<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-30894
PROSPECTUS
EQUITY ONE, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
1,500,000 SHARES
COMMON STOCK
-------------------------
Equity One, Inc., a Maryland corporation, is a fully integrated real
estate investment trust that owns, acquires, develops and operates primarily
supermarket anchored shopping centers in the State of Florida. With this
prospectus, we are offering participation in our Dividend Reinvestment and Stock
Purchase Plan to record holders of our outstanding shares of common stock. The
Dividend Reinvestment and Stock Purchase Plan is a simple, convenient and
low-cost means of investing in our common stock.
PLAN HIGHLIGHTS
o You may participate in the Plan if you currently own shares of our
common stock.
o Once you are enrolled in the Plan, you may buy additional common
shares by automatically reinvesting all or a portion of the cash
dividends paid on your shares of common stock. To participate in the
dividend reinvestment feature of the Plan, you must hold and elect
to reinvest the dividends on a minimum of 100 common shares.
o Once you are enrolled in the Plan, you may buy additional shares of
common stock by making optional cash investments of $100 to $5,000
per month. In certain instances, however, we may permit greater
optional cash investments.
o Your participation in the Plan is entirely voluntary, and you may
terminate your participation at any time. If you do not elect to
participate in the Plan, you will continue to receive cash
dividends, if and when authorized by our board of directors and
declared by us in the usual manner.
Our shares of common stock are traded on the New York Stock Exchange
under the ticker symbol "EQY." The closing price of our common stock on February
17, 2000 was $9.875 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR HAS
DETERMINED IF THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
INVESTING IN OUR COMMON SHARES INVOLVES RISKS. POTENTIAL INVESTORS SHOULD
CONSIDER THE INFORMATION PRESENTED UNDER OUR DISCUSSION OF "RISK FACTORS"
BEGINNING ON PAGE 6.
The date of this Prospectus is February 23, 2000.
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
Summary of the Plan................................................. 2
Where You Can Find More Information................................. 4
Special Note Regarding Forward-Looking Statements................... 5
Risk Factors........................................................ 6
Terms and Conditions of the Plan.................................... 14
Information About Equity One, Inc................................... 32
Use of Proceeds..................................................... 32
Plan of Distribution................................................ 32
Legal Matters....................................................... 33
Experts............................................................. 33
------------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it.
You should assume that the information appearing in this prospectus is
accurate as of the date on the front cover of this prospectus only. Our
business, financial condition, results of operations and prospectus may have
changed since that date.
i
<PAGE> 3
SUMMARY OF THE PLAN
The following summary of our Dividend Reinvestment and Stock Purchase
Plan may omit certain information that may be important to you. You should
carefully read the entire text of the Plan contained in this prospectus before
you decide to participate in the Plan.
ENROLLMENT: You can participate in the Plan if you currently
own shares of our common stock by completing and
submitting the enclosed authorization form. You
may also obtain an authorization form from the
Plan's administrator, American Stock Transfer &
Trust Company. Please see Question 6 set forth in
"Terms and Conditions of the Plan" for more
detailed information.
REINVESTMENT OF
DIVIDENDS: You can reinvest cash dividends paid on all or a
portion of your common shares. You will be able to
purchase additional shares of common stock by
reinvesting your dividends without paying fees. To
participate in the dividend reinvestment feature
of the Plan, you must hold and elect to reinvest
the dividends on a minimum of 100 shares of common
stock. Subject to the restrictions in our charter
on transfer and ownership of common stock
described in Question 16 "Tax Considerations," the
reinvestment of cash dividends paid on your common
shares is not subject to a maximum limit. Please
see Question 6 for more detailed information.
OPTIONAL CASH
INVESTMENTS: After you are enrolled in the Plan, you can buy
additional shares of common stock without paying
fees. You can invest a minimum of $100 up to a
maximum of $5,000 in any one month. Under certain
circumstances, we may approve a written request to
waive the $5,000 per month maximum investment
amount. Investments of less than $100 and
exceeding $5,000, unless we have granted a waiver,
will be returned to the participant without
interest. Please see Question 6 for more detailed
information.
ADMINISTRATION: American Stock Transfer & Trust Company, a
registered transfer agent, initially will serve as
the administrator of the Plan. You should send all
correspondence with the Administrator to: American
Stock Transfer & Trust Company, 40 Wall Street,
46th floor, New York, NY 10005. You may call the
Administrator at 877-253-6850, or you can send a
written request by facsimile to 718-234-1440.
Please see Question 4 for more detailed
information.
SOURCE OF COMMON
SHARES: The Administrator of the Plan will either purchase
shares of common stock directly from us as newly
issued shares of common stock, in the open market
or in privately negotiated transactions with third
parties, at our discretion. Please see Question 8
for more detailed information.
PURCHASE PRICE: Under the Plan, with respect to reinvested
dividends and optional cash investments of $5,000
or less, the purchase price for shares of our
common stock that the Administrator purchases
directly from us initially will equal 100% of the
average of the daily high and low sales price for
a share of our common stock reported by the New
York Stock Exchange on the applicable investment
date or, if no trading occurs in shares of our
common stock on the applicable investment date,
the average of the daily high and low sales prices
for the first trading day immediately preceding
the investment date for which trades are reported.
Please see Question 8 for more detailed
information.
2
<PAGE> 4
With respect to optional cash investments of
greater than $5,000, the purchase price for newly
issued shares of our common stock that the
Administrator purchases directly from us initially
will equal 100% of the average of the daily high
and low sales prices of our common stock reported
by the New York Stock Exchange for the trading day
relating to each investment date, or if no trading
occurs in shares of our common stock on such
trading day, the average of the daily high and low
sales prices for the first trading day immediately
preceding the investment date for which trades are
reported. We may elect to offer a discount in
connection with a waiver of the $5,000 optional
cash investment limit. Please see Question 8 for
more detailed information.
The purchase price for common shares purchased in
the open market or in privately negotiated
transactions with third parties will equal the
price paid for such shares on the relevant
investment date. Please see Question 8 for more
detailed information.
TRACKING YOUR
INVESTMENT: You will receive periodic statements of the
transactions made in your Plan account. These
statements will provide you with details of the
transactions and will indicate the share balance
in your Plan account. Please see Question 14 for
more detailed information.
3
<PAGE> 5
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission under File No.
001-13499. You may read and copy any document in our public files at the SEC's
offices at:
o Judiciary Plaza
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549,
o 500 West Madison Street
Suite 1400
Chicago, Illinois 60606
and
o 7 World Trade Center
Suite 1300
New York, New York 10048
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov through the SEC's electronic data gathering
analysis and retrieval system, EDGAR. Our common stock is traded on the NYSE
under the symbol "EQY."
You may inspect any reports, proxy statements and other information we
file with the NYSE at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to those documents. The information we incorporate by reference is an
important part of this prospectus. Later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
by us.
o Our Annual Report on Form 10-K, as amended on Form 10-K/A, for the
fiscal year ended December 31, 1998.
o Our Quarterly Report on Form 10-Q, for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999.
o The description of our common stock contained in our registration
statement on Form 8-A, dated October 15, 1997.
We will provide to you, without charge, a copy of any and all of the
documents or information referred to above that we have incorporated by
reference in this prospectus (other than exhibits to the documents unless those
exhibits are specifically incorporated by reference into this prospectus).
Requests for such copies should be directed to the following address:
4
<PAGE> 6
Equity One, Inc.
1600 N.E. Miami Gardens Drive, Suite 200
North Miami Beach, Florida 33179
Attn: Investor Relations Department
Telephone: (305) 947-1664
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. You should rely only on the information incorporated by
reference or provided in this prospectus or any supplement. We have not
authorized anyone else to provide you with different information. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of that document.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus (including the information incorporated by reference)
contains certain forward-looking statements within the meaning of federal
securities law. Words such as "may", "will", "expect", "anticipate", "intend",
"could", "estimate" or "continue" or other similar terms identify
forward-looking statements. These forward-looking statements discuss our
expectations or beliefs, concerning, among other things, industry performance,
our operations, performance, financial condition, plans, growth and strategies.
Although we believe that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, forward-looking statements are
not guarantees of future performance and involve substantial risks and
uncertainties. Actual results may differ materially from those predicted in the
forward-looking statements as a result of various factors, including those
described in Risk Factors.
5
<PAGE> 7
RISK FACTORS
OUR SUCCESS IS HIGHLY DEPENDENT ON OUR ANCHOR TENANTS.
ADVERSE DEVELOPMENTS IN THE BUSINESS OF WINN-DIXIE OR PUBLIX COULD
NEGATIVELY AFFECT OUR BUSINESS.
As of December 31, 1999, we leased 16.3%, 10.8% and 6.2% of our
aggregate gross leasable area to Winn-Dixie, Publix and K-Mart, respectively.
Winn-Dixie, Publix and K-Mart represented 12.1%, 8.4% and 3.5% of our aggregate
yearly minimum rental revenues, respectively. Our financial condition, results
of operations, liquidity, funds from operations and ability to make
distributions to stockholders could be adversely affected if Winn-Dixie, Publix,
K-Mart or any other anchor tenant of one of our shopping centers
o becomes insolvent or is the subject of bankruptcy proceedings;
o suffers a downturn in its business;
o becomes unable to pay its rent as it becomes due;
o does not renew its lease as it expires; or
o renews its lease at lower rental rates.
ANCHOR TENANTS ARE CENTRAL TO THE FINANCIAL SUCCESS OF OUR SUPERMARKET
CENTERS.
Anchor tenants attract customers and occupy a large percentage of the
gross leasable area of our supermarket centers. If an anchor tenant terminates
the space, we must find another tenant to rent the space at the same rate to
avoid losses. Even when the tenant vacates the space but continues to make
rental payments, the loss of customer traffic may adversely affect the
supermarket center. In addition, our leases with some other tenants permit lease
termination or rent reduction if the center's anchor tenant closes its store or
terminates its lease. Each of these developments could adversely affect our
funds from operations and our ability to make expected distributions to
stockholders.
OUR IMPORTANT TENANTS ARE CONCENTRATED IN CERTAIN INDUSTRIES
As of December 31, 1999, we leased 29.3% of our aggregate gross
leasable area to supermarket anchor tenants and 4.7% of our aggregate gross
leasable area to drugstore anchor tenants. These supermarket leases represented
22.9% of our aggregate yearly minimum rental revenues from current properties
and these drugstore leases represented 4.3% of our aggregate yearly minimum
rental revenues from current properties. An economic downturn in either of these
industries or a change in the manner in which these industries conduct business
could adversely affect our financial condition, results of operations,
liquidity, funds from operations and our ability to make expected distributions
to our stockholders.
CONCENTRATION OF OUR PROPERTIES IN FLORIDA CREATES A RISK OF A NEGATIVE IMPACT
AS A RESULT OF ECONOMIC DOWNTURNS IN FLORIDA.
All of our properties are located in Florida. A decline in the Florida
economy, especially a decline which affects supermarket centers, will adversely
affect our financial condition, results of operations, liquidity, funds from
operations and our ability to make expected distributions to our stockholders.
6
<PAGE> 8
WE MAY ENTER INTO NEW AND UNFAMILIAR MARKETS.
Although our current focus is on the purchase and development of
properties in Florida, we will continue to investigate and take advantage of
perceived opportunities including the acquisition and development of properties
outside Florida, with the same demographic characteristics as our existing
properties. We will seek to acquire properties which offer us attractive and
sustainable rates of return and other opportunities. We do not have the same
level of familiarity in these markets as we do with the Florida markets. Our
lack of experience in markets outside Florida could adversely affect our ability
to acquire, develop, manage or lease properties in these markets.
