As filed with the Securities and Exchange Commission on November 21, 2001
Registration No. 333-72210
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SIZELER PROPERTY INVESTORS, INC.
(Exact name of registrant as specified in its charter)
Maryland 72-1082589
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2542 Williams Boulevard
Kenner, Louisiana 70062
(504) 471-6200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
SIDNEY W. LASSEN, Chairman
2542 Williams Boulevard
Kenner, Louisiana 70062
(504) 471-6200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
WILLIAM I. SCHAPIRO, Esq.
Jaeckle Fleischmann & Mugel, LLP
800 Fleet Bank Building, Twelve Fountain Plaza
Buffalo, New York 14202
(716) 856-0600
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement as determined
by market conditions.
If the only securities being registered on this form are being offered
pursuant to a dividend or interest reinvestment plan, 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 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier 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. [_]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933, as amended, or until this
registration statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
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+The information in this prospectus is not complete and may be changed. We may +
+not issue these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any jurisdiction where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
Dated: November 21, 2001
Prospectus
$100,000,000
SIZELER PROPERTY INVESTORS, INC.
DEBT SECURITIES, COMMON STOCK, PREFERRED STOCK, WARRANTS
We may use this prospectus to offer and sell securities from time to time.
The types of securities we may sell include:
. senior debt securities;
. subordinated debt securities;
. shares of common stock;
. shares of preferred stock; or
. warrants to purchase debt securities, preferred stock or common stock.
We will provide the specific terms of these securities in supplements to this
prospectus in connection with each offering. These terms may include:
In the case of In the case of In the case of In the case
any securities: debt securities: preferred stock: of warrants:
. offering . interest . dividends . the
price; rate; rights; types of
. size of . maturity; . liquidation securities
offering; . ranking; preferences; that may
. underwriting . redemption . redemption be
discounts; provisions; provisions; acquired
. limitations and . conversion upon
on direct . additional privileges; exercise;
or covenants. and . expiration
beneficial . voting and date;
ownership; other rights. . exercise
and price; and
. restrictions . terms of
on transfer. exercisability.
The securities offered will contain other significant terms and conditions.
Please read this prospectus and the applicable prospectus supplement carefully
before you invest.
An investment in securities involves a high degree of risk. See "Risk
Factors" beginning on page 5 of this prospectus for a discussion of risk
factors that you should consider in connection with an investment in the
securities.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus is November , 2001
TABLE OF CONTENTS
Page
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ABOUT THIS PROSPECTUS...................................................... 4
WHERE YOU CAN FIND MORE INFORMATION........................................ 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 4
ABOUT SIZELER PROPERTY INVESTORS, INC...................................... 5
RISK FACTORS............................................................... 5
Real Estate Industry Risks............................................... 5
Risks Associated with our Properties..................................... 6
Financing Risks.......................................................... 7
Other Risks.............................................................. 7
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS............................ 8
USE OF PROCEEDS............................................................ 8
RATIO OF EARNINGS TO FIXED CHARGES......................................... 9
DESCRIPTION OF DEBT SECURITIES............................................. 9
General.................................................................. 9
Denomination, Interest, Registration and Transfer........................ 11
Merger, Consolidation or Sale............................................ 12
Certain Covenants........................................................ 13
Events of Default, Notice and Waiver..................................... 13
Modification of the Indentures........................................... 15
Conversion Rights........................................................ 16
Redemption of Securities................................................. 16
Subordination............................................................ 16
Subrogation.............................................................. 16
Global Securities........................................................ 16
DESCRIPTION OF CAPITAL STOCK............................................... 17
General.................................................................. 17
DESCRIPTION OF COMMON STOCK................................................ 17
Shareholder Rights Plan.................................................. 17
DESCRIPTION OF PREFERRED STOCK............................................. 18
DESCRIPTION OF WARRANTS.................................................... 19
Exercise of Warrants..................................................... 20
Amendments and Supplements to Warrant Agreement.......................... 20
Common Stock Warrant Adjustments......................................... 20
CERTAIN PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BY-LAWS............. 21
The Board of Directors................................................... 21
Business Combinations.................................................... 21
Control Share Acquisitions............................................... 22
Advance Notice of Director Nominations and New Business.................. 23
MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES............................ 23
Introductory Notes....................................................... 23
Taxation of the Company.................................................. 23
Requirements for Qualification........................................... 24
2
Page
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Qualified REIT Subsidiaries.............................................. 25
Taxable REIT Subsidiaries................................................ 25
Income Tests............................................................. 26
Asset Tests.............................................................. 27
Annual Distribution Requirements......................................... 28
Failure to Qualify....................................................... 29
Taxation of Stockholders................................................. 29
Backup Withholding Tax and Information Reporting......................... 32
Taxation of Domestic Debenture Holders................................... 33
Taxation of Non-U.S. Debenture Holders................................... 36
PLAN OF DISTRIBUTION....................................................... 36
LEGAL MATTERS.............................................................. 37
EXPERTS.................................................................... 37
3
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. You should read this prospectus and
the applicable prospectus supplement together with the additional information
described under the heading "Where You Can Find More Information" in this
prospectus. The registration statement that contains this prospectus and the
exhibits to that registration statement contain additional important
information about us and the securities offered under this prospectus.
Specifically, we have filed certain legal documents that control the terms of
the securities offered by this prospectus as exhibits to the registration
statement. We will file certain other legal documents that control the terms
of the securities offered by this prospectus as exhibits to reports we file
with the SEC. That registration statement and the other reports can be read at
the SEC website or at the SEC offices mentioned under the heading "Where You
Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act with respect to the securities offered hereunder. As permitted by the
SEC's rules and regulations, this prospectus does not contain all the
information set forth in the registration statement. For further information
regarding our company and our securities, please refer to the registration
statement and the contracts, agreements and other documents filed as exhibits
to the registration statement. Additionally, we file annual, quarterly and
special reports, proxy statements and other information with the SEC.
You may read and copy all or any portion of the registration statement or
any other materials that we file with the SEC at the SEC's public reference
rooms in Washington, D.C., Chicago, Illinois, and New York, New York. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. Our SEC filings, including the registration statement,
are also available to you on the SEC's website (http://www.sec.gov). We also
have a website (www.sizeler.net) through which you may access our SEC filings.
Please note that our website contains various financial data and analyses
computed or prepared by third parties and that we may not have verified and
confirmed the accuracy of all such data. Therefore, we disclaim all
responsibility for its accuracy. In addition, you may look at our SEC filings
at the offices of the New York Stock Exchange, Inc., which is located at 20
Broad Street, New York, New York 10005. Our SEC filings are available at the
NYSE because our common stock is listed and traded on the NYSE under the
symbol "SIZ".
Information contained on our website is not a part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information contained
in documents that we file with them: that means we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information.
We incorporate by reference the documents listed below and any future
filings we make with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, after the initial filing of
the registration statement that contains this prospectus and before we sell
all the securities offered by this prospectus.
. Our Annual Report on Form 10-K for the year ended December 31, 2000.
. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.
. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
. Our Quarterly Report on Form 10-Q for the quarter ended September 30,
2001.
. Our Current Report on Form 8-K dated June 26, 2001.
4
You may request a free copy of these filings (other than exhibits, unless
they are specifically incorporated by reference in the documents) by writing
or telephoning us at the following address and telephone number:
Sizeler Property Investors, Inc.
Attention: Chief Financial Officer
2542 Williams Boulevard
Kenner, Louisiana 70062
(504) 471-6200
ABOUT SIZELER PROPERTY INVESTORS, INC.
We are a self-administered and self-managed equity real estate investment
trust that acquires, develops, owns and operates income-producing retail
shopping centers and apartment properties in the southeastern region of the
United States. We are a self-administered REIT in that we provide our own
investment and administrative services internally through our own employees.
We are also self-managed as we internally provide, through a wholly-owned
subsidiary, the management, leasing and development services that our
properties require through our own employees. Our investment objective is to
acquire and develop high-quality properties at attractive initial yields with
potential for future growth in cash flows. As of September 30, 2001, our
existing portfolio contained 15 retail shopping centers with approximately 2.6
million square feet of gross leasable area and 14 apartment properties
containing approximately 3,400 units. During the nine month period ended
September 30, 2001, our retail and apartment properties were, on average,
approximately 92% and 97% leased, respectively. Our principal executive
offices are located at 2542 Williams Boulevard, Kenner, Louisiana 70062. Our
telephone number is (504) 471-6200.
RISK FACTORS
Before you decide to purchase securities, you should consider carefully the
risks described below, together with the information provided in the other
parts of this prospectus. From time to time, we may make forward-looking
statements (within the meaning of Section 27A of the Securities Act and
Section 21F of the Exchange Act) in documents filed under the Securities Act,
the Exchange Act, press releases or other public statements. If we make
forward-looking statements, we assume no obligation to update forward-looking
statements. Potential investors should not place undue reliance on forward-
looking statements as they involve numerous risks and uncertainties that could
cause actual results to differ materially from the results stated or implied
in the forward-looking statements. In addition to specific factors that may be
disclosed simultaneously with any forward-looking statement, some of the
factors related to us and our businesses that could cause actual results to
differ materially from a forward-looking statement are set forth below.
Real Estate Industry Risks
We face risks associated with local real estate conditions in areas where
we own properties. We may be affected adversely by general economic conditions
and local real estate conditions. For example, an oversupply of retail space
or apartments in a local area or a decline in the attractiveness of our
properties to shoppers, residents or tenants would have a negative effect on
us.
Other factors that may affect general economic conditions or local real
estate conditions include:
. population and demographic trends;
. employment and personal income trends;
. income tax laws;
. availability and costs of financing;
. construction costs; and
. weather conditions that may increase or decrease energy costs.
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We may be unable to compete with our larger competitors and other
alternatives available to tenants or potential tenants of our properties. The
real estate business is highly competitive. We compete for interests in
properties with other real estate investors and purchasers, many of whom have
greater financial resources, revenues, and geographical diversity than we
have. Furthermore, we compete for tenants with other property owners. All of
our shopping center and apartment properties are subject to significant local
competition. We also compete with a wide variety of institutions and other
investors for capital funds necessary to support our investment activities and
asset growth. In addition, our portfolio of retail properties faces
competition from other properties within each submarket where they are
located. Our apartment portfolio competes with providers of other forms of
housing, such as single family housing. Competition from single family housing
increases when low interest rates make mortgages more affordable.
We are subject to significant regulation that inhibits our activities.
Local zoning and use laws, environmental statutes and other governmental
requirements restrict our expansion, rehabilitation and reconstruction
activities. These regulations may prevent us from taking advantage of economic
opportunities. Legislation such as the Americans with Disabilities Act may
require us to modify our properties. Future legislation may impose additional
requirements. We cannot predict what requirements may be enacted or what
changes may be implemented to existing legislation.
Risks Associated with our Properties
We may be unable to renew leases or relet space as leases expire. When a
lease expires, a tenant may refuse to renew it. We may not be able to relet
the property on similar terms, if we are able to relet the property at all. We
have established an annual budget for renovation and reletting expenses that
we believe is reasonable in light of each property's operating history and
local market characteristics. This budget, however, may not be sufficient to
cover these expenses.
We have been and may continue to be affected negatively by tenant
bankruptcies and leasing delays. At any time, a shopping center tenant may
experience a downturn in its business that may weaken its financial condition.
Similarly, a general decline in the economy may result in a decline in the
demand for apartments. As a result, our commercial and residential tenants may
delay lease commencement, fail to make rental payments when due, or declare
bankruptcy. Any such event could result in the termination of that tenant's
lease and losses to us.
We receive a substantial portion of our shopping center income as rents
under long-term leases. If retail tenants are unable to comply with the terms
of their leases because of rising costs or falling sales, we may deem it
advisable to modify lease terms to allow tenants to pay a lower rental or a
smaller share of operating costs, taxes and insurance.
Coverage under our existing insurance policies may be inadequate to cover
losses. We generally maintain insurance policies related to our business,
including casualty, general liability and other policies covering our business
operations, employees and assets. However, we would be required to bear all
losses that are not adequately covered by insurance. Although we believe that
our insurance programs are adequate, we cannot assure you that we will not
incur losses in excess of our insurance coverage, or that we will be able to
obtain insurance in the future at acceptable levels and reasonable cost.
We face risks due to lack of geographic diversity. All of our properties
are located in Louisiana, Florida and Alabama. General economic conditions and
local real estate conditions in these geographic regions have a particularly
strong effect on us.
We face possible environmental liabilities. Current and former real estate
owners and operators may be required by law to investigate and clean up
hazardous substances released at the properties they own or operate. They may
also be liable to the government or to third parties for substantial property
damage, investigation costs and cleanup costs. In addition, some environmental
laws create a lien on the contaminated site in favor of the
6
government for damages and costs the government incurs in connection with the
contamination. Contamination may affect adversely the owner's ability to sell
or lease real estate or to borrow using the real estate as collateral.
We have no way of determining at this time the magnitude of any potential
liability to which we may be subject arising out of unknown environmental
conditions or violations with respect to the properties we formerly owned.
Environmental laws today can impose liability on a previous owner or operator
of a property that owned or operated the property at a time when hazardous or
toxic substances were disposed of, or released from, the property. A
conveyance of the property, therefore, does not relieve the owner or operator
from liability.
We are not currently aware of any environmental liabilities relating to our
investment properties which would have a material adverse effect on the our
business, assets, or results of operations. However, we cannot assure you that
environmental liabilities will not arise in the future.
Financing Risks
We face risks generally associated with our debt. We finance a portion of
our investments in real estate through debt. Although we have never missed a
required payment of principal or interest or otherwise defaulted on a required
payment related to our indebtedness, this debt creates risks, including:
. rising interest rates on our floating rate debt;
. failure to repay or refinance existing debt as it matures, including
our outstanding convertible debentures, which may result in forced
disposition of properties on disadvantageous terms;
. refinancing terms less favorable than the terms of existing debt; and
. failure to meet required payments of principal and/or interest.
We may amend our business policies without your approval. Our Board of
Directors determines our growth, investment, financing, capitalization,
borrowing, REIT status, operating and distribution policies. Although the
Board of Directors has no present intention to amend or revise any of these
policies, these policies may be amended or revised without notice to
stockholders. Accordingly, stockholders may not have control over changes in
our policies. We cannot assure you that changes in our policies will serve
fully the interests of all stockholders.
