<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 1999
REGISTRATION NO. 333- _____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
INNKEEPERS USA TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 65-0503831
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
306 ROYAL POINCIANA WAY
PALM BEACH, FLORIDA 33480
(561) 835-1800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MR. JEFFREY H. FISHER
INNKEEPERS USA TRUST
306 ROYAL POINCIANA WAY
PALM BEACH, FLORIDA 33480
(561) 835-1800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST INVESTMENT 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 FILED 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 REGISTRATION STATEMENT FOR THE SAME
OFFERING. [ ]
IF DELIVERY OF THIS PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OFFERING PRICE PER AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED TO BE REGISTERED(1) SHARE (2) OFFERING PRICE FEE (2)(3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON SHARES OF BENEFICIAL
INTEREST. $.01 PAR VALUE 3,000,000 $11.625 $34,875,000 $8,450
=======================================================================================================================
</TABLE>
(1) PLUS SUCH ADDITIONAL NUMBER OF SHARES AS MAY BE REQUIRED IN THE EVENT OF A
SHARE DIVIDEND, REVERSE SHARE SPLIT, SPLIT-UP, RECAPITALIZATION OR OTHER
SIMILAR EVENT.
(2) ESTIMATED SOLELY FOR THE PURPOSE OF COMPUTING THE REGISTRATION FEE. THIS
AMOUNT WAS CALCULATED IN ACCORDANCE WITH RULE 457 AND BASED ON THE AVERAGE
OF THE HIGH AND LOW SALE PRICES OF THE COMMON SHARES AS REPORTED ON THE NEW
YORK STOCK EXCHANGE ON JANUARY 12, 1999.
(3) PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, 375,000
COMMON SHARES COVERED BY AN EARLIER REGISTRATION STATEMENT ON FORM S-3 (FILE
NO. 333-1026) ARE BEING CARRIED FORWARD AND THE CORRESPONDING REGISTRATION
FEE OF $1,245 THAT WAS PREVIOUSLY PAID AT THE TIME OF FILING WITH RESPECT TO
SUCH COMMON SHARES IS BEING APPLIED TO THIS REGISTRATION STATEMENT.
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 BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE COMBINED
PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT ALSO RELATES TO SECURITIES
COVERED BY THE REGISTRANT'S PREVIOUS REGISTRATION STATEMENT ON FORM S-3 (FILE
NO. 333-1026).
<PAGE> 2
INNKEEPERS USA TRUST
[LOGO]
3,000,000 SHARES
COMMON SHARES, PAR VALUE $.01 PER SHARE
----------
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
----------
To the holders of Innkeepers USA Trust Common Shares:
We are pleased to send you this Prospectus describing the Innkeepers
USA Trust ("Innkeepers" or the "Company") Dividend Reinvestment and Share
Purchase Plan (the "Plan") as in effect beginning ____________, 1999. The Plan
provides you with a simple and convenient method to purchase additional Common
Shares of Innkeepers, $.01 par value ( "Common Shares"). Purchases of Common
Shares directly from Innkeepers pursuant to the Plan will provide Innkeepers
with additional capital for general corporate purposes.
Some of the significant features of the Plan are:
- You may purchase Common Shares through the reinvestment of
cash dividends on your Common Shares, at a 4% (subject to
adjustment) discount to market value.
- You may also make an initial investment in Common Shares or
purchase additional Common Shares through monthly optional
cash investments (subject to a minimum monthly limit of $250
for an initial investment and $50 per month for an additional
investment, and in either case a maximum monthly limit of
$3,000). Cash investments in excess of $3,000 may be made with
the permission of Innkeepers at a discount which will be from
0% to 3%.
- You will not be charged brokerage commissions or service
charges for purchases made under the Plan with reinvested
dividends.
- Holders of Common Shares in broker or nominee name may
participate in the Plan.
- Your recordkeeping will be simplified since you will receive
periodic statements of your account.
- You may deposit Common Shares held by you and registered in
your name into the Plan and thereby avoid the need for
safekeeping of certificates.
- HOLDERS OF COMMON SHARES CURRENTLY ENROLLED IN THE COMPANY'S
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN WILl BE
AUTOMATICALLY ENROLLED IN THE NEW PLAN.
This Prospectus contains complete information in an easy-to-read,
question-and-answer format, and we urge you to read it carefully.
Your participation is entirely voluntary, and you may begin or
terminate your participation at any time. If you are a registered holder and
wish to join the Plan, please complete and sign the Enrollment Authorization
Form (enclosed herein) and return it to Harris Trust and Savings Bank of
Chicago, the administrator of the Plan. Holders of Common Shares currently
enrolled in the Company's Dividend Reinvestment and Share Purchase Plan will be
automatically enrolled in the new Plan. If you are a beneficial owner, please
see Questions 5 and 6 for instructions on how you may participate in the Plan.
It is suggested that this Prospectus be retained for future reference.
Thank you for your continued interest in Innkeepers.
On behalf of the Board of Trustees,
Jeffrey H. Fisher
Chairman, Chief Executive Officer
and President
----------
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION. NONE OF THESE ORGANIZATIONS HAS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
The date of this Prospectus is _______________, 1999
<PAGE> 3
AVAILABLE INFORMATION
Innkeepers is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Information as of a particular date
concerning trustees and officers, their remuneration, and any material interest
of such persons in transactions with Innkeepers is disclosed in proxy statements
distributed to shareholders of Innkeepers and filed with the Commission. Such
reports, proxy statements, and other information filed by Innkeepers can be
inspected and copied at prescribed rates at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following Regional Offices, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material also can
be obtained from the Public Reference Section of the Commission, Washington,
D.C. 20549, at prescribed rates. Innkeepers' Common Shares is listed on the New
York Stock Exchange (the "Exchange"). Reports, proxy statements, and any other
information concerning Innkeepers can be inspected at the office of the Exchange
at Room 401, 20 Broad Street, New York, New York 10005. In addition, the Company
has filed certain of its reports, proxy statements and other information
electronically with the Commission. The Commission maintains a Web site at
(http://www.sec.gov) that contains such reports, proxy and information
statements and other information electronically filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents and information previously filed with the
Commission pursuant to the Exchange Act are incorporated in this Prospectus by
reference.
(a) The Company's Form 10-K for the fiscal year ended December 31, 1997
which contains audited financial statements for the Company's latest fiscal year
for which statements have been filed.
(b) The Company's Forms 10-Q for the periods ended March 31, 1998, June
30, 1998 and September 30, 1998; and the Company's Forms 8-K filed as of January
22, 1998 and June 17, 1998.
(c) The Company's definitive proxy statement dated April 6, 1998 in
connection with the annual meeting of its stockholders held on May 6, 1998.
(d) The description of the Company's Common Shares on Form 8-A dated
July 25, 1994 and the description of the Company's Series A Cumulative
Convertible Preferred Shares on Form 8-A dated September 4, 1998.
2
<PAGE> 4
All reports and other documents subsequently filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act, prior to the
termination of the offering, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such reports and
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
INNKEEPERS HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON
TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. WRITTEN OR ORAL REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO DIRECTOR OF INVESTOR RELATIONS, INNKEEPERS USA TRUST, 306
ROYAL POINCIANA WAY, PALM BEACH, FLORIDA 33480, TELEPHONE (561) 835-1800.
3
<PAGE> 5
SUMMARY OF PLAN
The following summary description of the Innkeepers USA Trust
("Innkeepers" or the "Company") Dividend Reinvestment and Share Purchase Plan
(the "Plan") is qualified by reference to the full text of the Plan which is
contained herein. Terms used in the summary have the meanings attributed to them
in the Plan.
The Company . . . . . . . . . . . . . . The Company is a self-administered
equity real estate investment trust
("REIT") which owns interests in hotel
properties. The Company, through a
wholly-owned subsidiary, owns an
approximately 95.7% partnership interest
in Innkeepers USA Limited Partnership, a
Virginia limited partnership (the
"Partnership"). The Partnership and its
subsidiary partnerships currently own 63
hotels with an aggregate of 7,639 rooms
in 23 states. The principal executive
office of the Company is located at 306
Royal Poinciana Way, Palm Beach, Florida
33480; telephone number (561) 835-1800.
The Company maintains a website at
www.innkeepersusa.com.
Purpose of Plan . . . . . . . . . . . .The primary purpose of the Plan is to
provide Innkeepers shareholders and
other interested investors a convenient
and economic method of investing cash
dividends, making an initial investment
in Common Shares and making optional
cash investments in additional Common
Shares.
Purchase Price . . . . . . . . . . . . .The Plan provides that shares to be
offered may be either newly issued
shares, shares purchased on the open
market, or shares purchased in privately
negotiated transactions. (See Question
11.)
Dividend Reinvestment. Under the Plan,
the purchase price of Common Shares
purchased with reinvested cash dividends
(x) directly from the Company will be
96% of the average of the daily high and
low sales prices of the Common Shares on
the Exchange during a Pricing Period
consisting of the twelve Trading Days
preceding the Investment Date and (y) on
the open market will be 96% of the
weighted average price paid for such
shares. The Company reserves the right
to change or eliminate the discount
offered on Common Shares purchased with
reinvested dividends.
4
<PAGE> 6
Optional Cash Investment and Initial
Cash Investment. The Purchase Price of
Common Shares purchased under the Plan
with optional cash investments or an
initial cash investment of $3,000 or
less will be (i) the average of the
daily high and low sales prices of the
Common Shares on the Exchange during the
Pricing Period if the shares are
purchased directly from the Company and
(ii) the weighted average price paid for
such shares if the shares are purchased
on the open market or in privately
negotiated transactions. No discount
will be offered on Common Shares
purchased under the Plan in the open
market or in privately negotiated
transactions with optional cash
investments or an initial cash
investment.
The Purchase Price for Common Shares
purchased with optional cash investments
or an initial cash investment in excess
of $3,000 pursuant to a Request for
Waiver (as described herein) may reflect
a discount of 0% to 3% from the market
price.
The Purchase Price for each purchase of
Common Shares will be contained in
periodic statements provided to each
Participant by the Administrator.
Brokerage Costs and Commissions;
Administrative Fees and Costs. . . . . Participants in the Plan will pay no
commissions or brokerage fees on
purchases made with reinvested
dividends. Participants will pay a pro
rata portion of commissions and
brokerage fees on open market or
privately negotiated purchases of Common
Shares with optional cash investments or
initial cash investments. Participants
selling Common Shares under the Plan
will be subject to brokerage fees and
commissions, taxes (if applicable) and
certain administrative charges.
Plan Limitations . . . . . . . . . . . .Persons not presently shareholders may
become Participants in the Plan by
making an initial cash investment of not
less than $250 and not more than $3,000
(except in cases where a Request for
Waiver is made and granted). Other
optional cash investments are subject to
a minimum investment of $50 per month
and a maximum investment of $3,000 per
month (except when a Request for Waiver
is made and granted). There is no
minimum or maximum limitation on the
amount of dividends a Participant may
reinvest under the Plan.
5
<PAGE> 7
Initial and
Optional Cash Investments. . . . . . . .With respect to initial cash investments
in excess of $3,000 per month,
Innkeepers may in its sole discretion
establish a Waiver Discount and a
Threshold Price each month. The Waiver
Discount, which may vary each month
between 0% and 3%, will be established
by Innkeepers after a review of current
market conditions, the level of Plan
participation and current and projected
capital needs. The Threshold Price will
be established by Innkeepers as a
minimum price applicable to a purchase
of Common Shares in a given month. For
each Trading Day during the Pricing
Period on which the Threshold Price is
not satisfied, one-twelfth of a
Participant's optional cash investment
in excess of $3,000 will be returned and
no interest on such returned amount will
be paid to the Participant. (See
Questions 9 and 13.)
Initial and optional cash investments
that do not exceed $3,000 and the
reinvestment of cash dividends in
additional Common Shares will not be
subject to the Waiver Discount or to the
Threshold Price. However, the Company
reserves the right to grant a discount
and set a minimum price in the future
for such investments.
Initial cash investments of less than
$250 (except when a lower initial cash
investment minimum has been established
for an investor by the Company in its
sole discretion) and optional cash
investments of less than $50 per month,
and that portion of any initial or
optional cash investment which exceeds
the maximum monthly purchase limit,
unless such limit has been waived, will
be returned to the Participant and no
interest on such amounts will be paid to
the Participant.
Requests for Waiver . . . . . . . . . . In deciding whether to approve a Request
for Waiver, Innkeepers will consider
relevant factors including, but not
limited to, whether it is then selling
newly issued Common Shares under the
Plan or acquiring Common Shares for the
Plan through open market purchases or
privately negotiated transactions;
Innkeepers' need for additional funds;
the attractiveness of obtaining such
funds by the sale of Common Shares in
comparison to other sources of funds;
the purchase price likely to apply to
any sale of Common Shares; the
6
<PAGE> 8
Participant submitting the request,
including the extent and nature of such
Participant's prior participation in the
Plan; and the number of Common Shares
held of record by such Participant; and
the aggregate amount, if any, of initial
and optional cash investments in excess
of the allowable maximum amount for
which Requests for Waiver have been
submitted by all Participants. (See
Question 13.)
Innkeepers has no arrangements or
understandings, formal or informal, with
any person relating to the distribution
of shares to be received pursuant to the
Plan. Broker-dealers, financial
intermediaries and other persons who
acquire Common Shares through the Plan
and resell them shortly after acquiring
them may be considered to be
underwriters within the meaning of the
Securities Act.
