<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 7, 1995
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EASTGROUP PROPERTIES
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 13-2711135
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
(601) 354-3555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID H. HOSTER II, PRESIDENT
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
JACKSON, MISSISSIPPI 39201-2195
(601) 354-3555
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
JOSEPH P. KUBAREK, Esq.
Jaeckle, Fleischmann & Mugel
800 Fleet Bank Building
12 Fountain Plaza
Buffalo, New York 14202
(716) 856-0600
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plan, please check the
following box. [X]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than the securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of Securities to be to be Aggregate Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Shares of Beneficial Interest, $1.00 par value
per share . . . . . . . . . . . . . . . . . . . . 1,700,000 shares $21.00 $35,700,000.00 $12,310.32
<FN>
(1) Estimated solely for the purpose of calculating the
registration fee. Pursuant to Rule 457(c), the offering price
and registration fee are computed on the basis of the average
of the high and low prices of the Registrant's Shares, as
reported on the New York Stock Exchange Composite Transactions
on December 1, 1995 which was $21.00.
</TABLE>
<PAGE> 2
EASTGROUP PROPERTIES
DISTRIBUTION REINVESTMENT PLAN
1,700,000 SHARES OF BENEFICIAL INTEREST
The Distribution Reinvestment Plan (the "Plan") of EastGroup Properties
(the "Trust") provides owners of the Trust's shares of beneficial interest,
$1.00 par value per share (the "Shares") with a convenient and economical way
of investing cash distributions in additional Shares without payment of any
brokerage commission, service charge or other expense.
Participants in the Plan may:
-- have cash distributions on all of the Shares owned by them
automatically reinvested, or
-- have cash distributions on less than all of such Shares
automatically reinvested while continuing to receive the
remainder of their cash distributions.
Shares needed for the Plan shall be purchased from the Trust. The price
per Share for the additional Shares purchased with invested distributions will
be the average of the high and low sales prices for Shares on the cash
distribution payment date as reported in The Wall Street Journal (or if The
Wall Street Journal is not published on that date, as reported in The New York
Times or by any other appropriate method), (each such source, the "Published
Authority"), for New York Stock Exchange Composite Transactions.
If a shareholder does not wish to participate in the Plan, such shareholder
will receive distributions, as declared, by check as usual.
This Prospectus relates to authorized and unissued Shares of the Trust
registered for purchase under the Plan.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS
NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is December 7, 1995.
<PAGE> 3
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any of the securities offered hereby in
any jurisdiction to any person to whom it is unlawful to make such offer in
such jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date of this
Prospectus.
AVAILABLE INFORMATION
The Trust is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Trust with the Commission in
accordance with the Exchange Act can be inspected and copied at prescribed
rates at the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following regional offices of the Commission,
Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, the Shares
are listed on the New York Stock Exchange and similar information concerning
the Trust can be inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Trust has filed with the Commission a registration statement (the
"Registration Statement"), of which this Prospectus is a part, under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Shares. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other document which
is filed as an exhibit to the Registration Statement are not necessarily
complete and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference and the exhibits
and schedules thereto. For further information regarding the Trust and the
Shares, reference is hereby made to the Registration Statement and such
exhibits and schedules which may be obtained from the Commission at its
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission.
2
<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Trust with the Commission
and are incorporated herein by reference:
1. The Trust's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. The Trust's Form 10-K/A (Amendment No. 1 to 1994 Form 10-K)
dated March 31, 1995.
3. The Trust's Quarterly Reports on Form 10-Q for the three-month
periods ended March 31, 1995, June 30, 1995 and September 30, 1995.
4. The Trust's Form 10-Q/A (Amendment No. 1 to the Quarterly
Report on Form 10-Q for the three month period ended March 31, 1995) dated May
16, 1995.
All reports and other documents subsequently filed by the Trust pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which registers all securities then remaining unsold, shall
be deemed to be incorporated by reference in and to be a part of this
Prospectus from the date of filing of such reports and documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in the Registration Statement containing this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request. Requests should be
directed to EastGroup Properties, Attention: Chief Financial Officer, 300 One
Jackson Place, 188 East Capitol Street, Jackson, Mississippi 39201; (601)
354-3555.
TABLE OF CONTENTS
The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Description of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Indemnification of Trustees and Officers . . . . . . . . . . . . . . . . . 12
3
<PAGE> 5
THE TRUST
Founded in 1969, EastGroup Properties (the "Trust") is an equity real
estate investment trust which owns a balanced portfolio of income producing
real estate properties. The Trust's primary emphasis is on industrial
properties and garden apartment complexes along with selected office buildings.
Geographically, EastGroup is concentrated in the major market areas of the
southeastern and southwestern United States with a special emphasis in the
states of Florida and Texas. On September 30, 1995, the Trust owned or had an
interest in 10 apartment complexes with a total of 1,949 apartment units, 22
industrial properties with a total of 2,474,000 square feet and 3 office
buildings with a total of 431,000 square feet.
The Trust's principal offices are located at 300 One Jackson Place, 188
East Capitol Street, Jackson, Mississippi 39201-2195, and its telephone number
is (601) 354-3555.
DESCRIPTION OF THE PLAN
The following, in question and answer form, is a summary description of the
provisions of the Distribution Reinvestment Plan (the "Plan") of the Trust.
