Use these links to rapidly review the document
TABLE OF CONTENTS
Table of Contents
As filed with the Securities and Exchange Commission on February 13, 2018
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VENTAS, INC.
and
VENTAS REALTY, LIMITED PARTNERSHIP
(Exact names of registrants as specified in charter)
|
|
|
Delaware
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
61-1055020
61-1324573
(I.R.S. Employer
Identification Number)
|
353 N. Clark Street, Suite 3300
Chicago, Illinois 60654
(877) 483-6827
(Address, including zip code, and telephone number, including
area code, of registrants' principal executive offices)
T. Richard Riney, Esq.
General Counsel
Ventas, Inc.
10350 Ormsby Park Place, Suite 300
Louisville, Kentucky 40223
(502) 357-9000
(Name, address, including zip code, telephone number, including area code, of agent for service)
Copy to:
Cathy A. Birkeland
Julian T.H. Kleindorfer
Roderick O. Branch
Latham & Watkins LLP
330 North Wabash Avenue, Suite 2800
Chicago, Illinois 60611
(312) 876-7700
Approximate date of commencement of proposed sale to the public:
From time to time or at one time as determined by the Registrants.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box.
o
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of
1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
ý
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.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering.
o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon
filing
with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
ý
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities
or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
o
Indicate by check mark whether the Registrant (Ventas, Inc.) is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2
of the Exchange Act.
|
|
|
|
|
|
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
Emerging growth company
o
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
o
Indicate by check mark whether the Registrant (Ventas Realty, Limited Partnership) is a large accelerated filer, an accelerated filer, a non-accelerated
filer, a
smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in
Rule 12b-2 of the Exchange Act.
|
|
|
|
|
|
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
ý
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
Emerging growth company
o
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
o
CALCULATION OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Title of Each Class of Securities
to be Registered
|
|
Amount to be
Registered
|
|
Proposed Maximum
Offering Price Per
Unit
|
|
Proposed Maximum
Aggregate Offering
Price
|
|
Amount of
Registration Fee
|
|
Common Stock of Ventas, Inc.
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(3)
|
|
Preferred Stock of Ventas, Inc.
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(3)
|
|
Depositary Shares of Ventas, Inc.
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(3)
|
|
Warrants of Ventas, Inc.
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(3)
|
|
Debt Securities of Ventas Realty, Limited Partnership
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(3)
|
|
Debt Securities of Ventas, Inc.
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(3)
|
|
Guarantees of Debt Securities of Ventas Realty, Limited Partnership by Ventas, Inc.(4)
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(4)
|
|
Guarantees of Debt Securities of Ventas, Inc. by Ventas Realty, Limited Partnership(4)
|
|
(1)(2)
|
|
(1)(2)
|
|
(1)(2)
|
|
(4)
|
|
-
(1)
-
Not
applicable pursuant to Form S-3 General Instruction II(E).
-
(2)
-
Such
indeterminable number or amount of (a) common stock of Ventas, Inc. (which may be issued separately, upon conversion of the debt securities
registered hereby and upon exercise of warrants), (b) prfeferred stock of Ventas, Inc., (c) depositary shares representing preferred stock of Ventas, Inc.,
(d) warrants of Ventas, Inc. to acquire other classes of securities of Ventas, Inc. registered hereby, (e) debt securities of Ventas Realty, Limited Partnership (which may
be senior or subordinated), (f) debt securities of Ventas, Inc. (which may be senior or subordinated), (g) guarantees of debt securities of Ventas Realty, Limited Partnership by
Ventas, Inc. and (h) guarantees of debt securities of Ventas, Inc. by Ventas Realty, Limited Partnership is being registered as may be issued from time to time at indeterminable
prices.
-
(3)
-
Deferred
in reliance upon Rule 456(b) and Rule 457(r).
-
(4)
-
No
separate consideration will be received for the guarantees by Ventas, Inc. of the debt securities of Ventas Realty, Limited Partnership or the guarantees
by Ventas Realty, Limited Partnership of the debt securities of Ventas, Inc. The guarantees will include the right of the holders of guaranteed securities under the guarantees and certain
undertakings, as described in this Registration Statement. Pursuant to Rule 457(n), no registration fee is required with respect to the guarantees.
Table of Contents
PROSPECTUS
Ventas, Inc.
Common Stock, Preferred Stock, Depositary Shares, Warrants and
Debt Securities
Ventas Realty, Limited Partnership
Debt Securities
Guarantees of Debt Securities of Ventas, Inc.
by Ventas Realty, Limited Partnership
Guarantees of Debt Securities of Ventas Realty, Limited Partnership
by Ventas, Inc.
Ventas, Inc. may offer and sell, from time to time, in one or more offerings, common stock, preferred stock, depositary shares, warrants
and debt securities. These securities may be offered and sold separately, together or as units with other securities described herein. These debt securities may be fully and unconditionally guaranteed
by Ventas Realty, Limited Partnership, as described herein or in a prospectus supplement. These debt securities and any such guarantees may be senior or subordinated.
Ventas
Realty, Limited Partnership may offer and sell, from time to time, in one or more offerings, debt securities. These debt securities may be offered and sold separately, together or
as units with other securities described herein. These debt securities may be fully and unconditionally guaranteed by Ventas, Inc., as described herein or in a prospectus supplement. These debt
securities and any such guarantees may be senior or subordinated.
The
securities described herein may be issued in one or more series or issuances. We will provide the specific terms of any offering (including the securities being offered and their
offering prices) in supplements to this prospectus. You should carefully read this prospectus and the applicable prospectus supplement before making an investment decision.
See "Risk Factors" on page 7 for a discussion of matters that you should consider before investing in these
securities.
The
common stock of Ventas, Inc. is listed on the New York Stock Exchange under the symbol "VTR." The closing price of our common stock on the New York Stock Exchange was $50.46
per share on February 12, 2018. None of the other securities offered hereby are currently listed on a national securities exchange.
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.
The date of this prospectus is February 13, 2018.
Table of Contents
TABLE OF CONTENTS
Table of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement filed with the Securities and Exchange Commission (the "SEC") using a "shelf" registration
process. Under this shelf process, we may sell any combination of the securities described herein, from time to time, in one or more offerings.
This
prospectus provides you only with a general description of the securities we may offer. Each time we offer securities, we will provide one or more prospectus supplements containing
specific information about the terms of such offering. A prospectus supplement may also add to, update or change the information contained herein. You should read this prospectus, any applicable
prospectus supplement and the additional information described under "Where You Can Find More Information and Incorporation by Reference."
You
should rely only on the information included or incorporated by reference herein or in a prospectus supplement. We have not authorized anyone to provide you with different
information. We will not make an offer of the securities described herein in any jurisdiction where it is unlawful. You should assume that the information included or incorporated by reference herein
and in any prospectus supplement is accurate only as of the date of the document containing such information.
Unless
otherwise indicated or except where the context otherwise requires:
-
-
references herein to "Ventas, "we," "us," "our" and other similar terms mean Ventas, Inc., together with its consolidated subsidiaries;
and
-
-
references herein to "Ventas Realty" mean Ventas Realty, Limited Partnership.
1
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein include forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements regarding our or our
tenants', operators', borrowers' or managers' expected future financial condition, results of operations, cash flows, funds from operations, dividends and dividend plans, financing opportunities and
plans, capital markets transactions, business strategy, budgets, projected costs, operating metrics, capital expenditures, competitive positions, acquisitions, investment opportunities, dispositions,
merger integration, growth opportunities, expected lease income, continued qualification as a real estate investment trust ("REIT"), plans and objectives of management for future operations and
statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will" and other similar expressions, are forward-looking
statements. These forward-looking statements are inherently uncertain, and actual
results may differ from our or our expectations. We do not undertake a duty to update these forward-looking statements, which speak only as of the date on which they are made.
Our
actual future results and trends may differ materially from expectations depending on a variety of factors discussed in our filings with the SEC. These factors include, without
limitation:
-
-
The ability and willingness of our tenants, operators, borrowers, managers and other third parties to satisfy their obligations under their
respective contractual arrangements with us, including, in some cases, their obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities;
-
-
The ability of our tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their
respective obligations and liabilities to third parties, including, without limitation, obligations under their existing credit facilities and other indebtedness;
-
-
Our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying
acquisitions and investments;
-
-
Macroeconomic conditions such as a disruption of or lack of access to the capital markets, changes in the debt rating on U.S. government
securities, default or delay in payment by the United States of its obligations and changes in the federal or state budgets resulting in the reduction or nonpayment of Medicare or Medicaid
reimbursement rates;
-
-
The nature and extent of future competition, including new construction in the markets in which our seniors housing communities and office
buildings are located;
-
-
The extent and effect of future or pending healthcare reform and regulation, including cost containment measures and changes in reimbursement
policies, procedures and rates;
-
-
Increases in our borrowing costs as a result of changes in interest rates and other factors;
-
-
The ability of our tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of our
properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients;
-
-
Changes in general economic conditions or economic conditions in the markets in which we may, from time to time, compete, and the effect of
those changes on our revenues, earnings and funding sources;
-
-
Our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due;
2
Table of Contents
-
-
Our ability and willingness to maintain our qualification as a REIT in light of economic, market, legal, tax and other considerations;
-
-
Final determination of our taxable net income for the year ended December 31, 2017 and for the year ending December 31, 2018;
-
-
The ability and willingness of our tenants to renew their leases with us upon expiration of the leases, our ability to reposition our
properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations, including indemnification obligations, we may
incur in connection with the replacement of an existing tenant;
-
-
Risks associated with our senior living operating portfolio, such as factors that can cause volatility in our operating income and earnings
generated by those properties, including without limitation national and regional economic conditions, development of new competing properties, costs of food, materials, energy, labor and services,
employee benefit costs, insurance costs, and professional and general liability claims, and the timely delivery of accurate property-level financial results for those properties;
-
-
Changes in exchange rates for any foreign currency in which we may, from time to time, conduct business;
-
-
Year-over-year changes in the Consumer Price Index or the U.K. Retail Price Index and the effect of those changes on the rent escalators
contained in our leases and on our earnings;
-
-
Our ability and the ability of our tenants, operators, borrowers and managers to obtain and maintain adequate property, liability and other
insurance from reputable, financially stable providers;
-
-
The impact of increased operating costs and uninsured professional liability claims on our liquidity, financial condition and results of
operations or that of our tenants, operators, borrowers and managers and our ability and the ability of our tenants, operators, borrowers and managers to accurately estimate the magnitude of those
claims;
-
-
Risks associated with our office building portfolio and operations, including our ability to successfully design, develop and manage office
buildings and to retain key personnel;
-
-
The ability of the hospitals on or near whose campuses our medical office buildings ("MOBs") are located and their affiliated health systems to
remain competitive and financially viable and to attract physicians and physician groups;
-
-
Risks associated with our investments in joint ventures and unconsolidated entities, including our lack of sole decision-making authority and
our reliance on our joint venture partners' financial condition;
-
-
Our ability to obtain the financial results expected from our development and redevelopment projects, including projects undertaken through our
joint ventures;
-
-
The impact of market or issuer events on the liquidity or value of our investments in marketable securities;
-
-
Consolidation in the seniors housing and healthcare industries resulting in a change of control of, or a competitor's investment in, one or
more of our tenants, operators, borrowers or managers or significant changes in the senior management of our tenants, operators, borrowers or managers;
-
-
The impact of litigation or any financial, accounting, legal or regulatory issues that may affect us or our tenants, operators, borrowers or
managers; and
3
Table of Contents
-
-
Changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the
estimates, which could have an effect on our earnings.
We
describe some of these risks and uncertainties in greater detail below under "Risk Factors" and in the risk factors that are incorporated or deemed to be incorporated by reference
herein. Many of these factors are beyond our control and the control of our management.
4
Table of Contents
ABOUT THE REGISTRANTS
The following highlights information about the registrants and our business included elsewhere or incorporated by
reference in this prospectus. It is not complete and does not contain all of the information that you should consider before making an investment decision. You should carefully read this prospectus,
any applicable prospectus supplement and the information incorporated by reference herein and therein.
Ventas
Ventas, an S&P 500 company, is a REIT with a highly diversified portfolio of seniors housing and healthcare properties located throughout
the United States, Canada and the United Kingdom. As of December 31, 2017, we owned more than 1,200 properties (including properties owned through investments in unconsolidated entities and
properties classified as held for sale), consisting of seniors housing communities, MOBs, life science and innovation centers, inpatient rehabilitation facilities and long-term acute care facilities,
health systems and skilled nursing facilities, and we had 14 properties under development, including four properties that are owned by unconsolidated real estate entities. Our company was originally
founded in 1983 and is headquartered in Chicago, Illinois.
We
primarily invest in seniors housing and healthcare properties through acquisitions and lease our properties to unaffiliated tenants or operate them through independent third-party
managers. As of December 31, 2017, we leased a total of 546 properties (excluding MOBs) to various healthcare operating companies under "triple-net" or "absolute-net" leases that obligate the
tenants to pay all property-related expenses, including maintenance, utilities, repairs, taxes, insurance and capital expenditures.
As
of December 31, 2017, pursuant to long-term management agreements, we engaged independent operators, such as Atria Senior Living, Inc. and Sunrise Senior
Living, LLC, to manage 297 seniors housing communities for us.
Our
three largest tenants, Brookdale Senior Living, Inc. (together with its subsidiaries, "Brookdale Senior Living"), Ardent Health Partners, LLC and Kindred
Healthcare, Inc. leased from us 135 properties (excluding one property managed by Brookdale Senior Living pursuant to a long-term management agreement), 10 properties and 31 properties
(excluding one MOB included within our office operations reportable business segment), respectively, as of December 31, 2017.
Through
our Lillibridge Healthcare Services, Inc. subsidiary and our ownership interest in PMB Real Estate Services LLC, we also provide MOB management, leasing, marketing,
facility development and advisory services to highly rated hospitals and health systems throughout the United States. In addition, from time to time, we make secured and non-mortgage loans and other
investments relating to seniors housing and healthcare operators or properties.
We
aim to enhance shareholder value by delivering consistent, superior total returns through a strategy of: (1) generating reliable and growing cash flows; (2) maintaining
a balanced, diversified portfolio of high-quality assets; and (3) preserving our financial strength, flexibility and liquidity.
Our
ability to access capital in a timely and cost-effective manner is critical to the success of our business strategy because it affects our ability to satisfy existing obligations,
including the repayment of maturing indebtedness, and to make future investments. Factors such as general market conditions, interest rates, credit ratings on our securities, expectations of our
potential future earnings and cash distributions, and the trading price of our common stock that are beyond our control and fluctuate over time all impact our access to and cost of external capital.
For that reason, we generally attempt to match the long-term duration of our investments in real property with long-term financing through the issuance of shares of our common stock or the incurrence
of long-term fixed rate debt.
5
Table of Contents
Our
principal executive offices are located at 353 North Clark Street, Suite 3300, Chicago, Illinois 60654, and our telephone number is (877) 483-6827. We maintain a
website on the Internet at www.ventasreit.com. Information on our website is not incorporated by reference herein and our web address is included herein as an inactive textual reference only.
Ventas Realty
Ventas Realty is a wholly owned direct subsidiary of Ventas, Inc. and a limited partnership organized under the laws of the State of
Delaware.
6
Table of Contents
RISK FACTORS
Our business, operations and financial condition are subject to various risks. Before you invest in our securities, you should carefully read
and consider:
-
-
the risks described in Ventas' Annual Report on Form 10-K for the year ended December 31, 2017, which is incorporated by
reference herein; and
-
-
any risks described in other filings we make with the SEC or in the prospectus supplements relating to specific offerings of securities.
USE OF PROCEEDS
Unless otherwise described in a prospectus supplement, we intend to use the net proceeds from the sale of any securities under this prospectus
for general corporate purposes, including to fund future acquisitions and investments and to repay indebtedness outstanding under our unsecured credit facility, term loans or other debt. Until we
apply the proceeds from a sale of securities to their intended purposes, we may invest such proceeds in short-term investments, including repurchase agreements, some or all of which may not have an
investment grade rating.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our ratios of (i) earnings to fixed charges and (ii) earnings to combined fixed charges and preferred
stock dividends for each of the periods indicated. We do not currently have any preferred stock outstanding.
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
Ratio of earnings to fixed charges(1)
|
|
2.30x
|
|
2.24x
|
|
2.01x
|
|
2.20x
|
|
2.45x
|
Ratio of earnings to combined fixed charges and preferred stock dividends(2)
|
|
2.30x
|
|
2.24x
|
|
2.01x
|
|
2.20x
|
|
2.45x
|
-
(1)
-
For
this ratio, earnings consist of income before loss/income from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and
non-controlling interest, plus fixed charges (excluding capitalized interest) and distributions from unconsolidated entities. Fixed charges consist of interest expensed and capitalized.
-
(2)
-
For
this ratio, earnings consist of income before loss/income from unconsolidated entities, income taxes, discontinued operations, real estate dispositions and
non-controlling interest, plus fixed charges and preferred stock dividends (excluding capitalized interest) and distributions from unconsolidated entities. Fixed charges and preferred stock dividends
consist of interest expensed and capitalized, plus preferred stock dividends.
7
Table of Contents
DESCRIPTION OF VENTAS, INC. COMMON STOCK
This section describes the general terms and provisions of the common stock of Ventas, Inc. The prospectus supplement relating to any
offering of common stock, or other securities convertible into or exchangeable or exercisable for common stock, will describe more specific terms of the offering of common stock or other securities,
including the number of shares offered, the initial offering price, and market price and dividend information.
The
summary set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to Ventas, Inc.'s Amended and Restated Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), and Ventas, Inc.'s Fifth Amended and Restated Bylaws, as amended (the "Bylaws"), each of which is filed or incorporated by
reference as an exhibit to the registration statement of which this prospectus is a part and incorporated by reference herein. You should read the Certificate of Incorporation and Bylaws for
additional information before you purchase any shares of Ventas, Inc. common stock.
General
The Certificate of Incorporation authorizes Ventas, Inc. to issue up to 600,000,000 shares of its common stock, par value $0.25 per
share. As of January 31, 2018, 356,185,981 shares of Ventas, Inc. common stock were issued and outstanding.
All
shares of common stock offered hereby, when issued, will be duly authorized, fully paid and nonassessable. Subject to the preferential rights of any other shares of capital stock and
to certain provisions of the Certificate of Incorporation, holders of shares of Ventas, Inc. common stock are entitled to receive distributions if, as and when authorized and declared by
Ventas, Inc.'s Board of Directors out of assets legally available therefor and to share ratably in our assets legally available for distribution to stockholders in the event of our liquidation,
dissolution or winding-up after payment of, or adequate provision for, all of our known debts and liabilities. We currently expect to continue to make quarterly distributions, and from time to time we
may make additional distributions.
Holders
of shares of Ventas, Inc. common stock are entitled to one vote per share on all matters on which the holders of common stock are entitled to vote. Holders of shares of
Ventas, Inc. common stock have no conversion, sinking fund, redemption or preemptive rights. Subject to certain provisions of the Certificate of Incorporation, shares of Ventas, Inc.
common stock have equal distribution, liquidation and other rights.
Restrictions on Ownership and Transfer
In order to preserve its ability to maintain its REIT status, Ventas, Inc.'s Certificate of Incorporation provides that if a person
acquires beneficial ownership of more than 9%, in number or value, of the outstanding shares of Ventas, Inc. common stock, the shares that are beneficially owned in excess of such 9% limit are
considered to be "excess shares." Excess shares are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by
Ventas, Inc.'s Board of Directors. The trust is entitled to all dividends with respect to the excess shares and the trustee may exercise all voting power over the excess shares.
Ventas, Inc. has the right to buy the excess shares for a purchase price equal to the lesser of (1) the price per share in the transaction that created the excess shares, or
(2) the market price on the date Ventas, Inc. buys the shares, and Ventas, Inc. may defer payment of the purchase price for up to five years. If Ventas, Inc. does not
purchase the excess shares, the trustee of the trust is required to transfer the excess shares at the direction of Ventas, Inc.'s Board of Directors. The owner of the excess shares is entitled
to receive the lesser of the proceeds from the sale of the excess shares or the original purchase price for such excess shares, and any additional amounts are payable to the beneficiary of the trust.
Ventas, Inc.'s Board of Directors may grant waivers from the excess share limitations.
8
Table of Contents
DESCRIPTION OF VENTAS, INC. PREFERRED STOCK
This section describes the general terms and provisions of the preferred stock of Ventas, Inc. The prospectus supplement relating to any
offering of preferred stock, or other securities convertible into or exchangeable or exercisable for preferred stock, will describe more specific terms of the preferred stock being offered, including
the designation of the series, the number of shares offered, the initial offering price and any voting, dividend and liquidation preference rights, and any general terms described in this section that
will not apply to those shares of preferred stock.
The
summary set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to the Certificate of Incorporation and the certificate of
designation relating to the applicable series of preferred stock that we will file with the SEC, each of which is or will be filed or incorporated by reference as an exhibit to the registration
statement of which this prospectus is a part
and incorporated by reference herein. You should read the Certificate of Incorporation and such certificate of designation for additional information before you buy any shares of Ventas, Inc.
preferred stock.
General
The Certificate of Incorporation authorizes Ventas, Inc. to issue up to 10,000,000 shares of preferred stock, par value $1.00 per share.
As of January 31, 2018, no shares of Ventas, Inc. preferred stock were issued or outstanding.
