As filed with the Securities and Exchange Commission on October 10 ,
2001
Registration No. 333- 70076
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMLI RESIDENTIAL PROPERTIES TRUST
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(Exact Name of Registrant as Specified in Its Charter)
Maryland 36-3925916
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(State of Organization) (I.R.S. Employer
Identification Number)
Allan J. Sweet
125 South Wacker Drive 125 South Wacker Drive
Suite 3100 Suite 3100
Chicago, Illinois 60606 Chicago, Illinois 60606
(312) 443-1477 (312) 443-1477
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(Address, Including Zip Code, (Name, Address, Including
and Telephone Number, Zip Code and Telephone Number,
Including Area Code, of Including Area Code, of
Registrant's Principal Agent for Service)
Executive Offices)
Copy of Service to:
John W. Noell, Jr.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box: [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following
box: [ X ]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) 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 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: [ ]
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of each Amount offering aggregate Amount of
class of security to be price per offering registration
to be registered registered share (1) price (1) fee (2)
----------------- -------------- ---------- ---------- ------------
Common shares
of beneficial
interest,
par value $.01
per share 569,988 shares $22.95 $13,081,225 $3,271
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(1) Pursuant to Rule 457(c) under the Securities Act of 1933, the
registration fee has been calculated on the basis of the average of
the high and low sales prices of the common shares on the New York
Stock Exchange on September 21 , 2001.
(2) Previously paid.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND
EXCHANGE 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 sell 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 state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 10 , 2001
PROSPECTUS
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AMLI RESIDENTIAL PROPERTIES TRUST
569,988 Common Shares
This prospectus relates to the offer and sale by selling shareholders
of 569,988 common shares of AMLI Residential Properties Trust from time to
time. AMLI has registered the common shares to enable the holders of units
of partnership interest in AMLI Residential Properties, L.P. to resell the
common shares into which those units may be converted, but the registration
of the common shares does not necessarily mean that those selling
shareholders will offer or sell any of the common shares.
The selling shareholders may from time to time offer and sell the
common shares on the New York Stock Exchange or otherwise and they may sell
the common shares at market prices or at negotiated prices. They may sell
the common shares in ordinary brokerage transactions, in block
transactions, in privately negotiated transactions, pursuant to Rule 144
under the Securities Act of 1933 or otherwise. If the selling shareholders
sell the common shares through brokers, they expect to pay customary
brokerage commissions and charges.
We will not receive any of the proceeds when the selling shareholders
sell any of the common shares. However, we have agreed to pay certain
expenses of the registration and sale of the common shares.
Our common shares are listed on the New York Stock Exchange under the
symbol "AML". On September 21 , 2001, the last reported sale price
of our common shares on the NYSE was $22.80 per share.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED ON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is _____, 2001
1
We have not authorized any person to give any information or to make
any representation not contained in this prospectus in connection with any
offering of these common shares. This prospectus is not an offer to sell
any security other than these common shares and it is not soliciting an
offer to buy any security other than these common shares. This prospectus
is not an offer to sell these common shares to any person and it is not
soliciting an offer from any person to buy these common shares in any
jurisdiction where the offer or sale to that person is not permitted. You
should not assume that the information contained in this prospectus is
correct on any date after the date of this prospectus, even though this
prospectus is delivered or these common shares are offered or sold on a
later date.
TABLE OF CONTENTS
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Page
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AMLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Description of common shares . . . . . . . . . . . . . . . . . . . 3
Description of provisions of Maryland law and of
AMLI's declaration of trust and bylaws . . . . . . . . . . . . . 9
Federal income tax considerations. . . . . . . . . . . . . . . . . 11
Selling shareholders . . . . . . . . . . . . . . . . . . . . . . . 21
Plan of distribution . . . . . . . . . . . . . . . . . . . . . . . 22
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Legal matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Where you can find more information. . . . . . . . . . . . . . . . 23
2
AMLI
AMLI is a self-administered and self-managed real estate investment
trust (a REIT) which owns, manages, leases, acquires and develops
institutional quality apartment communities. AMLI's communities are
located in specific markets in the Southwest, Southeast, Midwest and
Mountain areas of the United States. AMLI also holds interests in co-
investment ventures involving residential apartment communities.
Additionally, AMLI engages in development activities on its own and through
co-investment joint ventures.
AMLI is operated through AMLI Residential Properties, L.P., AMLI
Management Company, AMLI Management Company's wholly-owned construction
subsidiary AMLI Residential Construction, LLC and AMLI Institutional
Advisors, Inc. AMLI is the sole general partner of AMLI Residential
Properties, L.P., a Delaware limited partnership, through which it owns the
communities and its interests in the co-investment communities. AMLI
Residential Properties, L.P. is referred to in this prospectus as AMLI,
L.P. As of September 20, 2001, AMLI owned 85.1% of the units of
partnership interest in AMLI, L.P. AMLI Management Company provides
management and leasing services to each of the communities, the co-
investment communities and several additional properties in which AMLI has
no interest. AMLI Institutional Advisers, a qualified professional asset
manager, renders real estate investment advice to institutional capital
sources, primarily pension plans, endowments, foundations and insurance
companies. AMLI actively pursues co-investments through relationships
administered by AMLI Institutional Advisers as a way of diversifying the
sources of its equity capital for investment in apartment communities. AMLI
Residential Construction provides general contracting, construction
management and landscaping services to AMLI and its managed ventures. AMLI
Institutional Advisors, AMLI Management Company and AMLI Residential
Construction are referred to in this prospectus as the service companies.
AMLI was formed in 1993 and is organized as a REIT under the laws of
Maryland. Its principal executive offices are located at 125 South Wacker
Drive, Suite 3100, Chicago, Illinois 60606, and its telephone number is
(312) 443-1477.
USE OF PROCEEDS
AMLI will not receive any of the proceeds from the sale of any of the
common shares by the selling shareholders. The selling shareholders will
receive all proceeds from the sale of the common shares.
DESCRIPTION OF COMMON SHARES
GENERAL
AMLI's declaration of trust authorizes AMLI to issue up to
150,000,000 shares of beneficial interest, par value $.01 per share,
consisting of common shares, preferred shares and such other types or
classes of shares of beneficial interest as AMLI's board of trustees may
create and authorize from time to time. AMLI's board of trustees may amend
AMLI's declaration of trust without shareholder consent to increase or
decrease the shares of any class which AMLI has authority to issue. At
September 20, 2001, approximately 17,847,398 common shares were issued and
outstanding and held of record by approximately 330 shareholders. At
September 20, 2001, 350,000 Series A cumulative convertible preferred
shares and 3,125,000 Series B cumulative convertible preferred shares were
issued and outstanding.
3
The following description of certain general terms and provisions of
the common shares is not complete and you should refer to AMLI's
declaration of trust and bylaws for more information.
The outstanding common shares are fully paid and, except as described
below under "-- Shareholder liability," non-assessable. Each common share
entitles the holder to one vote on all matters requiring a vote of
shareholders, including the election of trustees. Holders of common shares
do not have the right to cumulate their votes in the election of trustees,
which means that the holders of a majority of the outstanding common shares
can elect all of the trustees then standing for election.
Holders of common shares are entitled to those distributions that
AMLI's board of trustees may declare from time to time out of funds legally
available for the payment of distributions. Holders of common shares have
no conversion, redemption, preemptive or exchange rights to subscribe to
any securities of AMLI. If there is a liquidation, dissolution or winding
up of AMLI's affairs, the holders of the common shares are entitled to
share equally in AMLI's assets remaining after AMLI pays, or sets aside
assets to pay, all liabilities to its creditors and subject to the rights
of the holders of AMLI's preferred shares.
