As filed with the Securities and Exchange Commission on September 13, 2002
Registration No. 333-98775
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
EQUITY ONE, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 1696 N.E. MIAMI GARDENS DRIVE 52-1794271
NORTH MIAMI BEACH, FLORIDA 33179
(305) 947-1664
----------------------------- ---------------------------------- -------------------------------------------------
(State or Other Jurisdiction (Address, Including Zip Code, and (I.R.S. Employer of Incorporation
Identification No.) Code, of Registrant's Principal or Organization)
Executive Offices)
Telephone Number, Including Area
CHAIM KATZMAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
EQUITY ONE, INC.
1696 N.E. MIAMI GARDENS DRIVE
NORTH MIAMI BEACH, FLORIDA 33179
(305) 947-1664
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code,of Agent for Service)
--------------------
COPIES OF COMMUNICATIONS TO:
PHILLIP J. KUSHNER, ESQ.
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
TELEPHONE: (305) 579-0500
FACSIMILE: (305) 579-0717
--------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement,
as determined by market conditions and other factors.
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 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| _____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
--------------------
CALCULATION OF REGISTRATION FEE
============================================ =================== ================= ================= ===============
Proposed Proposed
Maximum Maximum Amount of
Title of Shares Amount Aggregate Price Aggregate Registration
To Be Registered To Be Registered Per Unit Offering Price Fee
- -------------------------------------------- ------------------- ----------------- ----------------- ---------------
- -------------------------------------------- ------------------- ----------------- ----------------- ---------------
Common Stock, par value $.01 per 5,000,000 $ 13.43(1) $ 67,150,000 $ 6,177.80(2)
share............................................
- -------------------------------------------- ------------------- ----------------- ----------------- ---------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(2) Previously Paid. In addition, 153,214 shares of common stock registered by
the Registrant under Registration No. 333-30894 referred to below and not
previously sold are proposed to be consolidated in this Registration Statement
pursuant to Rule 429. All registration fees in connection with such unsold
shares of common stock have previously been paid by the Registrant under the
foregoing Registration Statement. Accordingly, the total amount to be registered
under the Registration Statement as so consolidated as of the date of this
filing is 5,153,214 shares of common stock.
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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE
================================================================================
Pursuant to Rule 429 promulgated under the Securities Act of 1933, as
amended, the Prospectus which is a part of this Registration Statement shall
relate to any securities which remain unsold under the Registration Statement on
Form S-3 (333-30894) of the Registrant.
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 we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
EQUITY ONE, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
5,153,214 SHARES
COMMON STOCK
-------------------------
We are Equity One, Inc., a self-administered, self-managed real estate
investment trust that principally acquires, renovates, develops and manages
community and neighborhood shopping centers anchored by supermarkets or other
necessity-oriented retailers such as drug stores or discount retail stores. With
this prospectus, we are offering participation in our Dividend Reinvestment and
Stock Purchase Plan, as amended, to record holders of our outstanding shares of
common stock, par value $.01 per share. The Dividend Reinvestment and Stock
Purchase Plan, as amended, is a simple, convenient and low-cost means of
investing in our common stock.
PLAN HIGHLIGHTS
o You may participate in the Plan if you currently own shares of our
common stock.
o Once you are enrolled in the Plan, you may buy additional shares
of common stock by automatically reinvesting all or a portion of
any cash dividends paid on your shares of common stock. To
participate in the dividend reinvestment feature of the Plan, you
must hold and elect to reinvest the dividends on a minimum of 100
shares of our common stock.
o Once you are enrolled in the Plan, you may buy additional shares
of our common stock by making optional cash investments from $100
to $10,000 per month on a regular or occasional basis. In our sole
discretion, we may permit optional cash investments greater than
$10,000 per month.
o Under the Plan, the purchase price for shares of our common stock
that the Administrator purchases directly from us for dividend
reinvestments or optional purchases from $100 to $10,000 per month
will equal the higher of 98% of the weighted average of the sales
prices for our common stock during the five trading days ending on
the day immediately prior to the purchase or 95% of the average of
the daily high and low sales prices on the purchase date.
o Your participation in the Plan is entirely voluntary, and you may
terminate your participation at any time. If you do not elect to
participate in the Plan, you will continue to receive any cash
dividends paid on your shares of common stock.
Our shares of common stock are traded on the New York Stock Exchange, or
NYSE, under the ticker symbol "EQY." The closing price of our common stock on
September 11, 2002 was $13.86 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR HAS DETERMINED IF
THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INVESTING IN OUR COMMON SHARES INVOLVES RISKS. POTENTIAL INVESTORS SHOULD
CONSIDER THE INFORMATION PRESENTED UNDER OUR DISCUSSION OF "RISK FACTORS"
BEGINNING ON PAGE 7.
The date of this Prospectus is September 11, 2002.
Table of Contents
PAGE
----
SUMMARY OF THE PLAN............................................................3
WHERE YOU CAN FIND MORE INFORMATION............................................5
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................6
RISK FACTORS...................................................................7
TERMS AND CONDITIONS OF THE PLAN..............................................14
INFORMATION ABOUT EQUITY ONE, INC.............................................31
USE OF PROCEEDS...............................................................31
PLAN OF DISTRIBUTION..........................................................31
LEGAL MATTERS.................................................................32
EXPERTS.......................................................................32
INDEMNIFICATION...............................................................32
------------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it.
You should assume that the information appearing in this prospectus is
accurate as of the date on the front cover of this prospectus only. Our
business, financial condition, results of operations and prospectus may have
changed since that date.
SUMMARY OF THE PLAN
The following summary of our Dividend Reinvestment and Stock Purchase Plan
may omit certain information that may be important to you. You should carefully
read the entire text of the Plan contained in this prospectus before you decide
to participate in the Plan.
Enrollment: You can participate in the Plan if you currently
own shares of our common stock by completing and
submitting the enclosed authorization form. You
may also obtain an authorization form from the
Plan's administrator, American Stock Transfer &
Trust Company. Please see Question 6 set forth in
"Terms and Conditions of the Plan" for more
detailed information.
Reinvestment of Dividends: You can reinvest any cash dividends paid on all
or a portion of your shares of common stock.
You will be able to purchase additional shares
of our common stock by reinvesting your dividends
without paying any fees. To participate in the
dividend reinvestment feature of the Plan, you
must hold and elect to reinvest the dividends
on a minimum of 100 shares of common stock. Except
for the restrictions contained in our charter on
transfer and ownership of common stockdescribed in
Question 21, the reinvestment of any cash
dividends paid on your common shares is not
subject to a maximum limit. Please see Question 6
for more detailed information.
Optional Cash Investments: After you are enrolled in the Plan, you can also
buy additional shares of common stock without
paying any fees. You can invest from $100 to
$10,000 per month on a regular or occasional
basis. In our sole discretion, we may approve a
written request to waive the $10,000 per month
maximum investment amount. Investments of less
than $100 and exceeding $10,000, unless we
have granted a waiver, will be returned to the
participant without interest. Please see Question
6 for more detailed information.
Administration: American Stock Transfer & Trust Company, a
registered transfer agent, initially will serve as
the administrator of the Plan. You should send
all correspondence with the Administrator to:
American Stock Transfer & Trust Company, P.O.
Box 922, Wall Street Station, New York, NY
10269-0560. You may call the Administrator at
877-253-6850, or you can send a written request by
facsimile to 718-234-1440. Please see Question 4
for more detailed information.
Source of Common Shares: Initially, shares of common stock purchased by the
Administrator under the Plan will come from our
legally authorized but unissued shares of common
stock. However, we may, in our sole discretion,
direct the Administrator to purchase shares of
common stock in the open market or in privately
negotiated transactions with third parties. Please
see Question 8 for more detailed information.
Purchase Price: Under the Plan, the purchase price for shares of
our common stock that the Administrator purchases
directly from us for dividend reinvestments or
optional purchases from $100 to $10,000 per month
will equal 98% of the weighted average of the
sales prices for our common stock during the five
trading days ending on the day immediately prior
to the purchase. Please see Question 8 for more
detailed information.
Under the Plan, the purchase price for shares of
our common stock that the Administrator purchases
directly from us for optional purchases greater
than $10,000 per month pursuant to a request for
waiver approved by us will equal the weighted
average of the sales prices for our common stock
during the five trading days ending on the day
immediately prior to the purchase, subject to any
minimum purchase price and discount established by
us for that month, in our sole discretion. Please
see Question 10 for more detailed information.
The purchase price for common shares purchased in
the open market or in privately negotiated
transactions with third parties will equal the
weighted average of the purchase prices paid by
the Administrator for the shares. Please see
Question 8 for more detailed information.
However, regardless of the source of shares, in no
event will the purchase price for shares of our
common stock for dividend reinvestments or
optional purchases be less than 95% of the average
of the high and low sales prices for our common
stock as reported by the NYSE on the purchase
date, plus, if the shares are acquired through
open market purchases, the per share amount of
brokerage commissions or fees paid by us.
Participants will incur no brokerage commissions,
service charges or other expenses in connection
with purchases of common stock under the Plan,
except, if the amount of brokerage commissions or
fees paid by us caused the 95% purchase price
limitation to be met, you would effectively be
paying a proportionate share of those commissions
and fees equal to the amount that caused the 95%
limitation to be met. All costs of administration
of the Plan will be paid by us.
Tracking Your Investment: You will receive periodic statements of the
transactions made in your Plan account. These
statements will provide you with details of the
transactions and will indicate the share balance
in your Plan account. Please see Question 14 for
more detailed information.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file 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 rooms. The SEC maintains an Internet site
that contains reports, proxy and information statements, and other information
that we file electronically with the SEC and which are available at the SEC's
web site at: http://www.sec.gov. You can also inspect reports and other
information we file at the offices of the New York Stock Exchange, 20 Broad
Street, 17th Floor, New York, New York 10005.
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding us and our common stock, including certain exhibits. You can obtain a
copy of the registration statement from the SEC at the address listed above or
from the SEC's web site listed above.
The SEC allows us to "incorporate by reference" some of the documents we
file with it into this prospectus, which means:
o we can disclose important information to you by referring you to those
documents;
o the information incorporated by reference is considered to be part of
this prospectus; and
o later information that we file with the SEC will automatically update
and supersede this information.
We incorporate by reference the documents listed below:
o our Annual Report on Form 10-K, as amended, for the year ended December
31, 2001;
o our Quarterly ReportS on Form 10-Q for the quarterS ended March 31, and
June 30, 2002;
o our definitive Proxy Statement, dated April 29, 2002, filed in
connection with our 2002 Annual Meeting of Stockholders;
o our Current Reports on Form 8-K, dated March 27, 2002, April 25, 2002
and July 24, 2002; and
o the description of our common stock filed as part of our Registration
Statement (File No. 001-13499) on Form 8-A filed on October 15, 1997.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference in this prospectus
and to be part of this prospectus from the date they are filed.
We will provide without charge to each person, including any stockholder,
to whom a prospectus is delivered, upon written or oral request of that person,
a copy of any and all of the information that has been incorporated by reference
in this prospectus (excluding exhibits unless specifically incorporated by
reference into those documents). Please direct requests to us at the following
address:
Equity One, Inc.
1696 N.E. Miami Gardens Drive
North Miami Beach, Florida 33179
Attention: Investor Relations
(305) 947-1664
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus (including the information incorporated by reference)
contains certain forward-looking statements within the meaning of federal
securities law. Words such as "may", "will", "expect", "anticipate", "intend",
"could", "estimate" or "continue" or other similar terms identify
forward-looking statements. These forward-looking statements discuss our
expectations or beliefs, concerning, among other things, industry performance,
our operations, performance, financial condition, plans, growth and strategies.
Although we believe that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, forward-looking statements are
not guarantees of future performance and involve substantial risks and
uncertainties. Actual results may differ materially from those predicted in the
forward-looking statements as a result of various factors, including those
described in Risk Factors.
RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. YOU SHOULD
CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS
PROSPECTUS BEFORE YOU DECIDE TO BUY OUR COMMON STOCK. THE TRADING PRICE OF OUR
COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU COULD LOSE ALL OR
PART OF YOUR INVESTMENT.
RISKS RELATED TO OUR PROPERTIES AND OUR BUSINESS
WE ARE DEPENDENT UPON CERTAIN KEY TENANTS SUCH AS PUBLIX AND WINN DIXIE,
AND ADVERSE DEVELOPMENTS IN THE BUSINESS OF THESE TENANTS COULD HAVE A NEGATIVE
IMPACT ON OUR FINANCIAL CONDITION.
As part of our business strategy, we own shopping centers which are
supported by "anchor" tenants which, due to size, reputation or other factors,
are particularly responsible for drawing other tenants and shoppers to our
centers. As of June 30, 2002, 747,101 square feet and 535,862 square feet, or
8.6% and 6.2% of our aggregate gross leasable area, were leased to Publix and
Winn Dixie, respectively. Leases with these anchor tenants represented
approximately $4.9 million and $3.4 million, or 6.3% and 4.4%, respectively, of
the annualized minimum rent from our properties.
At any time, our anchor tenants or other tenants may experience a downturn
in their businesses that may weaken their financial condition. As a result, our
tenants may delay lease commencement, fail to make rental payments when due or
declare bankruptcy. We are also subject to the risk that these tenants may be
unable to make their lease payments or may decline to extend a lease upon its
expiration. Any tenant bankruptcies, leasing delays, or failure to make rental
payments when due could result in the termination of the tenant's lease and
material losses to our company and harm to our operating results. In addition to
the loss of rental payments from the anchor tenant, a lease termination by an
anchor tenant or a failure by that anchor tenant to occupy the premises could
result in lease terminations or reductions in rent by other tenants in the same
shopping center whose leases permit cancellation or rent reduction if an anchor
tenant's lease is terminated. In January 2002, Kmart Corporation, one of our
anchor tenants in three of our shopping centers, filed for bankruptcy protection
and has subsequently closed one of these stores and terminated the lease.
