<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1998
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
REGISTRATION STATEMENT
ON
FORM S-3
UNDER
THE SECURITIES ACT OF 1933
------------------------
KIMCO REALTY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
MARYLAND 13-2744380
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
------------------------
3333 NEW HYDE PARK ROAD
NEW HYDE PARK, NEW YORK 11042-0020
(516) 869-9000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
BRUCE KAUDERER, ESQ.
3333 NEW HYDE PARK ROAD
NEW HYDE PARK, NEW YORK 11042-0020
(516) 869-9000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
Copies to:
<TABLE>
<S> <C>
RAYMOND Y. LIN, ESQ. EDWARD F. PETROSKY, ESQ.
SHARON Y. BOWEN, ESQ. BROWN & WOOD LLP
LATHAM & WATKINS ONE WORLD TRADE CENTER
885 THIRD AVENUE 58TH FLOOR
SUITE 1000 NEW YORK, NEW YORK 10048
NEW YORK, NEW YORK 10022
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration
Statement as determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
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 securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /x/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED PROPOSED AMOUNT OF
OF SECURITIES TO BE AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
REGISTERED(1) REGISTERED(2) PRICE PER UNIT(2)(3) OFFERING PRICE(2)(3) FEE(3)(9)
<S> <C> <C> <C> <C>
Debt Securities(4)..............
Preferred Stock, par value $1.00
per share(5)....................
Depositary Shares representing $702,989,674 (8) $702,989,674 $213,027
Preferred Stock(6)..............
Common Stock, par value $.01 per
share(7)........................
Common Stock Warrants...........
</TABLE>
(Footnotes on following page)
------------------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED
PROSPECTUS AND RELATES TO REGISTRATION STATEMENT NO. 333-37285 PREVIOUSLY FILED
BY THE REGISTRANT ON FORM S-3 AND DECLARED EFFECTIVE ON NOVEMBER 4, 1997. THIS
REGISTRATION STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, ALSO CONSTITUTES
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-37285, AND SUCH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(C) OF
THE SECURITIES ACT OF 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(Footnotes continued from previous page)
(1) This Registration Statement also covers contracts which may be issued by the
Registrant under which the counterparty may be required to purchase Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Such
contracts would be issued with the Debt Securities, Preferred Stock,
Depositary Shares, Common Stock and/or Common Stock Warrants covered hereby.
In addition, Offered Securities registered hereunder may be sold separately,
together or as units with other Offered Securities registered hereunder.
(2) In U.S. Dollars or the equivalent thereof denominated in one or more foreign
currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units). In addition, in the event that
Debt Securities are issued at a discount, Debt Securities may be sold at a
higher principal amount such that the aggregate initial offering price shall
not exceed $702,989,674.
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for shares of Common Stock or
Preferred Stock that are issued upon conversion of Debt Securities,
Preferred Stock or Depositary Shares registered hereunder or upon exercise
of the Common Stock Warrants registered hereunder, as the case may be. The
aggregate maximum public offering price of all Offered Securities issued
pursuant to this Registration Statement will not exceed $702,989,674.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus included in this Registration Statement also relates to an
aggregate of $47,010,326 of securities previously registered pursuant to
registration statement no. 333-37285, for which a filing fee of $133,940 has
previously been paid at the time such registration statement was originally
filed.
(4) Such indeterminate principal amount of Debt Securities as may from time to
time be issued at indeterminate prices or issuable upon conversion of other
Debt Securities, Preferred Stock or Depositary Shares registered hereunder.
Debt Securities may be issued from time to time in one or more series.
(5) Such indeterminate number of shares of Preferred Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion of Debt
Securities or other classes or series of Preferred Stock registered
hereunder. Shares of Preferred Stock may be issued from time to time in one
or more classes or series.
(6) To be represented by Depositary Receipts representing an interest in all or
a specified portion of a share of Preferred Stock.
(7) Such indeterminate number of shares of Common Stock as may from time to time
be issued at indeterminate prices or issuable upon conversion of Debt
Securities, Preferred Stock or Depositary Shares registered hereunder or
upon exercise of the Common Stock Warrants registered hereunder, as the case
may be. Shares of Common Stock may be issued from time to time in one or
more classes or series.
(8) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
(9) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
<PAGE>
PROSPECTUS
KIMCO REALTY CORPORATION
$750,000,000
DEBT SECURITIES, PREFERRED STOCK,
DEPOSITARY SHARES, COMMON STOCK AND COMMON STOCK WARRANTS
Kimco Realty Corporation ('Kimco' or the 'Company') may from time to time
offer in one or more classes or series (i) its unsecured senior debt securities
(the 'Debt Securities'), (ii) shares or fractional shares of its preferred
stock, par value $1.00 per share (the 'Preferred Stock'), (iii) shares of
Preferred Stock represented by depositary shares (the 'Depositary Shares'), (iv)
shares of its common stock, par value $.01 per share (the 'Common Stock'), or
(v) warrants to purchase Common Stock (the 'Common Stock Warrants'), with an
aggregate public offering price of up to $750,000,000 on terms to be determined
at the time of offering. The Debt Securities, Preferred Stock, Depositary
Shares, Common Stock, and Common Stock Warrants (collectively, the 'Offered
Securities') may be offered separately, together or as units, in separate
classes or series in amounts, at prices and on terms to be set forth in a
supplement to this Prospectus (each, a 'Prospectus Supplement').
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific title, aggregate principal amount, currency of
denomination and payment, form (which may be registered or bearer, or
certificated or global), authorized denominations, maturity, rate (or manner of
calculation thereof) and time of payment of interest, terms for redemption at
the option of the Company or repayment at the option of the Holder, terms for
sinking fund payments, terms for conversion into Preferred Stock or Common
Stock, and any initial public offering price; (ii) in the case of Preferred
Stock, the specific title and stated value, any dividend, liquidation,
redemption, conversion, voting and other rights, and any initial public offering
price; (iii) in the case of Depositary Shares, the fractional share of Preferred
Stock represented by each such Depositary Share; (iv) in the case of Common
Stock, any initial public offering price; and (v) in the case of Common Stock
Warrants, the duration, offering price, exercise price and detachability. In
addition, such specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Offered Securities, in each case
as may be appropriate to preserve the status of the Company as a real estate
investment trust ('REIT') for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by such Prospectus Supplement.
The Offered Securities may be offered directly, through agents designated
from time to time by the Company, or to or through underwriters or dealers. If
any agents or underwriters are involved in the sale of any of the Offered
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See 'Plan of Distribution.' No Offered Securities may be sold
without delivery of the applicable Prospectus Supplement describing the method
and terms of the offering of such series of Offered Securities.
------------------
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 date of this Prospectus is August , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company 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 Registration
Statement, the exhibits and schedules forming a part thereof and the reports,
proxy statements and other information filed by the Company with the Commission
in accordance with the Exchange Act can be inspected and copied 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. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. If available, such information also
may be accessed through the Commission's electronic data gathering, analysis and
retrieval system ('EDGAR') via electronic means, including the Commission's
home-page on the Internet (http://www.sec.gov). In addition, certain of the
Company's securities are listed on the New York Stock Exchange and similar
information concerning the Company can be inspected and copied at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company 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
Offered Securities. 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 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 Company and the Offered Securities, 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference:
a. Annual Report on Form 10-K for the year ended December 31, 1997,
as amended;
b. Quarterly Reports on Form 10-Q for the quarter ended March 31,
1997;
c. Current Reports on Form 8-K filed January 21, 1998, January 22,
1998, January 30, 1998, March 12, 1998, April 15, 1998, May 6,
1998, May 22, 1998, June 4, 1998, June 24, 1998, July 9, 1998 and
August 10, 1998 and Current Report on Form 8-K/A on April 21,
1998; and
d. Definitive proxy statement filed May 15, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Offered Securities shall be
deemed to be incorporated by reference in this Prospectus and the applicable
Prospectus Supplement and to be part hereof and thereof from the date of filing
such documents. Any statement contained herein or therein or in a document
incorporated or deemed to be incorporated by reference herein or therein shall
be deemed to be modified or superseded for purposes of this Prospectus and the
applicable Prospectus Supplement to the extent that a statement contained herein
or therein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein and therein 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 or the applicable Prospectus Supplement.
Copies of all documents which are incorporated by reference in this
Prospectus and the applicable Prospectus Supplement (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 of the Offered Securities, to whom this
Prospectus and the applicable Prospectus Supplement are delivered, upon written
or oral request. Requests should be directed to the Secretary of the Company,
3333 New Hyde Park Road, New Hyde Park, New York 11042-0020 (telephone number:
(516) 869-9000).
2
<PAGE>
THE COMPANY
The Company began operations through a predecessor in 1966, and today is
the nation's largest publicly-traded owner and operator of neighborhood and
community shopping centers. As of April 1, 1998, the Company's portfolio was
comprised of approximately 42.2 million square feet of gross leasable area
('GLA') in 343 property interests, consisting of 277 neighborhood and community
shopping center properties, two regional malls and 62 retail store leases,
located in 38 states. On June 19, 1998, The Price REIT, Inc., a Maryland
corporation ('Price REIT'), which as of April 1, 1998, owned or had interests in
40 properties, consisting of 36 power and community centers, one stand-alone
warehouse, one project under development and two undeveloped land parcels,
located in 16 states containing approximately 7.7 million square feet of GLA,
was merged into REIT Sub, Inc., a wholly owned subsidiary of the Company (the
'Merger').
The Company believes that it has operated, and the Company intends to
continue to operate, in such a manner to qualify as a REIT under the Internal
Revenue Code of 1986, as amended (the 'Code'). The Company is self-administered
and self-managed through present management which has owned and managed
neighborhood and community shopping centers for more than 30 years. The
executive officers are engaged in the day-to-day management and operation of
real estate exclusively with the Company, with nearly all operating functions,
including leasing, legal, construction, data processing, maintenance, finance
and accounting administered by the Company.
In order to maintain its qualification as a REIT for federal income tax
purposes, the Company is required to distribute at least 95% of its taxable
income each year. Dividends on any preferred stock issued by the Company are
included as distributions for this purpose. Historically, the Company's
distributions have exceeded, and the Company expects that its distributions will
continue to exceed, taxable income each year. A portion of such distributions
may constitute a return of capital. As a result of the foregoing, the
consolidated net worth of the Company may decline. The Company, however, does
not believe that consolidated stockholders' equity is a meaningful reflection of
net real estate values.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Offered Securities
for general corporate purposes, which may include the acquisition of
neighborhood and community shopping centers as suitable opportunities arise, the
expansion and improvement of certain properties in the Company's portfolio, and
the repayment of indebtedness outstanding at such time.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, dated as of
September 1, 1993, as amended by the First Supplemental Indenture dated as of
August 4, 1994, the Second Supplemental Indenture dated as of April 7, 1995 and
as further amended or supplemented from time to time (the 'Indenture'), between
the Company and IBJ Schroder Bank & Trust Company, as Trustee (the 'Trustee').
The Indenture has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part and is available for inspection at the corporate
trust office of the Trustee at One State Street, New York, New York 10004 or as
described above under 'Available Information.' The Indenture is subject to, and
governed by, the Trust Indenture Act of 1939, as amended (the 'TIA'). The
statements made hereunder relating to the Indenture and the Debt Securities to
be issued thereunder are summaries of certain provisions thereof and do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture and such Debt Securities. All
section references appearing herein are to sections of the Indenture, and
capitalized terms used but not defined herein shall have the respective meanings
set forth in the Indenture.
3
<PAGE>
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company
and will rank equally with all other unsecured and unsubordinated indebtedness
of the Company. The Indenture provides that the Debt Securities may be issued
without limit as to aggregate principal amount, in one or more series, in each
case as established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of the Company or as established in one or
more indentures supplemental to the Indenture. All Debt Securities of one series
need not be issued at the same time and, unless otherwise provided, a series may
be reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series (Section
301).
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
such series (Section 608). In the event that two or more persons are acting as
Trustee with respect to different series of Debt Securities, each such Trustee
shall be a Trustee of a trust under the Indenture separate and apart from the
trust administered by any other Trustee (Section 609), and, except as otherwise
indicated herein, any action described herein to be taken by the Trustee may be
taken by each such Trustee with respect to, and only with respect to, the one or
more series of Debt Securities for which it is Trustee under the Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) if other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or (if applicable) the portion of the principal
amount of such Debt Securities which is convertible into Common Stock
or Preferred Stock, or the method by which any such portion shall be
determined;
(4) if convertible, in connection with the preservation of the Company's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Stock or Preferred Stock into which such
Debt Securities are convertible;
(5) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(7) the date or dates, or the method for determining such date or dates,
from which any interest will accrue, the Interest Payment Dates on
which any such interest will be payable, the Regular Record Dates for
such Interest Payment Dates, or the method by which any such Date
shall be determined, the Person to whom such interest shall be
payable, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, such Debt
Securities may be surrendered for conversion or registration of
transfer or exchange and notices or demands to or upon the Company in
respect of such Debt Securities and the Indenture may be served;
(9) the period or periods within which, the price or prices at which and
the terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of the Company, if the
Company is to have such an option;
(10) the obligation, if any, of the Company to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or
periods
4
<PAGE>
within which, the price or prices at which and the terms and
conditions upon which such Debt Securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be units of two
or more foreign currencies or a composite currency or currencies, and
the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula
or method may, but need not be, based on a currency, currencies,
currency unit or units or composite currency or currencies) and the
manner in which such amounts shall be determined;
(13) any additions to, modifications of or deletions from the terms of such
Debt Securities with respect to the Events of Default or covenants set
forth in the Indenture;
(14) whether such Debt Securities will be issued in certificated and/or
book-entry form;
(15) whether such Debt Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the
denominations thereof and terms and conditions relating thereto;
(16) the applicability, if any, of the defeasance and covenant defeasance
provisions of Article XIV of the Indenture;
(17) if such Debt Securities are to be issued upon the exercise of debt
warrants, the time, manner and place for such Debt Securities to be
authenticated and delivered;
(18) the terms, if any, upon which such Debt Securities may be convertible
into Common Stock or Preferred Stock of the Company and the terms and
conditions upon which such conversion will be effected, including,
without limitation, the initial conversion price or rate and the
conversion period;
(19) whether and under what circumstances the Company will pay Additional
Amounts as contemplated in the Indenture on such Debt Securities in
respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt
Securities in lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301).
