QUANTUMONLINE.COM SECURITY DESCRIPTION: Regional Health Properties, formerly AdCare Health Systems, 10.875% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25 $5 per share, redeemable at the issuer's option on or after 12/1/2017 at $25 $5 per share and with no stated maturity. Cumulative distributions of 10.875% per annum ($2.7187 per annum or $0.679675 per quarter) will be paid quarterly on 3/31, 6/30, 9/30 & 12/31 to holders of record on the record date that will be the tenth day prior to the payment date or on the record date fixed by the board, not more than 30 days or less than 10 days prior to the payment date (NOTE: the ex-dividend date is one business day prior to the record date). In the event that the shares are no longer listed on the NYSE, the AMEX or the Nasdaq exchanges, the dividend rate will be increased to 12.875% per annum. If there is a dividend default and dividends are accrued but not paid for any four quarterly periods, then, until the issuer has paid all accumulated and unpaid dividends in full: (i) the annual dividend rate will be increased to the 12.875% commencing on the first day after the missed fourth quarterly payment; and (ii) the holders of the Preferred Stock will have the voting rights. There are no longer any distributions for this security.
Dividends paid by this preferred are eligible for the preferential income tax rate of 15% to a maximum of 20% depending on the holder's tax bracket (and under IRS specified holding restrictions) and are also eligible for the dividends received deduction for corporate holders (see page S-27 of the prospectus for further information).
Following a change of control of the company by a person or entity, the company or the acquiring entity will be required to redeem the preferred stock within 120 days for cash at $5 per share plus accrued and unpaid dividends.
In regard to the payment of dividends and upon liquidation, the preferred shares rank junior to the company's senior debt, equally with other preferreds of the company, and senior to the common shares of the company. See the IPO prospectus for further information on the preferred stock by clicking on the ‘Link to IPO Prospectus’ provided below.