OUR EXPERIENCE WITH CONSTRUCTION AND DEVELOPMENT MAY BE INSUFFICIENT TO
EFFECTIVELY COMPETE.
Our growth strategy has focused primarily on the acquisition and
renovation of existing supermarket centers. In light of changing market
conditions, we have modified our growth strategy toward development of vacant
land and redevelopment of certain properties we already own. We have developed
only the initial phase of one new supermarket center. Our relative inexperience
in these activities may make it more difficult for us to construct, develop and
redevelop supermarket centers successfully.
CONSTRUCTION COSTS AND OTHER CONTINGENCIES COULD ADVERSELY AFFECT OUR
PERFORMANCE.
We intend to pursue construction and development activities as
opportunities arise. These activities may include expanding and/or renovating
properties or developing new sites. Expansion, renovation and development
projects require significant expenditures of capital, and various government and
other approvals. We may be unable to obtain the necessary approvals, or may only
obtain them after delay and at substantial costs. We have policies to limit some
of the risks associated with expansion, renovation and development, including
the policy of initiating construction after securing commitments from anchor
tenants. However, construction presents a number of risks, including:
o construction costs may exceed original estimates, possibly making
the property uneconomical;
o occupancy rates and rents at a newly completed property may not be
sufficient to make the property profitable;
o financing may not be available on favorable terms for development of
a property; and
o construction and lease-up may not be completed on schedule,
resulting in increased debt service expense and construction costs.
DIFFICULTIES AND COSTS ASSOCIATED WITH RENTING UNLEASED SPACE AND SPACE TO BE
VACATED IN FUTURE YEARS COULD ADVERSELY AFFECT OUR PERFORMANCE AND THE VALUE OF
OUR PROPERTIES.
Shopping centers, in particular, may be affected by changing
perceptions of retailers or shoppers of the safety, convenience and
attractiveness of the shopping center. Real estate values are also affected by
government regulations, interest rate levels, the availability of financing and
potential liability under and changes in environmental, zoning, tax and other
laws. Because substantially all of our income and funds from operations is and
will continue to be derived from rental income from real property, the inability
of a significant number of our existing tenants to meet their rental obligations
would adversely affect our funds from operations and our ability to make
expected distributions to stockholders. Additionally, our inability to lease a
significant amount of space in our properties on favorable terms would adversely
affect our
7
<PAGE> 9
business and our ability to make expected distributions to stockholders.
Accordingly, the value of our properties could decrease.
Leases covering 204,132 square feet (representing 7.4% of our gross
leasable area), will expire in the year 2000. No anchor tenant leases expire
before 2002. Our ability to rent unleased or vacated space will be affected by
many factors, including covenants in tenant leases restricting the use of other
space at a property. If we are unable to re-let vacated space, our financial
condition, results of operations, liquidity, funds from operations and our
ability to make expected distributions to our stockholders could be adversely
affected. We may incur substantial costs in obtaining new tenants, including
leasing commissions, and in connection with completing improvements or repairs
required by a new tenant.
COMPETITION COULD HARM OUR FINANCIAL PERFORMANCE.
We face intense competition from
o commercial developers,
o real estate companies, and
o other owners of real estate
in seeking land for development, properties for acquisition, financing and
tenants. Many of our competitors have longer operating histories, greater name
recognition, and significantly greater financial and marketing resources than we
have. We believe that because of these competitive factors, we will be unable to
achieve our growth objectives exclusively through acquisitions and that we will
need to develop or redevelop more properties. We have limited experience in
developing properties. In addition, retailers at our properties face increasing
competition from
o outlet malls,
o discount shopping clubs,
o direct mail,
o telemarketing sales,
o television shopping networks, and
o increased usage of internet shopping.
In the event that the use of online grocery shopping significantly increases,
the business of our supermarket anchor tenants could be materially adversely
affected which, in turn, could have an adverse effect on our financial condition
and results of operations.
We may not be able to acquire suitable properties and tenants for our
properties in the future, which could have an adverse effect on our financial
condition, results of operations, liquidity, funds from operations and our
ability to make expected distributions to our stockholders.
8
<PAGE> 10
BECAUSE REAL ESTATE INVESTMENTS ARE HIGHLY ILLIQUID, WE MAY NOT BE ABLE TO SELL
PROPERTIES WHEN APPROPRIATE.
Equity real estate investments are highly illiquid. This illiquidity
will limit our ability to quickly vary our portfolio in response to changes in
economic or other conditions. Additionally, most of our existing properties are
supermarket centers. We presently do not intend to vary the types of real estate
properties in our portfolio.
WE WILL BE SUBJECT TO ADVERSE CONSEQUENCES IF WE FAIL TO QUALIFY AS A REIT.
We believe that we qualify as a REIT under the Internal Revenue Code.
New legislation, new regulations, administrative interpretations or court
decisions could significantly change the tax laws with respect to qualification
as a REIT or the federal income tax consequences of such qualification.
Qualification as a REIT involves the application of highly technical and complex
provisions for which there are only limited judicial and administrative
interpretations. The determination of various factual matters and circumstances
not entirely within our control may affect our ability to continue to qualify as
a REIT. For example, at least 95.0% of our gross income in any year must be
derived from qualifying sources and we must make distributions to stockholders
aggregating annually at least 95.0% (90% starting January 1, 2000) of our REIT
taxable income (excluding capital gains). We intend to make distributions to
comply with the distribution provisions of the Internal Revenue Code. Our cash
flows from operating activities and funds from operations may not be sufficient
to enable us to pay our operating expenses and meet our distribution
requirements
If we fail to qualify as a REIT in any taxable year, we would be
subject to federal income tax on our taxable income at regular corporate rates;
we would not be allowed a deduction in computing our taxable income for amounts
distributed to our stockholders. Also, under certain circumstances we would be
ineligible for qualification as a REIT for the four taxable years following the
year during which we lost our qualification. A disqualification would reduce our
net earnings available for investment or distribution.
OUR FUTURE SUCCESS DEPENDS ON THE CONTINUED SERVICES OF OUR KEY MANAGEMENT
PERSONNEL.
One of the factors on which our continued success depends is the
continued contributions of Chaim Katzman, our Chairman of the Board, President
and Chief Executive Officer, and Doron Valero, our Executive Vice President and
Chief Operating Officer. Pursuant to Mr. Katzman's employment agreement with us,
Mr. Katzman is required to devote only so much of his business time, attention,
skill and efforts as shall be required for the faithful performance of his
duties. Presently, his significant other activities consist primarily of serving
as the Chairman of the Board and Chief Executive Officer of Gazit-Globe (1982),
Ltd., Inc., a public company whose securities are traded on the Tel Aviv Stock
Exchange and whose primary activity is its substantial investment in us. Mr.
Katzman is also the Chief Executive Officer of Gazit, Inc., the parent company
of Gazit-Globe (1982), Ltd. Mr. Katzman currently also invests in and serves as
the non-executive chairman of the board of real estate companies whose holdings
include commercial properties in Canada and Israel. Mr. Valero currently serves
as the president and director of several entities which own apartment properties
in Miami Beach, Florida. The loss of the services of either Mr. Katzman or Mr.
Valero could materially adversely affect our business and our ability to make
expected distributions to our stockholders.
CONTROL BY OUR PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS COULD ADVERSELY
AFFECT OUR STOCKHOLDERS.
Our directors and executive officers and their affiliates beneficially
own 71.1% of our outstanding common shares. Each of MGN (U.S.A.), Inc.,
Gazit-Globe (1982) Ltd. and Gazit (1995), Inc., stockholders which beneficially
own an aggregate of 64.8% of our outstanding common shares, have
9
<PAGE> 11
advised us that they intend to reinvest all of the dividends paid on their
common shares in additional shares pursuant to the Plan and may also make
additional optional cash investments. These entities, acting together, currently
have the ability to control all matters submitted to our stockholders for
approval (including the election and removal of directors and any merger,
consolidation or sale of all or substantially all of our assets) and to control
our management and affairs. This concentration of ownership may have the effect
of delaying, deferring or preventing a change in control of us, impeding a
merger consolidation, takeover or other business combination involving us or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of us, which in turn could materially adversely
affect the market price of the common stock.
WE MAY NOT BE ABLE TO MAKE EXPECTED DISTRIBUTIONS TO OUR STOCKHOLDERS.
The Internal Revenue Code requires a REIT to distribute to its
stockholders 95.0% of its taxable income (excluding capital gains).
Distributions by us will be dependent on a number of other factors, including
o our financial condition,
o reinvestment of funds in properties,
o capital expenditures,
o cash flow invested in the construction and development of properties
which are not yet income producing, and
o annual distribution requirements under the REIT provisions of the
Internal Revenue Code.
Our failure to meet anticipated operating results could result in our inability
to make projected distributions.
Distributions to our stockholders will be based principally on cash
available for distribution from our existing properties and properties acquired
in the future. Increases in base rent under existing property leases or the
payment of rent in connection with future acquisitions will increase our cash
available for distribution. However, in the event of a default or a lease
termination by a lessee, there could be a decrease or cessation of rental
payments and thereby a decrease in our cash available for distribution. If cash
available for distribution generated by our properties for any period is less
than our estimate, or if such cash available for distribution decreases in
future periods, our ability to make distributions would be adversely affected.
Any failure to make expected distributions could result in a decrease in the
market price of our common shares.
ENVIRONMENTAL LIABILITIES ARE POSSIBLE AND CAN BE COSTLY.
The obligation to pay for the cost of complying with existing
environmental laws, ordinances and regulations, as well as the costs of
complying with future legislation, may be substantial and could effect our
operating results. Under various federal, state and local laws, ordinances and
regulations, an owner or operator of real estate may be required to investigate
and clean up hazardous or toxic substances or petroleum product releases at such
property and may be held liable to a governmental entity or to third parties for
property damage and for investigation and clean-up costs incurred by such
parties in connection with contamination. Environmental laws often impose
liability whether or not the owner or operator knew of, or was responsible for,
the presence of such hazardous or toxic substances and whether or not such
substances originated from the property. In addition, the presence of hazardous
or
10
<PAGE> 12
toxic substances, or the failure to remediate such property or properties
properly, may adversely affect our ability to borrow by using such real property
as collateral.
We believe that the environmental studies conducted to date on our
properties have not revealed significant environmental liabilities that would
have a material adverse effect on our financial condition, results of
operations, liquidity and funds from operations. However, we cannot be sure that
the environmental studies that we have obtained reveal all environmental
liabilities, that any prior owners of our property did not create any material
environmental condition not known to us, or that a material environmental
condition does not otherwise exist (or may not exist in the future). Tenants at
our shopping centers and other properties include plant-on-premises dry
cleaners, gasoline service stations and tire centers, photo development stores
and other retailers which use hazardous substances in their businesses. Although
our leases with theses tenants contain provisions intended to minimize the
environmental risks and to shift the financial risks to the tenants, we may
still incur liability for the existence or release of hazardous materials. The
cost of defending against claims of liability or remediating contaminated
property and the cost of complying with environmental laws could materially
adversely affect us and our ability to pay amounts due on indebtedness and make
distributions to our stockholders.
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT CAN BE COSTLY.
Under the Americans with Disabilities Act of 1990, or ADA, all public
accommodation or commercial facilities are required to meet certain federal
requirements related to access and use by disabled persons. Although we believe
that our existing properties are substantially in compliance with the present
requirements of the ADA, we may incur additional costs in connection with such
compliance in the future. Also, a number of additional federal, state and local
laws and regulations exist that may require modifications to our properties, or
affect certain future renovations thereof, with respect to access by disabled
persons. Non-compliance with the ADA could result in the imposition of fines, an
award of damages to private litigants, or an order to correct any non-complying
feature. Under certain of our leases, the tenant is responsible for ensuring
that the property complies with all laws and regulations, including the ADA.
