e424b5
Filed Pursuant to Rule 424(b)(5)
Registration
No. 333-156689
Prospectus Supplement
(To Prospectus dated
February 9, 2009)
400,000 Shares
7.25% Series D Cumulative
Convertible Perpetual Preferred Shares of Beneficial
Interest
We are offering 400,000 shares of 7.25% Series D
Cumulative Convertible Perpetual Preferred Shares of Beneficial
Interest (the Series D Preferred Shares). The
annual dividend on each Series D Preferred Share is $3.625
and is payable, when, as and if declared by our board of
trustees, quarterly in cash, in arrears, on each January 1,
April 1, July 1 and October 1, commencing on
July 1, 2011. Each Series D Preferred Share has a
liquidation preference of $50.00 per share and is convertible,
at the holders option at any time, initially into 3.4699
of our common shares (equal to an initial conversion price of
approximately $14.41 per share), subject in each case to
specified adjustments as set forth in this prospectus
supplement. The Series D Preferred Shares are not
redeemable by us. If a fundamental change occurs, we may be
required to pay a make-whole premium on Series D Preferred
Shares converted in connection therewith, through the increase
of the applicable conversion rate, as described in this
prospectus supplement. On or after April 20, 2018, we may
at our option cause all of the outstanding Series D
Preferred Shares to be mandatorily converted into that number of
common shares for each Series D Preferred Share equal to
the then-prevailing conversion rate if the Daily VWAP (as
defined herein) of our common shares equals to or exceeds 130%
of the then-prevailing conversion price for at least 20 trading
days in a period of 30 consecutive trading days, including the
last trading day of such
30-day
period.
The Series D Preferred Shares are listed on the New York
Stock Exchange (the NYSE), under the symbol
RPT PrD. We will apply to list the Series D
Preferred Shares offered hereby on the NYSE under the existing
symbol RPT PrD covering the outstanding
Series D Preferred Shares. Our common shares are traded on
the NYSE under the symbol RPT. On April 26,
2011, the last sale price of our common shares as reported on
the NYSE was $12.84 per share.
Investing in our securities involves risk. You should
carefully consider each of the factors described under
Risk Factors beginning on
page S-9
of this prospectus supplement, as well as the accompanying
prospectus and our most recent Annual Report on
Form 10-K,
which is incorporated by reference in this prospectus supplement
and the accompanying prospectus, before you make any investment
in our Series D Preferred Shares.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of the securities or
passed upon the accuracy or adequacy of this prospectus
supplement or the accompanying prospectus. Any representation to
the contrary is a criminal offense.
|
|
|
|
|
|
|
|
|
|
Per share
|
|
Total
|
|
Public offering price (1)
|
|
$
|
50
|
.00
|
|
$
|
20,000,000
|
Underwriting discount
|
|
$
|
1
|
.50
|
|
$
|
600,000
|
Proceeds, before expenses, to us
|
|
$
|
48
|
.50
|
|
$
|
19,400,000
|
|
|
|
(1)
|
|
Plus accrued dividends from
April 6, 2011.
|
Delivery of our convertible preferred shares to purchasers is
expected to occur on or about April 29, 2011.
Joint Book Running Managers
|
|
Deutsche Bank
Securities |
J.P. Morgan |
KeyBanc Capital
Markets
Stifel Nicolaus
Weisel
|
|
|
|
|
Comerica Securities
|
|
PNC Capital Markets LLC
|
|
RBS
|
The date of this prospectus supplement is April 27, 2011.
You should rely only on the information contained or
incorporated by reference in this prospectus supplement, the
accompanying prospectus and any related free writing prospectus
required to be filed with the Securities and Exchange Commission
(the SEC). We have not, and the underwriters have
not, authorized anyone to provide you with different
information. We are not, and the underwriters are not, offering
to sell these securities or soliciting an offer of these
securities in any jurisdiction where the offer is not permitted.
You should not assume that the information contained in this
prospectus supplement or the accompanying prospectus is accurate
as of any date other than the date on the front of this
prospectus supplement. Our business, financial condition,
results of operations and prospects may have changed since that
date. Information contained on our web site does not constitute
part of this prospectus supplement or the accompanying
prospectus.
TABLE OF
CONTENTS
Prospectus
Supplement
|
|
|
|
|
|
|
Page
|
|
|
|
|
S- 1
|
|
|
|
|
S- 1
|
|
|
|
|
S- 2
|
|
|
|
|
S- 3
|
|
|
|
|
S- 9
|
|
|
|
|
S-17
|
|
|
|
|
S-18
|
|
|
|
|
S-19
|
|
|
|
|
S-20
|
|
|
|
|
S-44
|
|
|
|
|
S-51
|
|
|
|
|
S-54
|
|
|
|
|
S-55
|
|
Prospectus
|
|
|
|
|
|
|
Page
|
|
About This Prospectus
|
|
|
3
|
|
Where You Can Find More Information
|
|
|
3
|
|
Incorporation of Information We File With the SEC
|
|
|
3
|
|
Special Note Regarding Forward-Looking Statements
|
|
|
4
|
|
Who We Are
|
|
|
5
|
|
Risk Factors
|
|
|
6
|
|
Use of Proceeds
|
|
|
6
|
|
Ratios of Earnings to Fixed Charges and Preferred Share Dividends
|
|
|
7
|
|
The Securities We May Offer
|
|
|
7
|
|
Description of Debt Securities
|
|
|
8
|
|
Description of Common Shares
|
|
|
11
|
|
Description of Preferred Shares
|
|
|
15
|
|
Description of Warrants
|
|
|
20
|
|
Description of Rights
|
|
|
21
|
|
Certain Provisions of Maryland Law and of Our Declaration of
Trust and Amended and Restated Bylaws
|
|
|
21
|
|
Certain Federal Income Tax Considerations
|
|
|
25
|
|
Legal Matters
|
|
|
46
|
|
Experts
|
|
|
46
|
|
Disclosure of SEC Position on Indemnification for Securities Act
Liabilities
|
|
|
46
|
|
(i)
ABOUT THIS
PROSPECTUS SUPPLEMENT
You should read this prospectus supplement along with the
accompanying prospectus and any free writing
prospectus we authorize to be delivered to you, as well as
the information incorporated by reference herein and therein,
carefully before you invest in our Series D Preferred
Shares. The documents incorporated by reference herein are
described under Where You Can Find More Information
in the accompanying prospectus and Incorporation of
Information We File With the SEC below. These documents
contain important information that you should consider before
making your investment decision. This prospectus supplement and
the accompanying prospectus contain the terms of this offering
of Series D Preferred Shares. The accompanying prospectus
contains information about our securities generally, some of
which does not apply to the Series D Preferred Shares
covered by this prospectus supplement. This prospectus
supplement may add, update or change information contained in or
incorporated by reference in the accompanying prospectus. If the
information in this prospectus supplement is inconsistent with
any information contained in or incorporated by reference in the
accompanying prospectus, the information in this prospectus
supplement will apply and will supersede the inconsistent
information contained in or incorporated by reference in the
accompanying prospectus.
Unless this prospectus supplement otherwise indicates or the
context otherwise requires, the terms trust,
company, we, us and
our as used in this prospectus supplement refer to
Ramco-Gershenson Properties Trust
and/or one
or more of a number of separate, affiliated entities, including
Ramco-Gershenson Properties, L.P., which we refer to as our
Operating Partnership.
INCORPORATION OF
INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference into
this prospectus supplement documents that we file with the SEC.
This permits us to disclose important information to you by
referring you to those filed documents. Any information
incorporated by reference this way is considered to be a part of
this prospectus, and information filed by us with the SEC
subsequent to the date of this prospectus will automatically be
deemed to update and supersede this information.
We incorporate by reference into this prospectus supplement the
documents listed below, which we have already filed with the SEC:
|
|
|
|
|
our Annual Report on
Form 10-K
for the year ended December 31, 2010 (including the
portions of our Proxy Statement on Schedule 14A, filed on
April 19, 2011, incorporated by reference therein);
|
|
|
|
our Current Reports on Form 8-K filed on April 6, 2011
and April 12, 2011; and
|
|
|
|
the description of our common shares contained in our
registration statement on
Form 8-A
filed with the SEC on November 1, 1988 (which incorporates
by reference pages
101-119 of
our prospectus/proxy statement filed with the SEC on
November 1, 1988), as updated by the description of our
common shares contained in our definitive proxy statement on
Schedule 14A for our special meeting of shareholders held on
December 18, 1997.
|
Whenever, after the date of this prospectus supplement, we file
reports or documents under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the
Exchange Act), those reports and documents will be
incorporated by reference and deemed to be a part of this
prospectus supplement from the time they are filed (other than
Current Reports or portions thereof furnished under
Item 2.02 or Item 7.01 of
Form 8-K).
Any statement made in this prospectus supplement or in a
document incorporated or deemed to be
S-1
incorporated by reference into this prospectus supplement will
be deemed to be modified or superseded for purposes of this
prospectus supplement to the extent that a statement contained
in this prospectus supplement or in any other subsequently filed
document that is also incorporated or deemed to be incorporated
by reference into this prospectus supplement modifies or
supersedes that statement. Any statement so modified or
superseded will not be deemed, except as so modified or
superseded, to constitute a part of this prospectus supplement.
We will provide without charge, upon written or oral request, a
copy of any or all of the documents which are incorporated by
reference into this prospectus supplement, excluding any
exhibits to those documents unless the exhibit is specifically
incorporated by reference as an exhibit to the registration
statement of which this prospectus supplement forms a part.
Requests for documents should be directed to Ramco-Gershenson
Properties Trust, 31500 Northwestern Highway, Suite 300,
Farmington Hills, Michigan 48334 (telephone number
(248) 350-9900).
You should rely only on the information contained or
incorporated by reference into this prospectus supplement and
the accompanying prospectus. We have not authorized anyone to
provide you with different or additional information. If anyone
provides you with different or inconsistent information, you
should not rely on it.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
Information included and incorporated by reference in this
prospectus supplement and the accompanying prospectus contains
forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, or
the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, or the
Exchange Act. You can identify these forward-looking
statements by our use of the words believe,
anticipate, plan, expect,
may, might, should,
will, intend, estimate,
predict and similar expressions, whether in the
negative or affirmative. These forward-looking statements
represent our expectations or beliefs concerning future events,
including: statements regarding future developments and joint
ventures, rents, returns, and earnings; statements regarding the
continuation of trends; and any statements regarding the
sufficiency of our cash balances and cash generated from
operating, investing, and financing activities for our future
liquidity and capital resource needs. We caution that although
forward-looking statements reflect our good faith beliefs and
reasonable judgment based upon current information, these
statements are not guarantees of future performance and are
qualified by important factors that could cause actual results
to differ materially from those in the forward-looking
statements, because of risks, uncertainties, and factors
including, but not limited to: the final terms of the offering
and the final size of the offering; our success or failure in
implementing our business strategy; economic conditions
generally and in the commercial real estate and finance markets
specifically; our cost of capital, which depends in part on our
asset quality, our relationships with lenders and other capital
providers; our business prospects and outlook; changes in
governmental regulations, tax rates and similar matters; and our
continuing to qualify as a REIT. Further, we have included
important factors in this prospectus supplement, particularly
under the heading Risk Factors beginning on
page S-9,
and the accompanying prospectus and the documents incorporated
by reference herein, that we believe could cause our actual
results to differ materially from the forward-looking statements
that we make. All forward-looking statements included or
incorporated by reference in this prospectus supplement and the
accompanying prospectus are made as of the date hereof or the
date specified herein, based on information available to us as
of such date. Except as required by law, we do not undertake any
obligation to update our forward-looking statements or the risk
factors contained herein to reflect new information or future
events or otherwise. You are cautioned not to place undue
reliance on forward-looking statements.
S-2
SUMMARY
This summary may not contain all the information that may be
important to you in deciding whether to invest in our
Series D Preferred Shares. You should read the entire
prospectus supplement and the accompanying prospectus and the
documents incorporated and deemed to be incorporated by
reference herein and therein, including the financial statements
and related notes before making an investment decision.
The
Company
Ramco-Gershenson Properties Trust is a fully integrated,
self-administered, publicly-traded REIT specializing in the
ownership, management, development and redevelopment of
community shopping centers located in the Eastern and Midwestern
regions of the United States. At December 31, 2010, we
owned and managed, either directly or through our interest in
real estate joint ventures, a total of 89 shopping centers and
one office building with approximately 20.3 million square
feet of gross leasable area (GLA), of which
15.6 million square feet is owned directly by us and our
real estate joint ventures.
We conduct substantially all of our business, and hold
substantially all of our interests in our properties, through
the Operating Partnership. The Operating Partnership, either
directly or indirectly through partnerships or limited liability
companies, holds fee title to all owned properties. We have the
exclusive power to manage and conduct the business of the
Operating Partnership. As of December 31, 2010, we owned
approximately 92.9% of the interests in the Operating
Partnership.
Our executive offices are located at 31500 Northwestern Highway,
Suite 300, Farmington Hills, Michigan 48334. Our telephone
number is
(248) 350-9900.
We maintain a web site that contains information about us at
www.rgpt.com. The information included on the web site is not,
and should not be considered to be, a part of this prospectus
supplement or the accompanying prospectus and is not
incorporated by reference herein or therein.
If you want to find more information about us, please see the
sections entitled Where You Can Find More
Information in the accompanying prospectus and
Incorporation of Information We File With the SEC
above.
Recent
Developments
On April 26, 2011, we announced financial results for the
first quarter of 2011.
Funds from Operations (FFO) for the three months ended
March 31, 2011 was $10.1 million or $0.25 per
diluted share, as compared to FFO of $8.5 million, or
$0.25 per diluted share for the same period in 2010. FFO
per share amounts were impacted by a 7.2 million increase
in the number of weighted average shares outstanding for the
three months ended March 31, 2011, compared to the same
period in 2010.
Net loss attributable to our common shareholders for the three
months ended March 31, 2011 was $0.3 million or
$0.01 per diluted share, compared to $0.7 million or
$0.02 per diluted share for the same period in 2010.
S-3
The
Offering
|
|
|
Issuer |
|
Ramco-Gershenson Properties Trust. |
|
Securities Offered |
|
400,000 shares of 7.25% Series D Preferred Shares. |
|
Liquidation Preference |
|
$50.00 per share, plus unpaid accrued and accumulated dividends. |
|
Dividends |
|
Cumulative annual dividends of $3.625 per share payable in cash
quarterly on each January 1, April 1, July 1 and
October 1, commencing on July 1, 2011, when, as and if
authorized by the board of trustees out of funds legally
available for the payment of dividends. Dividends will
accumulate and be paid in arrears on the basis of a
360-day year
consisting of twelve
30-day
months. Dividends on the Series D Preferred Shares will
accumulate and be fully cumulative from the most recent date to
which dividends have been paid, or if no dividends have been
paid, from the original issue date of the Series D
Preferred Shares (April 6, 2011). Accumulated dividends on
the Series D Preferred Shares will not bear interest. See
Description of the Series D Preferred
SharesDividends. |
|
Ranking |
|
The Series D Preferred Shares, with respect to dividend
rights and rights upon our liquidation, dissolution or
winding-up
of our affairs, rank: |
|
|
|
senior to all of our common shares and all of our
other shares of beneficial interest issued in the future, unless
the terms of which specifically provide that such shares rank
senior to, or on a parity with, the Series D Preferred
Shares;
|
|
|
|
on a parity with any of our shares of beneficial
interest issued in the future the terms of which specifically
provide that such shares will rank on a parity with the
Series D Preferred Shares; and
|
|
|
|
junior to all of our shares of beneficial interest
issued in the future, the terms of which specifically provide
that such
|
S-4
|
|
|
|
|
shares will rank senior to the Series D Preferred Shares. |
|
Maturity |
|
The Series D Preferred Shares have no maturity date, and
will not be redeemable by us. Accordingly, the Series D
Preferred Shares will remain outstanding indefinitely unless you
decide to convert your shares, we exercise our mandatory
conversion right or the Series D Preferred Shares are
otherwise repurchased or acquired by us. |
|
Conversion Rights |
|
Each Series D Preferred Share will be convertible, at any
time, at the option of the holder thereof at an initial
conversion rate of 3.4699 common shares per Series D
Preferred Share (which represents an initial conversion price of
approximately $14.41 per common share), subject to adjustment as
described under Description of the Series D Preferred
SharesConversion Rate Adjustment. In certain
circumstances, holders of the Series D Preferred Shares may
be restricted in their ability to convert their Series D
Preferred Shares. See Description of the Series D
Preferred SharesRestrictions on Ownership and
Transfer. |
|
Mandatory Conversion |
|
At any time on or after April 20, 2018, we may at our
option cause all (but not less than all) outstanding
Series D Preferred Shares to be mandatorily converted into
common shares at the then-prevailing conversion rate if the
Daily VWAP (as defined herein) of our common shares is equal to
or exceeds 130% of the then-prevailing conversion price for at
least 20 trading days in a period of 30 consecutive trading
days, including the last trading day of such
30-day
period, ending on the trading day prior to our issuance of a
press release announcing the mandatory conversion as described
under Description of Series D Preferred
SharesMandatory Conversion. |
|
Fundamental Change |
|
If a holder converts its Series D Preferred Shares at any
time beginning at the opening of business on the trading day
immediately following the effective date of a fundamental change
(as described under Description of the Series D |
S-5
|
|
|
|
|
Preferred SharesSpecial Rights Upon a Fundamental
Change) and ending at the close of business on the 30th
trading day immediately following such effective date, the
holder will receive a number of our common shares equal to the
greater of: |
|
|
|
the sum of (i) the applicable conversion rate
and (ii) the make-whole premium, if any, described under
Description of the Series D Preferred
SharesDetermination of the Make-Whole Premium; and
|
|
|
|
the lesser of (i) the liquidation preference
divided by the average of the volume-weighted average prices of
our common shares for ten days preceding the effective date of a
fundamental change and (ii) 7.9808 (subject to adjustment).
|
|
Voting Rights |
|
Except as set forth in the articles supplementary relating to
the Series D Preferred Shares, the holders of Series D
Preferred Shares will have no voting rights. In the event
dividends payable on the Series D Preferred Shares are in
arrears for six or more quarterly dividends, the holders of the
Series D Preferred Shares, voting as a single class with
the holders of any other series of our preferred shares having
similar voting rights, will be entitled at the next regular or
special meeting of our shareholders to elect two trustees and
the number of trustees that comprise our board will be increased
by the number of trustees so elected. These voting rights and
the terms of the trustees so elected will continue until such
time as the dividend arrearage on the Series D Preferred
Shares has been paid in full. |
|
|
|
In addition, subject to certain exceptions, the affirmative vote
or consent of holders of at least two-thirds of the
Series D Preferred Shares outstanding at the time, given in
person or by proxy, either in writing or at a meeting (voting
separately as a class), will be required to (i) authorize,
create or issue, or increase the authorized or issued amount of,
any class or series of our shares of beneficial |
S-6
|
|
|
|
|
interest ranking senior to the Series D Preferred Shares
with respect to the payment of dividends or the distribution of
assets upon our liquidation, dissolution or winding up, or
reclassify any authorized shares of beneficial interest into any
such class or series of our shares of beneficial interest, or
create, authorize or issue any obligation or security
convertible or exchangeable into or evidencing the right to
purchase any such class or series of our shares of beneficial
interest; or (ii) amend, alter or repeal the provisions of
our declaration of trust or the articles supplementary for the
Series D Preferred Shares, whether by merger or
consolidation or otherwise, so as to materially and adversely
affect any right, preference, privilege or voting power of such
Series D Preferred Shares or the holders thereof. |
|
Use of Proceeds |
|
We estimate that the net proceeds from this offering will be
approximately $19.35 million. We intend to use the net
proceeds we receive from this offering for working capital and
other general corporate purposes. See Use of
Proceeds in this prospectus supplement. |
|
Restrictions on Ownership and Transfer |
|
To assist us in complying with certain federal income tax
requirements applicable to real estate investment trusts, among
other purposes, our declaration of trust imposes certain
restrictions on ownership and transfer of our shares of
beneficial interest. See Description of the Series D
Preferred SharesRestrictions on Ownership and
Transfer in this prospectus supplement and
Description of Common SharesRestrictions on
Ownership and Transfer in the accompanying prospectus. |
|
U.S. Federal Income Tax Consequences |
|
For a discussion of the U.S. federal income tax consequences of
purchasing, owning, converting and disposing of the
Series D Preferred Shares and any common shares received
upon conversion, see Additional Federal Income Tax
Considerations in this prospectus supplement. Prospective
investors are urged to consult their own tax advisors regarding |
S-7
|
|
|
|
|
these matters in light of their personal investment
circumstances. |
|
Listing |
|
The Series D Preferred Shares are listed on the NYSE under
the symbol RPT PrD. We will apply to list the
Series D Preferred Shares offered hereby on the NYSE under
the existing symbol RPT PrD covering the outstanding
Series D Preferred Shares. |
|
Book Entry, Delivery and Form |
|
The Series D Preferred Shares will be represented by one or
more global certificates in definitive, fully registered form
deposited with a custodian for, and registered in the name of, a
nominee of the Depository Trust Company. |
|
Risk Factors |
|
Investing in our securities involves risks. See Risk
Factors beginning on
page S-9
of this prospectus supplement, as well as the accompanying
prospectus and our Annual Report on
Form 10-K
for the year ended December 31, 2010, which is incorporated
by reference herein, to read about factors you should consider
before deciding whether to invest in our Series D Preferred
Shares. Realization of any of those risks or adverse results
could have a material adverse effect on our business, financial
condition, cash flows and results of operations. |
|
Common Shares |
|
Our common shares are listed for trading on the NYSE under the
symbol RPT. |
S-8
RISK
FACTORS
Before investing
in our securities, you should carefully consider the risks and
uncertainties described below, as well as such information set
forth elsewhere in this prospectus supplement, the accompanying
prospectus, and any other information that is incorporated by
reference, including the risks described in our reports we file
with the SEC that are incorporated by reference
herein.
The Series D
Preferred Shares rank junior to all of our indebtedness and
other liabilities and is effectively junior to all indebtedness
and other liabilities of our subsidiaries.
In the event of our bankruptcy, liquidation, dissolution or
winding-up
of our affairs, our assets will be available to pay obligations
on the Series D Preferred Shares, including the conversion
of your Series D Preferred Shares into cash, if we so
elect, upon a fundamental change, only after all of our
indebtedness and other liabilities have been paid. The rights of
holders of the Series D Preferred Shares to participate in
the distribution of our assets will rank junior to the prior
claims of our creditors and any future series or class of
preferred shares that ranks senior to the Series D
Preferred Shares. In addition, the Series D Preferred
Shares effectively rank junior to all existing and future
indebtedness and other liabilities of (as well as any preferred
equity interests held by others in) our subsidiaries. Our
subsidiaries, which owned all of our real estate investments at
December 31, 2010, are separate legal entities and have no
legal obligation to pay any amounts to us in respect of
dividends due on the Series D Preferred Shares. If we are
forced to liquidate our assets to pay our creditors, we may not
have sufficient assets to pay amounts due on any or all of the
Series D Preferred Shares then outstanding. We and our
subsidiaries may incur substantial amounts of additional debt
and other obligations that will rank senior to the Series D
Preferred Shares.
We may not be
able to pay dividends on the Series D Preferred
Shares.
Our secured credit facility prohibits us from paying cash
dividends on the Series D Preferred Shares and our common
shares if we default under the credit facility, and other
financing agreements that we enter into in the future also may
limit our ability to pay cash dividends on our shares of
beneficial interest. If we default under the credit facility, or
future financing agreements restrict our ability to pay cash
dividends, we will be unable to pay cash dividends on the
Series D Preferred Shares unless we can refinance amounts
outstanding under those agreements.
In addition, no payment or adjustment will be made upon
conversion for any undeclared or, subject to limited exceptions,
unpaid dividends.
Our ability to pay dividends may be impaired if any of the risks
described in this prospectus supplement and the accompanying
prospectus or incorporated by reference herein and in the
accompanying prospectus, were to occur. In addition, payment of
our dividends depends upon our earnings, our financial
condition, maintenance of our REIT status and other factors as
our board of trustees may deem relevant from time to time.
The price of our
common shares may fluctuate significantly, which will affect the
price of the Series D Preferred Shares and may make it
difficult for you to resell the Series D Preferred Shares
or common shares issuable upon conversion of the Series D
Preferred Shares when you want or at prices you find
attractive.
The price of our common shares on the NYSE has historically
fluctuated significantly. Between January 1, 2009 and
April 26, 2011, the trading price of our common shares has
ranged from $3.88 to $13.51 per share. We expect that the market
price of our common shares will continue to fluctuate for many
reasons, including: our financial condition, performance
S-9
and prospects; general economic and financial market conditions;
changes in estimates by analysts; the market for similar
securities issued by real estate investment trusts; and our
ability to meet analysts estimates. The market price of
our common shares also may be affected by future sales of our
securities, including additional issuances of common shares and
securities convertible into common shares. In addition, the
stock markets in general and companies operating in the real
estate industry in particular have experienced extreme
volatility that has often been unrelated to the operating
performance of specific companies. These factors, among others,
could significantly depress the trading price of our common
shares. Because the Series D Preferred Shares are
convertible into our common shares, volatility or depressed
prices for our common shares could have a similar effect on the
trading price of the Series D Preferred Shares. Holders who
receive common shares pursuant to the terms of the Series D
Preferred Shares also will be subject to the risk of volatility
and depressed prices.
Market interest
rates may affect the price of our Series D Preferred
Shares.
One of the factors that will influence the price of our
Series D Preferred Shares will be the dividend yield on our
Series D Preferred Shares relative to market interest
rates. An increase in market interest rates could cause the
market price of Series D Preferred Shares to go down. The
trading price of our Series D Preferred Shares also will
depend on many other factors, which may change from time to
time, including:
|
|
|
|
|
the market for similar securities;
|
|
|
|
the attractiveness of REIT securities in comparison to the
securities of other companies, taking into account, among other
things, the higher tax rates imposed on dividends paid by REITs;
|
|
|
|
government action or regulation;
|
|
|
|
general economic conditions or conditions in the financial or
real estate markets; and
|
|
|
|
our financial condition, performance and prospects.
|
We may issue
additional series of preferred shares that rank senior or
equally to the Series D Preferred Shares as to dividend
rights, rights upon liquidation or voting rights.
The Series D Preferred Shares, with respect to rights to
the payment of dividends and the distribution of assets upon our
voluntary or involuntary liquidation, dissolution or winding up,
will rank (a) senior to our common shares and all other
classes or series of our shares of beneficial interest issued in
the future that specifically provide that such class or series
of shares of beneficial interest ranks junior to the
Series D Preferred Shares as to the payment of dividends
and the distribution of assets upon our liquidation, dissolution
or winding up, (b) on a parity with all other classes or
series of our shares of beneficial interest issued in the future
other than those referred to in clauses (a) and
(c) that specifically provide that such classes or series
of shares of beneficial interest rank on a parity with the
Series D Preferred Shares as to the payment of dividends
and the distribution of assets upon our liquidation, dissolution
or winding up, and (c) junior to all other classes or
series of our shares issued in the future that specifically
provide that such classes or series of shares of beneficial
interest rank senior to the Series D Preferred Shares as to
the payment of dividends and the distribution of assets upon our
liquidation, dissolution or winding up. We also are allowed to
issue additional series of preferred shares that would rank
equally to the Series D preferred shares as to dividend
payments and rights upon our liquidation, dissolution or winding
up of our affairs pursuant to our declaration of trust,
including the articles supplementary relating to the
Series D Preferred Shares. The issuance of additional
preferred shares could have the effect of reducing the amounts
available to the Series D Preferred Shares issued in this
offering upon our liquidation,
S-10
dissolution or winding up of our affairs. It also may reduce
dividend payments on the Series D Preferred Shares if we do
not have sufficient funds to pay dividends on all Series D
Preferred Shares outstanding and other classes of shares of
beneficial interest with equal priority with respect to
dividends.
In addition, although holders of Series D Preferred Shares
are entitled to limited voting rights, as described in
Description of the Series D Preferred
SharesVoting Rights, with respect to such matters,
the Series D Preferred Shares will vote separately as a
class along with all other series of our preferred shares upon
which like voting rights have been conferred and are exercisable
(which may include holders of any series of preferred shares we
may issue in the future). As a result, the voting rights of
holders of Series D Preferred Shares may be significantly
diluted, and the holders of such other series of preferred
shares may be able to control or significantly influence the
outcome of any vote.
Future issuances and sales of preferred shares, or the
perception that such issuances and sales could occur, may cause
prevailing market prices for the Series D Preferred Shares
and our common shares to decline and may adversely affect our
ability to raise additional capital in the financial markets at
times and prices favorable to us.
Ownership
limitations in our declaration of trust, our amended and
restated bylaws and the articles supplementary relating to the
Series D Preferred Shares may impair the ability of holders
to convert Series D Preferred Shares into our common
shares.
To maintain our qualification as a REIT for federal income tax
purposes, no person or entity may own more than 9.8% of the
aggregate number or value of all of our outstanding common
shares of beneficial interest nor may any person acquire
Series D Preferred Shares such that (i) if such
Series D Preferred Shares were converted into common
shares, such person would own more than 9.8% of the aggregate
number of all of our outstanding common shares; or (ii) he
would own more than 9.8% of the aggregate value of our
outstanding shares (including common shares and all series and
classes of preferred shares). Any acquisition by you of
Series D Preferred Shares (whether in this offering or
following completion of the offering) or other classes of our
shares of beneficial interest (including our common shares) that
result in you exceeding any of these thresholds may not be
valid. See Description of the Series D Preferred
SharesRestrictions on Ownership and Transfer in this
prospectus supplement and Description of Common
SharesRestrictions on Ownership and Transfer in the
accompanying prospectus.
The conversion
rate of the Series D Preferred Shares may not be adjusted
for all dilutive events that may occur.
As described under Description of the Series D
Preferred SharesConversion Rate Adjustment, we will
adjust the conversion rate of the Series D Preferred Shares
for certain events, including, among others:
|
|
|
|
|
the issuance of share dividends on our common shares;
|
|
|
|
the issuance of certain rights, options or warrants;
|
|
|
|
the distribution of shares of beneficial interest, indebtedness
or assets, securities or property;
|
|
|
|
certain subdivisions and combinations of our shares of
beneficial interest;
|
|
|
|
certain cash dividends on our common shares; and
|
|
|
|
certain tender or exchange offers.
|
S-11
We will not adjust the conversion rate for other events, such as
an issuance of common shares for cash or in connection with an
acquisition, which may adversely affect the trading price of the
Series D Preferred Shares or our common shares. If we
engage in any of these types of transactions, the value of the
common shares into which the Series D Preferred Shares may
be convertible may be diluted. In addition, it is possible that
an event will adversely affect the value of the Series D
Preferred Shares or common shares but does not result in an
adjustment to the conversion rate.
The additional
common shares issuable to holders of our Series D Preferred
Shares in connection with a fundamental change may not
adequately compensate you for the lost option time value of your
Series D Preferred Shares or otherwise make you whole as a
result of such fundamental change.
If a fundamental change occurs, you may be entitled to receive,
in certain circumstances, in addition to the number of shares
equal to the applicable conversion rate, an additional number of
shares upon conversion as described under Description of
the Series D Preferred SharesDetermination of the
Make-Whole Premium. The number of additional common shares
will be determined based on the date on which the fundamental
change becomes effective, and the price paid per common share in
the fundamental change transaction as described under
Description of the Series D Preferred
SharesSpecial Rights Upon a Fundamental Change.
While the additional common shares upon conversion are designed
to compensate you for the lost option time value of your
Series D Preferred Shares as a result of the fundamental
change, the increase is only an approximation of this lost value
and may not adequately compensate you for your loss.
In addition, in certain other circumstances involving a
fundamental change, you may be entitled to receive a number of
our common shares for each Series D Preferred Share you
convert equal to the lesser of (i) the liquidation
preference divided by the Market Value (as defined below) of our
common shares on the effective date of the fundamental change
and (ii) 7.9808 common shares (subject to adjustment)
as described under Description of the Series D
Preferred SharesSpecial Rights Upon a Fundamental
Change. To the extent the Market Value of our common
shares is less than $12.53 per share at the time of such a
fundamental change, the number of shares receivable by you upon
conversion in such circumstances will be limited by the
3.9904 share cap, and the value of the shares received by
you will likely be less than $50.00 per Series D Preferred
Share.
Further, the fundamental change provisions will not afford
protection to holders of the Series D Preferred Shares in
the event of certain transactions. For example, transactions
such as leveraged recapitalizations, refinancings,
restructurings or acquisitions initiated by us may not
constitute a fundamental change. In the event of any such
transaction, the holders of the Series D Preferred Shares
would not have the rights described under Description of
the Series D Preferred SharesSpecial Rights Upon a
Fundamental Change, even though each of these transactions
could significantly increase the amount of our leverage, or
otherwise adversely affect our capital structure, thereby
adversely affecting the holders of the Series D Preferred
Shares.
Our obligation to issue shares in excess of the conversion rate
in connection with a fundamental change as described above could
be considered a penalty, in which case its enforceability would
be subject to general principles of reasonableness of economic
remedies.
S-12
The value of the
conversion right associated with the Series D Preferred
Shares may be substantially decreased or eliminated if we are
party to a merger, consolidation, or other similar
transaction.
If we are party to a consolidation, merger, share exchange or
sale or lease of all or substantially all of our assets pursuant
to which our common shares are converted into the right to
receive cash, securities or other property, at the effective
time of the transaction, the right to convert the Series D
Preferred Shares into our common shares will be changed into a
right to convert such shares into the kind and amount of cash,
securities or other property which the holder would have
received if the holder had converted its Series D Preferred
Shares immediately prior to the transaction. This change could
substantially lessen or eliminate the value of the conversion
privilege associated with the Series D Preferred Shares in
the future. For example, if all of our outstanding common shares
were acquired for cash in a merger transaction, each of the
Series D Preferred Shares would become convertible solely
into cash and would no longer be convertible into securities
whose value would vary depending on our future prospects and
other factors.
An active trading
market for the Series D Preferred Shares may not
develop.
Although the Series D Preferred Shares currently
outstanding are listed on the NYSE, we cannot assure you that
a trading market will exist for those securities or the
securities offered hereby. Listing of the Series D
Preferred Shares on the NYSE does not guarantee that a trading
market for the Series D Preferred Shares will develop or,
if a trading market for the Series D Preferred Shares does
develop, that the depth or liquidity of that market will provide
holders the ability to sell their Series D Preferred Shares
on any particular basis.
There may be
future sales or other dilution of our equity, which may
adversely affect the market price of our common shares and the
Series D Preferred Shares.
Except as described under Underwriting with respect
to the
lock-up
arrangements that we will be subject to for a short period of
time following this offering, we are not restricted from issuing
additional common shares, including securities that are
convertible into or exchangeable for, or that represent the
right to receive, common shares, or additional preferred shares.
The issuance of additional common shares upon conversion of the
Series D Preferred Shares or other issuances of our common
shares or convertible securities, including outstanding options,
or otherwise will dilute the ownership interest of our common
shareholders.
Sales of a substantial number of our common shares or other
equity-related securities in the public market could depress the
market price of the Series D Preferred Shares, our common
shares, or both, and impair our ability to raise capital through
the sale of additional equity securities. We cannot predict the
effect that future sales of our common shares or other
equity-related securities would have on the market price of our
common shares or the value of the Series D Preferred
Shares. The price of our common shares could be affected by
sales of our common shares by investors who view the
Series D Preferred Shares as a more attractive means of
equity participation in our company and by hedging or arbitrage
trading activity that we expect to develop involving our common
shares as a result of this offering. The hedging or arbitrage
could, in turn, affect the market price of the Series D
Preferred Shares.
If you hold our
Series D Preferred Shares, you will not be entitled to any
rights with respect to our common shares, but you will be
subject to all changes made with respect to our common
shares.
If you hold our Series D Preferred Shares, you will not be
entitled to any rights with respect to our common shares
(including, without limitation, voting rights and rights to
receive any dividends or other distributions on our common
shares), but you will be subject to all
S-13
changes affecting the common shares. You will have rights with
respect to our common shares only if and when we deliver common
shares to you upon conversion of your Series D Preferred
Shares and, in certain cases, under the conversion rate
adjustments applicable to our Series D Preferred Shares.
Provisions in the
articles supplementary relating to the Series D Preferred
Shares or our organizational documents could delay or prevent a
change in control of our company, which could adversely affect
the price of our common shares and the Series D Preferred
Shares.
If a fundamental change occurs, we may be required to increase
the number of common shares issuable upon conversion of the
Series D Preferred Shares as described under
Description of the Series D Preferred
SharesDetermination of the Make-Whole Premium and
Description of the Series D Preferred
SharesSpecial Rights Upon a Fundamental Change. In
addition, our declaration of trust and bylaws contain
anti-takeover provisions, including REIT ownership limitations,
advance-notice requirements for shareholder proposals and a
two-thirds shareholder vote requirement for certain amendments
to our declaration of trust, that could make it more difficult
for or even prevent a third party from acquiring us without the
approval of our incumbent board of trustees. Provisions like
these, as well as certain terms in our credit facilities and
other indebtedness, could reduce the market value of our common
shares or the Series D Preferred Shares and inhibit or
discourage takeover attempts, even where a takeover could be
beneficial to you.
Recent regulatory
actions may adversely affect the trading price and liquidity of
the Series D Preferred Shares.
We expect that many investors in, and potential purchasers of,
the Series D Preferred Shares will employ, or seek to
employ, a convertible arbitrage strategy with respect to the
Series D Preferred Shares. Investors that employ a
convertible arbitrage strategy with respect to convertible
instruments often implement that strategy by selling short the
common shares underlying the convertible instrument and
dynamically adjusting their short position while they hold the
convertible instrument. Investors also may implement this
strategy by entering into swaps on the common shares in lieu of
or in addition to short selling the common shares. As a result,
any specific rules regulating equity swaps or short selling of
securities or other governmental action that interfere with the
ability of market participants to effect short sales or equity
swaps with respect to our common shares could adversely affect
the ability of investors in, or potential purchasers of, the
Series D Preferred Shares to conduct the convertible
arbitrage strategy that we believe they may seek to employ with
respect to the Series D Preferred Shares. This could, in
turn, adversely affect the trading price and liquidity of the
Series D Preferred Shares.
Recent regulatory actions that could affect the ability to
successfully execute convertible arbitrage and hedging
strategies include the SECs adoption in February 2010 of
new short sale-related restrictions through an amendment to
Rule 201 of Regulation SHO, the Financial Industry
Regulatory Authoritys and stock exchanges circuit
breaker pilot that commenced in June 2010, and the July 2010
enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. Although the direction and magnitude of the
effect that these actions and any additional regulations may
have on the trading price and the liquidity of the Series D
Preferred Shares will depend on a variety of factors, many of
which cannot be determined at this time, past regulatory actions
have had a significant impact on the trading prices and
liquidity of convertible debt instruments. For example, in
September 2008, the SEC issued emergency orders generally
prohibiting short sales in the common shares of a variety of
financial services companies while Congress worked to provide a
comprehensive legislative plan to stabilize the credit and
capital markets. The orders made the convertible arbitrage
strategy that many
S-14
convertible debt investors employ difficult to execute and
adversely affected both the liquidity and trading price of
convertible preferred stock issued by many of the financial
services companies subject to the prohibition. Any governmental
actions that restrict the ability of investors in, or potential
purchasers of, the Series D Preferred Shares to effect
short sales in our common shares or to implement hedging
strategies, including the recently adopted amendments to
Regulation SHO, the circuit breaker pilot or the
implementation of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, could similarly adversely affect the trading
price and the liquidity of the Series D Preferred Shares or
our common shares.
