<PAGE> 1
As filed with the Securities and Exchange Commission on December 16, 1997.
REGISTRATION STATEMENT NO. 333-41511
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
BAY APARTMENT COMMUNITIES, INC.
(Exact name of Registrant as specified in its charter)
Maryland 77-0404318
(State of Incorporation) (I.R.S. Employer Identification Number)
4340 STEVENS CREEK BOULEVARD, SUITE 275
SAN JOSE, CALIFORNIA 95129
(408) 983-1500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------------
GILBERT M. MEYER
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
BAY APARTMENT COMMUNITIES, INC.
4340 STEVENS CREEK BOULEVARD, SUITE 275, SAN JOSE, CALIFORNIA 95129
(408) 983-1500
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------------------
WITH COPIES TO:
DAVID W. WATSON, ESQ.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE, BOSTON, MASSACHUSETTS 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective. If the only
securities being registered on this form are being offered pursuant to dividend
or interest reinvestment plans, please check the following box./ /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering./ /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective registration statement
for the same offering./ /
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box./ /
-----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Title of Securities Being Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Registered Registered (1) Price Per Unit (2) Offering Price (3) Registration Fee (4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities $600,000,000 N.A. $600,000,000 $25,444
Preferred Stock
Common Stock
===================================================================================================================================
</TABLE>
(1) The amount to be registered consists of up to $600,000,000 of an
indeterminate amount of Debt Securities, Preferred Stock and/or Common
Stock. Pursuant to Rule 429 under the Securities Act of 1933, as amended
(the "Securities Act"), this amount includes $273,600,433 of securities
being carried forward from the earlier Registration Statement on Form
S-3 (No. 333-39037), which have not been previously sold. There is also
being registered hereunder such currently indeterminate number of shares
of Common Stock as may be issued upon conversion of the Debt Securities
or the Preferred Stock registered hereby and shares of Preferred Stock
as may be issued upon conversion of the Debt Securities registered
hereby.
(2) The proposed maximum offering price per unit has been omitted pursuant
to Securities Act Release No. 6964.
(3) Estimated solely for purposes of computing the registration fee. No
separate consideration will be received for securities issued upon
conversion of Debt Securities or Preferred Stock.
(4) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act. Pursuant to Rule 429 under the Securities Act,
the amount of $273,600,433 of securities covered by the earlier
Registration Statement on Form S-3 (No. 333-39037) is being carried
forward and the corresponding registration fee of $82,910 was
previously paid at the time of filing. In addition, the aggregate
amount of $70,845 was previously paid at the time of the original filing
of this Registration Statement on Form S-3 (File No. 333-41511) and the
Pre-Effective Amendment No. 1 thereto, which amount represents the
applicable registration fee with respect to the registration of
$240,149,567 of securities.
The Prospectus contained in this Registration Statement relates to and
constitutes a Post-Effective Amendment to the Registration Statement on Form S-3
(No. 333-39037) of the Registrant, and it is intended to be the combined
prospectus referred to in Rule 429 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
<PAGE> 2
PROSPECTUS
[LOGO]
$600,000,000
BAY APARTMENT COMMUNITIES, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
-------------------
Bay Apartment Communities, Inc. (the "Company") may offer from time to
time in one or more series (i) unsecured debt securities ("Debt Securities"),
(ii) shares of preferred stock, par value $.01 per share ("Preferred Stock"),
and (iii) shares of common stock, par value $.01 per share ("Common Stock"),
with an aggregate public offering price of up to $600,000,000 in amounts, at
prices and on terms to be determined at the time of offering. The Debt
Securities, Preferred Stock and Common Stock (collectively, the "Securities")
may be offered separately or together, in separate series, in amounts, at prices
and on terms to be set forth in one or more supplements to this Prospectus (each
a "Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement and will
include, where applicable: (i) in the case of Debt Securities, the specific
title, aggregate principal amount, ranking, currency, form (which may be
registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Company or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion into
Common Stock or Preferred Stock, covenants and any initial public offering
price, (ii) in the case of Preferred Stock, the specific designation and stated
value per share, any dividend, liquidation, redemption, conversion, voting and
other rights, and any initial public offering price, and (iii) in the case of
Common Stock, any initial public offering price. In addition, such specific
terms may include limitations on direct or beneficial ownership and restrictions
on transfer of the Securities, in each case as may be consistent with the
Company's Articles of Incorporation, as amended (the "Articles of
Incorporation"), or otherwise appropriate to preserve the status of the Company
as a real estate investment trust ("REIT") for federal income tax purposes. See
"Restrictions on Transfers of Capital Stock."
The applicable Prospectus Supplement will also contain information,
where appropriate, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered by the Company directly to one or more
purchasers, through agents designated from time to time by the Company or to or
through underwriters or dealers. If any agents or underwriters are involved in
the sale of any of the Securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them, will be
set forth, or will be calculable from the information set forth, in an
accompanying Prospectus Supplement. See "Plan of Distribution." No Securities
may be sold without delivery of a Prospectus Supplement describing the method
and terms of the offering of such Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is December 16, 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities. 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 Northwestern Atrium
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. In addition, the
Company is required to file electronic versions of these documents with the
Commission through the Commission's Electronic Data Gathering, Analysis and
Retrieval (EDGAR) system, and such electronic versions are available to the
public at the Commission's World-Wide Web Site, http://www.sec.gov. 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 via EDGAR or 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 Company's Common Stock and 8.50% Series C
Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C
Preferred Stock"), are listed on the New York Stock Exchange (the "NYSE") and
the Pacific Exchange (the "PCX"), and such reports and information can be
inspected at the NYSE, 20 Broad Street, New York, New York 10005, and at the
PCX, 301 Pine Street, San Francisco, California 94104.
In accordance with Section 2-210 of the Maryland General Corporation
Law, as amended (the "MGCL"), the Board of Directors has authorized the issuance
of some or all of the shares of any or all of its classes or series of capital
stock without certificates. In addition, the Company has the authority to
designate and issue more than one class or series of capital stock having
various preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption. See "Description of Preferred Stock" and "Description of Common
Stock." The Company's Articles of Incorporation impose limitations on the
ownership and transfer of the Company's capital stock. See "Restrictions on
Transfers of Capital Stock." The Company will furnish a full statement of the
relative rights and preferences of each class or series of capital stock of the
Company which has been so designated and any restrictions on the ownership or
transfer of capital stock of the Company to any stockholder upon request and
without charge. Written requests for such copies should be directed to: Bay
Apartment Communities, Inc., 4340 Stevens Creek Boulevard, Suite 275, San Jose,
California 95129, Attention: Chief Financial Officer.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated by reference in this
Prospectus: (i) Annual Report on Form 10-K for the fiscal year ended December
31, 1996, (ii) Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, (iii) Current Report on
Form 8-K dated January 21, 1997, (iv) Current Report on Form 8-K dated April 18,
1997, as amended by Current Reports on Form 8-K dated April 18, 1997, as filed
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on April 21, 1997 and June 16, 1997, respectively, (v) Current Report on Form
8-K dated July 25, 1997, (vi) Current Report on Form 8-K dated August 14, 1997,
(vii) Current Report on Form 8-K dated September 4, 1997, (viii) Current Report
on Form 8-K dated September 10, 1997, (ix) Current Report on Form 8-K dated
September 23, 1997, (x) Current Report on Form 8-K dated October 31, 1997, and
(xi) the description of the Company's Common Stock, Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock contained in the Company's
Registration Statement on Form 8-A dated June 18, 1997.
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 all Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. The Company will provide, without charge, to
each person, including any beneficial owner, to whom a copy of this Prospectus
is delivered, at the request of such person, a copy of any or all of the
documents incorporated herein by reference (other than exhibits thereto, unless
such exhibits are specifically incorporated by reference into such documents).
Written requests for such copies should be directed to: Bay Apartment
Communities, Inc., 4340 Stevens Creek Boulevard, Suite 275, San Jose, California
95129, Attention: Chief Financial Officer.
Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in an applicable Prospectus Supplement) or in any
subsequently filed document that is incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Prospectus or any Prospectus
Supplement, except as so modified or superseded.
THE COMPANY
The Company has engaged in apartment community acquisition, development,
construction, reconstruction, financing, marketing, leasing and management since
1978 and is one of the most experienced developers and operators of upscale
apartment communities in Northern California and, in particular, the San
Francisco Bay Area. As a self-administered and self-managed REIT, the Company
owns and manages apartment communities (the "Communities") located in Northern
California (principally in the San Francisco Bay Area), Southern California
(i.e., Los Angeles, Orange and San Diego Counties) and the State of Washington
(i.e., King County).
