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Filed Pursuant to Rule 424(b)(3)
Registration No. 33-93540
PROSPECTUS
1,681,728 Shares
SUMMIT PROPERTIES INC.
Common Stock
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This Prospectus relates to the possible offer and sale from time to time
of (i) up to 170,609 shares of common stock, par value $.01 per share ("Common
Stock"), of Summit Properties Inc. (the "Company") by certain holders thereof,
and (ii) up to 1,511,119 shares of Common Stock by certain holders thereof, if
and to the extent that the Company elects to issue such shares to certain
holders of units of limited partnership interests ("Units") in Summit Properties
Partnership, L.P. (the "Operating Partnership"). Under the terms of the
Agreement of Limited Partnership of the Operating Partnership, holders of Units
in the Operating Partnership have the right to require the Operating Partnership
to redeem their Units for cash, subject to certain restrictions. However, at the
Company's election it may deliver an equivalent number of shares of Common Stock
to the holders of Units in satisfaction of the Operating Partnership's
obligation to redeem the Units for cash. The registration of the shares of
Common Stock offered hereby (the "Shares") does not necessarily mean that the
Shares will be issued by the Company in satisfaction of the Unit holders'
redemption rights or that, if issued by the Company, any of the Shares will be
offered or sold by the holders thereof (the "Selling Stockholders").
The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the symbol "SMT." To ensure that the Company maintains its qualification
as a real estate investment trust (a "REIT") for federal income tax purposes,
ownership of Common Stock by any person is limited to 9.8% of the Company's
capital stock, with certain exceptions. See "Restrictions on Transfers of
Capital Stock." The Company will not receive any proceeds from the sale of
Shares by the Selling Stockholders. The Company has agreed to bear certain
expenses of registration of the Shares under federal and state securities laws.
See "Risk Factors" on p. 4 of this Prospectus for certain factors
relevant to an investment in the Shares.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON
OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
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From time to time, the Selling Stockholders may offer and sell Shares
held by them directly or through agents or broker-dealers on terms to be
determined at the time of sale. To the extent required, the names of any agent
or broker-dealer and applicable commissions or discounts and any other required
information with respect to any particular offer will be set forth in an
accompanying Prospectus Supplement. See "Plan of Distribution." Each of the
Selling Stockholders reserves the right to accept or reject, in whole or in
part, any proposed purchase of Shares to be made directly or through agents.
The Selling Stockholders and any agents or broker-dealers that
participate with the Selling Stockholders in the distribution of Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any commission received by them and any
profit on the resale of the Shares may be deemed to be underwriting commissions
or discounts under the Securities Act. See "Registration Rights" for a
description of certain indemnification arrangements between the Company and the
Selling Stockholders.
The date of this Prospectus is April 13, 1998
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC" or "Commission") a registration statement on Form S-3 (the "Registration
Statement") under the Securities Act with respect to the Shares. This
Prospectus, which constitutes part of the Registration Statement, omits certain
of the information contained in the Registration Statement and the exhibits
thereto on file with the Commission pursuant to the Securities Act and the rules
and regulations of the Commission thereunder. The Registration Statement,
including exhibits thereto, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and copies may be
obtained at the prescribed rates from the Public Reference Section of the
Commission at its principal office in Washington, D.C. The Commission also
maintains a Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission. Statements contained
in this Prospectus as to the contents of any contract or other document referred
to are not necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
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 proxy statements and other information
with the Commission. Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
In addition, the Common Stock is listed on the NYSE, and such materials can be
inspected and copied at the NYSE, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1994,
filed with the Commission pursuant to the Exchange Act;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, filed with the Commission pursuant to the Exchange Act;
(c) Quarterly Report on Form 10-Q for the quarter ended June 30,
1995, filed with the Commission pursuant to the Exchange Act;
(d) Current Report on Form 8-K dated May 17, 1995, filed with the
Commission pursuant to the Exchange Act; and
(e) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission
pursuant to the Exchange Act, including all amendments and
reports updating such description.
In addition, all documents subsequently filed with the Commission
by the Company pursuant to Sections 13(a) and 13(c), Section 14 and Section
15(d) of the Exchange Act prior to the filing of a post-effective amendment
hereto that indicates that all securities offered hereunder have been sold or
that deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
in any applicable Prospectus Supplement or in any other document subsequently
filed with the Commission which also is or is deemed to be incorporated by
reference herein modifies or
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supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Copies of all documents which are incorporated by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such document) will be provided without charge to
each person, including any owner of Common Stock, to whom this Prospectus is
delivered, upon written or oral request. Requests should be directed to Summit
Properties Inc., 212 South Tryon Street, Suite 500, Charlotte, North Carolina
28281, Attention: General Counsel (telephone number (704) 334-9905).
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in this Prospectus. Unless the context otherwise
requires, all references in this Prospectus to the "Company" or "Summit" shall
also refer to Summit Properties Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership"), Summit Management Company, a Maryland
corporation (the "Management Company"), and Summit Apartment Builders, Inc., a
Florida corporation (the "Building Company").
The Company
Summit is one of the largest developers and operators of luxury garden
multifamily apartment communities in the southeastern United States. The
Company, a Maryland corporation, is a self-administered and self-managed REIT.
The Company's Common Stock is listed on the NYSE under the symbol "SMT."
The Company's business is conducted principally through the Operating
Partnership, of which the Company is the sole general partner and, as of March
31, 1998, the holder of approximately 85.4% of the outstanding partnership
interests of the Operating Partnership. The Company's third party management and
certain construction and other businesses are conducted through its
subsidiaries, the Management Company and the Building Company.
Risk Factors
An investment in Common Stock involves various risks, and prospective
investors should carefully consider the matters discussed under "Risk Factors"
prior to any investment in the Company.