Other Risks
We are subject to restrictions that may impede our ability to effect a
change in control. Certain provisions contained in our Charter and Bylaws, our
Shareholder Rights Agreement and certain provisions of Maryland law may have
the effect of discouraging a third party from making an acquisition proposal
for us and thereby inhibit a change in control. These provisions include the
following:
. Our Charter provides for three classes of directors with the term of
office of one class expiring each year, commonly referred to as a
"staggered board." By preventing stockholders from voting on the
election of more than one class of directors at any annual meeting of
stockholders, this provision may have the effect of keeping the current
members of our Board of Directors in control for a longer period of
time than stockholders may desire.
. Our Charter generally limits any holder from acquiring more than 9.9%
or more (in value or in number, whichever is more restrictive) of our
outstanding equity stock (defined as all of our classes of capital
stock, except our excess stock). While this provision is intended to
assure our ability to remain a qualified REIT for income tax purposes,
the ownership limit may also limit the opportunity for stockholders to
receive a premium for their shares of common stock that might otherwise
exist if an investor were attempting to assemble a block of shares in
excess of 9.9% of the outstanding shares of equity stock or otherwise
effect a change in control.
7
. In August 1998, our Board of Directors adopted a shareholder rights
plan. Under the terms of the plan, we declared a dividend of rights on
our common stock. The rights issued under the plan will be triggered,
with certain exceptions, if and when any person or group acquires, or
commences a tender offer to acquire, 15% or more of our shares. The
rights plan is intended to prevent abusive hostile takeover attempts by
requiring a potential acquiror to negotiate the terms with our Board of
Directors. However, it could have the effect of deterring or preventing
our acquisition, even if a majority of our stockholders were in favor
of such acquisition, and could have the effect of making it more
difficult for a person or group to gain control of us or to change
existing management.
We may fail to qualify as a REIT. If we fail to qualify as a REIT, we will
be subject to Federal income tax at regular corporate rates. In addition, we
might be barred from qualification as a REIT for the four years following
disqualification. The additional tax incurred at regular corporate rates would
reduce significantly the cash flow available for distribution to stockholders
and for debt service.
To qualify as a REIT, we must comply with certain highly technical and
complex requirements. We cannot be certain we have complied with these
requirements because there are few judicial and administrative interpretations
of these provisions. In addition, facts and circumstances that may be beyond
our control may affect our ability to qualify as a REIT. We cannot assure you
that new legislation, regulations, administrative interpretations or court
decisions will not change the tax laws significantly with respect to our
qualification as a REIT or with respect to the federal income tax consequences
of qualification. We believe that we have qualified as a REIT since our
inception and intend to continue to qualify as a REIT. However, we cannot
assure you that we are qualified or will remain qualified.
We may be unable to comply with the strict income distribution requirements
applicable to REITs. To obtain the favorable tax treatment associated with
qualifying as a REIT, we are required each year to distribute to our
stockholders at least 90% of our net taxable income. We could be required to
borrow funds on a short-term basis to meet the distribution requirements that
are necessary to achieve the tax benefits associated with qualifying as a
REIT, even if conditions were not favorable for borrowing. As of this date, we
have not needed to incur such borrowings.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
We have made forward-looking statements with respect to our financial
condition, results of operations and business and on the expected impact of
this exchange offer on our financial performance. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates" and similar
expressions as they relate to us or our management, are intended to identify
forward-looking statements. These forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties,
including those described under "Risk Factors" in this prospectus, that could
cause actual results to differ materially from the results contemplated by the
forward-looking statements. The safe harbor for forward-looking statements
provided for in the Private Securities Litigation Reform Act of 1995 does not
apply to statements made in connection with this offering.
In evaluating the securities offered by this prospectus, you should
carefully consider the discussion of risks and uncertainties in the section
entitled "Risk Factors" on pages 5 to 8 of this prospectus.
USE OF PROCEEDS
Unless otherwise described in the applicable prospectus supplement, we
intend to use the net proceeds of any sale of securities for general corporate
purposes, including, without limitation, the repayment of debt and the
development and acquisition of additional properties.
8
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the years ended December 31,
2000, 1999, 1998, 1997 and 1996 was 1.11, 1.14, 1.16, 1.17 and 1.15,
respectively. For each of the nine months ended September 30, 2001 and 2000,
our ratio of earnings to fixed charges was 1.15 and 1.10, respectively. For
purposes of computing these ratios, earnings have been calculated by adding
fixed charges, excluding capitalized interest, to pre-tax income from
continuing operations. Fixed charges consist of interest costs, whether
expensed or capitalized, the estimated interest component of rental expenses
and amortization of debt issuance costs. There were no shares of preferred
stock outstanding for any of the periods shown above. Accordingly, the ratio
of earnings to combined fixed charges and preferred stock dividends are
identical to the ratio of earnings to fixed charges.
Ratio of EBITDA to Fixed Charges. Our ratio of EBITDA to fixed charges for
the years ended December 31, 2000, 1999, 1998, 1997 and 1996 was 1.78, 1.84,
1.83, 1.82 and 1.73, respectively. For each of the nine months ended September
30, 2001 and 2000, our ratio of EBITDA to fixed charges was 1.84 and 1.75,
respectively. "EBITDA," as used here, is earnings before interest expense,
income taxes, depreciation and amortization. We have included information
concerning EBITDA because we believe that EBITDA is generally accepted as
providing useful information regarding a company's ability to service and/or
incur debt. EBITDA should not be considered in isolation as a substitute for
net income, cash flows or other consolidated or cash flow data prepared in
accordance with accounting principles generally accepted in the United States
or as a measure of a company's profitability or liquidity. While EBITDA is
frequently used as a measure of operations and ability to meet debt service
requirements, it is not necessarily comparable to similarly titled captions of
other companies due to differences in methods of calculation.
DESCRIPTION OF DEBT SECURITIES
The following is a general description of the debt securities that we may
offer from time to time. The particular terms of the debt securities being
offered and the extent to which such general provisions may apply will be set
forth in the applicable indenture or in one or more indenture supplements and
described in the applicable prospectus supplement.
The debt securities will be issued under one or more separate indentures,
as amended or supplemented from time to time, between us and a trustee to be
selected by us. A copy of a form of indenture is filed as an exhibit to this
prospectus and will be available for inspection at the corporate offices of
the trustee, or as described under the heading "Where You Can Find More
Information" in this prospectus. The indentures will be subject to, and
governed by, the Trust Indenture Act of 1939, as amended. We will execute the
applicable indenture when and if we issue debt securities. The following
summary of certain provisions of the debt securities and the indentures does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to all of the provisions of the indentures, including the
definitions of certain terms and the applicable prospectus supplement. You
should read the indentures carefully to fully understand the terms of the debt
securities.
General
The debt securities will be our direct, unsecured obligations and may be
either senior debt securities or subordinated debt securities.
The indebtedness represented by the senior debt securities will rank
equally with our other senior debt that may be outstanding from time to time.
The payment of principal, premium, if any, and interest on indebtedness
represented by subordinated debt securities will be subordinated, to the
extent provided in a subordinated indenture, in right of payment to the prior
payment in full of our senior debt.
Each indenture will provide that the debt securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case as
established from time to time (i) in or pursuant to authority granted
9
by a resolution of the Board of Directors; (ii) as established in the
applicable indenture; or (iii) as may be established in one or more
supplemental indentures to the applicable indenture. All debt securities of
one series need not be issued at the same time. Unless otherwise provided, a
series may be reopened for issuances of additional debt securities of that
series. This may be done without the consent of the holders of that series.
Each indenture may provide that there may be more than one trustee, each
with respect to one or more series of debt securities. Any trustee under an
indenture may resign or be removed with respect to one or more series of debt
securities. A successor trustee may be appointed to act with respect to that
series. If two or more persons are acting as trustee with respect to different
series of debt securities, each of those trustees will be a trustee of a trust
under the applicable indenture separate from the trust administered by any
other trustee of that series. Except as otherwise indicated, any action
described to be taken by each trustee may be taken by each trustee with
respect to, and only with respect to, the one or more series of debt
securities for which it is trustee under the applicable indenture.
The prospectus supplement relating to any series of debt securities being
offered will contain the specific terms of that series, including the
following:
(i) the title of such series of debt securities;
(ii) the classification of such series of debt securities as senior debt
securities or subordinated debt securities;
(iii) the aggregate principal amount of such series of debt securities and
any limit on the aggregate principal amount;
(iv) the percentage of the principal amount at which such series of debt
securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity of such series of debt
securities;
(v) if convertible in whole or in part into shares of common stock or
shares of preferred stock, the terms on which such series of debt
securities are convertible, including the initial conversion price
or rate (or method for determining the same), the portion that is
convertible and the conversion period, and any applicable
limitations on the ownership or transferability of the shares of
common stock or shares of preferred stock receivable on conversion;
(vi) the date or dates, or the method for determining the date or dates,
on which the principal of such series of debt securities will be
payable;
(vii) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates will be determined, at which such series of
debt securities will bear interest, if any;
(viii) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the dates on which any
interest will be payable, the Regular Record Dates for the Interest
Payment Dates, or the method by which the dates will be determined,
the person to whom the interest will be payable, and the basis upon
which interest will be calculated if other than that of a 360-day
year of twelve 30-day months;
(ix) the place or places where the principal, premium, if any, and
interest on the debt securities will be payable, where the debt
securities may be surrendered for conversion or registration of
transfer or exchange and where notices or demands to or upon us in
respect of the debt securities and the applicable indenture may be
served;
(x) the period or periods within which, the price or prices at which and
the other terms and conditions upon which the debt securities may be
redeemed, in whole or in part, at our option, if we were to have
that option;
(xi) our obligation, if any, to redeem, repay or purchase the debt
securities pursuant to any sinking fund or analogous provision or at
the option of a holder of the debt securities, and the period or
periods
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within which or the date and dates on which, the price or prices at
which and the other terms and conditions upon which such debt
securities will be redeemed, repaid or purchased, in whole or in
part, pursuant to the obligation;
(xii) if other than U.S. dollars, the currency or currencies in which the
debt securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies, and the terms and conditions relating
thereto;
(xiii) whether the amount of payments of principal, premium, if any, or
interest on the debt securities may be determined with reference to
an index, formula or other method (which index, formula or method
may, but need not be, based on a currency, currencies, currency
unit or units or composite currency or currencies) and the manner
in which those amounts will be determined;
(xiv) any additions to, modifications of or deletions from the terms of
the debt securities with respect to Events of Default or covenants
set forth in the applicable indenture;
(xv) whether such debt securities will be issued in certificated or
book-entry form;
(xvi) whether such debt securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than
$1,000 and any integral multiple thereof and, if in bearer form,
the denominations thereof and terms and conditions relating
thereto;
(xvii) the applicability, if any, of the defeasance and covenant
defeasance provisions of the applicable indenture;
(xviii) if such debt securities are to be issued upon the exercise of
warrants, the time, manner and place for such debt securities to be
authenticated and delivered; and
(xix) any other terms of such debt securities not inconsistent with the
provisions of the applicable indenture.
The debt securities may provide for less than the entire principal amount
to be payable upon declaration of acceleration of the maturity of such debt
securities. Special federal income tax, accounting and other considerations
applicable to Original Issue Discount Securities will be described in the
applicable prospectus supplement.
The indentures will not contain any provisions that would limit our ability
to incur indebtedness or that would afford holders of debt securities
protection in the event of a highly leveraged or similar transaction in which
we are involved or in the event of a change in control, unless otherwise
specified in the applicable prospectus supplement. Restrictions on ownership
and transfers of our common stock and shares of preferred stock are designed
to preserve our status as a REIT and, therefore, may act to prevent or hinder
a change of control. See "Description of Capital Stock--General" and "Risk
Factors--Other Risks." You should read the applicable prospectus supplement
carefully for information with respect to any deletions from, modifications of
or additions to our Events of Default. The applicable prospectus supplement
may also contain changes to the covenants described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
Denomination, Interest, Registration and Transfer
Unless otherwise described in the applicable prospectus supplement, the
debt securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Unless otherwise specified in the applicable prospectus supplement, the
principal, applicable premium and interest on any series of debt securities
will be payable at the corporate trust office of the applicable trustee. The
address of that trustee will be stated in the applicable prospectus
supplement. However, at our option, payment of interest may be made by check
mailed to the address of the person entitled thereto as it appears in the
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applicable register for such debt securities. Such payment may also be made by
wire transfer of funds to that person at an account maintained within the
United States.
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a debt security will from that time cease to be
payable to the holder on the applicable regular record date. It may be paid to
the person in whose name the debt security is registered at the close of
business on a special record date for the payment of that interest which
record date will be fixed by the applicable trustee. Notice of the payment
will be given to the holder of that debt security not less than ten days
before the record date. It may also be paid at any time in any other lawful
manner, all as more completely described in the applicable indenture.
Subject to certain limitations imposed upon debt securities issued in book-
entry form, the debt securities of any series will be exchangeable for other
debt securities of the same series upon surrender of the debt securities at
the corporate trust office of the applicable trustee. In addition, subject to
certain limitations imposed upon debt securities issued in book-entry form,
the debt securities of any series may be surrendered for conversion or
registration of transfer or exchange at the corporate trust office of the
applicable trustee. Every debt security surrendered for conversion,
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any debt securities, but we may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable prospectus
supplement refers to any transfer agent (in addition to the applicable
trustee) initially designated by us with respect to any series of debt
securities, we may at any time rescind the designation of that transfer agent
or approve a change in the location through which any of those transfer agents
act. However, we will be required to maintain a transfer agent in each place
of payment for that series. We may at any time designate additional transfer
agents with respect to any series of debt securities.
We will not nor will any trustee be required to do any of the following:
. issue, register the transfer of or exchange debt securities of any
series during a period beginning at the opening of business 15 days
before any selection of debt securities of that series to be redeemed
and ending at the close of business on the day of mailing of the
relevant notice of redemption;
. register the transfer of or exchange any debt security, or portion of
any debt security, called for redemption, except the unredeemed portion
of any debt security being redeemed in part;
. exchange any bearer security so selected for redemption, except to
exchange such bearer security for a registered security of that series
of like tenor when immediately surrendered for redemption; or
. issue, register the transfer of or exchange any debt security which has
been surrendered for repayment at the option of the holder, except the
portion, if any, of such debt security not to be so repaid.