Although we do not believe that Kmart's bankruptcy, the closure of one of its
stores or the potential closings of the remaining two stores will have a
materially adverse impact on our financial condition, its or other tenants'
bankruptcies could delay our efforts to collect past due balances under the
relevant leases and could ultimately preclude full collection of these sums.
VACATED ANCHOR SPACE AT ANY PROPERTY COULD ADVERSELY AFFECT THE PERFORMANCE
OF THE ENTIRE SHOPPING CENTER.
Vacated anchor tenant space reduces rental revenues if not re-rented
promptly at the same rental rates and, even when the tenant continues to make
rental payments, tends to adversely affect the entire shopping center because of
the loss of the departed anchor tenant's power to draw customers to the center.
For instance, during 2002 Albertson's closed a store in San Antonio, Texas
within our Wurzbach Shopping Center, but continues to pay rent under the lease
and also closed one of its stores adjacent to our Spring Shadows Shopping
Center. The closure of these stores by Albertson's may adversely affect us
because these stores were anchor tenants that attracted customers to our
centers. No assurances can be given that existing anchor stores, whether tenants
or not, will renew their leases as they expire or will not vacate their space
prior to expiration. For example, it has recently become more common for
drugstores to seek to rent freestanding structures instead of space within
shopping centers, and in the past, some of our drug store anchor tenants have
vacated their leased space for that reason. The closing of one or more stores
occupied by anchor tenants or lease terminations by one or more anchor tenants
could adversely affect that property and result in lease terminations or rent
reductions by other tenants whose leases may permit termination or rent
reduction in such circumstances. Each of these developments could adversely
affect our financial condition.
GEOGRAPHIC CONCENTRATION OF OUR PROPERTIES MAKES OUR BUSINESS VULNERABLE TO
ECONOMIC DOWNTURNS IN FLORIDA AND TEXAS.
The economic performance and value of our real estate assets are subject to
all of the risks associated with owning and operating real estate, including
risks related to adverse changes in national, regional and local economic and
market conditions. Economic and market conditions also may impact the ability of
our tenants to make lease payments. Our properties are located primarily in
Florida and Texas. Approximately 60.8% of our properties, based on gross
leasable area, are located in Florida and represent $48.1 million, or 62.7%, of
annualized minimum rent as of June 30, 2002. In addition, approximately 34.0% of
our properties, based on gross leasable area, are located in Texas and represent
$25.6 million, or 33.3%, of annualized minimum rent as of June 30, 2002. Our
performance may therefore be linked to economic conditions in Florida and Texas.
A decline in the economy in these markets may adversely affect our revenues from
shopping centers in these areas, or could result in an increase in tenant
bankruptcies, both of which may harm our performance in the affected market. In
addition, if our properties do not generate sufficient income to meet our
operating expenses, including future debt service, our income and results of
operations would be significantly harmed.
OUR GROWTH MAY BE IMPEDED IF WE ARE NOT SUCCESSFUL IN IDENTIFYING SUITABLE
ACQUISITIONS THAT MEET OUR CRITERIA.
Integral to our business strategy is our ability to expand through
acquisitions, which requires us to identify suitable acquisition candidates or
investment opportunities that meet our criteria and are compatible with our
growth strategy. We may not be successful in identifying suitable real estate
properties, other assets or other business that meet our acquisition criteria or
consummating acquisitions or investments on satisfactory terms. Failures in
identifying or consummating acquisitions could reduce the number of acquisitions
we complete and slow our growth, which could in turn harm our stock price.
FUTURE ACQUISITIONS OF REAL PROPERTIES, OTHER ASSETS OR OTHER COMPANIES MAY
NOT YIELD THE RETURNS WE EXPECT, MAY RESULT IN DISRUPTIONS TO OUR BUSINESS, MAY
STRAIN MANAGEMENT RESOURCES AND MAY RESULT IN STOCKHOLDER DILUTION.
We expect to make future acquisitions of or investments in real properties,
other assets or other companies. Our strategy of making acquisitions and our
market selection process may not ultimately be successful and may not provide
positive returns on our capital. If we acquire any businesses, we will be
required to integrate the operations, personnel and accounting and information
systems of the acquired business and train, retain and motivate any key
personnel from the acquired business. In addition, acquisitions may cause
disruptions in our operations and divert management's attention away from
day-to-day operations, which could impair our relationships with our current
tenants and employees. The issuance of equity securities for any acquisitions
could be substantially dilutive to our stockholders.
In September 2001, we acquired United Investors Realty Trust, or UIRT, and
Centrefund (U.S.) Realty Corp., or CEFUS. Although we believe that we have
successfully integrated these operations with ours, no assurances can be given
that the operational synergies or estimated expense reductions will be realized
or that unanticipated costs will not arise in the future as a result of these
acquisitions. In addition, our strategy includes renovating and re-leasing space
in some under-performing shopping centers acquired in these acquisitions. If
such operational synergies or expense reductions are not realized, if we are
unable to re-lease vacant space or if we experience material, unanticipated
costs as a result of these acquisitions, our results of operation could be
harmed and our stock price could decline.
AS WE EXPAND OUR BUSINESS INTO NEW MARKETS WE WILL BE SUBJECT TO RISKS
ASSOCIATED WITH THOSE MARKETS WHICH MAY HAVE AN ADVERSE IMPACT ON OUR FUTURE
OPERATIONS.
Although we are seeking to acquire additional properties and sites in our
primary markets of Florida and Texas, we will also seek to locate properties in
other areas with similar demographic characteristics. In seeking investment
opportunities in other areas of the United States, we will not initially possess
the same level of familiarity as we possess with respect to our current markets,
which could adversely affect our ability to acquire, develop, manage or lease
properties in new markets and may therefore have an adverse impact on our future
operations.
WE FACE INCREASING COMPETITION FOR THE ACQUISITION OF REAL ESTATE
PROPERTIES AND OTHER ASSETS, WHICH MAY IMPEDE OUR ABILITY TO MAKE FUTURE
ACQUISITIONS OR MAY INCREASE THE COST OF THESE ACQUISITIONS.
We compete with many other entities engaged in real estate investment
activities for acquisitions of community and neighborhood shopping centers,
including institutional pension funds, other REITs and other owner-operators of
shopping centers. These competitors may drive up the price we must pay for real
estate properties, other assets or other companies we seek to acquire or may
succeed in acquiring those companies or assets themselves. In addition, our
potential acquisition targets may find our competitors to be more attractive
suitors because they may have greater resources, may be willing to pay more or
may have a more compatible operating philosophy. In particular, larger REITs may
enjoy significant competitive advantages that result from, among other things, a
lower cost of capital and enhanced operating efficiencies. In addition, the
number of entities and the amount of funds competing for suitable investment
properties may increase. Such competition may reduce the number of suitable
properties and increase the bargaining position of the owners of those
properties. This will result in increased demand for these assets and therefore
increased prices paid for them. If we pay higher prices for properties, our
profitability will be reduced, and you may experience a lower return on your
investment.
OUR EXISTING PROPERTIES ARE, AND FUTURE PROPERTIES ARE EXPECTED TO BE,
SUBJECT TO COMPETITION WHICH COULD AFFECT OUR ABILITY TO LEASE VACANT SPACE AND
MAINTAIN CURRENT RENTAL VALUES.
Many of our shopping centers are located in developed areas that include
other shopping centers. The number of retail properties in a particular area
could harm our ability to lease vacant space and maintain the rents charged at
the shopping centers or at any newly acquired property or properties. Retailers
at our properties face increasing competition from outlet malls, discount
shopping clubs, direct mail, telemarketing sales and internet sales.
In addition, any new competitive properties that are developed within the
neighborhoods of our existing properties may result in increased competition for
customer traffic and creditworthy tenants. Increased competition for tenants may
require us to make capital improvements to properties which we would not have
otherwise planned to make. Any unbudgeted capital improvements we undertake may
divert cash that would otherwise be available for dividends to stockholders.
Ultimately, to the extent we are unable to renew leases or re-let space as
leases expire, it would result in decreased cash flow from tenants and harm our
operating results.
WE MAY EXPERIENCE DIFFICULTIES AND ADDITIONAL COSTS ASSOCIATED WITH RENTING
UNLEASED SPACE AND SPACE TO BE VACATED IN FUTURE YEARS.
As a result of our acquisitions of UIRT and CEFUS, we now own several
properties the performance of which we plan to improve by re-leasing vacated
space. However, our ability to rent unleased or vacated space in these or other
properties will be affected by many factors, including the property's location,
current market conditions and covenants found in certain leases with tenants
restricting the use of other space at a property. For instance, in some cases,
our tenant leases contain provisions giving the tenant the exclusive right to
sell particular types of merchandise or provide specific types of services
within the particular retail center, or limit the ability of other tenants to
sell that merchandise or provide those services. When re-leasing space after a
vacancy, these provisions may limit the number and types of prospective tenants
for the vacant space. The failure to lease or to re-lease on satisfactory terms
could harm our operating results.
In addition, if we are able to re-lease vacated space, there is no
assurance that rental rates will be equal to or in excess of current rental
rates. In addition, we may incur substantial costs in obtaining new tenants,
including brokerage commission fees paid by us in connection with new leases or
lease renewals, and the cost of making leasehold improvements.
WE HAVE SUBSTANTIAL DEBT OBLIGATIONS WHICH MAY REDUCE OUR OPERATING
PERFORMANCE AND PUT US AT A COMPETITIVE DISADVANTAGE.
We are subject to the risks normally associated with debt financing,
including the risk that our cash flow will be insufficient to meet required
payments of principal and interest, and the risk that indebtedness on our
properties will not be refinanced at maturity or that the terms of such
refinancing will not be as favorable as the terms of such indebtedness. Most of
our existing mortgage indebtedness has an amortization schedule which results in
substantial payments being due at maturity.
Since we anticipate that our internally generated cash will be adequate to
repay only a portion of our indebtedness prior to maturity, we expect that we
will be required to repay debt through refinancings or equity offerings. If we
were unable to refinance our indebtedness on acceptable terms, or at all, we
might be forced to dispose of one or more of our properties upon disadvantageous
terms, which might result in losses to us and might adversely affect our cash
available for distribution. If prevailing interest rates or other factors at the
time of refinancing result in higher interest rates on refinancings, our
interest expense would increase, without a corresponding increase in our rental
rates, which would adversely affect our results of operations. Further, if one
of our properties is mortgaged to secure payment of indebtedness and we are
unable to meet mortgage payments, or we are in default under the related
mortgage or deed of trust, such property could be transferred to the mortgagee,
or the mortgagee could foreclose upon the property, appoint a receiver and
receive an assignment of rents and leases or pursue other remedies, all with a
consequent loss of income and asset value to us. Foreclosure could also create
taxable income without accompanying cash proceeds, thereby hindering our ability
to meet the REIT distribution requirements under the Internal Revenue Code. In
addition, under the terms of our credit facility with Wells Fargo, defaults in
excess of $25 million under our other mortgage indebtedness could cause a
default under that facility.
We also intend to incur additional debt in connection with future
acquisitions of real estate. We may, in some instances, borrow under our
existing credit facilities or borrow new funds to acquire properties. In
addition, we may incur or increase our mortgage debt by obtaining loans secured
by a portfolio of some or all of the real estate properties we acquire. We may
also borrow funds if necessary to satisfy the requirement that we distribute to
stockholders as dividends at least 90% of our annual REIT taxable income, or
otherwise as is necessary or advisable to ensure that we maintain our
qualification as a REIT for federal income tax purposes.
Our substantial debt may harm our business and operating results,
including:
o requiring us to use a substantial portion of our funds from operations
to pay interest and required principal payments, which reduces the
amount available for dividends;
o placing us at a competitive disadvantage compared to our competitors
that have less debt;
o making our company more vulnerable to economic and industry downturns
and reducing our flexibility in responding to changing business and
economic conditions; and
o limiting our ability to borrow more money for operations, capital or to
finance acquisitions in the future.
CERTAIN INDEBTEDNESS MAY BE IN DEFAULT AS A RESULT OF PRIOR ISSUANCES OF OUR
COMMON STOCK OR PRIOR ACQUISITIONS WHICH MAY SERVE AS A BASIS FOR THE LENDERS TO
ACCELERATE AMOUNTS DUE UNDER THE RELATED MORTGAGES OR DEMAND PAYMENTS OR FEES.
Certain of the mortgages on our properties contain prohibitions on
transfers of ownership interests in the mortgagor or its parents without the
prior written consent of the lenders, which provisions may have been violated by
previous transactions. A violation could serve as a basis for the lenders to
accelerate amounts due under the related mortgages, demand payments or assess
fees or penalties. We are currently in the process of obtaining a clarification,
amendment or consent from each of the various lenders under such mortgages.
The outstanding amounts under the mortgages on the affected properties
covered by such restrictions on transfer total approximately $79 million. In the
event that the requested assurances or consents are not obtained and the
mortgage holders declare defaults under the mortgage documents, we will, if
required, prepay the remaining mortgages from existing resources, refinancings
of such mortgages, borrowings under our other lines of credit or other sources
of financing. The repayment of these mortgages could have an adverse impact on
our operations and affect our ability to make distributions to stockholders in
the anticipated amounts.
CHANGES IN INTEREST RATES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR
COMMON STOCK.
The market price of our common stock will be affected by the annual
distribution rate on the shares of our common stock. Increasing market interest
rates may lead prospective purchasers of our common stock to seek a higher
annual yield from their investments. Such an increase in market expectations or
requirements would likely adversely affect the market price of our common stock.
In addition, we have variable rate loans with various lenders. As interest rates
rise, more of our funds from operations will be required to service that debt.
Finally, increases in interest rates may have the effect of depressing the
market value of retail properties such as ours, including the value of those
properties securing our indebtedness.
OUR FINANCIAL COVENANTS MAY RESTRICT OUR OPERATING OR ACQUISITION
ACTIVITIES, WHICH MAY HARM OUR FINANCIAL CONDITION AND OPERATING RESULTS.