An adverse rating
of the Series D Preferred Shares may cause their trading
price to decrease.
If a rating agency rates the Series D Preferred Shares, it
may assign a rating that is lower than anticipated. If a rating
is assigned to the Series D Preferred Shares, that rating
may be lowered in the future. If rating agencies assign a
lower-than-expected
rating or reduce, or indicate that they may reduce, their
ratings in the future, the trading price of the Series D
Preferred Shares could significantly decline.
You may have
taxable income if we adjust the conversion rate in certain
circumstances, even if you do not receive any cash.
We will adjust the conversion rate of the Series D
Preferred Shares for share splits and combinations, share
dividends, certain cash dividends and certain other events that
affect our capital structure. See Description of the
Series D Preferred SharesConversion Rate
Adjustment. If we adjust the conversion rate, or if we
fail to make certain adjustments, you may be treated as having
received a constructive distribution from us, resulting in
taxable income to you for U.S. federal income tax purposes,
even though you would not receive any cash in connection with
the conversion rate adjustment and even though you might not
exercise your conversion right. See Additional Federal
Income Tax Considerations in this prospectus supplement.
In the case of a
non-U.S. shareholder,
we may, at our option, withhold U.S. federal income tax
with respect to any such deemed distribution from cash payments
of dividends and any other payments in respect of the
Series D Preferred Shares.
We may not have
sufficient earnings and profits in order for distributions on
the Series D Preferred Shares to be treated as
dividends.
The dividends payable by us on the Series D Preferred
Shares may exceed our current and accumulated earnings and
profits, as calculated for U.S. federal income tax
purposes, at the time of payment. If that were to occur, it
would result in the amount of dividends that exceed our earnings
and profits being treated first as a return of capital to the
extent of the holders adjusted tax basis in the
Series D Preferred Shares and then, to the extent of any
excess over such adjusted tax basis, as capital gain. See
Certain Federal Income Tax ConsiderationsFederal
Income Taxation of ShareholdersFederal Income Taxation of
Taxable Domestic ShareholdersDistributions and
Certain Federal Income Tax ConsiderationsFederal
Income Taxation of ShareholdersFederal Income Taxation of
Non-U.S. ShareholdersNon-Dividend
Distributions in the accompanying prospectus.
S-15
We believe that
the Series D Preferred Shares and any common shares
received upon your conversion of the Series D Preferred
Shares do not constitute U.S. real property
interests and therefore we would not generally be required
to withhold from payments to
non-U.S.
holders under the Foreign Investment in Real Property Act, or
FIRPTA. We cannot assure you, however, that the Series D
Preferred Shares or our common shares will not constitute U.S.
real property interests.
Although we are not currently aware of any facts that would
cause our conclusion to change, depending on the facts in
existence at the time of any sale, repurchase, conversion, or
retirement of Series D Preferred Shares or our common
shares, it is possible that the Series D Preferred Shares
and common shares could constitute U.S. real property
interests. If so,
non-U.S. shareholders
of Series D Preferred Shares or common shares would be
subject to U.S. federal income tax withholding on payments
in connection with such a sale, repurchase, conversion, or
retirement regardless of whether such
non-U.S. shareholders
provide certification documenting their
non-U.S. status.
If you convert
your Series D Preferred Shares into our common shares and
we decide to pay taxable share dividends on our common shares to
meet the REIT distribution requirements, your tax liability with
respect to our common shares may be greater than the amount of
cash you receive.
The IRS has issued Revenue Procedure
2010-12,
which provides that the IRS will treat share dividends declared
on or before December 31, 2012, for taxable years ending
before December 31, 2011, as distributions for purposes of
satisfying the REIT distribution requirements, if each
shareholder can elect to receive the distribution in cash or
shares, even if the aggregate cash amount paid to all
shareholders is limited, provided certain requirements are met.
Taxable holders of our common shares receiving such dividends
will be required to include the full amount of the dividend as
income for U.S. federal income tax purposes to the extent
of our current and accumulated earnings and profits.
Accordingly, if we decide to pay a share dividend on our common
shares in accordance with Revenue Procedure
2010-12 to
you, as a holder of our common shares, your tax liability with
respect to such dividend may be significantly greater than the
amount of cash you receive. If you decide to sell the shares
received as a dividend in order to pay this tax, the sales
proceeds you receive may be less than the amount you are
required to include in income with respect to the dividend,
depending on the market price of the shares at the time of the
sale. With respect to non-U.S. shareholders, we may be required
to withhold U.S. federal income tax with respect to such
dividends, including in respect of all or a portion of such
dividend that is payable in shares. In addition, if a
significant number of our shareholders sell shares in order to
pay taxes owed on dividends, such sales may put downward
pressure on the trading price of our shares. See
Additional Federal Income Tax ConsiderationsOther
Federal Income Tax ConsiderationsTaxable Stock
Dividends in this prospectus supplement.
S-16
USE OF
PROCEEDS
We estimate that our net proceeds from this offering, after
deducting the underwriting discount and other estimated offering
expenses, will be approximately $19.35 million. We intend
to use the net proceeds we receive from this offering for
working capital and other general corporate purposes.
S-17
CAPITALIZATION
The following table sets forth our cash and capitalization as of
December 31, 2010, on an actual basis and an as adjusted
basis to give effect to: (1) the offer and sale of
1,600,000 Series D Preferred Shares that closed on
April 6, 2011, after deducting the underwriting discount
and transaction costs, (2) the offer and sale of
400,000 Series D Preferred Shares at the public
offering price set forth on the cover page of this prospectus
supplement, after deducting the underwriting discount and
estimated transaction costs, and (3) the application of the
net proceeds of the offerings to retire our $30.0 million
bridge loan, reduce outstanding borrowings under our revolving
credit facilities and increase our cash and cash equivalents as
described in Use of Proceeds in this prospectus
supplement.
This table should be read in conjunction with our consolidated
financial statements and related notes included in our Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2010 and
incorporated by reference in the accompanying prospectus.
|
|
|
|
|
|
|
|
|
December 31, 2010
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
(in thousands,
|
|
|
|
except share amounts)
|
|
|
Cash and cash equivalents
|
|
$
|
10,175
|
|
|
$
|
29,525
|
|
|
|
|
|
|
|
|
|
|
Mortgages and Notes Payable:
|
|
|
|
|
|
|
|
|
Mortgages payable
|
|
|
363,819
|
|
|
|
363,819
|
|
Secured revolving credit facility
|
|
|
119,750
|
|
|
|
72,350
|
|
Secured term loan facility
|
|
|
30,000
|
|
|
|
30,000
|
|
Secured bridge loan
|
|
|
30,000
|
|
|
|
|
|
Junior subordinated notes
|
|
|
28,125
|
|
|
|
28,125
|
|
|
|
|
|
|
|
|
|
|
Total Mortgages and Notes Payable
|
|
$
|
571,694
|
|
|
$
|
494,294
|
|
|
|
|
|
|
|
|
|
|
Shareholders Equity:
|
|
|
|
|
|
|
|
|
Preferred Shares of Beneficial Interest, par value $0.01,
10,000,000 shares authorized:
|
|
|
|
|
|
|
|
|
0 and 2,000,000 Series D Preferred Shares issued and
outstanding, at December 31, 2010 and as adjusted,
respectively
|
|
|
|
|
|
|
100,000
|
|
Common Shares of Beneficial Interest, par value $0.01,
45,000,000 shares authorized and 37,947,000 shares
issued and outstanding
|
|
|
379
|
|
|
|
379
|
|
Additional paid-in capital and other
|
|
|
563,370
|
|
|
|
560,120
|
|
Accumulated distributions in excess of net income
|
|
|
(161,476
|
)
|
|
|
(161,476
|
)
|
Noncontrolling interest
|
|
|
37,093
|
|
|
|
37,093
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders Equity
|
|
|
439,366
|
|
|
|
536,116
|
|
|
|
|
|
|
|
|
|
|
Total Capitalization
|
|
$
|
1,011,060
|
|
|
$
|
1,030,410
|
|
|
|
|
|
|
|
|
|
|
S-18
PRICE RANGE OF
COMMON SHARES AND DIVIDENDS
Our common shares are listed on the NYSE under the symbol
RPT. On April 26, 2011, the last reported sales
price per share of our common shares on the NYSE was $12.84. The
table below sets forth, for the periods indicated, the high and
low closing sales price per share of our common shares, as
reported by the NYSE, and the cash dividends declared per share
with respect to such periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Per Share
|
|
|
Dividends
|
|
|
|
High
|
|
|
Low
|
|
|
Per Share
|
|
|
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
13.51
|
|
|
$
|
12.43
|
|
|
$
|
0.1633
|
|
Second quarter (through April 26, 2011)
|
|
|
12.84
|
|
|
|
12.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
11.71
|
|
|
$
|
8.91
|
|
|
$
|
0.1633
|
|
Second quarter
|
|
|
12.97
|
|
|
|
9.62
|
|
|
|
0.1633
|
|
Third quarter
|
|
|
11.94
|
|
|
|
9.69
|
|
|
|
0.1633
|
|
Fourth quarter
|
|
|
12.45
|
|
|
|
10.82
|
|
|
|
0.1633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter
|
|
$
|
7.16
|
|
|
$
|
3.88
|
|
|
$
|
0.2313
|
|
Second quarter
|
|
|
11.60
|
|
|
|
6.01
|
|
|
|
0.2313
|
|
Third quarter
|
|
|
10.82
|
|
|
|
8.41
|
|
|
|
0.1633
|
|
Fourth quarter
|
|
|
9.94
|
|
|
|
7.82
|
|
|
|
0.1633
|
|
S-19
DESCRIPTION OF
THE SERIES D PREFERRED SHARES
The following is a summary of certain provisions of the
articles supplementary creating Series D Preferred Shares.
As used in this section, the terms we,
us or our refer to Ramco-Gershenson
Properties Trust and not any of its subsidiaries. Please read
Description of Common Shares, Description of
Preferred Shares and Certain Provisions of Maryland
Law and of Our Declaration of Trust and Amended and Restated
Bylaws in the accompanying prospectus for a description of
general terms applicable to the Series D Preferred Shares,
a description of our common shares and certain provisions of our
organizational documents and Maryland law.
General
We are offering an additional 400,000 shares of 7.25%
Series D Cumulative Convertible Perpetual Preferred Shares
of Beneficial Interest (the Series D Preferred
Shares) with the same terms and with the same CUSIP number
as the Series D Preferred Shares offered by the Prospectus
Supplement dated March 31, 2011. The additional
Series D Preferred Shares constitute an additional issuance
of, and form a single series with, the outstanding
Series D Preferred Shares.
Articles Supplementary to our Declaration of Trust classifying
1,840,000 preferred shares as 7.25% Series D Cumulative
Convertible Perpetual Preferred Shares, par value $.01 per share
were filed with the Maryland State Department of Assessments and
Taxation (the MSDAT) on April 5, 2011. A filing
with the MSDAT of articles supplementary classifying an
additional 160,000 Series D Preferred Shares has been
approved and authorized. When issued, the Series D
Preferred Shares offered hereby will be validly issued, fully
paid and nonassessable by us and will have no preemptive rights.
We will contribute the net proceeds of the sale of the
Series D Preferred Shares offered hereby to our operating
partnership, through which we conduct substantially all of our
business, in exchange for 7.25% Series D Cumulative
Preferred Units, or the Series D preferred units, that have
substantially identical economic terms as the Series D
Preferred Shares. Our operating partnership will be required to
make all required distributions on the Series D preferred
units prior to any distribution of cash or assets to the holders
of common partnership units or to the holders of any other
equity interest of our operating partnership, except for any
other series of preferred units ranking on a parity with the
Series D preferred units as to distributions and
liquidation, except for dividends required to enable us to
maintain our qualification as a REIT.
The Series D Preferred Shares are subject to mandatory
conversion, as described below in Mandatory
Conversion, and are not redeemable by us.
Ranking
The Series D Preferred Shares, with respect to rights to
the payment of dividends and the distribution of assets upon our
voluntary or involuntary liquidation, dissolution or winding up,
will rank (a) senior to our common shares and all other
classes or series of our shares of beneficial interest issued in
the future that specifically provide that such class or series
of shares of beneficial interest ranks junior to the
Series D Preferred Shares as to the payment of dividends
and the distribution of assets upon our liquidation, dissolution
or winding up, (b) on a parity with all other classes or
series of our shares of beneficial interest issued in the
future, other than those referred to in clauses (a) and
(c), that specifically provide that such classes or series of
shares of beneficial interest rank on a parity with the
Series D Preferred Shares as to the payment of dividends
and the distribution of assets upon our liquidation, dissolution
or winding up, and (c) junior to all other classes or
series of our shares of beneficial interest issued in the future
that specifically provide that such classes or series of shares
of beneficial
S-20
interest rank senior to the Series D Preferred Shares as to
the payment of dividends and the distribution of assets upon our
liquidation, dissolution or winding up.
Dividends
Subject to the preferential rights of holders of any class or
series of our shares of beneficial interest ranking senior to
the Series D Preferred Shares as to the payment of
dividends, holders of Series D Preferred Shares will be
entitled to receive, when, if and as declared by our board of
trustees, out of funds legally available for the payment of
quarterly cumulative preferential cash dividends, an amount per
share equal to 7.25% of the $50.00 liquidation preference per
annum (equivalent to a fixed annual amount of $3.625 per share),
payable in equal amounts of $0.90625 per share quarterly.
Dividends on the Series D Preferred Shares offered hereby
shall begin to accrue and will be fully cumulative starting from
April 6, 2011 and shall be payable quarterly when, if and
as authorized by our board of trustees, in equal amounts in
arrears on the first day of each January, April, July and
October or, if not a business day, then the next succeeding
business day (each, a Dividend Payment Date), and no
interest or additional dividends or other sums will accrue on
the amount so payable from the Dividend Payment Date to such
next succeeding business day. The first dividend on the
Series D Preferred Shares offered hereby, which will be
paid on July 1, 2011, will be for the entire full quarter
and will reflect dividends accumulated from April 6, 2011
up to, and excluding, July 1, 2011. Any dividend payable on
the Series D Preferred Shares for any portion of a dividend
period that ends prior to a Dividend Payment Date will be
prorated and computed on the basis of a
360-day year
consisting of twelve
30-day
months. Dividends will be payable to holders of record as they
appear in our share records at the close of business on the
applicable record date, which will be the 20th day of the
calendar month immediately preceding the month in which the
applicable Dividend Payment Date falls or such other date
designated by our board of trustees that is not more than 30 nor
less than 10 days prior to such Dividend Payment Date
(each, a Dividend Record Date). Notwithstanding any
provision to the contrary contained in this prospectus
supplement, each outstanding Series D Preferred Share will
be entitled to receive a dividend with respect to any dividend
record date equal to the dividend paid with respect to each
other Series D Preferred Share that is outstanding on such
date.
No dividend on the Series D Preferred Shares will be
declared or paid or set apart for payment by our board of
trustees if such authorization, declaration, payment or setting
apart for payment would violate any of our agreements or is
restricted or prohibited by law.
When dividends are not paid in full (or a sum sufficient for
such full payment is not so set apart) upon the Series D
Preferred Shares and any other class or series of our shares of
beneficial interest ranking on a parity as to the payment of
dividends with the Series D Preferred Shares, all dividends
declared upon the Series D Preferred Shares and any other
class or series of shares of beneficial interest ranking on a
parity as to the payment of dividends with the Series D
Preferred Shares will be declared pro rata so that the amount of
dividends declared per Series D Preferred Share and such
other class or series of our shares of beneficial interest will
in all cases bear to each other the same ratio that accumulated
dividends per Series D Preferred Share and such other class
or series of shares of beneficial interest (which shall not
include any accrual in respect of unpaid dividends for prior
dividend periods if such class or series of our shares of
beneficial interest does not have a cumulative dividend) bear to
each other. No interest, or sum of money in lieu of interest,
will be payable in respect of any dividend payment or payments
on the Series D Preferred Shares which may be in arrears.
Except as provided in the immediately preceding paragraph:
|
|
|
|
|
no dividends will be declared or paid or set apart for payment
and no other distribution of cash or other property will be
declared or made (other than in our common shares or other class
or series of shares of beneficial interest ranking on a parity
with or junior to
|
S-21
|
|
|
|
|
the Series D Preferred Shares as to the payment of
dividends and the distribution of assets upon our liquidation,
dissolution or winding up) on or with respect to any of our
common shares or shares of any other class or series of our
shares of beneficial interest ranking, as to the payment of
dividends or the distribution of assets upon our liquidation
dissolution or winding up, on a parity with or junior to the
Series D Preferred Shares; and
|
|
|
|
|
|
no common shares or any other class or series of shares of
beneficial interest ranking junior to or on a parity with the
Series D Preferred Shares as to the payment of dividends
and the distribution of assets upon our liquidation, dissolution
or winding up will be redeemed, purchased or otherwise acquired
for any consideration (or any money paid or made available for a
sinking fund for the redemption of any such class or series of
shares of beneficial interest) by us (except by conversion into
or exchange for any other class or series of our shares of
beneficial interest ranking on a parity with or junior to the
Series D Preferred Shares as to the payment of dividends
and the distribution of assets upon our liquidation, dissolution
or winding up or by redemption, purchase or acquisition for the
purpose of maintaining our qualification as a REIT);
|
unless full cumulative dividends on the Series D Preferred
Shares have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart
for payment for all dividend periods ending on or prior to the
date of such declaration, payment, set aside, redemption,
purchase or acquisition.
Notwithstanding the foregoing, dividends on the Series D
Preferred Shares will accrue whether or not we have earnings,
whether or not there are funds legally available for the payment
thereof and whether or not such dividends are authorized.
Accrued but unpaid dividends on the Series D Preferred
Shares will not bear interest and holders of the Series D
Preferred Shares will not be entitled to any dividends in excess
of full cumulative dividends as described above.
Holders of Series D Preferred Shares will not be entitled
to any dividend or other distribution, whether payable in cash,
property or shares of any class or series of shares of
beneficial interest (including Series D Preferred Shares)
in excess of full cumulative dividends on the Series D
Preferred Shares as described above. Any dividend payment made
on the Series D Preferred Shares will first be credited
against the earliest accumulated but unpaid dividend due with
respect to such shares which remains payable.
Dividends paid by regular C corporations to persons or entities
that are taxed as individuals are now generally taxed at the
rate applicable to long-term capital gains, which is a maximum
of 15%, subject to certain limitations. Because we are a REIT,
however, our dividends, including dividends paid on our
Series D Preferred Shares, generally will continue to be
taxed at regular ordinary income tax rates, except in limited
circumstances that we do not contemplate. See
Certain Federal Income Tax
ConsiderationsFederal Income Taxation of
ShareholdersFederal Income Taxation of Taxable Domestic
ShareholdersDistributions in the accompanying
prospectus.
If, for any taxable year, we elect to designate as capital
gain dividends (as defined in Section 857 of the
Internal Revenue Code of 1986, as amended, or any successor
revenue code or section) any portion, which we refer to as the
Capital Gains Amount, of the total dividends (as
determined for federal income tax purposes) paid or made
available for such taxable year to holders of all classes and
series of shares of beneficial interest, then the portion of the
Capital Gains Amount that will be allocable to holders of
Series D Preferred Shares shall be in the same proportion
that the total of the dividends (as determined for
U.S. federal income tax purposes) paid or made available to
the holders of Series D Preferred Shares for the year bears
to the total of all such dividends for the year paid with
respect to all classes and series of our outstanding shares of
beneficial interest.
S-22
Liquidation
Preference
In the event of our voluntary or involuntary liquidation,
dissolution or winding up, the holders of the Series D
Preferred Shares will be entitled to receive out of our assets
legally available for distribution to our shareholders remaining
after payment or provisions for payment of all of our debts and
other liabilities liquidating distributions, in cash or property
at its fair market value as determined by our board of trustees,
in the amount of a liquidation preference of $50.00 per share,
plus an amount equal to any accumulated and accrued dividends
(whether or not earned or authorized) to (but not including) the
date of payment, before any distribution of assets is made to
holders of common shares or any other class or series of our
shares of beneficial interest ranking junior to the
Series D Preferred Shares as to the distribution of assets
upon our liquidation, dissolution or winding up, but subject to
the preferential rights of the holders of any class or series of
our shares of beneficial interest ranking senior to the
Series D Preferred Shares as to the distribution of assets
upon our liquidation, dissolution or winding up. After payment
of the full amount of the liquidating distributions and all such
accumulated and accrued dividends to which they are entitled,
the holders of Series D Preferred Shares will have no right
or claim to any of our remaining assets. None of (i) our
consolidation or merger with or into another entity, (ii) a
merger of another entity with or into us, (iii) a statutory
share exchange by us or (iv) a sale, lease or conveyance of
all or substantially all of our property or business shall be
considered a liquidation, dissolution or winding up. If, upon
our voluntary or involuntary liquidation, dissolution or winding
up, our assets legally available for distribution to our
shareholders are insufficient to make the full payment due to
holders of the Series D Preferred Shares and the
corresponding amounts payable on all outstanding shares of other
classes or series of shares of beneficial interest ranking on a
parity with the Series D Preferred Shares as to the
distribution of assets upon our liquidation, dissolution or
winding up, then the holders of the Series D Preferred
Shares and all other such classes or series of shares of
beneficial interest shall share ratably in any such distribution
of assets in proportion to the full liquidating distributions
(including, if applicable, accumulated and accrued dividends) to
which they would otherwise be respectively entitled.
Voting
Rights
Holders of Series D Preferred Shares will not have any
voting rights, except as provided by law and as described below.
Whenever dividends on any Series D Preferred Shares are in
arrears for six or more quarterly periods, whether or not such
quarterly periods are consecutive, the holders of Series D
Preferred Shares (voting together as a single class with all
other classes or series of our shares of beneficial interest
ranking on a parity with the Series D Preferred Shares as
to the payment of dividends and the distribution of assets upon
our voluntary or involuntary liquidation dissolution or winding
up upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two
additional trustees who will each be elected for a one-year
term. Such election shall be held at a special meeting of the
shareholders and at each subsequent annual meeting until all
arrearages and the dividends on the Series D Preferred
Shares and such other series of preferred shares upon which like
voting rights have been conferred and are exercisable for the
then current dividend period have been fully paid or declared
and a sum sufficient for the full payment thereof has been set
aside. Vacancies for trustees elected by holders of
Series D Preferred Shares and any other such series of
preferred shares shall be filled by the remaining trustee so
elected then in office or, if there is no such remaining
trustee, by vote of holders of a majority of the outstanding
Series D Preferred Shares, when they have the voting rights
described above, and any other such series of preferred shares
voting as a single class. A trustee elected by the holders of
Series D Preferred Shares and any other such series of
preferred shares may be removed with or without cause and only
by vote of holders of a
S-23
majority of the outstanding Series D Preferred Shares, when
they have the voting rights described above, and any other such
series of preferred shares voting as a single class.
So long as any Series D Preferred Shares remain
outstanding, we will not, without the affirmative vote or
consent of the holders of at least two-thirds of the
Series D Preferred Shares outstanding at the time, given in
person or by proxy, either in writing or at a meeting (voting
separately as a class), (i) authorize, create or issue, or
increase the authorized or issued amount of, any class or series
of our shares of beneficial interest ranking senior to the
Series D Preferred Shares with respect to the payment of
dividends or the distribution of assets upon our liquidation,
dissolution or winding up, or reclassify any of our authorized
shares of beneficial interest into any such class or series of
our shares of beneficial interest, or create, authorize or issue
any obligation or security convertible or exchangeable into or
evidencing the right to purchase any such class or series of our
shares of beneficial interest; or (ii) amend, alter or
repeal the provisions of our declaration of trust or the
articles supplementary for the Series D Preferred Shares,
whether by merger or consolidation or otherwise (an
Event), so as to adversely affect any right,
preference, privilege or voting power of such Series D
Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in
(ii) above, so long as Series D Preferred Shares
remain outstanding, with changes to the terms of the
Series D Preferred Shares required pursuant to and made in
compliance with the provisions described under
Recapitalizations, Reclassifications and Changes of
our Common Shares in connection with such Event and, if
such transaction also constitutes a fundamental change, the
provisions under Special Rights Upon a Fundamental
Change are complied with, taking into account that upon
the occurrence of an Event, we may not be the surviving entity
and such surviving entity may be a non-corporate entity, the
occurrence of any such Event will not be deemed to adversely
affect such rights, preferences, privileges or voting powers of
holders of Series D Preferred Shares; and provided further
that (x) any increase in the amount of the authorized
preferred shares or the creation or issuance of any other series
of preferred shares ranking on a parity with or junior to the
Series D Preferred Shares with respect to payment of
dividends and the distribution of assets upon our voluntary or
involuntary liquidation, dissolution or winding up, or
(y) the creation, issuance or increase in the amount of
authorized shares of any other class or series of our shares of
beneficial interest ranking on a parity with or junior to the
Series D Preferred Shares with respect to payment of
dividends and the distribution of assets upon our voluntary or
involuntary liquidation, dissolution or winding up, or
(z) any increase in the amount of authorized Series D
Preferred Shares ranking on a parity with or junior to the
Series D Preferred Shares with respect to payment of
dividends and the distribution of assets upon our voluntary or
involuntary liquidation, dissolution or winding up, will not
require the consent of the holders of Series D Preferred
Shares and will not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers.
Holders of Series D Preferred Shares shall not be entitled
to vote with respect to any increase in total number of
authorized shares of our common shares or preferred shares, any
increase in the amount of the authorized Series D Preferred
Shares or the creation or issuance of any other class or series
of shares of beneficial interest, or any increase in the number
of authorized Series D Preferred Shares or any other class
or series of shares of beneficial interest, in each case ranking
on a parity with or junior to the Series D Preferred Shares
with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up.
In addition, the holders of such Series D Preferred Shares
will not have any voting rights with respect to, and the consent
of the holders of Series D Preferred Shares is not required
for, the taking of any corporate action, including any merger or
consolidation involving us or a sale of all or substantially all
of our assets, regardless of the effect that such merger,
consolidation or sale may have upon the powers, preferences,
voting power or other rights or privileges of
S-24
the Series D Preferred Shares, except as set forth in part
(ii) of the second preceding paragraph. Except as expressly
set forth in the articles supplementary that relate to the
Series D Preferred Shares, the Series D Preferred
Shares will not have any relative, participatory, optional or
other special voting rights and powers.
The foregoing voting provisions will not apply if, at or prior
to the time when the act with respect to which such vote would
otherwise be required will be effected, all outstanding
Series D Preferred Shares have been converted, surrendered
for voluntary conversion or called for mandatory conversion and
a sufficient number of our common shares shall have been
deposited in trust to effect such conversion.
In any matter in which the Series D Preferred Shares may
vote (as expressly provided in the articles supplementary that
relate to the Series D Preferred Shares), each of the
Series D Preferred Shares shall be entitled to one vote,
except that when any other class or series of our preferred
shares shall have the right to vote with the Series D
Preferred Shares as a single class on any matter, the
Series D Preferred Shares and such other class or series
shall have with respect to such matters one vote per each $50.00
of stated liquidation preference.
Redemption
The Series D Preferred Shares will not be redeemable by us.
However, under certain circumstances, we may at our option cause
all outstanding Series D Preferred Shares to be converted
into common shares as described below under
Mandatory Conversion.
Subject to applicable law, we may purchase Series D
Preferred Shares, at any time, in the open market, by tender or
by private agreement. Any Series D Preferred Shares that we
reacquire will be retired and reclassified as authorized but
unissued preferred shares, without designation as to class or
series, and may thereafter be reissued as any class or series of
preferred shares.
Conversion
Rights
Each Series D Preferred Share will be convertible, at any
time, at the option of the holder thereof at an initial
conversion rate of 3.4699 of our common shares per Series D
Preferred Share (the Conversion Rate) (which
represents an initial conversion price of approximately $14.41
per common share). The Conversion Rate, and thus the conversion
price, will be subject to adjustment as described below under
Conversion Rate Adjustment.
The holders of Series D Preferred Shares at the close of
business on a Record Date will be entitled to receive the
dividend payment on those shares on the corresponding Dividend
Payment Date notwithstanding the conversion of such shares
following that Record Date or our failure to pay the dividend
due on that Dividend Payment Date. However, Series D
Preferred Shares surrendered for conversion at the option of the
holder during the period between the close of business on any
Record Date and the close of business on the Business Day
immediately preceding the applicable Dividend Payment Date must
be accompanied by payment of an amount equal to the dividend
payable on such shares on that Dividend Payment Date. A holder
of Series D Preferred Shares on a Record Date who (or whose
transferee) surrenders any shares for conversion on the
corresponding Dividend Payment Date will receive the dividend
payable by us on the Series D Preferred Shares on that
date, and the converting holder need not include payment in the
amount of such dividend upon surrender of Series D
Preferred Shares for conversion. Except as provided above with
respect to a voluntary conversion and as provided under
Mandatory Conversion and Special
Rights Upon a Fundamental Change, we will make no payment
or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the common shares issued
upon conversion.
S-25
The articles supplementary relating to the Series D
Preferred Shares require that we at all times reserve and keep
available for issuance upon conversion of the Series D
Preferred Shares a sufficient number of authorized and unissued
common shares to permit the conversion of all outstanding
Series D Preferred Shares and that we use our reasonable
best efforts to take all action required to increase the
authorized number of common shares if at any time there are
insufficient unissued common shares to permit such reservation
or to permit the conversion of all outstanding Series D
Preferred Shares.
In addition, the articles supplementary relating to the
Series D Preferred Shares provide that any common shares
issued upon conversion of the Series D Preferred Shares
will be validly issued, fully paid and nonassessable and that we
will use our reasonable best efforts to list the common shares
required to be delivered upon conversion of the Series D
Preferred Shares, prior to such delivery, upon each national
securities exchange, if any, upon which the outstanding common
shares are listed at the time of delivery.
Restrictions on
Ownership and Transfer
For us to qualify as a REIT under the Code, among other things,
not more than 50% in value of our outstanding shares of
beneficial interest may be owned, directly or indirectly, by
five or fewer individuals (defined in the Code to include
certain entities) during the last half of a taxable year (other
than the first taxable year), and such shares of beneficial
interest must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of
12 months (other than the first taxable year) or during a
proportionate part of a shorter taxable year. This test is
applied by looking through certain shareholders
which are not individuals (e.g., corporations or partnerships)
to determine indirect ownership of us by individuals.
In order to protect us against the risk of losing our status as
a REIT due to a concentration of ownership among our
shareholders, our declaration of trust, subject to certain
exceptions, provides that no shareholder may own, or be deemed
to own by virtue of the attribution provisions of the Code, more
than 9.8% (the Ownership Limit) of the lesser of the
aggregate number or value of our outstanding common shares. The
articles supplementary creating the preferred shares designated
as the Series D Preferred Shares will provide that no
shareholder may own, or be deemed to own by virtue of the
attribution provisions of the Code, nor may any shareholder
acquire Series D Preferred Shares such that (i) if
such Series D Preferred Shares were converted into common
shares, such person would own more than 9.8% of the aggregate
number of all of our outstanding common shares; or (ii) he
would own, more than 9.8% of the aggregate value of our
outstanding shares (including common shares and all series and
classes of preferred shares). Any direct or indirect ownership
of shares of beneficial interest in excess of the Ownership
Limit or the aggregate ownership limit or that would result in
our disqualification as a REIT, including any transfer that
results in our shares of beneficial interest being owned by
fewer than 100 persons or results in us being closely
held within the meaning of Section 856(h) of the
Code, shall be null and void, and the intended transferee will
acquire no rights to the shares of beneficial interest. The
foregoing restrictions on transferability and ownership
contained in our declaration of trust will not apply if our
board of trustees determines that it is no longer in our best
interests to attempt to qualify, or to continue to qualify, as a
REIT. Our board of trustees may, in its sole discretion, waive
the Ownership Limit if evidence satisfactory to our board of
trustees and tax counsel is presented that the changes in
ownership will not then or in the future jeopardize our REIT
status and our board of trustees otherwise decides that such
action is in our best interest.
For a discussion of the treatment of shares deemed to be in
excess of the Ownership Limit, see Description of Common
SharesRestrictions On Ownership And Transfer in the
accompanying prospectus.
These restrictions will not preclude settlement of transactions
through the NYSE.
S-26
All certificates representing shares of beneficial interest will
bear a legend referring to the restrictions described above.
Each shareholder shall upon demand be required to disclose to us
in writing any information with respect to the direct, indirect
and constructive ownership of our shares of beneficial interest
as our board of trustees deems necessary to comply with the
provisions of the Code applicable to REITs, to comply with the
requirements of any taxing authority or governmental agency or
to determine any such compliance.
The Ownership Limit may have the effect of delaying, deferring
or preventing our change in control unless our board of trustees
determines that maintenance of REIT status is no longer in our
best interest.
Conversion
Procedures
On the date of any conversion at the option of the holders, if a
holders interest is a beneficial interest in a global
certificate representing Series D Preferred Shares, the
holder must comply with the Depositarys procedures for
converting a beneficial interest in a global security. The
Depository Trust Company initially will act as Depositary.
If a holders interest is in certificated form, a holder
must do each of the following in order to convert:
|
|
|
|
|
complete and manually sign the conversion notice, which is
irrevocable, provided by the conversion agent, or a facsimile of
the conversion notice, and deliver this notice to the conversion
agent;
|
|
|
|
surrender the Series D Preferred Shares to the conversion
agent;
|
|
|
|
if required, furnish appropriate endorsements and transfer
documents;
|
|
|
|
if required, pay any share transfer, documentary, stamp or
similar taxes not payable by us; and
|
|
|
|
if required, pay funds equal to any declared and unpaid dividend
payable on the next Dividend Payment Date to which such holder
is entitled.
|
The date on which a holder complies with the foregoing
procedures is the conversion date.
The conversion agent for the Series D Preferred Shares is
initially the transfer agent. A holder may obtain copies of the
required form of the conversion notice from the conversion
agent. The conversion agent will, on a holders behalf,
convert the Series D Preferred Shares into our common
shares, in accordance with the terms of the notice delivered by
us. A share certificate or certificates representing the common
shares to be delivered in connection with the conversion,
together with, if applicable, any payment of cash in lieu of
fractional shares, will be delivered by us to the holder, or in
the case of global certificates, a book-entry transfer through
the Depositary will be made by the conversion agent. Such
delivery will be made as promptly as practicable, but in no
event later than three Business Days following the conversion
date.
The person or persons entitled to receive the common shares
issuable upon conversion of the Series D Preferred Shares
will be treated as the record holder(s) of such shares as of the
close of business on the applicable conversion date. On the
conversion date, all rights with respect to the Series D
Preferred Shares so converted, including the rights, if any, to
receive notices, will terminate, except only the rights of
holders thereof to receive the number of whole common shares
into which such Series D Preferred Shares have been
converted (with such adjustment or cash payment for fractional
shares as we may elect, as described under No
Fractional Shares) and, if applicable, any additional
common shares or other consideration as
S-27
may be issuable upon conversion in payment of a make-whole
premium or otherwise as described under Special
Rights Upon a Fundamental Change or any reference
property that may be issuable in lieu of common shares
upon conversion as described under
Recapitalizations, Reclassifications and Changes of
our Common Shares and the rights to which they are
otherwise entitled as holders of common shares or other property
receivable upon conversion. Prior to the close of business on
the applicable conversion date, the common shares issuable upon
conversion of the Series D Preferred Shares will not be
deemed to be outstanding for any purpose and you will have no
rights with respect to the common shares, including voting
rights, rights to respond to tender offers and rights to receive
any dividends or other distributions on the common shares, by
virtue of holding the Series D Preferred Shares.
Mandatory
Conversion
At any time on or after April 20, 2018, we may at our
option cause all (but not less than all) outstanding
Series D Preferred Shares to be mandatorily converted into
a number of common shares for each Series D Preferred
Shares equal to the then-prevailing Conversion Rate, if the
Daily VWAP (as defined below) of our common shares equals or
exceeds 130% of the then-prevailing conversion price for at
least 20 Trading Days in a period of 30 consecutive Trading
Days, including the last Trading Day of such
30-day
period, ending on the Trading Day prior to our issuance of a
press release announcing the mandatory conversion as described
below.
The term Trading Day means a day during which
(i) trading in securities generally occurs on the NYSE or,
if our common shares are not listed on the NYSE, on the other
principal national securities exchange on which our common
shares are then listed or, if our common shares are not listed
on a national securities exchange, on the principal other market
on which our common shares are then traded and (ii) there
is no Market Disruption Event. A Trading Day only
includes those days that have a scheduled closing time of
4:00 p.m. (New York City time) or the then standard closing
time for regular trading on the relevant exchange or trading
system. If our common shares are not so listed or traded,
Trading Day means a Business Day.
Market Disruption Event means (1) a failure by
the NYSE or, if our common shares are not listed on the NYSE,
the principal U.S. national securities exchange on which
our common shares are listed or, if our common shares are not
listed on a national securities exchange, on the principal other
market on which our common shares are then traded, to open for
trading during its regular trading session or (2) the
occurrence or existence prior to 1:00 p.m. on any Trading
Day for our common shares of an aggregate one half hour period
of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by the stock
exchange or otherwise) in our common shares or in any options,
contracts or future contracts relating to our common shares.
Daily VWAP means the average of the per share
volume-weighted average prices of our common shares for each
day, as displayed under the heading Bloomberg VWAP
on Bloomberg page RPT.UN <Equity> AQR (NYSE
VWAP) (or its equivalent successor if such page is not
available) in respect of the period from scheduled open of
trading until the scheduled close of trading of the primary
trading session on each such Trading Day (or if such
volume-weighted average price is unavailable on any such day,
the Closing Sale Price shall be used for such day). The per
share volume-weighted average price on each such day will be
determined without regard to after hours trading or any other
trading outside of the regular trading session trading hours.
The Closing Sale Price of our common shares on any
date means the closing sale price per share (or if no closing
sale price is reported, the average of the closing bid and ask
prices or, if more than one in either case, the average of the
average closing bid and the average
S-28
closing ask prices) on such date as reported on the NYSE or, if
our common shares are not listed on the NYSE, on the principal
other national securities exchange on which our common shares
are then listed or, if our common shares are not listed on a
national securities exchange, on the principal other market on
which our common shares are then traded. If our common shares
are not so listed, the Closing Sale Price will be an amount
determined in good faith by our board of trustees to be the fair
value of the common shares.
To exercise the mandatory conversion right described above, we
must issue a press release for publication on the Dow Jones News
Service or Bloomberg Business News (or if either such service is
not available, another broadly disseminated news or press
release service selected by us) prior to the opening of business
on the first Trading Day following any date on which the
conditions described in the first paragraph of this
Mandatory Conversion section are met, announcing
such a mandatory conversion. We also will give notice by mail or
by publication (with subsequent prompt notice by mail) to the
holders of the Series D Preferred Shares (not more than
four Business Days after the date of the press release) of the
mandatory conversion announcing our intention to convert the
Series D Preferred Shares. The conversion date will be the
date (which we refer to as the Mandatory Conversion
Date) that is five Trading Days after the date on which we
issue such press release.
