8-KLeadership ChangesAcquisitions & DispositionsFinancial Events+2

WELLTOWER INC. 8-K Report, Acquisition Completed (Dec 20, 2006)

Filed December 20, 2006For Securities:WELL

Summary

Health Care REIT, Inc. (now Welltower Inc.) announced the completion of its merger with Windrose Medical Properties Trust on December 20, 2006. This strategic transaction involved the merger of Windrose into a Health Care REIT subsidiary and its operating partnership into a Health Care REIT subsidiary. As a result of the merger, former Windrose common shareholders received 0.4509 shares of Health Care REIT common stock for each Windrose share, and its preferred shareholders received a new series of Health Care REIT preferred stock. In conjunction with this acquisition, Health Care REIT assumed approximately $300 million in debt from Windrose, with interest rates ranging from 5.0% to 7.6%. The filing also details significant executive changes and compensation, most notably the appointment of Windrose's former CEO, Fred S. Klipsch, to Health Care REIT's Board of Directors and his role as Vice Chairman. Mr. Klipsch's compensation package includes a consulting agreement, performance bonuses, a substantial retention bonus, and severance provisions, along with tax indemnification agreements for himself and his sons regarding the exchange of partnership units.

Key Highlights

  • 1Completion of the merger between Health Care REIT, Inc. and Windrose Medical Properties Trust, effective December 20, 2006.
  • 2Windrose common shares were exchanged for 0.4509 shares of Health Care REIT common stock per share.
  • 3Windrose 7.5% Series A Cumulative Convertible Preferred Shares were exchanged for Health Care REIT 7.5% Series G Cumulative Convertible Preferred Stock.
  • 4Health Care REIT assumed approximately $300 million of Windrose's debt, with interest rates between 5.0% and 7.6%.
  • 5Fred S. Klipsch, former Chairman and CEO of Windrose, appointed to Health Care REIT's Board of Directors and named Vice Chairman.
  • 6Fred S. Klipsch entered into a two-year consulting agreement with Health Care REIT, including a base consulting fee, performance bonuses, a significant retention bonus, and severance provisions.
  • 7Tax indemnity agreements were entered into with Fred S. Klipsch and his sons regarding the exchange of Windrose OP units for Health Care REIT common stock.

Frequently Asked Questions

The primary event reported is the completion of the merger between Health Care REIT, Inc. and Windrose Medical Properties Trust, which occurred on December 20, 2006. This involved the combination of the two companies and their respective operating partnerships.

Common shareholders of Windrose received 0.4509 shares of Health Care REIT common stock for each Windrose common share they held. Holders of Windrose's 7.5% Series A Cumulative Convertible Preferred Shares received Health Care REIT's 7.5% Series G Cumulative Convertible Preferred Stock.

Health Care REIT assumed approximately $300 million of debt from Windrose and its subsidiaries. These assumed loans carry annual interest rates ranging from 5.0% to 7.6% and are subject to certain covenants and potential acceleration.

Yes, Fred S. Klipsch, the former Chairman and CEO of Windrose, has been appointed to Health Care REIT's Board of Directors and will serve as Vice Chairman. He has a two-year consulting agreement with Health Care REIT that includes a base fee, performance bonuses, a substantial retention bonus, and severance provisions. Additionally, tax indemnity agreements were made with Mr. Klipsch and his sons concerning the exchange of partnership units.