Our existing mortgage indebtedness contains customary terms and conditions
typically found in mortgages including, among others, the requirement to
maintain insurance on the properties, the requirement to preserve and maintain
the properties and restrictions upon the incurrence of additional indebtedness
and liens on the properties. Furthermore, the terms of some of our indebtedness
restrict our ability to consummate transactions which result in a change in
control or to otherwise issue equity or debt securities. The mortgages on our
properties also contain customary negative covenants such as those that limit
our ability, without the prior consent of the lender, to further mortgage the
applicable property or to discontinue insurance coverage. If we breach covenants
in our debt agreements, the lender can declare a default and require us to repay
the debt immediately and, if the debt is secured, be entitled to take possession
of the property securing the loan.
OUR INVESTMENTS IN DEVELOPMENT AND REDEVELOPMENT PROJECTS MAY NOT YIELD
ANTICIPATED RETURNS, WHICH WOULD HARM OUR OPERATING RESULTS AND REDUCE THE
AMOUNT OF FUNDS AVAILABLE FOR DISTRIBUTIONS.
A component of our growth strategy is redeveloping existing properties
within our portfolio as well as developing new shopping centers at other
locations. There can be no assurance that we will be able to do so successfully.
We intend to pursue development activities as opportunities arise. Such
activities may include expanding and/or renovating properties or developing new
sites. Expansion, renovation and development projects generally require
expenditures of capital, as well as various governmental and other approvals,
which we may not be able to obtain, or may only obtain after delay and at
substantial costs.
While our policies with respect to expansion, renovation and development
activities are intended to limit some of the risks otherwise associated with
such activities, such as initiating construction only after securing commitments
from anchor tenants, we will nevertheless be subject to risks that construction
costs, such as cost overruns and timing delays due to lack of availability of
materials and labor, weather conditions and other factors outside of our
control, of a property may exceed original estimates, possibly making the
property uneconomical. Any substantial unanticipated delays or expenses could
adversely affect the investment returns from these redevelopment projects and
harm our operating results. In addition, occupancy rates and rents at a newly
completed property may not be sufficient to make the property profitable,
construction and permanent financing may not be available on favorable terms for
development and construction and lease-up may not be completed on schedule,
resulting in increased debt service expense and construction costs.
THE COSTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS, INCLUDING LIABILITY
FOR CONTAMINATION AT OUR PROPERTIES RESULTING FROM, AMONG OTHER THINGS,
GASOLINE OR DRY-CLEANING POLLUTANTS, MAY HARM OUR OPERATING RESULTS.
Under various federal, state and local laws, ordinances and
regulations, an owner or operator of real estate or real estate-related
facilities may be liable for the costs of removal or remediation of
hazardous or toxic substances present at, on, under, in or released from
its property. In connection with the direct or indirect ownership,
operation, management and development of real properties, we are generally
considered an owner or operator of such properties or as having arranged
for the disposal or treatment of hazardous or toxic substances. Therefore,
we may be potentially liable for removal or remediation costs, as well as
certain other related costs, including governmental fines and damages for
injuries to persons and property.
Some of the properties in our portfolio have been identified as having
or potentially having some form of environmental contamination. In some
cases, contamination has or is expected to have migrated into the
groundwater beneath our properties from adjacent properties, such as
service stations. In other cases, contamination has resulted from on-site
uses by current or former owners or tenants, such as gas stations or dry
cleaners, which have released pollutants such as gasoline or dry-cleaning
solvents into the soil or groundwater. We believe that, based on
environmental studies conducted to date, none of these environmental
problems is likely to have a material adverse effect on our financial
condition. However, no assurances can be given that environmental studies
obtained by us reveal all environmental liabilities, that any prior owner
of land or a property owned or acquired by us did not create any material
environmental condition not known to us, or that a material environmental
condition does not otherwise exist, or may not exist in the future.
Although many of our leases with tenants contain provisions intended to
minimize the environmental risks and to shift the financial risks to the
tenants, there is no assurance that we will not incur liability in this
regard.
COSTS ASSOCIATED WITH COMPLYING WITH THE AMERICANS WITH DISABILITIES
ACT MAY ADVERSELY AFFECT OUR FINANCIAL CONDITION AND OPERATING RESULTS.
Our properties are subject to the Americans with Disabilities Act of 1990.
Under the Disabilities Act, all places of public accommodation are required to
comply with federal requirements related to access and use by disabled persons.
The Disabilities Act has separate compliance requirements for "public
accommodations" and "commercial facilities" that generally require that
buildings and services, including restaurants and retail stores, be made
accessible and available to people with disabilities. The Disabilities Act's
requirements could require removal of access barriers and could result in the
imposition of injunctive relief, monetary penalties or, in some cases, an award
of damages.
RISKS RELATED TO OUR ORGANIZATION AND STRUCTURE
WE MAY EXPERIENCE ADVERSE CONSEQUENCES IN THE EVENT WE FAIL TO QUALIFY AS A
REIT.
Although we believe that we have operated so as to qualify as a REIT under
the Internal Revenue Code since our REIT election in 1995, no assurance can be
given that we have qualified or will remain qualified as a REIT. In addition, no
assurance can be given that legislation, new regulations, administrative
interpretations or court decisions will not significantly change the tax laws
with respect to qualification as a REIT or the federal income tax consequences
of such qualification. Qualification as a REIT involves the application of
highly technical and complex provisions of the Internal Revenue Code for which
there are only limited judicial and administrative interpretations. The
determination of various factual matters and circumstances not entirely within
our control may affect our ability to qualify as a REIT. For example, in order
to qualify as a REIT, at least 95% of our gross income in any year must be
derived from qualifying sources, and we must make distributions to stockholders
aggregating annually at least 90% of our REIT taxable income, excluding capital
gains. We intend to make distributions to our stockholders to comply with the
distribution provisions of the Internal Revenue Code. Although we anticipate
that our cash flows from operating activities will be sufficient to enable us to
pay our operating expenses and meet distribution requirements, no assurances can
be given in this regard.
If we were to fail to qualify as a REIT in any taxable year, we would be
subject to federal income tax, including any applicable alternative minimum tax,
on our taxable income at regular corporate rates, and we would not be allowed a
deduction in computing our taxable income for amounts distributed to our
stockholders. Moreover, unless entitled to relief under certain statutory
provisions, we also would be ineligible for qualification as a REIT for the four
taxable years following the year during which qualification was lost.
Disqualification would reduce our net earnings available for investment or
distribution to our stockholders due to our additional tax liability for the
years involved.
OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER AND HIS AFFILIATES OWN A MAJORITY
OF OUR COMMON STOCK AND EXERCISE SIGNIFICANT CONTROL OF OUR COMPANY AND MAY
DELAY, DEFER OR PREVENT US FROM TAKING ACTIONS THAT WOULD BE BENEFICIAL TO OUR
OTHER STOCKHOLDERS.
Chaim Katzman, our Chairman and Chief Executive Officer and, together with
his affiliates, is our largest stockholder. Mr. Katzman and his affiliates own
in the aggregate as of June 30, 2002 approximately 62.2% of the outstanding
shares of our common stock. Accordingly, Mr. Katzman will be able to exercise
significant control over the outcome of substantially all matters required to be
submitted to our stockholders for approval, including decisions relating to the
election of our board of directors and the determination of our day-to-day
corporate and management policies. In addition, Mr. Katzman will be able to
exercise significant control over the outcome of any proposed merger or
consolidation of our company under the Maryland General Corporation Law (the
"MGCL"). Mr. Katzman's ownership interest in our company may discourage third
parties from seeking to acquire control of our company which may adversely
affect the market price of our common stock.
OUR ORGANIZATIONAL DOCUMENTS CONTAIN PROVISIONS WHICH MAY DISCOURAGE A
TAKEOVER OF US, MAY MAKE REMOVAL OF OUR MANAGEMENT MORE DIFFICULT, AND DEPRESS
OUR STOCK PRICE.
Our organizational documents contain provisions which may have an
anti-takeover effect and inhibit a change in our management. For instance, our
charter contains ownership limits and restrictions on transferability of shares
of our stock in order to protect our status as a REIT. These provisions prevent
any one stockholder from owning, actually or constructively, more than 9.9% of
the value or number of outstanding shares of our stock without our prior
consent. In addition, our articles and bylaws contain other provisions that may
have the effect of delaying, deferring or preventing a change of control of our
company or the removal of existing management and, as a result, could prevent
our stockholders from receiving a premium for their shares of common stock above
the prevailing market prices. In addition, these provisions include the ability
to issue preferred stock, staggered terms for our directors, advance notice
requirements for stockholder proposals, the absence of cumulative voting rights
and provisions relating to the removal of incumbent directors. Finally, the MGCL
also contains several statutes that restrict mergers and other business
combinations with interested stockholder or that may otherwise have the effect
of preventing or delaying a change of control.
LOSS OF KEY PERSONNEL COULD HARM OUR BUSINESS.
Our ability to successfully execute our acquisition and growth strategy
depends to a significant degree upon the continued contributions of Chaim
Katzman, our Chairman of the Board and Chief Executive Officer, Doron Valero,
our President and Chief Operating Officer, and Howard Sipzner, our Chief
Financial Officer. Pursuant to our employment agreements with Mr. Katzman, he is
only required to devote so much of his business time, attention, skill and
efforts as shall be required for the faithful performance of his duties.
Moreover, there is no guarantee that Mr. Katzman, Mr. Valero or Mr. Sipzner will
remain employed with us. While we have employment agreements with these
executives, we cannot guarantee that we will be able to retain their services.
The loss of the services of Messrs. Katzman, Valero or Sipzner could have a
material adverse effect on our results of operations.
OUR RIGHTS AND THE RIGHTS OF OUR STOCKHOLDERS TO TAKE ACTION AGAINST OUR
DIRECTORS AND OFFICERS ARE LIMITED.
Our charter requires us to indemnify our directors and officers for actions
taken by them in those capacities to the maximum extent permitted by the MGCL.
As a result, we and our stockholders may have more limited rights against our
directors and officers than might otherwise exist under common law. In addition,
we may be obligated to fund the defense costs incurred by our directors and
officers.
TERMS AND CONDITIONS OF THE PLAN
The following constitutes our Dividend Reinvestment and Stock Purchase
Plan, as amended, in effect beginning September 11, 2002. All references in this
prospectus to "common stock" or "common shares" refers to shares of our common
stock, par value $.01 per share.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The primary purpose of the Plan is to give our stockholders a convenient
and economical way to purchase our common stock and to reinvest all or a portion
of their cash dividends in additional shares of common stock. A secondary
purpose of the Plan is to provide us with an economical way to raise additional
capital for general corporate purposes through sales of common stock to our
existing stockholders under the Plan.
PARTICIPATION OPTIONS
2. WHAT ARE MY INVESTMENT OPTIONS UNDER THE PLAN?
Once enrolled in the Plan, you may buy shares of common stock through any
of the following investment options:
o FULL DIVIDEND REINVESTMENT. You may reinvest any cash dividends
paid on all of your shares of common stock to purchase additional
shares of common stock if you have at least 100 shares of common
stock in your Plan account. This option also permits you to make
optional cash investments to buy additional shares of common stock
as described below.
o PARTIAL DIVIDEND REINVESTMENT. You may reinvest any cash dividends
paid on a specified number of your shares of common stock held in
certificate form, provided you have at least 100 common shares in
your Plan account. However, you must elect to reinvest the
dividends on at least 100 common shares. In addition, dividends on
all shares of common stock held in your Plan account will be
reinvested. We will continue to pay you any cash dividends on the
remaining shares of common stock held in stock certificate form.
This option also permits you to make optional cash investments to
buy additional shares of common stock as described below.
o OPTIONAL CASH INVESTMENTS. You may make optional cash investments
from $100 to $10,000 per month to buy additional shares of common
stock on a regular or occasional basis. You may also request, and
in our sole discretion we may approve, a waiver permitting you to
make optional cash investments in an amount greater than $10,000
per month. See Question 10 to learn how to request such a waiver.
You may elect to make optional cash investments even if you do not
elect to reinvest any cash dividends paid on your shares of common
stock. We will continue to pay you any cash dividends on the
shares of common stock owned by you then or in the future, unless
you designate such shares for reinvestment pursuant to the Plan,
as noted above.
BENEFITS AND DISADVANTAGES
3. WHAT ARE THE BENEFITS AND DISADVANTAGES OF THE PLAN?
BENEFITS
Before deciding whether to participate in the Plan, you should consider the
following benefits of participation in the Plan:
o The price of shares of common stock purchased by the Administrator
under the Plan directly from us for dividend reinvestments and
optional purchases from $100 to $10,000 per month will equal 98%
of the weighted average of the sales prices for our common stock
during the five trading days ending on the day immediately prior
to the purchase date, but never less than 95% of the average of
the daily high and low sales prices for our common stock on the
purchase date.
o Except for costs related to your voluntary selling of common
shares or withdrawal from the Plan, there are no costs associated
with the Plan that you must pay. Therefore, you will not pay
brokerage commissions or service fees to purchase shares of common
stock through the Plan. Please see the "Plan Service Fees
Schedule" attached as Exhibit A for a detailed description of the
costs for which you will be responsible.
o You will realize the convenience of having all or a portion of any
of your cash dividends automatically reinvested in additional
shares of common stock. Since the Administrator will credit
fractional shares of common stock to your Plan account, you will
receive full investment of your dividends and optional cash
investments.
o You will have the option of having your stock certificates held
for safekeeping by the Administrator, protecting against loss,
theft or destruction of the certificates representing your shares
of common stock.
o You will simplify your record keeping by receiving periodic
statements which will reflect all current activity in your Plan
account, including purchases, sales and latest balances.
o You will have the flexibility of making optional cash investments
from $100 to $10,000 in any one month to buy additional shares of
common stock. You may make these optional cash investments on a
regular or occasional basis.
o At any time, you may direct the Administrator to sell or transfer
all or a portion of the shares of common stock held in your Plan
account. You will be responsible for any brokerage fees and other
expenses associated with the sale.
DISADVANTAGES
Before deciding whether to participate in the Plan, you should consider the
following disadvantages of participation in the Plan:
o Without giving you prior notice, we may direct the Administrator
to buy shares of common stock under the Plan either in the open
market or in privately negotiated transactions with third parties.