Number of Shares Offered . . . . . . . .As of ___________, 1999, there were
3,000,000 Common Shares authorized to be
issued and registered under the
Securities Act for offering pursuant to
the Plan. Because Innkeepers currently
expects to continue the Plan
indefinitely, it expects to authorize
for issuance and register under the
Securities Act additional shares from
time to time as necessary for purposes
of the Plan. See "Plan of Distribution".
7
<PAGE> 9
DESCRIPTION OF THE PLAN
The Company's prior Dividend Reinvestment and Share Purchase Plan is
being replaced by a new Plan. Holders of Common Shares currently enrolled in the
Company's Dividend Reinvestment and Share Purchase Plan will be automatically
enrolled in the new Plan. The following questions and answers constitute the new
Plan. Shareholders who do not participate in the Plan will continue to receive
cash dividends, as declared and paid, in the usual manner.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The primary purpose of the Plan is to provide Innkeepers shareholders
and others seeking to invest in Innkeepers a convenient and economic method of
making an initial investment in the Company, investing cash dividends or making
optional cash investments in additional Common Shares. In addition, purchases of
Common Shares directly from Innkeepers pursuant to the Plan will provide
Innkeepers with additional capital for general corporate purposes.
PARTICIPATION OPTIONS
2. WHAT OPTIONS ARE AVAILABLE UNDER THE PLAN?
If you elect to participate in the Plan (a "Participant"), you may make
an initial investment in the Company in a minimum amount of $250 (although the
Company may, in its sole discretion, establish a lower initial investment
minimum for an investor) and a maximum amount of $3,000. You may also have all
or a portion of your cash dividends automatically reinvested in Common Shares.
If you wish, you may also make optional cash investments to purchase Common
Shares, subject to a minimum investment of $50 per month and a maximum
investment of $3,000 per month. Innkeepers may permit greater initial or
optional cash investments. See Question 7 for more detail on options available
under the Plan. You may make optional cash investments even if you do not
reinvest dividends on your Common Shares.
ADVANTAGES AND DISADVANTAGES
3. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE PLAN?
The primary advantages of the Plan are:
- You may have the cash dividends on all or a portion of your
Common Shares automatically reinvested in additional Common
Shares.
- Common Shares purchased with reinvested dividends will be
acquired by Participants at a discount (initially, 4%) to the
market price.
8
<PAGE> 10
- Persons who are not shareholders may make an initial
investment in Innkeepers, subject to a minimum investment of
$250 (except when a lower minimum amount has been accepted by
the Company in its sole discretion) and a maximum limit of
$3,000 per month (unless a Request for Waiver is approved).
- You may invest in additional Common Shares by making optional
cash investments, subject to an individual minimum limit of
$50 per month and an individual maximum limit of $3,000 per
month (unless a Request for Waiver is approved). Optional cash
investments may be made occasionally or at regular intervals,
as the Participant desires. Participants may make optional
cash investments even if dividends on their shares are not
being reinvested.
- When Common Shares are purchased directly from the Company,
you pay no brokerage commissions or service charges in
connection with your purchases under the Plan. In addition,
with respect to reinvested dividends, you pay no brokerage
commissions or service charges even if the shares purchased
with such dividends are purchased in the open market or in
privately negotiated transactions. However, Participants will
pay a pro rata portion of brokerage fees and commissions on
open market purchases or privately negotiated purchases in
connection with initial or optional cash investments. See
Question 24.
- Initial investments in Innkeepers and optional cash
investments in excess of $3,000 per month may be made with the
permission of Innkeepers at a discount which will be from 0%
to 3%.
- Your reinvested cash dividends and optional cash investments
will be fully invested because the Plan provides for
fractional shares to be credited to your account.
Additionally, dividends on such fractional shares, as well as
whole shares held under the Plan, will be automatically
reinvested in additional shares and credited to your Plan
account.
- You will avoid cumbersome safekeeping of share certificates
for Plan shares credited to your account and you may also
deposit shares held by you and registered in your name,
thereby avoiding the need for safekeeping of certificates.
- Periodic statements reflecting all current activity, including
shares purchased and latest Plan account balance, will
simplify your recordkeeping.
The primary disadvantages of the Plan are:
- Participants cannot depend on the availability of a market
discount regarding shares acquired under the Plan. Initially,
for initial and optional cash investments, no discount will be
applicable. The granting of a discount for one month will not
insure
9
<PAGE> 11
the availability of a discount or the same discount in future
months. Each month, the Company may lower or eliminate
discounts without prior notice to Participants. The Company
may also, without prior notice to Participants, change its
determination as to whether Common Shares will be purchased by
the Administrator directly from the Company or in the open
market or in privately negotiated transactions from third
parties. See Question 11.
- Participants that reinvest cash dividends will be treated for
federal income tax purposes as having received a distribution
on the dividend payment date; such dividend generally will
give rise to income tax liability for the payment of income
tax without providing Participants with immediate cash to pay
such tax when it becomes due. See Question 21.
- Because the date by which you must decide to make an initial
cash investment or optional cash investments is prior to the
Investment Date (as defined herein) for such investments, your
investments may be exposed to changes in market conditions.
See Question 12.
- The Purchase Price (as defined herein) for Common Shares under
the Plan may exceed the price of acquiring Common Shares
(including transaction costs) on the open market on the
related Investment Date. See Questions 9 and 11.
- No interest will be paid to Participants on funds held by the
administrator of the Plan pending investment. See Question 12.
- Execution of sales of Common Shares held in the Plan may be
subject to delay. See Question 18.
ADMINISTRATION
4. WHO WILL ADMINISTER THE PLAN?
The Plan will be administered by Harris Trust and Savings Bank or such
successor administrator as Innkeepers may designate (the "Administrator"). The
Administrator acts as agent for Participants, keeps records of Participants'
accounts, sends regular account statements to Participants, and performs other
duties relating to the Plan. Common Shares purchased for each Participant under
the Plan will be held by the Administrator and will be registered in the name of
the Administrator or its nominee on behalf of the Participants, unless and until
a Participant requests that a share certificate for his or her shares be issued,
as more fully described in Question 16. The Administrator also serves as
dividend disbursement agent, transfer agent, and registrar for the Common
Shares. Correspondence concerning the Plan in general should be sent to:
Harris Trust and Savings Bank
Dividend Reinvestment Services
P.O. Box A3309
Chicago, Illinois 60690-3309
10
<PAGE> 12
Optional cash investments of checks or money orders, and sale requests,
should be sent to:
Harris Trust and Savings Bank
Shareholder Communications Team
P.O. Box A3504
Chicago, Illinois 60690-3504
Initial cash investments of checks or money orders should be mailed to:
--------------------------
--------------------------
--------------------------
Please reference Innkeepers and your account number in all
correspondence. When corresponding with the Administrator, we suggest that you
give your daytime telephone number and area code.
For general questions about the Plan, you may contact the Administrator
at 1-800-___-____.
An automated phone system is available 24 hours a day, 7 days a week.
Customer service representatives are available from 8:30 a.m. to 5:00 p.m.
Central time each business day.
Spanish language translation service is available.
E-Mail: The Administrator's E-mail address is
"[email protected]."
If you wish to contact the Company directly, you may write or call:
Innkeepers USA Trust
Director of Investor Relations
306 Royal Poinciana Way
Palm Beach, Florida 33480
(561) 835-1800
The Director of Investor Relations may also be reached by e-mail
through the Company's website at www.innkeepersusa.com.
11
<PAGE> 13
PARTICIPATION
5. WHO IS ELIGIBLE TO PARTICIPATE?
You may participate in the Plan if: (a) you are a "registered holder;"
a shareholder whose Common Shares are registered in the share transfer books of
Innkeepers in your name, or (b) you are a "beneficial owner;" a shareholder who
has beneficial ownership of Common Shares that are registered in a name other
than your name (for example, in the name of a broker, bank or other nominee) or
(c) you are not presently a shareholder but wish to invest in the Company's
Common Shares. Registered holders may participate in the Plan directly. If you
are a beneficial owner, you must either become a registered holder by having
such shares transferred into your own name or make arrangements with your
broker, bank or other nominee to participate on your behalf. See Question 6.
Your right to participate in the Plan is not transferable to another
person apart from a transfer of your underlying shares of Common Shares.
Innkeepers reserves the right, which may be exercised in its sole discretion, to
exclude from participation in the Plan persons who utilize the Plan to engage in
short-term trading activities which cause aberrations in the trading volume of
the Common Shares.
Persons who reside in jurisdictions in which it is unlawful for
Innkeepers to permit their participation are not eligible to participate in the
Plan.
ENROLLMENT
6. HOW DO YOU BECOME A PARTICIPANT?
All holders of Common Shares that are currently enrolled in the
Innkeepers USA Trust Dividend Reinvestment and Share Purchase Plan will
automatically become Participants in the new Plan.
(a) Shareholders of Record. If you are a registered holder who is not
currently enrolled in the Company's Dividend Reinvestment and Share Purchase
Plan, you may enroll in the Plan and become a Participant by completing and
signing an Enrollment Authorization Form (enclosed herein) and returning it to
the Administrator at the address set forth in Question 4. An Enrollment
Authorization Form may also be obtained at any time upon your request to the
Administrator at the same address. If you have your Common Shares registered in
more than one name (e.g., joint tenants, trustees), all registered holders of
such shares must sign the Enrollment Authorization Form exactly as their names
appear on the account registration.
(b) Beneficial Owners. If you are a beneficial owner of Common Shares
not currently participating in the Company's Dividend Reinvestment and Share
Purchase Plan, you must instruct your broker, bank or other nominee in whose
name your shares are held to participate in the Plan on
12
<PAGE> 14
your behalf. To facilitate participation by beneficial owners, the Plan is
eligible for the Depository Trust Dividend Reinvestment Services. If a broker,
bank or other nominee holds shares of a beneficial owner through a securities
depository, such broker, bank or other nominee may also be required to provide a
Broker and Nominee Form to the Administrator in order to participate in the
initial or optional cash investment portion of the Plan. See Question 12.
(c) Interested investors not presently shareholders. If you are not a
shareholder of the Company you may become a Participant by delivering a
completed Enrollment Authorization Form to the Administrator directly, or
through coordination with your broker, bank or other nominee as described in (b)
above if you wish to become a beneficial owner (as opposed to a registered
holder), along with an initial cash investment of not less than $250 and not
more than $3,000; provided, that initial cash investments of more than $3,000
may be made if a Request for Waiver is made and approved by the Company. The
Company may, in its sole discretion, also establish an initial cash investment
minimum of less than $250 for an investor.
Enrollment Authorization Forms and, if applicable, Broker and Nominee
Forms, will be processed as promptly as practicable. Participation in the
Program will begin after the properly completed Enrollment Authorization Form
and/or Broker and Nominee Form has been reviewed and accepted by the
Administrator (and, in cases of initial or optional cash investments exceeding
$3,000, a properly completed Request for Waiver Form has been reviewed and
approved by the Company).
You may enroll in the Plan at any time. Once enrolled, you will remain
enrolled without further action on your part until you discontinue your
participation or until the Plan is terminated. See Question 20 regarding
withdrawal from the Plan and Question 29 regarding termination of the Plan.
However, if there is any subsequent change in the manner in which your name
appears on your certificate(s), you must sign another Enrollment Authorization
Form to continue participation in the Plan and execute a stock power form to
change the registration of your Plan account.
7. WHAT DOES THE ENROLLMENT AUTHORIZATION FORM PROVIDE?
The Enrollment Authorization Form appoints the Administrator as your
agent for purposes of the Plan. It also permits you to direct Innkeepers to pay
to the Administrator for purchase of additional Common Shares all of the cash
dividends on (a) the specified number of Common Shares owned by you on the
applicable Record Date and designated by you to be included in the Plan
("Participating Shares") and (b) all whole and fractional Common Shares which
have been credited to your Plan account ("Plan Shares"). The Enrollment
Authorization Form also permits you to direct the Administrator to purchase
additional Common Shares with any initial or optional cash investments that you
make. The options offered on Enrollment Authorization Form are described more
fully below:
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(1) "Full Dividend Reinvestment"
This option directs the Administrator to invest, in accordance
with the Plan, all cash dividends on all Common Shares then or subsequently
registered in your name, including all whole and fractional Plan Shares. This
option also permits you to make optional cash investments and directs the
Administrator to apply such investments towards the purchase of additional
Common Shares in accordance with the Plan.
(2) "Partial Dividend Reinvestment"
This option directs the Administrator to send you, in
accordance with the Plan, cash dividends in the usual manner on the number of
whole Common Shares held by you which you designate in the appropriate space on
the Enrollment Authorization Form. Dividends paid on all of your other shares
will be reinvested in additional Common Shares in accordance with the Plan. This
option also permits you to make optional cash investments and directs the
Administrator to apply such investments towards the purchase of additional
Common Shares in accordance with the Plan.
(3) "Optional Cash Investments Only"
This option permits you to make an initial cash investment and
optional cash investments and directs the Administrator to apply such
investments towards the purchase of Common Shares in accordance with the Plan.
If this option is selected, you will continue to receive cash dividends on all
Common Shares registered in your name in the usual manner, and the Administrator
will apply only an initial cash investment or optional cash investments received
from you towards the purchase of Common Shares.