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
('Original Issue Discount Securities'). If material or applicable, special U.S.
federal income tax, accounting and other considerations applicable to Original
Issue Discount Securities will be described in the applicable Prospectus
Supplement.
Except as described under 'Certain Covenants--Limitations on Incurrence of
Debt' and under 'Merger, Consolidation or Sale,' the Indenture does not contain
any other provisions that would limit the ability of the Company to incur
indebtedness or to substantially reduce or eliminate the Company's assets, which
may have an adverse effect on the Company's ability to service its indebtedness
(including the Debt Securities) or that would afford Holders of the Debt
Securities protection in the event of (i) a highly leveraged or similar
transaction involving the Company, the management of the Company, or any
Affiliate of either such party, (ii) a change of control, or (iii) a
reorganization, restructuring, merger or similar transaction involving the
Company that may adversely affect the Holders of the Debt Securities.
Furthermore, subject to the limitations set forth under 'Merger, Consolidation
or Sale,' the Company may, in the future, enter into certain transactions, such
as the sale of all or substantially all of its assets or the merger or
consolidation of the Company, that would increase the amount of the Company's
indebtedness or substantially reduce or eliminate the Company's assets, which
may have an adverse effect on the Company's ability to service its indebtedness,
including the Debt Securities. In addition, restrictions on ownership and
transfers of the Company's common stock and preferred stock are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. See 'Description of Common Stock' and 'Description of
Preferred Stock.' Reference is made to the applicable
5
<PAGE>
Prospectus Supplement for information with respect to any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
A significant number of the Company's properties are owned through its
subsidiaries. Therefore, the rights of the Company and its creditors, including
Holders of Debt Securities, to participate in the assets of such subsidiaries
upon the liquidation or recapitalization of such subsidiaries or otherwise will
be subject to the prior claims of such subsidiaries' respective creditors
(except to the extent that claims of the Company itself as a creditor may be
recognized).
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the corporate trust office of the Trustee, initially located
at One State Street, New York, New York 10004, provided that, at the option of
the Company, payment of interest may be made by check mailed to the address of
the Person entitled thereto as it appears in the Security Register or by wire
transfer of funds to such Person at an account maintained within the United
States (Sections 301, 305, 306, 307 and 1002).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ('Defaulted Interest') will
forthwith cease to be payable to the Holder on the applicable Regular Record
Date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the 'Special
Record Date') for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the Indenture.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Trustee referred to above.
In addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the Trustee referred to above. Every Debt Security surrendered
for conversion, registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer. No service charge will be made
for any registration of transfer or exchange of any Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith (Section 305). If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the Trustee) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that the Company will be required to maintain a
transfer agent in each place of payment for such series. The Company may at any
time designate additional transfer agents with respect to any series of Debt
Securities (Section 1002).
Neither the Company nor the Trustee shall be required to (i) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) issue, register the transfer of or exchange any Debt Security
which has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such Debt Security not to be so repaid (Section 305).
MERGER, CONSOLIDATION OR SALE
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation, provided that (a) either the Company shall be the continuing
corporation, or the successor corporation (if other than the Company) formed by
or resulting from any such consolidation or
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merger or which shall have received the transfer of such assets shall expressly
assume payment of the principal of (and premium, if any) and interest on all of
the Debt Securities and the due and punctual performance and observance of all
of the covenants and conditions contained in the Indenture; (b) immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any Subsidiary as a result thereof as
having been incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default under the Indenture, and no event which, after
notice or the lapse of time, or both, would
become such an Event of Default, shall have occurred and be continuing; and (c)
an officer's certificate and legal opinion covering such conditions shall be
delivered to the Trustee (Sections 801 and 803).
CERTAIN COVENANTS
Limitations on Incurrence of Debt. The Company will not, and will not
permit any Subsidiary to, incur any Debt (as defined below) if, immediately
after giving effect to the incurrence of such additional Debt, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis determined in accordance with generally accepted accounting
principles is greater than 65% of the sum of (i) the Company's Undepreciated
Real Estate Assets (as defined below) as of the end of the calendar quarter
covered in the Company's Annual Report on Form 10-K or Quarterly Report on Form
10-Q, as the case may be, most recently filed with the Commission (or, if such
filing is not permitted under the Exchange Act, with the Trustee) prior to the
incurrence of such additional Debt and (ii) the purchase price of any real
estate assets acquired by the Company or any Subsidiary since the end of such
calendar quarter, including those obtained in connection with the incurrence of
such additional Debt (Section 1004).
In addition to the foregoing limitation on the incurrence of Debt, the
Company will not, and will not permit any Subsidiary to, incur any Debt secured
by any mortgage, lien, charge, pledge, encumbrance or security interest of any
kind upon any of the property of the Company or any Subsidiary if, immediately
after giving effect to the incurrence of such additional Debt, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis which is secured by any mortgage, lien, charge, pledge,
encumbrance or security interest on property of the Company or any Subsidiary is
greater than 40% of the sum of (i) the Company's Undepreciated Real Estate
Assets as of the end of the calendar quarter covered in the Company's Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not permitted under
the Exchange Act, with the Trustee) prior to the incurrence of such additional
Debt and (ii) the purchase price of any real estate assets acquired by the
Company or any Subsidiary since the end of such calendar quarter, including
those obtained in connection with the incurrence of such additional Debt
(Section 1004).
In addition to the foregoing limitations on the incurrence of Debt, the
Company will not, and will not permit any Subsidiary to, incur any Debt if
Consolidated Income Available for Debt Service (as defined below) for any 12
consecutive calendar months within the 15 calendar months immediately preceding
the date on which such additional Debt is to be incurred shall have been less
than 1.5 times the Maximum Annual Service Charge (as defined below) on the Debt
of the Company and all Subsidiaries to be outstanding immediately after the
incurring of such additional Debt (Section 1004).
Restrictions on Dividends and Other Distributions. The Company will not, in
respect of any shares of any class of its capital stock, (a) declare or pay any
dividends (other than dividends payable in capital stock of the Company)
thereon, (b) apply any of its property or assets to the purchase, redemption or
other acquisition or retirement thereof, (c) set apart any sum for the purchase,
redemption or other acquisition or retirement thereof, or (d) make any other
distribution, by reduction of capital or otherwise if, immediately after such
declaration or other action referred to above, the aggregate of all such
declarations and other actions since the date on which the Indenture was
originally executed shall exceed the sum of (i) Funds from Operations (as
defined below) from June 30, 1993 until the end of the calendar quarter covered
in the Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Exchange Act, with the Trustee) prior to such
declaration or other action and (ii) $26,000,000; provided, however, that the
foregoing limitation shall not apply to any declaration or other action referred
to above which is necessary to maintain the Company's status as a REIT under the
Internal Revenue Code of 1986, as amended (the 'Code'), if the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries at
such time is less than 65% of the Company's Undepreciated Real Estate
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Assets as of the end of the calendar quarter covered in the Company's Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not permitted under
the Exchange Act, with the Trustee) prior to such declaration or other action
(Section 1005).
Notwithstanding the foregoing, the Company will not be prohibited from
making the payment of any dividend within 30 days of the declaration thereof if
at such date of declaration such payment would have complied with the provisions
of the immediately preceding paragraph (Section 1005).
Existence. Except as permitted under 'Merger, Consolidation or Sale,' the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business and that the loss thereof
is not disadvantageous in any material respect to the Holders of the Debt
Securities (Section 1006).
Maintenance of Properties. The Company will cause all of its properties
used or useful in the conduct of its business or the business of any Subsidiary
to be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that the Company and its Subsidiaries shall not be prevented
from selling or otherwise disposing for value its properties in the ordinary
course of business (Section 1007).
Insurance. The Company will, and will cause each of its Subsidiaries to,
keep all of its insurable properties insured against loss or damage at least
equal to their then full insurable value with insurers of recognized
responsibility and having a rating of at least A:VIII in Best's Key Rating Guide
(Section 1008).
Payment of Taxes and Other Claims. The Company will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings (Section 1009).
Provision of Financial Information. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Company will, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents which the Company would have been required
to file with the Commission pursuant to such Section 13 or 15(d) (the 'Financial
Statements') if the Company were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the 'Required Filing Dates') by
which the Company would have been required so to file such documents if the
Company were so subject. The Company will also in any event (x) within 15 days
of each Required Filing Date (i) transmit by mail to all Holders of Debt
Securities, as their names and addresses appear in the Security Register,
without cost to such Holders copies of the annual reports and quarterly reports
which the Company would have been required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Company were subject to such Sections and (y) if filing such documents by the
Company with the Commission is not permitted under the Exchange Act, promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of such documents to any prospective Holder (Section
1010).
Maintenance of Unencumbered Total Asset Value. The Company will at all
times maintain an Unencumbered Total Asset Value in an amount of not less than
one hundred percent (100%) of the aggregate principal amount of all outstanding
Debt of the Company and its Subsidiaries that is unsecured (Section 1014).
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As used herein,
'Consolidated Income Available for Debt Service' for any period means
Consolidated Net Income (as defined below) of the Company and its Subsidiaries
plus amounts which have been deducted for (a) interest on Debt of the Company
and its Subsidiaries, (b) provision for taxes of the Company and its
Subsidiaries based on income, (c) amortization of debt discount, (d) property
depreciation and amortization and (e) the effect of any noncash charge resulting
from a change in accounting principles in determining Consolidated Net Income
for such period.
'Consolidated Net Income' for any period means the amount of consolidated
net income (or loss) of the Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
'Debt' of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary, whether or not contingent, in respect of (i) borrowed
money or evidenced by bonds, notes, debentures or similar instruments, (ii)
indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any
security interest existing on property owned by the Company or any Subsidiary,
(iii) letters of credit or amounts representing the balance deferred and unpaid
of the purchase price of any property except any such balance that constitutes
an accrued expense or trade payable or (iv) any lease of property by the Company
or any Subsidiary as lessee which is reflected on the Company's Consolidated
Balance Sheet as a capitalized lease in accordance with generally accepted
accounting principles, in the case of items of indebtedness under (i) through
(iii) above to the extent that any such items (other than letters of credit)
would appear as a liability on the Company's Consolidated Balance Sheet in
accordance with generally accepted accounting principles, and also includes, to
the extent not otherwise included, any obligation by the Company or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
indebtedness of another person (other than the Company or any Subsidiary) (it
being understood that Debt shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
'Funds from Operations' for any period means the Consolidated Net Income of
the Company and its Subsidiaries for such period without giving effect to
depreciation and amortization, gains or losses from extraordinary items, gains
or losses on sales of real estate, gains or losses on investments in marketable
securities and any provision/benefit for income taxes for such period, plus
Funds from Operations of unconsolidated joint ventures, all determined on a
consistent basis for such period.
'Maximum Annual Service Charge' as of any date means the maximum amount
which may become payable in any period of 12 consecutive calendar months from
such date for interest on, and required amortization of, Debt. The amount
payable for amortization shall include the amount of any sinking fund or other
analogous fund for the retirement of Debt and the amount payable on account of
principal on any such Debt which matures serially other than at the final
maturity date of such Debt.
'Total Assets' as of any date means the sum of (i) the Company's
Undepreciated Real Estate Assets and (ii) all other assets of the Company
determined in accordance with generally accepted accounting principles (but
excluding goodwill and amortized debt costs).
'Undepreciated Real Estate Assets' as of any date means the amount of real
estate assets of the Company and its Subsidiaries on such date, before
depreciation and amortization determined on a consolidated basis in accordance
with generally accepted accounting principles.
'Unencumbered Total Asset Value' as of any date means the sum of the
Company's Total Assets which are unencumbered by any mortgage, lien, charge,
pledge or security interest that secures the payment of any obligations under
any Debt.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are 'Events of Default'
with respect to any series of Debt Securities issued thereunder: (a) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (b) default in the payment of the principal of (or premium, if any,
on) any Debt Security
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of such series at its Maturity; (c) default in making any sinking fund payment
as required for any Debt Security of such series; (d) default in the performance
of any other covenant of the Company contained in the Indenture (other than a
covenant added to the Indenture solely for the benefit of a series of Debt
Securities issued thereunder other than such series), continued for 60 days
after written notice as provided in the Indenture; (e) default in the payment of
an aggregate principal amount exceeding $10,000,000 of any evidence of
indebtedness of the Company or any mortgage, indenture or other instrument under
which such indebtedness is issued or by which such indebtedness is secured, such
default having occurred after the expiration of any applicable grace period and
having resulted in the acceleration of the maturity of such indebtedness, but
only if such indebtedness is not discharged or such acceleration is not
rescinded or annulled; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of the
Company or any Significant Subsidiary or either of its property; and (g) any
other Event of Default provided with respect to a particular series of Debt
Securities (Section 501). The term 'Significant Subsidiary' means each
significant subsidiary (as defined in Regulation S-X promulgated under the
Securities Act) of the Company.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Debt Securities of that series may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities or Indexed Securities, such portion of the principal amount as may be
specified in the terms thereof) of all of the Debt Securities of that series to
be due and payable immediately by written notice thereof to the Company (and to
the Trustee if given by the Holders). However, at any time after such a
declaration of acceleration with respect to Debt Securities of such series (or
of all Debt Securities then Outstanding under the Indenture, as the case may be)
has been made, but before a judgment or decree for payment of the money due has
been obtained by the Trustee, the Holders of not less than a majority in
principal amount of Outstanding Debt Securities of such series (or of all Debt
Securities then Outstanding under the Indenture, as the case may be) may rescind
and annul such declaration and its consequences if (a) the Company shall have
deposited with the Trustee all required payments of the principal of (and
premium, if any) and interest on the Debt Securities of such series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the Trustee and (b) all
Events of Default, other than the non-payment of accelerated principal (or
specified portion thereof), with respect to Debt Securities of such series (or
of all Debt Securities then Outstanding under the Indenture, as the case may be)
have been cured or waived as provided in the Indenture (Section 502). The
Indenture also provides that the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be) may
waive any past default with respect to such series and its consequences, except
a default (x) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series or (y) in respect of a covenant or
provision contained in the Indenture that cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security affected thereby
(Section 513).
The Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the Indenture; provided, however, that the
Trustee may withhold notice to the Holders of any series of Debt Securities of
any default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if the Responsible Officers of the Trustee consider
such withholding to be in the interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the case of failure of the Trustee, for
60 days, to act after it has received a written request to institute proceedings
in respect of an Event of Default from the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of such series, as well as
an offer of indemnity reasonably satisfactory to it (Section 507). This
provision will not prevent, however, any Holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof (Section 508).
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Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
(Section 602). The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred upon the
Trustee. However, the Trustee may refuse to follow any direction which is in
conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of Debt
Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, the Company must
deliver to the Trustee a certificate, signed by one of several specified
officers, stating whether or not such officer has knowledge of any default under
the Indenture and, if so, specifying each such default and the nature and status
thereof (Section 1011).
MODIFICATION
Modifications and amendments of the Indenture and Debt Securities may be
made only with the consent of the Holders of not less than a majority in
principal amount of all Outstanding Debt Securities which are affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each such Debt Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (b)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the Holder
of any such Debt Security; (c) change the Place of Payment, or the coin or
currency, for payment of principal of (or premium, if any) or interest on any
such Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Debt Security; (e) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security
(Section 902).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities have the right to waive compliance by the Company with certain
covenants in the Indenture (Section 1013).
Modifications and amendments of the Indenture may be made by the Company
and the Trustee without the consent of any Holder of Debt Securities for any of
the following purposes: (i) to evidence the succession of another Person to the
Company as obligor under the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of all or any series of Debt Securities
or to surrender any right or power conferred upon the Company in the Indenture;
(iii) to add Events of Default for the benefit of the Holders of all or any
series of Securities; (iv) to add or change any provisions of the Indenture to
facilitate the issuance of, or to liberalize certain terms of, Debt Securities
in bearer form, or to permit or facilitate the issuance of Debt Securities in
uncertificated form, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provisions of the Indenture, provided
that any such change or elimination shall become effective only when there are
no Debt Securities Outstanding of any series created prior thereto which are
entitled to the benefit of such provision; (vi) to secure the Debt Securities;
(vii) to establish the form or terms of Debt Securities of any series, including
the provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Stock or Preferred Stock of the Company; (viii) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the Indenture by more than one Trustee;
(ix) to cure any ambiguity, defect or inconsistency in the Indenture, provided
that such action shall not adversely affect the interests of Holders of Debt
Securities of any series in any material respect; or (x) to supplement any of
the provisions of the Indenture
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to the extent necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, provided that such action shall not adversely
affect the interests of the Holders of the Debt Securities of any series in any
material respect (Section 901).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of a Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above), (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to
Section 301 of the Indenture, and (iv) Debt Securities owned by the Company or
any other obligor upon the Debt Securities or any Affiliate of the Company or of
such other obligor shall be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of at
least 10% in principal amount of the Outstanding Debt Securities of such series,
in any such case upon notice given as provided in the Indenture (Section 1502).
Except for any consent that must be given by the Holder of each Debt Security
affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series;
provided, however, that, except as referred to above, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Debt Securities of a series may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of Debt Securities of any series duly held in accordance with
the Indenture will be binding on all Holders of Debt Securities of that series.
The quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be Persons holding or representing a majority in principal amount
of the Outstanding Debt Securities of a series; provided, however, that if any
action is to be taken at such meeting with respect to a consent or waiver which
may be given by the Holders of not less than a specified percentage in principal
amount of the Outstanding Debt Securities of a series, the Persons holding or
representing such specified percentage in principal amount of the Outstanding
Debt Securities of such series will constitute a quorum (Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of Holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage in principal amount of all Outstanding Debt Securities
affected thereby, or of the Holders of such series and one or more additional
series: (i) there shall be no minimum quorum requirement for such meeting and
(ii) the principal amount of the Outstanding Debt Securities of such series that
vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under the Indenture (Section
1504).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may discharge certain obligations to Holders of any series of
Debt Securities that have not already been delivered to the Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or
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currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal (and
premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be (Section 401).
The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, the Company may elect either (a) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for the obligation to pay Additional Amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
('defeasance') (Section 1402) or (b) to be released from its obligations with
respect to such Debt Securities under Sections 1004 to 1010, inclusive, and
Section 1014 of the Indenture (being the restrictions described under 'Certain
Covenants') or, if provided pursuant to Section 301 of the Indenture, its
obligations with respect to any other covenant, and any omission to comply with
such obligations shall not constitute a default or an Event of Default with
respect to such Debt Securities ('covenant defeasance') (Section 1403), in
either case upon the irrevocable deposit by the Company with the Trustee, in
trust, of an amount, in such currency or currencies, currency unit or units or
composite currency or currencies in which such Debt Securities are payable at
Stated Maturity, or Government Obligations (as defined below), or both,
applicable to such Debt Securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Company
has delivered to the Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred, and such Opinion of Counsel, in the case of defeasance, must refer to
and be based upon a ruling of the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
Indenture (Section 1404).
'Government Obligations' means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the Foreign
Currency in which the Debt Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the Holder of a Debt Security of such series is entitled to, and does, elect
pursuant to Section 301 of the Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any)
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and interest on such Debt Security as they become due out of the proceeds
yielded by converting the amount so deposited in respect of such Debt Security
into the currency, currency unit or composite currency in which such Debt
Security becomes payable as a result of such election or such cessation of usage
based on the applicable market exchange rate (Section 1405). 'Conversion Event'
means the cessation of use of (i) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) any currency
unit or composite currency other than the ECU for the purposes for which it was
established. Unless otherwise provided in the applicable Prospectus Supplement,
all payments of principal of (and premium, if any) and interest on any Debt
Security that is payable in a Foreign Currency that ceases to be used by its
government of issuance shall be made in U.S. dollars (Section 101).
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default described
in clause (d) under 'Events of Default, Notice and Waiver' with respect to
Sections 1004 to 1010, inclusive, and Section 1014 of the Indenture (which
Sections would no longer be applicable to such Debt Securities) or described in
clause (g) under 'Events of Default, Notice and Waiver' with respect to any
other covenant as to which there has been covenant defeasance, the amount in
such currency, currency unit or composite currency in which such Debt Securities
are payable, and Government Obligations on deposit with the Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of their
Stated Maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of Default.
However, the Company would remain liable to make payment of such amounts due at
the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into other Debt Securities, Common Stock or Preferred Stock will be
set forth in the applicable Prospectus Supplement relating thereto. Such terms
will include whether such Debt Securities are convertible into other Debt
Securities, Common Stock or Preferred Stock, the conversion price (or manner of
calculation thereof), the conversion period, provisions as to whether conversion
will be at the option of the Holders or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Debt Securities.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the 'Global Securities') that will be
deposited with, or on behalf of, a depositary (the 'Depositary') identified in
the applicable Prospectus Supplement relating to such series. Global Securities
may be issued in either registered or bearer form and in either temporary or
permanent form. The specific terms of the depositary arrangement with respect to
a series of Debt Securities will be described in the applicable Prospectus
Supplement relating to such series.
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DESCRIPTION OF COMMON STOCK
The Company has the authority to issue 100,000,000 shares of common stock,
par value $.01 per share, and 51,000,000 shares of excess stock, par value $.01
per share. At June 30, 1998, the Company had outstanding 55,446,111 shares of
common stock and no shares of excess stock. On August 4, 1994, the Company,
previously a Delaware corporation, reincorporated as a Maryland corporation
pursuant to an Agreement and Plan of Merger approved by the Company's
stockholders.
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock to which any Prospectus Supplement may
relate, including a Prospectus Supplement providing that Common Stock will be
issuable upon conversion of Debt Securities or Preferred Stock of the Company or
upon the exercise of the Common Stock Warrants issued by the Company. The
statements below describing the Common Stock are in all respects subject to and
qualified in their entirety by reference to the applicable provisions of the
Company's charter and Bylaws.
Holders of the Company's Common Stock will be entitled to receive dividends
when, as and if declared by the Board of Directors of the Company, out of assets
legally available therefor. Payment and declaration of dividends on the Common
Stock and purchases of shares thereof by the Company will be subject to certain
restrictions if the Company fails to pay dividends on the preferred stock. See
'Description of Preferred Stock.' Upon any liquidation, dissolution or winding
up of the Company, holders of Common Stock will be entitled to share equally and
ratably in any assets available for distribution to them, after payment or
provision for payment of the debts and other liabilities of the Company and the
preferential amounts owing with respect to any outstanding preferred stock. The
Common Stock will possess ordinary voting rights for the election of directors
and in respect of other corporate matters, with each share entitling the holder
thereof to one vote. Holders of Common Stock will not have cumulative voting
rights in the election of directors, which means that holders of more than 50%
of all of the shares of the Company's common stock voting for the election of
directors will be able to elect all of the directors if they choose to do so
and, accordingly, the holders of the remaining shares will be unable to elect
any directors. Holders of shares of Common Stock will not have preemptive
rights, which means they have no right to acquire any additional shares of
Common Stock that may be issued by the Company at a subsequent date. The Common
Stock will, when issued, be fully paid and nonassessable and will not be subject
to preemptive or similar rights.
Under Maryland law and the Company's charter, a distribution (whether by
dividend, redemption or other acquisition of shares) to holders of shares of
common stock may be made only if, after giving effect to the distribution, the
Company's total assets are greater than the Company's total liabilities plus the
amount necessary to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights on dissolution are superior to the
holders of common stock. The Company has complied with this requirement in all
of its prior distributions to holders of Common Stock.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code, not more than 50% in
value of its outstanding stock may be owned, actually or constructively, by five
or fewer individuals (as defined in the Code to include certain entities) during
the last half of a taxable year, and its stock must be beneficially owned by 100
or more persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year. In addition, rent from
Related Party Tenants (as defined below) is not qualifying income for purposes
of the income tests under the Code.
Subject to certain exceptions specified in the Company's charter, no holder
may own, or be deemed to own by virtue of the constructive ownership provisions
of the Code, more than 2% (the 'Ownership Limit') in value of the outstanding
shares of the Company's common stock. The constructive ownership rules are
complex and may cause common stock owned actually or constructively by a group
of related individuals and/or entities to be deemed constructively owned by one
individual or entity. As a result, the acquisition of less than 2% in value of
the common stock (or the acquisition of an interest in an entity which owns
common stock) by an individual or entity could cause that individual or entity
(or another individual or entity) to own constructively in excess of 2% in value
of the common stock, and thus subject such common stock to the Ownership Limit.
Existing stockholders who exceeded the Ownership Limit immediately after
the completion of the Company's initial public offering of its common stock (the
'IPO') in November 1991, may continue to do so
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and may acquire additional shares through the stock option plan, or from other
existing stockholders who exceed the Ownership Limit, but may not acquire
additional shares from such sources such that the five largest beneficial owners
of common stock could own, actually or constructively, more than 49.6% of the
outstanding common stock, and in any event may not acquire additional shares
from any other sources. In addition, because rent from Related Party Tenants
(generally, a tenant owned, actually or constructively, 10% or more by a REIT,
or a 10% owner of a REIT) is not qualifying rent for purposes of the gross
income tests under the Code, the Company's charter provides that no individual
or entity may own, or be deemed to own by virtue of the attribution provisions
of the Code (which differ from the attribution provisions applied to the
Ownership Limit), in excess of 9.8% in value of the outstanding common stock
(the 'Related Party Limit'). The Board of Directors may waive the Ownership
Limit and the Related Party Limit with respect to a particular stockholder (such
Related Party Limit has been waived with respect to the existing stockholders
who exceeded the Related Party Limit immediately after the IPO) if evidence
satisfactory to the Board of Directors and the Company's tax counsel is
presented that such ownership will not then or in the future jeopardize the
Company's status as a REIT. As a condition of such waiver, the Board of
Directors may require opinions of counsel satisfactory to it and/or an
undertaking from the applicant with respect to preserving the REIT status of the
Company. The foregoing restrictions on transferability and ownership will not
apply if the Board of Directors determines that it is no longer in the best
interests of the Company to attempt to qualify, or to continue to qualify, as a
REIT. If shares of common stock in excess of the Ownership Limit or the Related
Party Limit, or shares which would cause the REIT to be beneficially owned by
less than 100 persons or which would cause the Company to be 'closely held'
within the meaning of the Code or would otherwise result in failure to qualify
as a REIT, are issued or transferred to any person, such issuance or transfer
shall be null and void to the intended transferee, and the intended transferee
would acquire no rights to the stock. Shares transferred in excess of the
Ownership Limit or the Related Party Limit, or shares which would otherwise
cause the Company to be 'closely held' within the meaning of the Code or would
otherwise result in failure to qualify as a REIT, will automatically be
exchanged for shares of a separate class of stock ('Excess Stock') that will be
transferred by operation of law to the Company as trustee for the exclusive
benefit of the person or persons to whom the shares are ultimately transferred,
until such time as the intended transferee retransfers the shares. While these
shares are held in trust, they will not be entitled to vote or to share in any
dividends or other distributions (except upon liquidation). The shares may be
retransferred by the intended transferee to any person who may hold such shares
at a price not to exceed (i) the price paid by the intended transferee, or (ii)
if the intended transferee did not give value for such shares, a price per share
equal to the market value of the shares on the date of the purported transfer to
the intended transferee, at which point the shares will automatically be
exchanged for ordinary common stock. In addition, such shares of Excess Stock
held in trust are purchasable by the Company for a 90-day period at a price
equal to the lesser of the price paid for the stock by the intended transferee
and the market price for the stock on the date the Company determines to
purchase the stock. This period commences on the date of the violative transfer
if the intended transferee gives notice to the Company of the transfer, or the
date the Board of Directors determines that a violative transfer has occurred if
no notice is provided.
All certificates representing shares of common stock will bear a legend
referring to the restrictions described above.
All persons who own, directly or by virtue of the attribution provisions of
the Code, more than a specified percentage of the outstanding shares of common
stock must file an affidavit with the Company containing the information
specified in the Company's charter within 30 days after January 1 of each year.
In addition, each common stockholder shall upon demand be required to disclose
to the Company in writing such information with respect to the actual and
constructive ownership of shares as the Board of Directors deems necessary to
comply with the provisions of the Code applicable to a REIT or to comply with
the requirements of any taxing authority or governmental agency.