The purchase price for common shares purchased in the open market
or in privately negotiated transactions with third parties will
equal the weighted average of the purchase prices paid by the
Administrator for the shares.
o Your reinvestment of cash dividends will result in your being
treated for federal income tax purposes as having received on the
dividend payment date a dividend equal to the fair market value of
our common stock that you received to the extent of our earnings
and profits attributable to that distribution. The dividend may
give rise to a liability for the payment of income tax without
providing you with immediate cash to pay the tax when it becomes
due.
o You will not know the actual number of shares of common stock that
the Administrator of the Plan buys for your account until on or
after the applicable Investment Date (as defined in Question 8).
o Because the Administrator of the Plan may buy shares of common
stock directly from us for your account at an average price per
share, the price paid for such shares on any date may be greater
than the price at which shares of common stock are then trading.
o Because the Administrator of the Plan may sell shares only once
per week, sales of shares of common stock held in your Plan
account may be delayed.
o We will not pay interest on funds that we hold pending
reinvestment or investment.
o You may not pledge shares of common stock deposited in your Plan
account unless you withdraw those shares from the Plan.
ADMINISTRATION
4. WHO WILL ADMINISTER THE PLAN?
ADMINISTRATOR. American Stock Transfer & Trust Company or another entity we
may designate, will serve as the Administrator of the Plan. The Administrator:
o acts as your agent;
o keeps records of all Plan accounts;
o sends your account statements to you;
o buys and sells, on your behalf, all shares of common stock under the
Plan; and
o performs other duties relating to the Plan.
You should send all correspondence with the Administrator to:
American Stock Transfer & Trust Company
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
Telephone: 877-253-6850
Facsimile: 718-234-1440
SUCCESSOR ADMINISTRATOR. We may replace the Administrator with a successor
Administrator at any time. The Administrator may resign as Administrator of the
Plan at any time. In either such case, we will appoint a successor
Administrator, and we will notify you of such change.
PARTICIPATION
For purposes of this section, we have based our responses upon the method
by which you hold your shares of common stock. Generally, you are either a
record owner or a beneficial owner. You are a record owner if you own shares of
common stock in your own name. You are a beneficial owner if you own shares of
common stock that are registered in a name other than your own; for example, if
the shares are held in the name of a broker, bank or other nominee. If you are a
record owner, you may participate directly in the dividend reinvestment portion
of the Plan, provided you own at least 100 common shares. If you are a
beneficial owner, you will have to either coordinate your participation in the
Plan through the broker, bank or other nominee in whose name your common shares
are held or become a record owner by:
o directing your bank, broker or other nominee in whose name your
shares are held to transfer at least one common share to your
name, following which you may enroll in the Plan directly and
submit an optional cash investment sufficient to increase your
Plan account balance to at least 100 common shares; or
o instructing your broker, bank or other nominee in whose name your
shares are held to transfer at least one hundred common shares
into your name.
5. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
You may participate in the Plan if you meet the following requirements:
MINIMUM OWNERSHIP INTEREST. You may directly join the Plan if you are a
registered holder of common stock. If you are a beneficial owner of shares of
common stock and wish to participate in the Plan, you should either (1) direct
your broker, bank or other nominee in whose name your shares are held to
transfer at least one share of common stock to your name, or (2) arrange with
your broker, bank or other nominee in whose name your shares are held to
participate in the Plan on your behalf.
There is no minimum requirement as to the number of shares of common stock
that you must hold in your Plan account in order to participate in the optional
cash investment portion of the Plan. However, if you wish to reinvest all or a
portion of your dividends, you must hold at least 100 shares of common stock in
your Plan account.
NON-TRANSFERABILITY OF RIGHT TO PARTICIPATE. You may not transfer your
right to participate in the Plan to another person.
FOREIGN LAW RESTRICTIONS. You may not participate in the Plan if it would
be unlawful for you to do so in the jurisdiction where you are a citizen or
resident. If you are a citizen or resident of a country other than the United
States, you should confirm that by participating in the Plan you will not
violate local laws governing, among other things, taxes, currency and exchange
controls, stock registration and foreign investments.
EXCLUSION FROM PLAN AT OUR ELECTION. Notwithstanding any other
provision in the Plan, we reserve the right to prevent you from participating in
the Plan for any reason. It is in our sole discretion to exclude you from
participation in the Plan.
ENROLLMENT
6. HOW DO I ENROLL IN THE PLAN?
If you are eligible to participate in the Plan, you may join the Plan at
any time. Once you enroll in the Plan, you will remain enrolled until you
withdraw from the Plan or we terminate the Plan or your participation in the
Plan.
THE AUTHORIZATION FORM. To enroll and participate in the Plan, you must
complete the enclosed Authorization Form and mail it to the Administrator of the
Plan at the address set forth in Question 4. If your shares of common stock are
registered in more than one name (such as joint tenants or trustees), all such
registered holders must sign the Authorization Form. If you are eligible to
participate in the Plan, you may sign and return the Authorization Form to
participate in the Plan at any time.
If you are a beneficial owner of common stock and wish to enroll and
participate in the Plan, you may do so in one of the following ways:
a) Request your broker, bank or other nominee in whose name your
shares are held to complete and sign a Broker and Nominee Form
(please see the "Broker and Nominee Form" below for more
information), or
b) Instruct your broker, bank or other nominee in whose name your
shares are held to transfer at least one share of common stock
to your name, following which you may enroll in the Plan
directly and submit an optional cash investment sufficient to
increase your Plan account balance to at least 100 shares of
common stock, or
c) Instruct your broker, bank or other nominee in whose name your
shares are held to transfer at least 100 shares of our common
stock to your name, following which you may enroll in the Plan
directly.
CHOOSING YOUR INVESTMENT OPTION. When completing the Authorization Form,
you should choose one or more of the following three investment options:
o Full Dividend Reinvestment. This option directs the Administrator
to reinvest any cash dividends paid on all of the shares of common
stock owned by you then or in the future in additional shares of
common stock. To participate in the full dividend reinvestment
feature of the Plan you must hold a minimum of 100 shares of
common stock in your Plan account. This option also permits you to
make optional cash investments to buy additional shares of common
stock, as noted below.
o Partial Dividend Reinvestment. This option directs the
Administrator to reinvest any cash dividends paid on a specified
number of shares of common stock then owned by you in stock
certificate form plus all dividends on shares of our common stock
held in your Plan account. We will continue to pay you any cash
dividends on the remaining shares of common stock owned by you in
stock certificate form. To participate in the partial dividend
reinvestment feature of the Plan, you must own a minimum of 100
shares of common stock in stock certificate form, and you must
elect to reinvest any dividends on at least 100 shares of such
common stock. This option also permits you to make optional cash
investments to buy additional shares of common stock, as noted
below.
o Optional Cash Investments. This option permits you to make
optional cash investments from $100 to $10,000 per month to buy
additional shares of common stock on a regular or occasional
basis. You may also request, and in our sole discretion we may
approve, a waiver permitting you to make optional cash investments
in an amount greater than $10,000 per month. You may elect to make
optional cash investments even if you do not elect to reinvest any
cash dividends paid on your shares of common stock. We will
continue to pay you any cash dividends on the shares of common
stock owned by you then or in the future, unless you designate
such shares for dividend reinvestment pursuant to the Plan, as
noted above.
You should choose your investment option by checking the appropriate
option(s) on the Authorization Form. If you sign and return an Authorization
Form without checking an option, the Administrator will choose the "Full
Dividend Reinvestment" option and will reinvest all cash dividends on all shares
of common stock registered in your name, provided you are the registered holder
of at least 100 shares of common stock. If you are not the registered holder of
at least 100 shares of common stock, the Administrator will choose the "Optional
Cash Investments" option, provided you have enclosed an amount from $100 to
$10,000. If you select both Full and Partial Dividend Reinvestment, the
Administrator will choose the "Full Dividend Reinvestment" option, provided you
are the registered holder of at least 100 shares of common stock.
The Administrator automatically will reinvest any cash dividends paid on
all shares of common stock that you have designated for participation in the
Plan until you indicate otherwise or withdraw from the Plan, or until we
terminate the Plan. If you have elected to have your dividends reinvested, we
will pay to the Administrator dividends on all shares of common stock held in
your Plan account. The Administrator will credit the common stock purchased with
your reinvested dividends to your Plan account.
CHANGING YOUR INVESTMENT OPTION. You may change your investment option by
completing and signing a new Authorization Form and returning it to the
Administrator of the Plan. The Administrator must receive any such change at
least three business days before the record date for a dividend payment in order
for the change to become effective for that dividend payment. The Administrator
also must receive any change in the number of shares of common stock that you
have designated for partial dividend reinvestment at least three business days
before the record date for a dividend payment in order to reinvest for the new
number of shares on the next Investment Date.
THE BROKER AND NOMINEE FORM. If you are a beneficial owner of shares of
common stock and wish for your broker, bank or other nominee in whose name your
shares are held to participate in the Plan on your behalf, such broker, bank or
other nominee in whose name your shares are held must complete and submit the
enclosed Broker and Nominee Form. The Broker and Nominee Form provides the only
means by which a broker, bank or other nominee in whose name your common shares
are held, may make optional cash investments on your behalf. Your broker, bank
or other nominee in whose name your common shares are held must submit a Broker
and Nominee Form to the Administrator each time such broker, bank or other
nominee in whose name your common shares are held transmits optional cash
investments on your behalf. You, your broker, bank or other nominee in whose
name your common shares are held may request a Broker and Nominee Form at any
time by contacting the Administrator at the address set forth in Question 4.
Prior to submitting a Broker and Nominee Form, your broker, bank or other
nominee in whose name your common shares are held must have submitted a
completed Authorization Form on your behalf. The Administrator must receive the
Broker and Nominee Form and appropriate instructions at least three business
days before the applicable Investment Date or the optional cash investment will
not be invested until the following Investment Date.
7. WHEN WILL MY PARTICIPATION IN THE PLAN BEGIN?
The date on which the Administrator receives your properly completed
Authorization Form will determine the date on which the Administrator will buy
shares of common stock for your account. If you choose either the full or
partial dividend reinvestment option, the Administrator will begin to reinvest
dividends on the Investment Date after receipt of your Authorization Form,
provided it receives such Authorization Form at least three business days before
the record date set for the related dividend payment.
If you choose the "Optional Cash Investments" option and wish to invest
from $100 to $10,000 in any one month, the Administrator will purchase shares of
common stock for you on the Investment Date after receipt of both your
Authorization Form and the funds to be invested, provided it receives such
Authorization Form and funds on or before the close of business on the sixth
business day immediately preceding such Investment Date. If the Administrator
receives your Authorization Form and funds for optional cash investment after
the sixth business day indicated above but before the Investment Date, then the
Administrator will hold your funds, without interest, for investment on the next
Investment Date. Please refer to Question 10 if you wish to invest more than
$10,000.
Once you enroll in the Plan, you will remain enrolled in the Plan until you
withdraw from the Plan or we terminate the Plan or your participation in the
Plan.
PURCHASES
8. HOW ARE SHARES PURCHASED UNDER THE PLAN?
SOURCE OF THE SHARES OF COMMON STOCK. Initially, shares of common stock
purchased by the Administrator under the Plan will come from our legally
authorized but unissued shares of common stock. However, we may, in our sole
discretion, direct the Administrator to purchase shares of common stock in the
open market or in privately negotiated transactions with third parties.
INVESTMENT DATES. When the Administrator purchases shares of common stock
from us, such purchases shall be made on either (1) the dividend payment date
during any calendar month in which we pay a cash dividend or (2) the last
trading day of any calendar month in which we do not pay a cash dividend. This
date of purchase is referred to in the Plan as the Investment Date. A trading
day is a day on which trades in our common shares are reported on the NYSE.
If the Administrator is buying shares of common stock for the Plan through
open market or privately negotiated transactions, then the Administrator will
reinvest dividends or make optional purchases as soon as is practical on or
after the applicable Investment Date.
DIVIDEND PAYMENT DATES. We historically have paid dividends on or about the
last business day of each March, June, September and December. In the past,
record dates for dividends have preceded the dividend payment dates by
approximately two weeks. We cannot assure you that we will continue to pay
dividends according to this schedule, and nothing contained in the Plan
obligates us to do so. Neither we nor the Administrator will be liable when
conditions, including compliance with the provisions of our charter and rules
and regulations of the SEC, prevent the Administrator from buying shares of
common stock or interfere with the timing of such purchases.
We pay dividends as and when authorized by our board of directors and
declared by us. We cannot assure you that we will declare or pay a dividend in
the future, and nothing contained in the Plan obligates us to do so. The Plan
does not represent a guarantee of future dividends.
PRICE OF SHARES OF COMMON STOCK. If the Administrator purchases shares of
common stock directly from us for dividend reinvestments or optional purchases
from $100 to $10,000, then the purchase price for shares of our common stock
will equal 98% of the weighted average of the sales prices for our common stock
during the five trading days ending on the day immediately prior to the
applicable Investment Date.
If the Administrator is buying shares of common stock directly from us
through an optional cash investment of greater than $10,000 pursuant to a
request for waiver (see Question 10 for how to obtain such a waiver), then the
purchase price for shares of our common stock will equal the weighted average of
the sales prices for our common stock during the five trading days ending on the
day immediately prior to the applicable Investment Date. However, we may elect
to offer a discount as described in Question 10 below in connection with a
waiver of the $10,000 optional cash investment limit.
Notwithstanding the foregoing, if the Company has established a Minimum
Waiver Price as described in Question 10 below for optional cash investments of
greater than $10,000 and if the weighted average of the sales prices for our
common stock during the five trading days ending on the day immediately prior to
the applicable Investment Date is less than the Minimum Waiver Price, then the
entire optional cash investment greater than $10,000 will be returned to you
without interest as described in Question 10 below. Both for dividend
reinvestments and optional purchases, we will calculate the weighted average of
the sales prices for any trading day using trading information that we obtain
from both public and private sources.
