Registration No. 333-09315
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HORIZON GROUP, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2559212
(State or other jurisdiction of (IRS
Employer
incorporation or organization)
Identification No.)
5000 HAKES DRIVE
NORTON SHORES, MI 49441
(616) 798-9100
(Address, including ZIP Code, and telephone number, including area code, of
registrant's principal executive offices)
MR. JEFFREY A. KERR
CHAIRMAN OF THE BOARD AND PRESIDENT
5000 HAKES DRIVE
NORTON SHORES, MI 49441
(616) 798-9100
(Name, address, including ZIP Code, and telephone number, including area code,
of agent for service)
Copies to:
ERROL R. HALPERIN, ESQ.
HAL M. BROWN, ESQ.
RUDNICK & WOLFE
203 NORTH LASALLE STREET, SUITE 1800
CHICAGO, ILLINOIS 60601
(312) 368-4000
(312) 236-7516 (TELECOPIER)
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 10, 1996
PROSPECTUS
HORIZON GROUP, INC.
1996 DIVIDEND REINVESTMENT PLAN
The 1996 Dividend Reinvestment Plan (the "Plan") of Horizon Group, Inc.
(the "Company") provides holders of record and beneficial owners of shares
of common stock, $.01 par value, of the Company (the "Common Stock") and
holders of record of units ("Units") of limited partnership interest in
Horizon/Glen Outlet Centers Limited Partnership (the "Partnership") with a
simple and convenient method of investing cash dividends and distributions
("dividends") in shares of Common Stock at a 1% discount (subject to
change) from the market price (as determined in accordance with the Plan),
to the extent shares are acquired directly from the Company. Common Stock
may also be purchased on a monthly basis with optional cash payments made
by participants in the Plan who are holders of record of Common Stock or
Units at a 3% discount (subject to change) from the market price, to the
extent shares are acquired directly from the Company (as determined in
accordance with the Plan). If the shares are acquired in open market
transactions by the Plan Administrator (as defined in Question 4), the
discount will not be available. Each of the discounts is subject to
change (but will not vary from the range of 0% to 5%) from time to time or
discontinuance at the Company's discretion after a review of current
market conditions, the level of participation in the Plan and the
Company's current and projected capital needs. Except with respect to the
Waiver Discount (as defined below), the Company will provide Participants
(as defined below) with written notice of a change in the applicable
discount rate at least thirty days prior to the relevant record date.
Brokers and nominees may reinvest dividends on behalf of beneficial
owners. Those holders of Common Stock and/or Units who do not participate
in the Plan will receive cash dividends, as declared, in the usual manner.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY ON
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
The date of this Prospectus is September ______, 1996
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To enroll in the Plan, Record Owners and Unit Owners need simply
complete the enclosed Enrollment Authorization Form and return it in the
envelope provided. Beneficial Owners should not complete an Enrollment
Authorization Form. Instead, the broker, bank or other nominee may
reinvest dividends on behalf of Beneficial Owners as provided herein. See
Question 6. Enrollment in the Plan is entirely voluntary and participants
in the Plan may terminate their participation at any time.
A Participant in the Plan may obtain additional shares of Common Stock
by:
-reinvesting dividends on all or part of the shares of Common
Stock or Units held by the Participant;
-making optional cash payments of not less than $50 and up to
$10,000 per month whether or not dividends on shares or Units held by
the Participant are being reinvested; or
-making optional cash payments in excess of $10,000 per month
with the permission of the Company whether or not dividends on shares
or Units held by the Participant are being reinvested.
Optional cash payments in excess of $10,000 may be made only pursuant
to an accepted Request for Waiver. It is expected that a portion of the
shares of Common Stock available for issuance under the Plan will be
issued pursuant to such waivers. Each month, at least three business days
prior to the related record date, the Company will establish the Threshold
Price, if any (as defined in Question 17), applicable to optional cash
payments that exceed $10,000. The price to be paid for shares of Common
Stock purchased under the Plan in excess of $10,000 pursuant to the
optional cash payment feature of the Plan will be a price reflecting a
discount of 0% to 5% (the "Waiver Discount") (see Question 17) from the
applicable Market Price (as defined in Question 12). There is no
preestablished maximum limit applicable to optional cash payments that may
be made pursuant to accepted Requests for Waiver. Optional cash payments
that do not exceed $10,000 and the reinvestment of dividends in additional
shares of Common Stock will not be subject to the Waiver Discount or the
Threshold Price, if any. Participants in the Plan may request that any or
all of their shares held in Plan accounts be sold by the Plan
Administrator. See Question 27.
To the extent that shares of Common Stock issued hereunder are
authorized but previously unissued shares rather than shares acquired in
the open market, the Plan will raise additional capital for the Company.
The Company currently intends to issue such shares and, therefore, the
Plan is expected to raise capital for the Company. Each month a portion
of the shares available for issuance under the Plan may be purchased by
owners of shares or Units (including brokers or dealers) who, in
connection with any resales of such shares, may be deemed to be
underwriters within the meaning of the Securities Act of 1933, as amended
the "Securities Act"). These sales will be effected through the Company's
ability to waive limits applicable to the amounts which Participants who
are Record Owners or Unit Owners may invest pursuant to the Plan's
optional cash payment feature.
From time to time, financial intermediaries, including brokers and
dealers, may engage in positioning transactions in order to benefit from
the discount from market price of the Common Stock. Such transactions may
cause fluctuations in the trading volume of the Common Stock. Financial
intermediaries which engage in positioning transactions may be deemed to
be underwriters within the meaning of the Securities Act.
This Prospectus relates to 3,000,000 shares of Common Stock offered
hereby and registered for sale under the Plan. Participants should retain
this Prospectus for future reference.
<PAGE>
This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such an offer or
solicitation in such jurisdiction. No person has been authorized to give
any information or to make any representations other than those contained
in this Prospectus in connection with the offering made hereby, and if
given or made, such information or representations must not be relied upon
as having been authorized by the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that information herein is correct as of any time
subsequent to the date hereof.
TABLE OF CONTENTS
AVAILABLE INFORMATION ....................................... 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ............. 6
HORIZON GROUP, INC. ......................................... 7
RECENT DEVELOPMENTS ......................................... 7
SUMMARY OF PLAN ............................................. 8
THE PLAN .................................................... 10
PURPOSE ..................................................... 11
OPTIONS AVAILABLE TO PARTICIPANTS ........................... 11
ADVANTAGES AND DISADVANTAGES ................................ 12
ADMINISTRATION .............................................. 13
PARTICIPATION ............................................... 14
PURCHASES AND PRICES OF SHARES .............................. 19
REPORTS TO PARTICIPANTS ..................................... 27
DIVIDENDS ON FRACTIONS ...................................... 27
CERTIFICATES FOR COMMON SHARES .............................. 27
WITHDRAWALS AND TERMINATION ................................. 29
OTHER INFORMATION ........................................... 30
DIVIDENDS ................................................... 36
USE OF PROCEEDS ............................................. 36
PLAN OF DISTRIBUTION ........................................ 36
LEGAL OPINION ............................................... 37
EXPERTS ..................................................... 37
GLOSSARY .................................................... 38
SCHEDULE A .................................................. 41
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information concerning the Company can be inspected
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the following regional offices of the Commission: New York
(7 World Trade Center, 13th Floor, New York, New York 10048), and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661), and copies of such material can be obtained from the
Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that
file electronically with the Commission. The address of the Commission's
Web site is: http://www.sec.gov. Reports, proxy statements and other
information concerning the Company also may be inspected at the offices of
the New York Stock Exchange where the Company's Common Stock is listed.
This Prospectus does not contain all information set forth in the
Registration Statement and Exhibits thereto which the Company has filed
with the Commission under the Securities Act and to which reference is
hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission by the Company are incorporated by reference in this
Prospectus: (1) the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and Amendment No. 1 to such report on Form 10-K/A;
(2) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996; (3) the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996; (4) the Company's Current Report on Form 8-K
dated July 22, 1996; and (5) the description of the Common Stock contained
in the Company's registration statement on Form 8-A dated October 28,
1993.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the securities offered
hereby shall be deemed incorporated by reference into this Prospectus and
to be a part hereof from the date of filing such documents.
Any person receiving a copy of this Prospectus may obtain without
charge, upon request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents. Written
requests should be addressed to Investor Relations, Horizon Group, Inc.,
5000 Hakes Drive, Norton Shores, Michigan 49441. Telephone requests may
be directed to Investor Relations at (616) 798-9100.
<PAGE>
THIS PROSPECTUS, INCLUDING DOCUMENTS INCORPORATED BY REFERENCE,
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. FORWARD-LOOKING
STATEMENTS ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF
WHICH CANNOT BE PREDICTED WITH ACCURACY AND SOME OF WHICH MIGHT NOT EVEN
BE ANTICIPATED. FUTURE EVENTS AND ACTUAL RESULTS, FINANCIAL AND
OTHERWISE, MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION"
INCORPORATED BY REFERENCE IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1995, AND THE COMPANY'S QUARTERLY
REPORTS ON FORM 10-Q FOR THE FISCAL QUARTERS ENDED MARCH 31, 1996, AND
JUNE 30, 1996, WHICH ARE INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
HORIZON GROUP, INC.
The Company is one of the largest developers, owners and operators of
outlet centers in the United States based on total gross leasable area
("GLA"), number of tenants and total revenues. As of March 31, 1996, the
Company owned and operated 35 outlet centers containing an aggregate of
approximately 8.5 million square feet of total GLA.
Commencing with its taxable year ended December 31, 1994, the Company
has elected to be treated as a Real Estate Investment Trust ("REIT") for
federal income tax purposes and the Company believes that it has operated
in such a manner as to qualify for taxation as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"). The Company intends to
continue to operate in the manner required to continue to be taxed as a
REIT. The Company is self-administered and self-managed.
The Company's principal executive office is located at 5000 Hakes
Drive, Norton Shores, Michigan 49441. Its telephone number is (616) 798-
9100.
RECENT DEVELOPMENTS
In April 1996, the Company completed the restructuring process
contemplated by the July 14, 1995 merger between the Company and
McArthur/Glen Realty Corp. The restructuring consolidated the Company's
three regional operating divisions into two and eliminated an aggregate of
29 corporate management and staff positions. In connection with the
restructuring, Alan Glen, Chairman of the Board, George T. Haworth,
Executive Vice President and Gary E. Geisler and Margaret M. Ernst, Senior
Vice Presidents, resigned. Joseph Cattivera, former Western Region
President, became Executive Vice President and William H. Neville and
Paul M. Sobel, became Presidents of the newly expanded Eastern and Western
Regions, respectively.
Effective June 17, 1996, the Company changed its name from HGI Realty,
Inc. to Horizon Group, Inc.
On June 28, 1996, the Company entered into a $205 million revolving
credit facility agreement with a subsidiary of First Chicago NBD
Corporation ("FCNBD") and certain other banks (the "New Credit Facility").