The Company is a fully-integrated real estate organization with in-house
development, construction, acquisition, reconstruction, financing, marketing,
leasing and management expertise. With its experience and in-house capabilities,
the Company believes it is well-positioned to continue to take advantage of
opportunities to develop and acquire upscale apartment homes in its target
markets.
The Company elected to be taxed as a REIT for federal income tax
purposes for the year ended December 31, 1994 and has not revoked such election.
The Company was incorporated under the laws of the State of California in 1978
and reincorporated under the laws of the State of Maryland, pursuant to a
reincorporation merger, in July 1995. Its executive offices are located at 4340
Stevens Creek Boulevard, Suite 275, San Jose, California 95129, and its
telephone number is (408) 983-1500.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of Securities for general
corporate purposes, which may include the acquisition or development of
additional properties, the repayment of outstanding debt or the improvement of
certain properties already in the Company's portfolio.
3
<PAGE> 5
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's consolidated ratios of
earnings to combined fixed charges and preferred stock dividends for the periods
shown:
<TABLE>
<CAPTION>
January 1- Year Ended Year Ended March 17- January 1- Year Ended Year Ended
September 30, December 31, December 31, December 31, March 16, December 31, December 31,
1997 1996 1995 1994 1994(1) 1993(1) 1992(1)
---- ---- ---- ---- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Ratio 1.88x 1.61x 1.26x 1.76x .71x .96x .71x
</TABLE>
- ------------------------------
(1) Ratios for the period January 1 - March 16, 1994 and the years ended
1993 and 1992 reflect periods prior to the recapitalization and initial
public offering of the Company on March 17, 1994. The earnings for these
periods were inadequate to cover fixed charges as follows:
Period January 1 - March 16, 1994 $ 716,000
Year ended December 31, 1993 447,000
Year ended December 31, 1992 3,916,000
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of pre-tax income from
continuing operations plus fixed charges. Fixed charges consist of interest
expense, capitalized interest and the amortization of debt issuance costs. The
Company issued 2,308,800 shares of Series A Preferred Stock, par value $.01 per
share (the "Series A Preferred Stock"), in October 1995, 405,022 shares of
Series B Preferred Stock, par value $.01 per share (the "Series B Preferred
Stock"), in May 1996 and 2,300,000 shares of Series C Preferred Stock in June
1997.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be direct unsecured obligations of the Company
and may be either senior Debt Securities ("Senior Securities") or subordinated
Debt Securities ("Subordinated Securities"). The Debt Securities will be issued
under one or more indentures, each dated as of a date prior to the issuance of
the Debt Securities to which it relates. Senior Securities and Subordinated
Securities may be issued pursuant to separate indentures (respectively, a
"Senior Indenture" and a "Subordinated Indenture"), in each case between the
Company and a trustee (a "Trustee"), which may be the same Trustee, and in the
form that has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part, subject to such amendments or supplements as may be
adopted from time to time. The Senior Indenture and the Subordinated Indenture,
as amended or supplemented from time to time, are sometimes hereinafter referred
to collectively as the "Indentures." The Indentures will be subject to and
governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made under this heading relating to the Debt Securities and the
Indentures are summaries of the anticipated provisions thereof, do not purport
to be complete and are qualified in their entirety by reference to the
Indentures and such Debt Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
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<PAGE> 6
TERMS
Unless otherwise indicated in the applicable Prospectus Supplement, the
indebtedness represented by the Senior Securities will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The indebtedness
represented by Subordinated Securities will be subordinated in right of payment
to the prior payment in full of the Senior Debt of the Company as described
under "--Subordination." The particular terms of the Debt Securities offered by
a Prospectus Supplement will be described in the applicable Prospectus
Supplement, along with any applicable modifications of or additions to the
general terms of the Debt Securities as described herein and in the applicable
Indenture and any applicable federal income tax considerations. Accordingly, for
a description of the terms of any series of Debt Securities, reference must be
made to both the Prospectus Supplement relating thereto and the description of
the Debt Securities set forth in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities
may be issued without limit as to aggregate principal amount, in one or more
series, in each case as established from time to time by the Company or as set
forth in the applicable Indenture or in one or more indentures supplemental to
such Indenture. All Debt Securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of the holders of such series, for issuance of additional Debt
Securities of such series.
Each Indenture will provide that the Company may, but need not,
designate more than one Trustee thereunder, each with respect to one or more
series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities and a successor
Trustee may be appointed to act with respect to such series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a Trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any other
Trustee, and, except as otherwise indicated herein, any action described herein
to be taken by each Trustee may be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Debt Securities for which it
is Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions
of the Indentures and the Debt Securities. The Prospectus Supplement relating to
the series of Debt Securities being offered will contain further terms of such
Debt Securities, including the following specific terms:
(1) The title of such Debt Securities and whether such Debt
Securities are Senior Securities or Subordinated
Securities;
(2) The aggregate principal amount of such Debt Securities and
any limit on such aggregate principal amount;
(3) The price (expressed as a percentage of the principal
amount thereof) at which such Debt Securities will be
issued and, if other than the principal amount thereof,
the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof, or
(if applicable) the portion of the principal amount of
such Debt Securities that is convertible into Common Stock
or Preferred Stock, or the method by which any such
portion shall be determined;
(4) If convertible, the terms on which such Debt Securities
are convertible, including the initial conversion price or
rate and the conversion period and any applicable
limitations on the ownership or transferability of the
Common Stock or Preferred Stock receivable on conversion;
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(5) The date or dates, or the method for determining such date
or dates, on which the principal of such Debt Securities
will be payable;
(6) The rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at
which such Debt Securities will bear interest, if any;
(7) The date or dates, or the method for determining such date
or dates, from which any such interest will accrue, the
dates on which any such interest will be payable, the
record dates for such interest payment dates, or the
method by which such dates shall be determined, the
persons to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(8) The place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such
Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or
registration of transfer or exchange and where notices or
demands to or upon the Company in respect of such Debt
Securities and the applicable Indenture may be served;
(9) The period or periods, if any, within which, the price or
prices at which, and the other terms and conditions upon
which, such Debt Securities may, pursuant to any optional
or mandatory redemption provisions, be redeemed, as a
whole or in part, at the option of the Company;
(10) The obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund
or analogous provision or at the option of a holder
thereof, and the period or periods within which, the price
or prices at which and the other terms and conditions upon
which such Debt Securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such
obligation;
(11) If other than U.S. dollars, the currency or currencies in
which such Debt Securities are denominated and payable,
which may be a foreign currency or units of two or more
foreign currencies or a composite currency or currencies,
and the terms and conditions relating thereto;
(12) Whether the principal of (and premium or Make-Whole
Amount, if any) or interest on the Debt Securities of the
series are to be payable, at the election of the Company
or a holder thereof, in a currency or currencies, currency
unit or units or composite currency or currencies other
than that in which such Debt Securities are denominated or
stated to be payable, the period or periods within which,
and the terms and conditions upon which, such election may
be made, and the time and manner of, and identity of the
exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies,
currency unit or units or composite currency or currencies
in which such Debt Securities are denominated or stated to
be payable and the currency or currencies, currency unit
or units or composite currency or currencies in which such
Debt Securities are to be so payable;
(13) Provisions, if any, granting special rights to the holders
of Debt Securities of the series upon the occurrence of
such events as may be specified;
(14) Whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any) or interest, if any,
on such Debt Securities may be determined with reference
to an index, formula or other method (which index, formula
or method may, but need not be,
6
<PAGE> 8
based on the yield on or trading price of other
securities, or on a currency, currencies, currency unit or
units, or composite currency or currencies) and the manner
in which such amounts shall be determined;
(15) Whether such Debt Securities will be issued in
certificated or book-entry form and, if so, the identity
of the depository for such Debt Securities;
(16) Whether such Debt Securities will be in registered or
bearer form and, if in registered form, the denominations
thereof if other than $1,000 and any integral multiple
thereof and, if in bearer form, the denominations thereof
and terms and conditions relating thereto, any
restrictions applicable to the offer, sale or delivery of
Bearer Securities and the terms upon which Bearer
Securities of the series may be exchanged for Registered
Securities of the series and vice versa (if permitted by
applicable laws and regulations), whether any Debt
Securities of the series are to be issuable initially in
temporary global form and whether any Debt Securities of
the series are to be issuable in permanent global form
with or without coupons and, if so, whether beneficial
owners of interests in any such permanent Global Security
(as defined under "--Book-Entry System and Global
Securities") may exchange such interests for Debt
Securities of such series and of like tenor of any
authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in
the manner provided in the Indenture, and, if Registered
Securities of the series are to be issuable as a Global
Security, the identity of the depository for such series;
(17) The applicability, if any, of the defeasance and covenant
defeasance provisions described herein or set forth in the
applicable Indenture, or any modification thereof;
(18) Whether and under what circumstances the Company will pay
any additional amounts on such Debt Securities in respect
of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such
Debt Securities in lieu of making such payment;
(19) Any deletions from, modifications of or additions to the
events of default or covenants of the Company, to the
extent different from those described herein or set forth
in the applicable Indenture with respect to such Debt
Securities, and any change in the right of any Trustee or
any of the holders to declare the principal amount of any
of such Debt Securities due and payable; and
(20) Any other terms of such Debt Securities not inconsistent
with the provisions of the applicable Indenture.
