UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

SCHEDULE 14A INFORMATION

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material under Rule 14a-12

Healthcare Realty Trust Incorporated

(Exact name of registrant as specified in its charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

☒	No Fee Required.

 

☐	Fee paid previously with preliminary materials:

 

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 

To the Stockholders of Healthcare Trust of America, Inc. and Healthcare Realty Trust Incorporated:

The board of directors of Healthcare Trust of America, Inc., which we refer to as the Company, and the board of directors of Healthcare Realty Trust Incorporated, which we refer to as HR, have each unanimously approved an Agreement and Plan of Merger, dated as of February 28, 2022, as it may be amended from time to time, which we refer to as the Merger Agreement, among the Company, HR, Healthcare Trust of America Holdings, LP, a Delaware limited partnership, which we refer to as the Company OP, and HR Acquisition 2, LLC, a subsidiary of the Company, which we refer to as Merger Sub. Pursuant to the Merger Agreement, the Company will enter into a combination with HR through a merger of Merger Sub with and into HR, with HR surviving the merger as the surviving entity, which we refer to as the Merger. The combined company after the Merger, which we refer to as the Combined Company, will be named “Healthcare Realty Trust Incorporated” and will trade on the New York Stock Exchange under the symbol “HR.” Todd J. Meredith will serve as the President and Chief Executive Officer of the Combined Company and John Knox Singleton, the current independent chair of the HR board of directors, will be the chair of the board of directors of the Combined Company. W. Bradley Blair II, the current chair of the Company board of directors, will be the vice chair of the board of directors of the Combined Company. The obligations of the Company and HR to effect the Merger are subject to the satisfaction or waiver of certain customary conditions set forth in the Merger Agreement (including the applicable approvals of each company’s stockholders).

If the Merger is completed pursuant to the Merger Agreement, each share of common stock, $0.01 par value per share, of HR, which we refer to as HR Common Stock, outstanding immediately prior to the effective time of the Merger will convert into the right to receive 1.00 newly-issued share of class A common stock, $0.01 par value per share, of the Company, which we refer to as Company Common Stock. As of May 31, 2022, there were 151,632,308 issued and outstanding shares of HR Common Stock. Contingent on the closing of the Merger, the holders of shares of Company Common Stock issued and outstanding on the last business day prior to the closing date of the Merger will receive a special distribution in the amount of $4.82 in cash per share of Company Common Stock held on such date, which we refer to as the Special Distribution. As of May 31, 2022, there were 229,073,594 issued and outstanding shares of Company Common Stock.

If the Merger is completed pursuant to the Merger Agreement, each HR stock option that is outstanding immediately prior to the effective time of the Merger, which we refer to as an HR Stock Option, whether or not then vested or exercisable, will, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by the Combined Company. Each HR Stock Option so assumed will continue to have, and be subject to, the same terms and conditions of such HR Stock Option immediately prior to the effective time of the Merger (including, without limitation, any vesting provisions and provisions regarding the acceleration of vesting), except that each HR Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Company Common Stock equal to the product of: (a) the number of shares of HR Common Stock subject to such HR Stock Option; and (b) 1.00.

If the Merger is completed pursuant to the Merger Agreement, each share of HR restricted stock, which we refer to as HR Restricted Stock, and each right of any kind, contingent or accrued, to receive shares of HR Common Stock or benefits measured in whole or in part by the value of a number of shares of HR Common Stock granted by HR outstanding immediately prior to the effective time of the Merger (including restricted stock units, phantom units, deferred stock units, stock equivalents and dividend equivalents), other than HR Stock Options (each, other than HR Stock Options, we refer to as an HR Stock-Based Award), will, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by the Combined Company, on the same terms and conditions (including applicable vesting

requirements and deferral provisions) as applied to each such HR Stock-Based Award immediately prior to the effective time of the Merger, with respect to the number of shares of Company Common Stock that is equal to the number of shares of HR Common Stock subject to the HR Stock-Based Award immediately prior to the effective time of the Merger multiplied by 1.00.

In connection with the Merger, we anticipate that the Company will issue or reserve a total of approximately 152,051,954 shares of Company Common Stock, including (a) 149,690,599 shares of Company Common Stock in exchange for shares of HR Common Stock in the Merger, (b) 419,646 shares of Company Common Stock in order to issue shares of Company Common Stock upon the subsequent exercise of HR Stock Options, and (c) 1,941,709 shares of Company Common Stock in exchange for HR Restricted Stock Awards. Upon completion of the Merger and after giving effect to the issuance of shares of Company Common Stock in connection therewith, we estimate that the continuing Company stockholders will own approximately 60.0% of the issued and outstanding shares of the Combined Company (on a fully diluted basis), and former HR stockholders will own approximately 40.0% of the issued and outstanding shares of the Combined Company (on a fully diluted basis).

In connection with the proposed Merger, the Company and HR will each hold a special meeting of their respective stockholders. At the Company special meeting, which we refer to as the Company Special Meeting, the Company stockholders will be asked to consider and vote on (a) a proposal to approve the issuance of shares of Company Common Stock in connection with the Merger, which we refer to as the Company Issuance Proposal, (b) a proposal to approve, in a non-binding advisory vote, the “golden parachute” compensation that may become vested and payable to the Company’s named executive officers in connection with the Merger as disclosed on the Golden Parachute Compensation table on page 78 of this joint proxy statement/prospectus, which we refer to as the Company Golden Parachute Proposal, and (c) a proposal to approve one or more adjournments of the Company Special Meeting to another date, time, place, or format, if necessary or appropriate, including to solicit additional proxies in favor of the proposal to approve the issuance of shares of Company Common Stock in connection with the Merger, which we refer to as the Company Adjournment Proposal. At the HR special meeting, which we refer to as the HR Special Meeting, HR stockholders will be asked to consider and vote on (a) a proposal to approve the Merger and the transactions contemplated by the Merger Agreement, which we refer to as the HR Merger Proposal, and (b) a proposal to approve one or more adjournments of the HR Special Meeting to another date, time, place, or format, if necessary or appropriate, including to solicit additional proxies in favor of the proposal to approve the Merger and the other transactions contemplated by the Merger Agreement, which we refer to as the HR Adjournment Proposal.

The record date for determining stockholders entitled to receive notice of, and to vote at, the Company Special Meeting and the HR Special Meeting is June 10, 2022. The Merger cannot be completed unless, among other matters, (a) the Company stockholders approve the Company Issuance Proposal by the affirmative vote of the holders of at least a majority of the outstanding shares of Company Common Stock entitled to vote on the proposal, and (b) HR stockholders approve the HR Merger Proposal by the affirmative vote of the holders of at least two-thirds of the outstanding shares of HR Common Stock entitled to vote on the proposal.

The board of directors of the Company, which we refer to as the Company Board, has unanimously (a) determined that the Merger Agreement and the Merger, including the issuance of shares of Company Common Stock in connection with the Merger, are advisable and in the best interests of the Company, (b) authorized and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the issuance of shares of Company Common Stock in connection with the Merger, upon the terms and subject to the conditions set forth therein, and (c) subject to the terms of the Merger Agreement, resolved to recommend approval of the issuance of shares of Company Common Stock in connection with the Merger by the Company stockholders and that such approval be submitted for consideration at the Company Special Meeting. The Company Board unanimously recommends that the Company stockholders vote “FOR” the Company Issuance Proposal, “FOR” the Company Golden Parachute Proposal and “FOR” the Company Adjournment Proposal.

The board of directors of HR, which we refer to as the HR Board, has unanimously (a) determined that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of HR, (b) authorized and approved the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, and (c) subject to the terms of the Merger Agreement, resolved to recommend approval of the Merger by HR stockholders and that such approval be submitted for consideration at the HR Special Meeting. The HR Board unanimously recommends that HR stockholders vote “FOR” the HR Merger Proposal and “FOR” the HR Adjournment Proposal.

This joint proxy statement/prospectus contains important information about the Company, HR, the Merger, the Merger Agreement, and the special meetings. This document is also a prospectus for the shares of Company Common Stock that will be issued to HR stockholders pursuant to the Merger Agreement. We encourage you to read this joint proxy statement/prospectus carefully before voting, including the section entitled “Risk Factors” beginning on page 16.

Your vote is very important, regardless of the number of shares of Company Common Stock or HR Common Stock you own. Whether or not you plan to attend the Company Special Meeting and/or the HR Special Meeting, as applicable, please submit a proxy to vote your shares as promptly as possible to make sure that your shares of Company Common Stock and/or HR Common Stock, as applicable, are represented at the applicable special meeting. Please review this joint proxy statement/prospectus for more complete information regarding the Merger and the Company Special Meeting and the HR Special Meeting, as applicable.

Sincerely,

 

/s/ W. Bradley Blair II		/s/ John Knox Singleton
W. Bradley Blair II Chairman of the Board of Directors Healthcare Trust of America, Inc.		John Knox Singleton Chairman of the Board of Directors Healthcare Realty Trust Incorporated

Neither the Securities and Exchange Commission, nor any state securities regulatory authority, has approved or disapproved of the Merger or the securities to be issued under this joint proxy statement/prospectus or has passed upon the adequacy or accuracy of the disclosure in this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This joint proxy statement/prospectus is dated June 10, 2022, and is first being mailed to the Company and HR stockholders on or about June 15, 2022.

HEALTHCARE TRUST OF AMERICA, INC.

16435 N. Scottsdale Road, Suite 320

Scottsdale, AZ 85254

(480) 998-3478

 

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JULY 15, 2022

 

 

To the Stockholders of Healthcare Trust of America, Inc.:

A special meeting of the stockholders, which we refer to as the Company Special Meeting, of Healthcare Trust of America, Inc., a Maryland corporation, which we refer to as the Company, will be held in a virtual-only format on July 15, 2022 at 10:00 a.m., Pacific Time. You will be able to attend the Company Special Meeting, vote your Company shares electronically, and submit your questions during the live webcast of the meeting by visiting http://www.virtualshareholdermeeting.com/HTA2022SM and entering your control number included in the notice containing instructions on how to access special meeting materials or your proxy card. The Company Special Meeting will be held to consider and vote upon the following matters:

 

1.

a proposal to approve the issuance of the Company’s shares of class A common stock, $0.01 par value per share, which we refer to as Company Common Stock, in connection with the merger, which we refer to as the Merger, pursuant to the Agreement and Plan of Merger, dated as of February 28, 2022, as it may be amended from time to time, which we refer to as the Merger Agreement, among Healthcare Trust of America, Inc., Healthcare Trust of America Holdings, LP, Healthcare Realty Trust Incorporated, and HR Acquisition 2, LLC (a copy of the Merger Agreement is attached as Annex A to the joint proxy statement/prospectus accompanying this notice), which we refer to as the Company Issuance Proposal;

 

2.

a proposal to approve, in a non-binding advisory vote, the “golden parachute” compensation that may become vested and payable to the Company’s named executive officers in connection with the Merger, which we refer to as the Company Golden Parachute Proposal; and

 

3.

a proposal to approve one or more adjournments of the Company Special Meeting to another date, time, place, or format, if necessary or appropriate, including to solicit additional proxies in favor of the proposal to approve the issuance of shares of Company Common Stock in connection with the Merger, which we refer to as the Company Adjournment Proposal.

The Company does not expect to transact any other business at the Company Special Meeting or any adjournment or postponement thereof. Please refer to the attached joint proxy statement/prospectus for further information with respect to the business to be transacted at the Company Special Meeting. The board of directors of the Company, which we refer to as the Company Board, has fixed the close of business on June 10, 2022 as the record date for determination of the Company stockholders entitled to receive notice of, and to vote at, the Company Special Meeting and any adjournments of the Company Special Meeting. Only holders of record of shares of Company Common Stock at the close of business on the record date are entitled to receive notice of, and to vote at, the Company Special Meeting. In considering the recommendation of the Company Board, you should be aware that certain directors and executive officers of the Company will have interests in the Merger that may be different from, or in addition to, the interests of the Company stockholders generally. See the section entitled “The Merger—Interests of the Company Directors and Executive Officers in the Merger” in the accompanying joint proxy statement/prospectus.