Tax Status of the Company
The Company has elected to be taxed as a REIT under Sections 856 through
860 of the Internal Revenue Code of 1986, as amended (the "Code") commencing
with its taxable year ending December 31, 1994. As long as the Company qualifies
for taxation as a REIT, the Company generally will not be subject to federal
income tax on that portion of its ordinary income and capital gains that is
currently distributed to its stockholders. REITs are subject to a number of
highly technical and complex organizational and operational requirements.
Although the Company believes it has operated, and intends to continue to
operate, in such a manner as to qualify as a REIT under the Code, no assurance
can be given that the Company will at all times so qualify. If the Company fails
to qualify as a REIT in any taxable year, the Company will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at regular corporate rates. Even if the Company qualifies for taxation as
a REIT, the Company may be subject to certain state and local taxes on its
income and property and to federal income and excise taxes on its undistributed
income. See "Federal Income Tax Considerations."
Securities to be Offered
This Prospectus relates to the offer and sale from time to time of up to
1,681,728 Shares by the holders thereof. The Company is registering the Shares
pursuant to its obligations under certain registration rights agreements.
The Company will not receive any proceeds from the sale of any Shares.
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RISK FACTORS
An investment in Common Stock involves various risks. Prospective
investors should carefully consider the following information in conjunction
with the other information contained in this Prospectus and any related
Prospectus Supplement before making an investment decision regarding the Shares
offered hereby.
Real Estate Investment Risks
General Risks. Real estate investments are subject to varying degrees of
risk. The yields available from equity investments in real estate depend on the
amount of income generated and expenses incurred. If the Company's multifamily
apartment communities (the "Communities") do not generate sufficient revenues to
meet operating expenses, including debt service and capital expenditures, the
Company's cash flow and ability to pay distributions to its stockholders will be
adversely affected.
A multifamily apartment community's revenues and value may be adversely
affected by a number of factors including: the cyclical nature of the real
estate market (which is characterized by periods of significant expansion and
contraction in the number of housing starts, the amount of building permit
activity and the availability of financing); the national economic climate; the
local economic climate (which may be adversely impacted by plant closings,
industry slowdowns, military base closings and other factors); local real estate
conditions (such as oversupply of, or reduced demand for, apartment homes); the
perceptions by prospective residents of the safety, convenience and
attractiveness of the community; the ability of the owner to provide adequate
management, maintenance and insurance; and increased operating costs (including
real estate taxes and utilities). Certain significant expenditures associated
with each equity investment (such as mortgage payments, real estate taxes,
insurance and maintenance costs) are generally not reduced when circumstances
cause a reduction in income from the investment. If a property is mortgaged to
secure payment of indebtedness, and if the Company is unable to meet its
mortgage payments, a loss could be sustained as a result of foreclosure on the
property or the exercise of other remedies by the mortgagee. In addition, real
estate values and income from properties are also affected by such factors as
potential liability under applicable laws and regulations, including tax laws,
environmental laws and rent stabilization laws.
Development and Construction Risks. The Company intends to continue to
pursue the development and construction of apartment communities. Risks
associated with the Company's development and construction activities may
include: the abandonment of development opportunities explored by the Company
and related costs; construction costs of a community may exceed original
estimates, possibly making the community uneconomical; the incurrence of
additional costs or liability resulting from defects in construction material;
occupancy rates and rents at a newly completed community may not be sufficient
to make the community profitable; financing may not be available on favorable
terms for development of a community; and construction and lease-up may not be
completed on schedule, resulting in increased debt service expense and
construction costs. In addition, new development activities, regardless of
whether or not they are ultimately successful, typically require a substantial
portion of management's time and attention. Development activities are also
subject to risks relating to the inability to obtain, or delays in obtaining,
all necessary zoning, land-use, building, occupancy, and other required
governmental permits and authorizations. The occurrence of any of these events
could affect the Company's ability to make expected distributions.
Competition. There are numerous housing alternatives that compete with
the Communities in attracting residents. The Communities compete directly with
other multifamily rental apartments, condominiums and single family homes that
are available for rent or sale in its markets. In addition, other competitors
for development and acquisition opportunities may have greater resources than
the Company. The Company is also forced to compete with several other
multifamily REITs currently in its markets.
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Affordable Housing Laws. Certain of the Communities are, and will be in
the future, subject to federal, state and local statutes or other restrictions
requiring that a percentage of apartment homes be made available to residents
whose incomes do not exceed a certain percentage of the local median. These laws
and regulations, as well as any changes thereto making it more difficult to meet
such requirements, or a reduction in or elimination of certain financing
advantages available to those persons satisfying such requirements, could
adversely affect the Company's profitability and its ability to develop certain
communities in the future.
Real Estate Financing Risks
Debt Financing and Debt Maturities. The Company is subject to the risks
normally associated with debt financing, including the risk that the Company's
cash flow will be insufficient to meet required payments of principal and
interest, the risk that existing indebtedness on its Communities, which in
virtually all cases will not have been fully amortized at maturity, will not be
able to be refinanced or that the terms of such refinancing will not be as
favorable as the terms of the existing indebtedness.
The Company currently has outstanding approximately $253.7 million of
indebtedness secured by the Communities. This amount includes: two mortgage
loans of $119.7 and $29.1 million with Northwestern Mutual Life Insurance
Company, which are secured by fifteen Communities and which require $111.4
million and $24.3 million balloon payments due in 2001 and 2005, respectively; a
mortgage loan of $8.5 million with Invesco Realty Advisors which is secured by
two Communities and which requires a $7.7 million balloon payment in 2005; and
eight mortgage loans totaling $43.8 in the aggregate, secured by individual
properties which require monthly principal payments over the life of the loans
and have maturity dates ranging from 2002 to 2029. In addition, the indebtedness
includes approximately $52.6 million of tax-exempt bonds (the "Bonds") secured
by five Communities. The bonds are enhanced by letters of credit from financial
institutions (the "Credit Enhancements"), certain of which Credit Enhancements
will terminate prior to the maturity dates of the related Bonds. In the event
such Credit Enhancements are not renewed or replaced upon termination, the
related loan obligations will be accelerated.