The New Credit Facility, which combines two prior revolving credit
facilities with the same banks, expires in June 1999. At the Company's
election, interest on the New Credit Facility is charged at the rate of
1/4 of 1 percent over the prime rate, or 2 percent over the London
interbank offered rate ("LIBOR"). The interest in excess of the prime rate
or LIBOR rate is subject to reduction in certain instances, including the
rating of certain debt of the Company, a reduction in the Company's debt
to capitalized value and additional equity investments in the Company.
Borrowings under the New Credit Facility are primarily used for
acquisitions, property expansion and development activities and are
collateralized by certain properties owned by the Company. On June 30,
1996, the combined commitment of the New Credit Facility was not fully
collateralized, resulting in a borrowing base of approximately $184.8
million.
The Company received a commitment, dated July 1, 1996, from Heitman
Capital Management Corporation ("Heitman"), acting as an advisor for an
institutional advisory client, to form a new venture (the "Venture") for
the purposes of acquiring and owning the Company's Finger Lakes Outlet
Center (the "Property"). The commitment provides that Heitman will invest
a total of $42.5 million which will be distributed to the Company upon its
contribution of the Property and current expansion phases under
development to the Venture. The Company will develop these additional
phases of the Property pursuant to a development agreement with the
Venture and will manage and lease the Property. The commitment also
provides that Heitman has the right to convert its interest in the Venture
into 1,950,000 shares of Common Stock. The commitment is subject to the
execution of a definitive venture agreement and the completion of final
due diligence by both parties. There can be no assurances that the
Venture will be formed in a timely manner or at all. Norman Perlmutter, a
director of the Company, is Chairman of the Board and Chief Executive
Officer of Heitman Financial Limited of which Heitman is a wholly-owned
subsidiary.
On July 23, 1996, the Company consummated the sale of 1,500,000 shares
of Common Stock for an aggregate price of $28,500,000 to Smith Barney Inc.
("Smith Barney"). The Company also granted to Smith Barney a 30-day
option (the "Option") to purchase up to 225,000 additional shares of
Common Stock at a purchase price of $19.00 per share, solely to cover
over-allotments, if any. On August 16, 1996, Smith Barney partially
exercised the Option for 25,100 additional shares of Common Stock for an
aggregate purchase price of $476,900.
SUMMARY OF PLAN
The Plan provides owners of Common Stock and Units with a convenient
and attractive method of investing cash dividends and Record Owners of
Common Stock and Unit Owners with a convenient and attractive method of
investing optional cash payments in additional shares of Common Stock and
without payment of any brokerage commission or service charge at a
discount from the Market Price (as defined in Question 12) to the extent
shares are purchased directly from the Company. The price to be paid for
shares of Common Stock purchased directly from the Company under the Plan
will be a price reflecting a discount of 1% (subject to change) from the
Market Price for the reinvestment of cash dividends, to the extent shares
are purchased directly from the Company, a discount of 3% (subject to
change) from the Market Price for the investment of optional cash payments
of up to $10,000, and a discount of 0% to 5% (the "Waiver Discount") from
the Market Price for the investment of optional cash payments that exceed
$10,000. Each of the discounts is subject to change (but will not vary
from the range of 0% to 5%) from time to time or discontinuance at the
Company's discretion after a review of current market conditions, the
level of participation in the Plan and the Company's current and projected
capital needs. Except with respect to the Waiver Discount (See
Question 17), the Company will provide Participants (as defined in
Question 2) with written notice of a change in the applicable discount
rate at least thirty days prior to the relevant record date.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no minimum or maximum limitation on the
amount of dividends a Participant may reinvest under the Plan. See
Question 2.
Participants who are Record Owners or Unit Owners and elect to invest
optional cash payments in additional shares of Common Stock are subject to
a minimum per month purchase limit of $50 and a maximum per month purchase
limit of $10,000 (subject to waiver). See Question 17. Optional cash
payments in excess of $10,000 may be made only upon acceptance by the
Company of a completed Request for Waiver form from a Participant. See
Question 17. Except with respect to the first Investment Date relating to
optional cash payments, each month, at least three business days prior to
each record date (as defined in Question 18), the Company will establish
the Waiver Discount and Threshold Price, if any (each as defined in
Question 17), applicable to optional cash payments that exceed $10,000.
The Waiver Discount, which may vary each month, will be established in the
Company's sole discretion after a review of current market conditions, the
level of participation in the Plan and the Company's current and projected
capital needs. With respect to optional cash payments that exceed $10,000
only, for each Trading Day of the related Pricing Period (each as defined
in Question 12) on which the Threshold Price is not satisfied, one-twelfth
of a Participant's optional cash payment will be returned without
interest. Optional cash payments that do not exceed $10,000 and the
reinvestment of dividends in additional shares of Common Stock will not be
subject to the Waiver Discount or Threshold Price, if any. Optional cash
payments of less than $50 and that portion of any optional cash payment
which exceeds the maximum monthly purchase limit of $10,000, unless such
limit has been waived, are subject to return to the Participant without
interest. Participants may request that any or all shares held in the
Plan be sold by the Plan Administrator on behalf of such Participants.
See Question 27.
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 no
preestablished maximum limit applies to optional cash payments that may be
made pursuant to Requests for Waiver. As of the date hereof, 3,000,000
shares of Common stock have been registered and are available for sale
under the Plan.
The Company expects to grant Requests for Waiver to financial
intermediaries, including brokers and dealers, and other Participants in
the future. Grants of Requests for Waiver will be made in the sole
discretion of the Company based on a variety of factors, which may
include: the Company's current and projected capital needs, the
alternatives available to the Company to meet those needs, prevailing
market prices for Common Stock, general economic and market conditions,
expected aberrations in the price or trading volume of the Common Stock,
the potential disruption of the price of the Common Stock by a financial
intermediary, the number of shares of Common Stock held by the Participant
submitting the waiver request, the past actions of a Participant under the
Plan, the aggregate amount of optional cash payments for which such
waivers have been submitted and the administrative constraints associated
with granting such waivers. If such Requests for Waiver are granted, a
portion of the shares available for issuance under the Plan will be
purchased by Participants (including brokers or dealers) who, in
connection with any resales of such shares, may be deemed to be
underwriters within the meaning of the Securities Act. To the extent that
Requests for Waiver are granted, it is expected that a greater number of
shares will be issued under the optional cash payment feature of the Plan
as opposed to the dividend reinvestment feature of the Plan.
Financial intermediaries may purchase a significant portion of the
shares of Common Stock issued pursuant to the optional cash payment
feature of the Plan. The Company does not have any formal or informal
understanding with any such organizations and, therefore, the extent of
such financial intermediaries, participation under the Plan cannot be
estimated at this time. Participants that are financial intermediaries
that acquire shares of Common Stock under the Plan with a view to
distribution of such shares or that offer or sell shares of Common Stock
for the Company in connection with the Plan may be deemed to be
underwriters within the meaning of the Securities Act.
From time to time, financial intermediaries, including brokers and
dealers, may engage in positioning transactions in order to benefit from
the discount from the Market Price of the shares of Common Stock. Such
transactions may cause fluctuations in the trading volume of the Common
Stock. Financial intermediaries which engage in positioning transactions
may be deemed to be underwriters within the meaning of the Securities Act.
The Plan is intended for the benefit of investors in the Company and not
for individuals or investors who engage in transactions which may cause
aberrations in the price or trading volume of the Common Stock.
THE PLAN
The Plan was adopted by the Board of Directors of Horizon Group, Inc.
(the "Company") on July 9, 1996. The following questions and answers
explain and constitute the Plan as in effect for cash dividends paid and
optional cash payments received on or after the date of this prospectus.
Shareholders and holders of Units who do not participate in the Plan will
receive cash dividends, as declared, and paid in the usual manner.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The primary purpose of the Plan is to provide eligible holders of
shares of Common Stock of the Company and Units with a convenient and
simple method of increasing their investment in the Company by investing
cash dividends and optional cash payments in additional shares of Common
Stock without payment of any brokerage commission or service charge and at
a discount from the Market Price (as defined in Question 12) to the extent
shares are purchased directly from the Company. See Question 5 for a
description of the holders who are eligible to participate in the Plan.
The Plan may also be used by the Company to raise additional capital
through the sale each month of a portion of the shares available for
issuance under the Plan to owners of shares (including brokers or dealers)
who, in connection with any resales of such shares, may be deemed to be
underwriters. These sales will be effected through the Company's ability
to waive limitations applicable to the amounts which Participants (as
defined in Question 2) may invest pursuant to the Plan's optional cash
payment feature. See Question 17 for information concerning limitations
applicable to optional cash payments and certain of the factors considered
by the Company in granting waivers. To the extent shares are purchased
from the Company under the Plan, it will receive additional funds for
general corporate purposes. The Plan is intended for the benefit of
investors in the Company and not for individuals or investors who engage
in transactions which may cause aberrations in the price or trading volume
of Common Stock. From time to time, financial intermediaries may engage
in positioning transactions in order to benefit from the discount from the
Market Price of the shares of Common Stock. Such transactions may cause
fluctuations in the trading volume of the Common Stock. The Company
reserves the right to modify, suspend or terminate participation in the
Plan by otherwise eligible holders of Common Stock in order to eliminate
practices which are not consistent with the purposes of the Plan.
OPTIONS AVAILABLE TO PARTICIPANTS
2. WHAT OPTIONS ARE AVAILABLE TO ENROLLED PARTICIPANTS?
Eligible holders of Common Stock and Units who wish to participate in
the Plan each a "Participant") may elect to have cash dividends paid on
all or a portion of their shares of Common Stock and Units automatically
reinvested in additional shares of Common Stock. Cash dividends are paid
on the Common Stock and Units when and as declared by the Company's Board
of Directors. Subject to the availability of shares of Common Stock
registered for issuance under the Plan, there is no minimum limitation on
the amount of dividends a Participant may reinvest under the dividend
reinvestment feature of the plan.
Each month, Participants who are Record Owners or Unit Owners may also
elect to invest optional cash payments in additional shares of Common
Stock, subject to a minimum per month purchase limit of $50 and a maximum
per month purchase limit of $10,000, subject to waiver. See Question 17
for information concerning limitations applicable to optional cash
payments and the availability of waivers with respect to such limitations.
Participants who are eligible to make optional cash payments may make such
optional cash payments each month even if dividends on their shares of
Common Stock or Units are not being reinvested and whether or not a
dividend has been declared.
ADVANTAGES AND DISADVANTAGES
3. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE PLAN?
ADVANTAGES:
(a) The Plan provides Participants with the opportunity to reinvest
cash dividends paid on all or a portion of their shares of Common Stock
and/or Units in additional shares of Common Stock without payment of any
brokerage commission or service charge and at a 1% discount from the
Market Price (subject to change), to the extent shares are purchased
directly from the Company.
(b) The Plan provides Participants who are Record Owners or Unit
Owners with the opportunity to make monthly investments of optional cash
payments, subject to minimum and maximum amounts, for the purchase of
additional shares of Common Stock at a 3% discount from the Market Price
(subject to change) and without payment of any brokerage commission or
service charge, to the extent shares are purchased directly from the
Company.