In addition to any information required by applicable law or
regulation, the press release and notice of a mandatory
conversion shall state, as appropriate:
|
|
|
|
|
the Mandatory Conversion Date;
|
|
|
|
the number of our common shares to be issued upon conversion of
each Series D Preferred Share;
|
|
|
|
the number of Series D Preferred Shares to be
converted; and
|
|
|
|
that dividends on the Series D Preferred Shares to be
converted will cease to accrue on the Mandatory Conversion Date.
|
On and after the Mandatory Conversion Date, dividends will cease
to accrue on the Series D Preferred Shares that are subject
to a mandatory conversion and all rights of holders of such
Series D Preferred Shares will terminate except for the
right to receive the common shares issuable upon conversion
thereof. The dividend payment with respect to any Series D
Preferred Shares that are subject to a mandatory conversion on a
date during the period between the close of business on any
Record Date for the payment of dividends to the close of
business on the corresponding Dividend Payment Date will be
payable on such Dividend Payment Date to the record holders of
such shares on such Record Date if such shares have been
converted after such Record Date and prior to such Dividend
Payment Date. Except as provided in the immediately preceding
sentence, no payment or adjustment will be made upon mandatory
conversion of any Series D Preferred Shares for unpaid
accrued and accumulated dividends or for dividends with respect
to the common shares issued upon such conversion.
We may not authorize or give notice of any mandatory conversion
unless, prior to giving the conversion notice, all accumulated
and unpaid dividends on the Series D Preferred Shares for
all quarterly dividend periods ending on or prior to the date on
which we give such notice shall have been paid.
In addition to the mandatory conversion provision described
above, if there are fewer than 150,000 Series D Preferred
Shares outstanding, we may, at any time on or after
April 20, 2018, at our option, cause all such outstanding
Series D Preferred Shares to be converted into the number
of whole common shares equal to the greater of (i) the
then-prevailing Conversion Rate and (ii) the liquidation
preference divided by the Market Value of the common shares as
determined on the second Trading Day immediately prior to the
Mandatory Conversion Date. The provisions of the immediately
preceding four paragraphs shall apply to any such
S-29
mandatory conversion pursuant to this paragraph; provided,
however, that (1) the Mandatory Conversion Date will not be
less than 15 calendar days nor more than 30 calendar days after
the date on which we issue a press release announcing such
mandatory conversion and (2) the press release and notice
of mandatory conversion will not state the number of common
shares to be issued upon conversion of each Series D
Preferred Share.
The term Market Value means the average of the Daily
VWAP of our common shares for each day during a 10 consecutive
Trading Day period ending immediately prior to the date of
determination.
Conversion Rate
Adjustment
The applicable Conversion Rate will be subject to adjustment,
without duplication, upon the occurrence of any of the following
events:
(1) If we issue our common shares as a dividend or
distribution on our common shares, or if we effect a share split
or share combination, the Conversion Rate will be adjusted based
on the following formula:
|
|
|
where, |
|
|
|
CR0 |
|
= the Conversion Rate in effect immediately prior to
the open of business on the
Ex-Date for
such dividend or distribution, or the open of business on the
effective date of such share split or share combination, as the
case may be;
|
|
CR1 |
|
= the Conversion Rate in effect immediately after the
open of business on the
Ex-Date for
such dividend or distribution, or the open of business on the
effective date of such share split or share combination, as the
case may be;
|
|
OS0 |
|
= the number of common shares outstanding immediately
prior to the open of business on the
Ex-Date for
such dividend or distribution, or the open of business on the
effective date of such share split or share combination, as the
case may be; and |
|
OS1 |
|
= the number of common shares outstanding immediately
after such dividend or distribution, or such share split or
share combination, as the case may be. |
Any adjustment made under this clause (1) shall become
effective immediately after the open of business on the
Ex-Date for
such dividend or distribution, or immediately after the open of
business on the effective date for such share split or share
combination. If any dividend or distribution of the type
described in this clause (1) is declared but not so paid or
made, or any share split or combination of the type described in
this clause (1) is announced but the outstanding common
shares are not split or combined, as the case may be, the
Conversion Rate shall be immediately readjusted, effective as of
the date our board of trustees determines not to pay such
dividend or distribution, or not to split or combine our
outstanding common shares, as the case may be, to the Conversion
Rate that would then be in effect if such dividend,
distribution, share split or share combination had not been
declared or announced.
S-30
(2) If we distribute to all or substantially all holders of
our common shares any rights, options or warrants entitling
them, for a period expiring not more than 45 days
immediately following the record date of such distribution, to
purchase or subscribe for our common shares at a price per share
less than the average of the Daily VWAP of our common shares
over the 10 consecutive
Trading-Day
period ending on the Trading Day immediately preceding the
Ex-Date for
such distribution, the Conversion Rate will be increased based
on the following formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0
|
|
x
|
|
OS0 + X
OS0 + Y
|
|
|
|
where, |
|
|
|
CR0 |
|
= the Conversion Rate in effect immediately prior to
the open of business on the
Ex-Date for
such distribution;
|
|
CR1 |
|
= the Conversion Rate in effect immediately after the
open of business on the
Ex-Date for
such distribution; |
|
OS0 |
|
= the number of our common shares outstanding
immediately prior to the open of business on the
Ex-Date for
such distribution; |
|
X |
|
= the total number of our common shares issuable
pursuant to such rights, options or warrants; and |
|
Y |
|
= the number of our common shares equal to the
aggregate price payable to exercise such rights, options or
warrants divided by the average of the Daily VWAP of our common
shares over the 10 consecutive Trading-Day period ending on
the Trading Day immediately preceding the
Ex-Date for
such distribution. |
Any increase made under this clause (2) will be made
successively whenever any such rights, options or warrants are
distributed and shall become effective immediately after the
open of business on the
Ex-Date for
such distribution. To the extent that common shares are not
delivered after the expiration of such rights, options or
warrants, the Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect had the increase
with respect to the distribution of such rights, options or
warrants been made on the basis of delivery of only the number
of common shares actually delivered. If such rights, options or
warrants are not so distributed, the Conversion Rate shall be
decreased to be the Conversion Rate that would then be in effect
if such
Ex-Date for
such distribution had not occurred.
In determining whether any rights, options or warrants entitle
the holders to subscribe for or purchase our common shares at
less than such average of the Daily VWAP for the 10 consecutive
Trading Day period ending on the Trading Day immediately
preceding the
Ex-Date for
such distribution, and in determining the aggregate offering
price of such common shares, there shall be taken into account
any consideration received by us for such rights, options or
warrants and any amount payable on exercise or conversion
thereof, the value of such consideration, if other than cash, to
be determined by our board of trustees in its good faith
judgment.
(3) If we distribute shares of beneficial interest,
evidences of our indebtedness or other assets, securities or
property, to all or substantially all holders of our common
shares, excluding:
dividends or distributions referred to in the first
and second clauses above;
|
|
|
|
|
spin-offs to which the provisions set forth in the latter
portion of this third clause shall apply; and
|
S-31
|
|
|
|
|
dividends or distributions paid exclusively in cash referred to
in the fourth clause below, then the Conversion Rate will be
increased based on the following formula:
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0
|
|
x
|
|
SP0
SP0 - FMV
|
|
|
|
where, |
|
|
|
CR0 |
|
= the Conversion Rate in effect immediately prior to
the open of business on the
Ex-Date for
such distribution;
|
|
CR1 |
|
= the Conversion Rate in effect immediately after the
open of business on the
Ex-Date for
such distribution; |
|
SP0 |
|
= the average of the Daily VWAP of our common shares
over the 10 consecutive Trading-Day period ending on the Trading
Day immediately preceding the
Ex-Date for
such distribution; and |
|
FMV |
|
= the fair market value (as determined by our board
of trustees in its good faith judgment) of the shares of
beneficial interest, evidences of indebtedness, assets,
securities or property distributable with respect to each
outstanding common share on the
Ex-Date for
such distribution. |
If FMV (as defined above) is equal to or greater
than the
SP0
(as defined above), in lieu of the foregoing increase, each
holder of a Series D Preferred Share shall receive in
respect of each Series D Preferred Share owned by it, at
the same time and upon the same terms as holders of our common
shares, the amount and kind of our shares of beneficial
interest, evidences of our indebtedness, other assets,
securities or property of ours that such holder would have
received as if such holder owned a number of common shares equal
to the Conversion Rate in effect on the
Ex-Date for
the distribution.
Any increase made under the above portion of this
clause (3) will become effective immediately after the open
of business on the
Ex-Date for
such distribution.
With respect to an adjustment pursuant to this third clause
where there has been a payment of a dividend or other
distribution on our common shares of shares of beneficial
interest of any class or series, or similar equity interests, of
or relating to a subsidiary or other business unit where such
shares of beneficial interest or similar equity interest is
listed or quoted (or will be listed or quoted upon consummation
of the spin-off (as defined below)) on a national securities
exchange, which we refer to as a spin-off, the
Conversion Rate in effect immediately before 5:00 p.m., New
York City time, on the tenth Trading Day immediately following,
and including, the
Ex-Date for
the spin-off will be increased based on the following formula:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0
|
|
x
|
|
FMV + MP0
MP0
|
|
|
|
CR0 |
|
= the Conversion Rate in effect immediately prior to
the close of business on the tenth Trading Day immediately
following, and including, the
Ex-Date for
the spin-off;
|
|
CR1 |
|
= the Conversion Rate in effect immediately after the
close of business on the tenth Trading Day immediately
following, and including, the
Ex-Date for
the spin-off; |
|
FMV |
|
= the average of the volume-weighted average sale
prices of the shares of beneficial interest or similar equity
interest distributed to holders of our common shares applicable
to one common share over the 10 consecutive Trading-Day period
immediately following, and including, the
Ex-Date for
the spin-off; and |
S-32
|
|
|
MP0 |
|
= the average of the Daily VWAP of our common shares
over the 10 consecutive Trading-Day period immediately
following, and including, the
Ex-Date for
the spin-off. |
The adjustment to the Conversion Rate under the preceding
paragraph will occur at the close of business on the tenth
Trading day immediately following, and including, the
Ex-Date for
the spin-off; provided that, for purposes of determining the
Conversion Rate, in respect of any conversion during the
10 Trading Days following, and including, the effective
date of any spin-off, references within the portion of this
clause (3) related to spin-offs to
10 consecutive Trading Days shall be deemed replaced with
such lesser number of consecutive Trading Days as have elapsed
between the effective date of such spin-off and the relevant
conversion date.
If the dividend or distribution described in this third clause
is declared but not paid or made, the new Conversion Rate shall
be readjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.
(4) If any cash dividend or distribution is made to all or
substantially all holders of our common shares (excluding any
dividend or distribution in connection with our liquidation,
dissolution or winding up) during any of our quarterly fiscal
periods in an aggregate amount that, together with other cash
dividends or distributions made during such quarterly fiscal
period, exceeds the product of $0.1633, which we refer to as the
reference dividend, multiplied by the number of common shares
outstanding on the record date for such distributions, the
Conversion Rate will be increased based on the following formula:
|
|
|
where, |
|
|
|
CR0 |
|
= the Conversion Rate in effect immediately prior to
the open of business on the
Ex-Date for
such dividend or distribution;
|
|
CR1 |
|
= the Conversion Rate in effect immediately after the
open of business on the
Ex-Date for
such dividend or distribution; |
|
SP0 |
|
= the average of the Daily VWAP of our common shares
over the 10 consecutive Trading-Day period immediately preceding
the Ex-Date
for such dividend or distribution; and |
|
C |
|
= the amount in cash per common share we distribute
to holders of our common shares that exceeds the reference
dividend. |
Such increase shall become effective immediately after the open
of business on the
Ex-Date for
such dividend or distribution. If such dividend or distribution
is not so paid, the Conversion Rate shall be decreased to be the
Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
If the total per share amount of cash distributed by us as a
dividend or in any other distribution to holders of our common
shares that would require an adjustment pursuant to this fourth
clause is equal to or greater than
SP0
(as defined above), in lieu of the foregoing increase, each
holder of Series D Preferred Shares shall receive in
respect of each Series D Preferred Share owned by it, at
the same time as holders of our common shares receive their
dividend or other distribution, an amount of cash equal to C
multiplied by the number of common shares equal to the
Conversion Rate in effect on the
Ex-Date for
such cash dividend or distribution.
S-33
The reference dividend amount is subject to adjustment in a
manner inversely proportional to adjustments to the Conversion
Rate; provided that no adjustment will be made to the reference
dividend amount for any adjustment made to the Conversion Rate
under this fourth clause.
Notwithstanding the foregoing, if an adjustment is required to
be made under this clause (4) as a result of a distribution
that is not a regular quarterly dividend, the reference dividend
amount will be deemed to be zero.
(5) If we or any of our subsidiaries makes a payment in
respect of a tender offer or exchange offer for our common
shares, if the cash and value of any other consideration
included in the payment per common share exceeds the average of
the Daily VWAP of our common shares over the 10 consecutive
Trading-Day
period commencing on, and including, the Trading Day next
succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer, the Conversion
Rate will be increased based on the following formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0
|
|
x
|
|
AC +
(SP1 x OS1)
OS0 x SP1
|
|
|
|
where, |
|
|
|
CR0 |
|
= the Conversion Rate in effect immediately prior to
the close of business on the last Trading Day of the 10
consecutive Trading-Day period commencing on, and including, the
Trading Day next succeeding the date such tender or exchange
offer expires;
|
|
CR1 |
|
= the Conversion Rate in effect immediately after the
close of business on the last Trading Day of the 10 consecutive
Trading-Day period commencing on, and including, the Trading Day
next succeeding the date such tender or exchange offer expires; |
|
AC |
|
= the aggregate value of all cash and any other
consideration (as determined in good faith by our board of
trustees) paid or payable for shares purchased in such tender or
exchange offer; |
|
OS0 |
|
= the number of our common shares outstanding
immediately prior to the date such tender or exchange offer
expires; |
|
OS1 |
|
= the number of our common shares outstanding
immediately after the date such tender or exchange offer expires
(after giving effect to such tender offer or exchange offer and
excluding fractional shares); and |
|
SP1 |
|
= the average of the Daily VWAP of our common shares
over the 10 consecutive Trading-Day period commencing on, and
including, the Trading Day next succeeding the date such tender
or exchange offer expires. |
The increase to the Conversion Rate under the preceding
paragraph will occur at the close of business on the tenth
Trading Day immediately following, but excluding, the date such
tender or exchange offer expires; provided that, for purposes of
determining the Conversion Rate, in respect of any conversion
during the 10 Trading Days immediately following, but excluding,
the date that any such tender or exchange offer expires,
references within this clause (5) to 10 consecutive Trading
Days shall be deemed replaced with such lesser number of
consecutive Trading Days as have elapsed between the date such
tender or exchange offer expires and the relevant conversion
date.
Notwithstanding the foregoing, if (i) a Conversion Rate
adjustment pursuant to any of the foregoing becomes effective on
any Ex-Date
as described above and (ii) a holder converting its
Series D Preferred Shares on or after such
Ex-Date and
on or prior to the related record date
S-34
would be treated as the record holder of our common shares as of
the related conversion date as described under
Conversion Procedures based on an adjusted
Conversion Rate for such
Ex-Date,
then, notwithstanding the foregoing Conversion Rate adjustment
provisions, the Conversion Rate adjustment relating to such
Ex-Date will
not be made for any holder converting Series D Preferred
Shares on or after such
Ex-Date and
on or prior to the related record date. Instead, such holder
will be treated as if such holder were the record owner of the
common shares on an un-adjusted basis and participate in the
related dividend, distribution or other event giving rise to
such adjustment.
The Ex-Date as used herein is the first date on
which our common shares trade on the applicable exchange or in
the applicable market, regular way, without the right to receive
the issuance, dividend or distribution in question from us or,
if applicable, from the seller of our common shares on such
exchange or market (in the form of due bills or otherwise) as
determined by such exchange or market.
We are not required to adjust the Conversion Rate for any of the
transactions described in the clauses above (other than for
share splits or share combinations) if we make provision for
each holder of a Series D Preferred Share to participate in
the transaction, at the same time as holders of our common
shares participate, without conversion, as if such holder held a
number of our common shares in respect of each Series D
Preferred Share equal to the Conversion Rate in effect on the
Ex-Date or effective date.
If we issue rights, options or warrants that are only
exercisable upon the occurrence of certain triggering events,
then the Conversion Rate will not be adjusted pursuant to the
second or third clause above, as applicable, until the earliest
of these triggering events occurs and the Conversion Rate shall
be readjusted to the extent any of these rights, options or
warrants are not exercised before they expire.
If we have in effect a shareholder rights plan while any of the
Series D Preferred Shares remains outstanding, holders of
the Series D Preferred Shares will receive, upon a
conversion of such shares, in addition to such common shares,
rights under our shareholder rights agreement unless, prior to
conversion, the rights have expired, terminated or been redeemed
or unless the rights have separated from our common shares. If
the rights provided for in any rights plan that our board of
trustees may adopt have separated from our common shares in
accordance with the provisions of the applicable shareholder
rights agreement so that holders of the Series D Preferred
Shares would not be entitled to receive any rights in respect of
our common shares that we deliver upon conversion of the
Series D Preferred Shares, we will adjust the Conversion
Rate at the time of separation as if we had distributed to all
holders of our common shares, evidences of indebtedness or other
assets or property pursuant to the third clause above, subject
to readjustment upon the subsequent expiration, termination or
redemption of the rights.
We will not adjust the Conversion Rate pursuant to the clauses
above unless the adjustment would result in a change of at least
1% in the then effective Conversion Rate. However, we will carry
forward any adjustment that is less than 1% of the Conversion
Rate and make such carry forward adjustment in any subsequent
adjustment and, regardless of whether the aggregate adjustment
is less than 1%, on the conversion date for any Series D
Preferred Shares. In addition, at the end of each fiscal year,
beginning with the fiscal year ending December 31, 2011, we
will give effect to any adjustments that we have otherwise
deferred pursuant to this provision, and those adjustments will
no longer be carried forward and taken into account in any
subsequent adjustment. Adjustments to the Conversion Rate will
be calculated to the nearest 1/10,000 of a share.
To the extent permitted by law and the continued listing
requirements of NYSE (or any stock exchange on which our common
shares may then be listed), we may, from time to time, increase
the Conversion Rate by any amount for a period of at least 20
Business Days or any
S-35
longer period permitted or required by law, so long as the
increase is irrevocable during that period and our board of
trustees determines that the increase is in our best interests.
We will mail a notice of the increase to registered holders at
least 15 calendar days before the day the increase commences. In
addition, we may, but are not obligated to, increase the
Conversion Rate as we determine to be advisable in order to
avoid or diminish taxes to recipients of certain distributions.
Upon each adjustment to the Conversion Rate, a corresponding
adjustment shall be made to the conversion price, calculated by
dividing the liquidation preference by the adjusted Conversion
Rate.
If certain of the possible adjustments to the Conversion Rate of
the Series D Preferred Shares are made (or if failures to
make certain adjustments occur), a holder of such shares may be
deemed to have received a taxable distribution from us even
though such holder has not received any cash or property as a
result of such adjustments. In the case of a
non-U.S. shareholder, we may, at our option, withhold
U.S. federal income tax with respect to any such deemed
distribution from cash payments of dividends and any other
payments in respect of the Series D Preferred Shares. See
Additional Federal Income Tax Considerations in this
prospectus supplement.
Events That Will
Not Result In Adjustment
The Conversion Rate will not be adjusted:
|
|
|
|
|
upon the issuance of any of our common shares pursuant to any
present or future plan providing for the reinvestment of
dividends or interest payable on our securities;
|
|
|
|
upon the issuance of any of our common shares, restricted shares
or restricted share units, nonqualified share options, incentive
share options or any other options or rights (including share
appreciation rights) to purchase our common shares pursuant to
any present or future employee, trustee or consultant benefit
plan or program of, or assumed by, us or any of our subsidiaries;
|
|
|
|
upon the issuance of any common shares pursuant to any option,
warrant, right or exercisable, exchangeable or convertible
security not described in the preceding clause and outstanding
as of the date the Series D Preferred Shares were first
issued;
|
|
|
|
for unpaid accrued and accumulated dividends, if any;
|
|
|
|
upon the repurchase of any common shares pursuant to an
open-market share repurchase program or other buy-back
transaction that is not a tender offer or exchange offer; or
|
|
|
|
for a change in the par value of our common shares.
|
We shall not take any action that would require an adjustment to
the Conversion Rate such that the Conversion Price, as adjusted
to give effect to such action, would be less than the
then-applicable par value per common share, except we may
undertake a share split or similar event if such share split
results in a corresponding reduction in the par value per common
share such that the as-adjusted new effective conversion price
per share would not be below the new as-adjusted par value per
common share following such share split or similar transaction
and the Conversion Rate is adjusted as provided under the first
clause (and/or any such other clause(s) as may be applicable)
under Conversion Rate Adjustment above. In
addition, the articles supplementary relating to the
Series D Preferred Shares provide that we may not take any
action that would result in an adjustment to the Conversion Rate
without complying with any applicable shareholder approval rules
of the NYSE or any other stock exchange on which our common
shares may be listed at the relevant time.
S-36
Except as described in this prospectus supplement and as
provided for in the articles supplementary relating to the
Series D Preferred Shares, we will not adjust the
Conversion Rate for any issuance of our common shares or any
securities convertible into or exchangeable or exercisable for
our common shares or rights to purchase our common shares or
such convertible, exchangeable or exercisable securities.
Recapitalizations,
Reclassifications and Changes of our Common Shares
In the case of any recapitalization, reclassification or change
of our common shares (other than changes resulting from a
subdivision or combination), a consolidation, merger or
combination involving us, a sale, lease or other transfer to a
third party of all or substantially all of the assets of us (or
us and our subsidiaries on a consolidated basis), or any
statutory share exchange, in each case as a result of which our
common shares would be converted into, or exchanged for, shares,
other securities, other property or assets (including cash or
any combination thereof), then, at the effective time of the
transaction, the right to convert each Series D Preferred
Share will be changed into a right to convert such Series D
Preferred Share into the kind and amount of shares, other
securities or other property or assets (including cash or any
combination thereof) (the reference property) that a
holder would have received in respect of common shares issuable
upon conversion of such shares immediately prior to such
transaction. If such transaction also constitutes a fundamental
change, a holder of our Series D Preferred Shares who
converts its Series D Preferred Shares in connection with
such fundamental change will, if applicable, also be entitled to
receive additional common shares in connection with such
conversion as described below under Special Rights
Upon a Fundamental Change, in which case the converting
holder would also receive reference property in lieu of such
additional common shares. In the event that our common
shareholders have the opportunity to elect the form of
consideration to be received in such transaction, the reference
property into which the Series D Preferred Shares will be
convertible shall be deemed to be the weighted average of
elections made by the holders of our Series D Preferred
Shares who participate in such determination. The articles
supplementary relating to the Series D Preferred Shares
provide that we may not become a party to any such transaction
unless its terms are consistent with the foregoing.
A change in the conversion right described in this
Recapitalizations, Reclassifications and Changes of our
Common Shares could substantially lessen or eliminate the
value of the conversion right. For example, if a third party
acquires us in a cash merger, each Series D Preferred Share
would be convertible solely into cash and would no longer be
potentially convertible into securities whose value could
increase depending on our future financial performance,
prospects and other factors. There is no precise, established
definition of the phrase all or substantially all
under applicable law. Accordingly, there may be uncertainty as
to whether the provisions above would apply to a sale, transfer,
lease, conveyance or other disposition of less than all of the
consolidated property or assets of us or us and our subsidiaries.
No Fractional
Shares
No fractional common shares or securities representing
fractional common shares will be issued upon conversion of the
Series D Preferred Shares, whether voluntary or mandatory.
Instead, we may elect to either make a cash payment to each
holder that would otherwise be entitled to a fractional share
or, in lieu of such cash payment, the number of common shares to
be issued to any particular holder upon conversion will be
rounded up to the nearest whole share.
S-37
Special Rights
Upon a Fundamental Change
We must give notice of each fundamental change (as defined
below) to all record holders of the Series D Preferred
Shares, by the later of 20 Business Days prior to the
anticipated effective date of the fundamental change (the
fundamental change effective date) and the first
public disclosure by us of the anticipated fundamental change.
In addition, we must give notice announcing the effective date
of such fundamental change and certain other matters as set
forth under Determination of the Make-Whole
Premium. If a holder converts its Series D Preferred
Shares at any time beginning at the opening of business on the
Trading Day immediately following the effective date of such
fundamental change and ending at the close of business on the
30th Trading Day immediately following such effective date,
such conversion will be deemed to be in connection with the
fundamental change and the holder will receive for each
Series D Preferred Shares converted, a number of common
shares equal to the greater of:
|
|
|
|
|
(i) the applicable conversion rate (with such adjustment or
cash payment for fractional shares as we may elect, as described
under No Fractional Shares) plus (ii) the
make-whole premium, if any, described under
Determination of the Make-Whole
Premium; and
|
|
|
|
the lesser of (i) the liquidation preference divided by the
Market Value of the Common Shares on the fundamental change
effective date and (ii) 7.9808 (subject to adjustment).
|
In addition, a converting holder will have the right to receive
cash in an amount equal to all unpaid accrued and accumulated
dividends on such converted Series D Preferred Shares,
whether or not declared prior to that date, for all prior
dividend periods ending on or prior to the Dividend Payment Date
immediately preceding (or, if applicable, ending on) the
conversion date (other than previously declared dividends on our
Series D Preferred Shares payable to holders of record as
of a prior date), provided that we are then legally permitted to
pay such dividends.
In lieu of issuing the number of common shares issuable upon
conversion pursuant to the foregoing provisions, we may, at our
option, make a cash payment equal to the Market Value determined
for the period ending on the fundamental change effective date
for each such common share otherwise issuable upon conversion.
Our notice of fundamental change will specify whether we intend
to issue common shares or pay cash upon conversion.
A fundamental change will be deemed to have occurred
upon the occurrence of any of the following:
(1) any person is or becomes the
beneficial owner, directly or indirectly, through a
purchase, merger or other transaction, of 50% or more of the
total voting power of all classes of our voting shares of
beneficial interest;
(2) we consolidate with, or merge with or into, another
person or any person consolidates with
or merges with or into us, or we convey, transfer, lease or
otherwise dispose of all or substantially all of our assets or
all or substantially all of the assets of us and our
subsidiaries on a consolidated basis to any person
(whether in one transaction or a series of related
transactions), other than:
(a) any transaction pursuant to which the holders of our
voting shares of beneficial interest immediately prior to the
transaction collectively have the entitlement to exercise,
directly or indirectly, 50% or more of the total voting power of
all classes of voting stock of the continuing or surviving
person immediately after the transaction; or
(b) any merger solely for the purpose of changing our
jurisdiction of formation and resulting in a reclassification,
conversion or exchange of outstanding shares of our common
shares solely into common shares of the surviving entity;
S-38
(3) the first day on which a majority of the members of our
board of trustees does not consist of Continuing
Trustees;
(4) we approve a plan of liquidation or dissolution; or
(5) our common shares cease to be listed on a national
securities exchange.
Continuing Trustees means (i) individuals who
on the date of original issuance of the Series D Preferred
Shares constituted our board of trustees or (ii) any new
trustees whose election to our board of trustees or whose
nomination for election by our shareholders was approved by at
least a majority of our trustees then still in office (or a duly
constituted committee thereof) who were either trustees on the
date of original issuance of the Series D Preferred Shares
or whose election or nomination for election was previously so
approved.
The term beneficially own as used herein means
beneficial ownership as determined in accordance with
Rule 13d-3
promulgated by the SEC under the Securities Exchange Act of
1934, as amended (the Exchange Act), except that a
person will be deemed to own any securities that such person has
a right to acquire, whether such right is exercisable
immediately or only after the passage of time. The term
person includes any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of
the Exchange Act and the rules of the SEC thereunder.
Voting shares of beneficial interest with respect to
any person means the shares of beneficial interest of such
person that is at the time entitled, without regard to the
occurrence of any contingency, to vote in the election of the
board of trustees (or comparable governing body of such person).
Notwithstanding the foregoing, a fundamental change will be
deemed not to have occurred in the case of a merger or
consolidation if (i) at least 90% of the consideration for
our common shares (excluding cash payments for fractional shares
and cash payments pursuant to dissenters appraisal rights)
in the merger or consolidation consists of common stock of a
corporation or other entity organized and existing under the
laws of the United States or any state thereof and traded on a
national securities exchange (or which will be so traded when
issued or exchanged in connection with such transaction)
(publicly traded common stock) and (ii) as a
result of such transaction or transactions the Series D
Preferred Shares become convertible into such publicly traded
common stock.
There is no precise, established definition of the phrase
all or substantially all under applicable law.
Accordingly, there may uncertainty as to whether the provisions
above would apply to a sale, transfer, lease, conveyance or
other disposition of less than all of the consolidated assets of
us or of us and our subsidiaries.
This fundamental change conversion feature may make more
difficult or discourage a takeover of us and the removal of
incumbent management. We are not, however, aware of any specific
effort to accumulate our common shares or to obtain control of
us by means of a merger, tender offer, solicitation or
otherwise. In addition, the fundamental change conversion
feature is not part of a plan by management to adopt a series of
anti-takeover provisions. Instead, the fundamental change
conversion feature is a result of negotiations between us and
the underwriters.
Our obligation to issue shares in excess of the Conversion Rate
in connection with a fundamental change as described above could
be considered a penalty, in which case its enforceability would
be subject to general principles of reasonableness of economic
remedies.
S-39
Determination of
the Make-Whole Premium
If you elect to convert your Series D Preferred Shares upon
the occurrence of a fundamental change, in certain
circumstances, we will increase the Conversion Rate (the
make-whole premium) by reference to the table below.
Holders will be entitled to receive the make-whole premium only
with respect to shares surrendered for conversion from and after
the opening of business on the Trading Day immediately following
the fundamental change effective date until the close of
business on the 30th Trading Day following such fundamental
change effective date.
The increase in the Conversion Rate will be determined by
reference to the table below, based on the fundamental change
effective date and the share price (as defined below). If
holders of our common shares receive only cash in the
transaction constituting a fundamental change, the share price
shall be the cash amount paid per share. Otherwise, the share
price shall be the average of the Closing Sale Prices of our
common shares on the five Trading Days prior to but excluding
the effective date of the transaction constituting a fundamental
change.
The following table sets forth the share price paid, or deemed
paid, per common share in a transaction that constitutes the
fundamental change, the fundamental change effective date and
the make-whole premium (expressed as the number of additional
common shares that will be added to the Conversion Rate) to be
paid upon a conversion in connection with a fundamental change:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fundamental Change
|
|
Share price ($)
|
|
Effective Date
|
|
$12.53
|
|
|
$13.50
|
|
|
$14.00
|
|
|
$15.00
|
|
|
$16.00
|
|
|
$17.00
|
|
|
$18.00
|
|
|
$20.00
|
|
|
April 6, 2011
|
|
|
0.5205
|
|
|
|
0.5179
|
|
|
|
0.4903
|
|
|
|
0.4399
|
|
|
|
0.3967
|
|
|
|
0.3575
|
|
|
|
0.3239
|
|
|
|
0.2692
|
|
April 15, 2012
|
|
|
0.5205
|
|
|
|
0.5130
|
|
|
|
0.4846
|
|
|
|
0.4339
|
|
|
|
0.3887
|
|
|
|
0.3478
|
|
|
|
0.3141
|
|
|
|
0.2575
|
|
April 15, 2013
|
|
|
0.5205
|
|
|
|
0.5110
|
|
|
|
0.4820
|
|
|
|
0.4293
|
|
|
|
0.3820
|
|
|
|
0.3400
|
|
|
|
0.3048
|
|
|
|
0.2461
|
|
April 15, 2014
|
|
|
0.5205
|
|
|
|
0.5086
|
|
|
|
0.4787
|
|
|
|
0.4227
|
|
|
|
0.3730
|
|
|
|
0.3295
|
|
|
|
0.2922
|
|
|
|
0.2314
|
|
April 15, 2015
|
|
|
0.5205
|
|
|
|
0.5047
|
|
|
|
0.4725
|
|
|
|
0.4130
|
|
|
|
0.3601
|
|
|
|
0.3138
|
|
|
|
0.2742
|
|
|
|
0.2107
|
|
April 15, 2016
|
|
|
0.5205
|
|
|
|
0.4932
|
|
|
|
0.4581
|
|
|
|
0.3933
|
|
|
|
0.3354
|
|
|
|
0.2853
|
|
|
|
0.2425
|
|
|
|
0.1760
|
|
April 15, 2017
|
|
|
0.5205
|
|
|
|
0.4742
|
|
|
|
0.4345
|
|
|
|
0.3607
|
|
|
|
0.2938
|
|
|
|
0.2362
|
|
|
|
0.1869
|
|
|
|
0.1149
|
|
April 15, 2018 and thereafter
|
|
|
0.5205
|
|
|
|
0.4677
|
|
|
|
0.4239
|
|
|
|
0.3431
|
|
|
|
0.2694
|
|
|
|
0.1971
|
|
|
|
0.1168
|
|
|
|
0.0000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fundamental Change
|
|
Share price ($)
|
|
Effective Date
|
|
$22.00
|
|
|
$24.00
|
|
|
$26.00
|
|
|
$28.00
|
|
|
$30.00
|
|
|
$35.00
|
|
|
$45.00
|
|
|
$50.00
|
|
|
April 6, 2011
|
|
|
0.2267
|
|
|
|
0.1935
|
|
|
|
0.1670
|
|
|
|
0.1462
|
|
|
|
0.1282
|
|
|
|
0.0960
|
|
|
|
0.0566
|
|
|
|
0.0446
|
|
April 15, 2012
|
|
|
0.2149
|
|
|
|
0.1813
|
|
|
|
0.1554
|
|
|
|
0.1347
|
|
|
|
0.1174
|
|
|
|
0.0867
|
|
|
|
0.0502
|
|
|
|
0.0391
|
|
April 15, 2013
|
|
|
0.2028
|
|
|
|
0.1690
|
|
|
|
0.1434
|
|
|
|
0.1230
|
|
|
|
0.1065
|
|
|
|
0.0774
|
|
|
|
0.0441
|
|
|
|
0.0339
|
|
April 15, 2014
|
|
|
0.1869
|
|
|
|
0.1532
|
|
|
|
0.1279
|
|
|
|
0.1083
|
|
|
|
0.0928
|
|
|
|
0.0661
|
|
|
|
0.0367
|
|
|
|
0.0278
|
|
April 15, 2015
|
|
|
0.1650
|
|
|
|
0.1316
|
|
|
|
0.1073
|
|
|
|
0.0891
|
|
|
|
0.0753
|
|
|
|
0.0522
|
|
|
|
0.0280
|
|
|
|
0.0206
|
|
April 15, 2016
|
|
|
0.1301
|
|
|
|
0.0991
|
|
|
|
0.0778
|
|
|
|
0.0631
|
|
|
|
0.0525
|
|
|
|
0.0358
|
|
|
|
0.0188
|
|
|
|
0.0135
|
|
April 15, 2017
|
|
|
0.0720
|
|
|
|
0.0486
|
|
|
|
0.0356
|
|
|
|
0.0281
|
|
|
|
0.0233
|
|
|
|
0.0163
|
|
|
|
0.0087
|
|
|
|
0.0061
|
|
April 15, 2018 and thereafter
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
The share prices set forth in the table will be adjusted as of
any date on which the Conversion Rate of the Series D
Preferred Shares is adjusted by multiplying the applicable price
in effect immediately before the adjustment by a fraction:
|
|
|
|
|
whose numerator is the Conversion Rate immediately before the
adjustment; and
|
|
|
|
whose denominator is the adjusted Conversion Rate.
|
S-40
In addition, we will adjust the number of additional shares in
the table at the same time, in the same manner in which, and for
the same events for which, we must adjust the Conversion Rate as
described under Conversion Rate Adjustment.
The exact share price and fundamental change effective date may
not be set forth on the table, in which case:
|
|
|
|
|
if the share price is between two share prices on the table or
the fundamental change effective date is between two fundamental
change effective dates on the table, the make-whole premium will
be determined by straight-line interpolation between make-whole
premium amounts set forth for the higher and lower share prices
and the two effective dates, as applicable, based on a
365-day year;
|
|
|
|
if the share price is in excess of $50.00 per share (subject to
adjustment in the same manner as the share price) no make-whole
premium will be paid; and
|
|
|
|
if the share price is less than $12.53 per share (subject to
adjustment in the same manner as the share price), no make-whole
premium will be paid
|
However, we will not increase the Conversion Rate as described
above to the extent the increase will cause the Conversion Rate
to exceed 3.9904. We will adjust this maximum Conversion Rate in
the same manner in which, and for the same events for which, we
must adjust the Conversion Rate as described under
Conversion Rate Adjustment.
Our obligation to pay the make-whole premium could be considered
a penalty, in which case the enforceability thereof would be
subject to general equitable principles of reasonableness of
economic remedies.
No later than the third Business Day after the occurrence of a
fundamental change, we will provide to the holders and the
transfer agent of the Series D Preferred Shares a notice of
the occurrence of the fundamental change. Such notice will state:
|
|
|
|
|
the events constituting the fundamental change;
|
|
|
|
the date of the fundamental change;
|
|
|
|
the last date on which the holder of our Series D Preferred
Shares may convert Series D Preferred Shares in connection
with such fundamental change;
|
|
|
|
the Conversion Rate and, if applicable, the Make-Whole Premium
and/or other
consideration issuable upon conversions of Series D
Preferred Shares in connection with such fundamental change;
|
|
|
|
whether we will issue common shares or deliver cash upon
conversion of Series D Preferred Shares in connection with
the fundamental change and whether any of the consideration
issuable upon a conversion of Series D Preferred Shares in
connection with such fundamental change will consist of
reference property (and, in such case, specifying such reference
property);
|
|
|
|
the name and address of the paying agent and the conversion
agent; and
|
|
|
|
the procedures that the holder of Series D Preferred Shares
must follow to exercise the fundamental change conversion right.
|
We will also issue a press release for publication on the Dow
Jones News Service or Bloomberg Business News (or if either such
service is not available, another broadly disseminated news or
press release service selected by us), or post notice on our
website containing the information specified above, in any event
prior to the opening of business on the first trading day
following any date on which we provide such notice to the
holders of our Series D Preferred Shares.
S-41
Book-Entry,
Delivery and Form
We will initially issue the Series D Preferred Shares in
the form of one or more global securities. The global securities
will be deposited with, or on behalf of, the Depositary and
registered in the name of the Depositary or its nominee. Except
as set forth below, the global securities may be transferred, in
whole and not in part, only to the Depositary or another nominee
of the Depositary. Investors may hold their beneficial interests
in the global securities directly through the Depositary if they
have an account with the Depositary or indirectly through
organizations which have accounts with the Depositary.
Series D Preferred Shares that are issued as described
below under Certificated Series D Preferred
Shares will be issued in definitive form. Upon the
transfer of Series D Preferred Shares in definitive form,
such Series D Preferred Shares will, unless the global
securities have previously been exchanged for Series D
Preferred Shares in definitive form, be exchanged for an
interest in global securities representing the liquidation
preference of the Series D Preferred Shares being
transferred.
