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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 24, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
42-1283895
(I.R.S. Employer
Identification No.)
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 960-5000
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
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MR. JOHN BUCKSBAUM
CHIEF EXECUTIVE OFFICER
GENERAL GROWTH PROPERTIES, INC.
110 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 960-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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WITH COPIES TO:
MARSHALL E. EISENBERG, ESQ.
NEAL, GERBER & EISENBERG
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
(312) 269-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
possible after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box: [X]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, 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,
check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SHARES TO BE REGISTERED(1) REGISTERED PER SHARE PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, ($0.10 par value)......... 1,000,000 shares $29.875 $29,875,000 $8,814
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</TABLE>
(1) This Registration Statement also includes preferred share purchase rights,
which are attached to all shares of Common Stock issued, pursuant to the
terms of the Registrant's Shareholder Rights Agreement, dated November 18,
1998, as amended. Until the occurrence of certain prescribed events, the
rights are not exercisable, are evidenced by the certificates for the Common
Stock and will be transferred with and only with such stock. Because no
separate consideration is paid for the rights, the registration fee for the
rights is included in the fee for the Common Stock. This Registration
Statement also relates to such additional shares as may be issuable as a
result of certain adjustments including, without limitation, stock
dividends, stock splits and distributions of options, warrants, convertible
securities, evidences of indebtedness or assets.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) for the purpose of computing the amount of
registration fee based upon the average of the high and low prices of the
Common Stock as reported on the New York Stock Exchange on November 17,
1999.
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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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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The information in this Prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
Prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 24, 1999
PROSPECTUS
GENERAL GROWTH PROPERTIES, INC.
DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN
COMMON STOCK
(PAR VALUE $.10 PER SHARE)
General Growth Properties, Inc., a Delaware corporation, is a
self-administered, self-managed real estate investment trust ("REIT") trust that
owns, operates, manages, leases, acquires, develops and finances regional mall
shopping centers in major and middle markets throughout the United States. With
this prospectus, we are offering participation in our Dividend Reinvestment and
Stock Purchase Plan to record holders of common stock, as well as to other
interested investors. The Dividend Reinvestment and Stock Purchase Plan is a
simple, convenient and low-cost means of investing in our common stock.
PLAN HIGHLIGHTS
- You may participate in the Plan if you currently own shares of our common
stock. If you do not own any common stock, you can participate in the
Plan by making your initial investment in our common stock through the
Plan with a minimum initial investment of $ .
- Once you are enrolled in the Plan, you may buy additional shares of our
common stock by automatically reinvesting all or a portion of the cash
dividends paid on your shares of common stock. To participate in the
dividend reinvestment feature of the Plan, you must hold and elect to
reinvest all or a minimum portion of the dividends on your shares of our
common stock.
- Once you are enrolled in the Plan, you may buy additional shares of
common stock by making optional cash investments of $ to
$ per month. In certain instances, however, we may permit
greater optional cash investments.
Your participation in the Plan is entirely voluntary, and you may terminate
your participation at any time. If you do not elect to participate in the Plan,
you will continue to receive cash dividends, if and when declared by our board
of directors, in the usual manner.
There are certain risk factors to be considered in connection with
investment in our common stock. See "RISK FACTORS" on page 26 for information
about these risks.
Our common stock is traded on the NYSE under the ticker symbol "GGP." The
closing price of our common stock on November , 1999 was $ per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR HAS DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 1999.
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You should rely only on information contained or incorporated by reference
in this Prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information provided
by the Prospectus is accurate as of any date other than the date on the front of
this Prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Where You Can Find More Information......................... 3
Incorporation of Certain Documents by Reference............. 3
The Company................................................. 4
Use of Proceeds............................................. 5
Capital Stock............................................... 5
Terms and Conditions of the Plan............................ 12
Plan of Distribution........................................ 31
Risk Factors................................................ 32
Legal Matters............................................... 39
Experts..................................................... 40
</TABLE>
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). You
may read and copy any document we file at the Commission's public reference room
located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
Commission at 1-800-732-0330 for further information on the operation of such
public reference room. You also can request copies of such documents, upon
payment of a duplicating fee, by writing to the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 or obtain copies of such documents from the
Commission's web site at http://www.sec.gov or our web site at
http://www.ggpi.com.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file annual, quarterly and special reports, proxy statements and other
information with the Commission. The Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring to those documents. The information
incorporated by reference is an important part of this Prospectus. Any statement
contained in a document which is incorporated by reference in this Prospectus is
automatically updated and superseded if information contained in this
Prospectus, or information that we later file with the Commission, modifies or
replaces this information. We incorporate by reference the following documents:
1. Our Annual Report on Form 10-K for the year ended December 31,
1998, dated March 19, 1999.
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, dated May 10, 1999.
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30,
1999, dated August 12, 1999.
4. Our Quarterly Report on Form 10-Q for the quarter ended September
30, 1999, dated November 11, 1999.
5. Our Current Report on Form 8-K, dated March 18, 1999.
6. Our Current Report on Form 8-K, dated July 12, 1999.
7. Our Current Report on Form 8-K, dated July 14, 1999.
8. Our Current Report on Form 8-K, dated August 12, 1999.
9. The portions of our Proxy Statement for our 1999 Annual Meeting of
Stockholders that have been incorporated by reference into our Annual
Report on Form 10-K.
10. The description of our 7.25% Preferred Income Equity Redeemable
Stock, Series A, par value $100 per share ("PIERS"), contained in our
Registration Statement on Form 8-A which was filed with the Commission on
June 5, 1998, pursuant to Section 12(b) of the Exchange Act.
11. The description of our Common Stock contained in our Registration
Statement on Form 8-A which was filed with the Commission on January 12,
1993, pursuant to Section 12(b) of the Exchange Act.
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12. The description of our Common Stock contained in our Registration
Statement on Form 8-A which was filed with the Commission on November 18,
1998, pursuant to Section 12(b) of the Exchange Act.
13. All documents filed by us with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering.
To receive a free copy of any of the documents incorporated by reference in
this Prospectus (other than exhibits) you may generate such a copy by connecting
to our web site at http://www.ggpi.com, or you can call or write General Growth
Properties, Inc., 110 North Wacker, Chicago, IL 60606, Attention: Director of
Investor Relations, Telephone (312) 960-5000.
You should rely only on the information provided or incorporated by
reference in this prospectus or any related supplement. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the cover page of such documents.
THE COMPANY
We were organized in 1986 to continue expanding the Bucksbaum family
business, which has been engaged in the shopping center business since 1954.
We conduct our business through GGP Limited Partnership, which holds
substantially all of our interests in properties. We own an approximate 72%
partnership interest in GGP Limited Partnership. The remaining approximate 28%
interest in GGP Limited Partnership is held by limited partners which include a
partnership comprised of trusts for the benefit of the Bucksbaum family and
others who have contributed properties to us. As of November 15, 1999, GGP
Limited Partnership owned or had an ownership interest in 91 regional mall
shopping centers in 35 states and had two mall shopping centers under
development. Our regional mall shopping centers have approximately 78 million
square feet of gross retail space, including anchor stores that may, in some
cases, be owned by the anchor retailer, freestanding stores and mall tenant
areas.
Specifically, as of November 15, 1999, GGP Limited Partnership owned:
- 100% of 53 regional mall shopping centers, including one mall shopping
center currently under development.
- 51% of the outstanding common stock of GGP/Ivanhoe, Inc., a Delaware
corporation that has qualified as a REIT for federal income tax purposes.
GGP/Ivanhoe owns 100% of two regional mall shopping centers.
- 51% of the common stock of GGP Ivanhoe III, Inc., a Delaware corporation
that has qualified as a REIT for federal income tax purposes. GGP Ivanhoe
III owns 100% of seven regional mall shopping centers.
- 50% of each of two regional mall shopping centers.
- 50% of the outstanding common stock of GGP/Homart, Inc., a Delaware
corporation that has qualified as a REIT for federal income tax purposes.
GGP/Homart owns interests in 23 regional mall shopping centers.
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- a 50% ownership interest in GGP/Homart II LLC, a Delaware limited
liability company that owns interests in seven regional mall shopping
centers, including one regional mall shopping center currently under
development.
- A 100% non-voting preferred stock interest, representing 95% of the
equity interest, in General Growth Management, Inc. Several of our
officers hold all of the voting common stock of GGMI, which represents 5%
of the equity interest in GGMI.
We are incorporated under the laws of the State of Delaware. We have
qualified as a REIT for federal income tax purposes. In order to maintain such
qualification, we must distribute at least 95% of our REIT taxable income (as
computed without regard to net capital gains or the dividends-paid deduction),
and of our after-tax net income from foreclosure property each year. Dividends
on any preferred stock, including PIERS, would be included as distributions for
this purpose.
In this Prospectus, references to "we," "us" or "our" include those
entities which we own or control, including GGP Limited Partnership, unless the
context indicates otherwise.
USE OF PROCEEDS
We will receive proceeds from the sale of shares of common stock that the
Administrator purchases directly from us. We will not receive proceeds from the
sale of common stock that the Administrator purchases in the open market or in
privately negotiated transactions. We will use the proceeds from the sale of
shares of common stock that the Administrator purchases directly from us for
general corporate purposes. We have no basis for estimating either the number of
shares of common stock or the prices of such shares that we will sell in
connection with the Plan.
CAPITAL STOCK
GENERAL
Our authorized capital stock consists of 210,000,000 shares of Common Stock
and 5,000,000 shares of preferred stock, par value $100 per share. The following
summary description of our capital stock does not purport to be complete and is
qualified by reference to our Second Amended and Restated Certificate of
Incorporation, as amended (the "Certificate"), the Certificate of Designations,
Preferences and Rights relating to PIERS, as amended (the "Certificate of
Designations"), which was filed on June 4, 1998 on Form 8-K and any other
certificate of designation which we will file with the Commission in connection
with any other offering of preferred stock.
As of November 15, 1999, 51,697,425 shares of Common Stock were issued and
outstanding and 13,500,000 depositary shares (the "Depositary Shares"), each
representing 1/40 of a PIERS, were issued and outstanding. In addition, as of
such date, there were 19,798,192 common units outstanding. Our Common Stock is
listed on the NYSE under the symbol "GGP" and our Depositary Shares are listed
on the NYSE under the symbol "GGPPrA."
DESCRIPTION OF COMMON STOCK
The holders of Common Stock exclusively possess all voting power, except as
otherwise required by law or provided in the Certificate of Designations and any
resolution adopted by the Board of Directors with respect to any series of
capital stock subsequently established. Each share of common stock entitles the
holder to one vote on all matters submitted to a vote of stockholders, including
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elections of directors. 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 (including PIERS), the holders of Common
Stock are entitled to such distributions as the Board of Directors may declare
from time to time from available funds and, upon liquidation, are entitled to
receive their proportionate share of all assets of the REIT available for
distribution.
SHAREHOLDER RIGHTS PLAN
On November 18, 1998, we adopted a shareholder rights plan (the "Plan").
Pursuant to the Plan, we declared a dividend of one preferred share purchase
right (a "Right") for each share of Common Stock outstanding on December 10,
1998 to the stockholders of record on that date. Prior to becoming exercisable,
the Rights trade together with the Common Stock. The Rights become exercisable
when a person or group acquires or commences or announces a tender or exchange
offer for 15% or more of the Common Stock (or, in the case of certain
grandfathered stockholders described in the Plan, more than the applicable
grandfathered limit described in the Plan). Each Right initially entitles the
holder to purchase from us one one-thousandth of a share of newly-created Series
A Junior Participating Preferred Stock, par value $100 per share, at an exercise
price of $148 per one one-thousandth of a share, subject to adjustment. In the
event that a person or group acquires 15% or more of the Common Stock, each
Right will entitle the holder (other than the acquirer) to purchase shares of
Common Stock (or, in certain circumstances cash or other securities) having a
market value of twice the exercise price of a Right at such time. Under certain
circumstances, each Right will entitle the holder (other than acquirer) to
purchase Common Stock of the acquirer having a market value of twice the
exercise price of a Right at such time. In addition, under certain
circumstances, our Board of Directors may exchange each Right (other than those
held by the acquirer) for one share of Common Stock, subject to those
adjustments. The Rights expire on November 18, 2008, unless earlier redeemed by
our Board of Directors for $.01 per Right or such expiration date is extended.
DESCRIPTION OF PIERS AND DEPOSITARY SHARES
Each owner of a Depositary Share is entitled to its proportionate share of
all the rights and preferences of PIERS represented thereby. The following is a
brief description of the dividend, voting, conversion, redemption and
liquidation rights, preferences and privileges applicable to PIERS.
Dividends. Dividends are cumulative and payable in arrears quarterly on or
about the fifteenth day of January, April, July and October of each year,
commencing on October 15, 1998, in an amount per PIERS equal to the greater of
(i) 7.25% of the liquidation preference per annum (equivalent to $1.8125 per
annum per Depositary Share) and (ii) the cash dividends paid or payable
(determined on each of the dividend payment dates for PIERS) on that number of
shares of Common Stock equal to the number of shares of Common Stock (or portion
thereof) into which a PIERS is convertible. Dividends will accumulate whether or
not we have sufficient earnings, whether or not there are funds legally
available for the payment of such dividends, and whether or not such dividends
are declared.
Liquidation Preference and Conversion Rights. PIERS have a liquidation
preference of $1,000.00 per PIERS (equivalent to $25.00 per Depositary Share),
plus a proportionate amount equal to accrued and unpaid dividends on PIERS
(whether or not earned or declared).
PIERS are convertible at any time, in whole or in part at the option of the
holder, unless previously redeemed, into shares of Common Stock, at an initial
conversion price of $39.70 per share of Common Stock (equivalent to a conversion
rate of 0.6297 shares of Common Stock per Depositary Share) (the "Conversion
Price"), subject to adjustment in certain circumstances.
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Redemption. Except in certain circumstances relating to the preservation of
our status as a REIT for federal income tax purposes, PIERS and the Depositary
Shares are not redeemable prior to July 15, 2003. Under certain circumstances,
on and after July 15, 2003, we may redeem at our discretion PIERS and the
Depositary Shares, in whole or in part, for such number of shares of Common
Stock as are issuable at the Conversion Price (the "Stock Redemption Right")
(equivalent initially to a conversion rate of 0.6297 shares of Common Stock per
Depositary Share). In addition, on or after July 15, 2003, we may redeem at our
discretion PIERS and the Depositary Shares, in whole or in part, initially at
$1,032.22 per PIERS (equivalent to $25.8055 per Depositary Share) and thereafter
at prices declining to $1,000.00 per PIERS (equivalent to a price of $25.00 per
Depositary Share) on and after July 15, 2007, plus in each case accrued and
unpaid dividends, if any, to the redemption date.
PIERS and the Depositary Shares are subject to mandatory redemption on July
15, 2008, at a price of $1,000.00 per PIERS (equivalent to a price of $25.00 per
Depositary Share), plus accrued and unpaid dividends, if any, to the redemption
date.
Ranking and Voting Rights. PIERS will rank senior to the Common Stock as to
priority for receiving dividends and amounts upon our liquidation, dissolution
or winding-up. Holders of PIERS do not generally have any voting rights, except
as provided by applicable law. If dividends on PIERS are in arrears for six or
more quarterly periods, holders of PIERS (voting separately as a class with all
other 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 to serve on the Board of Directors until all dividend
arrearages are eliminated.