(c) Subject to the availability of shares of Common Stock registered
for issuance under the Plan, all cash dividends paid on Record Owners'
shares can be fully invested in additional shares of Common Stock because
the Plan permits fractional shares to be credited to Record Owners' Plan
accounts. Dividends on such fractional shares, as well as on whole
shares, will also be reinvested in additional shares which will be
credited to Plan accounts.
(d) The Plan Administrator, at no charge to Participants, provides
for the safekeeping of stock certificates for shares credited to each Plan
account.
(e) Periodic statements reflecting all current activity, including
share purchases and latest Plan account balance, simplify Participants'
record keeping. See Question 22 for information concerning reports to
Participants.
DISADVANTAGES:
(a) No interest will be paid by the Company or the Plan Administrator
on dividends or optional cash payments held pending reinvestment or
investment. See Question 11. In addition, optional cash payments in
excess of $10,000 pursuant to a Request for Wavier may be subject to
return to the Participant without interest in the event that the Threshold
Price, if any, is not met for any Trading Day during the related Pricing
Period. See Question 17.
(b) Because the Plan does not permit the reinvestment of dividends
paid on Beneficial Owners' shares in fractional shares, the amount of the
cash dividend not reinvested on behalf of such Beneficial Owner will be
returned without interest.
(c) With respect to optional cash payments, the actual number of
shares to be issued to a Participant's Plan account will not be determined
until after the end of the relevant Pricing Period. Therefore, during the
Pricing Period Participants will not know the actual number of shares they
have purchased.
(d) With respect to optional cash payments, while the Plan currently
provides for a 3% discount from the Market Price (subject to change)
during the Pricing Period to the extent shares are purchased directly from
the Company, the Market Price, as so discounted, may exceed the price at
which shares of the Common Stock are trading on the Investment Date when
the shares are issued or thereafter.
(e) Because optional cash payments must be received by the Plan
Administrator prior to the related Pricing Period, such payments may be
exposed to changes in market conditions for a longer period of time than
in the case of typical secondary market transactions. In addition,
optional cash payments once received by the Plan Administrator will not be
returned to Participants unless a written request is directed to the Plan
Administrator at least five business days prior to the record date for the
Investment Date with respect to which optional cash payments have been
delivered by such Participant. See Questions 18 and 20.
(f) Resales of shares of Common Stock credited to a Participant's
account under the Plan will involve a nominal fee per transaction paid to
the Plan Administrator (if such resale is made by the Plan Administrator
at the request of a Participant), a brokerage commission and any
applicable stock transfer taxes on the resales. See Questions 21 and 27.
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN?
The Company has retained First Chicago Trust Company of New York as
plan administrator (the "Plan Administrator"), to administer the Plan,
keep records, send statements of account activity to each Participant and
perform other duties relating to the Plan. See Question 22 for
information concerning reports to Participants. Shares purchased under
the Plan and held by the Plan Administrator will be registered in the Plan
Administrator's name or the name of its nominee for the benefit of the
Participants. In the event that the Plan Administrator resigns or
otherwise ceases to act as Plan Administrator, the Company will appoint a
new plan administrator to administer the Plan.
The Plan Administrator also acts as dividend disbursing agent,
transfer agent and registrar for the Company's Common Stock.
PARTICIPATION
For Purposes of this section, responses will generally be based upon
the method by which the shareholder holds his or her shares of Common
Stock. Shareholders are either Record Owners or Beneficial Owners. A
Record Owner is a shareholder who owns shares of Common Stock in his or
her own name. A Beneficial Owner is a shareholder who beneficially owns
shares of Common Stock that are registered in a name other than his or her
own name (for example, the shares are held in the name of a broker, bank
or other nominee). A Record Owner may participate directly in the Plan,
whereas a Beneficial Owner will have to either become a Record Owner by
having one or more shares transferred into his or her own name or
coordinate his or her participation in the Plan through the broker, bank
or other nominee in whose name the Beneficial Owner's shares are held. If
a Beneficial Owner who desires to become a Participant encounters any
difficulties in coordinating his or her participation in the Plan with his
or her broker, bank or other nominee, he or she should call the Company's
Investor Relations department at (616)798-9100.
5. WHO IS ELIGIBLE TO PARTICIPATE?
All Record Owners or Beneficial Owners of at least one share of Common
Stock and all owners of at least one Unit are eligible to participate in
the dividend reinvestment aspect of the Plan. All Record Owners of at
least one share of Common Stock and all owners of at least one Unit are
eligible to participate in the optional cash payment aspect of the Plan.
A Record Owner or Unit Owner may participate directly in the Plan. A
Beneficial Owner must either become a Record Owner by having one or more
shares transferred into his or her own name or arrange with the broker,
bank or other nominee who is the record holder to participate on his or
her behalf. See Question 6.
To facilitate participation by Beneficial Owners, the Company has made
arrangements with the Plan Administrator to reinvest dividends, on a per
dividend basis, by Record Owners such as brokers, banks and other
nominees, on behalf of Beneficial Owners. See Question 6.
The Company may terminate, by written notice, at any time any
Participant's individual participation in the Plan if such participation
would be in violation of the restrictions contained in the Articles of
Incorporation of the Company (the "Articles"). The Articles generally
prohibit any shareholder from having beneficial ownership, either directly
or indirectly, of more than 7% in value of the Company's outstanding
capital stock ("Ownership Limits"). The ownership restrictions contained
in the Articles (i) prohibit any person who is not an Existing Holder (as
such term is defined in the Articles) from having beneficial ownership of
any class of the Company's capital stock, either directly or by virtue of
the applicable attribution rules, in excess of the Ownership Limit, (ii)
prohibit any class of the company's capital stock from being owned by less
than 100 persons, and (iii) prohibit the Company from being "closely held"
within the meaning of Section 856(h) of the Code (collectively, "Ownership
Restrictions"). If the Ownership Restrictions are violated by a sale or
transfer, such sale or transfer is void AB INITIO. Upon the occurrence of
an event which could result in a violation of the Ownership Restrictions
certain shares of Common Stock may automatically be converted into Excess
Stock of the Company ("Excess Stock"). All Excess Stock will be determined
to be owned by the Company as trustee for the exclusive benefit of the
person to whom they are ultimately transferred, and the person who would
otherwise be the owner of the shares converted into such Excess Stock
shall have no rights in such shares of Excess Stock other than the right,
subject to certain limitations, to designate the person to whom such
Excess Stock is to be transferred.
All certificates representing shares of Common Stock will bear a
legend referring to the Ownership Restrictions. All persons who have
beneficial ownership, directly or by virtue of the attribution provisions
of the Code, of more than 2.5% of the outstanding capital stock of the
Company are required to file an affidavit with the Company containing the
information specified in the Articles within 30 days after January 1 of
each year. In addition, each shareholder shall upon demand be required to
disclose to the Company such information as the Board of Directors of the
Company 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.
6. HOW DOES AN ELIGIBLE SHAREHOLDER PARTICIPATE?
Record Owners and Unit Owners may join the Plan by completing and
signing the Enrollment Authorization Form included with this Prospectus
and returning it to the Plan Administrator. A postage-paid envelope is
provided for this purpose. Enrollment Authorization Forms may be obtained
at any time by written request to First Chicago Trust Company of New York,
Dividend Reinvestment, P.O. Box 2598, Jersey City, New Jersey 07303-2598,
or by telephoning the Plan Administrator at (800) 446-2617.
Beneficial Owners who wish to join the Plan must instruct their
broker, bank or other nominee to complete and sign a Broker and Nominee
Form (the "B&N Form") and return it to the Plan Administrator. See
Questions 8 and 16.
If a Record Owner or Unit Owner returns a properly executed Enrollment
Authorization Form to the Plan Administrator without electing an
investment option, such Enrollment Authorization Form will be deemed to
indicate the intention of such Record Owner or Unit Owner, as the case may
be, to apply all cash dividends and optional cash payments, if applicable,
toward the purchase of additional shares of Common Stock. If the broker,
bank or other nominee for a Beneficial Owner returns a properly executed
B&N Form to the Plan Administrator, such B&N Form will be deemed to
indicate the intention of such broker, bank or other nominee to reinvest
all cash dividends in additional shares of Common Stock on behalf of the
Beneficial Owners listed on the B&N Form. See Question 7 for investment
options.
7. WHAT DOES THE ENROLLMENT AUTHORIZATION FORM PROVIDE?
The Enrollment Authorization Form appoints the Plan Administrator as
agent for the Participant and directs the Company to pay to the Plan
Administrator each Participant's cash dividends on all or a specified
number of shares of Common Stock and/or Units registered in the name of
the Participant on the applicable record date ("Participating Shares"), as
well as on all whole and fractional shares of Common Stock credited to a
Participant's Plan account ("Plan Shares"). The Enrollment Authorization
Form directs the Plan Administrator to purchase on the Investment Date (as
defined in Question 11) additional shares of Common Stock with such
dividends and optional cash payments, if any, made by the Participant.
See Question 8 for a discussion of the B&N Form which is required to be
used by the broker, bank or nominee who holds shares owned by a Beneficial
Owner who wishes to participate in the Plan. The Enrollment Authorization
Form also directs the Plan Administrator to reinvest automatically all
subsequent dividends on Plan Shares. Dividends will continue to be
reinvested on the number of Participating Shares and on all Plan Shares
until the Participant specifies otherwise by contacting the Plan
Administrator, withdraws from the Plan (see Questions 26 and 27), or the
Plan is terminated. See Question 6 for additional information about the
Enrollment Authorization Form.
The Enrollment Authorization Form provides for the purchase of
additional shares of Common Stock through the following investment
options:
(1) If "Full Dividend Reinvestment" is elected, the Plan
Administrator will apply all cash dividends on all shares of Common
Stock and/or Units then or subsequently registered in the
Participant's name, and all cash dividends on all Plan Shares,
together with any optional cash payments, toward the purchase of
additional shares of Common Stock.
(2) If "Partial Dividend Reinvestment" is elected, the Plan
Administrator will apply all cash dividends on only the number of
Participating Shares registered in the Participant's name and
specified on the Enrollment Authorization Form and all cash dividends
on all Plan Shares, together with any optional cash payments, toward
the purchase of additional shares of Common Stock.
(3) If "Optional Cash Payments Only" is elected, the Participant
will continue to receive cash dividends on shares of Common Stock
registered in that Participant's name and/or Units owned by such
Participant in the usual manner. However, the Plan Administrator will
apply all cash dividends on all Plan Shares, if any, together with any
optional cash payments received from the Participant, toward the
purchase of additional shares of Common Stock.
Each Participant who is a Record Owner or Unit Owner may select any
one of these three options. In each case, dividends will be reinvested on
all Participating Shares and on all Plan Shares held in the Plan account,
including dividends on shares of Common Stock purchased with any optional
cash payments, until a Participant specifies otherwise by contacting the
Plan Administrator, or withdraws from the Plan altogether (see
Questions 26 and 27), or until the Plan is terminated. If a Participant
would prefer to receive cash payments of dividends paid on Plan Shares
rather than reinvest such dividends, those shares must be withdrawn from
the Plan by telephone or written notification to the Plan Administrator.