The Depositary has advised us as follows: The Depositary is
a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a
clearing corporation within the meaning of the New
York Uniform Commercial Code, and a clearing agency
registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary was created to hold securities of
institutions that have accounts with the Depositary
(direct participants) and to facilitate the
clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry
changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. The
Depositarys participants include securities brokers and
dealers (which may include the underwriters), banks, trust
companies, clearing corporations and certain other
organizations. Access to the Depositarys book-entry system
is also available to others such as banks, brokers, dealers and
trust companies (indirect participants) that clear
through or maintain a custodial relationship with a participant,
whether directly or indirectly.
We expect that pursuant to procedures established by the
Depositary, upon the deposit of the global securities with, or
on behalf of, the Depositary, the Depositary will credit, on its
book-entry registration and transfer system, the liquidation
preference of the Series D Preferred Shares represented by
such global securities to the accounts of participants. The
accounts to be credited shall be designated by the underwriters
of such Series D Preferred Shares. Ownership of beneficial
interests in the global securities will be limited to
participants or persons that may hold interests through
participants. Ownership of beneficial interests in the global
securities will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by
the Depositary (with respect to participants interests)
and such participants and indirect participants (with respect to
the owners of beneficial interests in the global securities
other than participants). The laws of some jurisdictions may
require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and
laws may impair the ability to transfer or pledge beneficial
interests in the global securities.
To facilitate subsequent transfers, all Series D Preferred
Shares deposited by direct participants with the Depositary are
registered in the name of its nominee. The deposit of
Series D Preferred Shares with the Depositary and its
registration in the name of the Depositarys nominee do not
effect any change in beneficial ownership. The Depositary has no
knowledge of the actual beneficial owners of the Series D
Preferred Shares; the Depositarys records reflect only the
identity of the direct participants to whose accounts such
Series D Preferred Shares are credited, which may or may
not be the beneficial owners. The direct and indirect
participants will remain responsible for keeping account of
their holdings on behalf of their customers.
S-42
Purchases of Series D Preferred Shares under the Depositary
system must be made by or through direct participants, which
will receive a credit for the shares on the Depositarys
records. The ownership interest of each actual purchaser of each
share is in turn to be recorded on the direct and indirect
Participants records. Beneficial owners will not receive
written confirmation from the Depositary of their purchase.
Beneficial owners are, however, expected to receive written
confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the direct or
indirect participant through which the beneficial owner entered
into the transaction. Transfers of ownership interests in the
Series D Preferred Shares are to be accomplished by entries
made on the books of direct and indirect participants acting on
behalf of beneficial owners.
So long as the Depositary, or its nominee, is the registered
holder and owner of the global securities, the Depositary or
such nominee, as the case may be, will be considered the sole
legal owner and holder of the Series D Preferred Shares
evidenced by the global certificates for all purposes of such
Series D Preferred Shares and the articles supplementary
relating to such Series D Preferred Shares. Except as set
forth below, as an owner of a beneficial interest in the global
certificates, you will not be entitled to have the Series D
Preferred Shares represented by the global securities registered
in your name, will not receive or be entitled to receive
physical delivery of certificated Series D Preferred Shares
in definitive form and will not be considered to be the owner or
holder of any Series D Preferred Shares under the global
securities. We understand that under existing industry practice,
in the event an owner of a beneficial interest in the global
securities desires to take any action that the Depositary, as
the holder of the global securities, is entitled to take, the
Depositary will authorize the participants to take such action,
and that the participants will authorize beneficial owners
owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning
through them.
All payments on Series D Preferred Shares represented by
the global securities registered in the name of and held by the
Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner and holder
of the global securities.
We expect that the Depositary or its nominee, upon receipt of
any payment on the global securities, will credit
participants accounts with payments in amounts
proportionate to their respective beneficial interests in the
liquidation preference of the global securities as shown on the
records of the Depositary or its nominee. We also expect that
payments by participants or indirect participants to owners of
beneficial interest in the global securities held through such
participants or indirect participants will be governed by
standing instructions and customary practices and will be the
responsibility of such participants or indirect participants. We
will not have any responsibility or liability for any aspect of
the records relating to, or payments made on account of,
beneficial ownership interests in the global securities for any
Series D Preferred Shares or for maintaining, supervising
or reviewing any records relating to such beneficial ownership
interests or for any other aspect of the relationship between
the Depositary and its participants or indirect participants, or
the relationship between such participants or indirect
participants and the owners of beneficial interests in the
global securities owning through such participants or indirect
participants.
Although the Depositary has agreed to the foregoing procedures
in order to facilitate transfers of interests in the global
securities among participants or indirect participants of the
Depositary, it is under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued
at any time. Neither we nor the transfer agent will have any
responsibility or liability for the performance by the
Depositary or its participants or indirect participants of their
respective obligations under the rules and procedures governing
their operations.
S-43
The information in this section concerning the Depositary and
its book-entry system has been obtained from sources that we
believe to reliable, but we take no responsibility for its
accuracy.
Certificated
Series D Preferred Shares
Subject to certain conditions, the Series D Preferred
Shares represented by the global securities is exchangeable for
certificated Series D Preferred Shares in definitive form
of like tenor as such Series D Preferred Shares if
(1) the Depositary notifies us that it is unwilling or
unable to continue as Depositary for the global securities or if
at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act and, in either case, a
successor is not appointed within 90 days or (2) we,
in our discretion, at any time determine not to have all of the
Series D Preferred Shares represented by the global
securities. Any Series D Preferred Shares that are
exchangeable pursuant to the preceding sentence are exchangeable
for certificated Series D Preferred Shares issuable for
such number of shares and registered in such names as the
Depositary shall direct. Subject to the foregoing, the global
securities are not exchangeable, except for global securities
representing the same aggregate number of shares and registered
in the name of the Depositary or its nominee.
ADDITIONAL
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the additional material federal
income tax considerations related to the acquisition, ownership,
conversion and disposition of our Series D Preferred Shares
that we anticipate may be material to purchasers of our
securities offered in this prospectus supplement, and that are
not discussed in our accompanying prospectus under the heading
Certain Federal Income Tax Considerations. This
summary is limited to the tax consequences to those persons who
purchase Series D Preferred Shares at their issue price in
this offering and who hold such Series D Preferred Shares
as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended (the
Code). This summary does not purport to deal with
all aspects of U.S. federal income taxation that might be
relevant to particular shareholders in light of their particular
investment circumstances or status, nor does it address specific
tax consequences that may be relevant to particular persons
(including, for example, financial institutions, broker-dealers,
insurance companies, tax-exempt organizations, persons whose
functional currency is other than the U.S. dollar or
persons in special situations, such as those who have elected to
mark securities to market, or those who hold Series D
Preferred Shares as part of a straddle, hedge, conversion
transaction, or other integrated investment). In addition, this
summary does not address U.S. federal alternative minimum
tax consequences or consequences under the tax laws of any
state, local or foreign jurisdiction. This summary is based upon
the Code, the Treasury Department regulations promulgated or
proposed thereunder and administrative and judicial
interpretations thereof, all as of the date hereof and all of
which are subject to change, possibly on a retroactive basis. We
have not sought any ruling from the Internal Revenue Service
(the IRS) with respect to the statements made and
the conclusions reached in this summary, and we cannot assure
you that the IRS will agree with such statements and conclusions.
This summary is for general information only. Prospective
purchasers of the Series D Preferred Shares are urged to
consult their tax advisors concerning the specific tax
consequences to them of acquiring, owning, converting, and
disposing of the Series D Preferred Shares and of our
election to be taxed as a REIT, including the application of
state, local and foreign income and other tax laws and potential
changes in such laws.
S-44
Certain Federal
Income Tax Considerations Relating to the Acquisition, Holding,
Conversion, and Disposition of Series D Preferred
Shares
Taxation of
Distributions on Series D Preferred Shares
For a discussion of the treatment of dividends and other
distributions with respect to Series D Preferred Shares,
see Certain Federal Income Tax ConsiderationsFederal
Income Taxation of ShareholdersFederal Income Taxation of
Taxable Domestic Shareholders and Certain Federal
Income Tax ConsiderationsFederal Income Taxation of
ShareholdersFederal Income Taxation of
Non-U.S. Shareholders
in the accompanying prospectus.
Taxation of
Sale or Exchange of Series D Preferred Shares
U.S.
Shareholders
For a discussion of the tax consequences of a sale or exchange
of our Series D Preferred Shares, see Certain Federal
Income Tax ConsiderationsFederal Income Taxation of
ShareholdersFederal Income Taxation of Taxable Domestic
ShareholdersDisposition of Common and Preferred
Shares.
Non-U.S.
Shareholders
Unless our common shares or Series D Preferred Shares
constitute a USRPI, a sale of such shares by a
non-U.S. shareholder
generally will not be subject to U.S. taxation under
FIRPTA. The shares will not constitute a USRPI if we are a
domestically-controlled REIT. A
domestically-controlled REIT is a REIT less than 50% in value of
the shares of which is held directly or indirectly by
non-U.S. shareholders
at all times during a prescribed testing period. We believe that
we are, and we expect to continue to be, a
domestically-controlled REIT and, therefore, the sale of our
common shares or Series D Preferred Shares by
non-U.S. shareholders
is not expected to be subject to taxation under FIRPTA. Because
our shares are publicly traded, however, no assurance can be
given that we are or will be a domestically-controlled REIT.
In the event that we do not constitute a domestically-controlled
REIT, a
non-U.S. shareholders
sale of common shares or Series D Preferred Shares
nonetheless will not constitute a USRPI and accordingly would
not be subject to tax under FIRPTA as a sale of a USRPI,
provided that (1) the shares are of a class that are
regularly traded (as defined by applicable Treasury
Regulations) on an established securities market, and
(2) the selling
non-U.S. shareholder
held 5% or less of such class of shares at all times during a
prescribed testing period. In addition, if (1) our
Series D Preferred Shares are not regularly
traded on an established securities market, (2) our
common shares are regularly traded on an established
securities market, and (3) the applicable
non-U.S. shareholder
has not, at the time it acquires the Series D Preferred
Shares, and at certain other times described in the applicable
Treasury Regulations, directly or indirectly held Series D
Preferred Shares (and in certain cases other direct or indirect
interests in our shares) that had a fair market value in excess
of 5% of the fair market value of all of our outstanding common
shares, then such
non-U.S. shareholders
sale of our Series D Preferred Shares generally would not
be a USRPI and accordingly would not be subject to tax under
FIRPTA as a sale of a USRPI. We believe that our common shares
are, and expect them to continue to be, regularly
traded on an established securities market.
If gain on the sale of our common shares or Series D
Preferred Shares were subject to taxation under FIRPTA, the
non-U.S. shareholder
would be subject to the same treatment as a
U.S. shareholder with respect to such gain (see
Certain Federal Income Tax Considerations
Federal Income Taxation of Shareholders Federal
Income Taxation of Taxable Domestic Shareholders
Disposition of Common and Preferred Shares in the
accompanying prospectus), subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of
non-resident alien individuals, and the purchaser of the shares
could, unless the
S-45
shares are of a class that are regularly traded (as
defined by applicable Treasury Regulations) on an established
securities market, be required to withhold 10% of the purchase
price and remit such amount to the IRS. Gain from the sale of
our common shares or Series D Preferred Shares that would
not otherwise be subject to FIRPTA will nonetheless be taxable
in the United States to a
non-U.S. shareholder
in two cases: (1) if the gain is effectively connected with
a U.S. trade or business conducted by such
non-U.S. shareholder
and, where a treaty applies, such trade or business is conducted
through a permanent establishment in the U.S., then the
non-U.S. shareholder
will be subject to the same treatment as a U.S. shareholder
with respect to such gain, except that the
non-U.S. shareholder
may also be subject to the 30% branch profits tax (or lower tax
treaty rate, if applicable) if it is a foreign corporation, or
(2) if the
non-U.S. shareholder
is a nonresident alien individual who was present in the United
States for 183 days or more during the taxable year and
certain other conditions are satisfied, the nonresident alien
individual will be subject to tax on the individuals
capital gain at a 30% rate (or lower tax treaty rate, if
applicable).
Taxation of
Conversion of Series D Preferred Shares into Common
Shares
U.S.
Shareholders
Conversion of
Series D Preferred Shares into Common Shares
Except as provided below, a U.S. shareholder generally will
not recognize gain or loss upon the conversion of our
Series D Preferred Shares into our common shares. Except as
provided below, a U.S. shareholders basis and holding
period in the common shares received upon conversion generally
will be the same as those of the converted Series D
Preferred Shares (but the basis will be reduced by the portion
of adjusted tax basis allocated to any fractional common share
exchanged for cash).
Any cash received upon conversion in lieu of a fractional common
share generally will be treated as a payment in a taxable
exchange for such fractional common share, and gain or loss will
be recognized on the receipt of cash in an amount equal to the
difference between the amount of cash received and the adjusted
tax basis allocable to the fractional common share deemed
exchanged. This gain or loss will be long-term capital gain or
loss if the U.S. shareholder has held the Series D
Preferred Shares for more than one year.
If a U.S. shareholder exercises its right to convert
Series D Preferred Shares into our common shares after a
Dividend Record Date but before the Dividend Payment Date, then
upon conversion, the U.S. shareholder generally will be
required to pay to us in cash an amount equal to the portion of
such dividend attributable to the current quarterly dividend
period. See Description of the Series D Preferred
Shares Conversion Rights. In this case, the
U.S. shareholder will be entitled to receive the dividend
payment on the corresponding Dividend Payment Date. Although not
entirely free from doubt, we may take the position that any cash
payment a U.S. shareholder makes to us in connection with a
conversion of Series D Preferred Shares should increase its
basis in our common shares received upon conversion, rather than
reduce the dividend (the latter being subject to any applicable
backup withholding of federal income tax). You should consult
your own tax advisor with respect to the treatment of such cash
payment, the subsequent receipt of such dividend payment, and
your basis and holding period in the common shares acquired in
the conversion.
If a U.S. shareholder converts Series D Preferred
Shares into our common shares in connection with a fundamental
change, the U.S. shareholder may receive cash in an amount
equal to all unpaid accrued and accumulated dividends on such
converted Series D Preferred Shares. See Description
of the Series D Preferred Shares Special Rights
Upon a Fundamental Change. The U.S. shareholder may
recognize gain or dividend income upon the receipt of such cash.
S-46
Adjustment of
Conversion Price
The conversion rate of our Series D Preferred Shares is
subject to adjustment under specific circumstances. In certain
circumstances, U.S. shareholders who hold our Series D
Preferred Shares may be deemed to have received a distribution
of our shares if and to the extent that the conversion rate is
adjusted, resulting in dividend income to the extent not in
excess of our current and accumulated earnings and profits. In
addition, the failure to provide for such an adjustment may also
result in a deemed distribution. Adjustments to the conversion
rate made pursuant to a bona fide reasonable adjustment formula
which has the effect of preventing the dilution of the interest
of the holders of the Series D Preferred Shares generally
will not be deemed to result in a constructive distribution.
Certain of the possible adjustments (including, without
limitation, adjustments in respect of cash dividends on our
common shares) do not qualify as being made pursuant to a bona
fide reasonable adjustment formula. If such adjustments are
made, a holder of Series D Preferred Shares will be deemed
to have received constructive distributions from us, even though
such shareholder has not received any cash or property as a
result of such adjustments. The tax consequences of the receipt
of a distribution from us are described in Certain Federal
Income Tax Considerations Federal Income Taxation of
Shareholders Federal Income Taxation of Taxable
Domestic Shareholders in the accompanying prospectus.
Non-U.S.
Shareholders
Conversion of
Series D Preferred Shares into Common Shares
Except as provided below, a
non-U.S. shareholder
generally will not recognize gain or loss upon the conversion of
our Series D Preferred Shares into our common shares,
provided our Series D Preferred Shares do not constitute a
USRPI. Even if our Series D Preferred Shares do constitute
a USRPI, a
non-U.S. shareholder
generally will not recognize gain or loss upon a conversion of
our Series D Preferred Shares into our common shares,
provided our common shares also constitute a USRPI and certain
reporting requirements are satisfied. Except as provided below,
a
non-U.S. shareholders
basis and holding period in the common shares received upon a
tax-free conversion will be the same as those of the converted
Series D Preferred Shares (but the basis will be reduced by
the portion of adjusted tax basis allocated to any fractional
common share exchanged for cash).
Cash received upon a conversion in lieu of a fractional common
share generally will be treated as a payment in a taxable
exchange for such fractional share, and gain or loss will be
taxed as described above under Taxation of
Sale or Exchange of Series D Preferred Shares
Non-U.S. Shareholders.
If a
non-U.S. shareholder
exercises its right to convert Series D Preferred Shares
into our common shares after a Dividend Record Date but before
the Dividend Payment Date, then upon conversion, the
non-U.S. shareholder
generally will be required to pay to us in cash an amount equal
to the portion of such dividend attributable to the current
quarterly dividend period. See Description of the
Series D Preferred Shares Conversion
Rights. In this case, the
non-U.S. shareholder
will be entitled to receive the dividend payment on the
corresponding Dividend Payment Date. Although not entirely free
from doubt, we may take the position that any cash payment a
non-U.S. shareholder
makes to us in connection with a conversion of Series D
Preferred Shares should increase its basis in our common shares
received upon a conversion, rather than reduce the dividend (the
latter being subject to any applicable withholding of
U.S. federal income tax). You should consult your own tax
advisor with respect to the treatment of such cash payment, the
subsequent receipt of such dividend payment, and your basis and
holding period in the shares acquired in the conversion.
If a
non-U.S. shareholder
converts Series D Preferred Shares into our common shares
in connection with a fundamental change, the
non-U.S. shareholder
may receive cash in an
S-47
amount equal to all unpaid accrued and accumulated dividends on
such converted Series D Preferred Shares. See
Description of the Series D Preferred
Shares Special Rights Upon a Fundamental
Change. The
non-U.S. shareholder
may recognize gain or dividend income upon the receipt of such
cash, and we may withhold U.S. federal income tax with
respect to such gain or dividend income.
Adjustment of
Conversion Price
As described above under
U.S. Shareholders Adjustment
of Conversion Price, adjustments in the conversion price
(or failures to adjust the conversion price) could result in
deemed distributions to the
non-U.S. shareholder,
resulting in dividend income to the extent not in excess of our
current and accumulated earnings and profits. It is possible
that any withholding tax on such a deemed distribution could be
withheld from cash dividends, our common shares, or sale
proceeds subsequently paid or credited to you.
Taxation of
Cash Redemption of Series D Preferred Shares
U.S.
Shareholders
For a discussion of the tax consequences of a cash redemption of
our Series D Preferred Shares, see Certain Federal
Income Tax ConsiderationsFederal Income Taxation of
ShareholdersFederal Income Taxation of Taxable Domestic
ShareholdersDisposition of Common and Preferred
Shares in the accompanying prospectus.
Non-U.S.
Shareholders
The U.S. federal income tax treatment of a cash redemption
of Series D Preferred Shares from a
non-U.S. shareholder
can only be determined on the basis of the facts and
circumstances at the time of the redemption. As discussed under
the heading Certain Federal Income Tax
Considerations Federal Income Taxation of
Shareholders Federal Income Taxation of Taxable
Domestic Shareholders Disposition of Common and
Preferred Shares in the accompanying prospectus, a cash
redemption may be treated as a distribution taxable as a
dividend or as a taxable sale or exchange, depending on the
facts and circumstances at the time of the redemption. If the
cash redemption is treated as a distribution taxable as a
dividend, the U.S. federal income tax treatment to the
non-U.S. shareholder
will be the same as described in Certain Federal Income
Considerations Federal Income Taxation of
Shareholders Federal Income Taxation of
Non-U.S. Shareholders
in the accompanying prospectus. If the cash redemption is
treated as a taxable sale or exchange, the U.S. federal
income tax treatment to a
non-U.S. shareholder
will be the same as described in Taxation of
Sale or Exchange of Series D Preferred Shares
Non-U.S. Shareholders
above.
In the case of a cash redemption of Series D Preferred
Shares from a
non-U.S. shareholder,
we reserve the right to treat the redemption proceeds as though
they are dividends (to the extent of our current and accumulated
earnings and profits) subject to withholding at a 30% rate or
lower applicable treaty rate. The
non-U.S. shareholder
will receive a credit for the amount withheld against such
shareholders U.S. federal income tax liability, if
any, and may be able to obtain a refund of all or a portion of
the withheld amount by filing a claim for refund with the IRS
(generally on a U.S. federal income tax return).
Other Federal
Income Tax Considerations
Taxation of
the Company
In connection with the offering of the Series D Preferred
Shares, we have received an opinion from Honigman Miller
Schwartz and Cohn LLP, our tax counsel, to the effect that since
the commencement of our taxable year which began January 1,
2002, we have been organized
S-48
and operated in conformity with the requirements for
qualification as a REIT under the Code, and that our proposed
method of operation will enable us to continue to meet the
requirements for qualification and taxation as a REIT. It must
be emphasized that the opinion of Honigman Miller Schwartz and
Cohn LLP is based on various assumptions relating to our
organization and operation, and is conditioned upon
representations and covenants made by our management regarding
our assets and the past, present, and future conduct of our
business operations. While we intend to operate so that we will
qualify as a REIT, given the highly complex nature of the rules
governing REITs, the ongoing importance of factual
determinations, and the possibility of future changes in our
circumstances, no assurance can be given by Honigman Miller
Schwartz and Cohn LLP or by us that we will so qualify for any
particular year. The opinion was expressed as of the date issued
and will not cover subsequent periods. Honigman Miller Schwartz
and Cohn LLP will have no obligation to advise us or the holders
of our securities of any subsequent change in the matters
stated, represented or assumed, or of any subsequent change in
the applicable law. You should be aware that opinions of counsel
are not binding on the IRS or any court, and no assurance can be
given that the IRS will not challenge, or a court will not rule
contrary to, the conclusions set forth in such opinions.
Recent
Legislation
On March 18, 2010, the President signed into law the Hiring
Incentives to Restore Employment Act of 2010, or the HIRE Act.
The HIRE Act imposes a U.S. withholding tax at a 30% rate
on dividends and gross proceeds of sale in respect of our
Series D Preferred Shares received by domestic shareholders
who own their shares through foreign accounts or foreign
intermediaries and by certain
non-U.S. shareholders
if certain disclosure requirements related to U.S. accounts
or ownership are not satisfied. If payment of withholding taxes
is required,
non-U.S. shareholders
that are otherwise eligible for an exemption from, or reduction
of, U.S. withholding taxes with respect to such dividends
and proceeds will be required to seek a refund from the IRS to
obtain the benefit of such exemption or reduction. We will not
pay any additional amounts in respect of any amounts withheld.
These new withholding rules are generally effective for payments
made after December 31, 2012. Prospective
non-U.S. shareholders
are encouraged to consult their tax advisors regarding the
possible implications of this new legislation on their
investment in our Series D Preferred Shares.
On March 30, 2010, the President signed into law the Health
Care and Education Reconciliation Act of 2010, or the
Reconciliation Act. The Reconciliation Act will require certain
domestic shareholders who are individuals, estates or trusts to
pay a 3.8% Medicare tax with respect to, among other things,
dividends on and capital gains from the sale or other
disposition of stock, subject to certain exceptions. This tax
will apply for taxable years beginning after December 31,
2012. Prospective shareholders should consult their tax advisors
regarding the effect, if any, of the Reconciliation Act on their
acquisition, ownership, conversion and disposition of our
Series D Preferred Shares.
On December 17, 2010, the President signed the Tax Relief,
Unemployment Insurance Reauthorization and Job Creation Act, or
the 2010 Tax Relief Act. The 2010 Tax Relief Act continues the
15% maximum tax rate for long-term capital gains and qualified
dividend income, and continues the maximum 35% tax rate on
ordinary income applicable to individuals, for taxable years
through December 31, 2012. For taxable years beginning
after December 31, 2012, the capital gains tax rate is
scheduled to increase to 20%, the rate of tax applicable to
ordinary income of individuals is scheduled to increase to a
maximum of 39.6%, and the rate applicable to dividends is
scheduled to increase to the tax rate then applicable to
ordinary income. In addition, the backup withholding rate
remains at 28% through December 31, 2012. As noted in the
accompanying prospectus, because we are not generally subject to
federal income tax on the portion of our REIT taxable income or
capital gains distributed to
S-49
our shareholders, our dividends will generally not be eligible
for the 15% tax rate on qualified dividends. As a result, our
ordinary REIT dividends will continue to generally be taxed at
the higher tax rates applicable to ordinary income.
Taxable Stock
Dividends
Although we have always paid and intend to continue to pay
dividends solely in cash, we may distribute taxable dividends on
our common shares that are payable in cash and common shares of
beneficial interest at the election of each shareholder. Under
IRS Revenue Procedure
2010-12, up
to 90% of any such taxable dividend for 2011 could be payable in
our common shares (including dividends paid after the close of
the year to which they relate). Taxable U.S. shareholders
receiving such dividends will be required to include the full
amount of the dividend as ordinary income to the extent of our
current and accumulated earnings and profits for
U.S. federal income tax purposes. As a result, a
U.S. shareholder may be required to pay income taxes with
respect to such dividends in excess of the cash dividends
received. If a U.S. shareholder sells the shares that it
receives as a dividend in order to pay this tax, the sales
proceeds may be less than the amount included in income with
respect to the dividend, depending on the market price of our
stock at the time of the sale. Furthermore, with respect to
non-U.S. shareholders,
we may be required to withhold U.S. tax with respect to
such dividends, including in respect of all or a portion of such
dividend that is payable in shares, and we may have to withhold
or dispose of part of the shares in such distribution and use
such withheld shares or the proceeds of such disposition to
satisfy any withholding tax imposed. In addition, if a
significant number of our shareholders determine to sell shares
in order to pay taxes owed on dividends, it may put downward
pressure on the trading price of our shares.
Moreover, because Revenue Procedure
2010-12
applies only to taxable dividends payable in cash or shares for
2010 and 2011, it is unclear whether and to what extent we will
be able to pay taxable dividends in cash and shares for later
years.
For a discussion
of the additional material federal income tax consequences
relating to the acquisition, holding, conversion, and
disposition of our Series D Preferred Shares and our common
shares, and of our election to be taxed as a REIT, please see
the description in the accompanying prospectus under the heading
Certain Federal Income Tax Considerations.
S-50
UNDERWRITING
Subject to the terms and conditions of the underwriting
agreement, the underwriters named below, through their
representatives Deutsche Bank Securities Inc. and
J.P. Morgan Securities LLC, have severally agreed to
purchase from us the following respective number of
Series D Preferred Shares at a public offering price less
the underwriting discounts and commissions set forth on the
cover page of this prospectus:
|
|
|
|
|
|
|
Number
|
|
Underwriters
|
|
of Shares
|
|
|
Deutsche Bank Securities Inc.
|
|
|
210,040
|
|
J.P. Morgan Securities LLC
|
|
|
90,000
|
|
KeyBanc Capital Markets Inc.
|
|
|
40,000
|
|
Stifel, Nicolaus & Company, Incorporated
|
|
|
20,000
|
|
Comerica Securities, Inc.
|
|
|
13,320
|
|
PNC Capital Markets LLC
|
|
|
13,320
|
|
RBS Securities Inc.
|
|
|
13,320
|
|
|
|
|
|
|
Total
|
|
|
400,000
|
|
The underwriting agreement provides that the obligations of the
several underwriters to purchase the Series D Preferred
Shares offered hereby are subject to certain conditions
precedent and that the underwriters will purchase all of the
Series D Preferred Shares offered by this prospectus if any
of these shares are purchased.
We have been advised by the representatives of the underwriters
that the underwriters propose to offer the Series D
Preferred Shares to the public at the public offering price set
forth on the cover of this prospectus and to dealers at a price
that represents a concession not in excess of $.90 per share
under the public offering price. The underwriters may allow, and
these dealers may re-allow, a concession of not more than $0 per
share to other dealers. After the initial offering of the
Series D Preferred Shares, the representatives of the
underwriters may change the public offering price and other
selling terms.
The Series D Preferred Shares are listed on the NYSE under
the symbol RPT PrD. We will apply to list the
Series D Preferred Shares offered hereby on the NYSE under
the existing symbol RPT PrD covering the outstanding
Series D Preferred Shares. No assurance can be given as to
the liquidity of the trading market for the Series D
Preferred Shares.
The underwriting discounts and commissions per share are equal
to the public offering price per Series D Preferred Share
less the amount paid by the underwriters to us per Series D
S-51
Preferred Share. The underwriting discounts and commissions are
3.0% of the public offering price. We have agreed to pay the
underwriters the following discounts and commissions:
|
|
|
|
|
|
|
|
|
|
|
Fee per share
|
|
|
Total Fees
|
|
|
Discounts and commissions paid by us
|
|
$
|
1.50
|
|
|
$
|
600,000
|
|
In addition, we estimate that our share of the total expenses of
this offering, excluding underwriting discounts and commissions,
will be approximately $50,000. The underwriters have agreed to
reimburse us for certain of our expenses in connection with this
offering.
We have agreed to indemnify the underwriters against some
specified types of liabilities, including liabilities under the
Securities Act, and to contribute to payments the underwriters
may be required to make in respect of any of these liabilities.
We, our trustees and executive officers have entered into a
lock-up
agreement with the underwriters prior to the commencement of
this offering pursuant to which we and each of these persons for
a period of 33 days after the date of this prospectus
supplement, may not, subject to limited exceptions, without the
prior written consent of Deutsche Bank Securities Inc.
(1) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right
or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any of our common shares, Series D
Preferred Shares or any securities convertible into or
exercisable or exchangeable for our common shares or
Series D Preferred Shares (including without limitation,
common shares or Series D Preferred Shares which may be
deemed to be beneficially owned by the
lock-up
signatory in accordance with the rules and regulations of the
SEC and securities which may be issued upon exercise of a stock
option or warrant) or (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the
economic consequences of ownership of our common shares or
Series D Preferred Shares, whether any such transaction
described in clause (1) or (2) above is to be settled
by delivery of common shares, Series D Preferred Shares or
such other securities, in cash or otherwise). Notwithstanding
the foregoing, if (i) during the last 17 days of the
33-day
restricted period, we issue an earnings release or material news
or a material event relating to our company occurs; or
(ii) prior to the expiration of the
33-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
33-day
period, the restrictions described above shall continue to apply
until the expiration of the
18-day
period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
The representatives of the underwriters have advised us that the
underwriters do not intend to confirm sales to any account over
which they exercise discretionary authority.
In connection with the offering, the underwriters may purchase
and sell our Series D Preferred Shares in the open market.
These transactions may include short sales, purchases to cover
positions created by short sales and stabilizing transactions.
Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the
offering. Stabilizing transactions consist of various bids for
or purchases of our Series D Preferred Shares made by the
underwriters in the open market prior to the completion of the
offering.
The underwriters may impose a penalty bid. This occurs when a
particular underwriter repays to the other underwriters a
portion of the underwriting discount received by it because the
representatives of the underwriters have repurchased shares sold
by or for the account of that underwriter in stabilizing or
short covering transactions.
Purchases to cover a short position and stabilizing transactions
may have the effect of preventing or slowing a decline in the
market price of our Series D Preferred Shares.
Additionally, these purchases, along with the imposition of the
penalty bid, may stabilize, maintain or
S-52
otherwise affect the market price of our Series D Preferred
Shares. As a result, the price of our Series D Preferred
Shares may be higher than the price that might otherwise exist
in the open market. These transactions may be effected on the
NYSE, in the
over-the-counter
market or otherwise.
A prospectus in electronic format is being made available on
Internet web sites maintained by one or more of the lead
underwriters of this offering and may be made available on web
sites maintained by other underwriters. Other than the
prospectus in electronic format, the information on any
underwriters web site and any information contained in any
other web site maintained by an underwriter is not part of the
prospectus or the registration statement of which the prospectus
forms a part.
Certain of the underwriters and their affiliates have provided
in the past to us and our affiliates and may provide from time
to time in the future certain commercial banking, financial
advisory, investment banking and other services for us and such
affiliates in the ordinary course of their business, for which
they have received and may continue to receive customary fees
and commissions. The underwriters and their affiliates may
provide similar services in the future. Affiliates of certain of
the underwriters are lenders
and/or
agents under our secured revolving credit facility and secured
term loan facility. On March 18, 2010, we closed a
$31.3 million CMBS loan with an affiliate of
J.P. Morgan Securities LLC. This loan is secured by our
West Oaks II shopping center in Novi, Michigan and our
Spring Meadows Place center in Holland, Ohio. The
$31.3 million financing has a ten year term with a fixed
interest rate of 6.5%. In addition, from time to time, certain
of the underwriters and their affiliates may effect transactions
for their own account or the account of customers, and hold on
behalf of themselves or their customers, long or short positions
in our debt or equity securities or loans, and may do so in the
future.
Notice To
Prospective Investors In European Economic Area
In relation to each member state of the European Economic Area
that has implemented the Prospectus Directive (each, a relevant
member state), other than Germany, with effect from and
including the date on which the Prospectus Directive is
implemented in that relevant member state (the relevant
implementation date), an offer of securities described in this
prospectus may not be made to the public in that relevant member
state other than:
|
|
|
|
|
to any legal entity which is a qualified investor as defined in
the Prospectus Directive;
|
|
|
|
by the underwriters to fewer than 100, or, if the Relevant
Member State has implemented the relevant provisions of the 2010
PD Amending Directive, 150, natural or legal persons (other than
qualified investors as defined in the Prospectus Directive), as
permitted under the Prospectus Directive, subject to obtaining
the prior consent of the underwriters for any such offer; or
|
|
|
|
in any other circumstances falling within Article 3(2) of
the Prospectus Directive.
|
provided that no such offer of securities shall require us or
any underwriter to publish a prospectus pursuant to
Article 3 of the Prospectus Directive.
For purposes of this provision, the expression an offer of
securities to the public in any relevant member state
means the communication in any form and by any means of
sufficient information on the terms of the offer and the
securities to be offered so as to enable an investor to decide
to purchase or subscribe for the securities, as the expression
may be varied in that member state by any measure implementing
the Prospectus Directive in that member state, and the
expression Prospectus Directive means Directive
2003/71/EC (and amendments thereto, including the 2010 PD
Amending Directive, to the extent implemented in the Relevant
Member State), and includes any relevant implementing measure in
the Relevant Member State, and includes any relevant
implementing measure in each relevant member state. The
expression 2010 PD Amending Directive means Directive 2010/73/EU.
S-53
We have not authorized and do not authorize the making of any
offer of securities through any financial intermediary on their
behalf, other than offers made by the underwriters with a view
to the final placement of the securities as contemplated in this
prospectus. Accordingly, no purchaser of the securities, other
than the underwriters, is authorized to make any further offer
of the securities on behalf of us or the underwriters.
The EEA selling restriction is in addition to any other selling
restrictions set out in this prospectus.
Notice To
Prospective Investors In Switzerland
We have not and will not register with the Swiss Financial
Market Supervisory Authority (FINMA) as a foreign collective
investment scheme pursuant to Article 119 of the Federal
Act on Collective Investment Scheme of 23 June 2006, as
amended (CISA), and accordingly the shares being offered
pursuant to this prospectus have not and will not be approved,
and may not be licensable, with FINMA. Therefore, the shares
have not been authorized for distribution by FINMA as a foreign
collective investment scheme pursuant to Article 119 CISA
and the shares offered hereby may not be offered to the public
(as this term is defined in Article 3 CISA) in or from
Switzerland. The shares may solely be offered to qualified
investors, as this term is defined in Article 10
CISA, and in the circumstances set out in Article 3 of the
Ordinance on Collective Investment Scheme of 22 November
2006, as amended (CISO), such that there is no public offer.
Investors, however, do not benefit from protection under CISA or
CISO or supervision by FINMA. This prospectus and any other
materials relating to the shares are strictly personal and
confidential to each offeree and do not constitute an offer to
any other person. This prospectus may only be used by those
qualified investors to whom it has been handed out in connection
with the offer described herein and may neither directly or
indirectly be distributed or made available to any person or
entity other than its recipients. It may not be used in
connection with any other offer and shall in particular not be
copied
and/or
distributed to the public in Switzerland or from Switzerland.
This prospectus does not constitute an issue prospectus as that
term is understood pursuant to Article 652a
and/or 1156
of the Swiss Federal Code of Obligations. We have not applied
for a listing of the shares on the SIX Swiss Exchange or any
other regulated securities market in Switzerland, and
consequently, the information presented in this prospectus does
not necessarily comply with the information standards set out in
the listing rules of the SIX Swiss Exchange and corresponding
prospectus schemes annexed to the listing rules of the SIX Swiss
Exchange.
Notice To
Prospective Investors In The Dubai International Financial
Centre
This document relates to an exempt offer in accordance with the
Offered Securities Rules of the Dubai Financial Services
Authority. This document is intended for distribution only to
persons of a type specified in those rules. It must not be
delivered to, or relied on by, any other person. The Dubai
Financial Services Authority has no responsibility for reviewing
or verifying any documents in connection with exempt offers. The
Dubai Financial Services Authority has not approved this
document nor taken steps to verify the information set out in
it, and has no responsibility for it. The shares which are the
subject of the offering contemplated by this prospectus may be
illiquid
and/or
subject to restrictions on their resale. Prospective purchasers
of the shares offered should conduct their own due diligence on
the shares. If you do not understand the contents of this
document you should consult an authorized financial adviser.
LEGAL
MATTERS
Certain matters of Maryland law will be passed upon for us by
Ballard Spahr LLP, Baltimore, Maryland. Certain tax matters
related to our qualification as a REIT will be passed upon for
us by Honigman Miller Schwartz and Cohn LLP, Detroit, Michigan.
Skadden, Arps,
S-54
Slate, Meagher & Flom LLP, New York, New York, is
representing the underwriters with respect to this offering.
EXPERTS
The consolidated financial statements and schedules of
Ramco-Gershenson Properties Trust as of December 31, 2010
and 2009, and for each of the years in the three-year period
ended December 31, 2010, and managements assessment
of the effectiveness of internal control over financial
reporting as of December 31, 2010 have been incorporated by
reference herein in reliance upon the reports of Grant Thornton,
LLP, independent registered public accounting firm, incorporated
by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
S-55
PROSPECTUS
$300,000,000
RAMCO-GERSHENSON PROPERTIES
TRUST
DEBT SECURITIES
PREFERRED SHARES
COMMON SHARES
WARRANTS
RIGHTS
Ramco-Gershenson Properties Trust may offer, issue and sell from
time to time our debt securities, which may be in one or more
class or series and may be senior debt securities or
subordinated debt securities; our preferred shares, which we may
issue in one or more class or series; our common shares;
warrants to purchase our preferred shares or common shares;
rights to purchase our common shares; and any combination of
these securities. The securities will have an aggregate initial
offering price of up to $300,000,000. We may sell any
combination of the securities described in this prospectus in
one or more offerings. We may offer the securities separately or
together, in separate classes or series and in amounts, at
prices and on terms described in one or more supplements to this
prospectus and other offering material.
This prospectus describes some of the general terms that may
apply to these securities. We will provide the specific terms of
these securities in supplements to this prospectus. We may
describe the terms of these securities in a term sheet which
will precede the prospectus supplement. You should read this
prospectus and the accompanying prospectus supplement carefully
before you make your investment decision.
This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
The securities may be offered through one or more underwriters,
dealers and agents or directly to purchasers on a continuous or
delayed basis. The prospectus supplement for each offering of
securities will describe in detail the plan of distribution for
that offering.
Our common shares are traded on the New York Stock Exchange (the
NYSE) under the symbol RPT. On
February 6, 2009, the closing sale price of our common
shares as reported on the NYSE was $4.82 per share.