PURPOSE
- - -------
1. What is the purpose of the Plan? The purpose of the Plan is to provide
owners of Shares with a convenient and economical way of reinvesting cash
distributions in new Shares at a price equal to market value without payment of
any brokerage commission, service charge or other expense. Since new Shares
will be purchased from the Trust, the Trust will receive additional funds which
will be used to make future acquisitions, to finance capital improvements to
Trust properties, to repay indebtedness and for working capital purposes.
ADVANTAGES
- - ----------
2. What are the advantages of the Plan? Participants in the plan
("Participants") may purchase Shares quarterly with cash distributions on all
or part of the Shares owned of record or beneficially by them. (See Questions
4 and 5 for information on who is eligible to participate and how to
participate.) The price of Shares purchased with cash distributions will be
one hundred percent of the market price (determined as set forth in the
response to Question 12.)
Participants are not required to pay any brokerage commission, service
charge or other expense in connection with purchases under the Plan. Full
reinvestment of funds is possible under the Plan because the Plan permits
fractions of Shares, as well as full Shares, to be purchased for Participants.
In addition, distributions on such fractions, as well as on full Shares, will
be used to purchase additional Shares for Participants. Participants also
avoid the necessity for safekeeping certificates representing the Shares
credited to their accounts and have increased protection against loss, theft or
destruction of such certificates. Furthermore, underlying certificates for
Shares already owned may be deposited by Participants for safekeeping as more
fully explained in the answer to Question 17. Regular statements will
4
<PAGE> 6
provide Participants with a record of each transaction. All Share purchases by
reinvestment of distributions will be credited to the Participant's account
representing certificated and non-certificated Shares subject to the Plan (the
"Plan Account").
ADMINISTRATION
- - --------------
3. Who administers the Plan? The distribution reinvestment agent, which is
currently Society National Bank (the "Agent"), administers the Plan for
Participants, keeps records, sends statements of account to Participants and
performs other duties relating to the Plan. Shares purchased under the Plan
will be registered in the Participant's name and will be credited to the
Participant's Plan Account.
ELIGIBILITY AND PARTICIPATION
- - -----------------------------
4. Who is eligible to participate? All holders of record of Shares are
eligible to participate in the Plan. Beneficial owners whose Shares are
registered in names other than their own (for instance, in the name of a
broker, bank nominee or other record holder) must either arrange participation
with the broker, bank nominee or other record holder or have their Shares
transferred into their own names. The Trust reserves the right to refuse to
permit a broker, bank nominee or other record holder to participate in the Plan
if the terms of such participation would in the Trust's judgment result in
excessive cost or burden on the Trust.
Shareholders who are citizens or residents of a country other than the
United States, its territories and possessions should make certain that their
participation does not violate local laws governing such things as taxes,
currency and exchange controls, stock registration, foreign investments and
related matters.
5. How does an eligible shareholder become a Participant? In order to
participate in the Plan, an eligible shareholder must properly complete the
Authorization Form furnished by the Agent and return it to EastGroup
Properties, c/o Society National Bank, Attention: Corporate Trust Division,
P.O. Box 92564, Cleveland, Ohio 44197. If the Shares of an eligible
participant are registered in more than one name (e.g., joint tenants,
trustees, etc.), all registered holders must sign the Authorization Form. An
Authorization Form and postage-paid envelope are enclosed with this Prospectus
and additional forms may be obtained at any time by written or oral request to
EastGroup Properties, Attention: Chief Financial Officer, 300 One Jackson
Place, 188 East Capitol Street, Jackson, Mississippi 39201-2195.
6. What does the Authorization Form provide? The Authorization Form
provides for the purchase of additional Shares through the following investment
options offered under the Plan:
Full Distribution Reinvestment--Reinvest cash distributions on all
Shares owned by a Participant at market price.
Partial Distribution Reinvestment--Reinvest cash distributions on less
than all of the Shares owned by a Participant at market price and continue to
receive cash distributions on the other Shares.
5
<PAGE> 7
Cash distributions on Shares credited to the Participant's Plan Account
are automatically reinvested to purchase additional Shares.
Shareholders who do not wish to participate in the Plan will receive
cash distributions, as declared, by check as usual.
7. Is partial participation possible under the Plan? A shareholder who
desires the distributions on only some full Shares to be reinvested under the
Plan may indicate such number of Shares on the Authorization Form under
"Partial Distribution Reinvestment." Cash distributions will continue to be
made on the remaining Shares.
8. When may an eligible shareholder join the Plan? If an Authorization
Form specifying "Full or Partial Distribution Reinvestment" is properly
completed and received by the Agent on or before the record date established
for the payment of a particular distribution (the date of each such payment, a
"Distribution Payment Date"), reinvestment of distributions will commence with
that distribution payment. Distribution Payment Dates normally occur on a
business day in the fourth week of March, June, September and December. If the
Authorization Form is received by the Agent after the record date established
for the payment of a particular distribution, then the reinvestment of
distributions will not begin until the Distribution Payment Date following the
next record date. Based on the current distribution payment schedule, the
dates by which a Participant's Authorization Form should be received are shown
below:
To Invest Distribution Authorization Form Normally Must Be
Normally Paid During: Received By The Record Date On Or About:
---------------------- ----------------------------------------
March March 15
June June 16
September September 16
December December 16
6
<PAGE> 8
COSTS
- - -----
9. Are there any expenses to Participants in connection with purchases
under the Plan? Participants will incur no brokerage commissions, service
charges or other expenses for purchases made under the Plan. Participants will
be charged a $5.00 service fee in the event of the termination his or her the
account, requests for certificates and the safekeeping of certificates (see
Questions 13, 17, 18 and 19). Any other costs of administration of the Plan
will be borne by the Trust.
