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Prospectus Filed pursuant to Rule 424(b)(3)
Registration No. 333-37247
GENERAL GROWTH PROPERTIES, INC.
PREFERRED STOCK, DEPOSITARY SHARES,
COMMON STOCK, COMMON STOCK WARRANTS
AND DEBT SECURITIES
-----------------------
General Growth Properties, Inc. (the "Company") may offer from time to
time, together or separately, in one or more series (a) shares of the Company's
preferred stock, par value $100 per share ("Preferred Stock"), (b) depositary
shares representing entitlement to all rights and preferences of a fraction of
a share of Preferred Stock of a specified series ("Depositary Shares"), (c)
shares of the Company's common stock, par value $.10 per share ("Common
Stock"), (d) warrants to purchase shares of Common Stock (the "Common Stock
Warrants") and (e) debt securities of the Company ("Debt Securities") (the
Preferred Stock, Depositary Shares, Common Stock, Common Stock Warrants and
Debt Securities are collectively referred to as the "Securities"), separately
or together, at an aggregate initial offering price not to exceed U.S.
$1,000,000,000, in amounts, at prices and on terms to be determined at the time
of sale.
The specific terms of any Securities offered pursuant to this Prospectus
will be set forth in an accompanying supplement to this Prospectus (a
"Prospectus Supplement"), together with the terms of the offering of such
Securities and the initial price and the net proceeds to the Company from the
sale thereof. The Prospectus Supplement will include, with regard to the
particular Securities, the following information: (a) in the case of Preferred
Stock, the designation, number of shares, liquidation preference per share,
initial offering price, dividend rate (or method of calculation thereof), dates
on which dividends shall be payable and dates from which dividends shall
accrue, any redemption or sinking fund provision, and any conversion or
exchange rights; (b) in the case of Common Stock, the number of shares and the
terms of the offering and sale thereof; (c) in the case of Common Stock
Warrants, the number and terms thereof, the designation and the number of
shares of Common Stock issuable upon exercise, the exercise price, the terms of
the offering and sale thereof, and where applicable, the duration and
detachability thereof; (d) in the case of Debt Securities, the specific
designation, aggregate principal amount, authorized denominations, currencies
in which such Debt Securities are issued or payable, maturity, rate (or manner
of calculation thereof) and time of payment of interest, if any, whether the
Debt Securities are issuable in registered form or bearer form or both, whether
any series of the Debt Securities will be represented by a single global
certificate, any terms for redemption or for sinking fund payments, the terms
and conditions, if any, on which the Debt Securities are convertible into
Common Stock or Debt Securities of a different series, the initial public
offering price and the net proceeds to the Company from the sale of the Debt
Securities; and (e) in the case of all Securities, whether such Securities will
be offered separately or as a unit with other Securities. The Prospectus
Supplement will also contain information, where applicable, about material
United States Federal income tax considerations relating to, and any listing on
a securities exchange of, the Securities covered by such Prospectus Supplement.
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the symbol "GGP". Any Common Stock offered pursuant to a
Prospectus Supplement will be listed on such exchange, subject to official
notice of issuance.
The Company may sell Securities directly through agents, underwriters or
dealers designated from time to time. If any agents, underwriters, or dealers
are involved in the sale of the Securities, the names of such agents,
underwriters, or dealers and any applicable commissions or discounts and the
net proceeds to the Company from such sale will be set forth in the applicable
Prospectus Supplement.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is January 29, 1998
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IN CONNECTION WITH AN OFFERING OF SECURITIES, THE UNDERWRITERS, IF ANY,
FOR SUCH OFFERING MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICES OF THE SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE
NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
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"). Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Commission's regional offices at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Room of the Commission, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
Such materials also may be accessed electronically by means of the Commission's
home page on the Internet at http://www.sec.gov. The Company's Common Stock is
listed on the NYSE and such reports, proxy statements and other information
also can be inspected at the offices of the NYSE, 20 Broad Street, 17th Floor,
New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain items of which are
contained in schedules and exhibits to the Registration Statement as permitted
by the rules and regulations of the Commission. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. Items and information omitted from this Prospectus but
contained in the Registration Statement may be inspected and copied at the
Public Reference Room of the Commission.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus or the Prospectus Supplement, and, if given or
made, such information or representations must not be relied upon as having
been authorized. This Prospectus and the Prospectus Supplement do not
constitute an offer of any securities other than those to which it relates or
an offer to sell, or a solicitation of an offer to buy, to any person in any
jurisdiction where such an offer or solicitation would be unlawful. Neither
the delivery of this Prospectus or any Prospectus Supplement nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that the information contained herein or therein is correct as of any time
subsequent to their respective dates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference and are
made a part hereof: (i) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by Form 10-K/A dated January 15, 1998 (the
"Company 10-K"); (ii) Quarterly Report on Form 10-Q for the quarter ended March
31, 1997, as amended by Form 10-Q/A dated January 15, 1998; (iii) Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, as amended by Form
10-Q/A dated January 15, 1998; (iv) Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, as amended by Form 10-Q/A dated January 15,
1998; (v) Current Report on Form 8-K dated January 16, 1997, as amended by Form
8-K/A dated February 18, 1997 and as further amended by a Form 8-K/A dated
January 15, 1998; (vi) Current Report on Form 8-K dated July 2, 1997, as
amended by Form 8-K/A dated August 28, 1997; (vii) Current Report on Form 8-K
dated August 18, 1997; (viii) the portions of the Company's Proxy Statement for
its 1997 Annual Meeting of Stockholders that have been incorporated by
reference into the Company 10-K; and (ix) the description of the Company's
Common Stock which is contained in the Registration Statement on Form 8-A filed
by the Company with the Commission on January 12, 1993, pursuant to Section
12(b) of the Exchange Act.
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All other documents and reports filed pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act from the date of this Prospectus and prior
to the termination of the offering of the Securities shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof from
the date of the filing of such reports and documents (provided, however, that
the information referred to in Item 402(a)(8) of Regulation S-K of the
Commission shall not be deemed specifically incorporated by reference herein).
The Company will provide without charge to each person to whom a copy of
this Prospectus or any Prospectus Supplement is delivered, on written or oral
request of such person, a copy of any or all documents which are incorporated
herein by reference (not including the exhibits to such documents, unless such
exhibits are specifically incorporated by reference in the document which this
Prospectus incorporates). Requests should be directed to General Growth
Properties, Inc., 55 West Monroe Street - Suite 3100, Chicago, Illinois 60603,
Attention: Director of Investor Relations, Telephone (312) 551-5000.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THE COMPANY
The Company is a self-managed real estate investment trust which, through
its general partnership interest in GGP Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), and its interest in GGP/Homart, Inc.