RESTRICTIONS ON TRANSFER OF CAPITAL STOCK
For us to remain qualified as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"):
(a) not more than 50% in value of our outstanding capital stock may be
owned, directly or indirectly, by five or fewer individuals (as defined in
the Code to include certain entities) at any time during the last half of a
taxable year;
(b) 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 a proportionate
part of a shorter taxable year; and
(c) certain percentages of a REIT's gross income must be from
particular activities.
Accordingly, the Certificate contains provisions, subject to certain exceptions,
which limit the number of shares of capital stock that may be owned by any
stockholder (the "Ownership Limit").
The Ownership Limit provides that, subject to certain exceptions specified
in the Certificate, no stockholder (other than Martin Bucksbaum (now deceased),
Matthew Bucksbaum, their families and related trusts (collectively, the
"Bucksbaums")) 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. Our Board of Directors is authorized to further
increase the Ownership Limit to not more than 9.8%. The Certificate permits the
Bucksbaums to exceed the Ownership Limit. Currently, the Bucksbaums exceed such
limit. The Ownership Limit provides that the Bucksbaums may acquire additional
shares pursuant to certain rights granted to them in connection with our initial
public offering, which rights are described more
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fully below, 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.
Our Board of Directors may waive the Ownership Limit if presented with
satisfactory evidence that such ownership will not jeopardize our status as a
REIT. As a condition of such waiver, our Board of Directors may require opinions
of counsel satisfactory to it and/or an undertaking from the applicant with
respect to preserving our REIT status. The Ownership Limit will not apply if the
Board of Directors and the holders of capital stock determine that it is no
longer in our best interests 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 us 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 us to serve as trustee of a trust for the
exclusive benefit of a charitable beneficiary to be designated by us 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 beneficiary will receive 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.
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 our status as a REIT, the
Ownership Limit may preclude an acquisition of control over us without the
approval of our Board of Directors.
All certificates representing capital 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 7.5% of the outstanding capital stock must file an affidavit
with us containing the information specified in the Certificate within 30 days
after January 1 of each year. In addition, each stockholder shall upon demand be
required to disclose to us in writing such information with respect to the
direct, indirect and constructive ownership of shares as our 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
us to send annual written statements requesting information as to the actual
ownership of the capital stock from each record holder of more than 1% of our
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 0.5%. Record holders that fail to submit a written
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statement in response to the request must 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.
DELAWARE ANTI-TAKEOVER STATUTE
We are a Delaware corporation subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prevents an "interested
stockholder" (defined generally as a person owning 15% or more of our
outstanding voting stock) from engaging in a "business combination" (as defined
in Section 203) with us for three years following the date that person becomes
an interested stockholder unless:
(a) before that person became an interested stockholder, our 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's, the interested
stockholder owned at least 85% of our voting stock outstanding at the time
the transaction commenced (excluding stock held by directors who are also
our officers 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 our Board
of Directors and authorized at a meeting of stockholders by the affirmative
vote of the holders of at least two-thirds of our outstanding voting stock
not owned by the interested stockholder.
Under Section 203, these restrictions do not apply to certain business
combinations proposed by an interested stockholder following the announcement or
notification of one of certain extraordinary transactions involving us 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 our
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.
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SUMMARY OF THE PLAN
The following summary of our Dividend Reinvestment and Stock Purchase Plan
may omit certain information that may be important to you. You should carefully
read the entire text of the Plan contained in this prospectus before you decide
to participate in the Plan.
Enrollment: If you currently own shares of our common stock,
you can participate in the Plan by submitting a
completed authorization form. You may obtain an
authorization form from the Plan's administrator,
The Chase Manhattan Bank. Please see Question 6 for
more detailed information.
Initial Investment: If you do not own any shares of our common stock,
you can participate in the Plan by making an
initial investment in our common stock through the
Plan with a minimum initial investment of
$ . Please see Question 5 for more
detailed information.
Reinvestment of Dividends: You can reinvest your cash dividends on all or a
portion of your shares of our common stock. You
will be able to purchase additional shares of our
common stock by reinvesting your cash dividends,
without paying any fees or commissions. To
participate in the dividend reinvestment feature of
the Plan, you must hold and elect to reinvest at
least % of the dividends on the total shares
of our common stock held in your Plan account and
held in your name in our records. Please see
Question 6 for more detailed information.
Optional Cash Investments: After you are enrolled in the Plan, you can buy
additional shares of our common stock without
paying fees. You can invest a minimum of
$ and up to a maximum of $ in any
one month. Under certain circumstances, we may
approve a written request to waive the $ per
month maximum amount. Please see Question 6 for
more detailed information.
Source of Shares: The administrator of the Plan will purchase shares
of our common stock directly from us as newly
issued shares of common stock, in the open market
or in privately negotiated transactions with third
parties. Please see Question 8 for more detailed
information.
Purchase Price: Under the Plan, with respect to reinvested
dividends and optional cash investments of
$ or less, the purchase price for shares
of our common stock that the Administrator
purchases directly from us initially will equal
100% of the average of the daily high and low sales
price for a share of our common stock reported by
the New York Stock Exchange on the applicable
investment date, or if no trading occurs in shares
of our common stock on the applicable investment
date, the average of the daily high and low sales
prices for the first trading day immediately
preceding the
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investment date for which trades are reported.
Please see Question 8 for more detailed
information.
With respect to optional cash investments of
greater than $ , the purchase price for
newly issued shares of our common stock that the
Administrator purchases directly from us will equal
100% of the average of the daily high and low sales
prices of our common stock reported by the New York
Stock Exchange for the ten consecutive trading
days, ending on the date a cash dividend is paid or
on the last trading day of any month in which we do
not pay a cash dividend, or if no trading occurs in
shares of our common stock on such trading days,
the average of the daily high and low sales prices
for the first trading day immediately preceding the
investment date for which trades are reported, less
any discount that may be granted by us, at our sole
discretion. Please see Question 8 for more detailed
information. The purchase price for shares of
common stock purchased in the open market or in
privately negotiated transactions with third
parties will equal the price paid for such shares
on the relevant investment date. Please see
Question 8 for more detailed information.
Tracking Your Investment: You will receive periodic statements of the
transactions made in your Plan account. These
statements will provide you with details of the
transactions and will indicate the share balance in
your Plan account. Please see Question 14 for more
detailed information.
Administration: The Chase Manhattan Bank will serve as the
administrator of the Plan. You should send all
correspondence with the administrator to:
The Chase Manhattan Bank, c/o ChaseMellon
Shareholder Services, L.L.C. P.O. Box 3338, South
Hackensack, New Jersey 07606-1938. You may call the
Administrator (800) ____-_____. Please see Question
4 for more detailed information.
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TERMS AND CONDITIONS OF THE PLAN
The following constitutes our Dividend Reinvestment and Stock Purchase
Plan, as in effect beginning , 1999. All references in this
prospectus to "common stock" refer to our common stock, par value $.10 per
share.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The primary purpose of the Plan is to give holders of record of common
stock and other interested investors a convenient and economical way to purchase
and to reinvest all or a portion of their cash dividends in shares of common
stock. A secondary purpose of the Plan is to provide us with another way to
raise additional capital for general corporate purposes through sales of common
stock under the Plan.
PARTICIPATION OPTIONS
2. WHAT ARE MY INVESTMENT OPTIONS UNDER THE PLAN?
Once enrolled in the Plan, you may buy shares of common stock through any
of the following investment options:
Full Dividend Reinvestment. You may reinvest cash dividends paid on
all of your shares of common stock to purchase additional shares of common
stock if you have at least shares of common stock in your Plan
account. This option also permits you to make optional cash investments
from $ to $ per month to buy additional shares of common stock.
Partial Dividend Reinvestment. You may reinvest cash dividends paid on
a specified amount of your shares of common stock to purchase additional
shares of common stock if you have at least shares of common stock in your
Plan account. You must elect to reinvest at least % of the dividends on
the total shares of common stock held in your Plan account and held in your
name in our records. We will continue to pay you cash dividends on the
remaining shares of common stock, when and if declared by our board of
directors. This option also permits you to make optional cash investments
from $ to $ per month to buy additional shares of common stock.
Optional Cash Investments Only. If you are (1) a registered holder of
common stock, (2) an investor who has purchased from us at least $ of
common stock under the Plan or (3) a beneficial owner of common stock and
either have directed your broker, bank or other nominee in whose name your
shares are held to transfer at least one share of common stock to your name
or you have arranged with your broker, bank or other nominee in whose name
your shares are held to participate in the Plan on your behalf, you may
make optional cash investments from $ to $ per month to buy
additional shares of common stock. You may request, and in certain
instances we will approve, a waiver from us permitting you to make optional
cash investments in an amount greater than $ per month. See Question 10
to learn how to request such a waiver.
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BENEFITS AND DISADVANTAGES
3. WHAT ARE THE BENEFITS AND DISADVANTAGES OF THE PLAN?
BENEFITS
Before deciding whether to participate in the Plan, you should consider the
following benefits of the Plan:
- There are no costs associated with the Plan that you must pay, except for
costs related to your voluntary selling of shares of common stock or
withdrawal from the Plan. Therefore, you will no longer need to pay
brokerage commissions or service fees to purchase common stock. (Please
see the "Plan Service Fees Schedule" attached as Exhibit A for a detailed
description of the costs for which you will be responsible. The Plan
Service Fees Schedule may be amended from time to time.
- You will get the convenience of having all or a portion of your cash
dividends automatically reinvested in additional shares of common stock.
Since the Administrator will credit fractional shares of common stock to
your Plan account, your dividends and cash payments will be invested
fully.
- You will have the option of having your stock certificates held for
safekeeping by the Administrator, insuring your protection against loss,
theft or destruction of the certificates representing your shares of
common stock.
- You will simplify your record keeping by receiving periodic statements
which will reflect all current activity in your Plan account, including
purchases, sales and latest balances.
- You will have the flexibility of making optional cash investments of
$ to $ in any one month to buy additional shares of common
stock. You may make these optional cash investments on a regular or
occasional basis.
- At any time, you may direct the Administrator to sell or transfer all or
a portion of the shares of common stock held in your Plan account,
subject to such fees as are set forth on the "Plan Service Fees Schedule"
attached as Exhibit A.
DISADVANTAGES
Before deciding whether to participate in the Plan, you should consider the
following disadvantages of the Plan:
- We may or may not offer a discount on purchases of common stock of
greater than $ made through optional cash investments, at our sole
discretion.
- Without giving you prior notice, we may direct the Administrator to buy
shares of common stock under the Plan either directly from us or in the
open market or in privately negotiated transactions with third parties.
- Your reinvestment of cash dividends will result in you being treated for
federal income tax purposes as having received a dividend on the dividend
payment date (to the extent of our earnings and profits attributable to
the shares of common stock held in your Plan account). Such dividend may
give rise to a liability for the payment of income tax without providing
you with immediate cash to pay such tax when it becomes due.
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<PAGE> 15
- You may not know the actual number of shares of common stock that the
Administrator of the Plan buys for your account until after the
applicable Investment Date (as defined in Question 8).
- Because the Administrator of the Plan will buy shares of common stock for
your account at an average price per share (as set forth in Question 8),
the price paid for such shares on any date may be greater than the price
at which shares of common stock are trading on the date or dates used to
set the price of shares of common stock purchased by the Administrator
under the Plan.
- Sales of shares of common stock held in your Plan account may be delayed.
- We will not pay interest on funds that we hold pending reinvestment or
investment.
- You may not pledge shares of common stock deposited in your Plan account
unless you withdraw such shares from the Plan.
ADMINISTRATION
4. WHO WILL ADMINISTER THE PLAN?
ADMINISTRATOR. The Chase Manhattan Bank, or such other entity as we may
designate, will serve as the Administrator of the Plan. ChaseMellon Shareholder
Services, L.L.C., a registered transfer agent, will provide certain
administrative support to the Administrator. The Administrator (i) acts as your
agent, (ii) keeps records of all Plan accounts, (iii) sends your account
statements to you, (iv) buys and sells, at your direction, all shares of common
stock under the Plan, and (v) performs other duties relating to the Plan. You
should send all correspondence with the Administrator to:
THE CHASE MANHATTAN BANK
C/O CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
P.O. BOX 3338
SOUTH HACKENSACK, NEW JERSEY 07606-1938
TELEPHONE: (800)
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PARTICIPATION
For purposes of this section, we generally have based our responses upon
the method by which you hold your shares of common stock. Generally, you either
are a record owner or a beneficial owner. You are a record owner if you own
shares of common stock in your own name. You are a beneficial owner if you own
shares of common stock that are registered in a name other than your own (for
example, the shares are held in the name of a broker, bank or other nominee). If
you are a record owner, you may participate directly in the Plan. If you are a
beneficial owner, you will have to either become a record owner by having one or
more shares transferred into your own name or coordinate your participation in
the Plan through the broker, bank or other nominee in whose name your shares are
held.
5. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
You may participate in the Plan if you meet the following requirements:
Minimum Ownership Interest. You may directly join the Plan if you are
a registered owner of common stock. If you are a beneficial owner of shares
of common stock and wish to
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<PAGE> 16
participate in the Plan, you either should (1) direct your broker, bank or
other nominee in whose name your shares are held to transfer through the
direct registration system at least one share of common stock to your name,
using the enclosed Direct Registration Transfer Instruction Form or (2)
arrange with your broker, bank or other nominee in whose name your shares
are held to participate in the Plan on your behalf, using the enclosed
Broker and Nominee Form.
There is no minimum requirement as to the number of shares of common
stock that you must hold in your Plan account in order to participate in
the optional cash investment portion of the Plan. However, if you wish to
reinvest all or a portion of your dividends, you must hold at least
shares of common stock in your Plan account.
If you are an interested investor who is not yet a shareholder, you
initially can purchase from us at least $ of common stock in order
to participate in the Plan. This initial purchase will enable you to
participate in both the optional cash investment and dividend reinvestment
portions of the Plan. You may purchase shares of common stock pursuant to
this paragraph in the manner set forth in Question 8.
Non-transferability of Right to Participate. You may not transfer your
right to participate in the Plan to another person.
Foreign Law Restrictions. You may not participate in the Plan if it
would be unlawful for you to do so in the jurisdiction where you are a
citizen or reside. If you are a citizen or resident of a country other than
the United States, you should confirm that by participating in the Plan you
will not violate local laws governing, among other things, taxes, currency
and exchange controls, stock registration and foreign investments.
Exclusion from Plan for Short-term Trading. You should not use the
Plan to engage in short-term trading activities that could change the
normal trading volume of the common stock. In such case, we may prevent you
from participating in the Plan.
Exclusion from Plan at Our Election. Notwithstanding any other
provisions in this prospectus, we reserve the right to prevent you from
participating in the Plan for any reason. It is in our sole discretion to
exclude you from participation in the Plan.
ENROLLMENT
6. HOW DO I ENROLL IN THE PLAN?
If you are eligible to participate in the Plan, you may join the Plan at
any time. Once you enroll in the Plan, you will remain enrolled until you
withdraw from the Plan or we terminate the Plan.
The Authorization Form. To enroll and participate in the Plan, you must
complete the enclosed Authorization Form and mail it to the Administrator of the
Plan at the address set forth in Question 4. If your shares of common stock are
registered in more than one name (such as joint tenants or trustees), all such
registered holders must sign the Authorization Form. If you are eligible to
participate in the Plan, you may sign and return the Authorization Form to join
the Plan at any time.