If the Company were unable to refinance its indebtedness on acceptable
terms, or at all, the Company might be forced to dispose of one or more of the
Communities upon disadvantageous terms, which might result in losses to the
Company and might adversely affect the cash available for distributions. If
prevailing interest rates or other factors at the time of refinancing result in
higher interest rates on refinancing, the Company's interest expense would
increase, which would adversely affect the Company's funds from operations and
its ability to pay distributions to stockholders. Further, if a Community is
mortgaged to secure payment of indebtedness and the Company is unable to make
payments, the mortgagee could foreclose upon the Community, appoint a receiver
and receive an assignment of rents and leases or pursue other remedies, all with
a consequent loss of income and asset value to the Company. Foreclosures could
also create taxable income without accompanying cash proceeds, thereby hindering
the Company's ability to meet the REIT distribution requirements of the Code.
Risk of Rising Interest Rates. The Company currently has variable rate
mortgage indebtedness and anticipates that it will continue to have variable
rate indebtedness in the future. Accordingly, increases in interest rates could
increase the Company's interest expense, which would adversely affect the
Company's funds from operations and its ability to pay expected distributions to
stockholders.
Bond Compliance Requirements. Five Communities are financed with
tax-exempt Bonds (the "Bond-Financed Communities"). As such, these Communities
are subject to various restrictions, conditions and requirements imposed by the
Code relating to the exclusion from gross income for Federal income tax purposes
of interest on qualified bond obligations, including a requirement that 20% (or
25% under certain state or local requirements) of the apartment homes in each of
these five Communities be occupied by residents whose incomes do not exceed a
certain percentage of the local median at all times during a
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particular period no shorter than the period during which the Bonds relating to
each such Community are outstanding. These Federal, state and local restrictions
may have the effect of limiting the Company's income if the Company is required
to lower its rental rates or otherwise provide housing or rental subsidies to
attract "income qualified" residents. If the required number of apartment homes
are not occupied by "income qualified" residents at any one of the five
Bond-Financed Communities, the tax-exempt status of the Bonds could be
terminated and/or the obligations of the Company under the Bond documents could
be accelerated for the Community not meeting the income qualification tests. The
Company's obligations under the Bond documents could also be accelerated if the
Company is unable to renew or replace certain of the Credit Enhancements
scheduled to terminate prior to the maturity date of the related Bonds.
Possible Environmental Liabilities
Under various federal, state and local environmental laws, ordinances
and regulations, a current or previous owner or operator of real property may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at such property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and
clean-up costs incurred by such parties in connection with the contamination.
Such laws, ordinances and regulations typically impose clean-up responsibility
and liability without regard to whether the owner knew of or caused the presence
of the contaminants, and the liability under such laws has been interpreted to
be joint and several, unless the harm is divisible and there is a reasonable
basis for allocation of responsibility. The cost of investigation, remediation
or removal of such substances may be substantial, and the presence of such
substances, or the failure to remediate properly the contamination on such
property, may adversely affect the owner's ability to sell or rent such property
or to borrow using such property as collateral. Persons who arrange for the
disposal or treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of such substances at the disposal or
treatment facility, whether or not such facility is owned or operated by such
person. In addition, some environmental laws create a lien on the contaminated
site in favor of the government for damages and costs it incurs in connection
with the contamination. Finally, the owner or operator of a site may be subject
to common law claims by third parties based on damages and costs resulting from
environmental contamination emanating from a site. In connection with the
ownership, operation, management and development of the Communities and other
real properties, the Company may be potentially liable for such damages and
costs.
All of the Communities have been subjected to a Phase I or similar
environmental assessment (which involves general inspections without soil
sampling or ground water analysis and generally without radon testing). These
assessments have not revealed any environmental liability that the Company
believes would have a material adverse effect on the Company's business, assets
or results of operations, nor has the Company been notified by any governmental
authority, and is not otherwise aware, of any noncompliance, liability or claim
relating to hazardous or toxic substances or petroleum products in connection
with any of the Communities that it believes would have a material adverse
effect on the Company's business, assets or results of operations. The Company
is also not aware of any environmental liability relating to those properties
which it has, or its predecessors have, owned or leased or otherwise managed,
developed or operated that it believes would have a material adverse effect on
the Company's business, assets or results of operations.
It is possible that given the limited scope of the Company's
assessments, such assessments do not reveal all environmental liabilities or
that there are material environmental liabilities of which the Company is
unaware. Moreover, no assurances can be given that (i) future laws, ordinances
or regulations will not impose any material environmental liability on the
Company; or (ii) the current environmental condition of the Communities will not
be affected by residents, by the condition of land or operations in the vicinity
of the properties (such as the presence of underground storage tanks), or by
third parties unrelated to the Company.
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THE COMPANY
General
Summit is one of the largest developers and operators of luxury garden
multifamily apartment communities in the southeastern United States. The
Company, a Maryland corporation, is a self-administered and self-managed REIT.
The Company's Common Stock is listed on the NYSE under the symbol "SMT."
The Company's business is conducted principally through the Operating
Partnership, of which the Company is the sole general partner and, as of March
31, 1998, the holder of approximately 85.4% of the outstanding partnership
interests. Each Unit, other than those held by the Company, may be submitted for
redemption by the holder thereof, subject to certain holding periods and other
conditions, and the Company may, at its option, elect to satisfy such redemption
request by redeeming each Unit for one share (subject to certain adjustments) of
Common Stock. With each such exchange, the number of Units owned by the Company
and, therefore, the Company's percentage interest in the Operating Partnership,
will increase.