("GGP/Homart"), owns, operates, acquires, develops and manages enclosed mall
shopping centers located throughout the United States. The Company and the
Operating Partnership together own, directly or indirectly, 100% of 35 enclosed
mall shopping centers, a 51% interest in two other enclosed mall shopping
centers, a 50% interest in two additional enclosed mall shopping centers and a
100% interest in one property under development. These properties contain an
aggregate of approximately 30.1 million square feet of gross retail space,
including anchor stores, freestanding stores and mall tenant areas ("GLA"). In
addition, the Company, through the Operating Partnership's ownership of stock
in GGP/Homart, owns a 38.2% interest in substantially all of the regional mall
assets formerly owned by a subsidiary of Sears, Roebuck & Co. GGP/Homart
currently owns interests in 24 shopping centers containing an aggregate of
approximately 22.0 million square feet of GLA. The Operating Partnership also
owns 95% of the non-voting preferred stock of General Growth Management, Inc., a
company which manages, leases, develops and operates enclosed malls. The
Company has qualified as a real estate investment trust (a "REIT") for federal
income tax purposes.
The Company is incorporated under the laws of the State of Delaware. Its
principal executive offices are located at 55 West Monroe Street - Suite 3100,
Chicago, Illinois 60603, and its telephone number is (312) 551-5000.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general corporate
purposes, which may include the acquisition of shopping centers as suitable
opportunities arise, the expansion and improvement of certain properties in the
Company's portfolio, payment of development costs for new centers, and the
repayment of indebtedness outstanding at such time.
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CONSOLIDATED RATIOS OF EARNINGS TO
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for each of the last five fiscal years. There was no
Preferred Stock outstanding for any of the periods shown below. Accordingly,
the ratio of earnings to fixed charges and Preferred Stock dividends is
identical to the ratio of earnings to fixed charges.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1997 1996 1995 1994 1993
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges: 2.61 2.37 2.43 1.67 1.53
</TABLE>
CAPITAL STOCK
The authorized capital stock of the Company consists of 210,000,000 shares
of Common Stock, par value $.10 per share, and 5,000,000 shares of Preferred
Stock, par value $100 per share. The following summary description of the
capital stock of the Company does not purport to be complete and is qualified
in its entirety by reference to the Company's Second Amended and Restated
Certificate of Incorporation, as amended (the "Certificate"), and the
certificates of designations which will be filed with the Commission in
connection with any offering of Preferred Stock.
As of December 31, 1997, 35,634,977 shares of the Company's Common Stock
were issued and outstanding and no shares of the Company's Preferred Stock were
issued and outstanding. The Board of Directors is authorized to provide for
the issuance of shares of Preferred Stock in one or more series, to establish
the number of shares in each series and to fix the designation, powers,
preferences and rights of each such series and the qualifications, limitations
or restrictions thereof. See "Description of Preferred Stock". The Company's
Common Stock is listed on the New York Stock Exchange under the symbol "GGP".
DESCRIPTION OF COMMON STOCK
The holders of the Company's Common Stock are entitled to one vote per
share on all matters voted on by stockholders, including elections of
directors, and, except as otherwise required by law or provided in any
resolution adopted by the Board of Directors with respect to any series of
Preferred Stock establishing the powers, designations, preferences and
relative, participating, option or other special rights of such series
("Preferred Stock Designation"), the holders of such shares exclusively possess
all voting power. The Certificate does not provide for cumulative voting in
the election of directors. Subject to any preferential rights of any
outstanding series of Preferred Stock, the holders of Common Stock are entitled
to such dividends as may be declared from time to time by the Board of
Directors from funds legally available therefor, and upon liquidation are
entitled to receive pro rata all assets of the Company available for
distribution to such holders. All shares of Common Stock offered hereby, upon
issuance against full payment of the purchase price therefor, will be fully
paid and nonassessable and the holders thereof will not have preemptive rights.
RESTRICTIONS ON TRANSFER
For the Company to remain qualified as a REIT under the Internal Revenue
Code of 1986, as amended (the "Code"), not more than 50% in value of its
outstanding Common Stock and Preferred Stock (collectively, the "Capital
Stock") may be owned, directly or indirectly, by five or fewer individuals (as
defined in the Code) during the last half of a taxable year, the Capital Stock
must be beneficially owned (without regard to any rules of attribution of
ownership) by 100 or more persons during at least 335 days of a taxable year of
12 months or during
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a proportionate part of a shorter taxable year and certain percentages of
the Company's gross income must be derived from particular activities. Because
the Board of Directors believes it is essential for the Company to continue to
qualify as a REIT, the Company's Certificate restricts the acquisition of shares
of Capital Stock (the "Ownership Limit").
The Ownership Limit provides that, subject to certain exceptions specified
in the Certificate, no stockholder (other than Martin Bucksbaum, Matthew
Bucksbaum, their families and related trusts (collectively, the "Bucksbaums")
and the International Business Machines Retirement Plan (the "IBM Retirement
Plan")) may own, or be deemed to own by virtue of the applicable attribution
provisions of the Code, more than the Ownership Limit. The Ownership Limit was
originally set at 6.5% of the outstanding Capital Stock, and was increased to
7.5% of the value of the outstanding Capital Stock as a result of legislation
passed in 1993. The Board of Directors is authorized to further increase the
Ownership Limit to not more than 9.8%. The Bucksbaums and the IBM Retirement
Plan are each permitted by the Certificate to exceed the Ownership Limit and
the Bucksbaums currently exceed such limit and may continue to do so. The
Ownership Limit provides that the Bucksbaums may acquire additional shares
pursuant to certain rights granted to them in connection with the Company's
initial public offering or from other sources so long as the acquisition does
not result in the five largest beneficial owners of Capital Stock holding more
than 50% of the outstanding Capital Stock. The Board of Directors may waive
the Ownership Limit if presented with satisfactory evidence that such ownership
will not jeopardize the Company's status as a REIT (and, from time to time, the
Board of Directors has waived the Ownership Limit). 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 Ownership Limit will not apply if the Board of
Directors and the holders of Capital Stock determine 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 shares which would cause the Company to be beneficially owned by
fewer than 100 persons, are issued or transferred to any person, such issuance
or transfer shall be null and void and the intended transferee will acquire no
rights to such shares.
The Certificate further provides that upon a transfer or other event that
results in a person owning (either directly or by virtue of the applicable
attribution rules) Capital Stock in excess of the applicable Ownership Limit
("Excess Shares"), such person (a "Prohibited Owner") will not acquire or
retain any rights or beneficial economic interest in such Excess Shares.
Rather, the Excess Shares will be automatically transferred to a person or
entity unaffiliated with and designated by the Company to serve as trustee (the
"Trustee") of a trust for the exclusive benefit of a charitable beneficiary
(the "Beneficiary") to be designated by the Company within five (5) days after
the discovery of the transaction which created the Excess Shares. The Trustee
shall have the exclusive right to designate a person who may acquire the Excess
Shares without violating the applicable ownership restrictions (a "Permitted
Transferee") to acquire all of the shares held by the Trust. The Permitted
Transferee must pay the Trustee an amount equal to the fair market value
(determined at the time of transfer to the Permitted Transferee) for the Excess
Shares. The Trustee shall pay to the Prohibited Owner the lesser of: a) the
value of the shares at the time they became Excess Shares and b) the price
received by the Trustee from the sale of the Excess Shares to the Permitted
Transferee. The excess of: a) the sale proceeds from the transfer to the
Permitted Transferee over b) the amount paid to the Prohibited Owner, if any,
in addition to any dividends paid with respect to the Excess Shares will be
distributed to the Beneficiary.