However, we may be required to make substantial capital expenditures to comply
with this law. In addition, provisions of the ADA may impose limitations or
restrictions on the completion of certain renovations and thus may limit the
overall returns on our investments.
SCHEDULED DEBT PAYMENTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
We are subject to the risks normally associated with debt financing,
including the risk that our cash flow will be insufficient to meet required
payments of principal and interest, and the risk that indebtedness on our
properties will not be refinanced at maturity or that the terms of such
refinancing will not be as favorable as the terms of such indebtedness. Most of
our existing mortgage indebtedness has an amortization schedule which results in
substantial payments being due at maturity. If we are unable to refinance our
indebtedness on acceptable terms, or at all, we might be forced to dispose of
one or more of our properties upon disadvantageous terms, which might result in
losses and might adversely affect our cash available for distribution.
If prevailing interest rates or other factors at the time of
refinancing result in higher interest rates on refinancings, our interest
expense would increase, without a corresponding increase in our rental rates,
which would adversely affect our cash flow and our ability to pay expected
distributions to stockholders. Further, if one of our properties is mortgaged to
secure payment of indebtedness and we are unable to meet mortgage payments, or
if we are in default under the related mortgage or deed of trust, such property
could be transferred to the mortgagee, or the mortgagee could foreclose upon the
property, appoint a receiver and receive an assignment of rents and leases or
pursue other remedies, all with a consequent loss of income and asset value to
us. Foreclosure could also create taxable income without
11
<PAGE> 13
accompanying cash proceeds, thereby hindering our ability to meet the REIT
distribution requirements under the Internal Revenue Code.
OUR BOARD OF DIRECTORS MAY DETERMINE TO CHANGE OUR POLICY REGARDING
INDEBTEDNESS WHICH COULD ADVERSELY AFFECT OUR ABILITY TO MAKE DISTRIBUTIONS.
Our board of directors has adopted a policy to limit our indebtedness
to the greater of approximately 60% of our total market capitalization (I.E.,
the market value of our issued and outstanding common shares, plus total debt)
and the fair market value of our assets, but our charter and Amended and
Restated Bylaws do not contain any limitation on the amount or percentage of
indebtedness that we may incur. Our board of directors may, without your vote,
alter or eliminate our current policy on borrowings at any time at its
discretion. If this policy were changed, we could become more highly leveraged,
resulting in an increase in debt service costs that could adversely affect our
ability to make expected distributions stockholders and an increased risk of
default on our obligations.
OUR BOARD OF DIRECTORS MAY CHANGE OUR INVESTMENT AND FINANCING POLICIES WITHOUT
STOCKHOLDER APPROVAL WHICH COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
Our board of directors determines our investment and financing policies
and our policies with respect to certain activities, including
o debt capitalization,
o growth,
o distributions,
o REIT status, and
o investment and operating policies.
Our board of directors has no present intention to amend or revise these
policies. However, the board of directors may do so at any time without your
approval. A change in these policies could adversely affect our financial
condition, results of operations, cash flows and the amounts distributed to
holders of our common shares.
MARKET INTEREST RATES MAY HAVE AN ADVERSE EFFECT ON THE PRICE OF OUR COMMON
SHARES AND THE VALUE OF OUR REAL PROPERTY.
The market price of our common shares will be affected by our annual
distribution rate. Increasing market interest rates may lead prospective
purchasers of our common shares to seek a higher annual distribution rate from
their investments. An increase in market expectations or requirements would be
likely to adversely affect the market price of the common shares. Likewise,
increases in interest rates may have the affect of depressing the value
(including the collateral value) of our existing properties.
UNINSURED LOSSES MAY HAVE AN ADVERSE EFFECT ON OUR FINANCIAL CONDITION.
We believe that our comprehensive liability, fire, flood, extended
coverage and rental loss insurance respecting our properties are within policy
specifications and insured limits customarily carried for similar properties. We
believe that the insurance currently carried on the existing properties is
adequate and in accordance with industry standards. However, certain types of
losses (such as from hurricanes) may become uninsurable, or the cost of insuring
against such losses may not be economically
12
<PAGE> 14
justifiable. Should an uninsured loss occur, we could lose both our invested
capital in and anticipated revenues from the property, and would continue to be
obligated to repay any recourse mortgage indebtedness on the property. This risk
may be intensified by the fact that our existing properties are clustered in
certain target markets within the State of Florida, making it likely that a
natural disaster in any such market could affect a number of our existing
properties.
ANTI-TAKEOVER PROVISIONS COULD PREVENT OR DELAY A CHANGE OF CONTROL.
Provisions of our charter and Amended and Restated Bylaws and Maryland
law could make it more difficult for a third party to acquire us, even if doing
so would be beneficial to our stockholders.
YEAR 2000 COMPLICATIONS MAY DISRUPT OUR OPERATIONS AND HARM OUR BUSINESS.
The "Year 2000 Issue" is the result of computer programs that were
written using two digits rather than four to define the applicable year. If our
computer programs with date-sensitive functions are not Year 2000 compliant,
they may recognize a date "00" as the Year 1900 rather than the Year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, inability to interchange information with connecting railroads or
engage in similar normal business activities.
As of the date of this offering memorandum, we have not experienced any
immediate adverse impact on our operations from the transition to the Year 2000.
We cannot assure you that our operations have not been affected in a manner that
is not yet apparent or in a manner that will arise in the future. In addition,
certain computer programs that were date sensitive to the Year 2000 may not have
been programmed to process the Year 2000 as a leap year, and negative effects
from this remain unknown. As a result, we will continue to monitor our Year 2000
compliance and the Year 2000 compliance of our suppliers and customers. However,
we do not anticipate any Year 2000 problems that are reasonably likely to have a
material adverse effect on our operations.
13
<PAGE> 15
TERMS AND CONDITIONS OF THE PLAN
The following constitutes our Dividend Reinvestment and Stock Purchase
Plan, as in effect beginning February 22, 2000. All references in this
prospectus to "common stock" or "common shares" refers to shares of our common
stock, par value $.01 per share.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The primary purpose of the Plan is to give our stockholders a
convenient and economical way to purchase our common stock and to reinvest all
or a portion of their cash dividends in additional shares of common stock. A
secondary purpose of the Plan is to provide us with an economical way to raise
additional capital for general corporate purposes through sales of common stock
to our existing stockholders under the Plan.
PARTICIPATION OPTIONS
2. WHAT ARE MY INVESTMENT OPTIONS UNDER THE PLAN?
Once enrolled in the Plan, you may buy shares of common stock through
any of the following investment options:
o FULL DIVIDEND REINVESTMENT. You may reinvest cash dividends paid on
all of your shares of common stock to purchase additional shares of
common stock if you have at least 100 shares of common stock in your
Plan account. This option also permits you to make optional cash
investments from $100 to $5,000 per month to buy additional shares
of common stock.
o PARTIAL DIVIDEND REINVESTMENT. You may reinvest cash dividends paid
on a specified number of your shares of common stock held in
certificate form, provided you have at least 100 common shares in
your Plan account. However, you must elect to reinvest the dividends
on at least 100 common shares. In addition, dividends on all shares
of common stock held in your Plan account will be reinvested. We
will continue to pay you cash dividends on the remaining shares of
common stock held in stock certificate form, when and if authorized
by our board of directors and declared by us. This option also
permits you to make optional cash investments from $100 to $5,000
per month to buy additional shares of common stock.
o OPTIONAL CASH INVESTMENTS. You may make optional cash investments
from $100 to $5,000 per month to buy additional shares of common
stock. You may request, and in certain instances we will approve, a
waiver permitting you to make optional cash investments in an amount
greater than $5,000 per month. See Question 10 to learn how to
request such a waiver.
BENEFITS AND DISADVANTAGES
3. WHAT ARE THE BENEFITS AND DISADVANTAGES OF THE PLAN?
BENEFITS
Before deciding whether to participate in the Plan, you should consider
the following benefits of participation in the Plan:
14
<PAGE> 16
o Except for costs related to your voluntary selling of shares of
common stock or withdrawal from the Plan, there are no costs
associated with the Plan that you must pay. Therefore, you will no
longer need to pay brokerage commissions or service fees to purchase
shares of common stock through the Plan. Please see the "Plan
Service Fees Schedule" attached as Exhibit A for a detailed
description of the costs for which you will be responsible.
o You will get the convenience of having all or a portion of your cash
dividends automatically reinvested in additional shares of common
stock. Since the Administrator will credit fractional shares of
common stock to your Plan account, you will receive full investment
of your dividends and optional cash investments.
o You will have the option of having your stock certificates held for
safekeeping by the Administrator, protecting against loss, theft or
destruction of the certificates representing your shares of common
stock.
o You will simplify your record keeping by receiving periodic
statements which will reflect all current activity in your Plan
account, including purchases, sales and latest balances.
o You will have the flexibility of making optional cash investments of
$100 to $5,000 in any one month to buy additional shares of common
stock. You may make these optional cash investments on a regular or
occasional basis.
o At any time, you may direct the Administrator to sell or transfer
all or a portion of the shares of common stock held in your Plan
account. You will be responsible for any trading fees associated
with the sale.
DISADVANTAGES
Before deciding whether to participate in the Plan, you should consider
the following disadvantages of participation in the Plan:
o We may not offer a discount on purchases of common stock made
through dividend reinvestments or optional cash investments,
although we reserve the right to offer any such discount in the
future.
o Without giving you prior notice, we may direct the Administrator to
buy shares of common stock under the Plan either directly from us,
in the open market or in privately negotiated transactions with
third parties.
o Your reinvestment of cash dividends will result in you being treated
for federal income tax purposes as having received a dividend on the
dividend payment date, to the extent of our earnings and profits
attributable to the distribution to you. The dividend may give rise
to a liability for the payment of income tax without providing you
with immediate cash to pay such tax when it becomes due.
o You may not know the actual number of shares of common stock that
the Administrator of the Plan buys for your account until after the
applicable Investment Date (as defined in Question 8).
o Because the Administrator of the Plan will buy shares of common
stock for your account at an average price per share, the price paid
for such shares on any date may be greater than the price at which
shares of common stock are then trading.
15
<PAGE> 17
o Because the Administrator of the Plan may sell shares only once per
week, sales of shares of common stock held in your Plan account may
be delayed.
o We will not pay interest on funds that we hold pending reinvestment
or investment.
o You may not pledge shares of common stock deposited in your Plan
account unless you withdraw those shares from the Plan.
ADMINISTRATION
4. WHO WILL ADMINISTER THE PLAN?
ADMINISTRATOR. American Stock Transfer & Trust Company or another
entity we may designate, will serve as the Administrator of the Plan. The
Administrator
o acts as your agent;
o keeps records of all Plan accounts;
o sends your account statements to you;
o buys and sells, on your behalf, all shares of common stock under the
Plan; and
o performs other duties relating to the Plan.
You should send all correspondence with the Administrator to:
American Stock Transfer & Trust Company
40 Wall Street, 46th floor
New York, NY 10005
Telephone: (877) 253-6850
Facsimile: (718) 234-1440
SUCCESSOR ADMINISTRATOR. We may replace the Administrator with a
successor Administrator at any time. The Administrator may resign as
Administrator of the Plan at any time. In either such case, we will appoint a
successor Administrator, and we will notify you of such change.