However, if you are a beneficial owner of common stock and wish to enroll
and participate in the Plan, you must either (1) instruct your broker, bank or
other nominee in whose name your shares are held to complete and sign a Broker
and Nominee Form (please see "The Broker and Nominee Form" below for more
information) or (2) sign and return the enclosed Authorization Form and instruct
your broker, bank or other nominee in whose name your shares are held to
transfer through
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<PAGE> 17
the direct registration system at least one share of common stock to your name
using the enclosed Direct Registration Transfer Instruction Form.
If you are an interested investor who is not presently our shareholder, but
you desire to participate in the Plan by making an initial purchase from us of
at least $ of common stock, you may join the Plan by signing an
Authorization Form and forwarding it together with such funds, to the
Administrator. You may obtain an Authorization Form at any time by writing to
the Administrator at the address set forth in Question 4.
Choosing your Investment Option. When completing the Authorization Form,
you should choose one of the three investment options discussed in Question 2
and repeated below:
- "Full Dividend Reinvestment" -- This option directs the Administrator to
reinvest the cash dividends paid on all of the shares of common stock
owned by you then or in the future in shares of common stock. To
participate in the full dividend reinvestment feature of the Plan, you
must hold a minimum of shares of common stock in your Plan account.
This option also permits you to make optional cash investments from
$ to $ per month to buy additional shares of common stock.
- "Partial Dividend Reinvestment" -- This option directs the Administrator
to reinvest cash dividends paid on a specified amount of shares of common
stock then owned by you in shares of common stock. We will continue to
pay you cash dividends on the remaining shares of common stock, when and
if declared by our board of directors. To participate in the partial
dividend reinvestment feature of the Plan, you must hold a minimum of
shares of common stock in your Plan account, and you must elect to
reinvest at least % of the dividends on at least % of total
shares of common stock in your Plan account and held in your name in our
records. This option also permits you to make optional cash investments
from $ to $ per month to buy additional shares of common stock.
- "Optional Cash Investments Only" -- This option permits you to make
optional cash investments from $ to $ per month to buy additional
shares of common stock. We will continue to pay you cash dividends, when
and if declared by our board of directors, on the shares of common stock
owned by you then or in the future, unless you designate such shares for
reinvestment pursuant to the Plan.
You should choose your investment option by checking the appropriate box on
the Authorization Form. If you sign and return an Authorization Form without
checking an option, the Administrator will choose the "Full Dividend
Reinvestment" option and will reinvest all cash dividends on all shares of
common stock registered in your name, provided that you are the registered
holder of at least shares of common stock. If you are not the registered
holder of at least shares of common stock, the Administrator will choose
the "Optional Cash Investments Only" option.
The Administrator automatically will reinvest all cash dividends paid on
all shares of common stock that you have designated for participation in the
Plan until you indicate otherwise or withdraw from the Plan, or until we
terminate the Plan. If you have elected to have your dividends reinvested, we
will pay to the Administrator dividends on all shares of common stock held in
your Plan account. The Administrator will credit the common stock purchased with
your reinvested dividends to your Plan account.
Changing your Investment Option. You may change your investment option by
completing and signing a new Authorization Form and returning it to the
Administrator of the Plan. The Administrator must receive any such change at
least three business days before the record date for a dividend payment in order
for such change to become effective for that dividend payment. The
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<PAGE> 18
Administrator also must receive any change in the number of shares of common
stock that you have designated for partial dividend reinvestment at least five
business days before the record date for a dividend payment in order to reinvest
for such new number of shares on the next Investment Date.
The Broker and Nominee Form. If you are a beneficial owner of shares of
common stock and wish for your broker, bank or other nominee in whose name your
shares are held to participate in the Plan on your behalf, such broker, bank or
other nominee in whose name your shares are held must complete a Broker and
Nominee Form. The Broker and Nominee Form provides the only means by which a
broker, bank or other nominee in whose name your shares are held may make
optional cash investments on your behalf. Your broker, bank or other nominee in
whose name your shares are held must submit a Broker and Nominee Form to the
Administrator each time such broker, bank or other nominee in whose name your
shares are held transmits optional cash investments on your behalf. You, your
broker, bank or other nominee in whose name your shares are held may request a
Broker and Nominee Form at any time by contacting the Administrator at the
address set forth in Question 4. Prior to submitting a Broker and Nominee Form,
your broker, bank or other nominee in whose name your shares are held must have
submitted a completed Authorization Form on your behalf.
The Administrator must receive the Broker and Nominee Form and appropriate
instructions at least three business days before the applicable record date or
the optional cash investment will not be invested until the following Investment
Date.
7. WHEN WILL MY PARTICIPATION IN THE PLAN BEGIN?
The date on which the Administrator receives your properly completed
Authorization Form will determine the date on which the Administrator will buy
shares of common stock for your account. If you choose either the full or
partial dividend reinvestment option, the Administrator will begin to reinvest
dividends on the Investment Date immediately following its receipt of your
Authorization Form, provided it receives such Authorization Form at least three
business days before the record date set for the related dividend payment.
If you choose the optional cash investments only option and wish to invest
$ or less in any one month, the Administrator will purchase shares of
common stock for you on the Investment Date after receipt of both your
Authorization Form and the funds to be invested, provided it receives such
Authorization Form and funds on or before the close of business on the fifth
business day immediately preceding such Investment Date. If the Administrator
receives your Authorization Form and funds for optional cash investment after
the fifth business day indicated above but before such Investment Date, then the
Administrator will hold your funds, without interest for investment on the next
Investment Date. Please see the provisions of Question 10 if you wish to invest
more than $ .
Once you enroll in the Plan, you will remain enrolled in the Plan until you
withdraw from the Plan or we terminate the Plan.
PURCHASES
8. HOW ARE SHARES PURCHASED UNDER THE PLAN?
Initial Purchase of Common Stock. If you are an interested investor who is
not yet our stockholder, then you initially may direct the Administrator to
purchase for your account at least $ worth of common stock, thus making
you eligible to participate in the Plan. You should send, together with your
Authorization Form, a check or money order (payable to The Chase Manhattan Bank)
in an amount from $ to $ to the Administrator at the address
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set forth in Question 4. The other provisions of this Question 8 will apply to
your purchase of shares of common stock in this manner.
Source of the Shares of Common Stock. The Administrator will use all
dividends reinvested through the Plan and all optional cash investments to buy
either newly issued shares of common stock directly from us or shares of common
stock on the open market or in privately negotiated transactions with third
parties, or a combination of both, at our discretion. Shares of common stock
purchased directly from us will consist of authorized but unissued shares of
common stock (including shares held in our treasury, if any).
Investment Dates. When the Administrator purchases shares of common stock
from us, such purchases shall be made on the "Investment Date" in each month. If
the Administrator is buying shares of common stock directly from us through
dividend reinvestment or optional cash investments of $ or less, then
the Investment Date will occur on either (1) the dividend payment date during
any month in which we pay a cash dividend or (2) the last trading day (as
defined below) of any month in which we do not pay a cash dividend.
If the Administrator is buying shares of common stock directly from us
through an optional cash investment of greater than $ pursuant to a
request for waiver (see Question 10 for how to obtain such a waiver), then there
will be ten (10) Investment Dates, each of which will occur on a separate day on
which the New York Stock Exchange is open for business in a Pricing Period (as
defined in the next paragraph), with one-tenth (1/10) of your optional cash
investment being invested on each such day, subject to the qualifications set
forth under "Minimum Waiver Price" in Question 10 below.
The "Pricing Period" is the period encompassing the ten consecutive trading
days ending on either (1) the dividend payment date during any month in which we
pay a cash dividend or (2) the last trading day of any month in which we do not
pay a cash dividend. A "trading day" is a day on which trades in common stock
are reported on the New York Stock Exchange. See "Calendar of Expected
Events--Optional Cash Investments of Greater than $ " attached as
Exhibit B to this prospectus for a list of the expected Pricing Period
commencement and conclusion dates.
If the Administrator is buying shares of common stock for the Plan through
open market or privately negotiated transactions, then the Administrator will
reinvest dividends or make optional cash investments as soon as is practical
after the applicable Investment Date.
In the past, record dates for dividends have preceded the dividend payment
dates by approximately two to four weeks. We historically have paid dividends on
or about the last business day of each January, April, July and October. We
cannot assure you that we will pay dividends according to this schedule in the
future, and nothing contained in the Plan obligates us to do so. Neither we nor
the Administrator will be liable when conditions, including compliance with the
rules and regulations of the Commission, prevent the Administrator from buying
shares of common stock or interfere with the timing of such purchases.
We pay dividends as and when declared by our board of directors. We cannot
assure you that we will declare or pay a dividend in the future, and nothing
contained in the Plan obligates us to do so. The Plan does not represent a
guarantee of future dividends.
Price of Shares of Common Stock. If the Administrator purchases shares of
common stock directly from us, then with respect to reinvested dividends and
optional cash investments of $ or less, the Administrator will pay a
price per share equal to 100% (subject to change) of the average of the daily
high and low sales price per share of our common stock reported by the New York
Stock Exchange on the applicable Investment Date, or, if no trading occurs in
shares of
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common stock on the applicable Investment Date, the first trading day
immediately preceding the Investment Date for which trades are reported,
computed to seven decimal places, if necessary.
If the Administrator purchases shares of common stock directly from us,
then with respect to optional cash investments of greater than $ , the
Administrator will pay a price per share of our common stock equal to 100%
(subject to change) of the average of the daily high and low sales prices per
share of our common stock reported by the New York Stock Exchange for the
trading day relating to each Investment Date, or, if no trading occurs in shares
of common stock on such trading day, the first trading day immediately preceding
the Investment Date for which trades are reported, computed up to seven decimal
places, if necessary.
If the Administrator purchases shares of common stock in the open market or
in privately negotiated transactions, then the Administrator will pay a price
equal to the weighted average purchase price paid by the Administrator for such
shares, computed up to seven decimal places, if necessary. The Administrator
will purchase such shares as soon as is practical on or after an Investment
Date.
Number of Shares to be Purchased. If you elect to participate in the Plan
by reinvesting your dividends, the Administrator will invest for you the total
dollar amount equal to the sum of (i) the dividend on all shares of common stock
(including fractional shares) held in your Plan account for which you have
requested dividend reinvestment and (ii) any optional cash investments to be
made as of that Investment Date.
If you elect to make only optional cash investments, the Administrator will
invest for you the total dollar amount equal to any optional cash investments to
be made as of that Investment Date.
As of any Investment Date, the Administrator will purchase for your account
the number of shares of common stock equal to the total dollar amount to be
invested for you, as described above, divided by the applicable purchase price,
computed to the seventh decimal place. The Administrator will deduct from the
amount to be invested for you any amount that we are required to deduct for
withholding tax purposes.
Administrator's Control of Purchase Terms. With respect to purchases of
common stock that the Administrator makes under the Plan, the Administrator, or
a broker that the Administrator selects, will determine the following:
- the exact timing of open market purchases;
- the number of shares of common stock, if any, that the Administrator
purchases on any one day or at any time of that day;
- the prices for the shares of common stock that the Administrator pays;
- the markets on which the Administrator makes such purchases; and
- the persons (including brokers and dealers) from or through which the
Administrator makes such purchases.
Commingling of Funds. When making purchases for an account under the Plan,
we or the Administrator may commingle your funds with those of other investors
participating in the Plan.
9. HOW DO I MAKE OPTIONAL CASH INVESTMENTS?
You may make optional cash investments at any time if you have submitted a
signed Authorization Form or your broker, bank or other nominee has submitted a
Broker and Nominee
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Form, and if you are (1) a registered holder of common stock, (2) an investor
who has purchased from us at least $ of common stock under the Plan or (3)
a beneficial owner of common stock and either have directed your broker, bank or
other nominee in whose name your shares are held to transfer at least one share
of common stock to your name or you have arranged with your broker, bank or
other nominee in whose name your shares are held to participate in the Plan on
your behalf.
Initial Optional Cash Investments. You may make an initial optional cash
investment when enrolling in the Plan by sending your properly completed
Authorization Form and a check or money order (payable to The Chase Manhattan
Bank) in an amount from $ to $ to the Administrator at the address
set forth in Question 4 by the close of the fifth business day preceding an
Investment Date. Please see Question 10 if you wish to make an optional cash
investment of more than $ in any month.
Subsequent Optional Cash Investments. Once you enroll in the Plan and make
an initial investment whether by dividend reinvestment or optional cash
investment, the Administrator will attach an Optional Cash Investment Form to
each statement of account it sends to you. To make an optional cash investment
once enrolled in the Plan, you should send a properly completed Optional Cash
Investment Form and a check or money order (payable to The Chase Manhattan Bank)
in an amount from $ to $ to the Administrator at the address set
forth in Question 4 by the close of the fifth business day preceding an
Investment Date.
If you are a beneficial owner of common stock, you (through your broker,
bank or other nominee) must make all optional cash investments through the use
of a Broker and Nominee Form. See Question 6.
The Administrator will hold, without interest, all optional cash
investments that it receives after the close of business on the fifth business
day before an Investment Date and before the next Investment Date. The
Administrator will invest such held-over funds on the next Investment Date,
provided that the next Investment Date falls within 35 or fewer days. If the
next Investment Date will occur in more than 35 days, then the Administrator
will return such funds to you, without interest.
Minimum and Maximum Limits. For any Investment Date that you choose to make
an optional cash investment, you must invest at least $ but not more than
$ . You may invest an amount greater than $ in any month if you
obtain a prior written waiver from us to do so. See Question 10 to learn how to
request a waiver.
Items to Remember When Making Optional Cash Investments. When making your
optional cash investment you should consider the following:
- All optional cash investments must equal at least $ but not more
than $ per month;
- You do not have to make an optional cash payment in any month;
- You do not have to send the same amount of cash payment each month;
- You must make all optional cash investments in United States dollars; and
- You must send optional cash investments in the form of a check or money
order payable to The Chase Manhattan Bank. Do not send cash.
Refunds of Uninvested Optional Cash Investments. To obtain a refund of
optional cash investments which the Administrator has not yet invested, you must
send a written request to the Administrator at the address set forth in Question
4. The Administrator must receive your request no
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later than five business days prior to the Investment Date in order to refund
your money for such Investment Date.
Interest on Optional Cash Investments. You will not earn interest on
optional cash investments held pending investment. We therefore suggest that you
send any optional cash investment that you wish to make so as to reach the
Administrator as close as possible to the fifth business day preceding the next
Investment Date. You should contact the Administrator if you have any questions
regarding these dates.
10. HOW DO I MAKE AN OPTIONAL CASH INVESTMENT OVER THE MAXIMUM MONTHLY AMOUNT?
If you wish to make an optional cash investment in excess of $ for
any Investment Date, you must obtain our prior written approval. To obtain our
approval, you must submit a request for waiver directly to the Administrator. To
make a request for waiver, you should complete the enclosed Request For Waiver
Form and send it to our Administrator at [(212) 273-8100] no later than two (2)
business days preceding the start of the Pricing Period for the applicable
Investment Date. If we have approved your request for waiver, then you must send
to the Administrator your optional cash investment of greater than $ . The
Administrator must receive your optional cash investment in good funds pursuant
to a Request For Waiver by the close of business on the last business day
immediately preceding the first day of the Pricing Period. Please see Question 9
for other provisions relating to optional cash investments.