PURCHASE RIGHTS
On November 2, 1998, AMLI's board of trustees declared a dividend of
one preferred share purchase right for each common share outstanding, which
was made to holders of common shares of record at the close of business on
November 13, 1998. The holders of any additional common shares issued
after that date and before the redemption or expiration of the preferred
share purchase rights also receive one preferred share purchase right for
each additional common share. Each preferred share purchase right entitles
the holder under certain circumstances to purchase from AMLI one one-
thousandth of a share of a series of participating preferred shares, par
value $0.01 per share, at a price of $70.00 per one one-thousandth of a
participating preferred share. AMLI will adjust that price from time to
time to prevent dilution. Preferred share purchase rights will be
exercisable if:
(1) a person or group of persons acquires 15% or more of the
outstanding common shares, or files a document with a
governmental agency indicating an intention to acquire 15% or
more of the outstanding common shares, or
(2) a person or group of persons announces a tender offer or
exchange offer for 15% or more of the outstanding common
shares.
Under certain circumstances, each preferred share purchase right will
entitle the holder to purchase, at the preferred share purchase right's
then current exercise price, a number of common shares having a market
value at the time equal to twice the preferred share purchase right's
exercise price. If any person or group acquires AMLI in a merger or other
business transaction, each holder will have the right to purchase, at the
preferred share purchase right's then current exercise price, a number of
the acquiring company's common shares having a market value at the time
equal to twice the preferred share purchase right's exercise price. The
preferred share purchase rights will expire on November 2, 2008 and AMLI
may redeem them in whole, but not in part, at a price of $0.01 per
preferred share purchase right payable in cash, shares of AMLI or any other
form of consideration determined by AMLI's board of trustees.
4
The preferred share purchase rights have certain anti-takeover
effects. The preferred share purchase rights will cause substantial
dilution to a person or group that attempts to acquire AMLI on terms not
approved by AMLI's board of trustees. The preferred share purchase rights
should not interfere with any merger or other business combination approved
by AMLI's board of trustees since the preferred share purchase rights may
be redeemed by AMLI at the redemption price prior to the time that a person
or group has acquired 15% or more of AMLI's outstanding common shares.
TRANSFER AGENT
The transfer agent and registrar for the common shares is EquiServe
Trust Company, N.A. The common shares are listed on the NYSE under the
symbol "AML."
RESTRICTIONS ON SIZE OF HOLDINGS OF SHARES
For AMLI to qualify as a REIT under the Internal Revenue Code of
1986, no more than 50% in value of AMLI's shares, after taking into account
options to acquire shares, may be owned, directly or indirectly, by five or
fewer individuals during the last half of each taxable year or during a
proportionate part of any short taxable year. "Individuals" are defined in
the Internal Revenue Code to include certain entities and constructive
ownership among specified family members. AMLI's shares must also be
beneficially owned by 100 or more persons during at least 335 days of each
taxable year or during a proportionate part of any short taxable year.
AMLI's declaration of trust prohibits any shareholder from owning, or
being deemed to own by virtue of the attribution provisions of the Internal
Revenue Code or Section 13(d) of the Securities Exchange Act of 1934, more
than 9.8% in number of shares or value of AMLI's outstanding shares.
AMLI's board of trustees, upon receipt of a ruling from the Internal
Revenue Service or an opinion of counsel or other evidence satisfactory to
AMLI's board of trustees and on any other conditions as AMLI's board of
trustees may direct, may exempt a proposed transferee from the ownership
limit. The proposed transferee must give written notice to AMLI of the
proposed transfer at least 15 days prior to any transfer which, if
consummated, would result in the proposed transferee owning AMLI's shares
in excess of the ownership limit. AMLI's board of trustees may require any
opinions of counsel, affidavits, undertakings or agreements that it
believes are necessary or advisable in order to determine or ensure AMLI's
status as a REIT. Any transfer of AMLI's shares that would:
(1) create a direct or indirect ownership of shares in excess
of the ownership limit;
(2) result in AMLI's shares being beneficially owned by fewer
than 100 persons, determined without reference to any rules of
attribution, as provided in Section 856(a) of the Internal
Revenue Code; or
(3) result in AMLI being "closely held" within the meaning of
Section 856(h) of the Internal Revenue Code,
will not have any effect, and the intended transferee will acquire no
rights to the shares. These restrictions on transferability and ownership
will not apply if AMLI's board of trustees determines, and AMLI's
shareholders approve that determination, that it is no longer in the best
interests of AMLI to attempt to qualify, or to continue to qualify, as a
REIT.
5
AMLI's declaration of trust excludes from these ownership
restrictions some of the investors and their transferees who received
shares of AMLI, or units in AMLI, L.P., in exchange for apartment
communities in connection with the formation of AMLI. AMLI's board of
trustees by resolution has excluded from the ownership restrictions UICI, a
Delaware corporation, and Gregory T. Mutz to the extent that (1) UICI
individually beneficially owns 29.9% or less of AMLI's outstanding shares,
(2) Mr. Mutz individually beneficially owns 24.9% or less of AMLI's
outstanding shares and (3) UICI and Mr. Mutz collectively beneficially own
34.9% or less of AMLI's outstanding shares as a group.
If there is any purported transfer of AMLI's shares which would
result in a person owning AMLI's shares in excess of the ownership limit,
except as permitted above, or would cause AMLI to become "closely held"
under Section 856(h) of the Internal Revenue Code, those shares will
constitute "excess shares." These excess shares will be transferred
pursuant to AMLI's declaration of trust to AMLI as the trustee of a trust
for the benefit of the person or persons to whom the excess shares are
ultimately transferred, until the excess shares are transferred to a person
whose ownership will not violate the restrictions on ownership. Subject to
the ownership limit, the trustee will transfer the excess shares at the
direction of the purported transferee to any person if the excess shares
would not be excess shares in the hands of that person. The purported
transferee will receive the lesser of:
(1) the price paid by the purported transferee for the excess
shares or, if no consideration was paid, the fair market value
of the excess shares on the day of the event which caused the
excess shares to be held in trust; and
(2) the price received from the sale or other disposition of the
excess shares.
Any amount received by the purported transferee in excess of that price
will be paid to AMLI. In addition, AMLI will have the right to purchase
the excess shares held in trust for a 90-day period at a purchase price
equal to the lesser of:
(1) the price paid by the purported transferee for the excess
shares or, if no consideration was paid, the fair market value
of the excess shares on the day of purchase by AMLI; and
(2) the fair market value of the excess shares on the date
AMLI elects to purchase them.
Fair market value, for these purposes, means the last reported sales
price on the NYSE on the trading day immediately preceding the relevant
date, or if those shares are not then traded on the NYSE, the last reported
sales price on the trading day immediately preceding the relevant date as
reported on any exchange or quotation system on which those shares are then
traded. If the shares are not then traded on any exchange or quotation
system, the fair market value will be the market price on the relevant date
as determined in good faith by AMLI's board of trustees.
From and after the purported transfer to the purported transferee of
the excess shares, the purported transferee will cease to be entitled to
distributions, voting rights and other benefits with respect to the excess
shares except the right to payment on the transfer of the excess shares as
described above. If the purported transferee receives any distributions on
excess shares prior to AMLI's discovery that those excess shares have been
transferred in violation of the provisions of AMLI's declaration of trust,
the purported transferee must repay those distributions to AMLI upon
demand.
6
If the restrictions on transferability and ownership are determined
to be void, invalid or unenforceable by any court of competent
jurisdiction, then AMLI may treat the purported transferee of any excess
shares to have acted as an agent of AMLI in acquiring those excess shares
and to hold those excess shares on behalf of AMLI.
All certificates evidencing shares will bear a legend referring to
the restrictions described above.
All persons who own, directly or by virtue of the attribution
provisions of the Internal Revenue Code, more than 5%, or such other
percentage between 0.5% and 5%, as provided in the rules and regulations of
the Internal Revenue Code, of the number or value of AMLI's outstanding
shares must give a written notice containing certain information to AMLI by
January 31 of each year. In addition, each shareholder is upon demand
required to disclose to AMLI in writing information with respect to its
direct, indirect and constructive ownership of AMLI's shares as AMLI's
board of trustees deems reasonably necessary to comply with the provisions
of the Internal Revenue Code applicable to a REIT, to determine AMLI's
status as a REIT, to comply with the requirements of any taxing authority
or governmental agency or to determine any such compliance.