PURCHASES
- - ---------
10. How many Shares will be purchased for Participants? The number of
Shares to be purchased will be determined by the amount of the Participant's
distributions being reinvested and the price of the Shares. Each Participant's
Plan Account will be credited with the number of Shares, including fractional
Shares computed to three decimal places, equal to the amount of the
distributions to be reinvested divided by the applicable purchase price.
11. How are Shares purchased under the Plan? At the direction of the
Trust, Shares needed for the Plan will be purchased directly from the Trust.
12. How will the purchase price of Shares be determined? The price of
Shares purchased with distribution reinvested cash will be the average of the
high and low sales prices of the Shares as reported in the Published Authority
for New York Stock Exchange Composite Transactions on the Distribution Payment
Date or if Shares are not traded on that day, on the next preceding day on
which the Shares have been traded.
13. Will certificates be issued to Participants for Shares purchased under
the Plan? Although the Trust reserves the right at any time to issue
certificates for any number of shares in a Participant's Plan Account, Shares
purchased under the Plan will be credited to a Participant's Plan Account and
will be shown on a Participant's statement of account as noncertificated
Shares. Certificates for the Shares purchased pursuant to the Plan will be
issued to Participants upon their written request for a fee of $5.00, except
that no certificates will be issued for fractional Shares. A Participant
requesting a certificate for all the Shares in such Participant's Plan Account
will receive cash for the fractional Shares based on the then market value of
any fractional Shares.
Distributions on any Shares remaining in a Participant's Plan Account
after issuance of certificates will continue to be reinvested in additional
Shares until participation in the Plan is terminated. Distributions on Shares
represented by certificates will be paid by check as usual unless and until the
Participant submits an Authorization Form to reinvest distributions on such
Shares. (See Question 21 for instructions on certificate issuance and
Questions 23 and 24 for information on termination of participation in the
Plan.)
REPORTS TO PARTICIPANTS
- - -----------------------
14. What kind of reports will be sent to Participants in the Plan? As soon
as practicable after each Distribution Payment Date, a Participant in the Plan
will receive a
7
<PAGE> 9
statement showing the total distribution, amount of the distribution
reinvested, the purchase price per Share, the number of Shares purchased, the
number of Shares in the Participant's Plan Account, the number of Shares
represented by certificates held by the Participant and the total number of
Shares owned by the Participant. THESE STATEMENTS ARE A CONTINUING RECORD OF
THE COST OF PURCHASES UNDER THE PLAN AND SHOULD BE RETAINED FOR TAX PURPOSES.
In addition, each Participant will receive copies of the Trust's annual and
other reports to shareholders, proxy statements and income tax information for
reporting distributions.
DISTRIBUTIONS
- - -------------
15. Will Participants be credited with distributions on Shares held in
their Plan Accounts? Participants enrolled in the Plan will have distributions
attributable to that number of their Shares with which they have elected to
participate in the Plan as of the distribution record date (including all
Shares in the Participant's Plan Account) reinvested on the Distribution
Payment Date in additional Shares.
SHARE CERTIFICATES
- - ------------------
16. How may a Participant obtain certificates for Shares purchased under
the Plan? A Participant who has purchased Shares under the Plan may obtain
certificates for those Shares in such Participant's Plan Account at any time by
requesting the Agent in writing to that effect. This notice should be mailed
to EastGroup Properties, c/o Society National Bank, Attention: Corporate Trust
Division, P.O. Box 92564, Cleveland, Ohio 44197. No certificates will be
issued for fractional Shares. A Participant requesting certificates for all
the noncertificated Shares held in a Plan Account will receive, in cash, the
market value of any fractional Shares. The Trust reserves the right at any
time to issue certificates to Participants for any Shares in their Plan
Accounts. (See Questions 18 and 19 for information on termination of
participation.)
17. May shares held in certificate form be deposited in a Participant's
Plan Account? Yes, whether or not the Participant has previously authorized
reinvestment of distributions with respect to those Shares deposited. However,
distributions on Shares evidenced by certificates deposited in accordance with
the Plan will automatically be reinvested in Shares. The Participant should
contact the Agent (see Question 30) for the proper procedure to deposit
certificates. Participants will be charged $5.00 for each transaction
involving the putting of one or more certificates into safekeeping.
MODIFICATION OR TERMINATION BY A PARTICIPANT
- - --------------------------------------------
18. How does a Participant change or terminate participation in the Plan?
A Participant may change his or her form of participation in the Plan from
partial to total distribution reinvestment, from total to partial distribution
reinvestment or may simply change the number of Shares which are enrolled in
distribution reinvestment by executing and delivering a new Authorization Form
to the Agent (Society National Bank, Attention: Corporate Trust Division, P.O.
Box 92564, Cleveland, Ohio 44197). A Participant may terminate participation
in the Plan by notifying the Agent in writing to that effect. Notices will be
effective only upon receipt by the Agent. Notices to change or discontinue
distribution reinvestment received by the Agent on or before any record date
for distribution payment will be effective as of that date.
8
<PAGE> 10
A service charge of $5.00 will be charged by the Agent and deducted from the
Participant's Plan Account in the event of termination by the Participant of
his or her participation in the Plan. In order to reenter the Plan after
termination, a shareholder must complete and submit a new Authorization Form
(see Question 8).