Ventas, Inc.'s
Board of Directors has authority, without the approval of stockholders, to issue preferred stock in one or more series having the powers, preferences and other
rights as it may determine from time to time. Any shares of Ventas, Inc. preferred stock that Ventas, Inc. offers and sells under this prospectus will have the rights described in this
section unless the applicable prospectus supplement provides otherwise. You should read the prospectus supplement relating to the particular series of preferred stock being offered for the specific
terms of the series, including some or all of the following:
-
-
the description of the shares of preferred stock;
-
-
the number of shares of preferred stock offered;
-
-
the voting rights, if any, of the holders of the shares of preferred stock;
-
-
the offering price of the shares of preferred stock;
-
-
the distribution rate on the shares of preferred stock, when distributions will be paid, or the method of determining the distribution rate if
it is based on a formula or not otherwise fixed;
-
-
the date from which distributions on the shares of preferred stock shall accumulate;
-
-
the provision, if any, for auctioning or remarketing of the shares of preferred stock;
-
-
the provision, if any, for redemption of, or a sinking fund with respect to, the shares of preferred stock;
-
-
the liquidation preference per share of preferred stock;
-
-
any listing of the shares of preferred stock on a securities exchange;
-
-
whether the shares of preferred stock will be convertible or exchangeable and, if so, the security into which they are convertible or
exchangeable and the terms and conditions of conversion or exchange, including the conversion price or exchange rate or the manner of determining it;
-
-
whether interests in the shares of preferred stock will be represented by depositary shares as more fully described below under "Description of
Ventas, Inc. Depositary Shares;"
9
Table of Contents
-
-
the U.S. federal income tax consequences of owning the shares of preferred stock;
-
-
the relative ranking and preferences of the shares of preferred stock as to distribution and liquidation rights;
-
-
any limitations on issuance of any shares of preferred stock ranking senior to or on a parity with the series of preferred stock being offered
as to distribution and liquidation rights;
-
-
any limitations on direct or beneficial ownership and restrictions on transfer of the shares of preferred stock, in each case as may be
appropriate to preserve our status as a REIT; and
-
-
any other terms of the preferred stock.
As
described under "Description of Ventas, Inc. Depositary Shares," Ventas, Inc. may, at its option, elect to offer depositary shares evidenced by depositary receipts. If
Ventas, Inc. elects to so offer, each depositary receipt will represent a fractional interest in a share of the particular series of preferred
stock issued and deposited with a depositary. The applicable prospectus supplement will specify that fractional interest.
Ranking
Unless Ventas, Inc.'s Board of Directors otherwise determines and we so specify in the applicable prospectus supplement, we expect that
any shares of Ventas, Inc. preferred stock will, with respect to distribution rights and rights upon liquidation or dissolution, rank senior to all shares of Ventas, Inc. common stock.
Dividends
Holders of shares of Ventas, Inc. preferred stock of each series will be entitled to receive dividends at the rates and on the dates
shown in the applicable prospectus supplement if, as and when authorized and declared by Ventas, Inc.'s Board of Directors out of assets legally available therefor. Ventas, Inc. will pay
each dividend to holders of record as they appear on its share transfer books on the record dates fixed by its Board of Directors. In the case of shares of preferred stock represented by depositary
receipts, the records of the depositary referred to under "Description of Ventas, Inc. Depositary Shares" will determine the persons to whom dividends are payable.
Dividends
on any series of Ventas, Inc. preferred stock may be cumulative or noncumulative, as provided in the applicable prospectus supplement. We refer to each particular
series, for ease of reference, as the applicable series. Cumulative dividends will be cumulative from and after the date shown in the applicable prospectus supplement. If Ventas, Inc.'s Board
of Directors fails to authorize a dividend on any applicable series that is noncumulative, the holders will have no right to receive, and Ventas, Inc. will have no obligation to pay, a dividend
in respect of the applicable dividend period, whether or not dividends on that series are declared payable in the future.
If
the applicable series is entitled to a cumulative dividend, Ventas, Inc. may not declare, or pay or set aside for payment, a dividend on any other series of preferred stock
ranking, as to dividends, on a parity with or junior to the applicable series, unless it declares, and either pays or sets aside for payment, full cumulative dividends on the applicable series for all
past dividend periods. If the applicable series does not have a cumulative dividend, Ventas, Inc. must declare, and pay or set aside for payment, full dividends for the then current dividend
period only. When dividends are not paid, or set aside for payment, in full on any applicable series and the shares of any other series ranking on a parity as to dividends with the applicable series,
Ventas, Inc. must declare, and pay or set aside for payment, all dividends upon the applicable series and any other parity series proportionately, in accordance with accrued and unpaid
dividends of the several series. For these purposes, accrued and
unpaid dividends do not include unpaid dividend periods on noncumulative shares of preferred stock. No interest will be payable in respect of any dividend payment that may be in arrears.
10
Table of Contents
Except
as provided in the immediately preceding paragraph, unless Ventas, Inc. declares, and pays or sets aside for payment, full cumulative dividends for all past dividend
periods on any applicable series entitled to a cumulative dividend, it may not declare, or pay or set aside for payment, any dividends on common stock or any other equity securities ranking junior to
or on a parity with the applicable series as to dividends or upon liquidation. The foregoing restriction does not apply to dividends paid in common stock or other equity securities ranking junior to
the applicable series as to dividends and upon liquidation. If the applicable series does not have cumulative dividends, Ventas, Inc. must declare, and pay or set aside for payment, only the
dividend for the then current period before declaring dividends on shares of common stock or junior or parity securities. In addition, under the circumstances in which Ventas, Inc. could not
declare a dividend, it may not redeem, purchase or otherwise acquire for any consideration any shares of common stock or other parity or junior equity securities, except upon conversion into or
exchange for shares of common stock or other junior equity securities. Ventas, Inc. may, however, make purchases and redemptions otherwise prohibited pursuant to certain redemptions or pro rata
offers to purchase the outstanding shares of the applicable series and any other parity series of preferred stock.
Ventas, Inc.
will credit any dividend payment made on an applicable series first against the earliest accrued but unpaid dividend due with respect to the series.
Redemption
Ventas, Inc. may have the right or may be required to redeem the applicable series, as a whole or in part, in each case upon the terms,
if any, and at the times and at the redemption prices shown in the applicable prospectus supplement.
If
the applicable series is subject to mandatory redemption, we will specify in the applicable prospectus supplement the number of shares Ventas, Inc. is required to redeem, when
the redemption starts, the redemption price, and any other terms and conditions affecting the redemption. The redemption price will include all accrued and unpaid dividends, except in the case of
noncumulative preferred stock. The redemption price may be payable in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for the applicable series is
payable only from the net proceeds of an issuance of capital stock, the terms of the applicable series may provide that, if no shares of capital
stock shall have been issued or to the extent the net proceeds from any such issuance are insufficient to pay in full the aggregate redemption price then due, the shares of preferred stock will
automatically and mandatorily be converted into shares of capital stock pursuant to conversion provisions specified in the applicable prospectus supplement.
Liquidation Preference
The applicable prospectus supplement will describe the liquidation preference of the applicable series. Upon our voluntary or involuntary
liquidation, before any distribution may be made to the holders of shares of Ventas, Inc. common stock or any other shares of capital stock ranking junior to the applicable series in the
distribution of assets upon liquidation, the holders of that series will be entitled to receive, out of assets legally available therefor, liquidating distributions in the amount of the liquidation
preference, plus an amount equal to all accrued and unpaid distributions. If the applicable series does not have a cumulative dividend, accrued and unpaid dividends include only the then current
dividend period. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of shares of the applicable series will have no right or claim to any of
Ventas, Inc.'s remaining assets, and Ventas, Inc.'s remaining assets will be distributed among the holders of any other shares of capital stock ranking junior to the applicable series
upon liquidation, according to their rights and preferences.
If,
upon any voluntary or involuntary liquidation, Ventas, Inc.'s available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of
any series and the
11
Table of Contents
corresponding
amounts payable on all shares of capital stock ranking on a parity in the distribution of assets with that series, then the holders of that series and all other equally ranking shares of
capital stock will share ratably in the distribution in proportion to the full liquidating distributions to which they would otherwise be entitled.
Voting Rights
Holders of shares of the applicable series will not have any voting rights, except as otherwise from time to time required by law or as
specified in the applicable prospectus supplement.
As
more fully described under "Description of Ventas, Inc. Depositary Shares" below, if Ventas, Inc. elects to issue depositary shares, each representing a fraction of a
share of a series of preferred stock, each depositary will in effect be entitled to a fraction of a vote per depositary share.
Conversion Rights
We will describe in the applicable prospectus supplement the terms and conditions, if any, upon which you may, or Ventas, Inc. may
require you to, convert shares of the applicable series into shares of common stock or any other class or series of shares of capital stock. The terms will include the number of shares of common stock
or other securities into which the shares of the applicable series are convertible, the conversion price (or the manner of determining it), the conversion period, provisions as to whether conversion
will be at the option of the holders of the series or at Ventas, Inc.'s option, the events requiring an adjustment of the conversion price, and provisions affecting conversion upon the
redemption of shares of the applicable series.
Our Exchange Rights
We will describe in the applicable prospectus supplement the terms and conditions, if any, upon which Ventas, Inc. may require you to
exchange shares of the applicable series for debt securities. If an exchange is required, you will receive debt securities with a principal amount equal to the liquidation preference of the applicable
series. The other terms and provisions of the debt securities will not be materially less favorable to you than those of the series of preferred stock being exchanged.
Restrictions on Ownership and Transfer
In order to preserve its ability to maintain its REIT status, Ventas, Inc.'s Certificate of Incorporation provides that if a person
acquires beneficial ownership of more than 9.9%, in number or value, of the outstanding shares of Ventas, Inc. preferred stock, the shares that are beneficially owned in excess of such 9.9%
limit are considered to be "excess shares." Excess shares are automatically deemed transferred to a trust for the benefit of a charitable institution or other qualifying organization selected by
Ventas, Inc.'s Board of Directors. The trust is entitled to all dividends with respect to the excess shares and the trustee may exercise all voting power over the excess shares.
Ventas, Inc. has the right to buy the excess shares for a purchase price equal to the lesser of (1) the price per share in the transaction that created the excess shares, or
(2) the market price on the date Ventas, Inc. buys the shares, and Ventas, Inc. may defer payment of the purchase price for up to five years. If Ventas, Inc. does not
purchase the excess shares, the trustee of the trust is required to transfer the excess shares at the direction of Ventas, Inc.'s Board of Directors. The owner of the excess shares is entitled
to receive the lesser of the proceeds from the sale of the excess shares or the original purchase price for such excess shares, and any additional amounts are payable to the beneficiary of the trust.
Ventas, Inc.'s Board of Directors may grant waivers from the excess share limitations.
12
Table of Contents
DESCRIPTION OF VENTAS, INC. DEPOSITARY SHARES
This section describes the general terms and provisions of shares of preferred stock of Ventas, Inc. represented by depositary shares.
The prospectus supplement relating to an offering of depositary shares will describe more specific terms of the depositary shares being offered, including the number of shares offered, the initial
offering price and the powers, preferences and other rights of the underlying preferred stock and any general terms outlined in this section that will not apply to those depositary shares.
The
summary set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to the applicable deposit agreement (including the depositary
receipt), the form of which is or will be filed or incorporated by reference as an exhibit to the registration statement of which this prospectus is a part and incorporated by reference herein. You
should read the form of deposit agreement (including the depositary receipt) for additional information before you buy any Ventas, Inc. depositary shares.
General
Ventas, Inc. may, at its option, elect to offer fractional interests in shares of preferred stock, rather than shares of preferred stock.
If Ventas, Inc. exercises this option, it will appoint a depositary to issue depositary receipts representing those fractional interests. Shares of preferred stock of each series represented by
depositary shares will be deposited under a separate deposit agreement between Ventas, Inc. and the depositary. The applicable prospectus supplement will provide the name and address of the
depositary. Subject to the terms of the applicable deposit agreement, each owner of depositary shares will be entitled to all of the dividend, voting, conversion, redemption, liquidation and other
rights and preferences of the shares of preferred stock represented by those depositary shares.
Depositary
receipts issued pursuant to the applicable deposit agreement will evidence ownership of depositary shares. Upon surrender of depositary receipts at the office of the
depositary, and upon payment of the charges provided in and subject to the terms of the deposit agreement, a holder of depositary shares will be entitled to receive the shares of Ventas, Inc.
preferred stock underlying the surrendered depositary receipts.
Dividends and Other Distributions
The depositary will be required to distribute all dividends and other cash distributions received in respect of the applicable shares of
preferred stock to the record holders of depositary receipts evidencing the related depositary shares in proportion to the number of depositary receipts owned by the holders. Fractions will be rounded
down to the nearest whole cent.
If
the distribution is other than in cash, the depositary will be required to distribute property received by it to the record holders of depositary receipts entitled thereto, unless the
depositary determines that it is not feasible to make the distribution. In that case, the depositary may, with Ventas, Inc.'s approval, sell the property and distribute the net proceeds from
the sale to the holders of depositary shares.
Depositary
shares that represent shares of preferred stock that have been converted or exchanged will not be entitled to distributions. The deposit agreement will also contain provisions
relating to the manner in which any subscription or similar rights we offer to holders of shares of preferred stock will be made available to holders of depositary shares. All distributions will be
subject to obligations of
holders to file proofs, certificates and other information and to pay certain charges and expenses to the depositary.
13
Table of Contents
Withdrawal of Shares of Preferred Stock
You may receive the number of whole shares of the applicable series of preferred stock and any money or other property represented by your
depositary receipts after surrendering your depositary receipts at the corporate trust office of the depositary. Partial shares of preferred stock will not be issued. If the number of depositary
shares that you surrender exceeds the number of depositary shares that represent the number of whole shares of preferred stock that you wish to withdraw, then the depositary will deliver to you at the
same time a new depositary receipt evidencing the excess number of depositary shares. Once you have withdrawn your shares of preferred stock, you will not be entitled to re-deposit those shares of
preferred stock under the deposit agreement in order to receive depositary shares. We do not expect that there will be any public trading market for withdrawn shares of preferred stock.
Redemption of Depositary Shares
If Ventas, Inc. redeems shares of the applicable series of preferred stock underlying the depositary shares, the depositary will redeem
the depositary shares from the proceeds it receives. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per share payable with respect to the
applicable series of preferred stock, and the redemption date for depositary shares will be the same as that of the preferred stock. If Ventas, Inc. has elected to redeem less than all of the
depositary shares, the depositary will select the depositary shares for redemption by lot or pro rata as the depositary may determine.
After
the date fixed for redemption, the depositary shares called for redemption will no longer be deemed outstanding. All rights of the holders of the depositary shares and the related
depositary receipts will cease at that time, except the right to receive the money or other property to which the holders of depositary shares were entitled upon redemption. Receipt of the money or
other property is
subject to surrender to the depositary of the depositary receipts evidencing the redeemed depositary shares.
Voting of the Underlying Shares of Preferred Stock
Upon receipt of notice of any meeting at which the holders of the applicable series of preferred stock are entitled to vote, a depositary will
be required to mail the information contained in the notice of meeting to the record holders of the depositary shares representing such preferred stock. Each record holder of depositary shares on the
record date will be entitled to instruct the depositary as to how to vote the shares of preferred stock represented by the holder's depositary shares. The record date for the depositary shares will be
the same as the record date for the preferred stock. The depositary will vote the shares of preferred stock represented by your depositary shares as you instruct. Ventas, Inc. will agree to
take all reasonable action that the depositary deems necessary in order to enable it to vote the preferred stock in that manner. If you do not instruct the depositary how to vote, the depositary will
abstain from voting the shares of preferred stock represented by your depositary shares. The depositary will not be responsible for any failure to carry out any voting instruction, or for the manner
or effect of any vote, as long as its action or inaction is in good faith and does not result from its negligence or willful misconduct.
Liquidation Preference
Upon Ventas, Inc.'s voluntary or involuntary liquidation, each holder of depositary shares will be entitled to the fraction of the
liquidation preference accorded each share of Ventas, Inc. preferred stock represented by the depositary shares, as described in the applicable prospectus supplement.
14
Table of Contents
Conversion or Exchange of Shares of Preferred Stock
The depositary shares will not themselves be convertible into or exchangeable for shares of Ventas, Inc.'s common stock or preferred
stock or any other securities or property. Nevertheless, if so specified in the applicable prospectus supplement, the depositary receipts may be surrendered by holders to the applicable depositary
with written instructions for the depositary to instruct Ventas, Inc. to cause the conversion of the preferred stock represented by the depositary shares. Similarly, if so specified in the
applicable prospectus supplement, Ventas, Inc. may require you to surrender all of your depositary receipts to the applicable depositary upon requiring the conversion or exchange of the
preferred stock represented by the depositary shares into debt securities. Ventas, Inc. will agree that, upon receipt of the instruction and any amounts payable in connection with the
conversion or exchange, it will cause the conversion or exchange using the same procedures as those provided for delivery of shares of preferred stock to effect the conversion or exchange. If you
convert less than all of your depositary shares, the depositary will issue you a new depositary receipt for any unconverted depositary shares.
Amendment and Termination of a Deposit Agreement
Ventas, Inc. and the applicable depositary are permitted to amend the provisions of depositary receipts and any deposit agreement.
However, the holders of at least a majority of the applicable depositary shares then outstanding must approve any amendment that adds or increases fees or charges or prejudices an important right of
holders. Every holder of an outstanding depositary receipt at the time any amendment becomes effective, by continuing to hold the receipt, will be bound by the applicable deposit agreement, as
amended.
Any
deposit agreement may be terminated by Ventas, Inc. upon not less than 30 days' prior written notice to the applicable depositary if (1) the termination is
necessary to preserve our status as a REIT or (2) holders of depositary shares representing a majority of each series of preferred stock affected by the termination consent to the termination.
If either event occurs, the depositary will be required to deliver or make available to each holder of depositary receipts, upon surrender of the depositary receipts held by the holder, the number of
whole or fractional shares of preferred stock that are represented by the depositary shares evidenced by the depositary receipts, together with any other property held by the depositary with respect
to the depositary receipts. In addition, a deposit agreement will automatically terminate if:
-
-
all depositary shares have been redeemed;
-
-
there shall have been a final distribution in respect of the applicable series of preferred stock in connection with a liquidation of
Ventas, Inc. and the distribution has been made to the holders of depositary receipts evidencing the depositary shares underlying the Ventas, Inc. preferred stock; or
-
-
each share of the applicable series of preferred stock has been converted or exchanged into securities not represented by depositary shares.
Charges of a Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of a deposit agreement. In addition, we will
pay the fees and expenses of the depositary in connection with the initial deposit of the preferred stock and any redemption of preferred stock. However, holders of depositary receipts will pay any
transfer or other governmental charges and the fees and expenses of the depositary for any duties the holders request to be performed that are outside those expressly provided for in the applicable
deposit agreement.
15
Table of Contents
Resignation and Removal of Depositary
A depositary may resign at any time by delivering to Ventas, Inc. notice of its election to do so. In addition, Ventas, Inc. may
at any time remove a depositary. Any resignation or removal will take effect when Ventas, Inc. appoints a successor depositary and it accepts the appointment. Ventas, Inc. must appoint a
successor depositary within 60 days after delivery of a notice of
resignation or removal. A depositary must be a bank or trust company having its principal office in the United States that has a combined capital and surplus of at least $50 million.
Miscellaneous
A depositary will be required to forward to holders of depositary receipts any reports and communications it receives from Ventas, Inc.
with respect to the related shares of preferred stock. Holders of depository receipts will be able to inspect the transfer books of the depository and the list of holders of receipts upon reasonable
notice.
Neither
Ventas, Inc. nor the depositary will be liable if the depositary is prevented from or delayed in performing its obligations under a deposit agreement by law or any
circumstances beyond its control. Ventas, Inc.'s obligations and those of the depositary under a deposit agreement will be limited to performing duties in good faith and without gross
negligence or willful misconduct. Neither Ventas, Inc. nor the depositary will be obligated to prosecute or defend any legal proceeding in respect of any depositary receipts, depositary shares
or related shares of preferred stock unless satisfactory indemnity is furnished. Ventas, Inc. and each depositary will be permitted to rely on written advice of counsel or accountants, on
information provided by persons presenting shares of preferred stock for deposit, by holders of depositary receipts, or by other persons believed in good faith to be competent to give the information,
and on documents believed in good faith to be genuine and signed by a proper party.
If
a depositary receives conflicting claims, requests or instructions from any holder of depositary receipts, on the one hand, and Ventas, Inc., on the other hand, the depositary
will be entitled to act on the claims, requests or instructions received from us.
16
Table of Contents
DESCRIPTION OF VENTAS, INC. WARRANTS
This section describes the general terms and provisions of warrants of Ventas, Inc. The prospectus supplement relating to an offering of
the warrants will describe more specific terms of
the warrants being offered, including the number of warrants offered, the initial offering price and the terms of the underlying securities and any general terms outlined in this section that will not
apply to those warrants.
The
summary set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to the applicable warrant agreement (including the warrant
certificate), the form of which is or will be filed or incorporated by reference as an exhibit to the registration statement of which this prospectus is a part and incorporated by reference herein.
You should read the form of warrant agreement (including the warrant certificate) for additional information before you buy any Ventas, Inc. warrants.
Ventas, Inc.
may issue, together with any other securities being offered or separately, warrants entitling the holder to purchase from or sell to Ventas, Inc., or to
receive from Ventas, Inc., the cash value of the right to purchase or sell, debt securities, preferred stock, depositary shares or common stock. Ventas, Inc. will enter into a warrant
agreement governing the issuance of the warrants with a warrant agent, who will act solely as its agent in connection with the warrants and will not assume any obligation or relationship of agency or
trust for or with any holders or beneficial owners of warrants.
The
applicable prospectus supplement will describe the terms of each series of warrants being offered, including some or all of the following:
-
-
the offering price of the warrants;
-
-
the number of warrants offered;
-
-
the securities underlying the warrants;
-
-
the exercise price of the warrants, the procedures for exercise and the circumstances, if any, that will cause the warrants to be automatically
exercised;
-
-
the date on which the warrants will expire;
-
-
the U.S. federal income tax consequences of owning the warrants;
-
-
the rights, if any, that Ventas, Inc. has to redeem the warrants;
-
-
the name of the warrant agent; and
-
-
any other terms of the warrants.
Warrants
may be exercised at the appropriate office of the warrant agent or any other office indicated in the applicable prospectus supplement. Before the exercise of warrants, holders
will not have any of the rights of holders of the securities underlying the warrants and will not be entitled to payments made to holders of those securities.
Ventas, Inc.
and the applicable warrant agent may amend or supplement the warrant agreement without the consent of the affected holders of warrants to effect changes that are not
inconsistent with the provisions of the warrants and that do not adversely affect the interests of the holders of the warrants. However, any amendment that materially and adversely alters the rights
of the holders of warrants will not be effective unless the holders of at least a majority of the applicable series of warrants then outstanding approve the amendment. Every holder of an outstanding
warrant at the time any amendment becomes effective, by continuing to hold the warrant, will be bound by the applicable warrant agreement, as amended. The applicable prospectus supplement may provide
that certain provisions of the warrants, including the securities for which they may be exercisable, the exercise price and the expiration date, may not be altered without the consent of the holder of
each warrant.