Our principal executive offices are located at 31500
Northwestern Highway, Suite 300, Farmington Hills, Michigan
48334, and our telephone number is
(248) 350-9900.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is February 9, 2009
TABLE OF
CONTENTS
|
|
|
|
|
About this Prospectus
|
|
|
3
|
|
Where You Can Find More Information
|
|
|
3
|
|
Incorporation of Information We File With the SEC
|
|
|
3
|
|
Special Note Regarding Forward-Looking Statements
|
|
|
4
|
|
Who We Are
|
|
|
5
|
|
Risk Factors
|
|
|
6
|
|
Use of Proceeds
|
|
|
6
|
|
Ratios of Earnings to Fixed Charges and Preferred Share Dividends
|
|
|
7
|
|
The Securities We May Offer
|
|
|
7
|
|
Description of Debt Securities
|
|
|
8
|
|
Description of Common Shares
|
|
|
11
|
|
Description of Preferred Shares
|
|
|
15
|
|
Description of Warrants
|
|
|
20
|
|
Description of Rights
|
|
|
21
|
|
Certain Provisions of Maryland Law and Our Declaration of Trust
and Amended and Restated Bylaws
|
|
|
21
|
|
Certain Federal Income Tax Considerations
|
|
|
25
|
|
Legal Matters
|
|
|
46
|
|
Experts
|
|
|
46
|
|
Disclosure of SEC Position on Indemnification for Securities Act
Liabilities
|
|
|
46
|
|
You should rely only on the information provided or
incorporated by reference in this prospectus or any applicable
prospectus supplement. We have not authorized anyone to provide
you with different or additional information. We are not making
an offer to sell these securities in any jurisdiction where the
offer or sale of these securities is not permitted. You should
not assume that the information appearing in this prospectus,
any accompanying prospectus supplement or the documents
incorporated by reference herein or therein is accurate as of
any date other than their respective dates. Our business,
financial condition, results of operations and prospects may
have changed since those dates.
You should read carefully the entire prospectus, as well as the
documents incorporated by reference in the prospectus, before
making an investment decision.
2
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement on
Form S-3
that we filed with the Securities and Exchange Commission, or
the SEC, using a shelf registration process. Under
this shelf registration process, we may, from time to time, sell
any combination of the securities described in this prospectus,
in one or more offerings, up to a maximum aggregate offering
price of $300,000,000.
This prospectus provides you with a general description of the
securities offered by us, which is not meant to be a complete
description of each security. Each time we sell securities, we
will provide a prospectus supplement containing specific
information about the terms of that offering, including the
specific amounts, prices and terms of the securities offered.
The prospectus supplement and any other offering material may
also add to, update or change information contained in this
prospectus or in documents we have incorporated by reference
into this prospectus. To the extent inconsistent, information in
or incorporated by reference in this prospectus is superseded by
the information in the prospectus supplement and any other
offering material related to such securities.
This prospectus and any applicable prospectus supplement does
not constitute an offer to sell, or a solicitation of an offer
to purchase, the securities offered by such documents in any
jurisdiction to or from any person to whom or from whom it is
unlawful to make such an offer or solicitation of an offer in
such jurisdiction.
You should not assume that the information contained in this
prospectus or any prospectus supplement is accurate as of any
date other than the date on the front cover of such documents.
Neither the delivery of this prospectus or any applicable
prospectus supplement nor any distribution of securities
pursuant to such documents shall, under any circumstances,
create any implication that there has been no change in the
information set forth in this prospectus or any applicable
prospectus supplement or in our affairs since the date of this
prospectus or any applicable prospectus supplement.
In this prospectus and any prospectus supplement hereto, unless
the context suggests otherwise, references to the
Company, we, RPT,
us, our Company, and our
mean Ramco-Gershenson Properties Trust.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and periodic reports, proxy statements
and other information with the SEC. You may read and copy any of
these documents at the SECs Public Reference Room located
at 100 F Street, N.E., Washington, D.C. 20549.
Information regarding the operation of the Public Reference Room
may be obtained by calling
1-800-SEC-0330.
The SEC maintains a website that contains reports, proxy and
information statements and other information regarding
registrants that file electronically with the SEC. The address
of the SECs website is
http://www.sec.gov.
Our SEC filings also are available through the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
We have filed a registration statement on
Form S-3
with the SEC covering the securities that may be sold under this
prospectus. For further information on us and the securities
being offered, you should refer to our registration statement
and its exhibits. This prospectus summarizes material provisions
of contracts and other documents that we refer you to. The rules
and regulations of the SEC allow us to omit from this prospectus
certain information that is included in the registration
statement. Because the prospectus may not contain all the
information that you may find important, you should review the
full text of these documents. We have included, or incorporated
by reference, copies of these documents as exhibits to our
registration statement of which this prospectus is a part.
INCORPORATION
OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference into
this prospectus documents that we file with the SEC. This
permits us to disclose important information to you by referring
you to those filed documents. Any information incorporated by
reference this way is considered to be a part of this
prospectus, and information filed by us with the SEC subsequent
to the date of this prospectus will automatically be deemed to
update and supersede this information.
3
We incorporate by reference into this prospectus the documents
listed below, which we have already filed with the SEC:
|
|
|
|
|
our Annual Report on
Form 10-K
for the year ended December 31, 2007;
|
|
|
|
the following sections from our Proxy Statement on
Form DEFR14A for our 2008 annual meeting of shareholders
held on June 11, 2008: Trustees and Executive
Officers, The Board of Trustees,
Committees of the Board, Trustee
Compensation, Corporate Governance,
Compensation Discussion and Analysis,
Compensation Committee Report, Report of the
Audit Committee, and Section 16(a) Beneficial
Ownership Reporting Compliance;
|
|
|
|
our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2008, June 30, 2008,
and September 30, 2008;
|
|
|
|
our Current Reports on
Form 8-K
filed on February 21, 2008, April 30, 2008,
July 30, 2008, October 8, 2008, October 22, 2008,
October 23, 2008, December 3, 2008 and
January 13, 2009; and
|
|
|
|
the description of our common shares contained in our
registration statement on
Form 8-A
filed with the SEC on November 1, 1988 (which incorporates
by reference pages
101-119 of
our prospectus/proxy statement filed with the SEC on
November 1, 1988), as updated by the description of our
common shares contained in our definitive proxy statement on
Schedule 14A for our special meeting of shareholders held
on December 18, 1997.
|
Whenever, after the date of this prospectus, we file reports or
documents under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), those reports and documents will be incorporated by
reference and deemed to be a part of this prospectus from the
time they are filed (other than Current Reports or portions
thereof furnished under Item 2.02 or Item 7.01 of
Form 8-K).
Any statement made in this prospectus or in a document
incorporated or deemed to be incorporated by reference into this
prospectus will be deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement
contained in this prospectus or in any other subsequently filed
document that is also incorporated or deemed to be incorporated
by reference into this prospectus modifies or supersedes that
statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a
part of this prospectus.
We will provide without charge, upon written or oral request, a
copy of any or all of the documents which are incorporated by
reference into this prospectus, excluding any exhibits to those
documents unless the exhibit is specifically incorporated by
reference as an exhibit to the registration statement of which
this prospectus forms a part. Requests for documents should be
directed to Ramco-Gershenson Properties Trust, 31500
Northwestern Highway, Suite 300, Farmington Hills, Michigan
48334 (telephone number
(248) 350-9900).
You should rely only on the information contained or
incorporated by reference into this prospectus and any
applicable prospectus supplement. We have not authorized anyone
to provide you with different or additional information. If
anyone provides you with different or inconsistent information,
you should not rely on it.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference
contain certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933,
as amended (the Securities Act), and
Section 21E of the Exchange Act. Statements that do not
relate strictly to historical or current facts are
forward-looking and are generally identifiable by use of
forward-looking terminology such as may,
will, should, potential,
intend, expect, endeavor,
seek, anticipate, estimate,
overestimate, underestimate,
believe, could, project,
predict, continue, trend,
opportunity, pipeline,
comfortable, current,
position, assume, outlook,
remain, maintain, sustain,
achieve, would or other similar words or
expressions. Such statements are based on assumptions and
expectations which may not be realized and are inherently
subject to risks and uncertainties, many of which cannot be
predicted with accuracy and some of which might not even be
anticipated.
4
Forward-looking statements speak only as of the date they are
made, and we assume no duty to and do not undertake to update
forward-looking statements. Our future events, financial
condition, business or other results may differ materially from
those anticipated and discussed in the forward-looking
statements. Risks and other factors that might cause
differences, some of which could be material, include, but are
not limited to, changes in political, economic or market
conditions generally and the real estate and capital markets
specifically; availability of capital; tenant bankruptcies;
concentration of our credit risk; REIT distribution
requirements; inability to successfully identify or complete
suitable acquisitions and new developments; inability of our
redevelopment projects to yield anticipated returns; competition
for both the acquisition and development of real estate
properties and the leasing operations; existing exclusivity
lease provisions; lack of complete control and conflicts of
interests in our joint ventures; potential bankruptcy of our
joint venture partners; rising operating expenses; illiquidity
of our real estate investments; potential losses that are not
covered by insurance; our debt obligations; our financial
covenants may restrict our operating or acquisition activities;
mortgage debt obligations; a failure to qualify as a REIT;
potential tax obligations; legislative or other actions
affecting REITs; environmental laws and obligations; changes in
generally accepted accounting principles or interpretations
thereof; terrorist activities and international hostilities,
which may adversely affect the general economy, domestic and
global financial and capital markets, specific industries and
us; the unfavorable resolution of legal proceedings; the impact
of future acquisitions and divestitures; significant costs
related to environmental issues as well as other risks listed
from time to time in the Companys other reports and
statements filed with the SEC.
When considering forward-looking statements, you should keep in
mind the risk factors and other cautionary statements in this
prospectus and any prospectus supplement hereto and in reports
of the Company filed with the SEC. Readers are cautioned not to
place undue reliance on any of these forward-looking statements,
which reflect our managements views as of the date of this
prospectus, or, if applicable, the date of a document
incorporated by reference. All subsequent written and oral
forward-looking statements attributable to us are expressly
qualified in their entirety by the cautionary statements
contained or referenced to in this section. Although we believe
that the expectations reflected in the forward-looking
statements are based on reasonable assumptions, we cannot
guarantee future results, levels of activity, performance or
achievements. We undertake no obligation to publicly update any
forward-looking statements, whether as a result of new
information, future events or the occurrence of unanticipated
events except as required by applicable law.
WHO WE
ARE
Ramco-Gershenson Properties Trust is a fully integrated,
self-administered, publicly-traded Maryland real estate
investment trust organized on October 2, 1997. The terms
Company, we, our or
us refer to
Ramco-Gershenson
Properties Trust, the Operating Partnership (defined below)
and/or its
subsidiaries, as the context may require. Our principal office
is located at 31500 Northwestern Highway, Suite 300,
Farmington Hills, Michigan 48334. Our predecessor, RPS Realty
Trust, a Massachusetts business trust, was formed on
June 21, 1988 to be a diversified growth-oriented REIT. In
May 1996, RPS Realty Trust acquired the Ramco-Gershenson
interests through a reverse merger, including substantially all
of the shopping centers and retail properties as well as the
management company and business operations of Ramco-Gershenson,
Inc. and certain of its affiliates. The resulting trust changed
its name to Ramco-Gershenson Properties Trust and
Ramco-Gershenson, Inc.s officers assumed management
responsibility. The trust also changed its operations from a
mortgage real estate investment trust (REIT) to an
equity REIT and contributed certain mortgage loans and real
estate properties to Atlantic Realty Trust, an independent,
newly formed liquidating REIT. In 1997, with approval from our
shareholders, we changed our state of organization by
terminating the Massachusetts trust and merging into a newly
formed Maryland real estate investment trust.
We conduct substantially all of our business, and hold
substantially all of our interests in our properties, through
our operating partnership, Ramco-Gershenson Properties, L.P.
(the Operating Partnership). The Operating
Partnership, either directly or indirectly through partnerships
or limited liability companies, holds fee title to all owned
properties. We have the exclusive power to manage and conduct
the business of the Operating Partnership. As of
September 30, 2008, we owned approximately 86.4% of the
interests in the Operating Partnership.
5
We are a REIT under the Internal Revenue Code of 1986, as
amended (the Code), and are therefore required to
satisfy various provisions under the Code and related Treasury
regulations. We are generally required to distribute annually at
least 90% of our REIT taxable income (as defined in
the Code), excluding any net capital gain, to our shareholders.
Additionally, at the end of each fiscal quarter, at least 75% of
the value of our total assets must consist of real estate assets
(including interests in mortgages on real property and interests
in other REITs) as well as cash, cash equivalents and government
securities. We are also subject to limits on the amount of
certain types of securities we can hold. Furthermore, at least
75% of our gross income for the tax year must be derived from
certain sources, which include rents from real
property and interest on loans secured by mortgages on
real property. An additional 20% of our gross income must be
derived from these same sources or from dividends and interest
from any source, gains from the sale or other disposition of
stock or securities or any combination of the foregoing.
Certain of our operations, including property management and
asset management, are conducted through taxable REIT
subsidiaries (each, a TRS). A TRS is a C corporation
that has not elected REIT status and, as such, is subject to
federal corporate income tax. We use the TRS format to
facilitate our ability to provide certain services and conduct
certain activities that are not generally considered as
qualifying REIT activities. Our executive offices are located at
31500 Northwestern Highway, Suite 300, Farmington Hills,
Michigan 48334 (telephone number
(248) 350-9900).
RISK
FACTORS
Before you invest in any of our securities, in addition to the
other information included or incorporated by reference into
this prospectus and any applicable prospectus supplement, you
should carefully consider the risk factors under the section
entitled Risk Factors in any prospectus supplement
as well as our most recent Annual Report on
Form 10-K
and in our Quarterly Reports on
Form 10-Q
filed subsequent to the Annual Report on
Form 10-K,
which are incorporated by reference into this prospectus and any
prospectus supplement in their entirety, as the same may be
amended, supplemented or superseded from time to time by other
reports we file with the SEC in the future. In addition, new
risks may emerge at any time and we cannot predict such risks or
estimate the extent to which they may affect our business,
financial condition, results of operations and prospects. For
more information, see the sections entitled, Where You Can
Find More Information and Incorporation of
Information We File With the SEC in this prospectus.
Recent
disruptions in the financial markets could affect our ability to
obtain financing for development or redevelopment of our
properties and other purposes on reasonable terms and have other
adverse effects on us and the market price of our common
shares.
The United States financial and credit markets have recently
experienced significant price volatility, dislocations and
liquidity disruptions, which have caused market prices of many
financial instruments to fluctuate substantially and the spreads
on prospective debt financings to widen considerably. These
circumstances have materially impacted liquidity in the
financial markets, making terms for certain financings less
attractive, and in some cases have resulted in the
unavailability of financing.
Continued uncertainty in the stock and credit markets may
negatively impact our ability to access additional financing for
development and redevelopment of our properties and other
purposes at reasonable terms, which may negatively affect our
business. It may also be more difficult or costly for us to
raise capital through the issuance of our common shares or
preferred shares. The disruptions in the financial markets may
have a material adverse effect on the market value of our common
shares and other adverse effects on us and our business. In
addition, there can be no assurance that the actions of the
U.S. government, U.S. Federal Reserve,
U.S. Treasury and other governmental and regulatory bodies
for the purpose of stabilizing the financial markets will
achieve the intended effects or that such actions will not
result in adverse market developments.
USE OF
PROCEEDS
Unless otherwise set forth in a prospectus supplement, we intend
to use the net proceeds from the sale of the securities for
working capital and other general corporate purposes, which may
include repaying debt, financing capital commitments, and
financing future acquisitions, redevelopment and development
activities. We will have significant discretion in the use of
any net proceeds. We may provide additional information on the
use of the net proceeds from the sale of our securities in an
applicable prospectus supplement or other offering materials
relating to the offered securities.
6
RATIOS OF
EARNINGS TO FIXED CHARGES AND PREFERRED SHARES
DIVIDENDS
Ratio of
Earnings to Combined Fixed Charges
The following table sets forth the historical ratios of earnings
to fixed charges for the periods indicated:
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
1.31
|
|
1.36
|
|
1.45
|
|
1.43
|
|
1.37
|
|
Nine Months Ended,
|
September 30, 2008
|
1.40
|
For purposes of computing the ratio of earnings to combined
fixed charges, earnings have been calculated by adding fixed
charges (excluding capitalized interest and preferred share
dividends) to income adjusted to remove minority interest in
unconsolidated entities and income or loss from equity
investees. Fixed charges consist of interest costs, whether
expensed or capitalized, the interest component of rental
expense, and amortization of deferred financing costs (including
amounts capitalized) paid or accrued for the respective period.
The ratios are based solely on historical financial information,
and no pro forma adjustment has been made thereto.
Ratio of
Earnings to Combined Fixed Charges and Preferred Share
Dividends
The following table sets forth the historical ratios of earnings
to combined fixed charges and preferred share dividends for the
periods indicated:
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
1.22
|
|
1.19
|
|
1.26
|
|
1.26
|
|
1.27
|
|
Nine Months Ended,
|
September 30, 2008
|
1.40
|
For purposes of computing the ratio of earnings to combined
fixed charges and preferred share dividends, earnings have been
calculated by adding fixed charges (excluding capitalized
interest and preferred share dividends) to income adjusted to
remove minority interest in unconsolidated entities and income
or loss from equity investees. Fixed charges consist of interest
costs, whether expensed or capitalized, the interest component
of rental expense, amortization of deferred financing costs
(including amounts capitalized) and preferred dividends paid or
accrued for the respective period.
The ratios are based solely on historical financial information,
and no pro forma adjustment has been made thereto.
THE
SECURITIES WE MAY OFFER
We may sell from time to time, in one or more offerings, common
shares of beneficial interest, preferred shares of beneficial
interest,
and/or
warrants in a dollar amount that does not exceed $300,000,000.
This prospectus contains only a summary of the securities we may
offer. The specific terms of any securities actually offered for
sale, together with the terms of that offering, the initial
price and the net proceeds to us from the sale of such
securities, will be set forth in an accompanying prospectus
supplement. That prospectus supplement also will contain
information, if applicable, about material United States federal
income tax considerations relating to the securities and the
securities exchange, if any, on which the securities will be
listed. This prospectus may not be used to consummate a sale of
securities unless it is accompanied by a prospectus supplement.
The following description of our common shares and preferred
shares, together with the additional information we include in
any applicable prospectus supplements, summarizes the material
terms and provisions of the common
7
shares and preferred shares that we may offer under this
prospectus. For the complete terms of our common shares and
preferred shares, please refer to our Articles of Amendment and
Restatement of Declaration of Trust (the Declaration of
Trust), as supplemented by the articles supplementary for
each series of preferred shares, that are incorporated by
reference into the registration statement which includes this
prospectus. Maryland law will also affect the terms of these
securities and the rights of holders thereof. While the terms we
have summarized below will apply generally to any future common
shares or preferred shares that we may offer, we will describe
the particular terms of any class or series of these securities
in more detail in the applicable prospectus supplement. If we so
indicate in any applicable prospectus supplement, the terms of
any common shares or preferred shares we offer may differ from
the terms we describe below.
Our authorized shares consist of an aggregate
55,000,000 shares of beneficial interest, par value $0.01
per share, consisting of 45,000,000 common shares and 10,000,000
preferred shares which may be issued in one or more classes or
series, each with such terms, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends
or other distributions, qualifications and terms or conditions
of redemption, as are permitted by Maryland law and as our board
of trustees may determine by resolution. As of December 31,
2008, we had issued and outstanding 18,583,362 common shares and
no preferred shares.
DESCRIPTION
OF DEBT SECURITIES
We may issue debt securities either separately, or together
with, or upon the conversion of or in exchange for, other
securities. The debt securities may be our unsecured and
unsubordinated obligations or our subordinated obligations. We
use the term senior debt securities to refer to the
unsecured and unsubordinated obligations. We use the term
subordinated debt securities to refer to the
subordinated obligations. The subordinated debt securities of
any class or series may be our senior subordinated obligations,
subordinated obligations, junior subordinated obligations or may
have such other ranking as is described in the relevant
prospectus supplement. We may issue any of these types of debt
securities in one or more classes or series.
Our senior debt securities may be issued from time to time under
a senior debt securities indenture with a trustee to be named in
the senior debt securities indenture. Our subordinated debt
securities may be issued from time to time under a subordinated
debt securities indenture with a trustee to be named in the
subordinated debt securities indenture, which will describe the
specific terms of the debt class or series. We use the term
indenture to refer to the senior debt securities
indenture or the subordinated debt securities indenture. We use
the term trustee to refer to the trustee named in
the senior debt securities indenture or the subordinated debt
securities indenture.
Some of our operations are conducted through our subsidiaries.
Accordingly, our cash flow and our ability to service our debt,
including the debt securities, are dependent upon the earnings
of our subsidiaries and the distribution of those earnings to
us, whether by dividends, loans or otherwise. The payment of
dividends and the making of loans and advances to us by our
subsidiaries may be (i) subject to statutory or contractual
restrictions, (ii) contingent upon the earnings of our
subsidiaries, and (iii) subject to various business
considerations. Our right to receive assets of any of our
subsidiaries upon their liquidation or reorganization (and the
consequent right of the holders of the debt securities to
participate in those assets) will be effectively subordinated to
the claims of that subsidiarys creditors (including trade
creditors), except to the extent that we are recognized as a
creditor of that subsidiary, in which case our claims would
still be subordinate to any security interests in the assets of
the subsidiary and any indebtedness held by a subsidiary that is
senior to indebtedness held by us.
The following summary of selected provisions that will be
included in indentures and in the debt securities is not
complete. Before making an investment in our debt securities,
you should review the applicable prospectus supplement and the
form of applicable indenture, which will be filed with the SEC
in connection with the offering of the specific debt securities.
General
We can issue debt securities of any class or series with terms
different from the terms of debt securities of any other class
or series and the terms of particular debt securities within any
class or series may differ from each other,
8
all without the consent of the holders of previously issued
classes or series of debt securities. The debt securities of
each class or series will be our direct, unsecured obligations.
The applicable prospectus supplement relating to the class or
series of debt securities will describe the specific terms of
each class or series of debt securities being offered,
including, where applicable, the following:
|
|
|
|
|
the title;
|
|
|
|
the aggregate principal amount and whether there is any limit on
the aggregate principal amount that we may subsequently issue;
|
|
|
|
whether the debt securities will be senior, senior subordinated,
subordinated or junior subordinated;
|
|
|
|
the name of the trustee and its corporate trust office;
|
|
|
|
any limit on the amount of debt securities that may be issued;
|
|
|
|
any subordination provisions;
|
|
|
|
any provisions regarding the conversion or exchange of such debt
securities with or into other securities;
|
|
|
|
any default provisions and events of default applicable to such
debt securities;
|
|
|
|
any covenants applicable to such debt securities;
|
|
|
|
whether such debt securities are issued in certificated or
book-entry form, and the identity of the depositary for those
issued in book-entry form;
|
|
|
|
whether such debt securities are to be issuable in registered or
bearer form, or both, and any restrictions applicable to the
exchange of one form or another and to the offer, sale and
delivery of such debt securities in either form;
|
|
|
|
whether such debt securities may be represented initially by a
debt security in temporary or permanent global form, and, if so,
the initial depositary and the circumstances under which
beneficial owners of interests may exchange such interests for
debt securities of like tenor and of any authorized form and
denomination and the authorized newspapers for publication of
notices to holders of bearer securities;
|
|
|
|
any other terms required to establish a class or series of
bearer securities;
|
|
|
|
the price(s) at which such debt securities class or series will
be issued;
|
|
|
|
the person to whom any interest will be payable on any debt
securities, if other than the person in whose name the debt
security is registered at the close of business on the regular
record date for the payment of interest;
|
|
|
|
any provisions restricting the declaration of dividends or
requiring the maintenance of any asset ratio or maintenance of
reserves;
|
|
|
|
the date or dates on which the principal of and premium, if any,
is payable or the method(s), if any, used to determine those
dates;
|
|
|
|
the rate(s) at which such debt securities will bear interest or
the method(s), if any, used to calculate the rate(s);
|
|
|
|
the date(s), if any, from which any interest will accrue, or the
method(s), if any, used to determine the dates on which interest
will accrue and date(s) on which interest will be payable;
|
|
|
|
any redemption or early repayment provisions applicable to such
debt securities;
|
|
|
|
the stated maturities of installments of interest, if any, on
which any interest on such debt securities will be payable and
the regular record dates for any interest payable on any debt
securities which are registered securities;
|
9
|
|
|
|
|
the places where and the manner in which the principal of and
premium
and/or
interest, if any, will be payable and the places where the debt
securities may be presented for transfer;
|
|
|
|
our obligation or right, if any, to redeem, purchase or repay
such debt securities of the class or series pursuant to any
sinking fund amortization or analogous provisions or at the
option of a holder of such debt securities and other related
provisions;
|
|
|
|
the denominations in which any registered securities are to be
issuable;
|
|
|
|
the currency, currencies or currency units, including composite
currencies, in which the purchase price for, the principal of
and any premium and interest, if any, on such debt securities
will be payable;
|
|
|
|
the time period within which the manner in which and the terms
and conditions upon which the purchaser of any of such debt
securities can select the payment currency;
|
|
|
|
if the amount of payments of principal, premium, if any, and
interest, if any, on such debt securities is to be determined by
reference to an index, formula or other method, or based on a
coin or currency or currency unit other than that in which such
debt securities are stated to be payable, the manner in which
these amounts are to be determined and the calculation agent, if
any, with respect thereto;
|
|
|
|
if other than the principal amount thereof, the portion of the
principal amount of the debt securities of the class or series
which will be payable upon declaration or acceleration of the
maturity thereof pursuant to an event of default;
|
|
|
|
if we agree to pay any additional amounts on any of the debt
securities, and coupons, if any, of the classes or series to any
holder in respect of any tax, assessment or governmental charge
withheld or deducted, the circumstances, procedures and terms
under which we will make these payments;
|
|
|
|
any terms applicable to debt securities of any class or series
issued at an issue price below their stated principal amount;
|
|
|
|
whether such debt securities are to be issued or delivered
(whether at the time of original issuance or at the time of
exchange of a temporary security of such class or series or
otherwise), or any installment of principal or any premium or
interest is to be payable only, upon receipt of certificates or
other documents or satisfaction of other conditions in addition
to those specified in the applicable indenture;
|
|
|
|
any provisions relating to covenant defeasance and legal
defeasance;
|
|
|
|
any provisions relating to the satisfaction and discharge of the
applicable indenture;
|
|
|
|
any special applicable United States federal income tax
considerations;
|
|
|
|
any provisions relating to the modification of the applicable
indenture both with and without the consent of the holders of
the debt securities of the class or series issued under such
indenture; and
|
|
|
|
any other material terms not inconsistent with the provisions of
the applicable indenture.
|
The above is not intended to be an exclusive list of the terms
that may be applicable to any debt securities and we are not
limited in any respect in our ability to issue debt securities
with terms different from or in addition to those described
above or elsewhere in this prospectus, provided that the terms
are not inconsistent with the applicable indenture. Any
applicable prospectus supplement will also describe any special
provisions for the payment of additional amounts with respect to
the debt securities. United States federal income tax
consequences and special considerations, if any, applicable to
any such class or series will be described in the applicable
prospectus supplement.
Debt securities may be issued where the amount of principal
and/or
interest payable is determined by reference to one or more
currency exchange rates, commodity prices, equity indices or
other factors. Holders of such securities may receive a
principal amount or a payment of interest that is greater than
or less than the amount of principal or interest otherwise
payable on such dates, depending upon the value of the
applicable currencies, commodities, equity indices or other
factors. Information as to the methods for determining the
amount of principal or interest, if any, payable on any date,
the currencies, commodities, equity indices or other factors to
which the
10
amount payable on such date is linked and certain additional
United States federal income tax considerations will be set
forth in the applicable prospectus supplement.
Subject to the limitations provided in the indenture and in the
prospectus supplement, debt securities that are issued in
registered form may be transferred or exchanged at the corporate
office of the trustee maintained in the City of New York or the
principal corporate trust office of the trustee, without the
payment of any service charge, other than any tax or other
governmental charge payable in connection therewith.
Global
Securities
The debt securities of a class or series may be issued in whole
or in part in the form of one or more global securities that
will be deposited with, or on behalf of, a depositary identified
in the prospectus supplement. Global securities will be issued
in registered form and in either temporary or definitive form.
Unless and until it is exchanged in whole or in part for the
individual debt securities, a global security may not be
transferred except as a whole by the depositary for such global
security to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a
successor of such depositary or a nominee of such successor. The
specific terms of the depositary arrangement with respect to any
debt securities of a class or series and the rights of and
limitations upon owners of beneficial interests in a global
security will be described in the applicable prospectus
supplement.
DESCRIPTION
OF COMMON SHARES
This section describes the general terms and provisions of our
common shares of beneficial interest, par value $.01 per share.
This summary is not complete. We have incorporated by reference
our Declaration of Trust and our amended and restated bylaws
(our Bylaws) as exhibits to the registration
statement of which this prospectus is a part. We have also
incorporated by reference in this prospectus a description of
our common shares which is contained in other documents we have
filed with the SEC. You should read these other documents before
you acquire any common shares.
Common
Shares
All common shares offered by any applicable prospectus
supplement will be duly authorized, fully paid and
nonassessable. All rights that accompany the ownership of our
common shares are subject to the preferential rights of any
other class or series of our shares and to the provisions of our
Declaration of Trust regarding restrictions on transfer of our
shares.
General
As of December 31, 2008 our authorized capital included
45,000,000 common shares, of which 18,583,362 shares were
issued and outstanding. All common shares offered pursuant to
any prospectus supplement will, when issued, be duly authorized,
fully paid and non-assessable. This means that the full price
for our common shares will be paid at issuance and that you, as
a purchaser of such common shares will not be later required to
pay us any additional monies for such common shares.
Dividends
Subject to the preferential rights of any shares or class or
series of beneficial interest that we may issue in the future,
and to the provisions of the Declaration of Trust regarding the
restriction on transfer of common shares, holders of common
shares are entitled to receive dividends on such shares out of
our funds that we can legally use to pay dividends, when and if
such dividends are declared by our board of trustees.
Voting
Rights
Subject to the provisions of our Declaration of Trust regarding
restrictions on the transfer and ownership of shares of
beneficial interest, the holders of common shares have the
exclusive power to vote on all matters presented to our
shareholders unless the terms of any outstanding preferred
shares gives the holders of preferred shares the
11
right to vote on certain matters or generally. Each outstanding
common share entitles the holder to one vote on all matters
submitted to a vote of shareholders, including the election of
trustees. There is no cumulative voting in the election of our
trustees, which means that the holders of a majority of the
outstanding common shares can elect all of the trustees then
standing for election, and the votes held by the holders of the
remaining common shares, if any, will not be sufficient to elect
any trustee.
Other
Rights
Subject to the provisions of our Declaration of Trust regarding
restrictions on the transfer and ownership of shares of
beneficial interest, each common share has equal distribution,
liquidation and other rights, and has no preference, conversion,
sinking fund, redemption or preemptive rights.
Pursuant to our Declaration of Trust and Maryland law, any
merger, consolidation or sale of all or substantially all of our
assets or dissolution requires the affirmative vote of at least
two-thirds of all the votes entitled to be cast by our
shareholders on the matter. Any amendment to our Declaration of
Trust, other than an amendment of any of the sections of our
Declaration of Trust which provide that the matters described in
the foregoing sentence must be approved by a two-thirds vote,
requires the affirmative vote of at least a majority of all the
votes entitled to be cast by our shareholders on the matter.
Subject to any rights of holders of one or more classes or
series of our preferred shares to elect one or more trustees, at
a meeting of our shareholders, the affirmative vote of at least
two-thirds of our shareholders entitled to vote in the election
of trustees is required in order to remove a trustee. Our
Declaration of Trust authorizes our board of trustees to
increase or decrease the aggregate number of our authorized
shares of beneficial interest and the number of shares of any
class or series of beneficial interest.
Transfer
Agent and Registrar
The transfer agent and registrar for our common shares is the
American Stock Transfer & Trust Company.
Power
To Reclassify Our Shares
Our Declaration of Trust authorizes our board of trustees to
classify and reclassify any of our unissued common shares and
preferred shares into other classes or series of shares. Prior
to issuance of shares of each class or series, our Board is
required by Maryland law and by our Declaration of Trust to set,
subject to the restrictions on transfer of shares contained in
our Declaration of Trust, the terms, preferences, conversion or
other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms or
conditions of redemption for each class or series. Thus, our
board of trustees could authorize the issuance of preferred
shares with terms and conditions which could have the effect of
delaying, deferring or preventing a transaction or a change in
control that might involve a premium price for holders of our
common shares or otherwise be in their best interest.
Power
To Increase Our Authorized Capital and to Issue Additional
Common Shares And Preferred Shares
Our Declaration of Trust authorizes our board of trustees,
without the approval of our shareholders, to amend our
Declaration of Trust from time to time to increase or decrease
the aggregate number of common shares
and/or
preferred shares or the number of shares of any class or series
that we have authority to issue.
We believe that the power to increase our authorized capital, to
issue additional common shares or preferred shares and to
classify or reclassify unissued common or preferred shares and
thereafter to issue the classified or reclassified shares
provides us with increased flexibility in structuring possible
future financings and acquisitions and in meeting other needs
which might arise. These actions can be taken without
shareholder approval, unless shareholder approval is required by
applicable law or the rules of any stock exchange or automated
quotation system on which our securities may be listed or traded.
The description of the limitations on the liability of
shareholders of ours set forth under Description of
Preferred Shares is applicable to holders of common shares.
12
Restrictions
On Ownership And Transfer
In order for us to qualify as a REIT, we must not be
closely held as determined under Section 856(h)
of the Code. We will not be considered closely held
if no more than 50% in value of our outstanding shares is
actually or constructively owned by five or fewer individuals
(as determined by applying certain attribution rules under the
Code) during the last half of a taxable year (other than the
first year for which an election to be treated as a REIT has
been made) or during a proportionate part of a shorter taxable
year. In addition, in order for us to qualify as a REIT, we must
satisfy two gross income tests that require us to derive a
certain percentage of our income from certain qualifying
sources, including rents from real property. If we, or an owner
of 10% or more of our shares, actually or constructively owns
10% or more of one of our tenants (or a tenant of any
partnership in which we are a partner), the rent we receive
(either directly or through any such partnership) from such
tenant (referred to in this section as a Related Party
Tenant) will not be treated as qualifying rent for
purposes of the REIT gross income tests. Moreover, in order for
us to qualify as a REIT, at least 100 persons must
beneficially own our shares during 335 or more days of a taxable
year of twelve months or during a proportionate part of a
shorter taxable year (other than the first year for which we
elected to be treated as a REIT).
In order to assist us in preserving our REIT status, our
Declaration of Trust prohibits:
|
|
|
|
|
any person from actually or constructively owning our shares
that would cause us to be closely held under
Section 856(h) of the Code or otherwise cause us to fail to
qualify as a REIT, including by reason of receiving rents from
tenants that are Related Party Tenants in an amount
that would cause us to fail to satisfy one or both of the REIT
gross income tests, and
|
|
|
|
any person from transferring our shares if the transfer would
cause our shares to be owned by fewer than 100 persons.
|
In addition, to assist us in avoiding a transfer of shares that
would cause us to become closely held or the receipt
of rent from a Related Party Tenant, our Declaration of Trust,
as amended, subject to customary exceptions, provides that no
holder may actually or constructively own more than the
ownership limit as determined by applying certain
attribution rules under the Code. The ownership
limit means:
|
|
|
|
|
with respect to our common shares, 9.8%, in value or number of
shares, whichever is more restrictive, of our outstanding common
shares, and
|
|
|
|
with respect to any class or series of our preferred shares,
9.8%, in value or number of shares, whichever is more
restrictive, of the outstanding shares of the applicable class
or series of our preferred shares.
|
The attribution rules under the Code are complex and may cause
common shares actually or constructively owned by a group of
related individuals
and/or
entities to be treated as being constructively owned by one
individual or entity. As a result, the acquisition by an
individual or entity of less than 9.8% of our common shares (or
the acquisition by an individual or entity of an interest in an
entity that actually or constructively owns our common shares)
could cause such individual or entity, or another individual or
entity, to constructively own in excess of 9.8% of our
outstanding common shares and, thus, subject those common shares
to the ownership limit.
Our board of trustees may, in its sole discretion and upon the
vote of 75% of its members, grant an exemption from the
ownership limit with respect to a person (or more than one
person) who would not be treated as an individual
for purposes of the Code if such person submits to the board
information satisfactory to the board, in its reasonable
discretion, demonstrating that:
|
|
|
|
|
such person is not an individual for purposes of the
Code,
|
|
|
|
such persons share ownership will not cause a person who
is an individual to be treated as owning common
shares in excess of the ownership limit, applying the
attribution rules under the Code, and
|
|
|
|
such persons share ownership will not otherwise jeopardize
our REIT status.
|
As a condition of a waiver, our board of trustees may, in its
reasonable discretion, require undertakings or representations
from such person to ensure that the conditions described above
are satisfied and will continue to be satisfied for as long as
such person owns shares in excess of the ownership limit.
13
Under some circumstances, our board of trustees may, in its sole
discretion and upon the vote of 75% of its members, grant an
exemption for individuals to acquire preferred shares in excess
of the ownership limit.
Our board of trustees also has the authority to increase the
ownership limit from time to time, but it does not have the
authority to do so to the extent that, after giving effect to an
increase, five beneficial owners of our common shares could
beneficially own in the aggregate more than 49.5% of our
outstanding common shares.
Any person who acquires, or attempts or intends to acquire,
actual or constructive ownership of our shares that violates or
may violate any of the foregoing restrictions on transferability
and ownership will be required to give notice to us immediately
and provide us with any information that we may request in order
to determine the effect of the transfer on our REIT status.
If any purported transfer of our shares or any other event would
otherwise result in any person violating the ownership limit or
the other restrictions in our Declaration of Trust, then the
purported transfer will be void and of no force or effect with
respect to the purported transferee as to that number of shares
that exceeds the ownership limit and the purported transferee
will acquire no right or interest (or, in the case of any event
other than a purported transfer, the person or entity holding
record title to any shares in excess of the ownership limit will
cease to own any right or interest) in those excess shares. Any
excess shares described above will be transferred automatically,
by operation of law, to a trust, the beneficiary of which will
be a qualified charitable organization selected by us. This
automatic transfer will be deemed to be effective as of the
close of business on the business day (as defined in our
Declaration of Trust) prior to the date of the violating
transfer.
Within 20 days of receiving notice from us of the transfer
of shares to the trust, the trustee of the trust (who will be
designated by us and will be unaffiliated to us and the
purported transferee or owner) will be required to sell the
excess shares to a person or entity who could own those shares
without violating the ownership limit and distribute to the
purported transferee an amount equal to the lesser of the price
paid by the purported transferee for the excess shares or the
sales proceeds received by the trust for the excess shares. In
the case of any excess shares resulting from any event other
than a transfer, or from a transfer for no consideration (such
as a gift), the trustee will be required to sell the excess
shares to a qualified person or entity and distribute to the
purported owner an amount equal to the lesser of the fair market
value of the excess shares as of the date of the event or the
sales proceeds received by the trust for the excess shares. In
either case, any proceeds in excess of the amount distributable
to the purported transferee or owner, as applicable, will be
distributed to the beneficiary of the trust.