The Company Issuance Proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of Company Common Stock entitled to vote on the proposal. If you abstain from voting on the Company Issuance Proposal, this will have the same effect as a vote against the approval of such proposal but will have no effect on the Company Golden Parachute Proposal or the Company Adjournment Proposal. The Merger cannot be completed without the approval of the Company stockholders of the Company Issuance Proposal.

The Company Golden Parachute Proposal and the Company Adjournment Proposal require the vote of a majority of the votes cast by the holders of shares of Company Common Stock represented at the Company Special Meeting, assuming the presence of a quorum. The presence in person (which includes presence by means of remote communication at a virtual meeting) or by proxy of the Company stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting constitutes a quorum. If a quorum is not present, the chair of the Company Special Meeting may adjourn the meeting.

The Company Board has unanimously (a) determined that the Merger Agreement and the Merger, including the issuance of shares of Company Common Stock in connection with the Merger, are advisable and in the best interests of the Company, (b) authorized and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the issuance of shares of Company Common Stock in connection with the Merger, upon the terms and subject to the conditions set forth therein, and (c) subject to the terms of the Merger Agreement, resolved to recommend approval of the issuance of shares of Company Common Stock in connection with the Merger by the Company stockholders and that such approval be submitted for consideration at the Company Special Meeting. The Company Board unanimously recommends that the Company stockholders vote “FOR” the Company Issuance Proposal, “FOR” the Company Golden Parachute Proposal and “FOR” the Company Adjournment Proposal.

YOUR VOTE IS IMPORTANT

Whether or not you plan to attend the Company Special Meeting, please submit a proxy to vote your shares as promptly as possible to make sure that your shares are represented at the Company Special Meeting. If the Company stockholders of record return properly executed proxies but do not indicate how their shares of Company Common Stock should be voted on a proposal, shares of Company Common Stock represented by their properly executed proxy will be voted as the Company Board recommends and therefore “FOR” the Company Issuance Proposal, “FOR” the Company Golden Parachute Proposal, and “FOR” the Company Adjournment Proposal.

Regardless of whether you plan to attend the Company Special Meeting, we urge you to submit your proxy as promptly as possible by (1) accessing the Internet website specified on your proxy card, (2) calling the toll-free number specified on your proxy card, or (3) completing, signing, dating, and returning the enclosed proxy card in the accompanying postage-paid envelope prior to the Company Special Meeting to ensure that your shares will be represented and voted at the Company Special Meeting.

To submit a proxy, use the Internet as described in the instructions on the enclosed proxy card, call the toll-free telephone number listed on your proxy card, or complete, sign, date, and mail your proxy card in the preaddressed postage-paid envelope provided. Submitting a proxy will ensure that your vote is counted at the Company Special Meeting if you do not attend in person (which includes presence by means of remote communication at a virtual meeting). If your shares of Company Common Stock are held in “street name” by your broker or other nominee, only your broker or other nominee can vote your shares of Company Common Stock and the vote cannot be cast unless you provide instructions to your broker or other nominee on how to vote or obtain a legal proxy from your broker or other nominee. You should follow the directions provided by your broker or other nominee regarding how to instruct your broker or other nominee to vote your shares of Company Common Stock. You may revoke your proxy at any time before it is voted. Please review the joint proxy statement/prospectus accompanying this notice for more complete information regarding the Merger and the Company Special Meeting.

This notice and the enclosed joint proxy statement/prospectus are first being mailed to the Company stockholders on or about June 15, 2022.

By Order of the Board of Directors of Healthcare Trust of America, Inc.

 

Scottsdale, Arizona

June 15, 2022

3310 West End Avenue, Suite 700

Nashville, Tennessee 37203

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO OUR STOCKHOLDERS:

You are cordially invited to attend a special meeting of stockholders, which we refer to as the HR Special Meeting, of Healthcare Realty Trust Incorporated, a Maryland corporation, which we refer to as HR, to be held on July 15, 2022, at 12:00 p.m., Central Time, at our executive offices at 3310 West End Avenue, Suite 700, Nashville, Tennessee 37203, for the following purposes:

(1) a proposal to approve the merger of HR Acquisition 2, LLC, a Maryland limited liability company and a direct, wholly-owned subsidiary of Healthcare Trust of America, Inc., a Maryland corporation, which we refer to as the Company, with and into HR, with HR continuing as the surviving entity and a direct, wholly-owned subsidiary of the Company, pursuant to which each outstanding share of HR common stock will be exchanged for one newly-issued share of the Company’s class A common stock, which we refer to as the Merger (HR Proposal 1); and

(2) a proposal to approve the adjournment of the HR Special Meeting, if necessary or appropriate, including to solicit additional proxies in favor of HR Proposal 1 if there are insufficient votes at the time of such adjournment to approve HR Proposal 1 (HR Proposal 2).

Please refer to the attached joint proxy statement/prospectus for further information with respect to the business to be transacted at the HR Special Meeting. HR will transact no other business at the HR Special Meeting. Holders of record of HR common stock at the close of business on June 10, 2022 are entitled to notice of, and to vote at, the HR Special Meeting and any adjournments or postponements of the HR Special Meeting. The proposal to approve the Merger requires the affirmative vote of the holders of two-thirds of the outstanding shares of HR common stock. The proposal to adjourn the HR Special Meeting requires the vote of a majority of the votes cast by the holders of shares of HR common stock represented at the HR Special Meeting, assuming the presence of a quorum. The presence in person or by proxy of HR stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting constitutes a quorum. If a quorum is not present, the chair of the HR Special Meeting may adjourn the meeting.

HR’s board of directors unanimously recommends that the HR stockholders vote FOR the approval of the Merger (HR Proposal 1) and FOR the approval of the adjournment of the HR Special Meeting, if necessary or appropriate, including to solicit additional proxies in favor of HR Proposal 1 (HR Proposal 2). In considering the recommendation of the board of directors of HR, you should be aware that certain directors and executive officers of HR will have interests in the Merger that may be different from, or in addition to, the interests of HR stockholders generally. See the section entitled “The Merger—Interests of HR Directors and Executive Officers in the Merger” in the accompanying joint proxy statement/prospectus.

Your vote is important. Whether or not you expect to attend the HR Special Meeting in person, we urge you to authorize a proxy to vote your shares as promptly as possible by: (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the HR Special Meeting. If your shares are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.

By order of the Board of Directors,

/s/ Andrew E. Loope

Andrew E. Loope

Senior Vice President, Corporate Counsel and Secretary

Dated: June 15, 2022

ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates important business and financial information about the Company and HR from other documents that are not included in or delivered with this joint proxy statement/prospectus. See “Where You Can Find More Information and Incorporation by Reference” beginning on page 183.

Documents incorporated by reference are also available to the Company stockholders and HR stockholders without charge upon written or oral request. You can obtain any of these documents by requesting them in writing or by telephone from the applicable company at the following addresses and telephone numbers.

 

Healthcare Trust of America, Inc.		Healthcare Realty Trust Incorporated
16435 N. Scottsdale Road		3310 West End Avenue
Suite 320		Suite 700
Scottsdale, AZ 85254		Nashville, TN 37203
Attention: Investor Relations		Attention: Investor Relations
P: (480) 998-3478 F: (480) 991-0755		P: (615) 269-8175 F: (615) 269-8461
Email: info@htareit.com		Email: communications@healthcarerealty.com

To receive timely delivery of the requested documents in advance of the applicable special meeting, you should make your request no later than July 8, 2022.

ABOUT THIS DOCUMENT

This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed by the Company (File No. 333-264604) with the Securities and Exchange Commission, which we refer to as the SEC, constitutes a prospectus of the Company for purposes of the Securities Act of 1933, as amended, with respect to shares of Company Common Stock to be issued in connection with the Merger pursuant to the Merger Agreement. This joint proxy statement/prospectus also constitutes a proxy statement for each of the Company and HR for purposes of the Securities Exchange Act of 1934, as amended. In addition, it constitutes a notice of meeting with respect to the Company Special Meeting and a notice of meeting with respect to the HR Special Meeting.

You should rely only on the information contained in, or incorporated by reference into, this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated June 10, 2022, and you should not assume that the information contained in, or incorporated by reference into, this joint proxy statement/prospectus is accurate as of any date other than the date of this joint proxy statement/prospectus. Neither our mailing of this joint proxy statement/prospectus to the Company stockholders and/or HR stockholders nor the issuance by the Company of its shares of Company Common Stock in connection with the Merger pursuant to the Merger Agreement will create any implication to the contrary.

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this joint proxy statement/prospectus regarding the Company has been provided by the Company and information contained in this joint proxy statement/prospectus regarding HR has been provided by HR.

Certain Definitions

Unless stated otherwise, all references in this joint proxy statement/prospectus to:

 

•

the “Code” are to the Internal Revenue Code of 1986, as amended;

 

•

the “Combined Company” are to the Company and its consolidated subsidiaries after the closing of the Merger, including the Surviving Entity;

 

•

“Combined Company Common Stock” are to shares of class A common stock, $0.01 par value per share, of the Combined Company, after the closing of the Merger;

 

•

the “Company” are to Healthcare Trust of America, Inc., a Maryland corporation;

 

•

the “Company Board” are to the board of directors of the Company;

 

•

the “Company Bylaws” are to the Fourth Amended and Restated Bylaws of Healthcare Trust of America, Inc., as amended;

 

•

the “Company Common Stock” are to shares of class A common stock, $0.01 par value per share, of the Company;

 

•

the “Company Charter” are to the Fifth Articles of Amendment and Restatement of Articles of Incorporation of Healthcare Trust of America, Inc., as amended, corrected, restated and supplemented, as filed with the State Department of Assessments and Taxation of Maryland;

 

•

the “Company OP” are to Healthcare Trust of America Holdings, LP, a Delaware limited partnership, of which the Company is the sole general partner;

 

•

“Company Restricted Shares” or shares of “Company Restricted Stock” are to shares of Company Common Stock subject to forfeiture conditions outstanding immediately prior to the effective time of the Merger;

•

“Company Restricted Stock Award” are to each outstanding unvested restricted stock award issued pursuant to the Company’s incentive plan;

 

•

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

•

“HR” are to Healthcare Realty Trust Incorporated, a Maryland corporation;

 

•

the “HR Board” are to the board of directors of HR;

 

•

“HR Bylaws” are to the Fourth Amended and Restated Bylaws of Healthcare Realty Trust Incorporated, as amended;

 

•

“HR Charter” are to the Second Articles of Amendment and Restatement of Healthcare Realty Trust Incorporated, as amended, corrected, restated and supplemented, as filed with the State Department of Assessments and Taxation of Maryland;

 

•

“HR Common Stock” are to shares of common stock, $0.01 par value per share, of HR;

 

•

“HR Stock Option” are to each outstanding option to purchase shares of HR Common Stock granted under an HR equity plan, whether vested or unvested;

 

•

the “Merger” are to the merger of Merger Sub with and into HR, with HR surviving the Merger, and the other transactions contemplated in the Merger Agreement;

 

•

the “Merger Agreement” are to the Agreement and Plan of Merger, dated as of February 28, 2022, among the Company, the Company OP, HR and Merger Sub, as it may be amended from time to time, a copy of which is attached as Annex A to this joint proxy statement/prospectus and is incorporated herein by reference;

 

•

“Merger Sub” are to HR Acquisition 2, LLC, a Maryland limited liability company and a wholly-owned subsidiary of the Company;

 

•

the “NYSE” are to the New York Stock Exchange;

 

•

the “Outside Date” are to August 28, 2022;

 

•

the “SEC” are to the U.S. Securities and Exchange Commission;

 

•

the “Securities Act” are to the Securities Act of 1933, as amended; and

 

•

the “Surviving Entity” are to HR, a subsidiary of the Combined Company, after the effective time of the Merger.

TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS			iv
SUMMARY			1
EQUIVALENT AND COMPARATIVE PER SHARE INFORMATION			15
RISK FACTORS			16
Risk Factors Relating to the Merger			16
Risk Factors Relating to the Combined Company			20
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			28
INFORMATION ABOUT THE COMPANIES			29
Healthcare Trust of America, Inc.			29
Healthcare Realty Trust Incorporated			35
HR Acquisition 2, LLC / Merger Sub			35
The Combined Company			36
THE MERGER			37
Background of the Merger			37
The Company’s Reasons for the Merger; Recommendation of the Company Board			50
HR’s Reasons for the Merger; Recommendation of the HR Board			55
Opinion of the Company Financial Advisor			58
Opinion of HR Financial Advisor			65
Certain Unaudited Prospective Financial Information			71
Interests of the Company Directors and Executive Officers in the Merger			75
Interests of HR Directors and Executive Officers in the Merger			78
Directors and Management Following the Merger			79
Treatment of the Company Restricted Shares			81
Treatment of HR Stock Options and Other Equity-Based Awards			81
Accounting Treatment			82
Regulatory Approvals Required for the Merger			83
Merger Consideration			83
Special Distribution			84
Asset Transfers and Joint Ventures			84
Backstop Financing			84
Treatment of Debt			85
Treatment of Limited Partnership Units in the Company OP			91
Dividends and Special Distribution			93
Listing of Company Common Stock			94
De-Listing and Deregistration of HR Common Stock			94
No Appraisal or Dissenters’ Rights			94
Litigation			94
THE MERGER AGREEMENT			96
Form, Effective Time and Closing of the Merger			96
Operating Agreement of the Surviving Entity			97
Directors and Officers of the Surviving Entity			97
Directors and Officers of the Combined Company			97
Merger Consideration; Special Distribution; Effects of the Merger			97
Representations and Warranties			98
Definition of “Material Adverse Effect”			100
Covenants and Agreements			101
Conditions to Completion of the Merger			110
Termination of the Merger Agreement			112
Miscellaneous Provisions			114
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES			115
Tax Consequences of the Merger			116

 

i

		Page
U.S. Federal Income Tax Considerations Relating to the Combined Company’s Qualification as a REIT			119
THE COMPANY SPECIAL MEETING			136
Date, Time, Place and Purpose of the Company Special Meeting			136
Recommendation of the Company Board of Directors			136
Company Record Date; Who Can Vote at the Company Special Meeting			136
Shares Held in “Street Name”			137
Abstentions and Broker Non-Votes			137
Required Vote; Quorum			137
Manner of Submitting Proxy			138
Revocation of Proxies or Voting Instructions			138
Tabulation of Votes			139
Solicitation of Proxies; Payment of Solicitation Expenses			139
Questions and Assistance Voting Shares of Company Common Stock			139
PROPOSALS SUBMITTED TO THE COMPANY STOCKHOLDERS			140
Company Issuance Proposal			140
Company Golden Parachute Proposal			140
Company Adjournment Proposal			141
THE HR SPECIAL MEETING			142
Date, Time and Place			142
Purpose of the HR Special Meeting			142
Recommendation of the HR Board			142
HR Record Date; Stock Entitled to Vote			142
Quorum			142
Required Vote			142
Abstentions and Failures to Vote			143
Shares Held in Street Name			143
Voting of Proxies			143
Revocability of Proxies or Voting Instructions			144
Solicitation of Proxies			144
PROPOSALS SUBMITTED TO HR STOCKHOLDERS			145
HR Proposal 1: Approval of the Merger			145
HR Proposal 2: Adjournment of the HR Special Meeting			145
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION			146
COMPARATIVE STOCK PRICES AND DIVIDENDS			166
DESCRIPTION OF THE COMPANY’S CAPITAL STOCK			167
General			167
Common Stock			167
Power to Reclassify Unissued Shares of Stock			168
Power to Increase or Decrease Authorized Shares of Common Stock and Issue Additional Shares of Common and Preferred Stock			168
Preferred Stock			168
Restrictions on Ownership and Transfer of Shares			169
Listing			170
Transfer Agent and Registrar			170
COMPARISON OF RIGHTS OF THE COMPANY STOCKHOLDERS AND HR STOCKHOLDERS			171
CERTAIN RELATIONSHIPS/RELATED PARTY TRANSACTIONS			178
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			180
LEGAL MATTERS			182
EXPERTS			182

 

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		Page
OTHER MATTERS			182
WHERE YOU CAN FIND MORE INFORMATION AND INCORPORATION BY REFERENCE			183
ANNEX A: AGREEMENT AND PLAN OF MERGER			A-1
ANNEX B: OPINION OF J.P. MORGAN SECURITIES LLC			B-1
ANNEX C: OPINION OF CITIGROUP GLOBAL MARKETS INC.			C-1

 

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QUESTIONS AND ANSWERS

The following are summary responses to questions that you, as a stockholder of the Company or HR, may have regarding the proposed transactions between the Company and HR and the matters being considered at the Company Special Meeting and the HR Special Meeting. The Company and HR urge you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the Merger and the other matters being considered at the Company Special Meeting and the HR Special Meeting. Additional important information is also contained in the annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus.

 

Q:	What is the proposed transaction?

 

A:

The Company and HR have entered into a Merger Agreement pursuant to which the Company will enter into a business combination with HR in an all-stock transaction. Pursuant to, and subject to the terms and conditions of, the Merger Agreement, Merger Sub, a wholly-owned subsidiary of the Company, will merge with and into HR, with HR surviving the Merger as a subsidiary of the Company.

 

Q:	What will HR stockholders receive in the proposed Merger?

 

A:

At the effective time of the Merger, each issued and outstanding share of HR Common Stock will be converted automatically into the right to receive 1.00 newly-issued share of Company Common Stock, which we refer to as the Merger consideration. See “The Merger Agreement—Merger Consideration; Special Distribution; Effects of the Merger” beginning on page 97 for detailed descriptions of the Merger consideration and treatment of securities.

 

Q:	What will the Company stockholders receive in the proposed Merger?

 

A:

Contingent on the closing of the Merger, the holders of shares of Company Common Stock issued and outstanding on the last business day prior to the closing date of the Merger will receive a special distribution in the amount of $4.82 in cash per share of Company Common Stock held on such date. We refer to such distribution as the Special Distribution.

 

Q:	What will holders of HR equity awards receive in the proposed Merger?

 

A:

At the effective time of the Merger, each HR Stock Option that is outstanding immediately prior to the effective time of the Merger, whether or not then vested or exercisable, will, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by the Combined Company. Each HR Stock Option so assumed will continue to have, and be subject to, the same terms and conditions of such HR Stock Option immediately prior to the effective time of the Merger (including, without limitation, any vesting provisions and provisions regarding the acceleration of vesting), except that each HR Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Company Common Stock equal to the product of: (a) the number of shares of HR Common Stock subject to such HR Stock Option; and (b) 1.00.

At the effective time of the Merger, each share of HR Restricted Stock, and each right of any kind, contingent or accrued, to receive shares of HR Common Stock or benefits measured in whole or in part by the value of a number of shares of HR Common Stock granted by HR outstanding immediately prior to the effective time of the Merger (including restricted stock units, phantom units, deferred stock units, stock equivalents and dividend equivalents), other than HR Stock Options (each, other than HR Stock Options, we refer to as an HR Stock-Based Award), will, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by the Combined Company, on the same terms and conditions (including applicable vesting requirements and deferral provisions) as applied to each such HR Stock-Based Award immediately prior to the effective time of the Merger, with respect to the number of shares of Company

 

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Common Stock that is equal to the number of shares of HR Common Stock subject to the HR Stock-Based Award immediately prior to the effective time of the Merger multiplied by 1.00.

See “The Merger—Interests of HR Directors and Executive Officers in the Merger—Treatment of HR Stock Options and Other Equity-Based Awards” beginning on page 81 for more information regarding the treatment of HR equity awards.

 

Q:	Will the Combined Company pay dividends or distributions following the closing of the Merger?

 

A:

Following closing of the Merger, HR and the Company currently expect that the Combined Company will pay a quarterly common dividend consistent with HR’s current dividend policy. However, the board of directors of the Combined Company will ultimately determine the timing and amount of any dividends following the closing of the Merger.

 

Q:	How will the Company stockholders be affected by the Merger and the issuance of shares of Company Common Stock in connection with the Merger?

 

A:

Upon completion of the Merger and after giving effect to the issuance of shares of Company Common Stock in connection therewith, the Company estimates that the continuing Company stockholders will own approximately 60.0% of the issued and outstanding shares of the Combined Company (on a fully diluted basis), and former HR stockholders will own approximately 40.0% of the issued and outstanding shares of the Combined Company (on a fully diluted basis).

 

Q:	What happens if the market price of Company Common Stock or HR Common Stock changes before the closing of the Merger?

 

A:

No change will be made to the exchange ratio of 1.00 to 1.00 if the market price of shares of Company Common Stock or HR Common Stock changes before the closing of the Merger. As a result, the value of the consideration to be received by HR stockholders at the closing of the Merger will increase or decrease depending on the market price of shares of Company Common Stock at the effective time of the Merger.

 

Q:	Why am I receiving this joint proxy statement/prospectus?

 

A:

The Company Board and the HR Board are using this joint proxy statement/prospectus to solicit proxies of the Company stockholders and HR stockholders in connection with the Merger Agreement and the Merger. In addition, the Company is using this joint proxy statement/prospectus as a prospectus for HR stockholders because the Company is offering Company Common Stock to be issued in connection with the Merger.

The Merger cannot be completed unless:

 

•

the Company stockholders approve the issuance of shares of Company Common Stock in connection with the Merger by the affirmative vote of at least a majority of the issued and outstanding shares of Company Common Stock entitled to vote on the proposal, which we refer to as the Company Issuance Proposal; and

 

•

HR stockholders approve the Merger and the other transactions contemplated by the Merger Agreement by the affirmative vote of at least two-thirds of the issued and outstanding shares of HR Common Stock entitled to vote on the proposal, which we refer to as the HR Merger Proposal.

Each of the Company and HR will hold separate meetings of their respective stockholders to obtain these approvals and to consider other proposals related to the proposed transaction as described elsewhere in this joint proxy statement/prospectus.

This joint proxy statement/prospectus contains important information about the Merger and the other proposals being voted on at the special meetings of stockholders and you should read it carefully. The enclosed voting materials allow you to vote your shares of Company Common Stock and/or HR Common Stock, as applicable, without attending the applicable special meeting.

 

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Your vote is important. You are encouraged to submit your proxy as promptly as possible.

 

Q:	Are stockholders of the Company or HR being asked to vote on any other proposals at the special meetings in addition to the Company Issuance Proposal or the HR Merger Proposal, respectively?

 

A:	The Company. At the Company Special Meeting, the Company stockholders will be asked to consider and vote upon the following additional proposals:

 

•

To approve, in a non-binding advisory vote, the “golden parachute” compensation that may become vested and payable to our named executive officers in connection with the Merger as disclosed on the Golden Parachute Compensation table on page 78 of this joint proxy statement/prospectus, which we refer to as the Company Golden Parachute Proposal; and

 

•

To approve one or more adjournments of the Company Special Meeting to another date, time, place, or format if necessary or appropriate, including to solicit additional proxies in favor of the proposal to approve the issuance of shares of Company Common Stock in connection with the Merger, which we refer to as the Company Adjournment Proposal.

HR. At the HR Special Meeting, HR stockholders will be asked to consider and vote upon the following additional proposal:

 

•

To authorize the HR Board to approve one or more adjournments of the HR Special Meeting to another date, time, place, or format, if necessary or appropriate, including to solicit additional proxies in favor of the proposal to approve the Merger and the other transactions contemplated by the Merger Agreement if there are not sufficient votes at the time of the HR Special Meeting to approve the Merger and the other transactions contemplated by the Merger Agreement, which we refer to as the HR Adjournment Proposal.