If so indicated in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon declaration
of acceleration of the maturity thereof ("Original Issue Discount Securities").
In such cases, any special U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt
Securities will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company or in the event of a change of control. Restrictions on ownership
and transfers of the Common Stock and Preferred Stock are designed to preserve
its status as a REIT and, therefore, may act to prevent or hinder a change of
control. See "Restrictions on Transfers of Capital Stock." Reference is made to
the applicable Prospectus Supplement for information with respect to any
deletions from, modifications of, or additions to, the events of
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<PAGE> 9
default or covenants of the Company that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest
on any series of Debt Securities will be payable at the corporate trust office
of the applicable Trustee, the address of which will be stated in the applicable
Prospectus Supplement; provided that, at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the applicable register for such Debt Securities or by
wire transfer of funds to such person at an account maintained within the United
States.
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security in registered form ("Defaulted
Interest") will forthwith cease to be payable to the holder on the applicable
Regular Record Date and may either be paid to the Person in whose name such Debt
Security is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee, in which case notice thereof shall be given to the holder of such
Debt Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described in
the applicable Indenture.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the corporate trust office of the applicable Trustee or at the office of any
transfer agent designated by the Company for such purpose. In addition, subject
to certain limitations imposed upon Debt Securities issued in book-entry form,
the Debt Securities of any series may be surrendered for conversion or
registration of transfer or exchange thereof at the corporate trust office of
the applicable Trustee or at the office of any transfer agent designated by the
Company for such purpose. Every Debt Security surrendered for conversion,
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer, and the person requesting such action must
provide evidence of title and identity satisfactory to the applicable Trustee or
transfer agent. No service charge will be made for any registration of transfer
or exchange of any Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. If the applicable Prospectus Supplement refers to any transfer agent
(in addition to the applicable Trustee) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each place of payment for such series.
The Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.
Neither the Company nor any Trustee shall be required (i) to issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before the selection of any
Debt Securities for redemption and ending at the close of business on the day of
mailing of a notice of redemption; (ii) to register the transfer of or exchange
any Debt Security, or portion thereof, so selected for redemption, in whole or
in part, except the unredeemed portion of any Debt Security being redeemed in
part; or (iii) to issue, register the transfer of or exchange any Debt Security
that has been surrendered for repayment at the option of the holder, except the
portion, if any, of such Debt Security not to be so repaid.
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MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indentures will provide that Company may, without the consent of the
holders of any outstanding Debt Securities, consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with or into, any
other entity provided that (a) either the Company shall be the continuing
entity, or the successor entity (if other than the Company) formed by or
resulting from any such consolidation or merger or which shall have received the
transfer of such assets is organized under the laws of any domestic jurisdiction
and assumes the Company's obligations to pay principal of (and premium or
Make-Whole Amount, if any) and interest on all of the Debt Securities and the
due and punctual performance and observance of all of the covenants and
conditions contained in each Indenture; (b) immediately after giving effect to
such transaction and treating any indebtedness that becomes an obligation of the
Company or any subsidiary as a result thereof as having been incurred by the
Company or such subsidiary at the time of such transaction, no Event of Default
under the Indentures, and no event which, after notice or the lapse of time, or
both, would become such an Event of Default, shall have occurred and be
continuing; and (c) an officers' certificate and legal opinion covering such
conditions shall be delivered to each Trustee.
CERTAIN COVENANTS
The applicable Prospectus Supplement will describe any material
covenants in respect of a series of Debt Securities that are not described in
this Prospectus. Unless otherwise indicated in the applicable Prospectus
Supplement, Senior Debt Securities will include the following covenants of the
Company:
Existence. Except as permitted under "--Merger, Consolidation or Sale of
Assets," the Indentures will require the Company to do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (by articles of incorporation, by-laws and statute) and
franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if its Board of Directors determines that the
preservation thereof is no longer desirable in the conduct of its business.
Maintenance of Properties. The Indentures will require the Company to
cause all of its material properties used or useful in the conduct of its
business or the business of any subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that the
Company and its subsidiaries shall not be prevented from selling or otherwise
disposing of their properties for value in the ordinary course of business.
Insurance. The Indentures will require the Company to cause each of its
and its subsidiaries' insurable properties to be insured against loss or damage
in an amount deemed reasonable by the Board of Directors with insurers of
recognized responsibility and, if described in the applicable Prospectus
Supplement, having a specified rating from a recognized insurance rating
service.
Payment of Taxes and Other Claims. The Indentures will require the
Company to pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges
levied or imposed upon it or any subsidiary or upon the income, profits or
property of the Company or any subsidiary and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any subsidiary unless such lien would not have a
material adverse effect upon such property; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim (i) whose amount, applicability or
validity is being contested in good faith or (ii) for which the Company has set
apart and maintains an adequate reserve.
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Provision of Financial Information. Whether or not the Company is
subject to Section 13 or 15(d) of the Exchange Act, the Indentures will require
the Company, within 15 days of each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject, (i) to transmit by
mail to all holders of Debt Securities, as their names and addresses appear in
the applicable register for such Debt Securities, without cost to such holders,
copies of the annual reports, quarterly reports and other documents that the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Company were subject to such sections,
(ii) to file with the applicable Trustee copies of the annual reports, quarterly
reports and other documents that the Company would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Company were subject to such Sections and (iii) to supply, promptly upon written
request and payment of the reasonable cost of duplication and delivery, copies
of such documents to any prospective holder.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise described in the applicable Prospectus Supplement, each
Indenture will provide that the following events are "Events of Default" with
respect to any series of Debt Securities issued thereunder: (a) default in the
payment of any installment of interest on any Debt Security of such series when
such interest becomes due and payable that continues for a period of 30 days;
(b) default in the payment of principal of (or premium or Make-Whole Amount, if
any, on) any Debt Security of such series when due and payable; (c) default in
making any sinking fund payment as required for any Debt Security of such
series; (d) default in the performance or breach of any other covenant or
warranty of the Company contained in the Indenture (other than a covenant added
to the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in the applicable Indenture; (e) a default under any bond,
debenture, note or other evidence of indebtedness for money borrowed by the
Company or any of its subsidiaries in an aggregate principal amount in excess of
$25,000,000 or under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any of its subsidiaries in an aggregate
principal amount in excess of $25,000,000, whether such indebtedness exists on
the date of such Indenture or shall thereafter be created, which default shall
have resulted in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable or
such obligations being accelerated, without such indebtedness having been
discharge or such acceleration having been rescinded or annulled within a
specified period of time; (f) certain events of bankruptcy, insolvency or
reorganization, or court appointment of a receiver, liquidator or trustee of the
Company or any Significant Subsidiary of the Company; and (g) any other event of
default provided with respect to a particular series of Debt Securities. The
term "Significant Subsidiary" has the meaning ascribed to such term in
Regulation S-X promulgated under the Securities Act.
If an Event of Default under any Indenture with respect to any series of
Debt Securities at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of that series will have the right to
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of, and premium or
Make-Whole Amount, if any, on, all the Debt Securities of that series to be due
and payable immediately by written notice thereof to the Company (and to the
applicable Trustee if given by the holders). However, at any time after such a
declaration of acceleration with respect to Debt Securities of such series (or
of all Debt Securities then outstanding under any Indenture, as the case may be)
has been made, but before a judgment or decree for payment of the money due has
been obtained by the applicable Trustee, the holders of not less than a majority
in principal amount of outstanding Debt Securities of such series (or of all
Debt Securities then outstanding under the applicable Indenture, as the case may
be) may rescind and annul such declaration and its consequences if (a) the
Company shall have deposited with the applicable Trustee all required payments
of the principal of (and premium or Make-Whole Amount, if any) and interest on
the Debt Securities of such series (or of all Debt
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Securities then outstanding under the applicable Indenture, as the case may be),
plus certain fees, expenses, disbursements and advances of the applicable
Trustee and (b) all Events of Default, other than the non-payment of accelerated
principal (or specified portion thereof and the premium or Make-Whole Amount, if
any), with respect to Debt Securities of such series (or of all Debt Securities
then outstanding under the applicable Indenture, as the case may be) have been
cured or waived as provided in such Indenture. The Indentures will also provide
that the holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) may waive any
past default with respect to such series and its consequences, except a default
(x) in the payment of the principal of (or premium or Make-Whole Amount, if any)
or interest on any Debt Security of such series or (y) in respect of a covenant
or provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the holder of each outstanding Debt Security
affected thereby.
