As filed with the Securities and Exchange Commission on November 24, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
GLENBOROUGH REALTY TRUST INCORPORATED
(Exact name of registrant as specified in its charter)
Maryland 94-3211970
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
400 South El Camino Real, 11th Floor
San Mateo, California 94402
(650) 343-9300
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Frank Austin, Esq.
Senior Vice President, Glenborough Realty Trust Incorporated
400 South El Camino Real, 11th Floor
San Mateo, California 94402
(650) 343-9300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
Stephen J. Schrader, Esq.
Justin L. Bastian, Esq.
David P. Valenti, Esq.
Morrison & Foerster LLP
755 Page Mill Road
Palo Alto, California 94304-1018
(650) 813-5600
Approximate date of commencement of proposed sale to 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 reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.|_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- - ----------------------------------------- ----------------- ------------------------ ------------------------ ----------------------
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Offering Amount of
Securities to be Registered Registered per Share(1) Price Registration Fee
- - ----------------------------------------- ----------------- ------------------------ ------------------------ ======================
Common Stock, $.001 par value....... 3,000,000 $20.875 $62,625,000 $18,474.38
- - ----------------------------------------- ----------------- ------------------------ ------------------------ ======================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) based on the average of the high and low
reported sales price on the New York Stock Exchange on November 20, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8 OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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Subject to Completion, Dated November 24, 1998
PROSPECTUS
Glenborough Realty Trust Incorporated
Direct Stock Purchase and Dividend Reinvestment Plan
Common Stock
-------------
Glenborough Realty Trust Incorporated hereby offers participation in its
Direct Stock Purchase and Dividend Reinvestment Plan. The Plan is designed to
provide Glenborough stockholders and other investors with a convenient and
economical method to purchase shares of the Company's common stock and to
reinvest their cash dividends in additional shares of Common Stock. Some of the
significant features of the Plan are as follows:
Automatic reinvesting of cash dividends.
Optional cash investments of $100 to $10,000 per month.
Initial investments of $250 to $10,000.
Cash investments in excess of $10,000 may be made with permission of
the Company.
0% to 5% discount from recent market prices on Common Stock purchased
directly from the Company pursuant to an optional cash investment of
more than $10,000. The discount will initially be 2%, but may be
adjusted by the Company in its discretion at any time.
Automatic monthly investments through electronic funds transfers.
The Administrator will purchase Common Stock to fulfill requirements
for the Plan directly from the Company, in open market or privately
negotiated transactions, as determined from time to time by the
Company.
Automatic enrollment of participants in the Company's Dividend
Reinvestment, Direct Purchase and Sale Plan.
Holders of shares in broker or nominee names may participate in the
Plan, in which case, brokers or nominees will reinvest dividends and
make optional cash investments on behalf of such holders.
Participation in the Plan is entirely voluntary, and participants may
terminate their participation at any time. Stockholders that do not choose to
participate in the Plan will continue to receive cash dividends, as declared, in
the usual manner. The Glenborough Common Stock is listed on the New York Stock
Exchange under the symbol "GLB".
This Prospectus relates to 3,000,000 shares of Common Stock offered for
purchase under the Plan.
-------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-------------
November 24, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith the Company files, reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed can be inspected and copied at the
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.,
20549, and at the following regional offices of the Commission: Seven World
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a
web site (http://www.sec.gov) containing reports, proxy and information
statements and other information of registrants, including the Company, that
file electronically with the Commission. In addition, the Common Stock is listed
on the New York Stock Exchange and similar information concerning the Company
can be inspected and copied at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005. The Company has filed with the
Commission a registration statement on Form S-3 (the "Registration Statement")
(of which this Prospectus is a part) under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Shares. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any contract or other documents are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference and the exhibits and schedules
thereto. For further information regarding the Company and the Shares, reference
is hereby made to the Registration Statement and such exhibits and schedules
which may be obtained from the Commission at its principal office in Washington,
D.C. upon payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference:
a. The Company's Annual Report on Form 10-K for the year ended December
31,1997;
b. The Company's Annual Report on Form 10-K/A for the year ended December
31, 1997 filed with the Commission on September 10, 1998;
c. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998, and September 30, 1998;
d. The Company's Quarterly Reports on Form 10-Q/A for the quarters ended
March 31, 1998 and June 30, 1998, each filed with the Commission on
September 10, 1998;
e. The Company's Current Reports on Form 8-K filed with the Commission on
January 6, 1998, January 12, 1998, January 22, 1998, January 27, 1998,
February 20, 1998, March 3, 1998, March 12, 1998, April 29, 1998, May
7, 1998, July 10,1998, July 15, 1998, July 22, 1998 and October 27,
1998 respectively;
f. The Company's current Reports on Form 8-K/A filed with the Commission
on January 9, 1998, January 12, 1998, March 24, 1998, May 15, 1998,
August 13, 1998 and September 10, 1998 respectively; and
g. The description of the Registrant's Common Stock contained in the
Company's Registration Statement on Form 8-A (File No. 1-14162).
Each document filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing such documents.
Any statement contained herein or 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
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herein(or in the applicable Prospectus Supplement) 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.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered upon written or oral request. Requests should be
directed to Shareholder Services, Glenborough Realty Trust Incorporated, 400
South El Camino Real, 11th Floor, San Mateo, California 94402-1708, telephone
number: (650) 343-9300.
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As used herein, the term "Company" means Glenborough Realty Trust
Incorporated, a Maryland real estate investment trust, and its consolidated
subsidiaries for the periods from and after December 31, 1995 (the date of the
merger of eight public limited partnerships and Glenborough Corporation, a
California corporation, with and into the Company (the "Consolidation")), and
the term "Operating Partnership" means Glenborough Properties, L.P. in which the
Company holds a 1% interest as sole general partner, and an approximate 89%
limited partner interest, as of September 30, 1998. Unless otherwise indicated,
ownership percentages of the units of limited partnership interest in the
Operating Partnership have been calculated assuming the entire Preferred Partner
Interest has been converted into such units. The Company's actual results
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors included in this Prospectus.
THE COMPANY
The Company is a self-administered and self-managed real estate investment trust
(a "REIT") that owns a portfolio of 188 office, office/flex, industrial, retail,
multifamily and hotel properties (collectively, the "Properties," and each a
"Property") located in 24 states throughout the country, as of the date of this
Prospectus. The Company's principal strategy is to acquire and manage a
diversified portfolio of real estate and to make dispositions from such
portfolio as appropriate. This strategy has evolved from the Company's
predecessors' experience since 1978 in managing real estate partnerships and
their assets and, since 1989, in acquiring portfolios and management interests
from third parties. In addition, an associated company (the "Associated
Company") provides comprehensive asset, partnership and property management
services for 39 other properties that are not owned by the Company.
A portion of the Company's operations is conducted through the Operating
Partnership in which the Company holds a 1% interest as the sole general partner
and in which the Company holds an approximate 89% limited partner interest, as
of September 30, 1998.
The Common Stock is listed on the New York Stock Exchange under the Symbol
"GLB." The Company's executive offices are located at 400 South El Camino Real,
Suite 1100, San Mateo, California 94402-1708 and its telephone number is (650)
343-9300.
USE OF PROCEEDS
The Company does not know the number of shares of Common Stock that will
ultimately be purchased pursuant to the Plan, or the prices at which such shares
will be purchased. The proceeds from purchases of Common Stock under the Plan
will be used to continue the Company's real estate acquisition, development and
investment activities and for general corporate purposes. Pending such uses, net
proceeds may be invested temporarily in short-term investments consistent with
the Company's investment policies and qualification as a REIT.
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SUMMARY OF THE PLAN
The following summary description of the Glenborough Direct Stock Purchase
and Dividend Reinvestment 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.
Purpose of Plan The purpose of the Plan is to provide
Glenborough stockholders and other investors with
a convenient and economical method of purchasing
shares of Common Stock and/or investing their
cash dividends in additional shares of Common
Stock. The Plan also provides the Company a means
of raising additional capital through the direct
sale of Common Stock.
Certain Terms "Investment Date" means (i) the dividend
payment date, for months in which dividends are
paid and (ii) the first business day on or after
the tenth calendar day of the month in months in
which dividends are not paid.
"Optional Cash Investment" means the purchase of
Common Stock of the Company under the Plan with
newly invested funds rather than with reinvested
dividends.
"Pricing Period" applies only to purchases made
pursuant to a Request for Waiver and means the
twelve trading days immediately preceding an
Investment Date.
"Request for Waiver" or Waiver" means the process
by which investors may, in any month, invest more
than $10,000 in the Company's Common Stock under
the Plan.
Purchase Price The price of shares you acquire through the Plan
as a result the reinvestment of dividends and
optional cash investments of $10,000 or less will
be (i) the average of the high and low price
reported by the New York Stock Exchange ("NYSE")
on the Investment Date for shares purchased
directly from the Company, or (ii) the average
price per share paid by the Administrator for
shares purchased in open market or privately
negotiated transactions. Although no discount is
presently offered for shares purchased directly
from the Company with reinvested dividends and/or
optional cash investments of $10,000 or less, the
Company reserves the right to establish such a
discount in the future.
Shares you purchase pursuant to a Request for
Waiver may reflect a discount of 0% to 5% (the
"Waiver Discount") from the Market Price
(initially 2%). The Market Price will be based on
the average of the daily high and low sales
prices of the Common Stock on the NYSE during a
"Pricing Period" consisting of twelve Trading
Days immediately preceding the Investment Date.
Shares purchased pursuant to a Request for Waiver
are also subject to a Threshold Price provision.
The following table provides an overview of the
initial pricing structure for each type of
investment permitted under the Plan:
- - ------------------------------------------------------------------------------
Reinvested Optional Cash Optional Cash
Dividends Investments Investments Through
Waiver
- - ------------------------------------------------------------------------------
Minimum Investment $0 $100 $10,001
- - ------------------------------------------------------------------------------
Maximum Investment No maximum $10,000 No maximum
- - ------------------------------------------------------------------------------
Stock Purchased The Purchase Price The PurchasePrice The Purchase Price
will be the average will be the average will be the average
of the high and low of the high and low of the high and low
trading price for trading price for trading prices over
shares traded on shares traded on the Pricing Period,
the Investment Date. the Investment Date. subject to the
Threshold Price.