The Agent shall terminate the Participant's Plan Account upon receipt
of written notice of the Participant's death or adjudication of incompetency,
provided, however, in the event of any such notice, the Agent shall retain all
Shares in the Participant's Plan Account until the Participant's legal
representative shall have been appointed and furnished proof satisfactory to
the Agent of the legal representative's right to receive such Shares.
19. What happens to the uncertificated Shares held in the Plan Account when
a Participant terminates participation in the Plan? A certificate for the
Shares held in the Plan Account will be issued to the Participant upon the
Participant's written request to the Agent. No fractional Shares will be
issued. Participants will receive, in cash, the market value of any fractional
Shares (see Question 16). A Participant will be charged a $5.00 service fee in
the event of termination (see Question 18).
SALE OF SHARES
- - --------------
20. May a Participant request that Shares held in a Plan Account be sold?
No. A Participant must terminate the account to the extent of those Shares he
or she intends to sell and the Participant is solely responsible for the sale
of his or her Shares. (See Questions 18 and 19 for information on termination
of participation.)
OTHER INFORMATION
- - -----------------
21. What happens if the Trust issues a stock dividend or declares a stock
split? Any Shares resulting from a stock dividend or from a stock split with
respect to Shares subject to the Plan will be added to the Participant's Plan
Account.
22. How will a Participant's Shares in a Plan Account be voted at a meeting
of shareholders? All of a Participant's Shares, both certificated and
noncertificated, will be voted by such Participant. For any meeting of
shareholders, a Participant will be sent proxy material for that meeting
covering all of the Shares which such Participant owns on the record date for
the meeting. A Participant may vote all of his or her Shares in person or by
proxy.
23. Can a Participant draw checks or drafts against the Plan Account? The
Participant shall have no right to draw checks or drafts against the
Participant's Plan Account or to give instructions to the Agent in respect of
any Shares held therein except as expressly provided in the Plan.
24. What are the federal income tax consequences of participation in the
Plan? In general, Participants will have the same federal income tax
consequences with respect to distributions on their Shares, as any other owner
of Shares. A Participant will be treated for federal income tax purposes as
having received on each Distribution Payment Date a taxable
9
<PAGE> 11
distribution equal to the fair market value of the Shares purchased (i.e., the
amount that would have been received as a cash distribution) plus the cash
actually distributed (if any). In the case of those foreign Participants whose
distributions are subject to United States federal income tax withholding, the
Trust will, to the extent permitted by law, apply an amount equal to the
distributions less the amount of tax required to be withheld to the purchase of
Shares. The regular statements confirming purchases made for foreign
Participants will indicate the amount of tax withheld. Participants in the
Plan are urged to consult with their own tax advisors for more specific
information.
25. What provision is made for foreign Participants subject to income tax
withholding or other Participants subject to back-up withholding? In the case
of both foreign Participants who elect to have their distributions reinvested
and whose distributions are subject to United States income tax withholding and
other Participants who elect to have their distributions reinvested and who are
subject to "back-up" withholding under Section 3406(a)(1) of the International
Revenue Code of 1986, as amended (the"Code"), the Agent will invest in Shares
an amount equal to the distributions of such Participants reinvested less the
amount of tax required to be withheld. The quarterly statements confirming
purchases made for such Participants will indicate the net payment reinvested.
Under Section 3406(a)(1) of the Code, the Trust is required to withhold
for United States income tax purposes 31% of all distribution payments to a
shareholder of the Trust if (i) such shareholder has failed to furnish to the
Trust his or her taxpayer identification number ("TIN"), which for an
individual is his or her social security number, (ii) the Internal Revenue
Service (the "Service") has notified the Trust that the TIN furnished by the
shareholder is incorrect, (iii) the Service notifies the Trust that back-up
withholding should be commenced because the shareholder has failed to properly
report interest or dividends, or (iv) the shareholder has failed to certify,
under penalties of perjury, that he or she is not subject to back-up
withholding. Shareholders have previously been requested by the Trust or their
broker to submit all information and certifications required in order to exempt
them from back-up withholding if such exemption is available to them.
26. What are the federal income tax consequences of participation in the
Plan by an IRA, Keogh Plan, 401(k) Plan, Simplified Pension Account or any
corporate employer-sponsored retirement plan? The tax consequences of
participation in the Plan by retirement plans differ from those outlined above
for individuals. Since the laws and regulations regarding the federal income
tax consequences of retirement plan participation are complex and subject to
change, a retirement plan considering such participation should consult with
its own retirement plan trustees, custodians or tax advisors for specific
information.
27. What is the responsibility of the Trust under the Plan? Neither the
Trust, the Agent nor any agent for either, in administering the Plan, is liable
for any act done in good faith or for any good faith omission to act,
including, without limitation, any claim of liability (a) arising out of the
failure to terminate a Participant's account upon such Participant's death
prior to receipt by the Agent of notice in writing of such death, (b) with
respect to the prices and times at which Shares are purchased for a
Participant, or (c) with respect to any fluctuation in market value before or
after any purchase of Shares. Neither the Agent, the Trust nor any agent for
either shall have any duties, responsibilities or liabilities except such as
are expressly set
10
<PAGE> 12
forth in the Plan. Since the Trust has delegated responsibility for
administering the Plan to the Agent, the Trust specifically disclaims any
responsibility for any of the Agent's actions or inactions in connection with
the administration of the Plan. Neither the trustees, officers or shareholders
of the Trust shall have any personal liability under the Plan.