You may select any one of the above options. FOR EACH METHOD OF
DIVIDEND REINVESTMENT, CASH DIVIDENDS WILL BE REINVESTED ON ALL PARTICIPATING
SHARES AND ON ALL PLAN SHARES HELD IN YOUR PLAN ACCOUNT, UNTIL YOU SPECIFY
OTHERWISE OR WITHDRAW FROM THE PLAN ALTOGETHER, OR UNTIL THE PLAN IS TERMINATED.
See Question 20 regarding notification of withdrawal to the Administrator. IF
YOU RETURN A PROPERLY EXECUTED ENROLLMENT AUTHORIZATION FORM TO THE
ADMINISTRATOR WITHOUT ELECTING AN INVESTMENT OPTION, YOU WILL BE ENROLLED AS
HAVING SELECTED FULL DIVIDEND REINVESTMENT.
8. WHEN WILL PARTICIPATION IN THE PLAN BEGIN?
Participation as to dividend reinvestment will commence with the next
Investment Date (as defined in Question 9 below) after receipt of the Enrollment
Authorization Form, provided it is received by the Administrator by the Record
Date (see Appendix I) for such investment. Reinvestment levels may be changed
from time to time as a Participant desires by submitting a new election to the
Administrator. Should the Enrollment Authorization Form be received after the
Record Date, participation will be delayed until the following Investment Date.
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Participation as to optional cash investments or an initial cash
investment will commence with the next Investment Date after receipt of the
authorization therefor and the funds to be invested, provided such authorization
and funds are received by the date specified in Question 12 for such investment.
Receipt of funds paid by check, wire transfer or money order (see Question 12)
means clearance and confirmation of receipt of good funds therefor by the
Administrator. All initial and optional cash investments are subject to
collection by the Administrator for full face value in U.S. funds. If the funds
to be invested are received by the Administrator after the date specified in
Question 12, but before the Investment Date for the related month, such funds
will be held until they can be invested on the next Investment Date, and no
interest on such funds shall be payable to the Participant. See Question 14.
Finally, please see Question 12 with respect to the requirement for banks,
brokers or other nominees holding Common Shares for beneficial owners (or that
will hold shares for prospective beneficial owners) in the name of a securities
depository to deliver broker or nominee forms in connection with initial or
optional cash investments.
PURCHASES
9. WHEN WILL SHARES BE PURCHASED UNDER THE PLAN?
Purchases under the Plan with reinvested dividends will be made once
each quarter. Purchases under the Plan with initial or optional cash investments
will be made once each month.
In a month when there is a cash dividend paid by the Company,
reinvested dividends and any optional cash investments or initial cash
investments under the Plan will be used to purchase Common Shares on the
dividend payment date declared by the Board of Trustees (in such case, the
"Investment Date"). Dividend payment dates historically have occurred on or
about the last Tuesday of each January, April, July and October. It is expected
that the past pattern with respect to timing of dividend payment dates generally
will be followed in the future. The expected "Record Date" for such dividends is
set forth on Appendix I, although the actual record dates will be determined by
the Board of Trustees. The Administrator may, in its discretion, initiate
purchase transactions for the reinvestment of dividends prior to the actual
payment of dividends in order to minimize the delay between the payment of
dividends and the settlement of purchase transactions. In months when no cash
dividend is paid by the Company, optional cash investments and initial cash
investments will be invested on the last Tuesday of the month, or if such day is
not a business day, the first business day following the last Tuesday, or, in
the case of Common Shares purchased on the open market or in privately
negotiated transactions, as soon thereafter as determined by the Administrator
(in each such case, the "Investment Date").
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Please see Appendix I for information with respect to expected
Investment Dates and other relevant dates.
THERE CAN BE NO ASSURANCE AS TO THE DECLARATION OR PAYMENT OF
DIVIDENDS, AND NOTHING CONTAINED IN THE PLAN OBLIGATES INNKEEPERS TO DECLARE OR
PAY ANY DIVIDENDS. THE PLAN DOES NOT REPRESENT A CHANGE IN INNKEEPERS' DIVIDEND
POLICY OR A GUARANTEE OF FUTURE DIVIDENDS, WHICH WILL CONTINUE TO BE DETERMINED
BY THE BOARD OF TRUSTEES BASED UPON INNKEEPERS' EARNINGS, FINANCIAL CONDITION,
AND OTHER FACTORS.
10. WHAT IS THE SOURCE OF SHARES TO BE PURCHASED UNDER THE PLAN?
All dividends reinvested through the Plan and all initial and optional
cash investments through the Plan will be used to (i) purchase newly issued
Common Shares directly from Innkeepers, (ii) purchase shares through open market
purchases, (iii) purchase shares through privately negotiated transactions, or
(iv) purchase shares through a combination of such transactions. Shares
purchased directly from Innkeepers will consist of authorized but unissued
Innkeepers Common Shares.
11. AT WHAT PRICE WILL SHARES BE PURCHASED?
When shares are acquired directly from the Company. All shares acquired
directly from Innkeepers with reinvested dividends will be acquired at a price
to you (the "Purchase Price") of ninety six percent (96%) of the average of the
daily high and low sales prices, computed up to four decimal places, if
necessary, of Common Shares as reported on the Exchange for the twelve Trading
Days (as defined below) immediately preceding the applicable Investment Date;
provided, that in no event will the Purchase Price per share be less than
ninety-five percent (95%) of the average of the daily high and low sales prices
of the Common Shares on the Exchange on the Investment Date. A "Trading Day"
means a day on which trades in Common Shares are reported on the Exchange. The
period encompassing the first twelve Trading Days immediately preceding the
applicable Investment Date constitutes the relevant "Pricing Period." All shares
acquired directly from Innkeepers with optional cash investments or an initial
cash investment will be acquired at a Purchase Price equal to one hundred
percent (100%) of the average of the daily high and low sales prices of Common
Shares as reported on the Exchange during the Pricing Period; provided, that in
no event will the Purchase Price per share be less than ninety-five percent
(95%) of the average of the daily high and low sales prices of the Common Shares
on the Exchange on the Investment Date (but see "- Exception" below).
When shares are acquired in the market. All Common Shares acquired
through open market purchases or in privately negotiated purchases with
reinvested dividends will be acquired as soon as practicable on or after the
applicable Investment Date at a Purchase Price equal to ninety six percent (96%)
of the actual weighted average price per share of all shares purchased in the
open market or in privately negotiated purchases with respect to the relevant
Investment Date; provided, that in no event will the Purchase Price per share be
less than ninety-five percent (95%) of the average of the daily high and low
sales prices of the Common Shares on the Exchange on the Investment Date. All
Common Shares acquired through open market purchases or in privately
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negotiated purchases with an initial cash investment or optional cash
investments will be acquired at a Purchase Price equal to one-hundred percent
(100%) of the actual weighted average price per share of all shares purchased in
the open market or in privately negotiated purchases with respect to the
relevant Investment Date; provided, that in no event will the Purchase Price per
share be less than ninety-five percent (95%) of the average of the daily high
and low sales prices of the Common Shares on the Exchange on the Investment Date
(but see "- Exception" below).
Exception. Shares purchased with an initial cash investment or optional
cash investments pursuant to a Request for Waiver may be purchased at a discount
from the Purchase Price as more fully described in Question 13. Purchases made
with optional cash investments or initial cash investments pursuant to a Request
for Waiver may be subject to a Threshold Price, as more fully described in
Question 13.
Due to regulatory requirements, the Plan may be required to make open
market purchases over two or more consecutive business days.
Discounts may be established, changed or eliminated by the Company
without prior notice to Participants at any time.
12. HOW ARE OPTIONAL CASH INVESTMENTS AND INITIAL CASH INVESTMENTS MADE?
All Plan Participants are eligible to make optional cash investments at
any time. Interested investors not presently shareholders of the Company may
become a Participant by directly enrolling in the Plan by delivering a completed
Enrollment Authorization Form to the Administrator and making an initial cash
investment. Interested investors not presently shareholders of the Company and
not wanting to directly enroll in the Plan must instruct their broker, bank or
other nominee to utilize an Enrollment Authorization Form. A broker, bank or
nominee, as holder on behalf of a beneficial owner, may utilize an Enrollment
Authorization Form unless it holds the shares in the name of a securities
depository. If a broker, bank or nominee holds shares of a beneficial owner in
the name of a securities depository, optional cash investments or initial cash
investments must be accompanied by a Broker and Nominee Form ("B/N Form").
The B/N Form provides the sole means whereby a broker, bank or other
nominee holding shares on behalf of a beneficial owner in the name of a
securities depository may make an initial cash investment or invest optional
cash investments under the Plan on behalf of such beneficial owner. In such
case, the broker, bank or other nominee must use a B/N Form for transmitting
initial or optional cash investments on behalf of the beneficial owner. A B/N
Form must be delivered to the Administrator at the address specified in Question
4 each time that such broker, bank or other nominee transmits initial or
optional cash investments on behalf of a beneficial owner. B/N Forms will be
furnished by the Administrator upon request.
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Initial and optional cash investments of $3,000 or less should be
received by the Administrator at least two business days before the Investment
Date. Initial and optional cash investments greater than $3,000 per month and
made pursuant to a Request for Waiver should be received by the Administrator at
least one business day before the commencement of the relevant Pricing Period in
order to purchase Common Shares on the next following Investment Date (see
Appendix I). Initial cash investments are subject to a minimum of $250 (except
when a lower minimum initial cash investment is accepted by the Company, in its
sole discretion) and optional cash investments are subject to a minimum of $50
per month. There is no obligation to make an optional cash investment, and the
amount of such investment may vary from time to time. Optional cash investments
and initial cash investments received after the dates stated above and before
the related Investment Date will be held without interest until they can be
invested on the next Investment Date. See Questions 9 and 14. NO INTEREST WILL
BE PAID TO PARTICIPANTS ON OPTIONAL CASH INVESTMENTS AND INITIAL CASH
INVESTMENTS HELD PENDING INVESTMENT. INNKEEPERS WILL RETAIN ANY INTEREST EARNED
ON SUCH FUNDS FOR ITS OWN ACCOUNT. IF YOU HAVE ANY QUESTIONS REGARDING THE DATES
ON WHICH THE ADMINISTRATOR MUST RECEIVE FUNDS FOR YOUR INITIAL OR OPTIONAL CASH
INVESTMENT YOU SHOULD CONTACT THE ADMINISTRATOR AT THE ADDRESS OR NUMBER SET
FORTH IN QUESTION 4.
You should be aware that since investments under the Plan are made as
of specified dates, you lose any advantage that otherwise might be available
from being able to select the timing of your investment. NEITHER THE COMPANY NOR
THE ADMINISTRATOR CAN ASSURE A PROFIT OR PROTECT AGAINST A LOSS ON COMMON SHARES
PURCHASED UNDER THE PLAN.
In the event that any check is returned unpaid for any reason, the
Administrator will consider the request for an initial or optional cash
investment null and void and shall immediately remove from the Participant's
account shares, if any, purchased upon credit of such money. The Administrator
shall also be entitled to sell these shares to satisfy uncollected amounts. If
the net proceeds of the sale of such shares are insufficient to satisfy such
uncollected amounts, the Administrator shall be entitled to sell additional
shares from the Participant's account to satisfy the uncollected balance.
ALL OPTIONAL CASH INVESTMENTS AND INITIAL CASH INVESTMENTS MADE BY
CHECK SHOULD BE MADE PAYABLE TO HARRIS TRUST AND SAVINGS BANK AND MAILED TO THE
ADMINISTRATOR AT THE ADDRESS LISTED IN QUESTION 4. OTHER FORMS OF PAYMENT, SUCH
AS WIRE TRANSFERS, MUST BE APPROVED IN ADVANCE BY THE ADMINISTRATOR. INQUIRIES
REGARDING OTHER FORMS OF PAYMENTS AND ALL OTHER WRITTEN INQUIRIES SHOULD BE
ADDRESSED TO THE ADMINISTRATOR AT THE ADDRESS LISTED IN QUESTION 4.
Investments may be made in the following ways:
Check Investment. Optional cash investments and initial cash
investments may be made by personal check or money order payable in U.S. dollars
to "Harris Trust and Savings Bank."
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Wire Investment. The Administrator may, but is not obligated to, permit
optional cash investments or initial cash investments to be made by wire
transfer to the Administrator. Participants who wish to make a wire transfer
should contact the Administrator for instructions. Participants making wire
investments may be charged fees by the commercial bank initiating the transfer.
Automatic Investment from a Bank Account. Participants may make
automatic monthly cash investments of a specified amount (not less than $50 per
month and, unless a Request for Waiver is approved by the Company, not more than
$3,000 per month) by electronic funds transfer from a predesignated U.S. bank
account. To initiate automatic monthly deductions, the Participant must provide
written authorization to the Administrator together with a voided blank check
for the account from which funds are to be drawn. The written request for
automatic monthly deduction will be processed and will become effective as
promptly as practicable. Once automatic monthly deduction is initiated, funds
will be drawn from the Participant's designated bank account on the business day
immediately preceding the relevant Pricing Period, and will be invested in
Common Shares beginning on the Investment Date. Participants may change or
terminate automatic monthly deduction by providing new written instructions to
the Administrator. To be effective with respect to a particular month, however,
the new instructions must be received by the Administrator prior to the last
business day of the preceding calendar month.
13. WHAT LIMITATIONS APPLY TO OPTIONAL CASH INVESTMENTS AND INITIAL CASH
INVESTMENTS?