17
Table of Contents
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt securities of Ventas Realty and the debt securities of Ventas, Inc.
For purposes hereof, references to the issuer means either Ventas Realty or Ventas, Inc., as applicable. The prospectus supplement relating to any offering of debt securities will describe more
specific terms of the debt securities being offered, including the designation of the series, the aggregate principal amount being offered, the initial offering price, the interest rate and any
redemption, purchase or conversion rights and any general terms described in this section that will not apply to those debt securities.
The
summary set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to the applicable base indenture referred to below and the
supplemental indenture (including the form of debt security) relating to the applicable series of debt securities, the form of each of which is or will be filed or incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part and incorporated by reference herein. You should read the
applicable base indenture and supplemental indenture (including the applicable form of debt security) for additional information before you buy any debt securities of the issuer.
The
debt securities will be direct unsecured general obligations of the issuer and may include debentures, notes, bonds or other evidences of indebtedness. The debt securities may be
senior or subordinated and will be issued under one or more indentures among the issuer and the guarantor, if any, named therein, and U.S. Bank National Association, as the initial trustee, which we
refer to herein as base indentures. The base indentures do not limit the aggregate principal amount of debt securities that may be issued thereunder.
Senior
debt securities will be issued under a senior indenture, in one or more series established pursuant to a supplemental indenture or a resolution duly adopted by the Board of
Directors of the issuer or a duly authorized committee thereof. Subordinated debt securities will be issued under a subordinated indenture, in one or more series established pursuant to a supplemental
indenture or a resolution duly adopted by the Board of Directors of the issuer or a duly authorized committee thereof. In this prospectus, we refer to the senior indenture and the subordinated
indenture (together with each applicable supplemental indenture or resolution establishing the applicable series of debt securities), collectively, as the indentures. The indentures will be subject to
and governed by the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
General
Each indenture provides that there may be more than one trustee with respect to one or more series of debt securities under that indenture. Any
trustee under an indenture may resign or be removed with respect to one or more series of debt securities issued under that indenture, and a successor trustee may be appointed to act with respect to
such series.
If
two or more persons are acting as trustee with respect to different series of debt securities issued under the same indenture, each of the trustees will be a trustee of a trust under
that indenture separate and apart from the trust administered by any other trustee. In that case, except as otherwise indicated in this prospectus, any action described in this prospectus to be taken
by the trustee may be taken by a trustee only with respect to the one or more series of debt securities for which it is trustee.
The
applicable prospectus supplement will describe the specific terms of each series of debt securities being offered, including some or all of the
following:
-
-
the title of the debt securities;
-
-
the issuer of the debt securities;
-
-
any limit on the aggregate principal amount of the debt securities;
18
Table of Contents
-
-
the purchase price of the debt securities, expressed as a percentage of the principal amount;
-
-
the date or dates on which the principal of and any premium on the debt securities will be payable or the method for determining the date or
dates;
-
-
if the debt securities will bear interest, the interest rate or rates or the method by which the rate or rates will be determined;
-
-
if the debt securities will bear interest, the date or dates from which any interest will accrue, the interest payment dates on which any
interest will be payable, the record dates for those interest payment dates and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months;
-
-
the place or places where payments on the debt securities will be made and the debt securities may be surrendered for registration of transfer
or exchange;
-
-
if the issuer will have the option to redeem all or any portion of the debt securities, the terms and conditions upon which the debt securities
may be redeemed;
-
-
the terms and conditions of any sinking fund or any similar provisions obligating the issuer or permitting a holder to require the issuer to
redeem or purchase all or any portion of the debt securities prior to final maturity;
-
-
the currency or currencies in which the debt securities are denominated and payable if other than U.S. dollars and the manner of determining
the equivalent of those amounts in U.S. dollars;
-
-
whether the amount of any payments on the debt securities may be determined with reference to an index, formula or other method and the manner
in which such amounts are to be determined;
-
-
any additions or changes to the events of default in the applicable base indenture;
-
-
the portion of the principal of the debt securities payable upon acceleration of maturity, if other than the entire principal amount;
-
-
any additions or changes with respect to the other covenants in the applicable base indenture;
-
-
the terms and conditions, if any, upon which the debt securities may be convertible into common stock;
-
-
whether the debt securities will be issued in certificated or book-entry form and, if the latter, the securities depositary;
-
-
whether the debt securities will be issued in denominations other than $1,000 and any integral multiple of $1,000;
-
-
the applicability of the defeasance and covenant defeasance provisions of the applicable base indenture;
-
-
the guarantor, if any, who will guarantee the debt securities and the methods for determining, and releasing, such guarantor, if any;
-
-
the trustee for that series of debt securities, if other than U.S. Bank National Association;
-
-
the U.S. federal income tax consequences of owning the debt securities; and
-
-
any other terms of the debt securities consistent with the provisions of the applicable base indenture.
19
Table of Contents
Debt
securities may be issued as original issue discount securities to be offered and sold at a substantial discount from their stated principal amount. Special U.S. federal income tax,
accounting and other considerations applicable to original issue discount securities may be described in the applicable prospectus supplement.
Unless
otherwise provided with respect to a series of debt securities, the debt securities will be issued only in registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000.
Certificated Debt Securities
Except as otherwise provided in the applicable prospectus supplement, debt securities will not be issued in certificated form. If, however, debt
securities are to be issued in certificated form, no service charge will be made for any transfer or exchange of any of those debt securities, but the issuer may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
Book-Entry Debt Securities
The debt securities of a series may be issued in whole or in part in the form of one or more fully registered global securities that will be
deposited with the depositary identified in the applicable prospectus supplement, which will keep a computerized record of its participants (for example, brokers) whose clients have purchased the debt
securities. Each participant will then keep a
record of its clients who purchased the debt securities. Unless a global security is exchanged in whole or in part for debt securities in certificated form, it may not be transferred. However,
transfers of the whole security between the depositary for that global security and its nominees or their respective successors are permitted.
Unless
otherwise provided in the applicable prospectus supplement, The Depository Trust Company, New York, New York ("DTC") will act as depositary for each series of global securities,
and DTC will register the global securities in the name of its nominee, Cede & Co. Beneficial interests in global securities will be shown on, and transfers of global securities will be
effected only through, records maintained by DTC and its participants.
DTC
has provided the following information to us. DTC, the world's largest securities depository, is a:
-
-
limited purpose trust company organized under the New York Banking Law;
-
-
"banking organization" within the meaning of the New York Banking Law;
-
-
member of the Federal Reserve System;
-
-
"clearing corporation" within the meaning of the New York Uniform Commercial Code; and
-
-
"clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC
holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over
100 countries) that its direct participants deposit with DTC. DTC also facilitates the post-trade settlement among direct participants of sales and other securities transactions in deposited
securities, through electronic computerized book-entry transfers and pledges between direct participants' accounts. This eliminates the need for physical movement of securities certificates. Direct
participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly owned subsidiary of The
Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and
20
Table of Contents
Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as
both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either
directly or indirectly. DTC has a Standard & Poor's rating of AA+. The rules applicable to DTC and its direct and indirect participants are on file with the SEC.
Principal
and interest payments on global securities registered in the name of DTC's nominee will be made in immediately available funds to DTC's nominee as the registered owner of the
global securities. The issuer and the trustee will treat DTC's nominee as the owner of the global securities for all other purposes as well. Accordingly, the issuer, the trustee and any paying agent
will have no direct responsibility or liability to pay amounts due on the global securities to owners of beneficial interests in the global securities. DTC's practice is to credit direct participants'
accounts upon receipt of any payment of principal or interest on the payment date in accordance with their respective holdings of beneficial interests in the global securities as shown on DTC's
records. Payments by direct and indirect participants to owners of beneficial interests in the global securities will be governed by standing instructions and customary practices. These payments will
be the responsibility of the direct and indirect participants and not of DTC, the trustee or the issuer, subject to any statutory or regulatory requirements as may be in effect from time to time.
Debt
securities represented by a global security will be exchangeable for debt securities in definitive form of like amount and terms in authorized denominations only
if:
-
-
DTC notifies us that it is unwilling or unable to continue as depositary;
-
-
DTC ceases to be a registered clearing agency and a successor depositary is not appointed by us within 120 days; or
-
-
we determine not to require all of the debt securities of a series to be represented by a global security and notify the applicable trustee of
our decision.
The
information in this section concerning DTC and DTC's book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for the accuracy
thereof.
Merger Covenant
Pursuant to the terms of each indenture, Ventas, Inc. may not, directly or indirectly: (1) consolidate or merge with or into
another person or entity, or (2) sell, assign, transfer, convey, lease (other than to an unaffiliated operator in the ordinary course of business) or otherwise dispose of all or substantially
all of the properties or assets of Ventas, Inc. and its subsidiaries taken as a whole, in one or more related transactions, to another person or entity,
unless:
-
-
either (a) Ventas, Inc. is the surviving corporation or (b) the person or entity formed by or surviving any such
consolidation or merger (if other than Ventas, Inc.) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the
laws of the United States, any state of the United States or the District of Columbia;
-
-
the person or entity formed by or surviving any such consolidation or merger (if other than Ventas, Inc.) or the person or entity to
which such sale, assignment, transfer, conveyance or other disposition has been made assumes all of Ventas, Inc.'s obligations under the applicable debt securities and the applicable indenture
pursuant to agreements reasonably satisfactory to the trustee; and
-
-
immediately after such transaction, on a pro forma basis giving effect to such transaction or series of transactions (and treating any
obligation of Ventas, Inc. or any subsidiary incurred in
21
Table of Contents
Upon
any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the properties or assets of Ventas, Inc.
in accordance with the foregoing provisions, the successor person or entity formed by such consolidation or into which Ventas, Inc. is merged or to which such sale, assignment, transfer,
conveyance, lease or other disposition is made, will succeed to, and be substituted for, and may exercise every right and power of, Ventas, Inc. under the applicable indenture with the same
effect as if such successor initially had been named as Ventas, Inc. therein. When a successor assumes all the obligations of its predecessor under the applicable indenture and the applicable
debt securities following a consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of all or substantially all of the assets of the predecessor in
accordance with the foregoing provisions, the predecessor will be released from those obligations.
The
foregoing restrictions will not apply to: (1) a sale, assignment, transfer, conveyance or other disposition of assets between or among Ventas, Inc. and its
subsidiaries; (2) a sale or transfer of assets from a guarantor to the issuer; or (3) the consolidation or merger of a guarantor with or into the issuer.
Events of Default, Notice and Waiver
Each indenture provides that the following are events of default with respect to any series of debt securities issued thereunder, unless the
applicable prospectus supplement states otherwise:
-
-
default by Ventas, Inc. or its subsidiaries for 30 days in the payment of any interest on any debt security of that series;
-
-
default by Ventas, Inc. or its subsidiaries in the payment of the principal or premium, if any, on any debt security of that series when
due and payable;
-
-
default by Ventas, Inc. or its subsidiaries in the making of any sinking fund payment required for any debt security of that series when
due;
-
-
breach by Ventas, Inc. or its subsidiaries of any other term of that indenture for 60 days after receipt of notice of default
stating they are in breach (either the applicable trustee or the holders of more than 25% in aggregate principal amount of the applicable debt securities of that series then outstanding may send the
notice);
-
-
default under any other indebtedness of Ventas, Inc. or its subsidiaries in an aggregate principal amount exceeding
$100.0 million after any applicable grace period, which default results in the acceleration of the maturity of such indebtedness and where that indebtedness is not discharged or that
acceleration is not rescinded or annulled within ten days after receipt of written notice specifying the default (either the applicable trustee or the holders of more than 25% in aggregate principal
amount of the applicable debt securities of that series then outstanding may send the notice);
-
-
certain events of bankruptcy, insolvency or reorganization of Ventas, Inc. or its significant subsidiaries;
-
-
the cessation of any guarantee of the debt securities of that series to be in full force and effect or the disaffirmance or denial by any
guarantor of its obligations with respect to any guarantee of the debt securities; and
22
Table of Contents
-
-
any other event of default provided with respect to the debt securities of that series and described in the applicable prospectus supplement.
The
applicable trustee will be required to give notice to the holders of the applicable debt securities within 90 days after a default under the applicable indenture unless the
default has been cured or waived. The applicable trustee may withhold notice to the holders of the applicable debt securities of any default, except a default in the payment of the principal of,
premium or additional amounts, if any, or interest on the applicable debt securities, if specified responsible officers of the applicable trustee in good faith determine that withholding the notice is
in the interest of the holders.
If
an event of default with respect to the applicable debt securities has occurred and has not been cured, either the applicable trustee or the holders of at least 25% in principal
amount of the applicable debt securities then outstanding may declare the entire principal amount of the applicable debt securities to be due and immediately payable by written notice to
Ventas, Inc., the issuer and the applicable trustee. If an event of default occurs because of certain events in bankruptcy, insolvency or reorganization, the principal amount of all outstanding
debt securities will be automatically accelerated, without any action by the applicable trustee or any holder. At any time after the applicable trustee or the holders have accelerated the applicable
debt securities, but before a judgment or decree for payment of the money due has been obtained, the holders of at least a majority in principal amount of the applicable debt securities then
outstanding may, under certain circumstances, rescind and annul such acceleration.
Holders
of a majority in principal amount of outstanding debt securities of any series may, subject to some limitations, waive any past default with respect to that series and the
consequences of the default (including without limitation waivers obtained in connection with the purchase of, or tender offer or exchange offer for, such debt securities). The prospectus supplement
relating to any series of debt securities that are original issue discount securities will describe the particular provisions relating to acceleration of a portion of the principal amount of those
original issue discount securities upon the occurrence and continuation of an event of default.
Except
in cases of default, where a trustee has some special duties, the applicable trustee is not required to take any action under the applicable indenture at the request of any
holders of applicable debt securities unless such holders offer the applicable trustee satisfactory protection from expenses and liability. We refer to this as an "indemnity." If reasonable indemnity
is provided, the holders of a majority in principal amount of the applicable debt securities then outstanding may direct the time, method and place of conducting any lawsuit or other formal legal
action seeking any remedy available to the applicable trustee. These majority holders may also direct the applicable trustee in performing any other action under the applicable indenture, subject to
certain limitations.
Before
a holder bypasses the applicable trustee and brings its own lawsuit or other formal legal action or takes other steps to enforce its rights or protect its interests relating to
the applicable debt securities, the following must occur:
-
-
the holder must give the applicable trustee written notice that an event of default with respect to the applicable debt securities has occurred
and remains uncured;
-
-
the holders of at least a majority in principal amount of all applicable debt securities outstanding must make a written request that the
applicable trustee take action because of the default, and must offer reasonable indemnity to the applicable trustee against the cost and other liabilities of taking that action;
-
-
the applicable trustee must have not taken action for 60 days after receipt of the notice and offer of indemnity; and
23
Table of Contents
-
-
the holders of at least a majority in principal amount of all applicable debt securities outstanding must not have given the applicable trustee
a direction inconsistent with such request within such 60-day period.
However,
a holder is entitled at any time to bring a lawsuit for the payment of money due on any debt security after its due date.
Within
120 days after the end of each fiscal year, Ventas, Inc. and the guarantor, if any, will furnish to the applicable trustee a written statement by certain of
Ventas, Inc.'s officers certifying that, to their knowledge, Ventas, Inc. is in compliance with the applicable indenture and the applicable debt securities, or otherwise specifying any
default.
Modification of the Indentures
Except as provided in the next two succeeding paragraphs, each indenture and/or the applicable debt securities may be amended or supplemented
with the written consent of the holders of at least a majority in principal amount of the debt securities then outstanding issued under the applicable indenture affected by such amendment or
supplement, voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, such debt securities), and any existing
default, event of default (other than a default or event of default with respect to the payment of the principal of, or premium or additional amounts, if any, or interest on, the applicable debt
securities, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the applicable indenture or the applicable debt securities may be
waived with the consent of the holders of a majority in principal amount of the debt securities then outstanding issued under the applicable indenture affected thereby, voting as a single class
(including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the applicable debt securities).
Without
the consent of each holder affected, an amendment or waiver may not (with respect to any debt securities held by a non-consenting
holder):
-
-
reduce the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver;
-
-
reduce the principal amount, or change the fixed maturity, of any debt security, reduce the rate of, or change the time for payment of,
interest or any premium on any debt security or alter the provisions with respect to the redemption thereof (excluding, for the avoidance of doubt, the number of days before a redemption date that a
notice of redemption must be mailed to holders of such debt securities, which may be amended with the written consent of the holders of at least a majority in aggregate principal amount of the debt
securities then outstanding);
-
-
reduce the rate of or change the time for payment of interest on any debt security, the payment of any sinking fund or analogous obligation, or
impair the right to institute suit for the enforcement of any such payment on or after the stated maturity of such security;
-
-
reduce the amount of principal of an original issue discount security that would be due and payable upon declaration of acceleration of its
maturity;
-
-
waive a default or event of default in the payment of principal of, or interest or premium, or additional amounts, if any, on the debt
securities (except a rescission of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the debt securities then outstanding and a waiver of the
payment default that resulted from such acceleration);
-
-
make a debt security payable in a currency, currencies or currency unit(s) other than the currency stated in such debt security;
24
Table of Contents
-
-
make any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of debt securities
to receive payments of principal of, or interest or premium, or additional amounts, if any, on such debt securities;
-
-
release any guarantor from any of its obligations under its guarantee of the debt securities or the applicable indenture except in accordance
with the terms of such indenture;
-
-
impair the rights of holders of the debt securities to convert their securities, if convertible, upon the terms established pursuant to or in
accordance with the provisions of the applicable indenture;
-
-
waive a redemption payment with respect to any debt security; or
-
-
make any change in the amendment and waiver provisions set forth above.
Any
such consent need only approve the substance, rather than the particular form, of the proposed amendment.
Notwithstanding
the preceding, without the consent of any holder of debt securities, the indentures and the applicable debt securities issued thereunder may be amended or supplemented
to:
-
-
cure any ambiguity, defect or inconsistency;
-
-
provide for uncertificated debt securities in addition to or in place of certificated debt securities;
-
-
provide for the assumption of the obligations of the issuer to holders of debt securities in the case of a merger or consolidation or sale of
all or substantially all of the assets of the issuer;
-
-
add to the covenants of the issuer for the benefit of the holders of all or any series of debt securities (and if such covenants are to be for
the benefit of less than all series of debt securities, stating that such covenants are expressly being included solely for the benefit of the debt securities of that series);
-
-
add any additional events of default for the benefit of the holders of all or any series of debt securities (and if such events of default are
to be for the benefit of less than all series of debt securities, stating that such events of default are expressly being included solely for the benefit of the debt securities of that series);
provided
,
however
, that in respect of any such additional events of default, such supplemental indenture
may provide for a particular period of grace after default (which may be shorter or longer than that allowed in the case of other defaults), may provide for an immediate enforcement upon such default,
may limit the remedies available to the trustee upon such default or may limit the right of the holders of a majority in aggregate principal amount of that or those series of debt securities to which
such additional events of default apply to waive such default;
-
-
add to, change or eliminate any of the provisions of an indenture, so long as any such addition not otherwise permitted under the applicable
indenture shall (i) neither apply to any Securities of any series created prior to the execution of such amendment or supplement and entitled to the benefit of such provision nor modify the
rights of the Holders of any such Security with respect to the benefit of such provision or (ii) become effective only when there is no such Security outstanding;
-
-
establish the form or terms of debt securities of any series as permitted by the applicable indenture, including the provisions and procedures
relating to debt securities convertible into Ventas, Inc. common stock;
-
-
evidence and provide for the acceptance of appointment under the applicable indenture by a successor trustee with respect to the debt
securities of one or more series and to add to or
25
Table of Contents
Defeasance and Covenant Defeasance
When the issuer establishes a series of debt securities, it may provide that the debt securities of that series are subject to the defeasance
and discharge provisions of the applicable indenture. If those provisions are made applicable, the issuer may elect either:
-
-
to defease and, together with the guarantor (if any), be legally released from, subject to some limitations, all of their respective
obligations with respect to the debt securities of that series; or
-
-
to be released from the obligations to comply with specified covenants and eliminate certain events of default relating to the debt securities
of that series as described in the applicable prospectus supplement.
To
effect defeasance or covenant defeasance, the issuer must irrevocably deposit in trust with the applicable trustee an amount in any combination of funds or government obligations,
which, through the payment of principal and interest in accordance with their terms, will provide money sufficient to make payments on the debt securities of that series and any mandatory sinking fund
or analogous payments on the debt securities of that series.
Upon
such defeasance, the issuer will not be released from obligations:
-
-
to pay additional amounts, if any, on the debt securities of that series upon the occurrence of some events;
-
-
to register the transfer or exchange of the debt securities of that series;
-
-
to replace some of the debt securities of that series;
26
Table of Contents
-
-
to maintain an office relating to the debt securities of that series; or
-
-
to hold moneys for payment in trust.
To
establish such a trust, the issuer must, among other things, deliver to the applicable trustee an opinion of counsel to the effect that the holders of the debt securities of that
series:
-
-
will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance; and
-
-
will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the
defeasance or covenant defeasance had not occurred. In the case of defeasance, the opinion of counsel must be based upon a ruling of the Internal Revenue Service (the "IRS") or a change in applicable
U.S. federal income tax law occurring after the date of the applicable indenture.
Government
obligations generally mean securities which are:
-
-
direct obligations of the U.S. or of the government that issued the foreign currency in which the applicable debt securities are payable, in
each case, where the issuer has pledged its full faith and credit to pay the obligations; or
-
-
obligations of an agency or instrumentality of the U.S. or of the government that issued the foreign currency in which the applicable debt
securities are payable, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the U.S. or that other government.
In
any case, the issuer of government obligations cannot have the option to call or redeem the obligations. In addition, government obligations include, subject to certain qualifications, a depository
receipt issued by a bank or trust company as custodian with respect to any government obligation or a specific payment of interest on or principal of any such government obligation held by the
custodian for the account of a depository receipt holder.
If
the issuer effects covenant defeasance with respect to the debt securities of any series, the amount on deposit with the applicable trustee will be sufficient to pay amounts due on
the debt securities of that series at the time of their stated maturity. However, the debt securities of that series may become due and payable prior to their stated maturity if there is an event of
default with respect to a covenant from which the issuer has not been released. In that event, the amount on deposit may not be sufficient to pay all amounts due on the debt securities of that series
at the time of the acceleration and the holders of those debt securities will be required to look to the issuer and the guarantor, if any, for repayment of any shortfall.