If the Administrator purchases shares of common stock in the open market or
in privately negotiated transactions, then the Administrator will pay a price
for the shares equal to the weighted average of the purchase prices paid by the
Administrator for the shares, computed to four decimal places. The Administrator
will purchase such shares as soon as is practical on or after an Investment
Date.
However, regardless of the source of shares, in no event will the purchase
price for shares of our common stock for dividend reinvestments or optional
purchases be less than 95% of the average of the high and low sales prices for
our common stock as reported by the NYSE on the purchase date, plus, if the
shares are acquired through open market purchases, the per share amount of
brokerage commissions or fees paid by us.
Participants will incur no brokerage commissions, service charges or other
expenses in connection with purchases of common stock under the Plan, except, if
the amount of brokerage commissions or fees paid by us caused the 95% purchase
price limitations to be met, you would effectively be paying a proportionate
share of those commissions and fees equal to the amount that caused the 95%
limitation to be met.
NUMBER OF SHARES TO BE PURCHASED. If you elect to participate in the Plan
by reinvesting your dividends, the Administrator will invest for you the total
dollar amount equal to the sum of (1) the dividend on all shares of common
stock, including fractional shares, held in your Plan account for which you have
requested dividend reinvestment, and (2) any optional cash investments to be
made as of that Investment Date. Subject to restrictions contained in our
charter on transfer and ownership of common stock described in Question 21,
there is no limit on the number of shares of common stock you may purchase
through dividend reinvestment. If you elect to make only optional cash
investments, the Administrator will invest for you the total dollar amount equal
to any optional cash investments to be made as of that Investment Date. As of
any Investment Date, the Administrator will purchase for your account the number
of shares of common stock equal to the total dollar amount to be invested for
you, as described above, divided by the applicable purchase price, computed to
the fourth decimal place. The Administrator will deduct from the amount to be
invested for you any amount that we are required to deduct for withholding tax
purposes.
ADMINISTRATOR'S CONTROL OF PURCHASE TERMS. With respect to purchases of
common stock that the Administrator makes under the Plan, the Administrator, or
a broker that the Administrator selects, will determine the following:
o the exact timing of open market purchases;
o the number of shares of common stock, if any, that the Administrator
purchases on any one day or at any time of that day;
o the prices for the shares of common stock that the Administrator pays;
o the markets on which the Administrator makes the purchases; and
o the persons, including brokers and dealers, from or through which the
Administrator makes such purchases.
COMMINGLING OF FUNDS. When making purchases for an account under the Plan,
the Administrator may commingle your funds with those of other stockholders
participating in the Plan.
9. HOW DO I MAKE OPTIONAL CASH INVESTMENTS?
You may make optional cash investments at any time if you have submitted a
signed Authorization Form or your broker, bank or other nominee has submitted a
Broker and Nominee Form, and if you are (1) a registered holder of common
shares, or (2) a beneficial owner of common shares and either have directed your
broker, bank or other nominee in whose name your shares are held to transfer at
least one common share to your name or you have arranged with your broker, bank
or other nominee in whose name your shares are held to participate in the Plan
on your behalf.
SUBSEQUENT OPTIONAL CASH INVESTMENTS. Once you enroll in the Plan and make
an initial investment, whether by dividend reinvestment or optional cash
investment, the Administrator will attach an Optional Cash Investment Form to
each statement of account it sends to you. To make an optional cash investment
once enrolled in the Plan, you should send a properly completed Optional Cash
Investment Form and a check or money order (payable to American Stock Transfer &
Trust Company) in an amount from $100 to $10,000 to the Administrator at the
address set forth in Question 4 by the close of business on the sixth business
day preceding an Investment Date.
If you are a beneficial owner of common stock, you, through your broker,
bank or other nominee, must make all optional cash investments through the use
of the Broker and Nominee Form, as set forth in Question 6.
The Administrator will hold, without interest, all optional cash
investments that it receives after the close of business on the sixth business
day before an Investment Date and before the next Investment Date. The
Administrator will invest such held-over funds on the next Investment Date,
provided that the next Investment Date falls within 35 or fewer days. If the
next Investment Date will occur in more than 35 days, then the Administrator
will return such funds to you, without interest.
MINIMUM AND MAXIMUM LIMITS. For any Investment Date on which you choose to
make an optional cash investment, you must invest at least $100 but not more
than $10,000. You may invest an amount greater than $10,000 in any month if you
obtain a prior written waiver from us to do so. See Question 10 to learn how to
request a waiver.
Items To Remember When Making Optional Cash Investments. When making your
optional cash investment, you should consider the following:
o All optional cash investments must equal at least $100 but not more
than $10,000 per month;
o You do not have to make an optional cash payment in any month;
o You do not have to send the same amount of cash payment each month;
o You must make all optional cash investments in United States dollars;
and
o You must send optional cash investments in the form of a check or
money order payable to American Stock Transfer & Trust Company. Do
not send cash.
REFUNDS OF UNINVESTED OPTIONAL CASH INVESTMENTS. To obtain a refund of
optional cash investment funds which the Administrator has not yet invested, you
must send a written request to the Administrator at the address set forth in
Question 4. The Administrator must receive your request no later than three
business days prior to the Investment Date in order to refund your money for
such Investment Date.
INTEREST ON OPTIONAL CASH INVESTMENTS. You will not earn interest on
optional cash investments held pending investment. We therefore suggest that you
send any optional cash investment that you wish to make so as to reach the
Administrator as close as possible to the sixth business day preceding the next
Investment Date. You should contact the Administrator if you have any questions
regarding these dates.
10. HOW DO I MAKE AN OPTIONAL CASH INVESTMENT OVER $10,000 PER MONTH?
If you wish to make an optional cash investment in excess of $10,000 for
any Investment Date, you must obtain our prior written approval. Our approval
will be granted or denied, in whole or in part, in our sole discretion. To make
a request for waiver, you should complete the enclosed Request for Waiver Form
and send it to our Chief Financial Officer via facsimile at (305) 947-1734 no
later than ten business days preceding the applicable Investment Date. If we
have approved your request for waiver, then you must send to the Administrator a
copy of our written waiver approval along with your optional cash investment of
greater than $10,000. The Administrator must receive your optional cash
investment in good funds pursuant to a Request for Waiver by the close of
business six business days preceding the applicable Investment Date. Please see
Question 9 for other provisions relating to optional cash investments.
We have the sole discretion to approve any request to make an optional cash
investment in excess of the $10,000 maximum allowable amount. We may grant such
requests for waiver in order of receipt or by any other method that we determine
to be appropriate. We may grant waivers for certain stockholders and deny
waivers for other stockholders, in our sole discretion. We also may grant, in
our sole discretion, the waiver for the entire requested amount or a portion of
the requested amount. In deciding whether to approve your request for waiver, we
may consider, among other things, the following factors:
o whether, at the time of such request, the Administrator is acquiring
shares of common stock for the Plan directly from us or in the open
market or in privately negotiated transactions with third parties;
o our need for additional funds;
o our desire to obtain such additional funds through the sale of common
stock as compared to other sources of funds;
o the purchase price likely to apply to any sale of common stock;
o the extent and nature of your prior participation in the Plan;
o the number of shares of common stock you hold of record or beneficially;
and
o the total amount of optional cash investments in excess of $10,000 for
which requests for waiver have been submitted for that Investment Date.
If you do not receive a timely response from us in connection with your
request for waiver, your request for waiver will be deemed denied.
MINIMUM WAIVER PRICE AND DISCOUNT. We may, in our sole discretion, set a
minimum purchase price per share (the "Minimum Waiver Price") and a discount on
the purchase price of shares of common stock purchased by the Administrator from
us (the "Discount") for optional cash investments made pursuant to all requests
for waiver for any month that have been approved by us. We will determine
whether to set a Minimum Waiver Price or Discount, and, if so, their respective
amounts, at least 15 business days prior to the applicable Investment Date. We
will notify the Administrator of the Minimum Waiver Price, if any, and the
Discount, if any. In deciding whether to set a Minimum Waiver Price or Discount,
we will consider current market conditions, the level of participation in the
Plan, our current and projected capital needs and other factors, as appropriate.
The Minimum Waiver Price, if any, for any month shall be a dollar amount
that the weighted average of the sales prices during the five trading days
immediately prior to the applicable Investment Date must equal or exceed. A
trading day is a day on which trades in our common shares are reported on the
NYSE. If the weighted average of the sales prices during the five trading days
immediately prior to the applicable Investment Date does not equal or exceed the
Minimum Waiver Price, then we will return to you the entire amount of the
optional cash investment that exceeds $10,000 without interest. We will
calculate the weighted average of the sales prices using trading information
that we obtain from the NYSE and other sources that we deem reliable.
The Discount may be between 0% and 3%, inclusive, of the weighted average
of the sales prices for our common stock during the five trading days ending on
the day immediately prior to the applicable Investment Date, but in no event
less than 95% of the average of the daily high and low sales prices for our
common stock on the purchase date.
The establishment of the Minimum Waiver Price or Discount applies only to
optional cash investments made pursuant to a request for waiver. Setting a
Minimum Waiver Price or Discount for any month will not affect the setting of a
Minimum Waiver Price or Discount for any other month. We may waive our right to
set a Minimum Waiver Price or Discount for any particular month. Neither we nor
the Administrator is required to give you notice of the Minimum Waiver Price or
Discount for any month. However, you may contact our Chief Financial Officer on
or after the Minimum Waiver Price/ Discount Set Date (indicated on "Calendar of
Expected Events" attached as Exhibit B to this prospectus) at (305) 947-1664 to
learn whether we have set a Minimum Waiver Price/Discount for that month.
11. WHAT IF I HAVE MORE THAN ONE ACCOUNT?
For purposes of the limitations discussed in Question 10, we may aggregate
all optional cash investments for Plan participants with more than one account
using the same social security or taxpayer identification number. If you are
unable to supply a social security or taxpayer identification number, we may
limit your participation to only one Plan account.
For purposes of the Plan, we may aggregate all Plan accounts that we
believe, in our sole discretion, to be under common control or management or to
have common ultimate beneficial ownership. Unless we have determined that
reinvestment of dividends and optional cash investments for each such account
would be consistent with the purposes of the Plan, we will have the right to
aggregate all such accounts and to return, without interest, within 30 (for
dividend reinvestment) or 35 (for optional cash investment) days of receipt, any
amounts in excess of the investment limitations applicable to a single account
received in respect of all such accounts.
CERTIFICATES
12. WILL I RECEIVE CERTIFICATES FOR SHARES PURCHASED?
Safekeeping of Certificates. Unless your shares are held by a broker, bank
or other nominee, we will register shares of common stock that the Administrator
purchases for your account under the Plan in your name. The Administrator will
credit such shares to your Plan account in "book-entry" form. This service
protects against the loss, theft or destruction of certificates representing
shares of common stock.
You also may send to the Administrator for safekeeping all certificates for
shares of common stock which you hold. The Administrator will credit the shares
of common stock represented by such certificates to your account in "book-entry"
form and will combine such shares with any whole and fractional shares then held
in your Plan account. In addition to protecting against the loss, theft or
destruction of your certificates, this service also is convenient if and when
you sell shares of common stock through the Plan. See Question 13 to learn how
to sell your shares of common stock under the Plan.
You may deposit certificates for shares of common stock into your account
regardless of whether you have previously authorized reinvestment of dividends.
The Administrator automatically will reinvest all dividends on any such shares
deposited in accordance with the Plan, unless you have instructed the
Administrator otherwise.
To deposit certificates for safekeeping under the Plan, you should send
your share certificates, in non-negotiable form, to the Administrator by insured
mail at the address specified in Question 4. You may withdraw any shares
deposited for safekeeping by mailing a written request to the Administrator.
ISSUANCE OF CERTIFICATES. Upon your written request to the Administrator or
upon our termination of the Plan or your participation in the Plan, the
Administrator will issue and deliver to you certificates for all whole shares of
common stock credited to your Plan account. The Administrator will not issue
certificates for fractional shares of common stock. The Administrator will
handle such requests at no cost to you. The Administrator will continue to
credit any remaining whole or fractional shares of common stock to your account.
EFFECT OF REQUESTING CERTIFICATES IN YOUR NAME. If you request a
certificate for whole shares of common stock held in your account, either of the
following may occur:
o If you maintain an account for reinvestment of dividends, then the
Administrator will continue to reinvest all dividends on the
shares of common stock for which you requested a certificate so
long as such shares remain registered in your name; or
o If you maintain an account only for optional cash investments,
then the Administrator will not reinvest dividends on shares of
common stock for which you requested a certificate unless and
until you submit an Authorization Form to authorize reinvestment
of dividends on the shares registered in your name.
TRANSFER RESTRICTIONS. You may not pledge, sell or otherwise transfer
common shares credited to your Plan account. If you wish to pledge, sell or
transfer the shares, you must first request that we issue a certificate for the
shares in your name. Please also see Question 21 which describes certain
provisions of our charter which restrict transfer and ownership of shares.
SALE OF SHARES
13. HOW DO I SELL SHARES?
Sale of Shares Held in Your Account. You may request in writing at any time
that the Administrator sell all or any part of the shares of common stock held
in your Plan account. After receipt of your written request, the Administrator
will sell such shares through a designated broker or dealer. The Administrator
will mail to you a check for the proceeds of such sale, less applicable
brokerage commissions, service charges and any taxes. The Administrator must
receive your written instructions at least 48 hours prior to the sale. The
Administrator will sell shares at least once per week at then current market
prices through one or more brokerage firms.
If you sell or transfer only a portion of the shares of common stock in
your Plan account, you will remain a participant in the Plan and may continue to
make optional cash investments and reinvest dividends, provided that you satisfy
the 100 share minimum dividend reinvestment eligibility threshold in your Plan
account. The Administrator will continue to reinvest the dividends on the shares
of common stock credited to your account unless you notify the Administrator
that you wish to withdraw from the Plan.
COSTS OF SELLING SHARES. The Plan requires you to pay all costs associated
with the sale of your shares of common stock under the Plan. Please see the
"Plan Service Fees Schedule" attached as Exhibit A hereto for a detailed
description of such costs.