The Ownership Limit will not be automatically removed even if the REIT
provisions of the Code are changed so as to no longer contain any ownership
concentration limitation or if the ownership concentration limitation is
increased. Except as otherwise described above, any change in the Ownership
Limit would require an amendment to the Certificate. Amendments to the
Certificate require the affirmative vote of holders owning a majority of the
outstanding Capital Stock. In addition to preserving the Company's status as a
REIT, the Ownership Limit may have the effect of precluding an acquisition of
control of the Company without the approval of the Board of Directors.
All certificates representing Capital Stock will bear a legend referring
to the restrictions described above.
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All persons who own, directly or by virtue of the attribution provisions
of the Code, more than 7.5% of the outstanding Capital Stock must file an
affidavit with the Company containing the information specified in the
Certificate within 30 days after January 1 and June 30 of each year. In
addition, each stockholder shall upon demand be required to disclose to the
Company in writing such information with respect to the direct, indirect 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. United States
Treasury Regulations (the "Regulations") currently require that the Company
annually request written statements requesting information as to the actual
ownership of the Capital Stock from each record holder of more than 1% of the
Company's outstanding Capital Stock. Depending upon the number of record
holders of the Capital Stock, the reporting threshold required by the
Regulations can fall as low as .5%. Record holders that fail to submit a
written statement in response to the request required by the Regulations are
required to attach to their federal income tax returns specified information
regarding the actual ownership of shares of Capital Stock of which they are the
record holder.
LIMITATION OF LIABILITY OF DIRECTORS
The Certificate provides that a director will not be personally liable for
monetary damages to the Company or its stockholders for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for paying a dividend or approving a stock repurchase
in violation of Section 174 of the Delaware General Corporation Law ("DGCL") or
(iv) for any transaction from which the director derived an improper personal
benefit.
While the Certificate provides directors with protection from awards for
monetary damages for breaches of their duty of care, it does not eliminate such
duty. Accordingly, the Certificate will have no effect on the availability of
equitable remedies such as an injunction or rescission based on a director's
breach of his or her duty of care. The provisions of the Certificate described
above apply to an officer of the Company only if he or she is a director of the
Company and is acting in his or her capacity as director, and do not apply to
officers of the Company who are not directors.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnification agreements with each of its
officers and directors. The indemnification agreements require, among other
things, that the Company indemnify its officers and directors to the fullest
extent permitted by law, and advance to the officers and directors all related
expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. The Company must also indemnify and advance
all expenses incurred by officers and directors seeking to enforce their rights
under the indemnification agreements, and cover officers and directors under
the Company's directors' and officers' liability insurance. Although the form
of the indemnification agreement offers substantially the same scope of
coverage afforded by provisions in the Company's Certificate and Bylaws, it
provides greater assurance to directors and officers that indemnification will
be available, because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors or by stockholders to eliminate the rights it
provides.
DELAWARE ANTI-TAKEOVER STATUTE
The Company is a Delaware corporation and is subject to Section 203 of the
DGCL. In general, Section 203 prevents an "interested stockholder" (defined
generally as a person owning 15% or more of the Company's outstanding voting
stock) from engaging in a "business combination" (as defined in Section 203)
with the Company for three years following the date that person becomes an
interested stockholder unless (a) before that person became an interested
stockholder, the Company's Board of Directors approved the transaction in which
the interested stockholder became an interested stockholder or approved the
business combination, (b) upon completion of the transaction that resulted in
the interested stockholder's becoming an interested stockholder, the interested
stockholder
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owns at least 85% of the Company's voting stock outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the Company and by employee stock plans that do not provide employees with
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer), or (c) following the
transaction in which that person became an interested stockholder, the business
combination is approved by the Company's Board of Directors and authorized at a
meeting of stockholders by the affirmative vote of the holders of at least
two-thirds of the Company's outstanding voting stock not owned by the interested
stockholder.
Under Section 203, these restrictions also do not apply to certain
business combinations proposed by an interested stockholder following the
announcement or notification of one of certain extraordinary transactions
involving the Company and a person who was not an interested stockholder during
the previous three years or who became an interested stockholder with the
approval of a majority of the Company's directors, if that extraordinary
transaction is approved or not opposed by a majority of the directors who were
directors before any person became an interested stockholder in the previous
three years or who were recommended for election or elected to succeed such
directors by a majority of such directors then in office.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock
will be described in the applicable Prospectus Supplement. If so indicated in
a Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of any series of the Company's Preferred Stock
contained in this Prospectus does not purport to be complete and is subject to,
and qualified in its entirety by, the provisions of the Certificate and the
applicable Preferred Stock Designation, which will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this
Prospectus is a part at or prior to the time of issuance of such series of the
Preferred Stock.
Under the Company's Certificate, the Board of Directors is authorized,
without further stockholder action, to provide for the issuance of up to
5,000,000 shares of Preferred Stock, par value $100 per share. No Preferred
Stock is outstanding as of the date of this Prospectus. The Preferred Stock
authorized by the Certificate may be issued, from time to time, in one or more
series in such amounts and with such designations, powers, preferences or other
rights, qualifications, limitations and restrictions as may be fixed by the
Board of Directors. Under certain circumstances, the issuance of Preferred
Stock could have the effect of delaying, deferring or preventing a change of
control of the Company and may adversely affect the voting and other rights of
the holders of Common Stock.
The Preferred Stock shall have the dividend, liquidation, redemption,
voting and certain other rights set forth below unless otherwise described in a
Prospectus Supplement relating to a particular series of Preferred Stock. The
applicable Prospectus Supplement will describe the following terms of the
series of Preferred Stock offered thereby: (1) the designation of such series
and the number of shares offered; (2) the liquidation preference of such
series; (3) the initial offering price at which such series will be issued; (4)
the dividend rate (or method of calculation), the dates on which dividends
shall be payable and the dates from which dividends shall commence to cumulate,
if any; (5) any redemption or sinking fund provisions; (6) any conversion or
exchange rights; (7) any additional voting, dividend, liquidation, redemption,
sinking fund and other rights, preferences, privileges, limitations and
restrictions; (8) any listing of such Preferred Stock on any securities
exchange; (9) a discussion of federal income tax considerations applicable to
such series; (10) the relative ranking and preferences of such series as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; (11) any limitations on issuance of any series of
Preferred Stock ranking senior to or on a parity with such series as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; (12) any limitations on direct or beneficial ownership
and restrictions on transfer, in each case as may be appropriate to
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preserve the status of the Company as a REIT for federal tax purposes; and (13)
any other specific terms, preferences, rights, limitations or restrictions of
such series.