The
applicable prospectus supplement may further describe the provisions, if any, permitting defeasance or covenant defeasance, including any modifications to the provisions described
above.
Ranking
Each series of senior debt securities will constitute senior indebtedness and will rank equally with each other series of senior debt securities
and other senior indebtedness and senior to all subordinated indebtedness, including, but not limited to, all subordinated debt securities. Each series of subordinated debt securities will constitute
subordinated indebtedness and will rank equally with each other series of subordinated debt securities but subordinate to all senior indebtedness.
Payments
on the subordinated debt securities will be subordinated to the senior indebtedness of the issuer and the guarantor, if any, described under "Guarantees" below, whether
outstanding on the date of the subordinated indenture or incurred after that date. As of December 31, 2017, we had $7.6 billion of outstanding senior indebtedness (excluding unamortized
fair value adjustment and
27
Table of Contents
unamortized
discounts). The prospectus supplement relating to each issuance of subordinated debt securities will specify the aggregate amount of our outstanding indebtedness as of the most recent
practicable date that would rank senior to the subordinated debt securities.
If
any of the following events occur, the holders of senior indebtedness must receive payment of the full amount due on the senior indebtedness, or that payment must be duly provided
for, before the issuer may make payments on the subordinated debt securities:
-
-
any distribution of our assets upon our liquidation, reorganization or other similar transaction except for a distribution in connection with a
merger or other transaction complying with the covenant described above under "Merger Covenant";
-
-
the occurrence and continuation of a payment default on any senior indebtedness; or
-
-
a declaration of the principal of any series of subordinated debt securities, or, in the case of original issue discount securities, the
portion of the principal amount specified under their terms, as due and payable, that has not been rescinded and annulled.
However,
if the event is the acceleration of any series of subordinated debt securities, only the holders of senior indebtedness outstanding at the time of the acceleration of those
subordinated debt securities, or, in the case of original issue discount securities, that portion of the principal amount specified under their terms, must receive payment of the full amount due on
that senior indebtedness, or such payment must be duly provided for, before the issuer makes payments on the subordinated debt securities.
As
a result of the subordination provisions, some of our general creditors, including holders of senior indebtedness, may recover more, ratably, than the holders of the subordinated debt
securities in the event of insolvency.
For
purposes of the subordinated indenture, "senior indebtedness" of the issuer and any guarantor means the following indebtedness and
obligations:
-
-
the principal of and premium, if any, and unpaid interest on indebtedness for money borrowed;
-
-
purchase money and similar obligations;
-
-
obligations under capital leases;
-
-
guarantees, assumptions or purchase commitments relating to, or other transactions as a result of which the issuer or the guarantor, if any,
are responsible for the payment of, the indebtedness of others;
-
-
renewals, extensions and refundings of the foregoing indebtedness;
-
-
interest or obligations in respect of the foregoing indebtedness accruing after the commencement of any insolvency or bankruptcy proceedings;
and
-
-
obligations associated with derivative products.
However,
indebtedness and obligations do not constitute senior indebtedness if the instrument by which the issuer or the guarantor becomes obligated for that indebtedness or those
obligations expressly provides that indebtedness or those obligations are junior in right of payment to any other indebtedness or obligations of the issuer or the guarantor, as applicable.
Convertible Debt Securities
Unless otherwise provided in the applicable prospectus supplement, the following provisions will apply to debt securities of Ventas, Inc.
that will be convertible into shares of Ventas, Inc. common stock.
28
Table of Contents
Each
holder of unredeemed convertible debt securities may, at any time during the period specified in the applicable prospectus supplement, convert those convertible debt securities into
shares of Ventas, Inc. common stock. The conversion price or rate for each $1,000 principal amount of convertible debt securities will be specified in the applicable prospectus supplement. The
holder of a convertible debt security may convert only a portion of the convertible debt security that is $1,000 principal amount or any integral multiple of $1,000. In the case of convertible debt
securities called for redemption, conversion rights will expire at the close of business on the date fixed for the redemption. However, in the case of repayment at the option of the applicable holder,
conversion rights will terminate upon receipt of written notice of the holder's exercise of that option.
The
conversion price or rate may be subject to adjustment in certain events, as specified in the applicable indenture, including:
-
-
the issuance of shares of Ventas, Inc. common stock as a dividend on the common stock;
-
-
subdivisions and combinations of Ventas, Inc. common stock;
-
-
the issuance to all holders of Ventas, Inc. common stock of rights or warrants entitling such holders for a period not exceeding
45 days to subscribe for or purchase shares of common stock at a price per share less than its then current per share market price; and
-
-
the distribution to all holders of Ventas, Inc. common stock of (i) shares of Ventas, Inc. capital stock, other than
common stock, (ii) evidence of Ventas, Inc. indebtedness or assets excluding cash dividends or distributions paid from its retained earnings or (iii) subscription rights or
warrants other than those referred to above.
However,
Ventas, Inc. will not be required to make any adjustment of the conversion price or rate of less than 1%. Fractional shares of common stock will not be issued upon
conversion. In lieu of fractional shares, Ventas, Inc. will pay a cash adjustment. Unless otherwise specified in the applicable prospectus supplement, debt securities surrendered for conversion
between any record date for an interest payment and the related interest payment date must be accompanied by payment of an amount in cash equal to the interest payment on the surrendered debt
security. However, that payment does not have to accompany debt securities surrendered for conversion if those debt securities have been called for redemption during that period. Furthermore, upon
conversion of any original issue discount security, the fixed number of shares of common stock into which such original issue discount security is convertible will first be applied to the portion
attributable to the accrued original issue discount relating to the period from the date of issuance to the date of conversion of the original issue discount security, and, second, to the portion
attributable to the balance of the principal amount of such debt securities.
Guarantees
If the applicable prospectus supplement relating to a series of debt securities provides that those debt securities will have the benefit of a
guarantee by Ventas, Inc. or Ventas Realty, then the debt securities will be fully and unconditionally guaranteed by Ventas, Inc. or Ventas Realty, as applicable. In the event of a
bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries of the issuer, the non-guarantor subsidiaries will pay the holders of their debt and their trade creditors before
they will be able to distribute any of their assets to the issuer. The guarantees will be general obligations of each guarantor. If a series of debt securities is so guaranteed, a supplemental
indenture to the applicable base indenture will be executed by each guarantor. Ventas, Inc. is the guarantor under the indentures governing all of Ventas Realty's existing senior notes,
including those co-issued with Ventas Capital Corporation ("Ventas Capital"). Ventas Capital is a wholly-owned subsidiary of Ventas Realty organized under the laws of the State of Delaware for the
purpose of serving as co-issuer with Ventas Realty of certain previously issued debt securities. Ventas Capital has no assets or operations
29
Table of Contents
and
will not be a co-issuer to any debt securities that may be offered pursuant to this prospectus and any applicable prospectus supplement.
The
obligations of each guarantor under its guarantee will be limited as necessary to prevent that guarantee from constituting a fraudulent conveyance under applicable law. A guarantor
may not sell or
otherwise dispose of all or substantially all of its assets to, or consolidate with or merge into another company, other than an issuer or another guarantor, unless the person acquiring the property
in any such sale or disposition or the person formed by or surviving any such consolidation or merger assumes all of the obligations of that guarantor pursuant to a supplemental indenture satisfactory
to the applicable trustee, and only if immediately after giving effect to the transaction, no default or event of default would exist. The terms of any guarantee and the conditions upon which a
guarantor may be released from its obligations under that guarantee will be set forth in the applicable prospectus supplement.
30
Table of Contents
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain material U.S. federal income tax considerations regarding our election to be taxed as a REIT and
the acquisition, ownership or disposition of our capital stock or debt securities. Supplemental U.S. federal income tax considerations relevant to holders of the securities offered by this prospectus
(including warrants, preferred stock and depositary shares) may be provided in the prospectus supplement that relates to those securities. For purposes of this discussion, references to "we," "our"
and "us" mean only Ventas, Inc. and do not include any of its subsidiaries, except as otherwise indicated. This summary is for general information only and is not tax advice. The information in
this summary is based on:
-
-
the Internal Revenue Code of 1986, as amended (the "Code");
-
-
current, temporary and proposed Treasury Regulations promulgated under the Code;
-
-
the legislative history of the Code;
-
-
administrative interpretations and practices of the IRS; and
-
-
court decisions;
in
each case, as of the date of this prospectus. In addition, the administrative interpretations and practices of the IRS include its practices and policies as expressed in private letter rulings that
are not binding on the IRS except with respect to the particular taxpayers who requested and received those rulings. The sections of the Code and the corresponding Treasury Regulations that relate to
qualification and taxation as a REIT are highly technical and complex. The following discussion sets forth certain material aspects of the sections of the Code that govern the U.S. federal income tax
treatment of a REIT and its stockholders. This summary is qualified in its entirety by the applicable Code provisions, Treasury Regulations promulgated under the Code, and administrative and judicial
interpretations thereof. Potential tax reforms may result in significant changes to the rules governing U.S. federal income taxation. New legislation, Treasury Regulations, administrative
interpretations and practices and/or court decisions may significantly and adversely affect our ability to qualify as a REIT, the U.S. federal income tax consequences of such qualification, or the
U.S. federal income tax consequences of an investment in us, including those described in this discussion. Moreover, the law relating to the tax treatment of other entities, or an investment in other
entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT. Any such changes could apply retroactively to transactions preceding the date
of the change. We have not requested, and do not plan to request, any rulings from the IRS that we qualify as a REIT, and the statements in this prospectus are not binding on the IRS or any court.
Thus, we can provide no assurance that the tax considerations contained in this discussion will not be challenged by the IRS or will be sustained by a court if challenged by the IRS. This summary does
not discuss any state, local or non-U.S. tax consequences, or any tax consequences arising under any U.S. federal tax laws other than U.S. federal income tax laws, associated with the acquisition,
ownership or disposition of our capital stock or debt securities, or our election to be taxed as a REIT.
You are urged to consult your tax advisor regarding the tax consequences to you of:
-
-
the acquisition, ownership and disposition of our capital stock or debt securities, including the U.S. federal, state,
local, non-U.S. and other tax consequences;
-
-
our election to be taxed as a REIT for U.S. federal income tax purposes;
and
-
-
potential changes in applicable tax laws.
31
Table of Contents
Taxation of Our Company
General
We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with our taxable year ended
December 31, 1999. We believe that we have been organized and have operated in a manner that has allowed us to qualify for taxation as a REIT under the Code commencing with such taxable year,
and we intend to continue to be organized and operate
in this manner. However, qualification and taxation as a REIT depend upon our ability to meet the various qualification tests imposed under the Code, including through actual operating results, asset
composition, distribution levels and diversity of stock ownership. Accordingly, no assurance can be given that we have been organized and have operated, or will continue to be organized and operate,
in a manner so as to qualify or remain qualified as a REIT. See "Failure to Qualify" for potential tax consequences if we fail to qualify as a REIT.
Latham &
Watkins LLP has acted as our tax counsel in connection with this prospectus and our election to be taxed as a REIT. Latham & Watkins LLP has rendered
an opinion to us, as of the date of this prospectus, to the effect that, commencing with our taxable year ending December 31, 2013, we have been organized and have operated in conformity with
the requirements for qualification and taxation as a REIT under the Code, and our proposed method of operation will enable us to continue to meet the requirements for qualification and taxation as a
REIT under the Code. It must be emphasized that this opinion was based on various assumptions and representations as to factual matters, including representations made by us in a factual certificate
provided by one or more of our officers. In addition, this opinion was based upon our factual representations set forth in this prospectus. Moreover, our qualification and taxation as a REIT depend
upon our ability to meet the various qualification tests imposed under the Code, which are discussed below, including through actual operating results, asset composition, distribution levels and
diversity of stock ownership, the results of which have not been and will not be reviewed by Latham & Watkins LLP. Accordingly, no assurance can be given that our actual results of
operation for any particular taxable year have satisfied or will satisfy those requirements. Further, the anticipated U.S. federal income tax treatment described herein may be changed, perhaps
retroactively, by legislative, administrative or judicial action at any time. Latham & Watkins LLP has no obligation to update its opinion subsequent to the date of such opinion.
Provided
we qualify for taxation as a REIT, we generally will not be required to pay U.S. federal corporate income taxes on our REIT taxable income that is currently distributed to our
stockholders. This treatment substantially eliminates the "double taxation" that ordinarily results from investment in a C corporation. A C corporation is a corporation that generally is required to
pay tax at the corporate level. Double taxation means taxation once at the corporate level when income is earned and once again at the stockholder level when the income is distributed. We will,
however, be required to pay U.S. federal income tax as follows:
-
-
First, we will be required to pay regular U.S. federal corporate income tax on any undistributed REIT taxable income, including undistributed
capital gain.
-
-
Second, if we have (1) net income from the sale or other disposition of "foreclosure property" held primarily for sale to customers in
the ordinary course of business or (2) other nonqualifying income from foreclosure property, we will be required to pay regular U.S. federal corporate income tax on this income. To the extent
that income from foreclosure property is otherwise qualifying income for purposes of the 75% gross income test, this tax is not applicable. Subject to certain other requirements, foreclosure property
generally is defined as property we acquired through foreclosure or after a default on a loan secured by the property or a lease of the property. See "Foreclosure Property."
32
Table of Contents
-
-
Third, we will be required to pay a 100% tax on any net income from prohibited transactions. Prohibited transactions are, in general, sales or
other taxable dispositions of property, other than foreclosure property, held as inventory or primarily for sale to customers in the ordinary course of business.
-
-
Fourth, if we fail to satisfy the 75% gross income test or the 95% gross income test, as described below, but have otherwise maintained our
qualification as a REIT because certain other requirements are met, we will be required to pay a tax equal to (1) the greater of (A) the amount by which we fail to satisfy the 75% gross
income test and (B) the amount by which we fail to satisfy the 95% gross income test, multiplied by (2) a fraction intended to reflect our profitability.
-
-
Fifth, if we fail to satisfy any of the asset tests (other than a de minimis failure of the 5% or 10% asset tests), as described below, due to
reasonable cause and not due to willful neglect, and we nonetheless maintain our REIT qualification because of specified cure provisions, we will be required to pay a tax equal to the greater of
$50,000 or the corporate tax rate multiplied by the net income generated by the nonqualifying assets that caused us to fail such test.
-
-
Sixth, if we fail to satisfy any provision of the Code that would result in our failure to qualify as a REIT (other than a violation of the
gross income tests or certain violations of the asset tests, as described below) and the violation is due to reasonable cause and not due to willful neglect, we may retain our REIT qualification but
we will be required to pay a penalty of $50,000 for each such failure.
-
-
Seventh, we will be required to pay a 4% excise tax to the extent we fail to distribute during each calendar year at least the sum of
(1) 85% of our ordinary income for the year, (2) 95% of our capital gain net income for the year, and (3) any undistributed taxable income from prior periods.
-
-
Eighth, if we acquire any asset from a corporation that is or has been a C corporation in a transaction in which our tax basis in the asset is
less than the fair market value of the asset, in each case determined as of the date on which we acquired the asset, and we subsequently recognize gain on the disposition of the asset during the
five-year period beginning on the date on which we acquired the asset, then we generally will be required to pay regular U.S. federal corporate income tax on this gain to the extent of the excess of
(1) the fair market value of the asset over (2) our adjusted tax basis in the asset, in each case determined as of the date on which we acquired the asset. The results described in this
paragraph with respect to the recognition of gain assume that the C corporation will refrain from making an election to receive different treatment under applicable Treasury Regulations on its tax
return for the year in which we acquire the asset from the C corporation. Under applicable Treasury Regulations, any gain from the sale of property we acquired in an exchange under Section 1031
(a like-kind exchange) or Section 1033 (an involuntary conversion) of the Code generally is excluded from the application of this built-in gains tax.
-
-
Ninth, our subsidiaries that are C corporations, including our "taxable REIT subsidiaries" described below, generally will be required to pay
U.S. federal corporate income tax on their earnings.
-
-
Tenth, we will be required to pay a 100% tax on any "redetermined rents," "redetermined deductions," "excess interest" or "redetermined TRS
service income," as described below under "Penalty Tax." In general, redetermined rents are rents from real property that are overstated as a result of services furnished to any of our
tenants by a taxable REIT subsidiary of ours. Redetermined deductions and excess interest generally represent amounts that are deducted by a taxable REIT subsidiary of ours for amounts paid to us that
are in excess of the amounts that
33
Table of Contents
We
and our subsidiaries may be subject to a variety of taxes other than U.S. federal income tax, including payroll taxes and state and local income, property and other taxes on our
assets and operations.
From
time to time we may own properties in other countries which may impose taxes on our operations within their jurisdictions. To the extent possible, we will structure our activities
to minimize our non-U.S. tax liability. However, there can be no assurance that we will be able to eliminate our non-U.S. tax liability or reduce it to a specified level. Furthermore, as a REIT, both
we and our stockholders will derive little or no benefit from foreign tax credits arising from those non-U.S. taxes.
Requirements for Qualification as a REIT
The Code defines a REIT as a corporation, trust or association:
-
(1)
-
that
is managed by one or more trustees or directors;
-
(2)
-
that
issues transferable shares or transferable certificates to evidence its beneficial ownership;
-
(3)
-
that
would be taxable as a domestic corporation, but for Sections 856 through 860 of the Code;
-
(4)
-
that
is not a financial institution or an insurance company within the meaning of certain provisions of the Code;
-
(5)
-
that
is beneficially owned by 100 or more persons;
-
(6)
-
not
more than 50% in value of the outstanding stock of which is owned, actually or constructively, by five or fewer individuals, including certain specified
entities, during the last half of each taxable year; and
-
(7)
-
that
meets other tests, described below, regarding the nature of its income and assets and the amount of its distributions.
The
Code provides that conditions (1) to (4), inclusive, must be met during the entire taxable year and that condition (5) must be met during at least 335 days of a
taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Conditions (5) and (6) do not apply until after the first taxable year
for which an election is made to be taxed as a REIT. For purposes of condition (6), the term "individual" includes a supplemental unemployment compensation benefit plan, a private foundation or
a portion of a trust permanently set aside or used exclusively for charitable purposes, but generally does not include a qualified pension plan or profit sharing trust.
34
Table of Contents
We
believe that we have been organized and have operated in a manner that has allowed us, and will continue to allow us, to satisfy conditions (1) through (7) inclusive,
during the relevant time periods. In addition, our charter provides for restrictions regarding ownership and transfer of our shares that are intended to assist us in continuing to satisfy the share
ownership requirements described in conditions (5) and (6) above. A description of the share ownership and transfer restrictions relating to our capital stock is contained in the
discussion in this prospectus under the heading "Description of Ventas, Inc. Common StockRestrictions on Ownership and Transfer" and "Description of Ventas, Inc. Preferred
StockRestrictions on Ownership and Transfer." These restrictions, however, do not ensure that we have previously satisfied, and may not ensure that we will, in all cases, be able to
continue to satisfy, the share ownership requirements described in conditions (5) and (6) above. If we fail to satisfy these share ownership requirements, except as provided in the next
sentence, our status as a REIT will terminate. If, however, we comply with the rules contained in applicable Treasury Regulations that require us to ascertain the actual ownership of our shares and we
do not know, or would not have known through the exercise of reasonable diligence, that we failed to meet the requirement described in condition (6) above, we will be treated as having met this
requirement. See "Failure to Qualify."
In
addition, we may not maintain our status as a REIT unless our taxable year is the calendar year. We have and will continue to have a calendar taxable year.
Ownership of Interests in Partnerships, Limited Liability Companies and Qualified REIT Subsidiaries
In the case of a REIT that is a partner in a partnership or a member in a limited liability company treated as a partnership for U.S. federal
income tax purposes, Treasury Regulations provide that the REIT will be deemed to own its proportionate share of the assets of the partnership or limited liability company, as the case may be, based
on its interest in partnership capital, subject to special rules relating to the 10% asset test described below. Also, the REIT will be deemed to be
entitled to its proportionate share of the income of that entity. The assets and gross income of the partnership or limited liability company retain the same character in the hands of the REIT for
purposes of Section 856 of the Code, including satisfying the gross income tests and the asset tests. Thus, our pro rata share of the assets and items of income of any partnership or limited
liability company treated as a partnership or disregarded entity for U.S. federal income tax purposes in which we directly or indirectly own an interest is treated as our assets and items of income
for purposes of applying the requirements described in this discussion, including the gross income and asset tests described below. A brief summary of the rules governing the U.S. federal income
taxation of partnerships and limited liability companies is set forth below in "Tax Aspects of the Subsidiary Partnerships and the Limited Liability Companies."
We
generally have control of most of the subsidiary partnerships and limited liability companies in which we own an interest and intend to operate them in a manner consistent with the
requirements for our qualification as a REIT. We may from time to time be a limited partner or non-managing member in some of our partnerships and limited liability companies. If a partnership or
limited liability company in which we own an interest takes or expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose of our interest
in such entity. In addition, it is possible that a partnership or limited liability company could take an action which could cause us to fail a gross income or asset test, and that we would not become
aware of such action in time to dispose of our interest in the partnership or limited liability company or take other corrective action on a timely basis. In that case, we could fail to qualify as a
REIT unless we were entitled to relief, as described below.
We
may from time to time own and operate certain properties through wholly-owned subsidiaries that we intend to be treated as "qualified REIT subsidiaries" under the Code. A corporation
will qualify as our qualified REIT subsidiary if we own 100% of the corporation's outstanding stock and do not elect with the subsidiary to treat it as a "taxable REIT subsidiary," as described below.
A qualified
35
Table of Contents
REIT
subsidiary is not treated as a separate corporation, and all assets, liabilities and items of income, gain, loss, deduction and credit of a qualified REIT subsidiary are treated as assets,
liabilities and items of income, gain, loss, deduction and credit of the parent REIT for all purposes under the Code, including all REIT qualification tests. Thus, in applying the U.S. federal tax
requirements described in this discussion, any qualified REIT subsidiaries we own are ignored, and all assets, liabilities and items of income, gain, loss, deduction and credit of such corporations
are treated as our assets, liabilities and items of income, gain, loss, deduction and credit. A qualified REIT subsidiary is not subject to U.S. federal income tax, and our ownership of the stock of a
qualified REIT subsidiary will not violate the restrictions on ownership of securities, as described below under "Asset Tests."