The Registrar and Transfer Agent for the Company's common stock is
BankBoston N.A.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with any
other Offered Securities offered by any Prospectus Supplement and may be
attached to or separate from such Offered Securities. Each series of Common
Stock
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Warrants will be issued under a separate warrant agreement (each, a 'Warrant
Agreement') to be entered into between the Company and a warrant agent specified
in the applicable Prospectus Supplement (the 'Warrant Agent'). The Warrant Agent
will act solely as an agent of the Company in connection with the Common Stock
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Common Stock
Warrants.
The applicable Prospectus Supplement will describe the terms of the Common
Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following: (1) the title of such Common Stock
Warrants; (2) the aggregate number of such Common Stock Warrants; (3) the price
or prices at which such Common Stock Warrants will be issued; (4) the
designation, number and terms of the shares of Common Stock purchasable upon
exercise of such Common Stock Warrants; (5) the designation and terms of the
other Offered Securities with which such Common Stock Warrants are issued and
the number of such Common Stock Warrants issued with each such Offered Security;
(6) the date, if any, on and after which such Common Stock Warrants and the
related Common Stock will be separately transferable; (7) the price at which
each share of Common Stock purchasable upon exercise of such Common Stock
Warrants may be purchased; (8) the date on which the right to exercise such
Common Stock Warrants shall commence and the date on which such right shall
expire; (9) the minimum or maximum amount of such Common Stock Warrants which
may be exercised at any one time; (10) information with respect to book-entry
procedures, if any; (11) a discussion of certain federal income tax
considerations; and (12) any other material terms of such Common Stock Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Common Stock Warrants.
DESCRIPTION OF PREFERRED STOCK
The Company is authorized to issue 3,470,000 shares of preferred stock, par
value $1.00 per share, 345,000 shares of 7 3/4% Class A Cumulative Redeemable
Preferred Stock, $1.00 par value per share ('Class A Preferred Stock'), 230,000
shares of 8 1/2% Class B Cumulative Redeemable Preferred Stock, $1.00 par value
per share ('Class B Preferred Stock'), 460,000 shares of 8 3/8% Class C
Cumulative Redeemable Preferred Stock, $1.00 par value per share ('Class C
Preferred Stock'), 700,000 shares of 7 1/2% Class D Cumulative Convertible
Redeemable Preferred Stock, $1.00 par value per share ('Class D Preferred
Stock') and 65,000 shares of Class E Floating Rate Cumulative Preferred Stock.
The Company is also authorized to issue 345,000 shares of Class A Excess
Preferred Stock, $1.00 par value per share ('Class A Excess Preferred Stock'),
230,000 shares of Class B Excess Preferred Stock, $1.00 par value per share
('Class B Excess Preferred Stock'), 460,000 shares of Class C Excess Preferred
Stock, $1.00 par value per share ('Class C Excess Preferred Stock'), 700,000
shares of Class D Excess Preferred Stock, $1.00 par value per share ('Class D
Excess Preferred Stock') and 65,000 shares of Class E Excess Preferred Stock,
par value $1.00 per share ('Class E Preferred Stock'), which are reserved for
issuance upon conversion of certain outstanding Class A Preferred Stock, Class B
Preferred Stock, Class C Preferred Stock, Class D Preferred Stock or Class E
Preferred Stock, as the case may be, as necessary to preserve the Company's
status as a REIT. At June 30, 1998, 300,000 shares of Class A Preferred Stock,
represented by 3,000,000 depositary shares, 200,000 shares of Class B Preferred
Stock, represented by 2,000,000 depositary shares, 400,000 shares of Class C
Preferred Stock, represented by 4,000,000 depositary shares, 429,159 shares of
Class D Preferred Stock, represented by 4,291,590 depositary shares and 65,000
shares of Class E Preferred Stock, represented by 650,000 depositary shares,
were outstanding.
Under the Company's charter, the Board of Directors may from time to time
establish and issue one or more classes or series of preferred stock and fix the
designations, powers, preferences and rights of the shares of such classes or
series and the qualifications, limitations or restrictions thereon, including,
but not limited to, the fixing of the dividend rights, dividend rate or rates,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions) and the liquidation preferences.
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Company's charter (including the applicable
articles supplementary) and Bylaws.
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GENERAL
Subject to limitations prescribed by Maryland law and the Company's
charter, the Board of Directors is authorized to fix the number of shares
constituting each class or series of Preferred Stock and the designations and
powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, including such
provisions as may be desired concerning voting, redemption, dividends,
dissolution or the distribution of assets, conversion or exchange, and such
other subjects or matters as may be fixed by resolution of the Board of
Directors or duly authorized committee thereof. The Preferred Stock will, when
issued, be fully paid and nonassessable and will not have, or be subject to, any
preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the class or
series of Preferred Stock offered thereby for specific terms, including:
(1) The class or series, title and stated value of such Preferred
Stock;
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the offering price of such
Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock;
(4) Whether dividends on such Preferred Stock shall be cumulative or
not and, if cumulative, the date from which dividends on such
Preferred Stock shall accumulate;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) Provisions for a sinking fund, if any, for such Preferred Stock;
(7) Provisions for redemption, if applicable, of such Preferred
Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into Common Stock of the
Company, including the conversion price (or manner of calculation
thereof);
(10) Whether interests in such Preferred Stock will be represented by
Depositary Shares;
(11) A discussion of certain federal income tax considerations
applicable to such Preferred Stock;
(12) In addition to those limitations described below, any other
limitations on direct or beneficial ownership and restrictions on
transfer of such Preferred Stock and, if convertible, the related
Common Stock, in each case as may be appropriate to preserve the
status of the Company as a REIT; and
(13) Any other material terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will, with respect to (as applicable) dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of common stock and excess stock of the Company and to all
equity securities of the Company the terms of which provide that such equity
securities are subordinated to the Preferred Stock; (ii) on a parity with all
equity securities of the Company other than those referred to in clauses (i) and
(iii) and (iii) junior to all equity securities of the Company which the terms
of such Preferred Stock provide will rank senior to it. As used in the Company's
charter for these purposes, the term 'equity securities' does not include
convertible debt securities.
DIVIDENDS
Holders of shares of the Preferred Stock of each class or series shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Company, out of assets of the Company legally available for payment, cash
dividends at such rates and on such dates as will be set forth in the applicable
Prospectus Supplement. Each such dividend shall be payable to holders of record
as they appear on the stock transfer books of the Company on such record dates
as shall be fixed by the Board of Directors of the Company.
Dividends on any class or series of the Preferred Stock may be cumulative
or non-cumulative, as provided in the applicable Prospectus Supplement.
Dividends, if cumulative, will accumulate from and after the date set forth
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in the applicable Prospectus Supplement. If the Board of Directors of the
Company fails to declare a dividend payable on a dividend payment date on any
class or series of the Preferred Stock for which dividends are noncumulative,
then the holders of such class or series of the Preferred Stock will have no
right to receive a dividend in respect of the dividend period ending on such
dividend payment date, and the Company will have no obligation to pay the
dividend accrued for such period, whether or not dividends on such class or
series are declared payable on any future dividend payment date.
If any shares of the Preferred Stock of any class or series are
outstanding, no full dividends shall be declared or paid or set apart for
payment on the preferred stock of the Company of any other class or series
ranking, as to dividends, on a parity with or junior to the Preferred Stock of
such class or series for any period unless (i) if such class or series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Stock of such
class or series for all past dividend periods and the then current dividend
period or (ii) if such class or series of Preferred Stock does not have a
cumulative dividend, full dividends for the then current dividend period have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Preferred Stock of
such class or series. When dividends are not paid in full (or a sum sufficient
for such full payment is not so set apart) upon the shares of Preferred Stock of
any class or series and the shares of any other class or series of preferred
stock ranking on a parity as to dividends with the Preferred Stock of such class
or series, all dividends declared upon shares of Preferred Stock of such class
or series and any other class or series of preferred stock ranking on a parity
as to dividends with such Preferred Stock shall be declared pro rata so that the
amount of dividends declared per share on the Preferred Stock of such class or
series and such other class or series of preferred stock shall in all cases bear
to each other the same ratio that accrued and unpaid dividends per share on the
shares of Preferred Stock of such class or series (which shall not include any
accumulation in respect of unpaid dividends for prior dividend periods if such
Preferred Stock does not have a cumulative dividend) and such other class or
series of preferred stock bear to each other. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on Preferred Stock of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such class or series of Preferred Stock has a cumulative dividend, full
cumulative dividends on the Preferred Stock of such class or series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period and (ii) if such class or series of Preferred Stock does
not have a cumulative dividend, full dividends on the Preferred Stock of such
class or series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set aside for payment for the then
current dividend period, no dividends (other than in common stock or other stock
ranking junior to the Preferred Stock of such class or series as to dividends
and upon liquidation, dissolution or winding up of the Company) shall be
declared or paid or set aside for payment or other distribution shall be
declared or made upon the common stock, excess stock or any other stock of the
Company ranking junior to or on a parity with the Preferred Stock of such class
or series as to dividends or upon liquidation, nor shall any common stock,
excess stock or any other capital stock of the Company ranking junior to or on a
parity with the Preferred Stock of such class or series as to dividends or upon
liquidation, dissolution or winding up of the Company be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by the Company (except by conversion into or exchange for other stock of the
Company ranking junior to the Preferred Stock of such class or series as to
dividends and upon liquidation, dissolution or winding up of the Company).
Any dividend payment made on shares of a class or series of Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due
with respect to shares of such class or series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the shares of
Preferred Stock will be subject to mandatory redemption or redemption at the
option of the Company, as a whole or in part, in each case upon the terms, at
the times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a class or series of Preferred Stock
that is subject to mandatory redemption will specify the number of shares of
such Preferred Stock that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with
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an amount equal to all accrued and unpaid dividends thereon (which shall not, if
such Preferred Stock does not have a cumulative dividend, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of stock of the Company, the terms of such Preferred
Stock may provide that, if no such stock shall have been issued or to the extent
the net proceeds from any issuance are insufficient to pay in full the aggregate
redemption price then due, such Preferred Stock shall automatically and
mandatorily be converted into shares of the applicable stock of the Company
pursuant to conversion provisions specified in the applicable Prospectus
Supplement.
Notwithstanding the foregoing, unless (i) if such class or series of
Preferred Stock has a cumulative dividend, full cumulative dividends on all
shares of any class or series of Preferred Stock shall have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period and (ii) if such class or series of Preferred Stock does
not have a cumulative dividend, full dividends on the Preferred Stock of any
class or series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the then
current dividend period, no shares of any class or series of Preferred Stock
shall be redeemed unless all outstanding shares of Preferred Stock of such class
or series are simultaneously redeemed; provided, however, that the foregoing
shall not prevent the purchase or acquisition of shares of Preferred Stock of
such class or series pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding shares of Preferred Stock of such class or
series; and, unless (i) if such class or series of Preferred Stock has a
cumulative dividend, full cumulative dividends on all outstanding shares of any
class or series of Preferred Stock have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period and
(ii) if such class or series of Preferred Stock does not have a cumulative
dividend, full dividends on the Preferred Stock of any class or series have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend period,
the Company shall not purchase or otherwise acquire directly or indirectly any
shares of Preferred Stock of such class or series (except by conversion into or
exchange for stock of the Company ranking junior to the Preferred Stock of such
class or series as to dividends and upon liquidation, dissolution or winding up
of the Company).
If fewer than all of the outstanding shares of Preferred Stock of any class
or series are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares held
by such holders (with adjustments to avoid redemption of fractional shares) or
any other equitable method determined by the Company that will not result in the
issuance of any Excess Preferred Stock (as hereinafter defined).
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of a share of Preferred
Stock of any class or series to be redeemed at the address shown on the stock
transfer books of the Company. Each notice shall state: (i) the redemption date;
(ii) the number of shares and class or series of the Preferred Stock to be
redeemed; (iii) the redemption price; (iv) the place or places where
certificates for such Preferred Stock are to be surrendered for payment of the
redemption price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; and (vi) the date upon which the holder's
conversion rights, if any, as to such shares shall terminate. If fewer than all
the shares of Preferred Stock of any class or series are to be redeemed, the
notice mailed to each such holder thereof shall also specify the number of
shares of Preferred Stock to be redeemed from each such holder. If notice of
redemption of any shares of Preferred Stock has been given and if the funds
necessary for such redemption have been set apart by the Company in trust for
the benefit of the holders of any shares of Preferred Stock so called for
redemption, then from and after the redemption date dividends will cease to
accrue on such shares of Preferred Stock, such shares of Preferred Stock shall
no longer be deemed outstanding and all rights of the holders of such shares
will terminate, except the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, then, before any distribution or payment shall be made to the
holders of any common stock, excess stock or any other class or series of stock
of the Company ranking junior to such class or series of Preferred Stock in the
distribution of
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assets upon any liquidation, dissolution or winding up of the Company, the
holders of each class or series of Preferred Stock shall be entitled to receive
out of assets of the Company legally available for distribution to stockholders
liquidating distributions in the amount of the liquidation preference per share
(set forth in the applicable Prospectus Supplement), plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any accumulation
in respect of unpaid dividends for prior dividend periods if such class or
series of Preferred Stock does not have a cumulative dividend). After payment of
the full amount of the liquidating distributions to which they are entitled, the
holders of such class or series of Preferred Stock will have no right or claim
to any of the remaining assets of the Company. In the event that, upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
the legally available assets of the Company are insufficient to pay the amount
of the liquidating distributions on all outstanding shares of such class or
series of Preferred Stock and the corresponding amounts payable on all shares of
other classes or series of stock of the Company ranking on a parity with such
class or series of Preferred Stock in the distribution of assets upon any
liquidation, dissolution or winding up of the Company, then the holders of such
class or series of Preferred Stock and all other such classes or series of stock
shall share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
If liquidating distributions shall have been made in full to all holders of
shares of such class or series of Preferred Stock, the remaining assets of the
Company shall be distributed among the holders of any other classes or series of
stock ranking junior to such class or series of Preferred Stock upon any
liquidation, dissolution or winding up of the Company, according to their
respective rights and preferences and in each case according to their respective
number of shares. For such purposes, neither the consolidation or merger of the
Company with or into any other corporation nor the sale, lease, transfer or
conveyance of all or substantially all of the property or business of the
Company shall be deemed to constitute a liquidation, dissolution or winding up
of the Company.
VOTING RIGHTS
Holders of such class or series of Preferred Stock will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law or as indicated in the applicable Prospectus Supplement.