The Discount will
vary monthly and
range between 0%
and 5%.
- - --------------------------------------------------------------------------------
Stock Purchased The Purchase Price The Purchase Price The Purchase Price
on the Open Market will be the average will be the average will be the average
or in Privately price per share price per share price per share
Negotiated paid by the paid by the paid by the
Transactions Administrator Administrator Administrator
- - --------------------------------------------------------------------------------
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Plan Limitations Optional cash investments by current stockholders
are subject to a minimum investment
of $100 and a maximum investment of $10,000 per
month. The $10,000 per month maximum may be
waived only pursuant to a written request
approved by the Company ("Request for Waiver").
Initial optional cash investments are subject to
a minimum of $250 and a maximum of $10,000.
There is no limit to the amount of cash dividend
that you may reinvest in additional shares of
Common Stock. However, the Company reserves the
right to set a minimum price in the future for
such investments.
Optional cash investments of less than $100 and
that portion of any optional cash investment that
exceeds $10,000, unless such limit has been
waived, will be returned to the Participant
without interest.
Request for Waiver Optional Cash Investments made pursuant to a
Request for Waiver are not subject to a
predetermined maximum limit on the amount of the
investment or on the number of shares that may be
purchased. The Company will establish the Waiver
Discount, which may vary each month between 0%
and 5%, after a review of current market
conditions, the level of participation, and
current and projected capital needs.The Company
will also establish a Threshold Price, which will
be the minimum price applicable to purchases of
Common Stock 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 made
pursuant to a Request for Waiver will be returned
without interest.
Because of certain tax concerns which we have as
a REIT, we will only consider Requests for Waiver
for investors who certify that they are NOT
participating in the dividend reinvestment
component of the Plan. In deciding whether to
approve a
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Request for Waiver, we will also consider
relevant factors including, but not limited to:
(1) whether the Plan is then acquiring newly
issued shares of Common Stock;
(2) the Company's need for additional funds;
(3) the attractiveness of obtaining such funds
through the sale of Common Stock under the
Plan in comparison to other sources of funds;
(4) the purchase price likely to apply to any
sale of Common Stock under the Plan;
(5) the Participant submitting the request,
including the extent and nature of such
Participant's prior participation in the Plan
and the number of shares of Common Stock held
of record by such Participant; and
(6) the aggregate amount of optional cash
investments in excess of $10,000 for which
Requests for Waiver have been submitted by
all Participants.
If Requests for Waiver are submitted for any
Investment Date for an aggregate amount in excess
of the amount we are then willing to accept, we
may accept such requests by any method we
determine is appropriate.
Any person who acquires shares of Common Stock
through the Plan and resells them shortly before
or after acquiring them may be considered to be
an underwriter within the meaning of the
Securities Act. We expect that certain persons
will acquire shares of Common Stock pursuant to a
Request for Waiver and resell such shares in
order to obtain the financial benefit of any
Waiver Discount. We have no arrangements or
understandings, formal or informal, with any
person relating to a distribution of shares to be
received pursuant to the Plan.
Number of Shares Offered We have authorized 3,000,000 shares of
Common Stock to be issued and registered
under the Securities Act for offering pursuant to
the Plan. Because we expect to continue the
plan indefinitely, we expect to authorize for
issuance and register under the Securities Act
additional shares from time to time as necessary
for purposes of the Plan.
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THE PLAN
The following questions and answers explain and constitute the Glenborough
Realty Trust Incorporated Direct Stock Purchase and Dividend Reinvestment Plan,
as in effect beginning November 24, 1998.
TABLE OF CONTENTS
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<S> <C> <C>
1. What is the purpose of the Plan? ................................................................ 9
2. What options are available under the Plan? ..................................................... 9
3. What are the benefits and disadvantages of the Plan?............................................. 9
4. Who will administer the Plan? .................................................................. 10
5. Who is eligible to participate? ................................................................ 10
6. How does an eligible holder of Common Stock or any other interested investor
enroll in the Plan and become a Participant?..................................................... 11
7. What does the Enrollment Form provide?........................................................... 11
8. When will participation in the Plan begin?....................................................... 12
9. When will shares be acquired under the Plan?..................................................... 12
10. What is the source of shares to be purchased under the Plan?..................................... 12
11. At what price will shares be purchased?.......................................................... 12
12. How are optional cash investments made?.......................................................... 13
13. What limitations apply to optional cash investments?............................................. 14
14. What if a Participant has more than one account? ................................................ 15
15. Will certificates be issued for share purchases?................................................. 15
16. May a Participant add shares of Common Stock to his or her account by
transferring stock certificates that the Participant possesses?.................................. 15
17. Can Participants sell shares held under the Plan?................................................ 16
18. What reports will be sent to Participants in the Plan?........................................... 16
19. How may a Participant request a refund of dividends or
optional cash investments?....................................................................... 16
20. How may Participants withdraw from the Plan?..................................................... 16
21. What are the federal income tax consequences of participating in the Plan? ...................... 17
22. What happens if a Participant sells or transfers shares of stock or acquires
additional shares of stock?...................................................................... 17
23. How will a Participant's shares be voted?........................................................ 18
24. Who pays the expenses of the Plan?............................................................... 18
25. What are the responsibilities of Glenborough or the Administrator under the Plan? .............. 18
26. What happens if Glenborough issues a stock dividend, subscription rights
or declares a stock split?....................................................................... 18
27. May shares in a Participant's account be pledged? ............................................... 18
28. May a Participant transfer all or a part of the Participant's shares held in
the Plan to another person? .................................................................... 18
29. May the Plan be changed or terminated? ......................................................... 19
30 How may the Plan be modified or terminated?...................................................... 19
</TABLE>
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1. WHAT IS THE PURPOSE OF THE PLAN? The purpose of the Plan is to provide
Glenborough stockholders and other investors with a convenient and economical
method to purchase shares of Common Stock and to reinvest their cash dividends
in additional shares of Common Stock. In addition, the Plan will provide the
Company with a means of raising additional capital for general corporate
purposes through sales of Common Stock under the Plan. Whether significant
additional capital is raised may be affected, in part, by the Company's decision
to waive the limitations applicable to optional cash investments and by the
Company's decision to sell newly issued shares of Common Stock to fulfill the
requirements of the Plan. See Question 13 regarding the Company's criteria for
granting a Request for Waiver.
2. WHAT OPTIONS ARE AVAILABLE UNDER THE PLAN? Registered holders or
beneficial owners of Common Stock and other interested investors may elect to
participate in the Plan (each a "Participant"). Participants may have their cash
dividends automatically reinvested in Common Stock. Even if they do not reinvest
their dividends, Participants may make optional cash investments to purchase
Common Stock, subject to a minimum investment of $100 (which may be made by
automated funds transfer) and a maximum investment of $10,000 per month.
Interested investors that are not stockholders of the Company may make an
initial optional cash investment in Common Stock of not less than $250 and not
more than $10,000. In certain instances, however, Glenborough may permit greater
optional cash investments. See Question 12 regarding optional cash investments
and Question 13 regarding a Request for Waiver.
3. WHAT ARE THE BENEFITS AND DISADVANTAGES OF THE PLAN?
BENEFITS
o The Plan provides Participants the opportunity to automatically reinvest
their cash dividends in additional shares of Common Stock. Initially,
shares purchased with reinvested dividends will not be sold at a discount
to Market Price. However, the Company reserves the right to implement such
a discount on shares purchased directly from the Company in the future.
o In addition to reinvestment of dividends, eligible stockholders may
purchase additional shares of Common Stock pursuant to optional cash
investments of not less than $100 and not more than $10,000 per month.
Optional cash investments may be made occasionally or at regular intervals,
as the Participants desire and may be made by automated funds transfer for
as little as $100 per month. Participants may make optional cash
investments even if the dividends on their shares are not being reinvested
under the Plan. Initially, shares purchased with optional cash investments
of $10,000 or less will not be sold at a discount to Market Price. However,
the Company reserves the right to implement such a discount on shares
purchased directly from the Company in the future.
o Persons not presently stockholders of the Company may become Participants
by making an initial cash investment of not less than $250 and not more
than $10,000 (except with the consent of the Company) to purchase shares of
Common Stock under the Plan.
o Shares purchased directly from the Company under the Plan pursuant to a
Request for Waiver may be issued at a discount to the Market Price without
payment of brokerage commissions. Initially, optional cash investments of
more than $10,000 in shares purchased directly from the Company will be
subject to a discount of 2% from Market Price, but the Company reserves the
right to change the discount percentage in the future. There will be no
discount for shares purchased in open market and privately negotiated
transactions.
o Dividends and any optional cash investments will be fully invested because
the Plan permits fractional shares to be credited to Participants'
accounts. Dividends, whether on whole and on fractional shares, may be
reinvested in additional shares and such shares will be credited to
Participants' accounts. See Question 7.
o Participants will avoid the need for safekeeping of certificates for shares
of Common Stock credited to their Plan accounts and may submit for
safekeeping certificates held by them and registered in their name.
See Questions 15 and 16.
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o Participants that are registered holders may direct the Administrator to
sell or transfer all or a portion of their shares held in the Plan. See
Question 17.
o Periodic statements reflecting all current activity in Plan accounts,
including purchases, sales and latest balances, will simplify
recordkeeping for registered holders. See Question 18.
DISADVANTAGES
o Initially, for optional cash investments pursuant to a Request for Waiver,
a discount of 2% has been established for the purchase of shares directly
from the Company, but the granting of a discount for one month does not
insure the availability of a discount or the same discount in future
months. Each month, the Company may lower or eliminate the discount
without prior notice to Participants. The Company may also, without prior
notice to Participants, change its determination as to whether Common
Stock will be purchased by the Administrator directly from the Company or
in the open market or in privately negotiated transactions from third
parties (although the Company may not effect such a change more than once
in any three month period). See Question 13.
o Participants that reinvest their cash dividends will be treated for federal
income tax purposes as having received a dividend on the dividend payment
date; such dividend may give rise to a liability for the payment of income
tax without providing Participants with immediate cash to pay such tax when
it becomes due. See Question 20.
o Participants will not know the actual number of shares purchased under the
Plan until after the Investment Date. See Question 11 regarding the timing
of the purchase of shares.
o The purchase price per share will be an average price and, therefore, may
exceed the price at which shares are trading on the Investment Date when
the shares are issued. See Questions 11 and 12 regarding the purchase price
of the shares.
o Execution of sales of shares held in the Plan may be subject to delay. See
Questions 12 and 17.
o No interest will be paid on funds held by the Company pending reinvestment
or investment. See Questions 12 and 14.
o Shares deposited in a Plan account may not be pledged until the shares are
withdrawn from the Plan. See Question 26.