The restrictions on share ownership in AMLI's declaration of trust
are designed to protect the REIT status of AMLI. The restrictions could
have the effect of discouraging a takeover or other transaction in which
holders of some, or a majority, of the common shares 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 interest.
INDEMNIFICATION OF TRUSTEES AND OFFICERS
As permitted by Maryland law, AMLI's declaration of trust provides
that a trustee or officer of AMLI will not be liable for money damages to
AMLI or the shareholders for any act or omission in the performance of his
or her duties, except to the extent that (1) the person actually received
an improper benefit or (2) the person's action or failure to act was the
result of active and deliberate dishonesty and was material to the cause of
action adjudicated.
AMLI's officers and trustees are and will be indemnified under AMLI's
declaration of trust and bylaws and the partnership agreement of AMLI, L.P.
against certain liabilities. AMLI's declaration of trust requires AMLI to
indemnify its trustees and officers against claims and liabilities and
reasonable expenses actually incurred by them in connection with any claim
or liability by reason of their services in those or other capacities
unless it is established that:
(1) the act or omission of the trustee or officer was material to
the matter giving rise to the proceeding and was committed in
bad faith or was the result of active and deliberate
dishonesty;
(2) the trustee or officer actually received an improper personal
benefit; or
(3) in the case of any criminal proceeding, the trustee had
reasonable cause to believe that the act or omission was
unlawful.
7
However, AMLI may not indemnify for an adverse judgment in a suit by
or in the right of AMLI. As permitted by Maryland law, AMLI's declaration
of trust allows AMLI to advance reasonable expenses to a trustee upon
AMLI's receipt of (1) a written affirmation by the trustee of his or her
good faith belief that he or she has met the standard of conduct necessary
for indemnification by AMLI and (2) a written undertaking by or on his or
her behalf to repay the amount paid or reimbursed by AMLI if it is
ultimately determined that the trustee did not meet the standard of
conduct. Additionally, AMLI has entered into indemnification agreements
with AMLI's officers and trustees providing substantially the same scope of
coverage afforded by provisions in AMLI's declaration of trust.
The partnership agreement of AMLI, L.P. also provides for
indemnification of AMLI and its officers and trustees to the same extent
indemnification is provided to officers and trustees of AMLI in its
declaration of trust. In addition, the partnership agreement of AMLI, L.P.
limits the liability of AMLI to AMLI, L.P. and its partners to the same
extent the liability of AMLI's officers and trustees to AMLI and its
shareholders is limited under AMLI's declaration of trust.
SHAREHOLDER LIABILITY
Both the Maryland statutory law governing REITs and AMLI's
declaration of trust provide that shareholders shall not be personally or
individually liable for any debt, act, omission or obligation of AMLI or
AMLI's board of trustees. AMLI's declaration of trust further provides
that AMLI shall indemnify and hold each shareholder harmless from all
claims and liabilities to which the shareholder may become subject by
reason of his or her being or having been a shareholder. AMLI shall
reimburse each shareholder for all legal and other expenses reasonably
incurred by the shareholder in connection with any such claim or liability,
provided that the claim or liability did not arise from the shareholder's
bad faith, willful misconduct or gross negligence, and the shareholder
gives AMLI prompt notice of the claim or liability and permits AMLI to
conduct the defense of the claim or liability.
In addition, AMLI's policy is to include a clause in its contracts,
including the partnership agreement of AMLI, L.P., providing that
shareholders assume no personal liability for obligations entered into on
behalf of AMLI. Nevertheless, with respect to tort claims, contractual
claims where shareholder liability is not so negated, claims for taxes and
some statutory liabilities, the shareholders may, in some jurisdictions, be
personally liable to the extent that those claims are not satisfied by
AMLI. Inasmuch as AMLI carries public liability insurance which it
considers adequate, any risk of personal liability to shareholders is
limited to situations in which AMLI's assets plus its insurance coverage
would be insufficient to satisfy the claims against AMLI and its
shareholders.
8
DESCRIPTION OF PROVISIONS OF MARYLAND LAW AND OF
AMLI'S DECLARATION OF TRUST AND BYLAWS
The following description of some general provisions of Maryland law
and of AMLI's declaration of trust and bylaws is not complete and you
should refer to Maryland law, AMLI's declaration of trust and AMLI's bylaws
for more information.
BOARD OF TRUSTEES
AMLI's declaration of trust provides that AMLI's board of trustees
will have not less than three nor more than fifteen trustees, as determined
from time to time by AMLI's board of trustees. AMLI's declaration of trust
further provides that a majority of AMLI's trustees must be "disinterested
trustees." Disinterested trustees are persons who are not affiliated with
AMLI Realty Co., which has been succeeded by UICI, and its affiliates and
successors. The trustees are divided into three classes. Each trustee will
hold office for three years and until his or her successor is duly elected
and qualified. At each annual meeting of shareholders, the successors to
the class of trustees whose term expires at that meeting will be elected to
hold office for three years.
A majority of the trustees then in office, even if less than a
quorum, may fill vacancies on AMLI's board of trustees, except that a
vacancy resulting from an increase in the number of trustees will be filled
by a majority of the entire board of trustees. In the event that a
majority of AMLI's board of trustees are not disinterested trustees, the
remaining disinterested trustees, or, if there are no disinterested
trustees, the remaining members of AMLI's board of trustees, must promptly
appoint that number of disinterested trustees necessary to cause the board
to include a majority of disinterested trustees. Any trustees so appointed
by the trustees then in office will hold office until the next annual
meeting of shareholders.
The classified board provision may have the effect of making it more
difficult for a third party to acquire control of AMLI without the consent
of AMLI's board of trustees, even if a change in control would be
beneficial to AMLI and its shareholders.
BUSINESS COMBINATIONS
Under Maryland law, certain "business combinations," including a
merger, consolidation, share exchange, or, in certain circumstances, an
asset transfer or issuance or reclassification of equity securities,
between a Maryland REIT and an "interested shareholder" or an affiliate of
an interested shareholder are prohibited for five years after the most
recent date on which the interested shareholder became an interested
shareholder. After the five-year period, these business combinations must
be recommended by the board of trustees of the REIT and approved by at
least 80% of the votes entitled to be cast by shareholders of the REIT,
including at least two-thirds of the votes entitled to be cast by
shareholders other than the interested shareholder with whom the business
combination is to be effected, unless, among other things, the REIT's
common shareholders receive a minimum price (as defined under Maryland law)
for their shares and they receive the consideration in cash or in the same
form as previously paid by the interested shareholder for its shares. An
"interested shareholder" is a person who either beneficially owns 10% or
more of the voting power of the REIT's outstanding shares or is an
affiliate of the REIT and, at any time during the prior two years,
beneficially owned 10% or more of the voting power of the REIT's then
outstanding shares. These provisions of Maryland law do not apply, however,
to business combinations which are approved or exempted by the board of
trustees of the REIT prior to the time that the interested shareholder
becomes an interested shareholder.
9
AMLI's declaration of trust exempts any business combination with
Gregory T. Mutz, Baldwin & Lyons, Inc., an Indiana corporation, AMLI Realty
Co., which has been succeeded by UICI, and their affiliates and successors
from these provisions of Maryland law.
CONTROL SHARE ACQUISITIONS
Maryland law provides that "control shares" of a Maryland REIT
acquired in a "control share acquisition" have no voting rights except to
the extent approved by a vote of two-thirds of the votes entitled to be
cast by shareholders other than the acquiror or officers or trustees who
are employees of the REIT. "Control shares" are voting shares which, if
aggregated with all other voting shares previously acquired by the acquiror
or in respect of which the acquiror is able to exercise voting power, would
entitle the acquiror to exercise at least one-tenth of the voting power in
electing trustees. Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained
shareholder approval. A "control share acquisition" means the acquisition
of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share
acquisition, upon satisfaction of certain conditions, including an
undertaking to pay expenses, may compel the board of trustees of the REIT
to call a special meeting of shareholders to be held within 50 days of
demand to consider voting rights for the shares. If no request for a
meeting is made, the REIT may itself present the question at any
shareholders' meeting.