See Questions 26 and 27 regarding withdrawal of Plan Shares.
Participants may change their investment options at any time by
requesting a new Enrollment Authorization Form and returning it to the
Plan Administrator at the address set forth in Question 37. See
Question 11 for the effective date for any change in investment options.
8. WHAT DOES THE B&N FORM PROVIDE?
The B&N Form provides the ONLY means by which a broker, bank or other
nominee holding shares of a Beneficial Owner in the name of a recognized
securities depository may participate in the Plan by reinvesting cash
dividends on behalf of such Beneficial Owner. B&N Forms will be furnished
at any time upon request to the Plan Administrator at the address or
telephone number specified in Question 37.
THE B&N FORM AND APPROPRIATE INSTRUCTIONS MUST BE RECEIVED BY THE PLAN
ADMINISTRATOR NOT LATER THAN FIVE DAYS AFTER THE APPLICABLE RECORD DATE
FOR THE CASH DIVIDEND TO BE INVESTED ON THE APPLICABLE INVESTMENT DATE.
9. IS PARTIAL PARTICIPATION POSSIBLE UNDER THE PLAN?
Yes. Record Owners, Unit Owners or the broker, bank or other nominee
for Beneficial Owners may designate on the Enrollment Authorization Form
or B&N Form, as applicable, the number of shares and/or Units for which
dividends are to be reinvested. Dividends will thereafter be reinvested
only on the number of shares and/or Units specified, and the Record Owner,
Unit Owner or Beneficial Owner, as the case may be, will continue to
receive cash dividends on the remainder of the shares and/or Units.
10. WHEN MAY AN ELIGIBLE SHAREHOLDER OR UNIT OWNER JOIN THE PLAN?
A Record Owner, Unit Owner or a Beneficial Owner may join the Plan at
any time. Once in the Plan, a Participant remains in the Plan until he or
she withdraws from the Plan, the Company terminates his or her
participation in the Plan or the Company terminates the Plan. See
Question 27 regarding withdrawal from the Plan.
11. WHEN WILL DIVIDENDS BE REINVESTED AND/OR OPTIONAL CASH PAYMENTS BE
INVESTED?
When shares are purchased from the Company, such purchases will be
made on the "Investment Date" in each month. The Investment Date with
respect to Common Stock acquired directly from the Company and relating to
a dividend reinvestment will be the dividend payment date declared by the
Board of Directors (unless such date is not a business day in which came
it is the first business day immediately thereafter) or, in the case of
open market purchases and relating to a dividend reinvestment, no later
than ten business days following the dividend payment date. Except with
respect to the first Investment Date relating to optional cash payments,
the Investment Date with respect to Common Stock acquired directly from
the Company or in the case of open market purchases and relating to an
optional cash payment will generally be on or about the twentieth day of
each month.
When open market purchases are made by the Plan Administrator, such
purchases may be made on any securities exchange where the shares are
traded, in the over-the-counter market or by negotiated transactions, and
may be subject to such terms with respect to price, delivery and other
matters as agreed to by the Plan Administrator and will be completed no
later than 30 days after each Investment Date except where completion at a
later date is necessary or advisable under any applicable federal
securities law. Neither the Company nor any Participant shall have any
authorization or power to direct the time or price at which shares will be
purchased or the selection of the broker or dealer through or from whom
purchases are to be made by the Plan Administrator.
If the Enrollment Authorization Form is received within five days
after the record date for a dividend payment, the election to reinvest
dividends will begin with that dividend payment. If the Enrollment
Authorization Form or B&N Form is received after the fifth day subsequent
to any such record date, reinvestment of dividends will begin on the
dividend payment date following the next record date if the Participant is
still a Record Owner, Unit Owner or Beneficial Owner. Record dates for
payment of dividends normally precede payment dates by approximately three
weeks.
See Question 17 for information concerning limitations on the minimum
and maximum amounts of optional cash payments that may be made each month
by Record Owners and Unit Owners and Question 18 for information as to
when optional cash payments must be received to be invested on each
Investment Date.
Shares will be allocated and credited to Participants' Plan accounts
who are Record Owners or Unit Owners as follows: (1) shares purchased
from the Company will be allocated and credited on the appropriate
Investment Date; and (2) shares purchased in market transactions will be
allocated and credited as of the date on which the Plan Administrator
completes the purchases of the aggregate number of shares to be purchased
on behalf of all Participants with dividends to be reinvested or optional
cash payments, as the case may be, during the month.
With respect to Beneficial Owners, the Plan Administrator will, on the
relevant Investment Date, reinvest the dividend payable in as many WHOLE
shares of Common Stock as can be purchased with the total dividend paid at
the purchase price computed in accordance with the Plan. The remaining
dividend, if any, will be paid to the Beneficial Owner.
NO INTEREST WILL BE PAID ON CASH DIVIDENDS OR OPTIONAL CASH PAYMENTS
PENDING INVESTMENT OR REINVESTMENT UNDER THE TERMS OF THE PLAN. SINCE NO
INTEREST IS PAID ON CASH HELD BY THE PLAN ADMINISTRATOR, IT NORMALLY WILL
BE IN THE BEST INTEREST OF A PARTICIPANT TO DEFER OPTIONAL CASH PAYMENTS
UNTIL SHORTLY BEFORE THE DATE OF COMMENCEMENT OF THE RELATED PRICING
PERIOD.
PURCHASES AND PRICES OF SHARES
12. WHAT WILL BE THE PRICE TO PARTICIPANTS OF SHARES PURCHASED UNDER THE
PLAN?
With respect to reinvested dividends, the price per share of Common
Stock acquired directly from the Company will be 99% (subject to change)
of the average of the high and low sales prices, computed to three decimal
places, of the Common Stock on the NYSE on the Investment Date (as defined
in Question 11), or if no trading occurs in the Common Stock on the
Investment Date, the average of the high and low sales prices for the
first trading day immediately preceding the Investment Date for which
trades are reported.
No discount will be available for dividends reinvested in Common Stock
acquired in open market purchases. See Question 15. The price per share
of Common Stock acquired through open market purchases with reinvested
dividends will be the weighted average of the actual prices paid, computed
to three decimal places, for all of the Common Stock purchased by the Plan
Administrator with all Participants, reinvested dividends for the related
quarter. Additionally, each Participant will be charged a pro rata
portion of any brokerage commissions or other fees or charges paid by the
Plan Administrator in connection with such open market purchases. If a
Participant desires to opt out of the dividend reinvestment feature of the
Plan when the Common Stock relating to dividend reinvestments will be
purchased in the open market, a Participant must notify the Plan
Administrator no later than the record date for the related dividend
payment date. For information as to the source of the Common Stock to be
purchased under the Plan see Question 15.)
With respect to optional cash payments that do not exceed $10,000 (see
Question 17 for a discussion of the discount applicable to optional cash
payments in excess of $10,000), the price per share of Common Stock
acquired directly from the Company will be 97% (subject to change) of the
average of the daily high and low sale prices, computed to three decimal
places, of the Common Stock as reported on the NYSE for the twelve Trading
Days immediately preceding the relevant Investment Date (as defined in
Question 11 above) or, if no trading occurs in the Common Stock on one or
more of such Trading Days, for the twelve Trading Days immediately
preceding the Investment Date for which trades are reported. A "Trading
Day" means a day on which trades in the Common Stock are reported on the
NYSE with respect to all optional cash payments, regardless of the amount
being invested, the period encompassing the twelve Trading Days which
relate to an Investment Date constitutes the relevant "Pricing Period".
No discount will be available for shares of Common Stock acquired
through open market purchases with optional cash payments. The price per
share of Common Stock acquired through open market purchases with optional
cash payments will be the weighted average of the actual prices paid, plus
brokerage commissions or other fees or charges paid by the Plan
Administrator in connection with such open market purchaser, computed to
three decimal places, for all of the Common Stock purchased by the Plan
Administrator with all Participants, optional cash payments for the
related month.
The price per share of Common Stock purchased directly from the
Company with cash dividends or optional cash payments, currently reflects
a discount which is subject to change (but will not vary from the range of
0% to 5%) from time to time or discontinuance at the Company's discretion
after a review of current market conditions, the level of participation in
the Plan and the Company's current and projected capital needs. Except
with respect to the Waiver Discount (see Question 17), the Company will
provide Participants with written notice of a change in the applicable
discount rate at least thirty days prior to the relevant record date.
Neither the Company nor any Participant shall have any authorization
or power to direct the time or price at which shares will be purchased or
the selection of the broker or dealer through or from whom purchases are
to be made by the Plan Administrator.
All references in the Plan to the "Market Price," when it relates to
cash dividends which will be reinvested in Common Stock acquired directly
from the Company shall mean the average of the high and low sales prices,
computed to three decimal places, of the Common Stock on the NYSE on the
Investment Date, or if no trading occurs in the Common Stock on the
Investment Date, the average of the high and low sales prices for the
first trading day immediately preceding the Investment Date for which
trades are reported. With respect to cash dividends which will be
reinvested in Common Stock purchased in the open market, "Market Price"
shall mean the weighted average of the actual prices paid, plus brokerage
commissions or other fees or charges paid by the Plan Administrator in
connection with such open market purchase, computed to three decimal
places, for all of the Common Stock purchased by the Plan Administrator
with all Participants' reinvested dividends for the related quarter. All
references in the Plan to the "Market Price" for optional cash payments
which will be invested in Common Stock acquired directly from the Company
shall mean the average of the daily high and low sales prices of the
Common Stock as reported on the NYSE consolidated reporting system during
the Pricing Period (as defined above). With respect to optional cash
payments which will be invested in Common Stock purchased in the open
market, "Market Price" shall mean the weighted average of the actual
prices paid, plus brokerage commissions or other fees or charges paid by
the Plan Administrator in connection with such open market purchase,
computed to three decimal places, for all of the Common Stock purchased by
the Plan Administrator with all Participants' optional cash payments for
the related month.
13. WHAT ARE THE RECORD DATES AND INVESTMENT DATES FOR DIVIDEND
REINVESTMENT?
For the reinvestment of dividends, the "Record Date" is the record
date declared by the Board of Directors for such dividend. Likewise, the
dividend payment date declared by the Board of Directors constitutes the
Investment Date applicable to the reinvestment of such dividend with
respect to Common Stock acquired directly from the Company, except that if
any such date is not a business day, the first business day immediately
following such date shall be the Investment Date. The Investment Date
with respect to Common Stock purchased in open market transactions will be
no later than ten business days following the dividend payment date.
Dividends will be reinvested beginning on the Investment Date using the
applicable Market Price (as defined in Question 12). Generally, record
dates for quarterly dividends on the Common Stock will precede the
dividend payment dates by approximately three weeks. See Schedule A for a
list of the future dividend record dates and payment dates. Please refer
to Question 18 for a discussion of the Record Dates and Investment Dates
applicable to optional cash payments.
14. HOW WILL THE NUMBER OF SHARES PURCHASED FOR A PARTICIPANT BE
DETERMINED?