4. WHO WILL ADMINISTER THE PLAN? The Plan will be administered by Registrar
and Transfer Company or such successor administrator as Glenborough may
designate (the "Administrator"). The Administrator acts as agent for
Participants, keeps records of the accounts of Participants, sends regular
account statements to Participants, and performs other duties relating to the
Plan. 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 stock certificate for all or part of such shares be issued, as more fully
described in Question 15. The Administrator also serves as dividend disbursement
agent, transfer agent, and registrar for the Common Stock. Correspondence with
the Administrator should be sent to:
Glenborough Realty Trust Incorporated
Direct Stock Purchase and Dividend Reinvestment Plan
c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Telephone: (800) 368-5948
5. WHO IS ELIGIBLE TO PARTICIPATE? Any investor, whether or not a current
stockholder of the Company, may participate in the Plan. A "registered holder"
(which means a stockholder whose shares of Common Stock are registered in the
stock transfer books of Glenborough in his or her name) may participate in the
Plan directly. A "beneficial owner" (which means a stockholder whose shares of
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Common Stock are registered in a name other than his or her name, for example,
in the name of a broker, bank or other nominee) must either become a registered
holder by having such shares transferred into his or her name or by making
arrangements with his or her broker, bank or other nominee to participate in the
Plan on the Participant's behalf. An interested investor that is not a
stockholder may participate in the Plan by making an initial optional cash
investment in Common Stock of not less than $250 or more than $10,000 unless
granted a Request for Waiver (in which case such initial investment may exceed
$10,000). See Question 6 regarding enrollment.
The right to participate in the Plan is not transferable to another person
apart from a transfer of the underlying shares of Common Stock. Glenborough
reserves the right to exclude from participation in the Plan persons who utilize
the Plan to engage in short-term trading activities that cause aberrations in
the trading volume of the Common Stock.
Participants residing in jurisdictions in which their participation in the
Plan would be unlawful will not be eligible to participate in the Plan.
6. HOW DOES AN ELIGIBLE HOLDER OF COMMON STOCK OR ANY OTHER INTERESTED
INVESTOR ENROLL IN THE PLAN AND BECOME A PARTICIPANT? All holders of shares of
Common Stock that are currently enrolled in the Glenborough Realty Trust
Incorporated Direct Stock Purchase and Dividend Reinvestment Plan will
automatically become Participants in the new Plan unless they terminate their
Plan participation. Stockholders may terminate their Plan participation by
notifying the Administrator at the address set forth in Question 4.
A registered holder who is not currently enrolled in the Plan may become a
Participant by completing and signing an Enrollment Form and returning it to the
Administrator at the address set forth in Question 4. An Enrollment Form may
also be obtained at any time upon request from the Administrator at the same
address. If shares are registered in more than one name (e.g., joint tenants,
trustees), all registered holders of such shares must sign the Enrollment Form
exactly as their names appear on the account registration.
Eligible beneficial owners must instruct their brokers, banks or other
nominees in whose name their shares are held to participate in the Plan on their
behalf. If a broker, bank or other nominee holds shares of beneficial owners
through a securities depository, such broker, bank or other nominee may also be
required to provide a Broker and Nominee Form (a "B/N Form") to the
Administrator in order to participate in the optional cash investment portion of
the Plan. See Question 12. To participate only in the dividend reinvestment
feature of the Plan, eligible beneficial owners whose broker, bank or nominee
participates in the Depository Trust Company (DTC) dividend reinvestment
service, may be able to have their dividends reinvested through the Plan. Those
investors whose broker, bank or nominee do not participate in the DTC
reinvestment service will need to become registered stockholders in order to
participate in the dividend reinvestment feature of the Plan.
An interested investor that is not presently a stockholder of the Company,
but desires to become a Participant by making an initial investment in Common
Stock, may join the Plan by completing an Enrollment Form and forwarding it,
together with such initial investment, to the Administrator at the address set
forth in Question 4. See Question 12 regarding initial optional cash
investments.
7. WHAT DOES THE ENROLLMENT FORM PROVIDE? The Enrollment Form appoints the
Administrator as the Participant's agent for purposes of the Plan and directs
the Administrator to apply to the purchase of additional shares of Common Stock
all of the cash dividends on the shares of Common Stock owned by the Participant
on the applicable Record Date. The Enrollment Form also directs the
Administrator to purchase additional shares of Common Stock with any optional
cash investments that the Participant may elect to make.
CASH DIVIDENDS WILL BE REINVESTED ON ALL SHARES IN THE MANNER SPECIFIED
ABOVE UNTIL THE PARTICIPANT SPECIFIES OTHERWISE OR WITHDRAWS FROM THE PLAN
ALTOGETHER, OR UNTIL THE PLAN IS TERMINATED.
8. WHEN WILL PARTICIPATION IN THE PLAN BEGIN? Participation as to dividend
reinvestment will commence with the next Investment Date after receipt of the
Enrollment Form, provided it is received by the Administrator five business days
prior to the Record Date for the payment of the dividend. Participation as to
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optional cash investments of $10,000 or less will commence with the next
Investment Date, provided the funds to be invested are received two business
days immediately preceding the Investment Date. See Questions 9 and 11 below to
determine the applicable Pricing Period and Investment Date for the reinvestment
of dividends or optional cash investments of $10,000 or less. Should the funds
to be invested arrive after the time indicated above and before the next
succeeding Investment Date, such funds will be held without interest until they
can be invested on the next Investment Date.
Eligible stockholders and other interested investors may enroll in the Plan
at any time. Once enrolled, a Participant will remain enrolled until the
Participant discontinues participation or until the Company terminates the Plan.
See Question 19 regarding withdrawal from the Plan and Question 26 regarding
termination of the Plan.
9. WHEN WILL SHARES BE ACQUIRED UNDER THE PLAN? If shares are being
acquired for the Plan directly from the Company, dividends and optional cash
investments will be invested on the dividend payment date for months in which
dividends are paid and on the first business day on or after the tenth calendar
day of the month for months in which dividends are not paid (in each case, the
"Investment Date").
If shares are being acquired for the Plan through open market or privately
negotiated transactions, all dividends and all optional cash investments will be
applied to the purchase of Common Stock pursuant to the Plan as soon as
practicable on or after the applicable Investment Date.
In the past, dividend payment dates have occurred on or about each January
10, April 10, July 10, and October 10. This past pattern with respect to timing
of dividend payment dates is expected to be followed generally in the future.
Please see Appendix I for information with respect to Investment Dates, Record
Dates, and other data pertinent to a Request for Waiver.
DIVIDENDS ARE PAID AS AND WHEN DECLARED BY THE COMPANY'S BOARD OF
DIRECTORS. THERE CAN BE NO ASSURANCE AS TO THE DECLARATION OR PAYMENT OF A
DIVIDEND, AND NOTHING CONTAINED IN THE PLAN OBLIGATES GLENBOROUGH TO DECLARE OR
PAY ANY SUCH DIVIDEND ON COMMON STOCK. THE PLAN DOES NOT REPRESENT A GUARANTEE
OF FUTURE DIVIDENDS.
10. WHAT IS THE SOURCE OF SHARES TO BE PURCHASED UNDER THE PLAN? All
dividends reinvested through the Plan and all optional cash investments will be
used to purchase either newly issued shares directly from Glenborough, on the
open market or in privately negotiated transactions from third parties, or a
combination of those sources. Shares purchased directly from Glenborough will
consist of authorized but unissued shares of Common Stock.
11. AT WHAT PRICE WILL SHARES BE PURCHASED? The price of shares acquired
through the Plan as a result of the reinvestment of dividends and optional cash
investments of $10,000 or less will be (i) the average of the high and low price
reported by the NYSE on the Investment Date for shares purchased directly from
the Company, or (ii) the average price per share paid by the Administrator for
shares purchased in open market or privately negotiated transactions. The
Company reserves the right to establish a discount to the price of shares
purchased directly from the Company with reinvested dividends and/or optional
cash investments of $10,000 or less.
Shares purchased directly from the Company pursuant to a Request for Waiver
(as described below) may reflect a discount of 0% to 5% from the Market Price
which will be based on the average of the daily high and low sales prices of the
Common Stock on the NYSE during a Pricing Period consisting of twelve Trading
Days preceding the Investment Date. Initially, optional cash investments
pursuant to a Request for Waiver of shares purchased directly from the Company
will be subject to a discount of 2% from Market Price, but the Company reserves
the right to change the discount percentage in the future. The price of shares
acquired through the Plan pursuant to a Request for Waiver in open market and
privately negotiated transactions will be the average price per share paid by
the Administrator. There will be no discount for shares purchased in open market
and privately negotiated transactions. Shares purchased pursuant to a Request
for Waiver are also subject to a Threshold Price provision, as described below.
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12. HOW ARE OPTIONAL CASH INVESTMENTS MADE? All Plan Participants
are eligible to make optional cash investments at any time.
The B/N Form provides the sole means whereby a broker, bank or other
nominee holding shares on behalf of beneficial owners in the name of a
securities depository may make optional cash investments on behalf of such
beneficial owners. In such case, the broker, bank or other nominee must use a
B/N Form for transmitting optional cash investments on behalf of the beneficial
owners. 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 optional cash investments on behalf of the beneficial owners. B/N
Forms will be furnished by the Administrator upon request.
Other interested investors that are not stockholders of the Company are
also eligible to make an initial investment in Common Stock through an optional
cash investment by submitting an Enrollment Form.
Optional Cash Investments of $10,000 or less should be received by the
Administrator two business days before the Investment Date (the first business
day on or after the tenth calendar day of the month or the dividend payment
date).