Merger, Consolidation or Sale
We will be permitted to consolidate with, or sell, lease or convey all or
substantially all of our assets to, or merge with or into, any other entity,
if:
. either we will be the continuing entity, or the successor entity (if
other than us) formed by or resulting from any such consolidation or
merger or which has received the transfer of such assets will expressly
assume payment of the principal, premium, if any, and interest on all
of the debt securities and the due and punctual performance and
observance of all of the covenants and conditions contained in each
indenture;
. immediately after giving effect to the transaction, no Event of Default
under the applicable indenture has occurred and be continuing; and
. an officer's certificate and legal opinion covering such conditions
will be delivered to each trustee.
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Certain Covenants
Existence. Except as described above under "--Merger, Consolidation or
Sale," we are required to do or cause to be done all things necessary to
preserve and keep in full force and effect our existence.
Payment of Dividends. We will not be permitted to declare or pay any
dividends or make any distributions to holders of our capital stock (other
than dividends or distributions necessary to maintain our REIT status), or
purchase, redeem or otherwise acquire or retire any of our capital stock if at
the time of such action an event of default has occurred and is continuing or
would exist immediately after giving effect to such action. See "Events of
Default, Notice and Waiver" below.
Provision of Financial Information. We will, to the extent permitted under
the Exchange Act, file with the Securities and Exchange Commission the annual
reports, quarterly reports and other documents, which we refer to as the
Financial Information, which we may be required to file with the Commission
pursuant to Sections 13 or 15(d) of the Exchange Act on or before the
respective dates by which we may be required so to file those documents. We
will also, within 15 days of each Required Filing Date, to all holders of debt
securities, as their names and addresses appear in the Security Register, mail
copies of the annual reports and quarterly reports. These reports will be sent
without cost to each holder of debt securities. We will also file with the
trustees copies of the Financial Information. If our filing of such documents
with the Commission is not permitted under the Exchange Act, we will promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of these documents to any prospective holder of debt
securities.
Additional Covenants And/or Modifications to The Covenants Described Above.
Any additional covenants and/or modifications to the covenants we have
described above with respect to any debt securities or series of debt
securities will be set forth in the applicable indenture or an indenture
supplemental to the applicable indenture and described in the prospectus
supplement relating to those debt securities. These covenants will include any
covenants relating to limitations on incurrence of indebtedness or other
financial covenants.
Events of Default, Notice and Waiver
The following will be Events of Default under the applicable indenture with
respect to the debt securities of any series: (i) default for 30 days in the
payment of any installment of interest on any debt security of that series;
(ii) default in the payment of principal of (and premium, if any, on) any debt
security of that series at its maturity, upon redemption or otherwise; (iii)
default in making any sinking fund payment as required for any debt security
of that series; (iv) default in the performance or breach of any other of our
covenants or warranties contained in the applicable indenture (other than a
covenant added to the indenture solely for the benefit of a series of debt
securities issued thereunder other than that series), that continues for 60
days after written notice as provided in the applicable indenture; (v) default
in the payment of an aggregate principal amount exceeding $1,000,000 of any of
our indebtedness, mortgage, indenture or other instrument under which that
indebtedness is issued or by which the indebtedness is secured. However, the
default must have occurred after the expiration of any applicable grace period
and must have resulted in the acceleration of the maturity of the
indebtedness, but only if that indebtedness is not discharged or the
acceleration is not rescinded or annulled within a specified period of time;
(vi) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the Company; and (vii) any
other Event of Default provided with respect to a particular series of debt
securities.
If an Event of Default under any indenture with respect to debt securities
of any series at the time outstanding occurs and is continuing, then the
applicable trustee or the holders of not less than 25% of the principal amount
of the outstanding debt securities of that series will have the right to
declare the principal amount (or, if the debt securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all the debt
securities of that series to be due and payable immediately by written notice
to us (and to the applicable trustee if given by the holders). However, at any
time after that declaration of acceleration with respect to debt securities of
that series (or of all
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debt securities then outstanding under any indenture, as the case may be) has
been made, but before a judgment or decree for payment of the money due has
been obtained by the applicable trustee, the holders of not less than a
majority in principal amount of outstanding debt securities of that series (or
of all debt securities then outstanding under the applicable indenture, as the
case may be) may rescind and annul such declaration and its consequences. This
rescission may occur if:
. we have deposited with the applicable trustee all required payments of
the principal, premium, if any, and interest on the debt securities of
the series (or of all debt securities then outstanding under the
applicable indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the applicable trustee; and
. all Events of Default, other than the non-payment of accelerated
principal (or specified portion thereof), with respect to debt
securities of such series (or of all debt securities then outstanding
under the applicable indenture, as the case may be) have been cured or
waived as provided in the indenture.
Each indenture will provide that the holders of not less than a majority in
principal amount of the outstanding debt securities of any series (or of all
debt securities then outstanding under the applicable indenture, as the case
may be) may waive any past default with respect to such series and its
consequences. This waiver does not apply to the following:
. a default in the payment of the principal of, premium, if any, or
interest on any debt security of the series; or
. a covenant or provision contained in the applicable indenture that
cannot be modified or amended without the consent of the holder of each
outstanding debt security affected by that default.
Each indenture will provide that no holders of debt securities of any
series may institute any proceedings, judicial or otherwise, with respect to
that indenture or for any remedy allowed under the indenture. However,
proceedings may be instituted in the cases of failure of the applicable
trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the holders of
not less than 25% in principal amount of the outstanding debt securities of
the series, as well as an offer of indemnity reasonably satisfactory to it.
However, this provision will not prevent any holder of debt securities from
instituting suit for the enforcement of payment of the principal of, premium,
if any, and interest on, and any additional amounts in respect of those debt
securities at the respective due dates.
Subject to provisions in each indenture relating to its duties in case of
default, no trustee will be under any obligation to exercise any of its rights
or powers under an indenture at the request or direction of any holders of any
series of debt securities then outstanding under that indenture. However, if
such holders have offered to the trustee reasonable security or indemnity the
trustee is obligated to exercise its rights or powers under the applicable
indenture. The holders of not less than a majority in principal amount of the
outstanding debt securities of any series (or of all debt securities then
outstanding under an indenture, as the case may be) will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable trustee exercising any trust or power conferred
upon that trustee. However, a trustee may refuse to follow any direction which
is in conflict with any law or the applicable indenture, which may involve
that trustee in personal liability or which may be unduly prejudicial to the
holders of debt securities of that series not joining therein.
Within 120 days after the close of each fiscal year, we will be required to
deliver to each trustee a certificate, signed by one of several specified
officers. This certificate will state whether or not the officer has knowledge
of any default under the applicable indenture. If the officer has this
knowledge, the certificate will specify each default and the nature and status
of that default.
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Modification of the Indentures
Modifications and amendments of an indenture will not be permitted to be
made unless the consent of the holders of not less than a majority in
principal amount of all outstanding debt securities issued under that
indenture which are affected by the modification or amendment is obtained.
However, none of these modifications or amendments may, without the consent of
the holder of each such debt security affected thereby, do any of the
following things:
. change the stated maturity of the principal of, or any installment of
interest, or premium on any such debt security;
. reduce the principal amount of, or the rate or amount of interest on
any such debt security;
. reduce any premium payable on redemption of, any such debt security;
. reduce the amount of principal of an Original Issue Discount Security
that would be due and payable upon declaration of acceleration of the
maturity thereof or would be provable in bankruptcy, or adversely
affect any right of repayment of the holder of any such debt security;
. change the place of payment, or the coin or currency, for payment of
principal or premium, if any, or interest on any such debt security;
. impair the right to institute suit for the enforcement of any payment
on or with respect to any such debt security;
. reduce the stated percentage of outstanding debt securities of any
series necessary to modify or amend the applicable indenture, to waive
compliance with certain provisions of that indenture or certain
defaults and consequences thereunder;
. reduce the quorum or voting requirements set forth in the applicable
indenture;
. modify any of the foregoing provisions or any of the provisions
relating to the waiver of certain past defaults or certain covenants,
except to increase the required percentage to effect such action; or
. to provide that certain other provisions may not be modified or waived
without the consent of the holder of such debt security.
The holders of not less than a majority in principal amount of outstanding
debt securities of each series affected by those covenants in the indenture
will have the right to waive compliance by us with certain covenants in the
indenture.
We may amend and modify each indenture and substitute the respective
trustee thereunder without the consent of any holder of debt securities for
any of the following purposes:
. to evidence the succession of another entity to us as obligor under the
applicable indenture;
. to add or change any provisions of an indenture to facilitate the
issuance of, or to liberalize certain terms of, debt securities in
bearer form, or to permit or facilitate the issuance of debt securities
in uncertificated form, provided that such action will not adversely
affect the interests of the holders of the debt securities of any
series in any material respect; or
. to cure any ambiguity, defect or inconsistency in an indenture,
provided that such action will not adversely affect the interests of
holders of debt securities of any series issued under such indenture in
any material respect.
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Conversion Rights
The terms and conditions, if any, upon which the debt securities are
convertible into shares of common stock or shares of preferred stock will be
set forth in the applicable prospectus supplement relating thereto. The terms
will include:
. whether such debt securities are convertible into shares of common
stock or shares of preferred stock;
. the conversion price (or manner of calculation thereof);
. the conversion period;
. provisions as to whether conversion will be at the option of the
holders or the Company; and
. the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such
debt securities and any restrictions on conversion, including
restrictions directed at maintaining our REIT status.
Redemption of Securities
Each indenture will provide that our debt securities may be redeemed at any
time at our option, in whole or in part, at a stated redemption price, except
as may otherwise be provided in connection with any debt securities or series
of debt securities under the applicable indenture.
Subordination
The payment of the principal of premium and interest on any subordinated
debt securities will be expressly subordinated, to the extent and in the
manner set forth in an indenture governing such subordinated debt securities,
in right of payment to the prior payment in full of all of our senior debt.
Such subordination provisions will be described in detail in the applicable
prospectus supplement.
Subrogation
Subject to the payment in full in cash of all amounts then due (whether by
acceleration of the maturity thereof or otherwise) on account of all senior
debt at the time outstanding, the holders of a subordinated debt security will
be subrogated to the rights of the holders of senior debt to receive payments
or distributions of cash, property or securities of the Company applicable to
the senior debt until the principal of (and premium, if any) and interest on
the subordinated debt securities is paid in full.
Global Securities
The debt securities of a series may be issued in whole or in part in the
form of one or more Global securities that will be deposited with, or on
behalf of, a depositary identified in the applicable prospectus supplement
relating to that series. Global securities, if any, issued in the United
States are expected to be deposited with the Depository Trust Company. Global
securities may be issued in either registered or bearer form and in either
temporary or permanent form. The specific terms of the depositary arrangement
with respect to a series of debt securities will be described in the
applicable prospectus supplement relating to such series.
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DESCRIPTION OF CAPITAL STOCK
The following description is only a summary of certain terms and provisions
of our capital stock. You should refer to our Charter and Bylaws for the
complete provisions thereof.
General
The total number of shares of capital stock of all classes that we are
authorized to issue is 70,000,000. Currently, the Charter authorizes the
issuance of 51,484,000 shares of common stock, par value $.0001 per share,
40,000 shares of Series A preferred stock, par value $.0001 per share,
2,476,000 shares of Series B preferred stock, par value $.0001 per share, and
16,000,000 shares of excess stock, par value $.0001 per share. Only shares of
common stock are now outstanding. The common stock is currently listed on the
New York Stock Exchange under the symbol "SIZ".
Our Board of Directors is authorized by the Charter, to classify and
reclassify any of our unissued shares of capital stock, by, among other
alternatives, setting, altering or eliminating the designation, preferences,
conversion or other rights, voting powers, qualifications and terms and
conditions of redemption of, limitations as to dividends and any other
restrictions on, our capital stock. The power of the Board of Directors to
classify and reclassify any of the shares of capital stock includes the
authority to classify or reclassify such shares into a class or classes of
preferred stock or other stock.
Pursuant to the provisions of the Charter, if a transfer of stock occurs
such that any person would own, beneficially or constructively, 9.9% or more
(in value or in number, whichever is more restrictive) of our outstanding
equity stock (excluding shares of excess stock), then the amount in excess of
the 9.9% limit will automatically be converted into shares of excess stock and
any such transfer will be void from the beginning. However, such restrictions
will not prevent the settlement of a transaction entered into through the
facilities of any interdealer quotation system or national securities exchange
upon which shares of our capital stock are traded. Notwithstanding the prior
sentence, certain transactions may be settled by providing shares of excess
stock.
DESCRIPTION OF COMMON STOCK
The holders of common stock are entitled to one vote on all matters to be
voted upon by the stockholders. The holders of common stock have no cumulative
voting rights. Additionally, subject to the rights of holders of preferred
stock, holders of common stock are entitled to receive such dividends as may
be declared from time to time by the directors out of funds legally available
therefore. The holders of shares of excess stock have no voting rights or
dividend rights and shares of excess stock are not transferrable.
The registrar and transfer agent for shares of our common stock is The Bank
of New York.
Shareholder Rights Plan
Our Shareholder Rights Agreement provides that the rights issued under the
agreement will be triggered, with certain exceptions, if and when any person
or group acquires, or commences a tender offer to acquire, 15% or more of our
shares. Shares of Series A preferred stock are issuable on the exercise of
rights that may become exercisable under the Shareholder Rights Agreement.
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DESCRIPTION OF PREFERRED STOCK
General. Shares of preferred stock may be issued from time to time, in one
or more series, as authorized by the Board of Directors. Before issuance of
shares of each series, the Board is required to fix for each such series,
subject to the provisions of Maryland law and our Charter, the powers,
designations, preferences and relative, participating, optional or other
special rights of such series and qualifications, limitations or restrictions
thereof, including such provisions as may be desired concerning voting,
redemption, dividends, dissolution or the distribution of assets, conversion
or exchange, and such other matters as may be fixed by resolution of the Board
of Directors or a duly authorized committee thereof. The Board could authorize
the issuance of shares of preferred stock with terms and conditions which
could have the effect of discouraging a takeover or other transaction which
holders of some, or a majority of, shares of common stock might believe to be
in their best interests, or in which holders of some, or a majority of, shares
of common stock might receive a premium for their shares of common stock over
the then market price of such shares. The shares of preferred stock will, when
issued, be fully-paid and non-assessable and will have no preemptive rights.
