On December 21, 2006, NHR and National HealthCare Corporation (NHC) announced that they have entered into an agreement and plan of merger.  Completion of the merger, which is expected to occur in the summer of 2007, is subject to Hart-Scott-Rodino anti-trust review and approval by shareholders of both NHR and NHC, including a majority of the shares of NHR held by holders not affiliated with NHC.  The merger will be preceded by and conditioned upon an internal reorganization of NHR, which will also be subject to approval by the NHR shareholders.  There is no financing condition to the merger.

If the merger is completed as announced, NHR will cease to exist as a...