The Preferred Stock offered hereby will be issued in one or more series.
The Preferred Stock, upon issuance against full payment of the purchase price
therefor, will be fully paid and nonassessable. The liquidation preference is
not indicative of the price at which the Preferred Stock will actually trade on
or after the date of issuance.
RANK
The Preferred Stock shall, with respect to dividend rights and rights upon
liquidation, dissolution and winding up of the Company, rank prior to the
Common Stock and to all other classes and series of equity securities of the
Company now or hereafter authorized, issued or outstanding (the Common Stock
and such other classes and series of equity securities collectively may be
referred to herein as the "Junior Stock"), other than any classes or series of
equity securities of the Company which by their terms specifically provide for
a ranking on a parity with (the "Parity Stock") or senior to (the "Senior
Stock") the Preferred Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the Company. The Preferred Stock shall be junior
to all outstanding debt of the Company. The Preferred Stock shall be subject
to creation of Senior Stock, Parity Stock and Junior Stock to the extent not
expressly prohibited by the Company's Certificate.
DIVIDENDS
Holders of Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of assets of the Company legally
available for payment, dividends, or distributions in cash, property or other
assets of the Company or in Securities of the Company or from any other source
as the Board of Directors in their discretion shall determine and at such dates
and at such rates per share per annum as described in the applicable Prospectus
Supplement. Such rate may be fixed or variable or both. Each declared
dividend shall be payable to holders of record as they appear at the close of
business on the books of the Company on such record dates, not more than 90
calendar days preceding the payment dates therefor, as are determined by the
Board of Directors (each of such dates, a "Record Date").
Dividends on a series of Preferred Stock may be cumulative or
noncumulative. If dividends on a series of Preferred Stock are noncumulative
and if the Board of Directors fails to declare a dividend in respect of a
dividend period with respect to such series, then holders of such Preferred
Stock will have no right to receive a dividend in respect of such dividend
period, and the Company will have no obligation to pay the dividend for such
period, whether or not dividends are declared payable on any future dividend
payment dates. If dividends of a series of Preferred Stock are cumulative, the
dividends on such shares will accrue from and after the date set forth in the
applicable Preferred Stock Designation.
No full dividends shall be declared or paid or set apart for payment on
any series of Preferred Stock ranking, as to dividends, on a parity with or
junior to the series of Preferred Stock offered by the applicable Prospectus
Supplement for any period unless full dividends for the immediately preceding
dividend period on such Preferred Stock (including any accumulation in respect
of unpaid dividends for prior dividend periods, if dividends on such Preferred
Stock are cumulative) have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof is set apart for such
payment. When dividends are not so paid in full (or a sum sufficient for such
full payment is not so set apart) on such Preferred Stock and any Parity Stock
of the Company ranking on a parity as to dividends with such Preferred Stock,
dividends upon such Preferred Stock and dividends upon such Parity Stock shall
be declared pro rata so that the amount of dividends declared per share on such
Preferred Stock and such Parity Stock shall in all cases bear to each other the
same ratio that accrued dividends for the then-current dividend period per
share on such Preferred Stock (including any accumulation in respect of unpaid
dividends for prior dividend periods, if dividends on such Preferred Stock are
cumulative) and accrued dividends, including required or permitted
accumulations, if any, on shares of such Parity Stock, bear to each other.
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No interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment(s) on Preferred Stock which may be in arrears. Unless
full dividends on the series of Preferred Stock offered by the applicable
Prospectus Supplement have been declared and paid or set apart for payment for
the immediately preceding dividend period (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends on such
Preferred Stock are cumulative), (a) no cash dividend or distribution (other
than in shares of Junior Stock) may be declared, set aside or paid on the
Junior Stock, (b) the Company may not, directly or indirectly, repurchase,
redeem or otherwise acquire any shares of its Junior Stock (or pay any monies
into a sinking fund for the redemption of any shares) except by conversion into
or exchange for Junior Stock, and (c) the Company may not, directly or
indirectly, repurchase, redeem or otherwise acquire any such Preferred Stock or
any Parity Stock ranking on parity with such Preferred Stock (or pay any monies
into a sinking fund for the redemption of any shares of any such stock)
otherwise than pursuant to pro rata offers to purchase or a concurrent
redemption of all, or a pro rata portion, of such Preferred Stock and such
Parity Stock (except by conversion into or exchange for Junior Stock).
Any dividend payment made on a series of Preferred Stock shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of such series.
REDEMPTION
The terms, if any, on which Preferred Stock of any series may be redeemed
will be set forth in the applicable Prospectus Supplement.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock will be convertible into Common Stock will be set forth in the
applicable Prospectus Supplement. Such terms will include the number of shares
of Common Stock 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 the 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 Preferred Stock.
LIQUIDATION
In the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, the holders of a series of Preferred
Stock will be entitled, subject to the rights of creditors, but before any
distribution or payment to the holders of Common Stock or any Junior Stock on
liquidation, dissolution or winding up of the Company, to receive a liquidating
distribution in the amount of the liquidation preference per share as set forth
in the applicable Prospectus Supplement plus accrued and unpaid dividends for
the then-current dividend period (including any accumulation in respect of
unpaid dividends for prior dividend periods, if dividends on such series of
Preferred Stock are cumulative). If the amounts available for distribution
with respect to a series of Preferred Stock and all other outstanding Parity
Stock are not sufficient to satisfy the full liquidation rights of all such
Preferred Stock outstanding and such other Parity Stock outstanding, then the
holders of each such series will share ratably in any such distribution of
assets in proportion to the full respective preferential amount (which in the
case of Preferred Stock may include accumulated dividends) to which they are
entitled. Unless otherwise provided in the applicable Preferred Stock
Designation for a particular series of Preferred Stock, after payment of the
full amount of the liquidation distribution, the holders of Preferred Stock
will not be entitled to any further participation in any distribution of assets
by the Company.
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VOTING
The Preferred Stock of a series will not be entitled to vote, except as
described below or in the applicable Prospectus Supplement. Without the
affirmative vote of a majority of the Preferred Stock then outstanding (voting
separately as a class together with any Parity Stock), the Company may not (i)
increase or decrease the aggregate number of authorized shares of such class or
increase the aggregate number of authorized shares of any security ranking
prior to the Preferred Stock, (ii) increase or decrease the par value of the
shares of holders of such class, or (iii) alter or change the voting or other
powers, preferences or special rights of such class so as to affect them
adversely. An amendment which increases the number of authorized shares of or
authorizes the creation or issuance of other classes or series of Junior Stock
or Parity Stock, or substitutes the surviving entity in a merger,
consolidation, reorganization or other business combination for the Company,
shall not be considered to be such an adverse change.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or described in the applicable Prospectus Supplement,
set forth in the Certificate or in the applicable Preferred Stock Designation
or as otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
RESTRICTIONS ON OWNERSHIP
As discussed above, for the Company to maintain its qualification as a
REIT under the Code, (i) not more than 50% in value of its outstanding Capital
Stock may be owned, directly or indirectly, by five or fewer individuals (as
defined in the Code) during the last half of a taxable year, (ii) the Capital
Stock, which term includes the Preferred 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 and (iii) certain
percentages of the Company's gross income must be from particular activities.