The prospectus supplement relating to any shares of preferred stock offered
thereby will contain the specific terms, including:
(i) The title and stated value of such shares of preferred stock;
(ii) The number of such shares of preferred stock offered, the
liquidation preference per share and the offering price of such
shares of preferred stock;
(iii) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such shares of preferred stock;
(iv) The date from which dividends on such shares of preferred stock will
accumulate, if applicable;
(v) The procedures for any auction and remarketing, if any, for such
shares of preferred stock;
(vi) The provision for a sinking fund, if any, for the shares of
preferred stock;
(vii) The provisions for redemption, if applicable, of the shares of
preferred stock;
(viii) Any listing of the shares of preferred stock on any securities
exchange;
(ix) The terms and conditions, if applicable, upon which the shares of
preferred stock will be convertible into shares of common stock of
the Company, including the conversion price (or manner of
calculation thereof);
(x) A discussion of federal income tax considerations applicable to such
shares of preferred stock;
(xi) The relative ranking and preferences of such shares of preferred
stock as to dividend rights and rights upon liquidation, dissolution
or winding up of our affairs;
(xii) Any limitations on issuance of any series of shares of preferred
stock ranking senior to or on a parity with such series of shares of
preferred stock as to dividend rights and rights upon liquidation,
dissolution or winding up of our affairs;
(xiii) Any limitations on direct or beneficial ownership and restrictions
on transfer of such shares of preferred stock, in each case as may
be appropriate to preserve our status as a REIT; and
(xiv) Any other specific terms, preferences, rights, limitations or
restrictions of such shares of preferred stock.
The Registrar and Transfer Agent for the shares of preferred stock will be
set forth in the applicable prospectus supplement.
The description of the provisions of the shares of preferred stock set
forth in this prospectus and in the related prospectus supplement is only a
summary, does not purport to be complete and is subject to, and is
18
qualified in its entirety by, reference to the definitive Articles
Supplementary to our Charter relating to such series of shares of preferred
stock. You should read these documents carefully to fully understand the terms
of the shares of preferred stock. In connection with any offering of shares of
preferred stock, Articles Supplementary will be filed with the SEC as an
exhibit or incorporated by reference in the Registration Statement.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, shares of
preferred stock or shares of common stock. Warrants may be issued
independently or together with any other securities offered by any prospectus
supplement and may be attached to or separate from such securities. Each
series of warrants will be issued under a separate warrant agreement to be
entered into between us and a warrant agent specified in the applicable
prospectus supplement. The warrant agent will act solely as our agent in
connection with the warrants of such series and will not assume any obligation
or relationship of agency or trust for or with any holders or beneficial
owners of warrants. The following summary of certain provisions of the
securities warrant agreement and the warrants does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the securities warrant agreement and the securities warrant
certificates relating to each series of warrants which will be filed with the
SEC and incorporated by reference as an exhibit to the Registration Statement
of which this prospectus is a part at or before the time of the issuance of
that series of warrants.
If warrants are offered, the applicable prospectus supplement will describe
the terms of those warrants, including, in the case of warrants for the
purchase of debt securities, the following:
. the offering price;
. the denominations and terms of the series of debt securities
purchasable upon exercise of such warrants;
. the designation and terms of any series of debt securities with which
such warrants are being offered and the number of such warrants being
offered with such debt securities;
. the date, if any, on and after which such warrants and the related
series of debt securities will be transferable separately;
. the principal amount of the series of debt securities purchasable upon
exercise of each such securities warrant and the price at which such
principal amount of debt securities of such series may be purchased
upon such exercise;
. the date on which the right to exercise such warrants shall commence
and the date on which such right will expire;
. whether the warrants will be issued in registered or bearer form;
. any special United States federal income tax consequences;
. the terms, if any, on which we may accelerate the date by which the
warrants must be exercised; and
. any other material terms of such warrants.
In the case of warrants for the purchase of shares of preferred stock or
shares of common stock, the applicable prospectus supplement will describe the
terms of those warrants, including the following where applicable:
. the offering price;
. the type and aggregate number of shares purchasable upon exercise of
the warrants, the exercise price, and in the case of warrants for
shares of preferred stock, the designation, aggregate number and terms
of the series of shares of preferred stock with which the warrants are
being offered, if any, and the number of such warrants being offered
with the shares of preferred stock;
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. the date, if any, on and after which the warrants and the related
series of shares of preferred stock, if any, or shares of common stock
will be transferable separately;
. the date on which the right to exercise such warrants shall commence
and the date on which such right will expire;
. any special United States federal income tax consequences; and
. any other material terms of the warrants.
Warrant certificates may be exchanged for new warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office
of the warrant agent or any other office indicated in the applicable
prospectus supplement. Before the exercise of any securities warrant to
purchase debt securities, holders of such warrants will not have any of the
rights of holders of the debt securities purchasable upon such exercise,
including the right to receive payments of principal, premium, if any, or
interest, if any, on such debt securities or to enforce covenants in the
applicable indenture. Before the exercise of any warrants to purchase shares
of preferred stock or shares of common stock, holders of such warrants will
not have any rights of holders of such shares of preferred stock or shares of
common stock, including the right to receive payments of dividends, if any, on
such shares of preferred stock or shares of common stock, or to exercise any
applicable right to vote.
Exercise of Warrants
Each warrant will entitle the holder thereof to purchase such principal
amount of debt securities or number of shares of preferred stock or shares of
common stock, as the case may be, at such exercise price as shall in each case
be set forth in, or calculable from, the prospectus supplement relating to the
offered warrants. After the close of business on the expiration date (or such
later date to which such expiration date may be extended by us), unexercised
warrants will become void.
Warrants may be exercised by delivering to the warrant agent payment as
provided in the applicable prospectus supplement of the amount required to
purchase the shares of common stock purchasable upon such exercise, together
with certain information set forth on the reverse side of the securities
warrant certificate. Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt within five
(5) business days, of the securities warrant certificate evidencing such
warrants. Upon receipt of such payment and the securities warrant certificate
properly completed and duly executed at the corporate trust office of the
securities warrant agent or any other office indicated in the applicable
prospectus supplement, we will, as soon as practicable, issue and deliver the
shares of common stock purchasable upon such exercise. If fewer than all of
the warrants represented by such securities warrant certificate are exercised,
a new securities warrant certificate will be issued for the remaining amount
of warrants.
Amendments and Supplements to Warrant Agreement
The warrant agreements may be amended or supplemented without the consent
of the holders of the warrants issued under the warrant agreement to effect
changes that are not inconsistent with the provisions of the warrants and that
do not adversely affect the interests of the holders of the warrants.
Common Stock Warrant Adjustments
Unless otherwise indicated in the applicable prospectus supplement, the
exercise price of, and the number of shares of common stock covered by, a
common stock warrant will be subject to adjustment in certain events,
including:
. payment of a dividend on the shares of common stock payable in shares
of common stock and stock splits, combinations or reclassifications of
the shares of common stock;
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. issuance to all holders of shares of common stock of rights or warrants
to subscribe for or purchase shares of common stock at less than their
current market price (as defined in the warrant agreement for that
series of shares of common stock warrants); and
. certain distributions of evidences of indebtedness or assets (including
securities but excluding cash dividends or distributions paid out of
consolidated earnings or retained earnings), or of subscription rights
and warrants (excluding those referred to above).
No adjustment in the exercise price of, and the number of shares of common
stock covered by, a shares of common stock warrant will be made for regular
quarterly or other periodic or recurring cash dividends or distributions or
for cash dividends or distributions to the extent paid from consolidated
earnings or retained earnings. No adjustment will be required unless such
adjustment would require a change of at least 1% in the exercise price then in
effect. Except as stated above, the exercise price of, and the number of
shares of common stock covered by, a shares of common stock warrant will not
be adjusted for the issuance of shares of common stock or any securities
convertible into or exchangeable for shares of common stock, or carrying the
right or option to purchase or otherwise acquire the foregoing, in exchange
for cash, other property or services.
In the event of any (i) consolidation or merger of the Company with or into
any entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of common stock); (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of the Company; or (iii) reclassification,
capital reorganization or exchange of the shares of common stock (other than
solely a change in par value or from par value to no par value), then any
holder of a shares of common stock warrant will be entitled, on or after the
occurrence of any such event, to receive on exercise of such shares of common
stock warrant the kind and amount of shares of beneficial interest or other
securities, cash or other property (or any combination thereof) that the
holder would have received had such holder exercised such holder's shares of
common stock warrant immediately before the occurrence of such event. If the
consideration to be received upon exercise of the shares of common stock
warrant following any such event consists of shares of common stock of the
surviving entity, then from and after the occurrence of such event, the
exercise price of such shares of common stock warrant will be subject to the
same anti-dilution and other adjustments described in the second preceding
paragraph, applied as if such common stock warrant were shares of common
stock.
CERTAIN PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BY-LAWS
The following paragraphs summarize certain provisions of Maryland law and
our Charter and Bylaws. The summary does not purport to be complete and is
subject to and qualified in its entirety by reference to Maryland law and the
Charter, including any Articles Supplementary, and Bylaws. You should read
these documents carefully to fully understand the terms of Maryland law, our
Charter and our Bylaws.
The Board of Directors
Our Board of Directors is currently comprised of eight directors. Our
Bylaws provide that the Board may alter the number of directors to a number
not exceeding 15 nor below the minimum permitted in our Bylaws. Our Charter
provides that the members of the Board shall be divided, as evenly as
possible, into three classes, with approximately one-third of the directors
elected by the stockholders annually. Each director is to serve for a three
year term or until his or her successor is duly elected and has qualified.
Holders of shares will have no right to cumulative voting in the election of
directors.
Business Combinations
As a Maryland corporation, we are subject to certain restrictions
concerning certain "business combinations" (including a merger, consolidation,
share exchange or, in certain circumstances, an asset transfer
21
or issuance or reclassification of equity securities) between us and an
"interested stockholder." Interested stockholders are persons (i) who
beneficially own 10% or more of the voting power of our shares or (ii) are
affiliates or associates of us who, at any time within the two-year period
prior to the date in question, was the beneficial owner of 10% or more of the
voting power of our shares. Such business combinations are prohibited for 5
years after the most recent date on which the interested stockholder became an
interested stockholder. Thereafter, any such business combination must be
recommended by the Board of Directors and approved by the affirmative vote of
at least (i) 80% of the votes entitled to be cast by holders of our
outstanding voting shares and (ii) 66 2/3% of the votes entitled to be cast by
holders of our outstanding voting shares other than shares held by the
interested stockholder or an affiliate or associate of the interested
stockholder with whom the business combination is to be effected, unless,
among other things, the corporation's stockholders receive a minimum price for
their shares and the consideration is received in cash or in the same form as
previously paid by the interested stockholder for its shares. These provisions
of Maryland law do not apply, however, to business combinations that are
approved or exempted by the Board of Directors prior to the time that the
interested stockholder becomes an interested stockholder.
Control Share Acquisitions
Maryland law provides that, with certain exceptions, "control shares" of a
corporation acquired in a "control share acquisition" have no voting rights
except to the extent approved by the stockholders by the affirmative vote of
two-thirds, excluding shares of stock owned by the acquiring person or by
officers or directors who are employees of the corporation. "Control shares"
are shares of voting stock which, if aggregated with all other such shares
previously acquired by such a person, would entitle the acquiring person to
exercise voting power in electing directors within one of the following ranges
of voting power: (i) 20% or more but less than 33 1/3%, (ii) 33 1/3% or more
but less than a majority, or (iii) a majority or more of all voting power.
Control shares do not include shares the acquiring person is then entitled to
vote as a result of having previously obtained stockholder approval. A
"control share acquisition" means, subject to certain exceptions, the
acquisition of, ownership of or the power to direct the exercise of voting
power with respect to, control shares.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of various conditions (including an undertaking to pay expenses),
may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of demand therefore to consider the
voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any stockholders' meeting.
If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute,
then, subject to certain conditions and limitations, the corporation may
redeem any or all of the control shares (except those for which voting rights
have previously been approved) for fair value determined, without regard to
voting rights, as of the date of the last control share acquisition or of any
meeting of stockholders at which the voting rights of such shares are
considered and not approved. If voting rights for control shares are approved
at a stockholders' meeting and the acquiring person becomes entitled to vote a
majority of the shares entitled to vote, all other stockholders may exercise
appraisal rights. The fair value of the shares as determined for purposes of
such appraisal rights may not be less than the highest price per share paid in
the control share acquisition, and certain limitations and restrictions
otherwise applicable to the exercise of dissenters' appraisal rights do not
apply in the context of a control share acquisition.
The control share acquisition statute does not apply to stock acquired in a
merger, consolidation or stock exchange if we are a party to the transaction,
or to acquisitions previously approved or exempted by our Charter or Bylaws
adopted before the acquisition of stock.
As permitted under Maryland law, our Bylaws contain a provision opting out
of the control share acquisition statute.
22
Advance Notice of Director Nominations and New Business
Pursuant to our Bylaws, a stockholder seeking to nominate persons for
election to our Board of Directors or propose other business to be conducted
at an annual meeting of stockholders or to nominate persons for election of
directors at any special meeting of stockholders called for the purpose of
electing directors must provide the required notice to our chairman of the
board (i) in the case of an annual meeting, generally not less than 90 days
nor more than 120 days prior to the first anniversary of the date of mailing
of the notice for the preceding year's annual meeting and (ii) in the case of
a special meeting, not later than the earlier of the 10th day following the
day on which notice of the special meeting was mailed or public disclosure of
the date of the special meeting.
