2.2.0.25falsefalse0218 - Disclosure - Commitments and Contingenciestruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011 USD ($) / shares USD ($) $Jan-01-2011_Mar-31-2011http://www.sec.gov/CIK0000780053duration2011-01-01T00:00:002011-03-31T00:00:00USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0nhp_CommitmentsAndContingenciesAbstractnhpfalsenadurationCommitments and Contingencies.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringCommitments and Contingencies.falsefalseCommitments and Contingencies [Abstract]3false0us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>18. Commitments and Contingencies</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Proposed Merger with Ventas</i> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">On February 27, 2011, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ventas, Inc., a Delaware corporation, and Needles Acquisition LLC, a Delaware limited liability company and wholly owned subsidiary of Ventas (“Merger Sub”). </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Under the terms of the Merger Agreement, NHP will be merged with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a subsidiary of Ventas. Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of common stock, other than shares held by any wholly owned subsidiary of NHP, by Ventas or by any subsidiary of Ventas, will be cancelled and converted into the right to receive 0.7866 shares (the “Exchange Ratio”) of common stock of Ventas (“Ventas Common Stock”). </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Upon completion of the Merger, (i) each outstanding stock option will become fully vested and, in Ventas’s discretion, either be (A) cashed out based on the option spread or (B) assumed by Ventas, on the same terms and conditions (subject to adjustment for the exchange ratio), provided that stock options granted to certain senior executives in February 2011 will be assumed by Ventas on the same terms and conditions (subject to adjustment for the Exchange Ratio); (ii) each restricted stock unit will vest in full and be cashed out based on the Exchange Ratio, provided that (a) restricted stock units granted to certain senior executives in February 2011 will be assumed by Ventas on the same terms and conditions (subject to adjustment for the Exchange Ratio) and (b) certain restricted stock units granted to certain senior executives will vest and be settled in accordance with their terms; (iii) each share of restricted stock will vest in full and be converted into Ventas Common Stock, based on the Exchange Ratio; (iv) performance shares will vest under the relevant agreements and will be converted into Ventas Common Stock based on the Exchange Ratio; and (v) dividend equivalent rights granted in connection with any award will become fully vested and be paid out. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">We have made customary representations and warranties in the Merger Agreement and have agreed to customary covenants, including covenants regarding the operation of our business prior to the closing and covenants prohibiting us from soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, except in limited circumstances relating to unsolicited proposals that constitute, or are reasonably expected to lead to, a superior proposal. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Consummation of the Merger is subject to customary closing conditions, including approval of our stockholders and Ventas’s stockholders. The Merger Agreement may be terminated under certain circumstances, including by either party if the Merger has not occurred by October 31, 2011, if an order is entered prohibiting or disapproving the transaction and the order has become final and non-appealable, if our stockholders or Ventas’s stockholders fail to approve the transaction, or upon a material uncured breach by the other party that would cause the closing conditions not to be satisfied. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Litigation</i> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">From time to time, we are a party to various legal proceedings, lawsuits and other claims (as to some of which we may not be insured) that arise in the normal course of our business. Regardless of their merits, these matters may require us to expend significant financial resources. Except as described herein and in our Annual Report on Form 10-K for the year ended December 31, 2010, we are not aware of any other legal proceedings or claims that we believe may have, individually or taken together, a material adverse effect on our business, results of operations or financial position. However, we are unable to predict the ultimate outcome of pending litigation and claims, and if our assessment of our liability with respect to these actions and claims is incorrect, such actions and claims could have a material adverse effect on our business, results of operations or financial position. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Stockholder Litigation </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In the weeks following the announcement of the proposed Merger between us and Ventas on February 28, 2011, purported stockholders filed seven lawsuits against us and our directors. The purported stockholder plaintiffs commenced these actions in two jurisdictions: the Superior Court of the State of California, Orange County (the “California State Court”); and the Circuit Court for Baltimore City, Maryland (the “Maryland State Court”). All of these actions were brought as putative class actions, and two also purport to assert derivative claims on behalf of the company. All of these stockholder complaints allege that our directors breached certain alleged duties to our stockholders by approving the Merger Agreement, and certain complaints allege that we aided and abetted those breaches. All of the complaints request an injunction of the proposed Merger. Certain of the complaints also seek damages. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In the California State Court, the following actions were filed purportedly on behalf of our stockholders: on February 28, 2011, a putative class action entitled <i>Palma v. Nationwide Health Properties, Inc., et al.</i>; on March 3, 2011, a putative class action entitled <i>Barker v. Nationwide Health Properties, Inc., et al.</i>; and on March 3, 2011, a putative class action entitled <i>Davis v. Nationwide Health Properties, Inc., et al.</i>, which was subsequently amended on March 11, 2011 under the caption <i>Davids v. Nationwide Health Properties, Inc., et al</i>. Each action names us and our directors as defendants. Each complaint alleges, among other things, that our directors breached certain alleged duties by approving the Merger Agreement because the proposed transaction purportedly fails to maximize stockholder value and purportedly provides the directors personal benefits not shared by our stockholders. The <i>Palma </i>and <i>Davids </i>actions allege that we aided and abetted those purported breaches. Along with other relief, the complaints seek an injunction against the closing of the proposed Merger. On March 22, 2011, the parties to the <i>Palma</i>, <i>Barker</i>, and <i>Davids </i>actions signed a Stipulation and Proposed Order on Consolidation of Related Actions providing for consolidation of all three actions. On April 4, 2011, the defendants in all three actions demurred and moved to stay the proceedings in favor of parallel litigation pending in the Maryland State Court. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In the Maryland State Court, the following actions were filed purportedly on behalf of our stockholders: on March 7, 2011, a putative class action entitled <i>Crowley v. Nationwide Health Properties, Inc., et al.</i>; on March 10, 2011, a putative class action entitled <i>Taylor v. Nationwide Health Properties, Inc., et. al.</i>; on March 17, 2011, a putative class action entitled <i>Haughey Family Trust v. Pasquale, et al.</i>; and on March 31, 2011, a putative class action entitled <i>Rappaport v. Pasquale, et al</i>. All four actions name us and our directors as defendants. All four actions allege, among other things, that our directors breached certain alleged duties by approving the Merger Agreement because the proposed transaction purportedly fails to maximize stockholder value and purportedly provides certain directors personal benefits not shared by our stockholders. The <i>Haughey</i>, <i>Rappaport </i>and <i>Crowley </i>actions allege that we aided and abetted those purported breaches. In addition to asserting direct claims on behalf of a putative class of our stockholders, the <i>Haughey </i>and <i>Rappaport </i>actions purport to bring derivative claims on behalf of the company, asserting breaches of certain alleged duties by our directors in connection with their approval of the proposed Merger. All four actions seek to enjoin the proposed Merger, and the <i>Taylor </i>action seeks damages. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">On March 30, 2011, pursuant to stipulation of the parties, the Maryland State Court entered an order consolidating the <i>Crowley</i>, <i>Taylor </i>and <i>Haughey </i>actions. On April 1, 2011, pursuant to stipulation of the parties, the Maryland State Court entered an order: (i) certifying a class of our stockholders; and (ii) providing for the plaintiffs to file a consolidated amended complaint. On April 13, 2011, the Maryland State Court held a status conference and thereafter entered certain scheduling orders. On April 22, 2011, the plaintiffs in Maryland filed a consolidated amended class action complaint. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Development Agreements</i> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">As of March 31, 2011, we had entered into a joint venture to develop a medical office building (see Note 5) and entered into other agreements to develop two assisted and independent living facilities (see Note 3) and to fund the expansion of a skilled nursing facility securing a mortgage loan (see Note 4). As of March 31, 2011, we had committed to fund an additional $52.5 million under these agreements, of which $34.5 million will be funded through a third party construction loan obtained during the three months ended March 31, 2011 (see Note 10). </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Lines of Credit</i> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Under the terms of an agreement with PMB LLC, we agreed to extend to PMB LLC a $10.0 million line of credit to fund certain costs of PMB LLC with respect to the proposed development of multi-tenant medical office buildings. During the three months ended March 31, 2011, we funded $1.3 million and received payments of $2.6 million under the line of credit. As of March 31, 2011, $3.6 million was outstanding and is included in the caption “Other assets” on our consolidated balance sheet. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">During 2010, we agreed to loan two of our consolidated joint ventures up to $65.3 million as project financing, including $56.6 million that was disbursed initially and remained outstanding at March 31, 2011. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Indemnities</i> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">We have entered into indemnification agreements with those partners who contributed appreciated property into NHP/PMB. Generally, under these indemnification agreements, if any of the appreciated real estate contributed by the partners is sold by NHP/PMB in a taxable transaction within a specified number of years after the property was contributed, we will reimburse the affected partners for the federal and state income taxes associated with the pre-contribution gain that is specially allocated to the affected partner under the Code. We have no current plans to sell any of these properties. </div> </div>  <!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringIncludes disclosure of commitments and contingencies. 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