Prior to a sale of any excess shares by the trust, the trustee
will be entitled to receive, in trust for the beneficiary, all
dividends and other distributions paid by us with respect to the
excess shares, and also will be entitled to exercise all voting
rights with respect to the excess shares. Subject to Maryland
law, effective as of the date that the shares have been
transferred to the trust, the trustee will have the authority
(at the trustees sole discretion and subject to applicable
law) (1) to rescind as void any vote cast by a purported
transferee prior to the discovery by us that its shares have
been transferred to the trust and (2) to recast votes in
accordance with the desires of the trustee acting for the
benefit of the beneficiary of the trust. Any dividend or other
distribution paid to the purported transferee or owner (prior to
the discovery by us that its shares had been automatically
transferred to a trust as described above) will be required to
be repaid to the trustee upon demand for distribution to the
beneficiary of the trust.
If the transfer to the trust as described above is not
automatically effective (for any reason) to prevent violation of
the ownership limit, then our Declaration of Trust provides that
the transfer of the excess shares will be void.
In addition, our shares held in the trust will be deemed to have
been offered for sale to us, or our designee, at a price per
share equal to the lesser of (1) the price per share in the
transaction that resulted in the transfer to the trust (or, in
the case of a devise or gift, the fair market value at the time
of that devise or gift) and (2) the fair market value of
such shares on the date we, or our designee, accept the offer.
We will have the right to accept the offer until the trustee has
sold the shares of beneficial interest held in the trust. Upon
the sale to us, the interest of the beneficiary in the shares
sold will terminate and the trustee will distribute the net
proceeds of the sale to the purported owner.
All certificates evidencing our shares will bear a legend
referring to the restrictions described above and a statement
that we will furnish a copy of our Declaration of Trust to a
shareholder on request and without charge.
14
All persons who own, either actually or constructively by
application of the attribution rules under the Code, more than
5% (or other percentage between 1/2 of 1% and 5% as provided in
applicable rules and regulations under the Code) of the lesser
of the number or value of our outstanding shares must give a
written notice to us by January 30 of each year. In addition,
each shareholder will, upon demand, be required to disclose to
us in writing information with respect to the direct, indirect
and constructive ownership of our shares that our board of
trustees deems reasonably necessary to comply with the
provisions of the Code applicable to a REIT, to comply with the
requirements of any taxing authority or governmental agency or
to determine our compliance with such provisions or requirements.
DESCRIPTION
OF PREFERRED SHARES
The following description of the preferred shares, which may be
offered pursuant to a prospectus supplement, sets forth certain
general terms and provisions of the preferred shares to which
any prospectus supplement may relate. The particular terms of
the preferred shares being offered and the extent to which such
general provisions may or may not apply will be described in a
prospectus supplement relating to such preferred shares. The
statements below describing the preferred shares are in all
respects subject to and qualified in their entirety by reference
to the applicable provisions of our Declaration of Trust, as
amended (including any articles supplementary setting forth the
terms of the preferred shares), and our Bylaws.
Subject to limitations prescribed by Maryland law and our
Declaration of Trust, as amended, our board of trustees is
authorized to fix the number of shares constituting each class
or series of preferred shares and to set or fix the terms,
preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of
redemption of each such class or series. The preferred shares
will, when issued, be fully paid and nonassessable and will have
no preemptive rights.
Pursuant to our Declaration of Trust, our board of trustees may
authorize the issuance of up to 10,000,000 preferred shares of
beneficial interest, par value $.01 per share, in one or more
classes or series and may classify any unissued preferred shares
and reclassify any previously classified but unissued preferred
shares of any class or series. All previously issued and
outstanding preferred shares have been reacquired by us and
restored to the status of undesignated preferred shares.
The register and transfer agent for any preferred shares will be
set forth in the applicable prospectus supplement.
Reference is made to the prospectus supplement relating to the
preferred shares offered thereby for specific terms, including:
|
|
|
|
|
the title and stated value of such preferred shares;
|
|
|
|
the number of such preferred shares being offered, the
liquidation preference per share and the offering price of such
preferred shares;
|
|
|
|
the distribution rate(s), period(s)
and/or
payment date(s) or method(s) of calculation thereof applicable
to such preferred shares;
|
|
|
|
the date from which distributions on such preferred shares shall
accumulate, if applicable;
|
|
|
|
the procedures for any auction and remarketing, if any, for such
preferred shares;
|
|
|
|
the provision for a sinking fund, if any, for such preferred
shares;
|
|
|
|
the provisions for redemption, if applicable, of such preferred
shares;
|
|
|
|
any listing of such preferred shares on any securities exchange;
|
|
|
|
the terms and conditions, if applicable, upon which such
preferred shares will be convertible into common shares,
including the conversion price (or manner of calculation
thereof);
|
|
|
|
a discussion of United States federal income tax considerations
applicable to such preferred shares;
|
15
|
|
|
|
|
the relative ranking and preferences of such preferred shares as
to distribution rights (including whether any liquidation
preference as to the preferred shares will be treated as a
liability for purposes of determining the availability of assets
of ours for distributions to holders of common or preferred
shares remaining junior to the preferred shares as to
distribution rights) and rights upon liquidation, dissolution or
winding up of our affairs;
|
|
|
|
any limitations on issuance of any class or series of preferred
shares ranking senior to or on a parity with such class or
series of preferred shares as to distribution rights and rights
upon liquidation, dissolution or winding up of our affairs;
|
|
|
|
any limitations on direct or beneficial ownership and
restrictions on transfer of such preferred shares, in each case
as may be appropriate to preserve our status as a REIT; and
|
|
|
|
any other specific terms, preferences, rights, limitations or
restrictions of such preferred shares.
|
Rank
Unless otherwise specified in the applicable prospectus
supplement, the preferred shares will, with respect to
distribution rights
and/or
rights upon liquidation, dissolution or winding up, rank
(i) senior to all classes or series of common shares, and
to all equity securities ranking junior to such preferred shares
with respect to our distribution rights
and/or
rights upon liquidation, dissolution or winding up of, as the
case may be; (ii) on a parity with all equity securities
issued by us the terms of which specifically provide that such
equity securities rank on a parity with the preferred shares
with respect to distribution rights
and/or
rights upon liquidation, dissolution or winding up, as the case
may be; and (iii) junior to all equity securities issued by
us the terms of which specifically provide that such equity
securities rank senior to the preferred shares with respect to
distribution rights
and/or
rights upon liquidation, dissolution or winding up, as the case
may be.
Distributions
Unless otherwise specified in the applicable prospectus
supplement, holders of preferred shares will be entitled to
receive, when, as and if authorized by our board of trustees,
out of assets of ours legally available for payment, cash
distributions at such rates (or method of calculation thereof)
and on such dates as will be set forth in the applicable
prospectus supplement. Each such distribution shall be payable
to holders of record as they appear on our stock transfer books
on such record dates as shall be fixed by our board of trustees.
Distributions on any class or series of the preferred shares may
be cumulative or non-cumulative, as provided in the applicable
prospectus supplement. Distributions, if cumulative, will be
cumulative from and after the date set forth in the applicable
prospectus supplement. If our board of trustees fails to
authorize a distribution payable on a distribution payment date
on any class or series of the preferred shares for which
distributions are noncumulative, then the holders of such class
or series of the preferred shares will have no right to receive
a distribution in respect of the distribution period ending on
such distribution payment date, and we will have no obligation
to pay the distribution accrued for such period, whether or not
distributions on such class or series are authorized for payment
on any future distribution payment date.
Unless otherwise specified in the applicable prospectus
supplement, if any preferred shares of any class or series are
outstanding, no full distributions will be authorized or paid or
set apart for payment on the preferred shares of ours of any
other class or series ranking, as to distributions, on a parity
with or junior to the preferred shares of such class or series
for any period unless (i) if such class or series of
preferred shares has a cumulative distribution, full cumulative
distributions have been or contemporaneously are authorized and
paid or authorized and a sum sufficient for the payment thereof
set apart for such payment on the preferred shares of such class
or series for all past distribution periods and the then current
distribution period or (ii) if such class or series of
preferred shares does not have a cumulative distribution, full
distributions for the then current distribution period have been
or contemporaneously are authorized and paid or authorized and a
sum sufficient for the payment thereof set apart for such
payment on the preferred shares of such class or series. When
distributions are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the preferred shares of
any class or series and the shares of any other class or series
of preferred shares ranking on a parity as to distributions with
the preferred shares of such
16
class or series, all distributions authorized upon the preferred
shares of such class or series and any other class or series of
preferred shares ranking on a parity as to distributions with
such preferred shares shall be authorized pro rata so that the
amount of distributions authorized per share on the preferred
shares of such class or series and such other class or series of
preferred shares shall in all cases bear to each other the same
ratio that accrued and unpaid distributions per share on the
preferred shares of such class or series (which shall not
include any accumulation in respect of unpaid distributions for
prior distribution periods if such preferred shares do not have
a cumulative distribution) and such other class or series of
preferred shares bear to each other. No interest, or sum of
money in lieu of interest, shall be payable in respect of any
distribution payment or payments on preferred shares of such
class or series which may be in arrears.
Except as provided in the immediately preceding paragraph, or in
the applicable prospectus supplement, unless (i) if such
class or series of preferred shares has a cumulative
distribution, full cumulative distributions on the preferred
shares of such class or series have been or contemporaneously
are authorized and paid or authorized and a sum sufficient for
the payment thereof set apart for payment for all past
distribution periods and the then current distribution period
and (ii) if such class or series of preferred shares does
not have a cumulative distribution, full distributions on the
preferred shares of such class or series have been or
contemporaneously are authorized and paid or authorized and a
sum sufficient for the payment thereof set apart for payment for
the then current distribution period, no distributions (other
than in common shares or other shares of beneficial interest
ranking junior to the preferred shares of such class or series
as to distributions and upon liquidation, dissolution or winding
up of our affairs) shall be authorized or paid or set aside for
payment or other distribution upon the common shares or any
other shares of beneficial interest of us ranking junior to or
on a parity with the preferred shares of such class or series as
to distributions or upon liquidation, dissolution or winding up
of our affairs, nor shall any common shares or any other shares
of beneficial interest ranking junior to or on a parity with the
preferred shares of such class or series as to distributions or
upon liquidation, dissolution or winding up of our affairs be
redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of beneficial interest) by us
(except by conversion into or exchange for other shares of
beneficial interest ranking junior to the preferred shares of
such class or series as to distributions and upon liquidation,
dissolution or winding up of our affairs).
Any distribution payment made on a class or series of preferred
shares shall first be credited against the earliest accrued but
unpaid distribution due with respect to shares of such class or
series which remains payable.
Redemption
If so provided in the applicable prospectus supplement, the
preferred shares of any class or series will be subject to
mandatory redemption or redemption at our option, as a whole or
in part, in each case upon the terms, at the times and at the
redemption prices set forth in such prospectus supplement.
The prospectus supplement relating to a class or series of
preferred shares that is subject to mandatory redemption will
specify the number of such preferred shares that will be
redeemed by us in each year commencing after a date to be
specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid
distributions thereon (which shall not, if such preferred shares
does not have a cumulative distribution, include any
accumulation in respect of unpaid distributions for prior
distribution periods) to the date of redemption. The redemption
price may be payable in cash or other property, as specified in
the applicable prospectus supplement. If the redemption price
for preferred shares of any class or series is payable only from
the net proceeds of the issuance of shares of beneficial
interest, the terms of such preferred shares may provide that,
if no such shares of beneficial interest shall have been issued
or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then
due, such preferred shares shall automatically and mandatorily
be converted into shares of the applicable shares of beneficial
interest pursuant to conversion provisions specified in the
applicable prospectus supplement.
Notwithstanding the foregoing, but subject to the provisions of
the applicable prospectus supplement, unless (i) if such
class or series of preferred shares has a cumulative
distribution, full cumulative distributions on all shares of
such class or series have been or contemporaneously are
authorized and paid or authorized and a sum sufficient for the
payment thereof set apart for payment for all past distribution
periods and the then current distribution period
17
and (ii) if such class or series of preferred shares does
not have a cumulative distribution, full distributions on all
shares of such class or series have been or contemporaneously
are authorized and paid or authorized and a sum sufficient for
the payment thereof set apart for payment for the then current
distribution period, no shares of such class or series of
preferred shares shall be redeemed unless all outstanding
preferred shares of such class or series are simultaneously
redeemed; provided, however, that the foregoing shall not
prevent the purchase or acquisition of preferred shares of such
class or series pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding preferred shares of
such class or series, and, unless (a) if such class or
series of preferred shares has a cumulative distribution, full
cumulative distributions on all outstanding shares of such class
or series have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof set
apart for payment for all past distribution periods and the then
current distribution period and (b) if such class or series
of preferred shares does not have a cumulative distribution,
full distributions on all shares of such class or series have
been or contemporaneously are authorized and paid or authorized
and a sum sufficient for the payment thereof set apart for
payment for the then current distribution period, we shall not
purchase or otherwise acquire directly or indirectly any
preferred shares of such class or series (except by conversion
into or exchange for shares of beneficial interest ranking
junior to the preferred shares of such class or series as to
distributions and upon liquidation).
If fewer than all of the outstanding preferred shares of any
class or series are to be redeemed, the number of shares to be
redeemed will be determined by us and such shares may be
redeemed pro rata from the holders of record of such shares in
proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares) or
any other equitable method determined by us.
Unless otherwise provided in the applicable prospectus
supplement, a notice of redemption will be mailed at least
30 days but not more than 60 days before the
redemption date to each holder of record of preferred shares of
any class or series to be redeemed at the address shown on our
stock transfer books. Each notice shall state: (i) the
redemption date, (ii) the number of shares and class or
series of the preferred shares to be redeemed, (iii) the
redemption price, (iv) the place or places where
certificates for such preferred shares are to be surrendered for
payment of the redemption price, (v) that distributions on
the shares to be redeemed will cease to accrue on such
redemption date, and (vi) the date upon which the
holders conversion rights, if any, as to such shares shall
terminate. If fewer than all the preferred shares of any class
or series are to be redeemed, the notice mailed to each such
holder thereof shall also specify the number of preferred shares
to be redeemed from each such holder. If notice of redemption of
any preferred shares has been properly given and if the funds
necessary for such redemption have been irrevocably set aside by
us in trust for the benefit of the holders of any preferred
shares so called for redemption, then from and after the
redemption date distributions will cease to accrue on such
preferred shares, such preferred shares shall no longer be
deemed outstanding and all rights of the holders of such shares
will terminate, except the right to receive the redemption
price. Any moneys so deposited which remain unclaimed by the
holders of such preferred shares at the end of two years after
the redemption date will be returned by the applicable bank or
trust company to us.
Liquidation
Preference
Unless otherwise provided in the applicable prospectus
supplement, upon any voluntary or involuntary liquidation,
dissolution or winding up of our affairs, then, before any
distribution or payment shall be made to the holders of any
common shares or any other class or series of shares of
beneficial interest ranking junior to any class or series of
preferred shares in the distribution of assets upon our
liquidation, dissolution or winding up, the holders of such
class or series of preferred shares shall be entitled to
receive, after payment or provision for payment of our debts and
other liabilities, out of our assets legally available for
distribution to shareholders, liquidating distributions in the
amount of the liquidation preference per share (set forth in the
applicable prospectus supplement), plus an amount equal to all
distributions accrued and unpaid thereon (which shall not
include any accumulation in respect of unpaid distributions for
prior distribution periods if such preferred shares do not have
a cumulative distribution). After payment of the full amount of
the liquidating distributions to which they are entitled, the
holders of such class or series of preferred shares will have no
right or claim to any of the remaining assets of ours. In the
event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, our legally available assets are
insufficient to pay the amount of the liquidating distributions
on all such outstanding preferred shares and
18
the corresponding amounts payable on all of our shares of other
classes or series of shares of beneficial interest of ranking on
a parity with such class or series of preferred shares in the
distribution of assets upon liquidation, dissolution or winding
up, then the holders of such class or series of preferred shares
and all other such classes or series of shares of beneficial
interest shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which
they would otherwise be respectively entitled.
If the liquidating distributions shall have been made in full to
all holders of a class or series of preferred shares, the
remaining assets of ours shall be distributed among the holders
of any other classes or series of shares of beneficial interest
ranking junior to such class or series of preferred shares upon
liquidation, dissolution or winding up, according to their
respective rights and preferences and in each case according to
their respective number of shares. For purposes of this section,
a distribution of assets in any dissolution, winding up or
liquidation will not include (i) any consolidation or
merger of us with or into any other corporation, (ii) our
dissolution, liquidation, winding up, or reorganization
immediately followed by organization of another entity to which
such assets are distributed or (iii) a sale or other
disposition of all or substantially all of our assets to another
entity; provided that, in each case, effective provision is made
in the charter of the resulting and surviving entity or
otherwise for the recognition, preservation and protection of
the rights of the holders of preferred shares.
Voting
Rights
Holders of any class or series of preferred shares will not have
any voting rights, except as set forth below or as otherwise
indicated in the applicable prospectus supplement.
Unless provided otherwise for any class or series of preferred
shares, so long as any preferred shares remain outstanding, we
will not, without the affirmative vote or consent of the holders
of a majority of the shares of each class or series of preferred
shares outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such class or series voting
separately as a class or series), (i) authorize, create or
issue, or increase the authorized or issued amount of, any class
or series of shares of beneficial interest ranking prior to such
class or series of preferred shares with respect to payment of
distributions or the distribution of assets upon liquidation,
dissolution or winding up, or reclassify any authorized shares
of beneficial interest into any such shares, or create,
authorize or issue any obligation or security convertible into
or evidencing the right to purchase any such shares; or
(ii) amend, alter or repeal the provisions of the
Declaration of Trust, as amended, including the applicable
articles supplementary for such class or series of preferred
shares, whether by merger, consolidation or otherwise, so as to
materially and adversely affect any right, preference, privilege
or voting power of such class or series of preferred shares or
the holders thereof; provided, however, that any increase in the
amount of the authorized preferred shares or the creation or
issuance of any other class or series of preferred shares, or
any increase in the amount of authorized shares of such class or
series or any other class or series of preferred shares, in each
case ranking on a parity with or junior to the preferred shares
of such class or series with respect to payment of distributions
or the distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior
to the time when the act with respect to which such vote would
otherwise be required shall be affected, all outstanding shares
of such class or series of preferred shares shall have been
redeemed or called for redemption upon proper notice and
sufficient funds shall have been irrevocably deposited in trust
to effect such redemption.
Whenever distributions on any preferred shares shall be in
arrears for six or more consecutive quarterly periods, the
holders of such preferred shares (voting together as a class or
series with all other class or series of preferred shares upon
which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two
additional trustees of ours until, (i) if such class or
series of preferred shares has a cumulative distribution, all
distributions accumulated on such preferred shares for the past
distribution periods and the then current distribution period
shall have been fully paid or authorized and a sum sufficient
for the payment thereof set aside for payment or (ii) if
such class or series of preferred shares does not have a
cumulative distribution, four consecutive quarterly
distributions shall have been fully paid or authorized and a sum
sufficient for the payment thereof set aside for payment. In
such case, our entire board of trustees will be increased by two
trustees.
19
Conversion
Rights
The terms and conditions, if any, upon which any class or series
of preferred shares are convertible into common shares will be
set forth in the applicable prospectus supplement relating
thereto. Such terms will include the number of common shares
into which the preferred shares are convertible, the conversion
price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the
holders of the preferred shares or us, the events requiring an
adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such preferred
shares.
Restrictions
on Transfer
For us to qualify as a REIT under the Code, not more than 50% in
value of its outstanding shares of beneficial interest may be
owned, directly or indirectly, by five or fewer individuals (as
defined in the Code) during the last half of a taxable year, and
the shares of beneficial interest must be beneficially owned by
100 or more persons during at least 335 days of a taxable
year of 12 months (or during a proportionate part of a
shorter taxable year). Therefore, the Declaration of Trust, as
amended, imposes certain restrictions on the ownership and
transferability of preferred shares. For a general description
of such restrictions, see Description of Common
Shares Restrictions on Ownership and Transfer.
All certificates evidencing preferred shares will bear a legend
referring to these restrictions.
DESCRIPTION
OF WARRANTS
We have no outstanding warrants to purchase our common shares or
outstanding warrants to purchase our preferred shares. We may
issue warrants for the purchase of common shares or preferred
shares. We may issue warrants independently or together with any
other securities offered by any prospectus supplement, and the
warrants may be attached to or separate from such securities.
Each series of warrants will be issued under a separate warrant
agreement, which we will enter into with a warrant agent
specified in the applicable prospectus supplement. The warrant
agent will act solely as our agent in connection with the
applicable warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or
beneficial owners of the warrants. The following summary is not
complete and is subject to and qualified in its entirety by the
provisions of the warrant agreement and the warrant certificates
relating to each series of warrants which will be filed with the
SEC and incorporated by reference as an exhibit to the
registration statement of which this prospectus is a part at or
prior to the time of the issuance of such series of warrants.
The prospectus supplement relating to any warrants we are
offering will describe the specific terms relating to the
offering, including some or all of the following:
|
|
|
|
|
the title of the warrants,
|
|
|
|
the offering price,
|
|
|
|
the exercise price of the warrants,
|
|
|
|
the aggregate number of common or preferred shares purchasable
upon exercise of the warrants and, in the case of warrants for
preferred shares, the designation, aggregate number and terms of
the class or series of preferred shares purchasable upon
exercise of the warrants,
|
|
|
|
the designation and terms of any class or series of preferred
shares with which the warrants are being offered and the number
of warrants being offered with such preferred shares,
|
|
|
|
the date, if any, on and after which the warrants and any
related class or series of common shares or preferred shares
will be transferable separately,
|
|
|
|
the date on which the right to exercise the warrants will
commence and the date on which such right shall expire,
|
|
|
|
any federal income tax considerations, and
|
|
|
|
any other material terms of the warrants.
|
20
DESCRIPTION
OF RIGHTS
We may from time to time, issue rights to our shareholders for
the purchase of common shares, preferred shares or other
securities. Each series of rights will be issued under a
separate rights agreement to be entered into between the
Company, from time to time, and a bank or trust company, as
rights agent, all as set forth in the prospectus supplement
relating to the particular issue of rights. The rights agent
will act solely as an agent of ours in connection with the
certificates relating to the rights and will not assume any
obligation or relationship of agency or trust for or with any
holders of rights certificates or beneficial owners of rights.
The rights agreement and the rights certificates relating to
each series of rights will be filed with the SEC and
incorporated by reference as an exhibit to the registration
statement of which this prospectus is a part at or prior to the
time of the issuance of such series of rights.
The applicable prospectus supplement will describe the terms of
the rights to be issued, including the following where
applicable:
|
|
|
|
|
the date for determining the shareholders entitled to the rights
distribution;
|
|
|
|
the aggregate number of common shares or other securities
purchasable upon exercise of the rights and the exercise price
and any adjustments to such exercise price;
|
|
|
|
the aggregate number of rights being issued;
|
|
|
|
the date, if any, on and after which the rights may be
transferable separately;
|
|
|
|
the date on which the right to exercise the rights shall
commence and the date on which the right shall expire;
|
|
|
|
any special United States federal income tax
consequences; and
|
|
|
|
any other terms of the rights, including terms, procedures and
limitations relating to the distribution, exchange and exercise
of the rights.
|
CERTAIN
PROVISIONS OF MARYLAND LAW AND OF OUR DECLARATION OF
TRUST AND AMENDED AND RESTATED BYLAWS
The following description of certain provisions of Maryland law
and of our Declaration of Trust and Bylaws is only a summary.
For a complete description, we refer you to Maryland law, our
Declaration of Trust and our Bylaws. See Where You Can
Find More Information.
Classification
Of The Board Of Trustees
Our Declaration of Trust and Bylaws provide that our board of
trustees will establish the number of trustees. Our board of
trustees currently comprises seven trustees. Our Bylaws also
provide that a majority of the entire board of trustees may
increase or decrease the number of trustees serving on our board
of trustees. Any vacancy on our board of trustees, other than a
vacancy created as a result of the removal of any trustee by the
action of the shareholders, shall be filled, at any regular
meeting or at any special meeting called for that purpose, by
the majority of the remaining trustees.
Pursuant to our Declaration of Trust, our board of trustees is
divided into three classes of trustees. Trustees of each class
are chosen for three-year terms upon the expiration of their
current terms and each year one class of trustees will be
elected by the shareholders. We intend to propose an amendment
to our Declaration of Trust to declassify our board of trustees
(so that trustees would be elected annually, for one year terms)
at our 2009 annual meeting of shareholders. Holders of our
common shares have no right to cumulative voting in the election
of trustees. Consequently, at each annual meeting of
shareholders, the holders of a majority of our common shares are
able to elect all of the successors of the class of trustees
whose terms expire at that meeting.
The classified board provision could have the effect of making
the replacement of incumbent trustees more time-consuming and
difficult. At least two annual meetings of shareholders, instead
of one, will generally be required to effect a change in a
majority of the board of trustees. Thus, the classified board
provision could increase the likelihood that incumbent trustees
will retain their positions. The staggered terms of trustees may
delay, defer or
21
prevent a tender offer or an attempt to change control, even
though the tender offer or change in control might be in the
best interest of our shareholders.
Removal
Of Trustees
Our Declaration of Trust provides that, subject to any rights of
holders of one or more classes or series of preferred shares to
elect one or more trustees, any trustee may be removed at any
time, with or without cause, at a meeting of the shareholders,
by the affirmative vote of the holders of not less than
two-thirds of the shares then outstanding and entitled to vote
generally in the election of trustees. If any trustee shall be
so removed, our shareholders may take action to fill the vacancy
so created. An individual so elected as trustee by the
shareholders shall hold office for the unexpired term of the
trustee whose removal created the vacancy.
Business
Combinations
Under Maryland law, business combinations between a
Maryland real estate investment trust and an interested
shareholder or an affiliate of an interested shareholder are
prohibited for five years after the most recent date on which
the interested shareholder becomes an interested shareholder.
These business combinations include, among other things
specified in the statute, a merger, consolidation, share
exchange, or, in circumstances specified in the statute, an
asset transfer or issuance or reclassification of equity
securities. An interested shareholder is defined as:
|
|
|
|
|
any person who beneficially owns ten percent or more of the
voting power of the trusts shares; or
|
|
|
|
an affiliate or associate of the trust who, at any time within
the two-year period prior to the date in question, was the
beneficial owner of ten percent or more of the voting power of
the then outstanding voting shares of the trust.
|
A person is not an interested shareholder under the statute if
the board of trustees approved in advance the transaction by
which such person or entity otherwise would have become an
interested shareholder. However, in approving a transaction, the
board of trustees may provide that its approval is subject to
compliance, at or after the time of approval, with any terms and
conditions determined by the board of trustees.
After the five-year prohibition, any business combination
between the Maryland trust and an interested shareholder
generally must be recommended by the board of trustees of the
trust and approved by the affirmative vote of at least:
|
|
|
|
|
80% of the votes entitled to be cast by holders of outstanding
voting shares of the trust; and
|
|
|
|
two-thirds of the votes entitled to be cast by holders of voting
shares of the trust other than shares held by the interested
shareholder with whom or with whose affiliate the business
combination is to be effected or held by an affiliate or
associate of the interested shareholder.
|
These super-majority vote requirements do not apply if the
trusts common shareholders receive a minimum price, as
defined under Maryland law, for their shares in the form of cash
or other consideration in the same form as previously paid by
the interested shareholder for its shares.
The statute permits various exemptions from its provisions,
including business combinations that are exempted by the board
of trustees before the time that the interested shareholder
becomes an interested shareholder. Pursuant to the statute, our
board of trustees has adopted a resolution that any business
combination between us and any other person or entity is
exempted from the provisions of the statute described in the
preceding paragraphs. This resolution, however, may be altered
or repealed, in whole or in part, by our board of trustees at
any time.
The business combination statute may discourage others from
trying to acquire control of us and increase the difficulty of
consummating any offer.
Control
Share Acquisitions
Maryland law provides that control shares of a Maryland real
estate investment trust acquired in a control share acquisition
have no voting rights except to the extent approved by a vote of
two-thirds of the votes entitled to be cast
22
on the matter. Shares owned by the acquiror, by officers or by
trustees who are employees of the trust are excluded from shares
entitled to vote on the matter. Control shares are voting shares
which, if aggregated with all other shares owned by the acquiror
or in respect of which the acquiror is able to exercise or
direct the exercise of voting power (except solely by virtue of
a revocable proxy), would entitle the acquiror to exercise
voting power in electing trustees within one of the following
ranges of voting power:
|
|
|
|
|
one-tenth or more but less than one-third;
|
|
|
|
one-third or more but less than a majority; or
|
|
|
|
a majority or more of all voting power.
|
Control shares do not include shares the acquiring person is
then entitled to vote as a result of having previously obtained
shareholder approval. A control share acquisition means the
acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share
acquisition may compel the board of trustees of the trust to
call a special meeting of shareholders to be held within
50 days of demand to consider the voting rights of the
shares. The right to compel the calling of a special meeting is
subject to the satisfaction of certain conditions, including an
undertaking to pay the expenses of the meeting. If no request
for a meeting is made, the trust may itself present the question
at any shareholders meeting.
If voting rights are not approved at the meeting or if the
acquiring person does not deliver an acquiring person statement
as required by the statute, then the trust may redeem for fair
value any or all of the control shares, except those for which
voting rights have previously been approved. The right of the
trust to redeem control shares is subject to certain conditions
and limitations. Fair value is determined, without regard to the
absence of voting rights for the control shares, as of the date
of the last control share acquisition by the acquiror or of any
meeting of shareholders at which the voting rights of the shares
are considered and not approved. If voting rights for control
shares are approved at a shareholders meeting and the acquiror
becomes entitled to vote a majority of the shares entitled to
vote, all other shareholders may exercise appraisal rights. The
fair value of the shares as determined for purposes of appraisal
rights may not be less than the highest price per share paid by
the acquiror in the control share acquisition.
The control share acquisition statute does not apply (i) to
shares acquired in a merger, consolidation or share exchange if
the trust is a party to the transaction or (ii) to
acquisitions approved or exempted by the declaration of trust or
bylaws of the trust.
Our Bylaws contain a provision exempting from the control share
acquisition statute any and all acquisitions by any person of
our shares. This provision of our Bylaws may not be repealed or
amended, nor may another provision that is inconsistent with
this provision be adopted in either our Bylaws or our
Declaration of Trust, except upon the affirmative vote of a
majority of all the votes cast by our shareholders at a meeting
of shareholders duly called and at which a quorum is present.
Merger;
Amendment To The Declaration Of Trust
Under Maryland law, a Maryland REIT generally cannot amend its
declaration of trust or merge with another entity, unless
approved by the affirmative vote of shareholders holding at
least two-thirds of the shares entitled to vote on the matter.
However, a Maryland REIT may provide in its declaration of trust
for approval of these matters by a lesser percentage, but not
less than a majority of all of the votes entitled to be cast on
the matter. Our Declaration of Trust does not provide for a
lesser percentage of shareholder votes for approval of a merger
but does provide that most amendments to our Declaration of
Trust may be approved by the affirmative vote of a majority of
all votes entitled to be cast by our shareholders on the matter.
However, amendments to provisions of our Declaration of Trust
relating to the following: (1) our merger into another
entity, (2) our consolidation with one or more other
entities into a new entity, (3) the sale, lease, exchange
or transfer of all or substantially of our assets, or
(4) the termination of our existence must be approved by
the affirmative vote of at least two-thirds of all votes
entitled to be cast by our shareholders on the matter. Under
Maryland law, the declaration of trust of a Maryland real estate
investment trust may permit the trustees, by a two-thirds vote,
to amend the declaration of trust from time to
23
time to qualify as a REIT under the Code or a real estate
investment trust under Maryland law governing real estate
investment trusts, without the affirmative vote or written
consent of the shareholders. Our Declaration of Trust permits
such action by our board of trustees.
Transfer
of Assets; Consolidation
Our Declaration of Trust provides that, subject to the
provisions of any class or series of our shares outstanding, we
may merge or consolidate with another entity or entities or sell
or transfer all or substantially all of our property, if such
action is approved by our board of trustees and by the
affirmative vote of at least two-thirds of all of the votes
entitled to be cast by our shareholders on the matter.
Termination
Of The Trust
Subject to the provisions of any class or series of our shares
at the time outstanding, our existence may be terminated at any
meeting of our shareholders by the affirmative vote of at least
two-thirds of all of the votes entitled to be cast by our
shareholders on the matter.
Advance
Notice Of Trustee Nominations And New Business
Our Bylaws provide that with respect to an annual meeting of
shareholders, nominations of persons for election to the board
of trustees and the proposal of business to be considered by our
shareholders may be made only (1) pursuant to our notice of
the meeting, (2) by or at the direction of our board of
trustees or (3) by any shareholder who was a shareholder of
record both at the time of giving notice and at the time of the
annual meeting, who is entitled to vote at the meeting and who
has complied with the advance notice procedures of our Bylaws.
With respect to special meetings of shareholders, only the
business specified in our notice of the meeting may be brought
before the special meeting. Nominations of persons for election
to the board of trustees at a special meeting may be made only
(1) pursuant to our notice of the meeting, (2) by or
at the direction of our board of trustees, or (3) provided
that the board of trustees has determined that trustees shall be
elected at such special meeting, by any shareholder who was a
shareholder of record both at the time of giving of notice and
at the time of the special meeting, who is entitled to vote at
the meeting and who has complied with the advance notice
provisions of our Bylaws.
Unsolicited Takeovers. Under certain
provisions of Maryland law relating to unsolicited takeovers, a
Maryland corporation or real estate investment trust with a
class of equity securities registered under the Securities
Exchange Act of 1934, as amended, and at least three independent
directors may elect to be subject to certain statutory
provisions relating to unsolicited takeovers which, among other
things, would automatically classify our board of trustees into
three classes with staggered terms of three years each and vest
in our board of trustees the exclusive right to determine the
number of trustees and the exclusive right by the affirmative
vote of a majority of the remaining trustees, to fill vacancies
on the board of trustees, even if the remaining trustees do not
constitute a quorum. These statutory provisions also provide
that any trustee elected to fill a vacancy shall hold office for
the remainder of the full term of the class of trustees in which
the vacancy occurred, rather than the next annual meeting of
trustees as would otherwise be the case, and until his successor
is elected and qualified. Finally, these statutory provisions
provide that a special meeting of shareholders need be called
only upon the written request of shareholders entitled to cast
at least a majority of the votes entitled to be cast at the
special meeting.
An election to be subject to any or all of the foregoing
statutory provisions may be made in our Declaration of Trust or
Bylaws, or by resolution of our board of trustees. Any such
statutory provision to which we elect to be subject will apply
even if other provisions of Maryland law or our Declaration of
Trust or Bylaws provide to the contrary.
Our Declaration of Trust currently classifies our board of
trustees into three classes with staggered terms of three years
each. However, if we made an election to be subject to the
statutory provisions described above, our board of trustees
would have the exclusive right to determine the number of
trustees and the exclusive right to fill vacancies on the board
of trustees. Moreover, any trustee elected to fill a vacancy
would hold office for the remainder of the full term of the
class of trustees in which the vacancy occurred.
24
We have not elected to become subject to the foregoing statutory
provisions relating to unsolicited takeovers. However, we could,
by resolutions adopted by our board of trustees and without
shareholder approval, elect to become subject to any or all of
these statutory provisions.
Anti-Takeover
Effect Of Certain Provisions Of Maryland Law, The Declaration Of
Trust, And Bylaws
The business combination provisions of Maryland law, if we
decide in the future to rescind our election to be exempt
therefrom and, if the applicable provision in our Bylaws is
rescinded, the control share acquisition provisions of Maryland
law, the unsolicited takeover provision of Maryland law if we
elect to become subject thereto, the provisions of our
Declaration of Trust on classification of the board of trustees
and removal of trustees and the advance notice provisions of our
Bylaws could delay, defer or prevent a transaction or a change
in control that might involve a premium price for holders of our
common shares or otherwise be in their best interest.
CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material federal income tax
consequences and considerations relating to the acquisition,
holding, and disposition of our securities. For purposes of this
discussion under the heading Certain Federal Income Tax
Considerations, we, our,
us, and the Company refer to
Ramco-Gershenson Properties Trust, but excluding all its
subsidiaries and affiliated entities, and the Operating
Partnership refers to
Ramco-Gershenson
Properties, L.P. This summary is based upon the Code, the
regulations promulgated by the U.S. Treasury Department
(which are referred to in this section as Treasury
Regulations), rulings and other administrative
pronouncements issued by the Internal Revenue Service
(IRS), and judicial decisions, all as currently in
effect, and all of which are subject to differing
interpretations or to change, possibly with retroactive effect.
No assurance can be given that the IRS would not assert, or that
a court would not sustain, a position contrary to any
description of the tax consequences summarized below. No advance
ruling has been or will be sought from the IRS regarding any
matter discussed in this prospectus. This summary is also based
upon the assumption that our operation and the operation of each
of our subsidiaries and affiliated entities will be in
accordance with any applicable organizational documents or
partnership or limited liability company operating agreement.
This summary is for general information only, and does not
purport to discuss all aspects of federal income taxation that
may be important to a particular investor in light of its
investment or tax circumstances, or to investors subject to
special tax rules, such as:
|
|
|
|
|
financial institutions;
|
|
|
|
insurance companies;
|
|
|
|
broker-dealers;
|
|
|
|
regulated investment companies;
|
|
|
|
holders who receive securities through the exercise of employee
stock options or otherwise as compensation;
|
|
|
|
persons holding securities as part of a straddle,
hedge, conversion transaction,
synthetic security or other integrated investment;
|
|
|
|
except to the extent discussed below, tax-exempt
organizations; and
|
|
|
|
except to the extent discussed below, foreign investors.
|
In addition, certain U.S. expatriates, including certain
individuals who have lost U.S. citizenship and
long-term residents (within the meaning of
Section 877(e)(2) of the Code) who have ceased to be lawful
permanent residents of the United States, are subject to special
rules.
If a partnership, including for this purpose any entity treated
as a partnership for U.S. federal income tax purposes,
holds stock issued by us, the tax treatment of a partner will
generally depend upon the status of the partner and the
activities of the partnership.
This summary assumes that investors will hold their securities
as capital assets, which generally means assets held for
investment.
25
The federal income tax treatment of holders of securities
depends in some instances on determinations of fact and
interpretations of complex provisions of federal income tax law
for which no clear precedent or authority may be available. In
addition, the tax consequences of holding securities to any
particular holder will depend on the holders particular
tax circumstances. You are urged to consult your own tax advisor
regarding the federal, state, local, and foreign income and
other tax consequences to you (in light of your particular
investment or tax circumstances) of acquiring, holding,
exchanging, or otherwise disposing of securities.
Taxation
of the Company
We have elected to be a REIT for federal income tax purposes
under Sections 856 through 860 of the Code and applicable
provisions of the Treasury Regulations, which set forth the
requirements for qualifying as a REIT. Our policy has been and
is to operate in such a manner as to qualify as a REIT for
federal income tax purposes. If we so qualify, then we will
generally not be subject to federal income tax on income we
distribute to our shareholders. For any year in which we do not
meet the requirements for qualification as a REIT, we will be
taxed as a corporation. See Failure to
Qualify below.