The Indentures will require each Trustee to give notice to the holders
of Debt Securities within 90 days of a default under the applicable Indenture
unless such default shall have been cured or waived; provided, however, that
such Trustee may withhold notice to the holders of any series of Debt Securities
of any default with respect to such series (except a default in the payment of
the principal of (or premium or Make-Whole Amount, if any) or interest on any
Debt Security of such series or in the payment of any sinking fund installment
in respect of any Debt Security of such series) if specified responsible
officers of such Trustee consider such withholding to be in the interest of such
holders.
The Indentures will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the case of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of Debt
Securities from instituting suit for the enforcement of payment of the principal
of (and premium or Make-Whole Amount, if any) and interest on such Debt
Securities at the respective due dates or redemption dates thereof.
The Indentures will provide that, subject to provisions in each
Indenture relating to its duties in case of default, a Trustee will be under no
obligation to exercise any of its rights or powers under an Indenture at the
request or direction of any holders of any series of Debt Securities then
outstanding under such Indenture, unless such holders shall have offered to the
Trustee thereunder reasonable security or indemnity. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under an Indenture, as the
case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee, or
of exercising any trust or power conferred upon such Trustee. However, a Trustee
may refuse to follow any direction which is in conflict with any law or the
applicable Indenture, which may involve such Trustee in personal liability or
which may be unduly prejudicial to the holders of Debt Securities of such series
not joining therein.
Within 120 days after the close of each fiscal year, the Company will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers of the Company, stating whether or not such officer has
knowledge of any default under the applicable Indenture and, if so, specifying
each such default and the nature and status thereof.
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities issued under such Indenture
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Debt Security affected thereby, (a) change the
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stated maturity of the principal of, or any installment of interest (or premium
or Make-Whole Amount, if any) on, any such Debt Security; (b) reduce the
principal amount of, or the rate or amount of interest on, or any premium
payable on redemption of, any such Debt Security, or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon declaration of acceleration of the maturity thereof or would be provable in
bankruptcy, or adversely affect any right of repayment of the holder of any such
Debt Security; (c) change the place of payment, or the coin or currency, for
payment of principal of, premium or Make-Whole Amount, if any, or interest on
any such Debt Security; (d) impair the right to institute suit for the
enforcement of any payment on or with respect to any such Debt Security; (e)
reduce the above-stated percentage of outstanding Debt Securities of any series
necessary to modify or amend the applicable Indenture, to waive compliance with
certain provisions thereof or certain defaults and consequences thereunder or to
reduce the quorum or voting requirements set forth in the applicable Indenture;
or (f) modify any of the foregoing provisions or any of the provisions relating
to the waiver of certain past defaults or certain covenants, except to increase
the required percentage to effect such action or to provide that certain other
provisions may not be modified or waived without the consent of the holder of
such Debt Security.
The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive covenants of the applicable
Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Company and the respective Trustee thereunder without the consent of
any holder of Debt Securities for any of the following purposes: (i) to evidence
the succession of another person to the Company as obligor under such Indenture;
(ii) to add to the covenants of the Company for the benefit of the holders of
all or any series of Debt Securities or to surrender any right or power
conferred upon the Company in such Indenture; (iii) to add events of default for
the benefit of the holders of all or any series of Debt Securities; (iv) to add
or change any provisions of an Indenture to facilitate the issuance of, or to
liberalize certain terms of, Debt Securities in bearer form, or to permit or
facilitate the issuance of Debt Securities in uncertificated form, provided that
such action shall not adversely affect the interests of the holders of the Debt
Securities of any series in any material respect; (v) to change or eliminate any
provisions of an Indenture, provided that any such change or elimination shall
become effective only when there are no Debt Securities outstanding of any
series created prior thereto which are entitled to the benefit of such
provision; (vi) to secure the Debt Securities; (vii) to establish the form or
terms of Debt Securities of any series, including the provisions and procedures,
if applicable, for the conversion of such Debt Securities into Common Stock or
Preferred Stock; (viii) to provide for the acceptance of appointment by a
successor Trustee or facilitate the administration of the trusts under an
Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or
inconsistency in an Indenture, provided that such action shall not adversely
affect the interests of holders of Debt Securities of any series issued under
such Indenture; or (x) to supplement any of the provisions of an Indenture to
the extent necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, provided that such action shall not adversely
affect the interests of the holders of the outstanding Debt Securities of any
series in any material respect.
The Indentures will provide that in determining whether the holders of
the requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above), (iii) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed
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security pursuant such Indenture, and (iv) Debt Securities owned by the Company
or any other obligor upon the Debt Securities or any affiliate of the Company or
of such other obligor shall be disregarded.
The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be called
at any time by the applicable Trustee, and also, upon request, by the Company or
the holders of at least 25% in principal amount of the outstanding Debt
Securities of such series, in any such case upon notice given as provided in
such Indenture. Except for any consent that must be given by the holder of each
Debt Security affected by certain modifications and amendments of an Indenture,
any resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present may be adopted by the affirmative vote of the holders
of a majority in principal amount of the outstanding Debt Securities of that
series; provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the holders of a
specified percentage, which is less than a majority, in principal amount of the
outstanding Debt Securities of a series may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote of
the holders of such specified percentage in principal amount of the outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance with
an Indenture will be binding on all holders of Debt Securities of that series.
The quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the outstanding Debt Securities of a series; provided, however, that if any
action is to be taken at such meeting with respect to a consent or waiver which
may be given by the holders of not less than a specified percentage in principal
amount of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, the Indentures will provide
that if any action is to be taken at a meeting of holders of Debt Securities of
any series with respect to any request, demand, authorization, direction,
notice, consent, waiver and other action that such Indenture expressly provides
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding Debt Securities affected thereby, or of the
holders of such series and one or more additional series: (i) there shall be no
minimum quorum requirement for such meeting, and (ii) the principal amount of
the outstanding Debt Securities of such series that vote in favor of such
request, demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made,
given or taken under such Indenture.
SUBORDINATION
Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Securities will be subject to the following subordination
provisions.
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Debt (as defined below), but the obligation of the Company to make
payments of the principal of and interest on such Subordinated Securities will
not otherwise be affected. No payment of principal or interest will be permitted
to be made on Subordinated Securities at any time if a default on Senior Debt
exists that permits the holders of such Senior Debt to accelerate its maturity
and the default is the subject of judicial proceedings or the Company receives
notice of the default. After all Senior Debt is paid in full and until the
Subordinated Securities are paid in full, holders will be subrogated to the
rights of holders of Senior Debt to the extent that distributions otherwise
payable to holders have been applied to the payment of Senior Debt. The
Subordinated Indenture will not restrict the amount of Senior Indebtedness or
other indebtedness of the Company and its subsidiaries. As a result of these
subordination provisions, in the event of a distribution of assets upon
insolvency, holders of Subordinated Indebtedness may recover less, ratably, than
general creditors of the Company.
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Senior Debt will be defined in the applicable Indenture as the principal
of and interest on, or substantially similar payments to be made by the Company
in respect of, the following, whether outstanding at the date of execution of
the applicable Indenture or thereafter incurred, created or assumed: (a)
indebtedness of the Company for money borrowed or represented by purchase-money
obligations, (b) indebtedness of the Company evidenced by notes, debentures, or
bonds, or other securities issued under the provisions of an indenture, fiscal
agency agreement or other agreement, (c) obligations of the Company as lessee
under leases of property either made as part of any sale and leaseback
transaction to which the Company is a party or otherwise, (d) indebtedness of
partnerships and joint ventures which is included in the consolidated financial
statements of the Company, (e) indebtedness, obligations and liabilities of
others in respect of which the Company is liable contingently or otherwise to
pay or advance money or property or as guarantor, endorser or otherwise or which
the Company has agreed to purchase or otherwise acquire, and (f) any binding
commitment of the Company to fund any real estate investment or to fund any
investment in any entity making such real estate investment, in each case other
than (1) any such indebtedness, obligation or liability referred to in clauses
(a) through (f) above as to which, in the instrument creating or evidencing the
same pursuant to which the same is outstanding, it is provided that such
indebtedness, obligation or liability is not superior in right of payment to the
Subordinated Securities or ranks pari passu with the Subordinated Securities,
(2) any such indebtedness, obligation or liability which is subordinated to
indebtedness of the Company to substantially the same extent as or to a greater
extent than the Subordinated Securities are subordinated, and (3) the
Subordinated Securities. There will not be any restrictions in any Indenture
relating to Subordinated Securities upon the creation of additional Senior Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the Company's most recent
fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company will be permitted, at its option, to discharge certain obligations to
holders of any series of Debt Securities issued under any Indenture that have
not already been delivered to the applicable Trustee for cancellation and that
either have become due and payable or will become due and payable within one
year (or scheduled for redemption within one year) by irrevocably depositing
with the applicable Trustee, in trust, funds in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium or Make-Whole Amount,
if any) and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the stated maturity or redemption date, as the
case may be.