MINIMUM/MAXIMUM LIMITS. Optional cash investments are subject to a $50
minimum per month, initial cash investments are subject to a $250 minimum
(except when the Company, in its sole discretion, establishes a lower minimum
initial cash investment), and Innkeepers reserves the right to refuse to accept
any initial cash investment of more than $3,000, or any optional cash investment
in excess of $3,000 per month, from any Participant or related or associated
group of Participants. Optional cash investments of less than $50 per month,
initial cash investments of less than $250 (or any lower minimum amount
determined for an investor by the Company, in its sole discretion) and that
portion of any initial or optional cash investment which exceeds the $3,000
purchase limit, unless such limit has been waived, are subject to return to the
Participant without interest. Innkeepers reserves the right to waive such limits
on initial or optional cash investments in its sole discretion.
REQUEST FOR WAIVER. Initial cash investments in excess of $3000 and
optional cash investments in excess of $3,000 per month may only be made
pursuant to a written request for waiver (a "Request for Waiver") accepted by
Innkeepers. To submit an initial cash investment in excess of $3,000 or optional
cash payment in excess of $3,000 for any monthly period, a Participant must
submit a written Request for Waiver no later than 3:00 P.M. EST on the date that
is three (3) business days prior to the commencement of the relevant Pricing
Period for such initial or optional cash investment. It is solely within
Innkeepers' discretion as to whether any such approval in excess of the
allowable maximum amount will be granted. In deciding whether to approve a
Request for Waiver, Innkeepers will consider relevant factors including, but not
limited to (a) whether it is then selling newly issued Common Shares under the
Plan or acquiring Common Shares for the Plan
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through open market purchases or privately negotiated transactions, (b)
Innkeepers' need for additional funds, (c) the attractiveness of obtaining such
funds by the sale of Common Shares by comparison to other sources of funds, (d)
the purchase price likely to apply to any sale of Common Shares, (e) the
Participant submitting the request, including the extent and nature of such
Participant's prior participation in the Plan, and the number of Common Shares
held of record by such Participant, and (f) the aggregate amount, if any, of
initial and optional cash investments in excess of the allowable maximum amounts
for which requests have been submitted by all Participants. If such requests are
submitted for any monthly period for an aggregate amount in excess of the amount
Innkeepers is willing to accept, Innkeepers may honor requests in order of
receipt, pro rata or by any other method which Innkeepers determines to be
appropriate. To obtain a Request for Waiver Form, please contact Innkeepers'
Director of Investor Relations at (561) 835-1800. Completed Requests for Waiver
should be sent to Innkeepers at 306 Royal Poinciana Way, Palm Beach, Florida
33480, Attention: Chief Financial Officer, or by facsimile to (561) 835-0457.
GOOD FUNDS ON ALL APPROVED REQUESTS FOR WAIVER MUST BE RECEIVED BY THE
ADMINISTRATOR NOT LATER THAN 12:00 P.M. (NOON) EASTERN TIME ON THE BUSINESS DAY
IMMEDIATELY PRECEDING THE RELEVANT PRICING PERIOD IN ORDER FOR SUCH FUNDS TO BE
INVESTED ON THE RELEVANT INVESTMENT DATE.
INNKEEPERS RESERVES THE RIGHT TO MODIFY, SUSPEND OR TERMINATE
PARTICIPATION IN THE PLAN BY OTHERWISE ELIGIBLE HOLDERS OR BENEFICIAL OWNERS OF
COMMON SHARES IN ORDER TO DETER OR ELIMINATE PRACTICES WHICH ARE NOT CONSISTENT
WITH THE PURPOSES OF THE PLAN. SEE "PLAN OF DISTRIBUTION."
THRESHOLD PRICE. Unless it waives its right to do so, Innkeepers may
establish for any Pricing Period a minimum price (the "Threshold Price") for
purchasing shares with optional cash investments (or an initial investment) made
pursuant to Requests for Waiver. Innkeepers will, at least five business days
prior to the commencement of the relevant Pricing Period, determine whether to
establish a Threshold Price and, if a Threshold Price is established, its
amount, and so notify the Administrator. The determination whether to establish
a Threshold Price and, if a Threshold Price is established, its amount, will be
made by Innkeepers in its sole discretion after a review of current market
conditions, the level of participation in the Plan, and current and projected
capital needs.
The Threshold Price for optional cash investments (or an initial cash
investment) made pursuant to Requests for Waiver, if established for any Pricing
Period, will be a stated dollar amount that the average of the high and low sale
prices of the Common Shares on the Exchange for each Trading Day of the relevant
Pricing Period must equal or exceed. In the event that the Threshold Price is
not satisfied for a Trading Day in the Pricing Period, then that Trading Day and
all trading prices for that day will be excluded from the Pricing Period and the
determination of the Purchase Price. A day will also be excluded if there are
not trades of Common Shares on the Exchange for such day. Thus, for example, if
the Threshold Price is not satisfied for three of the twelve Trading
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Days, then the Purchase Price will be based upon the remaining nine Trading Days
for which the Threshold Price was satisfied.
Each Trading Day of a Pricing Period for which the Threshold Price is
not satisfied or each day for which there are no trades of Common Shares
reported on the Exchange will cause the return of a portion of your optional
cash investment (or initial cash investment) in excess of $3,000. The returned
amount will equal one-twelfth of the total amount of the optional cash
investment (or initial cash investment) in excess of $3,000 for each Trading Day
that the Threshold Price is not satisfied or for each day no such sale is
reported. Thus, for example, if the Threshold Price is not satisfied or no such
sales are reported for three Trading Days, 3/12 (i.e., 25%) of your optional
cash investment (or initial cash investment) in excess of $3,000 will be
returned without interest to you.
The Threshold Price concept and return procedure discussed above apply
only to optional cash investments (or an initial cash investment) made pursuant
to written Requests for Waiver, and not to the reinvestment of dividends or
investments that do not exceed $3,000. Setting a Threshold Price for a Pricing
Period shall not affect the setting of a Threshold Price for any subsequent
Pricing Period.
For any particular month, Innkeepers may waive its right to set a
Threshold Price for optional cash investments (or initial cash investments) that
exceed $3,000. Neither Innkeepers nor the Administrator shall be required to
provide any written notice to Participants as to the Threshold Price for any
Pricing Period. Participants, however, may ascertain whether the Threshold Price
applicable to a given Pricing Period has been set or waived, as applicable, by
telephoning Innkeepers' Director of Investor Relations at (561) 835-1800.
WAIVER DISCOUNT. Each month, at least five business days prior to the
commencement of the relevant Pricing Period, Innkeepers may establish a discount
from the Purchase Price applicable to optional cash investments (or initial cash
investments) made pursuant to Requests for Waiver. Such discount (the "Waiver
Discount") will be between 0% and 3% of the Purchase Price and may vary each
month, but once established will apply uniformly to all optional cash
investments (or initial cash investments) made pursuant to Requests for Waiver
during that month. The Waiver Discount will be established in Innkeepers' sole
discretion after a review of relevant factors including, but not limited to,
current market conditions, the level of participation in the Plan, and current
and projected capital needs. Participants may obtain the Waiver Discount
applicable to the next Pricing Period by telephoning Innkeepers at (561)
835-1800. Setting a Waiver Discount for a particular month shall not affect the
setting of a Waiver Discount for any subsequent monthly purchase. The Waiver
Discount feature discussed above applies only to optional cash investments and
initial cash investments made pursuant to written Requests for Waiver and does
not apply to the reinvestment of cash dividends or optional cash investments and
initial investments of $3,000 or less.
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14. UNDER WHAT CIRCUMSTANCES WILL OPTIONAL CASH INVESTMENTS AND INITIAL
INVESTMENTS BE RETURNED?
Optional cash investments and initial investments must be received by
the Administrator by the dates described in the third paragraph of Question 12.
Any optional cash investments and initial investments received after such dates
and before the related Investment Date will be promptly returned to the
Participant, and no interest on such returned amounts will be paid to the
Participant. Optional cash investments of less than $50 and initial cash
investments of less than $250 (or such lower initial cash investment minimum as
may have been established for an investor by the Company in its sole discretion)
and that portion of any optional cash investment or initial investment which
exceeds the allowable maximum amount will also be returned promptly to the
Participant, and no interest on such returned amounts will be paid to the
Participant. In addition, a portion of each optional cash investment or initial
cash investment in excess of $3,000 will be returned to the Participant for each
Trading Day that the Threshold Price is not satisfied or for which there are no
trades in Common Shares on the Exchange, and no interest on such returned
amounts will be paid to the Participant. (See Question 13 regarding the
minimum/maximum monthly purchase limits and the Threshold Price.).
15. WHAT IF A PARTICIPANT HAS MORE THAN ONE ACCOUNT?
For the purpose of the limitations discussed in Question 13, Innkeepers
may aggregate all reinvestment dividends, initial cash investments and optional
cash investments for Participants with more than one account using the same
Social Security Number or Taxpayer Identification Number. Participants unable to
supply a Social Security Number or Taxpayer Identification Number may be limited
by Innkeepers to only one Plan account. Also, for the purpose of such
limitations, all Plan accounts which Innkeepers believes to be under common
control or management or to have common ultimate beneficial ownership may be
aggregated. Unless Innkeepers has determined that reinvestment of dividends and
optional cash investments for each such account would be consistent with the
purposes of the Plan, Innkeepers will have the right to aggregate all such
accounts and to return, without interest, any amounts in excess of the
investment limitations applicable to a single account received in respect of all
such accounts. See Question 13.
CERTIFICATES
16. WILL CERTIFICATES BE ISSUED FOR SHARE PURCHASES?
All Plan Shares and all Participating Shares deposited for safekeeping
with the Administrator pursuant to Question 17 below will be held together in
the name of the Administrator or its nominee. This service protects against the
loss, theft, and destruction of certificates evidencing shares. Upon written
request or upon withdrawal of a Participant from the Plan or upon termination of
the Plan, the Administrator will have certificates issued and delivered to you
for any full Common Shares credited to your account. Certificates will be issued
only in the same names as those enrolled in the Plan. In no event will
certificates for fractional shares be issued.
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17. MAY A PARTICIPANT ADD COMMON SHARES TO HIS OR HER ACCOUNT BY TRANSFERRING
SHARE CERTIFICATES THAT THE PARTICIPANT POSSESSES?
You may send to the Plan for safekeeping all Common Share certificates
which you hold and designate for participation in the Plan. The Plan will hold
the shares purchased for a Participant, and any shares deposited by the
Participant with the Plan for safekeeping, until the Participant terminates
participation in the Plan. The safekeeping of shares offers the advantage of
protection against loss, theft or inadvertent destruction of certificates as
well as convenience if and when shares are sold through the Plan. All shares
represented by such certificates will be kept in safekeeping in "book entry"
form and will be combined with any full and fractional shares then held by the
Plan for the Participant. ALL SUCH SHARES TRANSFERRED TO THE PLAN UNDER THE
SAFEKEEPING SERVICE WILL BE DEEMED PARTICIPATING SHARES, AND ALL DIVIDENDS ON
SUCH SHARES WILL BE REINVESTED FOR THE PARTICIPANT.
To deposit your certificates for safekeeping under the Plan, you must
submit a letter of transmittal, which will be provided by the Administrator upon
request. Share certificates and the letter of transmittal, as well as all
written inquiries about the safekeeping service, should be directed to the
Administrator at the address listed in Question 4. It is recommended that
certificates be sent by registered mail.
Shares deposited for safekeeping may be withdrawn by the Participant by
submitting a written request to the Administrator. Dividends on Plan Shares
acquired by the reinvestment of dividends on any such withdrawn shares (and on
any other shares subsequently acquired and held by the Participant) will
continue to be reinvested unless the Participant provides contrary written
instructions or a new Enrollment Authorization Form.
SALE OF SHARES
18. CAN PARTICIPANTS SELL SHARES HELD UNDER THE PLAN?
Following receipt of written instructions from you, the Plan will sell
some or all of your shares held under the Plan (including Common Shares
deposited with the Plan for safekeeping) and will remit to you a check for the
proceeds of such sale, less your share of brokerage commissions,
service/administrative charges and any applicable taxes. Prior written
instructions from the Participant must be received at least 48 hours preceding
the sale. Shares will be sold at least once per week by the Plan at then current
market prices in transactions carried out through one or more brokerage firms.
If a request to sell shares is received on or after the ex-dividend date but
before the related dividend payment date, any cash dividend paid on such shares
will be reinvested. The request to sell shares will then be processed as soon as
practicable after the dividend is reinvested and the additional shares are
credited to the Participant's account. Shares to be sold may be commingled with
those of other Participants requesting sale of their shares, and the proceeds to
each Participant will be based on the average price for all shares sold during
the day of sale. This procedure for selling shares may be particularly
attractive to holders of small amounts of Common
23
<PAGE> 25
Shares, because the Plan can combine odd lots and small numbers of shares into
larger blocks to be sold, and thereby take advantage of lower brokerage costs
than might otherwise be available to individual Participants in the sale of
their shares. Participants should understand that the price of the Common Shares
may go down between the date a request to sell is received and the date the sale
is executed. A request to sell all shares held in a Participant's account will
be treated as a withdrawal from the Plan. See Question 20 below.