We have received an opinion from Honigman Miller Schwartz and
Cohn LLP, our tax counsel, to the effect that since the
commencement of our taxable year which began January 1,
2009, we have been organized and operated in conformity with the
requirements for qualification as a REIT under the Code, and
that our proposed method of operation will enable us to continue
to meet the requirements for qualification and taxation as a
REIT. A copy of this opinion is filed as an exhibit to the
registration statement of which this prospectus is a part. It
must be emphasized that the opinion of Honigman Miller Schwartz
and Cohn LLP is based on various assumptions relating to our
organization and operation, and is conditioned upon
representations and covenants made by our management regarding
our assets and the past, present, and future conduct of our
business operations. While we intend to operate so that we will
qualify as a REIT, given the highly complex nature of the rules
governing REITs, the ongoing importance of factual
determinations, and the possibility of future changes in our
circumstances, no assurance can be given by Honigman Miller
Schwartz and Cohn LLP or by us that we will so qualify for any
particular year. The opinion was expressed as of the date issued
and will not cover subsequent periods. Honigman Miller Schwartz
and Cohn LLP will have no obligation to advise us or the holders
of our securities of any subsequent change in the matters
stated, represented or assumed, or of any subsequent change in
the applicable law. You should be aware that opinions of counsel
are not binding on the IRS or any court, and no assurance can be
given that the IRS will not challenge, or a court will not rule
contrary to, the conclusions set forth in such opinions.
Our qualification and taxation as a REIT depend upon our ability
to meet on a continuing basis, through actual operating results,
distribution levels, and diversity of stock ownership, various
qualification requirements imposed upon REITs by the Code, our
compliance with which has not been, and will not be, reviewed by
Honigman Miller Schwartz and Cohn LLP. In addition, our ability
to qualify as a REIT depends in part upon the operating results,
organizational structure and entity classification for federal
income tax purposes of certain of our affiliated entities, the
status of which may not have been reviewed by Honigman Miller
Schwartz and Cohn LLP. Accordingly, no assurance can be given
that the actual results of our operations for any taxable year
satisfy such requirements for qualification and taxation as a
REIT.
Taxation
of REITs in General
As indicated above, our qualification and taxation as a REIT
depend upon our ability to meet, on a continuing basis, various
qualification requirements imposed upon REITs by the Code. The
material qualification requirements are summarized below under
Requirements for Qualification
General. While we intend to operate so that we qualify as
a REIT, no assurance can be given that the IRS will not
challenge our REIT status, or that we will be able to operate in
accordance with the REIT requirements in the future.
As a REIT, we will generally be entitled to a deduction for
dividends that we pay and therefore will not be subject to
federal corporate income tax on our net income that is currently
distributed to our shareholders. This treatment substantially
eliminates the double taxation at the corporate and
shareholder levels that results from investment in a corporation
or an entity treated as a corporation for federal income tax
purposes. Rather, income
26
generated by a REIT generally is taxed only at the shareholder
level upon a distribution of dividends by the REIT. Net
operating losses, foreign tax credits and other tax attributes
of a REIT do not pass through to the shareholders of the REIT,
subject to special rules for certain items such as capital gains
recognized by REITs. See Federal Income Taxation of
Shareholders below.
As a REIT, we will nonetheless be subject to federal tax in the
following circumstances:
|
|
|
|
|
We will be taxed at regular corporate rates on any undistributed
income, including undistributed net capital gains.
|
|
|
|
We may be subject to the alternative minimum tax on
our items of tax preference, and, in computing alternative
minimum taxable income subject to such tax, deductions for
net operating losses carried from any other year(s) would be
limited.
|
|
|
|
If we have net income from prohibited transactions,
which are, in general, sales or other dispositions of property,
other than foreclosure property, held primarily for sale to
customers in the ordinary course of business, such income will
be subject to a 100% excise tax. See Prohibited
Transactions and Foreclosure
Property below.
|
|
|
|
If we elect to treat property that we acquire in connection with
a foreclosure of a mortgage loan or certain leasehold
terminations as foreclosure property, we may thereby
avoid the 100% excise tax on gain from a resale of that property
(if the sale would otherwise constitute a prohibited
transaction), but the income from the sale or operation of the
property may be subject to corporate income tax at the highest
applicable rate (currently 35%).
|
|
|
|
We will be subject to a 100% penalty tax on any redetermined
rents, redetermined deductions, or excess interest. In general,
redetermined rents are rents from real property that are
overstated as a result of services furnished by a taxable
REIT subsidiary (described below) of ours to any of our
tenants. Redetermined deductions and excess interest represent
amounts that are deducted by a taxable REIT
subsidiary (described below) of ours for amounts paid to
us that are in excess of the amounts that would have been
charged based on arms-length negotiations. See
Redetermined Rents, Redetermined Deductions, and
Excess Interest below.
|
|
|
|
If we should fail to satisfy the 75% gross income test or the
95% gross income test discussed below, due to reasonable cause
and not due to willful neglect and we nonetheless maintain our
qualification as a REIT as a result of specified cure
provisions, we will be subject to a 100% tax on an amount equal
to (1) the amount by which we fail the 75% gross income
test or the amount by which we fail the 95% gross income test
(whichever is greater), multiplied by (2) a fraction
intended to reflect our profitability.
|
|
|
|
If we fail to satisfy any of the REIT asset tests (other than a
de minimis failure of the 5% and 10% asset tests) described
below, due to reasonable cause and not due to willful neglect
and we nonetheless maintain our REIT qualification as a result
of specified cure provisions, we will be required to pay a tax
equal to the greater of $50,000 or the highest corporate tax
rate multiplied by the net income generated by the nonqualifying
assets that caused us to fail such test.
|
|
|
|
If we fail to satisfy any requirement of the Code for qualifying
as a REIT, other than a failure to satisfy the REIT gross income
tests or asset tests, and the failure is due to reasonable
cause, we may retain our REIT qualification but we will be
required to pay a penalty of $50,000 for each such failure.
|
|
|
|
If we should fail to distribute during each calendar year at
least the sum of (1) 85% of our REIT ordinary
income (i.e., REIT taxable income excluding
capital gain and without regard to the dividends paid deduction)
for such year, (2) 95% of our REIT capital gain net income
for such year, and (3) any undistributed taxable income
from prior periods, we would be subject to a 4% excise tax on
the excess of such sum over the aggregate of amounts actually
distributed and retained amounts on which income tax is paid at
the corporate level.
|
|
|
|
We may be required to pay monetary penalties to the IRS in
certain circumstances, including if we fail to meet certain
record keeping requirements intended to monitor our compliance
with rules relating to the composition of a REITs
shareholders, as described below in Requirements
for Qualification General.
|
27
|
|
|
|
|
If we acquire any asset from a subchapter C corporation in a
transaction in which gain or loss is not recognized, and we
subsequently recognize gain on the disposition of any such asset
during the ten-year period (to which we refer in this section as
the Recognition Period) beginning on the date on
which we acquire the asset, then the excess of (1) the fair
market value of the asset as of the beginning of the Recognition
Period, over (2) our adjusted basis in such asset as of the
beginning of such Recognition Period (to which we refer in this
section as Built-in Gain) will generally be (with
certain adjustments) subject to tax at the highest corporate
income tax rate. Similar rules would apply if within the
ten-year period beginning on the first day of a taxable year for
which we re-qualify as a REIT after being subject to tax as a
corporation under subchapter C of the Code for more than two
years we were to dispose of any assets that we held on such
first day.
|
|
|
|
Certain of our subsidiaries are corporations and their earnings
are subject to corporate income tax.
|
In addition, we and our subsidiaries may be subject to a variety
of taxes, including payroll taxes, and state and local income,
property and other taxes on our assets and operations. We could
also be subject to tax in situations and on transactions not
currently contemplated.
Requirements
for Qualification General
The Code defines a REIT as a corporation, trust or association:
(1) that is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by
transferable shares or by transferable certificates of
beneficial interest;
(3) that would be taxable as a domestic corporation but for
the special Code provisions applicable to REITs;
(4) that is neither a financial institution nor an
insurance company subject to certain provisions of the Code;
(5) the beneficial ownership of which is held by 100 or
more persons;
(6) not more than 50% in value of the outstanding stock of
which is owned, directly or indirectly through the application
of certain attribution rules, by five or fewer individuals (as
defined in the Code to include certain tax-exempt entities)
during the last half of each taxable year; and
(7) that meets other tests described below, including tests
with respect to the nature of its income and assets and the
amount of its distributions.
The Code provides that conditions (1) through (4) must
be met during the entire taxable year and that condition
(5) must be met during at least 335 days of a taxable
year of 12 months, or during a proportionate part of a
taxable year of less than 12 months. We believe that we
have been organized and operated in a manner that has allowed us
to satisfy the requirements set forth in (1) through
(7) above. In addition, our Declaration of Trust currently
includes certain restrictions regarding transfer of our shares
of beneficial interest which are intended (among other things)
to assist us in continuing to satisfy the share ownership
requirements described in (5) and (6) above.
To monitor compliance with the share ownership requirements, we
are required to maintain records regarding the actual ownership
of our shares. To do so, we must demand written statements each
year from the record holders of significant percentages of our
shares in which the record holders are to disclose the actual
owners of such shares (that is, the persons required to include
in gross income the dividends we paid). A list of those persons
failing or refusing to comply with this demand must be
maintained as part of our records. Our failure to comply with
these record-keeping requirements could subject us to monetary
penalties. A shareholder that fails or refuses to comply with
the demand is required by Treasury Regulations to submit a
statement with its tax return disclosing the actual ownership of
the shares and other information.
In addition, a trust may not elect to become a REIT unless its
taxable year is the calendar year. We satisfy this requirement.
28
Effect
of Subsidiary Entities
Ownership of Partnership Interests. In the
case of a REIT that is a partner in a partnership (treating, as
a partner of a partnership for this purpose, a member of a
limited liability company that is classified as a partnership
for federal income tax purposes), Treasury Regulations provide
that the REIT will be deemed to own its proportionate share of
the assets of the partnership, and the REIT will be deemed to be
entitled to the income of the partnership attributable to such
share. The character of the assets and gross income of the
partnership (determined at the level of the partnership) are the
same in the hands of the REIT for purposes of Section 856
of the Code, including satisfying the gross income and asset
tests described below. Accordingly, our proportionate share of
the assets, liabilities, and items of income of the Operating
Partnership and our other subsidiary partnerships (provided that
none of the subsidiary partnerships are taxable as corporations
for federal income tax purposes) is treated as our assets,
liabilities and items of income for purposes of applying the
requirements described in this summary (including the gross
income and asset tests described below). Commencing with our
taxable year beginning January 1, 2005, one exception to
the rule described above is that, for purposes of the
prohibition against holding securities having a value greater
than 10% of the total value of the outstanding securities of any
one issuer discussed under Asset Tests below,
a REITs proportionate share of any securities held by a
partnership is not based solely on its capital interest in the
partnership but also includes its interest (as a creditor) in
certain debt securities of the partnership (excluding
straight debt and certain other securities described
under Asset Tests below). A summary of
certain rules governing the federal income taxation of
partnerships and their partners is provided below in Tax
Aspects of Investment in the Operating Partnership.
Disregarded Subsidiaries. If a REIT owns a
corporate subsidiary that is a qualified REIT
subsidiary, that subsidiary is disregarded for federal
income tax purposes, and all assets, liabilities and items of
income, deduction and credit of the subsidiary are treated as
assets, liabilities and items of income, deduction and credit of
the REIT itself, including for purposes of applying the gross
income and asset tests applicable to REITs summarized below. A
qualified REIT subsidiary is any corporation, other than a
taxable REIT subsidiary (described below), that is
wholly-owned by a REIT, or by other disregarded subsidiaries, or
by a combination of the two. Other entities we wholly own,
including single member limited liability companies, are also
generally disregarded as separate entities for federal income
tax purposes, including for purposes of applying the REIT income
and asset tests described below. Disregarded subsidiaries, along
with our subsidiary partnerships, are sometimes referred to as
pass-through subsidiaries. In the event that any of
our disregarded subsidiaries ceases to be wholly-owned by us
(for example, if any equity interest in the subsidiary is
acquired by a person other than us or one of our other
disregarded subsidiaries), the subsidiarys separate
existence would no longer be disregarded for federal income tax
purposes. Instead, it would have multiple owners and would be
treated as either a partnership or a taxable corporation. Such
an event could, depending on the circumstances, adversely affect
our ability to satisfy the various asset and gross income
requirements applicable to REITs, including the requirement that
REITs generally may not own, directly or indirectly, more than
10% (as measured by either voting power or value) of the
securities of any one issuer. See Income
Tests and Asset Tests below.
Taxable Subsidiaries. A REIT may jointly elect
with a subsidiary corporation, whether or not wholly-owned, to
treat the subsidiary corporation as a taxable REIT
subsidiary of the REIT. (A taxable REIT subsidiary is
referred to in this section as a TRS.) In addition,
a corporation (other than a REIT or qualified REIT subsidiary)
is treated as a TRS if a TRS of a REIT owns directly or
indirectly securities possessing more than 35% of the total
voting power, or having more than 35% of the total value, of the
outstanding securities of the corporation. We have made a joint
election with Ramco-Gershenson, Inc., to treat Ramco-Gershenson,
Inc. as a TRS. Moreover, we have interests in several other
corporations treated as TRSs. The separate existence of a TRS
(such as
Ramco-Gershenson,
Inc.) or other taxable corporation, unlike a disregarded
subsidiary as discussed above, is not ignored for federal income
tax purposes. Accordingly, Ramco-Gershenson, Inc. is subject to
corporate income tax on its earnings, and this may reduce the
aggregate cash flow that we and our subsidiaries generate and
thus our ability to make distributions to our shareholders.
A parent REIT is not treated as holding the assets of a taxable
subsidiary corporation or as receiving any undistributed income
that the subsidiary earns. Rather, the stock issued by the
subsidiary is an asset in the hands of the parent REIT, and the
REIT recognizes, as income, any dividends that it receives from
the subsidiary. This treatment can affect the income and asset
test calculations that apply to the REIT. Because a parent REIT
does not
29
include the assets and undistributed income of taxable
subsidiary corporations in determining the parents
compliance with the REIT requirements, these entities may be
used by the parent REIT indirectly to undertake activities that
the applicable rules might otherwise preclude the parent REIT
from doing directly or through pass-through subsidiaries (for
example, activities that give rise to certain categories of
income, such as management fees, that do not qualify under the
75% and 95% gross income tests described immediately below).
In addition, certain sections of the Code that are intended to
insure that transactions between a parent REIT and its TRS occur
at arms length and on commercially reasonably terms may
prevent a TRS from deducting interest on debt funded directly or
indirectly by its parent REIT if certain tests regarding the
TRSs debt to equity ratio and interest expense are not
satisfied.
Income
Tests
In order to maintain qualification as a REIT, we must annually
satisfy two gross income requirements. First, at least 75% of
our gross income for each taxable year, excluding gross income
from sales of inventory or dealer property in prohibited
transactions, must derive from (1) investments in
real property or mortgages on real property, including
rents from real property, dividends received from
other REITs, interest income derived from mortgage loans secured
by real property (including certain types of mortgage-backed
securities), and gains from the sale of real estate assets, or
(2) certain kinds of temporary investment of new capital.
Second, at least 95% of our gross income in each taxable year,
excluding gross income from prohibited transactions, must derive
from some combination of such income from investments in real
property and temporary investment of new capital (that is,
income that qualifies under the 75% income test described
above), as well as other dividends, interest, and gain from the
sale or disposition of stock or securities, which need not have
any relation to real property.
From time to time, we enter into transactions, such as interest
rate swaps, that hedge our risk with respect to one or more of
our assets or liabilities. Any income we derive from
hedging transactions entered into prior to
July 31, 2008, will be nonqualifying income for purposes of
the 75% gross income test. Income from hedging
transactions that are clearly identified in the manner
specified by the Code will not constitute gross income, and will
not be counted, for purposes of the 75% gross income test if
entered into by us on or after July 31, 2008, and will not
constitute gross income, and will not be counted, for purposes
of the 95% gross income test if entered into by us on or after
January 1, 2005. The term hedging transaction,
as used above, generally means any transaction into which we
enter in the normal course of our business primarily to manage
risk of interest rate changes or fluctuations with respect to
borrowings made or to be made by us in order to acquire or carry
real estate assets. We intend to structure our hedging
activities in a manner that does not jeopardize our status as a
REIT.
For purposes of satisfying the 75% and 95% gross income tests,
rents from real property generally include rents
from interests in real property, charges for services
customarily furnished or rendered in connection with the rental
of real property (whether or not such charges are separately
stated), and rent attributable to personal property which is
leased under, or in connection with, a lease of real property.
However, the inclusion of these items as rents from real
property is subject to the conditions described immediately
below.
|
|
|
|
|
Any amount received or accrued, directly or indirectly, with
respect to any real or personal property cannot be based in
whole or in part on the income or profits of any person from
such property. However, an amount received or accrued generally
will not be excluded from rents from real property solely by
reason of being based on a fixed percentage or percentages of
receipts or sales. In addition, amounts received or accrued
based on income or profits do not include amounts received from
a tenant based on the tenants income from the property if
the tenant derives substantially all of its income with respect
to such property from leasing or subleasing substantially all of
such property, provided that the tenant receives from subtenants
only amounts that would be treated as rents from real property
if received directly by the REIT.
|
|
|
|
Amounts received from a tenant generally will not qualify as
rents from real property in satisfying the gross income tests if
the REIT directly, indirectly, or constructively owns,
(1) in the case of a tenant which is a corporation, 10% or
more of the total combined voting power of all classes of stock
entitled to vote or 10% or more of the total value of shares of
all classes of stock of such tenant, or (2) in the case of
a tenant which is not a corporation, an interest of 10% or more
in the assets or net profits of such tenant. (Such a tenant is
referred to in this section as a Related Party
Tenant.) Rents that we receive from a Related Party Tenant
that is also a
|
30
|
|
|
|
|
TRS of ours, however, will not be excluded from the definition
of rents from real property if at least 90% of the
space at the property to which the rents relate is leased to
third parties, and the rents paid by the TRS are substantially
comparable to rents paid by our other tenants for comparable
space. Whether rents paid by our TRS are substantially
comparable to rents paid by our other tenants is determined at
the time the lease with the TRS is entered into, extended, and
modified, if such modification increases the rents due under
such lease. Notwithstanding the foregoing, however, if a lease
with a controlled TRS is modified and such
modification results in an increase in the rents payable by such
TRS, any such increase will not qualify as rents from real
property. For purposes of this rule, a controlled
TRS is a TRS in which we own stock possessing more than 50% of
the voting power or more than 50% of the total value.
|
|
|
|
|
|
If rent attributable to personal property leased in connection
with a lease of real property is greater than 15% of the total
rent received under the lease, then the portion of rent
attributable to such personal property will not qualify as rents
from real property. The determination whether more than 15% of
the rents received by a REIT from a property is attributable to
personal property is based upon a comparison of the fair market
value of the personal property leased by the tenant to the fair
market value of all the property leased by the tenant.
|
|
|
|
Rents from real property do not include any amount received or
accrued directly or indirectly by a REIT for services furnished
or rendered to tenants of a property or for managing or
operating a property, unless the services furnished or rendered,
or management or operation provided, are of a type that a
tax-exempt organization can provide to its tenants without
causing its rental income to be unrelated business taxable
income under the Code (that is, unless they are of a type
usually or customarily rendered in connection with the
rental of space for occupancy only or are not considered
primarily for the tenants convenience).
Services, management, or operations which, if provided by a
tax-exempt organization, would give rise to unrelated business
taxable income (referred to in this section as
Impermissible Tenant Services) will not be treated
as provided by the REIT if provided by either an
independent contractor (as defined in the Code) who
is adequately compensated and from whom the REIT does not derive
any income, or by a TRS. If an amount received or accrued by a
REIT for providing Impermissible Tenant Services to tenants of a
property exceeds 1% of all amounts received or accrued by the
REIT with respect to such property in any year, none of such
amounts will constitute rents from real property. For purposes
of this test, the income received from Impermissible Tenant
Services is deemed to be at least 150% of the direct cost of
providing the services. If the 1% threshold is not exceeded,
only the amounts received for providing Impermissible Tenant
Services will not qualify as rents from real property.
|
Substantially all of our income derives from the Operating
Partnership. The Operating Partnerships income derives
largely from rent attributable to our properties (which
properties are referred to in this section as the
Properties). The Operating Partnership also derives
income from Ramco-Gershenson, Inc. to the extent that
Ramco-Gershenson, Inc. pays dividends on shares owned by the
Operating Partnership. The Operating Partnership does not, and
is not expected to, charge rent that is based in whole or in
part on the income or profits of any person (but does charge
rent based on a fixed percentage or percentages of receipts or
sales). The Operating Partnership does not, and is not
anticipated to, derive rent attributable to personal property
leased in connection with real property that exceeds 15% of the
total rent.
In addition, we do not believe that we derive (through the
Operating Partnership) rent from a Related Party Tenant.
However, the determination of whether we own 10% or more (as
measured by either voting power or value) of any tenant is made
after the application of complex attribution rules under which
we will be treated as owning interests in tenants that are owned
by our Ten Percent Shareholders. In identifying our
Ten Percent Shareholders, each individual or entity will be
treated as owning shares held by related individuals and
entities. Accordingly, we cannot be absolutely certain whether
all Related Party Tenants have been or will be identified.
Although rent derived from a Related Party Tenant will not
qualify as rents from real property and, therefore, will not be
qualifying income under the 75% or 95% gross income test, we
believe that the aggregate amount of any such rental income
(together with any other nonqualifying income) in any taxable
year will not cause us to exceed the limits on nonqualifying
income under such gross income tests.
The Operating Partnership provides certain services with respect
to the Properties (and expects to provide such services with
respect to any newly acquired properties) through
Ramco-Gershenson, Inc. Because Ramco-
31
Gershenson, Inc. is a TRS, the provision of such services will
not cause the amounts received by us (through our ownership
interest in the Operating Partnership) with respect to the
Properties to fail to qualify as rents from real property for
purposes of the 75% and 95% gross income tests.
We may (through one or more pass-through subsidiaries)
indirectly receive distributions from TRSs or other corporations
that are neither REITs nor qualified REIT subsidiaries. These
distributions will be classified as dividend income to the
extent of the earnings and profits of the distributing
corporation. Such distributions will generally constitute
qualifying income for purposes of the 95% gross income test, but
not for purposes of the 75% gross income test.
In sum, our investment in real properties through the Operating
Partnership and the provision of services with respect to those
properties through Ramco-Gershenson, Inc., gives and will give
rise mostly to rental income qualifying under the 75% and 95%
gross income tests. Gains on sales of such properties, or of our
interest in such properties or in the Operating Partnership,
will generally qualify under the 75% and 95% gross income tests.
We anticipate that income on our other investments will not
result in our failing the 75% or 95% gross income test for any
year.
If we fail to satisfy one or both of the 75% and 95% gross
income tests for any taxable year, we may nevertheless qualify
as a REIT for such year if we are entitled to relief under
certain provisions of the Code. Commencing with our taxable year
beginning January 1, 2005, we may avail ourselves of the
relief provisions if: (1) following our identification of
the failure to meet the 75% or 95% gross income test for any
taxable year, we file a schedule with the IRS setting forth each
item of our gross income for purposes of the 75% or 95% gross
income test for such taxable year in accordance with Treasury
Regulations to be issued; and (2) our failure to meet the
test was due to reasonable cause and not due to willful neglect.
It is not possible, however, to state whether in all
circumstances we would be entitled to the benefit of these
relief provisions. As discussed above in Taxation
of REITs in General, even if these relief provisions
apply, a tax would be imposed with respect to the excess
nonqualifying gross income.
Asset
Tests
At the close of each calendar quarter of our taxable year, we
must also satisfy the following four tests relating to the
nature of our assets. For purposes of each of these tests, our
assets are deemed to include the assets of any disregarded
subsidiary and our share of the assets of any subsidiary
partnership, such as the Operating Partnership.
|
|
|
|
|
At least 75% of the value of our total assets must be
represented by some combination of real estate
assets, cash, cash items, U.S. government securities,
and, under some circumstances, stock or debt instruments
purchased with new capital. For this purpose, real estate
assets include interests in real property, such as land,
buildings, leasehold interests in real property, stock of
corporations that qualify as REITs, and some kinds of
mortgage-backed securities and mortgage loans.
|
|
|
|
The aggregate value of all securities of TRSs we hold may not
exceed 20% of the value of our total assets (or 25% of the value
of our total assets for our taxable years beginning on or after
July 31, 2008).
|
|
|
|
The value of any one issuers securities owned by us may
not exceed 5% of the value of our assets. This asset test does
not apply to securities of TRSs or to any security that
qualifies as a real estate asset.
|
|
|
|
We may not own more than 10% of any one issuers
outstanding securities, as measured by either voting power or
value. This asset test does not apply to securities of TRSs or
to any security that qualifies as a real estate
asset. In addition, solely for purposes of the 10% value
test, certain types of securities, including certain
straight debt securities, are disregarded.
|
No securities issued by a corporation or partnership will
qualify as straight debt if we own (or a TRS in
which we own a greater than 50% interest, as measured by vote or
value owns) other securities of such issuer that represent more
than 1% of the total value of all securities of such issuer.
Debt instruments issued by a partnership that do not qualify as
straight debt are (1) not subject to the 10%
value test to the extent of our interest as a partner in that
partnership and (2) completely excluded from the 10% value
test if at least 75% of the partnerships gross income
(excluding income from prohibited transactions)
consists of income qualifying under the 75% gross income test.
In addition, the 10% value test does not apply to
32
(1) any loan made to an individual or an estate,
(2) certain rental agreements in which one or more payments
are to be made in subsequent years (other than agreements
between us and certain persons related to us), (3) any
obligation to pay rents from real property, (4) securities
issued by governmental entities that are not dependent in whole
or in part on the profits of (or payments made by) a
non-governmental entity, and (5) any security issued by
another REIT.
Commencing with our taxable year which began January 1,
2005, we are deemed to own, for purposes of the 10% value test,
the securities held by a partnership based on our proportionate
interest in any securities issued by the partnership (excluding
straight debt and the securities described in the
last sentence of the preceding paragraph). Thus, our
proportionate share is not based solely on our capital interest
in the partnership but also includes our interest in certain
debt securities issued by the partnership.
After meeting the asset tests at the close of any quarter, we
will not lose our status as a REIT for failure to satisfy the
asset tests at the end of a later quarter solely by reason of
changes in asset values. If the failure to satisfy the asset
tests results from an acquisition of securities or other
property during a quarter, the failure can be cured by a
disposition of sufficient nonqualifying assets within
30 days after the close of that quarter. We believe that we
maintain adequate records with respect to the nature and value
of our assets to enable us to comply with the asset tests and to
enable us to take such action within 30 days after the
close of any quarter as may be required to cure any
noncompliance. There can be no assurance, however, that we will
always successfully take such action.
Commencing with our taxable year which began January 1,
2005, certain relief provisions may be available to us if we
discover a failure to satisfy the asset tests described above
after the
30-day cure
period. Under these provisions, we will be deemed to have met
the 5% and 10% asset tests if the value of our nonqualifying
assets (1) does not exceed the lesser of (a) 1% of the
total value of our assets at the end of the applicable quarter
or (b) $10,000,000 and (2) we dispose of the
nonqualifying assets or otherwise satisfy such tests within
(a) six months after the last day of the quarter in which
the failure to satisfy the asset tests is discovered or
(b) the period of time prescribed by Treasury Regulations
to be issued. For violations of any asset tests due to
reasonable cause and not due to willful neglect and that are, in
the case of the 5% and 10% asset tests, in excess of the de
minimis exception described in the preceding sentence, we may
avoid disqualification as a REIT after the
30-day cure
period by taking steps including (1) the disposition of
sufficient nonqualifying assets or the taking of other actions
that allow us to meet the asset tests within (a) six months
after the last day of the quarter in which the failure to
satisfy the asset tests is discovered or (b) the period of
time prescribed by Treasury Regulations to be issued,
(2) paying a tax equal to the greater of (a) $50,000
or (b) the highest corporate tax rate multiplied by the net
income generated by the nonqualifying assets, and
(3) disclosing certain information to the IRS. Although we
believe that we have satisfied the asset tests described above
and plan to take steps to ensure that we satisfy such tests for
any calendar quarter with respect to which re-testing is to
occur, there can be no assurance that we will always be
successful or that a reduction in our overall interest in an
issuer (including a TRS) will not be required. If we fail to
cure any noncompliance with the asset tests in a timely manner
and the relief provisions described above are not available, we
would cease to qualify as a REIT. See Failure to
Qualify below.
We believe that our holdings of securities and other assets have
complied and will continue to comply with the foregoing REIT
asset requirements, and we intend to monitor compliance on an
ongoing basis. No independent appraisals have been obtained,
however, to support our conclusions as to the value of our total
assets, or the value of any particular security or securities.
Moreover, values of some assets may not be susceptible to a
precise determination, and values are subject to change in the
future. Accordingly, there can be no assurance that the IRS will
not contend that we fail to meet the REIT asset requirements by
reason of our interests in our subsidiaries or in the securities
of other issuers or for some other reason.
Annual
Distribution Requirement
To qualify as a REIT, we are required to distribute dividends
(other than capital gain dividends) to our shareholders each
year in an amount at least equal to: (1) the sum of
(a) 90% of our REIT taxable income (computed
without regard to the dividends paid deduction, our net capital
gain and net income from foreclosure property, and with certain
other adjustments) and (b) 90% of the excess of our net
income, if any, from foreclosure property (described
below) over the tax imposed on that income; minus (2) the
sum of certain items of non-cash income.
33
These distributions must be paid in the taxable year to which
they relate, or in the following taxable year if the
distributions are declared before we timely file our tax return
for the taxable year to which they relate, the distributions are
paid on or before the first regular dividend payment after such
declaration, and we make an election to treat the distributions
as relating to the prior taxable year. In order for
distributions to be counted for this purpose, and to give rise
to a tax deduction by us, they must not be preferential
dividends. A dividend is not a preferential dividend if it
is pro rata among all outstanding shares within a particular
class, and is in accordance with the preferences among different
classes of shares as set forth in our organizational documents.
In addition, any dividend we declare in October, November, or
December of any year and payable to a shareholder of record on a
specified date in any such month will be treated as both paid by
us and received by the shareholder on December 31 of such year,
provided that we actually pay the dividend before the end of
January of the following calendar year.
To the extent that we distribute at least 90%, but less than
100%, of our REIT taxable income (computed without
regard to the dividends paid deduction and with certain
adjustments), we will be subject to tax at ordinary corporate
rates on the retained portion. We may elect to retain, rather
than distribute, our net long-term capital gains and pay tax on
such gains. In this case, we could elect to have our
shareholders include their proportionate share of such
undistributed long-term capital gains in income, and to receive
a corresponding credit for their share of the tax we paid. Our
shareholders would then increase the adjusted basis of their
shares by the difference between the designated amounts included
in their long-term capital gains and the tax deemed paid with
respect to their shares.
Net operating losses that we are allowed to carry forward from
prior tax years may reduce the amount of distributions that we
must make in order to comply with the REIT distribution
requirements. Such losses, however, will generally not affect
the character, in the hands of the shareholders, of any
distributions that are actually made by us, which are generally
taxable to the shareholders as dividends to the extent that we
have current or accumulated earnings and profits. See
Federal Income Taxation of Shareholders
Federal Income Taxation of Taxable Domestic
Shareholders Distributions below.
If we fail to distribute during each calendar year at least the
sum of: (1) 85% of our REIT ordinary income
(i.e. REIT taxable income excluding capital gain and
without regard to the dividends paid deduction) for that year;
(2) 95% of our REIT capital gain net income for that year;
and (3) any undistributed taxable income from prior
periods, we would be subject to a 4% excise tax on the excess of
such sum over the aggregate of amounts actually distributed and
retained amounts on which income tax is paid at the corporate
level. We believe that we have made, and intend to continue to
make, distributions in such a manner so as not to be subject to
the 4% excise tax.
We intend to make timely distributions sufficient to satisfy the
annual distribution requirement. In this regard, the partnership
agreement of the Operating Partnership provides that we, as
general partner, must use our best efforts to cause the
Operating Partnership to distribute to its partners amounts
sufficient to permit us to meet this distribution requirement.
It is possible that, from time to time, we may not have
sufficient cash or other liquid assets to meet the 90%
distribution requirement, as a result of timing differences
between the actual receipt of cash (including distributions from
the Operating Partnership) and actual payment of expenses on the
one hand, and the inclusion of such income and deduction of such
expenses in computing our REIT taxable income on the
other hand. To avoid any failure to comply with the 90%
distribution requirement, we will closely monitor the
relationship between our REIT taxable income and
cash flow, and if necessary, will borrow funds (or cause the
Operating Partnership or other affiliates to borrow funds) in
order to satisfy the distribution requirement.
Under certain circumstances, we may be able to cure a failure to
meet the distribution requirement for a year by paying
deficiency dividends to shareholders in a later
year, which may be included in our deduction for dividends paid
for the earlier year. Thus, we may be able to avoid both losing
our REIT status and being taxed on amounts distributed as
deficiency dividends. We will be required to pay interest,
however, based upon the amount of any deduction taken for
deficiency dividends.
Failure
to Qualify
Commencing with our taxable year which began January 1,
2005, specified cure provisions are available to us in the event
that we violate a provision of the Code that would otherwise
result in our failure to qualify as a REIT. Except with respect
to violations of the REIT income tests and asset tests (for
which the cure provisions are described above), and provided the
violation is due to reasonable cause and not due to willful
neglect, these cure
34
provisions impose a $50,000 penalty for each violation in lieu
of a loss of REIT status. If we fail to qualify for taxation as
a REIT in any taxable year, and the relief provisions do not
apply, we will be subject to tax (including any applicable
alternative minimum tax) on our taxable income at regular
corporate rates. Distributions to shareholders in any year in
which we fail to qualify will not be deductible by us, nor will
they be required to be made. In such event, to the extent of
current and accumulated earnings and profits, all distributions
to shareholders will be taxable as dividends and, subject to
certain limitations in the Code, corporate distributees may be
eligible for the dividends received deduction. Unless entitled
to relief under specific statutory provisions, we will also be
disqualified from taxation as a REIT for the four taxable years
following the year of termination of our REIT status. It is not
possible to state whether in all circumstances we would be
entitled to this statutory relief.
Prohibited
Transactions
Net income derived from a prohibited transaction is
subject to a 100% excise tax. The term prohibited
transaction includes a sale or other disposition of
property (other than foreclosure property) that is held
primarily for sale to customers in the ordinary course of a
trade or business. The Operating Partnership owns interests in
real property that is situated on the periphery of certain of
the Properties. We and the Operating Partnership believe that
this peripheral property is not held primarily for sale to
customers and that the sale of such peripheral property will not
be in the ordinary course of the Operating Partnerships
business. We intend to conduct our operations so that no asset
owned by us or our pass-through subsidiaries will be held
primarily for sale to customers, and that a sale of any such
asset will not be in the ordinary course of our business.
Whether property is held primarily for sale to customers in the
ordinary course of our business depends, however, on the facts
and circumstances as they exist from time to time, including
those relating to a particular property. As a result, no
assurance can be given that the IRS will not recharacterize
property we own as property held primarily for sale to customers
in the ordinary course of our business, or that we can comply
with certain safe-harbor provisions of the Code that would
prevent such treatment. In the event we determine that a
property, the ultimate sale of which is expected to result in
taxable gain, will be regarded as held primarily for sale to
customers in the ordinary course of trade or business, we intend
to cause such property to be acquired by or transferred to a TRS
so that gain from such sale will be subject to regular corporate
income tax as discussed above under Effect of
Subsidiary Entities Taxable Subsidiaries.
Foreclosure
Property
Foreclosure property is real property and any personal property
incident to such real property (1) that is acquired by a
REIT as the result of the REITs having bid in the property
at foreclosure, or having otherwise reduced the property to
ownership or possession by agreement or process of law, after
there was a default (or default was imminent) on a lease of the
property or on a mortgage loan held by the REIT and secured by
the property, (2) the loan or lease related to which was
acquired by the REIT at a time when default was not imminent or
anticipated, and (3) that such REIT makes a proper election
to treat as foreclosure property. REITs are subject to tax at
the maximum corporate rate (currently 35%) on any net income
from foreclosure property, including any gain from the
disposition of the foreclosure property, other than income that
would otherwise be qualifying income for purposes of the 75%
gross income test. Any gain from the sale of property for which
a foreclosure property election has been made will not be
subject to the 100% excise tax on gains from prohibited
transactions described above, even if the property would
otherwise constitute dealer property (i.e., property held
primarily for sale to customers in the ordinary course of
business) in the hands of the selling REIT.
Redetermined
Rents, Redetermined Deductions, and Excess
Interest
Any redetermined rents, redetermined deductions, or excess
interest we generate will be subject to a 100% penalty tax. In
general, redetermined rents are rents from real property that
are overstated as a result of services furnished by a TRS to any
of our tenants, and redetermined deductions and excess interest
represent amounts that are deducted by a TRS for amounts paid to
us that are in excess of the amounts that would have been
charged based on arms length negotiations. Under
safe harbor provisions of the Code, rents we receive
from tenants of a
35
property will not constitute redetermined rents (by reason of
the performance of services by any TRS to such tenants) if:
|
|
|
|
|
So much of such amounts as constitutes impermissible tenant
service income does not exceed 1% of all amounts received or
accrued during the year with respect to the property;
|
|
|
|
The TRS renders a significant amount of similar services to
unrelated parties and the charges for such services are
substantially comparable;
|
|
|
|
Rents paid by tenants leasing at least 25% of the net leasable
space in the property who are not receiving services from the
TRS are substantially comparable to the rents paid by tenants
leasing comparable space who are receiving such services from
the TRS and the charge for the services is separately
stated; or
|
|
|
|
The TRSs gross income from the service is not less than
150% of the subsidiarys direct cost in furnishing the
service.
|
Tax
Aspects of Investment in the Operating Partnership
General
We hold a direct interest in the Operating Partnership and,
through the Operating Partnership, hold an indirect interest in
certain other partnerships and in limited liability companies
classified as partnerships for federal income tax purposes
(which, together, are referred to in this section as the
Partnerships). In general, partnerships are
pass-through entities which are not subject to
federal income tax. Rather, partners are allocated their
proportionate shares of the items of income, gain, loss,
deduction, and credit of a partnership, and are potentially
subject to tax thereon, without regard to whether the partners
receive a distribution from the partnership. We will include our
proportionate share of the foregoing partnership items in
computing our REIT taxable income. See
Taxation of the Company Income Tests
above. Any resultant increase in our REIT taxable
income will increase the amount we must distribute to
satisfy the REIT distribution requirement (see Taxation of
the Company Annual Distribution Requirement
above) but will not be subject to federal income tax in our
hands provided that we distribute such income to our
shareholders.