Whenever dividends on any shares of such class or series of Preferred Stock
shall be in arrears for six or more quarterly periods, regardless of whether
such quarterly periods are consecutive, the holders of such shares of such class
or series of Preferred Stock (voting separately as a class with all other
classes or series of preferred stock upon which like voting rights have been
conferred and are exercisable) will be entitled to vote for the election of two
additional directors of the Company at a special meeting called by an officer of
the Company at the request of a holder of such class or series of Preferred
Stock or, if such special meeting is not called by an officer of the Company
within 30 days, at a special meeting called by a holder of such class or series
of Preferred Stock designated by the holders of record of at least 10% of the
shares of any such class or series of Preferred Stock (unless such request is
received less than 90 days before the date fixed for the next annual or special
meeting of the stockholders), or at the next annual meeting of stockholders, and
at each subsequent annual meeting until (i) if such class or series of Preferred
Stock has a cumulative dividend, all dividends accumulated on such shares of
Preferred Stock for the past dividend periods and the then current dividend
period shall have been fully paid or declared and a sum sufficient for the
payment thereof set apart for payment or (ii) if such class or series of
Preferred Stock does not have a cumulative dividend, four consecutive quarterly
dividends shall have been fully paid or declared and a sum sufficient for the
payment thereof set apart for payment. In such case, the entire Board of
Directors of the Company will be increased by two directors.
Unless provided otherwise for any series of Preferred Stock, so long as any
shares of Preferred Stock remain outstanding, the Company shall not, without the
affirmative vote or consent of the holders of at least two-thirds of the shares
of each class or series of Preferred Stock outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such class or series
voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of stock ranking senior to
such class or series of Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up of the
Company or reclassify any authorized stock of the Company into any such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or repeal
the provisions of the charter in respect of such class or series of Preferred
Stock, whether by merger, consolidation or otherwise, so as to materially and
adversely affect any right, preference, privilege or voting power of such class
or series of Preferred Stock or the holders thereof; provided, however, that any
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increase in the amount of the authorized Preferred Stock or the creation or
issuance of any other class or series of Preferred Stock, or any increase in the
amount of authorized shares of such class or series, in each case ranking on a
parity with or junior to the Preferred Stock of such class or series with
respect to payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such class or series of Preferred Stock
shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been irrevocably deposited in trust to effect such
redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any class or series
of Preferred Stock are convertible into Common Stock, Debt Securities or another
series of Preferred Stock will be set forth in the applicable Prospectus
Supplement relating thereto. Such terms will include the number of shares of
Common Stock or such other series of Preferred Stock or the principal amount of
Debt Securities into which the Preferred Stock is convertible, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the holders of such class or
series of Preferred Stock or the Company, the events requiring an adjustment of
the conversion price and provisions affecting conversion in the event of the
redemption of such class or series of Preferred Stock.
RESTRICTIONS ON OWNERSHIP
As discussed above under 'Description of Common Stock--Restrictions on
Ownership,' for the Company to qualify as a REIT under the Code, not more than
50% in value of its outstanding stock may be owned, actually or constructively,
by five or fewer individuals (as defined in the Code to include certain
entities) during the last half of a taxable year, and the stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (or during a proportionate part of a shorter taxable year). In
addition, rent from Related Party Tenants (as defined above) is not qualifying
income for purposes of the gross income tests under the Code. Therefore, the
applicable articles supplementary for each class or series of Preferred Stock
will contain certain provisions restricting the ownership and transfer of such
class or series of Preferred Stock (the 'Preferred Stock Ownership Limit
Provision'). Except as otherwise described in the applicable Prospectus
Supplement relating thereto, the provisions of each applicable articles
supplementary relating to the applicable Preferred Stock Ownership Limit will
provide as follows:
The Preferred Stock Ownership Limit Provision will provide that, subject to
certain exceptions contained in the applicable articles supplementary, no holder
of such class or series of Preferred Stock may own, or be deemed to own by
virtue of the constructive ownership provisions of the Code, Preferred Stock in
excess of the Preferred Stock Ownership Limit, which will be equal to 9.8% of
the outstanding Preferred Stock of any class or series. The constructive
ownership rules are complex and may cause Preferred Stock owned actually or
constructively by a group of related individuals and/or entities to be deemed to
be constructively owned by one individual or entity. As a result, the
acquisition of less than 9.8% of any class or series of Preferred Stock (or the
acquisition of an interest in an entity which owns Preferred Stock) by an
individual or entity could cause that individual or entity (or another
individual or entity) to own constructively in excess of 9.8% of such class or
series of Preferred Stock, and thus subject such Preferred Stock to the
Preferred Stock Ownership Limit.
The Board of Directors will be entitled to waive the Preferred Stock
Ownership Limit with respect to a particular stockholder if evidence
satisfactory to the Board of Directors, with advice of the Company's tax
counsel, is presented that such ownership will not then or in the future
jeopardize the Company's status as a REIT. As a condition of such waiver, the
Board of Directors may require opinions of counsel satisfactory to it and/or an
undertaking from the applicant with respect to preserving the REIT status of the
Company.
Such articles supplementary will provide that a transfer of the class or
series of Preferred Stock that results in a person actually or constructively
owning shares of Preferred Stock in excess of the Preferred Stock Ownership
Limit, or which would cause the Company to be 'closely held' within the meaning
of the Code or would otherwise result in failure to qualify as a REIT, will be
null and void as to the intended transferee, and the intended transferee will
acquire no rights or economic interest in those shares. In addition, shares
actually or constructively owned by a person in excess of the Preferred Stock
Ownership Limit, or which would otherwise cause the Company to be 'closely held'
within the meaning of the Code or would otherwise result in failure to
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qualify as a REIT, will be automatically exchanged for shares of a separate
class of preferred stock that will be transferred, by operation of law to the
Company as trustee of a trust for the exclusive benefit of the transferee or
transferees to whom the shares are ultimately transferred (without violating the
Preferred Stock Ownership Limit) (the 'Excess Preferred Stock'). While held in
trust, a class of Excess Preferred Stock will not be entitled to vote, it will
not be considered for purposes of any stockholder vote or the determination of a
quorum for such vote, and it will not be entitled to participate in any
distributions made by the Company (except upon liquidation). The intended
transferee or owner may, at any time a class of Excess Preferred Stock is held
by the Company in trust, transfer the class of Excess Preferred Stock to any
person whose ownership of such class or series of Excess Preferred Stock would
be permitted under the Preferred Stock Ownership Limit, at a price not to exceed
either (i) the price paid by the intended transferee or owner in the purported
transfer which resulted in the issuance of such class of Excess Preferred Stock
or (ii) if the intended transferee did not give full value for such class of
Excess Preferred Stock, a price equal to the market price on the date of the
purported transfer or the other event that resulted in the issuance of such
class of Excess Preferred Stock, at which time such class of Excess Preferred
Stock would automatically be exchanged for the corresponding class or series of
Preferred Stock. In addition, the Company would have the right, for a period of
90 days during the time a class of Excess Preferred Stock is held by the Company
in trust, to purchase all or any portion of such class of Excess Preferred Stock
from the intended transferee or owner at a price equal to the lesser of the
price paid for the stock by the intended transferee or owner (or, if the
intended transferee did not give full value for such class of Excess Preferred
Stock, a price equal to the market price on the date of the purported transfer
or other event that resulted in the issuance of such class of Excess Preferred
Stock) and the closing market price for the corresponding class of Preferred
Stock on the date the Company exercises its option to purchase the stock. This
period commences on the date of the violative transfer of ownership if the
intended transferee or owner gives notice of the transfer to the Company, or the
date the Board of Directors determines that a violative transfer or ownership
has occurred if no notice is provided.
All certificates representing shares of a class or series of Preferred
Stock will bear a legend referring to the restrictions described above.
The Preferred Stock Ownership Limit Provision is set as a percentage of the
number of outstanding shares of any class or series of Preferred Stock. As a
result, if the number of shares of any class or series of Preferred Stock is
reduced on a non-pro rata basis among all holders of such class or series,
Excess Preferred Stock may be created as a result of such reduction. In the
event that the Company's action causes such reduction of shares, the Company has
agreed to exercise its option to repurchase such shares of such class or series
of Excess Preferred Stock if the intended owner notifies the Company that it is
unable to sell its rights to such class or series of Excess Preferred Stock.
All persons who own a specified percentage (or more) of the outstanding
stock of the Company must file an affidavit with the Company containing
information regarding their ownership of stock as set forth in the Treasury
Regulations. Under current Treasury Regulations, the percentage is set between
one-half of one percent and five percent, depending on the number of record
holders of stock. In addition, each stockholder shall upon demand be required to
disclose to the Company in writing such information with respect to the actual
and constructive ownership of shares of stock of the Company as the Board of
Directors deems necessary to comply with the provisions of the Code applicable
to a REIT or to comply with the requirements of any taxing authority or
governmental agency.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may issue Depositary Shares, each of which will represent a
fractional interest of a share of a particular class or series of Preferred
Stock, as specified in the applicable Prospectus Supplement. Shares of a class
or series of Preferred Stock represented by Depositary Shares will be deposited
under a separate Deposit Agreement (each, a 'Deposit Agreement') among the
Company, the depositary named therein (the 'Preferred Stock Depositary') and the
holders from time to time of the depositary receipts issued by the Preferred
Stock Depositary which will evidence the Depositary Shares ('Depositary
Receipts'). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Receipt will be entitled, in proportion to the fractional interest of
a share of a particular class or series of Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt, to all the rights and
preferences of the class or series of Preferred Stock represented by such
Depositary Shares (including dividend, voting, conversion, redemption and
liquidation rights).
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The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of a class or series of Preferred Stock by the Company to the
Preferred Stock Depositary, the Company will cause the Preferred Stock
Depositary to issue, on behalf of the Company, the Depositary Receipts. Copies
of the applicable form of Deposit Agreement and Depositary Receipt may be
obtained from the Company upon request, and the statements made hereunder
relating to the Deposit Agreement and the Depositary Receipts to be issued
thereunder are summaries of certain provisions thereof and do not purport to be
complete and are subject to, and qualified in their entirety by reference to,
all of the provisions of the applicable Deposit Agreement and related Depositary
Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of a class or series of Preferred Stock
to the record holders of Depositary Receipts evidencing the related Depositary
Shares in proportion to the number of such Depositary Receipts owned by such
holders, subject to certain obligations of holders to file proofs, certificates
and other information and to pay certain charges and expenses to the Preferred
Stock Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
No distribution will be made in respect of any Depositary Share to the
extent that it represents any class or series of Preferred Stock converted into
Excess Preferred Stock or otherwise converted or exchanged.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted into Excess Preferred Stock
or otherwise), the holders thereof will be entitled to delivery at such office,
to or upon such holder's order, of the number of whole or fractional shares of
the class or series of Preferred Stock and any money or other property
represented by the Depositary Shares evidenced by such Depositary Receipts.
Holders of Depositary Receipts will be entitled to receive whole or fractional
shares of the related class or series of Preferred Stock on the basis of the
proportion of Preferred Stock represented by each Depositary Share as specified
in the applicable Prospectus Supplement, but holders of such shares of Preferred
Stock will not thereafter be entitled to receive Depositary Shares therefor. If
the Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
shares of Preferred Stock to be withdrawn, the Preferred Stock Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing such
excess number of Depositary Shares.
REDEMPTION
Whenever the Company redeems shares of a class or series of Preferred Stock
held by the Preferred Stock Depositary, the Preferred Stock Depositary will
redeem as of the same redemption date the number of Depositary Shares
representing shares of such class or series of Preferred Stock so redeemed,
provided the Company shall have paid in full to the Preferred Stock Depositary
the redemption price of the Preferred Stock to be redeemed plus an amount equal
to any accrued and unpaid dividends thereon to the date fixed for redemption.
The redemption price per Depositary Share will be equal to the corresponding
proportion of the redemption price and any other amounts per share payable with
respect to such class or series of Preferred Stock. If fewer than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected pro rata (as nearly as may be practicable without creating
fractional Depositary Shares) or by any other equitable method determined by the
Company that will not result in the issuance of any Excess Preferred Stock.
From and after the date fixed for redemption, all dividends in respect of
the shares of a class or series of Preferred Stock so called for redemption will
cease to accrue, the Depositary Shares so called for redemption will
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no longer be deemed to be outstanding and all rights of the holders of the
Depositary Receipts evidencing the Depositary Shares so called for redemption
will cease, except the right to receive any moneys payable upon such redemption
and any money or other property to which the holders of such Depositary Receipts
were entitled upon such redemption and surrender thereof to the Preferred Stock
Depositary.
VOTING
Upon receipt of notice of any meeting at which the holders of a class or
series of Preferred Stock deposited with the Preferred Stock Depositary are
entitled to vote, the Preferred Stock Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Receipts evidencing the Depositary Shares which represent such class or series
of Preferred Stock. Each record holder of Depositary Receipts evidencing
Depositary Shares on the record date (which will be the same date as the record
date for such class or series of Preferred Stock) will be entitled to instruct
the Preferred Stock Depositary as to the exercise of the voting rights
pertaining to the amount of Preferred Stock represented by such holder's
Depositary Shares. The Preferred Stock Depositary will vote the amount of such
class or series of Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting the amount of such class or
series of Preferred Stock represented by such Depositary Shares to the extent it
does not receive specific instructions from the holders of Depositary Receipts
evidencing such Depositary Shares. The Preferred Stock Depositary shall not be
responsible for any failure to carry out any instruction to vote, or for the
manner or effect of any such vote made, as long as any such action or non-action
is in good faith and does not result from negligence or willful misconduct of
the Preferred Stock Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of each Depositary Receipt will be
entitled to the fraction of the liquidation preference accorded each share of
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipt, as set forth in the applicable Prospectus Supplement.
CONVERSION
The Depositary Shares, as such, are not convertible into Common Stock or
any other securities or property of the Company, except in connection with
certain conversions in connection with the preservation of the Company's status
as a REIT. See 'Description of Preferred Stock--Restrictions on Ownership.'