If the shareholders do not approve voting rights at the meeting or if
the acquiring person does not deliver an acquiring person statement as
required by Maryland law, then, subject to certain conditions and
limitations, the REIT may redeem any or all of the control shares, except
those for which voting rights have previously been approved, for fair
market value. Fair market value will be determined without regard to the
absence of voting rights for the control shares as of the date of the last
control share acquisition by the acquiror or of any meeting of shareholders
at which the voting rights of those shares were considered and not
approved. If the shareholders approve voting rights for control shares and
the acquiror becomes entitled to exercise a majority of the voting power in
electing trustees, all other shareholders may exercise appraisal rights.
The fair value of the shares for purposes of the appraisal rights may not
be less than the highest price per share paid by the acquiror for the
control shares.
The control share acquisition law does not apply to shares acquired
in a merger, consolidation or share exchange if the REIT is a party to the
transaction, or to acquisitions approved or exempted by the declaration of
trust or bylaws of the REIT. AMLI's declaration of trust exempts Gregory
T. Mutz, Baldwin & Lyons, AMLI Realty Co., which has been succeeded by
UICI, and their affiliates and successors from these provisions of Maryland
law.
10
AMENDMENTS TO AMLI'S DECLARATION OF TRUST
Maryland law requires the shareholder of a REIT to approve any
amendment to its declaration of trust, with certain exceptions. As
permitted by Maryland law, AMLI's declaration of trust permits AMLI's board
of trustees, by a two-thirds vote, to amend AMLI's declaration of trust to
enable AMLI to qualify as a REIT. A majority of the votes entitled to be
cast by shareholders must approve any other amendment to AMLI's declaration
of trust.
TERMINATION OF AMLI
AMLI has a perpetual term and intends to continue its operations for
an indefinite time period. However, AMLI's declaration of trust permits the
termination of AMLI after the holders of a majority of AMLI's outstanding
shares approve the termination.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
For a shareholder to properly bring nominations or other business
before an annual meeting of shareholders, AMLI's bylaws require the
shareholder to deliver a notice to the secretary, absent specified
circumstances, not less than 60 days nor more than 90 days prior to the
first anniversary of the preceding year's annual meeting setting forth:
(1) as to each person whom the shareholder proposes to
nominate for election or reelection as a trustee, all
information relating to that person that is required to be
disclosed in solicitations of proxies for the election of
trustees pursuant to Regulation 14A of the Securities Exchange
Act of 1934;
(2) as to any other business that the shareholder proposes to
bring before the meeting, a brief description of that business,
the reasons for conducting that business at the meeting and any
material interest of that shareholder and of the beneficial
owner, if any, on whose behalf the proposal is made; and
(3) as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or
proposal is made, the name and address of that shareholder as
they appear on AMLI's stock records and of that beneficial
owner and the number of shares which are owned beneficially and
of record by that shareholder and that beneficial owner.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a description of the Federal income tax consequences
to AMLI and its shareholders of the treatment of AMLI as a REIT. Since
these provisions are highly technical and complex, each prospective
purchaser of the common shares is urged to consult his or her own tax
advisor with respect to the Federal, state, local, foreign and other tax
consequences of the purchase, ownership and disposition of the common
shares.
Based upon certain representations of AMLI, in the opinion of Mayer,
Brown & Platt, counsel to AMLI, AMLI has been organized in conformity with
the requirements for qualification as a REIT, and its proposed method of
operation described in this prospectus and as represented by management
will enable it to satisfy the requirements for such qualification.
11
This opinion is conditioned upon representations made by AMLI as to
factual matters relating to AMLI's organization and intended or expected
manner of operation. In addition, this opinion is based on the law
existing and in effect on the date hereof. AMLI's qualification and
taxation as a REIT will depend on AMLI's ability to meet on a continuing
basis, through actual operating results, asset composition, distribution
levels and diversity of stock ownership, the various qualification tests
imposed under the Internal Revenue Code discussed below. Mayer, Brown &
Platt will not review compliance with these tests on a continuing basis.
No assurance can be given that AMLI will satisfy such tests on a continuing
basis.
In brief, if certain detailed conditions imposed by the REIT
provisions of the Internal Revenue Code are met, entities such as AMLI that
invest primarily in real estate and that otherwise would be treated for
Federal income tax purposes as corporations, are generally not taxed at the
corporate level on their "REIT taxable income" that is currently
distributed to shareholders. This treatment substantially eliminates the
"double taxation", at both the corporate and shareholder levels, that
generally results from the use of corporations. However, as discussed in
greater detail below, such an entity remains subject to tax in certain
circumstances even if it qualifies as a REIT.
If AMLI fails to qualify as a REIT in any year, however, it will be
subject to Federal income taxation as if it were a domestic corporation,
and its shareholders will be taxed in the same manner as shareholders of
ordinary corporations. In this event, AMLI could be subject to potentially
significant tax liabilities, and therefore the amount of cash available for
distribution to its shareholders would be reduced or eliminated.
AMLI's board of trustees believes that AMLI has been organized and
operated and currently intends that AMLI will continue to operate in a
manner that permits it to qualify as a REIT. There can be no assurance,
however, that this expectation will be fulfilled, since qualification as a
REIT depends on AMLI continuing to satisfy numerous asset, income and
distribution tests described below, which in turn will be dependent in part
on AMLI's operating results.
The following summary is based on the Internal Revenue Code, its
legislative history, administrative pronouncements, judicial decisions and
Treasury regulations, subsequent changes to any of which may affect the tax
consequences described herein, possibly on a retroactive basis. The
following summary is not exhaustive of all possible tax considerations and
does not give a detailed discussion of any state, local, or foreign tax
considerations, nor does it discuss all of the aspects of Federal income
taxation that may be relevant to a prospective shareholder in light of his
or her particular circumstances or to various types of shareholders
(including insurance companies, tax-exempt entities, financial institutions
or broker-dealers, foreign corporations and persons who are not citizens or
residents of the United States) subject to special treatment under the
Federal income tax laws.
12
TAXATION OF AMLI
GENERAL
In any year in which AMLI qualifies as a REIT, it will not, in
general, be subject to Federal income tax on that portion of its REIT
taxable income or capital gain which is distributed to shareholders. AMLI
may, however, be subject to tax at normal corporate rates upon any taxable
income or capital gain not distributed. To the extent that AMLI elects to
retain and pay income tax on its net long-term capital gain, shareholders
are required to include their proportionate share of AMLI's undistributed
long-term capital gain in income but receive a credit for their share of
any taxes paid on the gain by AMLI.
Notwithstanding its qualification as a REIT, AMLI may also be subject
to taxation in other circumstances. If AMLI should fail to satisfy either
the 75% or the 95% gross income test, as discussed below, and nonetheless
maintains its qualification as a REIT because other requirements are met,
it will be subject to a 100% tax on the greater of the amount by which AMLI
fails to satisfy either the 75% test or the 95% test, multiplied by a
fraction intended to reflect AMLI's profitability. AMLI will also be
subject to a tax of 100% on net income from any "prohibited transaction,"
as described below, and if AMLI has net income from the sale or other
disposition of "foreclosure property" which is held primarily for sale to
customers in the ordinary course of business or other non-qualifying income
from foreclosure property, it will be subject to tax on the income from
foreclosure property at the highest corporate rate. In addition, if AMLI
should fail to distribute during each calendar year at least the sum of:
(1) 85% of its REIT ordinary income for the year;
(2) 95% of its REIT capital gain net income for the year,
other than capital gains AMLI elects to retain and pay tax on
as described below; and
(3) any undistributed taxable income from prior years,
AMLI would be subject to a 4% excise tax on the excess of the required
distribution over the amounts actually distributed.