 

Q:	Why are the Company and HR proposing the Merger?

 

A:

The Merger would create the largest, pure-play medical office building REIT in the United States, with 733 properties totaling 44.0 million square feet – nearly double the square footage of the next largest medical office building portfolio. The Combined Company is expected to have a pro forma equity market capitalization of approximately $11.6 billion, based on the closing price of shares of HR Common Stock on February 24, 2022, the trading date prior to The Wall Street Journal reporting that the Company and HR were in advanced talks to combine, of $30.26 per share, or approximately $11.2 billion, based on the closing price of shares of HR Common Stock on May 31, 2022, the latest practicable trading day before the date of this joint proxy statement/prospectus, of $29.07 per share.

The combination positions the Combined Company to create long-term stockholder value with the majority of the combined portfolio located in coastal and sunbelt markets, broadening relationships with 57 of the top 100 health systems in the U.S., and providing an embedded development pipeline in excess of $2.0 billion, concentrated in high growth markets. In addition to the estimated annual run rate cost synergies of $33.0 million to $36.0 million, the Merger also is expected to result in significant operational and financial benefits to stockholders, including enhanced leasing volumes to drive occupancy and rent growth across the portfolio, substantial synergies from property level cost savings, elimination of duplicative corporate costs, and improved access to multiple forms of capital.

To review the reasons of the Company Board and the HR Board for the Merger in greater detail, see “The Merger—The Company’s Reasons for the Merger; Recommendation of the Company Board” beginning on page 50 and “The Merger—HR’s Reasons for the Merger; Recommendation of the HR Board” beginning on page 55.

 

Q:	Who will be the members of the board of directors and management of the Combined Company?

 

A:	Following completion of the Merger, the board of directors of the Combined Company will be increased from eight to thirteen members, consisting of (a) all nine members of the HR Board serving immediately

 

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prior to the effective time of the Merger, and (b) W. Bradley Blair II, Vicki U Booth, Jay P. Leupp and Constance B. Moore, who have been designated by the Company Board to serve on the board of directors of the Combined Company in accordance with the terms of the Merger Agreement, to serve until the next annual meeting of stockholders of the Combined Company (and until their successors qualify and are duly elected). John Knox Singleton, currently the independent chair of the HR Board, will be the chair of the board of directors of the Combined Company and W. Bradley Blair II, currently chair of the Company Board, will be the vice chair of the board of directors of the Combined Company.

Todd J. Meredith will serve as President and Chief Executive Officer and J. Christopher Douglas will serve as Executive Vice President and Chief Financial Officer of the Combined Company. The other current executive officers of HR will serve as executive officers of the Combined Company in the same capacities.

The current executive officers of the Company will not be employed by, or serve in their same capacities with the Combined Company or at all in the case of the Company’s President and Chief Executive Officer and Chief Financial Officer.

See “The Merger Agreement—Directors and Officers of the Combined Company” on page 97 for more information.

 

Q:	Will the Combined Company experience any cost savings in connection with the Merger?

 

A:

The Company currently expects the Combined Company to realize, after a transition period following the closing of the Merger, an estimated annual run rate cost savings of $33.0 million to $36.0 million from the elimination of duplicative corporate and public company costs and synergies expected to result from additional scale and the implementation of best practices across the combined portfolio.

 

Q:	When and where are the special meetings of the Company and HR stockholders?

 

A:

The Company Special Meeting is scheduled to be held on July 15, 2022 at 10:00 a.m., Pacific Time, in a virtual-only format. The HR Special Meeting is scheduled to be held on July 15, 2022, at 12:00 p.m., Central Time, at the executive offices of HR at 3310 West End Avenue, Suite 700, Nashville, Tennessee 37203.

 

Q:	Who can vote at the special meeting?

 

A:

The Company. All holders of Company Common Stock of record as of the close of business on June 10, 2022, the record date for determining stockholders entitled to notice of and to vote at the Company Special Meeting, are entitled to receive notice of and to vote at the Company Special Meeting. As of May 31, 2022, there were 229,073,594 shares of Company Common Stock outstanding, held by approximately 1,878 holders of record. Each share of Company Common Stock is entitled to one vote on each proposal presented at the Company Special Meeting. The Company is commencing solicitation of proxies on or about June 10, 2022, which is the record date for the Company Special Meeting. The Company will continue to solicit proxies until July 15, 2022, the date of the Company Special Meeting. The Company stockholders of record on the record date who have not received this joint proxy statement/prospectus prior to that date will receive a joint proxy statement/prospectus and have the opportunity to vote on the matters described in the joint proxy statement/prospectus.

HR. All holders of HR Common Stock of record as of the close of business on June 10, 2022, the record date for determining stockholders entitled to notice of and to vote at the HR Special Meeting, are entitled to receive notice of and to vote at the HR Special Meeting. As of May 31, 2022, there were 151,632,308 shares of HR Common Stock outstanding, held by approximately 664 holders of record. Each share of HR Common Stock is entitled to one vote on each proposal presented at the HR Special Meeting. HR is commencing solicitation of proxies on or about June 10, 2022, which is the record date for the HR Special Meeting. HR will continue to solicit proxies until July 15, 2022, the date of the HR Special Meeting. HR

 

vii

stockholders of record on the record date who have not received this joint proxy statement/prospectus prior to that date will receive a joint proxy statement/prospectus and have the opportunity to vote on the matters described in the joint proxy statement/prospectus.

 

Q:	Can I deliver my proxy prior to the record date?

 

A:

Proxies delivered prior to the record date will be valid and effective so long as the stockholder providing the proxy is a stockholder of the Company or HR, as applicable, on the record date. If you are not a holder of record of the Company or HR, as applicable, on the record date, any proxy you deliver will be ineffective. If you deliver a proxy prior to the record date and remain a holder on the record date, you do not need to deliver another proxy after the record date. If you deliver a proxy prior to the record date and do not revoke that proxy, your proxy will be deemed to cover the number of shares you own on the record date even if that number is different from the number of shares you owned when you executed and delivered your proxy or the number of shares you own as of the date of the special meeting. Proxies received from persons who are not holders of record on the record date will not be effective.

 

Q:	What constitutes a quorum?

 

A:

The Company. The Company Bylaws provide that the presence in person (which includes presence by means of remote communication at a virtual meeting) or by proxy of Company stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting constitutes a quorum. Shares that are voted and shares abstaining from voting are treated as being present at the Company Special Meeting for purposes of determining whether a quorum is present.

HR. The HR Bylaws provide that the presence in person or by proxy of HR stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting constitutes a quorum. Shares that are voted and shares abstaining from voting are treated as being present at the HR Special Meeting for purposes of determining whether a quorum is present.

 

Q:	What vote is required to approve the proposals?

 

A:	The Company.

 

•

Approval of the Company Issuance Proposal requires the affirmative vote of holders of at least a majority of the issued and outstanding shares of Company Common Stock entitled to vote on such proposal.

 

•

Approval of the Company Golden Parachute Proposal requires, assuming a quorum is present, the vote of at least a majority of all votes cast on such proposal.

 

•

Approval of the Company Adjournment Proposal requires, assuming a quorum is present, the vote of at least a majority of all votes cast on such proposal.

HR.

 

•

Approval of the HR Merger Proposal requires the affirmative vote of holders of at least two-thirds of the issued and outstanding shares of HR Common Stock entitled to vote on such proposal.

 

•

Approval of the HR Adjournment Proposal requires, assuming a quorum is present, the vote of at least a majority of all votes cast on such proposal.

 

Q:	How does the Company Board recommend that the Company stockholders vote on the proposals?

 

A:

After careful consideration, the Company Board has unanimously (a) determined that the Merger Agreement and the Merger, including the issuance of shares of Company Common Stock in connection with the Merger, are advisable and in the best interests of the Company, (b) authorized and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the issuance of shares of Company Common Stock in connection with the Merger, upon the terms and subject to the conditions set forth therein, and (c) subject to the terms of the Merger Agreement, resolved to

 

viii

recommend approval of the issuance of shares of Company Common Stock in connection with the Merger by the Company stockholders and that such approval be submitted for consideration at the Company Special Meeting. The Company Board unanimously recommends that the Company stockholders vote “FOR” the Company Issuance Proposal, “FOR” the Company Golden Parachute Proposal and “FOR” the Company Adjournment Proposal.

For a more complete description of the recommendation of the Company Board, see “The Merger—The Company’s Reasons for the Merger; Recommendation of the Company Board” beginning on page 50 of this joint proxy statement/prospectus.

 

Q:	How does the HR Board recommend that HR stockholders vote on the proposals?

 

A:

After careful consideration, the HR Board has unanimously (a) determined that the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of HR, (b) authorized and approved the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, and (c) subject to the terms of the Merger Agreement, resolved to recommend approval of the Merger by HR stockholders and that such approval be submitted for consideration at the HR Special Meeting. The HR Board unanimously recommends that HR stockholders vote FOR the HR Merger Proposal and FOR the HR Adjournment Proposal.

For a more complete description of the recommendation of the HR Board, see “The Merger—HR’s Reasons for the Merger; Recommendation of the HR Board” beginning on page 55 of this joint proxy statement/prospectus.

 

Q:	Do any of HR’s executive officers or directors have interests in the Merger that may differ from those of HR stockholders?

 

A:

HR’s executive officers and directors have interests in the Merger that are different from, or in addition to, their interests as HR stockholders. The members of the HR Board were aware of and considered these interests, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that HR stockholders vote FOR the proposal to approve the Merger and the other transactions contemplated by the Merger Agreement. For a description of these interests, see the section entitled “The Merger—Interests of HR Directors and Executive Officers in the Merger” beginning on page 78 of this joint proxy statement/prospectus.

 

Q:	Do any of the Company’s executive officers or directors have interests in the Merger that may differ from those of the Company stockholders?

 

A:

The Company’s executive officers and directors have interests in the Merger that are different from, or in addition to, their interests as stockholders of the Company. The members of the Company Board were aware of and considered these interests, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that the Company stockholders vote FOR the issuance of shares of Company Common Stock in connection with the Merger. For a description of these interests, see the section entitled “The Merger—Interests of the Company Directors and Executive Officers in the Merger” beginning on page 75 of this joint proxy statement/prospectus.

 

Q:	Are there any conditions to closing of the Merger that must be satisfied for the Merger to be completed?

 

A:

In addition to the approval of the Company Issuance Proposal and the HR Merger Proposal, there are a number of customary conditions that must be satisfied or waived for the Merger to be consummated. For a description of all of the conditions to the Merger, see “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 110 of this joint proxy statement/prospectus.

 

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Q:	Are there risks associated with the Merger that I should consider in deciding how to vote?

 

A:	Yes. There are a number of risks related to the Merger that are discussed in this joint proxy statement/prospectus described in the section entitled “Risk Factors” beginning on page 16.

 

Q:	If my shares of Company Common Stock or HR Common Stock are held in “street name” by my broker or other nominee, will my broker or other nominee vote my shares of Company Common Stock or HR Common Stock for me?

 

A:

If you hold your shares of Company Common Stock or HR Common Stock in a stock brokerage account or if your shares are held by a bank or nominee (that is, in “street name”), you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank, or nominee. In order for any shares held in street name to be represented at the applicable special meeting, you must provide your broker or other nominee with instructions on how to vote your shares. Brokers who hold shares of Company Common Stock and/or HR Common Stock on behalf of their customers may not give a proxy to the Company or HR, as applicable, to vote those shares without specific instructions from their customers.

 

Q:	What will happen if I fail to vote or fail to instruct my broker, bank, or nominee how to vote?

