Exhibit 1
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 By-Laws 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. As of November 23, 2001,
8,420,000 shares of common stock were issued and outstanding. The outstanding
common stock is currently listed on the New York Stock Exchange under the symbol
"SIZ". We intend to apply to the New York Stock Exchange to list any additional
shares of common stock pursuant to any prospectus supplement, and we anticipate
that such shares will be so listed.
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 (applying the
applicable attribution rules of the Code), more than 9.9% (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, any such transfer
will be void from the beginning, and we will have the right to redeem such
stock. These restrictions also apply to any transfer of stock that would result
in our being "closely held" within the meaning of Section 856(h) of the Code or
otherwise failing to qualify as a REIT for federal income tax purposes. Upon any
transfer that results in excess stock, such excess stock shall be held in trust
for the exclusive benefit of one or more charitable beneficiaries designated by
us. Upon the satisfaction of certain conditions, the person who would have been
the record holder of equity stock if the transfer had not resulted in excess
stock may designates a beneficiary of an interest in the trust. Upon such
transfer of an interest in the trust, the corresponding shares of excess stock
in the trust shall be automatically exchanged for an equal number of shares of
equity stock of the same class as such stock had been prior to it becoming
excess stock and shall be transferred of record to the designated beneficiary.
Excess stock has no voting rights, except as required by law, and any vote cast
by a purported transferee in respect of shares of excess stock prior to the
discovery that shares of equity stock had been converted into excess stock shall
be void from the beginning. Excess stock shall be entitled to dividends equal to
the dividends declared on any class of equity stock from which the excess stock
has been converted, which dividends shall be held in trust for the benefit of
the charitable beneficiary. Any dividend paid prior to our discovery that equity
stock has been converted to excess stock shall be paid to the trustee of the
trust upon demand. In the event of our liquidation, each holder of excess stock
shall be entitled to receive that portion of our assets that would have been
distributed to the equity stock in respect of which such excess stock was
issued. The trustee of the trust holding excess stock shall distribute such
assets to the beneficiaries of such trust. These 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.
Our board of directors, upon at least 15 days' written notice from a
transferee prior to a proposed transfer that would result in the intended
transferee "beneficially owning" (after the application of the applicable
attribution rules of the Code) equity stock in excess of the 9.9% ownership
limit and the satisfaction of such other conditions as the board of directors
may direct, may in its sole and absolute discretion exempt a person from the
ownership limit. Our board of directors may in its sole and absolute discretion
exempt a person from the limitation on a person "constructively owning" equity
stock in excess of the 9.9% ownership limit if (x) such person does not and
represents that it will not directly or "constructively own" (after the
application of the applicable attribution rules of the Code) more than a 9.9%
interest in a tenant of ours; (y) we obtain such representations and
undertakings as are reasonably necessary to ascertain this fact; and (z) such
person agrees that any violation or attempted violation of such representations,
undertakings and agreements will result in such equity stock in excess of the
ownership limit being converted into and exchanged for excess stock. Our board
of directors may from time to time increase or decrease the 9.9% limit, provided
that the 9.9% limit may be increased only if five persons could "beneficially
own" or "constructively own" (applying the applicable attribution rules of the
Code) no more than 50.0% in value of the shares of equity stock then
outstanding.
Description of Common Stock
Distributions. Subject to the preferential rights of any shares of
preferred stock currently outstanding or subsequently classified and to the
provisions of our Charter regarding restrictions on transfer and ownership of
1
shares of common stock, as a holder of our common stock, you will be entitled to
receive distributions, if, as and when declared by our board of directors, out
of our assets that we may legally use for distributions to stockholders and to
share ratably in our assets that we may legally distribute to our stockholders
in the event of our liquidation, dissolution or winding-up after payment of, or
adequate provision for, all of our known debts and liabilities. We currently pay
regular quarterly distributions on our common stock.
Relationship to Preferred Stock and Other Shares of Common Stock. Your
rights as a holder of shares of common stock will be subject to, and may be
adversely affected by, the rights of holders of preferred stock that have been
issued and that may be issued in the future. Our board of directors may cause
preferred stock to be issued to obtain additional capital, in connection with
acquisitions, to our officers, directors and employees pursuant to benefit plans
or otherwise and for other corporate purposes.
As a holder of our common stock, you will have no preferences, conversion,
sinking fund, redemption rights or preemptive rights to subscribe for any of our
securities. Subject to the provisions of our charter regarding restrictions on
ownership and transfer, all shares of common stock have equal distribution,
liquidation, voting and other rights.
Voting Rights. Subject to the provisions of our charter regarding
restrictions on transfer and ownership of shares of common stock, as a holder of
common stock, you will have one vote per share on all matters submitted to a
vote of stockholders, including the election of directors. Except as provided
with respect to any other class or series of shares of capital stock, the
holders of common stock will possess the exclusive voting power.
There is no cumulative voting in the election of directors, which means
that the holders of a plurality of the outstanding shares of common stock can
elect all of the directors then standing for election and the holders of the
remaining shares of common stock, if any, will not be able to elect any
directors, except as otherwise provided for any series of our preferred stock.
Stockholder Liability. Under Maryland law applicable to Maryland
corporations, you will not be liable as a shareholder for our obligations solely
as a result of your status as a stockholder.
Transfer Agent. The registrar and transfer agent for shares of our common
stock is The Bank of New York.
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;
2
(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 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 Stockholder Rights Plan
Our board of directors has adopted a stockholder rights plan. As a result,
we issued one right for each outstanding share of common stock. One right will
be issued for each additional share of common stock that we issue, including any
shares of common stock issued under this prospectus. Each right entitles the
holder to purchase on one-thousandth of a share of our Series A preferred stock
at an exercise price of $40. The rights become exercisable 10 business days
after any party acquires or announces an offer to acquire 15% or more of our
common stock or certain similar event. The rights expire on August 27, 2008,
unless earlier redeemed. The rights are redeemable at $0.01 per right at any
time before 10 business days following the time that any party acquires 15% or
more of our common stock, commences a tender offer for 15% or more of our common
stock, or our board of directors determines that a substantial stockholder's
ownership may be adverse to the interests of our other stockholders or our
qualification as a REIT. In certain circumstances, the rights will be
exercisable for the stock of any entity into which we merge or to which we
convey a substantial portion of our assets.
3