REPORTS
19. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Unless you are participating in the Plan through your broker, bank or
nominee, you will receive from the Administrator a detailed statement of your
Plan account following each dividend payment and account transaction. These
detailed statements will show total cash dividends received, total optional cash
investments received, total Common Shares purchased (including fractional
shares), price paid per share, total Common Shares held in the Plan and other
information. THESE STATEMENTS SHOULD BE RETAINED BY YOU TO DETERMINE YOUR TAX
COST BASIS FOR SHARES PURCHASED. See Question 21. If you are participating in
the Plan through your broker, bank or nominee, you should contact such party
regarding a statement of your interests in the Plan.
All notices from the Administrator to a Participant will be mailed to
the Participant at his last address of record with the Administrator.
Participants must notify the Administrator of any change in name or address.
WITHDRAWAL
20. HOW MAY PARTICIPANTS WITHDRAW FROM THE PLAN?
A Participant may terminate participation in the Plan by writing to the
Administrator. A Participant may request (1) that the Administrator send all
dividends to the Participant by check and continue to hold the Participant's
shares in the Plan account (in such case the Participant may continue to make
optional cash investments), (2) that the Administrator discontinue any automatic
withdrawals of funds and purchase of shares, (3) that a certificate be issued
for all full Common Shares held for such Participant's account and a check be
issued for the proceeds from the sale of any fractional shares, or (4) that all
full shares and any fractional share held for such Participant's account be sold
and a check issued for the net proceeds, less any applicable brokerage fees and
commissions, service/administrative charges and transfer tax. If such a request
is received on or after the ex-dividend date but before the related dividend
payment date, any cash dividend paid on that account will be reinvested for the
account. The request will then be processed as soon as practicable after the
dividend is reinvested and the additional shares are credited to the
Participant's account.
24
<PAGE> 26
If a Participant in the Plan does not own at least one whole share
registered in the Participant's name or held through the Plan, the Participant's
participation in the Plan may be terminated. The Company may also terminate the
Plan or any Participant's participation in the Plan after written notice in
advance mailed to such Participant at the address appearing on the
Administrator's records. Participants whose participation in the Plan has been
terminated will receive certificates for whole shares held in their accounts and
a check for the cash value of any fractional share held in any Plan account so
terminated.
TAXES
21. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN?
Reinvested Dividends. When your dividends are reinvested to acquire
Common Shares (including any fractional share), you will be treated as having
received a distribution in the amount of the average of the high and low sales
price of the Common Shares on the Exchange on the Investment Date (the "Tax
FMV"), multiplied by the number of Common Shares (including any fractional
share) purchased. Thus, for example, if $95 of your dividends are reinvested to
purchase Common Shares under the Plan having a Tax FMV of $100, you will be
treated as having received a $100 distribution for federal income tax purposes.
The amount treated as a distribution to you will be taxable as a dividend to the
extent of the Company's current and accumulated earnings and profits. To the
extent that the distribution exceeds the Company's current and accumulated
earnings and profits, the distribution will be treated first as a tax-free
return of capital, reducing your tax basis in your shares, and then as gain
realized from the sale of your shares. Your tax basis in Common Shares acquired
with reinvested dividends will be equal to the Tax FMV of such shares.
Initial Cash Investments and Optional Cash Investments. It is not
entirely clear under current law how a purchase of Common Shares under the Plan
with an initial cash investment or an optional cash investment (whether or not
pursuant to a Request for Waiver) should be treated for federal income tax
purposes. The tax treatment of such a purchase of Common Shares will differ
depending on whether you are participating in the dividend reinvestment feature
of the Plan. The Company currently intends to take the position for reporting
purposes that, if you are not participating in the dividend reinvestment feature
of the Plan, you will not be treated for federal income tax purposes as having
received a distribution from the Company upon the purchase of Common Shares with
an initial cash investment or an optional cash investment. In that case, your
tax basis in the Common Shares purchased will equal the Purchase Price for such
shares. However, the Company currently intends to take the position for tax
reporting purposes that, if you participate in the dividend reinvestment feature
of the Plan, you will be treated for federal income tax purposes as having
received a distribution from the Company upon the purchase of Common Shares with
an initial cash investment or an optional cash investment in an amount equal to
the excess, if any, of (i) the Tax FMV of the shares multiplied by the number of
Common Shares (including any fractional share) purchased over (ii) the Purchase
Price of such Common Shares, taking into account any discount, and that any such
distribution will be treated as a taxable dividend to you in the extent of the
Company's current and accumulated earnings and profits. Thus, for example, if
you make a $97
25
<PAGE> 27
optional cash investment to purchase Common Shares having a Tax FMV of $100, you
will be treated as having received a $3 distribution for federal income tax
purposes. The Company currently intends to take the position for tax reporting
purposes that, if you participate in the dividend reinvestment feature of the
Plan, you will receive a tax basis in Common Shares acquired with an initial
cash investment or an optional cash investment equal to the greater of the Tax
FMV or the purchase price of the shares.
The holding period for a Common Share (including a fractional share)
acquired under the Plan generally will begin on the day after the Investment
Date that the share was acquired. The holding period of a whole share resulting
from the acquisition of two or more Fractional Shares on different Investment
Dates normally will be split between the holding periods of the fractional
components comprising the whole share. In the case of Participants (including
foreign shareholders) whose dividends are subject to U.S. backup (or federal
tax) withholding, the Administrator will reinvest dividends less the amount of
tax required to be withheld.
Receipt of Share Certificates and Cash. You will not realize any income
when you receive certificates for whole shares credited to your account under
the Plan. Any cash received for a fractional share held in your account will be
treated as an amount realized on the sale of the fractional share. You therefore
will recognize gain or loss equal to any difference between the amount of cash
received for a fractional share and your tax basis in the fractional share.
Similarly, if the Plan Administrator sells your shares pursuant to your request
upon termination of your participation in the Plan, you will recognize gain or
loss equal to the difference between the amount you realize on the sale and your
tax basis in the shares. Gain or loss recognized on a sale of shares (including
a fractional share) from your account generally will be capital gain or loss if
you hold your Plan shares as capital assets.
The Plan is neither subject to the Employee Retirement Income Security
Act of 1974, as amended, nor qualified under Section 401(k) of the Internal
Revenue Code of 1986, as amended. The above rules may not be applicable to
certain Participants, such as tax-exempt entities (e.g., pension funds and IRAs)
and foreign shareholders, who should consult their own tax advisors concerning
the tax consequences applicable to them.
THE FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES
OF PARTICIPATING IN THE PLAN AND DOES NOT CONSTITUTE TAX ADVICE. SPECIFIC
QUESTIONS SHOULD BE REFERRED TO THE PARTICIPANT'S TAX ADVISOR.
26
<PAGE> 28
OTHER PROVISIONS
22. WHAT HAPPENS IF A PARTICIPANT SELLS OR TRANSFERS COMMON SHARES OR ACQUIRES
ADDITIONAL COMMON SHARES?
If a Participant has elected to have dividends automatically invested
in the Plan and subsequently sells or transfers all or any part of the Common
Shares registered in the Participant's name, automatic investment will continue
as long as shares are registered in the name of the Participant or held for the
Participant by the Administrator or until termination of enrollment. Similarly,
if a Participant has elected the Full or Partial Dividend Reinvestment options
under the Plan and subsequently acquires additional shares registered in the
Participant's name, dividends paid on such shares will automatically be
reinvested until termination of enrollment. If, however, a Participant has
elected the Optional Cash Investments Only option and subsequently acquires
additional shares which are registered in the Participant's name, dividends paid
on such shares will not be automatically reinvested under the Plan. See Question
7. Participants may, however, change their dividend reinvestment elections by
providing a letter of instruction to the Administrator.
23. HOW WILL A PARTICIPANT'S COMMON SHARE BE VOTED?
In connection with the exercise of shareholder voting rights, each
Participant will receive a proxy card representing any Common Shares held by the
Participant or for the Participant's account under the Plan. All Common Shares
will be voted as designated by the Participant on the proxy card. If a
Participant does not vote by proxy or in person and does not otherwise instruct
the Plan to the contrary, the Plan may vote the full shares held by it for the
account of the Participant in accordance with the recommendations of Innkeepers'
management.
24. WHO PAYS THE EXPENSES OF THE PLAN?
There are no brokerage commissions or service charges on newly issued
Common Shares purchased from Innkeepers for a Participant's account. Brokerage
fees on shares purchased on the open market or in a privately negotiated
transaction for a Participant's account with dividends will be paid by
Innkeepers and, for tax purposes, these fees will be considered additional
dividend income to the Participant. (See Question 21.) Participants will pay a
pro rata portion of brokerage fees on Common Shares purchased on the open market
or in a privately negotiated transaction for a Participant's account with
optional cash investments or initial cash investments. All costs of
administering the Plan will be paid by Innkeepers except costs associated with
custodial services, brokerage commissions on open market purchases or privately
negotiated purchases with optional cash investments or initial cash investments,
brokerage commissions in connection with sales under the Plan, the costs and
fees of any broker, bank or other nominee (other than the Administrator) which
holds shares on behalf of a Participant and taxes. When shares are sold for a
Participant's account, the Plan will first deduct any applicable brokerage
commissions, service charges (including applicable fees charged by the
Administrator) and transfer and other taxes.
27
<PAGE> 29
25. WHAT ARE THE RESPONSIBILITIES OF INNKEEPERS OR THE ADMINISTRATOR UNDER THE
PLAN?
Neither Innkeepers nor the Administrator will be liable for any act
done in good faith or for any good faith omission to act, including, without
limitation, any claims of liability arising out of a failure to terminate a
Participant's account upon such Participant's death or adjudicated incompetence
prior to the receipt of notice in writing of such death or adjudicated
incompetence, the prices at which shares are purchased for the Participant's
account, the times when purchases are made or fluctuations in the market value
of the Common Shares. Neither Innkeepers nor the Administrator has any duties,
responsibilities or liabilities except those expressly set forth in the Plan.
The Plan does not limit any Participant's right to sue under the Securities Act
or the Exchange Act.
THE PARTICIPANT SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE A
PROFIT OR PROTECT AGAINST A LOSS ON THE COMMON SHARES PURCHASED BY A PARTICIPANT
UNDER THE PLAN.
26. WHAT HAPPENS IF INNKEEPERS ISSUES A SHARE DIVIDEND OR DECLARES A SHARE
SPLIT?
Any Common Share distributed by Innkeepers as a result of a share
dividend or a share split on shares held under the Plan for a Participant will
be credited to the Participant's account. In the event that Innkeepers makes
available to holders of its Common Shares rights to purchase additional shares
or other securities, to the extent permitted by the terms of such rights the
Plan will sell all rights received by it for Participants and invest the
resulting funds in Common Shares with the next regular cash dividend.
Participants who wish to exercise any rights relating to their shares will be
able to do so only if they have requested that certificates for the shares
purchased under the Plan be issued to them prior to the record date for the
distribution of the rights. (See Question 16.)
27. MAY SHARES IN A PARTICIPANT'S ACCOUNT BE PLEDGED?
No shares credited to a Participant's account may be pledged and any
such purported pledge will be void. If a Participant wishes to pledge shares,
those shares must be withdrawn from the Plan.
28. MAY A PARTICIPANT TRANSFER ALL OR A PART OF THE PARTICIPANT'S SHARES HELD IN
THE PLAN TO ANOTHER PERSON?
A Participant may transfer ownership of all or part of his or her
shares held in the Plan through gift, private sale or otherwise, by mailing to
the Administrator at the address in Question 4 a properly executed stock
assignment, along with a letter with specific instructions regarding the
transfer and a Form W-9 (Certification of Taxpayer Identification Number)
completed by the transferee. Requests for transfer of shares held in the Plan
are subject to the same requirements as the transfer of Common Share
certificates, including the requirement of a medallion signature guarantee on
the share assignment. The Administrator will provide Participants with the
appropriate forms upon request. If any share certificates bearing a restrictive
legend are contained in the
28
<PAGE> 30
Participant's Plan account, the Administrator will comply with the provisions of
such restrictive legend before effecting a sale or transfer of such restricted
shares.
Shares so transferred will continue to be held by the Administrator
under the Plan. An account will be opened in the name of the transferee, if he
or she is not already a Participant, and such transferee will automatically be
enrolled in the Plan. If the transferee is not already a registered shareholder
or a Plan Participant, the donor may make a reinvestment election for the
transferee at the time of the gift. The transferee may change the reinvestment
election after the gift has been made. (See Question 7 above.) The transferee
will receive a statement showing the number of shares transferred to and held in
the transferee's Plan account.
29. MAY THE PLAN BE CHANGED OR TERMINATED?
While the Company intends to continue the Plan indefinitely, Innkeepers
reserves the right to amend, modify, suspend or terminate the Plan at any time.
If the Company terminates the Plan, you will receive a certificate for the
number of whole Common Shares credited to your account under the Plan and a
check for the value of any fractional share. Participants will be notified in
writing of any modifications made to the Plan.
USE OF PROCEEDS
The proceeds to Innkeepers from the issuance of Common Shares pursuant
to the Plan will be used for general corporate purposes.
DISTRIBUTION POLICY AND PRICE RANGE OF COMMON SHARES
The Company currently pays regular quarterly distributions to the
holders of Common Shares. Future distributions paid by the Company will be at
the discretion of the Board of Trustees and will depend on the Company's actual
cash available for distribution to shareholders of the Company, its financial
condition, capital requirements, the distribution requirements under federal
income tax provisions for qualification as a REIT and such other factors as the
Board of Trustees may deem relevant. The Company's Common Shares are listed on
the Exchange under the symbol "KPA".