We have the sole discretion to approve any request to make an optional cash
investment in excess of the $ maximum allowable amount. We may grant such
requests for waiver in order of receipt by the Administrator, or by any other
method that we determine to be appropriate. We also may determine the amount
that you may invest pursuant to a waiver. In deciding whether to approve your
request for waiver, we may consider, among other things, the following factors:
- whether, at the time of such request, the Administrator is acquiring
shares of common stock for the Plan directly from us or in the open
market or in privately negotiated transactions with third parties;
- our need for additional funds;
- our desire to obtain such additional funds through the sale of common
stock as compared to other sources of funds;
- the purchase price likely to apply to any sale of common stock;
- the extent and nature of your prior participation in the Plan;
- the number of shares of common stock you hold of record; and
- the total amount of optional cash investments in excess of $ for
which requests for waiver have been submitted.
If you do not receive a response from the Administrator in connection with
your request for waiver, you should assume that we have denied your request.
Minimum Waiver Price. We may set a minimum purchase price per share (the
"Minimum Waiver Price") for optional cash investments made pursuant to requests
for waiver for any Pricing Period. We will determine whether to set a Minimum
Waiver Price, and, if so, its amount at least three business days before the
first day of a Pricing Period. We will notify the Administrator of the Minimum
Waiver Price, if any. In deciding whether to set a Minimum Waiver Price, we will
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consider current market conditions, the level of participation in the Plan and
our current and projected capital needs.
We will fix the Minimum Waiver Price for a Pricing Period as a dollar
amount that the average of the high and low sale prices reported by the New York
Stock Exchange for each trading day of such Pricing Period must equal or exceed.
We will exclude from the Pricing Period and from the determination of the
purchase price any trading day within the Pricing Period that does not meet the
Minimum Waiver Price. We also will exclude any day in which no trades of common
stock are made on the New York Stock Exchange. Thus, for example, if the Minimum
Waiver Price is not met for two of the ten trading days in a Pricing Period,
then we will base the purchase price upon the remaining eight trading days in
which the Minimum Waiver Price was met.
In addition, we will return a portion of each optional cash investment for
each trading day of a Pricing Period for which the Minimum Waiver Price is not
met or for each day in which no trades of common stock are reported on the New
York Stock Exchange. The returned amount will equal one-tenth (1/10) of the
total amount of such optional cash investment (not just the amount exceeding
$ ) for each trading day that the Minimum Waiver Price is not met or for
each day in which no trades are reported. Thus, for example, if the Minimum
Waiver Price is not met or no sales of our common stock are reported for two of
the ten trading days in a Pricing Period, then we will return two-tenths (2/10)
(or 20%) of such optional cash investment to you without interest.
The establishment of the Minimum Waiver Price and the possible return of a
portion of the investment applies only to optional cash investments made
pursuant to a request for waiver. Setting a Minimum Waiver Price for a Pricing
Period will not affect the setting of a Minimum Waiver Price for any other
Pricing Period. We may waive our right to set a Minimum. Waiver Price for any
particular month. Neither we nor the Administrator is required to give you
notice of the Minimum Waiver Price for any Pricing Period. However, you may
contact the Administrator on the Minimum Waiver Price/Waiver Discount set date
(indicated on "Calendar of Expected Events-Optional Cash Investments of Greater
than $ " attached as Exhibit B to this prospectus) at (212) ____-_____ to
learn whether we have set a Minimum Waiver Price for that Pricing Period.
Waiver Discount. We may, at our sole discretion, grant a discount on the
purchase of shares of common stock under the Plan to any person who purchases in
excess of $ of common stock in one month pursuant to an approved request for
waiver. Such discount may be between 0% and 3%, inclusive, of the market price
of the common stock. We do not presently intend to offer such a discount and we
cannot guarantee that we ever will do so.
Neither we nor the Administrator is required to give you notice of the
Minimum Waiver Price for any Pricing Period. However, you may contact the
Administrator on the Minimum Waiver Price/ Waiver Discount set date (indicated
on "Calendar of Expected Events -- Optional Cash Investments of Greater than
$ " attached as Exhibit B attached to this prospectus) at [(212) 273-8200]
to learn whether we have set a Waiver Discount for that Pricing Period.
11. WHAT IF I HAVE MORE THAN ONE ACCOUNT?
For purposes of the limitations discussed in Question 10, we may aggregate
all optional cash investments for Plan participants with more than one account
using the same social security or taxpayer identification number. If you are
unable to supply a social security or taxpayer identification number, we may
limit your participation to only one Plan account.
For purposes of the Plan, we may aggregate all Plan accounts that we
believe, in our sole discretion, to be under common control or management or to
have common ultimate beneficial ownership. Unless we have determined that
reinvestment of dividends and optional cash investments
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for each such account would be consistent with the purposes of the Plan, we will
have the right to aggregate all such accounts and to return, without interest,
within 30 (for dividend reinvestment) or 35 (for optional cash investment) days
of receipt, any amounts in excess of the investment limitations applicable to a
single account received in respect of all such accounts.
CERTIFICATES
12. WILL I RECEIVE CERTIFICATES FOR SHARES PURCHASED?
Safekeeping of Certificates. Unless your shares are held by a broker, bank
or other nominee, we will register shares of common stock that the Administrator
purchases for your account under the Plan in your name. The Administrator will
credit such shares to your Plan account in "book-entry" form. This service
protects against the loss, theft or destruction of certificates evidencing
shares of common stock.
You also may send to the Administrator for safekeeping all certificates for
shares of common stock which you hold. The Administrator will credit the shares
of common stock represented by such certificates to your account in "book-entry"
form and will combine such shares with any whole and fractional shares then held
in your Plan account. In addition to protecting against the loss, theft or
destruction of your certificates, this service also is convenient if and when
you sell shares of common stock through the Plan. See Question 13 to learn how
to sell your shares of common stock under the Plan.
You may deposit certificates for shares of common stock into your account
regardless of whether you have previously authorized reinvestment of dividends.
The Administrator automatically will reinvest all dividends on any such shares
deposited in accordance with the Plan, unless you have instructed the
Administrator otherwise.
To deposit certificates for safekeeping under the Plan, you should send
your share certificates, in non-negotiable form, to the Administrator by Federal
Express or a courier providing equivalent tracking process services, at the
address specified in Question 4. You may withdraw any shares deposited for
safekeeping by mailing a written request to the Administrator.
Issuance of Certificates. Upon your written request to the Administrator or
upon our termination of the Plan, the Administrator will issue and deliver to
you certificates for all whole shares of common stock credited to your Plan
account. The Administrator will not issue certificates for fractional shares of
common stock. The Administrator will handle such requests at no cost to you. The
Administrator will continue to credit any remaining whole or fractional shares
of common stock to your account. If and when the Plan terminates or your account
terminates, the Administrator will convert to cash any fractional shares held in
your account at the time of termination, at the then current market price of the
common stock.
Effect of Requesting Certificates in Your Name. If you request a
certificate for whole shares of common stock held in your account either of the
following may occur:
- If you maintain an account for reinvestment of dividends, then the
Administrator will continue to reinvest all dividends on the shares of
common stock for which you requested a certificate so long as such shares
remain registered in your name; and
- If you maintain an account only for optional cash investments, then the
Administrator will not reinvest dividends on shares of common stock for
which you requested a certificate unless and until you submit an
Authorization Form to authorize reinvestment of dividends on such shares
registered in your name.
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Transfer Restrictions. You may not pledge, sell or otherwise transfer
shares of common stock credited to your Plan account. If you wish to pledge,
sell or transfer such shares, you must first request that we either issue and
transmit a stock certificate for such shares in your name or issue and
electronically transfer such shares in your name.
SALE OF SHARES
13. HOW DO I SELL SHARES?
Sale of Shares Held in Your Account. You may request in writing at anytime
that the Administrator sell all or any part of the shares of common stock held
in your Plan account. After receipt of your written request, the Administrator
will sell such shares through a designated broker or dealer. The Administrator
will mail to you a check for the proceeds of such sale, less applicable
brokerage commissions, service charges (as set forth on the attached Exhibit A)
and any taxes. The Administrator must receive your written instructions at least
48 hours prior to the sale. Upon request, the Administrator will sell shares at
least once per week at then current market prices through one or more brokerage
firms.
If you sell or transfer only a portion of the shares of common stock in
your Plan account, you will remain a participant in the Plan and may continue to
make optional cash investments and reinvest dividends, provided that you
maintain the share minimum dividend reinvestment eligibility threshold in
your Plan account. The Administrator will continue to reinvest the dividends on
the shares of common stock credited to your account unless you notify the
Administrator that you wish to withdraw from the Plan.
Costs of Selling Shares. The Plan requires you to pay all costs associated
with the sale of your shares of common stock under the Plan. Please see the
"Plan Service Fees Schedule" attached as Exhibit A hereto for a detailed
description of such costs.
Sale of Fractional Shares Held in Your Account. The Administrator will not
sell a fractional share of common stock unless you request that the
Administrator sell (or withdraw via a certificate issuance) all shares of common
stock held in your account.
Termination of Your Account Upon Sale of All Shares. If the Administrator
sells all shares of common stock held in your Plan account, the Administrator
will automatically terminate your account. In such case, you will have to
complete and file a new Authorization Form to rejoin the Plan.
REPORTS
14. HOW WILL I KEEP TRACK OF MY INVESTMENTS?
Each time the Administrator makes an investment for your account, whether
by reinvestment of dividends or by optional cash investment, the Administrator
will send you a detailed statement that will provide the following information
with respect to your Plan account:
- total cash dividends received;
- total optional cash investments received;
- total number of shares of common stock purchased (including fractional
shares);
- price paid per share of common stock;
- date of stock purchases; and
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- total number of shares of common stock in your Plan account.
You should retain these statements to determine the tax cost basis of the
shares purchased for your account under Plan.
WITHDRAWAL
15. HOW WOULD I WITHDRAW FROM PARTICIPATION IN THE PLAN?
How to Withdraw from the Plan. You may withdraw from the Plan at anytime.
In order to withdraw from the Plan, you must provide written notice instructing
the Administrator to terminate your account. The Administrator must receive such
written notice before the close of business on the record date for any dividend
payment in order to terminate your account prior to such dividend payment date.
Costs of Withdrawing from the Plan. The Plan requires you to pay all costs
associated with your withdrawal from the Plan. Please see the "Plan Service Fees
Schedule" attached as Exhibit A hereto for a detailed description of such costs.
Issuance of Stock Certificates upon Withdrawal from Plan. Upon termination
of your Plan account, the Administrator will issue to you stock certificates for
any whole shares of common stock in your account. The Administrator will convert
to cash any fractional shares held in your account at the time of termination at
the then current market price of the common stock. After the Administrator
terminates your account we will pay to you all cash dividends on shares of
common stock owned by you unless you rejoin the Plan.
Selling Shares upon Withdrawal from Plan. As an alternative to receiving
stock certificates, upon termination of your Plan account you may request in
writing that the Administrator sell all or a portion of the shares of common
stock (both whole and fractional) in your account. If you instruct the
Administrator only to sell a portion of your shares of common stock, then the
Administrator will issue to you certificates for the remaining shares. The
Administrator will mail to you a check for the proceeds of such sale, less
applicable brokerage commissions, service charges and any taxes.
Rejoining the Plan after Withdrawal. After you withdraw from the Plan, you
may rejoin the Plan at any time by filing a new Authorization Form with the
Administrator. However, the Administrator has the right to reject such
Authorization Form if you repeatedly join and withdraw from the Plan, or for any
other reason. The Administrator's exercise of such right is intended to minimize
unnecessary administrative expenses and to encourage use of the Plan as a
long-term shareholder investment service.
TAXES
16. WHAT ARE SOME OF THE TAX CONSEQUENCES OF MY PARTICIPATION IN THE PLAN?
The following is only a summary of certain of the federal income tax
consequences of participation in the Plan. This summary is for general
information only and does not constitute tax advice. This summary does not
reflect every possible tax outcome or consequence that could result from
participation in the Plan. Also, this summary does not discuss your tax
consequences if you are not a United States citizen or a resident alien. We
advise you to consult your own tax advisors to determine the tax consequences
particular to your situation, including any applicable state, local or foreign
income and other tax consequences that may result from your participation in the
Plan and your subsequent sale of shares acquired pursuant to the Plan. Any state
tax consequences will vary
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from state to state, and any tax consequences to you if you reside outside of
the United States will vary from jurisdiction to jurisdiction.
Reinvestment of Dividends Paid on Shares of Common Stock. With respect to
shares of common stock that the Administrator purchases from us with cash
dividends that you elect to have reinvested under the Plan, you will be treated
for federal income tax purposes as having received a distribution (with respect
to common stock) equal to the fair market value on the Investment Date of the
common stock credited to your Plan account (which should equal the amount of
cash dividends that you would have otherwise received, assuming that we have not
granted a discount on your purchase of shares of common stock under the Plan),
even though you will not receive such distribution in cash. With respect to
shares of common stock that the Administrator purchases on the open market with
cash dividends that you elect to have reinvested under the Plan, you will be
treated for federal income tax purposes as having received a distribution equal
to the price paid by the Administrator for such shares of common stock, plus
your pro rata portion of any brokerage and related costs incurred by us or the
Administrator to purchase such shares. For federal income tax purposes,
distributions made by us will first be taxable as dividends to the extent of our
current and accumulated earnings and profits. To the extent that the amount
distributed by us exceeds our current and accumulated earnings and profits, the
distribution will next be treated as a return of capital to you to the extent of
your basis in your shares of common stock, with any excess being taxable to you
as gain from the sale of shares of common stock. If you are a corporation, then
the distributions that you receive from us which are taxable as dividends will
not be eligible for the dividends received deduction.
All costs of administering the Plan, except for costs related to your
voluntary selling of shares of common stock and/or withdrawal from the Plan,
will be paid by us. Consistent with the conclusion reached by the Internal
Revenue Service in a recent private letter ruling issued to another real estate
investment trust, we intend to take the position that these costs do not
constitute a distribution which is either taxable to you or which would reduce
your basis in your shares of common stock. However, since the private letter
ruling was not issued to us, we can not rely on its conclusions. Thus, it is
possible that the Internal Revenue Service might view your share of such costs
as constituting a taxable distribution to you (and/or a distribution which
reduces the basis in your shares of common stock). For this or other reasons, we
may in the future take a different position with respect to such costs.
Your tax basis in the shares of common stock acquired for your Plan account
generally will equal the total amount of dividends you are treated as receiving
(as described above). Your holding period for such shares generally will begin
on the day following the Investment Date for such shares.
Optional Cash Investments. If you make an optional cash investment in the
Plan (whether under the Full Dividend Reinvestment option, the Partial Dividend
Reinvestment option, or the Optional Cash Investments Only option), you will not
be treated for federal income tax purposes as having received income by virtue
of the purchase of shares of common stock with the optional cash investment.
However, if you make an optional cash investment in the Plan, you will be
treated as receiving a cash dividend equal to a pro rata share of any brokerage
commissions or other related charges that we or the Administrator pay in
connection with the Administrator's purchase of shares of common stock on your
behalf on the open market. Such dividends would be taxable income or gain or may
reduce basis in shares of common stock (or some combination thereof) under the
rules described above under "Reinvestment of Dividends Paid on Shares of Common
Stock.
Your tax basis in the shares of common stock acquired through an optional
cash investment under the Plan generally will equal the amount of your optional
cash investment plus, if applicable, any deemed dividends on account of your pro
rata portion of any brokerage commissions or other
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related charges incurred by us or the Administrator to purchase such shares on
the open market. Your holding period for such shares generally will begin on the
day following the Investment Date for such shares.