 

A:

The Company. If you are a Company stockholder and you do not instruct your broker, bank or nominee on how to vote your shares of Company Common Stock, your broker, bank or nominee may not vote your shares on the Company Issuance Proposal, the Company Golden Parachute Proposal or the Company Adjournment Proposal and your shares will not be deemed to be represented at the virtual Company Special Meeting. This will have the same effect as a vote against the Company Issuance Proposal, but it will have no effect on the Company Golden Parachute Proposal or the Company Adjournment Proposal.

HR. If you are an HR stockholder and you do not instruct your broker, bank or nominee on how to vote your shares of HR Common Stock, your broker, bank or nominee may not vote your shares on the HR Merger Proposal or the HR Adjournment Proposal and your shares will not be deemed to be represented at the HR Special Meeting. This will have the same effect as a vote against the HR Merger Proposal, but it will have no effect on the HR Adjournment Proposal.

 

Q:	What will happen if I abstain from voting?

 

A:	The Company. If you are a Company stockholder and abstain from voting, it will have the same effect as a vote against the Company Issuance Proposal, but it will have no effect on the Company Golden Parachute Proposal or the Company Adjournment Proposal.

HR. If you are an HR stockholder and abstain from voting, it will have the same effect as a vote against the HR Merger Proposal, but it will have no effect on the HR Adjournment Proposal.

 

Q:	Will my rights as a stockholder of the Company or HR change as a result of the Merger?

 

A:

The rights of the Company stockholders will be unchanged as a result of the Merger. HR stockholders will have different rights following the effective time of the Merger due to the differences between the governing documents of the Company and HR. For more information regarding the differences in stockholders’ rights, see “Comparison of Rights of the Company Stockholders and HR Stockholders” beginning on page 171 of this joint proxy statement/prospectus.

 

Q:	When is the Merger expected to be completed?

 

A:	The Company and HR expect to complete the Merger as soon as reasonably practicable following satisfaction of all of the required conditions. If the Company stockholders approve the Company Issuance

 

x

Proposal, if HR stockholders approve the HR Merger Proposal, and if the other conditions to closing the Merger are satisfied or waived, it is currently expected that the Merger will be completed in the third quarter of 2022. However, there is no guarantee that the conditions to the Merger will be satisfied or that the Merger will close on this timing, or at all.

 

Q:	If I am an HR stockholder do I need to do anything with my stock certificates now?

 

A:

No. You should not submit your stock certificates at this time. After the Merger is completed, if you held shares of HR Common Stock, the exchange agent for the Company will send you a letter of transmittal and instructions for exchanging your shares of HR Common Stock for shares of Company Common Stock pursuant to the terms of the Merger Agreement. Upon surrender of a certificate or book-entry share for cancellation along with the executed letter of transmittal and other required documents described in the instructions, an HR stockholder will receive shares of Company Common Stock pursuant to the terms of the Merger Agreement.

 

Q:	What are the anticipated U.S. federal income tax consequences to me of the proposed Merger?

 

A:

The Company and HR intend that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The closing of the Merger is conditioned on the receipt by each of the Company and HR of a written opinion from its respective counsel to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Assuming that the Merger qualifies as a reorganization, HR stockholders are generally not expected to recognize gain or loss for U.S. federal income tax purposes upon the receipt of shares of Company Common Stock in exchange for shares of HR Common Stock in connection with the Merger, except with respect to cash received in lieu of fractional shares of Company Common Stock. HR stockholders should read the discussion under the heading “Material U.S. Federal Income Tax Consequences” beginning on page 115 and consult their tax advisors to determine the tax consequences to them (including the application and effect of any applicable state, local or non-U.S. income and other tax laws) of the Merger.

 

Q:	Are HR stockholders entitled to appraisal rights?

 

A:	No. HR stockholders are not entitled to exercise appraisal rights in connection with the Merger. See “The Merger Agreement—Merger Consideration; Special Distribution; Effects of the Merger—Appraisal Rights” beginning on page 98 of this joint proxy statement/prospectus for more information.

 

Q:	What do I need to do now?

 

A:

After you have carefully read this joint proxy statement/prospectus, please respond by completing, signing, and dating your proxy card or voting instruction card and returning it in the enclosed preaddressed postage-paid envelope or, if available, by submitting your proxy by one of the other methods specified in your proxy card or voting instruction card as promptly as possible so that your shares of Company Common Stock and/or HR Common Stock will be represented and voted at the Company Special Meeting or the HR Special Meeting, as applicable.

Please refer to your proxy card or voting instruction card forwarded by your broker or other nominee to see which voting options are available to you.

The method by which you submit a proxy will in no way limit your right to vote at the Company Special Meeting or the HR Special Meeting, as applicable, if you later decide to attend the special meeting in person (which, with respect to the Company Special Meeting, consists of presence at a virtual meeting).

 

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Q:	How will my proxy be voted?

 

A:

The Company. All shares of Company Common Stock entitled to vote and represented by properly completed proxies received prior to the Company Special Meeting, and not revoked, will be voted at the Company Special Meeting as instructed on the proxies. If you properly sign, date and return a proxy card, but do not indicate how your shares of Company Common Stock should be voted on a matter, shares of Company Common Stock represented by your proxy will be voted as the Company Board recommends and therefore “FOR” the Company Issuance Proposal, “FOR” the Company Golden Parachute Proposal and “FOR” the Company Adjournment Proposal. If you do not provide voting instructions to your broker or other nominee, your shares of Company Common Stock will NOT be represented at the Company Special Meeting and will be considered broker non-votes.

HR. All shares of HR Common Stock entitled to vote and represented by properly completed proxies received prior to the HR Special Meeting, and not revoked, will be voted at the HR Special Meeting as instructed on the proxies. If you are an HR stockholder and properly sign, date and return a proxy card, but do not indicate how your shares of HR Common Stock should be voted on a matter, the shares of HR Common Stock represented by your proxy will be voted as the HR Board recommends and therefore “FOR” the HR Merger Proposal and “FOR” the HR Adjournment Proposal. If you do not provide voting instructions to your broker, bank or other nominee, your shares of HR Common Stock will NOT be represented at the HR Special Meeting and will be considered broker non-votes.

 

Q:	Can I revoke my proxy or change my vote after I have delivered my proxy?

 

A:	Yes. You may revoke your proxy or change your vote at any time before your proxy is voted at the Company Special Meeting or the HR Special Meeting, as applicable. If you are a holder of record, you can do this in any of the three following ways:

 

•

by sending a written notice to the corporate secretary of the Company or the corporate secretary of HR, as applicable, in time to be received before the Company Special Meeting or the HR Special Meeting, as applicable, stating that you would like to revoke your proxy;

 

•

by completing, signing and dating another proxy card and returning it by mail in time to be received before the Company Special Meeting or the HR Special Meeting, as applicable, or by submitting a later dated proxy by the Internet or telephone in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or

 

•

by attending the virtual Company Special Meeting or the HR Special Meeting, as applicable, and voting at the meeting. Simply attending the virtual Company Special Meeting or the HR Special Meeting, as applicable, without voting will not revoke your proxy or change your vote.

If your shares of Company Common Stock or HR Common Stock are held in an account at a broker or other nominee and you desire to change your vote or vote in person, you should contact your broker or other nominee for instructions on how to do so.

 

Q:	What does it mean if I receive more than one set of voting materials for the Company Special Meeting or the HR Special Meeting?

 

A:

You may receive more than one set of voting materials for the Company Special Meeting and/or the HR Special Meeting, as applicable, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares of Company Common Stock or HR Common Stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold your shares of Company Common Stock or HR Common Stock. If you are a holder of record and your shares of Company Common Stock or HR Common Stock are registered in more than one name, you may receive more than one proxy card. Please complete, sign, date, and return each proxy card and voting instruction card that you receive or, if available, please submit your proxy by telephone or over the Internet.

 

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Q:	What happens if I am a stockholder of both the Company and HR?

 

A:

You will receive separate proxy cards for each entity and must complete, sign and date each proxy card and return each proxy card in the appropriate pre-addressed postage-paid envelope or, if available, by submitting a proxy by one of the other methods specified in your proxy card or voting instruction card for each entity.

 

Q:	Will a proxy solicitor be used?

 

A:

Yes. The Company has engaged Okapi Partners LLC, which we refer to as Okapi, to assist in the solicitation of proxies for the Company Special Meeting. The Company estimates it will pay Okapi a fee of approximately $50,000 plus $15,000 upon successful conclusion of the solicitation. The Company has also agreed to reimburse Okapi for costs and expenses incurred in connection with the proxy solicitation and to indemnify Okapi against certain losses, claims, damages, liabilities and expenses. In addition to mailing proxy solicitation material, the Company’s directors, officers, and employees may also solicit proxies in person, by telephone or by any other electronic means of communication deemed appropriate. No additional compensation will be paid to the Company’s directors, officers, or employees for such services.

HR has engaged Innisfree M&A Incorporated, which we refer to as Innisfree, to assist in the solicitation of proxies for the HR Special Meeting and HR estimates it will pay Innisfree a fee of approximately $60,000. HR has also agreed to reimburse Innisfree for reasonable out-of-pocket expenses and disbursements incurred in connection with the proxy solicitation and to indemnify Innisfree against certain losses, claims, damages, liabilities and expenses. In addition to mailing proxy solicitation material, HR’s directors, officers, and employees may also solicit proxies in person, by telephone or by any other electronic means of communication deemed appropriate. No additional compensation will be paid to HR’s directors, officers, or employees for such services.

 

Q:	Who can answer my questions?

 

A:	If you have any questions about the Merger or how to submit your proxy or need additional copies of this joint proxy statement/prospectus, the enclosed proxy card or voting instructions, you should contact:

 

If you are a Company stockholder:		If you are an HR stockholder:
Healthcare Trust of America, Inc.		Healthcare Realty Trust Incorporated
Attention: Investor Relations		Attention: Investor Relations
16435 N. Scottsdale Road, Suite 320		3310 West End Avenue, Suite 700
Scottsdale, AZ 85254		Nashville, TN 37203
P: (480) 998-3478 F: (480) 991-0755		P: (615) 269-8175 F: (615) 269-8461
Email: info@htareit.com		Email: communications@healthcarerealty.com
Proxy Solicitor:		Proxy Solicitor:
Okapi Partners LLC		Innisfree M&A Incorporated
1212 Avenue of the Americas, 24th Floor		501 Madison Avenue, 20th floor
New York, New York 10036		New York, New York 10022
Call Toll-Free: (855) 305-0857		Stockholders may call toll free: (800) 422-8620
Call Collect: (212) 297-0720		Banks and Brokers may call collect: (212) 750-5833

 

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14

EQUIVALENT AND COMPARATIVE PER SHARE INFORMATION

The following tables set forth, for the three months ended March 31, 2022 and the year ended December 31, 2021, selected per share information for HR Common Stock on a historical and pro forma consolidated basis and for Company Common Stock on a historical basis. You should read the tables below together with the historical consolidated financial statements and related notes of the Company and HR contained in their respective Quarterly Report on Form 10-Q for the three months ended March 31, 2022, and Annual Reports on Form 10-K and Form 10-K/A, as the case may be, for the year ended December 31, 2021, all of which are incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information and Incorporation by Reference.”

The pro forma consolidated per share amounts were calculated using the methodology as described below under the heading “Unaudited Pro Forma Condensed Consolidated Financial Information,” and are subject to all the assumptions, adjustments and limitations described thereunder. The pro forma financial information described below is presented as if the Merger occurred on January 1, 2021 for the results of operations and March 31, 2022 for financial position. You should not rely on the pro forma amounts as being indicative of the financial position or results of operations of the Combined Company that actually would have occurred had the Merger been completed as of the dates indicated above nor is it necessarily indicative of the future operating results or financial position of the Combined Company.