Ownership of Interests in Taxable REIT Subsidiaries
We currently own an interest in a number of taxable REIT subsidiaries and may acquire securities in additional taxable REIT subsidiaries in the
future. A taxable REIT subsidiary is a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) other than a REIT in which a REIT directly or indirectly holds stock,
and that has made a joint election with such REIT to be treated as a taxable REIT subsidiary. If a taxable REIT subsidiary owns more than 35% of the total voting power or value of the outstanding
securities of another corporation, such other corporation will also be treated as a taxable REIT subsidiary. Other than some activities relating to lodging and health care properties, a taxable REIT
subsidiary may generally engage in any business, including the provision of customary or non-customary services to tenants of its parent REIT. A taxable REIT subsidiary is subject to U.S. federal
income tax as a regular C corporation. A REIT's ownership of securities of a taxable REIT subsidiary is not subject to the 5% or 10% asset test described below. See "Asset Tests." For
taxable years beginning after December 31, 2017, taxpayers are subject to a 30% limitation on their ability to deduct net business interest, subject to certain exceptions. See
"Annual Distribution Requirements." While not clear, this provision may limit the ability of our taxable REIT subsidiaries to deduct interest, which could increase their taxable income.
Ownership of Interests in Subsidiary REITs
We own and may acquire direct or indirect interests in one or more entities that have elected or will elect to be taxed as REITs under the Code
(each, a "Subsidiary REIT"). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to us. If a Subsidiary REIT were to
fail to qualify as a REIT, then (i) that Subsidiary REIT could become subject to U.S. federal income tax or could become a qualified REIT subsidiary and (ii) the Subsidiary REIT's
failure to qualify could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus could impair our ability to qualify as a REIT unless we could avail ourselves of
certain relief provisions.
Income Tests
We must satisfy two gross income requirements annually to maintain our qualification as a REIT. First, in each taxable year we must derive
directly or indirectly at least 75% of our gross income (excluding gross income from prohibited transactions, certain hedging transactions and certain foreign currency gains) from investments relating
to real property or mortgages on real
property, including "rents from real property," dividends from other REITs and, in certain circumstances, interest, or certain types of temporary investments. Second, in each taxable year we must
derive at least 95% of our gross income (excluding gross income from prohibited transactions, certain hedging transactions, and certain foreign currency gains) from the real property investments
described above or dividends, interest and gain from the sale or disposition of stock or securities, or from any combination of the foregoing. For these purposes, the term "interest" generally does
not include any amount received or accrued, directly or indirectly, if the determination of all or some of the amount depends in any way on
36
Table of Contents
the
income or profits of any person. However, an amount received or accrued generally will not be excluded from the term "interest" solely by reason of being based on a fixed percentage or percentages
of receipts or sales.
Rents
we receive from a tenant will qualify as "rents from real property" for the purpose of satisfying the gross income requirements for a REIT described above only if all of the
following conditions are met:
-
-
The amount of rent is not based in whole or in part on the income or profits of any person. However, an amount we receive or accrue generally
will not be excluded from the term "rents from real property" solely because it is based on a fixed percentage or percentages of receipts or sales;
-
-
Neither we nor an actual or constructive owner of 10% or more of our capital stock actually or constructively owns 10% or more of the interests
in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation, 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of
the total value of all classes of stock of the tenant. Rents we receive from such a tenant that is a taxable REIT subsidiary of ours, however, will not be excluded from the definition of "rents from
real property" as a result of this condition if at least 90% of the space at the property to which the rents relate is leased to third parties, and the rents paid by the taxable REIT subsidiary are
substantially comparable to rents paid by our other tenants for comparable space. Whether rents paid by a taxable REIT subsidiary are substantially comparable to rents paid by other tenants is
determined at the time the lease with the taxable REIT subsidiary is entered into, extended, and modified, if such modification increases the rents due under such lease. Notwithstanding the foregoing,
however, if a lease with a "controlled taxable REIT subsidiary" is modified and such modification results in an increase in the rents payable by such taxable REIT subsidiary, any such increase will
not qualify as "rents from real property." For purposes of this rule, a "controlled taxable REIT subsidiary" is a taxable REIT subsidiary in which the parent REIT owns stock possessing more than 50%
of the voting power or more than 50% of the total value of the outstanding stock of such taxable REIT subsidiary;
-
-
Rent attributable to personal property, leased in connection with a lease of real property, is not greater than 15% of the total rent received
under the lease. If this condition is not met, then the portion of the rent attributable to personal property will not qualify as "rents from real property." To the extent that rent attributable to
personal property, leased in connection with a lease of real property, exceeds 15% of the total rent received under the lease, we may transfer a portion of such personal property to a taxable REIT
subsidiary; and
-
-
We generally may not operate or manage the property or furnish or render services to our tenants, subject to a 1% de minimis exception and
except as provided below. We may, however, perform services that are "usually or customarily rendered" in connection with the rental of space for occupancy only and are not otherwise considered
"rendered to the occupant" of the property. Examples of these services include the provision of light, heat, or other utilities, trash removal and general maintenance of common areas. In addition, we
may employ an independent contractor from whom we derive no revenue to provide customary services to our tenants, or a taxable REIT subsidiary (which may be wholly or partially owned by us) to provide
both customary and non-customary services to our tenants without causing the rent we receive from those tenants to fail to qualify as "rents from real property."
A
substantial portion of our rental income is derived from leases of health care properties to our taxable REIT subsidiaries. In order for the rent payable under each of these leases to
constitute "rents from real property," each lease must be respected as a true lease for U.S. federal income tax purposes and must not be treated as a service contract, joint venture, or some other
type of arrangement. We
37
Table of Contents
believe
that each such lease is a true lease for U.S. federal income tax purposes. However, this determination is inherently a question of fact, and we cannot assure you that the IRS will not
successfully assert a contrary position. If any lease is not respected as a true lease, part or all of the payments that we receive as rent from our taxable REIT subsidiary with respect to such lease
may not be considered rent or may not otherwise satisfy the various requirements for qualification as "rents from real property." In that case, we may not be able to satisfy either the 75% or 95%
gross income test and, as a result, could fail to qualify as a REIT.
Also,
as described above, our taxable REIT subsidiaries may not operate or manage a health care property or provide rights to any brand name under which any health care property is
operated. However, rents we receive from a lease of a health care property to our taxable REIT subsidiary will constitute "rents from real property" if the following conditions are
satisfied:
-
-
First, the health care property must be a "qualified health care property." A qualified health care property is any real property (including
interests therein), and any personal property incident to such real property, which is (or is necessary or incidental to the use of) a hospital, nursing facility, assisted living facility, congregate
care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients and which is operated by a provider of such services
which is eligible for participation in Medicare with respect to such facility; and
-
-
Second, the health care property must be managed by an "eligible independent contractor." An eligible independent contractor is an independent
contractor that, at the time the management contract is entered into, is actively engaged in the trade or business of operating qualified health care property for any person not related to us or any
of our taxable REIT subsidiaries. For this purpose, an independent contractor means any person (i) that does not own (taking into account relevant attribution rules) more than 35% of our
capital stock, and (ii) with respect to which no person or group owning directly or indirectly (taking into account relevant attribution rules) 35% or more of our capital stock owns 35% or more
directly or indirectly (taking into account relevant attribution rules) of the ownership interest in the contractor.
We
believe each health care property that we lease to our taxable REIT subsidiaries is a qualified health care property, and each health care property manager engaged by our taxable REIT
subsidiaries to manage each health care property is an eligible independent contractor. Furthermore, while we will
monitor the activities of the eligible independent contractors to maximize the value of our health care property investments, neither we nor our taxable REIT subsidiary lessees will directly or
indirectly operate or manage our health care properties. Thus, we believe that the rents we derive from our taxable REIT subsidiaries with respect to the leases of our health care properties will
qualify as "rents from real property."
We
generally do not intend to take actions we believe will cause us to fail to satisfy the rental conditions described above. However, we may intentionally fail to satisfy some of these
conditions to the extent we determine, based on the advice of our tax counsel, that the failure will not jeopardize our tax status as a REIT. In addition, with respect to the limitation on the rental
of personal property, we generally have not obtained appraisals of the real property and personal property leased to tenants. Accordingly, there can be no assurance that the IRS will not disagree with
our determinations of value.
From
time to time, we may enter into hedging transactions with respect to one or more of our assets or liabilities. Our hedging activities may include entering into interest rate swaps,
caps, and floors, options to purchase these items, and futures and forward contracts. Income from a hedging transaction, including gain from the sale or disposition of such a transaction, that is
clearly identified as a hedging transaction as specified in the Code will not constitute gross income under, and thus will be exempt from, the 75% and 95% gross income tests. The term "hedging
transaction," as used above, generally means (A) any transaction we enter into in the normal course of our business primarily to
38
Table of Contents
manage
risk of (1) interest rate changes or fluctuations with respect to borrowings made or to be made by us to acquire or carry real estate assets, or (2) currency fluctuations with
respect to an item of qualifying income under the 75% or 95% gross income test or any property which generates such income and (B) new transactions entered into to hedge the income or loss from
prior hedging transactions, where the property or indebtedness which was the subject of the prior hedging transaction was extinguished or disposed of. To the extent that we do not properly identify
such transactions as hedges or we hedge with other types of financial instruments, the income from those transactions will not be treated as qualifying income for purposes of the gross income tests.
We intend to structure any hedging transactions in a manner that does not jeopardize our status as a REIT.
We
have investments in several entities located outside the United States and from time to time may invest in additional entities or properties located outside the United States, through
a taxable REIT subsidiary or otherwise. These acquisitions could cause us to incur foreign currency gains or losses. Any foreign currency gains, to the extent attributable to specified items of
qualifying income or gain, or specified qualifying assets, however, generally will not constitute gross income for purposes of the 75% and 95% gross income tests, and therefore will be excluded from
these tests.
To
the extent our taxable REIT subsidiaries pay dividends or interest, our allocable share of such dividend or interest income will qualify under the 95%, but not the 75%, gross income
test (except to the extent the interest is paid on a loan that is adequately secured by real property).
We
will monitor the amount of the dividend and other income from our taxable REIT subsidiaries and will take actions intended to keep this income, and any other nonqualifying income,
within the limitations of the gross income tests. Although we expect these actions will be sufficient to prevent a violation of the gross income tests, we cannot guarantee that such actions will in
all cases prevent such a violation.
If
we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for the year if we are entitled to relief under certain
provisions of the Code. We generally may make use of the relief provisions if:
-
-
following our identification of the failure to meet the 75% or 95% gross income tests for any taxable year, we file a schedule with the
IRS setting forth each item of our gross income for purposes of the 75% or 95% gross income tests for such taxable year in accordance with Treasury Regulations to be issued; and
-
-
our failure to meet these tests was due to reasonable cause and not due to willful neglect.
It
is not possible, however, to state whether in all circumstances we would be entitled to the benefit of these relief provisions. For example, if we fail to satisfy the gross income
tests because nonqualifying income that we intentionally accrue or receive exceeds the limits on nonqualifying income, the IRS could conclude that our failure to satisfy the tests was not due to
reasonable cause. If these relief provisions do not apply to a particular set of circumstances, we will not qualify as a REIT. See "Failure to Qualify" below. As discussed above in
"Taxation of Our CompanyGeneral," even if these relief provisions apply, and we retain our status as a REIT, a tax would be imposed with respect to our nonqualifying income.
We may not always be able to comply with the gross income tests for REIT qualification despite periodic monitoring of our income.
Prohibited Transaction Income
Any gain that we realize on the sale of property held as inventory or otherwise held primarily for sale to customers in the ordinary course of
business, including any gain realized by our qualified REIT subsidiaries and our share of any gain realized by any of the partnerships or limited liability companies in which we own an interest, will
be treated as income from a prohibited transaction that is subject to a 100% penalty tax, unless certain safe harbor exceptions apply. This prohibited transaction income may
39
Table of Contents
also
adversely affect our ability to satisfy the gross income tests for qualification as a REIT. Under existing law, whether property is held as inventory or primarily for sale to customers in the
ordinary course of a trade or business is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. We intend to hold our properties for investment
with a view to long-term appreciation, to engage in the business of acquiring, developing and owning our properties and to make occasional sales of the properties as are consistent with our investment
objectives. We do not intend, and do not intend to permit any of the partnerships or limited liability companies in which we own an interest, to enter into any sales that are prohibited transactions.
However, the IRS may successfully contend that some or all of the sales made by us or our subsidiary partnerships or limited liability companies are prohibited transactions. We would be required to
pay the 100% penalty tax on our allocable share of the gains resulting from any such sales. The 100% penalty tax will not apply to gains from the sale of assets that are held through a taxable REIT
subsidiary, but such income will be subject to regular U.S. federal corporate income tax.
Penalty Tax
Any redetermined rents, redetermined deductions, excess interest or redetermined TRS service income we generate will be subject to a 100%
penalty tax. In general, redetermined rents are rents from real property that are overstated as a result of any services furnished to any of our tenants by a taxable REIT subsidiary of ours,
redetermined deductions and excess interest represent any amounts that are deducted by a taxable REIT subsidiary of ours for amounts paid to us that are in excess of the amounts that would have been
deducted based on arm's length negotiations, and redetermined TRS service income is income of a taxable REIT subsidiary that is understated as a result of services provided to us or on our behalf.
Rents we receive will not constitute redetermined rents if they qualify for certain safe harbor provisions contained in the Code.
We
do not believe we have been, and do not expect to be, subject to this penalty tax, although any rental or service arrangements we enter into from time to time may not satisfy the
safe-harbor provisions described above. These determinations are inherently factual, and the IRS has broad discretion to assert that amounts paid between related parties should be reallocated to
clearly reflect their respective incomes. If the IRS successfully made such an assertion, we would be required to pay a 100% penalty tax on any overstated rents paid to us, or any excess deductions or
understated income of our taxable REIT subsidiaries.
Asset Tests
At the close of each calendar quarter of our taxable year, we must also satisfy certain tests relating to the nature and diversification of our
assets. First, at least 75% of the value of our total assets must be represented by real estate assets, cash, cash items and U.S. government securities. For purposes of this test, the term "real
estate assets" generally means real property (including interests in real property and interests in mortgages on real property and, to a limited extent, personal property), shares (or transferable
certificates of beneficial interest) in other REITs, any stock or debt instrument attributable to the investment of the proceeds of a stock offering or a public offering of debt with a term of at
least five years (but only for the one-year period beginning on the date the REIT receives such proceeds), debt instruments of publicly offered REITs, and personal property leased in connection with a
lease of real property for which the rent attributable to personal property is not greater than 15% of the total rent received under the lease.
Second,
not more than 25% of the value of our total assets may be represented by securities (including securities of taxable REIT subsidiaries), other than those securities includable in
the 75% asset test.
40
Table of Contents
Third, of the investments included in the 25% asset class, and except for certain investments in other REITs, our qualified REIT subsidiaries and taxable REIT
subsidiaries, the value of any one issuer's securities may not exceed 5% of the value of our total assets, and we may not own more than 10% of the total vote or value of the outstanding securities of
any one issuer except, in the case of the 10% value test, securities satisfying the "straight debt" safe-harbor or securities issued by a partnership that itself would satisfy the 75% income test if
it were a REIT. Certain types of securities we may own are disregarded as securities solely for purposes of the 10% value test, including, but not limited to, any loan to an individual or an estate,
any obligation to pay rents from real property and any security issued by a REIT. In addition, solely for purposes of the 10% value test, the determination of our interest in the assets of a
partnership or limited liability company in which we own an interest will be based on our proportionate interest in any securities issued by the partnership or limited liability company, excluding for
this purpose certain securities described in the Code. From time to time we may own securities (including debt securities) of issuers that do not qualify as a REIT, a qualified REIT subsidiary or a
taxable REIT subsidiary. We intend that our ownership of any such securities will be structured in a manner that allows us to comply with the asset tests described above.
Fourth,
not more than 20% of the value of our total assets may be represented by the securities of one or more taxable REIT subsidiaries. We currently own the stock of certain
corporations that have elected, together with us, to be treated as our taxable REIT subsidiaries, and we may acquire securities
in additional taxable REIT subsidiaries in the future. So long as each of these companies qualifies as a taxable REIT subsidiary, we will not be subject to the 5% asset test, the 10% voting securities
limitation or the 10% value limitation with respect to our ownership of the securities of such companies. We believe that the aggregate value of our taxable REIT subsidiaries has not exceeded, and in
the future will not exceed, 20% of the aggregate value of our gross assets. We generally do not obtain independent appraisals to support these conclusions. In addition, there can be no assurance that
the IRS will not disagree with our determinations of value.
Fifth,
not more than 25% of the value of our total assets may be represented by debt instruments of publicly offered REITs to the extent those debt instruments would not be real estate
assets but for the inclusion of debt instruments of publicly offered REITs in the meaning of real estate assets, as described above (e.g., a debt instrument issued by a publicly offered REIT
that is not secured by a mortgage on real property).
The
asset tests must be satisfied at the close of each calendar quarter of our taxable year in which we (directly or through our qualified REIT subsidiaries, partnerships or limited
liability companies) acquire securities in the applicable issuer, and also at the close of each calendar quarter in which we increase our ownership of securities of such issuer (including as a result
of an increase in our interest in any partnership or limited liability company that owns such securities). For example, our indirect ownership of securities of each issuer may increase as a result of
our capital contributions to, or the redemption of other partners' or members' interests in, a partnership or limited liability company in which we have an ownership interest. Also, after initially
meeting the asset tests at the close of any quarter, we will not lose our status as a REIT for failure to satisfy the asset tests at the end of a later quarter solely by reason of changes in asset
values. If we fail to satisfy an asset test because we acquire securities or other property during a quarter (including as a result of an increase in our interest in any partnership or limited
liability company), we may cure this failure by disposing of sufficient nonqualifying assets within 30 days after the close of that quarter. We believe that we have maintained, and we intend to
maintain, adequate records of the value of our assets to ensure compliance with the asset tests. If we fail to cure any noncompliance with the asset tests within the 30-day cure period, we would cease
to qualify as a REIT unless we are eligible for certain relief provisions discussed below.
Certain
relief provisions may be available to us if we discover a failure to satisfy the asset tests described above after the 30-day cure period. Under these provisions, we will be
deemed to have met the 5% and 10% asset tests if the value of our nonqualifying assets (i) does not exceed the lesser of
41
Table of Contents
(a) 1%
of the total value of our assets at the end of the applicable quarter or (b) $10,000,000, and (ii) we dispose of the nonqualifying assets or otherwise satisfy such tests
within (a) six months after the last day of the quarter in which the failure to satisfy the asset tests is discovered or (b) the period of time prescribed by Treasury Regulations to be
issued. For violations of any of the asset tests due to reasonable cause and not due to willful neglect and that are, in the case of the 5% and 10% asset tests,
in excess of the de minimis exception described above, we may avoid disqualification as a REIT after the 30-day cure period by taking steps including (i) the disposition of sufficient
nonqualifying assets, or the taking of other actions, which allow us to meet the asset tests within (a) six months after the last day of the quarter in which the failure to satisfy the asset
tests is discovered or (b) the period of time prescribed by Treasury Regulations to be issued, (ii) paying a tax equal to the greater of (a) $50,000 or (b) the corporate
tax rate multiplied by the net income generated by the nonqualifying assets, and (iii) disclosing certain information to the IRS.
Although
we believe we have satisfied the asset tests described above and plan to take steps to ensure that we satisfy such tests for any quarter with respect to which retesting is to
occur, there can be no assurance that we will always be successful, or will not require a reduction in our overall interest in an issuer (including in a taxable REIT subsidiary). If we fail to cure
any noncompliance with the asset tests in a timely manner, and the relief provisions described above are not available, we would cease to qualify as a REIT.
Annual Distribution Requirements
To maintain our qualification as a REIT, we are required to distribute dividends, other than capital gain dividends, to our stockholders in an
amount at least equal to the sum of:
-
-
90% of our REIT taxable income; and
-
-
90% of our after-tax net income, if any, from foreclosure property; minus
-
-
the excess of the sum of certain items of non-cash income over 5% of our REIT taxable income.
For
these purposes, our REIT taxable income is computed without regard to the dividends paid deduction and our net capital gain. In addition, for purposes of this test, non-cash income
generally means income attributable to leveled stepped rents, original issue discount, cancellation of indebtedness, or a like-kind exchange that is later determined to be taxable.
In
addition, our REIT taxable income will be reduced by any taxes we are required to pay on any gain we recognize from the disposition of any asset we acquired from a corporation that is
or has been a C corporation in a transaction in which our tax basis in the asset is less than the fair market value of the asset, in each case determined as of the date on which we acquired the asset,
within the five-year period following our acquisition of such asset, as described above under "General."
For
taxable years beginning after December 31, 2017, our deduction for net business interest expense will generally be limited to 30% of our taxable income, as adjusted for
certain items of income, gain, deduction or loss. Any business interest deduction that is disallowed due to this limitation may be carried forward to future taxable years. If we are subject to this
interest expense limitation, our REIT taxable income for a taxable year may be increased. Taxpayers that conduct certain real estate businesses may elect not to have this interest expense limitation
apply to them, provided that they use an alternative depreciation system to depreciate certain property. We believe that we will be eligible to make this election. If we make this election, although
we would not be subject to the interest expense limitation described above, our depreciation deductions may be reduced and, as a result, our REIT taxable income for a taxable year may be increased.
We
generally must pay, or be treated as paying, the distributions described above in the taxable year to which they relate. At our election, a distribution will be treated as paid in a
taxable year if it is
42
Table of Contents
declared
before we timely file our tax return for such year and paid on or before the first regular dividend payment after such declaration, provided such payment is made during the 12-month period
following the close of such year. These distributions are treated as received by our stockholders in the year in which they are paid. This is so even though these distributions relate to the prior
year for purposes of the 90% distribution requirement. In order to be taken into account for purposes of our distribution requirement, except as provided below, the amount distributed must not be
preferentiali.e., every stockholder of the class of stock to which a distribution is made must be treated the same as every other stockholder of that class, and no class of stock
may be treated other than according to its dividend rights as a class. This preferential limitation will not apply to distributions made by us, provided we qualify as a "publicly offered REIT." We
believe that we are, and expect we will continue to be, a "publicly offered REIT." To the extent that we do not distribute all of our net capital gain, or distribute at least 90%, but less than 100%,
of our REIT taxable income, as adjusted, we will be required to pay regular U.S. federal corporate income tax on the undistributed amount. We believe that we have made, and we intend to continue to
make, timely distributions
sufficient to satisfy these annual distribution requirements and to minimize our corporate tax obligations.