Optional Cash Investments greater than $10,000 per month and made pursuant
to a Request for Waiver must be received by the Administrator as immediately
available funds at least one business day before the commencement of the Pricing
Period in order to purchase shares of Common Stock on the next following
Investment Date (see Appendix I).
NO INTEREST WILL BE EARNED ON OPTIONAL CASH INVESTMENTS HELD PENDING
INVESTMENT. The Company suggests therefore that any optional cash investment a
Participant wishes to make be sent so as to reach the Administrator as close as
possible to the date it is due to the Administrator. Any questions regarding
these dates should be directed to Shareholder Services, Glenborough Realty Trust
Incorporated, 400 South El Camino Real, 11th Floor, San Mateo, California
94402-1708, telephone number: (650) 343-9300.
Participants may also enroll in the Automatic Cash Investment Program by
completing the appropriate section of the Enrollment Form which is available
upon request to the Administrator or in the Investor Information section of the
Company's web site at www.glenborough.com. This form must be accompanied by a
voided bank check or deposit slip for the account from which the Participant
authorizes the Administrator to draw the funds. Once the form is received and
processed (which normally takes approximately two weeks) funds will
automatically be deducted each month from the designated account on the first
business day of each month and will be invested on the next Investment Date.
Automated funds transfers may be for as little as $100 per month, but in no case
for more than $10,000 per month.
Participants should be aware that since investments under the Plan are made
as of specified dates, one may lose any advantage that otherwise might be
available from being able to select the timing of an investment. NEITHER THE
COMPANY NOR THE ADMINISTRATOR CAN ASSURE A PROFIT OR PROTECT AGAINST A LOSS ON
SHARES OF COMMON STOCK PURCHASED UNDER THE PLAN.
ALL OPTIONAL CASH INVESTMENTS MADE BY CHECK SHOULD BE MADE PAYABLE TO
REGISTRAR AND TRANSFER COMPANY AND MAILED TO THE ADMINISTRATOR AT THE ADDRESS
LISTED IN QUESTION 4 . OTHER FORMS OF PAYMENT, SUCH AS WIRE TRANSFERS, MAY BE
MADE, BUT ONLY IF APPROVED IN ADVANCE BY THE ADMINISTRATOR. INQUIRIES REGARDING
OTHER FORMS OF PAYMENTS AND ALL OTHER WRITTEN INQUIRIES SHOULD BE DIRECTED TO
THE ADMINISTRATOR AT THE ADDRESS LISTED IN QUESTION 4, BY FAX AT (___) ___-____
OR BY EMAIL AT . CHECKS AND WIRE TRANSFERS FOR OPTIONAL CASH INVESTMENTS OF
$10,000 OR LESS MUST BE RECEIVED BY THE ADMINISTRATOR AT LEAST TWO BUSINESS DAYS
PRIOR TO THE INVESTMENT DATE. FUNDS FOR OPTIONAL CASH INVESTMENTS GREATER THAN
$10,000 MUST BE RECEIVED BY THE ADMINISTRATOR AS IMMEDIATELY AVAILABLE FUNDS AT
LEAST ONE BUSINESS DAY PRIOR TO THE COMMENCEMENT OF THE PRICING PERIOD (SEE
COLUMN B OF APPENDIX I).
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13. WHAT LIMITATIONS APPLY TO OPTIONAL CASH INVESTMENTS?
MINIMUM/MAXIMUM LIMITS. For any Investment Date, optional cash investments
made by stockholders of the Company are subject to a minimum of $100 and a
maximum of $10,000. Optional cash investments made by interested investors who
are not then stockholders of the Company are subject to a minimum initial
investment of $250 and a maximum of $10,000. See Question 9 regarding the
determination of Investment Dates for optional cash investments. Optional cash
investments of less than the allowable monthly minimum amount and that portion
of any optional cash investment that exceeds the allowable monthly maximum
amount will be returned promptly to Participants without interest, except as
noted below.
REQUEST FOR WAIVER. Optional cash investments in excess of $10,000 per
month may be made only pursuant to a Request for Waiver accepted by the Company.
Because of certain tax concerns which the Company has as a REIT, however, a
Request for Waiver may only be considered for investors who certify that they
are not participating in the dividend reinvestment component of the Plan.
Participants who wish to submit an optional cash investment in excess of $10,000
for any Investment Date must obtain the prior written approval of the Company. A
Request for Waiver should be sent to the Company via facsimile at (650) 343-8379
by 10:00 a.m. Eastern Time on the day that is at least two business days prior
to the first day of an applicable Pricing Period. The Request for Waiver form
will be furnished by the Company or the Administrator upon request. THE COMPANY
HAS SOLE DISCRETION TO GRANT ANY APPROVAL FOR OPTIONAL CASH INVESTMENTS IN
EXCESS OF THE ALLOWABLE MAXIMUM AMOUNT. In deciding whether to approve a Request
for Waiver, the Company will consider relevant factors including, but not
limited to, whether the Plan is then acquiring newly issued shares directly from
the Company or acquiring shares in the open market or in privately negotiated
transactions from third parties, the Company's need for additional funds, the
attractiveness of obtaining such additional funds through the sale of Common
Stock as compared to other sources of funds, the purchase price likely to apply
to any sale of Common Stock, the Participant submitting the request, the extent
and nature of such Participant's prior participation in the Plan, the number of
shares of Common Stock held of record by such Participant and the aggregate
amount of optional cash investments in excess of $10,000 for which Requests for
Waiver have been submitted by all Participants. If Requests for Waiver are
submitted for any Investment Date for an aggregate amount in excess of the
amount the Company is then willing to accept, the Company may accept such
requests by any method that the Company determines to be appropriate. With
regard to optional cash investments made pursuant to a Request for Waiver, the
Plan does not provide for a predetermined maximum limit on the amount that a
participant may invest or on the number of shares that may be purchased.
GLENBOROUGH RESERVES THE RIGHT TO MODIFY, SUSPEND OR TERMINATE
PARTICIPATION IN THE PLAN BY OTHERWISE ELIGIBLE REGISTERED HOLDERS OR BENEFICIAL
OWNERS OF COMMON STOCK FOR ANY REASON WHATSOEVER INCLUDING ELIMINATION OF
PRACTICES THAT ARE NOT CONSISTENT WITH THE PURPOSES OF THE PLAN.
THRESHOLD PRICE. Glenborough may establish for any Pricing Period a minimum
price (the "Threshold Price") applicable to optional cash investments made
pursuant to a Request for Waiver. At least three business days prior to the
first day of the applicable Pricing Period, Glenborough will determine whether
to establish a Threshold Price, and if a Threshold Price is established, its
amount, and will so notify the Administrator. This determination will be made by
Glenborough in its discretion after a review of current market conditions, the
level of participation in the Plan, and current and projected capital needs.
If established for any Pricing Period, the Threshold Price will be stated
as a dollar amount that the average of the high and low sale prices of the
Common Stock on the NYSE for each Trading Day of the relevant Pricing Period
must equal or exceed. In the event that the Threshold Price is not satisfied for
a Trading Day in the Pricing Period, then that Trading Day will be excluded from
the Pricing Period and all trading prices for that day will be excluded from the
determination of the Purchase Price. A day will also be excluded if no trades of
Common Stock are made on the NYSE for that day. Thus, for example, if the
Threshold Price is not satisfied for three of the twelve Trading Days in a
Pricing Period, then the purchase price will be based upon the remaining nine
Trading Days in which the Threshold Price was satisfied.
In addition, a portion of each optional cash investment will be returned
for each Trading Day of a Pricing Period in which the Threshold Price is not
satisfied or for each day in which no trades of Common Stock are reported on the
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NYSE. The returned amount will equal one-twelfth of the total amount of such
optional cash investment (not just the amount exceeding $10,000) for each
Trading Day that the Threshold Price is not satisfied. Thus, for example, if the
Threshold Price is not satisfied or no such sales are reported for three of the
twelve Trading Days in a Pricing Period, 3/12 (i.e., 25%) of such optional cash
investment will be returned to the Participant without interest.
The establishment of the Threshold Price and the possible return of a
portion of the investment applies only to optional cash investments made
pursuant to a Request for Waiver. Setting a Threshold Price for a Pricing Period
shall not affect the setting of a Threshold Price for any subsequent Pricing
Period. For any particular month, Glenborough may waive its right to set a
Threshold Price. Neither Glenborough nor the Administrator shall be required to
provide any written notice to Participants as to the Threshold Price for any
Pricing Period. Participants may, however, ascertain whether a Threshold Price
has been set or waived for any given Pricing Period by telephoning the Company
at (___) ________.
WAIVER DISCOUNT. Each month, at least three business days prior to the
first day of the applicable Pricing Period, Glenborough may establish a discount
from the Market Price applicable to optional cash investments made pursuant to a
Request for Waiver. Such Waiver Discount may be between 0% and 5% of the
purchase price and may vary each month, but once established will apply
uniformly to all optional cash investments made pursuant to a Request for Waiver
for that month. The Waiver Discount will be established in Glenborough's sole
discretion after a review of 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 the Company at (___) ________. Setting a Waiver Discount for a
particular month shall not affect the setting of a Waiver Discount for any
subsequent month. The Waiver Discount will apply to the entire optional cash
investment and not just the portion of such investment that exceeds $10,000. The
Waiver Discount will apply only to optional cash investments of $10,000 or more,
but the Company reserves the right to establish, in the future, a discount from
the Market Price for reinvestment of cash dividends and optional cash
investments of $10,000 or less.
14. WHAT IF A PARTICIPANT HAS MORE THAN ONE ACCOUNT? For the purpose of the
limitations discussed in Question 13, Glenborough may aggregate all optional
cash investments for Participants with more than one account using the same
social security or taxpayer identification number. For Participants unable to
supply a social security or taxpayer identification number, their participation
may be limited by Glenborough to only one Plan account.
Also for the purpose of such limitations, all Plan accounts that
Glenborough believes to be under common control or management or to have common
ultimate beneficial ownership may be aggregated. Unless Glenborough has
determined that reinvestment of dividends and optional cash investments for each
such account would be consistent with the purposes of the Plan, Glenborough will
have the right to aggregate all such accounts and to return, without interest,
within thirty days of receipt, any amounts in excess of the investment
limitations applicable to a single account received in respect of all such
accounts.