With respect to Record Owners and Unit Owners, a Participant's account
in the Plan will be credited with the number of shares, including
fractions computed to three decimal places, equal to the total amount to
be invested on behalf of such Participant divided by the purchase price
per share as calculated pursuant to the methods described in Question 12,
as applicable. The total amount to be invested will depend on the amount
of any dividends paid on the number of shares or Units participating in
the Plan and Plan Shares in such Participant's Plan account available for
investment on the related Investment Date, and/or the amount of any
optional cash payments, if any, made by such Participant and available for
investment on the related Investment Date. Subject to the availability of
shares of Common Stock registered for issuance under the Plan, there is no
total maximum number of shares available for issuance pursuant to the
reinvestment of dividends.
With respect to Beneficial Owners, the Plan Administrator will,
beginning on the relevant Investment Date, reinvest the dividend payable
in as many WHOLE shares of Common Stock as can be purchased with the total
dividend paid at the purchase price computed in accordance with the Plan.
The remaining dividend, if any, will be paid to the Beneficial Owner.
15. WHAT IS THE SOURCE OF COMMON STOCK PURCHASED UNDER THE PLAN?
Shares will be purchased either directly from the Company, in which
event such shares will be either authorized but unissued shares or shares
held in the treasury, or on the open market, or by a combination of the
foregoing, at the option of the Company, after a review of current market
conditions and the Company's current and projected capital needs. The
Company will determine the source of the Common Stock to be purchased
under the Plan at least three business days prior to the relevant Record
Date, and will notify the Plan Administrator of the same. Neither the
Company nor the Plan Administrator shall be required to provide any
written notice to Participants as to the source of the Common Stock to be
purchased under the Plan, but current information regarding the source of
the Common Stock may be obtained by contacting the Company's Chief
Accounting Officer at (616) 798-9100.
16. HOW DOES THE OPTIONAL CASH PAYMENT FEATURE OF THE PLAN WORK?
All Participants who are Record Owners or Unit Owners are eligible to
make optional cash payments during any month, whether or not a dividend is
declared. Beneficial Owners may not make optional cash payments without
first becoming a Record Owner. Optional cash payments from Record Owners
or Unit Owners must be accompanied by an Enrollment Authorization Form.
Each month the Plan Administrator will apply any optional cash payment
received from a Participant no later than one business day prior to the
commencement of that month's Pricing Period (as defined in Question 12) to
the purchase of additional shares of Common Stock for the account of the
Participant on the following Investment Date (as defined in Question 11).
The discount from the Market Price applicable to optional cash
payments will be 3% (subject to change) of the Market Price (as defined in
Question 12). Refer to Question 17 for a discussion of the possible
limitations on the purchase price applicable to the purchase of shares
made with optional cash payments.
17. WHAT LIMITATIONS APPLY TO OPTIONAL CASH PAYMENTS?
Each optional cash payment is subject to a minimum per month purchase
limit of $50 and a maximum per month purchase limit of $10,000. For
purposes of these limitations, all Plan accounts under the common control
or management of a Participant will be aggregated. Generally, optional
cash payments of less than $50 and that portion of any optional cash
payment which exceeds the maximum monthly purchase limit of $10,000,
unless such limit has been waived by the Company, will be returned to
Participants without interest as soon as practicable.
Participants who are Record Owners or Unit Owners may make optional
cash payments of up to $10,000 each month without the prior approval of
the Company. Optional cash payments in excess of $10,000 may be made by a
Participant who is a Record Owner or Unit Owner only upon acceptance by
the Company of a completed Request for Waiver form from such Participant.
There is no pre-established maximum limit applicable to optional cash
payments that may be made pursuant to accepted Requests for Waiver. A
Request for Waiver form must be received and accepted by the Company each
month no later than the Record Date (as defined in Question 18) for the
applicable Investment Date. Request for Waiver forms will be furnished at
any time upon request to the Company at the address or telephone number
specified in this Prospectus. Participants interested in obtaining further
information about a Request for Waiver should contact the Company's Chief
Accounting Officer at (616) 798-9100.
Waivers will be considered on the basis of a variety of factors, which
may include the Company's current and projected capital needs, the
alternatives available to the Company to meet those needs, prevailing
market prices for Common Stock and other Company securities, general
economic and market conditions, expected aberrations in the price or
trading volume of the Common Stock, the potential disruption of the price
of the Common Stock by a financial intermediary, the number of shares of
Common Stock held by the Participant submitting the waiver request, the
past actions of a Participant under the Plan, the aggregate amount of
optional cash payments for which such waivers have been submitted and the
administrative constraints associated with granting such waivers. Grants
of waivers will be made in the absolute discretion of the Company.
PARTICIPANTS IN THE PLAN ARE NOT OBLIGATED TO PARTICIPATE IN THE
OPTIONAL CASH PAYMENT FEATURE OF THE PLAN AT ANY TIME. OPTIONAL CASH
PAYMENTS NEED NOT BE IN THE SAME AMOUNT EACH MONTH.
Unless it waives its right to do so, the Company may establish for any
Pricing Period a minimum price (the "Threshold Price") applicable only to
the investment of optional cash payments that exceed $10,000 and that are
made pursuant to Requests for Waiver, in order to provide the Company with
the ability to set a minimum price at which Common Stock will be sold
under the Plan each month pursuant to such requests. A Threshold Price
will only be established when shares of Common Stock will be purchased
directly from the Company on the applicable Investment Date. Except with
respect to the first Investment Date relating to optional cash payments,
the Company will, at least three business days prior to each Record Date
(as defined in Question 18), determine whether to establish a Threshold
Price and, if a Threshold Price is established, its amount and so notify
the Plan Administrator. The determination whether to establish a
Threshold Price and, if a Threshold Price is established, its amount will
be made by the Company at its discretion after a review of current market
conditions, the level of participation in the Plan and the Company's
current and projected capital needs. Neither the Company nor the Plan
Administrator shall be required to provide any written notice to
Participants as to whether a Threshold Price has been established for any
Pricing Period, but current information regarding the Threshold Price may
be obtained by contacting the Company's Chief Accounting Officer at (616)
798-9100.
The Threshold Price for optional cash payments made pursuant to
Requests for Waiver, if established for any Pricing Period, will be a
stated dollar amount that the average of the high and low sale prices of
the Common Stock on the NYSE for each Trading Day of the relevant Pricing
Period must equal or exceed. In the event that the Threshold Price is not
satisfied for a Trading Day in the Pricing Period, then that Trading Day
and the trading prices for that day will be excluded from that Pricing
Period. Thus, for example, if the Threshold Price is not satisfied for
three of the twelve Trading Days in a Pricing Period, then the average
sales price for purchases and the amount of optional cash payments which
may be invested will be based upon the remaining nine Trading Days when
the Threshold Price is satisfied. For each Trading Day on which the
Threshold Price is not satisfied, 1/12 of each optional cash payment made
by a Participant pursuant to a Request for Waiver will be returned to such
Participant, without interest, as soon as practicable after the applicable
Investment Date. In the example above, therefore, 3/12 of each
Participant's optional cash payment made pursuant to a Request for Waiver
will be returned to such Participant by check, without interest, as soon
as practicable after the applicable Investment Date. This return
procedure will only apply when shares are purchased directly from the
Company for optional cash payments made pursuant to Requests for Waiver
and the Company has set a Threshold Price with respect to the relevant
Pricing Period. See Question 15.
Setting a Threshold Price for a Pricing Period shall not affect the
setting of a Threshold Price for any subsequent Pricing Period. The
Threshold Price concept and return procedure discussed above apply only to
optional cash payments made pursuant to Requests for Waiver.
For any Investment Date, the Company may waive its right to set a
Threshold Price for optional cash payments made pursuant to Requests for
Waiver. Participants may ascertain whether the Threshold Price applicable
to a given Pricing Period has been set or waived, as applicable, by
contacting the Company's Chief Accounting Officer at (616) 798-9100.
For a list of expected dates by which the Threshold Price will be set
in 1996 and 1997, see Schedule A.
Except with respect to the first Investment Date relating to optional
cash payments, each month, at least three business days prior to the
applicable Record Date (as defined in Question 18), the Company will
establish the discount from the Market Price applicable to optional cash
payments made pursuant to Requests for Waiver and will notify the Plan
Administrator of the same. Such discount (the "Waiver Discount") will be
between 0% and 5% of the Market Price and may vary each month, but once
established will apply uniformly to all optional cash payments made
pursuant to Requests for Waiver during that month. The Waiver Discount
will be established in the Company's sole discretion after a review of
current market conditions, the level of participation in the Plan, and the
Company's current and projected capital needs. The Waiver Discount
applies only to optional cash payments made Pursuant to Requests for
Waiver. Neither the Company nor the Plan Administrator shall be required
to provide any written notice to Participants as to the Waiver Discount,
but current information regarding the Waiver Discount applicable to the
next Pricing Period may be obtained by contacting the Company's Chief
Accounting Officer at (616) 798-9100. Setting a Waiver Discount for an
Investment Date shall not affect the setting of a waiver Discount for any
subsequent Investment Date. The Waiver Discount feature discussed above
applies only to optional cash payments made pursuant to Requests for
Waiver and does not apply to the reinvestment of dividends.
THE THRESHOLD PRICE CONCEPT AND RETURN PROCEDURE DISCUSSED ABOVE APPLY
ONLY TO OPTIONAL CASH PAYMENTS MADE PURSUANT TO REQUESTS FOR WAIVER WHEN
SHARES OF COMMON STOCK ARE TO BE PURCHASED FROM THE COMPANY ON THE
APPLICABLE INVESTMENT DATE. ONLY SUCH OPTIONAL CASH PAYMENTS WILL BE
AFFECTED BY THE WAIVER DISCOUNT. ALL OTHER OPTIONAL CASH PAYMENTS WILL BE
MADE AT A 3% DISCOUNT FROM THE MARKET PRICE (SUBJECT TO CHANGE) WHEN
SHARES OF COMMON STOCK ARE TO BE PURCHASED FROM THE COMPANY, WITHOUT
REGARD TO ANY THRESHOLD PRICE OR WAIVER DISCOUNT.
18. WHAT ARE THE RECORD DATES AND INVESTMENT DATES FOR OPTIONAL CASH
PAYMENTS?
Optional cash payments will be invested every month on the related
Investment Date. The "Record Date" for optional cash payments is two
business days prior to the commencement of the related Pricing Period and
the "Investment Date" is generally on or about the twentieth day of each
month or, in the case of open market purchases, no later than the last
business day of each month.
For a schedule of expected Record Dates and Investment Dates in 1996
and 1997, see Schedule A.
19. WHEN MUST OPTIONAL CASH PAYMENTS BE RECEIVED BY THE PLAN
ADMINISTRATOR?
Except with respect to the first Investment Date relating to optional
cash payments, optional cash payments received by the Plan Administrator
at least one business day prior to the commencement of a Pricing Period
will be applied to the purchase of shares of Common Stock on the
Investment Date which relates to that Pricing Period. No interest will be
paid by the Company or the Plan Administrator on optional cash payments
held pending investment. Generally, optional cash payments received on or
after the commencement of a Pricing Period will not be returned to the
Participant but will be invested in shares of Common Stock on behalf
Participant on the next Investment Date.