The Company's third party management and certain construction and other
businesses are conducted through its subsidiaries, the Management Company and
the Building Company.
The Company was organized as a real estate investment trust under the
laws of the State of Maryland on December 1, 1993 and later changed to corporate
form on January 13, 1994. On February 15, 1994, the Company completed its
initial public offering of Common Stock. The principal executive office of the
Company is located at 212 South Tryon Street, Suite 500, Charlotte, North
Carolina 28281; telephone number (704) 334-9905.
The Operating Partnership
The Company's business is conducted principally through the Operating
Partnership. As the sole general partner of the Operating Partnership, the
Company has the exclusive power to manage and conduct the business of the
Operating Partnership, subject to the consent of holders of Units in connection
with a sale, transfer or other disposition of all or substantially all of the
assets of the Operating Partnership, or any other transaction which would result
in the recognition of a significant taxable gain to the holders of Units. The
Company's general and limited partnership interests in the Operating Partnership
entitle it to share in 85.4% of the profits and losses of, and the cash
distributions from, the Operating Partnership.
The Operating Partnership was organized as a limited partnership under
the laws of the State of Delaware on January 14, 1994. The Operating Partnership
will continue until December 31, 2093, or until sooner dissolved upon (i)
withdrawal of Summit Properties Inc. as general partner of the Operating
Partnership (the "General Partner") (unless the limited partners elect to
continue the Operating Partnership), (ii) an election to dissolve the Operating
Partnership made on or before December 31, 2053 by the General Partner with the
consent of the limited partners (including Summit Properties Inc.) holding 85%
of the outstanding Units, subject to certain restrictions in the event of a
change-in-control of the Company, (iii) an election to dissolve the Operating
Partnership made on or after January 1, 2054 by the General Partner in its sole
and absolute discretion, subject to certain restrictions in the event of a
change-in-control of the Company, (iv) entry of a decree of judicial
dissolution, (v) the sale of all or substantially all of the assets of the
Operating Partnership, or (vi) a final and non-appealable judgment ruling the
General Partner bankrupt or insolvent (unless the limited partners elect to
continue the Operating Partnership prior to the entry of such order or
judgment).
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DESCRIPTION OF SECURITIES TO BE REGISTERED
The description of the Company's Common Stock set forth below is a
summary of the material provisions thereof, does not purport to be complete and
is qualified in its entirety by reference to the Company's Articles of
Incorporation and Bylaws, as in effect as of the date hereof.
General
Under the Articles of Incorporation, the Company has authority to issue
100 million shares of Common Stock, par value $.01 per share. Under Maryland
law, stockholders generally are not responsible for the corporation's debts or
obligations. At March 31, 1998, the Company had outstanding 24,233,806 shares of
Common Stock.
Terms
Subject to the preferential rights of any other class or series of stock
and to the provisions of the Company's Articles of Incorporation regarding
Excess Stock, holders of shares of Common Stock will be entitled to receive
dividends on shares of Common Stock if, as and when authorized and declared by
the Board of Directors of the Company out of assets legally available therefor
and to share ratably in the assets of the Company legally available for
distribution to its stockholders in the event of its liquidation, dissolution or
winding-up after payment of, or adequate provision for, all known debts and
liabilities of the Company.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, each outstanding share of Common Stock entitles the
holder to one vote on all matters submitted to a vote of stockholders, including
the election of Directors and, except as otherwise required by law or except as
provided with respect to any other class or series of stock, the holders of
Common Stock will possess the exclusive voting power. There is no cumulative
voting in the election of Directors, which means that the holders of a majority
of the outstanding shares of Common Stock can elect all of the Directors then
standing for election, and the holders of the remaining shares of Common Stock
will not be able to elect any Directors.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, all shares of Common Stock will have equal dividend,
distribution, liquidation and other rights, and will have no preference,
appraisal or exchange rights.
Pursuant to Maryland law, a corporation generally cannot dissolve, amend
its Articles of Incorporation, merge, sell all or substantially all of its
assets, engage in a share exchange or engage in similar transactions outside the
ordinary course of business unless approved by the affirmative vote of
stockholders holding at least two-thirds of the shares entitled to vote on the
matter or such lesser percentage (but not less than a majority of all of the
votes to be cast on the matter) as may be set forth in the corporation's
Articles of Incorporation. The Company's Articles of Incorporation provide that
such transactions, with the exception of an amendment of the Articles of
Incorporation affecting restrictions on transfer, can be effected by a vote of a
majority of the shares entitled to vote on such matters.
Provisions of the Company's Articles of Incorporation and Bylaws
described below under "Restrictions on Transfers of Capital Stock," together
with other provisions of the Company's Articles of Incorporation and Maryland
law may discourage a change in control and limit the opportunity for
stockholders to receive a premium for their Common Stock.
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Restrictions on Ownership
For the Company to qualify as a REIT under the Code, not more than 50%
in value of its outstanding capital stock may be owned, directly or indirectly,
by five or fewer individuals (defined in the Code to include certain entities)
during the last half of a taxable year. To assist the Company in meeting this
requirement, the Company may take certain actions to limit the beneficial
ownership, directly or indirectly, by a single person of the Company's
outstanding equity securities. See "Restrictions on Transfers of Capital Stock."
Transfer Agent
The transfer agent and registrar for the Common Stock is First Union
National Bank of North Carolina.
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, among other things,
not more than 50% in value of its outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals (defined in the Code to
include certain entities) during the last half of a taxable year (other than the
first year) (the "Five or Fewer Test"), and such capital stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (other than the first year) or during a proportionate part of
a shorter taxable year. In order to maintain the Company's qualification as a
REIT, the Articles of Incorporation, subject to certain exceptions, provide that
no holder who is an individual may own, or be deemed to own by virtue of the
attribution provisions of the Code, more than 9.8% (the "Ownership Limit") of
the Company's capital stock. Pursuant to the Code, certain types of entities,
such as pension trusts qualifying under Section 401(a) of the Code, United
States investment companies registered under the Investment Company Act of 1940
and corporations will be looked-through for purposes of the Five or Fewer Test.