Backup Withholding and Administrative Expenses. We or the Administrator may
be required to deduct as "backup withholding" thirty-one percent (31%) of the
dividends that we pay to any shareholder, regardless of whether such dividends
are reinvested pursuant to the Plan. Similarly, the Administrator may be
required to deduct backup withholding from the proceeds of sales of shares of
common stock held in your Plan account. You will be subject to backup
withholding if:
- you fail to properly furnish us and the Administrator with your correct
tax identification number, or "TIN;"
- the Internal Revenue Service or any other governmental body or agency
notifies us or the Administrator that you have provided an incorrect TIN;
- the Internal Revenue Service notifies us or the Administrator that backup
withholding should be commenced because you failed to properly report
dividends paid to you; or
- when required to do so, you fail to certify, under penalties of perjury,
that you are not subject to backup withholding.
Backup withholding amounts will be withheld from dividends before such
dividends are reinvested under the Plan. Therefore, if you are subject to backup
withholding, dividends which would otherwise be available for reinvestment under
the Plan will be reduced by the backup withholding amount. Any amount paid as
backup withholding will be creditable against your income tax liability.
Disposition. When you withdraw shares from the Plan and receive whole
shares, you will not realize any taxable income. However, if you receive cash
for a fraction of a share, you will be required to recognize gain or loss with
respect to such fraction. You also will be required to recognize a gain or loss
whenever your shares are sold, whether such shares are sold by the Administrator
pursuant to your request or by you after the shares are withdrawn from the Plan.
Generally, the amount of such gain or loss that you will be required to
recognize will be the difference between the amount that you receive for the
shares and your tax basis in those shares.
Exceeding the Ownership Limit Set Forth in our Certificate of
Incorporation. For us to qualify as a real estate investment trust for federal
income tax purposes, no more than 50% in value of our outstanding stock may be
actually and/or constructively owned by five or fewer individuals (as defined in
the Internal Revenue Code to include certain entities) during the last half of a
taxable year or during a proportionate part of a shorter taxable year (the
"Closely-Held Requirement"), and our common stock must be beneficially owned by
100 or more persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year (the "100 Shareholder
Requirement"). Because we expect to continue to qualify as a real estate
investment trust, our certificate of incorporation contains an ownership
restriction (the "Ownership Limit"), which is intended to help ensure compliance
with these requirements, that no holder of our stock may own, or be deemed to
own by virtue of any of the attribution rules of the Internal Revenue Code, more
than 7.5 percent by value of our outstanding capital stock. Our Board of
Directors is authorized to further increase the Ownership Limit to not more than
9.8%. The Certificate permits the Bucksbaums to exceed the Ownership Limit.
Currently, the Bucksbaums exceed such limit. The Ownership Limit provides that
the Bucksbaums may acquire additional shares pursuant to certain rights granted
to them in connection with our initial public offering, which rights are
described more fully below, 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.
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Our Board of Directors may waive the Ownership Limit if presented with
satisfactory evidence that such ownership will not jeopardize our status as a
REIT. As a condition of such waiver, our Board of Directors may require opinions
of counsel satisfactory to it and/or an undertaking from the applicant with
respect to preserving our REIT status. The Ownership Limit will not apply if the
Board of Directors and the holders of capital stock determine that it is no
longer in our best interests 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 us 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 us to serve as trustee of a trust for the
exclusive benefit of a charitable beneficiary to be designated by us 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 beneficiary will receive 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.
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 our status as a REIT, the
Ownership Limit may preclude an acquisition of control over us without the
approval of our Board of Directors.
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 us containing the information specified in the Certificate within 30 days
after January 1 of each year. In addition, each stockholder shall upon demand be
required to disclose to us in writing such information with respect to the
direct, indirect and constructive ownership of shares as our 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
us to send annual written statements requesting information as to the actual
ownership of the capital stock from each record holder of more than 1% of our
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 0.5%. Record holders that fail to submit a written statement in response
to the request must 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.
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OTHER PROVISIONS
17. HOW CAN I VOTE MY SHARES?
We will send you proxy materials for any meeting of stockholders in order
to vote all whole shares of common stock credited to your account. You may vote
your shares of common stock either by designating the vote of such shares by
proxy or by voting such shares in person at the meeting of stockholders.
18. WHAT ARE THE COSTS OF THE PLAN?
We will pay all brokerage commissions and service charges in connection
with the reinvestment of dividends and optional cash investments to purchase
common stock under the Plan. You will be responsible for any fees payable in
connection with your sale of shares or voluntary withdrawal from the Plan.
Please see the "Plan Service Fees Schedule" attached as Exhibit A hereto for a
detailed description of such costs.
19. WHAT ARE YOUR AND THE ADMINISTRATORS RESPECTIVE RESPONSIBILITIES?
We, the Administrator and any of our agents, in administering the Plan, are
not liable for any act done in good faith or for any good faith failure to act,
including, without limitation, any claim of liability (i) arising from the
failure to terminate your account upon your death or judgment of incompetence
prior to the Administrator's receipt of notice in writing of such death; (ii)
relating to the prices and times at which the Administrator buys or sells shares
of common stock for your account; or (iii) relating to any fluctuation in the
market value of the common stock.
We, the Administrator and any of our agents will not have any duties,
responsibilities or liabilities other than those expressly set forth in the Plan
or as imposed by applicable laws, including federal securities laws. Since we
have delegated all responsibility for administering the Plan to the
Administrator, we specifically disclaim any responsibility for any of the
Administrator's actions or inactions in connection with the administration of
the Plan. None of our directors, officers or shareholders shall have any
personal liability under the Plan.
20. HOW WILL A STOCK SPLIT OR A RIGHTS OFFERING AFFECT MY PLAN ACCOUNT?
Effect of A Stock Split. We will adjust your account to reflect any stock
split or dividend payable in shares of common stock. In such event, the
Administrator will receive and credit to your Plan account the applicable number
of whole and/or fractional shares of common stock. In order for the
Administrator to calculate the number of shares to be added to each Plan
account, the Administrator may curtail or suspend transaction processing for a
short time after the record date of such action.
Effect of A Rights Offering. If we have a rights offering in which we issue
separately tradable and exercisable rights to registered holders of shares of
common stock, we will transfer the rights attributable to whole shares of common
stock held in your Plan account to you as soon as practicable after we issue
such rights. The Administrator will sell rights attributable to fractional
shares of common stock and will treat the proceeds as optional cash payments on
the next Investment Date. In order for the Administrator to calculate the rights
allocable to each Plan account the Administrator may curtail or suspend
transaction processing for a short time after the record date of such action.
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21. CAN I PLEDGE MY SHARES UNDER THE PLAN?
You may not pledge any shares of common stock credited to your Plan
account. Any such pledge will be void. If you wish to pledge your shares of
common stock, you first must withdraw such shares from the Plan. See Question 13
to learn how to sell your shares under the Plan.
22. HOW CAN I TRANSFER MY SHARES?
You may transfer ownership of all or part of the shares of common stock
held in your Plan account through gift, private sale or otherwise by mailing to
the Administrator, at the address in Question 4, a properly executed stock
assignment, along with a letter with specific instructions regarding the
transfer. You also must mail to the Administrator an Authorization Form and a
Form W-9 (Certification of Taxpayer Identification Number) completed by the
person to whom you are transferring your shares.
You also may transfer ownership of all or part of the shares of common
stock held in your Plan account into the account of another person within the
Plan. To complete such a transfer, you must mail to the Administrator a letter
with specific instructions regarding the transfer and an Authorization Form
completed by the person to whom you are transferring your shares.
23. CAN THE PLAN BE AMENDED, MODIFIED, SUSPENDED OR TERMINATED?
Although we expect to continue the Plan indefinitely, we reserve the right
to amend, modify, suspend or terminate the Plan in any manner at any time. We
will notify you in writing of any modifications made to the Plan.
24. WHAT HAPPENS IF YOU TERMINATE THE PLAN?
If we terminate the Plan, you will receive a certificate for all whole
shares of common stock held in your Plan account and a check representing the
value of any fractional share of common stock valued at the then current market
price and any uninvested dividends or optional cash investments held in your
account.
25. ARE THERE ANY RISKS ASSOCIATED WITH THE PLAN?
Your investment in shares purchased under the Plan is no different from any
investment in shares that you hold directly. Neither we nor the Administrator
can assure you a profit or protect you against a loss on shares that you
purchase. You bear the risk of loss and enjoy the benefits of any gain from
changes in the market price with respect to shares of common stock purchased
under the Plan.
26. HOW WILL YOU INTERPRET AND REGULATE THE PLAN?
We may interpret, regulate and take any other action in connection with the
Plan that we deem reasonably necessary to carry out the Plan. As a participant
in the Plan, you will be bound by any such actions taken by us or the
Administrator.
27. WHAT LAW GOVERNS THE PLAN?
The laws of the State of Delaware will govern the terms, conditions and
operation of the Plan.
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28. WHERE WILL NOTICES BE SENT?
The Administrator will address all of its notices to you at your last known
address. You should notify the Administrator promptly in writing of any change
of address.
PLAN OF DISTRIBUTION
Except to the extent the Administrator purchases shares of common stock in
the open market or in privately negotiated transactions with third parties, we
will sell directly to the Administrator the shares of common stock acquired
under the Plan. Such shares, including shares acquired pursuant to requests for
waivers, may be resold in market transactions on any national securities
exchange on which shares of common stock trade or in privately negotiated
transactions. The common stock currently is listed on the New York Stock
Exchange.
Pursuant to the Plan, we may be requested to approve optional cash
investments in excess of the allowable maximum amounts pursuant to requests for
waiver on behalf of participants in the Plan that may be engaged in the
securities business. In deciding whether to approve a request for waiver, we may
consider relevant factors including, among other things, (i) whether, at the
time of such request, the Administrator is acquiring shares of common stock for
the Plan directly from us or in the open market or in privately negotiated
transactions with third parties; (ii) our need for additional funds; (iii) our
desire to obtain such additional funds through the sale of common stock as
compared to other sources of funds; (iv) the purchase price likely to apply to
any sale of common stock; (v) the extent and nature of your prior participation
in the Plan; (vi) the number of shares of common stock you hold of record; and
(vii) the total amount of optional cash investments in excess of $ for
which requests for waiver have been submitted. We may sell shares of common
stock through the Plan to persons who, in connection with the resale of such
shares, may be considered underwriters. We will not give any such person any
rights or privileges other than those that such person would be entitled to as a
participant under the Plan. We will not enter into any agreement with any such
person regarding such person's purchase, resale or distribution of shares. Under
certain circumstances, we may, however, approve requests for optional cash
investments in excess of the allowable maximum limitations pursuant to requests
for waivers.
Subject to the availability of shares of common stock registered for
issuance under the Plan, there is no total maximum number of shares that can be
issued pursuant to the reinvestment of dividends and optional cash investments.
We will pay all brokerage commissions and service charges in connection with the
reinvestment of dividends and optional cash investments to purchase common stock
under the Plan. You will have to pay any fees payable in connection with your
voluntary sale of shares from your Plan account and/or withdrawal from the Plan.
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RISK FACTORS
Prospective Plan participants should carefully consider, among other
factors, the matters described below.
THE VALUE AND INCOME OF REAL ESTATE INVESTMENTS FLUCTUATE DUE TO VARIOUS FACTORS
INCLUDING THOSE DESCRIBED BELOW.
THE VALUE OF REAL ESTATE INVESTMENTS FLUCTUATES DEPENDING ON CONDITIONS IN
THE GENERAL ECONOMY AND THE REAL ESTATE BUSINESS. THESE CONDITIONS MAY ALSO
LIMIT OUR REVENUES AND AVAILABLE CASH.
An enclosed mall shopping center's revenues and value may be adversely
affected by a number of factors, including:
- the national and regional economic climates;
- local real estate conditions, such as an oversupply of retail space;
- perceptions by retailers or shoppers of the safety, convenience and
attractiveness of the shopping center; and
- convenience and quality of competing shopping centers and other retailing
options such as the Internet.
In addition, other factors may adversely affect an enclosed mall shopping
center's value without necessarily affecting its current revenues, including:
- changes in governmental regulations, zoning or tax laws;
- potential environmental or other legal liabilities;
- availability of financing; and
- changes in interest rate levels.
WE DEPEND ON LEASING SPACE TO TENANTS ON ECONOMICALLY FAVORABLE TERMS AND
COLLECTING RENT FROM OUR TENANTS, WHO MAY NOT BE ABLE TO PAY.
Our results of operations will depend on our ability to continue to lease
space in our properties on economically favorable terms. In addition, as
substantially all of our income is derived from rentals of real property, our
income and cash available for distribution to our stockholders would be
adversely affected if a significant number of our lessees were unable to meet
their obligations to us. If the sales of stores operating in our centers decline
sufficiently, tenants might be unable to pay their existing minimum rents or
expense recovery charges, since these rents and charges would represent a higher
percentage of their sales. In addition, if our tenants' sales decline, new
tenants would be less likely to be willing to pay minimum rents as high as they
would otherwise pay. If there is a recession, these risks would increase.
BANKRUPTCY OF TENANTS MAY DECREASE OUR REVENUES AND AVAILABLE CASH.
A number of companies in the retail industry, including some of our
tenants, have declared bankruptcy in recent years. The bankruptcy or insolvency
of a major tenant, particularly an anchor tenant, may have a material adverse
effect on the enclosed mall shopping centers affected and the income produced by
these properties and may make it substantially more difficult to lease the
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<PAGE> 34
remainder of the affected enclosed mall shopping centers. Our leases generally
do not contain restrictions designed to ensure the creditworthiness of the
tenant. As a result, the bankruptcy or insolvency of a major tenant could result
in a lower level of cash available for distribution to our stockholders.
IT MAY BE DIFFICULT TO BUY AND SELL REAL ESTATE QUICKLY, AND TRANSFER
RESTRICTIONS APPLY TO SOME OF OUR MORTGAGED PROPERTIES.
Equity real estate investments are relatively illiquid, and this
characteristic tends to limit our ability to vary our portfolio promptly in
response to changes in economic or other conditions. In addition, significant
expenditures associated with each equity investment, such as mortgage payments,
real estate taxes and maintenance costs, are generally not reduced when
circumstances cause a reduction in income from the investment. If income from a
property declines while the related expenses do not decline, our income and cash
available for distribution to our stockholders would be adversely affected. A
significant portion of our properties are mortgaged to secure payment of
indebtedness, and if we were unable to meet our mortgage payments, we could lose
money as a result of foreclosure on the properties by the various mortgagees. In
addition, if it becomes necessary or desirable for us to dispose of one or more
of the mortgaged properties, we might not be able to obtain a release of the
lien on the mortgaged property without payment of the associated debt. The
foreclosure of a mortgage on a property or inability to sell a property could
affect the level of cash available for distribution to our stockholders. If
persons selling properties to us wish to defer the payment of taxes on the sales
proceeds, we are likely to pay them in units of limited partnership interest in
GGP Limited Partnership, which we call the "Operating Partnership". In
transactions of this kind, we may also agree, subject to certain exceptions, not
to sell the acquired properties for significant periods of time.
WE MAY ACQUIRE OR DEVELOP NEW PROPERTIES, AND THIS MAY CREATE RISKS.