Each month the Plan Administrator will apply any optional cash payment
for which good funds are timely received to the purchase of shares of
Common Stock for the account of the Participant on the next Investment
Date. See Question 18. Except with respect to the first Investment Date
relating to optional cash payments, in order for funds to be invested on
the next Investment Date, the Plan Administrator must have received a
check or money order and such check or money order must have cleared at
least one business day immediately preceding the first Trading Day of the
ensuing Pricing Period. Checks and money orders are accepted subject to
timely collection as good funds and verification of compliance with the
terms of the Plan. Checks or money orders should be made payable to First
Chicago - Horizon Group. Checks returned for any reason will not be
resubmitted for collection and are subject to a $20 fee charged to the
Participant.
Participants may make automatic monthly investments of a specified
amount (not less than $50 per purchase nor more than $10,000 per month) by
electronic funds transfer from a predesignated account with a U.S.
financial institution. To initiate automatic monthly deductions, the
Participant must complete and sign an Authorization Form For Automatic
Monthly Deduction and return it to the Plan Administrator together with a
voided blank check for the account from which funds are to be drawn. An
Authorization Form For Automatic Monthly Deduction is enclosed with this
Prospectus and additional forms may be obtained from the Plan
Administrator. Authorization Forms For Automatic Monthly Deduction will be
processed and will become effective as promptly as practicable.
Once automatic monthly deduction is initiated, funds will be drawn
from the Participant's designated bank account on the third business day
preceding each monthly Investment Date relating to optional cash payments
and will be invested in Common Stock beginning on that Investment Date.
Participants may change or terminate automatic monthly deductions by
completing and submitting to the Plan Administrator a new Authorization
Form For Automatic Monthly Deduction. To be effective with respect to a
particular Investment Date, however, the new Authorization Form For
Automatic Monthly Deduction must be received by the Plan Administrator at
least six business days preceding such Investment Date.
NO INTEREST WILL BE PAID BY THE COMPANY OR THE PLAN ADMINISTRATOR ON
OPTIONAL CASH PAYMENTS HELD PENDING INVESTMENT. SINCE NO INTEREST IS PAID
ON CASH HELD BY THE PLAN ADMINISTRATOR, IT NORMALLY WILL BE IN THE BEST
INTEREST OF A PARTICIPANT TO DEFER OPTIONAL CASH PAYMENTS UNTIL SHORTLY
BEFORE COMMENCEMENT OF THE PRICING PERIOD.
Except with respect to the first Investment Date relating to optional
cash payments, in order for payments to be invested on the Investment
Date, in addition to the receipt of good funds at least one business day
prior to the commencement of a Pricing Period, the Plan Administrator must
be in receipt of an Enrollment Authorization Form as of the same date.
See Questions 6 and 8.
20. MAY OPTIONAL CASH PAYMENTS BE RETURNED?
Upon telephone or written request to the Plan Administrator received
prior to the Investment Date with respect to which optional cash payments
have been delivered to the Plan Administrator, such optional cash payments
will be returned to the Participant as soon as practicable. Additionally,
a portion of each optional cash payment will be returned by check, without
interest, as soon as practicable after the Investment Date for each
Trading Day of the Pricing Period that does not meet the Threshold Price,
if any, applicable to optional cash payments made pursuant to Requests for
Waiver. See Question 17. Also, each optional cash payment, to the extent
that it does not either conform to the limitations described in
Question 18 or clear within the time limit described in Question 19, will
be subject to return to the Participant as soon as practicable.
21. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH THEIR
PARTICIPATION UNDER THE PLAN?
Participants will have to pay brokerage fees or commissions on shares
of Common Stock purchased on the open market, which will be included when
determining the number of shares to be purchased. Participants will incur
no brokerage commissions or service charges when shares of Common Stock
are acquired directly from the Company under the Plan. The Company will
pay all other costs of administration of the Plan. However, Participants
that request that the Plan Administrator sell all or any portion of their
shares (see Question 27) must pay a service fee per transaction to the
Plan Administrator, any related brokerage commissions, applicable stock
transfer taxes and any other costs of sale.
REPORTS TO PARTICIPANTS
22. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Each Participant in the Plan who is a Record Owner or Unit Owner will
receive, directly from the Plan Administrator a statement of his or her
account following each purchase of shares. These statements are
Participants' continuing record of the cost of their purchases and should
be retained for income tax purposes. In addition, Participants will
receive copies of other communications sent to holders of the Common
Stock, including the Company's annual report to its shareholders, the
notice of annual meeting and proxy statement in connection with its annual
meeting of shareholders and Internal Revenue Service information for
reporting dividends paid.
DIVIDENDS ON FRACTIONS
23. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON FRACTIONS OF SHARES?
Participants who have Plan accounts will be credited with dividends on
fractions of shares in such Participant's Plan account.
CERTIFICATES FOR COMMON SHARES
24. WILL CERTIFICATES BE ISSUED FOR SHARES PURCHASED?
Common Stock purchased for Participants who are Record Owners or Unit
Owners will be held in the name of the Plan Administrator or its nominee.
No certificates will be issued to Participants who are Record Owners or
Unit Owners for shares in the Plan unless a Participant makes a telephone
or written request to the Plan Administrator or until participation in the
Plan is terminated. At any time, a Participant may request the Plan
Administrator to send a certificate for some or all of the whole shares
credited to a Participant's account. Written requests should be mailed to
the Plan Administrator at the address set forth in Question 37. Telephone
requests should be made to the Plan Administrator at the telephone number
set forth in Question 37. Any remaining whole shares and any fractions of
shares will remain credited to the Plan account.
Certificates will be issued for whole shares purchased by Beneficial
Owners in the Plan and will be delivered to the broker, bank or other
nominee holding the Participating Shares on behalf of such Beneficial
Owner. Certificates for fractional shares will not be issued under any
circumstances.
At the time of enrollment in the Plan, or at any later time,
Participants may use the Plan's "Share Safekeeping Service" to deposit any
Common Stock certificates in their possession with the Plan Administrator.
Shares deposited will be transferred into the name of the Plan
Administrator or its nominee and credited to the Participant's account
under the Plan. Thereafter, such shares will be treated in the same manner
as shares purchased through the Plan. By using the Plan's Share
Safekeeping Service, Participants no longer bear the risk associated with
loss, theft or destruction of stock certificates. Also, because shares
deposited with the Plan Administrator are treated in the same manner as
shares purchased through the Plan, they may be transferred or sold through
the Plan in a convenient and efficient manner.
To insure against loss resulting from mailing stock certificates to
the Plan Administrator, the Plan Administrator provides mail insurance
free of charge for certificates valued at current market value up to
$25,000.
To be eligible for certificate mailing insurance, an individual
investor must observe the following guidelines. Certificates must be
mailed in brown, pre-addressed return envelopes supplied by the Plan
Administrator. Certificates mailed to the Plan Administrator must be
mailed first class. The Plan Administrator will promptly send the
Participant a statement confirming each deposit of Common Stock
certificates. Shareholders must notify the Plan Administrator of any
claim within thirty (30) calendar days of the date the certificates were
mailed. To submit a claim, a shareholder must be a current Participant or
the loss must be incurred in connection with becoming a participant. In
the latter case, the claimant must enroll in the Plan at the time the
insurance claim is processed. The maximum insurance protection provided to
the Participant is $25,000 and coverage is available only when the
certificates are sent to the Plan Administrator in accordance with the
guidelines described above.
Insurance covers the replacement of shares of stock, but in no way
protects against any loss resulting from fluctuations in the value of such
shares from the time the individual mails the certificates until such time
as replacement can be effected.
If a Participant does not use the brown pre-addressed return envelope
provided by the Plan Administrator, certificates should be mailed to the
address set forth in the answer to Question 37 and insured for possible
mail loss for 2% of the current market value (minimum of $20); this
represents the replacement cost to the Participant.
25. IN WHOSE NAME WILL CERTIFICATES BE REGISTERED WHEN ISSUED?
Each Plan account is maintained in the name in which the related
Record Owner or Unit Owner's certificates were registered at the time of
enrollment in the Plan. Stock certificates for whole shares purchased
under the Plan will be similarly registered when issued upon a Record
Owner or Unit Owner's request. If a Participant is a Beneficial Owner,
stock certificates for whole shares purchased under the Plan will be
registered in the name of such Participant's banker, broker or other
nominee. A Record Owner or Unit Owner who wishes to pledge shares credited
to such Participant's Plan account must first withdraw such shares from
such account.
WITHDRAWALS AND TERMINATION
26. WHEN MAY PARTICIPANTS WITHDRAW FROM THE PLAN?
Participants may withdraw from the Plan with respect to all or a
portion of such Participant's Participating Shares at any time. If the
request to withdraw is received by the Plan Administrator on or after the
dividend record date for the corresponding payment date, the Plan
Administrator, in its sole discretion, may either pay such dividend in
cash or reinvest it in shares for the Participant's account. If such
dividend is reinvested, the Plan Administrator may sell the shares
purchased and remit the proceeds to the Participant, less any related
brokerage commissions, applicable stock transfer taxes, service fees and
any other costs of sale. All subsequent dividends will be paid in cash
unless a shareholder re-enrolls in the Plan, which may be done at any
time.
Any optional cash payments which have been sent to the Plan
Administrator prior to a request for withdrawal will also be invested on
the next Investment Date unless a Participant expressly requests return of
that payment in the request for withdrawal from the Plan, and the request
for withdrawal is received by the Plan Administrator prior to the related
Investment Date.
27. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
A Participant who wishes to withdraw from the Plan with respect to all
or a portion of such Participant's Participating Shares must notify the
Plan Administrator by telephone as set forth in the answer to Question 37.
Upon a Participant's withdrawal from the Plan or termination of the Plan
by the Company, certificates for the appropriate number of whole shares
credited to his or her account under the Plan will be issued. A cash
payment will be made for any fraction of a share.
Upon withdrawal from the Plan, a Participant may also request that the
Plan Administrator sell all or part of the shares credited to his or her
account in the Plan. The Plan Administrator will sell the shares as
requested as soon as practicable after processing the request for
withdrawal. The Participant will receive the proceeds of the sale, less a
service fee per transaction paid to the Plan Administrator, any brokerage
fees or commissions and any applicable stock transfer taxes and any other
costs of sale.
28. ARE THERE ANY AUTOMATIC TERMINATION PROVISIONS?
Participation in the Plan will be terminated if the Plan Administrator
receives written notice of the death or adjudicated incompetency of a
Participant, together with satisfactory supporting documentation of the
appointment of a legal representative.
OTHER INFORMATION
29. WHAT HAPPENS IF A PARTICIPANT SELLS OR TRANSFERS ALL OF THE SHARES OR
UNITS REGISTERED IN THE PARTICIPANT'S NAME?
Even if a Participant disposes of all shares and Units registered in
his or her name, and is not shown as a Record Owner or Unit Owner on a
dividend record date, the Plan Administrator will continue to reinvest
dividends on the Plan Shares held in such Participant's Plan account until
a written request for withdrawal from the Plan is received from the
Participant.