PARTICIPATION
For purposes of this section, we have based our responses upon the
method by which you hold your shares of common stock. Generally, you either are
a record owner or a beneficial owner. You are a record owner if you own shares
of common stock in your own name. You are a beneficial owner if you own shares
of common stock that are registered in a name other than your own; for example,
if the shares are held in the name of a broker, bank or other nominee. If you
are a record owner, you may participate directly in the dividend reinvestment
portion of the Plan, provided you own at least 100 common shares. If you are a
beneficial owner, you will have to either coordinate your participation in the
Plan through the broker, bank or other nominee in whose name your common shares
are held or become a record owner by:
o directing your bank, broker or other nominee in whose name your
shares are held to transfer at least one common share to your name,
following which you may enroll in the Plan directly
16
<PAGE> 18
and submit an optional cash investment sufficient to increase your
Plan account balance to at least 100 common shares; or
o instructing your broker, bank or other nominee in whose name your
shares are held to transfer at least one hundred common shares into
your name.
5. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
You may participate in the Plan if you meet the following requirements:
MINIMUM OWNERSHIP INTEREST. You may directly join the Plan if you are a
registered holder of common stock. If you are a beneficial owner of shares of
common stock and wish to participate in the Plan, you should either (1) direct
your broker, bank or other nominee in whose name your shares are held to
transfer at least one share of common stock to your name, or (2) arrange with
your broker, bank or other nominee in whose name your shares are held to
participate in the Plan on your behalf.
There is no minimum requirement as to the number of shares of common
stock that you must hold in your Plan account in order to participate in the
optional cash investment portion of the Plan. However, if you wish to reinvest
all or a portion of your dividends, you must hold at least 100 shares of common
stock in your Plan account.
NON-TRANSFERABILITY OF RIGHT TO PARTICIPATE. You may not transfer your
right to participate in the Plan to another person.
FOREIGN LAW RESTRICTIONS. You may not participate in the Plan if it
would be unlawful for you to do so in the jurisdiction where you are a citizen
or resident. If you are a citizen or resident of a country other than the United
States, you should confirm that by participating in the Plan you will not
violate local laws governing, among other things, taxes, currency and exchange
controls, stock registration and foreign investments.
EXCLUSION FROM PLAN FOR SHORT-TERM TRADING. You should not use the Plan
to engage in short-term trading activities that could change the normal trading
volume of the common stock. In such case, we may prevent you from participating
in the Plan.
EXCLUSION FROM PLAN AT OUR ELECTION. Notwithstanding any other
provisions in this prospectus, we reserve the right to prevent you from
participating in the Plan for any reason. It is in our sole discretion to
exclude you from participation in the Plan.
ENROLLMENT
6. HOW DO I ENROLL IN THE PLAN?
If you are eligible to participate in the Plan, you may join the Plan
at any time. Once you enroll in the Plan, you will remain enrolled until you
withdraw from the Plan or we terminate the Plan or your participation in the
Plan.
THE AUTHORIZATION FORM. To enroll and participate in the Plan, you must
complete the enclosed Authorization Form and mail it to the Administrator of the
Plan at the address set forth in Question 4. If your shares of common stock are
registered in more than one name (such as joint tenants or trustees), all such
registered holders must sign the Authorization Form. If you are eligible to
participate in the Plan, you may sign and return the Authorization Form to
participate in the Plan at any time.
17
<PAGE> 19
If you are a beneficial owner of common stock and wish to enroll and
participate in the Plan, you may do so in one of the following ways:
a) Request your broker, bank or other nominee in whose name your
shares are held to complete and sign a Broker and Nominee Form
(please see the "Broker and Nominee Form" below for more
information), or
b) Instruct your broker, bank or other nominee in whose name your
shares are held to transfer at least one share of common stock
into your name, following which you may enroll in the Plan
directly and submit an optional cash investment sufficient to
increase your Plan account balance to at least 100 shares of
common stock, or
c) Instruct your broker, bank or other nominee in whose name your
shares are held to transfer at least 100 shares of our common
stock to your name, following which you may enroll in the Plan
directly.
CHOOSING YOUR INVESTMENT OPTION. When completing the Authorization
Form, you should choose one or more of the following three investment options:
o FULL DIVIDEND REINVESTMENT. This option directs the Administrator to
reinvest the cash dividends paid on all of the shares of common
stock owned by you then or in the future in additional shares of
common stock. To participate in the full dividend reinvestment
feature of the Plan you must hold a minimum of 100 shares of common
stock in your Plan account. This option also permits you to make
optional cash investments from $100 to $5,000 per month to buy
additional shares of common stock, as noted below.
o PARTIAL DIVIDEND REINVESTMENT. This option directs the Administrator
to reinvest cash dividends paid on a specified number of shares of
common stock then owned by you in stock certificate form plus all
dividends on shares of our common stock held in your Plan account.
We will continue to pay you cash dividends on the remaining shares
of common stock owned by you in stock certificate form, when and if
authorized by our board of directors and declared by us. To
participate in the partial dividend reinvestment feature of the
Plan, you must own a minimum of 100 shares of common stock in stock
certificate form, and you must elect to reinvest the dividends on at
least 100 shares of such common stock. This option also permits you
to make optional cash investments from $100 to $5,000 per month to
buy additional shares of common stock, as noted below.
o OPTIONAL CASH INVESTMENTS. This option permits you to make optional
cash investments from $100 to $5,000 per month to buy additional
shares of common stock. We will continue to pay you cash dividends,
when and if authorized by our board of directors and delcared by us,
on the shares of common stock owned by you then or in the future,
unless you designate such shares for reinvestment pursuant to the
Plan, as noted above.
You should choose your investment option by checking the appropriate
option(s) on the Authorization Form. If you sign and return an Authorization
Form without checking an option, the Administrator will choose the "Full
Dividend Reinvestment" option and will reinvest all cash dividends on all shares
of common stock registered in your name, provided you are the registered holder
of at least 100 shares of common stock. If you are not the registered holder of
at least 100 shares of common stock, the Administrator will choose the "Optional
Cash Investments" option, provided you have enclosed an amount between $100 and
$5,000. If you select both Full and Partial Dividend Reinvestment, the
Administrator will choose the "Full Dividend Reinvestment" option, provided you
are the registered holder of at least 100 shares of common stock.
18
<PAGE> 20
The Administrator automatically will reinvest all cash dividends paid
on all shares of common stock that you have designated for participation in the
Plan until you indicate otherwise or withdraw from the Plan, or until we
terminate the Plan. If you have elected to have your dividends reinvested, we
will pay to the Administrator dividends on all shares of common stock held in
your Plan account. The Administrator will credit the common stock purchased with
your reinvested dividends to your Plan account.
CHANGING YOUR INVESTMENT OPTION. You may change your investment option
by completing and signing a new Authorization Form and returning it to the
Administrator of the Plan. The Administrator must receive any such change at
least three (3) business days before the record date for a dividend payment in
order for the change to become effective for that dividend payment. The
Administrator also must receive any change in the number of shares of common
stock that you have designated for partial dividend reinvestment at least three
(3) business days before the record date for a dividend payment in order to
reinvest for the new number of shares on the next Investment Date.
THE BROKER AND NOMINEE FORM. If you are a beneficial owner of shares of
common stock and wish for your broker, bank or other nominee in whose name your
shares are held to participate in the Plan on your behalf, such broker, bank or
other nominee in whose name your shares are held must complete and submit the
enclosed Broker and Nominee Form. The Broker and Nominee Form provides the only
means by which a broker, bank or other nominee in whose name your common shares
are held, may make optional cash investments on your behalf. Your broker, bank
or other nominee in whose name your common shares are held must submit a Broker
and Nominee Form to the Administrator each time such broker, bank or other
nominee in whose name your common shares are held transmits optional cash
investments on your behalf. You, your broker, bank or other nominee in whose
name your common shares are held may request a Broker and Nominee Form at any
time by contacting the Administrator at the address set forth in Question 4.
Prior to submitting a Broker and Nominee Form, your broker, bank or other
nominee in whose name your common shares are held must have submitted a
completed Authorization Form on your behalf. The Administrator must receive the
Broker and Nominee Form and appropriate instructions at least three (3) business
days before the applicable Investment Date or the optional cash investment will
not be invested until the following Investment Date.
7. WHEN WILL MY PARTICIPATION IN THE PLAN BEGIN?
The date on which the Administrator receives your properly completed
Authorization Form will determine the date on which the Administrator will buy
shares of common stock for your account. If you choose either the full or
partial dividend reinvestment option, the Administrator will begin to reinvest
dividends on the Investment Date after receipt of your Authorization Form,
provided it receives such Authorization Form at least three (3) business days
before the record date set for the related dividend payment.
If you choose the "Optional Cash Investments" option and wish to invest
$5,000 or less in any one month, the Administrator will purchase shares of
common stock for you on the Investment Date after receipt of both your
Authorization Form and the funds to be invested, provided it receives such
Authorization Form and funds on or before the close of business on the third
business day immediately preceding such Investment Date. If the Administrator
receives your Authorization Form and funds for optional cash investment after
the third business day indicated above but before the Investment Date, then the
Administrator will hold your funds, without interest, for investment on the next
Investment Date. Please refer to Question 10 if you wish to invest more than
$5,000.
Once you enroll in the Plan, you will remain enrolled in the Plan until
you withdraw from the Plan or we terminate the Plan or your participation in the
Plan.
19
<PAGE> 21
PURCHASES
8. HOW ARE SHARES PURCHASED UNDER THE PLAN?
SOURCE OF THE SHARES OF COMMON STOCK. The Administrator will use all
dividends reinvested through the Plan and all optional cash investments to buy
either shares of common stock directly from us, on the open market or in
privately negotiated transactions with third parties, or any combination
thereof, at our discretion. Shares of common stock purchased directly from us
will consist of authorized but unissued shares of common stock at the time of
such purchase.
INVESTMENT DATES. When the Administrator purchases shares of common
stock from us, such purchases shall be made on the "Investment Date" in each
month. If the Administrator is buying shares of common stock directly from us
through dividend reinvestment or optional cash investments of $5,000 or less,
then the Investment Date will occur on either (1) the dividend payment date
during any month in which we pay a cash dividend or (2) the last trading day (as
defined below) of any month in which we do not pay a cash dividend.
If the Administrator is buying shares of common stock directly from us
through an optional cash investment of greater than $5,000 pursuant to a request
for waiver (see Question 10 for how to obtain such a waiver), then there will be
fifteen (15) Investment Dates, each of which will occur on a separate day on
which the New York Stock Exchange is open for business in a Pricing Period (as
defined in the next paragraph), with one-fifteenth (1/15) of your optional cash
investment being invested on each such day, subject to the qualifications set
forth under "Minimum Waiver Price" in Question 10 below.
The "Pricing Period" is the period encompassing the fifteen consecutive
trading days ending on either (1) the dividend payment date during any month in
which we pay a cash dividend or (2) the last trading day of any month in which
we do not pay a cash dividend. A "trading day" is a day on which trades in our
common shares are reported on the NYSE. See "Calendar of Expected
Events--Optional Cash Investments of Greater than $5,000" attached as Exhibit B
to this Prospectus for a list of the expected Pricing Period commencement and
conclusion dates.
If the Administrator is buying shares of common stock for the Plan
through open market or privately negotiated transactions, then the Administrator
will reinvest dividends or make optional cash investments as soon as is
practical after the applicable Investment Date.
DIVIDEND PAYMENT DATES. We historically have paid dividends on or about
the last business day of each March, June, September and December. In the past,
record dates for dividends have preceded the dividend payment dates by
approximately two weeks. We cannot assure you that we will continue to pay
dividends according to this schedule, and nothing contained in the Plan
obligates us to do so. Neither we nor the Administrator will be liable when
conditions, including compliance with the provisions of our charter and the
rules and regulations of the SEC, prevent the Administrator from buying shares
of common stock or interfere with the timing of such purchases.