15. WILL CERTIFICATES BE ISSUED FOR SHARE PURCHASES? All shares purchased
pursuant to the Plan will be held together in the name of the Administrator or
its nominee and credited to each individual account in "book entry" form. This
service protects against the loss, theft, or destruction of certificates
evidencing shares. Upon written request of a Participant or upon withdrawal of a
Participant from the Plan or upon termination of the Plan, the Administrator
will have certificates issued and delivered for all full shares credited to that
Participant's 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. See Questions 16 and 17.
16. MAY A PARTICIPANT ADD SHARES OF COMMON STOCK TO HIS OR HER ACCOUNT BY
TRANSFERRING STOCK CERTIFICATES THAT THE PARTICIPANT POSSESSES? Any Participant
may send to the Plan for safekeeping all Common Stock certificates which such
Participant holds. The safekeeping of shares offers the advantage of protection
against loss, theft or 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 for safekeeping in "book entry" form and combined with
any full and fractional shares then held by the Plan for the Participant.
To deposit certificates for safekeeping under the Plan, a Participant must
submit a letter of instruction. Stock certificates and the letter of instruction
as well as all written inquiries about the safekeeping service should be
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directed to the Administrator at the address listed in Question 4. Shares
deposited for safekeeping may be withdrawn by the Participant by submitting a
written request to the Administrator.
17. CAN PARTICIPANTS SELL SHARES HELD UNDER THE PLAN? Participants may
instruct the Administrator to sell some or all of their shares held in the Plan
by notifying the Administrator in writing or by using the form included with
account statements.
The Administrator will sell shares through a registered broker dealer
within five business days after receipt of a proper written notice. 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. Participants should understand that
the price of the Common Stock may go down as well as up between the date a
request to sell is received and the date the sale is executed. The Plan does not
offer the ability for Participants to specify either the dates or the prices at
which shares are to be sold through the Administrator. Requests for sales of
shares that specify the date and/or the price at which the Administrator is to
sell shares will be rejected.
If a request to sell shares is received on or after the record date for a
dividend, the request will be processed within five business days after receipt
of the notice and any cash dividend paid on such shares will be paid to the
Participant in cash and will not be reinvested.
There is no charge for selling shares through the Administrator except for
the Participant's pro rata share of brokerage commissions. These charges are
normally lower than the cost of executing sales through a brokerage account.
18. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN? Unless a
Participant participates in the Plan through a broker, bank or nominee,
Participants will receive from the Administrator a detailed statement of the
Participant's account following each dividend payment and a cash confirmation of
the investment made following other months in which there is purchase activity
in their respective accounts. The detailed statements will show total cash
dividends received, total optional cash investments received, total shares
purchased (including fractional shares), price paid per share, and total shares
held in the Plan. THESE STATEMENTS SHOULD BE RETAINED BY THE PARTICIPANT TO
DETERMINE THE TAX COST BASIS FOR SHARES PURCHASED PURSUANT TO THE PLAN. Any
Participant that participates in the Plan through a broker, bank or nominee,
should contact such party for such a statement.
19. HOW MAY A PARTICIPANT REQUEST A REFUND OF DIVIDENDS OR OPTIONAL CASH
INVESTMENTS? A Participant may request a refund of funds held by the
Administrator by submitting a written request for such a refund to the
Administrator at the address listed in Question 4 at least one business day
prior to the applicable Investment Date. The request must specify the amount of
the refund desired.
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
shares of Common Stock held for such Participant's account and a check be issued
for the proceeds from the sale of any fractional share equivalent, or (4) that
all full shares and any fractional share equivalent held for such Participant's
account be sold and a check issued for the net proceeds, less any applicable
transfer tax. If such a request is received on or after the record date for a
dividend, any cash dividend paid on that account will be paid to the Participant
in cash. The request will then be processed as soon as practicable after receipt
by the Administrator. There will be no cost to a Participant with respect to
termination of a Participant's reinvestment of dividends through the Plan other
than the brokerage costs described above under Question 17 with respect to any
shares sold.
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
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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.
21. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN THE
PLAN? Reinvestment of dividends in the Plan will not avoid the tax that would
otherwise apply to the dividends. With respect to shares purchased from the
Company with reinvested dividends, a Participant will be treated for federal
income tax purposes as having received a distribution from the Company equal to
the fair market value on the Investment Date of the shares acquired with the
reinvested dividends. In the event that the Company implements a discount on the
purchase price of shares purchased through the Plan, the fair market value on
the Investment Date of the shares received will likely exceed the amount of cash
dividends that would otherwise be paid to Participants. A Participant's tax
basis in the shares received through reinvested dividends will equal the fair
market value of such shares on the Investment Date.
Under a private letter ruling issued by the Internal Revenue Service to
Duke Realty Investments, Inc. (the "IRS Ruling"), the tax treatment of the
purchase of shares by a Participant under an Optional Cash Investment will
differ depending on whether the Participant is participating in the dividend
reinvestment feature of the Plan. For those Optional Cash Investment
Participants participating in the dividend reinvestment feature of the Plan,
Participants will be treated as having received a distribution equal to the
excess, if any, of the fair market value of the shares acquired on the
Investment Date over the actual purchase price of the shares. The tax basis in
the shares received by those Participants will equal the fair market value of
such shares on the Investment Date.
For those Optional Cash Investment Participants not participating in the
dividend reinvestment feature of the Plan, the IRS Ruling states that no taxable
income will be realized as a result of the acquisition of shares. For those
Participants, the tax basis in the shares received will equal the amounts paid
for such shares.
Distributions by the Company will be treated as dividends to the extent of
the Company's earnings and profits for federal income tax purposes. Depending on
certain designations of such dividends made by the Company, such dividends may
be treated as either income or capital gains in the hands of stockholders. To
the extent that the amount distributed by the Company exceeds its current and
accumulated earnings and profits, the distribution will be first treated as a
return of capital to the stockholder to the extent of basis, with any excess
taxable as gain realized from the sale of shares. For corporate Participants,
distributions by the Company that are taxable as dividends are not eligible for
the dividends-received deduction.
A Participant's holding period for shares acquired pursuant to the Plan
will begin on the day following the Investment Date.
When a Participant withdraws shares from the Plan and receives whole
shares, the Participant will not realize any taxable income. However, a
Participant that receives cash for a fraction of a share may realize gain or
loss with respect to such fraction. A gain or loss may also be realized by the
Participant whenever shares are sold, whether such shares are sold by the
Administrator pursuant to the Participant's request or by the Participant after
the shares are withdrawn from the Plan. The amount of such gain or loss will be
the difference between the amount that the Participant realizes for the shares
and the Participant's tax basis of those shares.
THE FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES OF
PARTICIPATION IN THE PLAN AND DOES NOT CONSTITUTE TAX ADVICE. THIS SUMMARY DOES
NOT REFLECT EVERY POSSIBLE OUTCOME THAT COULD RESULT FROM PARTICIPATION IN THE
PLAN AND, THEREFORE, PARTICIPANTS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES APPLICABLE TO THEIR PARTICULAR SITUATION.
22. WHAT HAPPENS IF A PARTICIPANT SELLS OR TRANSFERS SHARES OF STOCK OR
ACQUIRES ADDITIONAL SHARES OF STOCK? If a Participant has elected to have their
dividends automatically reinvested in the Plan and subsequently sells or
transfers all or any part of the shares registered in the Participant's name,
automatic reinvestment 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
Dividend Reinvestment option 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
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Participant has elected the Optional Cash Investments Only option and
subsequently acquires additional shares that 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 SHARES BE VOTED? For any meeting of
stockholders, each Participant will receive proxy materials in order to vote all
shares held by the Plan for the Participant's account. All shares will be voted
as designated by the Participant or may be voted in person at the meeting of
stockholders.
24. WHO PAYS THE EXPENSES OF THE PLAN? Participants pay no fees,
commissions or expenses of any kind in connection with the Plan except for their
pro rata share of commissions for shares sold through the Plan (See Question
17).
25. WHAT ARE THE RESPONSIBILITIES OF GLENBOROUGH OR THE ADMINISTRATOR UNDER
THE PLAN? Neither Glenborough 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 adjudication of
incompetence prior to the receipt of notice in writing of such death or
adjudication of 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 Stock. Neither Glenborough nor the Administrator has
any duties, responsibilities or liabilities except as expressly set forth in the
Plan or as imposed by applicable laws, including, without limitation, federal
securities laws.
THE PARTICIPANT SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE A PROFIT OR
PROTECT AGAINST A LOSS ON THE SHARES PURCHASED BY A PARTICIPANT UNDER THE PLAN
AND TAKES NO POSITION ON WHETHER STOCKHOLDERS OR INVESTORS SHOULD PARTICIPATE IN
THE PLAN.
26. WHAT HAPPENS IF GLENBOROUGH ISSUES A STOCK DIVIDEND, SUBSCRIPTION
RIGHTS OR DECLARES A STOCK SPLIT? Any stock dividend or stock split that may be
declared by the Company will be automatically credited to a Participant's Plan
account. In the event that the Company makes subscription rights to purchase
additional shares of Common Stock or other securities available to the holders
of its Common Stock, the Administrator will sell the rights accruing to all
shares held by the Administrator for Plan Participants and will apply the net
proceeds of such sale to the purchase of Common Stock prior to or with the next
monthly Common Stock investment. The Company will, however, inform Participants
in advance of any subscription offer so that a Participant who does not want the
Administrator to sell such rights and invest the proceeds can transfer all
shares held under the Plan to the Participant's own name by a given date. This
will permit the Participant to personally exercise, transfer or sell the rights
on such shares. Any such request must be received by the Administrator at least
three business days before the record date for distribution of the rights.
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 Stock certificates, including the requirement of a medallion signature
guarantee on the stock assignment. The Administrator will provide Participants
with the appropriate forms upon request. If any stock certificates bearing a
restrictive legend are contained in the 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.
20
<PAGE>
29. MAY THE PLAN BE CHANGED OR TERMINATED? While the Plan is intended to
continue indefinitely, Glenborough reserves the right to amend, modify,
suspend or terminate the Plan at any time. Participants will be notified in
writing of any modifications made to the Plan.