The Company's Articles of Incorporation limit such entities to holding no more
than 15% of the aggregate value of the Company's shares of capital stock (the
"Look-Through Ownership Limit"). Any transfer of capital stock or any security
convertible into capital stock that would create a direct or indirect ownership
of capital stock in excess of the Ownership Limit or the Look-Through Ownership
Limit or that would result in the disqualification of the Company as a REIT,
including any transfer that results in the capital stock being owned by fewer
than 100 persons or results in the Company being "closely held" within the
meaning of Section 856(h) of the Code, shall be null and void, and the intended
transferee will acquire no rights to the capital stock. The Board of Directors
in its sole discretion may waive the Ownership Limit or the Look-Through
Ownership Limit if evidence satisfactory to the Board of Directors and the
Company's tax counsel is presented that the changes in ownership will not
jeopardize the Company's status as a REIT. The foregoing restrictions on
transferability and ownership will not apply if the Board of Directors
determines that it is no longer in the best interests of the Company to attempt
to qualify, or to continue to qualify, as a REIT.
Capital stock owned, or deemed to be owned, or transferred to a
stockholder in excess of the Ownership Limit or the Look-Through Ownership Limit
will automatically be converted into shares of Excess Stock that will be
transferred, by operation of law, to the Company as trustee of a trust for the
exclusive benefit of the transferees to whom such capital stock may be
ultimately transferred without violating the Ownership Limit or the Look-Through
Ownership Limit. While held in trust, the Excess Stock will not be considered
for purposes of any stockholder vote or the determination of a quorum for such
vote and, except upon liquidation, will not be entitled to participate in
distributions. Any distribution paid on Excess Stock, prior to the discovery by
the Company that capital stock has been transferred in violation of the
Ownership Limit or the Look-Through Ownership Limit, shall be repaid to the
Company upon demand. Shares of Excess Stock are not treasury stock, but rather
constitute a separate class of issued and outstanding stock of the Company. The
original transferee-stockholder may, at any time the shares of
9
<PAGE> 11
Excess Stock are held by the Company in trust, transfer the interest in the
trust representing the Excess Stock to any individual whose ownership of the
capital stock converted into such Excess Stock would be permitted under the
Ownership Limit or the Look-Through Ownership Limit, at a price not in excess of
(i) the price paid by the original transferee-stockholder for the capital stock
that was converted into Excess Stock; or (ii) if the original
transferee-stockholder did not give value for such shares (e.g. the capital
stock was received through a gift, devise or other transaction), the average
closing price for the class of shares from which such shares of Excess Stock
were converted for the 10 days immediately preceding such sale or gift.
Immediately upon the transfer to the permitted transferee, the Excess Stock will
automatically be converted into capital stock of the class from which it was
converted. If the foregoing transfer restrictions are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any Excess Stock may be deemed, at the option of the
Company, to have acted as an agent on behalf of the Company in acquiring the
Excess Stock and to hold the Excess Stock on behalf of the Company.
In addition, the Company will have the right, for a period of 90 days
during the time any shares of Excess Stock are held by the Company in trust, to
purchase all or any portion of the Excess Stock from the original
transferee-stockholder for the lesser of (i) the price initially paid for the
capital stock by the original transferee-stockholder, or if the original
transferee-stockholder did not give value for such shares (e.g., the shares were
received through a gift, devise or other transaction), the average closing price
for the class of capital stock from which such shares of Excess Stock were
converted for the 10 days immediately preceding such sale or gift; and (ii) the
average closing price for the class of such shares of Excess Stock were
converted for the 10 trading days immediately preceding the date the Company
elects to purchase such shares. The 90-day period begins on the date of the
violative transfer if the original transferee-stockholder gives notice to the
Company of the transfer or, if no such notice is given, the date the Board of
Directors determines that a violative transfer has been made.
These restrictions will not preclude settlement of transactions through
the New York Stock Exchange.
Each stockholder shall, upon demand, be required to disclose to the
Company in writing any information with respect to the direct, indirect and
constructive ownership of the Company's capital stock as the Board of Directors
deems necessary to comply with the provisions of the Code applicable to REITs,
to comply with the requirements of any taxing authority or governmental agency
or to determine any such compliance.
The Ownership Limit and the Look-Through Ownership Limit may have the
effect of precluding acquisition of control of the Company unless the Board of
Directors determines that maintenance of REIT status is no longer in the best
interests of the Company.
REGISTRATION RIGHTS
The registration of the Shares pursuant to the Registration Statement of
which this Prospectus is a part will discharge certain of the Company's
obligations under the terms of (i) a Registration Rights Agreement dated as of
May 16, 1995 (the "Crosland Registration Rights Agreement"); (ii) a Registration
Rights Agreement dated as of February 8, 1994 (the "Continuing Investor
Registration Rights Agreement"); and (iii) a Registration Rights Agreement dated
as of October 12, 1994 (the "PK Partners Registration Rights Agreement," and
together with the Crosland Registration Rights Agreement and the Continuing
Investor Registration Rights Agreement, the "Registration Rights Agreements").
Pursuant to the Registration Rights Agreements, the Company has agreed
to pay all expenses of effecting the registration of the Shares (other than
brokerage and underwriting commissions and taxes of any kind and other than for
any legal, accounting and other expenses incurred by the Selling Stockholders).