The purpose of requiring such advance notice by stockholders is to provide
the Board of Directors a meaningful opportunity to consider the qualifications
of the proposed nominees or the advisability of the other proposed business
and, to the extent deemed necessary or advisable by the Board of Directors, to
inform stockholders and make recommendations about such qualifications or
business, as well as to provide a more orderly procedure for conducting
meetings of stockholders. Although our Bylaws do not give the Board of
Directors any power to disapprove of stockholder nominations or proposals for
action, they may have the effect of precluding a contest for the election of
trustees or the consideration of stockholder proposals if the proper
procedures are not followed. In addition, these provisions may discourage or
deter a third party from conducting a solicitation of proxies to elect its own
slate of directors or to approve its own proposal, without regard to whether
consideration of such nominees or proposals might be harmful or in the best
interests of the Company and its stockholders. The provisions in our Bylaws
regarding advance notice provisions could have the effect of discouraging a
takeover or other transaction in which holders of some, or a majority, of the
shares of common stock might receive a premium for their shares over the then
prevailing market price or which such holders might believe to be otherwise in
their best interests.
MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES
Introductory Notes
The following is a description of the material federal income tax
considerations to a holder of common stock. The tax treatment of a holder of
any of the securities will vary depending on the terms of the specific
securities acquired by such holder, as well as his particular situation, and
this discussion does not attempt to address any aspects of federal income
taxation relating to holders of securities. A description of certain federal
income tax considerations pertaining to holders of the securities will be
provided in the relevant prospectus supplement.
The following summary is based on federal income tax law in effect as of
the date hereof. Such law is subject to change without notice, and may be
changed with retroactive effect. The summary is for general information only,
and does not constitute tax advice.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS
SUPPLEMENT, AS WELL AS HIS OR HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES TO HIM OR HER OF THE ACQUISITION, OWNERSHIP AND SALE OF
SECURITIES IN AN ENTITY ELECTING TO BE TAXED AS A REAL ESTATE INVESTMENT
TRUST, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX
CONSEQUENCES OF SUCH ACQUISITION, OWNERSHIP, SALE, AND ELECTION AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
Taxation of the Company
General. We have elected to be taxed as a REIT under Sections 856 through
859 of the Internal Revenue Code. Our qualification and taxation as a REIT
depends upon our ability to meet on a continuing basis, through actual annual
operating results, distribution levels and diversity of stock ownership, the
various qualification tests
23
and organizational requirements imposed under the Code, as discussed below. We
believe that we are organized and have operated in such a manner as to qualify
under the Code for taxation as a REIT since our inception, and we intend to
continue to operate in such a manner. No assurances, however, can be given
that we will operate in a manner so as to qualify or remain qualified as a
REIT. See "--Failure to Qualify" below.
The following is a general summary of the material Code provisions that
govern the Federal income tax treatment of a REIT and its stockholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, the regulations
promulgated thereunder ("Treasury Regulations"), and administrative and
judicial interpretations thereof.
If we qualify for taxation as a REIT, we generally will not be subject to
Federal corporate income taxes on net income that we currently distribute to
stockholders. This treatment substantially eliminates the "double taxation"
(at the corporate and stockholder levels) that generally results from
investment in a corporation.
Notwithstanding our REIT election, however, we will be subject to Federal
income tax in the following circumstances. First, we will be taxed at regular
corporate rates on any undistributed taxable income, including undistributed
net capital gains provided, however, that properly designated undistributed
capital gains will effectively avoid taxation at the shareholder level.
Second, under certain circumstances, we may be subject to the "alternative
minimum tax" on its items of tax preference and alternative minimum tax
adjustments. Third, if we have (i) net income from the sale or other
disposition of "foreclosure property" (which is, in general, property acquired
by foreclosure or otherwise on default of a loan secured by the property) that
is held primarily for sale to customers in the ordinary course of business or
(ii) other nonqualifying income from foreclosure property, we will be subject
to tax at the highest corporate rate on such income. Fourth, if we have net
income from prohibited transactions (which are, in general, certain sales or
other dispositions of property (other than foreclosure property) held
primarily for sale to customers in the ordinary course of business), such
income will be subject to a 100% tax on prohibited transactions. Fifth, if we
should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), and have nonetheless maintained our qualification as a
REIT because certain other requirements have been met, we will be subject to a
100% tax equal to the gross income attributable to the greater of either (i)
the amount by which 75% of our gross income exceeds the amount qualifying
under the 75% test for the taxable year or (ii) the amount by which 90% of our
gross income exceeds the amount of our income qualifying under the 95% test
for the taxable year, multiplied in either case by a fraction intended to
reflect our profitability. Sixth, if we should fail to distribute during each
calendar year at least the sum of (i) 85% of our REIT ordinary income for such
year; (ii) 95% of our REIT capital gain net income for such year (for this
purpose such term includes capital gains which we elect to retain but which we
report as distributed to our stockholders. See "--Annual Distribution
Requirements" below); and (iii) any undistributed taxable income from prior
years, we would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, if we acquire any
asset from a C corporation (i.e., a corporation generally subject to full
corporate level tax) in a transaction in which the basis of the asset in our
hands is determined by reference to the basis of the asset (or any other
property) in the hands of the C corporation, and we recognize gain on the
disposition of such asset during the 10-year period beginning on the date on
which such asset was acquired by us, then, to the extent of such property's
built-in gain (the excess of the fair market value of such property at the
time of acquisition by us over the adjusted basis of such property at such
time), such gain will be subject to tax at the highest regular corporate rate
applicable (as provided in Service regulations that have not yet been
promulgated). Eighth, we will be subject to a 100% penalty tax on amounts
received (or on certain expenses deducted by a taxable REIT subsidiary) if
arrangements among us, our tenants and a taxable REIT subsidiary are not
comparable to similar arrangements among unrelated parties.
Requirements for Qualification
The Code defines a REIT as a corporation, trust or association (i) which is
managed by one or more trustees or directors; (ii) the beneficial ownership of
which is evidenced by transferable shares or by transferable certificates of
beneficial interest; (iii) which would be taxable as a domestic corporation
but for Code Sections 856 through 859; (iv) which is neither a financial
institution nor an insurance company subject to certain provisions of the
Code; (v) the beneficial ownership of which is held by 100 or more persons;
(vi) of which not
24
more than 50% in value of the outstanding capital stock is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of each taxable year after applying
certain attribution rules; (vii) that makes an election to be treated as a
REIT for the current taxable year or has made an election for a previous
taxable year which has not been revoked and (viii) which meets certain other
tests, described below, regarding the nature of its income and assets. The
Code provides that conditions (i) through (iv), inclusive, must be met during
the entire taxable year and that condition (v) must be met during at least 335
days of a taxable year of 12 months, or during a proportionate part of a
taxable year of less than 12 months. Condition (vi) must be met during the
last half of each taxable year other than the first taxable year for which an
election to become a REIT is made. For purposes of determining stock ownership
under condition (vi), a supplemental unemployment compensation benefits plan,
a private foundation or a portion of a trust permanently set aside or used
exclusively for charitable purposes generally is considered an individual.
However, a trust that is a qualified trust under Internal Revenue Code Section
401(a) generally is not considered an individual, and beneficiaries of a
qualified trust are treated as holding shares of a REIT in proportion to their
actuarial interests in the trust for purposes of condition (vi). Conditions
(v) and (vi) do not apply until after the first taxable year for which an
election is made to be taxed as a REIT. We have issued sufficient common stock
with sufficient diversity of ownership to allow us to satisfy requirements (v)
and (vi). In addition, our Charter contains restrictions regarding the
transfer of its shares and the issuance of excess stock intended to assist in
continuing to satisfy the share ownership requirements described in (v) and
(vi) above. See "Capital Stock of the Company--Restrictions on Transfer."
These restrictions, however, may not ensure that we will be able to satisfy
these share ownership requirements. If we fail to satisfy these share
ownership requirements, we will fail to qualify as a REIT.
In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. Our taxable year is the calendar year.
To qualify as a REIT, we cannot have at the end of any taxable year any
undistributed earnings and profits that are attributable to a non-REIT taxable
year. We believe that we have complied with this requirement.
For our tax years beginning prior to January 1, 1998, pursuant to
applicable Treasury Regulations, to be taxed as a REIT, we were required to
maintain certain records and request on an annual basis certain information
from our stockholders designed to disclose the actual ownership of our
outstanding shares. We have complied with such requirements. For our tax years
beginning January 1, 1998 and after, these records and informational
requirements are no longer a condition to REIT election. Instead, a monetary
penalty will be imposed for failure to comply with these requirements. If we
comply with these regulatory rules, and we do not know, or exercising
reasonable diligence would not have known, whether we failed to meet
requirement (vi) above, we will be treated as having met the requirement.
Qualified REIT Subsidiaries
If a REIT owns a corporate subsidiary that is a "qualified REIT
subsidiary," the separate existence of that subsidiary will be disregarded for
federal income tax purposes. Generally, a qualified REIT subsidiary is a
corporation, other than a taxable REIT subsidiary, all of the capital stock of
which is owned by the REIT. All assets, liabilities and items of income,
deduction and credit of the qualified REIT subsidiary will be treated as
assets, liabilities and items of income, deduction and credit of the REIT
itself. A qualified REIT subsidiary of ours will not be subject to federal
corporate income taxation, although it may be subject to state and local
taxation in some states.
Taxable REIT Subsidiaries
A "taxable REIT subsidiary" is an entity taxable as a corporation in which
we own stock and that elects with us to be treated as a taxable REIT
subsidiary under Section 856(l) of the Internal Revenue Code. In addition, if
one of our taxable REIT subsidiaries owns, directly or indirectly, securities
representing 35% or more of the vote or value of a subsidiary corporation,
that subsidiary will also be treated as a taxable REIT subsidiary of ours. A
taxable REIT subsidiary is subject to federal income tax, and state and local
income tax where applicable, as a regular "C" corporation.
25
Generally, a taxable REIT subsidiary can perform impermissible tenant
services without causing us to receive impermissible tenant services income
under the REIT income tests. However, several provisions regarding the
arrangements between a REIT and its taxable REIT subsidiaries ensure that a
taxable REIT subsidiary will be subject to an appropriate level of federal
income taxation. For example, a taxable REIT subsidiary is limited in its
ability to deduct interest payments made to us. In addition, we will be
obligated to pay a 100% penalty tax on some payments that we receive or on
certain expenses deducted by the taxable REIT subsidiary if the economic
arrangements among us, our tenants and the taxable REIT subsidiary are not
comparable to similar arrangements among unrelated parties. We currently do
not have any taxable REIT subsidiaries.
Income Tests
In order for us to maintain qualification as a REIT, certain separate
percentage tests relating to the source of its gross income must be satisfied
annually. First, at least 75% of the REIT's gross income (excluding gross
income from prohibited transactions) for each taxable year must be derived
directly or indirectly from investments relating to real property or mortgages
on real property (including "rents from real property" and, in certain
circumstances, interest) or from certain types of temporary investments.
Second, at least 95% of the REIT's gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived from such real
property investments described above, dividends, interest and gain from the
sale or disposition of stock or securities, some payments under hedging
instruments, or from any combination of the foregoing.
Rents received by us will qualify as "rents from real property" in
satisfying the above gross income tests only if several conditions are met.
First, the amount of rent must not be based in whole or in part on the income
or profits of any person. However, amounts received or accrued generally will
not be excluded from "rents from real property" solely by reason of being
based on a fixed percentage or percentages of receipts or sales.
Second, rents received from a tenant will not qualify as "rents from real
property" if we, or a direct or indirect owner of 10% or more of our stock,
actually or constructively owns 10% or more of such tenant (a "Related Party
Tenant"). We may, however, lease our properties to a taxable REIT subsidiary
and rents received from that subsidiary will not be disqualified from being
"rents from real property" by reason of our ownership interest in the
subsidiary if at least 90% of the property in question is leased to unrelated
tenants and the rent paid by the taxable REIT subsidiary is substantially
comparable to the rent paid by the unrelated tenants for comparable space.
Third, if rent attributable to personal property that is leased in
connection with a lease of real property is greater than 15% of the total rent
received under the lease, then the portion of rent attributable to such
personal property will not qualify as "rents from real property." Under prior
law, this 15% test was based on relative adjusted tax basis of both the real
and personal property. For taxable years beginning after December 31, 2000,
the test is based on relative fair market value of the real and personal
property.
Generally, for rents to qualify as "rents from real property" for the
purposes of the gross income tests, we are only allowed to provide services
that are both "usually or customarily rendered" in connection with the rental
of real property and not otherwise considered "rendered to the occupant."
Income received from any other service will be treated as "impermissible
tenant service income" unless the service is provided through an independent
contractor that bears the expenses of providing the services and from whom we
derive no revenue or through a taxable REIT subsidiary, subject to specified
limitations. The amount of impermissible tenant service income we receive is
deemed to be the greater of the amount actually received by us or 150% of our
direct cost of providing the service. If the impermissible tenant service
income exceeds 1% of our total income from a property, then all of the income
from that property will fail to qualify as rents from real property. If the
total amount of impermissible tenant service income from a property does not
exceed 1% of our total income from that property, the income will not cause
the rent paid by tenants of that property to fail to qualify as rents from
real property, but the impermissible tenant service income itself will not
qualify as rents from real property.
If we fail to satisfy one or both of the 75% or 95% gross income tests for
any taxable year, we may nevertheless qualify as a REIT for such year if we
are entitled to relief under certain provisions of the Code.
26
These relief provisions generally will be available if our failure to meet
such tests was due to reasonable cause and not due to willful neglect, if we
attach a schedule of the sources of our income to our federal income tax
return for such years, and if any incorrect information on the schedules was
not due to fraud with intent to evade tax. It is not possible, however, to
state whether in all circumstances we would be entitled to the benefit of
these relief provisions. As discussed above in "--General," even if these
relief provisions were to apply, a tax would be imposed with respect to the
excess net income.
Asset Tests
At the close of each quarter of our taxable year, we must satisfy six tests
relating to the nature of our assets.
1. At least 75% of the value of our total assets must be represented by
"real estate assets," cash, cash items and government securities. Our real
estate assets include, for this purpose, our allocable share of real estate
assets held by the partnerships in which we own an interest, and the non-
corporate subsidiaries of these partnerships, as well as stock or debt
instruments held for less than one year purchased with the proceeds of an
offering of shares or long term debt.
2. Not more than 25% of our total assets may be represented by securities,
other than those in the 75% asset class.
3. Except for investments in REITs, qualified REIT subsidiaries, and
taxable REIT subsidiaries, the value of any one issuer's securities owned by
us may not exceed 5% of the value of our total assets.