For a discussion of the restriction on ownership of Preferred Stock, see
"Description of Common Stock-Restrictions on Transfer" above.
DELAWARE ANTI-TAKEOVER STATUTE
See "Description of Common Stock-Delaware Anti-Takeover Statute" above.
DESCRIPTION OF DEPOSITARY SHARES
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than a full share of Preferred Stock. In
such event, receipts ("Depositary Receipts") for such Depositary Shares, each
of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of Preferred Stock) of a share of a
particular series of Preferred Stock, will be issued as described below.
Any series of Preferred Stock represented by Depositary Shares will be
deposited under a Deposit Agreement (the "Deposit Agreement") between the
Company and a depositary specified in the applicable Prospectus Supplement (the
"Depositary"). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fraction of
a share of Preferred Stock represented by such Depositary
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Share, to all the rights and preferences of the Preferred Stock represented
thereby (including dividend, voting, redemption, subscription and liquidation
rights).
The description set forth above and in any Prospectus Supplement of
certain provisions of the Deposit Agreement, the Depositary Shares and the
Depositary Receipts does not purport to be complete and is subject to and
qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipts relating to each series of Preferred Stock which have been
or will be filed with the Commission at or prior to the time of the offering of
such series of the Preferred Stock. If so indicated in a Prospectus
Supplement, the terms of any series of Depositary Shares may differ from the
terms set forth herein.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant Record
Date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction
of one cent, and the balance not so distributed shall be added to and treated
as part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
in an equitable manner, unless the Depositary determines that it is not
feasible to make such distribution, in which case the Depositary may sell such
property and distribute the net proceeds from such sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders
of the Preferred Stock shall be made available to the holders of Depositary
Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of Preferred Stock held by the Depositary. The Depositary shall
mail notice of redemption not less than 30 and not more than 60 days prior to
the date fixed for redemption to the record holders of the Depositary Shares to
be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. Whenever the Company redeems Preferred
Stock held by the Depositary, the Depositary will redeem as of the same
redemption date the number of Depositary Shares representing Preferred Stock so
redeemed. If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined to be equitable by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be outstanding and all rights of the holders of the
Depositary Shares will cease, except the right to receive the money,
securities, or other property payable upon such redemption and any money,
securities, or other property to which the holders of such Depositary Shares
were entitled upon such redemption upon surrender to the Depositary of the
Depositary Receipts evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notices of meeting to the record holders of the Depositary
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Shares relating to such Preferred Stock. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of the Preferred Stock
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares 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 Depositary in order to enable the Depositary to do so. The
Depositary will abstain from voting the Preferred Stock to the extent it does
not receive specific instructions from the holder of Depositary Shares
representing such shares of Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may be amended at any time by agreement
between the Company and the Depositary. However, any amendment which
materially and adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved by the holders of
at least a majority of the Depositary Shares then outstanding. The Deposit
Agreement will only terminate if (i) all outstanding Depositary Shares related
thereto have been redeemed or (ii) there has been a final distribution in
respect of the Preferred Stock in connection with any liquidation, dissolution
or winding up of the Company and such distribution has been distributed to the
holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of
the Preferred Stock and issuance of Depositary Receipts, all withdrawals of
Preferred Stock by owners of Depositary Shares and any redemption of the
Preferred Stock. Holders of Depositary Receipts will pay all other transfer
and other taxes and governmental charges and such other charges as are
expressly provided in the Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The 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
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and such successor Depositary's acceptance of the
appointment. Such successor 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.
RESTRICTIONS ON OWNERSHIP
In order to safeguard the Company against an inadvertent loss of REIT
status, the Deposit Agreement or the Certificate will contain provisions
restricting the ownership and transfer of Depositary Shares. Such restrictions
will be described in the applicable Prospectus Supplement and will be
referenced on the applicable Depositary Receipts.
MISCELLANEOUS
The Depositary will forward all reports and communications from the
Company which are delivered to the Depositary and which the Company is required
or otherwise determines to furnish to the holders of the Preferred Stock.
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Neither the Depositary nor the Company will be liable if it is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Shares or other
persons believed to be competent and on documents believed to be genuine.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue warrants for the purchase of Common Stock ("Common
Stock Warrants"). Common Stock Warrants may be issued independently or
together with any other Securities and may be attached to or separate from any
such Securities. Each series of Common Stock Warrants will be issued under a
separate warrant agreement (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
following summary of certain provisions of the Common Stock Warrants does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the provisions of the Warrant Agreement that will be filed with
the Commission in connection with the offering of such 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: (a) the title of such Common Stock
Warrants; (b) the aggregate number of such Common Stock Warrants; (c) the price
or prices at which such Common Stock Warrants will be issued; (d) the number of
shares of Common Stock purchasable upon exercise of such Common Stock Warrants;
(e) if applicable, the designation and terms of the Securities with which such
Common Stock Warrants are issued and the number of such Common Stock Warrants
issued with each such Security; (f) the date, if any, from and after which such
Common Stock Warrants and any Securities issued therewith will be separately
transferable; (g) the number of shares of Common Stock purchasable upon
exercise of a Common Stock Warrant and the price at which such shares may be
purchased upon exercise (which price may be payable in cash, securities, or
other property); (h) the date on which the right to exercise such Common Stock
Warrant shall commence and the date on which such right shall expire; (i) the
minimum or maximum amount of such Common Stock Warrants which may be exercised
at any one time; (j) the antidilution provisions of such Common Stock Warrants,
if any; (k) a discussion of certain federal income tax considerations; and (l)
any other terms of such Common Stock Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Common Stock
Warrants.
Reference is made to the section captioned "Description of Common Stock"
for a general description of the Common Stock to be acquired upon the exercise
of the Common Stock Warrants, including a description of certain restrictions
on the ownership of Common Stock.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms and provisions of the series of Debt Securities offered by a
Prospectus Supplement, including any additional covenants or changes to
existing covenants relating to such series, and the extent to which such
general terms and provisions described below may apply thereto, will be
described in the Prospectus Supplement relating to such series of Debt
Securities.
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The Debt Securities are to be issued under an Indenture, as supplemented
(the "Debt Indenture"), between the Company and a trustee to be named prior to
an offering of Debt Securities (the "Debt Trustee"). The following summaries
of certain provisions of the Debt Securities and the Debt Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Debt Securities and the Debt Indenture,
including the definitions therein of certain terms. Particular sections of the
Debt Indenture which are relevant to the discussion are cited parenthetically.