The Company also has agreed to indemnify each Selling Stockholder under the
Registration Rights Agreements
10
<PAGE> 12
and its officers, directors and other affiliated persons and any person who
controls any Selling Stockholder against certain losses, claims, damages and
expenses arising under the securities laws in connection with the Registration
Statement or this Prospectus, subject to certain limitations. In addition, each
Selling Stockholder under the Registration Rights Agreements severally agreed to
indemnify the Company and its respective directors, officers and any person who
controls the Company against all losses, claims, damages and expenses arising
under the securities laws insofar as such loss, claim, damage or expense relates
to written information furnished to the Company by such Selling Stockholder for
use in the Registration Statement or Prospectus or an amendment or supplement
thereto or the failure by such Selling Stockholder to deliver or cause to be
delivered this Prospectus or any amendment or supplement thereto to any
purchaser of shares covered by the Registration Statement from such Selling
Stockholder through no fault of the Company.
FEDERAL INCOME TAX CONSIDERATIONS
The Company believes it has operated, and the Company intends to
continue to operate, in such a manner as to qualify as a REIT under the Code,
but no assurance can be given that it will at all times so qualify.
The provisions of the Code pertaining to REITs are highly technical and
complex. The following is a brief and general summary of certain provisions that
currently govern the federal income tax treatment of the Company and its
stockholders. For the particular provisions that govern the federal income tax
treatment of the Company and its stockholders, reference is made to Sections 856
through 860 of the Code and the regulations thereunder. The following summary is
qualified in its entirety by such reference.
Under the Code, if certain requirements are met in a taxable year, a
REIT generally will not be subject to federal income tax with respect to income
that it distributes to its stockholders. If the Company fails to qualify during
any taxable year as a REIT, unless certain relief provisions are available, it
will be subject to tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates, which could have a material adverse
effect upon its stockholders.
In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its stockholders out of current or accumulated earnings
and profits will be taxed to stockholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain income to the stockholders. To
the extent that distributions exceed current or accumulated earnings and
profits, they will constitute a return of capital, rather than a dividend or
capital gain income, and will reduce the basis for the stockholder's capital
stock with respect to the distribution paid or, to the extent that they exceed
such basis, will be taxed in the same manner as gain from the sale of such
capital stock.
Investors are urged to consult their own tax advisors with respect to
the appropriateness of an investment in the Common Stock offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax consequences
of an investment in the Company, including the possibility of United States
income tax withholding on Company distributions.
SELLING STOCKHOLDERS
As used herein, "Selling Stockholders" are those persons listed below
who currently hold certain of the Shares and those persons listed below who may,
at the Company's option, receive Shares upon the exercise of their rights to
require the redemption of their Units.
11
<PAGE> 13
The following table provides the names of and the number of shares of
Common Stock and Units owned by each Selling Stockholder, to the best knowledge
of the Company as of March 31, 1998. The Shares offered by this Prospectus may
be offered from time to time by the Selling Stockholders. Since the Company is
not required to issue Shares upon the redemption of Units and the Selling
Stockholders may sell all, some or none of the Shares, no estimate can be made
of the aggregate number of Shares that will be offered hereby or the number or
percentage of shares of Common Stock that each Selling Stockholder will own upon
completion of the offering to which this Prospectus relates.
<TABLE>
<CAPTION>
Shares of Units Owned as of
Common Stock Shares March 31, 1998 that may Percent of Percent of
Owned as of Offered by be Redeemed for Shares at All Common All Shares/
Name March 31, 1998 This Prospectus the Company's Option (1) Stock (2) Units (3)
---- -------------- ---------------- ------------------------ --------- ---------
<S> <C> <C> <C> <C> <C>
AMMP, Inc. 9,077 9,077 0 * *
John & Patricia Ackerman 0 0 1,601 * *
Hazel Sterrett Allen 1,421 1,421 0 * *
William A. Allen 1,421 1,421 0 * *
Sam J. Apichai 1,601 1,601 0 * *
Gerson Asrael 4,772 4,772 0 * *
Patrick Bailey, Jr 0 0 2,413 * *
Kenneth M. Barnes 0 0 1,421 * *
James H. Barnhardt -
3/31/87 Trust 0 0 7,614 * *
Sadler H. Barnhardt 0 0 4,772 * *
Thomas M. Barnhardt 0 0 4,772 * *
James H. & Sybil
Blumenberg 0 0 1,601 * *
Charles C. Bollinger 0 0 8,524 * *
Douglas R. Boone 0 0 3,016 * *
David R. Boozer 0 0 1,421 * *
Timothy A. Braswell 0 0 14,206 * *
Eugene E. Brucker 0 0 1,601 * *