We intend to continue to pursue development and expansion activities as
opportunities arise. In connection with any development or expansion, we will
incur various risks, including:
- the risk that we may abandon development or expansion opportunities that
we explore;
- the risk that construction costs of a project may exceed original
estimates or available financing, possibly making the project
unprofitable;
- the risk that we may not be able to refinance construction loans, which
generally have full recourse to us;
- the risk that occupancy rates and rents at a completed project will not
meet projections, and will therefore be insufficient to make the project
profitable; and
- the need for anchor, mortgage lender and property partner approvals, if
applicable, for expansion activities.
If a development project is unsuccessful, our loss could exceed our investment
in the project.
We have experienced rapid growth in recent years, increasing our total
consolidated assets from approximately $1,758 million at December 31, 1996 to
approximately $5,257 million at September 30, 1999. We may continue this rapid
growth for the foreseeable future by acquiring or developing properties when we
believe that market circumstances and investment opportunities are attractive.
We may not, however, be able to manage our growth effectively or to maintain a
similar rate of growth in the future, and the failure to do so may have a
material adverse effect on our financial condition and results of operations.
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If we borrow funds or assume indebtedness to acquire or develop properties,
the Operating Partnership's indebtedness as a percentage of GGP's asset value or
market capitalization might increase. If this happens, the increased leverage
may impair our ability to take actions that would otherwise be in the best
interests of GGP and our security holders. If our indebtedness increases
significantly, the Operating Partnership might not be able to make required
principal and interest payments with respect to indebtedness. See also "-- Our
organizational and financial structure gives rise to operational and financial
risks, including those described below -- We have substantial indebtedness, and
this indebtedness may increase" for further information about our leverage.
WE MAY INCUR COSTS TO COMPLY WITH ENVIRONMENTAL LAWS.
Under various federal, state or local laws, ordinances and regulations, a
current or previous owner or operator of real estate may be required to
investigate and clean up hazardous or toxic substances released at a property,
and may be held liable to a governmental entity or to third parties for property
damage or personal injuries and for investigation and clean-up costs incurred by
the parties in connection with the contamination. These laws often impose
liability without regard to whether the owner or operator knew of, or was
responsible for, the release of the hazardous or toxic substances. The presence
of contamination or the failure to remediate contamination may adversely affect
the owner's ability to sell or lease real estate or to borrow using the real
estate as collateral. Other federal, state and local laws, ordinances and
regulations require abatement or removal of asbestos-containing materials in the
event of demolition or some renovations or remodeling and also govern emissions
of and.exposure to asbestos fibers in the air. Federal and state laws also
regulate the operation and removal of underground storage tanks. In connection
with the ownership, operation and management of our properties, we could be held
liable for the costs of remedial action with respect to these regulated
substances or tanks or related claims.
Each of our properties has been subjected to varying degrees of
environmental assessment at various times. The environmental assessments did not
reveal any material environmental condition. However, the identification of new
areas of contamination, a change in the extent or known scope of contamination,
the discovery of additional sites or changes in cleanup requirements could
result in significant costs to us. See "Business -- Environmental Matters" in
our Annual Report on Form 10-K for the year ended December 31, 1998, which is
incorporated by reference, for more information about environmental conditions
at our properties.
WE ARE IN A COMPETITIVE BUSINESS.
There are numerous shopping facilities that compete with our properties in
attracting retailers to lease space. In addition, retailers at our properties
face continued competition from discount shopping centers, outlet malls,
wholesale and discount shopping clubs, direct mail, telemarketing, television
shopping networks and, most recently, shopping via the Internet. Competition of
this type could adversely affect our revenues and cash available for
distribution to stockholders.
We compete with other major real estate investors with significant capital
for attractive investment opportunities. These competitors include other real
estate investment trusts, or REITs, investment banking firms and private
institutional investors. This competition has increased prices for commercial
properties and may impair our ability to make suitable property acquisitions on
favorable terms in the future. See "Business -- Competition" in our Annual
Report on Form 10-K for the year ended December 31, 1998, which is incorporated
by reference, for more information about competition in our markets.
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WE MAY NOT BE ABLE TO OBTAIN CAPITAL TO MAKE INVESTMENTS.
We depend primarily on external financing to fund the growth of our
business. This is because one of the requirements of the Internal Revenue Code
for a REIT is that it distribute 95% of its net taxable income, excluding net
capital gains, to its stockholders. Our access to debt or equity financing
depends on banks' willingness to lend to us and on conditions in the capital
markets in general. We and other companies in the real estate industry have
experienced less favorable terms for bank loans and capital markets financing
from time to time. Although we believe, based on current market conditions, that
we will be able to finance any investments we wish to make in the foreseeable
future, financing might not be available on acceptable terms. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources of the Company" in our Annual
Report on Form 10-K for the year ended December 31, 1998 and in our Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999, and the Notes to
the Consolidated Financial Statements in the same reports, which are
incorporated by reference, for information about our available sources of funds.
SOME OF OUR POTENTIAL LOSSES MAY NOT BE COVERED BY INSURANCE.
We carry comprehensive liability, fire, flood, earthquake, extended
coverage and rental loss insurance on all of our properties. We believe the
policy specifications and insured limits of these policies are adequate and
appropriate. There are, however, some types of losses, including lease and other
contract claims, that generally are not insured. If an uninsured loss or a loss
in excess of insured limits occurs, we could lose all or a portion of the
capital we have invested in a property, as well as the anticipated future
revenue from the property. If this happens, we might nevertheless remain
obligated for any mortgage debt or other financial obligations related to the
property.
OUR ORGANIZATIONAL AND FINANCIAL STRUCTURE GIVES RISE TO OPERATIONAL AND
FINANCIAL RISKS, INCLUDING THOSE DESCRIBED BELOW.
WE HAVE SUBSTANTIAL INDEBTEDNESS, AND THIS INDEBTEDNESS MAY INCREASE.
As of September 30, 1999 we had aggregate indebtedness outstanding of
approximately $3,378 million, approximately $3,058 million of which was secured
by our properties. A majority of the secured indebtedness was non-recourse to
GGP, while approximately $320 million of our aggregate indebtedness was
unsecured, recourse indebtedness of the Operating Partnership. We anticipate
incurring substantial additional indebtedness to finance acquisitions or for
other corporate purposes.
WE SHARE CONTROL OF SOME OF OUR PROPERTIES WITH OTHER INVESTORS AND MAY
HAVE CONFLICTS OF INTEREST WITH THOSE INVESTORS.
We own partial interests ranging from approximately 16 2/3% to 51% in 34
shopping centers. We generally make all operating decisions for these shopping
centers, but we are required to make some major decisions jointly with the other
investors who have interests in the relevant property or properties. For
example, the consent of each of the other relevant investors could be required
with respect to refinancing, encumbering, expanding or selling any of these
properties. We might not have the same interests as the other investors in
relation to these transactions. Accordingly, we might not be able to favorably
resolve any of these issues, or we might have to provide financial or other
inducement to the other investors to obtain a favorable resolution.
In addition, various restrictive provisions and rights apply to sales or
transfers of interests in our jointly owned properties. These may work to our
disadvantage because, among other things, we might
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be required to make decisions about buying or selling interests in a property or
properties at a time that is disadvantageous to us.
BANKRUPTCY OF JOINT VENTURE PARTNERS COULD IMPOSE DELAYS AND COSTS ON US
WITH RESPECT TO THE JOINTLY OWNED SHOPPING CENTERS.
The bankruptcy of one of the other investors in any of our jointly owned
shopping centers could materially adversely affect the relevant property or
properties. Under the bankruptcy laws, we would be precluded by the automatic
stay from taking some actions affecting the estate of the other investor without
prior approval of the bankruptcy court, which would, in most cases, entail prior
notice to other parties and a hearing in the bankruptcy court. At a minimum, the
requirement to obtain court approval may delay the actions we want to take. If
the relevant joint venture through which we have invested in a property has
incurred recourse obligations, the discharge in bankruptcy of one of the other
investors might result in our ultimate liability for a greater portion of those
obligations than we would otherwise bear.
WE DO NOT CONTROL SOME OF OUR AFFILIATES.
Some of our businesses, including the corporations that provide all of our
management, operating and leasing services, are currently conducted through
corporations in which we own all of the non-voting preferred stock and none of
the voting common stock. We refer to these corporations as "preferred stock
affiliates". Ownership of the non-voting preferred stock entitles us to
substantially all of the distributed income of these affiliates. The voting
common stock of the preferred stock affiliates is owned by several of our
officers. Accordingly, we are not able to elect the Boards of Directors of the
preferred stock affiliates and do not have the authority to control the
management and operations of these affiliates or the timing or amount of
dividends paid by them. We therefore do not have the authority to require that
funds be distributed to us by any of these entities.
WE DEPEND ON OUR DIRECT AND INDIRECT SUBSIDIARIES' DIVIDENDS AND
DISTRIBUTIONS. THESE SUBSIDIARIES' CREDITORS AND PREFERRED SECURITY HOLDERS
ARE ENTITLED TO PAYMENT OF AMOUNTS PAYABLE TO THEM BY THE SUBSIDIARIES
BEFORE THE SUBSIDIARIES MAY PAY ANY DIVIDENDS OR DISTRIBUTIONS TO US.
Substantially all of our assets consist of our general partnership interest
in the Operating Partnership. The Operating Partnership holds substantially all
of its properties and assets through subsidiaries, including subsidiary
partnerships, limited liability companies and corporations that have elected to
be taxed as real estate investment trusts. The Operating Partnership therefore
derives substantially all of its revenue from cash distributions to it by its
subsidiaries, and we in turn derive substantially all of our revenue from cash
distributions to us by the Operating Partnership. The creditors of each of our
direct and indirect subsidiaries are entitled to payment of that subsidiary's
obligations to them, when due and payable, before that subsidiary may make
distributions to its equity holders. Thus, the Operating Partnership's ability
to make distributions to its partners, including us, depends on its
subsidiaries' ability first to satisfy their obligations to their creditors and
then to make distributions to the Operating Partnership. Similarly, our ability
to pay dividends to holders of common stock depends on the Operating
Partnership's ability first to satisfy its obligations to its creditors and then
to make distributions to us.
In addition, we will have the right to participate in any distribution of
the assets of any of our direct or indirect subsidiaries upon the liquidation,
reorganization or insolvency of the subsidiary only after the claims of the
creditors, including trade creditors, and preferred security holders, if any, of
the subsidiary are satisfied. Our common stockholders, in turn, will have the
right to participate in
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any distribution of our assets upon the liquidation, reorganization or
insolvency of GGP only after the claims of our creditors, including trade
creditors, and preferred security holders are satisfied.
WE MIGHT FAIL TO QUALIFY OR REMAIN QUALIFIED AS A REIT.
Although we believe that we will remain structured and will continue to
operate so as to qualify as a real estate investment trust for federal income
tax purposes, we might not continue to be so qualified. Qualification as a REIT
for federal income tax purposes involves the application of highly technical and
complex provisions of the Internal Revenue Code of 1986, as amended, for which
there are only limited judicial or administrative interpretations. Therefore,
the determination of various factual matters and circumstances not entirely
within our control may impact our ability to qualify as a REIT. In addition,
legislation, new regulations, administrative interpretations or court decisions
might significantly change the tax laws with respect to the requirements for
qualification as a REIT or the federal income tax consequences of qualification
as a REIT. President Clinton's fiscal year 2000 budget plan and a proposal that
has been introduced in the House of Representatives contain a number of
provisions that could affect the way we conduct our business. At this time it is
unclear whether this proposal will be enacted into law and, if enacted into law,
the exact form these provisions would take and the effect that they would have
upon our operations, if any.
If, with respect to any taxable year, we fail to maintain our qualification
as a REIT, we would not be allowed to deduct distributions to stockholders in
computing our taxable income and federal income tax, including any applicable
alternative minimum tax, would apply to our taxable income at regular corporate
rates. As a result, the amount available for distribution to stockholders would
be reduced for the year or years involved, and we would no longer be required to
make distributions. In addition, unless we were entitled to relief under the
relevant statutory provisions, we would also be disqualified from treatment as a
REIT for the four taxable years following the year during which qualification
was lost. Notwithstanding that we currently intend to operate in a manner
designed to allow us to qualify as a REIT, future economic, market, legal, tax
or other considerations may cause us to determine that it is in our best
interest and the best interest of our stockholders to revoke the REIT election.
OUR CHARTER DOCUMENTS AND STOCKHOLDER RIGHTS PLAN AND APPLICABLE LAW MAY
HINDER ANY ATTEMPT TO ACQUIRE US.
Generally, for GGP to maintain its qualification as a REIT under the
Internal Revenue Code, not more than 50% in value of the outstanding shares of
capital stock of GGP may be owned, directly or indirectly, by five or fewer
individuals at any time during the last half of GGP's taxable year. The Internal
Revenue Code defines "individuals" for purposes of the requirement described in
the preceding sentence to include some types of entities. Under GGP's Second
Amended and Restated Certificate of Incorporation, as amended, no person other
than Martin Bucksbaum, Matthew Bucksbaum, their families and related trusts may
own more than 7.5% of the value of the outstanding capital stock. See "Capital
Stock -- Description of Common Stock -- Restrictions on Transfer" in the
accompanying prospectus for more information about these ownership restrictions.
These restrictions on transferability and ownership may delay, deter or prevent
a change in control of GGP or other transaction that might involve a premium
price or otherwise be in the best interest of the stockholders.
GGP's Board of Directors is divided into three classes of directors.
Directors of each class are chosen for three-year staggered terms. Staggered
terms of directors may reduce the possibility of a
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tender offer or an attempt to change control of GGP, even though a tender offer
or change in control might be in the best interest of our stockholders. GGP's
charter authorizes the Board Directors:
- to cause GGP to issue additional authorized but unissued shares of common
stock or preferred stock;
- to classify or reclassify, in one or more series, any unissued preferred
stock; and
- to set the preferences, rights and other terms of any classified or
reclassified stock that GGP issues.
The Board of Directors could establish a series of preferred stock whose terms
could delay, deter or prevent a change in control of GGP or other transaction
that might involve a premium price or otherwise be in the best interest of our
stockholders.
GGP has a stockholder rights plan, which may delay, deter or prevent a
change in control of GGP unless the acquiror negotiates with the Board of
Directors of GGP and the Board approves the transaction. See "Capital
Stock -- Description of Common Stock -- Stockholder Rights Plan" in this
prospectus for more information about the stockholder rights plan. GGP's charter
and bylaws contain other provisions that may delay, deter or prevent a change in
control of GGP or other transaction that might involve a premium price or
otherwise be in the best interest of the stockholders.
GGP is a Delaware corporation, and Section 203 of the Delaware General
Corporation Law applies to GGP. In general, Section 203 prevents an "interested
stockholder", as defined in the next sentence, from engaging in a "business
combination", as defined in the statute, with GGP for three years following the
date that person becomes an interested stockholder unless:
- before that person became an interested stockholder, the Board of
Directors of GGP approved the transaction in which the interested
stockholder became an interested stockholder or approved the business
combination;
- upon completion of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested
stockholder owns at least 85% of GGP's voting stock outstanding at the
time the transaction commenced, excluding stock held by directors who are
also officers of GGP and by employee stock plans that do not provide
employees with the right to determine confidentially whether shares held
under the plan will be tendered in a tender or exchange offer; or
- following the transaction in which that person became an interested
stockholder, the business combination is approved by GGP's Board of
Directors and authorized at a meeting of stockholders by the affirmative
vote of the holders of at least two-thirds of GGP's outstanding voting
stock not owned by the interested stockholder.