SALE OF FRACTIONAL SHARES HELD IN YOUR PLAN ACCOUNT. The Administrator will
not sell a fractional share of common stock unless you request that the
Administrator sell (or withdraw via a certificate issuance) all shares of common
stock held in your Plan account.
TERMINATION OF YOUR ACCOUNT UPON SALE OF ALL SHARES. If the Administrator
sells all shares of common stock held in your Plan account, the Administrator
will automatically terminate your account. In such case, you will have to
complete and file a new Authorization Form to again participate in the Plan.
REPORTS
14. HOW WILL I KEEP TRACK OF MY INVESTMENTS?
Each time the Administrator makes an investment for your account, whether
by reinvestment of dividends or by optional cash investment, the Administrator
will send you a detailed statement that will provide the following information
with respect to your Plan account:
o total cash dividends received;
o total optional cash investments received;
o total number of shares of common stock purchased (including fractional
shares);
o price paid per share of common stock;
o date of share purchases; and
o total number of shares of common stock in your Plan account.
You should retain these statements to determine the tax cost basis of
the shares purchased for your account under the Plan.
WITHDRAWAL
15. HOW WOULD I WITHDRAW FROM PARTICIPATION IN THE PLAN?
Withdrawal from the Plan. You may withdraw from the Plan at any time. In
order to withdraw from the Plan, you must provide written notice instructing the
Administrator to terminate your account. The Administrator must receive notice
at least three business days before the record date for any dividend payment in
order to terminate your Plan account prior to the dividend payment date. If your
request to withdraw from the Plan is received by the Administrator after the
sixth business day before the dividend payment date, then your withdrawal
request will be processed by the Administrator following completion of the
reinvestment of your proceeds of the upcoming cash dividend, in accordance with
your existing instructions.
Costs of Withdrawal from the Plan. The Plan requires you to pay all costs
associated with your withdrawal from the Plan. Please see the "Plan Service Fees
Schedule" attached as Exhibit A hereto for a detailed description of such costs.
Issuance of Stock Certificates upon Withdrawal from the Plan. Upon
termination of your Plan account, the Administrator will issue to you stock
certificates for any whole shares of common stock in your account. The
Administrator will convert to cash any fractional share held in your account at
the time of termination at the then current market price of the common stock.
After the Administrator terminates your account, we will pay to you all cash
dividends on shares of common stock owned by you unless you rejoin the Plan.
Selling Shares upon Withdrawal from the Plan. As an alternative to
receiving stock certificates, upon termination of your Plan account you may
request in writing that the Administrator sell all or a portion of the common
shares (both whole and fractional) in your account. If you instruct the
Administrator only to sell a portion of your common shares, then the
Administrator will issue a certificate to you for the remaining shares. The
Administrator will mail a check to you for the proceeds of the sale, less
applicable brokerage commissions, service charges and applicable taxes.
Rejoining the Plan after Withdrawal. After you withdraw from the Plan, you
may again participate in the Plan at any time by filing a new Authorization Form
with the Administrator. However, the Administrator has the right to reject such
Authorization Form if you repeatedly join and withdraw from the Plan, or for any
other reason. The Administrator's exercise of such right is intended to minimize
unnecessary administrative expenses and to encourage use of the Plan as a
LONG-TERM STOCKHOLDER INVESTMENT SERVICE.
TAX CONSIDERATIONS
16. WHAT ARE THE INCOME TAX CONSEQUENCES FOR PARTICIPANTS IN THE PLAN?
You are encouraged to consult your personal tax advisers with specific
reference to your own tax situation and potential changes in the applicable law
as to all federal, state, local, foreign and other tax matters in connection
with the reinvestment of distributions and optional purchases of common stock
under the Plan, your tax basis and holding period for common stock acquired
under the Plan and the character, amount and tax treatment of any gain or loss
realized on the disposition of common stock. The following is a brief summary of
the material federal income tax considerations applicable to the Plan, is for
general information only, and is not tax advice. In particular, this summary
generally does not address tax consequences to persons who are not United States
persons. In general, a United States person is a citizen or individual resident
of the United States, a corporation or other entity taxable as a corporation for
U.S. federal income tax purposes that is created or organized in the United
States or under the laws of the United States or of any state or the District of
Columbia, an estate whose income is includible in gross income for U.S. federal
income tax purposes regardless of its source, or a trust if (1) a court within
the United States is able to exercise primary supervision over the
administration of the trust, and one or more United States persons have the
authority to control all substantial decisions of the trust or (2) the trust was
in existence on August 20, 1996 and properly elected to continue to be treated
as a United States person. Partners in partnerships that hold common shares and
participate in the plan should consult their own tax advisers regarding their
tax consequences.
In the case of common stock purchased by the Administrator from us, you
will be treated for federal income tax purposes as having received a
distribution equal to the fair market value, as of the Investment Date, of the
common stock purchased with reinvested distributions. The discount will be
treated as being part of the distribution received. With respect to common stock
purchased by the Administrator in open market transactions or in negotiated
transactions with third parties, the Internal Revenue Service has indicated in
somewhat similar situations that the amount of distribution you receive would
include the fair market value of the common stock purchased with reinvested
distributions and a pro rata share of any brokerage commission or other related
charges paid by us in connection with the Administrator's purchase of the common
stock on your behalf. As in the case of nonreinvested cash distributions, the
distributions described above will constitute taxable dividends to you to the
extent of our current and accumulated earnings and profits allocable to the
distributions, and any excess distributions will constitute a return of capital
that reduces the basis of your common stock and gain to the extent the excess
distribution exceeds your tax basis in your common stock. In addition, if we
designate part or all of our distributions as capital gain distributions, you
would treat those designated amounts as long-term capital gains. Dividends that
we pay are not eligible for the dividends received deduction otherwise generally
available to a stockholder that is a corporation.
Your tax basis in your common stock acquired under the Plan will generally
equal the total amount of distributions you are treated as receiving, as
described above. Your holding period in your common stock generally begins on
the day following the date on which the common stock is credited to your Plan
account.
17. WHAT ARE THE TAX CONSEQUENCES OF OPTIONAL CASH PAYMENTS?
The Internal Revenue Service has indicated in somewhat similar situations
that if you make an optional cash purchase of common stock under the Plan you
will be treated as having received a distribution equal to the excess, if any,
of the fair market value on the Investment Date of the common stock over the
amount of the optional cash payment you made. Also, if the common stock is
acquired by the Administrator in an open market transaction or in a negotiated
transaction with third parties, then the Internal Revenue Service may assert
that you will be treated as receiving a distribution equal to a pro rata share
of any brokerage commission or other related charges paid by us on your behalf.
The Plan provides that we will pay those amounts for both the reinvestment of
distributions and purchases of common stock with optional cash payments. Any
distributions that you are treated as receiving, including any discount, would
be taxable income or gain or reduce basis in your common stock, or some
combination thereof, under the rules described above.
In several private letter rulings, the Internal Revenue Service has held
that a stockholder who participated in both the dividend reinvestment and stock
purchase aspects of a dividend reinvestment and cash option purchase plan
offered by a REIT under which stock could be acquired at a discount, would be
treated in the case of a cash option purchase as having received at the time of
the purchase a distribution from the REIT, taxable to the stockholder in the
manner described above in an amount equal to the amount of the discount; but
that a stockholder who participated solely in the cash purchase part of the plan
would not be treated as having received a distribution of the discount amount
and, therefore, would realize no income attributable to the discount.
Your tax basis in common stock acquired through an optional cash purchase
under the Plan generally will equal the total amount of distributions, if any,
you are treated as receiving, as described above, plus the amount of the
optional cash payment. Your holding period for common stock purchased under the
Plan generally will begin on the day following the date on which common stock is
credited to your Plan account.
18. HOW ARE ADMINISTRATIVE EXPENSES TREATED?
Although the matter is not free from doubt, based on certain private letter
rulings obtained by other taxpayers, we intend to take the position that
administrative expenses of the Plan that we pay do not give rise to constructive
distributions to you.
19. WHAT ARE THE TAX CONSEQUENCES OF DISPOSITIONS?
When you withdraw shares from the Plan and receive whole shares, you will
not realize any taxable income. You may recognize a gain or loss upon receipt of
a cash payment for a fractional share of common stock credited to your Plan
account or when the common stock held in your account is sold at your request.
You may also recognize a gain or loss upon your disposition of common stock you
receive from the Plan. The amount of any gain or loss you recognize will be the
difference between your amount realized, generally the amount of cash you
receive, for the common stock and your tax basis in the common stock. Generally,
gain or loss recognized on the disposition of common stock acquired under the
Plan will be treated for federal income tax purposes as capital gain or loss if
you do not hold the common stock as a dealer. The capital gain or loss will be
taxed as long-term capital gain or loss if your holding period for the common
stock exceeds one year.
20. HOW ARE BACKUP WITHHOLDING AND INFORMATION REPORTING PROVISIONS
APPLIED TO YOU?
In general, any distribution reinvested under the Plan is not subject to
federal income tax withholding. The Administrator or we may be required,
however, to deduct as "backup withholding" at rates described below a portion of
all distributions paid to you, regardless of whether those distributions are
reinvested pursuant to the Plan. Similarly, the Administrator may be required to
deduct backup withholding from all proceeds of sales of common stock held in
your Plan account. The backup withholding rate is 30% for payments made in 2002
and 2003, 29% for payments made in 2004 and 2005, and 28% for payments made in
2006 and thereafter. You are subject to backup withholding if (1) you fail to
properly furnish the Administrator and us with your correct taxpayer
identification number ("TIN"), (2) the Internal Revenue Service notifies the
Administrator that the TIN you furnished is incorrect, (3) the Internal Revenue
Service notifies the Administrator or us that backup withholding should be
commenced because you failed to report on your tax return certain amounts paid
to you, or (4) when required to do so, you fail to certify, under penalties of
perjury, that you are not subject to backup withholding. Backup withholding
amounts will be withheld from distributions before those distributions are
reinvested under the Plan. Therefore, if you are subject to backup withholding,
your distributions to be reinvested under the Plan will be reduced by the backup
withholding amount. The withheld amounts constitute a credit on your federal
income tax return or may be refundable. Backup withholding will not apply,
however, if you (1) furnish a correct TIN and certify that you are not subject
to backup withholding on Internal Revenue Service Form W-9 or an appropriate
substitute form, (2) provide a certificate of foreign status on Internal Revenue
Service Form W-8BEN or an appropriate substitute form or (3) are otherwise
exempt from backup withholding.
The Administrator will send a Form 1099-DIV to you and to the Internal
Revenue Service after the end of each year, reporting all dividend income you
received during the year on your common stock. If you sell any common stock
through the Plan, the Administrator will send a Form 1099-B to you and to the
Internal Revenue Service after the end of each year, showing the total proceeds
of the transactions.
21. IS THERE ANY LIMIT ON THE AMOUNT OF COMMON STOCK I CAN PURCHASE
PURSUANT TO THE PLAN?
For us to qualify as a real estate investment trust for federal income tax
purposes, no more than 50% in value of our outstanding stock may be actually
and/or constructively owned by five or fewer individuals (as defined in the
Internal Revenue Code to include certain entities) during the last half of a
taxable year or during a proportionate part of a short taxable year (the
"Closely-Held Requirement"), and our common stock must be beneficially owned by
100 or more persons during at least 335 days of a taxable year or during a
proportionate part of a short taxable year (the "100 Stockholder Requirement").
Our charter contains an ownership restriction (the "Ownership Limitation") to
help ensure compliance with these requirements. The Ownership Limitation
provides that no holder of our stock may own, or be deemed to own by virtue of
any of the attribution rules of the Internal Revenue Code, more than 9.9% by
value of our outstanding Stock. Our board of directors may exempt a stockholder
from the Ownership Limitation if the stockholder presents evidence satisfactory
to the board of directors or our tax counsel that the ownership of our common
stock by the stockholder will not then or in the future jeopardize our status as
a real estate investment trust. As a condition of the exemption, a stockholder
must give us written notice of the proposed transaction and must furnish those
opinions of counsel, affidavits, undertakings, agreements and information as the
board of directors may require, no later than the fifteenth day prior to any
transaction which, if consummated, would result in the stockholder having the
direct or beneficial ownership of shares in excess of the Ownership Limitation.
The Ownership Limitation will not apply if the board of directors determines
that it is no longer in our best interests to continue to qualify as a real
estate investment trust.
Any acquisition of shares of our common stock under the Plan, whether a
reinvestment of dividends or an optional cash investment, is subject to being
voided, ab initio, in the event that acquisition would result in a violation of
the Ownership Limitation, Closely-Held Requirement or 100 Stockholder
Requirement. If your acquisition is voided, you will receive in cash any
dividends that were to be reinvested and a refund of any optional cash payment,
in either case without interest.
OTHER PROVISIONS
22. HOW CAN I VOTE MY SHARES?
We will send you proxy materials for any meeting of stockholders in order
to vote all shares of common stock credited to your account. You may vote your
common shares either by designating the vote of such shares by proxy or by
voting such shares in person at the meeting of stockholders.
23. WHAT ARE THE COSTS OF THE PLAN?
You will not pay any brokerage commissions and service charges in
connection with the purchase of shares of common stock under the Plan, except
that if the amount of brokerage commissions or fees paid by us causes the 95%
purchase price limitation that is described in the answer to Question 8 to be
met, you would effectively be paying a proportionate share of those commissions
and fees equal to the amount that causes the 95% limitation to be met. You will
be responsible for any fees payable in connection with your sale of shares or
voluntary or involuntarily withdrawal from the Plan. Please see the "Plan
Service Fees Schedule" attached as Exhibit A hereto for a detailed description
of such costs.
All costs of administration of the Plan will be paid by us.
24. WHAT ARE YOUR AND THE ADMINISTRATOR'S RESPONSIBILITIES?
We, the Administrator and any of our agents, in administering the Plan, are
not liable for any act done in good faith or for any good faith failure to act,
including, without limitation, any claim of liability (1) arising from the
failure to terminate your account upon your death or judgment of incompetence
prior to the Administrator's receipt of notice in writing of such death; (2)
relating to the prices and times at which the Administrator buys or sells shares
of common stock for your account; or (3) relating to any fluctuation in the
market value of the common stock.