We pay dividends as and when authorized by our board of directors and
declared by us. We cannot assure you that we will declare or pay a dividend in
the future, and nothing contained in the Plan obligates us to do so. The Plan
does not represent a guarantee of future dividends.
PRICE OF SHARES OF COMMON STOCK. If the Administrator purchases shares
of common stock directly from us, then with respect to reinvested dividends and
optional cash investments of $5,000 or less, the Administrator will pay a price
equal to 100% of the average of the daily high and low sales price for a share
of common stock reported by the NYSE on the applicable Investment Date, or, if
no trading occurs in shares of common stock on the applicable Investment Date,
the first trading day immediately preceding the Investment Date for which trades
are reported, computed to four decimal places.
20
<PAGE> 22
If the Administrator purchases shares of common stock directly from us,
then with respect to optional cash investments of greater than $5,000, the
Administrator will pay a price equal to 100% of the average of the daily high
and low sales prices of our common stock reported by the NYSE for the trading
day relating to each Investment Date, or, if no trading occurs in shares of
common stock on such trading day, the first trading day immediately preceding
the Investment Date for which trades are reported, computed to four decimal
places. We may elect to offer a discount in connection with a waiver of the
$5,000 optional cash investment limit.
If the Administrator purchases shares of common stock in the open
market or in privately negotiated transactions, then the Administrator will pay
a price equal to the weighted average purchase price paid by the Administrator
for the shares, computed to four decimal places. The Administrator will purchase
such shares as soon as is practical on or after an Investment Date.
NUMBER OF SHARES TO BE PURCHASED. If you elect to participate in the
Plan by reinvesting your dividends, the Administrator will invest for you the
total dollar amount equal to the sum of (1) the dividend on all shares of common
stock, including fractional shares, held in your Plan account for which you have
requested dividend reinvestment, and (2) any optional cash investments to be
made as of that Investment Date. Subject to restrictions contained in our
charter on transfer and ownership of common shares described in Question 16
"Tax Considerations," there is no limit on the number of common shares you may
purchase through dividend reinvestment. If you elect to make only optional cash
investments, the Administrator will invest for you the total dollar amount equal
to any optional cash investments to be made as of that Investment Date. As of
any Investment Date, the Administrator will purchase for your account the number
of shares of common stock equal to the total dollar amount to be invested for
you, as described above, divided by the applicable purchase price, computed to
the fourth decimal place. The Administrator will deduct from the amount to be
invested for you any amount that we are required to deduct for withholding tax
purposes.
ADMINISTRATOR'S CONTROL OF PURCHASE TERMS. With respect to purchases of
common stock that the Administrator makes under the Plan, the Administrator, or
a broker that the Administrator selects, will determine the following:
o the exact timing of open market purchases;
o the number of shares of common stock, if any, that the Administrator
purchases on any one day or at any time of that day;
o the prices for the shares of common stock that the Administrator
pays;
o the markets on which the Administrator makes the purchases; and
o the persons, including brokers and dealers, from or through which
the Administrator makes such purchases.
COMMINGLING OF FUNDS. When making purchases for an account under the
Plan, the Administrator may commingle your funds with those of other
stockholders participating in the Plan.
9. HOW DO I MAKE OPTIONAL CASH INVESTMENTS?
You may make optional cash investments at any time if you have
submitted a signed Authorization Form or your broker, bank or other nominee has
submitted a Broker and Nominee Form, and if you are (1) a registered holder of
common shares, or (2) a beneficial owner of common shares and either have
directed your broker, bank or other nominee in whose name your shares are held
to transfer at least one common share to your name or you have arranged with
your broker, bank or other nominee in whose name your shares are held to
participate in the Plan on your behalf.
21
<PAGE> 23
SUBSEQUENT OPTIONAL CASH INVESTMENTS. Once you enroll in the Plan and
make an initial investment, whether by dividend reinvestment or optional cash
investment, the Administrator will attach an Optional Cash Investment Form to
each statement of account it sends to you. To make an optional cash investment
once enrolled in the Plan, you should send a properly completed Optional Cash
Investment Form and a check or money order (payable to American Stock Transfer &
Trust Company) in an amount from $100 to $5,000 to the Administrator at the
address set forth in Question 4 by the close of the third business day preceding
an Investment Date.
If you are a beneficial owner of common stock, you, through your
broker, bank or other nominee, must make all optional cash investments through
the use of the Broker and Nominee Form, as set forth in Question 6.
The Administrator will hold, without interest, all optional cash
investments that it receives after the close of business on the third business
day before an Investment Date and before the next Investment Date. The
Administrator will invest such held-over funds on the next Investment Date,
provided that the next Investment Date falls within 35 or fewer days. If the
next Investment Date will occur in more than 35 days, then the Administrator
will return such funds to you, without interest.
MINIMUM AND MAXIMUM LIMITS. For any Investment Date on which you choose
to make an optional cash investment, you must invest at least $100 but not more
than $5,000. You may invest an amount greater than $5,000 in any month if you
obtain a prior written waiver from us to do so. See Question 10 to learn how to
request a waiver.
ITEMS TO REMEMBER WHEN MAKING OPTIONAL CASH INVESTMENTS. When making
your optional cash investment, you should consider the following:
o All optional cash investments must equal at least $100 but not more
than $5,000 per month;
o You do not have to make an optional cash payment in any month;
o You do not have to send the same amount of cash payment each month;
o You must make all optional cash investments in United States
dollars; and
o You must send optional cash investments in the form of a check or
money order payable to American Stock Transfer & Trust Company. Do
not send cash.
REFUNDS OF UNINVESTED OPTIONAL CASH INVESTMENTS. To obtain a refund of
optional cash investment funds which the Administrator has not yet invested, you
must send a written request to the Administrator at the address set forth in
Question 4. The Administrator must receive your request no later than three
business days prior to the Investment Date in order to refund your money for
such Investment Date.
INTEREST ON OPTIONAL CASH INVESTMENTS. You will not earn interest on
optional cash investments held pending investment. We therefore suggest that you
send any optional cash investment that you wish to make so as to reach the
Administrator as close as possible to the third business day preceding the next
Investment Date. You should contact the Administrator if you have any questions
regarding these dates.
10. HOW DO I MAKE AN OPTIONAL CASH INVESTMENT OVER THE MAXIMUM MONTHLY
AMOUNT?
If you wish to make an optional cash investment in excess of $5,000 for
any Investment Date, you must obtain our prior written approval. To obtain our
approval, you must submit a request for waiver. To make a request for waiver,
you should complete the enclosed Request For Waiver Form and send it to
22
<PAGE> 24
our Chief Financial Officer via facsimile at (305) 947-1734 no later than two
(2) business days preceding the start of the Pricing Period for the applicable
Investment Date. If we have approved your request for waiver, then you must send
to the Administrator a copy of our written waiver approval along with your
optional cash investment of greater than $5,000. The Administrator must receive
your optional cash investment in good funds pursuant to a Request For Waiver by
the close of business on the last business day immediately preceding the first
day of the Pricing Period. Please see Question 9 for other provisions relating
to optional cash investments.
We have the sole discretion to approve any request to make an optional
cash investment in excess of the $5,000 maximum allowable amount. We may grant
such requests for waiver in order of receipt or by any other method that we
determine to be appropriate. We also may determine the amount that you may
invest pursuant to a waiver. In deciding whether to approve your request for
waiver, we may consider, among other things, the following factors:
o whether, at the time of such request, the Administrator is acquiring
shares of common stock for the Plan directly from us or in the open
market or in privately negotiated transactions with third parties;
o our need for additional funds;
o our desire to obtain such additional funds through the sale of
common stock as compared to other sources of funds;
o the purchase price likely to apply to any sale of common stock;
o the extent and nature of your prior participation in the Plan;
o the number of shares of common stock you hold of record or
beneficially; and
o the total amount of optional cash investments in excess of $5,000
for which requests for waiver have been submitted.
If you do not receive a response from us in connection with your
request for waiver, you should assume that we have denied your request.
MINIMUM WAIVER PRICE. We may set a minimum purchase price per share
(the "Minimum Waiver Price") for optional cash investments made pursuant to
requests for waiver for any Pricing Period. We will determine whether to set a
Minimum Waiver Price, and, if so, its amount, at least three (3) business days
before the first day of a Pricing Period. We will notify the Administrator of
the Minimum Waiver Price, if any. In deciding whether to set a Minimum Waiver
Price, we will consider current market conditions, the level of participation in
the Plan, our current and projected capital needs and other factors, as
appropriate.
We will fix the Minimum Waiver Price for a Pricing Period as a dollar
amount that the average of the high and low sale prices reported by the NYSE for
each trading day of the Pricing Period must equal or exceed. We will exclude
from the Pricing Period and from the determination of the purchase price any
trading day within the Pricing Period that does not meet the Minimum Waiver
Price. We also will exclude any day in which no trades of common stock are made
on the NYSE. For example, if the Minimum Waiver Price is not met for two of the
fifteen trading days in a Pricing Period, then we will base the purchase price
upon the remaining thirteen trading days in which the Minimum Waiver Price was
met.
In addition, we will return a portion of each optional cash investment
for each trading day of a Pricing Period for which the Minimum Waiver Price is
not met or for each day in which no trades of
23
<PAGE> 25
common stock are reported on the NYSE. The returned amount will equal
one-fifteenth (1/15) of the total amount of the optional cash investment, not
just the amount exceeding $5,000, for each trading day that the Minimum Waiver
Price is not met or for each day in which no trades are reported. For example,
if the Minimum Waiver Price is not met or no sales of our common stock are
reported for three of the fifteen trading days in a Pricing Period, then we will
return three-fifteenths (3/15), or 20% of the optional cash investment to you
without interest.
The establishment of the Minimum Waiver Price and the possible return
of a portion of the investment applies only to optional cash investments made
pursuant to a request for waiver. Setting a Minimum Waiver Price for a Pricing
Period will not affect the setting of a Minimum Waiver Price for any other
Pricing Period. We may waive our right to set a Minimum Waiver Price for any
particular month. Neither we nor the Administrator is required to give you
notice of the Minimum Waiver Price for any Pricing Period. However, you may
contact our Chief Financial Officer on the Minimum Waiver Price/Waiver Discount
set date (indicated on "Calendar of Expected Events--Optional Cash Investments
of Greater than $5,000" attached as Exhibit B to this prospectus) at (305)
947-1664 to learn whether we have set a Minimum Waiver Price for that Pricing
Period.
WAIVER DISCOUNT. We may, at our sole discretion, grant a discount on
the purchase of shares of common stock under the Plan to any person who
purchases in excess of $5,000 of common shares in one month pursuant to an
approved request for waiver. Such discount may be between 0% and 3%, inclusive,
of the market price of the common stock. We will determine whether and at what
amount to set a Waiver Discount at least three (3) business days before the
first day of a Pricing Period. We do not presently intend to offer such a
discount, and we cannot guarantee that we ever will do so.
Neither we nor the Administrator is required to give you notice of the
Minimum Waiver Discount or Minimum Waiver Price for any Pricing Period. However,
you may contact our Chief Financial Officer on the Minimum Waiver Price/Waiver
Discount set date (indicated on "Calendar of Expected Events--Optional Cash
Investments of Greater than $5,000" attached as Exhibit B attached to this
prospectus) at (305) 947-1664 to learn whether we have set a Waiver Discount for
that Pricing Period.
11. WHAT IF I HAVE MORE THAN ONE ACCOUNT?
For purposes of the limitations discussed in Question 10, we may
aggregate all optional cash investments for Plan participants with more than one
account using the same social security or taxpayer identification number. If you
are unable to supply a social security or taxpayer identification number, we may
limit your participation to only one Plan account.