The Participant should recognize that neither the Trust nor the Agent
can provide any assurance of a profit or protection against loss on any Shares
purchased under the Plan.
28. May the Plan be changed or discontinued? Although the Trust hopes to
continue the Plan indefinitely, the Trust reserves the right to suspend or
terminate the Plan at any time. The Trust also reserves the right to make
modifications to the Plan. Participants will be notified of any suspension,
termination or modification of the Plan.
The Trust is authorized to issue such interpretations, adopt such
regulations and take such action as it may deem reasonably necessary to
effectuate the Plan. Any action to effectuate the Plan taken by the Trust or
the Agent in the good faith exercise of its judgment will be binding on
Participants.
29. Are there any limitations to the Trust's obligations under the Plan?
The Trust's obligation to offer, issue or sell its Shares under the Plan shall
be subject to the Trust's obtaining any necessary approval, authorization and
consent from any regulatory authorities having jurisdiction over the issuance
and sale of the Shares. The Trust may elect not to offer or sell its Shares
under the Plan to shareholders residing in any jurisdiction where, in the sole
discretion of the Trust, the burden or expense of compliance with applicable
blue sky or securities laws make that offer or sale impracticable or
inadvisable.
30. What law governs the Plan? The terms and conditions of the Plan and
its operation shall be governed by the laws of the State of Maryland.
31. Who answers a Participant's questions or supplies information? Any
inquiries or correspondence about the Plan should be addressed as follows:
Society National Bank, Attention: Corporate Trust Division, P.O. Box 92564,
Cleveland, Ohio 44197; (216) 813-5745.
USE OF PROCEEDS
The Trust will receive all proceeds from the sale of Shares since they
will be purchased by the Agent from the Trust. The proceeds from the sale of
Shares will be used for general Trust purposes, including the acquisition of
additional properties as suitable opportunities arise, capital improvements to
Trust properties, the repayment of indebtedness and working capital.
LEGAL OPINIONS
Certain legal matters will be passed upon for the Trust by Jaeckle,
Fleischmann & Mugel, Buffalo, New York.
11
<PAGE> 13
EXPERTS
The consolidated financial statements and schedules of the Trust as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994, have been incorporated by reference herein and in the
registration statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, also incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
INDEMNIFICATION OF TRUSTEES AND OFFICERS
The Trust's Declaration of Trust, as amended, contains a provision
authorizing the Trust to indemnify and hold harmless, to the fullest extent
permitted by Maryland law, Trustees and officers involved in an action, suit or
proceeding.
Section 2-418 of the Maryland General Corporation Law (the "Indemnification
Statute"), the law of the state in which the Trust is organized, empowers a
Trust, subject to certain limitations, to indemnify its officers and Trustees
against expenses, including attorneys' fees, judgments, penalties, fines,
settlements and expenses, actually and reasonably incurred by them in any suit
or proceeding to which they are parties unless the act or omission of the
Trustee was material to the matter giving rise to the proceeding and was
committed in bad faith, or was the result of active and deliberate dishonesty
or the Trustee received an improper personal benefit or, with respect to a
criminal action or proceeding, unless they had no reasonable cause to believe
their conduct to be unlawful.
The Trust has entered into an indemnification agreement (the
"Indemnification Agreement") with each of its Trustees and officers, and the
Board of Trustees has authorized the Trust to enter into an Indemnification
Agreement with each of the future Trustees and officers of the Trust. The
Indemnification Statute permits a corporation to indemnify its Trustees and
officers. However, the protection that is specifically afforded by the
Indemnification Statute authorizes other arrangements for indemnification of
Trustees and officers, including insurance. The Board has approved and the
shareholders have ratified the Indemnification Agreement, which is intended to
provide indemnification to the maximum extent allowable by, or not in violation
of, or offensive to, any law of the State of Maryland.
The Indemnification Agreement provides that the Trust shall indemnify a
Trustee or officer who is a party to the agreement (the "Indemnitee") if he was
or is a party to or otherwise involved in any proceeding by reason of the fact
that he was or is a Trustee or officer of the Trust, or was or is serving at
its request in a certain capacity of another entity, against losses incurred in
connection with the defense or settlement of such proceeding. This
indemnification shall be provided to the fullest extent permitted by Maryland
law. This is similar to the indemnification provided by the Indemnification
Statute except that indemnification is not available to the Indemnitee who is
adjudged liable on the basis that personal benefit was improperly received or
who pays any amount in settlement of a proceeding without the Trust's written
consent.
12
<PAGE> 14
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the offering contemplated by this Registration Statement:
Item Amount
- - ---- ------
SEC Registration Fee . . . . . . . . . . . . . . . . . . . . . . $12,310.32
New York Stock Exchange Listing Fee . . . . . . . . . . . . . . . 1,500.00
Blue Sky Fees and Expenses. . . . . . . . . . . . . . . . . . . . 3,000.00
Printing and Engraving Costs. . . . . . . . . . . . . . . . . . . 8,000.00
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . 1,000.00
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 8,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 1,189.68
----------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,000.00
==========
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
The Trust's Declaration of Trust contains a provision authorizing the Trust
to indemnify and hold harmless, to the fullest extent permitted by Maryland
law, Trustees and officers involved in an action, suit or proceeding.
