National Health Realty Inc. Schedule 13D - 12/20/2006
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the Securities Exchange Act of 1934
(Amendment
No. )*
NATIONAL
HEALTH REALTY, INC.
(Name
of
Issuer)
Common
Stock, par value $0.01 per share
(Title
of
Class of Securities)
635905102
(CUSIP
Number)
National
HealthCare Corporation
100
Vine Street, Suite 1400
Murfreesboro,
TN
37130
Copies
to:
James
J. Clark
Susanna
M. Suh
Cahill
Gordon & Reindel LLP
80
Pine Street
New
York, NY
10005
(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
December
20, 2006
(Date
of
Event Which Requires Filing of this Statement)
If
the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§ 240.134-1(e), 240.13d-l(f) or 240.13d-l(g), check
the following box. o
Note:
Schedules filed in paper format shall include a signed original and five copies
of the schedule, including all exhibits. See § 240.134-7 for other parties
to whom copies are to be sent.
*
The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed
to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP
No. 635905102
|
1
|
NAMES
OF REPORTING PERSONS:
National
HealthCare Corporation
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
52-2057472
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a)
o
(b)
x
|
3
|
SEC
USE ONLY:
|
4
|
SOURCE
OF FUNDS (SEE INSTRUCTIONS):
N/A
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR
2(e): o
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION:
Delaware
|
NUMBER
OF
|
7
|
SOLE
VOTING POWER:
363,200
|
SHARES
BENEFICIALLY OWNED BY
|
8
|
SHARED
VOTING POWER:
1,715,538*
|
EACH
REPORTING
PERSON
|
9
|
SOLE
DISPOSITIVE POWER
363,200
|
WITH
|
10
|
SHARED
DISPOSITIVE POWER:
1,715,538*
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
2,078,738
|
12
|
CHECK
IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS): x**
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
20.8%***
|
14
|
TYPE
OF REPORTING PERSON (SEE INSTRUCTIONS):
CO
|
*
|
Represents
the aggregate number of shares of common stock of National Health
Realty,
Inc., a Maryland corporation (“NHR”), beneficially owned by the directors
of NHR. National HealthCare Corporation, a Delaware corporation (“NHCC”),
and the directors of NHR are among the parties to the Voting Agreement
which is described in further detail herein. NHCC and the directors
of NHR
share voting and dispositive power, by virtue of the Voting Agreement,
with respect to shares of NHR beneficially owned by the directors
of
NHR.
|
**
|
Aggregate
amount in Row 11 does not include shares, listed on Annex A, which
are
beneficially owned by the directors and executive officers of NHCC
who are
not a party to the Voting Agreement.
|
***
|
The
total number of issued and outstanding shares of voting stock of
NHR was
calculated in the
|
|
manner
described in Item 5 hereof.
|
TABLE
OF CONTENTS
|
|
Page
|
Item
1.
|
Security
and Issuer
|
5
|
Item
2.
|
Identity
and Background
|
5
|
Item
3.
|
Source
and Amount of Funds or Other Consideration
|
5
|
Item
4.
|
Purpose
of the Transaction
|
5
|
Item
5.
|
Interest
in Securities of the Issuer
|
6
|
Item
6.
|
Contracts,
Arrangements, Understandings or Relationships With Respect to Securities
of the Issuer
|
7
|
Item
7.
|
Material
To Be Filed as Exhibits
|
7
|
SIGNATURE
|
|
8 |
Annex
A
|
|
9 |
Item
1. |
Security
and Issuer
|
This
statement on Schedule 13D (this “Schedule”) relates to shares of common stock,
par value $0.01 per share (the “NHR Common Stock”), of National Health Realty,
Inc., a Maryland corporation (“NHR”). The address and principal office of NHR is
100 Vine Street, Suite 1402, Murfreesboro, Tennessee 37130.
Item
2. |
Identity
and Background
|
(a)
This
Schedule 13D is being filed by National HealthCare Corporation
(“NHCC”).
(b)
The
principal executive office of NHCC is 100 Vine Street, Suite 1400, Murfreesboro,
Tennessee 37130.
(c),
(f)
NHCC, a Delaware corporation, operates long-term health care and assisted living
facilities.
The
name,
business address, present principal occupation or employment (including the
name, principal business and address of the corporation or other organization
in
which such employment is conducted) and citizenship of each director and
executive officer of NHCC is set forth on Annex A hereto and are incorporated
by
reference herein.
(d),
(e)
During the past five years, neither NHCC nor, to the best of its knowledge,
any
person listed on Annex A attached hereto, has (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors),
or
(ii) been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was, or is,
subject to a judgment, decree or final order enjoining future violations of,
or
prohibiting or mandating activities subject to, federal or state securities
laws, or finding any violation with respect to such laws.