For purposes of the Plan, we may aggregate all Plan accounts that we
believe, in our sole discretion, to be under common control or management or to
have common ultimate beneficial ownership. Unless we have determined that
reinvestment of dividends and optional cash investments for each such account
would be consistent with the purposes of the Plan, we will have the right to
aggregate all such accounts and to return, without interest, within 30 (for
dividend reinvestment) or 35 (for optional cash investment) days of receipt, any
amounts in excess of the investment limitations applicable to a single account
received in respect of all such accounts.
CERTIFICATES
12. WILL I RECEIVE CERTIFICATES FOR SHARES PURCHASED?
SAFEKEEPING OF CERTIFICATES. Unless your shares are held by a broker,
bank or other nominee, we will register shares of common stock that the
Administrator purchases for your account under the Plan in your name. The
Administrator will credit such shares to your Plan account in "book-entry" form.
This service protects against the loss, theft or destruction of certificates
representing shares of common stock.
24
<PAGE> 26
You also may send to the Administrator for safekeeping all certificates
for shares of common stock which you hold. The Administrator will credit the
shares of common stock represented by such certificates to your account in
"book-entry" form and will combine such shares with any whole and fractional
shares then held in your Plan account. In addition to protecting against the
loss, theft or destruction of your certificates, this service also is convenient
if and when you sell shares of common stock through the Plan. See Question 13 to
learn how to sell your shares of common stock under the Plan.
You may deposit certificates for shares of common stock into your
account regardless of whether you have previously authorized reinvestment of
dividends. The Administrator automatically will reinvest all dividends on any
such shares deposited in accordance with the Plan, unless you have instructed
the Administrator otherwise.
To deposit certificates for safekeeping under the Plan, you should send
your share certificates, in non-negotiable form, to the Administrator by insured
mail at the address specified in Question 4. You may withdraw any shares
deposited for safekeeping by mailing a written request to the Administrator.
ISSUANCE OF CERTIFICATES. Upon your written request to the
Administrator or upon our termination of the Plan or your participation in the
Plan, the Administrator will issue and deliver to you certificates for all whole
shares of common stock credited to your Plan account. The Administrator will not
issue certificates for fractional shares of common stock. The Administrator will
handle such requests at no cost to you. The Administrator will continue to
credit any remaining whole or fractional shares of common stock to your account.
EFFECT OF REQUESTING CERTIFICATES IN YOUR NAME. If you request a
certificate for whole shares of common stock held in your account, either of the
following may occur:
o If you maintain an account for reinvestment of dividends, then the
Administrator will continue to reinvest all dividends on the shares
of common stock for which you requested a certificate so long as
such shares remain registered in your name; or
o If you maintain an account only for optional cash investments, then
the Administrator will not reinvest dividends on shares of common
stock for which you requested a certificate unless and until you
submit an Authorization Form to authorize reinvestment of dividends
on the shares registered in your name.
TRANSFER RESTRICTIONS. You may not pledge, sell or otherwise transfer
common shares credited to your Plan account. If you wish to pledge, sell or
transfer the shares, you must first request that we issue a certificate for the
shares in your name. Please also see Question 16 describing the restrictions on
transfer and ownership of shares contained in our charter.
SALE OF SHARES
13. HOW DO I SELL SHARES?
SALE OF SHARES HELD IN YOUR ACCOUNT. You may request in writing at any
time that the Administrator sell all or any part of the shares of common stock
held in your Plan account. After receipt of your written request, the
Administrator will sell such shares through a designated broker or dealer. The
Administrator will mail to you a check for the proceeds of such sale, less
applicable brokerage commissions, service charges and any taxes. The
Administrator must receive your written instructions at least 48 hours prior to
the sale. The Administrator will sell shares at least once per week at then
current market prices through one or more brokerage firms.
25
<PAGE> 27
If you sell or transfer only a portion of the shares of common stock in
your Plan account, you will remain a participant in the Plan and may continue to
make optional cash investments and reinvest dividends, provided that you satisfy
the 100 share minimum dividend reinvestment eligibility threshold in your Plan
account. The Administrator will continue to reinvest the dividends on the shares
of common stock credited to your account unless you notify the Administrator
that you wish to withdraw from the Plan.
COSTS OF SELLING SHARES. The Plan requires you to pay all costs
associated with the sale of your shares of common stock under the Plan. Please
see the "Plan Service Fees Schedule" attached as Exhibit A hereto for a detailed
description of such costs.
SALE OF FRACTIONAL SHARES HELD IN YOUR ACCOUNT. The Administrator will
not sell a fractional share of common stock unless you request that the
Administrator sell (or withdraw via a certificate issuance) all shares of common
stock held in your account.
TERMINATION OF YOUR ACCOUNT UPON SALE OF ALL SHARES. If the
Administrator sells all shares of common stock held in your Plan account, the
Administrator will automatically terminate your account. In such case, you will
have to complete and file a new Authorization Form to again participate in the
Plan.
REPORTS
14. HOW WILL I KEEP TRACK OF MY INVESTMENTS?
Each time the Administrator makes an investment for your account,
whether by reinvestment of dividends or by optional cash investment, the
Administrator will send you a detailed statement that will provide the following
information with respect to your Plan account:
o total cash dividends received;
o total optional cash investments received;
o total number of shares of common stock purchased (including
fractional shares);
o price paid per share of common stock;
o date of share purchases; and
o total number of shares of common stock in your Plan account.
You should retain these statements to determine the tax cost basis of
the shares purchased for your account under the Plan.
WITHDRAWAL
15. HOW WOULD I WITHDRAW FROM PARTICIPATION IN THE PLAN?
WITHDRAWAL FROM THE PLAN. You may withdraw from the Plan at any time.
In order to withdraw from the Plan, you must provide written notice instructing
the Administrator to terminate your account. The Administrator must receive
notice at least three (3) business days before the record date for any dividend
payment in order to terminate your Plan account prior to the dividend payment
date. If your request to withdraw from the Plan is received by the Administrator
after the third business day before the dividend payment date, then your
withdrawal request will be processed by the Administrator following
26
<PAGE> 28
completion of the reinvestment of your proceeds of the upcoming cash dividend,
in accordance with your existing instructions.
COSTS OF WITHDRAWAL FROM THE PLAN. The Plan requires you to pay all
costs associated with your withdrawal from the Plan. Please see the "Plan
Service Fees Schedule" attached as Exhibit A hereto for a detailed description
of such costs.
ISSUANCE OF STOCK CERTIFICATES UPON WITHDRAWAL FROM THE PLAN. Upon
termination of your Plan account, the Administrator will issue to you stock
certificates for any whole shares of common stock in your account. The
Administrator will convert to cash any fractional share held in your account at
the time of termination at the then current market price of the common stock.
After the Administrator terminates your account, we will pay to you all cash
dividends on shares of common stock owned by you unless you rejoin the Plan.
SELLING SHARES UPON WITHDRAWAL FROM THE PLAN. As an alternative to
receiving stock certificates, upon termination of your Plan account you may
request in writing that the Administrator sell all or a portion of the common
shares (both whole and fractional) in your account. If you instruct the
Administrator only to sell a portion of your common shares, then the
Administrator will issue a certificate to you for the remaining shares. The
Administrator will mail a check to you for the proceeds of the sale, less
applicable brokerage commissions, service charges and applicable taxes.
REJOINING THE PLAN AFTER WITHDRAWAL. After you withdraw from the Plan,
you may again participate in the Plan at any time by filing a new Authorization
Form with the Administrator. However, the Administrator has the right to reject
such Authorization Form if you repeatedly join and withdraw from the Plan, or
for any other reason. The Administrator's exercise of such right is intended to
minimize unnecessary administrative expenses and to encourage use of the Plan as
a long-term stockholder investment service.
TAX CONSIDERATIONS
16. WHAT ARE SOME OF THE TAX CONSEQUENCES OF MY PARTICIPATION IN THE PLAN?
The following is only a summary of certain of the federal income tax
consequences of participation in the Plan. This summary is for general
information only and does not constitute tax advice. This summary does not
reflect every possible tax outcome or consequence that could result from
participation in the Plan. Also, this summary does not discuss your tax
consequences if you are not a United States citizen or a resident alien or a
domestic corporation, partnership, trust or estate. We advise you to consult
your own tax advisers to determine the tax consequences particular to your
situation, including any applicable state, local or foreign income and other tax
consequences that may result from your participation in the Plan and your
subsequent sale of shares acquired pursuant to the Plan. Any state tax
consequences will vary from state to state, and any tax consequences to you if
you reside outside of the United States will vary from jurisdiction to
jurisdiction.
REINVESTMENT OF DIVIDENDS PAID ON SHARES OF COMMON STOCK. With respect
to shares of common stock that the Administrator purchases from us with cash
dividends that you elect to have reinvested under the Plan, you will be treated
for federal income tax purposes as having received a distribution (on your
shares of common stock) in an amount equal to the fair market value on the
Investment Date of the common stock credited to your Plan account (which should
equal the amount of cash dividends that you would have otherwise received,
assuming that we have not granted a discount on your purchase of shares of
common stock under the Plan), even though you will not receive that distribution
in cash. With respect to shares of common stock that the Administrator purchases
on the open market with cash dividends that you elect to have reinvested under
the Plan, you should be treated for federal income tax purposes as having
received a distribution equal to the price paid by the Administrator for those
shares of common stock, plus your pro rata portion of any brokerage and related
costs incurred by us or the
27
<PAGE> 29
Administrator to purchase those shares. It is possible that, in lieu of the
amount of the distribution being based on the price paid by the Administrator,
it instead could be based on the fair market value of the shares, which for this
purpose should be the average of the reported high and low sales prices of the
shares on the Investment Date and thus could differ from the price paid for the
shares. The amount of a distribution will be taxable to you as ordinary dividend
income to the extent of our current and accumulated earnings and profits
allocable to the distribution, and the amount of any distribution not taxable as
a dividend will constitute a nontaxable return of capital that reduces the tax
basis of your shares of common stock or results in capital gain to the extent
the distribution also exceeds your tax basis in your shares. If we designate
part or all of our distributions in any year as capital gain distributions, that
designated amount would be taxable to you as long-term capital gain. If you are
a corporation, then the distributions that you receive from us that are taxable
as dividends will not be eligible for the dividends received deduction otherwise
generally available to a shareholder that is a corporation.
All costs of administering the Plan, except for costs related to your
voluntary selling of shares of common stock and/or withdrawal from the Plan,
will be paid by us. Consistent with the conclusion reached by the Internal
Revenue Service in a recent private letter ruling issued to another real estate
investment trust, we intend to take the position that these costs do not
constitute a distribution to you (and thus do not give rise to taxable income or
gain or a reduction in your basis in your shares of common stock). However,
since the private letter ruling was not issued to us, we cannot rely on its
conclusions. Thus, it is possible that the Internal Revenue Service would view
your share of those costs as constituting a distribution to you. For this or
other reasons, we may take a different position in the future with respect to
those costs.
Your tax basis in shares of common stock you acquire with reinvested
dividends generally will equal the total amount of the distribution you are
treated as receiving (as described above) with respect to those shares. Your
holding period in those shares generally will begin on the day following the
Investment Date for those shares.