The Indemnification Statute empowers a Trust, subject to certain
limitations, to indemnify its officers and Trustees against expenses, including
attorneys' fees, judgments, penalties, fines, settlements and expenses,
actually and reasonably incurred by them in any suit or proceeding to which
they are parties unless the act or omission of the Trustee was material to the
matter giving rise to the proceeding and was committed in bad faith, or was the
result of active and deliberate dishonesty or the Trustee received an improper
personal benefit or, with respect to a criminal action or proceeding, unless
they had no reasonable cause to believe their conduct to be unlawful.
The Trust has entered into an Indemnification Agreement with each of its
Trustees and officers, and the Board of Trustees has authorized the Trust to
enter into an Indemnification Agreement with each of the future Trustees and
officers of the Trust. The Indemnification Statute permits a corporation to
indemnify its Trustees and officers. However, the protection that is
specifically afforded by the Indemnification Statute authorizes other
arrangements for indemnification of Trustees and officers, including insurance.
The Board has approved and the shareholders have ratified the Indemnification
Agreement, which is intended to provide indemnification to the maximum extent
allowable by, or not in violation of, or offensive to, any law of the State of
Maryland.
II-1
<PAGE> 15
The Indemnification Agreement provides that the Trust shall indemnify an
Indemnitee if he was or is a party to or otherwise involved in any proceeding
by reason of the fact that he was or is a Trustee or officer of the Trust, or
was or is serving at its request in a certain capacity of another entity,
against losses incurred in connection with the defense or settlement of such
proceeding. This indemnification shall be provided to the fullest extent
permitted by Maryland law. This is similar to the indemnification provided by
the Indemnification Statute except that indemnification is not available to the
Indemnitee who is adjudged liable on the basis that personal benefit was
improperly received or who pays any amount in settlement of a proceeding
without the Trust's written consent.
ITEM 16. EXHIBITS.
Exhibit
Number Description of Exhibits
- - ------- -----------------------
4(a) Restated Declaration of Trust dated December 14, 1971
(incorporated by reference to Exhibit 3 of the Registrant's
1980 Annual Report on Form 10-K and to Exhibit 20 of the
Registrant's May 31, 1981 Quarterly Report on Form 10-Q)
(b) Amendment to the Restated Declaration of Trust effective as of
April 19, 1983 (incorporated by reference to Exhibit 3(b) of
the Registrant's 1983 Annual Report on Form 10-K)
(c) Amendment to Registrant's Restated Declaration of Trust,
effective March 20, 1987 (incorporated by reference to Exhibit
3(c) of the Registrant's 1987 Annual Report on Form 10-K)
(d) Trustees Regulations of the Registrant, as amended
(incorporated by reference to Exhibit 3 of the Registrant's
1980 Annual Report on Form 10-K)
(e) Amendment to Registrant's Trustees Regulations (incorporated
by reference to Exhibit 3 of the Registrant's 1980 Annual
Report on Form 10-K)
(f) Amendment to Registrant's Trustees Regulations effective as of
April 19, 1983 (incorporated by reference to Exhibit 3(d) of
the Registrant's 1983 Annual Report on Form 10-K)
5 Opinion of Jaeckle, Fleischmann & Mugel (filed herewith)
23(a) Consent of KPMG Peat Marwick LLP (filed herewith)
(b) Consent of Jaeckle, Fleischmann & Mugel (incorporated by
reference to Exhibit 5 hereto)
24 Power of Attorney (contained on signature page)
99 EastGroup Properties Distribution Reinvestment Plan (filed
herewith)
II-2
<PAGE> 16
ITEM 17. UNDERTAKINGS.
The registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 17
(6) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Jackson, State of Mississippi on December 7, 1995.
EASTGROUP PROPERTIES
By: /s/ David H. Hoster II
------------------------------
David H. Hoster II, President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints each of Leland R. Speed and David H.
Hoster II his or her true and lawful attorney-in-fact and agent, each with full
power of substitution and revocation, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each such
attorney-in-fact and agent, full power and authority to do and perform each
such and every act and thing requisite and necessary to be done, as fully to
all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement and the foregoing Powers of Attorney have been signed by
the following persons in the capacities indicated and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Leland R. Speed Managing Trustee and Chief December 7, 1995
- - ------------------------- Executive Officer (Principal
Leland R. Speed Executive Officer)
/s/ N. Keith McKey Executive Vice President, December 7, 1995
- - ------------------------- Chief Financial Officer and
N. Keith McKey Secretary
/s/ Diane W. Hayman Controller (Principal December 7, 1995
- - ------------------------- Accounting Officer)
Diane W. Hayman
/s/ Alexander G. Anagnos Trustee December 7, 1995
- - -------------------------
Alexander G. Anagnos
II-5
<PAGE> 19
Signature Title Date
--------- ----- ----
/s/ David H. Hoster II President and Trustee December 7, 1995
------------------------
David H. Hoster II
/s/ Harold B. Judell Trustee December 7, 1995
------------------------
Harold B. Judell
Trustee December 7, 1995
------------------------
David M. Osnos
Trustee December 7, 1995
------------------------
John N. Palmer
/s/ H.C. Bailey, Jr. Trustee December 7, 1995
------------------------
H.C. Bailey, Jr.