We, the Administrator and any of our agents will not have any duties,
responsibilities or liabilities other than those expressly set forth in the Plan
or as imposed by applicable law, including federal securities laws. Since we
have delegated all responsibility for administering the Plan to the
Administrator, we specifically disclaim any responsibility for any of the
Administrator's actions or inactions in connection with the administration of
the Plan. None of our directors, officers or stockholders will have any personal
liability under the Plan.
25. HOW WILL A STOCK SPLIT OR A RIGHTS OFFERING AFFECT MY PLAN ACCOUNT?
Effect of a Stock Split. We will adjust your account to reflect any stock
split or dividend payable in shares of common stock. In such event, the
Administrator will receive and credit to your Plan account the applicable number
of whole and/or fractional common shares.
Effect of a Rights Offering. If we have a rights offering in which we issue
separately tradable and exercisable rights to registered holders of common
shares, we will transfer the rights attributable to whole shares of common stock
held in your Plan account to you as soon as practicable after we issue such
rights. The Administrator will sell rights attributable to fractional shares of
common stock and will treat the proceeds as optional cash payments on the next
Investment Date.
26. CAN I PLEDGE MY SHARES UNDER THE PLAN?
You may not pledge any shares of common stock credited to your Plan
account. Any attempted pledge will be void. If you wish to pledge your common
shares, you first must withdraw the shares from the Plan. See Question 13 to
learn how to sell your shares under the Plan.
27. HOW CAN I TRANSFER MY SHARES?
You may transfer ownership of all or part of the shares of common stock
held in your Plan account through gift, private sale or otherwise by mailing to
the Administrator, at the address in Question 4, a properly executed stock
assignment, along with a letter with specific instructions regarding the
transfer. You also must mail to the Administrator an Authorization Form and a
Form W-9 (Certification of Taxpayer Identification Number) completed by the
person to whom you are transferring your shares.
You also may transfer ownership of all or part of the shares of common
stock held in your Plan account into the account of another person within the
Plan. To complete such a transfer, you must mail to the Administrator a letter
with specific instructions regarding the transfer and an Authorization Form
completed by the person to whom you are transferring your shares.
28. CAN THE PLAN BE AMENDED, MODIFIED, SUSPENDED OR TERMINATED?
Although we expect to continue the Plan indefinitely, we reserve the right
to amend, modify, suspend or terminate the Plan in any manner at any time. We
will provide advanced public notification in writing of any modifications made
to the Plan.
29. WHAT HAPPENS IF YOU TERMINATE THE PLAN?
If we terminate the Plan, you will receive a certificate for all whole
shares of common stock held in your Plan account and a check representing the
value of any fractional share of common stock valued at the then current market
price and any uninvested dividends or optional cash investments held in your
account.
30. ARE THERE ANY RISKS ASSOCIATED WITH THE PLAN?
Your investment in shares purchased under the Plan is no different from any
investment in shares that you hold directly. Neither we nor the Administrator
can assure you a profit or protect you against a loss on shares that you
purchase. You bear the risk of loss and enjoy the benefits of any gain from
changes in the market price with respect to shares of common stock purchased
under the Plan. We encourage you to carefully consider the various risks
associated with an investment in our common stock set forth in "Risk Factors"
contained elsewhere in this prospectus.
31. HOW WILL YOU INTERPRET AND REGULATE THE PLAN?
We may interpret, regulate and take any other action in connection with the
Plan that we deem reasonably necessary to carry out the Plan. As a participant
in the Plan, you will be bound by any actions taken by us or the Administrator.
32. WHAT LAW GOVERNS THE PLAN?
The laws of the State of Maryland will govern the terms, conditions and
operation of the Plan.
33. WHERE WILL NOTICES BE SENT?
The Administrator will address all of its notices to you at your last known
address. You should notify the Administrator promptly in writing of any change
of address.
INFORMATION ABOUT EQUITY ONE, INC.
We are a self-administered, self-managed real estate investment trust, or
REIT, that principally acquires, renovates, develops and manages community and
neighborhood shopping centers. Our shopping centers are primarily anchored by
supermarkets or other necessity-oriented retailers such as drug stores or
discount retail stores. As of June 30, 2002, our portfolio consisted of 90
properties, comprising 56 supermarket-anchored shopping centers, eight drug
store-anchored shopping centers, 20 other retail-anchored shopping centers,
three commercial properties and three retail developments, as well as
non-controlling interests in three joint ventures that own commercial
properties. Our existing properties are located primarily in metropolitan areas
of Florida and Texas, contain an aggregate of 8.7 million square feet of gross
leasable area, and were 87.6% leased based on gross leasable area as of June 30,
2002.
Our executive offices are located at 1696 N.E. Miami Gardens Drive, North
Miami Beach, Florida 33179. Our telephone number is (305) 947-1664.
USE OF PROCEEDS
We will receive proceeds from the sale of common shares that the
Administrator purchases directly from us. We will not receive proceeds from the
sale of common shares that the Administrator purchases in the open market or in
privately negotiated transactions. We will use the proceeds from the sale of the
shares of common stock that the Administrator purchases directly from us for
general corporate purposes. We cannot estimate either the number of shares of
common stock or the prices of the shares that we will sell in connection with
the Plan.
PLAN OF DISTRIBUTION
Except to the extent the Administrator purchases shares of common stock in
the open market or in privately negotiated transactions with third parties, we
will sell directly to the Administrator the shares of common stock acquired
under the Plan. The shares, including shares acquired pursuant to requests for
waivers, may be resold in market transactions on any national securities
exchange on which shares of common stock trade or in privately negotiated
transactions. Our common stock is currently listed on the NYSE.
Pursuant to the Plan, we may be requested to approve optional cash
investments in excess of the allowable maximum amounts pursuant to requests for
waiver on behalf of participants in the Plan that may be engaged in the
securities business. In deciding whether to approve a request for waiver, we may
consider relevant factors including, among other things:
o whether, at the time of such request, the Administrator is
acquiring shares of common stock for the Plan directly from us or
in the open market or in privately negotiated transactions with
third parties;
o our need for additional funds;
o our desire to obtain such additional funds through the sale of
common stock as compared to other sources of funds;
o the purchase price likely to apply to any sale of common stock;
o the extent and nature of or participant's prior participation in
the Plan;
o the number of shares of common stock a participant holds of
record; and
o the total amount of optional cash investments in excess of
$10,000 for which requests for waiver have been submitted.
We may sell shares of common stock through the Plan to persons who, in
connection with the resale of the shares, may be considered underwriters. In
connection with these types of transactions, compliance with Regulation M under
the Securities Exchange Act of 1934, as amended, would be required. We will not
give any person any rights or privileges other than those that the person would
be entitled to as a participant under the Plan. We will not enter into any
agreement with any the person regarding the person's purchase, resale or
distribution of shares. Under certain circumstances, we may, however, approve
requests for optional cash investments in excess of the allowable maximum
limitations pursuant to requests for waivers.
Subject to the availability of shares of common stock registered for
issuance under the Plan, there is no total maximum number of shares that can be
issued pursuant to the reinvestment of dividends and optional cash investments.
We will pay all brokerage commissions and service charges in connection with the
reinvestment of dividends and optional cash investments to purchase common
shares under the Plan. You will have to pay any fees payable in connection with
your voluntary sale of shares from your Plan account and/or withdrawal from the
Plan.
LEGAL MATTERS
Our special Maryland counsel, Ballard Spahr Andrews & Ingersoll, LLP, has
issued an opinion to us regarding certain legal matters in connection with this
offering, including the validity of the issuance of the shares of common stock
offered pursuant to the Plan. Our counsel, Greenberg Traurig, P.A., has issued
an opinion to us regarding certain tax matters.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-K/A for the year ended December 31, 2001
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
INDEMNIFICATION
The MGCL requires us, unless our charter provides otherwise, which it does
not, to indemnify a director or officer who has been successful in the defense
of any proceeding to which he or she is made a party by reason of his or her
service in that capacity. The MGCL allows a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or she is or was
a director, officer, employee or agent of the corporation or is or was serving
at the request of the corporation as a director, officer, employee, partner,
trustee, or agent of another foreign or domestic corporation, partnership, joint
venture, trust, or other enterprise, unless it is established that:
o the act or omission was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result of
active and deliberate dishonesty;
o the person actually received an improper personal benefit in money,
property or services; or
o in the case of any criminal proceeding, the person had reasonable
cause to believe that the act or omission was unlawful.
Under The MGCL, indemnification may be provided against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by the
person in connection with the proceeding. The indemnification may be provided,
however, only if authorized for a specific proceeding after a determination has
been made that indemnification is permissible in the circumstances because the
person met the applicable standard of conduct. This determination is required to
be made:
o by the board of directors by a majority vote of a quorum consisting of
directors not, at the time, parties to the proceeding;
o if a quorum cannot be obtained, then by a majority vote of a committee
of the board consisting solely of two or more directors not, at the
time, parties to the proceeding;
o by special legal counsel; or
o by the shareholders.
However, under the MGCL, a Maryland corporation may not indemnify for an
adverse judgment in a suit by or in the right of the corporation or for a
judgment of liability on the basis that personal benefit was improperly
received, unless in either case a court orders indemnification and then only for
expenses.
A Maryland corporation may pay, before final disposition, the expenses,
including attorneys' fees, incurred by a director, officer, employee or agent in
defending a proceeding. Under the MGCL, expenses may be advanced to a director
or officer when the trustee or officer gives written affirmation that he or she
has met the standard of conduct necessary for indemnification and a written
undertaking to the corporation to repay the amounts advanced if it is ultimately
determined that he or she is not entitled to indemnification. The MGCL does not
require that the undertaking be secured and the undertaking may be accepted
without reference to the financial ability of the director or officer to repay
the advance. A Maryland corporation is required to indemnify any director who
has been successful, on the merits or otherwise, in defense of a proceeding for
reasonable expenses. The determination as to reasonableness of expenses is
required to be made in the same manner as required for indemnification.
Under the MGCL, the indemnification and advancement of expenses provided by
statute are not exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of shareholders, vote of directors or otherwise.
Our bylaws require the corporation to indemnify, to the maximum extent
permitted by the MGCL, and, without requiring a preliminary determination of the
ultimate entitlement to indemnification, to pay or reimburse reasonable expenses
in advance of final disposition of a proceeding to:
o any individual who is a present or former director or officer of us and
who is made a party to the proceeding by reason of his service in that
capacity; or
o any individual who, while a director of us and at our request, serves or
has served another corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or any other
enterprise as a director, officer, partner, managing member or trustee
of such entity and who is made a party to the proceeding by reason of
his service in that capacity.
We may, with the approval of our board of directors, provide such
indemnification and advance expenses to a person who served a predecessor of us
in any of the capacities described in the two clauses above and to any employee
or agent of us or a predecessor of us.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trust managers, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission that
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
EXHIBIT A
PLAN SERVICE FEES SCHEDULE
Enrollment Fee for New Investors.....................No Charge
Initial Purchase of Shares...........................No Charge(2)
Sale of Shares (partial or full) (1)
Transaction Fee.................................$15.00 per sale transaction
Trading Fee.....................................$0.10 per share
Reinvestment of Dividends............................No Charge(2)
Optional Cash Purchases..............................No Charge(2)
Gift or Transfer of Shares...........................No Charge
Safekeeping of Stock Certificates....................No Charge
Certificate Issuance.................................No Charge
Returned Checks for Insufficient Funds...............$25.00 per item
Duplicate Statements
Current Year....................................No Charge
Prior Year(s)...................................$20.00 per year requested
- --------------------------------------------------------------------------
(1) The Administrator will deduct the applicable fees from the proceeds of a
sale.
(2) Under certain circumstances if the Administrator purchases shares of common
stock in open market transactions, you may effectively be paying a portion of
the brokerage commissions and fees. See Question 8.
WE RESERVE THE RIGHT TO AMEND OR MODIFY THIS PLAN SERVICE FEES SCHEDULE AT ANY
TIME.
A-1
EXHIBIT B
CALENDAR OF EXPECTED EVENTS
Minimum Waiver Price/Discount Set Date (1) Request For Waiver Optional Investment Due
Due Date Date (2) Investment Date (3)
- ----------------------------- ---------------------- ---------------------- ------------------------
September 9, 2002 (3) September 16, 2002 (3) September 20, 2002 (3) September 30, 2002 (3)
October 11, 2002 October 18, 2002 October 24, 2002 October 31, 2002
November 8, 2002 November 15, 2002 November 21, 2002 November 29, 2002
December 10, 2002 (3) December 17, 2002 (3) December 23, 2002 (3) December 31, 2002 (3)
January 10, 2003 January 17, 2003 January 23, 2003 January 31, 2003
February 7, 2003 February 14, 2003 February 20, 2003 February 28, 2003
March 11, 2003 (3) March 18, 2003 (3) March 24, 2003 (3) March 31, 2003 (3)
April 9, 2003 April 16, 2003 April 22, 2003 April 30, 2003
May 8, 2003 May 16, 2003 May 22, 2003 May 30, 2003
June 9, 2003 (3) June 16, 2003 (3) June 20, 2003 (3) June 30, 2003 (3)
July 10, 2003 July 17, 2003 July 23, 2003 July 31, 2003
August 8, 2003 August 15, 2003 August 21, 2003 August 29, 2003
September 9, 2003 (3) September 16, 2003 (3) September 22, 2003 (3) September 30, 2003 (3)
October 10, 2003 October 17, 2003 October 23, 2003 October 31, 2003
November 7, 2003 November 14, 2003 November 20, 2003 November 28, 2003
December 10, 2003 (3) December 17, 2003 (3) December 23, 2003 (3) December 31, 2003 (3)
- --------------
(1) The Minimum Waiver Price and Discount, if any, will be established 15
business days prior to the applicable Investment Date. The Minimum Waiver
Price and Discount only applies to purchases made pursuant to an approved
Request for Waiver.