The statute defines "interested stockholder" to mean generally any person that
is the owner of 15% or more of the outstanding voting stock of the corporation
or is an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time within the
three-year period immediately before the date of determination. The provisions
of this statute may delay, deter or prevent a change in control of GGP or other
transaction that might involve a premium price or otherwise be in the best
interests of stockholders. See "Capital Stock -- Description of Common
Stock -- Delaware Anti-Takeover Statute" in the accompanying prospectus for more
information about this statute.
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THE MARKET FOR OUR COMMON STOCK GIVES RISE TO VARIOUS RISKS, INCLUDING THOSE
DESCRIBED BELOW.
WE HAVE MANY SHARES OF COMMON STOCK AVAILABLE FOR FUTURE SALE, WHICH COULD
HURT
THE MARKET PRICE OF OUR COMMON STOCK.
As of November 15, 1999, 19,798,192 shares of common stock were reserved
for issuance upon redemption of units of the Operating Partnership. In addition,
we have reserved a number of shares of common stock for issuance under our
employee benefit plans, and these shares will be available for sale from time to
time. We have granted options to purchase additional shares of common stock to
some of our executive officers and employees. We also have reserved 8,500,950
shares of common stock for issuance upon conversion or redemption of our
outstanding preferred securities. We cannot predict the effect that future sales
of shares of common stock, or the perception that sales of common stock could
occur, will have on the market prices of our equity securities.
CHANGES IN MARKET CONDITIONS COULD HURT THE MARKET PRICE OF OUR COMMON
STOCK.
The value of our common stock depends on various market conditions, which
may change from time to time. Among the market conditions that may affect the
value of our common stock are the following:
- the extent of institutional investor interest in GGP;
- the reputation of REITs generally and the attractiveness of their equity
securities in comparison to other equity securities, including securities
issued by other real estate companies, and fixed income securities;
- our financial condition and performance; and
- general financial market conditions.
In addition, the stock market in recent years has experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of companies.
INCREASES IN MARKET INTEREST RATES MAY HURT THE MARKET PRICE OF OUR
COMMON STOCK.
We believe that investors consider the distribution rate on REIT stocks,
expressed as a percentage of the price of the stocks, relative to market
interest rates as an important factor in deciding whether to buy or sell the
stocks. If market interest rates go up, prospective purchasers of REIT stocks
may expect a higher distribution rate. Higher interest rates would not, however,
result in more funds being available for us to distribute and, in fact, would
likely increase our borrowing costs and might decrease our funds available for
distribution. Thus, higher market interest rates could cause the market price of
our common stock to decline.
LEGAL MATTERS
The validity of the Common Stock offered hereby and certain federal income
tax matters will be passed upon for us by Neal, Gerber & Eisenberg of Chicago,
Illinois. Marshall E. Eisenberg, a partner of Neal, Gerber & Eisenberg, is our
Secretary.
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EXPERTS
The consolidated financial statements incorporated in this Registration
Statement by reference to the Annual Report on Form 10-K for the year ended
December 31, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The combined statement of revenues and certain expenses of the Ala Moana
Properties for the year ended December 31, 1998, incorporated herein by
reference have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report which is incorporated herein by reference. This combined
statement of revenues and certain expenses has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
sale and distribution of securities being registered.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 8,814
Blue sky fees and expenses.................................. 250*
Legal fees and expenses..................................... 10,000*
Accounting fees and expenses................................ 5,000*
Miscellaneous (including NYSE listing fees)................. 936*
-------
Total............................................. $25,000*
=======
</TABLE>
- -------------------------
* Estimated
The Company will bear all of the foregoing expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Delaware corporation. In its Certificate of Incorporation,
the Company has adopted (a) the provisions of Section 102(b)(7) of the Delaware
General Corporation Law ("DGCL"), which enables a corporation in its certificate
of incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for monetary damages for breach of the director's
fiduciary duty, except (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the DGCL (providing for liability of directors
for unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which a director derived an improper personal
benefit and (b) the provisions of Section 145 of the DGCL, which provide that a
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that such person was an officer, director,
employee or agent of the corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest and, with respect to criminal proceedings, had no
reasonable cause to believe that his conduct was unlawful. A Delaware
corporation may indemnify officers or directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against expenses (including attorneys' fees) that
such officer or director actually and reasonably incurred.
The Company has entered into indemnification agreements with each of its
officers and directors. The indemnification agreements, among other things,
require the indemnification of our officers and directors to the fullest extent
permitted by law, and require that the Company advance to the officers and
directors all related expenses, subject to reimbursement if it is subsequently
determined that
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indemnification is not permitted. Such indemnification agreements also provide
for the indemnification and advance of all expenses incurred by officers and
directors seeking to enforce their rights under the indemnification agreements,
and require the Company to cover officers and directors under our directors' and
officers' liability insurance. Although the indemnification agreements offer
substantially the same scope of coverage afforded by provisions in the
Certificate and the bylaws of the Company, such agreements provide 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 the stockholders to eliminate the rights they provide.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
5.1 Opinion of Neal, Gerber & Eisenberg, counsel for the
Company.
8.1 Tax Opinion of Neal, Gerber & Eisenberg, counsel for the
Company.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Neal, Gerber & Eisenberg (included in Exhibit 5.1
and Exhibit 8.1).
24.1 Powers of Attorney of certain officers and directors of the
Company (included on signature page).
99.1 Form of Authorization Form
99.2 Form of Request for Waiver Form
99.3 Form of Broker and Nominee Form
99.4 Form of Direct Registration Transfer Instruction
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) 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:
To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore,
II-2
<PAGE> 44
unenforceable. In the event that a claim for indemnification against such
liabilities (other than insurance payments and 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 of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on November 22, 1999.
GENERAL GROWTH PROPERTIES, INC.
(Registrant)
By: /s/ JOHN BUCKSBAUM
------------------------------------
John Bucksbaum
Chief Executive Officer
We, the undersigned officers and directors of General Growth Properties,
Inc., hereby severally constitute Matthew Bucksbaum, John Bucksbaum, Robert
Michaels and Bernard Freibaum, and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, any and all amendments,
including post-effective amendments, to this registration statement, and
generally to do all such things in our name and behalf in such capacities to
enable General Growth Properties, Inc. to comply with the applicable provisions
of the Securities Act of 1933 and all requirements of the Securities and
Exchange Commission, and we hereby ratify and confirm our signatures as they may
be signed by our said attorneys above, or any of them, to any and all such
amendments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on November 22, 1999, by the
following persons in the capacities indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ MATTHEW BUCKSBAUM Chairman of the Board and Director
- --------------------------------------------
Matthew Bucksbaum
/s/ JOHN BUCKSBAUM Chief Executive Officer and Director
- -------------------------------------------- (Principal Executive Officer)
John Bucksbaum
/s/ ROBERT MICHAELS President and Director
- --------------------------------------------
Robert Michaels
/s/ BERNARD FREIBAUM Executive Vice President and Chief Financial
- -------------------------------------------- Officer (Principal Financial and Accounting
Bernard Freibaum Officer)
/s/ ANTHONY DOWNS Director
- --------------------------------------------
Anthony Downs
/s/ MORRIS MARK Director
- --------------------------------------------
Morris Mark
/s/ BETH STEWART Director
- --------------------------------------------
Beth Stewart
- -------------------------------------------- Director
A. Lorne Weil
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
[N,G&E LETTERHEAD]
November 22, 1999
General Growth Properties, Inc.
110 N. Wacker Drive
Chicago, Illinois 60606
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to General Growth Properties, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of 1,000,000 shares of its
common stock, par value $.10 per share (the "Shares"), which are proposed to be
issued from time to time by the Company pursuant to its Dividend Reinvestment
and Stock Purchase Plan (the "Plan") as described in its Registration Statement
on Form S-3 (the "Registration Statement"), to be filed with the Securities and
Exchange Commission (the "Commission") on or about November 22, 1999.
As such counsel, we have examined such documents and certificates of
officers of the Company as we deemed relevant and necessary as the basis for the
opinion hereafter expressed. In such examinations, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity to original documents of all documents
submitted to us as conformed or photostatic copies.
Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, we are of the opinion that the Shares have been
duly authorized and, when such Shares are issued and delivered by the Company
upon receipt of the consideration therefor as provided in the Plan, such Shares
will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Prospectus comprising a part of the Registration Statement.
This opinion is limited to the General Corporation Law of the State of
Delaware and we express no opinion with respect to the laws of any other
jurisdiction. Furthermore, the opinions presented in this letter are limited to
the matters specifically set forth herein and no other opinion shall be inferred
beyond the matters expressly set forth herein. Without limiting the generality
of the foregoing, we express no opinion with respect to any securities laws.
The opinions set forth in this letter are rendered as of the date
hereof and are necessarily limited to laws now in effect and facts and
circumstances presently existing and brought to our attention. We assume no
obligation to supplement this opinion if any applicable law is changed after the
date hereof or if we become aware of any facts or circumstances which now exist
or which occur or arise in the future and may change the opinions expressed
herein after the date hereof.
Please be advised that Marshall E. Eisenberg, a partner in our firm,
is the Secretary of the Company and certain of its affiliates and that certain
partners of our firm and attorneys associated with our firm and members of their
respective families and/or trusts for their benefit are stockholders of or other
beneficial owners of equity securities of the Company or are trustees (or
officers, directors or stockholders of trustees) of the Company or its
affiliates.
Very truly yours,
/s/ Neal, Gerber & Eisenberg
----------------------------
<PAGE> 1
EXHIBIT 8.1
[N,G&E LETTERHEAD]
November 22, 1999
General Growth Properties, Inc.
110 N. Wacker Drive
Chicago, Illinois 60606
Re: Certain Federal Income Tax Matters
Ladies and Gentlemen:
We have acted as tax counsel to General Growth Properties, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of 1,000,000 shares of its
common stock, par value $.10 per share (the "Common Stock"), which are proposed
to be issued from time to time by the Company pursuant to its Dividend
Reinvestment and Stock Purchase Plan as described in its Registration Statement
on Form S-3 (the "Registration Statement"), to be filed with the Securities and
Exchange Commission (the "Commission") on or about November 22, 1999.
In connection therewith, you have requested our opinion with respect to the
qualification of the Company as a real estate investment trust ("REIT") under
the Internal Revenue Code of 1986, as amended (the "Code").
We hereby consent to the use of our opinion as an exhibit to the Registration
Statement and to any and all references to our firm in the Prospectus that is a
part of the Registration Statement, which Prospectus will be delivered to
prospective purchasers of Common Stock, and we hereby consent to such use of our
opinion. All defined terms used herein shall have the same meaning as used in
the Registration Statement.
FACTS AND ASSUMPTIONS RELIED UPON
In rendering the opinion expressed herein, we have examined the Certificate of
Incorporation and Bylaws of the Company and such other records, certificates and
documents as we have deemed necessary or appropriate for purposes of rendering
the opinion set forth herein.
In our examination of documents, we have assumed, with your consent, that all
documents submitted to us are authentic originals, or if submitted as
photocopies, that they faithfully reproduce the originals thereof, that all such
documents have been or will be duly executed to the extent required, that all
representations and statements set forth in such documents are true and correct,
and that all obligations imposed by any such of the parties thereto have been or
will be performed or satisfied in accordance with their terms. We have also
assumed, without investigation, that all documents, representations,
certificates, warranties and covenants on which we have relied in rendering the
opinion set forth below and that were given or dated earlier than the date of
this letter continue to remain accurate, insofar as relevant to the opinion set
forth herein, from such earlier date through and including the date of this
letter.
We have reviewed the Registration Statement and the descriptions set forth
therein of the Company and its investments and activities. We have relied upon
the representations of the Company and its affiliates regarding the manner in
which the Company has been and will continue to be owned and operated. We have
neither independently investigated nor verified such representations, and we
assume that such representations are true, correct and complete and that all
representations made "to the best of the knowledge and belief" of any person(s)
or party(ies) are and will be true, correct and complete as if made without such
qualification. We assume that the Company has been and will be operated in
accordance with applicable laws and the terms and conditions of applicable
documents, and the descriptions of the Company and its investments, and the
proposed investments, activities, operations and governance of the Company set
forth in the Registration Statement continue to be true. In addition, we have
relied on certain additional facts and assumptions described below.
<PAGE> 2
The foregoing representations are all contained in letters to us (the
"Certificates"). No facts have come to our attention that are inconsistent with
the facts and representations set forth in the Certificates.
OPINIONS
Based upon and subject to the foregoing, we are of the opinion that the Company
has been organized in conformity with the requirements for qualification as a
REIT under the Code commencing with its taxable year ended December 31, 1993 and
for all subsequent taxable years to date, and its method of operation as
described in the representations referred to above, will enable it to continue
to meet the requirements for qualification and taxation as a REIT under the
Code.
The opinion expressed herein is based upon the Code, the Treasury Regulations
promulgated thereunder, current administrative positions of the Internal Revenue
Service, and existing judicial decisions, any of which could be changed at any
time, possibly on a retroactive basis. Any such changes could adversely affect
the opinion rendered herein and the tax consequences to the Company and
purchasers of Common Stock. In addition, as noted above, our opinion is based
solely on the documents that we have examined, the additional information that
we have obtained, and the representations that are being made to us, and cannot
be relied upon if any of the facts contained in such documents or in such
additional information are, or later become, inaccurate or if any of the
representations made to use are, or later become, inaccurate.
We express no opinion with respect to the Registration Statement other than that
expressly set forth herein. Furthermore, the Company's qualification as a REIT
will depend on the Company meeting, in its actual operations, the applicable
asset composition, source of income, stockholder diversification, distribution,
record keeping and other requirements of the Code and the Treasury Regulations
promulgated thereunder necessary for a corporation to qualify as a REIT. We will
not review these operations, and no assurance can be given that the actual
operations of the Company and its affiliates win meet these requirements or the
representations made to us with respect thereto.
Finally, our opinion is limited to the tax matters specifically covered hereby,
and we have not been asked to address, nor have we addressed, any other tax
consequences of a purchase of Common Stock.
Very truly yours,
/s/ Neal, Gerber & Eisenberg
----------------------------
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 8, 1999, relating to the
consolidated financial statements and financial statement schedule, which
appears in General Growth Properties, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1998. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PricewaterhouseCoopers LLP
Chicago, Illinois
November 22, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
of General Growth Properties, Inc. on Form S-3 of our report dated June 25,
1999, relating to our audit of the combined statement of revenues and certain
expenses of the Ala Moana Properties for the year ended December 31, 1998,
included in the Form 8-K of General Growth Properties, Inc. dated July 12, 1999,
and to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
Deloitte & Touche LLP
Honolulu, Hawaii
November 19, 1999
<PAGE> 1
EXHIBIT 99.1
<TABLE>
<S> <C>
GENERAL GROWTH PROPERTIES, ENROLLMENT FORM FOR
INC. GENERAL GROWTH PROPERTIES, INC.