II-6
<PAGE> 1
EXHIBIT 5
JAECKLE, FLEISCHMANN & MUGEL
A T T O R N E Y S A T L A W
FLEET BANK BUILDING TWELVE FOUNTAIN PLAZA BUFFALO, NEW YORK 14202-2292
TEL (716) 856-0600 FAX (716) 856-0432
December 5, 1995
EastGroup Properties
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
RE: EASTGROUP PROPERTIES
REGISTRATION STATEMENT ON FORM S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to EastGroup Properties, a Maryland real
estate investment trust (the "Trust"), in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration Statement
on Form S-3 (the "Registration Statement"), covering 1,700,000 shares of
beneficial interest, $1.00 par value, of the Trust (the "Shares"), which Shares
will be sold pursuant to the terms and conditions of the Trust's Distribution
Reinvestment Plan substantially in the form of the Trust's Distribution
Reinvestment Plan filed as Exhibit 99 to the Registration Statement (the
"Distribution Reinvestment Plan").
We have examined such corporate records of the Trust and other
documents as we have deemed necessary and appropriate under the circumstances
to furnish the following opinions:
1. The Trust is a real estate investment trust duly organized
and validly existing under the laws of the State of Maryland.
2. When the Registration Statement has become effective under
the Securities Act of 1933, as amended, and the Shares have
been sold and delivered pursuant to the terms and conditions
set forth in the Distribution Reinvestment Plan, the Shares
will be validly issued, fully-paid and non-assessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and all amendments thereto, and we further consent to
any and all references to our name therein.
Very truly yours,
JAECKLE, FLEISCHMANN & MUGEL
<PAGE> 1
EXHIBIT 23(a)
-------------
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Trustees
EastGroup Properties:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Jackson, Mississippi
December 5, 1995
<PAGE> 1
EXHIBIT 99
----------
DISTRIBUTION REINVESTMENT PLAN
1. Definitions
-----------
The following terms when used herein shall have the following
definitions:
"Agent" shall mean any dividend reinvestment agent as from
time to time may be appointed by the Trust as agent to administer the Plan.
The Trust has appointed Society National Bank, a KeyCorp Bank, as Agent for the
Plan.
"Authorization Form" shall mean such authorization form as the
Trust or the Agent may from time to time or upon request furnish shareholders
and which shall be returned to the Agent by such shareholders to indicate their
election to participate in specified portions of the Plan.
"Distribution Payment Date" shall mean the date on which
distributions are paid on Trust Shares. These dates usually occur in the
fourth week of March, June, September and December.
"Investment Date" shall mean the same date as the Distribution
Payment Date as indicated above.
"New York Stock Exchange" shall mean the New York Stock
Exchange, Inc. or any successor institution on which the Shares are listed.
"Participant" shall mean any Trust shareholder who has
returned a properly completed Authorization Form to the Trust or the Agent
indicating election to participate in any portion of the Plan and who has been
enrolled in that portion of the Plan by the Trust.
"Plan" shall mean this Distribution Reinvestment Plan.
"Shares" shall mean Shares of Beneficial Interest, $1.00 par
value, of the Trust.
"Trust" shall mean EastGroup Properties.
2. Purpose
-------
The purpose of this Plan is to enable Trust shareholders to
have all or part of their Share distributions automatically reinvested in
additional Shares of the Trust. Because Shares acquired under the Plan will be
purchased directly from the Trust, no brokerage commissions or other fees will
be incurred by Participants in making the purchases.
1
<PAGE> 2
3. Eligibility for Participation in the Plan
-----------------------------------------
All shareholders of record of the Trust's Shares are
automatically eligible to participate in the Plan and may do so by completing
and returning to the Trust or the Agent the Authorization Form furnished to
them by the Trust or the Agent. Beneficial owners of Shares which are
registered in names other than their own (e.g., in the name of a broker, bank
or other nominee) who want to participate, must either make appropriate
arrangements with their broker, bank or other nominee, or have their Shares
transferred into their own names. Although the Shares are not registered in
their own names, the Trust may permit participants in its employee benefits
plan to participate in the Plan on such terms and conditions as the Trust may
from time to time establish for such purposes. The Trust reserves the right to
refuse to permit a broker, bank or other nominee to participate in the Plan if
the terms of such participation would in the Trust's judgment result in
excessive cost or burden on the Trust.
4. Administration of the Plan
--------------------------
The Agent shall administer the Plan and the Trust shall pay
all the costs of such administration. The Agent will maintain records and
perform such other duties as may be required. In addition, the Agent will
send to each Participant (a) after each distribution reinvestment, a statement
which will show the amount of the distribution, the purchase price per Share,
the number of Shares purchased, the total number of certificated and
noncertificated Shares owned by the Participant and the total number of Shares
owned by the Participant, and (b) annual and semi-annual reports to
shareholders, proxy statements and income tax information for reporting
distributions. Shares purchased by a Participant through reinvested
distributions will be credited to the Participant's plan account. Upon request
of the Participant, the Agent will furnish certificates for Shares in the
Participant's plan account. No certificates will be issued for fractional
shares but the market value thereof will be paid in cash to a requesting
Participant.
The Agent will have the responsibility for furnishing
certificates for Shares and any cash payment in lieu of fractional shares owned
by a Participant upon request or termination of participation by the
Participant.