The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (a) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay additional amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities, to hold moneys for payment in trust and, with
respect to Subordinated Debt Securities which are convertible or exchangeable,
the right to convert or exchange) ("defeasance") or (b) to be released from its
obligations with respect to such Debt Securities under the applicable Indenture
(including the restrictions described under "--Certain Covenants") or, if
provided in the applicable Prospectus Supplement, its obligations with respect
to any other covenant, and any omission to comply with such obligations shall
not constitute an Event of Default with respect to such Debt Securities
("covenant defeasance"), in either case upon the irrevocable deposit by the
Company with the applicable Trustee, in trust, of an amount, in such currency or
currencies, currency unit or units or composite currency or currencies in which
such Debt Securities are payable at stated maturity, or Government Obligations
(as defined below), or both, applicable to such Debt Securities, which through
the
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scheduled payment of principal and interest in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium or
Make-Whole Amount, if any) and interest on such Debt Securities, and any
mandatory sinking fund or analogous payments thereon, on the scheduled due dates
therefor.
Such a trust will only be permitted to be established if, among other
things, the Company has delivered to the applicable Trustee an opinion of
counsel (as specified in the applicable Indenture) to the effect that the
holders of such Debt Securities will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of counsel,
in the case of defeasance, will be required to refer to and be based upon a
ruling received from or published by the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
Indenture. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal (and premium or Make-Whole Amount, if any) and interest.
"Government Obligations" means securities that are (i) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
Unless otherwise indicated in the applicable Prospectus Supplement, if
after the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security will be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium or Make-Whole Amount, if any) and interest on such Debt Security as
they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency, currency unit or
composite currency in which such Debt Security becomes payable as a result of
such election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency, currency
unit or composite currency both by the government of the country which issued
such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established. Unless otherwise indicated in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event
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of Default described in clause (d) under "--Events of Default, Notice and
Waiver" with respect to specified sections of an Indenture (which sections would
no longer be applicable to such Debt Securities) or described in clause (g)
under "--Events of Default, Notice and Waiver" with respect to any other
covenant as to which there has been covenant defeasance, the amount in such
currency, currency unit or composite currency in which such Debt Securities are
payable, and Government Obligations on deposit with the applicable Trustee, will
be sufficient to pay amounts due on such Debt Securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of Default.
However, the Company would remain liable to make payment of such amounts due at
the time of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance, including
any modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into shares of Common Stock or
Preferred Stock, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders or the Company, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of such
Debt Securities and any restrictions on conversion, including restrictions
directed at maintaining the Company's REIT status.
PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest
on any series of Debt Securities will be payable at the corporate trust office
of the Trustee, the address of which will be stated in the applicable Prospectus
Supplement; provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of the person entitled thereto as it
appears in the applicable register for such Debt Securities or by wire transfer
of funds to such person at an account maintained within the United States.
All moneys paid by the Company to a paying agent or a Trustee for the
payment of the principal of or any premium or interest on any Debt Security
which remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to the Company, and the
holder of such Debt Security thereafter may look only to the Company for payment
thereof.
BOOK-ENTRY SYSTEM AND GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the Prospectus Supplement relating to such series. Global Securities, if any,
issued in the United States are expected to be deposited with The Depository
Trust Company ("DTC"), as Depository. Global Securities may be issued in either
fully registered or bearer form and in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any nominee of such
Depositor to a successor Depository or any nominee of such successor.
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The specific terms of the depository arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company expects that unless otherwise indicated in
the applicable Prospectus Supplement, the following provisions will apply to
depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered directly by the
Company. Ownership of beneficial interests in such Global Security will be
limited to Participants or persons that may hold interests through Participants.
The Company expects that, pursuant to procedures established by DTC,
ownership of beneficial interests in any Global Security with respect to which
DTC is the Depository will be shown on, and the transfer of that ownership will
be effected only through, records maintained by DTC or its nominee (with respect
to beneficial interests of Participants) and records of Participants (with
respect to beneficial interests of persons who hold through Participants).
Neither the Company nor the Trustee will have any responsibility or liability
for any aspect of the records of DTC or for maintaining, supervising or
reviewing any records of DTC or any of its Participants relating to beneficial
ownership interests in the Debt Securities. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and laws may impair the ability to own, pledge or
transfer beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as described below or in the applicable Prospectus
Supplement, owners of beneficial interest in a Global Security will not be
entitled to have any of the individual Debt Securities represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Debt Securities in definitive form and
will not be considered the owners or holders thereof under the applicable
Indenture. Beneficial owners of Debt Securities evidenced by a Global Security
will not be considered the owners or holders thereof under the applicable
Indenture for any purpose, including with respect to the giving of any
direction, instructions or approvals to the Trustee thereunder. Accordingly,
each person owning a beneficial interest in a Global Security with respect to
which DTC is the Depository must rely on the procedures of DTC and, if such
person is not a Participant, on the procedures of the Participant through which
such person owns its interests, to exercise any rights of a holder under the
applicable Indenture. The Company understands that, under existing industry
practice, if it requests any action of holders or if an owner of a beneficial
interest in a Global Security desires to give or take any action which a holder
is entitled to give or take under the applicable Indenture, DTC would authorize
the Participants holding the relevant beneficial interest to give or take such
action, and such Participants would authorize beneficial owners through such
Participants to give or take such actions or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal of (and applicable premium or Make-Whole Amount,
if any) and interest on individual Debt Securities represented by a Global
Security registered in the name of a Depository or its nominee will be made to
or at the direction of the Depository or its nominee, as the case may be, as the
registered owner of the Global Security under the applicable Indenture. Under
the terms of the applicable Indenture, the Company and the Trustee may treat the
persons in whose name Debt Securities, including a Global Security, are
registered as the owners thereof for the purpose of receiving such payments.
Consequently, neither the Company nor the Trustee has or will have any
responsibility or liability for the payment of such amounts to beneficial owners
of Debt Securities (including principal, premium or Make-Whole Amount, if any,
and interest). The Company believes, however, that it is currently the policy of
DTC to immediately credit the accounts of relevant Participants with such
payments, in amounts proportionate to their
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respective holdings of beneficial interests in the relevant Global Security as
shown on the records of DTC or its nominee. The Company also expects that
payments by Participants to owners of beneficial interests in such Global
Security held through such Participants will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in street name, and will
be the responsibility of such Participants. Redemption notices with respect to
any Debt Securities represented by a Global Security will be sent to the
Depository or its nominee. If less than all of the Debt Securities of any series
are to be redeemed, the Company expects the Depository to determine the amount
of the interest of each Participant in such Debt Securities to be redeemed to be
determined by lot. None of the Company, the Trustee, any Paying Agent or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Security for such Debt
Securities or for maintaining any records with respect thereto.
Neither the Company nor the Trustee will be liable for any delay by the
holders of a Global Security or the Depository in identifying the beneficial
owners of Debt Securities and the Company and the Trustee may conclusively rely
on, and will be protected in relying on, instructions from the holder of a
Global Security or the Depository for all purposes. The rules applicable to DTC
and its Participants are on file with the Commission.
If a Depository for any Debt Securities is at any time unwilling, unable
or ineligible to continue as depository and a successor depository is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities in exchange for the Global Security representing such Debt
Securities. In addition, the Company may at any time and in its sole discretion,
subject to any limitations described in the Prospectus Supplement relating to
such Debt Securities, determine not to have any of such Debt Securities
represented by one or more Global Securities and in such event will issue
individual Debt Securities in exchange for the Global Security or Securities
representing such Debt Securities. Individual Debt Securities so issued will be
issued in denominations of $1,000 and integral multiples thereof.
The Debt Securities of a series may also be issued in whole or in part
in the form of one or more bearer global securities (a "Bearer Global Security")
that will be deposited with a depository, or with a nominee for such depository,
identified in the applicable Prospectus Supplement. Any such Bearer Global
Securities may be issued in temporary or permanent form. The specific terms and
procedures, including the specific terms of the depository arrangement, with
respect to any portion of a series of Debt Securities to be represented by one
or more Bearer Global Securities will be described in the applicable Prospectus
Supplement.
DESCRIPTION OF PREFERRED STOCK
The description of the Company's Preferred Stock set forth below does
not purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation and Bylaws, as amended (the "Bylaws").