(2) Payment for any optional cash investments must be received by the
Administrator by the close of business on the sixth business day
immediately preceding the applicable Investment Date.
(3) Based upon our historical dividend payment dates, we may pay common stock
dividends in this month. If our board of directors declares the common
stock dividend payments for this month, then the Investment Date will be
the dividend payment date in this month, and the Minimum Waiver
Price/Discount Set Date, Request for Waiver Due Date and Optional Cash
Investment Due Date will be adjusted accordingly.
B-1
U.S. EQUITY MARKETS
CLOSED AFTER SEPTEMBER 1, 2002
Thanksgiving Day........................................... November 28
Christmas Day.............................................. December 25
- --------------------------------------------------------
U.S. EQUITY MARKETS
CLOSED IN 2003
New Years Day.............................................. January 1
Martin Luther King Jr. Day................................. January 20
Presidents Day............................................. February 17
Good Friday................................................ April 18
Memorial Day............................................... May 26
Independence Day........................................... July 4
Labor Day.................................................. September 1
Thanksgiving Day........................................... November 27
Christmas Day.............................................. December 25
B-2
================================================================================
5,153,214 Shares of Common Stock
EQUITY ONE, INC.
Dividend Reinvestment
and
Stock Purchase Plan
---------------------------
PROSPECTUS
---------------------------
================================================================================
September 11, 2002
================================================================================
================================================================================
================================================================================
AUTHORIZATION FORM
EQUITY ONE, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
To: American Stock Transfer & Trust Company
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
Telephone: (877) 253-6850
Fax Number: (718) 234-1440
INSTRUCTIONS
This form is to be used only by Equity One, Inc. shareholders to indicate
their interest in participating in the Equity One, Inc. Dividend Reinvestment
and Stock Purchase Plan. This form will not be accepted by the Administrator
unless it is completed in its entirety and is accompanied by the full amount of
the optional cash investment, if any.
The Participant submitting this form hereby certifies that (i) the
information contained herein is true and correct as of the date of this form;
and (ii) the Participant has received a copy of the Prospectus, dated September
11, 2002, relating to the Plan and agrees to abide by its provisions. If you
are electing to make an optional cash investment, it must be at least $100. If
your optional cash investment is in excess of $10,000, you must submit a Request
for Waiver Form with this form. If your shares are held in your name by a
securities depository and you are making an optional cash investment, you must
submit a Broker and Nominee Form with this form.
I wish to participate in the Equity One, Inc. Dividend Reinvestment and
Stock Purchase Plan as follows (mark an "X" on the appropriate line(s)):
____ FULL DIVIDEND REINVESTMENT. I want to reinvest the cash dividends on all
shares now or hereafter registered in my name and on all shares held for
me by the Administrator. I may also elect to make an optional cash
investment, as noted below.
____ PARTIAL DIVIDEND REINVESTMENT. I want to reinvest the cash dividends on
_______ shares registered in my name and want to receive cash dividends
on the rest of my shares. I understand that cash dividends on all shares
held for me by the Administrator will be reinvested in shares. I may
also elect to make an optional cash investment, as noted below.
____ OPTIONAL CASH INVESTMENT. I want to make an optional cash investment. I
understand that you will continue to pay me cash dividends on the shares
of common stock owned by me now or in the future, unless I have
designated such shares for dividend reinvestment, as noted above.
- -------------------------------------------------- ------------------------
NAME OF PARTICIPANT (MUST MATCH PRINTED NAME BELOW) SOCIAL SECURITY NUMBER
- --------------------------------------------------------------------------------
ADDRESS OF PARTICIPANT
-------- CHECK ------- MONEY ORDER --------------
- --------------------------- MANNER OF PAYMENT (MARK ONE) TODAY'S DATE
OPTIONAL CASH INVESTMENT
AMOUNT, IF ANY
- --------------------------- --------------------------------
PARTICIPANT (SIGNATURE) PARTICIPANT (PRINT NAME)
BROKER AND NOMINEE FORM
EQUITY ONE, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
To: American Stock Transfer & Trust Company
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
Telephone: (877) 253-6850
Fax Number: (718) 234-1440
INSTRUCTIONS
This form is to be used by a broker, bank or other nominee submitting an
optional cash investment on behalf of a Participant whose shares are held in the
name of a securities depository, as provided for in the Prospectus, dated
September 11, 2002, for the Equity One, Inc. Dividend Reinvestment and Stock
Purchase Plan. A new form must be completed each month an optional cash
investment is submitted. This form will not be accepted by the Administrator
unless it is completed in its entirety and is accompanied by the full amount of
the optional cash investment, if any.
The broker, bank or other nominee submitting this form hereby certifies
that (i) the information contained herein is true and correct as of the date of
this form; (ii) a current copy of the Prospectus has been delivered to the
Participant; and (iii) the optional cash investment amount specified below is
not less than $100 nor greater than $10,000 (unless a completed Request for
Waiver Form accompanies this Broker and Nominee Form). Shares issued upon
request will be registered in the nominee name of the respective depository.
- -------------------------------------------------- ----------------------
NAME OF PARTICIPANT (MUST MATCH PRINTED NAME BELOW) SOCIAL SECURITY NUMBER
- --------------------------------------------------------------------------------
ADDRESS OF PARTICIPANT
- ---------------------------------- --------------------------------------------
NAME OF SECURITIES DEPOSITORY PARTICIPANT ACCOUNT NUMBER AT DEPOSITORY
- ---------------------------------- --------------------------------------------
BROKER/NOMINEE CONTACT BROKER/NOMINEE TELEPHONE NUMBER
- --------------------------------------------- --------------------------------
SHARES HELD WITH DEPOSITORY AS OF RECORD DATE TODAY'S DATE
- --------------------------------------- --------- MONEY ORDER ------- CHECK
OPTIONAL CASH INVESTMENT AMOUNT, IF ANY MANNER OF PAYMENT (MARK ONE)
- --------------------------------------- -------------------------------------
PARTICIPANT (SIGNATURE) PARTICIPANT (PRINT NAME)
REQUEST FOR WAIVER FORM
EQUITY ONE, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Chief Financial Officer
Equity One, Inc.
1696 N.E. Miami Gardens Drive
North Miami Beach, Florida 33179
Telephone: (305) 947-1664
Fax Number: (305) 947-1734
INSTRUCTIONS
This form is to be used only by Participants in the Equity One, Inc.
Dividend Reinvestment and Stock Purchase Plan who are requesting a waiver from
Equity One, Inc. to make an optional cash investment under the Plan in excess of
$10,000. A new form must be completed each month the Participant wishes to make
an optional cash investment in excess of $10,000. Equity One, Inc., in its sole
discretion, may approve investments in excess of $10,000.
The Participant submitting this form hereby certifies that (i) the
information contained herein is true and correct as of the date of this form;
(ii) the Participant has received a copy of the Prospectus dated September 11,
2002, relating to the Plan; and (iii) the Participant shall deliver a copy of
this Request for Waiver (approved by Equity One, Inc.) to American Stock
Transfer & Trust Company, the administrator of the Plan, no later than six
business days prior to the applicable Investment Date together with an
Authorization Form or a Broker and Nominee Form and the optional cash investment
in good funds.
- --------------------------------------- ------------------------
NAME OF PARTICIPANT (MUST MATCH PRINTED NAME BELOW) SOCIAL SECURITY NUMBER
- --------------------------------------------------------------------------------
ADDRESS OF PARTICIPANT
$---------------- -------------
OPTIONAL CASH INVESTMENT AMOUNT TODAY'S DATE
- ----------------------------- --------------------------------
PARTICIPANT (SIGNATURE) PARTICIPANT (PRINT NAME)
================================================================================
Approved by Equity One, Inc.
- ------------------------------------ ----------------------------------
Name: Date:
Title:
Minimum Waiver Price, if any: $_________ Applicable Discount, if any: _____%
THIS REQUEST FOR WAIVER MAY NOT BE WITHDRAWN BY THE PARTICIPANT.
---
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the offering are as follows:
Securities and Exchange Commission Registration Fee.............................$ 6,177.80
Legal Fees and Expenses.........................................................$ 20,000
Accounting Fees and Expenses....................................................$ 5,000
Printing and Engraving Expenses.................................................$ 10,000
Miscellaneous...................................................................$ 4,999.20
------------
Total.......................................................................$ 46,177
============
All amounts except the Securities and Exchange Commission registration fee
are estimated.
Item 15. Indemnification of Directors and Officers.
The Maryland General Corporation Law permits a Maryland corporation to
include in its charter a provision limiting the liability of its directors and
officers to the corporation and its stockholders for money damages except for
liability resulting from (a) actual receipt of an improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment as being material to the cause of action. Our charter
contains such a provision which limits such liability to the maximum extent
permitted by The MGCL. This provision does not limit our ability, or our
stockholders ability, to obtain other relief, such as an injunction or
rescission.
Our charter and bylaws authorize and obligate us, to the maximum extent
permitted by the MGCL, to indemnify and to pay or reimburse reasonable expenses
in advance of final disposition of a proceeding to any present or former
director or officer who is made a party to the proceeding by reason of his
service in that capacity or any individual who, while serving as a director on
our board, and at our request, serves or has served another corporation, REIT,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, partner or trustee of such corporation, REIT,
partnership, joint venture, trust, employee benefit plan or other enterprise and
who is made a party to the proceeding by reason of his service in that capacity.
The charter and bylaws also permit us to indemnify and advance expenses to any
person who served a predecessor to us in any of the capacities described above
and to any of our employees or agents, or employees or agents of a predecessor.
The MGCL requires a corporation, unless its charter provides otherwise,
which our charter does not, to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
also permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made a party by reason of their service in those or other
capacities unless it is established that the act or omission of the director 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,
the director or officer actually received an improper personal benefit in money,
property or services or in the case of any criminal proceeding, the director or
officer had reasonable cause to believe that the act or omission was unlawful.
However, under the MGCL, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation or for a judgment of
liability on the basis that a personal benefit was improperly received, unless
in either case a court orders indemnification and then only for expenses. In
addition, the MGCL permits a corporation to advance reasonable expenses to a
director or officer upon our receipt of a written affirmation by the director or
officer of his good faith belief that he has met the standard of conduct
necessary for indemnification by us and a written undertaking by him or on his
behalf to repay the amount paid or reimbursed by us if it shall ultimately be
determined that the standard of conduct was not met. The termination of any
proceeding by conviction, or upon a plea of nolo contendere or its equivalent,
or an entry of any order of probation prior to judgment, creates a rebuttable
presumption that the director or officer did not meet the requisite standard of
conduct required for indemnification to be permitted.
We have entered into indemnification agreements with each member of the
board of directors. The indemnification agreements require, among other things,
that we indemnify to the fullest extent permitted by law and advance to each
indemnified director all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. Under the
indemnification agreements, we must also indemnify and advance all expenses
incurred by an indemnified director seeking to enforce his rights under the
indemnification agreements and may cover executive officers and directors under
our directors' and officers' liability insurance. Although the form of
indemnification agreement offers substantially the same scope of coverage
afforded by law, it provides greater assurance to directors and executive
officers that indemnification will be available, because, as a contract, it
cannot be modified unilaterally in the future by the board of directors or the
stockholders to eliminate the rights it provides.
It is the position of the Securities and Exchange Commission that
indemnification of directors and officers for liabilities arising under the
Securities Act is against public policy and is unenforceable pursuant to Section
14 of the Securities Act.
Item 16. Exhibits
Exhibit
Number Description
------ -----------
4.1 Articles of Amendment and Restatement of Equity One, Inc. (incorporated
by reference to Exhibit 3.1 to the Registration Statement on Form S-11
filed November 6, 1997 (Registration No. 333-33977)).
4.2 Amended and Restated Bylaws of Equity One, Inc. (incorporated by
reference to Exhibit 3.2 to the Registration Statement on Form S-11
filed November 6, 1997 (Registration No. 333-33977)).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP, regarding the
legality of the offered securities.*
8.1 Opinion of Greenberg Traurig, P.A. as to certain federal income taxation
matters.*
23.1 Consent of Deloitte & Touche LLP.*
23.4 Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in legal
opinion filed as Exhibit 5.1).
23.5 Consent of Greenberg Traurig, P.A. (contained in legal opinion filed as
Exhibit 8.1).
24.1 Powers of Attorney (included on signature pages hereto).
- -------------------------
* Previously filed.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof, and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been, settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned registrants hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(2) For purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
as that time shall be deemed to be the initial bona fide offering
thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami, State of Florida, on September 13, 2002.
EQUITY ONE, INC.
By: /s/ Chaim Katzman
------------------------------------
Chaim Katzman
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Chaim Katzman and Howard M. Sipzner his
true and lawful attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ CHAIM KATZMAN Chairman of the Board and Chief September 13, 2002
- --------------------------------------------------- Executive Officer
Chaim Katzman
/s/ HOWARD M. SIPZNER Chief Financial Officer and September 13, 2002
- --------------------------------------------------- Principal Accounting Officer
Howard M. Sipzner
/s/ DORON VALERO President and September 13, 2002
Director
- ---------------------------------------------------
Doron Valero
/s/ NOAM BEN OZER Director September 13, 2002
- ---------------------------------------------------
Noam Ben Ozer
/s/ DR. SCHAIY PILPEL Director September 13, 2002
- ---------------------------------------------------
Dr. Schaiy Pilpel
/s/ ROBERT COONEY Director September 13, 2002
- ---------------------------------------------------
Robert Cooney
/s/ RONALD CHASE Director September 13, 2002
- ---------------------------------------------------
Ronald Chase
/s/ DORI SEGAL Director September 13, 2002
- ---------------------------------------------------
Dori Segal
/s/ PETER LINNEMAN Director September 13, 2002
- ---------------------------------------------------
Peter Linneman
/s/ NATHAN HETZ Director September 13, 2002
- ---------------------------------------------------
Nathan Hetz
By:/s/ Chaim Katzman
----------------------------------
Chaim Katzman
Attorney-in-Fact