We
expect that our REIT taxable income will be less than our cash flow because of depreciation and other non-cash charges included in computing REIT taxable income. Accordingly, we
anticipate that we generally will have sufficient cash or liquid assets to enable us to satisfy the distribution requirements described above. However, from time to time, we may not have sufficient
cash or other liquid assets to meet these distribution requirements due to timing differences between the actual receipt of income and actual payment of deductible expenses, and the inclusion of
income and deduction of expenses in determining our taxable income. In addition, we may decide to retain our cash, rather than distribute it, in order to repay debt or for other reasons. If these
timing differences occur, we may borrow funds to pay dividends or pay dividends in the form of taxable stock distributions in order to meet the distribution requirements, while preserving our cash.
Under
some circumstances, we may be able to rectify an inadvertent failure to meet the 90% distribution requirement for a year by paying "deficiency dividends" to our stockholders in a
later year, which may be included in our deduction for dividends paid for the earlier year. In that case, we may be able to avoid being taxed on amounts distributed as deficiency dividends, subject to
the 4% excise tax described below. However, we will be required to pay interest to the IRS based upon the amount of any deduction claimed for deficiency dividends. While the payment of a deficiency
dividend will apply to a prior year for purposes of our REIT distribution requirements, it will be treated as an additional distribution to our stockholders in the year such dividend is paid.
Furthermore,
we will be required to pay a 4% excise tax to the extent we fail to distribute during each calendar year at least the sum of 85% of our ordinary income for such year, 95% of
our capital gain net income for the year and any undistributed taxable income from prior periods. Any ordinary income and net capital gain on which corporate income tax is imposed for any year is
treated as an amount distributed during that year for purposes of calculating this excise tax.
For
purposes of the 90% distribution requirement and excise tax described above, dividends declared during the last three months of the taxable year, payable to stockholders of record on
a specified date during such period and paid during January of the following year, will be treated as paid by us and received by our stockholders on December 31 of the year in which they are
declared.
We
have net operating loss carryforwards that we may use (subject to certain limitations) to reduce our annual distribution requirements.
Like-Kind Exchanges
We may dispose of real property that is not held primarily for sale in transactions intended to qualify as like-kind exchanges under the Code.
Such like-kind exchanges are intended to result in the
43
Table of Contents
deferral
of gain for U.S. federal income tax purposes. The failure of any such transaction to qualify as a like-kind exchange could require us to pay U.S. federal income tax, possibly including the
100% prohibited transaction tax, depending on the facts and circumstances surrounding the particular transaction.
Tax Liabilities and Attributes Inherited Through Merger or Acquisitions
We may from time to time acquire other REITs through a merger or acquisition. If any such REIT failed to qualify as a REIT for any of its
taxable years, such REIT would be liable for (and we, as the surviving corporation in the merger or acquisition, would be obligated to pay) U.S. federal income tax on its taxable income at regular
rates. Furthermore, after the merger or acquisition is effective, the asset and income tests will apply to all of our assets, including the assets we acquire from such REIT, and to all of our income,
including the income derived from the assets we acquire from such REIT. As a result, the nature of the assets that we acquire from such REITs and the income we derive from those assets may have an
effect on our tax status as a REIT.
Foreclosure Property
The foreclosure property rules permit us (by our election) to foreclose or repossess properties without being disqualified as a REIT as a result
of receiving income that does not qualify under the gross income tests. However, in such a case, we would be subject to the U.S. federal
corporate income tax on the net non-qualifying income from "foreclosure property," and the after-tax amount would increase the dividends we would be required to distribute to stockholders. See
"Annual Distribution Requirements." This corporate tax would not apply to income that qualifies under the REIT 75% income test.
Foreclosure
property treatment will end on the first day on which we enter into a lease of the applicable property that will give rise to income that does not qualify under the REIT 75%
income test, but will not end if the lease will give rise only to qualifying income under such test. Foreclosure property treatment also will end if any construction takes place on the property (other
than completion of a building or other improvement that was more than 10% complete before default became imminent). Foreclosure property treatment (other than for qualified health care property) is
available for an initial period of three years and may, in certain circumstances, be extended for an additional three years. Foreclosure property treatment for qualified health care property is
available for an initial period of two years and may, in certain circumstances, be extended for an additional four years.
Failure to Qualify
If we discover a violation of a provision of the Code that would result in our failure to qualify as a REIT, certain specified cure provisions
may be available to us. Except with respect to violations of the gross income tests and asset tests (for which the cure provisions are described above), and provided the violation is due to reasonable
cause and not due to willful neglect, these cure provisions generally impose a $50,000 penalty for each violation in lieu of a loss of REIT status. If we fail to satisfy the requirements for taxation
as a REIT in any taxable year, and the relief provisions do not apply, we will be required to pay regular U.S. federal corporate income tax, including any applicable alternative minimum tax for
taxable years beginning before January 1, 2018, on our taxable income. Distributions to stockholders in any year in which we fail to qualify as a REIT will not be deductible by us. As a result,
we anticipate that our failure to qualify as a REIT would reduce the cash available for distribution by us to our stockholders. In addition, if we fail to qualify as a REIT, we will not be required to
distribute any amounts to our stockholders, and all distributions to stockholders will be taxable as regular corporate dividends to the extent of our current and accumulated earnings and profits. In
such event, corporate distributees may be eligible for the dividends-received deduction. In addition, non-corporate stockholders, including individuals, may be eligible for the preferential tax rates
44
Table of Contents
on
qualified dividend income. Non-corporate stockholders, including individuals, generally may deduct 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified
dividend income, for taxable years beginning after December 31, 2017 and before January 1, 2026. If we
fail to qualify as a REIT, such stockholders may not claim this deduction with respect to dividends paid by us. Unless entitled to relief under specific statutory provisions, we would also be
ineligible to elect to be treated as a REIT for the four taxable years following the year for which we lose our qualification. It is not possible to state whether in all circumstances we would be
entitled to this statutory relief.
Tax Aspects of the Subsidiary Partnerships and the Limited Liability Companies
General
From time to time, we may own, directly or indirectly, interests in various partnerships and limited liability companies. We expect these will
be treated as partnerships or disregarded entities for U.S. federal income tax purposes. In general, entities that are treated as partnerships or disregarded entities for U.S. federal
income tax purposes are "pass-through" entities which are not required to pay U.S. federal income tax. Rather, partners or members of such entities are allocated their shares of the items of
income, gain, loss, deduction and credit of the partnership or limited liability company, and are potentially required to pay tax on this income, without regard to whether they receive a distribution
from the partnership or limited liability company. We will include in our income our share of these partnership and limited liability company items for purposes of the various gross income tests, the
computation of our REIT taxable income, and the REIT distribution requirements. Moreover, for purposes of the asset tests, we will include our pro rata share of assets held by these partnerships and
limited liability companies, based on our capital interests in each such entity. See "Taxation of Our Company."
Entity Classification
Our interests in the subsidiary partnerships and limited liability companies involve special tax considerations, including the possibility that
the IRS might challenge the status of these entities as partnerships or disregarded entities. For example, an entity that would otherwise be treated as a partnership for U.S. federal income tax
purposes may nonetheless be taxable as a corporation if it is a "publicly traded partnership" and certain other requirements are met. A partnership or limited liability company would be treated as a
publicly traded partnership if its interests are traded on an established securities market or are readily tradable on a secondary market or a substantial equivalent
thereof, within the meaning of applicable Treasury Regulations. We do not anticipate that any subsidiary partnership or limited liability company will be treated as a publicly traded partnership that
is taxable as a corporation. However, if any such entity were treated as a corporation, it would be required to pay an entity-level tax on its income. In this situation, the character of our assets
and items of gross income would change and could prevent us from satisfying the REIT asset tests and possibly the REIT income tests. See "Taxation of Our CompanyAsset Tests"
and "Income Tests." This, in turn, could prevent us from qualifying as a REIT. See "Failure to Qualify" for a discussion of the effect of our failure to meet these tests. In
addition, a change in the tax status of one or more of the partnerships or limited liability companies might be treated as a taxable event. If so, we might incur a tax liability without any related
cash payment. We believe that each of our partnerships and limited liability companies are and will continue to be treated as partnerships or disregarded entities for U.S. federal income tax
purposes.
Allocations of Income, Gain, Loss and Deduction
A partnership agreement (or, in the case of a limited liability company treated as a partnership for U.S. federal income tax purposes, the
limited liability company agreement) generally will determine the
45
Table of Contents
allocation
of income and loss among partners. These allocations, however, will be disregarded for tax purposes if they do not comply with the provisions of Section 704(b) of the Code and the
Treasury Regulations thereunder. Generally, Section 704(b) of the Code and the Treasury Regulations thereunder require that partnership allocations respect the economic arrangement of the
partners. If an allocation of partnership income or loss does not comply with the requirements of Section 704(b) of the Code and the Treasury Regulations thereunder, the item subject to the
allocation will be reallocated in accordance with the partners' interests in the partnership. This reallocation will be determined by taking into account all of the facts and circumstances relating to
the economic arrangement of the partners with respect to such item. We intend that the allocations of taxable income and loss in each of the partnerships and limited liability companies in which we
own an interest from time to time comply with the requirements of Section 704(b) of the Code and the Treasury Regulations thereunder.
Tax Allocations With Respect to the Properties
Under Section 704(c) of the Code, income, gain, loss and deduction attributable to appreciated or depreciated property that is
contributed to a partnership (including a limited liability company treated as a partnership for U.S. federal income tax purposes) in exchange for an interest in the partnership, must be allocated in
a manner so that the contributing partner is charged with the unrealized gain or benefits from the unrealized loss associated with the property at the time of the contribution. The amount of the
unrealized gain or unrealized loss generally is equal to the difference between the fair market value or book value and the adjusted tax basis of the contributed property at the time of contribution
(this difference is referred to as a book-tax difference), as adjusted from time to time. These allocations are solely for U.S. federal income tax purposes and do not affect the book capital accounts
or other economic or legal arrangements among the partners. Some of the partnerships and/or limited liability companies in which we own an interest were formed by way of contributions of appreciated
property. The relevant partnership and/or limited liability company agreements require that allocations be made in a manner consistent with Section 704(c) of the Code. Under
Section 704(c) of the Code we could be allocated less depreciation or more gain on sale with respect to a contributed property than the amounts that would have been allocated to us if we had
instead acquired the contributed property with an initial tax basis equal to its fair market value. Such allocations might adversely affect our ability to comply with the REIT distribution
requirements. See "Taxation of Our CompanyRequirements for Qualification as a REIT" and "Annual Distribution Requirements."
Any
property acquired by a subsidiary partnership or limited liability company in a taxable transaction will initially have a tax basis equal to its fair market value, and
Section 704(c) of the Code generally will not apply.
Partnership Audit Rules
The Bipartisan Budget Act of 2015 changed the rules applicable to U.S. federal income tax audits of partnerships. Under the new rules (which are
generally effective for taxable years beginning after December 31, 2017), among other changes and subject to certain exceptions, any audit adjustment to items of income, gain, loss, deduction,
or credit of a partnership (and any partner's distributive share thereof) is determined, and taxes, interest, or penalties attributable thereto are assessed and collected, at the partnership level.
Although it is uncertain how certain aspects of these new rules will be implemented, it is possible that they could result in partnerships in which we directly or indirectly invest being required to
pay additional taxes, interest and penalties as a result of an audit adjustment, and we, as a direct or indirect partner of these partnerships, could be required to bear the economic burden of those
taxes, interest, and penalties even though we, as a REIT, may not otherwise have been required to pay additional corporate-level taxes as a result of the related audit adjustment.
The changes created by these new rules are sweeping and in many respects dependent on the promulgation of future
46
Table of Contents
regulations
or other guidance by the U.S. Department of the Treasury. Investors are urged to consult their tax advisors with respect to these changes and their potential impact on their investment in
our capital stock.
Material U.S. Federal Income Tax Consequences to Holders of Our Capital Stock and Debt Securities
The following discussion is a summary of the material U.S. federal income tax consequences to you of acquiring, owning and disposing of our
capital stock or debt securities. This discussion is limited to holders who hold our capital stock or debt securities as "capital assets" within the meaning of Section 1221 of the Code
(generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a holder's particular circumstances. In addition, except where
specifically noted, it does not address consequences relevant to holders subject to special rules, including, without limitation:
-
-
U.S. expatriates and former citizens or long-term residents of the United States;
-
-
persons subject to the alternative minimum tax;
-
-
U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
-
-
persons holding our capital stock or debt securities as part of a hedge, straddle or other risk reduction strategy or as part of a conversion
transaction or other integrated investment;
-
-
banks, insurance companies, and other financial institutions;
-
-
REITs or regulated investment companies;
-
-
brokers, dealers or traders in securities;
-
-
"controlled foreign corporations," "passive foreign investment companies," and corporations that accumulate earnings to avoid U.S. federal
income tax;
-
-
S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and
investors therein);
-
-
tax-exempt organizations or governmental organizations;
-
-
persons subject to special tax accounting rules as a result of any item of gross income with respect to our capital stock being taken into
account in an applicable financial statement;
-
-
persons deemed to sell our capital stock or debt securities under the constructive sale provisions of the Code; and
-
-
persons who hold or receive our capital stock pursuant to the exercise of any employee stock option or otherwise as compensation.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED AS TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION
OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR CAPITAL STOCK OR DEBT SECURITIES ARISING UNDER
OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS), UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
For
purposes of this discussion, a "U.S. holder" is a beneficial owner of our capital stock or debt securities that, for U.S. federal income tax purposes, is or is treated
as:
-
-
an individual who is a citizen or resident of the United States;
47
Table of Contents
-
-
a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia;
-
-
an estate the income of which is subject to U.S. federal income tax regardless of its source; or
-
-
a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more "United States persons"
(within the meaning of Section 7701(a)(30) of the Code) or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.
For
purposes of this discussion, a "non-U.S. holder" is any beneficial owner of our capital stock or debt securities that is neither a U.S. holder nor an entity treated as a partnership
for U.S. federal income tax purposes.
If
an entity treated as a partnership for U.S. federal income tax purposes holds our capital stock or debt securities, the tax treatment of a partner in the partnership will depend on
the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our capital stock or debt securities and the
partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.
Taxation of Taxable U.S. Holders of Our Capital Stock
Distributions Generally
Distributions out of our current or accumulated earnings and profits will be treated as dividends and, other than with respect to capital gain
dividends and certain amounts which have previously been subject to corporate level tax, as discussed below, will be taxable to our taxable U.S. holders as ordinary income when actually or
constructively received. See "Tax Rates" below. As long as we qualify as a REIT, these distributions will not be eligible for the dividends-received deduction in the case of
U.S. holders that are corporations or, except to the extent described in "Tax Rates" below, the preferential rates on qualified dividend income applicable to non-corporate
U.S. holders, including individuals. For purposes of determining whether distributions to holders of our capital stock are out of our current or accumulated earnings and profits, our earnings
and profits will be allocated first to our outstanding preferred stock, if any, and then to our outstanding common stock.
To
the extent that we make distributions on our capital stock in excess of our current and accumulated earnings and profits allocable to such stock, these distributions will be treated
first as a tax-free return of capital to a U.S. holder to the extent of the U.S. holder's adjusted tax basis in such shares of stock. Distributions in excess of our current and accumulated
earnings and profits and in excess of a U.S. holder's adjusted tax basis in its shares will be taxable as capital gain. Such gain will be taxable as long-term capital gain if the shares have been held
for more than one year. Dividends we declare in October, November, or December of any year and which are payable to a holder of record on a specified date in any of these months will be treated as
both paid by us and received by the holder on December 31 of that year, provided we actually pay the dividend on or before January 31 of the following year. U.S. holders may not include
in their own income tax returns any of our net operating losses or capital losses.
U.S.
holders that receive taxable stock distributions, including distributions partially payable in our common stock and partially payable in cash, would be required to treat the full
amount of the distribution (
i.e.
, the cash and the stock portion) as a dividend (subject to certain exceptions) to the extent of our current and
accumulated earnings and profits for U.S. federal income tax purposes, as described above. The amount of any distribution payable in our common stock generally is equal to the amount of cash that
could have been received instead of the common stock. Depending on the circumstances of a U.S. holder, the tax on the distribution may exceed the amount of the distribution
48
Table of Contents
received
in cash, in which case such U.S. holder would have to pay the tax using cash from other sources. If a U.S. holder sells the common stock it received in connection with a taxable stock
distribution in order to pay this tax and the proceeds of such sale are less than the amount required to
be included in income with respect to the stock portion of the distribution, such U.S. holder could have a capital loss with respect to the stock sale that could not be used to offset such dividend
income. A U.S. holder that receives common stock pursuant to such distribution generally has a tax basis in such common stock equal to the amount of cash that could have been received instead of such
common stock as described above, and has a holding period in such common stock that begins on the day immediately following the payment date for the distribution.
Capital Gain Dividends
Dividends that we properly designate as capital gain dividends will be taxable to our taxable U.S. holders as a gain from the sale or
disposition of a capital asset held for more than one year, to the extent that such gain does not exceed our actual net capital gain for the taxable year and may not exceed our dividends paid for the
taxable year, including dividends paid the following year that are treated as paid in the current year. U.S. holders that are corporations may, however, be required to treat up to 20% of
certain capital gain dividends as ordinary income. If we properly designate any portion of a dividend as a capital gain dividend then, except as otherwise required by law, we presently intend to
allocate a portion of the total capital gain dividends paid or made available to holders of all classes of our capital stock for the year to the holders of each class of our capital stock in
proportion to the amount that our total dividends, as determined for U.S. federal income tax purposes, paid or made available to the holders of each such class of our capital stock for the year
bears to the total dividends, as determined for U.S. federal income tax purposes, paid or made available to holders of all classes of our capital stock for the year. In addition, except as
otherwise required by law, we will make a similar allocation with respect to any undistributed long-term capital gains which are to be included in our stockholders' long-term capital gains, based on
the allocation of the capital gain amount which would have resulted if those undistributed long-term capital gains had been distributed as "capital gain dividends" by us to our stockholders.
Retention of Net Capital Gains
We may elect to retain, rather than distribute as a capital gain dividend, all or a portion of our net capital gains. If we make this election,
we would pay tax on our retained net capital gains. In addition, to the extent we so elect, our earnings and profits (determined for U.S. federal income tax purposes) would be adjusted accordingly,
and a U.S. holder generally would:
-
-
include its pro rata share of our undistributed capital gain in computing its long-term capital gains in its return for its taxable year in
which the last day of our taxable year falls, subject to certain limitations as to the amount that is includable;
-
-
be deemed to have paid its share of the capital gains tax imposed on us on the designated amounts included in the U.S. holder's income as
long-term capital gain;
-
-
receive a credit or refund for the amount of tax deemed paid by it;
-
-
increase the adjusted tax basis of its capital stock by the difference between the amount of includable gains and the tax deemed to have been
paid by it; and
-
-
in the case of a U.S. holder that is a corporation, appropriately adjust its earnings and profits for the retained capital gains in accordance
with Treasury Regulations to be promulgated by the IRS.
49
Table of Contents
Passive Activity Losses and Investment Interest Limitations
Distributions we make and gain arising from the sale or exchange by a U.S. holder of our capital stock will not be treated as passive activity
income. As a result, U.S. holders
generally will not be able to apply any "passive losses" against this income or gain. A U.S. holder generally may elect to treat capital gain dividends, capital gains from the disposition of our
capital stock and income designated as qualified dividend income, as described in "Tax Rates" below, as investment income for purposes of computing the investment interest limitation, but
in such case, the holder will be taxed at ordinary income rates on such amount. Other distributions made by us, to the extent they do not constitute a return of capital, generally will be treated as
investment income for purposes of computing the investment interest limitation.
Dispositions of Our Capital Stock
Except as described below under "Redemption or Repurchase by Us," if a U.S. holder sells or disposes of shares of our capital stock, it will
recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale or other
disposition and the holder's adjusted tax basis in the shares. This gain or loss, except as provided below, will be long-term capital gain or loss if the holder has held such capital stock for more
than one year. However, if a U.S. holder recognizes a loss upon the sale or other disposition of capital stock that it has held for six months or less, after applying certain holding period rules, the
loss recognized will be treated as a long-term capital loss to the extent the U.S. holder received distributions from us which were required to be treated as long-term capital gains.
A redemption or repurchase of shares of our capital stock will be treated under Section 302 of the Code as a distribution (and taxable as
a dividend to the extent of our current and accumulated earnings and profits as described above under "Distributions Generally") unless the redemption or repurchase satisfies one of the
tests set forth in Section 302(b) of the Code and is therefore treated as a sale or exchange of the redeemed or repurchased shares. The redemption or repurchase generally will be treated as a
sale or exchange if it:
-
-
is "substantially disproportionate" with respect to the U.S. holder;
-
-
results in a "complete redemption" of the U.S. holder's stock interest in us; or
-
-
is "not essentially equivalent to a dividend" with respect to the U.S. holder,
all
within the meaning of Section 302(b) of the Code.
In
determining whether any of these tests has been met, shares of our capital stock, including common stock and other equity interests in us, considered to be owned by the U.S. holder by
reason of certain constructive ownership rules set forth in the Code, as well as shares of our capital stock actually owned by the U.S. holder, generally must be taken into account. Because the
determination as to whether any of the alternative tests of Section 302(b) of the Code will be satisfied with respect to the U.S. holder depends upon the facts and circumstances at the time
that the determination must be made, U.S. holders are advised to consult their tax advisors to determine such tax treatment.
If
a redemption or repurchase of shares of our capital stock is treated as a distribution, the amount of the distribution will be measured by the amount of cash and the fair market value
of any property received. See "Distributions Generally." A U.S. holder's adjusted tax basis in the redeemed or repurchased shares generally will be transferred to the holder's remaining
shares of our capital stock, if any. If a U.S. holder owns no other shares of our capital stock, under certain circumstances,
50
Table of Contents
such
basis may be transferred to a related person or it may be lost entirely. Proposed Treasury Regulations issued in 2009, if enacted in their current form, would affect the basis recovery rules
described above. It is not clear whether these proposed regulations will be enacted in their current form or at all. Prospective investors should consult their tax advisors regarding the U.S. federal
income tax consequences of a redemption or repurchase of our capital stock.