Nevertheless, if so specified in the applicable Prospectus Supplement relating
to an offering of Depositary Shares, the Depositary Receipts may be surrendered
by holders thereof to the Preferred Stock Depositary with written instructions
to the Preferred Stock Depositary to instruct the Company to cause conversion of
a class or series of Preferred Stock represented by the Depositary Shares
evidenced by such Depositary Receipts into whole shares of Common Stock, other
shares of a class or series of Preferred Stock (including Excess Preferred
Stock) of the Company or other shares of stock, and the Company has agreed that
upon receipt of such instructions and any amounts payable in respect thereof, it
will cause the conversion thereof utilizing the same procedures as those
provided for delivery of Preferred Stock to effect such conversion. If the
Depositary Shares evidenced by a Depositary Receipt are to be converted in part
only, a new Depositary Receipt or Receipts will be issued for any Depositary
Shares not to be converted. No fractional shares of Common Stock will be issued
upon conversion, and if such conversion would result in a fractional share being
issued, an amount will be paid in cash by the Company equal to the value of the
fractional interest based upon the closing price of the Common Stock on the last
business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially and
adversely inconsistent with the rights granted to
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the holders of the related class or series of Preferred Stock will not be
effective unless such amendment has been approved by the existing holders of at
least two thirds of the Depositary Shares evidenced by the Depositary Receipts
then outstanding. No amendment shall impair the right, subject to certain
exceptions in the Deposit Agreement, of any holder of Depositary Receipts to
surrender any Depositary Receipt with instructions to deliver to the holder the
related class or series of Preferred Stock and all money and other property, if
any, represented thereby, except in order to comply with law. Every holder of an
outstanding Depositary Receipt at the time any such amendment becomes effective
shall be deemed, by continuing to hold such Receipt, to consent and agree to
such amendment and to be bound by the Deposit Agreement as amended thereby.
The Deposit Agreement may be terminated by the Company upon not less than
30 days' prior written notice to the Preferred Stock Depositary if (i) such
termination is necessary to preserve the Company's status as a REIT or (ii) a
majority of each class or series of Preferred Stock subject to such Deposit
Agreement consents to such termination, whereupon the Preferred Stock Depositary
shall deliver or make available to each holder of Depositary Receipts, upon
surrender of the Depositary Receipts held by such holder, such number of whole
or fractional shares of each such class or series of Preferred Stock as are
represented by the Depositary Shares evidenced by such Depositary Receipts
together with any other property held by the Preferred Stock Depositary with
respect to such Depositary Receipts. The Company has agreed that if the Deposit
Agreement is terminated to preserve the Company's status as a REIT, then the
Company will use its best efforts to list each class or series of Preferred
Stock issued upon surrender of the related Depositary Shares on a national
securities exchange. In addition, the Deposit Agreement will automatically
terminate if (i) all outstanding Depositary Shares issued thereunder shall have
been redeemed, (ii) there shall have been a final distribution in respect of
each class or series of Preferred Stock subject to such Deposit Agreement in
connection with any liquidation, dissolution or winding up of the Company and
such distribution shall have been distributed to the holders of Depositary
Receipts evidencing the Depositary Shares representing such class or series of
Preferred Stock or (iii) each share of Preferred Stock subject to such Deposit
Agreement shall have been converted into stock of the Company not so represented
by Depositary Shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Deposit Agreement. In addition, the
Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay the fees and expenses of the
Preferred Stock Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF PREFERRED STOCK DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary. A successor
Preferred Stock Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented from or delayed in, by law or any circumstances beyond its control,
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of a class or
series of Preferred Stock represented by the Depositary Shares), gross
negligence or
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willful misconduct, and the Company and the Preferred Stock Depositary will not
be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Receipts, Depositary Shares or shares of a class or series of
Preferred Stock represented thereby unless satisfactory indemnity is furnished.
The Company and the Preferred Stock Depositary may rely on written advice of
counsel or accountants, or information provided by persons presenting shares of
a class or series of Preferred Stock represented thereby for deposit, holders of
Depositary Receipts or other persons believed in good faith to be competent to
give such information, and on documents believed in good faith to be genuine and
signed by a proper party.
In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the three months ended
March 31, 1998 and for the years ended December 31, 1997, 1996, 1995, 1994 and
1993 was 3.0, 3.5, 3.5, 2.8, 2.9 and 2.7, respectively. The Company's ratio of
earnings to combined fixed charges and preferred stock dividend requirements for
the three months ended March 31, 1998 and for the years ended December 31, 1997,
1996, 1995, 1994 and 1993 was 2.2, 2.3, 2.3, 2.2, 2.3 and 2.5, respectively.
For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income before income
taxes and extraordinary items. Fixed charges consist of interest costs, whether
expensed or capitalized, the interest component of rental expense, and
amortization of debt discounts and issue costs, whether expensed or capitalized.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
TO THE COMPANY OF ITS REIT ELECTION
The following summary of certain federal income tax considerations to the
Company is based on current law, is for general information only, and is not tax
advice. The tax treatment of a holder of any of the Offered Securities will vary
depending upon the terms of the specific securities acquired by such holder, as
well as his particular situation, and this discussion does not attempt to
address any aspects of federal income taxation relating to holders of Offered
Securities. Certain federal income tax considerations relevant to holders of the
Offered Securities will be provided in the applicable Prospectus Supplement
relating thereto.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS SUPPLEMENT,
AS WELL AS HIS OWN TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO HIM OF THE
ACQUISITION, OWNERSHIP AND SALE OF THE OFFERED SECURITIES, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF THE COMPANY AS A REIT
General. The Company has elected to be taxed as a real estate investment
trust under Sections 856 through 860 of the Code, commencing with its taxable
year beginning January 1, 1992. The Company believes that, commencing with its
taxable year beginning January 1, 1992, it has been organized and is operating
in such a manner as to qualify for taxation as a REIT under the Code commencing
with such taxable year, and the Company intends to continue to operate in such a
manner, but no assurance can be given that it has operated or will operate in a
manner so as to qualify or remain qualified.
These sections of the Code and the corresponding Treasury Regulations are
highly technical and complex. The following sets forth the material aspects of
the sections that govern the Federal income tax treatment of a REIT. This
summary is qualified in its entirety by the applicable Code provisions, rules
and regulations promulgated thereunder, and administrative and judicial
interpretations thereof. Latham & Watkins has acted as tax counsel to the
Company in connection with the Offering and the Company's election to be taxed
as a REIT.
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As a condition to the closing of each offering of Offered Securities, other
than offerings of medium term notes and as otherwise specified in the applicable
Prospectus Supplement, tax counsel to the Company will render an opinion to the
underwriters of such offering to the effect that, commencing with the Company's
taxable year which began January 1, 1992, the Company has been organized in
conformity with the requirements for qualification as a REIT, and its proposed
method of operation will enable it to continue to meet the requirements for
qualification and taxation as a REIT under the Code. It must be emphasized that
this opinion will be based on various assumptions and will be conditioned upon
certain representations to be made by the Company as to factual matters and that
such tax counsel to the Company undertakes no obligation hereby to update any
such opinion subsequent to its date. In addition, this opinion will be based
upon the factual representations of the Company as set forth in this Prospectus
and assumes that the actions described in this Prospectus are completed in a
timely fashion. Moreover, such qualification and taxation as a REIT depends upon
the Company's ability to meet, through actual annual operating results,
distribution levels and diversity of stock ownership, the various qualification
tests imposed under the Code discussed below, the results of which have not been
and will not be reviewed by such tax counsel to the Company. Accordingly, no
assurance can be given that the actual results of the Company's operation of any
particular taxable year will satisfy such requirements. See'--Failure to
Qualify.' Further, the anticipated income tax treatment described in this
Prospectus may be changed, perhaps retroactively, by legislative, administrative
or judicial action at any time.
If the Company qualifies for taxation as a REIT, it generally will not be
subject to federal corporate income taxes on its net income that is currently
distributed to stockholders. This treatment substantially eliminates the 'double
taxation' (at the corporate and stockholder levels) that generally results from
investment in a regular corporation. However, the Company will be subject to
federal income tax as follows: First, the Company will be taxed at regular
corporate rates on any undistributed real estate investment trust taxable
income, including undistributed net capital gains. Second, under certain
circumstances, the Company may be subject to the 'alternative minimum tax' on
its items of tax preference. Third, if the Company has (i) net income from the
sale or other disposition of 'foreclosure property' (defined generally as
property acquired by the Company through foreclosure or otherwise after a
default on a loan secured by the property or a lease of the property) which is
held primarily for sale to customers in the ordinary course of business or (ii)
other non-qualifying income from foreclosure property, it will be subject to tax
at the highest corporate rate on such income. Fourth, if the Company has net
income from prohibited transactions (which are, in general, certain sales or
other dispositions of property held primarily for sale to customers in the
ordinary course of business other than foreclosure property), such income will
be subject to a 100% tax. Fifth, if the Company should fail to satisfy the 75%
gross income test or the 95% gross income test (as discussed below), but has
nonetheless maintained its qualification as a real estate investment trust
because certain other requirements have been met, it will be subject to a 100%
tax on an amount equal to (a) the gross income attributable to the greater of
the amount by which the Company fails the 75% or 95% test, multiplied by (b) a
fraction intended to reflect the Company's profitability. Sixth, if the Company
should fail to distribute during each calendar year at least the sum of (i) 85%
of its real estate investment trust ordinary income for such year, (ii) 95% of
its real estate investment trust capital gain net income for such year, and
(iii) any undistributed taxable income from prior periods, the Company would be
subject to a 4% excise tax on the excess of such required distribution over the
amounts actually distributed. Seventh, if during the 10-year period (the
'Recognition Period') beginning on the first day of the first taxable year for
which the Company qualified as a REIT, the Company recognizes gain on the
disposition of any asset held by the Company as of the beginning of such
Recognition Period, then, to the extent of the excess of (a) the fair market
value of such asset as of the beginning of such Recognition Period over (b) the
Company's adjusted basis in such asset as of the beginning of such Recognition
Period (the 'Built-in Gain'), such gain will be subject to tax at the highest
regular corporate rate pursuant to Internal Revenue Service ('IRS') regulations
that have not yet been promulgated. Eighth, if the Company acquires any asset
from a C Corporation (i.e., generally a corporation subject to full
corporate-level tax) in certain transactions in which the basis of the asset in
the hands of the Company is determined by reference to the basis of the asset
(or any other property) in the hands of the C corporation, and the Company
recognizes gain on the disposition of such asset during the Recognition Period
beginning on the date on which such asset was acquired by the Company, then, to
the extent of the Built-in Gain, such gain will be subject to tax at the highest
regular corporate rate pursuant to IRS regulations that have not yet been
promulgated. The results described above with respect to the recognition of
Built-In Gain assume that the Company will make an election pursuant to IRS
Notice 88-19.
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Requirements for Qualification. The Code defines a REIT as a corporation,
trust or association (1) which is managed by one or more trustees or directors,
(2) the beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest, (3) which would be taxable as
a domestic corporation, but for Sections 856 through 859 of the Code, (4) which
is neither a financial institution nor an insurance company subject to certain
provisions of the Code, (5) the beneficial ownership of which is held by 100 or
more persons, (6) during the last half of each taxable year, not more than 50%
in value of the outstanding stock of which is owned, directly or constructively,
by five or fewer individuals (as defined in the Code to include certain
entities) and (7) which meets certain other tests, described below, regarding
the nature of its income, assets and the amount of its distrubition. The Code
provides that conditions (1) to (4) must be met during the entire taxable year
and that condition (5) must be met during at least 335 days of a taxable year of
12 months, or during a proportionate part of a taxable year of less than 12
months. Conditions (5) and (6) will not apply until after the first taxable year
for which an election is made to be taxed as a real estate investment trust. For
purposes of condition (6), pension funds and certain other tax-exempt entities
are treated as individuals, subject to a 'look-through' exception.
The Company has satisfied condition (5) and believes that it has issued
sufficient shares to allow it to satisfy condition (6). In addition, the
Company's charter provides (and the Articles Supplementary for any series of
Preferred Stock will provide) for restrictions regarding ownership and transfer
of the Company's capital stock, which restrictions are intended to assist the
Company in continuing to satisfy the share ownership requirements described in
(5) and (6) above. The ownership and transfer restrictions pertaining generally
to the Common Stock and the Preferred Stock are described in 'Description of
Common Stock--Restrictions on Ownership and Transfer' and 'Description of
Preferred Stock--Restrictions on Ownership and Transfer' or, to the extent such
restrictions differ from those described in this Prospectus, such restrictions
will be described in the applicable Prospectus Supplement. There can be no
assurance, however, that such transfer restrictions will in all cases prevent a
violation of the stock ownership provisions described in (5) and (6) above. If
the Company fails to satisfy such share ownership requirements, the Company's
status as a REIT will terminate, provided, however, if the Company complies with
the rules contained in the applicable Treasury Regulations requiring the Company
to attempt to ascertain the actual ownership of its shares, and the Company does
not know, and would not have known through the exercise of reasonable diligence,
whether it failed to meet the requirement set forth in condition (6) above, the
Company will be treated as having met such requirement. See '--Failure to
Qualify.' In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. The Company has a calendar year.
The Company owns and operates a number of properties through subsidiaries.
Code Section 856(i) provides that a corporation which is a 'qualified REIT
subsidiary' shall not be treated as a separate corporation, and all assets,
liabilities, and items of income, deduction, and credit of a 'qualified REIT
subsidiary' shall be treated as assets, liabilities and such items (as the case
may be) of the REIT. Thus, in applying the requirements described herein, the
Company's 'qualified REIT subsidiaries' will be ignored, and all assets,
liabilities and items of income, deduction, and credit of such subsidiaries will
be treated as assets, liabilities and items of the Company. The Company has
received a ruling from the IRS to the effect that all of the subsidiaries that
were held by the Company prior to January 1, 1992, the effective date of its
election to be taxed as a REIT, will be 'qualified REIT subsidiaries' upon such
effective date of the Company's REIT election. Moreover, with respect to each
subsidiary of the Company formed subsequent to January 1, 1992, the Company has
owned 100% of the stock of such subsidiary at all times during the period such
subsidiary has been in existence. Therefore, all of the Company's subsidiaries
are 'qualified REIT subsidiaries' within the meaning of the Code. For tax years
of the Company beginning on or after January 1, 1998, any corporation wholly
owned by a REIT is permitted to be treated as a 'qualified REIT subsidiary'
regardless of whether such subsidiary has always been owned by the REIT.