RESTRICTIONS ON OWNERSHIP OF SHARES
For the Company to qualify as a REIT for federal income tax purposes,
no more than 50% in value of its outstanding capital shares may be owned,
directly or indirectly, by five or fewer individuals (as defined in the law to
include certain entities) during the last half of a taxable year or during a
proportionate part of a shorter taxable year, and the Common Shares must also be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year or during a proportionate part of a shorter taxable year. Because the
Company expects to continue to qualify as a REIT, the Amended and Restated
Declaration of Trust of the Company contains provisions that
29
<PAGE> 31
prohibit direct or indirect ownership by any shareholder of more than 9.8% of
the Common Shares (or 9.8% of the number of outstanding 8.625% Series A
Cumulative Convertible Preferred Shares of Beneficial Interest of the Company)
and renders null and void certain transfers of shares which would result in the
disqualification of the Company as a REIT. The provision also gives the board of
trustees the authority to take such actions as it deems advisable to enforce the
provision. Such actions might include, but are not limited to, refusing to give
effect to, or seeking to enjoin, a transfer which might jeopardize the Company's
status as a REIT. The provision also requires any shareholder to provide the
Company such information regarding his direct or indirect ownership of Common
Shares as the Company may reasonably require. The provisions could prevent you
from reinvesting dividends or prevent you from making an initial or optional
cash investment.
PLAN OF DISTRIBUTION
Except to the extent the Administrator purchases Common Shares in open
market transactions or privately negotiated purchases, the Common Shares
acquired under the Plan will be sold directly by the Company under the Plan. In
connection with the administration of the Plan, Innkeepers may be requested to
approve optional cash investments in excess of the allowable maximum amounts on
behalf of Participants pursuant to Requests for Waiver, including those engaged
in the securities business. In deciding whether to approve such a request,
Innkeepers will consider relevant factors including, but not limited to (a)
whether it is then selling newly issued Common Shares under the Plan or whether
shares for the Plan are being acquired through open market purchases or
privately negotiated transactions, (b) Innkeepers' need for additional funds,
(c) the attractiveness of obtaining such funds by the sale of Common Shares in
comparison to other sources of funds, (d) the purchase price likely to apply to
any sale of Common Shares, (e) the Participant submitting the request, including
the extent of the Participant's previous participation and the nature of such
Participant, and (f) the aggregate amount, if any, of optional cash investments
in excess of the allowable maximum amounts for which requests have been
submitted by all Participants. Persons who acquire Common Shares through the
Plan and resell them shortly after acquiring them, under certain circumstances,
may be participating in a distribution of securities that would require
compliance with Rule 10b-6 under the Exchange Act and may be considered to be
underwriters within the meaning of the Securities Act. Such shares, including
shares acquired pursuant to approved Requests for Waiver, may be resold in
market transactions (including coverage of short transactions on any national
securities exchange on which the Common Shares are traded) or in privately
negotiated transactions. Innkeepers will not extend to any such person any
rights or privileges other than those to which it would be entitled as a
Participant, nor will Innkeepers enter into any agreement with any such person
regarding such person's purchase of such shares or any resale or distribution
thereof. Innkeepers may, however, approve requests for optional cash investments
by such persons in excess of allowable maximum limitations. If such requests are
submitted for any Investment Date for an aggregate amount in excess of the
amount Innkeepers is willing to accept, Innkeepers may honor such requests in
order of receipt, pro rata or by any other method which Innkeepers determines to
be appropriate.
30
<PAGE> 32
LEGAL MATTERS
Certain legal matters with regard to the Common Shares have been passed
upon by Hunton & Williams, Richmond, Virginia.
EXPERTS
The consolidated financial statements and related financial statement
schedule of Innkeepers USA Trust, as of December 31, 1996 and 1997, and the
years ended December 31, 1995, 1996 and 1997; and the combined financial
statements of the JF Lessee as of December 31, 1996 and 1997 and for the years
ended December 31, 1995, 1996 and 1997, all of which are incorporated by
reference in this Prospectus have been audited by PricewaterhouseCoopers LLP,
independent accountants, as set forth in their reports thereon incorporated by
reference herein. Such financial statements and financial statement schedule are
incorporated herein by reference in reliance upon such reports given on the
authority of that firm as experts in accounting and auditing.
31
<PAGE> 33
APPENDIX I
<TABLE>
<CAPTION>
Threshold Price
and Waiver
Discount, if any, Requests for Pricing Period
Cycle will be set by: Wavier Due by: Record Date Start Date Investment Date
- ----- --------------- -------------- ----------- ----------------- -----------------
(C) (D) (E) (F) (G)
<S> <C> <C> <C> <C> <C>
A. . . . . . January 28, 1999 February 1, 1999 N/A February 4, 1999 February 23, 1999
A. . . . . . March 5, 1999 March 9, 1999 N/A March 12, 1999 March 30, 1999
B. . . . . . April 1, 1999 April 6, 1999 March 26, 1999 April 9, 1999 April 27, 1999
A. . . . . . April 30, 1999 May 4, 1999 N/A May 7, 1999 May 25, 1999
A. . . . . . June 4, 1999 June 8, 1999 N/A June 11, 1999 June 29, 1999
B. . . . . . July 1, 1999 July 6, 1999 June 25, 1999 July 9, 1999 July 27, 1999
A. . . . . . August 6, 1999 August 10, 1999 N/A August 13, 1999 August 31, 1999
A. . . . . . September 2, 1999 September 7, 1999 N/A September 10, 1999 September 28, 1999
B. . . . . . October 1, 1999 October 5, 1999 September 24, 1999 October 8, 1999 October 26, 1999
A. . . . . . November 4, 1999 November 8, 1999 N/A November 11, 1999 November 30, 1999
A. . . . . . December 2, 1999 December 6, 1999 N/A December 9, 1999 December 28, 1999
B. . . . . . December 30, 1999 January 3, 2000 December 31, 1999 January 6, 2000 January 25, 2000
A. . . . . . February 3, 2000 February 7, 2000 N/A February 10, 2000 February 29, 2000
A. . . . . . March 3, 2000 March 7, 2000 N/A March 10, 2000 March 28, 2000
B. . . . . . March 30, 2000 April 3, 2000 March 31, 2000 April 6, 2000 April 25, 2000
A. . . . . . May 4, 2000 May 8, 2000 N/A May 11, 2000 May 30, 2000
A. . . . . . June 2, 2000 June 6, 2000 N/A June 9, 2000 June 27, 2000
B. . . . . . June 29, 2000 July 3, 2000 June 30, 2000 July 7, 2000 July 25, 2000
A. . . . . . August 4, 2000 August 8, 2000 N/A August 11, 2000 August 29, 2000
A. . . . . . August 31, 2000 September 5, 2000 N/A September 8, 2000 September 26, 2000
B. . . . . . October 6, 2000 October 10, 2000 September 29, 2000 October 13, 2000 October 31, 2000
A. . . . . . November 2, 2000 November 6, 2000 N/A November 9, 2000 November 28, 2000
A. . . . . . November 30, 2000 December 4, 2000 N/A December 7, 2000 December 26, 2000
B. . . . . . January 4, 2001 January 8, 2001 December 29, 2000 January 11, 2001 January 30, 2001
A February 1, 2001 February 5, 2001 N/A February 8, 2001 February 27, 2001
A. . . . . . March 2, 2001 March 6, 2001 N/A March 9, 2001 March 27, 2001
B. . . . . . March 29, 2001 April 2, 2001 March 30, 2001 April 5, 2001 April 24, 2001
A. . . . . . May 3, 2001 May 7, 2001 N/A May 10, 2001 May 29, 2001
A. . . . . . June 1, 2001 June 5, 2001 N/A June 8, 2001 June 26, 2001
B. . . . . . July 6, 2001 July 10, 2001 June 29, 2001 July 13, 2001 July 31,2001
A. . . . . . August 3, 2001 August 7, 2001 N/A August 10, 2001 August 28, 2001
A. . . . . . August 30, 2001 September 4, 2001 N/A September 7, 2001 September 25, 2001
B. . . . . . October 5, 2001 October 9, 2001 September 28, 2001 October 12, 2001 October 30, 2001
A. . . . . . November 1, 2001 November 5, 2001 N/A November 8, 2001 November 27, 2001
A. . . . . . November 30, 2001 December 4, 2001 N/A December 7, 2001 December 26, 2001
</TABLE>
- ----------
A. Initial and optional cash investments only.
B. Initial and optional cash investments and reinvestment of cash
dividends.
C. The Threshold Price will be established at least five (5) Trading Days
prior to the commencement of the Pricing Period. The Waiver Discount,
if any, will also be established at least five (5) Trading Days prior
to the commencement of the Pricing Period.
D. Requests for Waiver are due at least three (3) Trading Days prior to
the commencement of the Pricing Period.
E. The actual Record Date for dividend months (those indicated by the
letter "B" in the cycle column) will be established by the Board of
Trustees; the expected Record Dates are as set forth in the table.
Non-dividend months are indicated by the letter "A" in the cycle
column.
F. The Pricing Period will be the twelve consecutive Trading Days ending
on the Trading Day immediately preceding the Investment Date.
G. The Investment Date will be the dividend payment date during a month in
which a cash dividend is paid and in any other month, the last Tuesday
of such month; however, if either the dividend payment date or such
last Tuesday falls on a date when the New York Stock Exchange is
closed, the Investment Date will be the first day following on which
the New York Stock Exchange is open.
A-1
<PAGE> 34
U.S. EQUITY
MARKETS CLOSED IN 1999
<TABLE>
<S> <C>
New Years Day...........................................................................January 1
Martin Luther King Jr. Day..............................................................January 18
Presidents Day..........................................................................February 15
Good Friday.............................................................................April 2
Memorial Day............................................................................May 31
Independence Day........................................................................July 5*
Labor Day...............................................................................September 6
Thanksgiving Day........................................................................November 25
Christmas Day...........................................................................December 24*
</TABLE>
- ----------
*Observed
U.S. EQUITY
MARKETS CLOSED IN 2000
<TABLE>
<S> <C>
New Years Day...........................................................................January 1*
Martin Luther King Jr. Day..............................................................January 17
Presidents Day..........................................................................February 21
Good Friday.............................................................................April 21
Memorial Day............................................................................May 29
Independence Day........................................................................July 4
Labor Day...............................................................................September 4
Thanksgiving Day........................................................................November 23
Christmas Day...........................................................................December 25
</TABLE>
- ----------
* New Year's Day 2000 falls on a Saturday. The Exchange will be open for
regular trading hours on Friday, December 31, 1999 and Monday, January 3,
2000.
U.S. EQUITY
MARKETS CLOSED IN 2001
<TABLE>
<S> <C>
New Years Day...........................................................................January 1
Martin Luther King Jr. Day..............................................................January 15
Presidents Day..........................................................................February 19
Good Friday.............................................................................April 13
Memorial Day............................................................................May 28
Independence Day........................................................................July 4
Labor Day...............................................................................September 3
Thanksgiving Day........................................................................November 22
Christmas Day...........................................................................December 25
</TABLE>
A-2
<PAGE> 35
- --------------------------------------------------
THE COMPANY HAS NOT AUTHORIZED ANYBODY TO MAKE
A STATEMENT THAT DIFFERS FROM WHAT IS IN THIS
PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT
THAT DIFFERS FROM WHAT IS IN THIS PROSPECTUS, YOU
SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN
OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE
SECURITIES, IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS
COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE
INFORMATION MAY CHANGE AFTER THAT DATE.
TABLE OF CONTENTS
Page
----
Available Information......................2
Incorporation of Certain
Documents by Reference..................2
Summary of Plan............................4
Description of the Plan....................8
Purpose............................8
Participation Options..............8
Advantages and Disadvantages.......8
Administration....................10
Participation.....................11
Enrollment........................11
Purchases.........................14
Certificates......................21
Sales of Shares...................22
Reports...........................22
Withdrawal........................23
Taxes.............................23
Other Provisions..................24
Use of Proceeds...........................26
Indemnification under the
Securities Act.........................26
Distribution Policy and Price Range
of Common Shares.......................27
Plan of Distribution......................29
Legal Matters.............................29
Experts ..................................29
Appendix I...............................A-1
- --------------------------------------------------
- --------------------------------------------------
3,000,000 SHARES
INNKEEPERS
USA
TRUST
COMMON SHARES
($0.01 PAR VALUE)
------------------------------
PROSPECTUS
------------------------------
DIVIDEND REINVESTMENT
AND SHARE PURCHASE PLAN
_____________, 1999
- --------------------------------------------------
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering are as follows
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 8,450
Accounting fees and expenses ...................... 2,000
Blue Sky fees and expenses ........................ 2,000
Legal fees and expenses ........................... 5,500
Miscellaneous ..................................... 50
-------
TOTAL ................................ $18,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Maryland law permits a Maryland real estate investment trust to include
in its declaration of trust a provision limiting the liability of its trustees
and officers to the trust and its shareholders for money damages except for
liability resulting from (a) actual receipt of an improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment as being material to the cause of action. The Declaration of
Trust of the Company contains such a provision which eliminates such liability
to the maximum extent permitted by Maryland law.