If
a redemption or repurchase of shares of our capital stock is not treated as a distribution, it will be treated as a taxable sale or exchange in the manner described under
"Dispositions of Our Capital Stock."
Tax Rates
The maximum tax rate for non-corporate taxpayers for (1) long-term capital gains, including certain "capital gain dividends," generally
is 20% (although depending on the characteristics of the assets which produced these gains and on designations which we may make, certain capital gain dividends may be taxed at a 25% rate) and
(2) "qualified dividend income" generally is 20%. In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that
certain holding period requirements have been met and the REIT's dividends are attributable to dividends received from taxable corporations (such as its taxable REIT subsidiaries) or to income that
was subject to tax at the corporate/REIT level (for example, if the REIT distributed taxable income that it retained and paid tax on in the prior taxable year). Capital gain dividends will only be
eligible for the rates described above to the extent that they are properly designated by the REIT as "capital gain dividends." U.S. holders that are corporations may be required to treat up to
20% of some capital gain dividends as ordinary income. In addition, non-corporate U.S. holders, including individuals, generally may deduct 20% of dividends from a REIT, other than capital gain
dividends and dividends treated as qualified dividend income, for taxable years beginning after December 31, 2017 and before January 1, 2026.
Taxation of Tax-Exempt Holders of Our Capital Stock
Dividend income from us and gain arising upon a sale of shares of our capital stock generally should not be unrelated business taxable income,
or UBTI, to a tax-exempt holder, except as described below. This income or gain will be UBTI, however, to the extent a tax-exempt holder holds its shares as "debt-financed property" within the meaning
of the Code. Generally, "debt-financed property" is property the acquisition or holding of which was financed through a borrowing by the tax-exempt holder.
For
tax-exempt holders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, or qualified group legal services plans exempt from
U.S. federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) or (c)(20) of the Code, respectively, income from an investment in our shares will constitute UBTI unless the
organization is able to properly claim a deduction for amounts set aside or placed in reserve for specific purposes so as to offset the income generated by its investment in our shares. These
prospective investors should consult their tax advisors concerning these "set aside" and reserve requirements.
Notwithstanding
the above, however, a portion of the dividends paid by a "pension-held REIT" may be treated as UBTI as to certain trusts that hold more than 10%, by value, of the
interests in the REIT. A
REIT will not be a "pension-held REIT" if it is able to satisfy the "not closely held" requirement without relying on the "look-through" exception with respect to certain trusts or if such REIT is not
"predominantly held" by "qualified trusts." As a result of restrictions on ownership and transfer of our stock contained in our charter, we do not expect to be classified as a "pension-held REIT," and
as a result, the tax treatment described above should be inapplicable to our holders.
51
Table of Contents
However,
because our common stock is (and, we anticipate, will continue to be) publicly traded, we cannot guarantee that this will always be the case.
Taxation of Non-U.S. Holders of Our Capital Stock
The following discussion addresses the rules governing U.S. federal income taxation of the acquisition, ownership and disposition of our capital
stock by non-U.S. holders. These rules are complex, and no attempt is made herein to provide more than a brief summary of such rules. Accordingly, the discussion does not address all aspects of U.S.
federal income taxation and does not address other federal, state, local or non-U.S. tax consequences that may be relevant to a non-U.S. holder in light of its particular circumstances. We urge
non-U.S. holders to consult their tax advisors to determine the impact of U.S. federal, state, local and non-U.S. income and other tax laws and any applicable tax treaty on the acquisition, ownership
and disposition of shares of our capital stock, including any reporting requirements.
Distributions Generally
Distributions (including any taxable stock dividends) that are neither attributable to gains from sales or exchanges by us of
United States real property interests, or USRPIs, nor designated by us as capital gain dividends (except as described below) will be treated as dividends of ordinary income to the extent that
they are made out of our current or accumulated earnings and profits. Such distributions ordinarily will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty, unless the distributions are treated as effectively connected with the conduct by the non-U.S. holder of a trade or business within the
United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such dividends are
attributable).
Under certain treaties, however, lower withholding rates generally applicable to dividends do not apply to dividends from a REIT. Certain certification and disclosure requirements must be satisfied
for a non-U.S. holder to be exempt from withholding under the effectively connected income exemption. Dividends that are treated as effectively connected with a U.S. trade or business generally will
not be subject to withholding but will be subject to U.S. federal income tax on a net basis at the regular graduated rates, in the same manner as dividends paid to U.S. holders are subject to U.S.
federal income tax. Any such dividends received by a non-U.S. holder that is a corporation may also be subject to an additional branch profits tax at a 30% rate (applicable after deducting U.S.
federal income taxes paid on such effectively connected income) or such lower rate as may be specified by an applicable income tax treaty.
Except
as otherwise provided below, we expect to withhold U.S. federal income tax at the rate of 30% on any distributions made to a non-U.S. holder unless:
-
(1)
-
a
lower treaty rate applies and the non-U.S. holder furnishes an IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) evidencing eligibility for
that reduced treaty rate; or
-
(2)
-
the
non-U.S. holder furnishes an IRS Form W-8ECI (or other applicable documentation) claiming that the distribution is income effectively connected with the
non-U.S. holder's trade or business.
Distributions
in excess of our current and accumulated earnings and profits will not be taxable to a non-U.S. holder to the extent that such distributions do not exceed the adjusted tax
basis of the holder's capital stock, but rather will reduce the adjusted tax basis of such stock. To the extent that such distributions exceed the non-U.S. holder's adjusted tax basis in such capital
stock, they generally will give rise to gain from the sale or exchange of such stock, the tax treatment of which is described below. However, such excess distributions to be treated as dividend income
for certain non-U.S.
52
Table of Contents
holders.
For withholding purposes, we expect to treat all distributions as made out of our current or accumulated earnings and profits. However, amounts withheld may be refundable if it is
subsequently determined that the distribution was, in fact, in excess of our current and accumulated earnings and profits, provided that certain conditions are met.
Capital Gain Dividends and Distributions Attributable to a Sale or Exchange of United States
Real Property Interests
Distributions to a non-U.S. holder that we properly designate as capital gain dividends, other than those arising from the disposition of a
USRPI, generally should not be subject to U.S. federal income taxation, unless:
-
(1)
-
the
investment in our capital stock is treated as effectively connected with the conduct by the non-U.S. holder of a trade or business within the
United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such dividends are
attributable), in which case the non-U.S. holder will be subject to the same treatment as U.S. holders with respect to such gain, except that a non-U.S. holder that is a corporation may also be
subject to a branch profits tax of up to 30%, as discussed above; or
-
(2)
-
the
non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain
other conditions are met, in which case the non-U.S. holder will be subject to U.S. federal income tax at a rate of 30% on the non-U.S. holder's capital gains (or such lower rate specified by an
applicable income tax treaty), which may be offset by U.S. source capital losses of such non-U.S. holder (even though the individual is not considered a resident of the United States), provided
the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.
Pursuant
to the Foreign Investment in Real Property Tax Act, which is referred to as "FIRPTA," distributions to a non-U.S. holder that are attributable to gain from sales or exchanges by
us of USRPIs, whether or not designated as capital gain dividends, will cause the non-U.S. holder to be treated as recognizing such gain as income effectively connected with a U.S. trade or business.
Non-U.S. holders generally would be taxed at the regular graduated rates applicable to U.S. holders, subject to any applicable alternative minimum tax and a special alternative minimum tax in the case
of nonresident alien individuals. We also will be required to withhold and to remit to the IRS 21% of any distribution to non-U.S. holders attributable to gain from sales or exchanges by us of USRPIs.
Distributions subject to FIRPTA may also be subject to a 30% branch profits tax in the hands of a non-U.S. holder that is a corporation. The amount withheld is creditable against the non-U.S. holder's
U.S. federal income tax liability. However, any distribution with respect to any class of stock that is "regularly traded," as defined by applicable Treasury Regulations, on an established securities
market located in the United States is not subject to FIRPTA, and therefore, not subject to the 21% U.S. withholding tax described above, if the non-U.S. holder did not own more than 10% of
such class of stock at any time during the one-year period ending on the date of the distribution. Instead, such distributions generally will be treated as ordinary dividend distributions and subject
to withholding in the manner described above with respect to ordinary dividends. In addition, distributions to certain
non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements ("qualified shareholders") are exempt from FIRPTA, except to the extent owners of such qualified
shareholders that are not also qualified shareholders own, actually or constructively, more than 10% of our capital stock. Furthermore, distributions to "qualified foreign pension funds" or entities
all of the interests of which are held by "qualified foreign pension funds" are exempt from FIRPTA. Non-U.S. holders should consult their tax advisors regarding the application of these rules.
53
Table of Contents
Retention of Net Capital Gains
Although the law is not clear on the matter, it appears that amounts we designate as retained net capital gains in respect of our capital stock
should be treated with respect to non-U.S. holders as actual distributions of capital gain dividends. Under this approach, the non-U.S. holders may be able to offset as a credit against their U.S.
federal income tax liability their proportionate share of the tax paid by us on such retained net capital gains and to receive from the IRS a refund to the extent their proportionate share of such tax
paid by us exceeds their actual U.S. federal income tax liability. If we were to designate any portion of our net capital gain as retained net capital gain, non-U.S. holders should consult their tax
advisors regarding the taxation of such retained net capital gain.
Sale of Our Capital Stock
Except as described below under "Redemption or Repurchase by Us," gain realized by a non-U.S. holder upon the sale, exchange or
other taxable disposition of our capital stock generally will not be subject to U.S. federal income tax unless such stock constitutes a USRPI. In general, stock of a domestic corporation that
constitutes a "United States real property holding corporation," or USRPHC, will constitute a USRPI. We believe that we are a USRPHC. Our capital stock will not, however, constitute a USRPI so long as
we are a "domestically controlled qualified investment entity." A "domestically controlled qualified investment entity" includes a REIT in which at all times during a five-year testing period less
than 50% in value of its stock is held directly or indirectly by non-United States persons, subject to certain rules. For purposes of determining whether a REIT is a "domestically controlled qualified
investment entity," a person who at all applicable times holds less than 5% of a class of stock that is "regularly traded" is treated as a United States person unless the REIT has actual knowledge
that such person is not a United States person. We believe, but cannot guarantee, that we are a "domestically controlled qualified investment entity." Because our common stock is (and, we anticipate,
will continue to be) publicly traded, no assurance can be given that we will continue to be a "domestically controlled qualified investment entity."
Even
if we do not qualify as a "domestically controlled qualified investment entity" at the time a non-U.S. holder sells our capital stock, gain realized from the sale or other taxable
disposition by a non-U.S. holder of such capital stock would not be subject to U.S. federal income tax under FIRPTA as a sale of a USRPI if:
-
(1)
-
such
class of capital stock is "regularly traded," as defined by applicable Treasury Regulations, on an established securities market such as the New York Stock
Exchange; and
-
(2)
-
such
non-U.S. holder owned, actually and constructively, 10% or less of such class of capital stock throughout the shorter of the five-year period ending on the date
of the sale or other taxable disposition or the non-U.S. holder's holding period.
In
addition, dispositions of our capital stock by qualified shareholders are exempt from FIRPTA, except to the extent owners of such qualified shareholders that are not also qualified
shareholders own, actually or constructively, more than 10% of our capital stock. Furthermore, dispositions of our capital stock by "qualified foreign pension funds" or entities all of the interests
of which are held by "qualified foreign pension funds" are exempt from FIRPTA. Non-U.S. holders should consult their tax advisors regarding the application of these rules.
Notwithstanding
the foregoing, gain from the sale, exchange or other taxable disposition of our capital stock not otherwise subject to FIRPTA will be taxable to a non-U.S. holder if
either (a) the investment in our capital stock is treated as effectively connected with the conduct by the non-U.S. holder of a trade or business within the United States (and, if required by
an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable), in which case the non-U.S. holder will be subject to
the same treatment as U.S.
54
Table of Contents
holders
with respect to such gain, except that a non-U.S. holder that is a corporation may also be subject to the 30% branch profits tax (or such lower rate as may be specified by an applicable income
tax treaty) on such gain, as adjusted for certain items, or (b) the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more during the
taxable year and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the non-U.S. holder's capital gains (or such lower rate specified by an applicable
income tax treaty), which may be offset by U.S. source capital losses of the non-U.S. holder (even though the individual is not considered a resident of the United States), provided the non-U.S.
holder has timely filed U.S. federal income tax returns with respect to such losses. In addition, even if we are a domestically controlled qualified investment entity, upon disposition of our capital
stock, a non-U.S. holder may be treated as having gain from the sale or other taxable disposition of a USRPI if the non-U.S. holder (1) disposes of such stock within a 30-day period preceding
the ex-dividend date of a distribution, any portion of which, but for the disposition, would have been treated as gain from the sale or exchange of a USRPI and (2) acquires, or enters into a
contract or option to acquire, or is deemed to acquire, other shares of that stock during the 61-day period beginning with the first day of the 30-day period described in clause (1), unless
such stock is "regularly traded" and the non-U.S. holder did not own more than 10% of the stock at any time during the one-year period ending on the date of the distribution described in
clause (1).
If
gain on the sale, exchange or other taxable disposition of our capital stock were subject to taxation under FIRPTA, the non-U.S. holder would be required to file a U.S. federal
income tax return and would be subject to regular U.S. federal income tax with respect to such gain in the same manner as a taxable U.S. holder (subject to any applicable alternative minimum tax and a
special alternative minimum tax in the case of nonresident alien individuals). In addition, if the sale, exchange or other taxable disposition of our capital stock were subject to taxation under
FIRPTA, and if shares of the applicable class of our capital stock were not "regularly traded" on an established securities market, the purchaser of such capital stock generally would be required to
withhold and remit to the IRS 15% of the purchase price.
Redemption or Repurchase by Us
A redemption or repurchase of shares of our capital stock will be treated under Section 302 of the Code as a distribution (and taxable as
a dividend to the extent of our current and accumulated earnings and profits) unless the redemption or repurchase satisfies one of the tests set forth in Section 302(b) of the Code and is
therefore treated as a sale or exchange of the redeemed or repurchased shares. See "Taxation of Taxable U.S. Holders of Our Capital StockRedemption or Repurchase by Us."
Qualified shareholders and their owners may be subject to different rules, and should consult their tax advisors regarding the application of such rules. If the redemption or repurchase of shares is
treated as a distribution, the amount of the distribution will be measured by the amount of cash and the fair market value of any property received. See "Taxation of Non-U.S. Holders of
Our Capital StockDistributions Generally." If the redemption or repurchase of shares is not treated as a distribution, it will be treated as a taxable sale or exchange in the manner
described under "Taxation of Non-U.S. Holders of Our Capital StockSale of Our Capital Stock."
Taxation of Holders of Our Debt Securities
The following summary describes the material U.S. federal income tax consequences of acquiring, owning and disposing of our debt securities.
This discussion assumes the debt securities will be issued with less than a statutory
de minimis
amount of original issue discount for U.S. federal
income tax purposes. In addition, this discussion is limited to persons purchasing the debt securities for cash at original issue and at their original "issue price" within the meaning of
Section 1273 of the Code (i.e., the first price at which a substantial amount of the debt securities is sold to the public for cash).
55
Table of Contents
U.S. Holders
Payments of Interest.
Interest on a debt security generally will be taxable to a U.S. holder as ordinary income at the time such
interest is received
or accrued, in accordance with such U.S. holder's method of tax accounting for U.S. federal income tax purposes.
Sale or Other Taxable Disposition.
A U.S. holder will recognize gain or loss on the sale, exchange, redemption, retirement or other
taxable
disposition of a debt security. The amount of such gain or loss generally will equal the difference between the amount received for the debt security in cash or other property valued at fair market
value (less amounts attributable to any accrued but unpaid interest, which will be taxable as interest to the extent not previously included in income) and the U.S. holder's adjusted tax basis in the
debt security. A U.S. holder's adjusted tax basis in a debt security generally will be equal to the amount the U.S. holder paid for the debt security. Any gain or loss will be capital gain or loss,
and will be long-term capital gain or loss if the U.S. holder has held the debt security for more than one year at the time of such sale or other taxable disposition. Otherwise, such gain or loss will
be short-term capital gain or loss. Long-term capital gains recognized by certain non-corporate U.S. holders, including individuals, generally will be taxable at a reduced rate. The deductibility of
capital losses is subject to limitations.
Non-U.S. Holders
Payments of Interest.
Interest paid on a debt security to a non-U.S. holder that is not effectively connected with the non-U.S. holder's
conduct of a
trade or business within the United States generally will not be subject to U.S. federal income tax or withholding, provided that:
-
-
the non-U.S. holder does not, actually or constructively, own 10% or more of the total combined voting power of all classes of our voting
stock;
-
-
the non-U.S. holder is not a controlled foreign corporation related to us through actual or constructive stock ownership; and
-
-
either (1) the non-U.S. holder certifies in a statement provided to the applicable withholding agent under penalties of perjury that it
is not a United States person and provides its name and address; (2) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary
course of its trade or business and holds the debt security on behalf of the non-U.S. holder certifies to the applicable withholding agent under penalties of perjury that it, or the financial
institution between it and the non-U.S. holder, has received from the non-U.S. holder a statement under penalties of perjury that such holder is not a United States person and provides a copy of such
statement to the applicable withholding agent; or (3) the non-U.S. holder holds its debt security directly through a "qualified intermediary" (within the meaning of applicable Treasury
Regulations) and certain conditions are satisfied.
If
a non-U.S. holder does not satisfy the requirements above, such non-U.S. holder will be subject to withholding tax of 30%, subject to a reduction in or an exemption from withholding
on such interest as a result of an applicable tax treaty. To claim such entitlement, the non-U.S. holder must provide the applicable withholding agent with a properly executed IRS Form W-8BEN
or W-8BEN-E (or other applicable documentation) claiming a reduction in or exemption from withholding tax under the benefit of an income tax treaty between the United States and the country in which
the non-U.S. holder resides or is established.
If
interest paid to a non-U.S. holder is effectively connected with the non-U.S. holder's conduct of a trade or business within the United States (and, if required by an applicable
income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such interest is attributable), the non-U.S. holder will be exempt from the U.S. federal
withholding tax described above. To claim the exemption, the non-U.S. holder must furnish to the applicable withholding agent a
56
Table of Contents
valid
IRS Form W-8ECI, certifying that interest paid on a debt security is not subject to withholding tax because it is effectively connected with the conduct by the non-U.S. holder of a trade
or business within the United States.
Any
such effectively connected interest generally will be subject to U.S. federal income tax at the regular graduated rates. A non-U.S. holder that is a corporation also may be subject
to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected interest, as adjusted for certain items.
The
certifications described above must be provided to the applicable withholding agent prior to the payment of interest and must be updated periodically. Non-U.S. holders that do not
timely provide the applicable withholding agent with the required certification, but that qualify for a reduced rate under an applicable income tax treaty, may obtain a refund of any excess amounts
withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax
treaty.
Sale or Other Taxable Disposition.
A non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale,
exchange,
redemption, retirement or other taxable disposition of a debt security (such amount excludes any amount allocable to accrued and unpaid interest, which generally will be treated as interest and may be
subject to the rules discussed above in "Taxation of Holders of Our Debt SecuritiesNon-U.S. HoldersPayments of Interest")
unless:
-
-
the gain is effectively connected with the non-U.S. holder's conduct of a trade or business within the United States (and, if required by an
applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable); or
-
-
the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the
disposition and certain other requirements are met.
Gain
described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A non-U.S. holder that is a
corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain
items.
Gain
described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may
be offset by U.S. source capital losses of the non-U.S. holder (even though the individual is not considered a resident of the United States), provided the non-U.S. holder has timely filed U.S.
federal income tax returns with respect to such losses.
Non-U.S.
holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
Information Reporting and Backup Withholding
U.S. Holders
A U.S. holder may be subject to information reporting and backup withholding when such holder receives payments on our capital stock or debt
securities or proceeds from the sale or other taxable disposition of such stock or debt securities (including a redemption or retirement of a debt security). Certain U.S. holders are exempt from
backup withholding, including corporations and certain tax-exempt organizations. A U.S. holder will be subject to backup withholding if such holder is not otherwise exempt
and:
-
-
the holder fails to furnish the holder's taxpayer identification number, which for an individual is ordinarily his or her social security
number;
57
Table of Contents
-
-
the holder furnishes an incorrect taxpayer identification number;
-
-
the applicable withholding agent is notified by the IRS that the holder previously failed to properly report payments of interest or dividends;
or
-
-
the holder fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS
has not notified the holder that the holder is subject to backup withholding.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a U.S. holder's U.S. federal income
tax liability, provided the required information is timely furnished to the IRS. U.S. holders should consult their tax advisors regarding their qualification for an exemption from backup withholding
and the procedures for obtaining such an exemption.
Non-U.S. Holders
Payments of dividends on our capital stock or interest on our debt securities generally will not be subject to backup withholding, provided the
applicable withholding agent does not have actual knowledge or reason to know the holder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid
IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any dividends on our capital
stock or interest on our debt securities paid to the non-U.S. holder, regardless of whether any tax was actually withheld. In addition, proceeds of the sale
or other taxable disposition of such stock or debt securities (including a retirement or redemption of a debt security) within the United States or conducted through certain U.S.-related brokers
generally will not be subject to backup withholding or information reporting, if the applicable withholding agent receives the certification described above and does not have actual knowledge or
reason to know that such holder is a United States person, or the holder otherwise establishes an exemption. Proceeds of a disposition of such stock or debt securities conducted through a non-U.S.
office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.
Copies
of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in
which the non-U.S. holder resides or is established.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's U.S. federal
income tax liability, provided the required information is timely furnished to the IRS.
Medicare Contribution Tax on Unearned Income
Certain U.S. holders that are individuals, estates or trusts are required to pay an additional 3.8% tax on, among other things, dividends on
stock, interest on debt obligations, and capital gains from the sale or other disposition of stock or debt obligations. U.S. holders should consult their tax advisors regarding the effect, if any, of
these rules on their ownership and disposition of our capital stock or debt securities.