Andrew P. Collins 0 0 4,772 * *
James P. Crews 4,772 4,772 0 * *
Crosland-Erwin &
Associates No. VI 0 0 51,101 * *
The Crosland Group Inc. 0 0 387,646 1.57 1.37
Crosland Investors, Inc. 0 0 2,381 * *
John Crosland, Jr 0 0 106,877 * *
John Crosland, Jr
& FUNB co-trustees
of the John Crosland,
Sr. Trust 10/25/74 0 0 11,566 * *
Betty S. Dedmon 4,772 4,772 0 * *
Carl T. Dedmon 0 0 2,842 * *
Robert W. Donaldson, Jr 0 0 3,016 * *
James H. Donnewald 0 0 3,202 * *
Raymond Donnewald -
Estate 0 0 3,202 * *
James S. Forrester 0 0 2,842 * *
Foundation For The
Carolinas 2,000 2,000 0 * *
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
Shares of Units Owned as of
Common Stock Shares March 31, 1998 that may Percent of Percent of
Owned as of Offered by be Redeemed for Shares at All Common All Shares/
Name March 31, 1998 This Prospectus the Company's Option (1) Stock (2) Units (3)
---- -------------- ---------------- ------------------------ --------- ---------
<S> <C> <C> <C> <C> <C>
B. D. Framer, III 0 0 3,833 * *
William A. & Cornelia D
Frank Living Trust 0 0 3,202 * *
Harvey & Cynthia P
Frohlichstein 0 0 3,202 * *
Robert H. Gaither 0 0 4,772 * *
John C. Golding 0 0 4,772 * *
Rebecca H. Gordon 0 0 4,772 * *
John T. Gray 89,347 17,529 0(4) * *
Charles H. Griffin 0 0 2,842 * *
W. Lamar Harrell, Jr 2,842 2,842 0 * *
David E. Harrold 0 0 2,842 * *
William M. Herndon 0 0 4,772 * *
Richard D. Hill 0 0 7,613 * *
K. Reid Hotaling 0 0 52,709 * *
Frances J. Intagliata 0 0 1,601 * *
JMJ Associates 0 0 307,311 1.25 1.08
Donald H. Jones 0 0 4,772 * *
Raymond V. Jones 68,887 13,387 0(4) 1.12 1.21
Ruthanne (Wise)
Jones 0 0 1,601 * *
Duncan A. Killen 0 0 3,202 * *
Richard E. Killough 0 0 4,772 * *
Jack Krause 0 0 3,202 * *
Keith H. Kuhlman 26,674 5,233 0(4) * *
Jean H. Lamb 0 0 5,683 * *
Paul R. Leonard, Jr 0 0 4,436 * *
Roger M. Lewis 0 0 2,516 * *
Virginia K. Lewis 1,150 1,150 0 * *
Terry G. Link 4,772 4,772 0 * *
Justin F. Little 0 0 35,134 * *
William F. Mabry 2,842 2,842 0 * *
Lewis L. Mack 2,842 2,842 0 * *
Michael G. Malone 22,428 3,914 0(4) * *
Thomas Mannausa 0 0 352 * *
Daniel P. McCabe 0 0 376 * *
Susan H. McDowell 0 0 2,842 * *
William B. McGuire, Jr 90,780 16,203 0(4) 2.50 2.61
Fredrick C. Meekins 4,772 4,772 0 * *
Mark L. Messerly 0 0 2,841 * *
Roy H. Michaux, Jr 0 0 1,207 * *
Jack R. Miller 0 0 2,842 * *
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
Shares of Units Owned as of
Common Stock Shares March 31, 1998 that may Percent of Percent of
Owned as of Offered by be Redeemed for Shares at All Common All Shares/
Name March 31, 1998 This Prospectus the Company's Option (1) Stock (2) Units (3)
---- -------------- ---------------- ------------------------ --------- ---------
<S> <C> <C> <C> <C> <C>
John C. Moore 38,281 7,463 0(4) * *
Carl R. Morrison 2,842 2,842 0 * *
Kenneth M. Murphy 0 0 3,202 * *
Pat Neal 352 352 0 * *
J. Frank Newton 0 0 3,016 * *
William F. Paulsen 136,732 26,252 0(4) 2.40 2.58
P K Partners L.P. 0 0 38,500 * *
L. Gordon Pfefferkorn 0 0 2,842 * *
P. V. Phillips 4,772 4,772 0 * *
Eugene V. Rankin 0 0 3,202 * *
Leroy Robinson 0 0 2,842 * *
Sam J. Rosenbloom 0 0 3,202 * *
Raymond Edgar
Rowland, Jr 0 0 8,005 * *
Robert W. Sauer -
Grantor Trust 0 0 1,601 * *
Albert F. Sloan 0 0 2,842 * *
Estate of W.H.L. Smith 3,202 3,202 0 * *
Brant R. Snavely, Jr 0 0 2,842 * *
Earl W. Spangler 7,613 7,613 0 * *
Eloise Y. Spangler 0 0 4,772 * *
Emil A. Stange 0 0 3,202 * *
John B. Summers 0 0 3,202 * *
Roberta K. Symonds 0 0 3,202 * *
Nick Tacony 0 0 3,202 * *
Allen H. Tate, Jr 4,772 4,772 0 * *
Charles E. Teal 0 0 10,013 * *
Edward D. Trevillian 0 0 817 * *
David F. Tufaro 40,870 8,019 0(4) * *
Westbury Park
Associates 0 0 91,162 * *
Westbury Place
Associates 0 0 108,336 * *
Westbury Woods
Associates 0 0 86,125 * *
Owen H. Whitfield 0 0 4,772 * *
Gerald S. Workman 0 0 3,016 * *
Bernard A. Zimmer 0 0 2,386 * *
Franz J. Zimmer 0 0 2,386 * *
</TABLE>
- ----------------------
* Less than 1%.
(1) All Units listed in this column can be redeemed on a one-for-one basis for
shares of the Company's Common Stock under certain conditions. Upon such
redemption, all such shares of Common Stock may be offered for sale
hereby.
14
<PAGE> 16
(2) Assumes that all Units held by the Selling Stockholder are redeemed for
shares of Common Stock. The total number of shares of Common Stock
outstanding used in calculating this percentage assumes that none of the
Units held by other persons are redeemed for shares of Common Stock.
(3) Assumes that all Units held by the Selling Stockholder are redeemed for
shares of Common Stock. The total number of shares of Common Stock
outstanding used in calculating this percentage includes the total number
of shares of Common Stock outstanding and the total number of Units
outstanding held by persons other than the Company.
(4) Does not include Units owned as of March 31, 1998 by John T. Gray (695
Units), Raymond V. Jones (274,526 Units), Keith H. Kuhlman (224,387
Units), Michael G. Malone (2,445 Units), William B. McGuire, Jr. (620,313
Units), John C. Moore (6,203 Units), William F. Paulsen (596,045 Units)
and David F. Tufaro (206,388 Units). This Registration Statement does not
register any shares that may be issued in the event that such Units are
submitted for redemption in the future.