 

		Three Months Ended March 31, 2022
		The Company				HR				Pro Forma
Basic earnings (loss) per share		$	0.08			$	0.28			$	(0.02	)
Diluted earnings (loss) per share		$	0.08			$	0.28			$	(0.02	)
Dividends declared per common share		$	0.33			$	0.31			$	0.30	(1)
Book value per common share		$	14.02			$	14.60			$	23.02
		Year Ended December 31, 2021
		The Company				HR				Pro Forma
Basic earnings (loss) per share		$	0.45			$	0.45			$	(0.74	)
Diluted earnings (loss) per share		$	0.44			$	0.45			$	(0.74	)
Dividends declared per common share		$	1.29			$	1.21			$	1.21	(1)

 

(1)	Dividends are declared and paid at the discretion of the HR Board. The HR Board may change HR’s dividend policy at any time and there can be no assurance as to amount or timing of dividends in the future.

 

15

RISK FACTORS

In addition to the other information included and incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risks before deciding how to vote. In addition, you should read and consider the risks associated with each of the businesses of the Company and HR because these risks will also affect the Combined Company. These risks can be found in the respective Annual Reports on Form 10-K for the year ended December 31, 2021 of the Company and HR, each of which are filed with the SEC and incorporated by reference into this joint proxy statement/prospectus. You should also read and consider the other information in this joint proxy statement/prospectus and the other documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information and Incorporation by Reference.”

Risk Factors Relating to the Merger

The exchange ratio is fixed and will not be adjusted in the event of any change in the share prices of either the Company or HR.

Upon the closing of the Merger, each share of HR Common Stock will be converted into the right to receive one share of Company Common Stock. The exchange ratio was fixed in the Merger Agreement, and while it will be adjusted in the event of any stock split, reverse stock split, stock dividend (including any dividend or other distribution of securities convertible into common stock), recapitalization, subdivision, reclassification, combination, exchange of shares or any similar transaction involving the Company or HR, the exchange ratio will not be adjusted for changes in the market price of either HR Common Stock or Company Common Stock. Changes in the price of Company Common Stock prior to the Merger will affect the market value of the Merger consideration that HR stockholders will receive on the closing date of the Merger. Share price changes may result from a variety of factors (many of which are beyond our control), including the following factors:

 

•

changes in the respective businesses, operations, assets, liabilities and prospects of the Company and HR;

 

•

changes in market assessments of the business, operations, financial position and prospects of either company or the Combined Company;

 

•

market assessments of the likelihood that the Merger will be completed;

 

•

interest rates, general market and economic conditions and other factors generally affecting the price of HR Common Stock and Company Common Stock;

 

•

the continuation or worsening of the COVID-19 pandemic; and

 

•

federal, state and local legislation, governmental regulation and legal developments in the businesses in which the Company and HR operate.

The price of Company Common Stock at the closing of the Merger may vary from the price on the date the Merger Agreement was executed, on the date of this joint proxy statement/prospectus and on the date of the Company Special Meeting and the HR Special Meeting. As a result, the market value of the Merger consideration represented by the exchange ratio will also vary. For example, based on the range of trading prices of shares of HR Common Stock during the period after February 24, 2022, the last trading day before published reports regarding a potential transaction involving the Company, through May 31, 2022, the latest practicable date before the date of this joint proxy statement/prospectus, the exchange ratio of 1.00 : 1.00 represented a market value ranging from a low of $3.9 billion to a high of $4.8 billion.

Because the Merger will be completed after the date of the Company Special Meeting and the HR Special Meeting, at the time of your special meeting, you will not know the exact market value of shares of Company Common Stock that HR stockholders will receive upon completion of the Merger. Therefore, while the number of shares of Company Common Stock to be issued per share of HR Common Stock is fixed, HR stockholders cannot be sure of the market value of the consideration they will receive upon completion of the Merger.

 

16

Failure to complete the Merger could negatively affect the share prices and the future business and financial results of the Company and HR.

If the Merger is not completed, the ongoing businesses of the Company and/or HR may be adversely affected and the Company and HR will be subject to numerous risks associated with the failure to complete the Merger, including the following:

 

•

the Company being required, under certain circumstances, to pay HR a termination fee of $291.0 million or an expense reimbursement base amount fee of $25.0 million plus up to $5.0 million of actual expenses in connection with the Merger;

 

•

HR being required, under certain circumstances, to pay the Company a termination fee of $163.0 million, an expense reimbursement base amount fee of $25.0 million plus up to $5.0 million of actual expenses or a termination fee of $163.0 million plus up to $5.0 million of actual expenses in connection with the Merger;

 

•

each of the Company and HR having to pay certain costs relating to the proposed Merger, such as legal, accounting, financial advisor, filing, printing and mailing fees;

 

•

the management of each of the Company and HR focusing on the Merger instead of on pursuing other opportunities that could be beneficial to the companies, in each case, without realizing any of the benefits of the Merger having been completed; and

 

•

the failure of each company to retain key employees during the pendency of the Merger, including, with respect to the Company, its Interim Chief Executive Officer whose employment agreement expires upon the closing of the Merger.

If the Merger is not completed, the Company and HR cannot assure their stockholders that these risks will not materialize and will not materially affect the business, financial results and share prices of the Company or HR. For a description of the circumstances under which the termination fees are payable by the Company or HR, see “The Merger Agreement—Termination of the Merger Agreement—Termination Fees and Expense Reimbursement.”

The Merger Agreement contains provisions that could discourage a potential acquirer of either the Company or HR or could result in any acquisition proposal being at a lower price than it might otherwise be.

The Merger Agreement contains provisions that, subject to limited exceptions, restrict the ability of each of the Company and HR to solicit, encourage, facilitate or discuss third-party proposals to acquire all or a significant part of the Company or HR. Further, even if the Company Board or the HR Board withdraws or modifies its recommendation of the Merger, respectively, they will still be required to submit the matter to a vote of their respective stockholders at their respective special meetings. In addition, either the Company or HR generally has an opportunity to offer to modify the terms of the proposed Merger Agreement in response to any acquisition proposal that may be made to the other party before their respective board of directors may withdraw or modify its recommendation in response to such acquisition proposal. In certain circumstances, on termination of the Merger Agreement, one of the parties may be required to pay a substantial termination fee to the other party. See “The Merger Agreement—Termination of the Merger Agreement—Termination Fees and Expense Reimbursement.”

These provisions could discourage a potential acquirer that might have an interest in acquiring all or a significant part of the Company or HR from considering or proposing such an acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than that market value proposed to be received or realized in the Merger, or might result in a potential acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the Merger Agreement.

 

17

If the Merger is not consummated by August 28, 2022, either the Company or HR may terminate the Merger Agreement.

Either the Company or HR may terminate the Merger Agreement if the Merger has not been consummated by August 28, 2022. However, the right to terminate the Merger Agreement will not be available to any party whose breach of any representation, warranty, covenant or agreement set forth in the Merger Agreement has been the cause of, or resulted in, the failure to consummate the Merger prior to August 28, 2022. See “The Merger Agreement—Termination of the Merger Agreement.”

The pendency of the Merger could adversely affect the business and operations of the Company and HR.

In connection with the pending Merger, some tenants or vendors of each of the Company and HR may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of the Company and HR, regardless of whether the Merger is completed. Similarly, current and prospective employees of the Company and HR may experience uncertainty about their future roles with the Combined Company following the Merger, which may materially adversely affect the ability of each of the Company and HR to attract or retain key personnel during the pendency of the Merger. In addition, due to operating covenants in the Merger Agreement, each of the Company and HR may be unable, during the pendency of the Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue certain other actions, even if such actions would prove beneficial.

Approval of the Merger requires a supermajority vote by HR stockholders, which could have the effect of increasing the difficulty of consummating the Merger.

The HR Charter, as well as provisions of Maryland law applicable to the HR Charter, require that the Merger be approved by the affirmative vote of the holders of two-thirds of the outstanding shares of HR Common Stock. If an HR stockholder does not vote or instruct his, her or its broker, bank, or nominee on how to vote shares of HR Common Stock held in his, her or its name, such abstentions and broker non-votes will have the same effect as a vote against the HR Merger Proposal, making it more difficult for the requisite vote requirement for the Merger to be satisfied.

The opinions of the financial advisors of the Company and HR will not reflect changes in circumstances between the date of such opinions and completion of the Merger.

The Company and HR have not obtained updated opinions from their respective financial advisors as of the date of this joint proxy statement/prospectus and do not expect to receive updated opinions prior to completion of the Merger. Changes in the operations and prospects of the Company or HR, general market and economic conditions and other factors that may be beyond the control of the Company or HR, and on which the opinions of the financial advisors to the Company and HR were based, may significantly alter the value of the Company or HR or the prices of shares of HR Common Stock or Company Common Stock by the time the Merger is completed. The opinions do not speak as of the time the Merger will be completed or as of any date other than the date of such opinions. Because the financial advisors of the Company and HR will not be updating their opinions, the opinions will not address the fairness of the Merger consideration or the exchange ratio, as the case may be, from a financial point of view at the time the Merger is completed. The Company Board’s recommendation that the Company stockholders vote “FOR” the proposals being submitted to the Company stockholders and the HR Board’s recommendation that HR stockholders vote “FOR” the proposals being submitted to HR stockholders, however, are made as of the date of this joint proxy statement/prospectus. For a description of the opinions that the Company and HR received from their respective financial advisors, see “The Merger—Opinion of the Company Financial Advisor” and “The Merger—Opinion of HR Financial Advisor.”

 

18

The directors and executive officers of the Company and directors and executive officers of HR have interests in the Merger that are different from, or in addition to, those of the Company stockholders and HR stockholders.

The directors and executive officers of the Company and directors and executive officers of HR have arrangements that provide them with interests in the Merger that are different from, or in addition to, those of the Company stockholders or HR stockholders, including, among other things, the continued service as director or executive officer of the Combined Company. These interests, among other things, may influence or may have influenced the directors and executive officers of the Company and directors and executive officers of HR to support or approve the Merger. See “The Merger—Interests of HR Directors and Executive Officers in the Merger” and “The Merger—Interests of the Company Directors and Executive Officers in the Merger.”

The Company and/or HR have been named in five lawsuits with respect to the Merger and may be or become the target of additional lawsuits, including stockholder direct and derivative lawsuits, that could result in substantial costs and may delay or prevent the Merger from being completed.

Stockholder direct and derivative lawsuits are often brought against companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Five lawsuits, which we refer to as the Lawsuits, have been filed by purported stockholders of HR or the Company with respect to the Merger. Three lawsuits have been filed against HR and the members of the HR Board in the United States District Court for the Eastern District of New York and two lawsuits have been filed against the Company and certain members of the Company Board in the United States District Court for the Southern District of New York. The Lawsuits allege that the Registration Statement on Form S-4 filed on May 2, 2022, in connection with the Merger omitted certain material information in violation of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, and further that the members of the HR Board and the Company Board, respectively, are liable for those omissions under Section 20(a) of the Exchange Act. The Lawsuits each seek a preliminary and permanent injunction to prevent the completion of the Merger, rescission of the Merger or rescissory damages, costs and attorneys’ fees. There can be no assurances as to the outcome of such lawsuits, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Merger on the agreed-upon terms, such an injunction may delay or prevent the Merger from being completed, which may adversely affect each of the Company’s and HR’s respective business, results of operations and financial position.

The Company stockholders and HR stockholders will be diluted by the Merger.

The Merger will dilute the ownership position of the Company stockholders and result in HR stockholders having an ownership stake in the Combined Company that is smaller than their current stake in HR. Upon completion of the Merger, we estimate that continuing the Company stockholders will own approximately 60.0% of the shares of common stock of the Combined Company, and former HR stockholders will own approximately 40.0% of shares of common stock of the Combined Company. Consequently, the Company stockholders and HR stockholders, as a general matter, will have less influence over the management and policies of the Combined Company after the effective time of the Merger than each currently may exercise over the management and policies of the Company and HR, respectively.