GENERAL
Under the Company's Articles of Incorporation, the Company has authority
to issue twenty-five (25) million shares of Preferred Stock, of which 2,308,800
shares have been designated Series A Preferred Stock and are currently
outstanding, 405,022 shares have been designated Series B Preferred Stock and
are currently outstanding and 2,300,000 shares have been designated Series C
Preferred Stock and are currently outstanding. The Series C Preferred Stock is
listed on the NYSE and the PCX under the symbol "BYA pc." Shares of Preferred
Stock may be issued from time to time, in one or more series, as authorized by
the Board of Directors of the Company. Prior to the issuance of shares of each
series, the Board of Directors is required by the MGCL, and the Company's
Articles of Incorporation, to fix for each series, subject to the provisions of
the
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Company's Articles of Incorporation regarding excess stock, $.01 par value per
share ("Excess Stock"), the terms, preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption, as are permitted by
Maryland law. The Preferred Stock will, when issued following the receipt of
full consideration therefor, be fully paid and nonassessable and will have no
preemptive rights. The Board of Directors could authorize the issuance of shares
of Preferred Stock with terms and conditions that could have the effect of
discouraging a takeover or other transactions that holders of Common Stock might
believe to be in their best interests or in which holders of some, or a
majority, of the shares of Common Stock might receive a premium for their shares
over the then market price of such shares of Common Stock.
TERMS
The following description of the Preferred Stock sets forth certain
general terms and provisions of the Preferred Stock to which any Prospectus
Supplement may relate. The statements below describing the Preferred Stock are
in all respects subject to and qualified in their entirety by reference to the
applicable provisions of the Company's Articles of Incorporation and Bylaws and
any applicable amendment to the Articles of Incorporation designating terms of a
series of Preferred Stock (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the offering price of
such Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such
Preferred Stock;
(4) The date from which dividends on such Preferred Stock
shall accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any,
for such Preferred Stock;
(6) The provision for a sinking fund, if any, for such
Preferred Stock;
(7) The provision for redemption, if applicable, of such
Preferred Stock;
(8) Any listing of such Preferred Stock on any securities
exchange;
(9) The terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into Common Stock,
including the conversion price (or manner of calculation
thereof);
(10) Any other specific terms, preferences, rights, limitations
or restrictions of such Preferred Stock;
(11) A discussion of federal income tax considerations
applicable to such Preferred Stock;
(12) The relative ranking and preference of such Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company;
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(13) Any limitations on issuance of any series of Preferred
Stock ranking senior to or on a parity with such series of
Preferred Stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of
the Company; and
(14) Any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be
appropriate to preserve the status of the Company as a
REIT.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company, rank (i) senior to all classes or
series of Common Stock of the Company, and to all equity securities ranking
junior to such Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company; (ii) on a parity with all
equity securities issued by the Company the terms of which specifically provide
that such equity securities rank on a parity with the Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company; and (iii) junior to all equity securities issued by the Company
the terms of which specifically provide that such equity securities rank senior
to the Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company. The term "equity
securities" does not include convertible debt securities.
DIVIDENDS
Holders of the Preferred Stock of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the Company, out
of assets of the Company legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the stock transfer books of the Company on such record dates as shall
be fixed by the Board of Directors of the Company.
Dividends on any series of the Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which dividends are non-cumulative, then the holders of such
series of the Preferred Stock will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and the
Company will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If Preferred Stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any Common Stock of the Company or
any other series of Preferred Stock ranking, as to dividends, on a parity with
or junior to the Preferred Stock of such series for any period unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof is set apart for such payment on the
Preferred Stock of such series for all past dividend periods and the then
current dividend period, or (ii) if such series of Preferred Stock does not have
a cumulative dividend, full dividends for the then current dividend period have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment on the Preferred Stock of
such series. When dividends are not paid in full (and a sum sufficient for such
full payment is not so set apart) upon Preferred Stock of any series and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Preferred Stock of such series, all dividends declared upon
Preferred Stock of such series and any other series of Preferred Stock ranking
on a parity as to dividends with such Preferred Stock shall be declared pro rata
so that the amount of dividends declared per share of Preferred Stock of such
series and such other series of Preferred Stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the Preferred Stock of
such series
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(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Stock does not have a cumulative
dividend) and such other series of Preferred Stock bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Preferred Stock of such series which may be
in arrears.
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period, or (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for the then current dividend
period, no dividends (other than in shares of Common Stock or other shares of
capital stock ranking junior to the Preferred Stock of such series as to
dividends and upon liquidation) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made upon the Common
Stock, or any other capital stock of the Company ranking junior to or on a
parity with the Preferred Stock of such series as to dividends or upon
liquidation, nor shall any shares of Common Stock, or any other shares of
capital stock of the Company ranking junior to or on a parity with the Preferred
Stock of such series as to dividends or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Company (except by conversion into or exchange for other capital stock of the
Company ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
REDEMPTION
If so indicated in the applicable Prospectus Supplement, the Preferred
Stock will be subject to mandatory redemption or redemption at the option of the
Company, as a whole or in part, in each case upon the terms, at the times and at
the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Stock that
is subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock does not have a cumulative dividend, include
any accumulation in respect of unpaid dividends for prior dividend periods) to
the date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of shares of capital stock of the Company, then the
terms of such Preferred Stock may provide that, if no such shares of capital
stock shall have been issued or to the extent the net proceeds from any issuance
are insufficient to pay in full the aggregate redemption price then due, then
such Preferred Stock shall automatically and mandatorily be converted into the
applicable shares of capital stock of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred Stock
has a cumulative dividend, full cumulative dividends on all shares of such
series of Preferred Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period, or
(ii) if a series of Preferred Stock does not have a cumulative dividend, full
dividends on all shares of the Preferred Stock of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for the then current dividend period, no
shares of such series of Preferred Stock shall be redeemed unless all
outstanding shares of Preferred Stock of such series are simultaneously
redeemed; provided, however,
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that the foregoing shall not prevent the purchase or acquisition of Preferred
Stock of such series to preserve the REIT status of the Company or pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of Preferred Stock of such series. In addition, unless (i) if such series
of Preferred Stock has a cumulative dividend, full cumulative dividends on all
outstanding shares of such series of Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, or (ii) if such series of Preferred Stock does not have
a cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then current dividend
period, the Company shall not purchase or otherwise acquire directly or
indirectly any shares of Preferred Stock of such series (except by conversion
into or exchange for capital shares of the Company ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation); provided,
however, that the foregoing shall not prevent the purchase or acquisition of
shares of Preferred Stock of such series to preserve the REIT status of the
Company or pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of Preferred Stock of such series.
If fewer than all of the outstanding shares of Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares held
or for which redemption is requested by such holder (with adjustments to avoid
redemption of fractional shares) or by any other equitable manner determined by
the Company.
Notice of redemption will be mailed at least thirty (30) days but not
more than sixty (60) days before the redemption date to each holder of record of
Preferred Stock of any series to be redeemed at the address shown on the stock
transfer books of the Company. Each notice shall state: (i) the redemption date;
(ii) the number of shares and series of the Preferred Stock to be redeemed;
(iii) the redemption price; (iv) the place or places where certificates for such
Preferred Stock are to be surrendered for payment of the redemption price; (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights, if
any, as to such shares shall terminate. If fewer than all the shares of
Preferred Stock of any series are to be redeemed, the notice mailed to each such
holder thereof shall also specify the number of shares of Preferred Stock to be
redeemed from each such holder. If notice of redemption of any Preferred Stock
has been given and if the funds necessary for such redemption have been set
aside by the Company in trust for the benefit of the holders of any Preferred
Stock so called for redemption, then from and after the redemption date
dividends will cease to accrue on such Preferred Stock, and all rights of the
holders of such shares will terminate, except the right to receive the
redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Common Stock or any other class or series of capital
stock of the Company ranking junior to the Preferred Stock in the distribution
of assets upon any liquidation, dissolution or winding up of the Company, the
holders of each series of Preferred Stock shall be entitled to receive out of
assets of the Company legally available for distribution to stockholders
liquidating distributions in the amount of the liquidation preference per share,
if any, set forth in the applicable Prospectus Supplement, plus an amount equal
to all dividends accrued and unpaid thereon (which shall not include any
accumulation in respect of unpaid noncumulative dividends for prior dividend
periods). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Stock will have no right or
claim to any of the remaining assets of the Company. In the event that, upon any
such voluntary or involuntary liquidation, dissolution or winding up, the
available assets of the Company are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of
capital stock of the Company ranking on a parity with the Preferred Stock in the
distribution of assets, then the holders of the Preferred Stock and all other
such
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classes or series of capital stock shall share ratably in any such distribution
of assets in proportion to the full liquidating distributions to which they
would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all holders
of Preferred Stock, then the remaining assets of the Company shall be
distributed among the holders of any other classes or series of capital stock
ranking junior to the Preferred Stock upon liquidation, dissolution or winding
up, according to their respective rights and preferences and in each case
according to their respective number of shares. For such purposes, the
consolidation or merger of the Company with or into any other corporation, trust
or entity, or the sale, lease or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Company.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except
as set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series of Preferred Stock, so long as
any shares of Preferred Stock of a series remain outstanding, the Company will
not, without the affirmative vote or consent of the holders of at least
two-thirds of the shares of such series of Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of capital stock ranking
prior to such series of Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized capital stock of the Company into such shares, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or repeal
the provisions of the Company's Articles of Incorporation or the Designating
Amendment for such series of Preferred Stock, whether by merger, consolidation
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of such series of Preferred Stock or the
holders thereof; provided, however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as the Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event the Company may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of Preferred Stock, and provided further that (x) any increase in the amount of
the authorized Preferred Stock or the creation or issuance of any other series
of Preferred Stock, or (y) any increase in the amount of authorized shares of
such series or any other series of Preferred Stock, in each case ranking on a
parity with or junior to the Preferred Stock of such series with respect to
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Stock
shall have been redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred
Stock is convertible into Common Stock will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
shares of Common Stock into which the shares of Preferred Stock are convertible,
the conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Stock or the Company, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of Preferred Stock.