Item
3. |
Source
and Amount of Funds or Other
Consideration
|
James
Paul
Abernathy, W. Andrew Adams, Robert G. Adams, Ernest G. Burgess, III, James
R.
Jobe, Joseph M. Swanson and Richard F. LaRoche, Jr. (each a “Stockholder” and
collectively, the “Stockholders”), who are all the directors of NHR, entered
into a Voting Agreement with NHCC, NHR and the directors of NHCC as an
inducement to NHCC, NHC/OP, L.P. (“NHC/OP) and Davis Acquisition Sub LLC
(“NHC/OP Sub”) to enter into the Merger Agreement described in Item 4 (the terms
of which are hereby incorporated by reference). NHCC did not pay additional
consideration to the Stockholders in connection with the execution and delivery
of their respective Voting Agreements and thus no funds were used for such
purpose. NHCC
does
not have any right to acquire any shares of NHR Common Stock pursuant to the
Voting Agreement. NHCC has not paid any consideration to the Stockholders in
connection with the execution of the Merger Agreement or the Voting Agreement
(as defined in Item 4 herein).
Item
4. |
Purpose
of the Transaction
|
On
December 20, 2006, NHC/OP Sub, a Delaware limited liability company, NHC/OP,
a
Delaware limited partnership and the direct parent of NHC/OP Sub, NHCC, the
ultimate parent of NHC/OP, and NHR, entered into an Agreement and Plan of Merger
(the “Merger Agreement”).
Pursuant
to the Merger Agreement and subject to receipt of the required stockholder
vote,
NHR will consolidate (the “Consolidation”) with its wholly-owned subsidiary NEW
NHR, Inc. as the result of which a new Maryland corporation (the “Consolidated
Company”) will be formed. Subject to the receipt of the required stockholder
vote and consummation of certain other transactions specified in the Merger
Agreement, the Consolidated Company will be merged with and into NHC/OP Sub
which will continue as a wholly-owned subsidiary of NHC/OP and shall succeed
to
and assume all the rights and obligations of the Consolidated Company (the
“Merger”).
Pursuant
to the Merger Agreement, each outstanding common share of the Consolidated
Company not owned by NHC/OP Sub, NHC/OP or NHCC will be converted into the
right
to receive one share of NHCC Series A Convertible Preferred Stock (the
“Preferred Stock”), plus $9.00 in cash, and a special dividend for the period
from January 1, 2007 until the closing of the Merger. Each share of the
Preferred Stock will be entitled to annual preferred dividends of $0.80 per
share and will have a liquidation preference of $15.75 per share. The Preferred
Stock, which will be listed on the American Stock Exchange, will be convertible
at any time at the option of the holder thereof into NHCC common stock at a
conversion price of $65.07. Each share of the Preferred Stock will be
convertible into 0.24204 shares of NHCC common stock. After the fifth
anniversary of the closing date of the Merger, NHCC will have the option to
redeem the Preferred Stock, in whole or in part, for cash in the amount of
$15.75 per share (plus accrued and unpaid dividends); provided that the
Preferred Stock will not be redeemable prior to the eighth anniversary of the
closing date, unless the average closing price for NHCC common stock for the
20
trading sessions prior to the date of the notice of such redemption equals
or
exceeds the conversion price. The conversion price will be adjusted to reflect
any future NHCC common stock splits or dividends.
The
foregoing summary of the Merger Agreement and the transactions contemplated
thereby does not purport to be complete and is subject to, and qualified in
its
entirety by, the full text of the Merger Agreement filed as Exhibit 2.1 to
NHCC’s Form 8-K filed on December 22, 2006 and incorporated herein by reference.
Simultaneously
with the execution and delivery of the Merger Agreement, and as a condition
and
inducement to the willingness of NHC/OP Sub, NHC/OP, NHCC and NHR to enter
into
the Merger Agreement, NHCC, NHR and their respective directors entered into
a
voting agreement (the “Voting Agreement”) pursuant to which, among other things,
(i) the directors of NHCC have agreed to vote their shares in favor of the
establishment and issuance of the NHCC Preferred Stock (including any related
amendment to the certificate of incorporation of NHCC) and (ii) the Stockholders
have agreed to vote their shares in favor of the Consolidation and the Merger
and the approval of the terms thereof and each of the other actions contemplated
by the Merger Agreement and the Voting Agreement.