In addition, in the Merger, each HR Stock Option to purchase HR Common Stock will be converted into an option exercisable for one share of Company Common Stock, subject to the same economic terms and conditions as were applicable to the corresponding HR Stock Option immediately prior to the Merger. Similarly, each HR Stock-Based Award will be assumed by the Combined Company with respect to the number of shares of Company Common Stock that is equal to the number of shares of HR Common Stock subject to the HR Stock-Based Award immediately prior to the effective time of the Merger multiplied by 1.00. The exercise of HR Stock Options and the vesting of HR Stock-Based Awards will further dilute the ownership positions of the Company stockholders and HR stockholders.

 

19

Risk Factors Relating to the Combined Company

Operational Risks

The Combined Company expects to incur substantial expenses related to the Merger.

The Combined Company expects to incur substantial expenses in connection with completing the Merger and integrating the business, operations, networks, systems, technologies, policies and procedures of the two companies, including severance costs. In addition, there are a large number of systems that must be integrated, including billing, management information, asset management, accounting and finance, payroll and benefits, lease administration and regulatory compliance. Although the Company and HR have assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and integration expenses associated with the Merger could, particularly in the near term, exceed the savings that the Combined Company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the businesses following the completion of the Merger. As a result, both the Company and HR expect to incur expenses against their earnings before the completion of the Merger, and the Combined Company expects to incur expenses and charges after the completion of the Merger.

HR and the Company have properties subject to purchase options that expose the Combined Company to reinvestment risk and reduction in expected investment returns.

HR and the Company have, in the aggregate, approximately $54.9 million of real estate property investments that were subject to purchase options held by lessees that were exercisable as of March 31, 2022. Other properties have purchase options that will become exercisable after March 31, 2022. The exercise of these purchase options exposes the Combined Company to reinvestment risk and a reduction in investment return. Certain properties subject to purchase options may be purchased at rates of return above the rates of return the Combined Company expects to achieve with new investments. If the Combined Company is unable to reinvest the sale proceeds at rates of return equal to the return received on the properties that are sold, it may experience a decline in lease revenues and profitability and a corresponding material adverse effect on the Combined Company’s financial condition and results of operations.

Many of HR’s and the Company’s properties are held under ground leases. These ground leases contain provisions that provide the ground lessor with purchase options or rights of first refusal that may be triggered by the Merger. In addition, ground leases may limit the Combined Company’s ability to lease, sell, or finance these properties in the future.

As of March 31, 2022, HR and the Company had, in the aggregate, 249 properties that were held under ground leases, representing an aggregate gross investment of approximately $5.4 billion. These ground lease agreements typically contain restrictions that limit building occupancy to physicians on the medical staff of an affiliated hospital and prohibit tenants from providing services that compete with the services provided by the affiliated hospital. Ground leases may also contain consent requirements or other restrictions on sale or assignment of the leasehold interest, including purchase options and rights of first refusal in favor of the lessor that may become exercisable as a result of the Merger. HR and the Company estimate that purchase options or rights of first refusal on ground leased properties having a gross investment of approximately $1.0 billion may be exercisable as a result of the Merger. Even if not currently exercisable, these ground lease provisions may limit the Combined Company’s ability to lease, sell, or obtain mortgage financing secured by such properties which, in turn, could adversely affect the income from operations or the proceeds received from a sale. As a ground lessee, the Combined Company is also exposed to the risk of reversion of the property upon expiration of the ground lease term, or an earlier breach by the Combined Company of the ground lease, which may have a material adverse effect on the Combined Company’s consolidated financial condition and results of operations.

 

20

Following the Merger, the Combined Company may be unable to integrate the businesses of the Company and HR successfully and realize the anticipated synergies and related benefits of the Merger or do so within the anticipated timeframe.

The Merger involves the combination of two companies that currently operate as independent public companies. The Combined Company will be required to devote significant management attention and resources to integrating the business practices and operations of the Company and HR. Potential difficulties the Combined Company may encounter in the integration process include the following:

 

•

the inability to successfully combine the businesses of the Company and HR in a manner that permits the Combined Company to achieve the cost savings anticipated to result from the Merger, which would result in the anticipated benefits of the Merger not being realized in the timeframe currently anticipated or at all;

 

•

certain tenants of either company may decide not to do business with the Combined Company;

 

•

the complexities associated with managing the combined businesses out of different locations and integrating personnel from the two companies;

 

•

the additional complexities of combining two companies with different histories, cultures, markets and tenant bases;

 

•

the failure to retain key employees of either company;

 

•

potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger; and

 

•

performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention caused by completing the Merger and integrating the companies’ operations.

For all these reasons, you should be aware that it is possible that the integration process could result in the distraction of the Combined Company’s management, the disruption of the Combined Company’s ongoing business or inconsistencies in the Combined Company’s services, standards, controls, procedures and policies, any of which could adversely affect the ability of the Combined Company to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits of the Merger, or could otherwise adversely affect the business and financial results of the Combined Company.

Following the Merger, the Combined Company may be unable to retain key employees.

The success of the Combined Company after the Merger will depend in part upon its ability to retain key employees. Key employees may depart either before or after the Merger because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the Combined Company following the Merger. Accordingly, no assurance can be given that the Company, HR or, following the Merger, the Combined Company will be able to retain key employees.

The employment agreement of Peter N. Foss, the Company’s current Interim Chief Executive Officer, expires upon the closing of the Merger.

Robert A. Milligan, the Company’s current Chief Financial Officer, is expected to terminate his employment with the Company for good reason immediately following the Merger as he will not be assuming the position of chief financial officer of the Combined Company.

Amanda L. Houghton, the Company’s current Executive Vice President — Asset Management, has generally obligated herself to continue her employment with the Combined Company for ninety days after the Merger, but is expected to terminate her employment at that time.

 

21

The Merger will result in changes to the board of directors and management of the Combined Company that may affect the strategy of the Combined Company as compared to that of the Company and HR.

If the parties complete the Merger, the composition of the board of directors of the Combined Company and management team will change from the current boards and management teams of the Company and HR. For example, the board of directors of the Combined Company will have thirteen members, expected to consist of all nine current HR Board members and four current Company Board members. The four Company directors who will continue on the board of directors of the Combined Company are W. Bradley Blair II, Vicki U. Booth, Jay P. Leupp and Constance Moore. The management team of the Combined Company will be comprised entirely of the current management team of HR, with no current members of the Company’s management team serving the Combined Company in their current roles. This new composition of the board of directors, together with the management team, of the Combined Company may affect the business strategy and operating decisions of the Combined Company upon the completion of the Merger. For more information about the management and directors of the Combined Company following the Merger, see “The Merger—Directors and Management Following the Merger.”

The future results of the Combined Company will suffer if the Combined Company does not effectively manage its expanded operations following the Merger.

Following the Merger, the Combined Company may continue to expand its operations through additional acquisitions and other strategic transactions, some of which involve complex challenges. The future success of the Combined Company will depend, in part, upon the ability of the Combined Company to manage its expansion opportunities, which pose substantial challenges for the Combined Company to integrate new operations into its existing business in an efficient and timely manner, and upon its ability to successfully monitor its operations, costs, regulatory compliance and service quality, and to maintain other necessary internal controls. The Combined Company cannot assure you that its expansion or acquisition opportunities will be successful, or that the Combined Company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

The trading price of shares of common stock of the Combined Company may be affected by factors different from those affecting the price of shares of HR Common Stock or Company Common Stock before the Merger.

If the Merger is completed, the Company stockholders will become holders of approximately 60.0%, and HR stockholders will hold approximately 40.0%, of the outstanding shares of common stock of the Combined Company. The results of operations of the Combined Company, as well as the trading price of the shares of common stock of the Combined Company after the Merger, may be affected by factors different from those currently affecting the Company’s or HR’s results of operations and the trading prices of shares of HR Common Stock and Company Common Stock. These factors include:

 

•

a greater number of shares of common stock of the Combined Company outstanding as compared to the number of currently outstanding shares of Company Common Stock;

 

•

different stockholders;

 

•

different businesses; and

 

•

different assets and capitalizations.

In addition, the Combined Company may take actions in the future—such as a share split, reverse share split, or reclassification—that could affect the trading price of its shares of common stock.

Accordingly, the historical trading prices and financial results of the Company and HR may not be indicative of these matters for the Combined Company after the Merger. For a discussion of the business of the Company and HR and of certain factors to consider in connection with that business, see the documents incorporated by reference by the Company or HR into this joint proxy statement/prospectus referred to under “Where You Can Find More Information and Incorporation by Reference.”

 

22

The Combined Company cannot assure you that it will be able to continue paying dividends at or above the rate currently paid by the Company and HR.

The stockholders of the Combined Company may not receive dividends at the same rate they received dividends as stockholders of the Company and stockholders of HR following the Merger for various reasons, including the following:

 

•

the Combined Company may not have enough cash to pay such dividends due to changes in the Combined Company’s cash requirements, capital spending plans, cash flow or financial position;

 

•

decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of the board of directors of the Combined Company, which reserves the right to change the Company’s current dividend practices at any time and for any reason;

 

•

the Combined Company may desire to retain cash to maintain or improve its credit ratings; and

 

•

the amount of dividends that the Combined Company’s subsidiaries may distribute to the Combined Company may be subject to restrictions imposed by state law, restrictions that may be imposed by state regulators, and restrictions imposed by the terms of any current or future indebtedness that these subsidiaries may incur.

Stockholders of the Combined Company will have no contractual or other legal right to dividends that have not been authorized by the board of directors of the Combined Company.

Regulatory and Legal Risks

Counterparties to certain agreements with the Company or HR may exercise contractual rights under such agreements in connection with the Merger.

The Company and HR are each party to certain agreements that give the counterparties certain rights in connection with a qualifying change in control, including in some cases the right to terminate the agreement. The Merger may constitute a change in control under some of these agreements, and therefore the counterparties could exercise any rights they may have regarding termination, recourse against the Combined Company for obligations of its subsidiaries, acceleration of payment obligations or otherwise. In addition, counterparties may seek modifications of the terms of agreements as a condition to granting a waiver or consent. If such counterparties exercise any such contractual rights, this may adversely impact the Combined Company.

Joint venture investments, including those resulting from the anticipated contribution of certain of the Company properties into one or more joint ventures prior to the consummation of the Merger, could be adversely affected by the Combined Company’s lack of sole decision-making authority, its reliance on its joint venture partners’ financial condition or disputes between any joint venture partner and the Combined Company.

Both the Company and HR currently have joint venture investments that will constitute a portion of the Combined Company’s assets upon consummation of the Merger. In addition, it is anticipated that certain to-be-identified assets of the Company will be contributed to one or more joint ventures to be formed immediately prior to the consummation of the Merger; provided, however, that any such contribution is contingent upon the exchange of irrevocable certifications by HR and the Company that all closing conditions set forth in the Merger Agreement have been irrevocably satisfied or waived. The Combined Company is expected to continue to have such arrangements, and may enter into additional joint ventures, following the completion of the Merger. The Company and HR are not, and the Combined Company will not be, in a position to exercise sole decision-making authority regarding these partnerships, joint ventures or other entities. Investments in partnerships, joint ventures and other entities may, under certain circumstances, involve risks not present were a

 

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third-party not involved. For example, joint venture partners may have economic or other business interests or goals that are inconsistent with the business interests or goals of HR, the Company or the Combined Company, they could be in a position to take actions contrary to the policies or objectives of HR, the Company or the Combined Company, and they may have competing interests that could create conflict of interest issues. Such investments may also have the potential risk of impasses with respect to decisions because neither HR, the Company, the Combined Company nor the joint venture partner would have full control over the partnership or joint venture. In addition, joint venture partners of HR or the Company may have consent rights, rights to buy or sell joint venture interests, or other rights under certain agreements, which may be implicated as a result of the Merger. Disputes between HR, the Company or the Combined Company and joint venture partners may result in litigation or arbitration. In addition, if joint venture partners fail to fund their share of required capital contributions due to insolvency or for other reasons, the joint venture investments, including properties owned by the joint ventures, could be subject to additional risk.

REIT Risks

The Combined Company would succeed to, and may incur, adverse tax consequences if the Company or HR has failed or fails to qualify as a REIT.