Wherever particular sections or defined terms of the Debt Indenture are
referred to, it is intended that such sections or defined terms shall be
incorporated herein by reference. Capitalized terms not otherwise defined
herein shall have the meaning ascribed to such terms in the Debt Indenture.
GENERAL
The Debt Indenture does not limit the amount of Debt Securities which can
be issued thereunder or the amount of debt which may otherwise be incurred by
the Company, and additional Debt Securities may be issued under the Debt
Indenture up to the aggregate principal amount which may be authorized from
time to time by, or pursuant to a resolution of, the Company's Board of
Directors or by a supplemental indenture. Reference is made to the applicable
Prospectus Supplement for the following terms, if applicable, of the particular
series of Debt Securities being offered thereby: (i) the title of the Debt
Securities of the series; (ii) any limit upon the aggregate principal amount of
the Debt Securities of the series; (iii) the date or dates on which the
principal of the Debt Securities of the series will be payable; (iv) the rate
or rates (or manner of calculation thereof), if any, at which the Debt
Securities of the series will bear interest, the date or dates from which any
such interest will accrue and on which such interest will be payable, and, with
respect to Debt Securities of the series issued in registered form, the record
date for the interest payable on any interest payment date; (v) the place or
places where the principal of and interest, if any, on the Debt Securities of
the series will be payable; (vi) any redemption or sinking fund provisions;
(vii) the denominations in which Debt Securities of the series shall be
issuable; (viii) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which will be payable upon
declaration of acceleration of the maturity thereof; (ix) whether the Debt
Securities of the series will be issuable in registered or bearer form or both,
any restrictions applicable to the offer, sale or delivery of Debt Securities
in bearer form ("bearer Debt Securities") and whether and the terms upon which
bearer Debt Securities will be exchangeable for Debt Securities in registered
form ("registered Debt Securities") and vice versa; (x) the terms and
conditions, if any, on which the Debt Securities of the series are convertible
into Common Stock or Debt Securities of a different series; (xi) whether and
under what circumstances the Company will pay additional amounts on the Debt
Securities of the series held by a person who is not a U.S. person (as defined
below) in respect of taxes or similar charges withheld or deducted and, if so,
whether the Company will have the option to redeem such Debt Securities rather
than pay such additional amounts; (xii) the currencies in which payments of
interest, premium or principal are payable with respect to such Debt
Securities; (xiii) whether the Debt Securities of any series will be issued as
one or more Global Securities; (xiv) whether Debt Securities of the series will
be issuable in Tranches; and (xv) any additional provisions or other terms not
inconsistent with the provisions of the Debt Indenture, including any terms
which may be required by or advisable under United States laws or regulations
or advisable in connection with the marketing of Debt Securities of such
series. (Section 2.1 and 2.2) To the extent not described herein, principal
and interest, if any, will be payable, and the Debt Securities of a particular
series will be transferable, in the manner described in the Prospectus
Supplement relating to such series. "Principal" when used herein includes,
when appropriate, the premium, if any, on the Debt Securities.
Each series of Debt Securities will constitute unsecured and
unsubordinated indebtedness of the Company and will rank on a parity with the
Company's other unsecured and unsubordinated indebtedness. Unless otherwise
described in a Prospectus Supplement, there are no covenants or "event risk"
provisions contained in the Debt Indenture that may afford holders of Debt
Securities protection in the event of a highly leveraged transaction involving
the Company.
Debt Securities of any series may be issued as registered Debt Securities
or bearer Debt Securities or both as specified in the terms of the series.
Additionally, Debt Securities of any series may be represented by a single
global note registered in the name of a depository's nominee and, if so
represented, beneficial interests in such
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global note will be shown on, and transfers thereof will be effected only
through, records maintained by a designated depository and its participants.
Unless otherwise indicated in the Prospectus Supplement, Debt Securities will be
issued in the denomination of $1,000 and integral multiples thereof and bearer
Debt Securities will not be offered, sold, resold or delivered to U.S. persons
in connection with their original issuance. Debt Securities of any series may
be denominated in and payments of principal and interest may be made in United
States dollars or any other currency, including composite currencies such as the
European Currency Unit. For purposes of this Prospectus, "U.S. person" means a
citizen or resident of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or any estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
To the extent set forth in a Prospectus Supplement, except in special
circumstances set forth in the Debt Indenture, interest on bearer Debt
Securities will be payable only against presentation and surrender of the
coupons for the interest installments evidenced thereby as they mature at a
paying agency of the Company located outside of the United States and its
possessions. (Section 2.5(c)) The Company will maintain such an agency for a
period of two years after the principal of such bearer Debt Securities has
become due and payable. During any period thereafter for which it is necessary
in order to conform to United States tax laws or regulations, the Company will
maintain a paying agent outside of the United States and its possessions to
which the bearer Debt Securities and coupons related thereto may be presented
for payment and will provide the necessary funds therefor to such paying agent
upon reasonable notice. (Section 2.4)
Bearer Debt Securities and the coupons related thereto will be
transferable by delivery. (Section 2.8(f))
If appropriate, United States federal income tax consequences applicable
to a series of Debt Securities will be described in the Prospectus Supplement
relating thereto.
BOOK-ENTRY REGISTRATION
If a Prospectus Supplement so indicates, the Debt Securities will be
represented by one or more certificates (the "Global Securities"). The Global
Securities representing Debt Securities will be deposited with, or on behalf
of, The Depository Trust Company ("DTC") or other successor depository
appointed by the Company (DTC or such other depository is herein referred to as
the "Depository") and registered in the name of the Depository or its nominee.
Debt Securities represented by a Global Security will not be issuable in
definitive form.
DTC currently limits the maximum denomination of any single Global
Security to $200,000,000. Therefore, for purposes hereof, "Global Security"
refers to the Global Security or Global Securities representing the entire
issue of Debt Securities of a particular series.
DTC has advised the Company and any underwriters, dealers or agents named
in a Prospectus Supplement as follows: DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants ("DTC Participants") and to facilitate the
clearance and settlement of securities transactions between DTC Participants
through electronic book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of securities certificates. DTC
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations. Indirect access to the DTC book-entry system is also
available to others, such as banks, brokers, dealers and trust companies, that
clear through or maintain a custodial relationship with a DTC Participant,
either directly or indirectly ("Indirect Participants").
Upon the issuance by the Company of Debt Securities represented by a
Global Security, DTC will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities represented by
such Global Security to the accounts of DTC Participants. The accounts to be
credited shall be designated by the underwriters, dealers or agents. Ownership
of beneficial interests in the Global Security will be limited to DTC
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Participants and Indirect Participants. Ownership of beneficial interests in
Debt Securities represented by the Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
DTC (with respect to interests of DTC Participants), or by DTC Participants or
Indirect Participants (with respect to persons other than DTC Participants).
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in the Global
Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Debt Indenture.
Except as provided below, owners of beneficial interests in Debt Securities
represented by the Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities in definitive
form and will not be considered the owners or holders thereof under the Debt
Indenture.