To the extent that AMLI elects to retain and pay income tax on its
long-term capital gain, the retained amounts will be treated as having been
distributed for purposes of the 4% excise tax. AMLI may also be subject to
the corporate "alternate minimum tax," as well as tax in various situations
and on some types of transactions not presently contemplated. AMLI will
use the calendar year both for Federal income tax purposes and for
financial reporting purposes.
In order to qualify as a REIT, AMLI must meet, among others, the
following requirements:
SHARE OWNERSHIP TEST
AMLI's shares must be held by a minimum of 100 persons for at least
335 days in each taxable year, or a proportional number of days in any
short taxable year. In addition, at all times during the second half of
each taxable year, no more than 50% in value of the shares of AMLI may be
owned, directly or indirectly and by applying constructive ownership rules,
by five or fewer individuals, which for this purpose includes some tax-
exempt entities. Any shares held by a qualified domestic pension or other
retirement trust will be treated as held directly by its beneficiaries in
proportion to their actuarial interest in such trust rather than by such
trust. If AMLI complies with the Treasury regulations for ascertaining its
actual ownership and did not know, or exercising reasonable diligence would
not have reason to know, that more than 50% in value of its outstanding
shares were held, actually or constructively, by five or fewer individuals,
then AMLI will be treated as meeting such requirement.
13
In order to ensure compliance with the 50% test, AMLI has placed
restrictions on the transfer of its shares to prevent additional
concentration of ownership. Moreover, to evidence compliance with these
requirements under Treasury regulations, AMLI must maintain records which
disclose the actual ownership of its outstanding shares and the regulations
impose penalties against AMLI for failing to do so. In fulfilling its
obligations to maintain records, AMLI must and will demand written
statements each year from the record holders of designated percentages of
shares disclosing the actual owners of the shares as prescribed by Treasury
regulations. A list of those persons failing or refusing to comply with
the demand must be maintained as a part of AMLI's records. A shareholder
failing or refusing to comply with AMLI's written demand must submit with
his or her tax returns a similar statement disclosing the actual ownership
of AMLI's shares and other information. In addition, AMLI's declaration of
trust provides restrictions on the transfer of shares that are intended to
assist AMLI in continuing to satisfy the share ownership requirements. For
more information, see "Description of Common Shares--Restrictions on size
of holdings of shares." AMLI intends to enforce the 5% limitation on
ownership of its shares to assure that its qualification as a REIT will not
be compromised.
ASSET TESTS
At the close of each quarter of AMLI's taxable year, AMLI must
satisfy tests relating to the nature of its assets determined in accordance
with generally accepted accounting principles. First, at least 75% of the
value of AMLI's total assets must be represented by interests in real
property, interests in mortgages on real property, shares in other REITs,
cash, cash items, government securities and qualified temporary
investments. Second, for taxable years beginning after December 31, 2000
not more than 20% of the value of AMLI's total assets may be represented by
securities of one or more "taxable REIT subsidiaries." Third, although the
remaining 25% of AMLI's assets generally may be invested without
restriction, securities in this class may not exceed, in the case of
securities of any one non-government issuer (the "Single Issuer Tests"),
except with respect to a taxable REIT subsidiary, (1) 5% of the value of
AMLI's total assets, (2) 10% of the outstanding voting securities of the
issuer or (3) for taxable years beginning after December 31, 2000, 10% of
the total value of the outstanding securities of the issuer (the "10% Value
Test"). The 10% Value Test was added by the Tax Extension Act of 1999.
For purposes of the 10% Value Test, securities are generally defined to
exclude certain safe-harbor debt owned by a REIT if the issuer is an
individual or if the REIT owns no other securities of the issuer; where a
REIT owns securities of a partnership, safe-harbor debt is excluded from
the definition of securities only if the REIT owns at least 20% or more of
the profits interest in the partnership.
A broad exception to the Single Issuer Tests applies in the case of a
"taxable REIT subsidiary" that meets certain requirements. To qualify as a
taxable REIT subsidiary, both the REIT and the subsidiary corporation must
join in an election. In addition, any corporation (other than another
REIT) of which a taxable REIT subsidiary owns, directly or indirectly, more
than 35% of the vote or value is automatically treated as a taxable REIT
subsidiary. AMLI and each of the AMLI Management Company and AMLI
Institutional Advisors, Inc. have made taxable REIT subsidiary elections.
14
GROSS INCOME TESTS
There are two separate percentage tests relating to the sources of
AMLI's gross income which must be satisfied for each taxable year. For
purposes of these tests, where AMLI invests in a partnership, such as AMLI,
L.P., AMLI will be treated as receiving its share of the income and loss of
the partnership, and the gross income of the partnership will retain the
same character in the hands of AMLI as it has in the hands of the
partnership.
1. THE 75% TEST. At least 75% of AMLI's gross income for the
taxable year must be "qualifying income." Qualifying income generally
includes:
(1) rents from real property, except as modified below;
(2) interest on obligations collateralized by mortgages on,
or interests in, real property;
(3) gains from the sale or other disposition of "non-dealer
property," which means interests in real property and real
estate mortgages, other than gain from property held primarily
for sale to customers in the ordinary course of AMLI's trade or
business;
(4) dividends or other distributions on shares in other
REITs, as well as gain from the sale of the shares;
(5) abatements and refunds of real property taxes;
(6) income from the operation, and gain from the sale, of
"foreclosure property," which means property acquired at or
in lieu of a foreclosure of the mortgage collateralized by
the property;
(7) commitment fees received for agreeing to make loans
collateralized by mortgages on real property or to purchase or
lease real property; and
(8) certain qualified temporary investment income
attributable to the investment of new capital received by AMLI
in exchange for its shares during the one-year period following
the receipt of the capital.
Rents received by AMLI, L.P. from a tenant (other than a taxable REIT
subsidiary) will not qualify as rents from real property in satisfying the
75% gross income test described above, or the 95% gross income test
described below, if AMLI, or an owner of 10% or more of AMLI, directly or
constructively owns 10% or more of the tenant. However, rents that are
paid by taxable REIT subsidiaries and that meet a limited rental exception
(when 90% of space is leased at comparable rents) quality as rents from
real property. In addition, if rent attributable to personal property
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 the personal property will not qualify as rents from real
property. Moreover, an amount received or accrued will not qualify as
rents from real property or as interest income for purposes of the 75% and
95% gross income tests if it is based in whole or in part on the income or
profits of any person, although an amount 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.
Finally, for rents received to qualify as rent from real property, AMLI
generally must not operate or manage the property or furnish or render
services to residents, other than through an "independent contractor" from
15
whom AMLI derives no income, except that the "independent contractor"
requirement does not apply to the extent that the services provided by AMLI
are "usually or customarily rendered" in connection with the rental of
multifamily units for occupancy only, or are not otherwise considered
"rendered to the occupant for his convenience." However, a REIT is
permitted to render a DE MINIMIS amount of impermissible services to
tenants, or in connection with the management of property, and still treat
amounts received with respect to that property as rent from real property.
The amount received or accrued by the REIT during the taxable year for the
impermissible services with respect to a property may not exceed one
percent of all amounts received or accrued by the REIT directly or
indirectly from the property. The amount received for any service or
management operation for this purpose shall be deemed to be not less than
150% of the direct cost of the REIT in furnishing or rendering the service
or providing the management or operation. However, the DE MINIMIS amount
itself will not qualify as "rent from real property." A taxable REIT
subsidiary can engage in certain business activities that under prior law
could disqualify a REIT because the taxable REIT subsidiary's activities
and relationship with the REIT could have prevented certain income from
qualifying as rents from real property. Effective December 31, 2000, the
taxable REIT subsidiary can provide services to tenants of REIT property
(even if such services were not considered services customarily furnished
in connection with the rental of real property), and can manage or operate
properties, generally for third parties, without causing amounts received
or accrued directly or indirectly by the REIT for such activities to fail
to be treated as rents from real property.