Pursuant
to the Voting Agreement, each of the Stockholders appointed certain officers
of
NHCC as such Stockholder’s proxy and attorney-in-fact to vote such Stockholder’s
NHR Common Stock (i) in favor of adoption and approval of the Merger Agreement,
the Consolidation and the Merger and the approval of the terms thereof and
each
of the other actions contemplated by the Merger Agreement and the Voting
Agreement; (ii) against any action or agreement that would result in a breach
of
any covenant, representation or warranty or any other obligation or agreement
of
Company contained in the Merger Agreement or of any Stockholder contained in
the
Voting Agreement; (iii) against any Company Takeover Proposal (as defined in
the
Merger Agreement); and (iv) against any other action, agreement or transaction
(other than the Merger Agreement and the transactions contemplated thereby)
that
is intended, or could reasonably be expected, to impede, interfere or be
inconsistent with, delay, postpone, discourage or materially adversely affect
the Consolidation, the Merger or the performance by each of the Stockholders
of
Company of such Stockholder’s obligations under the Voting Agreement. Each
Stockholder affirmed that the proxy is coupled with an interest and shall be
irrevocable and agreed not to enter into any subsequent voting agreement with
respect to such Stockholder’s NHR Common Stock. The Voting Agreement will
terminate if the Merger Agreement is terminated in accordance with its
terms.
The
foregoing summary of the Voting Agreement contained in this Item 4 is qualified
in its entirety by reference to the Voting Agreement, filed as Exhibit 10.1
to
NHCC’s Form 8-K filed on December 22, 2006 and incorporated herein by
reference.
Item
5. |
Interest
in Securities of the
Issuer
|
(a)-(b)
As
a result of the Merger Agreement and the Voting Agreement, NHCC may be deemed
to
be the beneficial owner of and to have voting and dispositive power with respect
to shares of NHR Common Stock. This
number
represents approximately 20.8% the NHR Common Stock.1
NHCC
and
the other persons referred to Annex A disclaim beneficial ownership of such
NHR
Common Stock, except for the 363,200 shares directly owned by NHCC and as
indicated on Annex A.
(c)-(d)
Except as described herein, neither NHCC, nor to the best of its knowledge,
any
other person referred to in Annex A attached hereto, has acquired or disposed
of
any shares of NHR Common Stock during the past 60 days, except that James Paul
Abernathy exercised 10,000 options to acquire NHR Common Stock and sold 7599
shares of NHR Common Stock on December 22, 2006. Furthermore, NHCC knows of
no
other person who has the right to receive or the power to direct the receipt
of
dividends from, or the proceeds from the sale of, the securities covered by
this
Schedule,
(e)
N/A
Item
6. |
Contracts,
Arrangements, Understandings or Relationships With Respect to Securities
of the Issuer
|
The
information set forth, or incorporated by reference, in Items 3, 4 and 5 is
incorporated by reference to this Item 6. Except as otherwise described in
this
Schedule, neither NHCC, nor any of the persons named on Annex A have any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any persons with respect to any securities of NHR, including but not
limited to the transfer or voting of any securities, finder’s fees, joint
ventures, loan or option agreements, puts or calls, guarantees of profits,
division of profits or losses, or the giving or withholding of proxies, except
the Agreement of Limited Partnership of NHR/OP, L.P., which provides that under
certain circumstances holders of units of limited partnership in NHR/OP, L.P.
can redeem units in exchange for NHR Common Stock. W. Andrew Adams, a party
to
the Voting Agreement, owns 571,754 units.
Item
7. |
Material
To Be Filed as Exhibits
|
Exhibit
1:
|
Agreement
and Plan of Merger dated December 20, 2006, by and among DAVIS ACQUISITION
SUB, LLC, NHC/OP, L.P., NATIONAL HEALTHCARE CORPORATION, and NATIONAL
HEALTH REALTY, INC. and Exhibits thereto. Incorporated by reference
to
Exhibit 2.1 to National HealthCare Corporation’s Form 8-K Current Report
filed with the SEC on December 22, 2006.
|
Exhibit
2:
|
Voting
Agreement dated December 20, 2006, between NATIONAL HEALTHCARE CORPORATION
and certain stockholders of NATIONAL HEALTHCARE CORPORATION, and
NATIONAL
HEALTH REALTY, INC. and certain stockholders of NATIONAL HEALTH REALTY,
INC. Incorporated by reference to Exhibit 10.1 to National HealthCare
Corporation’s Form 8-K Current Report file with the SEC on December 22,
2006.
|
1
The
total number of issued and outstanding shares of voting stock of NHR, as
calculated for purposes of this Schedule equals the sum of (a) 9,949,463 shares
of NHR Common Stock issued and outstanding as of November 30, 2006 (as
represented by NHR in the Merger Agreement) and (b) 65,000 options deemed to
be
outstanding pursuant to Rule 13d-3(d)(1). This number does not include 571,754
units of limited partnership interest in NHR/OP, L.P., which may be exchanged
for shares of NHR Common Stock or cash based on the then fair market value
of
NHR Common Stock, as elected by the General Partner of NHR/OP,
L.P.
SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
Dated:
January 3, 2007
NATIONAL
HEALTHCARE CORPORATION
By:
/s/ D. Gerald Coggin
Title:
Senior V.P., Corporate Relations
Annex
A
DIRECTORS
AND EXECUTIVE OFFICERS
The
following table sets forth the name and present principal occupation or
employment of each director and executive officer of National HealthCare
Corporation, as well as the name, principal business and address of such
employer, as of December 29, 2006. The principal business address of each person
listed below is c/o 100 Vine Street, Suite 1400, Murfreesboro, TN 37130, unless
stated otherwise. Each person listed below is a citizen of the United
States.
DIRECTORS
AND EXECUTIVE OFFICERS OF NATIONAL HEALTHCARE CORPORATION
Name
|
Present
Principal Occupation or Employment, Principal Business or Residence
Address, and Share Ownership of National Health Realty,
Inc.
|
|
|
Paul
Abernathy
|
Director
- Retired
Residence:
2102 Greenland Dr., Murfreesboro, TN 37130
Beneficially
owns 10,588 shares of NHR Common Stock
|
Robert
G. Adams
|
Director,
Chief Executive Officer & President of National HealthCare Corporation
and National Health Realty, Inc.
Beneficially
owns 436,309 shares of NHR Common Stock
|
W.
Andrew Adams
|
Director
& Chairman of National HealthCare Corporation and National Health
Realty, Inc.
Beneficially
owns 695,927 shares of NHR Common Stock, which includes 10,000
options
|
Ernest
G. Burgess III
|
Director
-County Mayor, Rutherford County, Tennessee
Residence:
7097 Franklin Road, Murfreesboro, TN 37128
Beneficially
owns 165,000 shares of NHR Common Stock, which includes 25,000
options
|
Emil
E. Hassan
|
Director
- Chairman of Automotive Services Americas
Residence:
1704 Irby Lane, Murfreesboro, TN 37127
Beneficially
owns 17,000 shares of NHR Common Stock
|
Richard
F. LaRoche, Jr.
|
Director
- Retired
Residence:
2103 Shannon Drive, Murfreesboro, TN 37129
Beneficially
owns 382,714 shares of NHR Common Stock, which includes 10,000 options
|
Lawrence
C. Tucker
|
Director
-General partner of Brown Brothers Harriman & Co.
Principal
business address: 140 Broadway, New York, NY 10005
Beneficially
owns 0 shares of NHR Common Stock
|
Joanne
M. Batey
|
Senior
V.P., Homecare of National HealthCare Corporation
Beneficially
owns 49,288 shares of NHR Common Stock
|
Name |
Present
Principal Occupation or Employment, Principal Business or Residence
Address, and Share Ownership of National Health Realty, Inc. |
|
|
D.
Gerald Coggin
|
Senior
V.P., Corporate Relations of National HealthCare Corporation
Beneficially
owns 273,181 shares of NHR Common Stock
|
Donald
K. Daniel
|
Senior
V.P. & Controller of National HealthCare Corporation and National
Health Realty, Inc.
Beneficially
owns 139,273 shares of NHR Common Stock
|
Kenneth
D. DenBesten
|
Senior
V.P., Finance of National HealthCare Corporation and National Health
Realty, Inc.
Beneficially
owns 22,466 shares of NHR Common Stock
|
Stephan
F. Flatt
|
Senior
V.P., Development of National HealthCare Corporation
Beneficially
owns 0 shares of NHR Common Stock
|
David
L. Lassiter
|
Senior
V.P., Corporate Affairs of National HealthCare Corporation
Beneficially
owns 11,478 shares of NHR Common Stock
|
Julia
W. Powell
|
Senior
V.P., Patient Services of National HealthCare Corporation
Beneficially
owns 83,010 shares of NHR Common Stock
|
Charlotte
A. Swafford
|
Senior
V.P. & Treasurer of National HealthCare Corporation and National
Health Realty, Inc.
Beneficially
owns 152,978 shares of NHR Common Stock
|
R.
Michael Ussery
|
Senior
V.P., Operations of National HealthCare Corporation
Beneficially
owns 27,257 shares of NHR Common Stock
|
John
K. Lines
|
Senior
V.P. & General Counsel of National HealthCare Corporation and National
Health Realty, Inc.
Beneficially
owns 0 shares of NHR Common Stock
|
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