23
<PAGE> 25
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code 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, including any
Preferred Stock of the Company. Therefore, in addition to limitations already
included in the Company's Articles of Incorporation, the Designating Amendment
for each series of Preferred Stock may contain provisions restricting the
ownership and transfer of the Preferred Stock. The applicable Prospectus
Supplement will specify any additional ownership limitation relating to a series
of Preferred Stock. See "Restrictions on Transfers of Capital Stock."
TRANSFER AGENT
The transfer agent and registrar for the Preferred Stock will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The description of the Company's Common Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation and Bylaws.
GENERAL
Under the Articles of Incorporation, the Company has authority to issue
40 million shares of Common Stock. Under Maryland law, stockholders generally
are not responsible for the Company's debts or obligations. As of December 11,
1997, the Company had outstanding 25,049,806 shares of Common Stock. The Common
Stock is listed on the NYSE and the PCX under the symbol "BYA."
TERMS
Subject to the preferential rights of any other shares or series of
capital 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 capital 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, subject to any rights to
elect Directors that are granted to the holders of any class or series of
Preferred Stock, 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.
24
<PAGE> 26
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm and quarterly reports for the
first three quarters of each fiscal year containing unaudited financial
information.
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 the MGCL, 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 unless a lesser percentage is set forth in the Company's Articles of
Incorporation, which percentage shall not in any event be less than a majority
of all of the shares entitled to vote on such matter. The Company's Articles of
Incorporation do not provide for a lesser percentage in such situations.
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 (as 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 American Stock
Transfer & Trust Company of New York, New York.
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, and such
capital stock must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of twelve (12) months or during a proportionate part
of a shorter taxable year (in each case, other than the first such year). To
ensure that the Company remains a qualified REIT, the Articles of Incorporation,
subject to certain exceptions, provide that no holder may own, or be deemed to
own by virtue of the attribution provisions of the Code, more than nine percent
(9%) (the "Ownership Limit") of any class or series of the Company's capital
stock. The Board of Directors may waive the 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 then or in the future
jeopardize the Company's status as a REIT. 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 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 may, in its discretion, determine
that it is no longer in the best interests of the Company to attempt to qualify,
or to continue to qualify, as a REIT.
25
<PAGE> 27
Capital stock owned, or deemed to be owned, or transferred to a
stockholder in excess of the Ownership Limit will automatically be exchanged for
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. While the Excess Stock is held in trust, it will not be
entitled to vote, it will not be considered for purposes of any stockholder vote
or the determination of a quorum for such vote and, except upon liquidation, it
will not be entitled to participate in dividends or other distributions. Any
dividend or distribution paid to a proposed transferee of Excess Stock prior to
the discovery by the Company that capital stock has been transferred in
violation of the provisions of the Company's Articles of Incorporation shall be
repaid to the Company upon demand. The Excess Stock is not treasury stock, but
rather constitutes a separate class of issued and outstanding stock of the
Company. The original transferee-stockholder may, at any time the Excess Stock
is 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
exchanged into such Excess Stock would be permitted under the Ownership Limit,
at a price not in excess of the price paid by the original
transferee-stockholder for the capital stock that was exchanged in Excess Stock.
Immediately upon the transfer to the permitted transferee, the Excess Stock will
automatically be exchanged for 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 to the foregoing transfer restrictions, the Company will
have the right, for a period of 90 days during the time any Excess Stock is 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 the price paid for the
capital stock by the original transferee-stockholder or the market price (as
determined in the manner set forth in the Articles of Incorporation) of the
capital stock on the date the Company exercises its option to purchase. The
90-day period begins on the date on which the Company receives written notice of
the transfer or other event resulting in the exchange of capital stock for
Excess Stock.
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 beneficial interests 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.
This ownership limitation 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.
FEDERAL INCOME TAX CONSIDERATIONS
The Company believes it has operated, and the Company intends to
continue to operate, in such 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 promulgated 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
26
<PAGE> 28
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.
To qualify as a REIT, the Company must comply with a number of annual
requirements regarding its income, assets and distributions. These requirements
impose a number of restrictions on the Company's operations. For example, the
Company may not lease property if the lease has the effect of giving the Company
a share of the net income of the lessee. The amount of personal property that
may be included under a lease may not exceed a defined, low level, and the
Company may not provide services to its tenants, other than customary services
and (beginning in 1998) de minimis non-customary services. The Company's ability
to acquire non-real estate assets is restricted, and a 100% tax is imposed on
any gain that the Company realizes from sales of property to customers in the
ordinary course of business (other than property acquired by reason of certain
foreclosures), effectively preventing the Company from participating directly in
condominium projects and other projects involving the development of property
for resale. Minimum distribution requirements also generally require the Company
to distribute at least 95% of its taxable income each year (excluding any net
capital gain).
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 dividend or
capital gain income, and will reduce the basis for the stockholder's Securities
with respect to which the distribution is paid or, to the extent that they
exceed such basis, will be taxed in the same manner as gain from the sale of
those Securities.
Investors are urged to consult their own tax advisors with respect to
the appropriateness of an investment in the Securities 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.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through one or more underwriters
or dealers for public offering and sale by or through them, directly to one or
more purchasers, through agents or through any combination of these methods of
sale. Direct sale to investors also may be accomplished through subscription
rights distributed to the Company's stockholders on a pro rata basis. In
connection with any distribution of subscription rights to stockholders, if all
of the underlying Securities are not subscribed for, the Company may sell the
unsubscribed Securities directly to third parties or may engage the services of
one or more underwriters, dealers or agents, including standby underwriters, to
sell the unsubscribed Securities to third parties.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices (any of which may represent a
discount from the prevailing market prices).
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Securities, for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or
27
<PAGE> 29
commissions from the purchasers for whom they may act as agents. Underwriters,
dealers, and agents that participate in the distribution of Securities may be
deemed to be underwriters under the Securities Act, and any discounts or
commissions they receive from the Company and any profit on the resale of
Securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the applicable Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
class or series of Securities will be a new issue with no established trading
market, other than the Common Stock and the Series C Preferred Stock, which are
listed on the NYSE and the PCX. Any shares of Common Stock sold pursuant to a
Prospectus Supplement will be listed on the NYSE and the PCX, subject to
official notice of issuance. The Company may elect to list any series of Debt
Securities or Preferred Stock on an exchange, but is not obligated to do so. It
is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of, or the trading market for, the Securities.
Under agreements into which the Company may enter, underwriters, dealers
and agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be tenants of, the Company in the ordinary course of
business.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize dealers acting as the Company's agents to solicit offers by
certain institutions to purchase Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Securities covered
by its Contracts shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject,
and (ii) if the Securities are being sold to underwriters, the Company shall
have sold to such underwriters the total principal amount of the Securities less
the principal amount thereof covered by Contracts. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such Contracts.
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states Securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, under
certain circumstances a person engaged in the distribution of the Securities
offered hereby may not simultaneously engage in market making activities with
respect to the Securities for a specified period prior to the commencement of
such distribution.
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<PAGE> 30
LEGAL MATTERS
Certain legal matters, including the legality of the Securities, will be
passed upon for the Company by Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.
EXPERTS
The financial statements and schedule thereto incorporated by reference
in this Prospectus or elsewhere in the Registration Statement, to the extent and
for the periods indicated in their reports have been audited by Coopers &
Lybrand L.L.P., independent accountants, and are incorporated herein in reliance
upon the authority of said firm as experts in giving said reports.