The Declaration of Trust of the Company obligates the Company, to the
maximum extent permitted by Maryland law, to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former shareholder, trustee, or officer or (b) any individual who,
while a trustee of the Company and at the request of the Company, serves or has
served another corporation, partnership, joint venture, trust, employee benefit
plan or any other enterprise as a trustee, director, officer, partner, employee
or agent of such a corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise from or against any claim or liability to which
such person may become subject or which such person may incur by reason of such
service. The Bylaws of the Company obligate it, to the maximum extent permitted
by Maryland law, to indemnify and to pay or reimburse reasonable expenses in
advance of a final disposition of a proceeding to (a) any present or former
trustee or officer who is made a party to the proceeding by reason of his
service in that capacity, (b) any individual who, while a shareholder, trustee
or officer of the Company and at the request of the Company, serves or has
served another corporation, partnership, joint venture, trust, employee benefit
plan or any other enterprise as a trustee, director, officer or partner of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made a party to the proceeding by reason of his service in
that capacity and (c) each shareholder or former shareholder for any claim or
liability to which he may become subject by reason of such status. The
Declaration of Trust and Bylaws also permit the Company to indemnify and advance
expenses to any person who served a predecessor of the Company in any of the
capacities described above and to any employee or agent of the Company or a
predecessor of the Company. The Bylaws require the Company to indemnify any
present or former shareholder, trustee or officer who has been successful, on
the merits or otherwise, in the defense of any proceeding to which he is made a
party by reason of his service in that capacity.
Maryland law permits a Maryland real estate investment trust to
indemnify and advance expenses to its trustees, officers, employees and agents
to the same extent as permitted by Maryland corporate law for directors and
officers of Maryland corporations. Maryland corporate law permits a corporation
to indemnify its present and former directors and officers, among others,
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that (a) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (i) was committed in
bad faith or (ii) was the result of active and deliberate dishonesty, (b) the
director or officer actually received an improper personal benefit in money,
property or services or (c) in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful.
<PAGE> 37
However, a Maryland corporation may not indemnify for an adverse judgment in a
suit by or in the right of the corporation. The Bylaws of the Company require
it, as a condition to advancing expenses, to obtain (a) a written affirmation by
the trustee or officer of his good faith belief that he has met the standard of
conduct necessary for indemnification by the Company as authorized by the Bylaws
and (b) a written statement by or on his behalf to repay the amount paid or
reimbursed by the Company if it shall ultimately be determined that the standard
of conduct was not met.
Any indemnification by the Company pursuant to the provisions of the
Declaration of Trust or Bylaws described above shall be paid out of the assets
of the Company and shall not be recoverable from the shareholders. To the extent
that the foregoing indemnification provisions purport to include indemnification
for liabilities arising under the Securities Act of 1933, as amended, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission such indemnification is contrary to public policy and, therefore,
unenforceable. The Company has purchased director and officer liability
insurance for the purpose of providing a source of funds to pay any
indemnification described above.
The Partnership Agreement also provides for indemnification of the
Company and its wholly-owned subsidiary which acts as general partner of the
Partnership, their trustees, directors and officers and such other persons as
the general partner may from time to time designate, against any and all losses,
claims, damages, liabilities (joint or several), expenses (including reasonable
legal fees and expenses), judgments, fines, settlements, and other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, that relate to the operations
of the Partnership in which such person may be involved, or is threatened to be
involved, provided that the Partnership shall not indemnify such persons if it
is established that (i) the act or omission of such person was material to the
matter giving rise to the proceeding and either was committed in bad faith or
was the result of active and deliberate dishonesty, (ii) such person actually
received an improper benefit in money, property or services, or (iii) in the
case of any criminal proceeding, such person had reasonable cause to believe
that the act or omission was unlawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted pursuant to the foregoing provisions
or otherwise, the Partnership has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy and, therefore, unenforceable.
ITEM 16. EXHIBITS
4.1 - Amended and Restated Declaration of Trust of the Registrant
(previously filed as Exhibit 3.1 to the Company's Form S-11
Registration Statement, Registration No. 33-81362 and incorporated
herein by reference)
4.2 - Articles Supplementary to the Amended and Restated Declaration of
Trust of the Registrant (previously filed as Exhibit 3.1 to the
Company's Form 8-K filed June 16, 1998)
4.3 - Bylaws of the Registrant (previously filed as Exhibit 3.2 to the
Company's Form S-11 Registration Statement, Registration No. 33-81362
and incorporated herein by reference)
4.4* - Form of Common Share Certificate
5.1* - Opinion of Hunton & Williams
8.1* - Opinion of Hunton & Williams with respect to tax matters
23.1* - Consent of Hunton & Williams (included in Exhibits 5.1 and 8.1)
23.2* - Consent of PricewaterhouseCoopers LLP
23.3* - Powers of Attorney (included on signature page)
- ------------
* Filed herewith
<PAGE> 38
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (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; 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 the undertakings set forth in subparagraphs
(i) and (ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this 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.
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the Town of Palm Beach, State of Florida, on the 18th day of
January, 1999.
INNKEEPERS USA TRUST,
a Maryland real estate investment trust
(Registrant)
By: /s/ Jeffrey H. Fisher
----------------------------------------
Jeffrey H. Fisher
Chairman of the Board
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Jeffrey H. Fisher and Mark A. Murphy or either of them, his true and
lawful attorney-in-fact, for him and in his name, place and stead, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to cause the same to be filed with the Securities and Exchange
Commission, hereby granting to said attorneys-in-fact full power and authority
to do and perform all and every act and thing whatsoever requisite or desirable
to be done in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact may do or cause to be done by virtue
of these presents.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on the 18th day of January, 1999 by
the following persons in the capacities indicated.
Signature Title
--------- -----
/s/ Jeffrey H. Fisher Chairman of the Board, President and
- ----------------------------------- Chief Executive Officer
Jeffrey H. Fisher
/s/ Bruce Zenkel Trustee
- -----------------------------------
Bruce Zenkel
/s/ Miles Berger Trustee
- -----------------------------------
Miles L. Berger
/s/ C. Gerald Goldsmith Trustee
- -----------------------------------
C. Gerald Goldsmith
/s/ Rolf E. Ruhfus Trustee
- -----------------------------------
Rolf E. Ruhfus
/s/ Thomas J. Crocker Trustee
- -----------------------------------
Thomas J. Crocker
/s/ Jack P. DeBoer Trustee
- -----------------------------------
Jack P. DeBoer
/s/ David Bulger Treasurer and Chief Financial Officer
- -----------------------------------
David Bulger
/s/ Gregory M. Fay Vice President of Accounting
- -----------------------------------
Gregory M. Fay
<PAGE> 1
EXHIBIT 4.4
COMMON SHARES COMMON SHARES
OF BENEFICIAL INTEREST OF BENEFICIAL INTEREST
NUMBER SHARES
KPA
THIS CERTIFICATE IS TRANSFERABLE IN CUSIP 4576JO 10 4
CHICAGO, ILLINOIS OR NEW YORK, NEW YORK SEE REVERSE FOR
CERTAIN DEFINITIONS
AND IMPORTANCE NOTICE
INNKEEPERS USA TRUST
A REAL ESTATE INVESTMENT TRUST
ORGANIZED UNDER THE LAWS OF THE STATE OF MARYLAND
THIS IS TO CERTIFY
is the owner of
FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF THE
BENEFICIAL INTEREST, $.01 PER SHARE, OF
Innkeepers USA Trust (the "Company"), a Maryland real estate investment trust
formed under the laws of the State of Maryland and under and subject to the
Declaration of Trust, filed with the State Department of Assessments and
Taxation of Maryland, and the Bylaws of the Company, both as amended from time
to time. The shares represented by this certificate are subject to all of the
provisions of the Declaration of Trust of the Company and any amendments thereto
and are transferable only on the share transfer books of the Company by the
holder of record hereof in person or by duly authorized attorney or legal
representative upon surrender of this Certificate properly endorsed. This
Certificate is not valid until countersigned and registered by the Company's
transfer agent and registrar.
In Witness Whereof, the Company has caused this Certificate to be
executed on its behalf by its duly authorized officers.
Dated:
COUNTERSIGNED AND REGISTERED
HARRIS TRUST AND SAVINGS BANK
TRANSFER AGENT
AND REGISTRAR [GRAPHIC OMITTED]
BY:
Secretary Chairman of the Board and President
Authorized Signature
<PAGE> 2
INNKEEPERS USA TRUST
IMPORTANT NOTICE
TO PRESERVE THE QUALIFICATIONS OF THE COMPANY AS A "REAL ESTATE
INVESTMENT TRUST" UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNDER THE
COMPANY'S DECLARATION OF TRUST, TRANSFER OF THE SHARES REPRESENTED HEREBY IS
RESTRICTED AND MAY BE STOPPED IF A PERSON OR GROUP OF PERSONS DIRECTLY OR
THROUGH THE OPERATION OF CERTAIN ATTRIBUTION RULES WOULD OWN IN EXCESS OF 9.8%
OF THE NUMBER OF THE COMPANY'S OUTSTANDING SHARES OF BENEFICIAL INTEREST AFTER
THE TRANSFER.
THE COMPANY MAY REQUIRE EVIDENCE OF A PROPOSED TRANSFEREE'S STATUS AND
OWNERSHIP INTEREST BEFORE PERMITTING ANY TRANSFER AND MAY REDEEM ANY SHARES HELD
IN VIOLATION OF THE PRECEDING PARAGRAPH. THE COMPANY WILL FURNISH TO ANY
SHAREHOLDER WITHOUT CHARGE A FULL STATEMENT OF THE TRANSFER RESTRICTIONS UPON
REQUEST TO THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL OFFICE.
THE COMPANY WILL FURNISH TO ANY SHAREHOLDER, ON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE INFORMATION REQUIRED BY SECTION 8-203(C) OF THE
CORPORATIONS AND ASSOCIATIONS ARTICLE OF THE ANNOTATED CODE OF MARYLAND WITH
RESPECT TO THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS,
VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER
DISTRIBUTIONS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE
SHARES OF EACH CLASS OF BENEFICIAL INTEREST WHICH THE COMPANY HAS AUTHORITY TO
ISSUE AND, IF THE COMPANY IS AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS
IN SERIES, (I) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN
THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (II) THE AUTHORITY OF THE BOARD
OF TRUSTEES TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. THE
FOREGOING SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT TO AND
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DECLARATION OF TRUST OF THE
COMPANY, A COPY OF WHICH WILL BE SENT TO THE DECLARATION OF TRUST OF THE
COMPANY, A COPY OF WHICH WILL BE SENT WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO
REQUESTS. SUCH REQUEST MUST BE MADE TO THE SECRETARY OF THE COMPANY AT ITS
PRINCIPAL OFFICE OR TO THE TRANSFER AGENT.
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws and regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ___________ Custodian __________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right Act ____________________
of survivorship and not as (State)
tenants in common
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, _____ hereby sell, assign and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
______________________________________
________________________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
________________________________________________________________________________
_________________________________________________________________________ shares
of beneficial interest of the Company represented by this Certificate, and do
hereby irrevocably constitute and appoint ______________________________________
attorney to transfer the said shares on the books of the Company, with full
power of substitution in the premises.
Date: ________________________
NOTICE: _______________________________________________________________
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE
WHATEVER.
SIGNATURE GUARANTEED:___________________________________________________________
THE SIGNATURES SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17AD-15.
<PAGE> 1
EXHIBIT 5.1
January 18, 1999
Board of Trustees
Innkeepers USA Trust
306 Royal Poinciana Way
Palm Beach, Florida 33480
REGISTRATION STATEMENT ON FORM S-3
3,000,000 COMMON SHARES
Gentlemen:
We are acting as counsel for Innkeepers USA Trust (the "Company") in
connection with the registration under the Securities Act of 1933, as amended
(the "Securities Act"), of 3,000,000 shares of beneficial interest, $.01 par
value (the "Shares"), issuable pursuant to the Company's Dividend Reinvestment
and Share Purchase Plan (the "Plan"). The Shares and the Plan are described in
the Registration Statement on Form S-3 of the Company (the "Registration
Statement"), to be filed with the Securities and Exchange Commission (the
"Commission") on January 19, 1999. In connection with the filing of the
Registration Statement you have requested our opinion concerning certain trust
matters.
In connection with rendering this opinion, we have examined the
Declaration of Trust of the Company, as amended and restated, the Bylaws of the
Company, such minutes and records of the Company and such other records and
documents as we considered necessary. For purposes of the opinions expressed
below, we have assumed (i) the authenticity of all documents submitted to us as
original, (ii) the conformity to the originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals and (iii)
genuineness of all signatures. As to factual matters, we have relied upon
certificates of public officials and upon certificates of officers of the
Company.
Based on the foregoing, we are of the opinion that:
1. The Company is a real estate investment trust duly formed, validly
existing and in good standing under the laws of the State of Maryland.
<PAGE> 2
Board of Trustees
January 18, 1998
Page 2
2. The issuance of the Shares has been duly authorized and, when the
Shares have been issued and sold as described in the Registration Statement and
the Company has received full payment therefor, will be legally issued, fully
paid and nonassessable.
We do not purport to express an opinion on any laws other than those of
the State of Maryland. We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement.
Very truly yours,
HUNTON & WILLIAMS
<PAGE> 1
EXHIBIT 8.1
January 18, 1999
Innkeepers USA Trust
306 Royal Poinciana Way
Palm Beach, Florida 33480
Innkeepers USA Trust
Qualification as
Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as counsel to Innkeepers USA Trust, a Maryland
real estate investment trust (the "Company"), in connection with the preparation
of a Form S-3 registration statement filed with the Securities and Exchange
Commission ("SEC") on January 15, 1999 (the "Registration Statement"), with
respect to the issuance from time to time of up to 3,000,000 common shares of
beneficial interest of the Company in connection with the Company's Dividend
Reinvestment and Share Purchase Plan. You have requested our opinion regarding
certain U.S. federal income tax matters.