Each of the Company and HR believes that it has been organized and has operated in a manner that enables it to qualify as a REIT and each company intends to operate so as to qualify as a REIT through the closing date, and in the case of the Combined Company, following the closing date of the Merger. None of the Company or HR has requested or plans to request a ruling from the IRS that it qualifies as a REIT. If either the Company or HR has failed or fails to qualify as a REIT and the Merger is completed, the Combined Company generally would succeed to and may incur significant tax liabilities, and the Combined Company could possibly fail to qualify as a REIT.

REITs are subject to a range of complex organizational and operational requirements.

Qualification as a REIT requires each company to satisfy numerous technical and highly complex requirements established under the Code, for which in many cases there are only limited judicial and administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within each company’s control. The complexity of these provisions and of applicable regulations promulgated under the Code, which we refer to as the Treasury Regulations, is greater in the case of REITs that, like the Company, HR and the Combined Company, hold or intend to hold some or all of their assets through partnerships. In order to qualify as a REIT, each of the Company and HR must satisfy a number of requirements regarding the composition of the assets and the sources of its gross income. The ability to satisfy the asset tests depends on each company’s analysis of the characterization and fair market value of its assets, some of which are not susceptible to precise determination, and for which it will not obtain independent valuations. Also, each of the Company and HR must make distributions to its stockholders aggregating annually at least 90% of its net taxable income (which does not equal net income, as calculated in accordance with GAAP), without regard to the deduction for dividends paid and excluding net capital gains. In addition, legislation, new regulations, administrative interpretations or court decisions may adversely affect, possibly retroactively, the Company’s (or, following the Merger, the Combined Company’s) and HR’s ability to qualify as REITs.

For any taxable year that the Company (or, following the Merger, the Combined Company) or HR fails to qualify as a REIT, each of the Company (or, following the Merger, the Combined Company) or HR will not be allowed a deduction for dividends paid to its stockholders in computing taxable income and thus would become subject to U.S. federal and state income tax as if it were a regular taxable corporation. In such an event, the Company (or, following the Merger, the Combined Company) or HR, as the case may be, could be subject to potentially significant tax liabilities. Unless entitled to relief under certain statutory provisions, the Company (or, following the Merger, the Combined Company) or HR, as the case may be, would also be disqualified from treatment as a REIT for the four taxable years following the year in which it lost its qualification, and dispositions of assets

 

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within five years after requalifying as a REIT could give rise to gains that would be subject to corporate income tax. If the Company or HR failed to qualify as a REIT, the market price of the shares of common stock of the Combined Company may decline and the Combined Company may need to reduce substantially the amount of distributions to its stockholders because of its increased tax liability.

Other Risks

In connection with the Merger, HR, the Company and the Combined Company are planning to finance all or a significant portion of the Special Distribution with the sale of Company assets and/or through the contribution of Company assets into one or more joint ventures, and cannot guarantee that they will succeed in obtaining the necessary funds through one or more of these contemplated sales or joint ventures, which would require the Combined Company to assume additional indebtedness.

The parties expect that the Special Distribution will be funded with a combination of proceeds from the sale of Company assets to third parties and/or capital contributed by one or more newly-formed joint ventures in exchange for Company assets. We refer to these contemplated transactions as the Asset Transfers. The Company and HR are in discussions with multiple potential joint venture partners and asset purchasers and, in the case of joint ventures, expect to contribute certain properties of the Company into one or more joint ventures, which we refer to as Joint Ventures, immediately prior to the closing of the Merger. Any such Company asset sales and/or contributions of Company assets into one or more joint ventures is contingent upon the exchange of irrevocable certifications by HR and the Company that all closing conditions set forth in the Merger Agreement have been irrevocably satisfied or waived.

To the extent that the parties determine not to pursue Asset Transfers or Joint Ventures because of unfavorable terms or for other reasons or proceeds from the Asset Transfers and Joint Ventures are not sufficient, or not available at the time of the closing of the Merger, to fund the Special Distribution, then the Company will need to finance the payment of all or a portion of the Special Distribution, as the case may be. On May 13, 2022, the Company and the Company OP entered into a new term loan agreement with J.P. Morgan Chase Bank, N.A., as administrative agent, and a syndicate of other lenders named therein, whom we refer to collectively as the Lenders, pursuant to which the Lenders committed to fund a term loan facility in an aggregate principal amount not to exceed $1.125 billion, which we refer to as the Term Loan.

It is expected that the Term Loan would only be drawn by the Company to the extent that proceeds from the Asset Transfers and Joint Ventures are not sufficient, or not available at the time of the closing of the Merger, to fund the Special Distribution. The Term Loan, if needed, would be sufficient to finance the aggregate Special Distribution to the Company stockholders.

The Combined Company will have a substantial amount of indebtedness and may need to incur more in the future.

The Combined Company will have substantial indebtedness, and in connection with executing the Combined Company’s business strategies following the Merger, the Combined Company expects to continue to evaluate the possibility of acquiring additional properties and making strategic investments, and the Combined Company may elect to finance these endeavors by incurring additional indebtedness. Its substantial indebtedness could have material adverse consequences for the Combined Company, including (a) reducing the Combined Company’s credit ratings and thereby raising its borrowing costs, including credit rating downgrades from the credit agencies, which would adversely modify the Combined Company’s financing costs, (b) hindering the Combined Company’s ability to adjust to changing market, industry or economic conditions, (c) limiting the Combined Company’s ability to access the capital markets to refinance maturing debt or to fund acquisitions or emerging businesses, (d) limiting the amount of free cash flow available for future operations, acquisitions, dividends, stock repurchases or other uses, (e) making the Combined Company more vulnerable to economic or industry downturns, including interest rate increases, and (f) placing the Combined Company at a competitive disadvantage compared to less leveraged competitors.

 

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Additionally, the Combined Company expects that the agreements that will govern the terms of its indebtedness will contain a number of restrictive covenants (including, without limitation, financial maintenance covenants) that impose significant operating and financial restrictions on the Combined Company and may limit its ability to engage in acts that may be in its long-term best interest. Moreover, the Combined Company’s ability to satisfy any financial maintenance covenants may be affected by events beyond its control and, as a result, it cannot provide assurance that it will be able to satisfy any such covenants.

A breach of the covenants under the agreements that govern the terms of any of the Combined Company’s indebtedness could result in an event of default under the applicable indebtedness. Such a default may allow the applicable creditors to accelerate the related debt and/or terminate any related commitments to extend further credit and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In the event debtholders accelerate the repayment of the Combined Company’s indebtedness, the Combined Company may not have sufficient resources to repay such indebtedness.

Moreover, to respond to competitive challenges, the Combined Company may be required to raise substantial additional capital to execute its business strategy. The Combined Company’s ability to arrange additional financing will depend on, among other factors, the Combined Company’s financial position and performance, as well as prevailing market conditions and other factors beyond the Combined Company’s control. If the Combined Company is able to obtain additional financing, the Combined Company’s credit ratings could be further adversely affected, which could further raise the Combined Company’s borrowing costs and further limit its future access to capital and its ability to satisfy its obligations under its indebtedness.

The unaudited pro forma condensed consolidated financial information included elsewhere in, or incorporated by reference into, this joint proxy statement/prospectus may not be representative of the Combined Company’s results after the Merger, and, accordingly, you have limited financial information on which to evaluate the Combined Company.

The unaudited pro forma condensed consolidated financial information included elsewhere in this joint proxy statement/prospectus has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the Merger been completed as of the date indicated, nor is it indicative of the future operating results or financial position of the Combined Company. The unaudited pro forma condensed consolidated financial information reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to the Company’s assets and liabilities. The purchase price allocation reflected in the unaudited pro forma condensed consolidated financial information included elsewhere in this joint proxy statement/prospectus is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of the Company as of the date of the completion of the Merger. The unaudited pro forma condensed consolidated financial information does not reflect future events that may occur after the Merger, including the costs related to the planned integration of the two companies and any future nonrecurring charges resulting from the Merger, and does not consider potential impacts of current market conditions on revenues or expense efficiencies. The unaudited pro forma condensed consolidated financial information presented elsewhere in this joint proxy statement/prospectus is based in part on certain assumptions regarding the Merger that the Company and HR believe are reasonable under the circumstances. The Company and HR cannot assure you that the assumptions will prove to be accurate over time.

Pandemics and other health concerns, including the currently ongoing COVID-19 pandemic, and the measures intended to prevent their spread, could have a material adverse effect on the Combined Company’s business, results of operations, cash flows and financial condition.

Pandemics, including the ongoing COVID-19 pandemic and those caused by possible new strains or mutations of the SARS-CoV-2 virus, as well as both future widespread and localized outbreaks of infectious diseases and other health concerns, and the measures taken to prevent the spread or lessen the impact, could cause a material

 

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disruption to the Combined Company’s industry or deteriorate the economy as a whole. The impacts of such events could be severe and far-reaching, and may impact the Combined Company’s operations in several ways. Such operational impacts include, but are not limited to, the following: (a) tenants could experience deteriorating financial conditions and be unable or unwilling to pay rent on time and in full; (b) the Combined Company may have to restructure tenants’ obligations and may not be able to do so on terms that are favorable to it; (c) inquiries and tours at the Combined Company’s properties could decrease; (d) move-ins and new tenanting efforts, and re-letting efforts could slow or stop altogether; (e) move-outs and potential early termination of leases thereunder could increase; (f) operating expenses, including the costs of certain essential services or supplies, including payments to third-party contractors, service providers, and employees essential to ensure continuity in the Combined Company’s building operations may increase; and (g) costs of development, including expenditures for materials utilized in construction and labor essential to complete existing developments in progress may increase substantively.

Further, disruption in the real estate markets may restrict the Combined Company’s ability to deploy capital for new investments, or limit its ability to make new investments on terms that are favorable to the Combined Company.

Additionally, these types of events could cause severe economic, market and other disruptions worldwide which could stretch to bank lending, capital and other financial markets. If these markets are affected, future access to capital and other sources of funding could be constrained which could adversely affect the availability and terms of the Combined Company’s future borrowings, its ability to refinance existing debt, its ability to draw on its revolving credit facility, and its ability to raise equity financing on terms that are favorable to the Combined Company.

The Company and HR face other risks.

The risks listed above are not exhaustive, and you should be aware that, following the Merger, the Combined Company will face various other risks, including those discussed in reports filed by the Company and HR with the SEC. See “Where You Can Find More Information and Incorporation by Reference.”

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus and the documents incorporated by reference into this joint proxy statement/prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which the Company and HR operate and beliefs of and assumptions made by the Company management and the HR management, involve uncertainties that could significantly affect the financial results of the Company or HR or the Combined Company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “should,” “may,” “projects,” “could,” “estimates” or variations of such words and other similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature, but not all forward-looking statements include such identifying words. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that any expectations will be attained and, therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Some of the factors that may affect outcomes and results include, but are not limited to, those set forth under “Risk Factors” as well as the following:

 

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HR’s and the Company’s ability to complete the Merger on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary stockholder approvals and satisfaction of other closing conditions to consummate the Merger;

 

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the outcome of any legal proceedings that may be instituted against the parties and others related to the Merger;

 

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changes in financial markets, interest rates and foreign currency exchange rates;

 

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the nature and extent of future competition;

 

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risks associated with acquisitions;

 

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maintenance of REIT status;

 

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availability of financing and capital;

 

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changes in demand for developed properties;

 

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risks associated with achieving expected revenue synergies or cost savings;

 

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national, international, regional and local economic climates;

 

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events beyond the control of the Company and HR, such as acts of terrorism, global conflicts, and the continuation or worsening of the COVID-19 pandemic and changes in applicable law; and

 

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those additional risks and factors discussed in reports filed with the SEC by the Company and HR from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Forms 10-K and 10-Q.

You are cautioned not to place undue reliance on these forward-looking statements. Neither the Company nor HR undertakes any obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.

 

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