2. THE 95% TEST. In addition to deriving 75% of its gross income
from the sources listed above, at least 95% of AMLI's gross income for the
taxable year must be derived from the above-described qualifying income, or
from dividends, interest or gains from the sale or disposition of shares or
other securities that are not dealer property. Dividends, other than on
REIT shares, and interest on any obligations not collateralized by an
interest in real property are included for purposes of the 95% test, but
not for purposes of the 75% test. In addition, payments to AMLI under an
interest rate swap, cap agreement, option, futures contract, forward rate
agreement or any similar financial instrument entered into by AMLI to hedge
indebtedness incurred or to be incurred, and any gain from the sale or
other disposition of these instruments, are treated as qualifying income
for purposes of the 95% test, but not for purposes of the 75% test.
AMLI believes that, for purposes of both the 75% and the 95% gross
income tests, its investment in the communities and the co-investment
communities through AMLI, L.P. will, in major part, give rise to qualifying
income in the form of rents, and that gains on the sales of the communities
and the co-investment communities, or AMLI's interest in AMLI, L.P.,
generally will also constitute qualifying income.
AMLI Management Company receives and anticipates continuing to
receive fee income in consideration of the performance of property
management and other services with respect to properties not owned by AMLI
or AMLI, L.P. and receives and anticipates continuing to receive fee income
in consideration of the performance of general contracting and construction
management services. AMLI Institutional Advisors receives and anticipates
continuing to receive fee income for providing investment advisory
services. Substantially all the income derived by AMLI from the service
companies will be in the form of dividends and interest on the securities
of each of the service companies owned by AMLI, L.P. The dividends and
interest income will satisfy the 95% gross income test, but not the 75%
gross income test, as discussed above.
16
For purposes of determining whether AMLI complies with the 75% and
95% income tests, gross income does not include income from prohibited
transactions. A "prohibited transaction" is a sale of dealer property,
excluding foreclosure property, unless the property is held by AMLI for at
least four years and certain other requirements relating to the number of
properties sold in a year, their tax bases, and the cost of improvements
made thereto are satisfied. For more information, see "--Taxation of AMLI-
General."
Even if AMLI fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, it may still qualify as a REIT for such
year if it is entitled to relief under provisions of the Internal Revenue
Code. These relief provisions will generally be available if: (1) AMLI's
failure to comply was due to reasonable cause and not to willful neglect;
(2) AMLI reports the nature and amount of each item of its income included
in the tests on a schedule attached to its tax return; and (3) any
incorrect information on this schedule is not due to fraud with intent to
evade tax. If these relief provisions apply, however, AMLI will
nonetheless be subject to a special tax upon the greater of the amount by
which it fails either the 75% or 95% gross income test for that year.
ANNUAL DISTRIBUTION REQUIREMENTS
In order to qualify as a REIT, AMLI is required to make
distributions, other than capital gain dividends, to its shareholders each
year in an amount at least equal to
(1) the sum of
(a) 90% of AMLI's REIT taxable income, computed without
regard to the dividends paid deduction and REIT net
capital gain, plus
(b) 90% of its net income after tax, if any, from foreclosure
property, minus
(2) the sum of some items of excess non-cash income.
Such distributions must be paid in the taxable year to which they relate,
or in the following taxable year if declared before AMLI timely files its
tax return for such year and if paid on or before the first regular
dividend payment after such declaration. To the extent that AMLI does not
distribute all of its net capital gain or distributes at least 90% but less
than 100%, of its REIT taxable income, as adjusted, it will be subject to
tax on the undistributed amount at regular capital gains or ordinary
corporate tax rates, as the case may be. For taxable years beginning after
August 5, 1997, a REIT is permitted, with respect to undistributed net
long-term capital gains it received during the taxable year, to designate
in a notice mailed to shareholders within 60 days of the end of the taxable
year, or in a notice mailed with its annual report for the taxable year,
such amount of such gains which its shareholders are to include in their
taxable income as long-term capital gains. Thus, if AMLI made this
designation, the shareholders of AMLI would include in their income as
long-term capital gains their proportionate share of the undistributed net
capital gains as designated by AMLI and AMLI would have to pay the tax on
such gains within 30 days of the close of its taxable year. Each
shareholder of AMLI would be deemed to have paid such shareholder's share
of the tax paid by AMLI on such gains, which tax would be credited or
refunded to the shareholder. A shareholder would increase his tax basis in
his AMLI stock by the difference between the amount of income to the holder
resulting from the designation less the holder's credit or refund for the
tax paid by AMLI.
17
AMLI intends to make timely distributions sufficient to satisfy the
annual distribution requirements. It is possible that AMLI may not have
sufficient cash or other liquid assets to meet the 90% distribution
requirement, due to timing differences between the actual receipt of income
and actual payment of expenses on the one hand, and the inclusion of such
income and deduction of such expenses in computing AMLI's REIT taxable
income on the other hand. To avoid any problem with the 90% distribution
requirement, AMLI will closely monitor the relationship between its REIT
taxable income and cash flow and, if necessary, intends to borrow funds in
order to satisfy the distribution requirement. However, there can be no
assurance that such borrowing would be available at such time.
If AMLI fails to meet the 90% distribution requirement as a result of
an adjustment to AMLI's tax return by the Internal Revenue Service, AMLI
may retroactively cure the failure by paying a "deficiency dividend," plus
applicable penalties and interest, within a specified period.
FAILURE TO QUALIFY
If AMLI fails to qualify for taxation as a REIT in any taxable year
and relief provisions do not apply, AMLI will be subject to tax, including
applicable alternative minimum tax, on its taxable income at regular
corporate rates. Distributions to shareholders in any year in which AMLI
fails to qualify as a REIT will not be deductible by AMLI, nor generally
will they be required to be made under the Internal Revenue Code. In that
event, to the extent of current and accumulated earnings and profits, all
distributions to shareholders will be taxable as ordinary income, and
subject to limitations in the Internal Revenue Code, corporate distributees
may be eligible for the dividends-received deduction. Unless entitled to
relief under specific statutory provisions, AMLI also will be disqualified
from reelecting taxation as a REIT for the four taxable years following the
year during which qualification was lost.
18
TAXATION OF AMLI'S SHAREHOLDERS
TAXATION OF TAXABLE DOMESTIC SHAREHOLDERS
As long as AMLI qualifies as a REIT, distributions made to AMLI's
taxable domestic shareholders 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 will not be eligible for the
dividends-received deduction for corporations. Distributions and
undistributed amounts that are designated as capital gain dividends will be
taxed as long-term capital gains, to the extent they do not exceed AMLI's
actual net capital gain for the taxable year, without regard to the period
for which the shareholder has held its shares. However, corporate
shareholders may be required to treat up to 20% of some capital gain
dividends as ordinary income. To the extent that AMLI makes distributions
in excess of current and accumulated earnings and profits, these
distributions are treated first as a tax-free return of capital to the
shareholder, reducing the tax basis of a shareholder's shares by the amount
of the distribution, but not below zero, with distributions in excess of
the shareholder's tax basis taxable as capital gains, if the shares are
held as a capital asset. In addition, any dividend declared by AMLI in
October, November or December of any year and payable to a shareholder of
record on a specific date in those months shall be treated as both paid by
AMLI and received by the shareholder on December 31 of that year, provided
that the dividend is actually paid by AMLI during January of the following
calendar year. Shareholders may not include in their individual income tax
returns any net operating losses or capital losses of AMLI. Federal income
tax rules may also require that minimum tax adjustments and preferences be
apportioned to AMLI shareholders.
In general, any loss upon a sale or exchange of shares by a
shareholder who has held the shares for six months or less, after applying
holding period rules, will be treated as a long-term capital loss, to the
extent of distributions from AMLI were required to be treated by the
shareholder as long-term capital gains.