4. Except for investments in REITs, qualified REIT subsidiaries and taxable
REIT subsidiaries, we may not own more than 10% of any one issuer's
outstanding voting securities.
5. Except for investments in REITs, qualified REIT subsidiaries and taxable
REIT subsidiaries, we may not own more than 10% of the total value of the
outstanding securities of any one issuer, other than securities that qualify
as "straight debt" under the Internal Revenue Code.
6. Not more than 20% of our total assets may be represented by the
securities of one or more taxable REIT subsidiaries.
For purposes of these asset tests, any shares of qualified REIT
subsidiaries are not taken into account, and any assets owned by the qualified
REIT subsidiary are treated as owned directly by the REIT.
Securities, for purposes of the assets tests, may include debt we hold.
However, debt we hold in an issuer will not be taken into account for purposes
of the 10% value test if the debt securities meet the "straight debt" safe
harbor and either (1) the issuer is an individual, (2) the only securities of
the issuer that we hold are straight debt or (3) if the issuer is a
partnership, we hold at least a 20 percent profits interest in the
partnership. Debt will meet the "straight debt" safe harbor if the debt is a
written unconditional promise to pay on demand or on a specified date a sum
certain in money (1) which is not convertible, directly or indirectly, into
stock and (2) the interest rate (or the interest payment dates) of which is
not contingent on the profits, the borrower's discretion or similar factors.
With respect to each issuer in which we currently own an interest that does
not qualify as a REIT, a qualified REIT subsidiary or a taxable REIT
subsidiary, we believe that our pro rata share of the value of the securities,
including unsecured debt, of any such issuer does not exceed 5% of the total
value of our assets and that we comply with the 10% voting securities
limitation and 10% value limitation (taking into account the "straight debt"
exceptions with respect to certain issuers). With respect to our compliance
with each of these asset tests, however, we cannot provide any assurance that
the Internal Revenue Service might not disagree with our determinations.
After initially meeting the assets tests after the close of any quarter, we
will not lose our status as a REIT if we fail to satisfy the 25%, 20% or 5%
asset tests or the 10% value limitation at the end of a later quarter solely
by
27
reason of changes in the relative values of our assets. If the failure to
satisfy the 25%, 20%, or 5% asset tests or the 10% value limitation results
from an increase in the value of our assets after the acquisition of
securities or other property during a quarter, the failure can be cured by a
disposition of sufficient non-qualifying assets within 30 days after the close
of that quarter. We intend to maintain adequate records of the value of our
assets to ensure compliance with the asset tests and to take any available
actions within 30 days after the close of any quarter as may be required to
cure any noncompliance with the 25%, 20%, or 5% asset tests or the 10% value
limitation. We cannot ensure that these steps always will be successful. If we
were to fail to cure the noncompliance with the asset tests within this 30 day
period, we could fail to qualify as a REIT.
Annual Distribution Requirements
We, in order to qualify as a REIT, are required to distribute dividends
(other than capital gain dividends) to our stockholders in an amount at least
equal to (i) the sum of (a) 90% of our "REIT taxable income" (computed without
regard to the dividends paid deduction and our net capital gain) and (b) 90%
of the net income (after tax), if any, from foreclosure property, minus (ii)
the sum of certain items of noncash income. Such distributions generally must
be paid in the taxable year to which they relate. Dividends may be paid in the
following year in two circumstances. First, dividends may be declared in the
following year if the dividends are declared before we timely file our tax
return for the year and if made before the first regular dividend payment made
after such declaration. Second, if we declare a dividend in October, November
or December of any year with a record date in one of these months and pay the
dividend on or before January 31 of the following year, we will be treated as
having paid the dividend on December 31 of the year in which the dividend was
declared. To the extent that we do not distribute all of our net capital gain
or distribute at least 90%, but less than 100%, of our "REIT taxable income,"
as adjusted, we will be subject to tax on the nondistributed amount at regular
capital gains and ordinary corporate tax rates. Furthermore, if we should fail
to distribute during each calendar year at least the sum of (i) 85% of our
REIT ordinary income for such year; (ii) 95% of our REIT capital gain income
for such year; and (iii) any undistributed taxable income from prior periods,
we will be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed.
We may elect to retain and pay tax on net long-term capital gains and
require our stockholders to include their proportionate share of such
undistributed net capital gains in their income. If we make such election,
stockholders would receive a tax credit attributable to their share of the
capital gains tax paid by us, and would receive an increase in the basis of
their shares in us in an amount equal to the stockholder's share of the
undistributed net long-term capital gain reduced by the amount of the credit.
Further, any undistributed net long-term capital gains that are included in
the income of our stockholders pursuant to this rule will be treated as
distributed for purposes of the 4% excise tax.
We have made and intend to continue to make timely distributions sufficient
to satisfy the annual distribution requirements. It is possible, however, that
we, from time to time, may not have sufficient cash or liquid assets to meet
the distribution requirements due to timing differences between the actual
receipt of income and actual payment of deductible expenses and the inclusion
of such income and deduction of such expenses in arriving at our taxable
income, or if the amount of nondeductible expenses such as principal
amortization or capital expenditures exceeds the amount of noncash deductions.
In the event that such timing differences occur, in order to meet the
distribution requirements, we may arrange for short-term, or possibly long-
term, borrowing to permit the payment of required dividends. If the amount of
nondeductible expenses exceeds noncash deductions, we may refinance our
indebtedness to reduce principal payments and may borrow funds for capital
expenditures.
Under certain circumstances, we may be able to rectify a failure to meet
the distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year that may be included in our deduction for
dividends paid for the earlier year. Thus, we may avoid being taxed on amounts
distributed as deficiency dividends; however, we will be required to pay
interest to the Internal Revenue Service based upon the amount of any
deduction taken for deficiency dividends.
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Failure to Qualify
If we fail to qualify for taxation as a REIT in any taxable year and no
relief provisions apply, we will be subject to tax (including any applicable
alternative minimum tax) on our taxable income at regular corporate rates.
Distributions to stockholders in any year in which we fail to qualify will not
be deductible by us, nor will such distributions be required to be made. In
such event, to the extent of current and accumulated earnings and profits, all
distributions to stockholders will be taxable as ordinary income, and, subject
to certain limitations in the Code, corporate distributees may be eligible for
the dividends received deduction. Unless entitled to relief under specific
statutory provisions, we will also be disqualified from taxation as a REIT for
the four taxable years following the year during which qualification was lost.
It is not possible to state whether in all circumstances we would be entitled
to such statutory relief.
Taxation of Stockholders
Taxation of Taxable Domestic Stockholders. As long as we qualify as a REIT,
distributions made to our taxable domestic stockholders out of current or
accumulated earnings and profits (and not designated as capital gain
dividends) will be taken into account by them as ordinary income, and
corporate stockholders will not be eligible for the dividends received
deduction as to such amounts. Distributions in excess of current and
accumulated earnings and profits will not be taxable to a stockholder to the
extent that they do not exceed the adjusted basis of such stockholder's common
stock, but rather will reduce the adjusted basis of such shares as a return of
capital. To the extent that such distributions exceed the adjusted basis of a
stockholder's common stock, they will be included in income as long-term
capital gain (or short-term capital gain if the shares have been held for one
year or less), assuming the shares are a capital asset in the hands of the
stockholder. In addition, any dividend declared by us in October, November or
December of any year payable to a stockholder of record on a specific date in
any such month shall be treated as both paid by us and received by the
stockholder on December 31 of such year, provided that the dividend is
actually paid by us during January of the following calendar year. For
purposes of determining what portion of a distribution is attributable to
current or accumulated earnings and profits, earnings and profits will first
be allocated to distributions made to holders of the shares of preferred
stock. Stockholders may not include in their individual income tax returns any
net operating losses or capital losses of ours.
In general, any gain or loss realized upon a taxable disposition of shares
by a stockholder who is not a dealer in securities will be treated as a long-
term capital gain or loss if the shares have been held for more than one year,
otherwise as short-term capital gain or loss. However, any loss upon a sale or
exchange of common stock by a stockholder who has held such shares for six
months or less (after applying certain holding period rules) will be treated
as long-term capital loss to the extent of distributions from us required to
be treated by such stockholder as long-term capital gain.
Distributions that we properly designates as capital gain dividends will be
taxable to stockholders as gains (to the extent that they do not exceed our
actual net capital gain for the taxable year) from the sale or disposition of
a capital asset held for greater than one year. If we designate any portion of
a dividend as a capital gain dividend, a U.S. stockholder will receive an
Internal Revenue Service Form 1099-DIV indicating the amount that will be
taxable to the stockholder as capital gain. However, stockholders that are
corporations may be required to treat up to 20% of certain capital gain
dividends as ordinary income. A portion of capital gain dividends received by
noncorporate taxpayers may be subject to tax at a 25% rate to the extent
attributable to certain gains realized on the sale of real property. In
addition, noncorporate taxpayers are generally taxed at a maximum rate of 20%
on net long-term capital gain (generally, the excess of net long-term capital
gain over net short-term capital loss) attributable to gains realized on the
sale of property held for greater that one year.
Distributions we make and gain arising from the sale or exchange by a
stockholder of shares of our stock will not be treated as passive activity
income, and, as a result, stockholders generally will not be able to apply any
"passive losses" against such income or gain. Distributions we make (to the
extent they do not constitute a return of capital) generally will be treated
as investment income for purposes of computing the investment interest
limitation. Gain arising from the sale or other disposition of our stock (or
distributions treated as such) will not be treated as investment income under
certain circumstances.
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Upon any taxable sale or other disposition of our stock, a U.S. stockholder
will recognize gain or loss for federal income tax purposes on the disposition
of our stock in an amount equal to the difference between
. the amount of cash and the fair market value of any property received
on such disposition; and
. the U.S. stockholder's adjusted basis in such stock for tax purposes.
Gain or loss will be capital gain or loss if the stock has been held by the
U.S. stockholder as a capital asset. The applicable tax rate will depend on
the stockholder's holding period in the asset (generally, if an asset has been
held for more than one year it will produce long-term capital gain) and the
stockholder's tax bracket. A U.S. stockholder who is an individual or an
estate or trust and who has long-term capital gain or loss will be subject to
a maximum capital gain rate of 20%. U.S. stockholders that acquire, or are
deemed to acquire, stock after December 31, 2000 and who hold the stock for
more than five years and certain low income taxpayers may be eligible for a
lower long-term capital gains rate. The Internal Revenue Service has the
authority to prescribe, but has not yet prescribed, regulations that would
apply a capital gain tax rate of 25% (which is generally higher than the long-
term capital gain tax rates for non-corporate stockholders) to a portion of
capital gain realized by a non-corporate stockholder on the sale of REIT stock
that would correspond to the REIT's "unrecaptured Section 1250 gain."
Stockholders are advised to consult with their own tax advisors with respect
to their capital gain tax liability.
In general, any loss upon a sale or exchange of securities by a U.S.
stockholder who has held such securities for six months or less (after
applying certain holding period rules) will be treated as a long-term capital
loss, but only to the extent of distributions from us received by such U.S.
stockholder that are required to be treated by such U.S. stockholder as long-
term capital gains.
Economic Accrual of Redemption Premium on Preferred Stock. For federal
income tax purposes, if a corporation issues preferred stock that may be
redeemed at a price that is more than a de minimis amount higher than its
issue price, the difference is treated as a "redemption premium" that is
taxable to the holder on an annual economic accrual basis. If a U.S.
stockholder recognizes income as a result of redemption premium on the
preferred stock, the holder's tax basis in the preferred stock will increase
by the amount included in the holder's gross income.
Taxation of Tax-Exempt Stockholders. Provided that a tax-exempt stockholder
has not held its common stock as "debt financed property" within the meaning
of the Internal Revenue Code, the dividend income from us will not be
unrelated business taxable income, referred to as UBTI, to a tax-exempt
stockholder. Similarly, income from the sale of common stock will not
constitute UBTI unless the tax-exempt stockholder has held its stock as debt
financed property within the meaning of the Internal Revenue Code or has used
the common stock in a trade or business. However, for a tax-exempt stockholder
that is a social club, voluntary employee benefit association, supplemental
unemployment benefit trust, or qualified group legal services plan exempt from
federal income taxation under Internal Revenue Code Sections 501(c)(7),
(c)(9), (c)(17) and (c)(20), respectively, or a single parent title-holding
corporation exempt under Section 501(c)(2) the income of which is payable to
any of the aforementioned tax-exempt organizations, income from an investment
in us will constitute UBTI unless the organization properly sets aside or
reserves such amounts for purposes specified in the Internal Revenue Code.
These tax exempt stockholders should consult their own tax advisors concerning
these "set aside" and reserve requirements.
A "qualified trust" (defined to be any trust described in Code Section
401(a) and exempt from tax under Code Section 501(a)) that holds more than 10%
of the value of the shares of a REIT may be required, under certain
circumstances, to treat a portion of distributions from the REIT as UBTI. This
requirement will apply for a taxable year only if (i) the REIT satisfies the
requirement that not more than 50% of the value of its shares be held by five
or fewer individuals (the "five or fewer requirement") only by relying on a
special "look-through" rule under which shares held by qualified trust
stockholders are treated as held by the beneficiaries of such trusts in
proportion to their actuarial interests therein; and (ii) the REIT is
"predominantly held" by qualified trusts. A REIT is "predominantly held" by
qualified trusts if either (i) a single qualified trust holds more than 25% of
the
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value of the REIT shares, or (ii) one or more qualified trusts, each owning
more than 10% of the value of the REIT shares, hold in the aggregate more than
50% of the value of the REIT shares. If the foregoing requirements are met,
the percentage of any REIT dividend treated as UBTI to a qualified trust that
owns more than 10% of the value of the REIT shares is equal to the ratio of
(i) the UBTI earned by the REIT (computed as if the REIT were a qualified
trust and therefore subject to tax on its UBTI) to (ii) the total gross income
(less certain associated expenses) of the REIT for the year in which the
dividends are paid. A de minimis exception applies where the ratio set forth
in the preceding sentence is less than 5% for any year.