30. HOW MAY THE PLAN BE MODIFIED OR TERMINATED? The Company and the Plan
Administrator reserve the right to modify the Plan, including the right to
terminate the Plan upon written notice mailed to Plan Participants' addresses of
record. In addition, the Company and the Plan Administrator reserve the right to
interpret and regulate the Plan as they deem necessary or desirable in
connection with Plan operations. If any regulatory agency or other act of law
prohibits all or portions of the Plan, the Plan may be amended as required by
the Company or the Plan Administrator.
21
<PAGE>
GLOSSARY
"Administrator" means Registrar & Transfer
Company or such successor
administrator as Glenborough
may designate.
"Attributed Owners" means Robert
Batinovich and the
individuals or entities
whose ownership of shares
of Common Stock is
attributed to Mr.
Batinovich under the Code.
"B/N Form" means the Broker and Nomine
Form.
"Code" means the Internal Revenue
Code of 1986, as amended.
"Commission" means the Securities and
Exchange Commission.
"Company" and "Glenborough" mean
Glenborough Realty Trust
Incorporated, a Maryland
real estate investment
trust and its consolidated
subsidiaries for the
periods from and after
December 31, 1995.
"Exchange Act" means the Securities
Exchange Act of 1934, as
amended.
"Investment Date" means (i) the
dividend payment date, for
months in which dividends
are paid and (ii) the first
business day on or after
the tenth calendar day of
the month in months in
which dividends are not
paid.
"IRS Ruling" means the private letter
ruling issued to Duke
Realty Investments, Inc.
"Market Price" means:
(a) for shares
acquired through the Plan
as a result of the
reinvestment of dividends
and optional cash
investments of $10,000 or
less (i) the average of the
high and low price reported
by the NYSE on the
Investment Date for shares
purchased directly from the
Company, or (ii) the
average price per share
paid by the Administrator
for shares purchased in
open market or privately
negotiated transactions;
and
(b) for shares
purchased pursuant to a
Request for Waiver, (i) the
average of the daily high
and low sales prices of the
Common Stock on the NYSE
during a Pricing Period
consisting of twelve
Trading Days preceding the
Investment Date for shares
purchased directly from the
Company, or (ii) the
average price per share
paid by the Administrator
for shares purchased in
open market or privately
negotiated transactions.
"Optional Cash Investment" means the
purchase of Common Stock of
the Company under the Plan
with newly invested funds
rather than with reinvested
dividends.
"Participant" means Glenborough stock
holders and other investors
who elect to participate in
the Plan.
22
<PAGE>
"Plan" means the Glenborough Direct
Stock Purchase and Dividend
Reinvestment Plan.
"Pricing Period" applies only to
purchases made pursuant to
a Request for Waiver and
means the twelve trading
days immediately preceding
an Investment Date.
"Registration Statement" means the
registration statement on
Form S-3 filed under the
Securities Act with respect
to the Shares of Common
Stock offered for purchase
under the Plan.
"Request for Waiver" or "Waiver"
means the process by which
investors may, in any
month, invest more than
$10,000 in the Company's
Common Stock under the
Plan.
"Securities Act" means the Securities Act of
1933, as amended.
"Threshold Price" means the minimum price
established by the Company
for any Pricing Period.
"Waiver Discount" means the
discount from Market Price
applied to purchases of
stock pursuant to a Request
for Waiver.
23
<PAGE>
RESTRICTIONS ON OWNERSHIP OF SHARES
For the Company to qualify as a REIT under the Code, not more than 50%
of the value of its outstanding shares of capital stock may be owned, directly
or indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year (other than the first
year) or during a proportionate part of a shorter taxable year (the
"closely-held test"). Shares of capital stock must be beneficially owned by 100
or more persons during at least 335 days of a taxable year of 12 months (other
than the first year) or during a proportionate part of a shorter taxable year
(the "100 person test"). See "Federal Income Tax Consequences -- Taxation of the
Company -- Requirements for Qualification."
Because the Board of Directors believes it is essential for the Company
to qualify as a REIT, the Charter, subject to certain exceptions, provides that
no holder, other than Robert Batinovich and the individuals or entities whose
ownership of shares of Common Stock is attributed to Mr. Batinovich under the
Code (the "Attributed Owners"), may own an amount of Common Stock and Preferred
Stock in excess of the Ownership Limitation, which, pursuant to Board action,
currently is 9.9% of the value of the outstanding shares of Common Stock and
Preferred Stock. A qualified trust (as defined in the Charter) generally may own
up to 9.9% of the outstanding shares of Common Stock and Preferred Stock. The
Ownership Limitation provides that Robert Batinovich and the Attributed Owners
may hold up to 9.9% of the outstanding shares of Common Stock and Preferred
Stock. Such limitation includes shares which Robert Batinovich and the
Attributed Owners may acquire through the exercise options they hold to cause
the Company to redeem their respective partnership interests in the Operating
Partnership, assuming Glenborough Partners then dissolves and distributes these
shares to the partners of Glenborough Partners.
The Board of Directors may waive the Ownership Limitation if evidence
satisfactory to the Board of Directors and the Company's tax counsel is
presented that such ownership will not jeopardize the Company's status as a
REIT. As a condition to such waiver, the Board of Directors may require opinions
of counsel satisfactory to it and/or an undertaking from the applicant with
respect to preserving the REIT status of the Company. The Ownership Limitation
will not apply if the Board of Directors and the stockholders determine that it
is no longer in the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT. Any transfer of Common Stock or Preferred Stock
that would (a) create actual or constructive ownership of Common Stock and
Preferred Stock in excess of the Ownership Limitation, (b) result in the Company
failing the 100 person test, or (c) result in the Company failing the
closely-held test, shall be null and void, and the intended transferee will
acquire no rights to the Common Stock or Preferred Stock.
The Charter also provides that Common Stock or Preferred Stock involved
in a transfer or change in capital structure that results in a person (other
than Robert Batinovich and the Attributed Owners) owning in excess of the
Ownership Limitation or would cause the Company to fail either the closely-held
test or the 100 person test will automatically be transferred to a trustee for
the benefit of a charitable organization until purchased by the Company or sold
to a third party without violation of the Ownership Limitation. While held in
trust, the Excess Shares will remain outstanding for purposes of any stockholder
vote or the determination of a quorum for such vote and the trustee will be
empowered to vote the Excess Shares. Excess Shares shall be entitled to
distributions, provided that such distributions shall be paid to a charitable
organization selected by the Board of Directors as beneficiary of the trust. The
trustee may transfer the Excess Shares to any individual (a "Permitted
Transferee") whose ownership of Common Stock or Preferred Stock would be
permitted under the Ownership Limitation and would not cause the Company to fail
the closely-held test. In addition, the Company would have the right, for a
period of 90 days, to purchase all or any portion of the Excess Shares from the
trustee at the lesser of: (i) where (a) the intended transferee gave value for
the Excess Shares, the price paid for the Excess Shares by the intended
transferee or (b) the intended transferee did not give value for the Excess
Shares, the price per share equal to the average of the market price for the
Common Stock for the five consecutive trading days ending on the date of the
purported transfer to the intended transferee; and (ii) the average of the
closing market price for the Common Stock for the five consecutive trading day
sending the date the Company exercises its option to purchase. The intended
transferee would be entitled to receive from the trustee the lesser of: (i)where
(a) the intended transferee gave value for the Excess Shares, the price paid for
the Excess Shares by the intended transferee or (b) the intended transferee did
not give value for the Excess Shares, the price per share equal to the average
of the closing market price for the Common Stock for the five consecutive
trading days ending on the date of the purported transfer to the intended
transferee; and (ii) the price per share received by the trustee from the
transfer of the Excess Shares to a Permitted Transferee.
24
<PAGE>
The Ownership Limitation will not be automatically removed even if the
REIT provisions of the Code are changed so as to no longer contain any ownership
concentration limitation or if the ownership concentration limitation is
increased. Except as otherwise described above, any change in the Ownership
Limitation would require an amendment to the Charter. Such amendments require
the affirmative vote of stockholders owning a majority of the outstanding Common
Stock. In addition to preserving the Company's status as a REIT, the Ownership
Limitation may have the effect of precluding an acquisition of control of the
Company by a third party without the approval of the Board of Directors.
All certificates representing shares of Common Stock will bear a legend
referring to the restrictions described above.
All stockholders of record who own 5% or more of the value of the
outstanding Common Stock (or 1% if there are fewer than 2,000 stockholders of
record but more than 200, or 1/2% if there are 200 or fewer stockholders of
record) must file written notice with the Company containing the information
specified in the Charter by January 30 of each year. In addition, each
stockholder shall upon demand be required to disclose to the Company in writing
such information with respect to the direct, indirect and constructive ownership
of Common Stock as the Board of Directors deems necessary to determine the
effect, if any, of such ownership on the Company's status as a REIT and to
ensure compliance with the Ownership Limitation. The Company intends to use its
best efforts to enforce the Ownership Limitation and will make prohibited
transferees aware of their obligation to pay over any distributions received,
will not give effect on its books to prohibited transfers, will institute
proceedings to enjoin any transfer violating the Ownership Limitation, and will
declare all votes of prohibited transferees invalid.
PLAN OF DISTRIBUTION
Pursuant to the Plan, Glenborough may be requested to approve optional cash
investments in excess of the allowable maximum amounts pursuant to Requests for
Waiver on behalf of Participants that may be engaged in the securities business.
In deciding whether to approve such a request, Glenborough will consider
relevant factors including, but not limited to, whether the Plan is then
acquiring newly issued shares of Common Stock or acquiring shares through open
market purchases or privately negotiated transactions, the Company's need for
additional funds, the attractiveness of obtaining such funds by the sale of
Common Stock under the Plan in comparison to other sources of funds, the
purchase price likely to apply to any sale of Common Stock, the Participant
submitting the request, including the extent and nature of such Participant's
prior participation in the Plan and the number of shares of Common Stock held of
record by such Participant, and the aggregate number of Requests for Waiver that
have been submitted by all Participants. Persons who acquire shares of Common
Stock through the Plan and resell them shortly after acquiring them, including
coverage of short positions, 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. Glenborough 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 Glenborough enter into any agreement with any such person
regarding such person's purchase of such shares or any resale or distribution
thereof. Glenborough 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 Glenborough is willing to accept, Glenborough may honor such
requests in order of receipt, pro rata or by any other method which Glenborough
determines to be appropriate.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered
pursuant to this Prospectus will be passed upon for the Company by Morrison &
Foerster LLP, Palo Alto, California.