Entity
Classification
Our interests in the Partnerships involve special tax
considerations, including the possibility of a challenge by the
IRS to the status of the Operating Partnership or any other
Partnership as a partnership (as opposed to an association
taxable as a corporation) for federal income tax purposes. In
general, under certain Treasury Regulations which became
effective January 1, 1997 (referred to in this section as
the
Check-the-Box
Regulations), an unincorporated entity with at least two
members may elect to be classified either as a corporation or as
a partnership for federal income tax purposes. If such an entity
does not make an election, it generally will be treated as a
partnership for federal income tax purposes. For such an entity
that was in existence prior to January 1, 1997, such as the
Operating Partnership and some of the other Partnerships, the
entity will have the same classification (unless it elects
otherwise) that it claimed under the rules in effect prior to
the
Check-the-Box
Regulations. In addition, the federal income tax classification
of an entity that was in existence prior to January 1, 1997
will be respected for all periods prior to January 1, 1997
if (1) the entity had a reasonable basis for its claimed
classification, (2) the entity and all members of the
entity recognized the federal income tax consequences of any
changes in the entitys classification within the
60 months prior to January 1, 1997, and
(3) neither the entity nor any member of the entity was
notified in writing by a taxing authority on or before
May 8, 1996 that the classification of the entity was under
examination. We believe that the Operating Partnership and each
of the other Partnerships that existed prior to January 1,
1997 reasonably claimed partnership classification under the
Treasury Regulations relating to entity classification in effect
prior to January 1, 1997, and such classification should be
respected for federal income tax purposes. Each of them intends
to continue to be classified as a partnership for federal income
tax purposes, and none of them intends to elect to be treated as
an association taxable as a corporation under the
Check-the-Box
Regulations.
If the Operating Partnership or any of the other Partnerships
were to be treated as an association, it would be taxable as a
corporation and therefore subject to an entity-level tax on its
income. In such a situation, the character of
36
our assets and items of gross income would change, which would
likely preclude us from satisfying the asset tests and possibly
the income tests (see Taxation of the Company
Income Tests and Taxation of the Company
Asset Tests above), and in turn would prevent us from
qualifying as a REIT, unless we were eligible for relief under
the relief provisions described above. See Taxation of the
Company Failure to Qualify above for
discussion of the effect of our failure to satisfy the REIT
tests for a taxable year. In addition, any change in the status
of any of the Partnerships for federal income tax purposes might
be treated as a taxable event, in which case we could have
taxable income that is subject to the REIT distribution
requirement without receiving any cash.
Tax
Allocations with Respect to the Properties
Pursuant to Section 704(c) of the Code and applicable
Treasury Regulations, income, gain, loss, and deduction
attributable to appreciated or depreciated property that is
contributed to a partnership in exchange for an interest in the
partnership (such as the Properties contributed to the Operating
Partnership by the limited partners of the Operating
Partnership) must be allocated in such a manner that the
contributing partner is charged with, or benefits from, the
unrealized gain or unrealized loss, respectively, associated
with the property at the time of the contribution. The amount of
such unrealized gain or unrealized loss is equal to the
difference between the fair market value of the contributed
property at the time of contribution and the adjusted tax basis
of such property at the time of contribution (referred to in
this section as the Book-Tax Difference). Such
allocations are solely for federal income tax purposes and do
not affect the book capital accounts or other economic or legal
arrangements among the partners. The Operating Partnership was
formed with contributions of appreciated property (including the
Properties contributed by the limited partners of the Operating
Partnership). Consequently, the Operating Partnerships
partnership agreement requires allocations to be made in a
manner consistent with Section 704(c) of the Code and the
applicable Treasury Regulations. If a partner contributes cash
to a partnership at a time when the partnership holds
appreciated (or depreciated) property, the applicable Treasury
Regulations provide for a similar allocation of these items to
the other (that is, the pre-existing) partners. These rules may
apply to any contribution by us to the Operating Partnership or
the other Partnerships of cash proceeds received from offerings
of our securities, including any offering of common shares,
preferred shares, or warrants contemplated by this prospectus.
In general, the partners that contributed appreciated Properties
to the Partnerships will be allocated less depreciation, and
increased taxable gain on sale, of such Properties. This will
tend to eliminate the Book-Tax Difference. However, the special
allocation rules of Section 704(c) and the applicable
Treasury Regulations do not always rectify the Book-Tax
Difference on an annual basis or with respect to a specific
taxable transaction such as a sale. Under the applicable
Treasury Regulations, special allocations of income and gain and
depreciation deductions must be made on a
property-by-property
basis. Depreciation deductions resulting from the carryover
basis of a contributed property are used to eliminate the
Book-Tax Difference by allocating such deductions to the
non-contributing partners (for example, to us) up to the amount
of their share of book depreciation. Any remaining tax
depreciation for the contributed property would be allocated to
the partners who contributed the property. The Partnerships have
generally elected the traditional method of
rectifying the Book-Tax Difference under the applicable Treasury
Regulations, pursuant to which if depreciation deductions are
less than the non-contributing partners share of book
depreciation, then the non-contributing partners lose the
benefit of the tax deductions to the extent of the difference.
When the property is sold, the resulting tax gain is used to the
extent possible to eliminate any remaining Book-Tax Difference.
Under the traditional method, it is possible that the carryover
basis of the contributed assets in the hands of a Partnership
may cause us to be allocated less depreciation and other
deductions than would otherwise be allocated to us. This may
cause us to recognize taxable income in excess of cash proceeds,
which might adversely affect our ability to comply with the REIT
distribution requirement. See Taxation of the Company
Annual Distribution Requirement above.
With respect to property purchased by (and not contributed to)
the Operating Partnership, such property will initially have a
tax basis equal to its fair market value, and
Section 704(c) of the Code and the applicable Treasury
Regulations will not apply unless such property is subsequently
revalued for capital accounting purposes under applicable
Treasury Regulations.
37
Sale
of the Properties
The Partnerships intend to hold the Properties for investment
with a view to long-term appreciation, to engage in the business
of acquiring, developing, owning, and operating the Properties
and other shopping centers and to make such occasional sales of
the Properties as are consistent with our investment objectives.
Based primarily on such investment objectives, we believe that
the Properties should not be considered dealer property (i.e.,
property held for sale to customers in the ordinary course of
business). Whether property is dealer property is a question of
fact that depends on the particular facts and circumstances with
respect to the particular transaction. No assurance can be given
that any property sold by us or any of our Partnerships will not
be dealer property, or that we can comply with certain
safe-harbor provisions of the Code that would prevent such
treatment. Our share of any gain realized by the Operating
Partnership or any other Partnership on the sale of any dealer
property generally will be treated as income from a prohibited
transaction that is subject to a 100% penalty tax. See
Taxation of the Company Prohibited
Transactions above. In the event we determine that a
property, the ultimate sale of which is expected to result in
taxable gain, will be held primarily for sale to customers in
the ordinary course of a trade or business, we intend to cause
such property to be acquired by or transferred to a TRS so that
gain from such sale will be subject to regular corporate income
tax as discussed above under Effect of
Subsidiary Entities Taxable Subsidiaries.
Taxation
of Ramco-Gershenson, Inc.
A portion of the amounts to be used to fund distributions to our
shareholders is expected to come from distributions made by
Ramco-Gershenson, Inc., our principal TRS, to the Operating
Partnership. In general, Ramco-Gershenson, Inc. pays federal,
state and local income taxes on its taxable income at regular
corporate rates. Any federal, state or local income taxes that
Ramco-Gershenson, Inc., is required to pay will reduce cash flow
otherwise available to us to make distributions to holders of
our securities.
Federal
Income Taxation of Shareholders
Federal
Income Taxation of Taxable Domestic Shareholders
Distributions. As a result of our status as a
REIT, distributions made to our taxable domestic shareholders
out of current or accumulated earnings and profits, and not
designated as capital gain dividends, will generally be taken
into account by them as ordinary income and will not be eligible
for the dividends received deduction for corporations. The
maximum federal income tax rate applicable to corporations is
35% and that applicable to ordinary income of individuals is
currently 35% through 2010.
The maximum individual rate of tax on dividends and long-term
capital gains is generally 15% through 2010. Because we are not
generally subject to federal income tax on the portion of our
REIT taxable income or capital gains distributed to our
shareholders, our dividends are generally not eligible for this
15% tax rate on dividends. As a result, our ordinary REIT
dividends will continue to be taxed at the higher tax rates
applicable to ordinary income. However, the 15% tax rate will
generally apply to:
|
|
|
|
|
our dividends attributable to dividends received by us from
non-REIT corporations, such as TRSs;
|
|
|
|
our dividends attributable to our REIT taxable income in the
prior taxable year on which we were subject to corporate level
income tax (net of the amount of such tax); and
|
|
|
|
our dividends attributable to income in the prior taxable year
from the sale of appreciated (i.e., Built-in Gain) property
acquired by us from C corporations in carryover
basis transactions or held by us on the first day of a taxable
year for which we first re-qualify as a REIT after being subject
to tax as a C corporation for more than two years
(net of the amount of corporate tax on such income).
|
Distributions that are designated as capital gain dividends will
be taxed to shareholders as long-term capital gains, to the
extent that they do not exceed our actual net capital gain for
the taxable year, without regard to the period for which the
shareholder has held its shares. A similar treatment will apply
to long-term capital gains we retain, to the extent that we
elect the application of provisions of the Code that treat
shareholders of a REIT as having received, for federal income
tax purposes, undistributed capital gains of the REIT, while
passing through to
38
shareholders a corresponding credit for taxes paid by the REIT
on such retained capital gains. Corporate shareholders may be
required to treat up to 20% of some capital gain dividends as
ordinary income. Long-term capital gains are generally taxable
at maximum federal rates of 15% through 2010 in the case of
shareholders who are individuals, and 35% for corporations.
Capital gains attributable to the sale of depreciable real
property held for more than 12 months are subject to a 25%
maximum federal income tax rate for taxpayers who are
individuals, to the extent of previously claimed depreciation
deductions. Pursuant to Treasury Regulations to be promulgated
by the U.S. Treasury Department, a portion of our
distributions may be subject to the alternative minimum tax to
the extent of our items of tax preference, if any, allocated to
the shareholders.
Distributions in excess of current and accumulated earnings and
profits will not be taxable to a shareholder to the extent that
they do not exceed the adjusted basis of the shareholders
common or preferred shares in respect of which the distributions
were made, but rather, will reduce the adjusted basis of those
common or preferred shares. To the extent that such
distributions exceed the adjusted basis of a shareholders
shares, they will be included in income as long-term capital
gain, or short-term capital gain if the shares have been held
for one year or less. In addition, any dividend we declare in
October, November or December of any year and payable to a
shareholder of record on a specified date in any such month will
be treated both as paid by us and received by the shareholder on
December 31 of such year, provided that we actually pay the
dividend before the end of January of the following calendar
year.
In determining the extent to which a distribution with respect
to preferred shares constitutes a dividend for tax purposes, our
earnings and profits will be allocated first to distributions
with respect to our preferred shares and then to our common
shares. In addition, the IRS has taken the position in published
guidance that if a REIT has two classes of shares, the amount of
any particular type of income (including net capital gain)
allocated to each class in any year cannot exceed such
class proportionate share of such income based on the
total dividends paid to each class for such year. Consequently,
if both common shares and preferred shares are outstanding,
particular types of income will be allocated in accordance with
the classes proportionate shares of such income. Thus, net
capital gain will be allocated between holders of common shares
and holders of preferred shares, if any, in proportion to the
total dividends paid to each class during the taxable year, or
otherwise as required by applicable law.
Net operating losses and capital losses that we are allowed to
carry forward from prior tax years may reduce the amount of
distributions that we must make in order to comply with the REIT
distribution requirements. See Taxation of the
Company Annual Distribution Requirement above.
Such losses, however, are not passed through to our shareholders
and do not offset income of shareholders from other sources, nor
do they affect the character of any distributions that we
actually make, which are generally taxable to our shareholders
as dividends to the extent that we have current or accumulated
earnings and profits.
We will be treated as having sufficient earnings and profits for
a year to treat as a dividend any distribution we make for such
year up to the amount required to be distributed in order to
avoid imposition of the 4% federal excise tax discussed in
Taxation of the Company Taxation of REITs in
General above. As a result, taxable domestic shareholders
may be required to treat certain distributions as taxable
dividends even though we may have no overall, accumulated
earnings and profits. Moreover, any deficiency
dividend, which is a dividend to our current shareholders
that is permitted to relate back to a year for which the IRS
determines a deficiency in order to satisfy the distribution
requirement for that year, will be treated as a dividend (an
ordinary dividend or a capital gain dividend, as the case may
be) regardless of our earnings and profits for the year in which
we pay the deficiency dividend.
Disposition of Common and Preferred Shares. In
general, capital gains recognized by individuals and other
non-corporate shareholders upon the sale or disposition of
common or preferred shares will be subject to a maximum federal
income tax rate of 15% through 2010 (applicable to long-term
capital gains) if the shares are held for more than
12 months, and will be taxed at rates of up to 35% through
2010 (applicable to short-term capital gains) if the shares are
held for 12 months or less. Gains recognized by
shareholders that are corporations are subject to federal income
tax at a maximum rate of 35%, whether or not classified as
long-term capital gains. Capital losses recognized by a
shareholder upon the disposition of shares held for more than
one year at the time of disposition will be considered long-term
capital losses, which are generally available first to offset
long-term capital gain (which is taxed at capital gain rates)
and then short-term capital gain (which is taxed at ordinary
income rates) of the
39
shareholder, but not ordinary income of the shareholder (except
in the case of individuals, who may offset up to $3,000 of
ordinary income each year). Capital losses recognized by a
shareholder upon the disposition of shares held for not more
than one year are considered short-term capital losses and are
generally available first to offset short-term capital gain and
then long-term capital gain of the shareholder, but not ordinary
income of the shareholder (except in the case of individuals,
who may offset up to $3,000 of ordinary income each year). In
addition, any loss upon a sale or exchange of shares by a
shareholder who has held the shares for six months or less,
after applying certain holding period rules, will be treated as
long-term capital loss to the extent of distributions received
from us that are required to be treated by the shareholder as
long-term capital gain.
If a holder of common or preferred shares recognizes a loss upon
a disposition of those shares in an amount that exceeds a
prescribed threshold, it is possible that the provisions of
certain Treasury Regulations involving reportable
transactions could apply to require a disclosure filing
with the IRS concerning the loss-generating transaction. While
these regulations are directed toward tax shelters,
they are quite broad, and apply to transactions that would not
typically be considered tax shelters. The Code imposes
significant penalties for failure to comply with these
requirements. You should consult your tax advisors concerning
any possible disclosure obligation with respect to the receipt
or disposition of common or preferred shares, or transactions
that might be undertaken directly or indirectly by us. Moreover,
you should be aware that we and other participants in the
transactions involving us (including their advisors) might be
subject to disclosure or other requirements pursuant to these
regulations.
A redemption of preferred shares will be treated under
Section 302 of the Code as a dividend subject to tax as
such (to the extent of our current or accumulated earnings and
profits), unless the redemption satisfies certain tests set
forth in Section 302(b) of the Code enabling the redemption
to be treated as a sale or exchange of the preferred shares. The
redemption will satisfy such test if it (1) is
substantially disproportionate with respect to the
holder (which will not be the case if only preferred shares are
redeemed, since preferred shares generally do not have voting
rights), (2) results in a complete termination
of the shareholders stock interest in us, or (3) is
not essentially equivalent to a dividend with
respect to the shareholder, all within the meaning of
Section 302(b) of the Code. In determining whether any of
these tests have been met, shares considered to be owned by the
shareholder by reason of certain constructive ownership rules
set forth in the Code, as well as shares actually owned, must
generally be taken into account. Because the determination as to
whether any of the alternative tests of Section 302(b) of
the Code is satisfied with respect to any particular holder of
preferred shares will depend upon the facts and circumstances as
of the time the determination is made, prospective investors are
advised to consult their own tax advisors to determine such tax
treatment.
If a redemption of preferred shares is not treated as a
distribution taxable as a dividend to a particular shareholder,
it will be treated, as to that shareholder, as a taxable sale or
exchange. As a result, such shareholder will recognize gain or
loss for federal income tax purposes in an amount equal to the
difference between (1) the amount of cash and the fair
market value of any property received (less any portion thereof
attributable to accumulated but unpaid dividends that we are
legally obligated to pay at the time of the redemption, which
will be taxable as a dividend to the extent of our current and
accumulated earnings and profits), and (2) the
shareholders adjusted basis in the preferred shares for
tax purposes. Such gain or loss will be capital gain or loss and
will be long-term capital gain or loss if, at the time of the
redemption, the shares were held for more than 12 months.
If a redemption of preferred shares is treated as a distribution
that is taxable as a dividend, the amount of the distribution
would be measured by the amount of cash and the fair market
value of any property received by the shareholder. The
shareholders adjusted tax basis in the redeemed preferred
shares will be transferred to the shareholders remaining
shares of our capital stock, if any. If, however, the
shareholder has no remaining shares of our capital stock, such
basis may, under certain circumstances, be transferred to a
related person or it may be lost entirely.
Conversion of Convertible Preferred Shares into Common
Shares. No gain or loss will be recognized to a
shareholder upon conversion of any convertible preferred shares
solely into common shares except to the extent of cash paid in
lieu of fractional common shares. Except to the extent of any
cash so paid, the adjusted tax basis for the common shares
received upon the conversion will be equal to the adjusted tax
basis of any converted preferred shares, and the holding period
of the common shares will include the holding period of any
converted preferred
40
shares. A holder of any convertible preferred shares may
recognize gain or dividend income to the extent there are
dividends in arrears on such shares at the time of conversion
into common shares.
Adjustment of Conversion
Price. Section 305(c) of the Code and the
Treasury Regulations thereunder treat as a dividend certain
constructive distributions of shares with respect to preferred
shares. The operation of the conversion price adjustment
provisions of any convertible preferred shares, or the failure
to adjust fully the conversion price for any convertible
preferred shares to reflect a distribution of shares, share
warrants or share rights with respect to the common shares, or a
reverse share split, may result in the deemed receipt of a
dividend by the holders of any convertible preferred shares or
the common shares if the effect is to increase such
holders proportionate interests in us. Adjustments to
reflect nontaxable share splits or distributions of shares,
share warrants or share rights generally will not be treated as
a constructive dividend.
Redemption Premium on Preferred
Shares. If the redemption price of preferred
shares that are subject to redemption exceeds their issue price
(such excess referred to in this section as a redemption
premium), in certain situations the entire amount of the
redemption premium will be treated as being distributed to the
holder of such shares, on an economic accrual basis, over the
period from issuance of such shares until the date the shares
are first redeemable (such deemed distribution referred to in
this section as a constructive distribution). A
constructive distribution may occur only if the preferred shares
are subject to a redemption premium, and only if (1) we are
required to redeem the shares at a specified time, (2) the
holder of the shares has the option to require us to redeem the
shares, or (3) we have the right to redeem the shares, but
only if under applicable regulations, redemption pursuant to
that right is more likely than not to occur. See the applicable
prospectus supplement for further information regarding the
possible tax treatment of redemption premiums with respect to
any such preferred shares offered by such prospective supplement.
Passive Activity Loss and Investment Interest
Limitations. Taxable dividends that we distribute
and gain from the disposition of common or preferred shares will
not be treated as passive activity income and, therefore,
shareholders subject to the limitation on the use of
passive losses will not be able to apply passive
losses against such income. Shareholders may elect to treat
capital gain dividends, capital gains from the disposition of
shares and qualified dividend income as investment income for
purposes of computing the limitation on the deductibility of
investment interest, but in such case the shareholder will be
taxed at ordinary income rates on those amounts. Other
distributions made by us, to the extent they do not constitute a
return of capital, will generally be treated as investment
income for purposes of computing the investment interest
limitation.
Federal
Income Taxation of
Non-U.S.
Shareholders
The following is a summary of certain U.S. federal income
tax consequences of the ownership and disposition of common and
preferred shares applicable to
non-U.S. shareholders.
A
non-U.S. shareholder
is any holder of our shares who is a foreign person.
For the purposes of this summary, a foreign person is any person
other than:
|
|
|
|
|
a citizen or resident of the United States,
|
|
|
|
a corporation (including an entity treated as a corporation for
U.S. federal income tax purposes) created or organized in
or under the laws of the United States, or of any state thereof,
or the District of Columbia,
|
|
|
|
an estate the income of which is includable in gross income for
U.S. federal income tax purposes regardless of its
source, or
|
|
|
|
a trust if (1) a United States court is able to exercise
primary supervision over the administration of such trust and
one or more United States fiduciaries have the authority to
control all substantial decisions of the trust or (2) it
has a valid election in place to be treated as a
U.S. person.
|
The following summary is based on current law and is for general
information only. The summary addresses only selected and not
all aspects of U.S. federal income taxation. Prospective
non-U.S. shareholders
should consult with their own tax advisors to determine the
impact of U.S. federal, state, and local income tax and
estate tax laws with regard to an investment in our shares,
including any reporting requirements.
41
Ordinary Dividends. The portion of dividends
received by
non-U.S. shareholders
payable out of our earnings and profits that are not
attributable to our capital gains and that are not effectively
connected with a U.S. trade or business of the
non-U.S. shareholder
will be subject to U.S. withholding tax at the rate of 30%,
unless reduced by treaty.
In general,
non-U.S. shareholders
will not be considered to be engaged in a U.S. trade or
business solely as a result of their ownership of common or
preferred shares. In cases where the dividend income from a
non-U.S. shareholders
investment in common or preferred shares is, or is treated as,
effectively connected with the
non-U.S. shareholders
conduct of a U.S. trade or business, the
non-U.S. shareholder
generally will be subject to U.S. income tax at graduated
rates, in the same manner as domestic shareholders are taxed
with respect to such dividends, and such income generally must
be reported on a U.S. federal income tax return filed by or
on behalf of the
non-U.S. shareholder.
Such income may also be subject to the 30% branch profits tax in
the case of a
non-U.S. shareholder
that is a corporation.
Non-Dividend Distributions. Unless our common
or preferred shares constitute a U.S. real property
interest (referred to in this section as a USRPI),
distributions by us that are not dividends out of our earnings
and profits will generally not be subject to U.S. federal
income tax. If it cannot be determined at the time at which a
distribution is made whether or not the distribution will exceed
current and accumulated earnings and profits, the entire
distribution will be subject to withholding at the rate
applicable to dividends. However, the
non-U.S. shareholder
may seek a refund from the IRS of any amounts withheld if it is
subsequently determined that the distribution was, in fact, in
excess of our current and accumulated earnings and profits. If
our common or preferred shares constitute a USRPI, as discussed
below under Dispositions of Common or
Preferred Shares, then distributions by us in excess of
the sum of our earnings and profits plus the shareholders
basis in its shares will be taxed under the Foreign Investment
in Real Property Tax Act of 1980 (which is referred to in this
section as FIRPTA) at the rate of tax, including any
applicable capital gains rates, that would apply to a domestic
shareholder of the same type (that is, an individual or a
corporation, as the case may be), and the collection of the tax
will be enforced by a refundable withholding at a rate of 10% of
the amount by which the distribution exceeds the
shareholders share of our earnings and profits.
Capital Gain Dividends. Distributions that are
attributable to gains from dispositions of USRPIs held by us
directly or through pass-through subsidiaries (referred to in
this section as USRPI capital gains) that are paid
with respect to any class of shares which is regularly traded on
an established securities market located in the United States
and that are made to a
non-U.S. shareholder
who does not own more than 5% of the class of shares at any time
during the one-year period ending on the date of distribution
will be treated as a regular distribution by us, and these
distributions will be treated as ordinary dividend
distributions. A distribution of USRPI capital gains made by us
to
non-U.S. shareholders
owning more than 5% of the class of shares in respect of which
the distribution is made will be considered effectively
connected with a U.S. trade or business of the
non-U.S. shareholder
and will be subject to U.S. income tax at the rates
applicable to U.S. individuals or corporations, as the case
may be (subject to alternative minimum tax and a special
alternative minimum tax in the case of nonresident alien
individuals), without regard to whether the distribution is
designated as a capital gain dividend. In addition, we will be
required to withhold tax equal to 35% of the amount of dividends
to the extent the dividends constitute USRPI capital gains.
Distributions subject to FIRPTA may also be subject to a 30%
branch profits tax (or lower tax treaty rate, if applicable) in
the hands of a
non-U.S. shareholder
that is a corporation.
Distributions to a
non-U.S. shareholder
that we properly designate as capital gain dividends, other than
those arising from the disposition of a USRPI, generally should
not be subject to U.S. federal income taxation unless:
(1) the investment in our shares is treated as effectively
connected with the
non-U.S. shareholders
U.S. trade or business, in which case the
non-U.S. shareholder
will be subject to the same treatment as a U.S. shareholder
with respect to such gain, except that a
non-U.S. shareholder
that is a foreign corporation may also be subject to the 30%
branch profits tax (or lower tax treaty rate, if applicable), or
(2) the
non-U.S. shareholder
is a nonresident alien individual who is present in the United
States for 183 days or more during the taxable year and
certain other conditions are satisfied, in which case the
nonresident alien individual will be subject to a 30% tax on the
individuals capital gains (unless a lower tax treaty rate
applies).
Retained Net Capital Gains. Although the law
is not clear on the matter, it appears that amounts designated
by us as retained capital gains in respect of our shares held by
non-U.S. shareholders
generally should be treated in
42
the same manner as our actual distributions of capital gain
dividends. Under this approach, a
non-U.S. shareholder
would be able to claim as a credit against its U.S. federal
income tax liability, its proportionate share of the tax paid by
us on the retained capital gains, and to obtain from the IRS a
refund to the extent its proportionate share of the tax paid by
us exceeds its actual U.S. federal income tax liability.
Dispositions of Common or Preferred
Shares. Unless our common or preferred shares
constitute a USRPI, a sale of such shares by a
non-U.S. shareholder
generally will not be subject to U.S. taxation under
FIRPTA. The shares will not constitute a USRPI if we are a
domestically-controlled REIT. A
domestically-controlled REIT is a REIT less than 50% in value of
the shares of which is held directly or indirectly by
non-U.S. shareholders
at all times during a prescribed testing period. We believe that
we are, and we expect to continue to be, a
domestically-controlled REIT and, therefore, the sale of our
common or preferred shares by
non-U.S. shareholders
should not be subject to taxation under FIRPTA. Because our
shares are publicly traded, however, no assurance can be given
that we are or will be a domestically-controlled REIT.
In the event that we do not constitute a domestically-controlled
REIT, a
non-U.S. shareholders
sale of shares nonetheless will generally not be subject to tax
under FIRPTA as a sale of a USRPI, provided that (1) the
shares are of a class that are regularly traded, as
defined by applicable Treasury Regulations, on an established
securities market, and (2) the selling
non-U.S. shareholder
held 5% or less of such class of shares at all times during a
prescribed testing period.
If gain on the sale of common or preferred shares were subject
to taxation under FIRPTA, the
non-U.S. shareholder
would be subject to the same treatment as a
U.S. shareholder with respect to such gain, subject to
applicable alternative minimum tax and a special alternative
minimum tax in the case of non-resident alien individuals, and
the purchaser of the shares could, unless the shares are of a
class that are regularly traded (as defined by
applicable Treasury Regulations) on an established securities
market, be required to withhold 10% of the purchase price and
remit such amount to the IRS.
Gain from the sale of common or preferred shares that would not
otherwise be subject to FIRPTA will nonetheless be taxable in
the United States to a
non-U.S. shareholder
in two cases: (1) if the
non-U.S. shareholders
investment in the common or preferred shares is effectively
connected with a U.S. trade or business conducted by such
non-U.S. shareholder,
then the
non-U.S. shareholder
will be subject to the same treatment as a U.S. shareholder
with respect to such gain, except that the
non-U.S. shareholder
may also be subject to the 30% branch profits tax (or lower tax
treaty rate, if applicable) if it is a foreign corporation, or
(2) if the
non-U.S. shareholder
is a nonresident alien individual who was present in the United
States for 183 days or more during the taxable year and
certain other conditions are satisfied, the nonresident alien
individual will be subject to tax on the individuals
capital gain at a 30% rate (or lower tax treaty rate, if
applicable).
Federal
Taxation of Tax-Exempt Shareholders
Tax-exempt entities, including qualified employee pension and
profit sharing trusts and individual retirement accounts,
generally are exempt from federal income taxation. However, they
are subject to taxation on their unrelated business taxable
income (which is referred to in this section as
UBTI). While many investments in real estate
generate UBTI, the IRS has ruled that dividend distributions
from a REIT to a tax-exempt entity do not constitute UBTI. Based
on that ruling, and provided that (1) a tax-exempt
shareholder has not held its common or preferred shares as
debt financed property within the meaning of the
Code (that is, property the acquisition of which is financed
through a borrowing by the tax-exempt shareholder), and
(2) the shares are not otherwise used in an unrelated trade
or business, we believe that distributions from us and income
from the sale of our shares should not give rise to UBTI to a
tax-exempt shareholder.
Tax-exempt shareholders that are social clubs, voluntary
employee benefit associations, supplemental unemployment benefit
trusts, and qualified group legal services plans exempt from
federal income taxation under Sections 501(c)(7), (9),
(17) and (20) of the Code, respectively, are subject
to different UBTI rules, which generally will require them to
characterize distributions from us as UBTI.
A pension trust that owns more than 10% of the value of our
shares could be required to treat a percentage of the dividends
from us as UBTI if we are a pension-held REIT. We
will not be a pension-held REIT unless either
43
(1) one pension trust owns more than 25% of the value of
our shares, or (2) a group of pension trusts, each
individually holding more than 10% of the value of our shares,
collectively owns more than 50% of the value of our shares. We
believe that we currently are not a pension-held REIT. Because
our shares are publicly traded, however, no assurance can be
given that we are not (or will not be) a pension-held REIT.
Tax-exempt shareholders are urged to consult their tax advisors
regarding the federal, state, local and foreign tax consequences
of an investment in our common or preferred shares.
Federal
Income Taxation of Warrants
A holder who receives shares upon the exercise of a warrant
should not recognize gain or loss except to the extent of any
cash received for fractional shares. Except to the extent of any
cash so received, such a holder would have a tax basis in the
shares acquired pursuant to a warrant equal to the amount of the
purchase price paid for (or, if the warrant is purchased as part
of an investment unit, allocated to) the warrant
plus the amount paid for the shares pursuant to the warrant. The
holding period for the shares acquired pursuant to a warrant
would begin on the date of exercise. Upon the subsequent sale of
shares acquired pursuant to a warrant or upon a sale of a
warrant, the holder thereof would generally recognize capital
gain or loss in an amount equal to the difference between the
amount realized on the sale and its tax basis in such shares or
warrant, as the case may be. The foregoing assumes that warrants
will not be held as a hedge, straddle or as a similar offsetting
position with respect to our shares and that Section 1092
of the Code will not apply.
Federal
Income Taxation of Holders of Debt Securities
Federal
Income Taxation of Taxable Domestic Holders of Debt
Securities
This section describes the material federal income tax
consequences of owning the debt securities that we may offer. It
applies to taxable domestic holders who purchase debt securities
that are not original issue discount or zero coupon debt
securities and that were acquired in an initial offering at the
offering price. If you purchase these debt securities at a price
other than the offering price, the amortizable bond premium or
market discount rules may also apply to you. You should consult
your own tax advisor regarding this possibility.
The tax consequences of owning any debt securities that are zero
coupon debt securities, original issue discount debt securities,
floating rate debt securities or indexed debt securities that we
offer will be discussed in the applicable prospectus supplement.
A holder will be taxed on interest on debt securities at
ordinary income rates at the time such holder receives the
interest or when it accrues, depending on such holders
method of accounting for federal income tax purposes.
A holders tax basis in the debt security will generally be
its cost. A holder will generally recognize capital gain or loss
on the sale or retirement of a debt security equal to the
difference between the amount realized on the sale or
retirement, excluding any amounts attributable to accrued but
unpaid interest, and the tax basis in the debt security.
Federal
Income Taxation of
Non-U.S.
Holders of Debt Securities
The following is a summary of certain U.S. federal income
tax consequences of the acquisition, ownership and disposition
of our debt securities applicable to
non-U.S. holders.
A
non-U.S. holder
is any holder of our debt securities who is a foreign
person as defined under Federal Income
Taxation of Shareholders Federal Income Taxation of
Non-U.S. Shareholders
above.
Interest paid to a
non-U.S. holder
of debt securities generally will not be subject to
U.S. federal income taxes or withholding taxes if the
interest is not effectively connected with the
non-U.S. holders
conduct of a trade or business within the United States,
provided that the
non-U.S. holder:
|
|
|
|
|
does not actually or constructively own a 10% or greater
interest in us;
|
|
|
|
is not a controlled foreign corporation with respect to which we
are a related person within the meaning of
Section 864(d)(4) of the Code;
|
|
|
|
is not a bank receiving interest described in
Section 881(c)(3)(A) of the Code; and
|
|
|
|
provides the appropriate certification as to its foreign status.
|
44
A
non-U.S. holder
can generally meet this certification requirement by providing a
properly executed IRS
Form W-8BEN
or appropriate substitute form to us, or our paying agent. If a
non-U.S. holder
holds our debt securities through a financial institution or
other agent acting on its behalf, the
non-U.S. holder
may be required to provide appropriate documentation to its
agent. The
non-U.S. holders
agent will then generally be required to provide appropriate
certification to us or our paying agent, either directly or
through other intermediaries. Special certification rules apply
to foreign partnerships, estates and trusts, and in certain
circumstances certifications as to foreign status of partners,
trust owners or beneficiaries may have to be provided to us or
our paying agent.
If a
non-U.S. holder
does not qualify for an exemption under these rules, interest
income from the debt securities may be subject to withholding
tax at the rate of 30% (or lower applicable treaty rate) at the
time it is paid. The payment of interest effectively connected
with the
non-U.S. holders
U.S. trade or business, however, would not be subject to a
30% withholding tax so long as the
non-U.S. holder
provided us or our agent an adequate certification (currently on
IRS
Form W-8ECI),
but such interest would be subject to U.S. federal income
tax on a net basis at the rates applicable to U.S. holders
generally. In addition, if the
non-U.S. holder
is a foreign corporation and the payment of interest is
effectively connected with its U.S. trade or business, the
non-U.S. holder
may also be subject to a 30% (or lower applicable treaty rate)
branch profits tax. To claim the benefit of a tax treaty, the
non-U.S. holder
must provide a properly-executed IRS
Form W-8BEN
before the payment of interest, and it may be required to obtain
a U.S. taxpayer identification number and provide
documentary evidence issued by foreign governmental authorities
to prove residence in the foreign country.
A
non-U.S. holder
of our debt securities will generally not be subject to
U.S. federal income tax or withholding tax on any amount
which constitutes capital gain upon retirement or other
disposition of a debt security, unless any of the following is
true: (1) the
non-U.S. holders
investment in our debt securities is effectively connected with
its conduct of a U.S. trade or business; or (2) the
non-U.S. holder
is a nonresident alien individual holding the debt securities as
a capital asset and is present in the United States for
183 days or more in the taxable year within which sale,
redemption or other disposition takes place, and certain other
conditions are met.
If the
non-U.S. holder
has a U.S. trade or business and the investment in our debt
securities is effectively connected with that trade or business,
the gain on retirement or other disposition of our debt
securities would be subject to U.S. federal income tax on a
net basis at the rate applicable to U.S. holders generally.
In addition, foreign corporations may be subject to a 30% (or
lower applicable treaty rate) branch profits tax if the
investment in the debt securities is effectively connected with
the foreign corporations U.S. trade or business.
Other
Tax Considerations
Information
Reporting Requirements and Backup Withholding Tax
Under certain circumstances, holders of our securities may be
subject to backup withholding at a rate of 28% through 2010 on
payments made with respect to, or cash proceeds of a sale or
exchange of, our securities. Backup withholding will apply only
if the holder (1) fails to furnish its taxpayer
identification number, referred to in this section as a
TIN (which, for an individual, would be his or her
social security number), (2) furnishes an incorrect TIN,
(3) is notified by the IRS that it has failed to properly
report payments of interest and dividends, or (4) under
certain circumstances, fails to certify, under penalty of
perjury, that it has not been notified by the IRS that it is
subject to backup withholding for failure to report interest and
dividend payments. Backup withholding will not apply with
respect to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations. Prospective investors
should consult their own tax advisors regarding their
qualification for exemption from backup withholding and the
procedure for obtaining such an exemption. Backup withholding is
not an additional tax. Rather, the amount of any backup
withholding with respect to a payment to a holder of our
securities will be allowed as a credit against such
holders U.S. federal income tax liability and may
entitle such holder to a refund, provided that the required
information is furnished to the IRS. In addition, we may be
required to withhold a portion of capital gain distributions to,
or gross proceeds from our redemption of shares or other
securities from, any holders who fail to certify their
non-foreign status, if applicable.
Additional issues may arise pertaining to information reporting
and backup withholding with respect to foreign investors, and
foreign investors should consult their tax advisors with respect
to any such information reporting and backup withholding
requirements. Backup withholding with respect to foreign
investors is not an additional tax.
45
Rather, the amount of any backup withholding with respect to a
payment to a foreign investor will be allowed as a credit
against any U.S. federal income tax liability of such
foreign investor. If withholding results in an overpayment of
taxes, a refund may be obtained, provided that the required
information is furnished to the IRS.
Dividend
Reinvestment Plan
To the extent that a shareholder receives common shares or
preferred shares pursuant to a dividend reinvestment plan, the
federal income tax treatment of the shareholder and us will
generally be the same as if the distribution had been made in
cash. See Federal Income Taxation of Shareholders
and Taxation of the Company Annual
Distribution Requirement above.
Legislative
or Other Actions Affecting REITs
The rules dealing with federal income taxation are constantly
under review by persons involved in the legislative process and
by the IRS and the U.S. Treasury Department. Changes to the
federal tax laws and interpretations of federal tax laws could
adversely affect an investment in our securities.
State
and Local Taxes
We are subject to state, local, or other taxation in various
state, local, or other jurisdictions, including those in which
we transact business or own property. In addition, a holder of
our securities may be subject to state, local, or other taxation
on our distributions in various state, local, or other
jurisdictions, including the jurisdiction in which the holder
resides. The tax treatment in such jurisdictions may differ from
the federal income tax consequences discussed above.
Consequently, prospective investors should consult their own tax
advisors regarding the effect of state, local, and other tax
laws on their investment in our securities.
Additional
Tax Consequences for Holders of Rights
See the applicable prospectus supplement for a discussion of any
additional tax consequences for holders of rights offered by
such prospectus supplement.
LEGAL
MATTERS
Unless otherwise specified in a prospectus supplement, the
validity of any securities offered will be passed upon for us by
Ballard Spahr Andrews & Ingersoll, LLP, Baltimore,
Maryland. Certain tax matters will be passed upon for us by
Honigman Miller Schwartz and Cohn LLP, Detroit, Michigan.
EXPERTS
The financial statements and schedules as of December 31,
2007 and 2006 and for each of the three years in the period
ended December 31, 2007 and the effectiveness of internal
control over financial reporting as of December 31, 2007
incorporated by reference in this Prospectus have been so
incorporated in reliance on the reports of Grant Thornton, LLP,
an independent registered public accounting firm, incorporated
herein by reference, given on the authority of said firm as
experts in auditing and accounting.
DISCLOSURE
OF SEC POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, trustees
and persons controlling the Registrant pursuant to the foregoing
provisions, we have been informed that in the opinion of the SEC
such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
46
400,000 Shares
Ramco-Gershenson
Properties Trust
7.25%
Series D Cumulative Convertible Perpetual Preferred
Shares
PROSPECTUS
SUPPLEMENT
Deutsche
Bank Securities
J.P. Morgan
KeyBanc
Capital Markets
Stifel
Nicolaus Weisel
Comerica
Securities
PNC
Capital Markets LLC
RBS
April 27, 2011