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the
Shares offered hereby.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time of the
Shares by the holders thereof. The Company has registered the Shares for sale
pursuant to its obligations under the Registration Rights Agreements, but
registration of such shares does not necessarily mean that any of the Shares
will be offered or sold by the Selling Stockholders. The Company will not
receive any proceeds from the offering of Shares by the Selling Stockholders.
The distribution of Shares may be effected from time to time in one or
more underwritten transactions at a fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Any such underwritten offering
may be on a "best efforts" or a "firm commitment" basis. In connection with any
such underwritten offering, underwriters or agents may receive compensation in
the form of discounts, concessions or commissions from the Selling Stockholders
or from purchasers of the Shares for whom they may act as agents. Underwriters
may sell Shares to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents.
The Selling Stockholders and any underwriters, dealers or agents that
participate in the distribution of Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any profit on the sale of Shares
by them and any discounts, commissions or concessions received by any such
underwriters, dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.
At a time a particular offer of Shares is made by a Selling
Stockholder, a Prospectus Supplement, if required, will be distributed that will
set forth the names of any underwriters, dealers or agents and any discounts,
commissions and other terms constituting compensation from the Selling
Stockholders and any other required information.
The sale of Shares by the Selling Stockholders may also be effected
from time to time by selling Shares directly to purchasers or to or through
broker-dealers. In connection with any such sale, any such broker-dealer may act
as agent for the Selling Stockholders or may purchase from the Selling
Stockholders all or a portion of the Shares as principal, and may be made
pursuant to any of the methods described below. Such sales may be made on the
NYSE or other exchanges on which the shares of Common Stock are then traded, in
the over-the-counter market, in negotiated transactions or otherwise at prices
and at terms then prevailing or at prices related to the then-current market
prices or at prices otherwise negotiated.
The Shares may also be sold in one or more of the following
transactions: (i) block transactions (which may involve crosses) in which a
broker-dealer may sell all or a portion of such shares as agent but may position
15
<PAGE> 17
and resell all or a portion of the block as principal to facilitate the
transaction; (ii) purchases by any such broker-dealer as principal and resale by
such broker-dealer for its own account pursuant to a Prospectus Supplement;
(iii) a special offering, an exchange distribution or a secondary distribution
in accordance with applicable NYSE or other stock exchange rules; (iv) ordinary
brokerage transactions and transactions in which any such broker-dealer solicits
purchasers; (v) sales "at the market" to or through a market maker or into an
existing trading market, on an exchange or otherwise, for such shares; and (vi)
sales in other ways not involving market makers or established trading markets,
including direct sales to purchasers. In effecting sales, broker-dealers engaged
by the Selling Stockholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or other compensation from the Selling
Stockholders in amounts to be negotiated immediately prior to the sale that will
not exceed those customary in the types of transactions involved. Broker-dealers
may also receive compensation from purchasers of the Shares which is not
expected to exceed that customary in the types of transactions involved.
In order to comply with the securities laws of certain states, if
applicable, the Shares may be sold only through registered or licensed brokers
or dealers.
Until the distribution of the Shares is completed, rules of the
Commission may limit the ability of any underwriters and selling group members
to bid for and purchase the Common Stock. As an exception to these rules,
underwriters are permitted to engage in certain transactions that stabilize the
price of the Common Stock. Such transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the Common Stock.
If any underwriters create a short position in the Shares in connection
with the offering, i.e., if they sell more Shares than are set forth on the
cover page of this Prospectus, the underwriters may reduce that short position
by purchasing shares of Common Stock in the open market.
The lead underwriters may also impose a penalty bid on certain other
underwriters participating in the offering and selling group members. This means
that if the lead underwriters purchase shares of Common Stock in the open market
to reduce the underwriters short position or to stabilize the price of the
Common Stock, they may reclaim the amount of any selling concession from the
underwriters and selling group members who sold those Shares as part of the
offering.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resale of the security before the distribution is completed.
The Company does not make any representation or prediction as to the
direction or magnitude of any effect that the transactions described above might
have on the price of the Common Stock. In addition, the Company does not make
any representation that underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
All expenses incident to the offering and sale of the Shares (other
than brokerage and underwriting commissions and taxes of any kind and any legal,
accounting and other expenses incurred by the Selling Stockholders) shall be
paid by the Company. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. See "Registration Rights."
16
<PAGE> 18
EXPERTS
The financial statements and related financial statement schedule
incorporated in this registration statement by reference from the Company's
Annual Report on Form 10-K and the Annual Report on Form 11-K of the Company's
1996 Non-Qualified Employee Stock Purchase Plan have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report which are
incorporated herein by reference and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
LEGAL MATTERS
Certain legal matters, including, the legality of the Common Stock
offered hereby will be passed upon for the Company by Goodwin, Procter & Hoar
LLP, Boston, Massachusetts.
17
<PAGE> 19
================================================================================
No dealer, salesperson or other individual has been authorized to give
any information or make any representations not contained in this Prospectus. If
given or made, such information or representation must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, the Common Stock in any jurisdiction where, or to any person to whom, it
is unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has not been any change in the facts set forth in this
Prospectus or in the affairs of the Company since the date hereof.
---------------------------
SUMMARY TABLE OF CONTENTS
Page
----
Available Information............................ 1
Incorporation of Certain Documents by
Reference...................................... 1
Prospectus Summary............................... 3
Risk Factors..................................... 4
The Company...................................... 7
Description of Securities to be Registered....... 8
Restrictions on Transfers of Capital Stock....... 9
Registration Rights.............................. 10
Federal Income Tax Considerations................ 11
Selling Stockholders............................. 11
Use of Proceeds.................................. 15
Plan of Distribution............................. 15
Experts.......................................... 17
Legal Matters.................................... 17
---------------------------
================================================================================
================================================================================
1,681,728 Shares of Common Stock
SUMMIT PROPERTIES INC.
Common Stock
---------------------------
PROSPECTUS
---------------------------
April 13, 1998
================================================================================