COMMON STOCK
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
---------------------------------------------------------------------------------
This form when completed and signed, should be mailed in the courtesy envelope
provided to: ChaseMellon Shareholder Services Investor Services Program,
P.O. Box 3339, South Hackensack N.J. 17606-1939
Is this account for an existing shareholder? YES ( ) NO ( )
--------------------------------------------------------------------------------------------------------------------------------
1. ACCOUNT REGISTRATION Complete only ONE section. Print clearly in CAPITAL LETTERS.
( ) INDIVIDUAL OR JOINT ACCOUNT
OWNER'S NAME
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
OWNER'S SOCIAL SECURITY NUMBER OWNER'S DATE OF BIRTH
(used for tax reporting) Month Day Year
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | - | | | - | | | | | | | | / | | | / | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
JOINT OWNER'S NAME
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
JOINT OWNER'S SOCIAL SECURITY NUMBER The account will be registered "Joint Tenants with Rights
(used for tax reporting) of Survivorship" unless you check a box below:
--- --- --- --- --- --- --- --- ---
| | | | - | | | - | | | | | ( ) Tenants in common ( ) Tenants by entirety ( ) Community property
--- --- --- --- --- --- --- --- ---
--------------------------------------------------------------------------------------------------------------------------------
( ) GIFT TRANSFER TO A MINOR (UGMA/UTMA)
CUSTODIAN'S NAME
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
MINOR'S NAME
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
MINOR'S SOCIAL SECURITY NUMBER MINOR'S DATE OF BIRTH DONOR'S
(required) Month Day Year STATE
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | - | | | - | | | | | | | | / | | | / | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
--------------------------------------------------------------------------------------------------------------------------------
( ) TRUST (Please check only one of the trustee types) ( ) PERSON AS TRUSTEE ( ) ORGANIZATION AS TRUSTEE
TRUSTEE: INDIVIDUAL OR ORGANIZATION NAME
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
AND CO-TRUSTEE'S NAME, IF APPLICABLE
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
NAME OF TRUST
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
FOR THE BENEFIT OF
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
DATE OF TRUST DONOR'S
TRUST TAXPAYER IDENTIFICATION NUMBER Month Day Year STATE
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | - | | | | | | | | | | | / | | | / | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
--------------------------------------------------------------------------------------------------------------------------------
( ) ORGANIZATION OR BUSINESS ENTITY CHECK ONE: ( ) Corporation ( ) Partnership ( ) Other
NAME OF ENTITY
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
TAXPAYER IDENTIFICATION NUMBER
--- --- --- --- --- --- --- --- ---
| | | - | | | | | | | |
--- --- --- --- --- --- --- --- ---
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
--------------------------------------------------------------------------------------------------------------------------------
2. ADDRESS
MAILING ADDRESS (including apartment or box number)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
CITY STATE ZIP
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
| | | | | | | | | | | | | | | | | | | | | | | | | - | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
HOME PHONE WORK PHONE
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
( | | | | ) | | | | - | | | | | ( | | | | ) | | | | - | | | | |
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
FOR MAILING ADDRESS OUTSIDE THE U.S.:
COUNTRY OF RESIDENCE PROVINCE ROUTING OR POSTAL CODE
----------------------------------------- --------------------------------------------- ------------------------------
| | | | | |
----------------------------------------- --------------------------------------------- ------------------------------
--------------------------------------------------------------------------------------------------------------------------------
3. CASH PURCHASE (Make checks payable to The Chase Manhattan Bank)
( ) As a CURRENT registered shareholder I wish to make an ( ) As a NEW Investor I wish to enroll in the Plan by making an
additional investment. Enclosed is my check or money order for initial investment. Enclosed is my check or money order for
$ ______________. (Minimum $_______ with the Maximum not $______________. (Initial investment must be a least $2,000 not
to exceed $________ per month.) to exceed $______) AS A NEW INVESTOR YOU MUST COMPLETE
SECTIONS 1, 2, & 8.
--------------------------------------------------------------------------------------------------------------------------------
4. DIVIDEND REINVESTMENT (at least ___ shares must be reinvested)
You may choose to reinvest all or part of the dividends paid on General Growth Properties, Inc. Common Stock. If neither box is
selected, The Chase Manhattan Bank will automatically remit any dividends to you.
( ) Reinvest the dividends on ALL shares.
( ) I would like a portion of my dividends reinvested. Please reinvest the dividends on __________ of my shares. 100% of your
dividends will be reinvested if a number of shares is not indicated.
--------------------------------------------------------------------------------------------------------------------------------
5. SAFEKEEPING
Common stock certificates deposited for safekeeping in your account must be in the same registration as your Plan account.
( ) Please accept the enclosed certificate (s) for deposit to my account. Enclosed are ______________ share certificates.
insert number
CERTIFICATE NUMBER NUMBER OF SHARES
-------------------------------- -----------------------------
| | |
-------------------------------- -----------------------------
| | |
-------------------------------- -----------------------------
| | |
-------------------------------- -----------------------------
| | |
-------------------------------- -----------------------------
| | |
-------------------------------- -----------------------------
| T O T A L |
-----------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
--------------------------------------------------------------------------------------------------------------------------------
6. ACCOUNT AUTHORIZATION SIGNATURE (required)
( ) REQUEST FOR TAXPAYER IDENTIFICATION ( ) CERTIFICATE OF FOREIGN STATUS
NUMBER (SUBSTITUTE FORM W-9) (SUBSTITUTE FORM W-8)
I am a U.S. citizen or a resident alien. I certify, under I am an exempt foreign citizen. I certify, under penalties
penalties of perjury, that (1) the taxpayer identification of perjury, that for dividends, I am not a U.S. citizen or
number in Section 1 is correct (or I am waiting for a number resident alien (or I am filing for a foreign corporation,
to be issued to me) and (cross out the following if not true) partnership, estate, or trust) and I am an exempt foreign
(2) I am not subject to backup withholding because: (a) I am person. I have entered in Section 2 of this enrollment form
exempt from backup withholding, or (b) I have not been notified the country where I reside permanently for income-tax
by the Internal Revenue Service that I am subject to backup purposes.
withholding as a result of failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer ( ) FOR ORGANIZATIONS AND BUSINESS ENTITIES
subject to backup withholding. EXEMPT FROM BACKUP WITHHOLDING
I qualify for exemption and my account will not be
subject to tax reporting and backup withholding.
MY/OUR SIGNATURES (S) BELOW INDICATES I/WE HAVE READ THE PLAN PROSPECTUS AND AGREE TO THE TERMS THEREIN AND HEREIN.
SIGNATURE OF OWNER DATE (month, day, year)
------------------------------------------------------------------ -----------------------------
| | | |
------------------------------------------------------------------ -----------------------------
SIGNATURE OF JOINT OWNER
------------------------------------------------------------------ -----------------------------
| | | |
------------------------------------------------------------------ -----------------------------
IF YOU NEED ASSISTANCE, PLEASE CALL THE ADMINISTRATOR AT 1-888-______-_________
</TABLE>
<PAGE> 1
EXHIBIT 99.2
<TABLE>
<S> <C>
GENERAL GROWTH PROPERTIES, DISCOUNT WAIVER REQUEST FORM
INC. GENERAL GROWTH PROPERTIES, INC.
COMMON STOCK
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
---------------------------------------------------------------------------------
This form when completed and signed, should be faxed to (212) 273 8200
The Chase Manhattan Bank as Administrator c/o
ChaseMellon Capital Markets Advisory Group
- ------------------------------------------------------------------------------------------------------------------------------------
This form is to be used only by prospective purchasers ("Participants") of shares of common stock in the General Growth
Properties, Inc. ("Company") Direct Stock Purchase and Dividend Reinvestment Plan (the "Plan") who are requesting authorization
from the Company to make an optional cash investment under the Plan in excess of the $_______ monthly maximum. A new form must be
completed each month in which the Participant wishes to make an optional cash investment in excess of the $________ monthly
maximum under the plan. This form will not be accepted by the Administrator, unless it is completed in its entirety.
The Participant submitting this form hereby certifies that (a) the information contained herein is true and correct as of the
date of this form, (b) the Participant has received the Prospectus relating to the Plan (the "Prospectus"), (c) the Participant
is a Qualified Institutional Buyer, as defined in Rule 144A of the Securities and Exchange Commission, and (d) the person
submitting this form is authorized to do so.
---------------------------------------------------------------------------------------------------------------------------------
THIS FORM SHOULD BE COMPLETED AND RETURNED VIA FACSIMILE TO THE ADMINISTRATOR, AT (212) _____-________, ATTENTION: GENERAL
GROWTH, BY 10:00 A.M. EASTERN STANDARD TIME, ON THE DAY THAT IS TWO (2) BUSINESS DAYS PRIOR TO THE FIRST DAY OF THE PRICING
PERIOD FOR THE APPLICABLE INVESTMENT DATE. (SEE APPENDIX 1 TO THE PROSPECTUS.) FOR INFORMATION REGARDING THE DISCOUNT (IF ANY)
AND THRESHOLD PRICE (IF ANY) THAT MAY BE APPLICABLE TO OPTIONAL CASH INVESTMENTS MADE PURSUANT TO AN APPROVED REQUEST FOR WAIVER,
PLEASE CONTACT THE ADMINISTRATOR AT (212) ____-_______.
- ------------------------------------------------------------------------------------------------------------------------------------
2. BID INFORMATION In the table below, please enter one or more bids you wish to submit. You may submit a bid for any amount and
at any discount up to and including the maximum. The company may reject your bid for any reason, including requests for waivers
submitted by other shareholders at lesser discounts, greater amounts, or any combination thereof. The company has sole
discretion whether to accept or reject your offer.
Bid Amount Bid (US$) Discount Bid (%)
---------------------------------------------------------------------------------------------------------------------------------
1
---------------------------------------------------------------------------------------------------------------------------------
2
---------------------------------------------------------------------------------------------------------------------------------
3
---------------------------------------------------------------------------------------------------------------------------------
4
---------------------------------------------------------------------------------------------------------------------------------
5
---------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
3. Participant Information Please Fill Out Entirely. BIDS WITH INCOMPLETE INFORMATION WILL BE REJECTED.
---------------------------------------------------------------------------------------------------------------------------------
Name of Participant
---------------------------------------------------------------------------------------------------------------------------------
Name and Title of Authorized Officer Signature of Authorized Officer Date
---------------------------------------------------------------------------------------------------------------------------------
Participant's Tax I.D. Number Phone Number Fax Number
---------------------------------------------------------------------------------------------------------------------------------
Street Address City State Zip
---------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
4. Payment Information WIRED FUNDS SHOULD BE DIRECTED TO THE FOLLOWING CHASE MANHATTAN ACCOUNT: ABA 021000021, ACCOUNT
______________. CREDIT PARTY NAME IS _________________ PLAN, PLEASE MAKE REFERENCE TO GENERAL GROWTH PROPERTIES, INC. THE
ADMINISTRATOR MUST RECEIVE ALL FUNDS BY 4:00 P.M., EASTERN STANDARD TIME ON THE BUSINESS DAY PRIOR TO THE FIRST DAY OF THE
PRICING PERIOD FOR THE APPLICABLE INVESTMENT DATE.
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<PAGE> 1
EXHIBIT 99.3
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<S> <C>
GENERAL GROWTH PROPERTIES, BROKER AND NOMINEE FORM
INC. GENERAL GROWTH PROPERTIES, INC.
COMMON STOCK
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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This form when completed and signed, should be returned to the address below
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By Regular Mail: By Hand or Overnight Delivery:
- --------------- -----------------------------
The Chase Manhattan Bank The Chase Manhattan Bank
C/o ChaseMellon Shareholder Services ChaseMellon Shareholder Services
P.O. Box 3338 Overpeck Centre
Hackensack, NJ 07606-1938 Investment Plan Services
85 Challenger Road
Ridgefield Park, NJ 07660
Instructions:
- ------------
As provided in the Prospectus dated _________ ____, 19___ (the "Prospectus")
relating to General Growth Properties, Inc. ("GGPI") Direct Stock Purchase and
Dividend Reinvestment Plan (the "Plan"), this form is to be used only by a
broker, bank of other nominee making an optional cash investment under the Plan
on behalf of one or more Beneficial Owner(s) (as defined in the Prospectus)
whose shares are held in the name of a securities depository.
The broker, bank or other nominee submitting this form hereby certifies that (a)
the information contained herein is true and correct as of the date of this
form: (b) a current copy of the Prospectus has been delivered to each Beneficial
Owner on whose behalf the optional cash investment listed below is being
transmitted: and (c) either (i) the amount of the optional cash investment
listed below does not exceed $________ for each beneficial owner represented or
(ii) this form is accompanied by a completed Request for Waiver form approved by
GGPI relating to the applicable investment date.
A new Broker and Nominee Form must be completed and submitted each month that an
optional cash investment is submitted.
FOR FURTHER INFORMATION ABOUT THE PLAN, PLEASE CALL 1-800-000-0000.
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- ---------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------ ---------------------------------------------------------
Date Title of Account to Which Shares are to be Credited
- ------------------------------------------------------ ---------------------------------------------------------
Name of Depository Participant Submitting Payment Address
- ------------------------------------------------------ ---------------------------------------------------------
Participant Number with Depository Tax I.D. Number
- ------------------------------------------------------ ---------------------------------------------------------
Contact Phone
- ------------------------------------------------------
Name of Depository
- ------------------------------------------------------ ---------------------------------------------------------
Number of Beneficial Owners Represented Total Optional Cash Investment Amount
Method of Payment: Check Money Order Other (Specify)
----------- ------------ ----------- -------------
Payment by other than Check or Money Order requires approval of the Plan Administrator.
Signature:
- ----------
- ------------------------------------------------------
Name of Broker, Bank of other Nominee
By:
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Name
-----------------------------------------------
Title:
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- ---------------------------------------------------------------------------------------------------------------------------
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<PAGE> 1
EXHIBIT 99.4
GENERAL GROWTH PROPERTIES, INC.
DIRECT REGISTRATION TRANSFER INSTRUCTION FORM
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
FOR USE BY "STREET NAME" SHAREHOLDERS OF GENERAL GROWTH PROPERTIES, INC.
Dear "Street Name" Shareholder:
General Growth Properties, Inc.'s common stock is Direct Registration System
eligible. What this means is that you can now take advantage of the newest form
of book-entry share registration--Direct Registration. Direct Registration
allows you to register your shares on the books of the company and keep your
broker account information intact. This provides you with total portability
should you wish to sell your shares either through your broker or through the
company. In addition, once your broker initiates your Direct Registration
transfer, you are eligible as a registered shareholder to participate in General
Growth Properties, Inc.'s direct stock purchase plan.
If you want to transfer any of your "street name" shares to Direct
Registration, you can either:
1. Call your broker and provide him or her with the following information and
instructions or
2. Fill out the form below with the information known to you and present it to
your broker.
DIRECT REGISTRATION INSTRUCTIONS
Authorization and instructions to my broker to transfer ____________ of my
shares from "street name" to a registered position through the Direct
Registration System. This transfer should be processed by my broker via the
Night Auto Withdrawal-By-Transfer (NWTI) function
through the Depository Trust Company (DTC) coded as a "S" transaction.
NAME:
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ADDRESS:
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SOCIAL SECURITY OR TAX ID#:
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BROKER/DEALER ACCOUNT #:
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COMPANY:................................. General Growth Properties, Inc.
CUSIP #:................................. _______________________________
ISSUE:................................... Common Stock
BROKER/DEALER NAME:
-------------------------------------------------------------
BROKER/DEALER ID #:
------------------------------------------------------------
TRANSFER AGENT:............................... ChaseMellon Shareholder Services
TRANSFER AGENT TELEPHONE #:................... 1-888-000-0000 (Toll Free)
Signature of "Street Name" Owner:
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Date:
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