BACKUP WITHHOLDING
AMLI will report to its domestic shareholders and to the Internal
Revenue Service the amount of distributions paid during each calendar year,
and the amount of tax withheld, if any, with respect thereto. Under the
backup withholding rules, a shareholder may be subject to backup
withholding at applicable rates with respect to distributions paid unless
the shareholder is a corporation or comes within other exempt categories
and, when required, demonstrates this fact or provides a taxpayer
identification number, certifies as to no loss of exemption from backup
withholding, and otherwise complies with applicable requirements of the
backup withholding rules. A shareholder that does not provide AMLI with
its correct taxpayer identification number may also be subject to penalties
imposed by the Internal Revenue Service. Any amount paid as backup
withholding will be credited against the shareholder's income tax
liability. In addition, AMLI may be required to withhold a portion of
capital gain distributions made to any shareholders who fail to certify
their non-foreign status to AMLI.
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OTHER TAX CONSIDERATIONS
THE SERVICE COMPANIES
A portion of the cash to be used by AMLI, L.P. to fund distributions
to partners, including AMLI, is expected to come from the service companies
through dividends and interest on the securities of the service companies
held by AMLI, L.P.. In addition, the service companies will each receive
income from AMLI, AMLI, L.P. and unrelated third parties. Because the
service companies, AMLI, and AMLI, L.P. are related through stock or
partnership ownership, income of the service companies from services
performed for AMLI and AMLI, L.P. may be subject to rules under which
additional income may be allocated to the service companies. On account of
these ownership relationships, the allocation of some expenses and
reimbursements thereof among the service companies, AMLI and AMLI, L.P.,
could be subject to additional scrutiny by the Internal Revenue Service.
Each of the service companies will pay Federal and state income taxes
at the full applicable corporate rates on its income prior to payment of
any dividends. Each of the service companies will attempt to minimize the
amount of the taxes, but there can be no assurance whether or to the extent
to which measures taken to minimize taxes will be successful. To the
extent that the service companies are required to pay Federal, state or
local taxes, the cash available for distribution by AMLI to shareholders
will be reduced accordingly.
POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX CONSEQUENCES
Prospective shareholders should recognize that the present federal
income tax treatment of an investment in AMLI may be modified by
legislative, judicial or administrative action at any time and that any
such action may affect investments and commitments previously made. The
rules dealing with federal income taxation are constantly under review by
persons involved in the legislative process and by the Internal Revenue
Service and the Treasury, resulting in revisions of regulations and revised
interpretations of established concepts as well as statutory changes.
Revisions in federal tax laws and interpretations of these laws could
adversely affect the tax consequences of an investment in AMLI.
STATE AND LOCAL TAXES
AMLI and its shareholders may be subject to state or local taxation
in various jurisdictions, including those in which it or they transact
business or reside. The state and local tax treatment of AMLI and its
shareholders may not conform to the Federal income tax consequences
discussed above. Consequently, you should consult your own tax advisor
regarding the effect of state and local tax laws on an investment in the
common shares of AMLI.
You are advised to consult the applicable prospectus supplement, as well as
your tax advisor regarding the specific tax consequences to you of the
purchase, ownership and sale of any of the securities described in this
prospectus, including the Federal, state, local, foreign, and other tax
consequences of the purchase, ownership, sale and election and of potential
changes in applicable tax laws.
20
SELLING SHAREHOLDERS
The table below lists (1) each person who may receive common shares
covered by this prospectus in exchange for units and offer to resell those
common shares using this prospectus, (2) the number of common shares which
each person may receive in exchange for their units and offer to resell
using this prospectus and (3) the total number of common shares which each
person owned before this offering, which includes common shares they could
receive by exchanging their units. Since the holders of units may exchange
all, some or none of their units for common shares and may then sell all,
some or none of their common shares, AMLI cannot determine the number of
common shares which each person will own after this offering. If, however,
any person listed below converted all of their units into common shares,
none of them would hold one percent or more of AMLI's outstanding shares.
None of the persons listed below has had in the past three years a material
relationship with AMLI or its affiliates.
Number of
Common Shares Total Number of
Which May Be Common Shares
Offered Using Owned Before
this Prospectus this Offering
--------------- --------------
David H. Addis and Hemda Z. Addis,
as joint tenants with right
of survivorship 10,298 1,000
Jeremy A. Addis 5,428 0
Preston Butcher 45,262 0
William C. Debruler 79,749 0
Morton J. Harris, as Trustee
of the Mort Trust 20,068 0
Herbert A. Kaufman 60,757 0
Robert T. Kaufman, as Trustee
of the Robert T. Kaufman
Living Trust 60,757 0
Robert J. Krull 21,152 0
NWP Family Partnership 9,968 0
James Pickus 9,968 0
Jeffry Pickus 9,968 0
Joel Pickus 9,968 0
Louis Pickus 9,968 0
Theodore Pickus 9,968 0
Diane Pilibosian, as Trustee of the
Allan and Meline Pickus 1995
Children's Trust 1,993 0
Diane Pilibosian, as Trustee of the
Allan and Meline Pickus 1995
Grandchildren's Trust 7,974 0
Michael B. Susman, as Trustee of the
Michael B. Susman Trust 15,726 0
TMC Apartments, L.L.C. 109,748 0
Morris Weiser, as Trustee of the
Morris Trust 20,068 0
Robert Witucki, as Trustee of the
Robert A. Witucki Trust 9,968 0
Michael Zoellner 41,232 0
21
PLAN OF DISTRIBUTION
This prospectus relates to the offer and sale by selling shareholders
of 569,988 common shares from time to time. AMLI has registered the common
shares to enable the holders of units to resell the common shares into
which those units may be converted, but the registration of the common
shares does not necessarily mean that those shareholders will offer or sell
any of the common shares.
AMLI will not receive any of the proceeds when the selling
shareholders sell any of those common shares. The selling shareholders and
any agents or broker-dealers that participate in the distribution of those
common shares may be deemed to be underwriters under the Securities Act of
1933, and any commissions they receive and any profits they earn from
selling the common shares may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
Persons who receive common shares when they exchange their units may
use this prospectus and the registration statement of which this prospectus
is a part to offer and sell those common shares. The selling shareholders
may sell the common shares from time to time at varying prices determined
at the time of sale or at negotiated prices.
AMLI is registering the shares pursuant to or as required by the
provisions of the registration rights agreements among AMLI, AMLI, L.P. and
each of the selling shareholders.
AMLI has agreed to pay all expenses incurred in registering the
common shares, including fees and disbursements of AMLI's counsel.
However, the selling shareholders must pay their own brokerage discounts
and commissions and the costs, fees and disbursements of their own counsel.
AMLI estimates that the expenses in connection with the registration and
sale of the shares registered hereby will be approximately 34,771 ,
all of which AMLI will pay.
Each holder of units must indemnify AMLI and its trustees, officers
and any person who controls AMLI against some losses, liabilities, claims,
damages and expenses arising under the securities laws with respect to
written information furnished to AMLI by that holder of units.
EXPERTS
The consolidated financial statements and schedule of AMLI 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
and in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
Mayer, Brown & Platt will issue an opinion for AMLI on the validity
of the common shares offered. Mayer, Brown & Platt has in the past
represented and is currently representing AMLI and some of its affiliates.
22
WHERE YOU CAN FIND MORE INFORMATION
AMLI files annual, quarterly and current reports, proxy statements
and other information with the SEC. AMLI's SEC filings are available to
the public over the Internet at the SEC's web site at http://www.sec.gov.
You may also read and copy any document AMLI files with the SEC at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference room. You may also read any document AMLI files with
the SEC at the offices of the NYSE.
We filed a registration statement on Form S-3 with the SEC. This
prospectus does not contain all of the information in the registration
statement. Please refer to the registration statement for more information
about us and our common stock. Statements in this prospectus about any
contract or any other document are not necessarily complete and you should
refer to the copy of that contract or other document which we filed as an
exhibit to the registration statement. You may read a copy of the
registration statement at any of the sources described above.
The SEC allows AMLI to "incorporate by reference" the information it
files with them, which means that AMLI can disclose important information
to you by referring you to those documents. The information incorporated
by reference is an important part of this prospectus, and information that
AMLI files later with the SEC will automatically update and supersede this
information. AMLI incorporates by reference the documents listed below and
any future filings made with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until this offering is
terminated.