Payments of principal of and interest, if any, on the Debt Securities
represented by the Global Security registered in the name of DTC or its nominee
will be made by the Company through the Debt Trustee under the Debt Indenture
or a paying agent (the "Paying Agent"), which may also be the Debt Trustee
under the Debt Indenture, to DTC or its nominee, as the case may be, as the
registered owner of the Global Security. Neither the Company, the Debt
Trustee, nor the Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal or interest in respect of a Global Security, will credit immediately
the accounts of DTC Participants with payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in such Global
Security as shown on the records of DTC. The Company expects that payments by
DTC Participants to owners of beneficial interests in a Global Security will be
governed by standing customer instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such DTC
Participants.
If the Depository with respect to a Global Security is at any time
unwilling or unable to continue as Depository and a successor Depository is not
appointed by the Company within 90 days, the Company will issue certificated
notes in exchange for the Debt Securities represented by such Global Security.
The information contained in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company believes to
be reliable but the Company takes no responsibility for the accuracy thereof.
SAME-DAY SETTLEMENT
If a Prospectus Supplement so indicates, settlement for the Debt
Securities will be made by the underwriters, dealers or agents in immediately
available funds and all payments of principal and interest on the Debt
Securities will be made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Debt
Securities subject to settlement in immediately available funds will trade in
the Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in such Debt Securities will therefore be required by
the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Debt Securities.
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EXCHANGE OF DEBT SECURITIES
Registered Debt Securities may be exchanged, subject to certain specified
restrictions, for an equal aggregate principal amount of registered Debt
Securities of the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the registered Debt
Securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of such agent. (Section 2.8(a))
To the extent permitted by the terms of a series of Debt Securities
authorized to be issued in registered form and bearer form, bearer Debt
Securities may be exchanged for an equal aggregate principal amount of
registered or bearer Debt Securities of the same series and date of maturity in
such authorized denominations as may be requested upon surrender of the bearer
Debt Securities with all unpaid coupons relating thereto at an agency of the
Company maintained for such purpose and upon fulfillment of all other
requirements of such agent. (Section 2.8(b)) As of the date of this
Prospectus, temporary United States Treasury regulations essentially prohibit
exchanges of registered Debt Securities for bearer Debt Securities and, unless
such regulations are modified, the terms of a series of Debt Securities will
not permit registered Debt Securities to be exchanged for bearer Debt
Securities.
AMENDMENT AND WAIVER
Subject to certain exceptions, the Debt Indenture and the Debt Securities
may be amended or supplemented by the Company and the Debt Trustee with the
written consent of the holders of a majority in principal amount of the
outstanding Debt Securities of each series affected by the amendment or
supplement (with each series voting as a class), or compliance with any
provision may be waived with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities of each series affected by
such waiver (with each series voting as a class). However, without the consent
of each Securityholder affected, an amendment or waiver may not (i) reduce the
amount of Debt Securities whose holders must consent to an amendment or waiver,
(ii) change the rate of or change the time for payment of interest on any Debt
Security; (iii) change the principal of or change the Stated Maturity of any
Debt Security; (iv) reduce any premium payable upon redemption of any Debt
Security; (v) waive a default in the payment of the principal of or interest on
any Debt Security; (vi) make any Debt Security payable in money other than that
stated in the Debt Security; or (vii) impair the right to institute suit for
the enforcement of any payment on or with respect to any Debt Security.
(Section 9.02) The Debt Indenture may be amended or supplemented without the
consent of any Securityholder (i) to cure any ambiguity, defect or
inconsistency in the Debt Indenture or in the Debt Securities of any series;
(ii) to provide for the assumption of all the obligations of the Company under
the Debt Securities and any coupons appertaining thereto and under the Debt
Indenture by any corporation in connection with a merger, consolidation, or
transfer or lease of the Company's property and assets substantially as an
entirety, as provided for in the Debt Indenture; (iii) to secure the Debt
Securities; (iv) to provide for uncertificated Debt Securities in addition to
or in place of certificated Debt Securities; (v) to make any change that does
not adversely affect the rights of any Securityholder; (vi) to provide for the
issuance of and establish the form and terms and conditions of a series of Debt
Securities or to establish the form of any certifications required to be
furnished pursuant to the terms of the Debt Indenture or any series of Debt
Securities; or (vii) to add to rights of Securityholders. (Section 9.1)
SUCCESSOR ENTITY
The Company may consolidate with, or merge into, or be merged into, or
transfer or lease its property and assets substantially as an entirety to,
another U.S. corporation which assumes all the obligations of the Company under
the Debt Securities and any coupons appertaining thereto and under the Debt
Indenture if, after giving effect thereto, no default under the Debt Indenture
shall have occurred and be continuing. Thereafter, except in the case of a
lease, all such obligations of the Company shall terminate. (Section 5.1 and
Section 5.2)
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DEFEASANCE, SATISFACTION AND DISCHARGE OF THE DEBT SECURITIES PRIOR TO MATURITY
Defeasance. Unless provided for otherwise in a Prospectus Supplement, if
the Company shall deposit with the Debt Trustee, in trust, at or before
maturity, lawful money or direct obligations of the United States of America or
obligations the principal of and interest on which are guaranteed by the United
States of America in such amounts and maturing at such times that the proceeds
of such obligations to be received upon the respective maturities and interest
payment dates of such obligations will provide funds sufficient, in the opinion
of a nationally recognized firm of independent public accountants chosen by the
Company, to pay when due the principal of and interest on the Debt Securities
to maturity (such money or direct obligations of, or obligations guaranteed by,
the United States of America, initially deposited or equivalent cash or
securities subsequently exchanged therefor, to be held as security for the
payment of such principal and interest), then the Company may omit to comply
with certain of the terms of the Debt Indenture as they relate to the Debt
Securities, and the Event of Default described in clause (iv) under the caption
"Description of Debt Securities--Events of Default," and such other
restrictive covenants or Events of Default as may be set forth in the
Prospectus Supplement. Defeasance of the Debt Securities would be subject to
the satisfaction of certain conditions, including, among others, (i) the
absence of an Event of Default at the date of the deposit, (ii) the perfection
of the holders' interest in such deposit and (iii) that such deposit would not
result in a breach of a material instrument by which the Company is bound.
(Section 8.2)
Satisfaction and Discharge. Upon the deposit of money or securities
contemplated above and the satisfaction of certain conditions, the Company may
omit to comply with its obligations duly and punctually to pay the principal of
and interest on the Debt Securities, or with any Events of Default with respect
thereto, and thereafter the holders of Debt Securities shall be entitled only
to payment out of the money or securities deposited with the Debt Trustee.