In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership will retain the same character in the
hands of the real estate investment trust for purposes of Section 856 of the
Code, including satisfying the gross income tests and the asset tests. Thus, the
Company's proportionate share of the assets, liabilities and items of income of
the partnerships in which the Company is a
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partner will be treated as assets, liabilities and items of income of the
Company for purposes of applying the requirements described herein.
Income Tests. In order to maintain qualification as a REIT, the Company
annually must satisfy two gross income requirements. First, at least 75% of the
Company's gross income (excluding gross income from prohibited transactions) for
each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including 'rents from
real property' and, in certain circumstances, interest) or from certain types of
temporary investments. Second, at least 95% of the Company's gross income
(excluding gross income from prohibited transactions) for each taxable year must
be derived from such real property investments, dividends, interest and gain
from the sale or disposition of stock or securities (or from any combination of
the foregoing).
Rents received by the Company will qualify as 'rents from real property' in
satisfying the gross income requirements for a real estate investment trust
described above only if several conditions are met. First, the amount of rent
must not be based in whole or in part on the income or profits of any person.
However, an amount received or accrued generally will not be excluded from the
term 'rents from real property' solely by reason of being based on a fixed
percentage or percentages of receipts or sales. Second, the Code provides that
rents received from a tenant will not qualify as 'rents from real property' in
satisfying the gross income tests if the real estate investment trust, or an
actual or constructive owner of 10% or more of the real estate investment trust,
directly or constructively owns 10% or more of such tenant (a 'Related Party
Tenant'). Third, if rent attributable to personal property leased in connection
with a lease of real property is greater than 15% of the total rent received
under the lease, then the portion of rent attributable to such personal property
will not qualify as 'rents from real property.' Finally, for rents received to
qualify as 'rents from real property,' the real estate investment trust
generally must not operate or manage the property or furnish or render services
to the tenants of such property (subject to a 1% de minimis exception), other
than through an independent contractor from whom the real estate investment
trust derives no revenue; provided, however, the Company may directly perform
certain services that are 'usually or customarily rendered' in connection with
the rental of space for occupancy only and are not otherwise considered
'rendered to the occupant' of the property. The Company has not charged and will
not charge rent for any property that is based in whole or in part on the income
or profits of any person (except by reason of being based on a percentage of
receipts or sales, as described above), the Company has not and will not rent
any property to a Related Party Tenant, and the Company has not and will not
derive rental income attributable to personal property (other than personal
property leased in connection with the lease of real property, the amount of
which is less than 15% of the total rent received under the lease). The Company
directly performs services under certain of its leases. The Company has received
a ruling from the IRS providing that the performance of the types of services
provided by the Company will not cause the rents received with respect to such
leases to fail to qualify as 'rents from real property.' Notwithstanding the
foregoing, the Company may have taken and may continue to take certain of the
actions set forth above to the extent such actions will not, based on the advice
of tax counsel to the Company, jeapordize the Company's status as a REIT.
The term 'interest' generally does not include any amount received or
accrued (directly or indirectly) if the determination of such amount depends in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term 'interest'
solely by reason of being based on a fixed percentage or percentages of receipts
or sales.
If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a real estate
investment trust for such year if it is entitled to relief under certain
provisions of the Code. These relief provisions will generally be available if
the Company's failure to meet such tests was due to reasonable cause and not due
to willful neglect, the Company attaches a schedule of the sources of its income
to its Federal income tax return, and any incorrect information on the schedule
was not due to fraud with intent to evade tax. It is not possible, however, to
state whether in all circumstances the Company would be entitled to the benefit
of these relief provisions. As discussed above under '--General,' even if these
relief provisions apply, a tax would be imposed with respect to the excess net
income.
Any gain realized by the Company on the sale of any property held as
inventory or other property held primarily for sale to customers in the ordinary
course of business will be treated as income from a prohibited transaction that
is subject to a 100% penalty tax. Such prohibited transaction income may also
have an adverse
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effect upon the Company's ability to satisfy the income tests for qualification
as a REIT. Under existing law, whether property is held as inventory or
primarily for sale to customers in the ordinary course of business is a question
of fact that depends on all the facts and circumstances with respect to the
particular transaction. The Company holds the Properties for investment with a
view to long-term appreciation, engaged in the business of acquiring,
developing, owning and operating the Properties (and other properties) and makes
such occasional sales of the Properties as are consistent with the Company's
investment objectives. There can be no assurance, however, that the IRS might
not contend that one or more of such sales is subject to the 100% penalty tax.
Asset Tests. The Company, at the close of each quarter of its taxable year,
must also satisfy three tests relating to the nature of its assets. First, at
least 75% of the value of the Company's total assets must be represented by real
estate assets (including (i) assets held by the Company's qualified REIT
subsidiaries and the Company's allocable share of real estate assets held by
partnerships in which the Company owns an interest and (ii) stock or debt
instruments held for not more than one year purchased with the proceeds of a
stock offering or long-term (at least five years) debt offering of the Company),
cash, cash items and government securities. Second, not more than 25% of the
Company's total assets may be represented by securities other than those in the
75% asset class. Third, of the investments included in the 25% asset class, the
value of any one issuer's securities owned by the Company may not exceed 5% of
the value of the Company's total assets and the Company may not own more than
10% of any one issuer's outstanding voting securities.
The Company currently has numerous direct and indirect wholly-owned
subsidiaries. As set forth above, the ownership of more than 10% of the voting
securities of any one issuer by a REIT is prohibited by the asset tests.
However, if the Company's subsidiaries are 'qualified REIT subsidiaries' as
defined in the Code, such subsidiaries will not be treated as separate
corporations for federal income tax purposes. Thus, the Company's ownership of
stock of a 'qualified REIT subsidiary' will not cause the Company to fail the
asset tests.
The Company owns 100% of the nonvoting preferred stock of Kimco Realty
Service, Inc. (the 'Management Company'). The Company does not and will not own
any of the voting securities of the Management Company, and therefore the
Company will not be considered to own more than 10% of the voting securities of
the Management Company. In addition, the Company believes (and has represented
to counsel to the Company for purposes of its opinion, as discussed below) that
the value of the securities of the Management Company to be held by the Company
did not exceed at any time up to and including the date of this Prospectus 5% of
the total value of the Company's assets and will not exceed such amount in the
future. Tax counsel to the Company, in rendering its opinion as to the
qualification of the Company as a REIT, will be relying on representations of
the Company to such effect with respect to the value of such securities and
assets. No independent appraisals will be obtained to support this conclusion.
There can be no assurance that the IRS will not contend that the value of the
securities of the Management Company held by the Company exceeds the 5% value
limitation.
After initially meeting the asset tests at the close of any quarter, the
Company will not lose its status as a REIT for failure to satisfy the asset
tests at the end of a later quarter solely by reason of changes in asset values.
If the failure to satisfy the asset tests results from an acquisition of
securities or other property during a quarter, the failure can be cured by the
disposition of sufficient nonqualifying assets within 30 days after the close of
the quarter. The Company intends to maintain adequate records of the value of
its assets to ensure compliance with the asset tests and to take such other
actions within 30 days after the close of any quarter as may be required to cure
any noncompliance. If the Company fails to cure noncompliance with the asset
tests within such time period, the Company would cease to qualify as a REIT.
Annual Distribution Requirements. The Company, in order to qualify as a
REIT, is required to distribute dividends (other than capital gain dividends) to
its stockholders in an amount at least equal to (A) the sum of (i) 95% of the
Company's 'REIT taxable income' (computed without regard to the dividends paid
deduction and the Company's net capital gain) and (ii) 95% of the excess of the
net income, if any, from foreclosure property over the tax imposed on such
income, minus (B) the excess of the sum of certain items of non-cash income
(i.e., income attributable to leveled stepped rents, original issue discount or
purchase money discount debt, or a like-kind exchange that is later determined
to be taxable) over 5% of 'REIT taxable income' as described in clause (A)(i)
above. In addition, if the Company disposes of any asset during its Recognition
Period, the Company will be required, pursuant to IRS regulations which have not
yet been promulgated, to distribute at least 95% of the
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Built-in Gain (after tax), if any, recognized on the disposition of such asset.
Such distributions must be paid in the taxable year to which they relate, or in
the following taxable year if declared before the Company timely files its tax
return for such year and if paid on or before the first regular dividend payment
after such declaration. The amount distributed must not be preferential--i.e.,
each holder of shares of Common Stock and each holder of shares of each class of
Preferred Stock must receive the same distribution per share. To the extent that
the Company does not distribute all of its net capital gain or distributes at
least 95%, but less than 100%, of its 'real estate investment trust taxable
income,' as adjusted, it will be subject to tax thereon at regular ordinary and
capital gain corporate tax rates. Furthermore, if the Company should fail to
distribute during each calendar year at least the sum of (i) 85% of its real
estate investment trust ordinary income for such year, (ii) 95% of its real
estate investment trust capital gain income for such year, and (iii) any
undistributed taxable income from prior periods, the Company would be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. The Company intends to make timely distributions
sufficient to satisfy this annual distribution requirement.
It is possible that the Company, from time to time, may not have sufficient
cash or other liquid assets to meet the 95% distribution requirement due to
timing differences between (i) the actual receipt of income and actual payment
of deductible expenses and (ii) the inclusion of such income and deduction of
such expenses in arriving at taxable income of the Company. In the event that
such timing differences occur, in order to meet the 95% distribution
requirement, the Company may find it necessary to arrange for short-term, or
possibly long-term, borrowings or to pay dividends in the form of taxable stock
dividends.
Under certain circumstances, the Company may be able to rectify a failure
to meet the distribution requirement for a year by paying 'deficiency dividends'
to stockholders in a later year, which may be included in the Company's
deduction for dividends paid for the earlier year. Thus, the Company may be able
to avoid being taxed on amounts distributed as deficiency dividends; however,
the Company will be required to pay interest based upon the amount of any
deduction taken for deficiency dividends and would be subject to any applicable
penalty provisions.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Such a failure to qualify for taxation as a REIT could
have an adverse effect on the market value and marketability of the Offered
Securities. Distributions to stockholders in any year in which the Company fails
to qualify will not be deductible by the Company nor will they be required to be
made. As a result, the Company's failure to qualify as a REIT would
substantially reduce the cash available for distribution by the Company to its
stockholders. In such event, to the extent of current and accumulated earnings
and profits, all distributions to stockholders will be taxable as ordinary
income and, subject to certain limitations of the Code, corporate distributees
may be eligible for the dividends received deduction. Unless entitled to relief
under specific statutory provisions, the Company will also be disqualified from
taxation as a REIT for the four taxable years following the year during which
qualification was lost. It is not possible to state whether in all circumstances
the Company would be entitled to such statutory relief.
OTHER TAX MATTERS
Certain of the Company's investments are through partnerships which may
involve special tax risks. Such risks include possible challenge by the IRS of
(a) allocations of income and expense items, which could affect the computation
of income of the Company and (b) the status of the partnerships as partnerships
(as opposed to associations taxable as corporations) for income tax purposes.
Treasury Regulations that are effective as of January 1, 1997 provide that a
domestic partnership is generally taxed as a partnership unless it elects to be
taxed as an association taxable as a corporation. None of the partnerships in
which the Company is a partner has made or intends to make such an election.
Such Regulations provide, however, that a partnership's claimed classification
will be respected for periods prior to such date if the entity had a reasonable
basis for its claimed classification, and such partnership had not been notified
in writing on or before May 8, 1996 that the classification of such entity was
under examination. If any of the partnerships were treated as an association for
a
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prior period, and (i) if the Company's ownership in any such partnership
exceeded 10% of the partnership's voting interest or (ii) the value of such
interest exceeded 5% of the value of the Company's assets, the Company would
cease to qualify as a REIT for such period and possibly future periods. See
'--Failure to Qualify.' Moreover, the deemed change in classification of such a
partnership from an association to a partnership effective as of January 1, 1997
would be a taxable event. The Company believes that each of the partnerships
have been properly treated for tax purposes as a partnership (and not as an
association taxable as a corporation). However, no assurance can be given that
the IRS may not successfully challenge the status of any of the partnerships.
The Company may be subject to state or local taxation in various state or
local jurisdictions, including those in which it transacts business. The state
or local tax treatment of the Company may not conform to the federal income tax
consequences described above. Consequently, prospective investors should consult
their own tax advisors regarding the effect of state and local tax laws on an
investment in the Company.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more underwriters for
public offering and sale by them or may sell the Offered Securities to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Offered Securities will be named in the applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to offer and sell
the Offered Securities upon the terms and conditions as are set forth in the
applicable Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received compensation from the
Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for whom they may act
as agent. Underwriters may sell Offered Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ('Contracts') providing for payment and delivery on the date
or dates stated in such Prospectus Supplement.
Each Contract will be for an amount not less than, and the aggregate
principal amount of Offered Securities sold pursuant to Contracts shall be not
less nor more than, the respective amounts stated in the applicable Prospectus
Supplement. Institutions with whom Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except (i) the purchase by an
institution of the Offered Securities covered by its Contracts shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (ii) if the Offered Securities
are being sold to underwriters, the Company shall have sold to such underwriters
the total principal amount of the Offered Securities less the principal amount
thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Company and its
subsidiaries in the ordinary course of business.
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EXPERTS
The Company's consolidated balance sheet as of December 31, 1997 and 1996
and the consolidated statements of income, stockholders' equity and cash flows
for each of the years in the three year period ended December 31, 1997 and the
related financial statement schedules and the combined historical summary of
revenue and certain operating expenses of certain acquired properties (the '1997
Acquired Properties') for the year ended December 31, 1996 and the combined
historical summary of revenue and certain operating expenses of certain acquired
properties (the '1998 Acquired Properties') for the year ended December 31, 1997
and the historical summary of revenues of certain acquired Metropolitan Life
properties (the 'Met Life Properties') for the year ended December 31, 1997 and
the combined historical summary of revenues and certain operating expenses of
certain acquired properties (the 'Second 1998 Acquired Properties') for the year
ended December 31, 1997, all incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus have been incorporated herein and
therein in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
The consolidated financial statements of The Price REIT, Inc. included in
The Price REIT, Inc.'s Annual Report (Form 10-K) for the year ended December 31,
1997, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Latham & Watkins, New York, New York and for any underwriters, dealers or
agents by Brown & Wood LLP, New York, New York. Latham & Watkins and Brown &
Wood LLP will rely on Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland, as
to certain matters of Maryland law. Certain members of Latham & Watkins and
their families own beneficial interests in less than 1% of the common stock of
the Company.