. AMLI's Annual Report on Form 10-K for the year ended
December 31, 2000;
. AMLI's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 2001 and June 30, 2001;
. The description of AMLI's common shares contained in AMLI's
registration statement on Form 8-A; and
. The description of AMLI's preferred share purchase rights
contained in AMLI's registration statement on Form 8-A.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Secretary
AMLI Residential Properties Trust
125 South Wacker Drive
Chicago, IL 60606
(312) 443-1477
23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection
with the registration and sale of the shares registered hereby, all of
which will be paid by the registrant:
SEC registration fee . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . $3,271
Transfer agent fees. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Printing and duplicating expenses. . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Legal fees and expenses. . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Accounting fees and expenses . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Miscellaneous expenses . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
--------
Total. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . $34,771
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Maryland law, AMLI's declaration of trust provides
that a trustee or officer of AMLI will not be liable for money damages to
the registrant or the shareholders for any act or omission in the
performance of his or her duties, except to the extent that (1) the person
actually received an improper benefit or (2) the person's action or failure
to act was the result of active and deliberate dishonesty and was material
to the cause of action adjudicated.
The registrant's officers and trustees are and will be indemnified
under the registrant's declaration of trust and bylaws and the partnership
agreement of AMLI, L.P. against certain liabilities. The registrant's
declaration of trust requires the registrant to indemnify its trustees and
officers against claims and liabilities and reasonable expenses actually
incurred by them in connection with any claim or liability by reason of
their services in those or other capacities unless it is established that:
(1) the act or omission of the trustee or officer was material to
the matter giving rise to the proceeding and was committed in
bad faith or was the result of active and deliberate
dishonesty;
(2) the trustee or officer actually received an improper personal
benefit; or
(3) in the case of any criminal proceeding, the trustee had
reasonable cause to believe that the act or omission was
unlawful.
However, the registrant may not indemnify for an adverse judgment in
a suit by or in the right of AMLI. As permitted by Maryland law, the
registrant's declaration of trust allows the registrant to advance
reasonable expenses to a trustee upon the registrant's receipt of (1) a
written affirmation by the trustee of his or her good faith belief that he
or she has met the standard of conduct necessary for indemnification by the
II-1
registrant and (2) a written undertaking by or on his or her behalf to
repay the amount paid or reimbursed by the registrant if it is ultimately
determined that the trustee did not meet the standard of conduct.
Additionally, the registrant has entered into indemnification agreements
with the registrant's officers and trustees providing substantially the
same scope of coverage afforded by provisions in the registrant's
declaration of trust.
The partnership agreement of AMLI, L.P. also provides for
indemnification of the registrant and its officers and trustees to the same
extent indemnification is provided to officers and trustees of the
registrant in its declaration of trust. The partnership agreement of AMLI,
L.P. limits the liability of the registrant to AMLI, L.P. and its partners
to the same extent the liability of the registrant's officers and trustees
to the registrant and its shareholders is limited under the registrant's
declaration of trust.
The registrant has agreed to indemnify the selling shareholders and
their respective trustees, officers and controlling persons against certain
liabilities relating to the registration statement, including certain
liabilities under the Securities Act of 1933. Each selling shareholder has
agreed to indemnify the registrant and its trustees, officers and
controlling persons against certain liabilities relating to information
furnished by that selling shareholder to the registrant in writing for
inclusion in the registration statement, including certain liabilities
under the Securities Act of 1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
See the exhibit index which is incorporated by reference.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement; notwithstanding the
foregoing, any increase or decrease in the 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 Securities and
Exchange 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;
II-2
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not
apply if the information required to be included in a post
effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers or persons
controlling the registrant pursuant to the provisions set forth or
described in Item 15 of this registration statement, or otherwise, the
registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 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
trustee, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
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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 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
Chicago, State of Illinois on October 10 , 2001.
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ John E. Allen
----------------------------------------
John E. Allen
Vice Chairman of the Board of Trustees
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed by the
following persons in the capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
*
---------------------
Gregory T. Mutz Chairman of the
Board of Trustees
(Principal Executive Officer) October 10 ,
2001
*
---------------------
Robert J. Chapman Executive Vice President
(Principal Financial Officer) October 10 ,
2001
*
---------------------
Charles C. Kraft Treasurer
(Principal Accounting Officer) October 10 ,
2001
/s/ John E. Allen
---------------------
John E. Allen Vice-Chairman of the
Board of Trustees October 10 ,
2001
*
---------------------
Allan J. Sweet Trustee and President October 10 ,
2001
*
---------------------
Philip N. Tague Trustee and
Executive Vice President October 10 ,
2001
II-4
NAME TITLE DATE
---- ----- ----
*
---------------------
Laura D. Gates Trustee October 10 ,
2001
*
---------------------
Marc S. Heilweil Trustee October 10 ,
2001
*
-----------------------
Stephen G. McConahey Trustee October 10 ,
2001
*
-----------------------
Quintin E. Primo III Trustee October 10 ,
2001
*
-----------------------
John G. Schreiber Trustee October 10 ,
2001
* By: /s/ John E. Allen
------------------------------
John E. Allen
Attorney-in-Fact
II-5
INDEX TO EXHIBITS
EXHIBIT DOCUMENT DESCRIPTION
------- --------------------
3.1 Amended and Restated Declaration of Trust of the Registrant
(Incorporated by reference to exhibit 3.1 to Registration Statement No. 33-
71566).
3.2 Amended and Restated By-laws of the Registrant (Incorporated by
reference to exhibit 3.2 to Registration Statement No. 33-71566).
3.3 Articles Supplementary to the Amended and Restated Declaration
of Trust of the Registrant Classifying Unissued Shares of Beneficial
Interest in the Registrant as Series A Cumulative Convertible Preferred
Shares of Beneficial Interest (Incorporated by Reference to exhibit 4.9 to
the Registrant's Current Report on Form 8-K dated January 30, 1996).
3.4 Articles Supplementary to the Amended and Restated Declaration
of Trust of the Registrant Classifying Unissued Shares of Beneficial
Interest in the Registrant as Series B Cumulative Convertible Preferred
Shares of Beneficial Interest (Incorporated by reference to exhibit 4 to
the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1998).
3.5 Articles Supplementary to the Amended and Restated Declaration
of Trust of the Registrant Classifying Unissued Shares of Beneficial
Interest in the Registrant as Series C Junior Participating Preferred
Shares. *
4.1 Form of Common Share Certificate (Incorporated by reference to
exhibit 4.1 to Registration Statement No. 33-71566).
4.2 Rights Agreement, dated as of November 2, 1998, between the
Registrant and Harris Trust and Savings Bank, as Rights Agent, including
Exhibit A thereto (Form of Articles Supplementary relating to the Series C
Junior Participating Preferred Shares) and Exhibit B thereto (Form of Right
Certificate) (Incorporated by reference to exhibit 4 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998).
4.3 Registration Rights Agreement, dated January 29, 2001, among the
Registrant, AMLI Residential Properties, L.P. and certain
individuals. *
4.4 Registration Rights Agreement, dated February 1, 2001, among the
Registrant, AMLI Residential Properties, L.P. and certain individuals and
entities. *
4.5 Registration Rights Agreement, dated March 31, 2001, among the
Registrant, AMLI Residential Properties, L.P. and certain
individuals. *
4.6 Registration Rights Agreement, dated August 6, 2001, among the
Registrant, AMLI Residential Properties, L.P. and TMC Apartments,
L.L.C. *
II-6
EXHIBIT DOCUMENT DESCRIPTION
------- --------------------
5.1 Opinion of Mayer, Brown & Platt. *
8.1 Tax Opinion of Mayer, Brown & Platt. *
23.1 Consent of KPMG LLP. **
23.2 Consent of Mayer, Brown & Platt (Included in the opinions filed
as Exhibits 5.1 and 8.1 to this Registration Statement). *
24.1 Power of Attorney. .*
* Previously filed.
** Filed herewith.
II-7