The Company, through Innkeepers USA Limited Partnership, a
Virginia limited partnership (the "Operating Partnership"), and its subsidiary
partnerships (the "Subsidiary Partnerships"), currently owns 65 hotels and
associated personal property (the "Current Hotels"). The Company, or a
wholly-owned subsidiary of the Company, owns a 1% general partnership interest,
and the Operating Partnership owns a 99% limited partnership interest, in each
Subsidiary Partnership. The Operating Partnership and Subsidiary Partnerships
lease (i) 58 of the Current Hotels to JF Hotel, Inc., a Virginia corporation,
and its affiliated sister corporations (collectively, the "JF Lessee") pursuant
to substantially similar operating leases (the "JF Leases") and (ii) seven of
the Current Hotels to subsidiaries of Patriot American Hospitality, Inc. (the
"Summerfield Lessee") pursuant to substantially similar operating leases (the
"Summerfield Leases" and, together with the JF Leases, the "Leases"). The JF
Lessee operates 31 of the Current Hotels. A wholly-owned subsidiary of Marriott
International, Inc., a Delaware corporation, operates and manages 25 of the
Current Hotels on behalf of the JF Lessee pursuant to substantially similar
management agreements (the "Marriott Management Agreements") with the JF Lessee.
TMH Hotels, Inc., a Kansas corporation, operates and manages two of the Current
Hotels on behalf of the JF Lessee pursuant to substantially similar management
agreements (the
<PAGE> 2
"TMH Management Agreements") with the JF Lessee. Other subsidiaries of Patriot
American Hospitality, Inc. operate and manage seven of the Current Hotels on
behalf of the Summerfield Lessee pursuant to substantially similar management
agreements (the "Summerfield Management Agreements" and, together with the
Marriott Management Agreements and the TMH Management Agreements, the
"Management Agreements") with the Summerfield Lessee.
In giving the opinions set forth herein, we have examined the
following:
1. the Company's Amended and Restated Declaration of Trust, as filed with the
Department of Assessments and Taxation of the State of Maryland on September 21,
1994, as amended on October 4, 1995 and September 18, 1996, and the Articles
Supplementary to the Amended and Restated Declaration of Trust, as filed with
the Department of Assessments and Taxation of the State of Maryland on May 15,
1998;
2. the Company's Amended and Restated By-Laws;
3. the prospectus contained as part of the Registration Statement (the
"Prospectus");
4. the Second Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, dated as of November 1, 1996 (the "Operating Partnership
Agreement"), among the Company, Innkeepers Financial Corporation, as general
partner ("IFC"), and several limited partners;
5. the partnership agreements of the Subsidiary Partnerships, which are listed
on Exhibit A attached hereto;
6. the Leases;
7. the Management Agreements; and
8. such other documents as we have deemed necessary or appropriate for purposes
of this opinion.
In connection with the opinions rendered below, we have
assumed, with your consent, that:
1. each of the documents referred to above has been duly authorized, executed,
and delivered; is authentic, if an original, or is accurate, if a copy; and has
not been amended;
2. during its taxable year ending December 31, 1999 and subsequent taxable
years, the Company has operated and will continue to operate in such a manner
that makes and will continue to make the representations contained in a
certificate, dated the date hereof and executed by a duly appointed officer of
the Company (the "Officer's Certificate"), true for such years;
3. the Company will not make any amendments to its organizational documents, the
Operating Partnership Agreement, or the partnership agreement of any Subsidiary
Partnership
<PAGE> 3
after the date of this opinion that would affect its qualification as a real
estate investment trust (a "REIT") for any taxable year;
4. each partner (each, a "Partner") of the Operating Partnership, other than
IFC, that is a corporation or other entity has a valid legal existence;
5. each Partner, other than IFC, has full power, authority, and legal right to
enter into and to perform the terms of the Operating Partnership Agreement and
the transactions contemplated thereby; and
6. no action will be taken by the Company, the Operating Partnership, the
Subsidiary Partnerships, or the Partners after the date hereof that would have
the effect of altering the facts upon which the opinions set forth below are
based.
In connection with the opinions rendered below, we also have
relied upon the correctness of the representations contained in the Officer's
Certificate.
Based on the factual matters in the documents and assumptions
set forth above, the representations set forth in the Officer's Certificate, the
discussions in the Prospectus under the caption "TAXES -- Question 21" (which
are incorporated herein by reference), and without further investigation as to
such factual matters, we are of the opinion that:
(a)the Company qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Internal Revenue Code of 1986,
as amended (the "Code"), for its taxable years ended December
31, 1994 through December 31, 1998, and the Company's
organization and current and proposed method of operation will
enable it to continue to qualify as a REIT for its taxable
year ended December 31, 1999, and in the future; and
(b)the descriptions of the law contained in the Prospectus
under the caption "TAXES - Question 21" are correct in all
material respects.
We have performed no due diligence and have made no efforts to
verify the accuracy and genuineness of the documents and assumptions set forth
above, and the representations set forth in the Officer's Certificate. We will
not review on a continuing basis the Company's compliance with such documents,
assumptions or representations. Accordingly, no assurance can be given that the
actual results of the Company's operations will satisfy the requirements for
qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the
Code and the Treasury regulations thereunder (the "Regulations"), published
administrative interpretations thereof, and published court decisions. The
Internal Revenue Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to REIT
qualification. No assurance can be given that the law will not change in a way
that will prevent the Company from qualifying as a REIT.
<PAGE> 4
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. In giving this consent, we do not admit that we
are in the category of persons whose consent is required by Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder by the SEC.
The foregoing opinions are limited to the U.S. federal income
tax matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is solely for the information and use of the addressee, and it may not be
distributed, relied upon for any purpose by any other person, quoted in whole or
in part or otherwise reproduced in any document, or filed with any governmental
agency without our express written consent.
Very truly yours,
/s/ Hunton & Williams
<PAGE> 5
EXHIBIT A
SUBSIDIARY PARTNERSHIP AGREEMENTS
1. the Limited Partnership Agreement of Innkeepers Financing Partnership, L.P.,
a Virginia limited partnership, dated March 20, 1995, between Innkeepers USA
Trust, as general partner, and Innkeepers USA Limited Partnership (the
"Operating Partnership"), as limited partner;
2. the Limited Partnership Agreement of Innkeepers Financing Partnership II,
L.P., a Virginia limited partnership, dated October 6, 1995, between Innkeepers
Financial Corporation II, as general partner, and the Operating Partnership, as
limited partner;
3. the Limited Partnership Agreement of Innkeepers Financing Partnership III,
L.P., a Virginia limited partnership, dated March 6, 1997, between Innkeepers
Financial Corporation III, as general partner, and the Operating Partnership, as
limited partner;
4. the Limited Partnership Agreement of Innkeepers Residence San Mateo, L.P., a
Virginia limited partnership, dated October 9, 1996, between Innkeepers
Residence San Mateo, Inc., as general partner, and the Operating Partnership, as
limited partner;
5. the Limited Partnership Agreement of Innkeepers Residence Sili I, L.P., a
Virginia limited partnership, dated October 9, 1996, between Innkeepers
Financial Corporation III, as general partner, and the Operating Partnership, as
limited partner;
6. the Limited Partnership Agreement of Innkeepers Residence Sili II, L.P., a
Virginia limited partnership, dated October 9, 1996, between Innkeepers
Residence Sili II, Inc., as general partner, and the Operating Partnership, as
limited partner;
7. the Limited Partnership Agreement of Innkeepers Residence Denver-Downtown,
L.P., a Virginia limited partnership, dated October 9, 1996, between Innkeepers
Financial Corporation III, as general partner, and the Operating Partnership, as
limited partner;
8. the Limited Partnership Agreement of Innkeepers Residence Atlanta-Downtown,
L.P., a Virginia limited partnership, dated October 9, 1996, between Innkeepers
Residence Atlanta-Downtown, Inc., as general partner, and the Operating
Partnership, as limited partner;
9. the Limited Partnership Agreement of Innkeepers Residence Wichita East, L.P.,
a Virginia limited partnership, dated October 9, 1996, between Innkeepers
Financial Corporation III, as general partner, and the Operating Partnership, as
limited partner;
<PAGE> 6
10. the Limited Partnership Agreement of Innkeepers Residence East Lansing,
L.P., a Virginia limited partnership, dated October 9, 1996, between Innkeepers
Residence East Lansing, Inc., as general partner, and the Operating Partnership,
as limited partner;
11. the Limited Partnership Agreement of Innkeepers Residence Portland, L.P., a
Virginia limited partnership, dated October 9, 1996, between Innkeepers
Residence Portland, Inc., as general partner, and the Operating Partnership, as
limited partner;
12. the Limited Partnership Agreement of Innkeepers Residence Grand Rapids,
L.P., a Virginia limited partnership, dated October 9, 1996, between Innkeepers
Residence Grand Rapids, Inc., as general partner, and the Operating Partnership,
as limited partner;
13. the Limited Partnership Agreement of Innkeepers Hampton Norcross, L.P., a
Virginia limited partnership, dated October 9, 1996, between Innkeepers Hampton
Norcross, Inc., as general partner, and the Operating Partnership, as limited
partner;
14. the Limited Partnership Agreement of Innkeepers Residence Eden Prairie,
L.P., a Virginia limited partnership, dated January 1, 1997, between Innkeepers
Residence Eden Prairie, Inc., as general partner, and the Operating Partnership,
as limited partner;
15. the Limited Partnership Agreement of Innkeepers Residence Arlington (TX),
L.P., a Virginia limited partnership, dated January 24, 1997, between Innkeepers
Residence Arlington, Inc., as general partner, and the Operating Partnership, as
limited partner;
16. the Limited Partnership Agreement of Innkeepers Residence Addison (TX),
L.P., a Virginia limited partnership, dated January 24, 1997, between Innkeepers
Residence Addison, Inc., as general partner, and the Operating Partnership, as
limited partner;
17. the Limited Partnership Agreement of Innkeepers Schaumburg, L.P., dated as
of June 26, 1997, between Innkeepers Financial Corporation V, as general
partner, and the Operating Partnership, as limited partner;
18. the Limited Partnership Agreement of Innkeepers Financing Partnership IV,
L.P., dated as of June 26, 1997, between Innkeepers Financial Corporation V, as
general partner, and the Operating Partnership, as limited partner;
19. the Limited Partnership Agreement of Innkeepers Westchester, L.P., dated as
of June 26, 1997, between Innkeepers Financial Corporation V, as general
partner, and the Operating Partnership, as limited partner;
<PAGE> 7
20. the Limited Partnership Agreement of Innkeepers Summerfield General, L.P.,
dated as of July 2, 1997, between Innkeepers Financial Corporation IV, as
general partner, and the Operating Partnership, as limited partner;
21. the Limited Partnership Agreement of Innkeepers Sunrise Tinton Falls, L.P.,
dated as of July 2, 1997, between Innkeepers Financial Corporation IV, as
general partner, and the Operating Partnership, as limited partner;
22. the Limited Partnership Agreement of Innkeepers Summerfield General II,
L.P., dated as of July 2, 1997, between Innkeepers Financial Corporation V, as
general partner, and the Operating Partnership, as limited partner;
23. the Limited Partnership Agreement of Innkeepers Residence Shelton, L.P.,
dated as of October 31, 1997, between Innkeepers Residence Shelton, Inc., as
general partner, and the Operating Partnership, as limited partner;
24. the Limited Partnership Agreement of Innkeepers RI Altamonte, L.P., dated as
of December 23, 1997, between Innkeepers RI Altamonte, Inc., as general partner,
and the Operating Partnership, as limited partner;
25. the Limited Partnership Agreement of Innkeepers RI General, L.P., dated as
of December 23, 1997, between Innkeepers RI General, Inc., as general partner,
and the Operating Partnership, as limited partner;
26. the Limited Partnership Agreement of Innkeepers RI Northwest, L.P., dated as
of January 14, 1998, between Innkeepers RI Northwest, Inc., as general partner,
and the Operating Partnership, as limited partner; and
27. the Limited Partnership Agreement of Westborough Sierra Associates, L.P.,
dated as of August 7, 1997, between Innkeepers Westborough, L.L.C., as general
partner, and the Operating Partnership, as limited partner;
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of Innkeepers USA Trust on Form S-3 of our reports (i) dated February
20, 1998 on our audits of the consolidated financial statements of Innkeepers
USA Trust as of December 31, 1996 and 1997 and for the years ended December 31,
1995, 1996 and 1997, (ii) dated March 23, 1998 on our audit of the financial
statement schedule of Innkeepers USA Trust as of December 31, 1997, and (iii)
dated March 23, 1998 on our audits of the combined financial statements of JF
Hotel, Inc. as of December 31, 1996 and 1997 and for the years ended December
31, 1995, 1996 and 1997, all of which reports are included in or incorporated by
reference, in Innkeepers USA Trust's 1997 Annual Report on Form 10-K, which is
incorporated by reference herein. We also consent to the reference to our firm
under the caption "Experts".
PricewaterhouseCoopers LLP
Dallas, Texas
January 18, 1999