30. WHAT HAPPENS IF THE COMPANY DECLARES A DIVIDEND PAYABLE IN SHARES OF
COMMON STOCK OR DECLARES A SPLIT OF ITS COMMON STOCK?
Any dividend payable in shares and any additional shares distributed
by the Company in connection with a stock split in respect of shares
credited to a Participant's Plan account will be added to that account.
Stock dividends or split shares which are attributable to shares
registered in a Participant's own name and not in his or her Plan account
will be mailed directly to the Participant as in the case of Record Owners
not participating in the Plan.
31. HOW WILL SHARES HELD BY THE PLAN ADMINISTRATOR BE VOTED AT MEETINGS OF
SHAREHOLDERS?
If the Participant is a Record Owner, the Participant will receive a
proxy card covering both directly held shares and full shares held in the
Plan. If the Participant is a Beneficial Owner, the Participant will
receive a proxy covering shares purchased through the Plan through his or
her broker, bank or other nominee.
If a proxy is returned properly signed and marked for voting, all the
shares covered by the proxy will be voted as marked. If a proxy is
returned properly signed but no voting instructions are given, all of the
Participant's shares will be voted in accordance with recommendations of
the Board of Directors of the Company, unless applicable laws require
otherwise. If the proxy is not returned, or if it is returned unexecuted
or improperly executed, shares registered in a Participant's name may be
voted only by the Participant in person.
32. WHAT ARE THE RESPONSIBILITIES OF THE COMPANY AND THE PLAN
ADMINISTRATOR UNDER THE PLAN?
The Company and the Plan Administrator will not be liable in
administering the Plan for any act done in good faith or required by
applicable law or for any good faith omission to act including, without
limitation, any claim of liability arising out of failure to terminate a
Participant's account upon his or her death, with respect to the prices at
which shares are purchased or sold and/or the times when such purchases or
sales are made or with respect to any fluctuation in the market value
before or after purchase or sale of shares. Notwithstanding the
foregoing, nothing contained in the Plan limits the Company's liability
with respect to alleged violations of federal securities laws.
The Company and the Plan Administrator shall be entitled to rely on
completed forms and the proof of due authority to participate in the Plan,
without further responsibility of investigation or inquiry.
33. MAY THE PLAN BE CHANGED OR DISCONTINUED?
Yes. The Company may suspend, terminate, or amend the Plan at any
time. Notice will be sent to Participants of any suspension or
termination, or of any amendment that alters the Plan terms and
conditions, as soon as practicable after such action by the Company.
The Company may substitute another administrator or agent in place of
the Plan Administrator at any time; Participants will be promptly informed
of any such substitution.
Any questions of interpretation arising under the Plan will be
determined by the Company and any such determination will be final.
34. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE
PLAN?
The following summary is based upon an interpretation of current
federal tax law. Participants should consult their own tax advisers to
determine particular tax consequences, including state income tax (and
non-income tax, such as stock transfer tax) consequences, which vary from
state to state and which may result from participation in the Plan and
subsequent disposition of shares acquired pursuant to the Plan. Income
tax consequences to Participants residing outside the United States will
vary from jurisdiction to jurisdiction.
Participants in the Plan will be treated for federal income tax
purposes as having received, on the dividend payment date, a distribution
in an amount equal to the fair market value on that date of the shares
acquired with reinvested dividends. Such shares will have a tax basis
equal to the same amount. For federal income tax purposes, the fair
market value of shares acquired with reinvested dividends under the Plan
will be equal to 100% of the average of the high and low sale prices of
shares on the related Investment Date.
Such distribution will be taxable as a dividend to the extent of the
Company's current or accumulated earnings and profits. To the extent the
distribution is in excess of the Company's current or accumulated earnings
and profits, the distribution will be treated first as a tax-free return
of capital, reducing a Participant's tax basis in his or her shares, and
the distribution in excess of a Participant's tax basis will be taxable as
gain recognized from the sale of his or her shares.
EXAMPLE 1:
The following example may be helpful to illustrate the federal income
tax consequences of the reinvestment of dividends at a 1% discount from
Market Price when shares of Common Stock are purchased directly from the
Company.
<TABLE>
<CAPTION>
Cash dividends reinvested $100.00
<S> <C> <C>
Assumed fair market value and Market Price* $20.00
Less 1% discount per share $(0.20)
Net purchase price per share $19.80
Number of shares purchased ($100.00/$19.80) 5.051
Total taxable dividend resulting from $101.02
transaction ($20.00 X 5.051)**
</TABLE>
* These prices are assumed for illustrative purposes only, and will vary
with the market price of Common Stock.
** The foregoing example assumes that the entire amount of the $100 cash
distribution and $1.02 distribution from the discount on the purchase
of shares will be treated as a dividend for federal tax purposes.
However, as noted, if all or a portion of such distributions exceed
the Company's current or accumulated earnings and profits, a portion
of such distributions could be a non-taxable return of capital or
long-term capital gain, thereby affecting the total taxable dividend
resulting from the transaction. Participants are urged to consult
with their tax advisors in this regard.
Shares acquired under the optional cash payment feature of the Plan
will have a tax basis equal to the amount of the payment plus the excess,
if any, of the fair market value of the shares purchased over the amount
of the payment. The fair market value on an acquisition date is likely to
differ from the Market Price for the Pricing Period immediately preceding
the related Investment Date (which is used to determine the number of
shares acquired).
EXAMPLE 2:
The following example may be helpful to illustrate the federal income
tax consequences of the optional cash payment feature at a 3% discount
from the Market Price when shares of Common Stock are purchased directly
from the Company.
<TABLE>
<CAPTION>
Optional Cash Payment $100.00
<S> <C> <C>
Fair market value on Investment Date* $20.00
Market Price for relevant Pricing Period* $19.75
Less 3% discount per share $(0.59)
Net purchase price per share $19.16
Number of shares purchased ($100.00/$19.16) 5.219
Total taxable dividend resulting from $4.38
transaction (5.219 X $20.00 - $100.00)
</TABLE>
* These prices are assumed for illustrative purposes only, and will vary
with the market price of Common Stock.
As illustrated above, a Participant who purchases Common Stock in
connection with the optional cash payment feature of the Plan will be
treated as having received a distribution in an amount equal to the amount
by which the fair market value of the Common Stock on the Investment Date
exceeds the amount of the optional cash payment.
A Participant's holding period for shares acquired pursuant to the
Plan will begin on the day following the Investment Date.
A Participant will recognize gain or loss upon the sale or exchange of
shares acquired under the Plan. A Participant will also recognize gain or
loss upon receipt, following termination of participation in the Plan, of
a cash payment for any fractional share equivalent credited to the
Participant's account. The amount of any such gain or loss will be the
difference between the amount that the Participant received for the shares
or fractional share equivalent and the Participant's tax basis in such
shares.
A Participant will not realize any taxable income upon receipt of
certificates for whole shares credited to the Participant's account,
either upon the Participant's request for certain of those shares or upon
termination of participation in the Plan.
The foregoing discussion is based on the assumption that newly issued
shares will be purchased directly from the Company. No discount will be
available for shares purchased on the open market. Accordingly, the tax
consequences for such purchases will be different from those set forth in
Examples 1 and 2.
35. HOW ARE INCOME TAX WITHHOLDING PROVISIONS APPLIED TO SHAREHOLDERS WHO
PARTICIPATE IN THE PLAN?
If a Participant fails to provide certain federal income tax
certifications in the manner required by law, dividends on shares of
Common Stock and proceeds from the sale of shares held for a Participant's
account will be subject to federal income tax withholding at the rate of
31%. If withholding is required for any reason, the appropriate amount of
tax will be withheld. Certain shareholders (including most corporations)
are, however, exempt from the above withholding requirements.
If a Participant is a foreign shareholder whose dividends are subject
to federal income tax withholding at the 30% rate (or a lower treaty
rate), the appropriate amount will be withheld and the balance in shares
will be credited to such Participant's account.
36. WHO BEARS THE RISK OF MARKET FLUCTUATIONS IN THE COMPANY'S COMMON
STOCK?
A Participant's investment in shares held in the Plan account is no
different from his or her investment in directly held shares. The
Participant bears the risk of any loss and enjoys the benefits of any gain
from market price changes with respect to such shares.
37. WHO SHOULD BE CONTACTED WITH QUESTIONS ABOUT THE PLAN?
All correspondence regarding the Plan should be directed to:
First Chicago Trust Company of New York
Dividend Reinvestment
P.O. Box 2598
Jersey City, New Jersey 07303-2598
Telephone:
Shareholder customer service: 1-800-446-2617
Normal hours: 8:00 a.m. - 10:00 p.m., Eastern time,
business days
8:00 a.m. - 3:30 p.m., Eastern time,
Saturdays
Customer Service Representatives are available:
9:00 a.m. - 6:00 p.m., Eastern time, business days
Sale of shares: 1-800-446-2617
Normal hours: 8:00 a.m. - 10:00 p.m., Eastern time,
business days
8:00 a.m. - 3:30 p.m., Eastern time,
Saturdays
Internet: Messages forwarded on the Internet will be responded to
within one business day
The First Chicago Internet address is: "HTTP.//WWW.FCTC.COM"
TDD: (201) 222-4955 Telecommunications Device for the hearing
impaired
Please mention Horizon Group, Inc. and this Plan in all
correspondence.
38. HOW IS THE PLAN INTERPRETED?
Any question of interpretation arising under the Plan will be
determined by the Company and any such determination will be final. The
Company may adopt rules and regulations to facilitate the administration
of the Plan. The terms and conditions of the Plan and its operation will
be governed by the laws of the State of Michigan.
39. WHAT ARE SOME OF THE PARTICIPANT RESPONSIBILITIES UNDER THE PLAN?
Plan Shares are subject to escheat to the state in which the
Participant resides in the event that such shares are deemed, under such
state's laws, to have been abandoned by the Participant. Participants,
therefore, should notify the Plan Administrator promptly in writing of any
change of address. Account statements and other communications to
Participants will be addressed to them at the last address of record
provided by Participants to the Plan Administrator.
Participants will have no right to draw checks or drafts against their
Plan accounts or to instruct the Plan Administrator with respect to any
shares of Common Stock or cash held by the Plan Administrator except as
expressly provided herein.
DIVIDENDS
The Company has paid dividends since its initial public offering in
November, 1993. In order to accommodate the provisions of this Plan, the
Company anticipates that dividends will be payable on or about the
twentieth day of January, April, July and October.
The Company intends to pay regular quarterly dividends to its
shareholders. Dividends will be determined by the Board of Directors and
will depend on a number of factors, including the amount of funds from
operations, the financial condition of its properties, any decision by the
Board of Directors to reinvest cash available for distribution, rather
than to distribute such funds, the capital requirements of the
Partnership, the annual distribution requirements under the REIT
provisions of the Code and such other factors as the Board of Directors
deems relevant. The Company reviews its dividends on a quarterly basis in
light of actual results of operations and other factors.