OPTIONAL CASH INVESTMENTS. If you make an optional cash investment in
the Plan (whether under the Full Dividend Reinvestment option, the Partial
Dividend Reinvestment option or the Optional Cash Investments Only option), you
should not be treated for federal income tax purposes as having received income
by virtue of the purchase of shares of common stock with the optional cash
investment. However, based on the conclusion reached by the Internal Revenue
Service in a recent private letter ruling issued to another real estate
investment trust, it is possible the Internal Revenue Service would assert that,
if you simultaneously participate in the dividend reinvestment portion of the
Plan, you would be treated as receiving a distribution from the Company if and
to the extent the fair market value of shares purchased for you exceeds the
price paid for those shares. The fair market value of shares could exceed their
purchase price if we grant a discount on your purchase of shares of common stock
under the Plan, or, as indicated above, if the fair market value of the shares,
which for this purpose should be the average of the reported high and low sales
prices of the shares on the date they are purchased, exceeds their purchase
price. Regardless of whether you are treated as receiving any distribution as
just described, if you make an optional cash investment in the Plan, you will be
treated as receiving a cash dividend equal to a pro rata share of any brokerage
commissions or other related charges that we or the Administrator pays in
connection with the Administrator's purchase of shares of common stock on your
behalf on the open market. Any amounts treated as a distribution to you will be
taxable income or gain or will reduce your basis in your shares of common stock
(or some combination thereof) under the rules described above under
"Reinvestment of Dividends Paid on Shares of Common Stock."
Your tax basis in shares of common stock acquired through an optional
cash investment under the Plan will equal the amount of your optional cash
investment plus any deemed distributions on account of your pro rata portion of
any brokerage commissions or other related charges incurred by us or the
Administrator to purchase those shares on the open market plus, if applicable,
any excess of the fair market value of the shares over the price paid for those
shares that is treated as a distribution to you. Your holding period for those
shares of common stock will begin on the day following the Investment Date for
those shares.
DISPOSITION. When you withdraw shares from the Plan and receive whole
shares, you will not realize any taxable income. However, if you receive cash
for a fraction of a share, you will be required to recognize gain or loss with
respect to that fraction. You also will be required to recognize gain or loss
whenever your shares are sold, whether those shares are sold by the
Administrator pursuant to your request or by you after the shares are withdrawn
from the Plan. Generally, the amount of that gain or loss that you will be
required to recognize will be the difference between the amount that you receive
for the shares and your tax basis in those shares. If you hold your shares of
common stock as a capital asset, gain or loss you recognize on the disposition
of shares of common stock acquired under the Plan will be capital gain or loss
for federal income tax purposes.
28
<PAGE> 30
BACKUP WITHHOLDING AND ADMINISTRATIVE EXPENSES. We or the Administrator
may be required to deduct as "backup withholding" thirty-one percent (31%) of
the dividends that we pay to any stockholder, regardless of whether those
dividends are reinvested pursuant to the Plan. Similarly, the Administrator may
be required to deduct backup withholding from the proceeds of sales of shares of
common stock held in your Plan account. You will be subject to backup
withholding if:
o you fail to properly furnish us and the Administrator with your
correct tax identification number ("TIN");
o the Internal Revenue Service or any other governmental body or
agency notifies us or the Administrator that you have provided an
incorrect TIN;
o the Internal Revenue Service notifies us or the Administrator that
backup withholding should be commenced because you failed to
properly report dividends paid to you; or
o when required to do so, you fail to certify, under penalties of
perjury, that you are not subject to backup withholding.
Backup withholding amounts will be withheld from dividends before those
dividends are reinvested under the Plan. Therefore, if you are subject to backup
withholding, dividends that would otherwise be available for reinvestment under
the Plan will be reduced by the backup withholding amount. Any amount paid as
backup withholding will constitute a credit on your federal income tax return.
DISPOSITION. When you withdraw shares from the Plan and receive whole
shares, you will not realize any taxable income. However, if you receive cash
for a fraction of a share, you will be required to recognize gain or loss with
respect to such fraction. You also will be required to recognize a gain or loss
whenever your shares are sold, whether such shares are sold by the Administrator
pursuant to your request or by you after the shares are withdrawn from the Plan.
Generally, the amount of such gain or loss that you will be required to
recognize will be the difference between the amount that you receive for the
shares and your tax basis in those shares.
EXCEEDING THE OWNERSHIP LIMITATION SET FORTH IN OUR CHARTER. For us to
qualify as a real estate investment trust for federal income tax purposes, no
more than 50% in value of our outstanding stock may be actually and/or
constructively owned by five or fewer individuals (as defined in the Internal
Revenue Code to include certain entities) during the last half of a taxable year
or during a proportionate part of a shorter taxable year (the "Closely-Held
Requirement"), and our common stock must be beneficially owned by 100 or more
persons during at least 335 days of a taxable year or during a proportionate
part of a shorter taxable year (the "100 Stockholder Requirement"). Our charter
contains an ownership restriction (the "Ownership Limitation") to help ensure
compliance with these requirements, that no holder of our stock may own, or be
deemed to own by virtue of any of the attribution rules of the Internal Revenue
Code, more than 9.9 percent by value of our outstanding Capital Stock. Our board
of directors may exempt a stockholder from the Ownership Limitation if such
stockholder presents evidence satisfactory to the board of directors or our tax
counsel that the ownership by such stockholder will not then or in the future
jeopardize our status as a real estate investment trust. As a condition of such
exemption, a stockholder must give us written notice of the proposed transaction
and must furnish such opinions of counsel, affidavits, undertakings, agreements
and information as the board of directors may require, no later than the 15th
day prior to any transaction which, if consummated, would result in such
stockholder having the direct or beneficial ownership of shares in excess of the
Ownership Limitation. The Ownership Limitation will not apply if the board of
directors determines that it is no longer in our best interests to continue to
qualify as a real estate investment trust.
Any purchase of shares of our common stock under the Plan, including
the reinvestment of dividends or optional cash investments, is subject
to being voided, AB INITIO, in the event that such purchase would result in a
violation of the Ownership Limitation, Closely-Held Requirement or 100
Stockholder Requirement. If your purchase is voided, then you will receive
either the dividends that were to be reinvested in cash and/or a refund of your
optional cash payment (in either case without interest).
29
<PAGE> 31
OTHER PROVISIONS
17. HOW CAN I VOTE MY SHARES?
We will send you proxy materials for any meeting of stockholders in
order to vote all shares of common stock credited to your account. You may vote
your common shares either by designating the vote of such shares by proxy or by
voting such shares in person at the meeting of stockholders.
18. WHAT ARE THE COSTS OF THE PLAN?
We will pay all brokerage commissions and service charges in connection
with the reinvestment of dividends and optional cash investments to purchase
common shares under the Plan. You will be responsible for any fees payable in
connection with your sale of shares or voluntary or involuntarily withdrawal
from the Plan. Please see the "Plan Service Fees Schedule" attached as Exhibit A
hereto for a detailed description of such costs.
19. WHAT ARE YOUR AND THE ADMINISTRATOR'S RESPONSIBILITIES?
We, the Administrator and any of our agents, in administering the Plan,
are not liable for any act done in good faith or for any good faith failure to
act, including, without limitation, any claim of liability (1) arising from the
failure to terminate your account upon your death or judgment of incompetence
prior to the Administrator's receipt of notice in writing of such death; (2)
relating to the prices and times at which the Administrator buys or sells shares
of common stock for your account; or (3) relating to any fluctuation in the
market value of the common stock.
We, the Administrator and any of our agents will not have any duties,
responsibilities or liabilities other than those expressly set forth in the Plan
or as imposed by applicable law, including federal securities laws. Since we
have delegated all responsibility for administering the Plan to the
Administrator, we specifically disclaim any responsibility for any of the
Administrator's actions or inactions in connection with the administration of
the Plan. None of our directors, officers or stockholders will have any personal
liability under the Plan.
20. HOW WILL A STOCK SPLIT OR A RIGHTS OFFERING AFFECT MY PLAN ACCOUNT?
EFFECT OF A STOCK SPLIT. We will adjust your account to reflect any
stock split or dividend payable in shares of common stock. In such event, the
Administrator will receive and credit to your Plan account the applicable number
of whole and/or fractional common shares.
EFFECT OF A RIGHTS OFFERING. If we have a rights offering in which we
issue separately tradable and exercisable rights to registered holders of common
shares, we will transfer the rights attributable to whole shares of common stock
held in your Plan account to you as soon as practicable after we issue such
rights. The Administrator will sell rights attributable to fractional shares of
common stock and will treat the proceeds as optional cash payments on the next
Investment Date.
21. CAN I PLEDGE MY SHARES UNDER THE PLAN?
You may not pledge any shares of common stock credited to your Plan
account. Any attempted pledge will be void. If you wish to pledge your common
shares, you first must withdraw the shares from the Plan. See Question 13 to
learn how to sell your shares under the Plan.
22. HOW CAN I TRANSFER MY SHARES?
You may transfer ownership of all or part of the shares of common stock
held in your Plan account through gift, private sale or otherwise by mailing to
the Administrator, at the address in Question 4,
30
<PAGE> 32
a properly executed stock assignment, along with a letter with specific
instructions regarding the transfer. You also must mail to the Administrator an
Authorization Form and a Form W-9 (Certification of Taxpayer Identification
Number) completed by the person to whom you are transferring your shares.
You also may transfer ownership of all or part of the shares of common
stock held in your Plan account into the account of another person within the
Plan. To complete such a transfer, you must mail to the Administrator a letter
with specific instructions regarding the transfer and an Authorization Form
completed by the person to whom you are transferring your shares.
23. CAN THE PLAN BE AMENDED, MODIFIED, SUSPENDED OR TERMINATED?
Although we expect to continue the Plan indefinitely, we reserve the
right to amend, modify, suspend or terminate the Plan in any manner at any time.
We will notify you in writing of any modifications made to the Plan.
24. WHAT HAPPENS IF YOU TERMINATE THE PLAN?
If we terminate the Plan, you will receive a certificate for all whole
shares of common stock held in your Plan account and a check representing the
value of any fractional share of common stock valued at the then current market
price and any uninvested dividends or optional cash investments held in your
account.
25. ARE THERE ANY RISKS ASSOCIATED WITH THE PLAN?
Your investment in shares purchased under the Plan is no different from
any investment in shares that you hold directly. Neither we nor the
Administrator can assure you a profit or protect you against a loss on shares
that you purchase. You bear the risk of loss and enjoy the benefits of any gain
from changes in the market price with respect to shares of common stock
purchased under the Plan. We encourage you to carefully consider the various
risks associated with an investment in our common stock set forth in "Risk
Factors" contained elsewhere in this prospectus.
26. HOW WILL YOU INTERPRET AND REGULATE THE PLAN?
We may interpret, regulate and take any other action in connection with
the Plan that we deem reasonably necessary to carry out the Plan. As a
participant in the Plan, you will be bound by any actions taken by us or the
Administrator.
27. WHAT LAW GOVERNS THE PLAN?
The laws of the State of Maryland will govern the terms, conditions and
operation of the Plan.
28. WHERE WILL NOTICES BE SENT?
The Administrator will address all of its notices to you at your last
known address. You should notify the Administrator promptly in writing of any
change of address.
31
<PAGE> 33
INFORMATION ABOUT EQUITY ONE, INC.
We are a fully-integrated, self-administered and self-managed real
estate investment trust, or "REIT." We own predominantly supermarket-anchored
shopping centers located exclusively in the State of Florida.
As of December 31, 1999, we owned and operated 28 shopping center
properties aggregating approximately 3.1 million square feet. Our properties
include 22 shopping centers totaling approximately 2.7 million square feet, two
shopping center development projects (one of which is partially operating, and
is included above) totaling approximately 258,000 square feet and 5 other
properties aggregating approximately 120,000 square feet.
We believe that our properties are located in prime locations and are
well-maintained and professionally managed. As a result, we believe that our
properties attract high quality tenants and achieve among the highest rental,
occupancy and tenant retention rates within their markets. As of December 31,
1999, our properties were approximately 95% occupied by over 500 tenants.