5. Reinvestment of Distributions
-----------------------------
Participants may elect to have distributions on all or part of
their Shares automatically reinvested by completing the Authorization Form to
that effect and returning it to the Agent. Reinvestment of distributions shall
commence with distributions paid on the next Distribution Payment Date
following receipt of the Authorization Form provided it is received before the
record date for the distribution. Should an Authorization Form be received by
the Agent on or after the record date, distribution reinvestment will commence
with the following distribution. The price at which Shares shall be purchased
by reinvested distributions on each Distribution Payment Date shall be the
average of the high and low
2
<PAGE> 3
sales prices of the Shares as reported in The Wall Street Journal for the New
York Stock Exchange Composite Transactions, on that Distribution Payment Date,
or if no such transactions are reported on such date, then on the next
preceding date when such Shares have been sold. If The Wall Street Journal is
not published on a Distribution Payment Date, the Trust may determine the price
of the Shares by reference to The New York Times or by any other appropriate
method.
6. Calculation of Shares Purchased
-------------------------------
The number of Shares purchased, including fractional Shares
rounded to four decimal places, shall be determined by dividing the amount of
the distributions reinvested by the purchase price per Share.
7. Modification or Termination of Participation
--------------------------------------------
Participants may modify participation in the distribution
reinvestment portion of the Plan by notifying the Agent in writing of the
increased or decreased number of Shares with which they wish to participate.
Participants may terminate participation in the distribution reinvestment
portion of the Plan at any time by notifying the Agent in writing to that
effect. Any notice is effective only upon receipt. If such notice is received
by the Agent before any record date for distribution payment, the Agent will
modify or terminate the reinvestment of the Participant's distributions under
the Plan as of that Distribution Payment Date. In order to reenter the Plan
after termination, the shareholder must complete a new Authorization Form.
Upon termination of participation in the Plan, the Agent will send the
Participant a certificate for Shares and cash for any fractional Shares, as
provided herein.
The Agent shall terminate the Participant's plan account upon
receipt of written notice of the Participant's death or adjudication of
incompetency, provided, however, in the event of any such notice, the Agent
shall retain all Shares in the Participant's plan account until the
Participant's legal representative shall have been appointed and furnished
proof satisfactory to the Agent of the legal representative's right to receive
such Shares.
8. Termination Fee.
----------------
A service charge of $5.00 will be charged by the Agent and
deducted from the Participant's account in the event of termination by the
Participant of his or her participation in the Plan.
9. Certificates for Purchased Shares
---------------------------------
A shareholder who has purchased Shares under the Plan and
wishes to obtain certificates for those Shares may do so by notifying the Agent
in writing to that effect. However, no certificate will be issued for
fractional Shares. The market value of any
3
<PAGE> 4
fractional Shares will be paid in cash to a shareholder requesting a
certificate for all his noncertificated Shares.
10. Certificate Safekeeping
-----------------------
The Agent will provide certificate safekeeping. Participants
will be charged $5.00 for each transaction involving the putting of one or more
certificates into safekeeping.
11. Stock Splits or Stock Distributions
-----------------------------------
Any distributions of Shares resulting from stock splits or
dividends will be credited to a Participant's plan account.
12. Voting
------
All Shares credited to a Participant's plan account under the
Plan shall be voted by the Participant. If on the record date for a meeting of
shareholders there are Shares credited to the plan account of a Participant,
that Participant will be sent the proxy material for the meeting and a proxy
covering all of the Participant's Shares, including Shares credited to the
Participant's plan account. If the Participant returns an executed proxy to
the Agent, the Shares will be voted as directed with respect to all of
Participant's Shares (including any fractional Shares), or the Participant may
vote all of the Shares in person at the meeting. In the absence of any such
direction or attendance at the meeting, such Shares will not be voted by the
Agent.
13. Liability
---------
Neither the Trust, the Agent, nor any agent for either, in
administering the Plan, shall be liable for any act or failure to act taken in
good faith, including, without limitation, any claim of liability arising out
of failure to terminate a Participant's participation in the Plan upon the
Participant's death.
14. Tax
---
It is understood that the automatic reinvestment of dividends
under this Plan does not relieve the Participant of any income tax liability
arising as a result of such distributions. The Plan will report to each
Participant the amount of dividends credited to the Participant's account.
15. Termination, Suspension or Modification
---------------------------------------
The Trust reserves the right to modify, suspend or terminate
the Plan at any time by written instrument.
4
<PAGE> 5
16. Check or Drafts
---------------
The Participant shall have no right to draw checks or drafts
against the Participant's plan account or to give instructions to the Agent in
respect of any Shares held therein except as expressly provided herein.
17. Compliance with Applicable Law and Regulations
----------------------------------------------
The Trust's obligation to offer, issue or sell its Shares
hereunder shall be subject to the Trust's obtaining any necessary approval,
authorization and consent from any regulatory authorities having jurisdiction
over the issuance and sale of the Shares. The Trust may elect not to offer or
sell its Shares hereunder to shareholders residing in any jurisdiction where,
in the sole discretion of the Trust, the burden or expense of compliance with
applicable blue sky or securities laws make that offer or sale impracticable or
inadvisable.
18. Notices
-------
Any notice or request required or permitted to be given to the
Agent by a Participant shall be in writing and delivered to the Agent at its
Corporate Trust Division, P.O. Box 92564, Cleveland, Ohio 44197, by first-class
mail, postage prepaid. Notices to the Participant may be given by the Agent by
first-class mail, postage prepaid, addressed to the Participant at his or her
last known address as reflected by the records of the Agent. The Participant
agrees to notify the Agent promptly in writing of any change of address.
19. Governing Law
-------------
This Plan shall be governed by and construed in accordance
with the laws of the State of Maryland.
5