USE OF PROCEEDS
The Company does not know either the number of shares of Common Stock
that will be ultimately sold pursuant to the Plan or the prices at which
such shares will be sold. However, the Company proposes to use the net
proceeds from the sale of newly issued or treasury shares of Common Stock
for general corporate purposes.
PLAN OF DISTRIBUTION
Except to the extent the Plan Administrator purchases Common Stock in
open market transactions, the Common Stock acquired under the Plan will be
sold directly by the Company through the Plan. The Company may sell
Common Stock to owners of shares (including brokers or dealers) who, in
connection with any resales of such shares, may be deemed to be
underwriters. Such shares, including shares acquired pursuant to waivers
granted with respect to the optional cash payment feature of the Plan, may
be resold in market transactions (including coverage of short positions)
on any national securities exchange on which shares of Common Stock trade
or in privately negotiated transactions. The Common Stock is currently
listed on the New York Stock Exchange. Under certain circumstances, it is
expected that a portion of the shares of Common Stock available for
issuance under the Plan will be issued pursuant to such waivers. The
difference between the price such owners pay to the Company for shares of
Common Stock acquired under the Plan, after deduction of the applicable
discount from the Market Price, and the price at which such shares are
resold, may be deemed to constitute underwriting commissions received by
such owners in connection with such transactions.
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. From time to
time, financial intermediaries may engage in positioning transactions in
order to benefit from the discount from the Market Price of Common Stock
acquired through the reinvestment of dividends under the Plan.
Except with respect to open market purchases of Common Stock made in
connection with the Plan, the Company will pay any and all brokerage
commissions and related expenses incurred in connection with purchases of
Common Stock under the Plan. Upon withdrawal by a Participant from the
Plan by the sale of Common Stock held under the Plan, the Participant will
receive the proceeds of such sale less a nominal fee per transaction paid
to the Plan Administrator (if such resale is made by the Plan
Administrator at the request of a Participant), any related brokerage
commissions and any applicable transfer taxes.
Common Stock may not be available under the Plan in all states. This
Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, any Common Stock or other securities in any state or any
other jurisdiction to any person to whom it is unlawful to make such offer
in such jurisdiction.
LEGAL OPINION
The validity of the securities offered hereby has been passed upon by
Rudnick & Wolfe, Chicago, Illinois. Attorneys of that firm who
participated in the preparation of this Prospectus own a total of
approximately 4,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company and its
subsidiaries incorporated in this Prospectus by reference to the Annual
Report on Form 10-K for the year ended December 31, 1995 have been so
incorporated in reliance on the report of Ernst & Young LLP, independent
accountants, given on the authority of said firm as experts in auditing
and accounting.
<PAGE>
GLOSSARY
"Beneficial Owners" means shareholders who beneficially own shares of
Common Stock that are registered in a name other than their own for
example, in the name of a broker, bank or other nominee).
"B&N Form" means a Broker and Nominee form.
"business day" means any day other than Saturday, Sunday or legal
holiday on which the NYSE is closed or a day on which the Plan
Administrator is authorized or obligated by law to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.01 par value, of the Company.
"Company" means Horizon Group, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Investment Date" means, with respect to Common Stock acquired
directly from the Company and relating to a dividend reinvestment, the
dividend payment date declared by the Board of Directors (unless such date
is not a business day in which case it is the first business day
immediately thereafter) or, in the case of open market purchases, within
ten business days following the dividend payment date; and with respect to
Common Stock acquired directly from the Company or on the open market and
relating to an optional cash payment, generally on or about the twentieth
day of each month.
"Market Price" means, with respect to Common Stock acquired directly
from the Company and relating to a dividend reinvestment, the average of
the high and low sales prices, computed to three decimal places, of the
Common Stock on the NYSE on the Investment Date, or if no trading occurs
in the Common Stock on the Investment Date, the average of the high and
low sales prices for the first trading day immediately preceding the
Investment Date for which trades are reported. With respect to dividend
reinvestments which will be reinvested in Common Stock purchased in the
open market, "Market Price" shall mean the weighted average of the actual
prices paid (including brokerage commissions and any other costs of
purchase), computed to three decimal places, for all of the Common Stock
purchased by the Plan Administrator with all Participants' reinvested
dividends for the related quarter. With respect to Common Stock acquired
directly from the Company and relating to optional cash payments, "Market
Price" shall mean the average of the daily high and low sales prices of
the Common Stock as reported on the NYSE during the Pricing Period. With
respect to optional cash payments which will be reinvested in Common stock
purchased in the open market, "Market Price" shall mean the weighted
average of the actual prices paid (including brokerage commissions and any
other costs of purchase), computed to three decimal places, for all of the
Common Stock purchased by the Plan Administrator with all Participants'
optional cash payments for the related month.
"NYSE" means the New York Stock Exchange.
"Participant" means a holder of Common Stock and/or Units who
participates in the Plan.
"Participating Shares" means shares of Common Stock and/or Units owned
by a Participant on the applicable record date as to which such
Participant has directed the Company to pay the related cash dividends to
the Plan Administrator.
"Plan" means the Horizon Group, Inc. Dividend Reinvestment Plan.
"Plan Administrator" means a plan administrator that administers the
Plan, keeps records, sends statements of account to each Participant and
performs other duties related to the Plan. First Chicago Trust Company of
New York currently serves as Plan Administrator of the Plan.
"Plan Shares" means all whole and fractional shares of Common Stock
credited to a Participant's Plan account.
"Pricing Period" means the period encompassing the twelve Trading Days
preceding the relevant optional cash payment Investment Date.
"Record Date" means, with respect to reinvestments of dividends, the
record date declared by the Board of Directors for such dividend; and with
respect to optional cash payments, two business days prior to the
commencement of the related Pricing Period.
"Record Owners" means shareholders who own shares of Common Stock in
their own names, including participants in a recognized securities
depository.
"Request for Waiver" means a written request from a Participant to
make optional cash payments in excess of $10,000.
"Securities Act" means the Securities Act of 1933, as amended.
"Threshold Price" means the minimum price, if any, established by the
Company that the average high and low prices of the Common Stock must
equal or exceed during each Trading Day of the Pricing Period for optional
cash payments made pursuant to Requests for Waiver.
"Trading Day" means a day on which trades in the Common Stock are
reported on the NYSE.
"Unit Owners" means persons who own units of limited partnership
interest in Horizon/Glen Outlet Centers Limited Partnership.
"Waiver Discount" means the discount from the Market Price applicable
to optional cash payments made pursuant to Requests for Waiver. Such
discount will vary between 0% and 5% of the Market Price and may vary each
month.
<PAGE>
SCHEDULE A
OPTIONAL CASH PAYMENTS
<TABLE>
<CAPTION>
THRESHOLD PRICE AND WAIVER RECORD DATE OPTIONAL CASH PAYMENT DUE PRICING PERIOD INVESTMENT DATE
DISCOUNT SET DATE DATE COMMENCEMENT DATE
<S> <C> <C> <C> <C>
September 13, 1996 September 13, 1996 September 13, 1996 September 13, 1996 October 1, 1996
September 26, 1996 October 1, 1996 October 2, 1996 October 3, 1996 October 21, 1996
October 28, 1996 October 31, 1996 November 1, 1996 November 4, 1996 November 20, 1996
November 28, 1996 December 2, 1996 December 3, 1996 December 4, 1996 December 20, 1996
December 24, 1996 December 30, 1997 December 31, 1996 January 2, 1997 January 20, 1997
January 27, 1997 January 30, 1997 January 31, 1997 February 3, 1997 February 20, 1997
February 25, 1997 February 28, 1997 March 3, 1997 March 4, 1997 March 20, 1997
March 26, 1997 April 1, 1997 April 2, 1997 April 3, 1997 April 21, 1997
April 25, 1997 April 30, 1997 May 1, 1997 May 2, 1997 May 20, 1997
May 28, 1997 June 2, 1997 June 3, 1997 June 4, 1997 June 20, 1997
June 25, 1997 June 30, 1997 July 1, 1997 July 2, 1997 July 21, 1997
July 28, 1997 July 31, 1997 August 1, 1997 August 4, 1997 August 20, 1997
August 27, 1997 September 2, 1997 September 3, 1997 September 4, 1997 September 22, 1997
September 25, 1997 September 30, 1997 October 1, 1997 October 2, 1997 October 20, 1997
October 28, 1997 October 31, 1997 November 3, 1997 November 4, 1997 November 20, 1997
November 26, 1997 December 2, 1997 December 3, 1997 December 4, 1997 December 22, 1997
</TABLE>
DIVIDEND REINVESTMENTS{1/}
<TABLE>
<CAPTION>
RECORD DATE INVESTMENT DATE
<S> <C>
September 30, 1996 October 21, 1996
December 31, 1996 January 20, 1997
March 31, 1997 April 21, 1997
June 30, 1997 July 21, 1997
September 30, 1997 October 20, 1997
December 31, 1997 January 20, 1998
</TABLE>
1/ The dates indicated are those expected to be applicable under the Plan
with respect to future dividends, if and when declared by the Board of
Directors. The actual record and payment dates will be determined by
the Board of Directors.
<PAGE>
SUMMARY DATE INFORMATION
Except with respect to the first Investment Date relating to optional
cash payments, the following is a summary of the date information relating
to the Plan.
The Investment Date is, with respect to Common Stock acquired directly
from the Company and relating to a dividend reinvestment, the dividend
payment date declared by the Board of Directors (unless such date is not a
business day in which case it is the first business day immediately
thereafter) or, in the case of open market purchases, no later than ten
business days following the dividend payment date; and with respect to
Common Stock acquired directly from the Company and relating to an
optional cash payment, generally on or about the twentieth day of each
month; or, in the case of open market purchases, no later than the last
business day of each month.
The Pricing Period for optional cash payments which are invested in
Common Stock acquired directly from the Company is the twelve Trading Days
preceding the relevant Investment Date.
The due date for optional cash payments is one business day prior to
the commencement of the relevant Pricing Period.
The Record Date for dividends is set by the Board of Directors. The
Record Date for optional cash payments is two business days prior to the
commencement of the related Pricing Period.
The Waiver Discount and the Threshold Price, if any, are set three
business days prior to the applicable Record Date.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this amendment to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Norton Shores, State of Michigan, on September 10, 1996.
HORIZON GROUP, INC.
BY:/S/ JOSEPH CATTIVERA
Joseph Cattivera
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
Jeffrey A. Kerr* Director, Chairman of the September 10, 1996
Board of Directors and President
(Principal Executive Officer)
Douglas Crocker II* Director September 10, 1996
William P. Dickey* Director September 10, 1996
Alan Glen* Director September 10, 1996
Edwin N. Homer* Director September 10, 1996
Norman Perlmutter* Director September 10, 1996
Ronald L. Piasecki* Director September 10, 1996
Martin Sherman* Director September 10, 1996
Francis T. Vincent, Jr.* Director September 10, 1996
Richard Phillips* Vice President September 10, 1996
(Principal Accounting Officer)
*By:/S/ JOSEPH CATTIVERA Individually and as September 10, 1996
Joseph Cattivera Attorney-in-Fact