29
<PAGE> 31
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 REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF
THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN
WHICH 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 ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
---------------------------
TABLE OF CONTENTS
PAGE
Available Information.......................... 2
Incorporation of Certain
Documents by Reference....................... 2
The Company.................................... 3
Use of Proceeds................................ 3
Ratios of Earnings to Combined Fixed Charges
and Preferred Stock Dividends................ 4
Description of Debt Securities................. 4
Description of Preferred Stock................. 18
Description of Common Stock.................... 24
Restrictions on Transfers of Capital Stock..... 25
Federal Income Tax Considerations.............. 26
Plan of Distribution........................... 27
Legal Matters.................................. 29
Experts........................................ 29
$600,000,000
[LOGO] BAY
APARTMENT
COMMUNITIES, INC.
Debt Securities
Preferred Stock
Common Stock
---------------------------
PROSPECTUS
---------------------------
DECEMBER 16, 1997
30
<PAGE> 32
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered will be borne by the Company and are set forth in
the following table (all amounts except the registration fee are estimated):
Registration fee $ 96,289
Legal fees and expenses 350,000
Blue Sky expenses 10,000
Accounting fees and expenses 150,000
Printing fees and expenses 150,000
Miscellaneous 43,711
--------
TOTAL $800,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subject to certain limited exceptions, the Company's Articles of
Incorporation and Bylaws, each as amended, limit the liability of the Company's
Directors and officers to the Company for money damages for any breach of any
duty owed by such Director or officer of the Company to the fullest extent
permitted by Maryland law. The Maryland General Corporation Law ("MGCL")
generally permits the liability of Directors and officers to a corporation or
its stockholders for money damages to be limited, unless it is proved that
(i)(a) the Director or officer actually received an improper personal benefit in
money, property or services, (b) the Director or officer acted in bad faith, or
(c) the Director's or officer's act or omission was the result of active and
deliberate dishonesty, and (ii) the Director's or officer's act or omission was
material to the matter giving rise to the proceeding. However, if the proceeding
was one by or in the right of the Company, indemnification may not be made in
respect of any proceeding in which the Director or officer shall have been
adjudged to be liable to the Company. These provisions do not limit the ability
of the Company or its stockholders to obtain other relief, such as an injunction
or rescission.
Pursuant to the authority granted in the Company's Articles of
Incorporation and Bylaws, the Company has also entered into indemnification
agreements with certain of its executive officers and members of the Board of
Directors who are not officers of the Company, pursuant to which the Company has
agreed to indemnify them against certain liabilities incurred in connection with
their service as executive officers and/or Directors. These provisions and
contracts could reduce the legal remedies available to the Company and its
stockholders against these individuals.
ITEM 16. EXHIBITS.
Exhibit No. Description
4.1* Indenture for Senior Debt Securities.
4.2* Form of Senior Debt Security (included in Exhibit No. 4.1).
4.3* Indenture for Subordinated Debt Securities.
4.4* Form of Subordinated Debt Security (included in Exhibit No. 4.3).
5.1* Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Securities being registered.
8.1* Opinion of Goodwin, Procter & Hoar LLP as to certain tax
matters.
12.1* Calculation of Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
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<PAGE> 33
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP.
24.1* Powers of Attorney (included in Part II of this registration
statement).
-------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement or
any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the undersigned registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE> 34
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(d) The registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to
act under subsection (a) of Section 310 of the Trust Indenture
Act in accordance with the rules and regulations prescribed by
the Commission under Section 305(b)(2) of the Trust Indenture
Act.
33
<PAGE> 35
SIGNATURES
Pursuant to the requirements of the Securities Act, Bay Apartment
Communities, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement (the "Registration Statement") to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of San Jose,
California, on this 15th day of December, 1997.
BAY APARTMENT COMMUNITIES, INC.
By: /s/Gilbert M. Meyer
-----------------------------------
Gilbert M. Meyer
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ Gilbert M. Meyer Chairman of the Board, President December 15, 1997
- ------------------------ and Chief Executive Officer
GILBERT M. MEYER (Principal Executive Officer)
* Director, Executive Vice December 15, 1997
- ------------------------ President and Chief Operating
MAX L. GARDNER Officer
* Director December 15, 1997
- ------------------------
BRUCE A. CHOATE
* Director December 15, 1997
- ------------------------
JOHN J. HEALY, JR.
* Director December 15, 1997
- ------------------------
BRENDA J. MIXSON
* Director December 15, 1997
- ------------------------
THOMAS H. NIELSEN
* Vice President, Chief Financial December 15, 1997
- ------------------------ Officer and Secretary (Principal
JEFFREY B. VAN HORN Financial and Accounting Officer)
*By: /s/ Gilbert M. Meyer
--------------------
Gilbert M. Meyer
Attorney-in-Fact
</TABLE>
34
<PAGE> 36
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1* Indenture for Senior Debt Securities.
4.2* Form of Senior Debt Security (included in Exhibit No. 4.1).
4.3* Indenture for Subordinated Debt Securities.
4.4* Form of Subordinated Debt Security (included in Exhibit No. 4.3).
5.1* Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Securities being registered.
8.1* Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
12.1* Calculation of Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.1 Consent of Coopers & Lybrand L.L.P., Independent
Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP.
24.1* Powers of Attorney (included in Part II of this
registration statement).
--------------
* Previously filed.
35
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Bay Apartment Communities, Inc. on Form S-3 (File No. 333-41511) of our report
dated January 24, 1997, except for note 14 for which the date is March 7, 1997,
on our audits of the consolidated financial statements and financial statement
schedule of Bay Apartment Communities, Inc. as of December 31, 1996 and 1995,
and for the two years in the period ended December 31, 1996, the period from
March 17, 1994 to December 31, 1994, and the period January 1, 1994 to March 16,
1994, for the Greenbriar Group, which report is included in the 1996 Annual
Report on Form 10-K, of our reports dated March 18, 1997, on our audits of the
Historical Summary of Revenues and Direct Operating Expenses of Rancho
Penasquitos Racquet Club for the year ended December 31, 1996, the Historical
Summary of Revenues and Direct Operating Expenses of The Village Apartments for
the year ended December 31, 1996, the Historical Summary of Revenues and Direct
Operating Expenses of Banbury Cross Apartments for the year ended December 31,
1996, and the Historical Summary of Revenues and Direct Operating Expenses of
Villa Serena Apartments for the year ended December 31, 1996, which are included
in the Current Report on Form 8-K dated April 18, 1997, of our report dated
March 18, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Genesee Gardens Apartments for the year ended December 31,
1996, which is included in the Current Report on Form 8-K/A dated April 18,
1997, of our report dated June 2, 1997, on our audit of the Historical Summary
of Revenues and Direct Operating Expenses of Regency Apartments for the year
ended December 31, 1996, and of our report dated June 2, 1997, on our audit of
the Historical Summary of Revenues and Direct Operating Expenses of Amador Oaks
Apartments for the year ended December 31, 1996, which reports are included in
the Current Report on Form 8-K dated August 14, 1997, of our report dated
September 6, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Park Apartments for the year ended December 31, 1996, and
of our report dated September 6, 1997, on our audit of the Historical Summary of
Revenues and Direct Operating Expenses of Lakeside Apartments for the year ended
December 31, 1996, which reports are included in the Current Report on Form 8-K
dated September 4, 1997, and of our report dated August 29, 1997, on our audit
of the Historical Summary of Revenues and Direct Operating Expenses of Gallery
Place Apartments for the year ended December 31, 1996, and of our report dated
September 18, 1997, on our audit of the Historical Summary of Revenues and
Direct Operating Expenses of Landing West Apartments for the year ended December
31, 1996, which reports are included in the Current Report on Form 8-K dated
September 23, 1997, and of our report dated October 20, 1997, on our audit of
the Historical Summary of Revenues and Direct Operating Expenses of Creekside
Apartments for the year ended December 31, 1996, and of our report dated
November 5, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Governor's Square East and West Apartments for the year
ended December 31, 1996, and of our report dated November 14, 1997, on our
audit of the Historical Summary of Revenues and Direct Operating Expenses of
Warner Oaks Apartments for the year ended December 31, 1996 and of our report
dated November 14, 1997, on our audit of the Historical Summary of Revenues and
Direct Operating Expenses of Viewpointe Apartments for the year ended December
31, 1996, which reports are included in the Current Report on Form 8-K dated
October 31, 1997. We also consent to the reference to our firm under the
caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
December 15, 1997
<PAGE> 1
EXHIBIT 23.2
Consent of Goodwin, Procter & Hoar LLP
We hereby consent to being named as counsel to Bay Apartment Communities,
Inc. in its Registration Statement on Form S-3 (File No. 333-41511) and to the
references therein to our firm under the caption "Legal Matters.")
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
Boston, Massachusetts
December 15, 1997