The provisions requiring qualified trusts to treat a portion of REIT
distributions as UBTI will not apply if the REIT is able to satisfy the five
or fewer requirement without relying on the "look-through" rule. The
restrictions on ownership of stock in our Charter should prevent application
of the foregoing provisions to qualified trusts purchasing our stock, absent a
waiver of the restrictions by the Board of Directors.
Taxation of Non-U.S. Stockholders. The rules governing U.S. Federal income
taxation of nonresident alien individuals, foreign corporations, foreign
partnerships and other foreign stockholders (collectively, "Non-U.S.
Stockholders") are complex, and no attempt will be made herein to provide more
than a limited summary of such rules. The discussion does not consider any
specific facts or circumstances that may apply to a particular Non-U.S.
Stockholder. Prospective Non-U.S. Stockholders should consult with their own
tax advisors to determine the impact of U.S. Federal, state and local income
tax laws with regard to an investment in common stock, including any reporting
requirements.
Distributions that are not attributable to gain from sales or exchanges by
us of U.S. real property interests and not designated by us as capital gain
dividends will be treated as dividends of ordinary income to the extent that
they are made out of our current or accumulated earnings and profits. Such
distributions ordinarily will be subject to a withholding tax equal to 30% of
the gross amount of the distribution unless an applicable tax treaty reduces
such rate. However, if income from the investment in our stock is treated as
effectively connected with the Non-U.S. Stockholder's conduct of a U.S. trade
or business, the Non-U.S. Stockholder generally will be subject to a tax at
graduated rates in the same manner as U.S. stockholders are taxed with respect
to such dividends (and may also be subject to a branch profits tax of up to
30% if the stockholder is a foreign corporation). We expect to withhold U.S.
income tax at the rate of 30% on the gross amount of any dividends paid to a
Non-U.S. Stockholder that are not designated as capital gain dividends, unless
(i) a lower treaty rate applies and the Non-U.S. Stockholder files an IRS Form
W-8BEN evidencing eligibility for that reduced rate is filed with us or (ii)
the Non-U.S. Stockholder files an IRS Form W-8ECI with us claiming that the
distribution is income treated as effectively connected to a U.S. trade or
business.
Distributions in excess of our current and accumulated earnings and profits
will not be taxable to a stockholder to the extent that they do not exceed the
adjusted basis of the stockholder's stock, but rather will reduce the adjusted
basis of such shares. To the extent that such distributions exceed the
adjusted basis of a Non-U.S. Stockholder's shares, they will give rise to tax
liability if the Non-U.S. Stockholder would otherwise be subject to tax on any
gain from the sale or disposition of his or her stock as described below. We
may be required to withhold U.S. income tax at the rate of at least 10% on
distributions to Non-U.S. Stockholders that are not paid out of current or
accumulated earnings and profits unless the Non-U.S. Stockholders provide us
with withholding certificates evidencing their exemption from withholding tax.
If it cannot be determined at the time that such a distribution is made
whether or not such distribution will be in excess of current and accumulated
earnings and profits, the distribution will be subject to withholding at the
rate applicable to dividends. However, the Non-U.S. Stockholder may seek a
refund of such amounts from the Service if it is subsequently determined that
such distribution was, in fact, in excess of our current and accumulated
earnings and profits.
For any year in which we qualify as a REIT, distributions that are
attributable to gain from sales or exchanges by us of U.S. real property
interests will be taxed to a Non-U.S. Stockholder under the provisions of the
Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"). Under FIRPTA,
these distributions are taxed to a Non-U.S. Stockholder as if such gain were
effectively connected with a U.S. business. Thus, Non-U.S.
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Stockholders will be taxed on such distributions at the normal capital gain
rates applicable to U.S. stockholders (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of nonresident
alien individuals). Also, distributions subject to FIRPTA may be subject to a
30% branch profits tax in the hands of a corporate Non-U.S. Stockholder not
entitled to treaty relief or exemption. We are required by applicable Treasury
Regulations to withhold 35% of any distribution that could be designated by us
as a capital gain dividend. This amount is creditable against the Non-U.S.
Stockholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Stockholder upon the sale or exchange of our
stock generally would not be subject to United States taxation unless:
. the investment in our stock is effectively connected with the Non-U.S.
Stockholder's U.S. trade or business, in which case the Non-U.S.
Stockholder will be subject to the same treatment as domestic
stockholders with respect to any gain;
. the Non-U.S. Stockholder is a non-resident alien individual who is
present in the United States for 183 days or more during the taxable
year and has a tax home in the United States, in which case the non-
resident alien individual will be subject to a 30% tax on the
individual's net capital gains for the taxable year; or
. our stock constitutes a U.S. real property interest within the meaning
of FIRPTA, as described below.
Our stock will not constitute a United States real property interest if we
are a domestically-controlled REIT. We will be a domestically-controlled REIT
if, at all times during a specified testing period, less than 50% in value of
our stock is held directly or indirectly by Non-U.S. Stockholders.
We believe that, currently, we are a domestically controlled REIT and,
therefore, that the sale of our stock would not be subject to taxation under
FIRPTA. Because our stock is publicly traded, however, we cannot guarantee
that we are or will continue to be a domestically-controlled REIT.
Even if we do not qualify as a domestically-controlled REIT at the time a
Non-U.S. Stockholder sells our stock, gain arising from the sale still would
not be subject to FIRPTA tax if:
. the class or series of shares sold is considered regularly traded under
applicable Treasury regulations on an established securities market,
such as the NYSE; and
. the selling Non-U.S. Stockholder owned, actually or constructively, 5%
or less in value of the outstanding class or series of stock being sold
throughout the five-year period ending on the date of the sale or
exchange.
If gain on the sale or exchange of our stock were subject to taxation under
FIRPTA, the Non-U.S. Stockholder would be subject to regular U.S. income tax
with respect to any gain in the same manner as a taxable U.S. stockholder,
subject to any applicable alternative minimum tax and special alternative
minimum tax in the case of non-resident alien individuals.
Backup Withholding Tax and Information Reporting
U.S. Holders. In general, information-reporting requirements will apply to
certain U.S. holders to payments of dividends on our stock, OID, interest, and
payments of the proceeds of the sale of our stock and debentures, unless an
exception applies.
The payor will be required to withhold tax on such payments at the rate of
30.5% (scheduled to be reduced incrementally to 28% by 2006) if (i) the payee
fails to furnish a taxpayer identification number, or TIN, to the payor or to
establish an exemption from backup withholding, or (ii) the Internal Revenue
Service notifies the payor that the TIN furnished by the payor is incorrect.
32
In addition, a payor of interest on the debentures or dividends on our
stock will be required to withhold tax at a rate of 30.5% (scheduled to be
reduced incrementally to 28% by 2006) if (i) there has been a notified payee
under-reporting with respect to interest, dividends or original issue discount
described in Section 3406(c) of the Internal Revenue Code, or (ii) there has
been a failure of the payee to certify under the penalty of perjury that the
payee is not subject to backup withholding under the Internal Revenue Code.
Some stockholders, including corporations, may be exempt from backup
withholding. Any amounts withheld under the backup withholding rules from a
payment to a stockholder will be allowed as a credit against the stockholder's
United States federal income tax and may entitle the stockholder to a refund,
provided that the required information is furnished to the Internal Revenue
Service.
Non-U.S. Stockholders. Generally, information reporting will apply to
payments of dividends on our stock, interest, including OID, and backup
withholding described above for a U.S. stockholder will apply, unless the
payee certifies that it is not a U.S. person or otherwise establishes an
exemption.
The payment of the proceeds from the disposition of stock or debentures to
or through the U.S. office of a U.S. or foreign broker will be subject to
information reporting and backup withholding as described above for U.S.
stockholders unless the Non-U.S. Stockholder satisfies the requirements
necessary to be an exempt Non-U.S. Stockholder or otherwise qualifies for an
exemption. The proceeds of a disposition by a Non-U.S. Stockholder of stock or
debentures to or through a foreign office of a broker generally will not be
subject to information reporting or backup withholding. However, if the broker
is a U.S. person, a controlled foreign corporation for U.S. tax purposes, a
foreign person 50% or more of whose gross income from all sources for
specified periods is from activities that are effectively connected with a
U.S. trade or business, a foreign partnership if partners who hold more than
50% of the interest in the partnership are U.S. persons, or a foreign
partnership that is engaged in the conduct of a trade or business in the U.S.,
then information reporting generally will apply as though the payment was made
through a U.S. office of a U.S. or foreign broker.
Applicable Treasury regulations provide presumptions regarding the status
of stockholders when payments to the stockholders cannot be reliably
associated with appropriate documentation provided to the payor. Under these
Treasury regulations, some stockholders are required to provide new
certifications with respect to payments made after December 31, 2000. Because
the application of these Treasury regulations varies depending on the
stockholder's particular circumstances, you are advised to consult your tax
advisor regarding the information reporting requirements applicable to you.
State and Local Taxes. We and our stockholders may be subject to state or
local taxation in various state or local jurisdictions, including those in
which it or they transact business or reside (although stockholders who are
individuals generally should not be required to file state income tax returns
outside of their state of residence with respect to our operations and
distributions). The state and local tax treatment of us and our stockholders
may not conform to the Federal income tax consequences discussed above.
Consequently, prospective stockholders should consult their own tax advisors
regarding the effect of state and local tax laws on an investment in the
securities.
Taxation of Domestic Debenture Holders
Stated Interest. This discussion assumes that any debentures will be
treated as debt, not equity, for federal income tax purposes. Each U.S. holder
of a debenture and the Company must report the debenture as debt for such
purposes. The stated interest on a debenture therefore will be taxable to a
U.S. holder as ordinary interest income at the time it either accrues or is
received, depending on such U.S. holder's method of accounting for federal
income tax purposes.
Original Issue Discount. Generally, a debenture will bear original issue
discount ("OID") if and to the extent of any excess of the debenture's "stated
redemption price at maturity" over its "issue price." The "stated redemption
price at maturity" of a debt instrument is the sum of its principal amount
plus all other payments
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required thereunder, other than payments of "qualified stated interest"
(defined generally as stated interest that is unconditionally payable in cash
or in property (other than debt instruments of the issuer) at least annually
at a single fixed rate). The "issue price" of a debenture will be the fair
market value of the debenture on the date of issuance if the debentures are
deemed to be "traded on an established securities market" under the Code and
as provided in Treasury regulations. If the debentures are not so traded, the
"issue price" of a debenture will be its "stated redemption price at
maturity." Holders should consult their tax advisor regarding whether the
debentures will be considered "traded on an established market" under the
applicable regulations.
OID would not be includible in a U.S. holder's income, however, if the U.S.
holder is treated as having acquired the debenture at a "premium."
A U.S. holder will be treated as having acquired a debenture at a "premium"
if the adjusted basis of the debenture in the hands of the U.S. holder on the
date of issuance exceeds the sum of all amounts payable on the debenture other
than payments of qualified stated interest.
If a U.S. holder's adjusted basis in a debenture is less than or equal to
the debenture's adjusted issue price, the U.S. holder must include OID in
income as it accrues (and may be subject to the market discount rules
discussed below). The amount of accrued OID includible in income by such a
U.S. holder would be the sum of the "daily portions" of OID with respect to
the new debenture for each day during the taxable year or portion of the
taxable year in which such U.S. holder held such new debenture ("accrued
OID"). The daily portion is determined by allocating to each day in any
"accrual period" a pro rata portion of the OID allocable to that accrual
period. The "accrual period" for a debenture may be of any length and may vary
in length over the term of the debenture, provided that each accrual period is
no longer than one year and each scheduled payment of principal or interest
occurs on the first day or the final day of an accrual period. The amount of
OID allocable to any accrual period is an amount equal to the excess, if any,
of (i) the product of the debenture's adjusted issue price at the beginning of
such accrual period and its yield to maturity (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) over (ii) the amount of any qualified stated
interest allocable to the accrual period. OID allocable to a final accrual
period is the difference between the amount payable at maturity (other than a
payment of qualified stated interest) and the adjusted issue price at the
beginning of the final accrual period. The "adjusted issue price" of a
debenture at the beginning of any accrual period is equal to its issue price
increased by the accrued OID for each prior accrual period (determined without
regard to the amortization of any acquisition or bond premium) and reduced by
any payments made on such debenture (other than qualified stated interest) on
or before the first day of the accrual period. Special rules will apply for
calculating OID for an initial short accrual period. As OID accrues and is
included in a U.S. holder's income, it is added to the U.S. holder's tax basis
in the new debentures.
Market Discount. Generally, the market discount rules discussed below will
apply to any debenture if the U.S. holder's tax basis in the debenture is less
than the debenture's "adjusted issue price." If the debentures do not have
OID, the market discount rules generally will apply if the stated redemption
price at maturity exceeds the Holder's initial tax basis in the debentures.
Gain recognized on the disposition (including a redemption) of a debenture
that has accrued market discount will be treated as ordinary income, not
capital gain, to the extent of the accrued market discount, provided that the
amount of market discount exceeds a statutory de minimis amount. "Market
discount" is defined as the excess, if any, of (i) the stated redemption price
at maturity (or, in the case of a debt obligation with OID, the adjusted issue
price) over (ii) the tax basis of the debt obligation in the hands of the U.S.
holder immediately after its acquisition.
Unless a U.S. holder elects otherwise, the accrued market discount would be
the amount calculated by multiplying the market discount by a fraction, the
numerator of which is the number of days the obligation has been held by the
U.S. holder and the denominator of which is the number of days after the U.S.
holder's acquisition of the obligation up to and including its maturity date.
A U.S. holder of a debenture acquired at market discount may also be required
to defer the deduction of all or a portion of the interest on any indebtedness
incurred or maintained to carry the debenture until it is disposed of in a
taxable transaction.
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If a U.S. holder of a debenture acquired at market discount disposes of
such debenture in any transaction other than a sale, exchange or involuntary
conversion, even though otherwise nontaxable (e.g., a gift), such U.S. holder
will be deemed to have realized an amount equal to the fair market value of
the debenture and would be required to recognize as ordinary income any
accrued market discount to the extent of the deemed gain.