25
<PAGE>
EXPERTS
The financial statements of the Company, the GRT Predecessor Entities
and Glenborough Hotel Group, and related financial statements schedules included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1997, have been audited by Arthur Andersen LLP, independent public accountants,
to the extent and for the periods indicated in their reports, and have been
incorporated herein in reliance on such reports given on the authority of that
firm as experts in accounting and auditing.
In addition, the respective statements of revenues and certain expenses
of the Copley Properties, Thousand Oaks, the Opus Portfolio, the Windsor
Portfolio, the Marion Bass Portfolio, Bryant Lake, the CRI Properties, the San
Mateo Headquarters, Skypark, the BGK Portfolio, the Eaton and Lauth Portfolio,
the Pauls Portfolio, the Galesi Portfolio, the Donau/Gruppe Portfolio, and One
and Three Pacific Place, included in various Current Reports on Form 8-K and
Form 8-K/A, have also been audited by Arthur Andersen LLP, independent public
accountants, to the extent and for the periods indicated in their reports,
and have been incorporated herein, in reliance on such reports given on the
authority of that firm as experts in accounting and auditing.
26
<PAGE>
APPENDIX I
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(A) (B) (C) (D)
Optional Cash Investments
Threshold Price and Waiver Greater Than $10,000 must
Discount, if any, will be set by be received by Pricing Period Start Date Investment Date
-------------------------------- -------------- ------------------------- ---------------
December 17, 1998 December 21, 1998 December 22, 1998 January 11, 1999
January 20, 1999 January 22, 1999 January 25, 1999 February 10, 1999
February 17, 1999 February 19, 1999 February 22, 1999 March 10, 1999
March 19, 1999 March 23, 1999 March 24, 1999 April 12, 1999
April 19, 1999 April 21, 1999 April 22, 1999 May 10, 1999
May 19, 1999 May 21, 1999 May 24, 1999 June 10, 1999
June 18, 1999 June 22, 1999 June 23, 1999 July 12, 1999
July 20, 1999 July 22, 1999 July 23, 1999 August 10, 1999
August 19, 1999 August 23, 1999 August 24, 1999 September 10, 1999
September 20, 1999 September 22, 1999 September 23, 1999 October 11, 1999
October 20, 1999 October 22, 1999 October 25, 1999 November 10, 1999
November 18, 1999 November 22, 1999 November 23, 1999 December 10, 1999
December 17, 1999 December 21, 1999 December 22, 1999 January 10, 2000
January 20, 2000 January 24, 2000 January 25, 2000 February 10, 2000
February 17, 2000 February 22, 2000 February 23, 2000 March 10, 2000
March 20, 2000 March 22, 2000 March 23, 2000 April 10, 2000
April 18, 2000 April 20, 2000 April 24, 2000 May 10, 2000
May 19, 2000 May 23, 2000 May 24, 2000 June 12, 2000
June 16, 2000 June 20, 2000 June 21, 2000 July 10, 2000
July 20, 2000 July 24, 2000 July 25, 2000 August 10, 2000
August 18, 2000 August 22, 2000 August 23, 2000 September 11, 2000
September 19, 2000 September 21, 2000 September 22, 2000 October 10, 2000
October 20, 2000 October 24, 2000 October 25, 2000 November 10, 2000
</TABLE>
A. The Threshold Price and the Waiver Discount, if any, will be established by
the Company three business days prior to the first day of the Pricing
Period. The Threshold Price and Waiver Discount only apply to purchases via
a Request for Waiver.
B. Optional cash investments, made pursuant to a Request for Waiver, are
due by the close of business on the last business day immediately precedin
the first day of the Pricing Period.
C. Pursuant to a Request for Waiver, the Pricing Period will be the twelve
consecutive Trading Days ending on the Trading Day immediately preceding
the Investment Date.
D. The Investment Date will be (i) the dividend payment date, for months in
which dividends are paid and (ii) the first business day on or after the
tenth calendar day of the month in months in which dividends are not paid.
For months in which a cash dividend is paid, the dividend payment date is
expected to be on or about the tenth day of the month.
27
<PAGE>
U .S. EQUITY
MARKETS CLOSED IN 1998
Thanksgiving Day November 26
Christmas Day December 25
U .S. EQUITY
MARKETS CLOSED IN 1999
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*
*Observed
U .S. EQUITY
MARKETS CLOSED IN 2000
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
*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
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
28
<PAGE>
No dealer, salesman or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offering
made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder and
thereunder shall, under any circumstance, create an implication that there has
been no change in the facts set forth in this Prospectus or in the affairs of
the Company since the date hereof. This Prospectus does not constitute an offer
or solicitation by anyone in any state in which such offer or solicitation is
not authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
29
<PAGE>
-------------
DIRECT STOCK PURCHASE
AND
DIVIDEND REINVESTMENT PLAN
-------------
PROSPECTUS
-------------
TABLE OF CONTENTS PAGE
Available Information 2
Incorporation of Certain Documents by 2
Reference
The Company 4
Use of Proceeds 4
Summary of the Plan 5
The Plan 8
Restrictions on Ownership of Shares 22
Plan of Distribution 23
Legal Matters 23
Experts 24
Appendix I 25
SHARES
COMMON STOCK
November 24, 1998
30
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated fees and expenses payable
by the Company in connection with the issuance and distribution of the Common
Stock registered hereby. All of such fees and expenses are estimates, except the
Securities Act registration fee.
Securities Act Registration Fee $ 18,474
Printing and duplicating fees 10,000
Professional fees and expenses 15,000
Miscellaneous expenses 6,526
-----------
Total $ 50,000
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Maryland GCL permits a Maryland Corporation to include in its
charter a provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for (i) actual receipt
of an improper benefit or profit in money, property or services or (ii) active
and deliberate dishonesty established by a final judgment as being material to
the cause of action. The Charter contains such a provision which limits such
liability to the maximum extent permitted by the Maryland GCL.
The Charter authorizes the Company to obligate itself to indemnify its
present and former officers and directors and to pay or reimburse reasonable
expenses for those individuals in advance of the final disposition of a
proceeding to the maximum extent permitted from time to time by the laws of
Maryland. The Bylaws of the Company obligate it to indemnify, and advance
expenses to present, former and proposed directors and officers to the maximum
extent permitted by Maryland law. The Maryland GCL 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 a reasonable cause to believe that the act or omission was unlawful.
However, a corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation. In addition, the Maryland GCL requires the
Company, as conditions to advancing expenses, to obtain (i) a written
affirmation by the director 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 applicable Bylaws and (ii) a written statement by him 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. The Bylaws of
the Company also permit the Company to provide indemnification and to advance
expenses to a present or former director or officer who served a predecessor of
the Company in that capacity, and to any employee or agent of the Company, or a
predecessor of the Company. Finally, the Maryland GCL requires a
corporation(unless its charter provides otherwise, which the Company's Charter
does not) to indemnify a director 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 service in that capacity.
The Company has entered into indemnification agreements with each of
its directors and executive officers to provide them with indemnification to the
full extent permitted by the Charter and Bylaws of Company.
The Company has obtained an insurance policy to provide liability
coverage for directors and officers of Company.
31
<PAGE>
ITEM 16. EXHIBITS
4.1 - Articles of Amendment and Restatement of Articles of
Incorporation of the Registrant(incorporated by reference to
Exhibit 3.02 to Registrant's Registration Statement on Form
S-11 (File No. 333-09411))
4.2 - Bylaws of the Registrant (incorporated by reference to Exhibit
3.01 to Registrant's Registration Statement on Form S-11 (File No.
333-09411))
5.1 - Opinion of Morrison & Foerster LLP
8.1 - Opinion of Morrison & Foerster LLP relating to certain tax matters.
23.1 - Consent of Arthur Andersen LLP, independent public accountants
23.2 - Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1 - Power of Attorney (included on signature page hereto)
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)of the Securities
Act 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 this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) any deviation from the low or high and of the estimated
maximum offering price may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate changes in volume and
price represent no more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and (iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
registration statement or any material change to such information in this
registration statement; provided, however, that subparagraphs (i) and (ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in the periodic reports filed by the
Registrant pursuant to Section 13 or Section 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 herein, 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
these securities being registered which remain unsold at the termination of the
offering.
32
<PAGE>
The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual reports pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, when 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 to 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.
33
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Mateo, State of California on November 24, 1998.
GLENBOROUGH REALTY TRUST INCORPORATED
By: /s/ Robert Batinovich
Chairman and Chief Executive Officer
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Robert Batinovich,
Andrew Batinovich, Stephen Saul and Frank E. Austin as his/her true and lawful
attorneys-in-fact and agents, jointly and severally, with full power of
substitution and resubstitution, for and in his/her stead, in any and all
capacities, to sign on his/her behalf the Registration Statement on Form S-3 in
connection with the sale by Glenborough Realty Trust Incorporated of shares of
offered securities, and to execute any amendments thereto (including
post-effective amendments) or certificates that may be required in connection
with this Registration Statement, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission and granting unto said attorneys-in-fact and agents,
jointly and severally, the full power and authority to do and perform each and
every act and thing necessary or advisable to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, jointly and severally, or his/her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
/s/ Robert Batinovich Chairman and Chief Executive
Officer November 24, 1998
/s/ Andrew Batinovich Director, President and Chief
Operating Officer November 24, 1998
/s/ Stephen Saul Executive Vice President and
Chief Financial Officer November 24, 1998
/s/ Terri Garnick Senior Vice President and
Chief Accounting Officer November 24, 1998
/s/ Patrick Foley Director November 24, 1998
/s/ Laura Wallace Director November 24, 1998
</TABLE>
34
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
4.1 Articles of Amendment and Restatement of Articles of Incorporation
of the Registrant (incorporated by reference to Exhibit 3.02 to
Registrant's Registration Statement on Form S-11(File No.333-09411))
4.2 Bylaws of the Registrant (incorporated by reference to
Exhibit 3.01 to Registrant's Registration Statement on Form S-11
(File No. 333-09411))
5.1 Opinion of Morrison & Foerster LLP
8.1 Opinion of Morrison & Foerster LLP relating to certain tax matters
23.1 Consent of Arthur Andersen LLP, independent public accountants
23.2 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page hereto)
35
<PAGE>
Exhibit 5.1
November 24, 1998
Glenborough Realty Trust Incorporated
400 South El Camino Real, Suite 1100
San Mateo, CA 94402-1708
Ladies and Gentlemen:
We are acting as counsel to Glenborough Realty Trust Incorporated, a
Maryland corporation (the "Company"), in connection with preparation of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), pursuant to which the Company
proposes to offer, from time to time, up to 3,000,000 shares (the "Shares") of
Common Stock, $.001 par value (the "Common Stock") of the Company under the
Company's Direct Stock Purchase and Dividend Reinvestment Plan (the "Plan").