34
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offerings of the Securities are as follows:
<TABLE>
<S> <C>
Securities Act Registration Fee........................... $213,027
'Blue Sky' Fees and Expenses.............................. 15,000
Printing and Engraving Expenses........................... 150,000
Legal Fees and Expenses................................... 125,000
Accounting Fees and Expenses.............................. 75,000
Miscellaneous............................................. 21,973
--------
$600,000
--------
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Maryland General Corporation Law (the 'MGCL') permits a Maryland
corporation to include in its charter a provision limiting the liability of its
directors and officers to the corporation and its stockholders for money damages
except for liability resulting from (a) actual receipt of an improper benefit or
profit in money, property or services or (b) active and deliberate dishonesty
established by a final judgment as being material to the cause of action. The
charter of the Company contains such a provision which eliminates such liability
to the maximum extent permitted by Maryland law.
The charter of the Company authorizes it, to the maximum extent permitted
by Maryland law, to obligate itself to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former director or officer or (b) any individual who, while a
director of the Company and at the request of the Company, serves or has served
another corporation, partnership, joint venture, trust, employee benefit plan or
any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise. The Bylaws of the Company obligate it, to the maximum extent
permitted by Maryland law, to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to (a) any present or
former director or officer who is made a party to the proceeding by reason of
his service in that capacity or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise as a director, officer, partner or trustee of such corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise and
who is made a party to the proceeding by reason of his service in that capacity.
The charter and Bylaws also permit the Company to indemnify and advance expenses
to any person who served a predecessor of the Company in any of the capacities
described above and to any employee or agent of the Company or a predecessor of
the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made a party by reason of their service in those or other
capacities unless it is established that (a) the act or omission of the director
or officer was material to the matter giving rise to the proceeding and (i) was
committed in bad faith or (ii) was the result of active and deliberate
dishonesty, (b) the director or officer actually received an improper personal
benefit in money, property or services or (c) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. However, a Maryland corporation may not indemnify for
an adverse judgment in a suit by or in the right of the corporation. In
addition, the MGCL requires the Company, as a condition to advancing expenses,
to obtain (a) a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification by
the Company as authorized by the Bylaws and (b) a written statement
II-1
<PAGE>
by or on his behalf to repay the amount paid or reimbursed by the Company if it
shall ultimately be determined that the standard of conduct was not met.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1(a) -- Form of Underwriting Agreement for Debt Securities (filed as Exhibit
1(a) to Registrant's Registration Statement on Form S-3, dated August
18, 1993, File No. 33-67552)
(b) -- Form of Underwriting Agreement for Equity Securities (filed as Exhibit
1(b) to Registrant's Registration Statement on Form S-3, dated May 30,
1996, File No. 333-04833)
4(a) -- Indenture, dated as of September 1, 1993 (filed as Exhibit 4(a) to
Registrant's Registration Statement on Form S-3, dated August 31, 1994,
File No. 33-83102)
(b) -- First Supplemental Indenture, dated as of August 4, 1994 (filed as
Exhibit 4.6 to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995)
(c) -- Second Supplemental Indenture, dated as of April 7, 1995 (filed as
Exhibit 4(a) to Registrant's Current Report on Form 8-K, dated April 7,
1995)
(d) -- Form of Debt Security (filed as Exhibit 4(b) to Registrant's
Registration Statement on Form S-3, dated August 18, 1993, File No.
33-67552)
(e) -- Form of Common Stock Warrant Agreement (1)
(f) -- Form of Articles Supplementary for the Preferred Stock (1)
(g) -- Form of Preferred Stock Certificate (1)
(h) -- Form of Common Stock Certificate (filed as Exhibit 4(h) to Registrant's
Registration Statement on Form S-3, dated May 30, 1996, File No.
333-4833)
(i) -- Form of Deposit Agreement (filed as Exhibit 4(f) to Registrant's
Registration Statement on Form S-3, dated August 31, 1994, File No.
33-83102)
5 -- Opinion of Latham & Watkins(1)
8 -- Opinion of Latham & Watkins regarding tax matters(1)
12(a) -- Calculation of Ratios of Earnings to Fixed Charges and Ratios of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
23(a) -- Consent of PricewaterhouseCoopers LLP
(b) -- Consent of Ernst & Young LLP
(c) -- Consent of Latham & Watkins (included in Exhibit 5)
24 -- Power of Attorney included on signature page in Part II of the initial
Registration Statement
25 -- Statement of Eligibility of Trustee on Form T-1(1)
</TABLE>
- ------------------
* Previously filed
(1) To be filed by amendment or incorporated by reference in connection with an
offering of Offered Securities.
ITEM 17. UNDERTAKINGS.
The undersigned 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;
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in
II-2
<PAGE>
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed by the Registrant
pursuant to Section 13 or Section l5(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the Securities offered
herein, 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.
The undersigned Registrant hereby further undertakes that, for the purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section l5(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the Securities offered herein, and the offering of such Securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such 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 such Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of New Hyde Park, State of New York on this 12th
day of August, 1998.
KIMCO REALTY CORPORATION
By: _________/s/ MILTON COOPER________
Milton Cooper
Chairman of the Board of Directors
and
Chief Executive Officer
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears on
the signature page to this Registration Statement constitutes and appoints
Milton Cooper and Michael V. Pappagallo, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his 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, and grants unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed below by the following persons in the
capacities indicated on this 12th day of August, 1998:
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------- -------------------------------------------------
<S> <C>
/s/ MARTIN S. KIMMEL Director
- -----------------------------
Martin S. Kimmel
/s/ MILTON COOPER Chairman of the Board of Directors and Chief
- ----------------------------- Executive Officer
Milton Cooper
/s/ MICHAEL J. FLYNN Vice Chairman of the Board of Directors,
- ----------------------------- President and Chief Operating Officer
Michael J. Flynn
/s/ MICHAEL V. PAPPAGALLO Vice President and Chief Financial Officer
- -----------------------------
Michael V. Pappagallo
/s/ RICHARD G. DOOLEY Director
- -----------------------------
Richard G. Dooley
/s/ FRANK LOURENSO Director
- -----------------------------
Frank Lourenso
/s/ JOSEPH K. KORNWASSER Director and Senior Executive Vice President
- -----------------------------
Joseph K. Kornwasser
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
<S> <C> <C>
1(a) -- Form of Underwriting Agreement for Debt Securities
(filed as Exhibit 1(a) to Registrant's Registration
Statement on Form S-3, dated August 18, 1993, File No.
33-67552)
(b) -- Form of Underwriting Agreement for Equity Securities
(filed as Exhibit 1(b) to Registrant's Registration
Statement on Form S-3, dated May 30, 1996, File No.
333-04833)
4(a) -- Indenture, dated as of September 1, 1993 (filed as
Exhibit 4(a) to Registrant's Registration Statement on
Form S-3, dated August 31, 1994, File No. 33-83102)
(b) -- First Supplemental Indenture, dated as of August 4, 1994
(filed as Exhibit 4.6 to Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995)
(c) -- Second Supplemental Indenture, dated as of April 7, 1995
(filed as Exhibit 4(a) to Registrant's Current Report on
Form 8-K, dated April 7, 1995)
(d) -- Form of Debt Security (filed as Exhibit 4(b) to
Registrant's Registration Statement on Form S-3, dated
August 18, 1993, File No. 33-67552)
(e) -- Form of Common Stock Warrant Agreement (1)
(f) -- Form of Articles Supplementary for the Preferred Stock
(1)
(g) -- Form of Preferred Stock Certificate (1)
(h) -- Form of Common Stock Certificate (filed as Exhibit 4(h)
to Registrant's Registration Statement on Form S-3,
dated May 30, 1996, File No. 333-4833)
(i) -- Form of Deposit Agreement (filed as Exhibit 4(f) to
Registrant's Registration Statement on Form S-3, dated
August 31, 1994, File No. 33-83102)
5 -- Opinion of Latham & Watkins (1)
8 -- Opinion of Latham & Watkins regarding tax matters (1)
12(a) -- Calculation of Ratios of Earnings to Fixed Charges and
Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
23(a) -- Consent of PricewaterhouseCoopers LLP
(b) -- Consent of Ernst & Young LLP
(c) -- Consent of Latham & Watkins (included in Exhibit 5)
24 -- Power of Attorney included on signature page in Part II of the
initial Registration Statement
25 -- Statement of Eligibility of Trustee on Form T-1 (1)
</TABLE>
- ------------------
* Previously filed.
(1) To be filed by amendment or incorporated by reference in connection with an
offering of Offered Securities.
II-5
<PAGE>
EXHIBIT 12A
KIMCO REALTY CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
-------------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Income before extraordinary items....... $ 25,483,756 $ 85,836,445 $ 73,826,893 $51,921,799 $41,071,338 $35,159,112
Add
Portion of rents representative of the
interest factor.................... 1,648,768 2,070,049 2,482,917 1,451,048 104,918 167,263
Interest and related debt expenses.... 11,098,505 31,999,288 27,343,211 27,375,415 22,032,025 18,998,491
-------------- ------------ ------------ ----------- ----------- -----------
38,168,391 119,905,782 103,653,021 80,748,262 63,208,281 54,324,866
Adjustment for equity share in
partnerships.......................... (62,638) (653,466) (349,642) 504,238 652,725 (2,067,263)
-------------- ------------ ------------ ----------- ----------- -----------
Income before extraordinary items,
as adjusted...................... $ 38,168,391 $119,252,316 $103,303,379 $81,252,500 $63,861,006 $52,257,603
-------------- ------------ ------------ ----------- ----------- -----------
-------------- ------------ ------------ ----------- ----------- -----------
Combined Fixed Charges and Preferred
Stock Dividend Requirements
Interest and related debt expenses.... $ 11,107,045 $ 32,403,241 $ 27,189,181 $27,221,385 $21,877,995 $18,998,491
Portion of rents representative of the
interest factor.................... 1,648,769 2,070,049 2,482,917 1,451,048 104,918 167,263
Preferred stock dividend
requirements....................... 4,609,425 18,437,700 16,134,475 7,630,556 5,812,500 1,582,125
-------------- ------------ ------------ ----------- ----------- -----------
Combined Fixed Charges and
Preferred Stock Dividend
Requirements..................... $ 17,365,238 $ 52,910,990 $ 45,806,573 $36,302,989 $27,795,413 $20,747,879
-------------- ------------ ------------ ----------- ----------- -----------
-------------- ------------ ------------ ----------- ----------- -----------
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividend
Requirements.......................... 2.2 2.3 2.3 2.2 2.3 2.5
-------------- ------------ ------------ ----------- ----------- -----------
-------------- ------------ ------------ ----------- ----------- -----------
</TABLE>
<PAGE>
EXHIBIT 12A
KIMCO REALTY CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED DECEMBER 31,
ENDED -----------------------------------------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
-------------- ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Income before extraordinary items....... $ 25,483,756 $ 85,836,445 $ 73,826,893 $51,921,799 $41,071,338 $35,159,112
Add
Portion of rents representative of the
interest factor.................... 1,648,768 2,070,049 2,482,917 1,451,048 104,918 167,263
Interest and related debt expenses.... 11,098,505 31,999,288 27,343,211 27,375,415 22,032,025 18,998,491
-------------- ------------ ------------ ----------- ----------- -----------
38,231,029 119,905,782 103,653,021 80,748,262 63,208,281 54,324,866
Adjustment for equity share in
partnerships.......................... (62,638) (653,466) (349,642) 504,238 652,725 (2,067,263)
-------------- ------------ ------------ ----------- ----------- -----------
Income before extraordinary items,
as adjusted...................... $ 38,168,391 $119,252,316 $103,303,379 $81,252,500 $63,861,006 $52,257,603
-------------- ------------ ------------ ----------- ----------- -----------
-------------- ------------ ------------ ----------- ----------- -----------
Fixed charges
Interest and related debt expenses.... $ 11,107,045 $ 32,403,241 $ 27,189,181 $27,221,385 $21,877,995 $18,998,491
Portion of rents representative of the
interest factor.................... 1,648,768 2,070,049 2,482,917 1,451,048 104,918 167,263
-------------- ------------ ------------ ----------- ----------- -----------
Fixed charges................. $ 12,755,813 $ 34,473,290 $ 29,672,098 $28,672,433 $21,982,913 $19,165,754
-------------- ------------ ------------ ----------- ----------- -----------
-------------- ------------ ------------ ----------- ----------- -----------
Ratio of earnings to fixed charges...... 3.0 3.5 3.5 2.8 2.9 2.7
-------------- ------------ ------------ ----------- ----------- -----------
-------------- ------------ ------------ ----------- ----------- -----------
</TABLE>
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 of (i) our report dated February 27, 1998, except for Note 17, for
which the date is March 5, 1998, on our audits of the financial statements and
financial statement schedules of Kimco Realty Corporation as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997, (ii) our report dated January 20, 1998, on our audit of the combined
historical summary of revenue and certain operating expenses of certain acquired
properties (the '1997 Acquired Properties') for the year ended December 31,
1996, (iii) our report dated May 20, 1998, on our audit of the combined
historical summary of revenue and certain operating expenses of certain acquired
properties (the '1998 Acquired Properties') for the year ended December 31,
1997, (iv) our report dated July 7, 1998, on our audit of the historical summary
of revenues of certain acquired Metropolitan Life properties (the 'Met Life
Properties') for the year ended December 31, 1997 and (v) our report dated July
24, 1998, on our audit of the combined historical summary of revenues and
certain operating expenses of certain acquired properties (the 'Second 1998
Acquired Properties') for the year ended December 31, 1997. We also consent to
the references to our firm under the caption 'Experts.'
PRICEWATERHOUSECOOPERS LLP
New York, New York
August 11, 1998
<PAGE>
EXHIBIT 23(B)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption 'Experts' in the
Registration Statement (Form S-3) and related Prospectus of Kimco Realty
Corporation for the registration of an aggregate maximum total of $750,000,000
of its debt securities, preferred stock, depositary shares, common stock and
common stock warrants and to the incorporation by reference therein of our
report dated January 16, 1998 (except for Note 11, as to which the date is March
5, 1998), with respect to the consolidated financial statements and schedule of
The Price REIT, Inc. included in its Annual Report (Form 10-K) for the year
ended Decmber 31, 1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
August 10, 1998