Such conditions may include, among others, (i) except in certain limited
circumstances involving a deposit made within one year of maturity, (A) the
absence of an Event of Default at the date of deposit or on the 91st day
thereafter, and (B) the delivery to the Debt Trustee by the Company of an
opinion of nationally recognized tax counsel to the effect that holders of Debt
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and discharge and will be subject to
Federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred, and (ii) the receipt by the Company of an opinion of counsel to the
effect that such satisfaction and discharge will not result in a violation of
the rules of any nationally recognized exchange on which the Debt Securities
are listed. (Section 8.1)
EVENTS OF DEFAULT
The following events are defined in the Debt Indenture as "Events of
Default" with respect to a series of Debt Securities: (i) default in the
payment of interest on any Debt Security of such series for 30 days; (ii)
default in the payment of the principal of any Debt Security of such series;
(iii) default in the payment of any sinking fund installment required to be
made by the Company with respect to any series of Debt Securities; (iv) failure
by the Company for 90 days after notice to it to comply with any of its other
agreements in the Debt Securities of such series, in the Debt Indenture or in
any supplemental indenture under which the Debt Securities of that series may
have been issued; and (v) certain events of bankruptcy or insolvency. (Section
6.1) If an Event of Default occurs with respect to the Debt Securities of any
series and is continuing, the Debt Trustee or the holders of at least 25% in
principal amount of all of the outstanding Debt Securities of that series may
declare the principal (or, if the Debt Securities of that series are original
issue discount Debt Securities, such portion of the principal amount as may be
specified in the terms of that series) of, and any accrued interest on, all the
Debt Securities of that series to be due and payable. Upon such declaration,
such principal (or, in the case of original issue discount Debt Securities,
such specified amount) and all accrued interest thereon shall be due and
payable immediately. (Section 6.2)
Securityholders may not enforce the Debt Indenture or the Debt Securities,
except as provided in the Debt Indenture. (Section 6.6) The Debt Trustee may
require indemnity satisfactory to it before it enforces the Debt Indenture or
the Debt Securities. (Section 7.1(f)) Subject to certain limitations, holders
of a majority in principal
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amount of the Debt Securities of each series affected (with each series
voting as a class) may direct the Debt Trustee in its exercise of any trust
power. (Section 6.5) The Debt Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal or interest)
if it determines in good faith that withholding notice is in their interests.
(Section 7.5) The Company is not required under the Debt Indenture to furnish
any periodic evidence as to the absence of default or as to compliance with the
terms of the Debt Indenture.
CONCERNING THE DEBT TRUSTEE
The Company may maintain banking relationships in the ordinary course of
business with the Debt Trustee.
PLAN OF DISTRIBUTION
The Company may sell the Securities in or outside the United States
through underwriters or dealers, directly to one or more purchasers, or through
agents. The Prospectus Supplement with respect to the Securities will set
forth the terms of the offering of the Securities, including the name or names
of any underwriters, dealers, or agents, the purchase price of the Securities
and the proceeds to the Company from such sale, any delayed delivery
arrangements, any underwriting discounts and other items constituting
underwriters' compensation, the initial public offering price, any discounts or
concessions allowed or reallowed or paid to dealers, and any securities
exchanges on which the Securities may be listed.
If underwriters are used in the sale of the Securities, the Securities may
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Securities will be named in
the Prospectus Supplement relating to such offering, and if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth
on the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters or
agents to purchase the Securities will be subject to conditions precedent and
the underwriters will be obligated to purchase all the Securities if any are
purchased. The initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If dealers are utilized in the sale of Securities with respect to which
this Prospectus is delivered, the Company will sell such Securities to the
dealers as principals. The dealers may then resell such Securities to the
public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent
involved in the offer or sale or the Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Securities from
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters, agents, and dealers participating in the
distribution of the Securities may be deemed to be underwriters and any
discounts or commissions received by them from the Company and any profit on
the resale of the Securities by them may be deemed to be underwriting discounts
or commissions under the Securities Act.
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If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters, or dealers to solicit offers from certain types of
institutions to purchase Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers, and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments that such agents, dealers, or underwriters may be
required to make with respect thereto. Agents, dealers, and underwriters may
be customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
The Preferred Stock, the Depositary Shares, the Common Stock Warrants and
the Debt Securities may or may not be listed on a national securities exchange.
The Common Stock currently trades on the NYSE, and any Common Stock offered
hereby will be listed on the NYSE, subject to an official notice of issuance.
No assurances can be given that there will be a market for the Securities.
LEGAL MATTERS
Certain legal matters concerning the validity of the Securities will be
passed upon for the Company by Neal, Gerber & Eisenberg, Chicago, Illinois.
Marshall E. Eisenberg, a partner of Neal, Gerber & Eisenberg, is the Secretary
of the Company.
EXPERTS
The consolidated financial statements and schedule of the Company as of
December 31, 1996 and 1995 and for the three years in the period ended December
31, 1996 and the consolidated financial statements of Westfield America, Inc.
(formerly CenterMark Properties, Inc.) as of December 31, 1995 and for the year
ended December 31, 1995 and the periods from February 12, 1994 through December
31, 1994 and from January 1, 1994 through February 11, 1994 have been
incorporated by reference herein from the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, as amended by Form 10-K/A dated January
15, 1998, and the combined statement of revenues and certain expenses of the
Lansing Mall, the Westwood Mall and the Lakeview Mall for the year ended
December 31, 1995 has been incorporated by reference herein from the Company's
Current Report on Form 8-K/A, as amended, dated February 18, 1997, as further
amended by a Current Report on Form 8-K/A dated January 15, 1998, in reliance
upon the reports of Coopers & Lybrand L.L.P., independent accountants, and upon
the authority of that firm as experts in accounting and auditing.
The consolidated financial statements and financial statement schedule of
Westfield America, Inc. and Subsidiaries (formerly CenterMark Properties, Inc.)
as of December 31, 1996 and for the year then ended have been incorporated by
reference herein from the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, as amended by Form 10-K/A dated January 15, 1998, in
reliance upon the report of Ernst & Young LLP, independent auditors, and upon
authority of that firm as experts in accounting and auditing.
The statement of revenues and certain expenses of Park Mall for the year
ended December 31, 1995 has been incorporated by reference herein from the
Company's Current Report on Form 8-K/A, as amended, dated February 18, 1997, as
further amended by a Current Report on Form 8-K/A dated January 15, 1998, in
reliance upon the report of Addison, Roberts & Ludwig, P.C., independent
auditors, and upon the authority of that firm as experts in accounting and
auditing.
The statement of revenues and certain expenses of Market Place Shopping
Center for the year ended December 31, 1996 has been incorporated by reference
herein from the Company's Current Report on Form 8-K/A dated August 28, 1997 in
reliance upon the report of Shepard Schwartz & Harris LLP, independent
accountants, and upon the authority of that firm as experts in accounting and
auditing.
The statement of revenues and certain expenses of Southlake Mall for the
year ended December 31, 1996 has been incorporated by reference herein from the
Company's Current Report on Form 8-K/A dated August 28, 1997 in reliance upon
the report of KPMG Peat Marwick LLP, independent accountants, and upon the
authority of that firm as experts in accounting and auditing.
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