Additional Withholding Tax on Payments Made to Foreign Accounts
Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such sections commonly referred to as the Foreign Account Tax
Compliance Act, or FATCA) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on
our capital stock, interest on our debt securities, or gross proceeds from the sale or other disposition of our capital stock or debt securities, in each case
58
Table of Contents
paid
to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and
reporting obligations, (2) the non-financial foreign entity either certifies it does not have any "substantial United States owners" (as defined in the Code) or furnishes identifying
information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If
the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (1) above, it must enter into an agreement with the U.S. Department of the
Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified United States persons" or "United States owned foreign entities" (each as defined in the
Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign
financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.
Under
the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our capital stock or interest on our debt
securities, and will apply to payments of gross proceeds from the sale or other disposition of such stock or debt securities on or after January 1, 2019.
Prospective
investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our capital stock or debt securities.
Other Tax Consequences
State, local and non-U.S. income tax laws may differ substantially from the corresponding U.S. federal income tax laws, and this discussion does
not purport to describe any aspect of the tax laws of any state, local or non-U.S. jurisdiction, or any U.S. federal tax other than the income tax. You should consult your tax advisor regarding the
effect of state, local and non-U.S. tax laws with respect to our tax treatment as a REIT and on an investment in our capital stock or debt securities.
59
Table of Contents
PLAN OF DISTRIBUTION
We may sell the offered securities in and outside the United States (1) through underwriters or dealers, (2) directly to
purchasers, including to a limited number of institutional purchasers, to a single purchaser or to our affiliates and stockholders, (3) through agents or (4) through a combination of any
of these methods. The prospectus supplement relating to any offering will set forth the following information:
-
-
the terms of the offering;
-
-
the names of any underwriters, dealers or agents;
-
-
the name or names of any managing underwriter or underwriters;
-
-
the purchase price or initial public offering price of the securities;
-
-
the net proceeds from the sale of the securities;
-
-
any delayed delivery arrangements;
-
-
any underwriting discounts, commissions and other items constituting underwriters' compensation;
-
-
any discounts or concessions allowed or reallowed or paid to dealers; and
-
-
any commissions paid to agents.
Sale through Underwriters or Dealers
If any securities are offered through underwriters, the underwriters will acquire the securities for their own account and may resell them from
time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer and sell
securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise provided in
the applicable prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all of
the offered securities if they purchase any of them. In connection with the sale of securities, underwriters may be deemed to have received compensation from us in the form of underwriting discounts
or commissions and dealers may receive compensation from the underwriters in the form of discounts or concessions. The underwriters may change from time to time any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers.
In
order to facilitate the offering of securities, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. Specifically, the
underwriters may overallot in connection with the offering, creating a short position in the securities for their account. In
addition, to cover overallotments or to stabilize the price of the securities, the underwriters may bid for, and purchase, securities in the open market. Finally, an underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing the securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover
syndicate short positions, in stabilization transactions, or otherwise. Any of these activities may stabilize or maintain the market price of the offered securities above independent market levels.
The underwriters are not required to engage in these activities and may discontinue any of these activities at any time.
Some
or all of the securities that we offer through this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell securities for
public offering and sale may make a market in those securities, but they will not be obligated to do so and they may
60
Table of Contents
discontinue
any market making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities offered pursuant to this prospectus.
If
any securities are offered through dealers, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the
dealers at the time of resale.
Direct Sales and Sales through Agents
We may sell the securities directly to purchasers. If the securities are sold directly to institutional investors or others who may be deemed to
be underwriters within the meaning of the Securities Act with respect to any sale of those securities, we will describe the terms of any such sales in the applicable prospectus supplement. We may also
sell the securities through agents designated from time to time. Sales may be made by means of ordinary brokers' transactions on the New York Stock Exchange at market prices, in block transactions and
such other transactions as agreed by us and any agent. In the applicable prospectus supplement, we will name any agent involved in the offer or sale of the offered securities and we will describe any
commissions payable to the agent. Unless otherwise provided in the applicable prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its
appointment.
Remarketing Arrangements
Offered securities may also be offered and sold, if we so indicate in the applicable prospectus supplement, in connection with a remarketing
upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as our agents.
Any remarketing firm will be identified and the terms of its agreements, if any, with us and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed
to be underwriters of the offered securities under the Securities Act.
Delayed Delivery Contracts
If we so indicate in the applicable prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers by certain
institutions to purchase securities from us pursuant to contracts providing for payment and delivery on a specified future date. The applicable prospectus supplement will describe the conditions to
those contracts and the commission payable for solicitation of those contracts.
General Information
We may have agreements with the agents, dealers, underwriters and remarketing firms to indemnify them against certain civil liabilities,
including liabilities under the Securities Act, or to contribute with respect to payments that the agents, dealers or underwriters may be required to make. Agents, dealers, underwriters and
remarketing firms may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses.
61
Table of Contents
VALIDITY OF THE OFFERED SECURITIES
Latham & Watkins LLP, Chicago, Illinois, will issue an opinion for Ventas and Ventas Realty regarding the legality of certain of
the offered securities. In addition, Latham & Watkins LLP has issued an opinion to us regarding certain tax matters described herein under "Certain U.S. Federal Income Tax
Considerations." Any underwriters, dealers or agents will be advised about other issues relating to any offering by their own legal counsel that will be named in the applicable prospectus supplement.
EXPERTS
Our consolidated financial statements and schedules as of December 31, 2017 and 2016 and for each of the years in the three-year period
ended December 31, 2017 and management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2017 have been incorporated by reference herein
and in the registration statement in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION AND INCORPORATION BY REFERENCE
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy the reports, proxy
statements and other information that we file with the SEC at the public reference room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. For more information about
the public reference room, call the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding us.
Ventas, Inc. is a publicly held corporation and its common stock is traded on the New York Stock Exchange under the symbol "VTR." Reports, proxy statements and other information that we file
with the SEC can be inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. Information about us is also available on our website at www.ventasreit.com.
Information on our website is not incorporated by reference herein and our web address is included herein as an inactive textual reference only.
We
are incorporating by reference in this prospectus certain information that we file with the SEC. This means that we can disclose important information to you by referring you to other
documents that
we file with the SEC. The information incorporated by reference is an important part of this prospectus, and information that we subsequently file with the SEC will automatically update and supersede
this information. We are incorporating by reference herein the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date hereof until all of the securities offered hereby are sold:
-
-
our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on February 9, 2018;
-
-
our Proxy Statement on Schedule 14A for our 2017 Annual Meeting of Stockholders, filed with the SEC on April 4, 2017 (with
respect to the information contained therein that is incorporated by reference in Part III of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016); and
-
-
the description of our common stock set forth in our Registration Statement on Form 8-A (File No. 001-10989), filed with the SEC
on January 23, 1992, as amended.
We
do not incorporate by reference any information under Items 2.02 or 7.01 of any Current Report on Form 8-K, including the related exhibits, or in any document or other
information that is
62
Table of Contents
deemed
to have been "furnished" to and not "filed" with the SEC. You may request a copy of these filings at no cost, by writing or telephoning us at the following address:
Ventas, Inc.
Attention: Corporate Secretary
353 North Clark Street, Suite 3300
Chicago, Illinois 60654
(877) 483-6827
No
separate financial statements of Ventas Realty have been included herein. It is not expected that Ventas Realty will file reports, proxy statements or other information under the
Exchange Act with the SEC.
We have not authorized anyone to give any information or make any representation about us that is different from, or in addition to, that included or incorporated
by reference herein or in a prospectus supplement. If anyone gives you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to sell, or solicitations of
offers to purchase, the securities offered hereby are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented herein does not extend to
you. The information contained herein speaks only as of the date hereof unless the information specifically indicates that another date applies.
63
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.
Other Expenses of Issuance and Distribution
Set forth below is an estimate (except in the case of the registration fee) of the amount of fees and expenses to be incurred in connection with
the issuance and distribution of the offered securities, other than underwriting discounts and commissions.
|
|
|
|
|
SEC registration fee
|
|
$
|
|
(1)
|
Blue Sky fees and expenses
|
|
|
|
(2)
|
Legal fees and expenses
|
|
|
|
(2)
|
Accounting fees and expenses
|
|
|
|
(2)
|
Printing and engraving
|
|
|
|
(2)
|
Rating agencies fees
|
|
|
|
(2)
|
Trustee fees (including counsel fees)
|
|
|
|
(2)
|
Miscellaneous fees and expenses
|
|
|
|
(2)
|
|
|
|
|
|
Total
|
|
$
|
|
(2)
|
-
(1)
-
Pursuant
to Rules 456(b) and 457(r) under the Securities Act of 1933, as amended, the SEC registration fee will be paid at the time of any particular offering
of securities under the registration statement and is therefore not currently determinable.
-
(2)
-
These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
Item 15.
Indemnification of Directors and Officers
Ventas, Inc.
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers Ventas, Inc. ("Ventas") to, and
Article VII of Ventas' Amended and Restated Certificate of Incorporation, as amended (the "Certificate"), provides that Ventas will, indemnify any person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), because he or she is or was a director or
officer of Ventas, or is or was serving at the request of Ventas as a director, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise,
against all expenses, liabilities and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred
or suffered by him or her in connection with such Proceeding. Ventas may provide by action of its board of directors through agreement, resolution or by a provision in its Fifth Amended and Restated
Bylaws, as amended (the "Bylaws"), indemnification of its employees and agents with substantially the same scope and effect as the indemnification provided in Article VII of the Certificate.
Expenses
incurred by such a person in his or her capacity as a director or officer of Ventas (and not in any other capacity in which service was or is rendered by such person while a
director or officer) in defending a Proceeding may be paid by Ventas in advance of the final disposition of such Proceeding as authorized by the Ventas' board of directors in a specific case upon
receipt of an undertaking by or on behalf of that person to repay such amounts, unless it is ultimately determined that such person is
entitled to be indemnified by Ventas as authorized by the DGCL. Expenses incurred by a person in any capacity other than as one a director or officer of Ventas may be paid in advance of the final
disposition of a Proceeding on such terms and conditions, if any, as Ventas' board of directors deems appropriate.
Pursuant
to Section 102(b)(7) of the DGCL, the Certificate eliminates certain liability of Ventas' directors for breach of their fiduciary duty of care. Article VI of the
Certificate provides that neither Ventas nor its stockholders may recover monetary damages from directors of Ventas for breach of the
Table of Contents
duty
of care in the performance of their duties as directors of Ventas. Article VI does not, however, eliminate the liability of Ventas' directors (i) for a breach of the director's duty
of loyalty, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful distributions) or (iv) for any improper personal benefit.
The
indemnification provided for by Article VII of the Certificate is a contract right and continues as to persons who cease to be directors, officers, employees or agents and
inures to the benefit of the heirs, executors and administrators of such persons. No amendment to the Certificate or repeal of any article thereof increases the liability of any of its directors or
officers for acts or omissions of such persons occurring prior to such amendment or repeal.
The
right to indemnification conferred by Article VII of the Certificate is not exclusive of any other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to actions taken in his or her official capacity and in any other capacity while holding such office.
Ventas
may purchase and maintain insurance on behalf of any person who is or was one of its directors, officers, employees or agents, or is or was serving at its request as a director,
trustee, officer, partner, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him or her and
incurred by him or her in such capacity or arising out of his or her status as such, whether or not Ventas would have the power or be obligated to indemnify him or her against such liability under the
provisions of Article VII of the Certificate or the DGCL.
Ventas
currently has in effect directors' and officers' liability insurance policies. These policies cover any negligent act, error or omission of a director or officer, subject to
certain exclusions and limitations.
Ventas Realty, Limited Partnership
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act provides that, subject to such standards and restrictions in its
partnership agreement, if any, a limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands
whatsoever.
Section 9.5
of the First Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement") of Ventas Realty, Limited Partnership ("Ventas Realty") provides that
Ventas Realty will indemnify and hold its officers, employees, agents and representatives, its general partner, and each of the trustees, officers, employees, agents, and representatives of its
general partner harmless from any loss or damage, including without limitation reasonable legal fees and court costs, incurred by it or any of them by reason of anything it or any of them may do or
refrain from doing for and on behalf of Ventas Realty or in connection with Ventas Realty's business or affairs;
provided, however
, that Ventas Realty
will not be required to indemnify any of its officers, employees, agents and representatives, its general partner or any of the trustees, officers, employees, agents, and representatives of its
general partner for any loss or damage which such person might incur as a result of fraud, willful misconduct or gross negligence committed by any such person in the performance of their duties under
the Partnership Agreement. Ventas Realty's indemnification obligations under the Partnership Agreement continue and are unaffected in respect of any other person which or who shall not have committed
such fraud, willful misconduct or gross negligence. The indemnification provision under the Partnership Agreement does not relieve the general partner of its proportionate share of the obligations of
Ventas Realty in its capacity as a partner thereof.
II-2
Table of Contents
Section 9.5
of the Partnership Agreement also provides that Ventas Realty's general partner will be entitled to reimbursement from Ventas Realty for any amounts the general
partner pays in satisfaction of indemnification obligations owed by the general partner to its present or former trustees, officers, employees, agents or representatives or its predecessors, or other
persons indemnified by such general partner, as provided for in or pursuant to the organizational documents of the general partner or otherwise.
The
right to indemnification set forth in Section 9.5 of the Partnership Agreement is in addition to any rights to which the person or entity seeking indemnification may otherwise
be entitled and inures to the benefit of the successors and assigns of any such person or entity.
None
of Ventas Realty's partners are personally liable with respect to any claim for indemnification pursuant to Section 9.5 of the Partnership Agreement and such claims will be
satisfied solely out of assets of Ventas Realty.
Section 9.4
of the Partnership Agreement provides that Ventas Realty's general partner will not be liable or accountable, in damages or otherwise, to Ventas Realty or to any of
its partners for any error of judgment or for any mistakes of fact or law or for anything which it may do or refrain from doing hereafter in connection with the business and affairs of Ventas Realty
except (i) in the case of fraud, willful misconduct (such as an intentional breach of fiduciary duty or an intentional breach of the Partnership Agreement) or gross negligence, and
(ii) for other breaches of the Partnership Agreement.
Section 9.4
of the Partnership Agreement provides that Ventas Realty's general partner shall not have any personal liability for the return of any limited partner's capital.
Officers
and directors of Ventas Realty are covered under the same liability insurance policies described under "Ventas, Inc." above.
Item 16. Exhibits
(a) Exhibits
A list of exhibits filed with this registration statement is set forth on the Exhibit Index and is incorporated by reference herein.
Item 17. Undertakings
-
(a)
-
The
undersigned Registrants hereby undertake:
-
(1)
-
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
-
(i)
-
To
include any prospectus required by section 10(a)(3) of the Securities Act;
-
(ii)
-
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
II-3
Table of Contents
-
(iii)
-
To
include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such
information in this registration statement;
provided,
however, that subparagraphs (i), (ii) and (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the SEC by the Registrants pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
-
(2)
-
That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
-
(3)
-
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
-
(4)
-
That,
for the purpose of determining liability under the Securities Act to any purchaser:
-
(i)
-
Each
prospectus filed by the Registrants pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and
-
(ii)
-
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or
made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any
such document immediately prior to such effective date.
-
(5)
-
That,
for the purpose of determining liability of the Registrants under the Securities Act to any purchaser in the initial distribution of the securities:
The
undersigned Registrants undertake that in a primary offering of securities of the undersigned Registrants pursuant to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrants will
II-4
Table of Contents
-
(b)
-
The
undersigned Registrants hereby undertake that, for the purposes of determining any liability under the Securities Act, each filing of the annual reports of
Ventas, Inc. pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act) that are incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
-
(c)
-
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants
pursuant to the provisions described under Item 15 of this registration statement, or otherwise, the Registrants have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of
expenses incurred or paid by a director, officer or controlling person of the Registrants 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 Registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by it or them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of
such issue.
II-5
Table of Contents
Exhibit Index
|
|
|
|
Exhibit No.
|
|
Description
|
|
1.1
|
|
Form of Underwriting Agreement (for Ventas, Inc. common stock).*
|
|
1.2
|
|
Form of Underwriting Agreement (for Ventas, Inc. preferred stock).*
|
|
1.3
|
|
Form of Underwriting Agreement (for Ventas, Inc. depositary shares).*
|
|
1.4
|
|
Form of Underwriting Agreement (for Ventas, Inc. warrants).*
|
|
1.5
|
|
Form of Underwriting Agreement (for debt securities).*
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Ventas, Inc., as amended (incorporated herein by reference to
Exhibit 3.1 to Ventas, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011).
|
|
3.2
|
|
Fifth Amended and Restated By-Laws of Ventas, Inc. (incorporated herein by reference to Exhibit 3.2 to Ventas,
Inc.'s Current Report on Form 8-K filed on January 11, 2017).
|
|
4.1
|
|
Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to Ventas, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 2015).
|
|
4.2
|
|
Form of Certificate of Designation for Ventas, Inc. preferred stock (together with form of preferred stock certificate).*
|
|
4.3
|
|
Form of Deposit Agreement, including form of Ventas, Inc. Depositary Receipt for Ventas, Inc. Depositary Shares
(incorporated herein by reference to Exhibit 4.22 to Ventas, Inc.'s Registration Statement on Form S-3, Registration No. 333-90756, as amended).
|
|
4.4
|
|
Form of Warrant Agreement, including form of Ventas, Inc. warrant.*
|
|
4.5
|
|
Form of Senior Indenture.
|
|
4.6
|
|
Form of Subordinated Indenture.
|
|
5.1
|
|
Opinion of Latham & Watkins LLP as to the legality of the securities being offered.
|
|
8.1
|
|
Opinion of Latham & Watkins LLP as to certain tax matters
|
|
12.1
|
|
Statement Regarding Computation of Ratios of Earnings to Fixed Charges (incorporated herein by reference to Exhibit 12
to Ventas, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017).
|
|
23.1
|
|
Consent of Latham & Watkins LLP (included in Exhibit 5.1).
|
|
23.2
|
|
Consent of Latham & Watkins LLP (included in Exhibit 8.1).
|
|
23.3
|
|
Consent of KPMG LLP.
|
|
24.1
|
|
Powers of Attorney (included on the signature pages hereto).
|
|
25.1
|
|
Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939, as amended, of the trustee under the Senior Indenture referenced in
Exhibit 4.5.
|
|
25.2
|
|
Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939, as amended, of the trustee under the Subordinated Indenture referenced in
Exhibit 4.6.
|
-
*
-
To
be filed by amendment or incorporated by reference in connection with the offering of any securities, as appropriate.
II-6
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in
the City of Chicago, State of Illinois, on the 13
th
day of February, 2018.
|
|
|
|
|
|
|
|
|
VENTAS, INC.
|
|
|
By:
|
|
/s/ DEBRA A. CAFARO
|
|
|
|
|
Name:
|
|
Debra A. Cafaro
|
|
|
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
The
undersigned officers and directors of Ventas, Inc. hereby severally constitute and appoint Debra A. Cafaro and T. Richard Riney, and each of them, attorneys-in-fact for the
undersigned, in any and all capacities, with the power of substitution, to sign any amendments to this registration statement (including post-effective amendments), and to file the same with exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, 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 and to all interests and purposes as he or she might or could do in person, hereby ratifying and
confirming all that each said attorney-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue thereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on the
13
th
day of February, 2018.
|
|
|
Signature
|
|
Title
|
|
|
|
/S/ DEBRA A. CAFARO
Debra A. Cafaro
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
/S/ ROBERT F. PROBST
Robert F. Probst
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
/S/ MELODY C. BARNES
Melody C. Barnes
|
|
Director
|
/S/ JAY M. GELLERT
Jay M. Gellert
|
|
Director
|
/S/ RICHARD I. GILCHRIST
Richard I. Gilchrist
|
|
Director
|
II-7
Table of Contents
|
|
|
Signature
|
|
Title
|
|
|
|
/S/ MATTHEW J. LUSTIG
Matthew J. Lustig
|
|
Director
|
/S/ ROXANNE M. MARTINO
Roxanne M. Martino
|
|
Director
|
/S/ WALTER C. RAKOWICH
Walter C. Rakowich
|
|
Director
|
/S/ ROBERT D. REED
Robert D. Reed
|
|
Director
|
/S/ GLENN J. RUFRANO
Glenn J. Rufrano
|
|
Director
|
/S/ JAMES D. SHELTON
James D. Shelton
|
|
Director
|
II-8
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in
the City of Chicago, State of Illinois, on the 13
th
day of February, 2018.
|
|
|
|
|
|
|
|
|
VENTAS REALTY, LIMITED PARTNERSHIP
|
|
|
By:
|
|
VENTAS, INC.,
its General Partner
|
|
|
By:
|
|
/s/ DEBRA A. CAFARO
|
|
|
|
|
Name:
|
|
Debra A. Cafaro
|
|
|
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
The
undersigned officers and directors of Ventas, Inc., general partner of Ventas Realty, Limited Partnership, hereby severally constitute and appoint Debra A. Cafaro and T.
Richard Riney, and each of them, attorneys-in-fact for the undersigned, in any and all capacities, with the power of substitution, to sign any amendments to this registration statement (including
post-effective amendments), and to file the same with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact,
and each of them, 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 and to all interests and purposes as he
or she might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue thereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on the
13
th
day of February, 2018.
|
|
|
Signature
|
|
Title
|
|
|
|
/S/ DEBRA A. CAFARO
Debra A. Cafaro
|
|
Chairman and Chief Executive Officer (Principal Executive Officer) of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ ROBERT F. PROBST
Robert F. Probst
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ MELODY C. BARNES
Melody C. Barnes
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ JAY M. GELLERT
Jay M. Gellert
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
II-9
Table of Contents
|
|
|
Signature
|
|
Title
|
|
|
|
/S/ RICHARD I. GILCHRIST
Richard I. Gilchrist
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ MATTHEW J. LUSTIG
Matthew J. Lustig
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ ROXANNE M. MARTINO
Roxanne M. Martino
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ WALTER C. RAKOWICH
Walter C. Rakowich
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ ROBERT D. REED
Robert D. Reed
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ GLENN J. RUFRANO
Glenn J. Rufrano
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
/S/ JAMES D. SHELTON
James D. Shelton
|
|
Director of Ventas, Inc., general partner of Ventas Realty, Limited Partnership
|
II-10
Ventas (NYSE:VTR)
Historical Stock Chart
From Apr 2024 to May 2024
Ventas (NYSE:VTR)
Historical Stock Chart
From May 2023 to May 2024