certain
parts of which are omitted in accordance with the rules and regulations of the
SEC. For further information, reference is hereby made to the registration
statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document we have filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
except for any information superseded by information contained directly in this
prospectus. This prospectus incorporates by reference the documents set forth
below that we have previously filed with the SEC (File No. 001-11316) as well as
any filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this prospectus and prior to the termination
of this offering, other than information or reports furnished to the SEC under
Items 2.02 and 7.01 of Current Reports on Form 8-K:
-36-
o Annual Report on Form 10-K for the fiscal year ended December 31,
2003;
o Quarterly Reports on Form 10-Q for the quarterly periods ended
September 30, 2004, June 30, 2004 and March 31, 2004;
o Current Reports on Form 8-K filed on November 9, 2004, November 8,
2004, October 29, 2004, October 29, 2004, October 26, 2004*, October
18, 2004, September 16, 2004, July 27, 2004*, May 24, 2004, April 27,
2004*, March 26, 2004, March 11, 2004, March 8, 2004, March 4, 2004,
February 23, 2004, February 10, 2004, February 5, 2004, February 5,
2004, January 29, 2004*, and January 27, 2004*; and
o The description of our common stock contained in our initial
registration statement on Form 8-A, filed under Section 12 of the
Exchange Act, and declared effective by the SEC on August 7, 1992,
together with any amendment or report filed subsequent to the date
hereof for the purpose of updating such description (File No.
001-11316).
____________________________
* These reports contain information furnished to the SEC under Item 2.02
and/or Item 7.01 of Form 8-K which, pursuant to General Instructions
B(2) and (6) 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 Item
2.02 and/or Item 7.01 of Form 8-K.
These documents contain important information about our financial
condition. You may obtain copies of any documents incorporated by reference in
this prospectus from us, from the SEC or from the SEC's website as described
above. Documents incorporated by reference are available from us without charge,
excluding exhibits thereto, unless we have specifically incorporated by
reference such exhibits in this prospectus. Any person, including any beneficial
owner, to whom this prospectus is delivered may obtain documents incorporated by
reference in, but not delivered with, this prospectus by requesting them from us
in writing or by telephone at Omega Healthcare Investors, Inc., Attention: Chief
Financial Officer, 9690 Deereco Road, Suite 100, Timonium, Maryland 21093,
telephone number (410) 427-1700. You may also access our SEC filings free of
charge on our website at www.omegahealthcare.com, under the tab entitled "SEC
Filings."
LEGAL MATTERS
The legality of the shares of common stock being offered hereby has been
passed upon for us by Argue Pearson Harbison & Myers, Los Angeles, California.
In addition, Powell Goldstein LLP, Atlanta, Georgia, has passed upon certain
federal income tax matters.
EXPERTS
The consolidated financial statements and schedules of Omega Healthcare
Investors, Inc. appearing in Omega Healthcare Investors, Inc. Annual Report
(Form 10-K) for the year ended December 31, 2003, have been audited by Ernst &
Young LLP, independent registered public accounting firm, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedules are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
-37-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses in connection with the
distribution of the shares of our common stock being registered hereby, other
than underwriting discounts and commissions, if any:
SEC Registration Fee...................................................$0.00
Accounting Fees and Expenses........................................5,000.00
Legal Fees and Expenses............................................10,000.00
Miscellaneous.......................................................1,000.00
Total.............................................................$16,000.00
==========
The foregoing items, except for the SEC Registration Fee, are estimated.
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.
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
II-1
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.
Exhibit
Number Description
------- -----------
5.1 Opinion of Argue Pearson Harbison & Myers regarding legality of
securities (previously filed).
8.1 Opinion of Powell Goldstein LLP regarding certain tax matters.
23.1 Consent of Independent Registered Public Accounting Firm.
23.2 Consent of Argue Pearson Harbison & Myers (included in Exhibit 5.1)
23.3 Consent of Powell Goldstein LLP (included in Exhibit 8.1)
24.1 Power of Attorney (included on Signature Page).
99.1 Stock Purchase Initial Enrollment Form for Omega Healthcare Investors,
Inc. Dividend Reinvestment and Common Stock Purchase Plan.
99.2 Enrollment Authorization Form for Omega Healthcare Investors, Inc.
Dividend Reinvestment and Common Stock Purchase Plan.
99.3 Voluntary Cash Payment Enrollment Form for Omega Healthcare Investors,
Inc. Dividend Reinvestment and Common Stock Purchase Plan.
99.4 Form of Request for Waiver for Omega Healthcare Investors, Inc.
Dividend Reinvestment and Common Stock Purchase Plan.
99.5 Form of Letter to Stockholders of Omega Healthcare Investors, Inc.
Item 17. Undertakings.
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in a periodic report
filed by registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated herein by reference;
II-2
(b) 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, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and incorporated herein by
reference. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(c) 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.
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 purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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 foregoing provisions referred to 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 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.
II-3
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 23rd day of
November 2004.
OMEGA HEALTHCARE INVESTORS, INC.
By:/s/C. Taylor Picket
-----------------------
C. Taylor Picket
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, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated and on the date indicated.
Signature Position Date
--------- -------- ----
/s/ C. Taylor Pickett
---------------------------------------
C. Taylor Pickett Chief Executive Officer and Director November 23, 2004
(Principal Executive Officer)
/s/ Robert O. Stephenson
---------------------------------------
Robert O. Stephenson Chief Financial Officer November 23, 2004
(Principal Financial and Accounting Officer)
/s/ Bernard J. Korman
---------------------------------------
Bernard J. Korman Chairman of the Board of Directors November 23, 2004
/s/ Thomas S. Franke
---------------------------------------
Thomas S. Franke Director November 23, 2004
/s/ Harold J. Kloosterman
---------------------------------------
Harold J. Kloosterman Director November 23, 2004
/s/ Edward Lowenthal
---------------------------------------
Edward Lowenthal Director November 23, 2004
/s/ Stephen D. Plavin
---------------------------------------
Stephen D. Plavin Director November 23, 2004
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
5.1 Opinion of Argue Pearson Harbison & Myers regarding legality of
securities (previously filed).
8.1 Opinion of Powell Goldstein LLP regarding certain tax matters.
23.1 Consent of Independent Registered Public Accounting Firm.
23.2 Consent of Argue Pearson Harbison & Myers (included in Exhibit 5.1)
23.3 Consent of Powell Goldstein LLP (included in Exhibit 8.1)
24.1 Power of Attorney (included on Signature Page).
99.1 Stock Purchase Initial Enrollment Form for Omega Healthcare Investors,
Inc. Dividend Reinvestment and Common Stock Purchase Plan.
99.2 Enrollment Authorization Form for Omega Healthcare Investors, Inc.
Dividend Reinvestment and Common Stock Purchase Plan.
99.3 Voluntary Cash Payment Enrollment Form for Omega Healthcare Investors,
Inc. Dividend Reinvestment and Common Stock Purchase Plan.
99.4 Form of Request for Waiver for Omega Healthcare Investors, Inc.
Dividend Reinvestment and Common Stock Purchase Plan.
99.5 Form of Letter to Stockholders of Omega Healthcare Investors, Inc.