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization and issuance of the Shares, and for
the purposes of this opinion, have assumed such proceedings will be timely
completed in the manner presently proposed. In addition, we have made such legal
and factual examinations and inquiries, including an examination of originals or
copies certified or otherwise identified to our satisfaction of such documents,
corporate records and instruments, as we have deemed necessary or appropriate
for purposes of this opinion.
Based upon and subject to the foregoing, it is our opinion that the
Company has authority pursuant to its Articles of Incorporation to issue the
Shares to be registered under the Registration Statement upon compliance with
the applicable provisions of the Act and such state "blue sky" or securities
laws as may be applicable and upon issuance and delivery of and payment for the
Shares in the manner contemplated by the Registration Statement and the Plan,
the Shares will be legally issued, fully paid, and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the reference to us under the heading "Legal
Matters" in the Registration Statement, the Prospectus constituting a part
thereof and any amendments thereto.
Very truly yours,
/s/Morrison & Foerster LLP
36
<PAGE>
Exhibit 8.1
November 24, 1998
Glenborough Realty Trust Incorporated
400 South El Camino Real, 11th Floor
San Mateo, California 94402
Ladies and Gentlemen:
We have acted as special tax counsel to Glenborough Realty Trust
Incorporated, a Maryland corporation (the "Company") in connection with sale by
the Company of 3,000,000 shares of its common stock, par value $0.001 per share
(the "Common Stock"), which are the subject of a Registration Statement (the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission on Form S-3 under the Securities Act of 1933, as amended, on or about
November 24, 1998. Capitalized terms not defined herein shall have the meanings
ascribed to them in the certificate (or incorporated therein by reference),
dated November 24, 1998 (the "Certificate"), delivered to Morrison & Foerster
LLP which provides certain representations of fact by the Company relevant to
this opinion.
You have requested our opinion as to whether the Company has operated
in a manner to qualify it as a real estate investment trust ("REIT"), within the
meaning of Section 856(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). This opinion is solely for the benefit of the Company and may not be
relied upon by, nor may copies be delivered to, any other person without our
prior written consent.
In our capacity as special tax counsel to the Company and for purposes
of rendering this opinion, we have examined and relied upon the following, with
your consent: (i) the Certificate; (ii) the Registration Statement and (iii)
such other documents we have considered relevant to our analysis. In our
examination of such documents, we have assumed the authenticity of original
documents, the accuracy of copies, the genuineness of signatures, and the legal
capacity of signatories. We have also assumed that all parties to such documents
have acted, and will act, in accordance with the terms of such documents.
Furthermore, our opinion is based on (a) our understanding of the facts
as represented to us in the Certificate and (b) the assumption that (I) the
Company is operated and will continue to be operated in the manner described in
the Certificate, (II) the facts contained in the Registration Statement are true
and complete in all material respects, and (III) all representations of fact
contained in the Certificate are true and complete in all material respects. We
have not undertaken any independent inquiry into or verification of these facts
either in the course of our representation of the Company or for the purpose of
rendering this opinion. While we have reviewed all representations made to us to
determine their reasonableness, we have no assurance that they are or will
ultimately prove to be accurate.
We also note that the tax consequences addressed herein depend upon the
actual occurrence of events in the future, which events may or may not be
consistent with any representations made to us for purposes of this opinion. In
particular, qualification and taxation of the Company as a REIT under the Code
depends upon the Company's ability to meet on a continuing basis certain
distribution levels, diversity of stock ownership, and the various qualification
tests imposed by the Code. To the extent that the facts differ from those
represented to us or assumed by us herein, our opinion should not be relied
upon.
Our opinion herein is based on existing law as contained in the Code,
the Treasury Regulations promulgated thereunder, administrative pronouncements
of the IRS and court decisions as of the date hereof. The provisions of the Code
and the Treasury Regulations, IRS administrative pronouncements and case law
upon which this opinion is based could be changed at any time, perhaps with
retroactive effect. In addition, some of the issues under existing law that
could significantly affect our opinion have not yet been authoritatively
addressed by the IRS or the courts, and our opinion is not binding on the IRS or
the courts. Hence, there can be no assurance that the IRS will not challenge or
that the courts will agree with our conclusions.
37
<PAGE>
Based upon, and subject to, the foregoing and the next paragraph below,
we are of the opinion that, commencing with the Company's taxable year ending
December 31, 1996 through its taxable year ending December 31, 1997, the Company
has been organized in conformity with the requirements for qualification as a
REIT under the Code and its method of operation has enabled it to so qualify,
and if it operates after December 31, 1997 in the same manner as it has prior to
that date, it will continue to so qualify.
We undertake no obligation to update this opinion, or to ascertain
after the date hereof whether circumstances occurring after such date may affect
the conclusions set forth herein. We express no opinion as to matters governed
by any laws other than the Code, the Treasury Regulations, published
administrative announcements and rulings of the IRS and case law.
Very truly yours,
/s/Morrison & Foerster LLP
38
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 21, 1998
(except with respect to the matters discussed in Note 14, as to which the date
is March 20, 1998) on the financial statements of Glenborough Realty Trust
Incorporated and our report dated January 21, 1998 on the financial statements
of Glenborough Hotel Group each of which is included in the Form 10-K and the
Form 10-K/A of Glenborough Realty Trust Incorporated for the year ended December
31, 1997 and to all references to our firm included in this registration
statement.
We also consent to the incorporation by reference in this registration statement
of our report dated October 10, 1997 with respect to the combined statement of
revenues and certain expenses of the Copley Properties for the year ended
December 31, 1996, included in the Current Report on Form 8-K/A of Glenborough
Realty Trust Incorporated filed on January 9, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated January 8, 1998 with respect to the combined statement of
revenues and certain expenses of Thousand Oaks for the year ended December 31,
1996, included in the Current Report on Form 8-K/A of Glenborough Realty Trust
Incorporated filed on January 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated January 8, 1998 with respect to the combined statement of
revenues and certain expenses of the Opus Portfolio for the nine months ended
September 30, 1997, included in the Current Report on Form 8-K/A of Glenborough
Realty Trust Incorporated filed on January 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated January 8, 1998 with respect to the combined statements of
revenues and certain expenses of the Windsor Portfolio, Group A and B, for the
year ended December 31, 1996 and the nine months ended September 30, 1997,
respectively, included in the Current Report on Form 8-K of Glenborough Realty
Trust Incorporated filed on January 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated January 8, 1998 with respect to the combined statement of
revenues and certain expenses of the Marion Bass Portfolio for the year ended
December 31, 1996, included in the Current Report on Form 8-K of Glenborough
Realty Trust Incorporated filed on January 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated October 10, 1997 with respect to the combined statements of
revenues and certain expenses of Bryant Lake for each of the three years ended
December 31, 1996, 1995 and 1994 included in the Current Report on Form 8-K of
Glenborough Realty Trust Incorporated filed on January 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated January 8, 1998 with respect to the combined statement of
revenues and certain expenses of the CRI Properties for the nine months ended
August 31, 1997 included in the Current Report on Form 8-K of Glenborough Realty
Trust Incorporated filed on January 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated March 2, 1998 with respect to the combined statement of
revenues and certain expenses of the San Mateo Headquarters for the year ended
December 31, 1996, included in the Current Report on Form 8-K of Glenborough
Realty Trust Incorporated filed on March 12, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated March 2, 1998 with respect to the combined statement of
revenues and certain expenses of Skypark for the year ended December 31, 1996,
included in the Current Report on Form 8-K/A of Glenborough Realty Trust
Incorporated filed on March 24, 1998.
39
<PAGE>
We also consent to the incorporation by reference in this registration statement
of our report dated May 12, 1998 with respect to the combined statement of
revenues and certain expenses of the BGK Portfolio for the year ended December
31, 1997, included in the Current Reports on Form 8-K/A of Glenborough Realty
Trust Incorporated filed on Mary 15, 1998 and September 10, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated May 15, 1998 with respect to the combined statement of
revenues and certain expenses of the Eaton and Lauth Portfolio for the year
ended December 31, 1997, included in the Current Reports on Form 8-K/A of
Glenborough Realty Trust Incorporated filed on May 15, 1998 and September 10,
1998.
We also consent to the incorporation by reference in this registration statement
of our report dated June 12, 1998 with respect to the combined statement of
revenues and certain expenses of the Galesi Portfolio for the year ended
December 31, 1997, included in the Current Report on Form 8-K/A of Glenborough
Realty Trust Incorporated filed on August 13, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated June 25, 1998 with respect to the combined statement of
revenues and certain expenses of the Donau/Gruppe Portfolio for the year ended
December 31, 1997, included in the Current Report on Form 8-K/A of Glenborough
Realty Trust Incorporated filed on August 13, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated July 15, 1998 with respect to the combined statement of
revenues and certain expenses of the Pauls Portfolio for the year ended December
31, 1997, included in the Current Report on Form 8-K/A of Glenborough Realty
Trust Incorporated filed on August 13, 1998.
We also consent to the incorporation by reference in this registration statement
of our report dated July 15, 1998 with respect to the statement of revenues and
certain expenses of One and Three Pacific for the year ended December 31,
1997, included in the Current Report on Form 8-K/A of Glenborough Realty Trust
Incorporated filed on August 13, 1998.
/s/ARTHUR ANDERSEN LLP
San Francisco, California
November 24, 1998
40
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