A U.S. holder of a debenture acquired at market discount may elect to
include the market discount in income as it accrues, either on a straight-line
basis or, if elected, on a constant interest rate basis. The current income
inclusion election would apply to all market discount obligations acquired by
the electing U.S. holder on or after the first day of the first taxable year
to which the election applies. The election may be revoked only with the
consent of the IRS. If a U.S. holder of a debenture so elects to include
market discount in income currently, the rules discussed above with respect to
ordinary income recognition resulting from sales and certain other disposition
transactions and to deferral of interest deductions would not apply.
Amortizable Bond Premium. Generally, a U.S. holder who acquires a debenture
will have amortizable bond premium to the extent of the excess, if any, of its
basis in the debenture over the amount payable on maturity of the debenture
(or on an earlier call date if use of the earlier call date results in a
smaller amortizable bond premium).
A U.S. holder may elect to amortize any bond premium under Section 171 of
the Code on a constant yield basis over the period from the acquisition date
to the maturity date of the debenture (or, in certain circumstances, until an
earlier call date) and, except as future Treasury regulations may otherwise
provide, reduce the amount of interest included in income in respect of the
debenture by such amount. A U.S. holder who elects to amortize bond premium
must reduce its adjusted basis in the debenture by the amount of such
allowable amortization. An election to amortize the bond premium would apply
to all amortizable bond premium on all taxable bonds held at or acquired after
the beginning of the U.S. holder's taxable year as to which the election is
made, and may be revoked only with the consent of the IRS.
The amount of amortizable bond premium does not include any amount
attributable to the conversion feature of the new debenture. The value of the
conversion feature for purposes of the amortization of bond premium may be
determined under any reasonable method.
The amortized bond premium deduction is treated as an offset to interest
income on the related security for federal income tax purposes and is limited
to the purchaser's investment income from the debt instrument for the year. No
deduction of unamortized bond premium will be allowed on conversion of a
debenture into Common Stock. Each U.S. holder is urged to consult its tax
advisors as to the consequences of the treatment of such premium as an offset
to interest income for federal income tax purposes. If an election to amortize
the bond premium is not made, a U.S. holder must include the full amount of
each interest payment in income in accordance with its regular method of
accounting and will generally receive a tax benefit from the bond premium only
upon computing its gain or loss upon the sale or other disposition or payment
of the principal amount of the new debenture.
Election to Treat All Interest as Original Issue Discount. A U.S. holder
may elect to include in gross income all interest that accrues on the
debentures using the constant-yield method with the modifications described
below. For this purpose, interest includes stated interest, OID, market
discount and de minimis market discount, as adjusted by an acquisition premium
or amortizable bond premium. In applying the constant-yield method, the issue
price of the debenture will equal the electing U.S. holder's adjusted basis in
the debenture immediately after its acquisition, the issue date of the
debenture will be the date of its acquisition by the electing U.S. holder and
no payments on the debenture will be treated as payments of qualified stated
interest.
Sale or Redemption. Unless a nonrecognition provision applies, the sale,
exchange, redemption (including pursuant to an offer by the Company) or other
disposition of a debenture will be a taxable event for federal income tax
purposes. In such event, a U.S. holder will recognize gain or loss equal to
the difference between (i) the amount of cash plus the fair market value of
any property received upon such sale, exchange, redemption or
35
other taxable disposition (other than in respect of accrued and unpaid
interest thereon, which will be taxable as ordinary income) and (ii) the U.S.
holder's adjusted tax basis therein (as increased by any market discount
previously included in income by the U.S. holder and decreased by any
amortizable bond premium deducted over the term of the debenture by the U.S.
holder). Subject to the discussion under "--Market Discount," such gain or
loss should be capital gain or loss and will be long-term capital gain or loss
if the debenture had been held by the U.S. holder for more than one year at
the time of such sale, exchange, redemption or other disposition.
Taxation of Non-U.S. Debenture Holders
Interest and OID on New Debentures. Neither interest paid by the Company to
a Non-U.S. Holder nor any original issue discount will be subject to U.S.
federal income or withholding tax if (i) such interest is not effectively
connected with the conduct of a trade or business within the United States by
such Non-U.S. Holder, (ii) the Non-U.S. Holder does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (iii) the Non-U.S. Holder is
not a controlled foreign corporation with respect to which the Company is a
"related person" within the meaning of the Code, and (iv) either (a) the Non-
U.S. Holder certifies to the Company, under penalties of perjury, that the
Non-U.S. Holder is not a U.S. person and provides the beneficial owner's name
and address on a U.S. Treasury Form W-8 (or suitable substitute form) or (b) a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
and holds the new debenture certifies, under penalties of perjury, that such
Form W-8 (or suitable substitute form) has been received from the Non-U.S.
Holder by it or by such a financial institution between it and the Non-U.S.
Holder and furnishes the payor with a copy thereof. If the foregoing
exceptions do not apply, payments on the new debentures may be subject to U.S.
withholding tax at a rate of 30% (or such lower rate as may be applied under
an applicable tax treaty).
PLAN OF DISTRIBUTION
We may sell securities to one or more underwriters for public offer and
sale by them or may sell securities offered hereby to the public directly or
through agents. Any underwriter or agent involved in the offer and sale of the
securities will be named in the applicable prospectus supplement.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at
prices related to the prevailing market prices at the time of sale or at
negotiated prices (any of which may represent a discount from the prevailing
market prices). We also may, from time to time, authorize underwriters acting
as our agents to offer and sell the securities upon the terms and conditions
as are set forth in the applicable prospectus supplement. In connection with
the sale of securities, underwriters may be deemed to have received
compensation from us in the form of underwriting discounts or commissions and
may also receive commissions from purchasers of securities for whom they may
act as agent. Underwriters may sell securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by us to underwriters or agents in
connection with the offering of securities and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set
forth in the applicable prospectus supplement. Underwriters, dealers and
agents participating in the distribution of the securities may be deemed to be
underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the securities may be deemed to be
underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered
into with us, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
36
If so indicated in the applicable prospectus supplement, we will authorize
the underwriters, dealers or other persons acting as our agents to solicit
offers by certain institutions to purchase securities from us at the public
offering price set forth in that prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on the date or dates
stated in such prospectus supplement. Each contract will be for an amount not
less than, and the aggregate principal amount of securities sold pursuant to
contracts will not be less than nor greater than, the respective amounts
stated in the applicable prospectus supplement. Institutions with whom
contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be
subject to the approval of us. Contracts will not be subject to any conditions
except that (i) the purchase by an institution of the securities covered by
its contract will not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which such institution is subject;
and (ii) if the securities are being sold to underwriters, we have sold to
such underwriters the total principal amount of the securities less the
principal amount thereof covered by the contracts.
Some of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for us and our subsidiaries in the
ordinary course of business.
LEGAL MATTERS
The legality of the securities and certain other legal matters have been
passed upon for us by Jaeckle Fleischmann & Mugel, LLP, Buffalo, New York.
EXPERTS
The consolidated financial statements and schedules of Sizeler Property
Investors, Inc. and subsidiaries as of December 31, 2000 and 1999, and for
each of the years in the three-year period ended December 31, 2000, have been
incorporated by reference herein in reliance upon the report of KPMG LLP,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
37
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses in connection with the
issuance and distribution of the securities, other than underwriting discounts
and commissions. All of the amounts shown are estimated except the Securities
and Exchange Commission ("Commission") registration fee.
Commission Registration Fee........................................ $25,000
New York Stock Exchange, Inc. Listing Fee.......................... 10,000
Blue Sky fees and expenses......................................... 5,000
Printing and engraving expenses.................................... 50,000
Trustee, Transfer Agent and Registrar Expenses..................... 5,000
Legal fees and expenses............................................ 50,000
Accounting fees and expenses....................................... 30,000
Miscellaneous...................................................... 5,000
--------
Total............................................................ $180,000
========
Item 15. Indemnification of Directors and Officers.
Sizeler Property Investors, Inc. (the "Company") is organized in the State
of Maryland. The Maryland General Corporation Law ("MGCL") permits a
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 liability resulting from (i) actual receipt of an improper
personal 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 MGCL permits a corporation to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding
to which the person is made a party by reason of his or her service in that
capacity. The MGCL permits a corporation to indemnify its present and former
directors and officers, among others, 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 (i) the act or omission of the
indemnified party was material to the matter giving rise to the proceeding and
(a) was committed in bad faith or (b) was the result of active and deliberate
dishonesty, (ii) the indemnified party actually received an improper personal
benefit in money, property or services or (iii) in the case of any criminal
proceeding, the indemnified party had reasonable cause to believe that the act
or omission was unlawful.
The indemnity may include judgments, penalties, fines, settlements and
reasonable expenses actually incurred by the director or officer in connection
with the proceeding; provided, however, that if the proceeding is one by or in
the right of the Maryland corporation, indemnification is not permitted with
respect to any proceeding in which the director or officer has been adjudged
to be liable to the corporation.
In addition, a director or officer of a Maryland corporation may not be
indemnified with respect to any proceeding charging improper personal benefit
to the director or officer in which the director or officer was adjudged to be
liable on the basis that personal benefit was improperly received. The
termination of any proceeding by conviction or upon a plea of nolo contendere
or its equivalent or an entry of an order of probation prior to judgment
creates a rebuttal presumption that the director or officer did not meet the
requisite standard of conduct required for permitted indemnification. The
termination of any proceeding by judgment, order or settlement, however, does
not create a presumption that the director or officer did not meet the
requisite standard of conduct for permitted indemnification.
As a condition to advancing expenses to a director who is a party to a
proceeding, the MGCL requires the Company to obtain (a) a written affirmation
by the director or officer of his or her good faith belief that he or
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she has met the standard of conduct necessary for indemnification by is and
(b) a written statement by or on his or her 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 Company's Charter provides that the Company will indemnify its
directors and officers, whether serving the Corporation or at its request any
other entity, to the full extent required or permitted by Maryland law,
including the advance of expenses under the procedures and to the full extent
permitted by law. The Company's Charter contains a provision which limits a
director's or officer's personal liability for monetary damages to the Company
or its stockholders. The Company's Charter also provides that the Company will
indemnify other employees and agents to the extent authorized by the Company's
board of directors or the Company's Bylaws. The Bylaws of the Company do not
authorize any such indemnification for non-director, non-officer employees or
agents.
The Company has entered into an indemnification agreement (the
"Indemnification Agreement") with each of its directors and officers, and the
Board of Directors has authorized the Company to enter into an Indemnification
Agreement with each of the future directors and officers of the Company. The
MGCL permits a corporation to indemnify its directors and officers. However,
the protection that is specifically afforded by the MGCL authorizes other
arrangements for indemnification of directors and officers, including
insurance. The Indemnification Agreement is intended to provide
indemnification to the maximum extent allowable by, or not in violation of, or
offensive to, any law of the State of Maryland.
The Indemnification Agreement provides that the Company shall indemnify a
director or officer who is a party to the agreement (the "Indemnitee"), if he
or she was or is a party to or otherwise involved in any proceeding by reason
of the fact that he or she was or is a director or officer of the Company, or
was or is serving at its request in a certain capacity of another entity,
against losses incurred in connection with the defense or settlement of such
proceeding. This indemnification shall be provided to the fullest extent
permitted by the Indemnification Agreement. This is similar to the
indemnification provided by the MGCL except that indemnification is not
available under the Indemnification Agreement to the Indemnitee who pays any
amount in settlement of a proceeding without the Company's written consent.
Item 16. Exhibits.
The following exhibits are included as part of this Registration Statement:
1* Form of underwriting agreement.
3.1 Articles of Incorporation of the Registrant (incorporated by reference
to exhibit 3(i) of the Registrant's Form 8-K filed with the SEC on June
26, 2001).
3.2 Bylaws, as amended, of the Registrant (incorporated by reference to
exhibit 3.2 of the Registrant's Registration Statement on Form S-4 filed
with the SEC on October 25, 2001).
4.1 Form of Articles Supplementary creating Registrant's 10.0% Series B
Cumulative Redeemable Preferred Stock (incorporated by reference to
Exhibit 4.1 of the Registrant's Registration Statement on Form S-4 filed
with the SEC on October 25, 2001).
4.2 Form of Indenture for the Registrant's 9.0% Cumulative Subordinated
Debentures due 2009 (incorporated by reference to exhibit 4.3 of the
Registrant's Registration Statement on Form S-4 filed with the SEC on
October 25, 2001).
4.3* Form of Warrant Agreement.
5* Opinion of Jaeckle Fleischmann & Mugel, LLP regarding legality of
securities being registered.
8* Opinion of Jaeckle Fleischmann & Mugel, LLP regarding certain tax
matters.
12 Statement of ratio of earnings to fixed charges (incorporated by
reference to exhibit 12 to the Registrant's Registration Statement on
Form S-3 filed with the SEC on October 25, 2001).
23.1 Consent of KPMG LLP (filed herewith).
23.2 Consent of Jaeckle Fleischmann & Mugel, LLP (incorporated by reference
to Exhibit 5).
24 Powers of Attorney (incorporated by reference to exhibit 24 of the
Registrant's Registration Statement on Form S-3 filed with the SEC on
October 25, 2001).
25* Statement of Eligibility of Trustee.
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* To be filed, if applicable, subsequent to the effectiveness of this
registration statement by an amendment to the registration statement or
incorporated by reference pursuant to a Current Report on Form 8-K in
connection with the offering of securities.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 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 the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities 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
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to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section 305(b)(2)
of the Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kenner, State of Louisiana as of the
21st day of November 2001.
Sizeler Property Investors, Inc.
/s/ Thomas A. Masilla, Jr.
By:__________________________________
Thomas A. Masilla, Jr.
Vice Chairman, President and
Principal Operating Officer
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Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by Thomas A. Masilla, Jr. on
November 21, 2001, individually and as attorney-in-fact for the following
persons:
Signature Title
--------- -----
Sidney W. Lassen Chairman of the Board and
Chief Executive Officer
(Principal Executive
Officer)
/s/ Thomas A. Masilla, Jr.
Thomas A. Masilla, Jr. Vice Chairman, President
and Director (Principal -----------------------
Operating Officer) Thomas A. Masilla, Jr.
Individually and as
Attorney-in-Fact
Robert A. Whelan Chief Financial Officer
(Chief Financial and
Principal Accounting
Officer)
J. Terrell Brown Director
Francis L. Fraenkel Director
Harold B. Judell Director
James W. MacFarland Director
Richard L. Pearlstone Director
Theodore H. Strauss Director
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