Our strategy is to acquire, develop and own shopping center properties
in markets and sub-markets where we are, or can become, a significant and
preferred owner and operator. We will continue this strategy by expanding,
primarily through acquisitions, into markets and sub-markets where we have, or
can achieve, similar status. We also may develop properties in these markets and
sub-markets, particularly with a view towards potential utilization of certain
vacant land recently acquired or on which we hold options to purchase. We
believe that our extensive market knowledge gives us a significant competitive
advantage, which is further enhanced by our emphasis on delivering highly
responsive management services.
We were incorporated under the laws of the State of Maryland in June
1992. Our executive offices are located at 1600 N.E. Miami Gardens Drive, Suite
200, North Miami Beach, Florida 33179. Our telephone number is (305) 947-1664,
and our internet address is www.equityone.net.
USE OF PROCEEDS
We will receive proceeds from the sale of common shares that the
Administrator purchases directly from us. We will not receive proceeds from the
sale of common shares that the Administrator purchases in the open market or in
privately negotiated transactions. We will use the proceeds from the sale of
common shares that the Administrator purchases directly from us for general
corporate purposes. We cannot estimate either the number of shares of common
stock or the prices of the shares that we will sell in connection with the Plan.
PLAN OF DISTRIBUTION
Except to the extent the Administrator purchases shares of common stock
in the open market or in privately negotiated transactions with third parties,
we will sell directly to the Administrator the common shares acquired under the
Plan. The shares, including shares acquired pursuant to requests for waivers,
may be resold in market transactions on any national securities exchange on
which shares of common stock trade or in privately negotiated transactions. Our
common stock is currently listed on the NYSE.
Pursuant to the Plan, we may be requested to approve optional cash
investments in excess of the allowable maximum amounts pursuant to requests for
waiver on behalf of participants in the Plan that may be engaged in the
securities business. In deciding whether to approve a request for waiver, we may
consider relevant factors including, among other things,
32
<PAGE> 34
o whether, at the time of such request, the Administrator is acquiring
shares of common stock for the Plan directly from us or in the open
market or in privately negotiated transactions with third parties;
o our need for additional funds;
o our desire to obtain such additional funds through the sale of
common stock as compared to other sources of funds;
o the purchase price likely to apply to any sale of common stock;
o the extent and nature of or participant's prior participation in the
Plan;
o the number of shares of common stock a participant holds of record;
and
o the total amount of optional cash investments in excess of $5,000
for which requests for waiver have been submitted.
We may sell shares of common stock through the Plan to persons who, in
connection with the resale of the shares, may be considered underwriters. In
connection with these types of transactions, compliance with Regulation M under
the Securities Exchange Act of 1934, as amended, would be required. We will not
give any person any rights or privileges other than those that the person would
be entitled to as a participant under the Plan. We will not enter into any
agreement with any the person regarding the person's purchase, resale or
distribution of shares. Under certain circumstances, we may, however, approve
requests for optional cash investments in excess of the allowable maximum
limitations pursuant to requests for waivers.
Subject to the availability of shares of common stock registered for
issuance under the Plan, there is no total maximum number of shares that can be
issued pursuant to the reinvestment of dividends and optional cash investments.
We will pay all brokerage commissions and service charges in connection with the
reinvestment of dividends and optional cash investments to purchase common
shares under the Plan. You will have to pay any fees payable in connection with
your voluntary sale of shares from your Plan account and/or withdrawal from the
Plan.
LEGAL MATTERS
Our special Maryland counsel, Ballard Spahr Andrews & Ingersoll, LLP,
will issue an opinion to us regarding certain legal matters in connection with
this offering, including the validity of the issuance of the shares of common
stock offered pursuant to the Plan. Additionally, our counsel, Greenberg
Traurig, P.A. will issue an opinion to us regarding certain tax matters related
to the Plan.
EXPERTS
The financial statements incorporated in this prospectus by reference
to our Annual Report on Form 10-K for the year ended December 31, 1998, have
been so incorporated in reliance on the report of Deloitte & Touche LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
33
<PAGE> 35
EXHIBIT A
PLAN SERVICE FEES SCHEDULE
<TABLE>
<CAPTION>
<S> <C>
Enrollment Fee for New Investors...................................No Charge
Initial Purchase of Shares.........................................No Charge
Sale of Shares (partial or full) (1)
Transaction Fee...............................................$15.00 per sale transaction
Trading Fee...................................................$0.04 per share
Reinvestment of Dividends..........................................No Charge
Optional Cash Purchases............................................No Charge
Gift or Transfer of Shares.........................................No Charge
Safekeeping of Stock Certificates..................................No Charge
Certificate Issuance...............................................No Charge
Returned Checks for Insufficient Funds.............................$25.00 per item
Duplicate Statements
Current Year..................................................No Charge
Prior Year(s).................................................$20.00 per year requested
</TABLE>
- --------------------------------------------------------------------------
(1) The Administrator will deduct the applicable fees from the proceeds of a
sale.
WE RESERVE THE RIGHT TO AMEND OR MODIFY THIS PLAN SERVICE FEES SCHEDULE AT ANY
TIME.
A-1
<PAGE> 36
EXHIBIT B
CALENDAR OF EXPECTED EVENTS
OPTIONAL CASH INVESTMENTS OF $5,000 OR LESS
OPTIONAL CASH INVESTMENT
DUE DATE (1) INVESTMENT DATE
------------ ---------------
March 28, 2000 (2) March 31, 2000 (2)
April 25, 2000 April 28, 2000
May 25, 2000 May 31, 2000
June 27, 2000 (2) June 30, 2000 (2)
July 26, 2000 July 31, 2000
August 28, 2000 August 31, 2000
September 26, 2000 (2) September 29, 2000 (2)
October 26, 2000 October 31, 2000
November 27, 2000 November 30, 2000
December 26, 2000 (2) December 29, 2000 (2)
January 26, 2001 January 31, 2001
February 23, 2001 February 28, 2001
March 27, 2001 (2) March 30, 2001 (2)
April 25, 2001 April 30, 2001
May 25, 2001 May 31, 2001
June 26, 2001 (2) June 29, 2001 (2)
July 26, 2001 July 31, 2001
August 28, 2001 August 31, 2001
September 25, 2001 (2) September 28, 2001 (2)
October 26, 2001 October 31, 2001
November 27, 2001 November 30, 2001
December 26, 2001 (2) December 31, 2001 (2)
- --------------------------------------------------------------------------------
(1) Optional cash investments of $5,000 or less are due three (3) business days
before the Optional Cash Investment Due Date.
(2) Based upon our historical dividend payment dates, we may pay common stock
dividends in this month. If our board of directors declares the common
stock dividend payments for this month, then the Investment Date will be
the dividend payment date in this month, and the Optional Cash Investment
Due Date may be adjusted accordingly.
B-1
<PAGE> 37
CALENDAR OF EXPECTED EVENTS (CONTINUED)
OPTIONAL CASH INVESTMENTS OF GREATER THAN $5,000
<TABLE>
<CAPTION>
MINIMUM WAIVER PRICE/ OPTIONAL CASH PRICING PERIOD
WAIVER DISCOUNT INVESTMENT COMMENCEMENT PRICING PERIOD
SET DATE (1) DUE DATE(2) DATE(3) CONCLUSION DATE
------------ ----------- -------------- ---------------
<S> <C> <C> <C> <C>
March 8, 2000 (4) March 10, 2000 (4) March 13, 2000 (4) March 31, 2000 (4)
April 4, 2000 April 6, 2000 April 7, 2000 April 28, 2000
May 5, 2000 May 9, 2000 May 10, 2000 May 31, 2000
June 7, 2000 (4) June 9, 2000 (4) June 12, 2000 (4) June 30, 2000 (4)
July 6, 2000 July 10, 2000 July 11, 2000 July 31, 2000
August 8, 2000 August 10, 2000 August 11, 2000 August 31, 2000
September 6, 2000 (4) September 8, 2000 (4) September 11, 2000 (4) September 29, 2000 (4)
October 6, 2000 October 10, 2000 October 11, 2000 October 31, 2000
November 6, 2000 November 8, 2000 November 9, 2000 November 30, 2000
December 5, 2000 (4) December 7, 2000 (4) December 8, 2000 (4) December 29, 2000 (4)
January 5, 2001 January 9, 2001 January 10, 2001 January 31, 2001
February 2, 2001 February 6, 2001 February 7, 2001 February 28, 2001
March 7, 2001 (4) March 9, 2001 (4) March 12, 2001 (4) March 30, 2001 (4)
April 4, 2001 April 6, 2001 April 9, 2001 April 30, 2001
May 7, 2001 May 9, 2001 May 10, 2001 May 31, 2001
June 6, 2001 (4) June 8, 2001 (4) June 11, 2001 (4) June 29, 2001 (4)
July 6, 2001 July 10, 2001 July 11, 2001 July 31, 2001
August 8, 2001 August 10, 2001 August 13, 2001 August 31, 2001
September 5, 2001 (4) September 7, 2001 (4) September 10, 2001 (4) September 28, 2001 (4)
October 8, 2001 October 10, 2001 October 11, 2001 October 31, 2001
November 6, 2001 November 8, 2001 November 9, 2001 November 30, 2001
December 5, 2001 (4) December 7, 2001 (4) December 10, 2001 (4) December 31, 2001 (4)
</TABLE>
- --------------------------------------------------------------------------------
(1) The Minimum Waiver Price and the Waiver Discount, if any, will be
established three (3) business days prior to the first day of the Pricing
Period. The Minimum Waiver Price and Waiver Discount only apply to
purchases made pursuant to an approved Request for Waiver.
(2) Optional cash investments of greater than $5,000 made pursuant to an
approved Request for Waiver are due by the close of business on the last
business day immediately preceding the first day of the Pricing Period.
(3) The Pricing Period relating to optional cash investments of greater than
$5,000 made pursuant to an approved Request for Waiver will be the fifteen
consecutive trading days ending on either (a) the dividend payment date
during any month in which we pay a cash dividend or (b) the last trading
day of any month in which we do not pay a cash dividend.
(4) Based upon our historical dividend payment dates, we may pay common stock
dividends in this month. If our board of directors declares the common
stock dividend payments for this month, then the Pricing Period Conclusion
Date will be the dividend payment date in this month, and the Minimum
Waiver Price/ Waiver Discount Set Date, Optional Cash Investment Due Date
and Pricing Period Commencement Date may be adjusted accordingly.
B-2
<PAGE> 38
U.S EQUITY MARKETS
CLOSED IN 2000
New Years Day............................................ January 1*
Martin Luther King Jr. Day............................... January 17
Presidents Day........................................... February 21
Good Friday.............................................. April 21
Memorial Day............................................. May 29
Independence Day......................................... July 4
Labor Day................................................ September 4
Thanksgiving Day......................................... November 23
Christmas Day............................................ December 25
- ----------------------------------------------------
* New Years Day 2000 falls on a Saturday. The Exchange will be open for
regular trading hours on Friday, December 31, 1999 and Monday, January 3,
2000.
U.S EQUITY MARKETS
CLOSED IN 2001
New Years Day................................................ January 1
Martin Luther King Jr. Day................................... January 15
Presidents Day............................................... February 19
Good Friday.................................................. April 13
Memorial Day................................................. May 28
Independence Day............................................. July 4
Labor Day.................................................... September 3
Thanksgiving Day............................................. November 22
Christmas Day................................................ December 25
B-3
<PAGE> 39
================================================================================
1,500,000 SHARES OF COMMON STOCK
EQUITY ONE, INC.
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
---------------------------
PROSPECTUS
---------------------------
FEBRUARY 23, 2000
================================================================================
